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Brandes Investment Trust (BVNSC)

Filed: 28 Nov 16, 12:00am

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08614

 

 

Brandes Investment Trust

(Exact name of registrant as specified in charter)

 

 

11988 El Camino Real, Suite 600

San Diego, CA 92130

(Address of principal executive offices) (Zip code)

 

 

Michael Glazer

Morgan, Lewis & Bockius LLP

355 South Grand Ave., Suite 4400

Los Angeles, CA 90071-3106

(Name and address of agent for service)

 

 

800-331-2979

Registrant’s telephone number, including area code

Date of fiscal year end: September 30, 2016

Date of reporting period: September 30, 2016

 

 

 


Item 1. Reports to Stockholders.


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Table of Contents

 

 

Letter to Shareholders

   2  

Performance Graphs

   6  

Schedule of Investments

   57  

Statements of Assets and Liabilities

   92  

Statements of Operations

   94  

Statements of Changes in Net Assets

   96  

Financial Highlights

   100  

Notes to Financial Statements

   110  

Report of Independent Registered Public Accounting Firm

   134  

Additional Information

   135  

Trustees and Officers

   138  

 

1


Brandes International Equity Fund

 

Dear Fellow Investor,

The net asset value of the Brandes International Equity Fund (Class I Shares) advanced 8.10% in the 12 months ended September 30, 2016. For the same period, the MSCI EAFE Index rose 6.52%.

Allocations to pharmaceuticals boosted performance, including Japan’s Taisho Pharmaceutical Holdings and Daiichi Sankyo, as well as U.K.-based GlaxoSmithKline. Additionally, holdings in emerging markets significantly lifted returns, led by oil & gas firms Petrobras (Brazil) and Lukoil (Russia), as well as South Korea-based metals and mining firm POSCO and auto parts supplier Hyundai Mobis.

Petrobras’ stock continued to recover as the company divested non-core assets and revised down its capital expenditure plan. Petrobras has also benefited from domestic fuel being priced at a premium to imported fuel in its retail business, which had been a significant source of losses several years ago when high international fuel prices were not passed on to the local Brazilian market. Moreover, upstream operating costs have come down and management looks to cut more costs across the business.

Holdings in capital markets, specifically Switzerland-based Credit Suisse and UBS, weighed on performance. Other detractors included Brazilian jet manufacturer Embraer and U.K. retailer Marks & Spencer.

Embraer continued to struggle as the Brazilian real’s appreciation hurt its export-driven business and the company announced a poor 2016 sales forecast. While Embraer’s most recent quarterly commentary confirmed that the current business jet cycle remains challenging, we continue to focus on the long term and believe the company may benefit from a rebound in the business cycle and from its upcoming new products, which have a strong backlog of orders.

The investment team bought shares of Finland-based Nokia and France-based advertising firm Publicis.

Nokia has evolved quite significantly over the past few years, divesting several businesses while integrating and acquiring others in an effort to improve its scale and competitive position. Historically known as a mobile phone manufacturer, Nokia sold this business to Microsoft for $7.2 billion in 2013. Nokia largely retained its mobile technology patents after selling off its phone business. The company is also working to license non-essential patents.

Many investors have been concerned about the current demand environment for wireless infrastructure. Moreover, the outlook for the next few years for wireless infrastructure is poor, with China’s spending on LTE (long-term evolution, used for high-speed wireless communications for mobile phones and data terminals) having peaked. In addition to these industry-wide challenges, Nokia’s share price

 

2


Brandes International Equity Fund

 

has also been affected by worries over merger-integration risk. Nevertheless, in our view the risks are outweighed by the company’s positive attributes, which include:

 

  Its solid competitive position driven by growing demand for wireless networking equipment.

 

  A good track record of portfolio streamlining and operational rigor over the past five years.

 

  A strong balance sheet and capital-usage plan.

Other activity included the sale of a group of Brazilian holdings that reached our estimates of intrinsic value, namely Banco Santander Brasil, electric utility Centrais Eletricas Brasileiras (Eletrobras) and water utility Companhia de Saneamento Basico do Estado de Sao Paolo (SABESP).

A long-time position in the Fund, Eletrobras is a holding company that operates across the entire electricity value chain. The company is Brazil’s largest electricity provider, controlling 33% of the country’s generation capacity, mainly via hydro plants, and nearly 50% of the transmission grid. In April, Brazil’s Ministry of Mines and Energy announced very favorable compensation payment terms for the residual value of transmission assets built prior to 2000 (previously arbitrarily set to zero). The change marked a significant regulatory turnabout for Eletrobras and drove up its shares to a level where the risk/reward tradeoff no longer warranted an investment.

We first purchased SABESP when economic fear in Brazil, coupled with a severe drought, brought the market price for the company down to what we considered attractive levels. However, there have been a number of incremental positives for SABESP over the past year, including:

 

  Rainfall:  SABESP’s shares were previously pressured partly due to drought concerns in Sao Paolo. However, thanks to the long-awaited rainfall, the water reservoirs in the region have improved from critical levels.

 

  Lower financial leverage:  More-favorable investor sentiment in Brazil and the real’s appreciation against the U.S. dollar have helped SABESP reduce its financial leverage ratios as the company has exposure to foreign currency-denominated debt.

 

  Increased market appreciation:  Compared to when we first purchased the company, the market now seems to give more credit to SABESP’s defensive nature as a water utility with an inelastic demand and a fair regulator.

As a result of these factors, SABESP’s share price appreciated to a level where the offered fundamental value was no longer attractive to the investment committee.

Other positions sold included Italian cement producer Italcementi and Netherlands-based Royal Ahold.

 

3


Brandes International Equity Fund

 

Outlook

As of September 30, the Brandes International Equity Fund continued to exhibit more attractive fundamentals than the MSCI EAFE Index, with lower valuations and a higher dividend yield.

We took advantage of the solid performance of emerging-markets equities to exit or pare several of our positions. However, due to the strong share-price appreciation, our overall weighting to the region was 19% at the close of the fiscal year, largely unchanged compared to what it was at the beginning of the year. We believe emerging markets continue to represent some of the most appealing investment opportunities for value investors.

Beyond emerging markets, the Fund held its largest country overweight positions to France and Italy. From an industry standpoint, the Fund had higher allocations than the benchmark to oil & gas, food & staples retailing, pharmaceuticals and autos.

Meanwhile, the Fund’s lack of holdings in Germany continued to represent its largest underweight. The Fund also had lower allocations to industrials, materials and consumer staples.

We continue to find it challenging to uncover value in areas that are perceived as “safe” or less volatile, such as consumer staples. Many companies in the sector are regarded as less risky and have had above-average dividend yields, which typically garner investor attention in a yield-starved environment such as the current one. In our view, investor preference for such companies has led to overvaluations of many of these stocks. We have observed this even with some companies that have declining earnings or sales and very limited growth prospects. Investor allocation to such firms potentially overlooks a crucial factor that may drive future portfolio returns — the price paid in relation to the value received. More specifically, when the price paid for a business exceeds the value received, investors are actually injecting “valuation risk” into their portfolios, in our view.

At Brandes, we believe that valuation is the most important determinant of future returns. Our selectivity, focus on valuation and emphasis on margin of safety enable us to choose securities that we believe offer the best return potential in any environment.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes International Large-Cap Investment Committee

Brandes Investment Trust

Past performance is not a guarantee of future results. One cannot invest directly in an index.

 

4


Brandes International Equity Fund

 

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Diversification does not guarantee a profit or protect from loss in a declining market. Current and future portfolio holdings are subject to risk.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Margin of Safety:  The discount of a security’s market price to what the firm believes is the intrinsic value of that security.

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

Must be preceded or accompanied by a prospectus.

The MSCI EAFE (Europe, Australasia, Far East) Index with net dividends measures the equity market performance of developed markets in Europe, Australasia, and the Far East. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The Brandes International Equity Fund is distributed by ALPS Distributors, Inc.

 

5


Brandes International Equity Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes International Equity Fund – Class I from September 30, 2006 to September 30, 2016 with the value of such an investment in the Morgan Stanley Capital International EAFE Index for the same period.

Value of $100,000 Investment vs Morgan Stanley Capital International EAFE (Europe, Australasia and Far East) Index (Unaudited)

 

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   Average Annual Total Return
Periods Ended September 30, 2016
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes International Equity Fund

     

Class A*

   7.90  7.43  1.25  7.64

Class A* (with maximum sales charge)

   1.69  6.17  0.65  7.32

Class C*

   7.10  6.62  0.46  6.82

Class E*

   7.87  7.41  1.27  7.65

Class I

   8.10  7.62  1.44  7.88

Class R6*

   8.29  7.71  1.50  7.94

Morgan Stanley Capital International EAFE Index

   6.52  7.39  1.82  4.26

 

(1) The inception date is January 2, 1997.

 

*Performance shown prior to January 31, 2011 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to October 6, 2008 for Class E shares reflects the performance of Class I shares adjusted to reflect Class E expenses. Performance shown prior to February 1, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

 

6


Brandes International Equity Fund

 

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

7


Brandes Global Equity Fund

 

Dear Fellow Investor,

The net asset value of the Brandes Global Equity Fund (Class I Shares) rose 5.26% in the 12 months ended September 30, 2016. For the same period, the MSCI World Index advanced 11.36%.

The Fund’s financial holdings, primarily in banks and companies with capital markets exposure, were the most significant performance detractors. In our opinion, the market became indiscriminately concerned about some of these companies’ exposure to the energy sector, as well as about expectations of prolonged low interest rates in the United States and negative interest rates internationally.

Switzerland-based Credit Suisse and U.K.-based Barclays declined amid investor worries over the potential effects of Britain’s exit from the European Union (Brexit) on European financials in general. While the market has reacted negatively given the many unknowns about the depth and breadth of Brexit’s repercussions on European banks, we continue to believe they are well positioned. For example, the majority of Credit Suisse’s value comes from its attractive fee-based wealth management businesses.

Additionally, Brazilian airplane manufacturer Embraer and U.S.-based oil & gas firm Chesapeake Energy detracted from performance. We sold our equity position in Chesapeake, as discussed below.

Embraer’s stock price continued to struggle as the Brazilian real’s appreciation has hurt its export business, and the company announced a poor 2016 sales forecast. While Embraer’s most recent quarterly commentary confirmed that the current business-jet cycle remains challenging, we continue to focus on the company’s long-term prospects and believe Embraer may benefit from a rebound in the business cycle and its upcoming new product, which has a strong orders backlog.

Holdings in consumer staples, telecommunication services and information technology also weighed on performance.

The most significant positive contributors included South Korea-based Samsung Electronics, Chesapeake Energy bonds (as explained below) and Russia-based Lukoil. U.K.-based GlaxoSmithKline and U.S.-based Microsoft also added to returns.

Microsoft advanced after posting strong earnings due to the growth of its cloud software and services business. In addition, while Microsoft is issuing debt to acquire LinkedIn, it has also announced its intention to repurchase up to $40 billion worth of stock and increase its dividend.

Select portfolio activity included the sales of Ireland-based construction materials firm CRH, Netherlands-based retailer Royal Ahold, and U.K.-based tobacco firm Imperial Brands, as well as Japan-based electronics company Canon and Mitsubishi UFJ Financial Group.

 

8


Brandes Global Equity Fund

 

We initially bought CRH, one of the world’s largest building materials companies, following the construction downturn that began during the financial crisis and continued on to the European sovereign debt crisis in 2011. We believed the business was well positioned to benefit from a rebound in its cyclically depressed end markets given its strong market share, relatively strong balance sheet and solid cash generation.

Moreover, we believed the company had significant opportunity to cut costs considering its acquisition history. We also appreciated the fact that the company’s distribution business, which provides building materials to contractors and retail consumers, was more resilient amid the cyclical downturn than its building products business, as CRH’s distribution business relies on repair and maintenance demand as opposed to new infrastructure building.

Over the last year, the company made two large acquisitions, the most significant of which was a transaction involving certain assets Lafarge and Holcim were forced to sell in order to receive approval for their merger. Given the nature of the forced sale, we believe these assets were acquired at an attractive price, especially considering that infrastructure investment was likely near the trough of its cycle.

While the infrastructure-investment market remains relatively depressed, throughout this year the market showed appreciation for the company’s improved cost and competitive position and may be becoming more optimistic about the cyclical recovery in the United States and the potential for margin expansion. Consequently, CRH’s share price appreciated toward our estimate of intrinsic value and we divested our position.

Additionally, we divested the Fund’s equity position in Chesapeake Energy and purchased the company’s bonds, which we believed offer a more attractive risk/reward tradeoff than the common equity. At the time of purchase, Chesapeake bonds traded at 15 cents to 35 cents on the dollar. At these levels, the yield to maturity is north of 30%, and the bonds offer the potential for equity-like returns and provide some downside protection because debt holders have a higher claim on assets than do equity shareholders if the company decides to file for reorganization.

It is not typical for the Fund to hold securities other than common equity. Exceptions have been made when the securities within a company’s capital structure offered potential investment returns that rivaled those of its common equity. This happened with the preferred equity securities of U.S. banks during the financial crisis, for instance. In this particular case, Chesapeake endured an extremely difficult commodity-price environment which resulted in the market value of its common equity, preferred equity and debt falling significantly. The investment committee believes that the potential return from investing in Chesapeake debt surpasses that of many other common equity investments.

 

9


Brandes Global Equity Fund

 

If the company files for reorganization and emerges having restructured its debt, it is highly likely that some/all of the debt will be converted to equity, allowing us to potentially participate in any upside of enterprise value. The restructured company would allow for further potential recovery in value should natural-gas prices eventually rise to economically viable levels during or after the reorganization process.

Other positions added to the Fund included France-based oil firm Total, Finland-based Nokia and Credit Suisse.

Outlook

As of September 30, the Fund’s fundamentals remained more attractive than those of the benchmark, exhibiting significantly lower valuations such as price-to-book, price-to-earnings and price-to-cash-flow ratios. It also offered a higher dividend yield than the MSCI World Index.

The Fund’s largest overweight positions were in the United Kingdom and France, as well as in the energy sector. The Fund also had an off-benchmark allocation of over 16% in emerging-markets companies. Over the last year, we continued to find value in emerging-markets businesses and integrated oil companies, where we have been increasing the Fund’s allocations.

Meanwhile, the Fund maintained its largest underweight position in the United States. On the sector level, it had below-benchmark weightings in financials, consumer staples, materials and industrials.

In the past year and heading into the final months of 2016, it has been difficult to find many undervalued companies in the United States. Additionally, the consumer products industries and other areas where many companies are regarded as being less volatile and therefore “safer” are trading at what we believe to be lofty valuations. In many cases, higher valuations were evident even among companies with declining earnings or sales and very modest growth prospects. In this environment, a focus on price vs. value and selectivity remains paramount, in our view.

Despite the market’s perception that some areas of the market are safer or less volatile, Brandes’ disciplined focus on individual companies leads us to conclude that these areas may actually expose investors to increased risk of muted investment returns due to the current, optimistic prices.

In this environment, we hold the view that focusing on valuations enables us to choose what we believe are the best value opportunities to include in the Fund.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes Global Large-Cap Investment Committee

Brandes Investment Trust

 

10


Brandes Global Equity Fund

 

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Current and future portfolio holdings are subject to risk.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Margin Compression:  A decrease in a company’s operating margin (operating margin = operating income divided by sales).

Price/Book:  Price per share divided by book value per share.

Price/Cash Flow:  Price per share divided by cash flow per share.

Price/Earnings:  Price per share divided by earnings per share.

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Yield to Maturity:  The total return anticipated on a bond if the bond is held until the end of its lifetime.

Must be preceded or accompanied by a prospectus.

The MSCI World Index with net dividends measures equity market performance of developed markets. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The Brandes Global Equity Fund is distributed by ALPS Distributors, Inc.

 

11


Brandes Global Equity Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Equity Fund – Class I from its inception (October 6, 2008) to September 30, 2016 with the value of such an investment in the Morgan Stanley Capital International World Index for the same period.

Value of $100,000 Investment vs Morgan Stanley Capital International World Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2016
 
   One
Year
  Three
Years
  Five
Years
  Since
Inception(1)
 

Brandes Global Equity Fund

     

Class A*

   5.01  2.48  9.31  6.34

Class A* (with maximum sales charge)

   -1.02  0.47  8.03  5.56

Class C*

   4.20  1.73  8.52  5.52

Class E

   5.03  2.50  9.32  6.35

Class I

   5.26  2.73  9.59  6.57

Morgan Stanley Capital International World Index

   11.36  5.85  11.63  8.41

 

(1) The inception date is October 6, 2008.

 

*Performance shown prior to January 31, 2011 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses.

 

12


Brandes Global Equity Fund

 

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

13


Brandes Global Equity Income Fund

 

Dear Fellow Investor,

The net asset value of the Brandes Global Equity Income Fund (Class I Shares) rose 16.98% in the 12 months ended September 30, 2016. For the same period, the MSCI World Index advanced 11.36%.

Holdings in Brazil were the biggest positive return contributors, including electric utility Companhia Paranaense de Energia (Copel), water utility Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) and Telefonica Brasil.

Additionally, from an industry standpoint, holdings in pharmaceuticals significantly boosted performance, most notably Japan-based Daiichi Sankyo, U.S.-based Johnson & Johnson and Merck, as well as U.K.-based GlaxoSmithKline.

Performance detractors included U.K.-based retailer Marks & Spencer, U.S.-based computer data storage company Western Digital, Switzerland-based financial firm UBS and Swedish telecommunications equipment firm Ericsson.

UBS declined as markets became concerned about the potential effects of Britain’s exit from the European Union (Brexit) on European financials in general. While the market has reacted negatively given the many unknowns about the depth and breadth of Brexit’s repercussions on European banks, we continue to believe UBS is an appealing investment as the majority of the company’s value comes from what we view as attractive fee-based wealth management business.

Ericsson declined on the back of a weak earnings report, and the resignation of its chief executive officer after a string of disappointing earnings results. The company also announced cuts aimed at improving its cost structure and profitability. Ericsson continues to see a lull in demand for carrier infrastructure equipment as the transition to 4G is largely complete in developed markets, while carrier demand for 5G networks is yet to occur.

The investment team added Switzerland-based luxury goods firm Compagnie Financiere Richemont (with a dividend yield of 2.8% as of September 30), Wells Fargo (yield 3.3%) and Chile-based Enersis Chile (yield 3.3%).

Other activity included the sale of Ireland-based building firm CRH, Germany-based capital markets company Deutsche Boerse, Netherlands-based food & staples retailer Royal Ahold, and Brazil-based water utility SABESP.

We initially bought CRH, one of the world’s largest building materials companies, following the construction downturn that began during the financial crisis and continued on to the European sovereign-debt crisis in 2011. We believed the business was well positioned to benefit from a rebound in its cyclically depressed end markets given its strong market share, relatively conservative balance sheet and solid cash generation.

In addition, we believed the company had significant opportunity to cut costs considering its acquisition history. We also appreciated the fact that the company’s

 

14


Brandes Global Equity Income Fund

 

distribution business, which provides building materials to contractors and retail consumers, was more resilient amid the cyclical downturn than its building products business, as CRH’s distribution business relies on repair and maintenance demand as opposed to new infrastructure building.

Over the last year, the company made two large acquisitions, the most significant of which was a transaction involving certain assets Lafarge and Holcim were forced to sell in order to receive approval for their merger. Given the nature of the forced sale, we believe these assets were acquired at an attractive price, especially considering that infrastructure investment was likely near the trough of its cycle.

While the infrastructure-investment market remains relatively depressed, throughout this year the market showed appreciation for the company’s improved cost and competitive position and may be becoming more optimistic about the cyclical recovery in the United States and the potential for margin expansion. Consequently, CRH’s share price appreciated toward our estimate of intrinsic value and we divested our position.

Outlook

As of September 30, the Fund’s fundamentals remained more attractive than those of the benchmark, exhibiting significantly lower valuations such as price-to-book, price-to-earnings and price-to-cash-flow ratios. It also offered a dividend yield of 4.0% versus the MSCI World Index’s 2.6%.

The Fund’s largest overweight positions were in France and the United Kingdom. From an industry standpoint, the most significant allocations were in pharmaceuticals, oil & gas, banks and capital markets exposed companies. The Fund remained significantly underweight in the United States and Japan, as well as in the industrials, information technology and materials sectors.

As always, we anchor our allocation decisions on a fundamental, bottom-up investment approach focused on seeking undervalued companies with attractive dividend yields in all corners of the globe. We hold the view that focusing on valuations and the sustainability of a company’s dividend enables us to choose what we believe is the best combination of value opportunities with attractive yields to include in the Fund. Although some areas of the market that are generally less volatile and perceived as “safer” investments are, in our opinion, trading at lofty valuations, by having a global perspective, we have been able to build a Fund that is attractively valued and still has a very compelling dividend yield.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes Global Large-Cap Investment Committee

Brandes Investment Trust

 

15


Brandes Global Equity Income Fund

 

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Current and future portfolio holdings are subject to risk.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Margin Compression:  A decrease in a company’s operating margin (operating margin = operating income divided by sales).

Price/Book:  Price per share divided by book value per share.

Price/Cash Flow:  Price per share divided by cash flow per share.

Price/Earnings:  Price per share divided by earnings per share.

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

SEC 30-Day Yield:  2.98% (sub) -13.87% (unsub.) This calculation is based on a 30-day period ending on the last day of the month shown. It is computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period. The yield figure reflects the dividends and interest earned during the period, after the deduction of the fund expenses. A subsidized yield takes into consideration the expenses paid by the advisor.

Must be preceded or accompanied by a prospectus.

The MSCI World Index with net dividends measures equity market performance of developed markets. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The Brandes Global Equity Income Fund is distributed by ALPS Distributors, Inc.

 

16


Brandes Global Equity Income Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Equity Income Fund – Class I from its inception (December 31, 2014) to September 30, 2016 with the value of such an investment in the Morgan Stanley Capital International World Index for the same period.

Value of $100,000 Investment vs Morgan Stanley Capital International World Index (Unaudited)

 

LOGO

 

   Average Annual
Total Return Periods
Ended September 30, 2016
 
   One
Year
  Since
Inception(1)
 

Brandes Global Equity Income Fund

   

Class A

   17.35  8.04

Class A (with maximum sales charge)

   10.57  4.44

Class C

   16.01  6.99

Class I

   16.98  7.91

Morgan Stanley Capital International
World Index

   11.36  2.62

 

(1) The inception date is December 31, 2014.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

 

17


Brandes Global Equity Income Fund

 

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

18


Brandes Global Opportunities Value Fund

 

Dear Fellow Investor,

The net asset value of the Brandes Global Opportunities Value Fund (Class I Shares) rose 12.45% in the 12 months ended September 30, 2016. For the same period, the MSCI ACWI (All Country World) Index advanced 11.96%.

The Fund benefited from investments across a diverse set of countries, sectors and industries.

Major positive contributors were allocations to the energy, utilities, financials and health care sectors, as well as to Brazil and Russia.

At the company level, top performers included Brazilian holdings Telefonica Brasil, water utility Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) and holding company Itausa, as well as the bonds of U.S.-based Chesapeake Energy (as explained below).

In the past few years, economic fear in Brazil, coupled with a severe drought, brought the market price of SABESP down to what we considered attractive levels. Recently, the company garnered renewed investor interest as it finally benefitted from a number of incremental positives, including:

 

  Rainfall:  SABESP’s shares were previously pressured partly due to drought concerns in Sao Paolo. However, thanks to the long-awaited rainfall, the water reservoirs in the region have improved from critical levels.

 

  Lower financial leverage:  More- favorable investor sentiment in Brazil and the real’s appreciation against the U.S. dollar have helped SABESP reduce its financial leverage ratios as the company has exposure to foreign currency-denominated debt.

 

  Increased market appreciation:  In contrast to when we first purchased the company, the market now seems to give more credit to SABESP’s defensive nature as a water utility with an inelastic demand and a fair regulator.

As a result of these factors, SABESP’s share price appreciated to our estimate of its intrinsic value and we exited our position.

We purchased the bonds of Chesapeake Energy, which we believed offer a more attractive risk/reward tradeoff than the company’s common equity. At the time of purchase, the bonds traded at 15 cents to 35 cents on the dollar. At these levels, the yield to maturity is north of 30%, and the bonds offer the potential for equity-like returns and provide some downside protection because debt holders have a higher claim on assets than do equity shareholders if the company decides to file for reorganization.

It is not typical for the Fund to hold securities other than common equity. Exceptions have been made when the securities within a company’s capital structure offered potential investment returns that rivaled those of its common equity. This happened with the preferred equity securities of U.S. banks during the

 

19


Brandes Global Opportunities Value Fund

 

financial crisis, for instance. In this particular case, Chesapeake endured an extremely difficult commodity-price environment which resulted in the market value of its common equity, preferred equity and debt falling significantly. The investment committee believes that the potential return from investing in Chesapeake debt surpasses that of many other common equity investments.

If the company files for reorganization and emerges having restructured its debt, it is highly likely that some/all of the debt will be converted to equity, allowing us to potentially participate in the upside of the company’s enterprise value. The restructured company would allow for further potential recovery in value should natural-gas prices eventually rise to economically viable levels during or after the reorganization process.

Meanwhile, allocations to information technology and real estate hurt performance, as did a number of individual positions, including Brazil-based jet manufacturer Embraer, Switzerland-based Credit Suisse, and select U.K.-based holdings.

For Embraer, which derives the majority of its sales outside Brazil, the real’s appreciation presented a headwind. The company has also been experiencing margin compression, mainly due to the mature state of its current product mix ahead of the launch of its next-generation models expected in 2018. We see the challenges facing Embraer as temporary in nature and we continue to believe the company represents an attractive investment opportunity.

Credit Suisse declined as market became concerned about the Brexit vote’s impact on European financials in general. While the market has reacted negatively given the many unknowns about the depth and breadth of Brexit’s repercussions on European banks, we continue to believe Credit Suisse is an appealing investment as the majority of its value comes from attractive fee-based wealth management business.

The All-Cap Investment Committee divested a number of positions as they reached our intrinsic value estimates, including Italy-based holding company Italmobiliare, SABESP and Irish construction materials company CRH.

We initially bought CRH, one of the world’s largest building materials companies, following the downturn in construction that began during the financial crisis and continued on to the European sovereign debt crisis in 2011. We believed the business was well positioned to benefit from a rebound in its cyclically depressed end markets given its strong market share, relatively conservative balance sheet and solid cash generation.

In addition, we believed the company had significant opportunity to cut costs considering its acquisition history. We also appreciated the fact that the company’s distribution business, which provides building materials to contractors and retail consumers, was more resilient amid the cyclical downturn than its building products business, as CRH’s distribution business relies on repair and maintenance demand as opposed to new infrastructure building.

 

20


Brandes Global Opportunities Value Fund

 

Over the last year, the company made two large acquisitions, the most significant of which was a transaction involving certain assets Lafarge and Holcim were forced to sell in order to receive approval for their merger. Given the nature of the forced sale, we believe these assets were acquired at an attractive price, especially considering that infrastructure investment was likely near the trough of its cycle.

While the infrastructure-investment market remains relatively depressed, throughout this year the market showed appreciation for the company’s improved cost and competitive position and may be becoming more optimistic about the cyclical recovery in the United States and the potential for margin expansion. Consequently, CRH’s share price appreciated toward our estimate of intrinsic value and we divested our position.

Meanwhile, the investment committee initiated a position in Draegerwerk, a small-cap German company operating in the health care equipment & supplies industry. Draegerwerk applies its expertise in airflow dynamics and pressure regulation to two main segments: medical and safety. The medical division provides anesthesia workstations, ventilation equipment, patient monitoring systems and neonatal care products. Meanwhile, the company’s safety portfolio includes respiratory protection equipment, gas detection systems and professional diving equipment, as well as alcohol and drug impairment detection devices.

Several factors appear to have weighed on Draegerwerk’s shares. Earnings have been hurt due to the strength of the euro against the Japanese yen and also currencies in emerging markets, which account for approximately 25% of the company’s revenues. Poor cost management, weak demand in Europe and the United States, and higher research and development investments created further pressure on profitability. Operating margins in its medical business seem depressed despite the company’s relatively strong competitive position, and much of the company’s recent growth has come from emerging markets, which have shown signs of slowing. Moreover, the company has a somewhat complex capital structure.

Due to these challenges, our analysis suggested that Draegerwerk’s shares were undervalued. We like that the company enjoys a strong competitive position in most areas of its medical segment — a business with relatively high barriers to entry — and that a portion of its revenues are recurring in nature, which has contributed to stable cash-flow generation. With regard to the headwinds in emerging markets, we believe they are temporary, as health care infrastructure demand in many of those markets has much room to grow. Ultimately, we believe the investment risks are more than accounted for in Draegerwerk’s share price.

Our Outlook

Throughout the year, we have been finding a lot of value opportunities in emerging markets, as reflected in our large allocation of approximately 33% as of September 30. Brazil represented a key exposure, with about 11% weighting.

 

21


Brandes Global Opportunities Value Fund

 

We also continued to find value potential in companies based in the United Kingdom, where the Fund held an overweight position. The United States remained a key underweight as we have not been finding many attractively valued companies there.

From a sector standpoint, the Fund held key overweights in energy, financials and telecommunication services and key underweights in information technology and health care. The Fund’s cash position was higher than usual at the close of the fiscal year as we stand ready to deploy assets should any potential mispricing occur amid prevailing uncertainties globally.

At Brandes, our investment process focuses on a bottom-up analysis. As such, the Fund’s country and industry weightings are the result of our research-driven stock selection and reflect our convictions.

In the current environment, we have observed that some investors have shown a preference for high-growth companies and investments some would deem “safe.” In doing so, they may have overlooked a crucial factor that could drive future portfolio returns — the price paid in relation to the value received. We hold the view that focusing on valuations enables us to choose what we believe are the best value opportunities to include in the Fund.

We remain enthusiastic about the prospects for the Brandes Global Opportunities Value Fund. With its mandate to invest anywhere potential mispricing and value are apparent, the Fund is well positioned to traverse market cycles and seize opportunities, in our view.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes All-Cap Investment Committee

Brandes Investment Trust

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these

 

22


Brandes Global Opportunities Value Fund

 

currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Diversification does not guarantee a profit or protect from loss in a declining market. Current and future portfolio holdings are subject to risk.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Yield to Maturity:  The total return anticipated on a bond if the bond is held until the end of its lifetime.

Margin Compression:  A decrease in a company’s operating margin (operating margin = operating income divided by sales).

Operating Margin:  Operating income divided by net sales; used to measure a company’s operating efficiency.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

Must be preceded or accompanied by a prospectus.

The MSCI All Country World Index with net dividends measures equity market performance of developed and emerging markets. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The Brandes Global Opportunities Value Fund is distributed by ALPS Distributors, Inc.

 

23


Brandes Global Opportunities Value Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Opportunities Value Fund – Class I from its inception (December 31, 2014) to September 30, 2016 with the value of such an investment in the Morgan Stanley Capital International All Country World Index for the same period.

Value of $100,000 Investment vs Morgan Stanley Capital International All Country World Index (Unaudited)

 

LOGO

 

   Average Annual
Total Return Periods
Ended September 30, 2016
 
   One
Year
  Since
Inception(1)
 

Brandes Global Opportunities Value Fund

   

Class A

   12.13  3.27

Class A (with maximum sales charge)

   5.70  -0.17

Class C

   11.42  2.48

Class I

   12.45  3.27

Morgan Stanley Capital International All Country World Index

   11.96  2.31

 

(1) The inception date is December 31, 2014.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

 

 

24


Brandes Global Opportunities Value Fund

 

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

25


Brandes Emerging Markets Value Fund

 

Dear Fellow Investor,

The net asset value of the Brandes Emerging Markets Value Fund (Class I shares) increased 29.70% in the 12 months ended September 30, 2016. For the same period, the Fund’s benchmark, the MSCI Emerging Markets Index, gained 17.21%.

The Fund’s largest positive contributors were holdings in utilities, financials and materials. From a country perspective, allocations to Brazil and India aided relative returns significantly. Notable performers included Panamanian airline Copa Holdings, Brazilian water utility Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP), Indian conglomerate Reliance Infrastructure and Luxembourg-domiciled steelmaker Ternium.

SABESP’s shares increased on the back of a number of incremental positives, including:

 

  Rainfall:  SABESP’s shares were previously pressured partly due to drought concerns in Sao Paolo. However, thanks to the long-awaited rainfall, the water reservoirs in the region have improved from critical levels.

 

  Lower financial leverage:  Morefavorable investor sentiment in Brazil and the real’s appreciation against the U.S. dollar have helped SABESP reduce its financial leverage ratios as the company has exposure to foreign currency-denominated debt.

 

  Increased market appreciation:  In contrast to when we first purchased the company, the market now seems to give more credit to SABESP’s defensive nature as a water utility with an inelastic demand and a fair regulator.

As a result of these factors, SABESP’s share price appreciated to our estimate of its intrinsic value and we exited our position.

Our underweight position in information technology hurt relative returns, as did our underweight to Taiwan. Additionally, holdings in Hong Kong-based retailers detracted from relative performance.

While the majority of our Brazilian holdings performed well, export-oriented businesses such as Embraer, a regional jet manufacturer, and beef producer Marfrig Global Foods weighed on returns. Other detractors included China-based car manufacturer Dongfeng Motor Group and Chile-based electric utility Enersis Chile.

Enersis Chile’s share price declined after the results of the recent auction held by Chilean utilities to procure long-term power proved disappointing to companies and investors in the sector. This negatively impacted Enersis Chile, given that it is a holding company with the majority of its value coming from its 60%-owned power producer Endesa Chile. We believe the market has unrealistically extrapolated the results as conclusive evidence of where long-term power prices will go. Despite the

 

26


Brandes Emerging Markets Value Fund

 

uncertainty surrounding the trajectory of long-term power prices, we believe Enersis Chile offers an attractive risk/reward proposition and warrants continued investment.

In addition to SABESP discussed above, full sells included Czech telecommunications services provider Ceska Telekomunikacni Infrastruktura, China-based footwear manufacturer Yue Yuen Industrial, Brazilian electric utility Centrais Eletricas Brasileiras (Eletrobras) and Chile-based Sociedad Quimica y Minera de Chile (SQM).

Founded in 1968, SQM produces and distributes specialty plant nutrition solutions, potassium fertilizers, industrial chemicals, iodine and its derivatives, and lithium and its derivatives. We first added SQM to the Fund in the third quarter of 2015, when the company’s shares were pressured due to a number of factors, including:

 

  A dispute over underpayment of royalties alleged by its regulator, Corporación de Fomento de la Producción de Chile (CORFO), who threatened to terminate its mining concession.

 

  The accusation that some of SQM’s controlling shareholders did not disclose relevant political contributions.

 

  The resignation of the board members of one of SQM’s largest shareholders, which led to fears that this shareholder would sell its shares, potentially resulting in share overhang.

These challenges created what we viewed as a favorable entry point for an investment. A market leader in the production of iodine, nitrates and lithium, SQM possessed cost advantages and geographic diversification. At the time of our purchase, we believed the stock traded close to the level which assumed an early termination of its mining concession.

Over the past year, SQM’s share price increased significantly. This can largely be attributed to optimism about lithium market demand, potential investment by foreign strategic investors in the company, and a reversion to its historical premium among potash producers given its cost advantages. While the market appears to have welcomed these improvements¸ a number of risks persist, including the continued governance/litigation overhang with its regulator CORFO and poor near-term prospects for the potash and iodine markets. As SQM’s share price appreciated beyond our estimate of intrinsic value, we sold the position in the third quarter.

Other major activity included the new purchases of Chile-based Empresa Nacional de Telecomunicaciones, Greek Hellenic Telecommunications Organization and Turkish airport operator TAV Havalimanlari. Additionally, the Emerging Markets Investment Committee initiated positions in two Thailand-based banks: Bangkok Bank and Kasikornbank (formerly Thai Farmers Bank).

 

27


Brandes Emerging Markets Value Fund

 

Founded in 1944, Bangkok Bank is the largest commercial bank in Thailand with assets, loans and deposits all commanding over 15% in market share. Bangkok Bank offers a universal banking platform with a full range of consumer, small-/mid-enterprise and corporate financial products and services. Additionally, the company boasts a strong franchise with nearly 1,200 domestic branches, 39 international branches and over 9,000 ATMs.

Established in 1945, Kasikornbank is Thailand’s fourth-largest bank. The company provides a broad range of consumer, commercial and corporate banking services, including lending, deposit-taking, credit-card services, international-trade financing, custodian services, asset management, investment banking, life insurance and leasing. Moreover, Kasikornbank is the leader in Thailand’s small-/mid-enterprise lending market, which offers higher margins than retail and corporate lending segments.

The Thai banking industry is in the midst of a credit cycle where asset quality started deteriorating in 2015 due to the slowing economy. In descending order of credit risk, small-/mid-enterprise lending has represented the highest level of non-performing loans, followed by retail and corporate lending. However, we believe both Bangkok Bank and Kasikornbank are well positioned in the market and offer a margin of safety at their current prices — even after adjusting for further credit deterioration over the next few years.

Bangkok Bank applies conservative lending policies and has better asset quality than the majority of its peers. Moreover, while not as profitable historically, the bank has the highest level of excess capital and provision coverage in the industry, providing downside protection, in our opinion. Meanwhile, Kasikornbank has had higher structural profitability than most Thai banks due to its exposure to the small/mid-enterprise lending market and its success in fee-income generation. We also appreciate Kasikornbank’s competent management team, which has a history of transparency and clear disclosure.

Outlook

As of September 30, 2016, Brazil remained our largest country weighting and where we had higher allocations than the benchmark. The Fund continued to hold key underweight positions in China, Taiwan and India. From a sector standpoint, the Fund had a higher relative allocation to consumer discretionary, while maintaining a lower weighting in information technology.

The strong performance of many emerging markets over the past year following the downturn serves as a good reminder that market performance and investor sentiment shift constantly, and investors may be best served by focusing on company value.

With our selectivity and emphasis on margin of safety, we believe the Brandes Emerging Markets Value Fund remains well positioned to navigate this dynamic asset class over the long term.

 

28


Brandes Emerging Markets Value Fund

 

As always, thank you for your business and continued trust.

Sincerely yours,

The Brandes Emerging Markets Investment Committee

Brandes Investment Trust

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than large capitalization companies. Current and future portfolio holdings are subject to risk.

Margin of Safety:  The margin of safety for any security is defined as the discount of its market price to what the firm believes is the intrinsic value of that security.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

Must be preceded or accompanied by a prospectus.

The MSCI Emerging Markets Index with gross dividends measures equity market performance of emerging markets. One cannot invest directly in an index. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The Brandes Emerging Markets Value Fund is distributed by ALPS Distributors, Inc.

 

29


Brandes Emerging Markets Value Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Emerging Markets Value Fund – Class I from September 30, 2006 to September 30, 2016 with the value of such an investment in the Morgan Stanley Emerging Markets Index for the same period.

Value of $100,000 Investment vs Morgan Stanley Capital Emerging Markets Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2016**
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes Emerging Markets Value Fund

     

Class A

   29.38  3.36  5.18  7.22

Class A (with maximum sales charge)

   21.94  2.14  4.56  6.90

Class C*

   28.38  2.61  4.39  6.42

Class I

   29.70  3.63  5.43  7.48

Class R6*

   29.61  3.65  5.47  7.53

Morgan Stanley Capital International Emerging Markets Index

   17.21  3.39  4.28  6.06

 

(1) The inception date is August 20, 1996.

 

*Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to July 11, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

 

**

Prior to January 31, 2011, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes Emerging Markets Value Fund. The performance information shown for the Class I shares for periods before January 31, 2011 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to January 31, 2011 is based on a calculation method that is different from the standardized calculation method prescribed by

 

30


Brandes Emerging Markets Value Fund

 

 the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

31


Brandes International Small Cap Equity Fund

 

Dear Fellow Investor,

The net asset value of the Brandes International Small Cap Equity Fund (Class I Shares) advanced 10.85% in the 12 months ended September 30, 2016. For the same period, the S&P Developed Ex-U.S. SmallCap Index rose 12.71%.

Holdings in electric utilities, semiconductors & semiconductor equipment, and water utilities were noteworthy positive contributors, along with positions in some emerging markets. Additionally, relative performance for the Fund’s U.K. holdings was strong, and select companies performed well.

On an individual security basis, Canadian wood-based products company Norbord, Indian conglomerate Reliance Infrastructure and Brazilian water utility Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) helped performance significantly.

Norbord manufactures and distributes oriented strand boards used in home construction. The company continued to benefit from improved homebuilding activity in its North American markets.

SABESP benefited from renewed investor interest. In the past few years, economic fear in Brazil, coupled with a severe drought, brought the market price for the company down to what we considered attractive levels. However, there have been a number of incremental positives for SABESP over the past year, including:

 

 ��� Rainfall:  SABESP’s shares were previously pressured partly due to drought concerns in Sao Paolo. However, thanks to the long-awaited rainfall, the water reservoirs in the region have improved from critical levels.

 

  Lower financial leverage:  More-favorable investor sentiment in Brazil and the real’s appreciation against the U.S. dollar have helped SABESP reduce its financial leverage ratios as the company has exposure to foreign currency-denominated debt.

 

  Increased market appreciation:  In contrast to when we first purchased the company, the market now seems to give more credit to SABESP’s defensive nature as a water utility with an inelastic demand and a fair regulator.

As a result of these factors, in what was a surprisingly quick turnaround, SABESP’s share price appreciated to a level where the offered fundamental value was no longer attractive to the investment committee, and we divested our position.

Meanwhile, allocations to real estate management and development, aerospace and defense and multiline retail detracted from returns as did an underweight to metals & mining. Other detractors included U.K.-based estate companies LSL Property Services and Countrywide, retailer Debenhams and Brazilian jet manufacturer Embraer.

For Embraer, which derives the majority of its sales outside Brazil, the real’s appreciation presented a headwind. The company has also been experiencing

 

32


Brandes International Small Cap Equity Fund

 

margin compression, mainly due to the mature state of its current product mix ahead of the launch of its next-generation models expected in 2018. We see the challenges facing Embraer as temporary in nature and we continue to believe the company represents an attractive investment opportunity.

The Small-Cap Investment Committee exited several positions, including U.S.-based APR Energy and Switzerland-based Micronas Semiconductor.

APR Energy was acquired by a group of private equity firms and the transaction was completed in February. Meanwhile, in December 2015, TDK Corporation, a Japanese multinational electronics company, announced an all-cash public tender offer for Micronas that was at a 60% premium to its publicly traded market value. We accepted the cash offer as it approximated our estimate of the company’s intrinsic value.

Meanwhile, the investment committee took advantage of volatile markets to initiate positions in companies which, based on our analysis, exhibited attractive prices relative to our intrinsic value estimates. New purchases included U.K.-based retailer J Sainsbury, facilities management firm Mitie Group and real estate firm Countrywide.

Taking advantage of the short-term volatility following Britain’s exit from the European Union (Brexit) in late June, we added Countrywide and built out our position in the third quarter. Countrywide provides residential real estate brokerage and related services in the United Kingdom. While we had never held Countrywide despite following it closely for a number of years, the market’s sharp negative reaction to the Brexit vote allowed us to opportunistically build a position at what we considered an attractive price.

Since the global financial crisis, Countrywide’s U.K. residential property agency business has suffered from historically low transaction volumes. While we are concerned with the overall price level of U.K. residential property, we believe transaction volumes should eventually recover from multi-decade lows, in part through an improvement in the affordability rate (i.e., lower home price and/or higher incomes). We also appreciate that the company generates a third of its earnings from its fee-based business (e.g., title, insurance and origination), which is not tied to residential home prices but rather to transaction volumes. Moreover, in response to the lower volume environment, Countrywide has placed a strong emphasis on building out its rental property management business, which is now far more significant to group results than before. The rental business not only carries a higher margin and is more stable than the company’s core estate agency business, it also provides a natural hedge, in our opinion, should the U.K. residential property market or home ownership rate deteriorate from current levels.

 

33


Brandes International Small Cap Equity Fund

 

The Brexit news caused a dramatic negative market reaction toward many U.K.-based companies, including Countrywide. The market had already been concerned about home prices and consumer financial health, and the recent developments surrounding Brexit likely added to market angst regarding near-term residential property transaction volumes.

Recent concerns presented us with an attractive opportunity to invest in a diversified real-estate business operating in an environment currently filled with extreme pessimism. Transaction volumes appear to be below mid-cycle levels, thus providing potential longer-term upside. Additionally, we feel some of the risks associated with Countrywide are mitigated in part by the company’s ability to adjust its cost base and benefit from revenue streams from its rental business, which is less sensitive to transaction volumes.

During the period, the Fund added several new positions in Japan, including Kissei Pharmaceuticals, Fuji Media, Hachijuni Bank, leisure products company Sega Sammy Holdings, auto components firm Nippon Seiki, information technology firm Toshiba Machine and consumer electronics company Funai Electric.

Fuji Media is among Japan’s top-four for-profit, free-to-air television broadcasters in terms of number of viewers. Once the number-one broadcaster, Fuji Media has seen its viewer ratings decline continuously in the past decade. The market appears concerned that the ratings decline will continue, especially if the Japanese economy weakens further, potentially triggering a downturn in domestic television advertising, a major revenue source for Fuji Media.

We believe the market’s short-term view ignores the significant asset value, as reflected by the large discount to book value at which Fuji Media traded as of June 30, 2016, and considering its diversified business mix via its Urban Development Group, which develops and operates commercial and residential properties. Moreover, despite the TV ratings decline, the company’s media franchise has earned decent returns on capital and benefited from an industry with high barriers to entry. In our opinion, Fuji Media is well equipped to improve its ratings through recent initiatives but the market appears to give no credit for this potential positive development.

At the buy price, which incorporated the market’s negative view on its legacy media business, we see a TV ratings rebound and a property portfolio that is under recognized as potential positives for the company. Given the combination of these factors, we believe the risk/reward tradeoff warrants an investment in the company.

Outlook

As of September 30, holdings in Japan, the United Kingdom and emerging-markets countries accounted for the Fund’s largest weightings from a regional perspective.

For the past several years, Japan has been the largest country weighting. In recent years, we had significantly reduced our allocation to Japanese companies as a

 

34


Brandes International Small Cap Equity Fund

 

number of our holdings had appreciated to our estimates of their intrinsic value. In general, optimism surrounding Abenomics, corporate governance improvements and currency depreciation contributed to the share-price increases of our holdings, but the main performance drivers came from company-specific factors. As market optimism seems to have dissipated over the past year, we have started to find value potential again, as evidenced by the addition of a number of companies mentioned above.

The Fund also maintained a significant overweight to the United Kingdom and emerging markets.

From a sector standpoint, the Fund held key overweights in consumer staples and utilities, and key underweights in industrials, financials, information technology and materials. Additionally, the Fund had no allocation to the energy sector as of September 30.

The Fund’s country and sector weightings are the result of our research-driven stock selection and reflect our convictions.

Over the past couple of years, the Fund’s cash level has drifted up. Our mandate is to generally be fully invested, although we do have some flexibility as market conditions warrant. We believe now is one of those times to remain selective and patient as we await new value opportunities. The higher cash level does provide the opportunity to quickly deploy capital during a market dislocation, as we did in the days subsequent to the Brexit vote. As soon as the Brexit voting results became public, we put some of that cash to work, almost exclusively in the United Kingdom, by adding to existing positions and purchasing two new companies offering attractive risk/reward tradeoffs.

Amid prevailing macroeconomic and geopolitical uncertainties, we remain committed to our fundamental, Graham-and-Dodd bottom-up value discipline. We hold the view that focusing on valuations enables us to choose what we believe are the best opportunities to include in the Brandes International Small Cap Fund. In our opinion, selectivity and a laser focus on margin of safety remain paramount in any market environment.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes Small-Cap Investment Committee

Brandes Investment Trust

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform

 

35


Brandes International Small Cap Equity Fund

 

other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than large capitalization companies. Diversification does not guarantee a profit or protect from loss in a declining market. Current and future portfolio holdings are subject to risk.

Abenomics:  Economic policies advocated by Japan’s Prime Minister Shinzo Abe, which revolve around fiscal stimulus, monetary easing and structural reforms.

Graham and Dodd investment approach:  A method described by Benjamin Graham and David Dodd in their 1934 book Security Analysis that seeks to identify securities which may be underpriced relative to the value of their underlying assets.

Book Value:  Assets minus liabilities. Also known as shareholders’ equity.

Intrinsic Value:  The actual value of a company or an asset based on an underlying perception of its true value.

Margin Compression:  A decrease in a company’s operating margin (operating margin = operating income divided by sales).

Margin of Safety:  The discount of a security’s market price to what the firm believes is the intrinsic value of that security.

Yield:  Annual income from an investment (dividend, interest, etc.) divided by the current market price of the investment.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

Must be preceded or accompanied by a prospectus.

The S&P Developed Ex-U.S. SmallCap Index with gross dividends measures the equity performance of small capitalization companies from developed markets around the world, excluding the United States.

The Brandes International Small Cap Equity Fund is distributed by ALPS Distributors, Inc.

 

36


Brandes International Small Cap Equity Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes International Small Cap Fund – Class I from September 30, 2006 to September 30, 2016 with the value of such an investment in the S&P Developed Small Cap – Excluding U.S. Index for the same period.

Value of $100,000 Investment vs S&P Developed

Small Cap – Ex. U.S. Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2016**
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes International Small Cap Fund

     

Class A

   10.60  11.76  6.59  9.92

Class A (with maximum sales charge)

   4.24  10.44  5.96  9.60

Class C*

   9.78  10.92  5.80  9.10

Class I

   10.85  12.00  6.84  10.19

Class R6*

   10.93  12.06  6.90  10.24

S&P Developed Small Cap Ex. U.S. Index

   12.71  10.63  4.60  6.89

 

(1) The inception date is August 19, 1996.

 

*Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to June 27, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

 

**

Prior to February 1, 2012, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes International Small Cap Fund. The performance information shown for the Class I shares for periods before February 1, 2012 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to February 1, 2012 is based on a calculation method that is different from the standardized calculation method prescribed by

 

37


Brandes International Small Cap Equity Fund

 

 the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

The sector classifications represented in the graph above and industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

38


Brandes Core Plus Fixed Income Fund

 

Dear Fellow Investor,

The U.S. fixed-income market recorded solid gains in the 12 months ended September 30, 2016 following an eventful period characterized by continued low U.S. interest rates and the commitment from many central banks worldwide to uphold easy monetary policies.

After a relatively long stretch of benign market volatility, credit spreads moved wider in late 2015. This trend accelerated in early 2016 due to worries about plunging commodity prices and growing concerns of a U.S. recession. The early year risk-off sentiment permeated the fixed-income markets and propelled investors to seek safety in U.S. Treasury securities, sending interest rates toward multi-year lows.

In the subsequent months, however, a reversal in sentiment and rising energy prices caused a swift tightening of yield spreads. The largely unexpected vote by the United Kingdom to leave the European Union (Brexit) and its resulting uncertainty caused yield spreads to again move wider, only to tighten once more in the third quarter.

The bond market’s technical backdrop has remained strong and continues to drive credit spreads tighter than warranted by fundamentals, in our view. With historically unprecedented intervention from the Bank of Japan, the European Central Bank and the Federal Reserve, there has been a dearth of yield in the global bond market. At the end of the second quarter there were $10 trillion in global bonds trading at negative yields.1

The notable news from the most recent Fed meeting was that three Fed officials dissented from the unchanged rate policy. There has been growing consensus that the Fed will increase interest rates 0.25% at its meeting in December. At the end of the period, the market forecast favored a 60% probability of a rate hike before year end.2

The Fund

The Brandes Core Plus Fixed Income Fund (Class I Shares) gained 5.43% in the 12 months ended September 30, 2016, while its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, returned 5.19%.

The largest positive contributors were holdings in the energy sector and the metals & mining industry. The most significant individual positive contributor was our holding in Chesapeake Energy. The company continues to rationally and systematically explore all avenues to reduce its debt load to ensure long-term survival. The continued rise in energy prices, particularly natural gas, benefited Chesapeake bond prices. Additionally, energy holdings BP, Range Resources, and Occidental Petroleum, and pipeline company Kinder Morgan boosted returns.

 

 

 

 

1 Bloomberg: Black Swans and Game Theory: A Post-Brexit Guide to Bond Trading, July 5, 2016

 

2 Bloomberg: World Interest Rate Probability as of 9/30/16

 

39


Brandes Core Plus Fixed Income Fund

 

The Fund also benefited from three commodity-resource credits: Cloud Peak Energy, Royal Gold and Thompson Creek. The strongest contribution came from coal miner Cloud Peak Energy. The company performed strongly due to rising coal prices and efforts to reduce its overall debt exposure. Cloud Peak has some of the industry’s lowest-cost mines, as it operates in the lowest-cost mining regions in the United States. Additionally, the company, in our view, has the strongest balance sheet in the industry, which should enable it to survive the recent downturn in the coal market.

Our underweight position to U.S. agency mortgage-backed securities (MBS) contributed to positive relative performance in the first and second quarters but modestly detracted from performance in the third quarter. We believe a large supply/demand imbalance exists in the MBS sector, with continued heavy purchase activity from the Fed leading to credit spreads that remain close to decade tights.

The agency MBS market has faced a number of headwinds:

 

  The sharp rally in interest rates has added fears of additional supply through refinancing activity. With yields hovering near historic lows it isn’t clear that there will be sufficient demand to absorb the anticipated supply increase.

 

  Uncertainty injected into the market as a result of the Brexit vote. Uncertainty generally leads to additional volatility, and Agency MBS typically perform best in a low-volatility environment.

 

  Yield spreads on MBS remain tight relative to historical levels.

Meanwhile, the Fund’s duration positioning, which was set toward the lower end of our duration-controlled band, detracted from relative performance as interest rates not only remained low, but fell further to multi-year lows as news of the Brexit vote drove a flight to quality bid.

During the period, we established a new position in Clearwire Communications (14.75% coupon rate, maturing December 2016 and rated B2/B), reflecting a continuation of our strategy favoring shorter maturities exhibiting what we consider solid, tangible asset coverage of outstanding bonds.

Additional purchases included Sprint Communications (9.00% coupon rate, maturing November 2018 and rated B1/BB), Toll Brothers Corp (4.875% coupon rate, maturing November 2025 and rated Ba1/BB+), PulteGroup Inc. (5.50% coupon rate, maturing March 2026 and rated Ba1/BB+), Telefonica (6.221% coupon rate, maturing July 2017 and rated Baa2/BBB), Sappi Papier (7.75% coupon rate, maturing July 2017 and rated Ba2/BB-), Wells Fargo Corp (1.40% coupon rate, maturing September 2017 and rated A2/A), and Anadarko Petroleum (6.375% coupon rate, maturing September 2017 and rated Ba1/BBB). We also purchased a fixed-to-floating rate coupon security from Wells Fargo that has a March 2018 call date.

 

40


Brandes Core Plus Fixed Income Fund

 

The Fund divested its positions in Dayton Power and Light, Marks & Spencer and Valeant Pharmaceuticals.

We have owned Marks & Spencer since October 2010. With Brexit pushing the value of the pound lower versus other currencies, we became concerned that the company may be an attractive target to a foreign buyer, particularly since Marks & Spencer owns a good deal of real estate, which could possibly lead to an increase in leverage. Since credit spreads were largely unchanged in the Brexit aftermath, we took the opportunity to exit our position given our view that the risk parameters around the credit had changed.

Our Valeant bond was a strong performer, as the company’s new management team has made debt reduction a priority going forward.

Outlook

As we move into the final months of 2016, the Brandes Core Plus Fixed Income Fund remains defensively positioned, with an underweight to MBS. Within corporate bonds, we have been favoring shorter maturities and companies that we believe have solid, tangible asset bases. Our high-yield exposure is close to 15-year lows. The strategies are biased for higher interest rates with duration near the lower end of our duration-controlled band.

We believe many investors have become too complacent about risk, stretching their risk boundaries in search of higher yields. Amid this complacency, many may be underestimating the potential of higher interest rates. As mentioned earlier, the market is currently pricing in a 60% chance of a rate hike before year end, and a less than 10% chance of a 1% fed funds rate by the end of 2017.3 In comparison, the Fed’s Summary of Economic Projections’ median forecast for year-end fed funds rate is 1.1%.4 These projections point to a disconnect between the Fed and the market, which may lead to an uptick in market volatility.

Looking ahead, we believe a careful path remains the most prudent approach to protecting capital and pursuing value for the Fund. We remain convinced that the Fund is well positioned and we would welcome an uptick in market volatility. We are ready to redeploy ample capital — primarily in the form of U.S. Treasury securities — to pursue potential mispricing if company fundamentals disengage from their market prices.

As always, thank you for your business and continued trust.

Sincerely yours,

The Brandes Fixed-Income Investment Committee

Brandes Investment Trust

 

 

 

3 Bloomberg: World Interest Rate Probability as of 9/30/2016

 

4 Federal Reserve: Summary of Economic Projections, 9/21/2016

 

41


Brandes Core Plus Fixed Income Fund

 

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. As with most fixed income funds, the income on and value of your shares in the Fund will fluctuate along with interest rates. When interest rates rise, the market prices of the debt securities the Fund owns usually decline. When interest rates fall, the prices of these securities usually increase. Generally, the longer the Fund’s average portfolio maturity and the lower the average quality of its portfolio, the greater the price fluctuation. The price of any security owned by the Fund may also fall in response to events affecting the issuer of the security, such as its ability to continue to make principal and interest payments or its credit rating. Below investment grade debt securities are speculative and involve a greater risk of default and price change due to changes in the issuer’s creditworthiness than investment grade securities. The market prices of these debt securities may fluctuate more than the market prices of investment grade debt securities and may decline significantly in periods of general economic difficulty. Investments in bank debt involve credit risk, interest rate risk, liquidity risk and other risks, including the risk that any loan collateral may become impaired or that the Fund may obtain less than the full value for the loan interests when sold.

Investing in foreign securities poses additional risks. The performance of foreign securities can be adversely affected by the different political, regulatory and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies may experience substantial fluctuations or steady devaluation relative to the U.S. dollar. Mortgage-related securities are subject to certain additional risks. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in interest rates. As a result, when holding mortgage-related securities in a period of rising interest rates, the Fund may exhibit additional volatility. In addition, mortgage-related securities are subject to prepayment risk. When interest rates decline, borrowers may pay off their mortgages sooner than expected. This can reduce the returns of the Fund because it will have to reinvest that money at the lower prevailing interest rates.

 

42


Brandes Core Plus Fixed Income Fund

 

Asset Coverage:  A company’s ability to cover debt obligations with its assets after all liabilities have been satisfied. Source: Investopedia.com

Credit Spread:  The difference between the yield from a Treasury security and the yield from a debt security of the same maturity.

Duration:  The weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.

Risk Off:  An investment environment in which price behavior responds to, and is driven by, changes in investor risk tolerance. During periods when risk is perceived as low, risk-on risk-off theory states that investors tend to engage in higher-risk investments. Source: Investopedia.com

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Bond ratings are grades given to bonds that indicate their credit quality as determined by a private independent rating service such as Standard & Poor’s or Moody’s. The service evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. In limited situations when the rating agency has not issued a formal rating, the Advisor will classify the security as nonrated.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not a recommendation to buy or sell any security.

Must be preceded or accompanied by a prospectus.

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This index is a total return index which reflects the price changes and interest of each bond in the index.

The Brandes Core Plus Fixed Income Fund is distributed by ALPS Distributors, Inc.

 

43


Brandes Core Plus Fixed Income Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Core Plus Fixed Income Fund – Class I from its inception (December 28, 2007) to September 30, 2016 with the value of such an investment in the Barclays Capital U.S. Aggregate Index for the same period.

Value of $100,000 Investment vs Barclays Capital U.S. Aggregate Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2016
 
   One
Year
  Three
Years
  Five
Years
  Since
Inception(1)
 

Brandes Core Plus Fixed Income Fund

     

Class A*

   5.32  3.53  4.10  4.11

Class A* (with maximum sales charge)

   1.33  2.21  3.31  3.66

Class E*

   5.30  3.67  4.27  4.22

Class I

   5.43  3.84  4.45  4.41

Barclays Capital U.S. Aggregate Index

   5.19  4.03  3.08  4.57

 

(1) The inception date is December 28, 2007.

 

*Performance shown prior to January 31, 2013 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to May 28, 2008 for Class E shares reflects the performance of Class I shares adjusted to reflect Class E expenses.

 

44


Brandes Core Plus Fixed Income Fund

 

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Asset Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

 

45


Brandes Credit Focus Yield Fund

 

Dear Fellow Investor,

The U.S. fixed-income market recorded solid gains in the 12 months ended September 30, 2016 following an eventful period characterized by continued low U.S. interest rates and the commitment from many central banks worldwide to uphold easy monetary policies.

After a relatively long stretch of benign market volatility, credit spreads moved wider in late 2015. This trend accelerated in early 2016 due to worries about plunging commodity prices and growing concerns of a U.S. recession. The early year risk-off sentiment permeated the fixed-income markets and propelled investors to seek safety in U.S. Treasury securities, sending interest rates toward multi-year lows.

In the subsequent months, however, a reversal in sentiment and rising energy prices caused a swift tightening of yield spreads. The largely unexpected vote by the United Kingdom to leave the European Union (Brexit) and its resulting uncertainty caused yield spreads to again move wider, only to tighten once more in the third quarter.

The bond market’s technical backdrop has remained strong and continues to drive credit spreads tighter than warranted by fundamentals, in our view. With historically unprecedented intervention from the Bank of Japan, the European Central Bank and the Federal Reserve, there has been a dearth of yield in the global bond market. At the end of the second quarter there were $10 trillion in global bonds trading at negative yields.1

The notable news from the most recent Fed meeting was that three Fed officials dissented from the unchanged rate policy. There has been growing consensus that the Fed will increase interest rates 0.25% at its meeting in December. At the end of the period, the market forecast favored a 60% probability of a rate hike before year end.2

The Fund

The Brandes Credit Focus Yield Fund (Class I Shares) gained 6.49% during the 12 months ended September 30, 2016, while its benchmark, the Bloomberg Barclays U.S. Intermediate Credit Bond Index, returned 5.21%.

The largest positive contributors were holdings in the energy sector and the metals & mining industry. The most significant individual positive contributor was our holding in Chesapeake Energy. The company continues to rationally and systematically explore all avenues to reduce its debt load to ensure long-term survival. The continued rise in energy prices, particularly natural gas, benefited

 

 

 

1 Bloomberg: Black Swans and Game Theory: A Post-Brexit Guide to Bond Trading, July 5, 2016

 

2 Bloomberg: World Interest Rate Probability as of 9/30/16

 

46


Brandes Credit Focus Yield Fund

 

Chesapeake bond prices. Additionally, energy holdings BP, Range Resources, and Occidental Petroleum, and pipeline company Kinder Morgan boosted returns.

The Fund also benefited from three commodity-resource credits: Cloud Peak Energy, Royal Gold and Thompson Creek. The strongest contribution came from coal miner Cloud Peak Energy. The company performed strongly due to rising coal prices and efforts to reduce its overall debt exposure. Cloud Peak has some of the industry’s lowest-cost mines, as it operates in the lowest-cost mining regions in the United States. Additionally, the company, in our view, has the strongest balance sheet in the industry, which should enable it to survive the recent downturn in the coal market.

Meanwhile, the Fund’s duration positioning, which was set toward the lower end of our duration-controlled band, detracted from relative performance as interest rates not only remained low, but fell further to multi-year lows as news of the Brexit vote drove a flight to quality bid.

During the period, we established a new position in Clearwire Communications (14.75% coupon rate, maturing December 2016 and rated B2/B), reflecting a continuation of our strategy favoring shorter maturities exhibiting what we consider solid, tangible asset coverage of outstanding bonds.

Additional purchases included Sprint Communications (9.00% coupon rate, maturing November 2018 and rated B1/BB), Toll Brothers Corp (4.875% coupon rate, maturing November 2025 and rated Ba1/BB+), PulteGroup Inc. (5.50% coupon rate, maturing March 2026 and rated Ba1/BB+), Telefonica (6.221% coupon rate, maturing July 2017 and rated Baa2/BBB), Sappi Papier (7.75% coupon rate, maturing July 2017 and rated Ba2/BB-), Wells Fargo Corp (1.40% coupon rate, maturing September 2017 and rated A2/A), and Anadarko Petroleum (6.375% coupon rate, maturing September 2017 and rated Ba1/BBB). We also purchased a fixed-to-floating rate coupon security from Wells Fargo that has a March 2018 call date.

The Fund divested its holdings in Dayton Power and Light and Valeant Pharmaceuticals as they reached our estimates of fair value.

Outlook

As we move into the final months of 2016, the Brandes Credit Focus Yield Fund remains defensively positioned. Within corporate bonds, we have been favoring shorter maturities and companies that we believe have solid, tangible asset bases. Our high-yield exposure is close to 15-year lows. The Fund is biased for higher interest rates with duration near the lower end of our duration-controlled band.

We believe many investors have become too complacent about risk, stretching their risk boundaries in search of higher yields. Amid this complacency, many may be underestimating the potential of higher interest rates. As mentioned earlier, the market is currently pricing in a 60% chance of a rate hike before year end, and a

 

47


Brandes Credit Focus Yield Fund

 

less than 10% chance of a 1% fed funds rate by the end of 2017.3 In comparison, the Fed’s Summary of Economic Projections median forecast for year-end fed funds rate is 1.1%.4 These projections point to a disconnect between the Fed and the market, which may lead to an uptick in market volatility.

Looking ahead, we believe a careful path remains the most prudent approach to protecting capital and pursuing value for the Fund. We remain convinced that the Fund is well positioned and we would welcome an uptick in market volatility. We are ready to redeploy ample capital — primarily in the form of U.S. Treasury securities — to pursue potential mispricing if company fundamentals disengage from their market prices.

As always, thank you for your business and continued trust.

Sincerely yours,

The Brandes Fixed-Income Investment Committee

Brandes Investment Trust

Past performance is not a guarantee of future results. One cannot invest directly in an index.

Because the values of the Fund’s investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. As with most fixed income funds, the income on and value of your shares in the Fund will fluctuate along with interest rates. When interest rates rise, the market prices of the debt securities the Fund owns usually decline. When interest rates fall, the prices of these securities usually increase. Generally, the longer the Fund’s average portfolio maturity and the lower the average quality of its portfolio, the greater the price fluctuation. The price of any security owned by the Fund may also fall in response to events affecting the issuer of the security, such as its ability to continue to make principal and interest payments or its credit rating. Below investment grade debt securities are speculative and involve a greater risk of default and price change due to changes in the issuer’s creditworthiness than investment grade securities. The market prices of these debt securities may fluctuate more than the market prices of investment grade debt securities and may decline significantly in periods of general economic difficulty. Investments in bank debt involve credit risk, interest rate risk, liquidity risk and other risks, including the risk that any loan collateral may become impaired or that the Fund may obtain less than the full value for the loan interests when sold.

 

 

 

3 Bloomberg: World Interest Rate Probability as of 9/30/2016

 

4 Federal Reserve: Summary of Economic Projections, 9/21/2016

 

48


Brandes Credit Focus Yield Fund

 

Investing in foreign securities poses additional risks. The performance of foreign securities can be adversely affected by the different political, regulatory and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies may experience substantial fluctuations or steady devaluation relative to the U.S. dollar. Mortgage-related securities are subject to certain additional risks. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in interest rates. As a result, when holding mortgage-related securities in a period of rising interest rates, the Fund may exhibit additional volatility. In addition, mortgage-related securities are subject to prepayment risk. When interest rates decline, borrowers may pay off their mortgages sooner than expected. This can reduce the returns of the Fund because it will have to reinvest that money at the lower prevailing interest rates.

Asset Coverage:  A company’s ability to cover debt obligations with its assets after all liabilities have been satisfied. Source: Investopedia.com

Credit Spread:  The difference between the yield from a Treasury security and the yield from a debt security of the same maturity.

Duration:  The weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.

Risk Off:  An investment environment in which price behavior responds to, and is driven by, changes in investor risk tolerance. During periods when risk is perceived as low, risk-on risk-off theory states that investors tend to engage in higher-risk investments. Source: Investopedia.com

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Bond ratings are grades given to bonds that indicate their credit quality as determined by a private independent rating service such as Standard & Poor’s or Moody’s. The service evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. In limited situations when the rating agency has not issued a formal rating, the Advisor will classify the security as nonrated.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not a recommendation to buy or sell any security.

 

49


Brandes Credit Focus Yield Fund

 

Must be preceded or accompanied by a prospectus.

The Bloomberg Barclays U.S. Intermediate Credit Bond Index measures performance of U.S. dollar-denominated U.S. Treasuries, government-related and investment-grade U.S. corporate securities that have remaining maturities of greater than one year and less than ten years. This index is a total return index which reflects the price changes and interest of each bond in the index.

The Brandes Credit Focus Yield Fund is distributed by ALPS Distributors, Inc.

 

50


Brandes Credit Focus Yield Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Credit Focus Yield Fund – Class I from September 30, 2006 to September 30, 2016 with the value of such an investment in the Barclays Capital U.S. Intermediate Credit Index for the same period.

Value of $100,000 Investment vs Barclays Capital U.S. Intermediate Credit Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2016**
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes Credit Focus Yield Fund

     

Class A*

   6.33  4.08  4.02  5.59

Class A* (with maximum sales charge)

   2.34  3.28  3.62  5.34

Class I

   6.49  4.37  4.30  5.86

Barclays Capital U.S. Intermediate Credit Index

   5.21  3.92  5.08  5.71

 

(1) The inception date is June 29, 2000.

 

*Performance shown prior to March 1, 2012 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses.

 

**Prior to February 1, 2012, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes Credit Focus Yield Fund. The performance information shown for the Class I shares for periods before February 1, 2012 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to February 1, 2012 is based on a calculation method that is different from the standardized calculation method prescribed by the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

 

51


Brandes Credit Focus Yield Fund

 

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Asset Allocation as a Percentage of Total Investments as of

September 30, 2016 (Unaudited)

 

LOGO

 

52


Brandes Investment Trust

 

Expense Example (Unaudited)

As a shareholder of a Fund, you incur ongoing costs, including investment advisory and administrative fees and other fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2016 to September 30, 2016 (the “Period”).

Actual Expenses

This section provides information about actual account values and actual expenses. The “Ending Account Value” shown is derived from each Fund’s actual return. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for the Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

 

  Class A 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,045.50    1.18%   $6.03  

Global Equity Fund

 $1,000.00   $1,052.40    1.25%   $6.41  

Global Equity Income Fund

 $1,000.00   $1,077.00    1.25%   $6.49  

Global Opportunities Value Fund

 $1,000.00   $1,061.20    1.40%   $7.21  

Emerging Markets Value Fund

 $1,000.00   $1,108.20    1.37%   $7.22  

International Small Cap Fund

 $1,000.00   $1,026.10    1.32%   $6.69  

Core Plus Fixed Income Fund

 $1,000.00   $1,041.40    0.70%   $3.57  

Credit Focus Yield Fund

 $1,000.00   $1,060.40    0.85%   $4.38  

 

  Class C 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,041.90    1.93%   $9.85  

Global Equity Fund

 $1,000.00   $1,048.20    2.00%   $10.24  

Global Equity Income Fund

 $1,000.00   $1,070.30    2.00%   $10.35  

Global Opportunities Value Fund

 $1,000.00   $1,057.20    2.15%   $11.06  

Emerging Markets Value Fund

 $1,000.00   $1,104.20    2.12%   $11.15  

International Small Cap Fund

 $1,000.00   $1,021.60    2.06%   $10.41  

 

53


Brandes Investment Trust

 

 

  Class E 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,045.50    1.18%   $6.03  

Global Equity Fund

 $1,000.00   $1,052.00    1.25%   $6.41  

Core Plus Fixed Income Fund

 $1,000.00   $1,041.10    0.70%   $3.57  

 

  Class I 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,046.50    1.00%   $5.12  

Global Equity Fund

 $1,000.00   $1,053.10    1.00%   $5.13  

Global Equity Income Fund

 $1,000.00   $1,074.40    1.00%   $5.19  

Global Opportunities Value Fund

 $1,000.00   $1,062.40    1.15%   $5.93  

Emerging Markets Value Fund

 $1,000.00   $1,108.80    1.12%   $5.90  

International Small Cap Fund

 $1,000.00   $1,027.30    1.11%   $5.63  

Core Plus Fixed Income Fund

 $1,000.00   $1,042.30    0.50%   $2.55  

Credit Focus Yield Fund

 $1,000.00   $1,061.80    0.60%   $3.09  

 

  Class R6 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,048.00    0.82%   $4.20  

Emerging Markets Value Fund

 $1,000.00   $1,055.90    0.97%   $2.21  

International Small Cap Fund

 $1,000.00   $1,094.90    1.00%   $2.72  

Hypothetical Example for Comparison Purposes

This section provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Fund’s actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the last column of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

54


Brandes Investment Trust

 

 

  Class A 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,019.10    1.18%   $5.96  

Global Equity Fund

 $1,000.00   $1,018.75    1.25%   $6.31  

Global Equity Income Fund

 $1,000.00   $1,018.75    1.25%   $6.31  

Global Opportunities Value Fund

 $1,000.00   $1,018.00    1.40%   $7.06  

Emerging Markets Value Fund

 $1,000.00   $1,018.15    1.37%   $6.91  

International Small Cap Fund

 $1,000.00   $1,018.40    1.32%   $6.66  

Core Plus Fixed Income Fund

 $1,000.00   $1,021.50    0.70%   $3.54  

Credit Focus Yield Fund

 $1,000.00   $1,020.75    0.85%   $4.29  

 

  Class C 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,015.35    1.93%   $9.72  

Global Equity Fund

 $1,000.00   $1,015.00    2.00%   $10.08  

Global Equity Income Fund

 $1,000.00   $1,015.00    2.00%   $10.08  

Global Opportunities Value Fund

 $1,000.00   $1,014.25    2.15%   $10.83  

Emerging Markets Value Fund

 $1,000.00   $1,014.40    2.12%   $10.68  

International Small Cap Fund

 $1,000.00   $1,014.70    2.06%   $10.38  

 

  Class E 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,019.10    1.18%   $5.96  

Global Equity Fund

 $1,000.00   $1,018.75    1.25%   $6.31  

Core Plus Fixed Income Fund

 $1,000.00   $1,021.50    0.70%   $3.54  

 

  Class I 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,020.00    1.00%   $5.05  

Global Equity Fund

 $1,000.00   $1,020.00    1.00%   $5.05  

Global Equity Income Fund

 $1,000.00   $1,020.00    1.00%   $5.05  

Global Opportunities Value Fund

 $1,000.00   $1,019.25    1.15%   $5.81  

Emerging Markets Value Fund

 $1,000.00   $1,019.40    1.12%   $5.65  

International Small Cap Fund

 $1,000.00   $1,019.45    1.11%   $5.60  

Core Plus Fixed Income Fund

 $1,000.00   $1,022.50    0.50%   $2.53  

Credit Focus Yield Fund

 $1,000.00   $1,022.00    0.60%   $3.03  

 

55


Brandes Investment Trust

 

 

  Class R6 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annualized
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00   $1,020.90    0.82%   $4.14  

Emerging Markets Value Fund

 $1,000.00   $1,020.15    0.97%   $4.90  

International Small Cap Fund

 $1,000.00   $1,020.00    1.00%   $5.05  

 

*Expenses are equal to the Fund’s expense ratio for the period, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). The R6 share class of the Emerging Markets Value Fund commenced operations on July 11, 2016. Actual expenses for this share class are equal to the Fund’s expense ratio for the period multiplied by the average account value over the period, multiplied by 81/366. The R6 share class of the International Small Cap Fund commenced operations on June 27, 2016. Actual expenses for the share class are equal to the Fund’s expense ratio for the period multiplied by the average account value over the period, multiplied by 95/366.

 

56


Brandes International Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 88.69% 
 Austria – 1.55% 
 369,500   Erste Group Bank AG $10,941,579  
  

 

 

 
 Brazil – 3.92% 
 589,430   Embraer SA Sponsored – ADR  10,173,562  
 2,580,800   Petroleo Brasileiro SA(a)  10,871,873  
 379,600   TIM Participacoes SA  927,946  
 460,334   TIM Participacoes SA Sponsored – ADR  5,634,488  
  

 

 

 
   27,607,869  
  

 

 

 
 China – 1.22% 
 701,500   China Mobile Ltd.  8,617,485  
  

 

 

 
 Finland – 1.23% 
 1,489,213   Nokia OYJ  8,632,054  
  

 

 

 
 France – 14.58% 
 525,784   Carrefour SA  13,632,783  
 247,489   Compagnie De Saint-Gobain SA  10,708,908  
 1,213,357   Engie SA  18,812,848  
 920,440   Orange SA  14,421,115  
 113,339   Publicis Groupe SA  8,576,154  
 78,181   Renault SA  6,431,922  
 226,366   Sanofi  17,238,072  
 184,424   Schneider Electric SE  12,829,312  
  

 

 

 
   102,651,114  
  

 

 

 
 Hong Kong – 1.22% 
 12,046,000   First Pacific Co. Ltd.  8,604,320  
  

 

 

 
 Ireland – 2.15% 
 205,402   CRH Plc  6,799,615  
 62,517   Willis Towers Watson Plc  8,300,382  
  

 

 

 
   15,099,997  
  

 

 

 
 Italy – 4.61% 
 1,369,190   Eni SpA  19,730,533  
 15,940,524   Telecom Italia Rsp  10,821,180  
 2,281,374   Telecom Italia SpA(a)  1,895,607  
  

 

 

 
   32,447,320  
  

 

 

 
 Japan – 17.28% 
 322,600   Canon, Inc.  9,365,845  
Shares     Value 
 679,400   Dai Nippon Printing Co. Ltd. $6,664,670  
 506,402   Daiichi Sankyo Co. Ltd.  12,168,039  
 521,400   Honda Motor Co. Ltd.  15,047,761  
 485,900   Mitsubishi Tanabe Pharma Corp.  10,407,215  
 2,139,300   Mitsubishi UFJ Financial Group, Inc.  10,837,879  
 376,699   MS&AD Insurance Group Holdings, Inc.  10,499,058  
 1,519,300   Nissan Motor Co. Ltd.  14,902,624  
 330,600   Sumitomo Mitsui Trust Holdings, Inc.  10,801,234  
 46,500   Taisho Pharmaceutical Holdings Co. Ltd.  4,765,883  
 337,600   Takeda Pharmaceutical Co. Ltd.  16,181,047  
  

 

 

 
   121,641,255  
  

 

 

 
 Mexico – 1.86% 
 1,646,057   Cemex SAB de CV Sponsored – ADR(a)  13,069,693  
  

 

 

 
 Netherlands – 1.55% 
 2,865,407   AEGON NV  10,929,932  
  

 

 

 
 Russia – 3.34% 
 232,913   Oil Company LUKOIL PJSC  11,373,579  
 141,477   Oil Company LUKOIL PJSC Sponsored – ADR  6,894,174  
 2,433,900   Public Join-Stock Co. Gazprom  5,228,650  
  

 

 

 
   23,496,403  
  

 

 

 
 South Korea – 5.65% 
 407,418   Hana Financial Group, Inc.  10,372,397  
 61,329   Hyundai Mobis Co. Ltd.  15,390,896  
 22,915   Hyundai Motor Co.  2,831,873  
 53,971   POSCO  11,186,510  
  

 

 

 
   39,781,676  
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

57


Brandes International Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 Spain – 1.68% 
 870,239   Repsol SA $11,821,595  
  

 

 

 
 Sweden – 1.53% 
 1,495,061   LM Ericsson Telefon AB – Class B  10,794,765  
  

 

 

 
 Switzerland – 5.50% 
 887,766   Credit Suisse Group AG  11,667,584  
 26,823   Swatch Group Ltd. Bearer  7,603,979  
 62,955   Swatch Group Ltd. Registered  3,505,288  
 43,542   Swiss Resources AG  3,932,645  
 879,005   UBS Group AG  12,007,612  
  

 

 

 
   38,717,108  
  

 

 

 
 United Kingdom – 19.82% 
 4,886,503   Barclays Plc  10,593,987  
 3,177,802   BP Plc  18,522,473  
 3,425,049   G4S Plc  10,099,473  
 958,995   GlaxoSmithKline Plc  20,425,084  
 1,536,391   HSBC Holdings Plc  11,548,631  
 3,338,882   J Sainsbury Plc  10,634,490  
 1,973,757   Kingfisher Plc  9,630,032  
Shares     Value 
 2,834,397   Marks & Spencer Group Plc $12,159,843  
 6,657,420   Tesco Plc(a)  15,767,701  
 7,117,891   Wm Morrison Supermarkets Plc  20,098,318  
  

 

 

 
   139,480,032  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $698,902,434)

 $624,334,197  
  

 

 

 
 PREFERRED STOCKS – 3.27%  
 Brazil – 2.03% 
 270,263   Petroleo Brasileiro Sponsored – ADR(a) $2,245,885  
 626,500   Telefonica Brasil SA  9,121,589  
 200,724   Telefonica Brasil SA Sponsored – ADR  2,904,476  
  

 

 

 
   14,271,950  
  

 

 

 
 Russia – 1.24% 
 18,953,240   Surgutneftegas OJSC  8,751,469  
  

 

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $23,175,053)

 $23,023,419  
  

 

 

 
 
   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 5.98%   

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $38,930,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $42,920,325)] (proceeds $42,076,415)

 $42,076,380   $42,076,380  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $42,076,380)

  $42,076,380  
  

 

 

 

Total Investments (Cost $764,153,867) – 97.94%

  $689,433,996  

Other Assets in Excess of Liabilities – 2.06%

   14,478,993  
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $703,912,989  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

ADR American Depositary Receipt

(a)Non-income producing security.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

58


Brandes International Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   1.45

Auto Components

   2.19

Automobiles

   5.57

Banks

   9.25

Building Products

   1.52

Capital Markets

   3.36

Commercial Services & Supplies

   2.38

Communications Equipment

   2.76

Construction Materials

   2.82

Diversified Financial Services

   1.22

Diversified Telecommunication Services

   3.86

Electrical Equipment

   1.82

Food & Staples Retailing

   8.54

Insurance

   4.78

Media

   1.22

Metals & Mining

   1.59

Multiline Retail

   1.73

Multi-Utilities

   2.67

Oil, Gas & Consumable Fuels

   12.00

Pharmaceuticals

   11.53

Specialty Retail

   1.37

Technology Hardware, Storage & Peripherals

   1.33

Textiles, Apparel & Luxury Goods

   1.58

Wireless Telecommunication Services

   2.15
  

 

 

 

TOTAL COMMON STOCKS

   88.69
  

 

 

 

PREFERRED STOCKS

  

Diversified Telecommunication Services

   1.71

Oil, Gas & Consumable Fuels

   1.56
  

 

 

 

TOTAL PREFERRED STOCKS

   3.27
  

 

 

 

REPURCHASE AGREEMENTS

   5.98
  

 

 

 

TOTAL INVESTMENTS

   97.94

Other Assets in Excess of Liabilities

   2.06
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

59


Brandes Global Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 92.95% 
 Aerospace & Defense – 1.91% 
 238,420   Embraer SA $1,032,226  
  

 

 

 
 Auto Components – 1.98% 
 4,253   Hyundai Mobis
Co. Ltd.
  1,067,317  
  

 

 

 
 Automobiles – 5.89% 
 30,700   Honda Motor Co. Ltd.  886,011  
 9,981   Hyundai Motor Co.  1,233,468  
 107,600   Nissan Motor Co. Ltd.  1,055,435  
  

 

 

 
   3,174,914  
  

 

 

 
 Banks – 11.52% 
 58,097   Bank of America Corp.  909,218  
 251,809   Barclays Plc  545,924  
 30,872   Citigroup, Inc.  1,458,085  
 23,760   Erste Group Bank AG  703,578  
 87,902   HSBC Holdings Plc  660,735  
 9,560   PNC Financial Services Group, Inc.  861,260  
 24,275   Wells Fargo & Co.  1,074,897  
  

 

 

 
   6,213,697  
  

 

 

 
 Beverages – 0.94% 
 4,668   PepsiCo, Inc.  507,738  
  

 

 

 
 Capital Markets – 8.17% 
 26,440   Bank of New York Mellon Corp.  1,054,427  
 70,806   Credit Suisse Group AG  930,577  
 19,363   State Street Corp.  1,348,246  
 78,609   UBS Group AG  1,073,835  
  

 

 

 
   4,407,085  
  

 

 

 
 Communications Equipment – 3.05%  
 148,782   LM Ericsson Telefon
AB – Class B
  1,074,248  
 98,772   Nokia OYJ  572,521  
  

 

 

 
   1,646,769  
  

 

 

 
 Diversified Financial Services – 1.09%  
 30,849   Leucadia National Corp.  587,365  
  

 

 

 
 
 
Diversified Telecommunication
Services – 1.06%
 
  
 843,190   Telecom Italia Rsp  572,397  
  

 

 

 
 Electric Utilities – 0.93% 
 15,092   Exelon Corp.  502,413  
  

 

 

 
Shares     Value 
 Electrical Equipment – 4.12% 
 15,937   Emerson Electric Co. $868,726  
 19,489   Schneider Electric SE  1,355,737  
  

 

 

 
   2,224,463  
  

 

 

 
 
 
Electronic Equipment, Instruments &
Components – 2.07%
  
  
 47,263   Corning, Inc.  1,117,770  
  

 

 

 
 Food & Staples Retailing – 5.89%  
 21,139   Carrefour SA  548,102  
 263,953   J Sainsbury Plc  840,702  
 358,829   Tesco Plc(a)  849,865  
 332,380   Wm Morrison Supermarkets Plc  938,520  
  

 

 

 
   3,177,189  
  

 

 

 
 Health Care Providers & Services – 1.99%  
 15,206   Express Scripts
Holding Co.(a)
  1,072,479  
  

 

 

 
 Hotels, Restaurants & Leisure – 1.63%  
 798,600   Genting Malaysia Bhd.  879,167  
  

 

 

 
 Insurance – 2.67% 
 15,211   American International Group, Inc.  902,621  
 5,976   Swiss Resources AG  539,743  
  

 

 

 
   1,442,364  
  

 

 

 
 Multiline Retail – 1.49% 
 187,385   Marks & Spencer
Group Plc
  803,900  
  

 

 

 
 Multi-Utilities – 1.79% 
 30,884   Engie SA  478,850  
 20,100   Engie SA Registered Shares (Prime De Fidelite 2017)(a)(b)  311,371  
 11,100   Engie SA Registered Shares (Prime De Fidelite 2018)(a)(b)  171,951  
  

 

 

 
   962,172  
  

 

 

 
 Oil, Gas & Consumable Fuels – 10.91%  
 11,099   Apache Corp.  708,893  
 261,134   BP Plc  1,522,073  
 57,508   Eni SpA  828,712  
 20,962   Oil Company LUKOIL PJSC Sponsored – ADR  1,021,478  
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

60


Brandes Global Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 169,770   Public Joint-Stock Co. Gazprom $364,710  
 44,860   Repsol SA  609,392  
 17,427   Total SA  828,843  
  

 

 

 
   5,884,101  
  

 

 

 
 Pharmaceuticals – 12.26% 
 32,400   Daiichi Sankyo Co. Ltd.  778,521  
 85,105   GlaxoSmithKline Plc  1,812,602  
 21,071   Merck & Co., Inc.  1,315,041  
 33,554   Pfizer, Inc.  1,136,474  
 20,578   Sanofi  1,567,042  
  

 

 

 
   6,609,680  
  

 

 

 
 
 
Semiconductors & Semiconductor
Equipment – 1.02%
 
  
 10,134   Xilinx, Inc.  550,682  
  

 

 

 
 Software – 2.52% 
 23,575   Microsoft Corp.  1,357,920  
  

 

 

 
Shares     Value 
 
 
Technology Hardware, Storage
& Peripherals – 4.19%
 
 983   Samsung Electronics
Co. Ltd.
 $1,431,998  
 14,130   Western Digital Corp.  826,181  
  

 

 

 
   2,258,179  
  

 

 

 
 Wireless Telecommunication Services – 3.86%  
 41,946   

America Movil SAB de CV Sponsored –

Class L – ADR

  479,863  
 73,500   China Mobile Ltd.  902,901  
 57,130   TIM Participacoes SA Sponsored – ADR  699,271  
  

 

 

 
   2,082,035  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $49,616,393)

 $50,134,022  
  

 

 

 
 
   Principal
Amount
  Value 
CORPORATE BONDS – 1.18%  
Oil, Gas & Consumable Fuels – 1.18%  

Chesapeake Energy Corp. 8.000%, 12/15/2022
(Acquired 02/24/16, Cost $250,756)(c)

 $626,000   $634,607  
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $250,756)

  $634,607  
  

 

 

 
REPURCHASE AGREEMENTS – 6.11%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $3,050,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $3,362,625)] (proceeds $3,293,413)

 $3,293,411   $3,293,411  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $3,293,411)

  $3,293,411  
  

 

 

 

Total Investments (Cost $53,160,560) – 100.24%

  $54,062,040  

Liabilities in Excess of Other Assets – (0.24)%

   (127,664
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $53,934,376  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

ADR American Depositary Receipt

(a)Non-income producing security.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

61


Brandes Global Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

(b)The prices for these securities were derived from an estimate of fair market value using methods approved by the Fund's Board of Trustees. These securities represent $483,322 or 0.90% of the Fund's net assets and are classified as Level 2 securities. See Note 2 in the Notes to Financial Statements.
(c)Security was purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the "Act") or was acquired in a private placement, and, unless registered under the Act, may only be sold to "qualified institutional buyers" (as defined in the Act) or pursuant to another exemption from registration. The market value of this security totals $634,607 which represents 1.18% of the Fund's net assets.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

62


Brandes Global Equity Fund

SCHEDULE OF INVESTMENTS BY COUNTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Austria

   1.30

Brazil

   3.21

China

   1.67

Finland

   1.06

France

   9.76

Italy

   2.60

Japan

   5.04

Malaysia

   1.63

Mexico

   0.89

Russia

   2.57

South Korea

   6.92

Spain

   1.13

Sweden

   1.99

Switzerland

   4.72

United Kingdom

   14.79

United States

   33.67
  

 

 

 

TOTAL COMMON STOCKS

   92.95
  

 

 

 

CORPORATE BONDS

  

United States

   1.18
  

 

 

 

TOTAL CORPORATE BONDS

   1.18
  

 

 

 

REPURCHASE AGREEMENTS

   6.11
  

 

 

 

TOTAL INVESTMENTS

   100.24

Liabilities in Excess of Other Assets

   (0.24)% 
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

63


Brandes Global Equity Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 88.55%  
 Automobiles – 2.34%  
 700   Honda Motor Co. Ltd. $20,202  
  

 

 

 
 Banks – 6.77%  
 377   BB&T Corp.  14,220  
 2,038   HSBC Holdings Plc  15,319  
 176   PNC Financial Services Group, Inc.  15,856  
 295   Wells Fargo & Co.  13,063  
  

 

 

 
   58,458  
  

 

 

 
 Beverages – 2.64%  
 567   Diageo Plc  16,241  
 60   PepsiCo, Inc.  6,526  
  

 

 

 
   22,767  
  

 

 

 
 Capital Markets – 3.98%  
 280   Bank of New York Mellon Corp.  11,166  
 1,695   UBS Group AG  23,155  
  

 

 

 
   34,321  
  

 

 

 
 Communications Equipment – 3.35%  
 2,502   LM Ericsson Telefon AB – Class B  18,065  
 1,875   Nokia OYJ  10,868  
  

 

 

 
   28,933  
  

 

 

 
 
 
Diversified Telecommunication
Services – 2.60%
  
  
 1,890   Telefonica Brasil SA  22,433  
  

 

 

 
 Electric Utilities – 5.15%  
 3,600   Companhia Paranaense de Energia  23,323  
 87,742   Enersis Chile SA  8,099  
 392   Exelon Corp.  13,050  
  

 

 

 
   44,472  
  

 

 

 
 Electrical Equipment – 6.00%  
 435   Emerson Electric Co.  23,712  
 403   Schneider Electric SE  28,034  
  

 

 

 
   51,746  
  

 

 

 
 Food & Staples Retailing – 6.61% 
 3,955   J Sainsbury Plc  12,597  
 6,533   Tesco Plc (a)  15,473  
 190   Wal-Mart Stores, Inc.  13,703  
Shares     Value 
 5,400   Wm Morrison Supermarkets Plc $15,247  
  

 

 

 
   57,020  
  

 

 

 
 Household Products – 1.20%  
 115   Procter & Gamble Co.  10,321  
  

 

 

 
 Insurance – 1.67%  
 160   Swiss Resources AG  14,451  
  

 

 

 
 Multiline Retail – 1.60%  
 3,220   Marks & Spencer Group Plc  13,814  
  

 

 

 
 Multi-Utilities – 2.42%  
 950   Engie SA  14,730  
 400   Engie SA Registered Shares (Prime De Fidelite 2018)(a)(b)  6,196  
  

 

 

 
   20,926  
  

 

 

 
 Oil, Gas & Consumable Fuels – 12.02%  
 4,215   BP Plc  24,568  
 178   Chevron Corp.  18,320  
 1,585   Eni SpA  22,840  
 749   Royal Dutch Shell Plc – Class A  18,633  
 408   Total SA  19,405  
  

 

 

 
   103,766  
  

 

 

 
 Pharmaceuticals – 15.76%  
 600   Daiichi Sankyo Co. Ltd.  14,417  
 1,437   GlaxoSmithKline Plc  30,606  
 180   Johnson & Johnson  21,263  
 345   Merck & Co., Inc.  21,532  
 645   Pfizer, Inc.  21,846  
 346   Sanofi  26,348  
  

 

 

 
   136,012  
  

 

 

 
 
 
Semiconductors & Semiconductor
Equipment – 1.57%
  
  
 249   Xilinx, Inc.  13,531  
  

 

 

 
 Software – 2.46%  
 368   Microsoft Corp.  21,197  
  

 

 

 
 Specialty Retail – 1.65%  
 2,922   Kingfisher Plc  14,257  
  

 

 

 
 
 
Technology Hardware, Storage &
Peripherals – 1.36%
  
  
 200   Western Digital Corp.  11,694  
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

64


Brandes Global Equity Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 Textiles, Apparel & Luxury Goods – 4.84%  
 810   Burberry Group Plc $14,454  
 221   Cie Financiere Richemont SA  13,478  
 81   LVMH Moet Hennessy Louis Vuitton SE  13,812  
  

 

 

 
   41,744  
  

 

 

 
 Tobacco – 2.56%  
 196   British American Tobacco Plc  12,500  
 187   Imperial Tobacco Group Plc  9,625  
  

 

 

 
   22,125  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $754,787)

 $764,190  
  

 

 

 
 PREFERRED STOCKS – 9.81%  
 Banks – 2.59%  
 924   Bank of America Corp., 4.000% $22,352  
  

 

 

 
Shares     Value 
 Capital Markets – 5.45%  
 1,031   Goldman Sachs Group, Inc., 3.750% $23,321  
 979   Morgan Stanley, 4.000%  23,741  
  

 

 

 
   47,062  
  

 

 

 
 
 
Technology Hardware, Storage &
Peripherals – 1.77%
  
  
 13   Samsung Electronics Co. Ltd.  15,272  
  

 

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $69,253)

 $84,686  
  

 

 

 

 
 

Total Investments
(Cost $824,040) – 98.36%

 $848,876  

 
 

Other Assets in Excess of
Liabilities – 1.64%

  14,142  
  

 

 

 

 

TOTAL NET ASSETS – 100.00%

 $863,018  
  

 

 

 
 

 

Percentages are stated as a percent of total net assets.

 

(a)Non-income producing security.
(b)The price for this security was derived from an estimate of fair market value using methods approved by the Fund's Board of Trustees. This security represents $6,196 or 0.72% of the Fund's net assets and is classified as a Level 2 security. See Note 2 in the Notes to Financial Statements.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

65


Brandes Global Equity Income Fund

SCHEDULE OF INVESTMENTS BY COUNTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Brazil

   5.30

Chile

   0.94

Finland

   1.26

France

   12.58

Italy

   2.65

Japan

   4.01

Sweden

   2.09

Switzerland

   5.92

United Kingdom

   24.72

United States

   29.08
  

 

 

 

TOTAL COMMON STOCKS

   88.55
  

 

 

 

PREFERRED STOCKS

  

South Korea

   1.77

United States

   8.04
  

 

 

 

TOTAL PREFERRED STOCKS

   9.81
  

 

 

 

TOTAL INVESTMENTS

   98.36

Other Assets in Excess of Liabilities

   1.64
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. The accompanying notes are an integral part of these Schedule of Investments. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

66


Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 81.02% 
 Aerospace & Defense – 2.48% 
 8,183   Embraer SA Sponsored – ADR $141,239  
  

 

 

 
 Auto Components – 2.72% 
 384   Hyundai Mobis Co. Ltd.  96,367  
 3,600   Tachi-S Co. Ltd.  58,457  
  

 

 

 
   154,824  
  

 

 

 
 Automobiles – 2.86% 
 2,900   Honda Motor Co. Ltd.  83,695  
 8,100   Nissan Motor Co. Ltd.  79,452  
  

 

 

 
   163,147  
  

 

 

 
 Banks – 8.53% 
 5,639   Bank of America Corp.  88,250  
 26,904   Barclays Plc  58,328  
 2,418   Citigroup, Inc.  114,202  
 3,665   Erste Group Bank AG  108,528  
 1,667   KB Financial Group, Inc.  57,336  
 25,636   Sberbank of Russia OJSC  59,335  
  

 

 

 
   485,979  
  

 

 

 
 Capital Markets – 4.79% 
 7,082   Credit Suisse Group AG  93,076  
 1,339   State Street Corp.  93,235  
 6,359   UBS Group AG  86,867  
  

 

 

 
   273,178  
  

 

 

 
 Commercial Services & Supplies – 1.60%  
 11,206   De La Rue Plc  86,421  
 1,912   Mitie Group Plc  4,757  
  

 

 

 
   91,178  
  

 

 

 
 Communications Equipment – 1.01%  
 7,992   LM Ericsson Telefon AB – Class B  57,705  
  

 

 

 
 Construction & Engineering – 0.78%  
 5,000   Sanki Engineering Co. Ltd.  44,658  
  

 

 

 
 Construction Materials – 1.24% 
 8,895   Cemex SAB de CV Sponsored – ADR(a)  70,626  
  

 

 

 
 Diversified Financial Services – 3.35%  
 109,340   First Pacific Co. Ltd.  78,100  
 17,180   Haci Omer Sabanci Holding AS  53,150  
Shares     Value 
 3,132   Leucadia National Corp. $59,633  
  

 

 

 
   190,883  
  

 

 

 
 
 
Diversified Telecommunication
Services – 4.51%
 
  
 72,550   APT Satellite Holdings Ltd.  50,389  
 25,652   Magyar Telekom Telecommunications Plc  42,101  
 85,312   Telecom Italia Rsp  57,914  
 9,000   Telefonica Brasil SA  106,821  
  

 

 

 
   257,225  
  

 

 

 
 Electric Utilities – 2.45% 
 10,400   Companhia Paranaense
de Energia
  67,380  
 2,909   Reliance Infrastructure Ltd. – GDR  72,255  
  

 

 

 
   139,635  
  

 

 

 
 Electrical Equipment – 2.55% 
 3,300   Futaba Corp.  53,858  
 1,316   Schneider Electric SE  91,546  
  

 

 

 
   145,404  
  

 

 

 
 Food & Staples Retailing – 6.87% 
 2,184   Carrefour SA  56,628  
 34,912   J Sainsbury Plc  111,196  
 37,648   Tesco Plc(a)  89,167  
 47,632   Wm Morrison Supermarkets Plc  134,495  
  

 

 

 
   391,486  
  

 

 

 
 Food Products – 1.76% 
 36,800   Marfrig Global Foods SA(a)  58,954  
 664   Savencia SA  41,324  
  

 

 

 
   100,278  
  

 

 

 
 
 
Health Care Equipment
& Supplies – 0.78%
 
  
 6,206   Syneron Medical Ltd.(a)  44,435  
  

 

 

 
 Household Durables – 2.41% 
 237,603   Consorcio ARA SAB
de CV
  82,960  
 2,108   MDC Holdings, Inc.  54,386  
  

 

 

 
   137,346  
  

 

 

 
 Insurance – 0.83% 
 357   Willis Towers Watson Plc  47,399  
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

67


Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 Machinery – 2.49% 
 6,072   Briggs & Stratton Corp. $113,243  
 2,641   China Yuchai International Ltd.  28,655  
  

 

 

 
   141,898  
  

 

 

 
 Metals & Mining – 1.23% 
 338   POSCO  70,057  
  

 

 

 
 Multiline Retail – 2.45% 
 67,330   Debenhams Plc  48,635  
 21,181   Marks & Spencer Group Plc  90,869  
  

 

 

 
   139,504  
  

 

 

 
 Multi-Utilities – 1.52% 
 1,198   Engie SA  18,575  
 4,400   Engie SA Registered Shares (Prime De Fidelite 2018)(a)(b)  68,160  
  

 

 

 
   86,735  
  

 

 

 
 Oil, Gas & Consumable Fuels – 7.58%  
 14,645   BP Plc  85,361  
 5,318   Chesapeake Energy Corp.(a)  33,344  
 6,068   Eni SpA  87,442  
 1,974   Oil Company LUKOIL PJSC Sponsored – ADR  96,193  
 13,340   Petroleo Brasileiro SA(a)  56,196  
 17,322   Public Joint-Stock Co. Gazprom Sponsored – ADR  73,272  
  

 

 

 
   431,808  
  

 

 

 
 Pharmaceuticals – 3.30% 
 4,967   GlaxoSmithKline Plc  105,789  
 1,078   Sanofi  82,091  
  

 

 

 
   187,880  
  

 

 

 
 Real Estate Investment Trusts – 1.96%  
 7,411   Grivalia Properties Real Estate Investment Co. SA  55,779  
 3,044   St Joe Co.(a)  55,949  
  

 

 

 
   111,728  
  

 

 

 
 
 
Real Estate Management &
Development – 3.31%
 
  
 22,390   Countrywide Plc  62,931  
Shares     Value 
 14,966   LSL Property Services Plc $41,415  
 69,020   Macquarie Mexico Real Estate Management SA
de CV
  84,505  
  

 

 

 
   188,851  
  

 

 

 
 
 
Semiconductors & Semiconductor
Equipment – 1.01%
 
 1,100   NuFlare Technology, Inc.  57,439  
  

 

 

 
 
 
Technology Hardware, Storage &
Peripherals – 2.31%
 
 38   Samsung Electronics
Co. Ltd.
  55,357  
 1,309   Western Digital Corp.  76,537  
  

 

 

 
   131,894  
  

 

 

 
 Textiles, Apparel & Luxury Goods – 0.77%  
 7,500   TSI Holdings Co. Ltd.  43,621  
  

 

 

 
 
 
Wireless Telecommunication
Services – 1.57%
 
 95,261   Sistema JSFC  30,810  
 4,803   TIM Participacoes SA Sponsored – ADR  58,789  
  

 

 

 
   89,599  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $4,466,339)

 $4,617,639  
  

 

 

 
 PREFERRED STOCKS – 6.16% 
 Automobiles – 1.93% 
 1,201   Hyundai Motor Co. $109,827  
  

 

 

 
 Banks – 1.30% 
 28,608   Itausa – Investimentos
Itau SA
  73,716  
  

 

 

 
 Food & Staples Retailing – 1.18% 
 4,100   Companhia Brasileira de Distribuicao  67,397  
  

 

 

 
 Health Care Equipment & Supplies – 0.78%  
 622   Draegerwerk AG & Co. KGaA  44,624  
  

��

 

 
 Oil, Gas & Consumable Fuels – 0.97%  
 119,841   Surgutneftegas OJSC  55,335  
  

 

 

 
 
 
TOTAL PREFERRED STOCKS
(Cost $310,940)
 $350,899  
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

68


Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

 

   Principal
Amount
  Value 
CORPORATE BONDS – 2.38%  
Oil, Gas & Consumable Fuels – 2.38%  

Chesapeake Energy Corp.

  

6.625%, 8/15/2020

 $86,000   $80,947  

8.000%, 12/15/2022 (Acquired 02/08/16, Cost $22,942)(c)

  54,000    54,743  
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $64,632)

  $135,690  
  

 

 

 
REPURCHASE AGREEMENTS – 10.71%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $565,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $622,913)] (proceeds $610,170)

 $610,170   $610,170  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $610,170)

  $610,170  
  

 

 

 

Total Investments (Cost $5,452,081) – 100.27%

  $5,714,398  

Liabilities in Excess of Other Assets – (0.27)%

   (15,202
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $5,699,196  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

ADR American Depositary Receipt

GDR Global Depositary Receipt

(a)Non-income producing security.
(b)The price for this security was derived from an estimate of fair market value using methods approved by the Fund's Board of Trustees. This security represents $68,160 or 1.20% of the Fund's net assets and is classified as a Level 2 security. See Note 2 in the Notes to Financial Statements.
(c)Security was purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the "Act") or was acquired in a private placement, and, unless registered under the Act, may only be sold to "qualified institutional buyers" (as defined in the Act) or pursuant to another exemption from registration. The market value of this security totals $54,743 which represents 0.96% of the Fund's net assets.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

69


Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS BY COUNTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Austria

   1.90

Brazil

   8.59

China

   1.38

France

   6.29

Greece

   0.98

Hong Kong

   1.37

Hungary

   0.74

India

   1.27

Ireland

   0.83

Israel

   0.78

Italy

   2.55

Japan

   7.39

Mexico

   4.18

Russia

   4.56

South Korea

   4.90

Sweden

   1.01

Switzerland

   3.16

Turkey

   0.93

United Kingdom

   16.13

United States

   12.08
  

 

 

 

TOTAL COMMON STOCKS

   81.02
  

 

 

 

PREFERRED STOCKS

  

Brazil

   2.48

Germany

   0.78

Russia

   0.97

South Korea

   1.93
  

 

 

 

TOTAL PREFERRED STOCKS

   6.16
  

 

 

 

CORPORATE BONDS

  

United States

   2.38
  

 

 

 

TOTAL CORPORATE BONDS

   2.38
  

 

 

 

REPURCHASE AGREEMENTS

   10.71
  

 

 

 

TOTAL INVESTMENTS

   100.27

Liabilities in Excess of Other Assets

   (0.27)% 
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. The accompanying notes are an integral part of these Schedule of Investments. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

70


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 84.98%  
 Argentina – 1.53%  
 585,363   Adecoagro SA(a) $6,678,992  
 2,080,257   Arcos Dorados Holdings, Inc. –
Class A(a)
  10,962,954  
  

 

 

 
   17,641,946  
  

 

 

 
 Austria – 2.64%  
 1,030,473   Erste Group
Bank AG
  30,514,215  
  

 

 

 
 Brazil – 10.30%  
 2,097,450   Banco do Brasil SA  14,807,882  
 768,910   Companhia Paranaense de Energia  4,981,607  
 1,703,374   Embraer SA Sponsored – ADR  29,400,235  
 3,637,200   Estacio
Participacoes SA
  20,019,336  
 4,000,100   Kroton Educacional SA  18,326,796  
 11,310,611   Marfrig Global
Foods SA(a)
  18,119,792  
 1,105,206   TIM Participacoes SA Sponsored – ADR  13,527,721  
 14,155   Viver Incorporadora e Construtora SA(a)  12,187  
  

 

 

 
   119,195,556  
  

 

 

 
 Chile – 3.45%  
 1,792,503   Empresa Nacional de Telecomunicaciones SA(a)  17,529,391  
 51,051,761   Enersis Chile SA  4,712,172  
 3,724,374   Enersis Chile SA Sponsored – ADR  17,690,776  
  

 

 

 
   39,932,339  
  

 

 

 
 China – 7.04%  
 167,238,000   Bosideng International Holdings Ltd.  15,174,945  
 2,373,900   China Mobile Ltd.  29,161,864  
 159,770   China Yuchai International Ltd.  1,733,505  
 21,295,000   Dongfeng Motor Group Co. Ltd. – Class H  21,474,905  
Shares     Value 
 11,918,377   Weiqiao Textile Co. – Class H $8,534,628  
 13,468,000   Yingde Gases Group
Co. Ltd.
  5,356,077  
  

 

 

 
   81,435,924  
  

 

 

 
 Colombia – 1.57%  
 2,052,876   Grupo Aval Acciones y Valores Grupo Sponsored – ADR  18,126,895  
  

 

 

 
 Czech Republic – 0.78%  
 934,049   O2 Czech Republic AS  9,075,072  
  

 

 

 
 Greece – 1.52%  
 1,997,927   Hellenic Telecommunications Organization SA  17,533,531  
  

 

 

 
 Hong Kong – 6.91%  
 24,175,400   Chow Tai Fook Jewellery Group Ltd.  17,629,391  
 26,015,899   First Pacific Co. Ltd.  18,582,860  
 15,085,500   Lifestyle China
Group Ltd.(a)
  4,570,539  
 15,085,500   Lifestyle International Holdings Ltd.  20,737,634  
 7,475,000   Luk Fook Holdings International Ltd.  18,355,982  
  

 

 

 
   79,876,406  
  

 

 

 
 India – 1.37%  
 1,910,604   Reliance
Infrastructure Ltd.
  15,862,424  
  

 

 

 
 Indonesia – 1.13%  
 63,178,425   PT XL Axiata Tbk(a)  13,098,576  
  

 

 

 
 Luxembourg – 1.14%  
 669,877   Ternium SA
Sponsored – ADR
  13,149,686  
  

 

 

 
 Malaysia – 0.92%  
 9,658,500   Genting Malaysia Bhd.  10,632,903  
  

 

 

 
 Mexico – 6.45%  
 3,994,684   Cemex SAB de CV Sponsored – ADR(a)  31,717,791  
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

71


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 14,598,119   Fideicomiso PLA Administradora Industrial S de RL
de CV
 $24,167,388  
 15,231,262   Macquarie Mexico Real Estate Management SA de CV  18,648,521  
 13,688   Urbi Desarrollos Urbanos SA de CV(a)(b)(d)  9,946  
  

 

 

 
   74,543,646  
  

 

 

 
 Pakistan – 1.20%  
 10,247,760   Nishat Mills Ltd.  13,840,745  
  

 

 

 
 Panama – 4.01%  
 395,989   Banco Latinoamericano de Comercio Exterior
SA – Class E
  11,158,970  
 401,031   Copa Holdings
SA – Class A
  35,262,656  
  

 

 

 
   46,421,626  
  

 

 

 
 Russia – 8.34%  
 6,137,841   Mobile
TeleSystems PJSC
  22,236,779  
 174,783   Mobile
TeleSystems PJSC Sponsored – ADR
  1,333,594  
 609,372   Oil Company LUKOIL PJSC Sponsored – ADR  29,694,698  
 829,519   Public Joint-Stock Co. Gazprom  1,782,022  
 3,765,133   Public Joint-Stock Co. Gazprom
Sponsored – ADR
  15,926,513  
 2,699,294   Sberbank of
Russia OJSC Sponsored – ADR
  25,427,349  
  

 

 

 
   96,400,955  
  

 

 

 
 South Korea – 11.83%  
 677,649   Hana Financial
Group, Inc.
  17,252,169  
 121,635   Hyundai Mobis Co. Ltd.  30,525,064  
 502,470   KB Financial
Group, Inc.
  17,282,434  
Shares     Value 
 407,443   KIA Motors Corp. $15,654,721  
 75,235   POSCO  15,593,875  
 17,438   Samsung Electronics Co. Ltd.  25,403,023  
 412,290   Shinhan Financial Group Co. Ltd.  15,099,979  
  

 

 

 
   136,811,265  
  

 

 

 
 Thailand – 3.38%  
 2,513,300   Bangkok Bank
Plc – NVDR
  11,831,614  
 43,883,700   Jasmine Broadband Internet Infrastructure  14,817,873  
 2,281,300   Kasikornbank
Plc – NVDR
  12,386,862  
  

 

 

 
   39,036,349  
  

 

 

 
 Turkey – 6.74%  
 4,340,472   Akbank TAS  11,627,829  
 25,639,389   Emlak Konut Gayrimenkul Yatirim
Ortakligi AG
  25,989,284  
 2,241,025   TAV Havalimanlari Holding AS  9,237,363  
 4,720,950   Turkiye Garanti Bankasi Anonim Sirketi  12,509,654  
 12,137,591   Turkiye Vakiflar Bankasi Turk Anonim Ortakligi  18,567,578  
  

 

 

 
   77,931,708  
  

 

 

 
 United Kingdom – 2.73%  
 2,875,926   Globaltrans Investment Plc Sponsored
RegS – GDR
  13,516,852  
 5,541,410   ITE Group Plc  11,604,209  
 795,036   Standard
Chartered Plc(a)
  6,469,775  
  

 

 

 
   31,590,836  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $1,089,242,192)

 $982,652,603  
  

 

 

 
 PREFERRED STOCKS – 11.93%  
 Brazil – 8.22%  
 1,474,389   Banco
Bradesco SA
  13,573,546  
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

72


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 1,679,500   Companhia Brasileira de Distribuicao $27,608,219  
 709,810   Companhia Brasileira de Distribuicao Sponsored – Class A – ADR  11,633,786  
 614,550   Companhia Paranaense de Energia – COPEL B  6,394,653  
 821,025   Companhia Paranaense de Energia Sponsored – Class B – ADR  8,514,030  
 1,573,146   Petroleo Brasileiro Sponsored – ADR(a)  13,072,843  
 987,576   Telefonica Brasil SA Sponsored – ADR  14,290,225  
  

 

 

 
   95,087,302  
  

 

 

 
Shares     Value 
 Colombia – 0.14%  
 3,573,799   Grupo Aval Acciones y Valores SA $1,561,720  
  

 

 

 
 Russia – 1.37%  
 11,019,015   Surgutneftegas OJSC  5,087,920  
 2,304,816   Surgutneftegas OJSC Sponsored – ADR  10,786,539  
  

 

 

 
   15,874,459  
  

 

 

 
 South Korea – 2.20%  
 277,826   Hyundai Motor Co.  25,406,176  
  

 

 

 

 
 
 

TOTAL PREFERRED
STOCKS
(Cost $157,504,738)

 $137,929,657  
  

 

 

 
 
   Contracts  Value 
RIGHTS – 0.61%  
Mexico – 0.61%  

Urbi Desarrollos Urbanos SA de CV – Certificates(a)(b)(d)

  2,297,682   $1,669,544  

Urbi Desarrollos Urbanos SA de CV – Certificates
(Acquired 05/23/16 through 06/24/16, Cost $5,596,564)(a)(b)(c)(d)

  7,442,812    5,408,104  
  

 

 

 

TOTAL RIGHTS
(Cost $6,917,254)

  $7,077,648  
  

 

 

 

 

   Principal
Amount
  Value 
CORPORATE BONDS – 0.01%  
Brazil – 0.01%  

Viver Incorporadora e Construtora SA, CETIP
Interbank Rate + 2.000%, 08/06/2016
(Acquired 09/30/13, Cost $1,488,955)(a)(b)(c)(d)(e)

  BRL 3,299,971   $114,053  
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $1,488,955)

  $114,053  
  

 

 

 
REPURCHASE AGREEMENTS – 2.24%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $24,015,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $26,476,538)] (proceeds $25,954,262)

 $25,954,240    25,954,240  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

73


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 

TOTAL REPURCHASE AGREEMENTS
(Cost $25,954,240)

  $25,954,240  
  

 

 

 

Total Investments (Cost $1,281,107,379) – 99.77%

  $1,153,728,201  

Other Assets in Excess of Liabilities – 0.23%

   2,629,833  
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $1,156,358,034  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

ADR American Depositary Receipt

GDR Global Depositary Receipt

NVDR Non-Voting Depository Receipt

BRL Brazilian Real

(a)Non-income producing security.
(b)The prices for these securities were derived from an estimate of fair market value using methods approved by the Fund's Board of Trustees. These securities represent $7,201,647 or 0.62% of the Fund's net assets and, with the exception of Viver Incorporadora e Construtora SA, CETIP Interbank Rate + 2.000%, 08/06/2016 ("Viver Corporate Bond"), are classified as Level 3 securities. Viver Corporate Bond is classified as a Level 2 security. See Note 2 in the Notes to Financial Statements.
(c)Securities were purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the "Act") or were acquired in a private placement, and, unless registered under the Act, may only be sold to "qualified institutional buyers" (as defined in the Act) or pursuant to another exemption from registration. The market value of these securities total $5,522,157 which represents 0.48% of the Fund's net assets.
(d)These securities have limited liquidity and represent $7,201,647 or 0.62% of the Fund's net assets and, with the exception of Viver Corporate Bond, are classified as Level 3 securities. Viver Corporate Bond is classified as a Level 2 security. See Note 2 in the Notes to Financial Statements.
(e)In default.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

74


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   2.54

Airlines

   3.05

Auto Components

   2.64

Automobiles

   3.21

Banks

   19.29

Chemicals

   0.46

Construction Materials

   2.74

Diversified Consumer Services

   3.32

Diversified Financial Services

   1.61

Diversified Telecommunication Services

   2.30

Electric Utilities

   3.74

Food Products

   2.14

Hotels, Restaurants & Leisure

   1.87

Machinery

   0.15

Media

   1.00

Metals & Mining

   2.49

Multiline Retail

   2.19

Oil, Gas & Consumable Fuels

   4.10

Real Estate Investment Trusts

   7.23

Road & Rail

   1.17

Specialty Retail

   3.11

Technology Hardware, Storage & Peripherals

   2.20

Textiles, Apparel & Luxury Goods

   3.25

Transportation Infrastructure

   0.80

Wireless Telecommunication Services

   8.38
  

 

 

 

TOTAL COMMON STOCKS

   84.98
  

 

 

 

PREFERRED STOCKS

  

Automobiles

   2.20

Banks

   1.31

Diversified Telecommunication Services

   1.24

Electric Utilities

   1.29

Food & Staples Retailing

   3.39

Oil, Gas & Consumable Fuels

   2.50
  

 

 

 

TOTAL PREFERRED STOCKS

   11.93
  

 

 

 

RIGHTS

  

Household Durables

   0.61
  

 

 

 

TOTAL RIGHTS

   0.61
  

 

 

 

CORPORATE BONDS

  

Household Durables

   0.01
  

 

 

 

TOTAL CORPORATE BONDS

   0.01
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

75


Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2016 (Unaudited) (continued)

 

 

 

REPURCHASE AGREEMENTS

   2.24
  

 

 

 

TOTAL INVESTMENTS

   99.77

Other Assets in Excess of Liabilities

   0.23
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. The accompanying notes are an integral part of these Schedule of Investments. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

76


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

Shares     Value 
 COMMON STOCKS – 81.99%  
 Belgium – 2.00% 
 587,066   D'Ieteren SA $27,379,170  
  

 

 

 
 Brazil – 4.39% 
 1,468,720   Companhia Paranaense de Energia  9,515,530  
 8,237,200   Embraer SA  35,662,493  
 9,302,024   Marfrig Global Foods SA(a)  14,902,001  
 6,467   Viver Incorporadora e Construtora SA(a)  5,568  
  

 

 

 
   60,085,592  
  

 

 

 
 Canada – 5.45% 
 1,122,044   Dorel Industries, Inc. – Class B(a)  30,207,397  
 12,114   E-L Financial Corp. Ltd.(a)  6,463,508  
 1,478,813   Norbord, Inc.(g)  37,986,202  
  

 

 

 
   74,657,107  
  

 

 

 
 China – 2.25% 
 14,961,750   APT Satellite Holdings Ltd.  10,391,509  
 47,744,500   Sinotrans Shipping Ltd.(a)  7,245,285  
 18,429,000   Weiqiao Textile Co. – Class H  13,196,819  
  

 

 

 
   30,833,613  
  

 

 

 
 France – 0.87% 
 191,944   Savencia SA  11,945,425  
  

 

 

 
 Germany – 0.73% 
 156,726   Draegerwerk AG & Co. KGaA  10,027,141  
  

 

 

 
 Greece – 1.95% 
 2,080,177   Grivalia Properties Real Estate Investment Co. SA  15,656,417  
 1,005,596   GR Sarantis SA  11,070,491  
  

 

 

 
   26,726,908  
  

 

 

 
Shares     Value 
 Hong Kong – 0.96% 
 10,889,500   Dickson Concepts International Ltd. $3,748,513  
 316,040,000   Emperor Watch & Jewellery Ltd.(a)  9,412,747  
  

 

 

 
   13,161,260  
  

 

 

 
 Hungary – 1.84% 
 15,336,018   Magyar Telekom Telecommunications Plc  25,169,952  
  

 

 

 
 India – 3.40% 
 1,912,537   NIIT Technologies Ltd.  12,069,515  
 4,164,040   Reliance Infrastructure Ltd.  34,571,145  
  

 

 

 
   46,640,660  
  

 

 

 
 Ireland – 2.67% 
 8,843,235   C&C Group Plc  36,656,823  
  

 

 

 
 Israel – 1.98% 
 7,952,280   Israel Discount Bank Ltd. – Class A(a)  14,639,295  
 1,748,885   Syneron Medical Ltd.(a)(e)  12,522,017  
  

 

 

 
   27,161,312  
  

 

 

 
 Italy – 1.70% 
 1,012,844   Buzzi Unicem SpA  11,491,619  
 988,642   ITALCEMENTI Fabbriche Riunite Cemento SpA – Bergamo(a)  11,750,220  
  

 

 

 
   23,241,839  
  

 

 

 
 Japan – 26.62% 
 213,800   Bank of Nagoya Ltd.  7,448,280  
 2,453,000   Denki Kogyo Co. Ltd.  12,350,699  
 635,600   Fuji Machine Manufacturing Co. Ltd.  7,353,626  
 1,663,500   Fuji Media Holdings, Inc.  22,598,988  
 1,632,700   Funai Electric Co. Ltd.  13,400,560  
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

77


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 916,600   Futaba Corp. $14,959,406  
 4,449,600   Hachijuni Bank Ltd.  23,174,221  
 227,200   Hibiya Engineering Ltd.  3,737,745  
 2,718,000   Hitachi Koki Co. Ltd.  19,779,627  
 2,200,050   Hosiden Corp.  15,952,864  
 4,249,000   Hyakugo Bank Ltd.  15,385,304  
 1,000,800   Kato Sangyo Co. Ltd.  23,709,367  
 641,900   Kissei Pharmaceutical Co. Ltd.  17,163,067  
 1,761,700   Komori Corp.  22,235,580  
 419,000   Nippon Seiki Co. Ltd.  7,986,533  
 1,655,800   Noritsu Koki Co. Ltd.  11,468,753  
 311,700   NuFlare Technology, Inc.  16,276,041  
 1,653,700   Sanki Engineering Co. Ltd.  14,770,115  
 1,130,900   Sega Sammy Holdings, Inc.  16,132,230  
 1,911,100   Sintokogio Ltd.  17,618,262  
 1,272,700   Tachi-S Co. Ltd.  20,666,131  
 565,100   Torii Pharmaceutical Co. Ltd.  12,216,981  
 1,413,000   Toshiba Machine Co. Ltd.  4,852,765  
 1,806,300   TSI Holdings Co. Ltd.  10,505,719  
 283,700   Tsutsumi Jewelry Co. Ltd.  4,716,500  
 1,077,400   Wakita & Co. Ltd.  8,187,167  
  

 

 

 
   364,646,531  
  

 

 

 
 Mexico – 1.57% 
 43,348,757   Consorcio ARA SAB de CV  15,135,372  
 2,517,107   Desarrolladora Homex SAB de CV(a)  251,844  
Shares     Value 
 4,986,650   Macquarie Mexico Real Estate Management SA de CV $6,105,446  
 6,089   Urbi Desarrollos Urbanos SA de CV(a)(b)(d)  4,425  
  

 

 

 
   21,497,087  
  

 

 

 
 Philippines – 0.61% 
 5,541,060   First Philippine Holdings Corp.  8,323,873  
  

 

 

 
 Russia – 1.00% 
 42,262,804   Sistema JSFC  13,669,185  
  

 

 

 
 Spain – 2.56% 
 718,475   Hispania Activos Inmobiliarios SOCIMI SA  9,637,104  
 1,428,164   Lar Espana Real Estate SOCIMI SA  10,267,752  
 1,276,859   Merlin Properties SOCIMI SA  15,119,519  
  

 

 

 
   35,024,375  
  

 

 

 
 South Korea – 2.56% 
 100,264   Binggrae Co. Ltd.  5,430,862  
 66,245   Lotte Confectionery Co. Ltd.  10,602,848  
 208,685   Samchully Co. Ltd.(e)  19,079,016  
  

 

 

 
   35,112,726  
  

 

 

 
 United Kingdom – 16.88% 
 4,893,560   Balfour Beatty Plc  17,707,530  
 256,963   Clarkson Plc  6,979,032  
 9,110,030   Countrywide Plc  25,605,428  
 3,828,362   De La Rue Plc  29,524,515  
 30,014,393   Debenhams Plc  21,680,684  
 6,707,907   ITE Group Plc  14,046,958  
 8,970,858   J Sainsbury Plc  28,572,588  
 4,151,341   LSL Property Services Plc  11,487,859  
 1,078,526   Mitie Group Plc  2,683,238  
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

78


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

Shares     Value 
 13,874,444   Premier Foods Plc(a) $9,486,169  
 14,481,089   Spirent Communications Plc  15,391,037  
 17,015,273   Wm Morrison Supermarkets Plc  48,044,901  
  

 

 

 
   231,209,939  
  

 

 

 

 
 

TOTAL COMMON STOCKS
(Cost $1,106,163,386)

 $1,123,170,518  
  

 

 

 
Shares     Value 
 PREFERRED STOCKS – 3.02%  
 Brazil – 1.42% 
 1,866,100   Companhia Paranaense de Energia – COPEL B $19,417,562  
  

 

 

 
 Germany – 1.60% 
 306,161   Draegerwerk AG & Co. KGaA  21,964,760  
  

 

 

 

 
 
 

TOTAL PREFERRED
STOCKS
(Cost $36,587,810)

 $41,382,322  
  

 

 

 
 
   Contracts  Value 
RIGHTS – 0.67%  
Mexico – 0.67%  

Urbi Desarrollos Urbanos SA de CV – Certificates(a)(b)(d)

  869,021   $631,449  

Urbi Desarrollos Urbanos SA de CV – Certificates
(Acquired 05/23/16 through 06/24/16, Cost $8,8,818,325)(a)(b)(c)(d)

  11,839,244    8,602,643  
  

 

 

 

TOTAL RIGHTS
(Cost $9,317,831)

  $9,234,092  
  

 

 

 
   Principal
Amount
  Value 
CORPORATE BONDS & NOTES – 0.30%  
Brazil – 0.00%  

Viver Incorporadora e Construtora SA, CETIP Interbank Rate + 2.000%, 08/06/2016 (Acquired 09/30/13, Cost $512,591)(a)(b)(c)(d)(f)

  
 
BRL
1,136,056
  
  
 $39,264  
  

 

 

 
Mexico – 0.30%  

Desarrolladora Homex SA de CV Promissory Note
4.000%, 10/23/2022 (Acquired 10/23/15 through 06/06/16,
Cost $4,261,018)(b)(c)(d)

 $919,113    3,944,540  

Urbi Desarrollos Urbanos SA de CV
8.500%, 04/26/2016(a)(d)(f)

  8,014,000    80,140  
  

 

 

 
   4,024,680  
  

 

 

 

TOTAL CORPORATE BONDS & NOTES
(Cost $6,778,530)

  $4,063,944  
  

 

 

 
REPURCHASE AGREEMENTS – 13.35%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $169,190,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $186,531,975)] (proceeds $182,869,802)

 $182,869,650   $182,869,650  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $182,869,650)

  $182,869,650  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

79


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

    Principal
Amount
   Value 

Total Investments (Cost $1,341,717,207) – 99.33%

    $1,360,720,526  

Other Assets in Excess of Liabilities – 0.67%

     9,121,284  
    

 

 

 

TOTAL NET ASSETS – 100.00%

    $1,369,841,810  
    

 

 

 

 

Percentages are stated as a percent of total net assets.

BRL Brazilian Real

(a)Non-income producing security.
(b)The prices for these securities were derived from an estimate of fair market value using methods approved by the Fund's Board of Trustees. These securities represent $13,222,321 or 0.97% of the Fund's net assets and, with the exceptions of Desarrolladora Homex SA de CV Promissory Note, 4.000%, 10/23/2022 ("Homex Promissory Note") and Viver Incorporadora e Construtora SA, CETIP Interbank Rate + 2.000%, 08/06/2016 ("Viver Corporate Bond"), are classified as Level 3 securities. Homex Promissory Note and Viver Corporate Bond are classified as Level 2 securities. See Note 2 in the Notes to Financial Statements.
(c)Securities were purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the "Act") or were acquired in a private placement, and, unless registered under the Act, may only be sold to "qualified institutional buyers" (as defined in the Act) or pursuant to another exemption from registration. The market value of these securities total $12,586,447 which represents 0.92% of the Fund's net assets.
(d)These securities have limited liquidity and represent $13,302,461 or 0.97% of the Fund's net assets and, with the exception of Homex Promissory Note, Viver Corporate Bond and Urbi Desarrollos Urbanos SA de CV, 8.500%, 04/26/2016 ("Urbi Corporate Bond"), are classified as Level 3 securities. Homex Promissory Note, Viver Corporate Bond and Urbi Corporate Bond are classified as Level 2 securities. See Note 2 in the Notes to Financial Statements.
(e)Affiliated issuer. See Note 8 in the Notes to Financial Statements.
(f)In default.
(g)All or a portion of this security is on loan. See Note 2 in the Notes to Schedule of Investments.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

80


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2016 (Unaudited)

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   2.60

Auto Components

   2.09

Banks

   4.43

Beverages

   2.68

Commercial Services & Supplies

   2.35

Communications Equipment

   2.03

Construction & Engineering

   2.64

Construction Materials

   1.70

Distributors

   2.00

Diversified Telecommunication Services

   2.60

Electric Utilities

   3.83

Electrical Equipment

   1.09

Electronic Equipment, Instruments & Components

   1.16

Food & Staples Retailing

   7.32

Food Products

   3.82

Gas Utilities

   1.39

Health Care Equipment & Supplies

   1.65

Household Durables

   4.31

Insurance

   0.47

IT Services

   0.88

Leisure Products

   1.18

Machinery

   5.24

Marine

   1.04

Media

   2.68

Multiline Retail

   1.58

Paper & Forest Products

   2.77

Personal Products

   0.81

Pharmaceuticals

   2.14

Real Estate Investment Trusts

   4.14

Real Estate Management & Development

   2.71

Semiconductors & Semiconductor Equipment

   1.19

Specialty Retail

   0.96

Technology Hardware, Storage & Peripherals

   0.84

Textiles, Apparel & Luxury Goods

   2.07

Trading Companies & Distributors

   0.60

Wireless Telecommunication Services

   1.00
  

 

 

 

TOTAL COMMON STOCKS

   81.99
  

 

 

 

PREFERRED STOCKS

  

Electric Utilities

   1.42

Health Care Equipment & Supplies

   1.60
  

 

 

 

TOTAL PREFERRED STOCKS

   3.02
  

 

 

 

RIGHTS

  

Household Durables

   0.67
  

 

 

 

TOTAL RIGHTS

   0.67
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

81


Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2016 (Unaudited) (continued)

 

 

 

CORPORATE BONDS & NOTES

  

Household Durables

   0.30
  

 

 

 

TOTAL CORPORATE BONDS & NOTES

   0.30
  

 

 

 

REPURCHASE AGREEMENTS

   13.35
  

 

 

 

TOTAL INVESTMENTS

   99.33

Other Assets in Excess of Liabilities

   0.67
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. The accompanying notes are an integral part of these Schedule of Investments. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

82


Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

   Principal
Amount
  Value 
FEDERAL AND FEDERALLY SPONSORED CREDITS – 5.02%   
Federal Home Loan Mortgage Corporation – 2.74%  

Pool G1-8578, 3.000%, 12/1/2030

 $2,342,373   $2,461,244  

Pool G0-6018, 6.500%, 4/1/2039

  41,293    48,419  

Pool A9-3505, 4.500%, 8/1/2040

  195,368    214,242  
  

 

 

 
   2,723,905  
  

 

 

 
Federal National Mortgage Association – 2.28%  

Pool MA0918, 4.000%, 12/1/2041

  432,283    465,744  

Pool AS6201, 3.500%, 11/1/2045

  1,613,663    1,702,802  

Pool 934124, 5.500%, 7/1/2038

  53,846    60,932  

Pool 634757, 5.500%, 3/1/2017

  318    320  

Pool 254631, 5.000%, 2/1/2018

  37,296    38,325  
  

 

 

 
   2,268,123  
  

 

 

 

TOTAL FEDERAL AND FEDERALLY SPONSORED CREDITS
(Cost $4,892,022)

  $4,992,028  
  

 

 

 
OTHER MORTGAGE RELATED SECURITIES – 0.13%  
Collateralized Mortgage Obligations – 0.00%  

Wells Fargo Mortgage Backed Securities 2006-AR14 Trust
Series 2006-AR14, 3.106%, 10/25/2036(c)

 $2,330   $2,160  
  

 

 

 
Near Prime Mortgage – 0.13%  

Bear Stearns ALT-A Trust 2004-11
Series 2004-11, 1.205%, 11/25/2034(c)

  131,936    128,479  
  

 

 

 

TOTAL OTHER MORTGAGE RELATED SECURITIES
(Cost $124,390)

  $130,639  
  

 

 

 
US GOVERNMENTS – 59.13%  
Sovereign – 59.13%  

United States Treasury Bond
4.750%, 2/15/2037

 $1,475,000   $2,140,709  

United States Treasury Note
3.375%, 11/15/2019

  7,465,000    8,025,457  

2.000%, 11/15/2021

  19,711,000    20,479,414  

2.000%, 2/15/2023

  14,390,000    14,948,735  

2.375%, 8/15/2024

  12,450,000    13,265,089  
  

 

 

 
   56,718,695  
  

 

 

 

TOTAL US GOVERNMENTS
(Cost $57,445,520)

  $58,859,404  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

83


Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Shares  Value 
PREFERRED STOCKS – 0.99%  
Technology Hardware – 0.99%  

Pitney Bowes International Holdings, Inc.,
6.125% (Acquired 10/24/12 through 02/10/15, Cost $999,581)(a)(b)(c)

  960   $989,100  
  

 

 

 

TOTAL PREFERRED STOCKS
(Cost $999,581)

  $989,100  
  

 

 

 
   Principal
Amount
  Value 
ASSET BACKED SECURITIES – 1.89%  
Equipment – 0.04%  

Continental Airlines 2007-1 Class A Pass Through Trust
Series 2007-1, 5.983%, 4/19/2022

 $30,895   $34,834  
  

 

 

 
Student Loan – 1.85%  

SLM Private Credit Student Loan Trust 2004-B
Series 2004-B, 1.280%, 9/15/2033

  300,000    264,096  

SLM Private Credit Student Loan Trust 2005-A
Series 2005-A, 1.160%, 12/15/2038

  400,000    356,233  

SLM Private Credit Student Loan Trust 2006-A
Series 2006-A, 1.140%, 6/15/2039

  1,025,000    919,052  

SLM Private Credit Student Loan Trust 2007-A
Series 2007-A, 1.090%, 12/16/2041

  350,000    304,558  
  

 

 

 
   1,843,939  
  

 

 

 

TOTAL ASSET BACKED SECURITIES
(Cost $1,850,516)

  $1,878,773  
  

 

 

 
CORPORATE BONDS – 29.73%  
Banks & Thrifts – 4.50%  

Citigroup, Inc.
6.125%, 11/21/2017

 $885,000   $930,489  

Fifth Third Bancorp
8.250%, 3/1/2038

  175,000    259,325  

Goldman Sachs Group, Inc.
7.500%, 2/15/2019

  445,000    502,968  

JPMorgan Chase & Co.
7.900%, Perpetual

  2,085,000    2,142,337  

USB Capital IX
3.500%, Perpetual

  750,000    642,188  
  

 

 

 
   4,477,307  
  

 

 

 
Building Materials – 0.65%  

USG Corp.
6.300%, 11/15/2016

  645,000    647,902  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

84


Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 
Commercial Services & Supplies – 1.75%  

ADT Corp.
3.500%, 7/15/2022

 $1,510,000   $1,453,375  

S&P Global, Inc.
5.900%, 11/15/2017

  280,000    292,238  
  

 

 

 
   1,745,613  
  

 

 

 
Diversified Financial Services – 1.95%  

Voya Financial, Inc.
5.500%, 7/15/2022

  335,000    379,676  

Wells Fargo & Co.
1.400%, 9/8/2017

  625,000    624,813  

7.980%, Perpetual

  900,000    940,590  
  

 

 

 
   1,945,079  
  

 

 

 
Electric Utilities – 3.41%  

Arizona Public Service Co.
8.750%, 3/1/2019

  340,000    397,244  

Commonwealth Edison Co.
5.900%, 3/15/2036

  175,000    229,806  

FirstEnergy Corp.
7.375%, 11/15/2031

  1,465,000    1,903,343  

Israel Electric Corp. Ltd.
7.250%, 1/15/2019 (Acquired 11/26/12 through 09/04/13, Cost $433,482)(b)

  420,000    466,200  

Oncor Electric Delivery Co., LLC
7.000%, 9/1/2022

  315,000    399,109  
  

 

 

 
   3,395,702  
  

 

 

 
Energy – 0.20%  

Valero Energy Corp.
9.375%, 3/15/2019

  170,000    200,128  
  

 

 

 
Food, Beverage & Tobacco – 1.02%  

Tesco Plc
5.500%, 11/15/2017 (Acquired 03/12/15 through 02/24/2016,
Cost $1,008,209)(b)

  980,000    1,015,437  
  

 

 

 
Forest Products & Paper – 1.11%  

Sappi Papier Holding GmbH
7.750%, 7/15/2017 (Acquired 05/23/2016 through 07/07/16,
Cost $1,112,480)(b)

  1,080,000    1,104,300  
  

 

 

 
Health Care Providers & Services – 0.50%  

Laboratory Corp. of America Holdings
3.750%, 8/23/2022

  165,000    175,898  

Tenet Healthcare Corp.
8.000%, 8/1/2020

  315,000    318,150  
  

 

 

 
   494,048  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

85


Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 
Homebuilders – 0.66%  

PulteGroup, Inc.
5.500%, 3/1/2026

 $370,000   $388,500  

Toll Brothers Finance Corp.
4.875%, 11/15/2025

  245,000    251,125  

Urbi Desarrollos Urbanos SAB de CV
9.500%, 1/21/2020 (Acquired 04/17/13 through 02/17/15, Cost $292,050)(a)(b)(c)(d)

  1,640,000    16,400  
  

 

 

 
   656,025  
  

 

 

 
Independent Power & Renewable Electricity Producers – 0.26%  

Talen Energy Supply, LLC
6.500%, 5/1/2018

  255,000    262,650  
  

 

 

 
Insurance – 2.39%  

American International Group, Inc.
6.400%, 12/15/2020

  800,000    938,244  

CNA Financial Corp.
7.350%, 11/15/2019

  785,000    905,075  

5.875%, 8/15/2020

  135,000    153,320  

Genworth Holdings, Inc.
7.700%, 6/15/2020

  385,000    382,112  
  

 

 

 
   2,378,751  
  

 

 

 
Metals & Mining – 2.58%  

Cloud Peak Energy Resources, LLC / Cloud Peak Energy Finance Corp.
8.500%, 12/15/2019

  815,000    652,000  

Royal Gold, Inc.
2.875%, 6/15/2019

  625,000    698,047  

Thompson Creek Metals Co., Inc.
9.750%, 12/1/2017

  1,205,000    1,217,683  
  

 

 

 
   2,567,730  
  

 

 

 
Oil, Gas & Consumable Fuels – 6.30%  

Anadarko Petroleum Corp.
6.375%, 9/15/2017

  1,100,000    1,146,796  

BP Capital Markets Plc
3.506%, 3/17/2025

  810,000    858,581  

Chesapeake Energy Corp.
6.625%, 8/15/2020

  1,560,000    1,468,350  

Exxon Mobil Corp.
2.397%, 3/6/2022

  745,000    763,723  

Kinder Morgan, Inc.
7.000%, 6/15/2017

  195,000    201,796  

4.300%, 6/1/2025

  904,000    939,538  

Occidental Petroleum Corp.
3.500%, 6/15/2025

  405,000    431,202  

 

The accompanying notes are an integral part of these Schedules of Investments.

 

86


Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 

Range Resources Corp.
5.000%, 3/15/2023 (Acquired 08/06/15, Cost $450,463)(b)

 $470,000   $459,425  
  

 

 

 
   6,269,411  
  

 

 

 
Telecommunications – 2.45%  

Clearwire Communications, LLC / Clearwire Finance, Inc.
14.750%, 12/1/2016(c)

  960,000    978,000  

Sprint Communications, Inc.
9.000%, 11/15/2018 (Acquired 11/24/15, Cost $554,913)(b)

  525,000    579,469  

Telecom Italia Capital SA
6.999%, 6/4/2018

  85,000    91,723  

Telefonica Emisiones SAU
6.221%, 7/3/2017

  610,000    631,391  

5.462%, 2/16/2021

  135,000    153,300  
  

 

 

 
   2,433,883  
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $28,323,052)

  $29,593,966  
  

 

 

 
REPURCHASE AGREEMENTS – 3.84%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $3,545,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $3,908,363)] (proceeds $3,826,638)

 $3,826,635   $3,826,635  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $3,826,635)

  $3,826,635  
  

 

 

 

Total Investments (Cost $97,461,716) – 100.73%

  $100,270,545  

Liabilities in Excess of Other Assets – (0.73)%

   (727,897
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $99,542,648  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

 

(a)Non-income producing security.
(b)Securities were purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the “Act”) or were acquired in a private placement, and, unless registered under the Act, may only be sold to “qualified institutional buyers” (as defined in the Act) or pursuant to another exemption from registration. The market values of these securities total $4,630,331 which represents 4.65% of the Fund's net assets.
(c)These securities have limited liquidity and represent $2,114,139 or 2.12% of the Fund's net assets and are classified as Level 2 securities. See Note 2 in the Notes to Schedule of Investments.
(d)In default.

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. The accompanying notes are an integral part of these Schedule of Investments. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

87


Brandes Credit Focus Yield Fund

SCHEDULE OF INVESTMENTS — September 30, 2016

 

 

 

   Principal
Amount
  Value 
US GOVERNMENTS – 36.82%  
Sovereign – 36.82%  

United States Treasury Note

  

3.375%, 11/15/2019

 $4,930,000   $5,300,134  

2.000%, 11/15/2021

  2,690,000    2,794,867  

2.000%, 2/15/2023

  1,805,000    1,875,085  

2.375%, 8/15/2024

  1,475,000    1,571,567  
  

 

 

 

TOTAL US GOVERNMENTS
(Cost $11,284,650)

  $11,541,653  
  

 

 

 
   Shares  Value 
PREFERRED STOCKS – 1.99%  
Technology Hardware – 1.99%  

Pitney Bowes International Holdings, Inc.,
6.125% (Acquired 10/24/12 through 02/10/15, Cost $617,719)(a)(b)(c)

  605   $623,339  
  

 

 

 

TOTAL PREFERRED STOCKS
(Cost $617,719)

  $623,339  
  

 

 

 
   Principal
Amount
  Value 
ASSET BACKED SECURITIES – 2.55%  
Equipment – 0.28%  

Continental Airlines 2007-1 Class A Pass Through Trust Series 2007-1, 5.983%, 4/19/2022

 $77,236   $87,084  
Student Loan – 2.27%  

SLM Private Credit Student Loan Trust 2006-A Series 2006-A, 1.140%, 6/15/2039

  505,000    452,801  

SLM Private Credit Student Loan Trust 2007-A Series 2007-A, 1.090%, 12/16/2041

  300,000    261,049  
  

 

 

 
   713,850  
  

 

 

 

TOTAL ASSET BACKED SECURITIES
(Cost $758,960)

  $800,934  
  

 

 

 
CORPORATE BONDS – 55.56%  
Banks & Thrifts – 7.83%  

Citigroup, Inc.
6.125%, 11/21/2017

 $500,000   $525,700  

Fifth Third Bancorp
8.250%, 3/1/2038

  65,000    96,321  

Goldman Sachs Group, Inc.
7.500%, 2/15/2019

  320,000    361,685  

JPMorgan Chase & Co.
7.900%, Perpetual

  1,140,000    1,171,350  

USB Capital IX
3.500%, Perpetual

  350,000    299,687  
  

 

 

 
   2,454,743  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

88


Brandes Credit Focus Yield Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 
Building Materials – 1.06%  

USG Corp.
6.300%, 11/15/2016

 $330,000   $331,485  
  

 

 

 
Commercial Services & Supplies – 3.17%  

ADT Corp.
3.500%, 7/15/2022

  745,000    717,063  

S&P Global, Inc.
5.900%, 11/15/2017

  265,000    276,582  
  

 

 

 
   993,645  
  

 

 

 
Computers & Peripherals – 2.44%  

Apple, Inc.
2.400%, 5/3/2023

  750,000    763,609  
  

 

 

 
Diversified Financial Services – 3.17%  

Voya Financial, Inc.
5.500%, 7/15/2022

  355,000    402,344  

Wells Fargo & Co.

  

1.400%, 9/8/2017

  350,000    349,895  

7.980%, Perpetual

  230,000    240,373  
  

 

 

 
  992,612  
  

 

 

 
Electric Utilities – 5.47%  

Arizona Public Service Co.
8.750%, 3/1/2019

  435,000    508,239  

FirstEnergy Corp.
7.375%, 11/15/2031

  380,000    493,700  

Israel Electric Corp. Ltd.
7.250%, 1/15/2019 (Acquired 11/26/12 through 09/04/13,
Cost $521,127)(b)

  505,000    560,550  

Oncor Electric Delivery Co., LLC
7.000%, 9/1/2022

  120,000    152,041  
  

 

 

 
   1,714,530  
  

 

 

 
Energy – 0.77%  

Valero Energy Corp.
9.375%, 3/15/2019

  205,000    241,331  
  

 

 

 
Food, Beverage & Tobacco – 1.83%  

Tesco Plc
5.500%, 11/15/2017 (Acquired 03/12/15 through 02/24/16,
Cost $571,062)(b)

  555,000    575,069  
  

 

 

 
Forest Products & Paper – 1.92%  

Sappi Papier Holding GmbH
7.750%, 7/15/2017 (Acquired 06/16/16 through 07/07/16,
Cost $607,802)(b)

  590,000    603,275  
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

89


Brandes Credit Focus Yield Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 
Health Care Providers & Services – 1.48%  

Laboratory Corp. of America Holdings
3.750%, 8/23/2022

 $240,000   $255,852  

Tenet Healthcare Corp.
8.000%, 8/1/2020

  205,000    207,050  
  

 

 

 
   462,902  
  

 

 

 
Homebuilders – 1.17%  

PulteGroup, Inc.
5.500%, 3/1/2026

  205,000    215,250  

Toll Brothers Finance Corp.
4.875%, 11/15/2025

  135,000    138,375  

Urbi Desarrollos Urbanos SAB de CV
9.500%, 1/21/2020 (Acquired 04/17/13 through 02/17/15,
Cost $259,625)(a)(b)(c)(d)

  1,225,000    12,250  
  

 

 

 
   365,875  
  

 

 

 
Independent Power & Renewable Electricity Producers – 0.72%  

Talen Energy Supply, LLC
6.500%, 5/1/2018

  220,000    226,600  
  

 

 

 
Insurance – 3.81%  

American International Group, Inc.
6.400%, 12/15/2020

  485,000    568,810  

CNA Financial Corp.

  

7.350%, 11/15/2019

  125,000    144,120  

5.875%, 8/15/2020

  235,000    266,890  

Genworth Holdings, Inc.
7.700%, 6/15/2020

  215,000    213,388  
  

 

 

 
   1,193,208  
  

 

 

 
Metals & Mining – 4.70%  

Cloud Peak Energy Resources, LLC / Cloud Peak Energy Finance Corp. 8.500%, 12/15/2019

  405,000    324,000  

Royal Gold, Inc.
2.875%, 6/15/2019

  365,000    407,659  

Thompson Creek Metals Co., Inc.
9.750%, 12/1/2017

  735,000    742,736  
  

 

 

 
   1,474,395  
  

 

 

 
Oil, Gas & Consumable Fuels – 11.51%  

Anadarko Petroleum Corp.
6.375%, 9/15/2017

  540,000    562,973  

BP Capital Markets Plc
3.506%, 3/17/2025

  445,000    471,689  

Chesapeake Energy Corp.
6.625%, 8/15/2020

  1,010,000    950,662  

Exxon Mobil Corp.
2.397%, 3/6/2022

  435,000    445,932  

 

The accompanying notes are an integral part of these Schedules of Investments.

 

90


Brandes Credit Focus Yield Fund

SCHEDULE OF INVESTMENTS — September 30, 2016 (continued)

 

 

 

   Principal
Amount
  Value 

Kinder Morgan, Inc.

  

7.000%, 6/15/2017

 $270,000   $279,410  

4.300%, 6/1/2025

  353,000    366,877  

Occidental Petroleum Corp.
3.500%, 6/15/2025

  220,000    234,233  

Range Resources Corp.
5.000%, 3/15/2023 (Acquired 08/06/15, Cost $292,322)(b)

  305,000    298,138  
  

 

 

 
   3,609,914  
  

 

 

 
Telecommunications – 4.51%  

Clearwire Communications, LLC / Clearwire Finance, Inc.
14.750%, 12/1/2016(c)

  495,000    504,281  

Sprint Communications, Inc.
9.000%, 11/15/2018 (Acquired 11/24/15, Cost $306,524)(b)

  290,000    320,088  

Telecom Italia Capital SA
6.999%, 6/4/2018

  140,000    151,073  

Telefonica Emisiones SAU

  

6.221%, 7/3/2017

  335,000    346,748  

5.462%, 2/16/2021

  80,000    90,844  
  

 

 

 
   1,413,034  
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $17,004,597)

  $17,416,227  
  

 

 

 
REPURCHASE AGREEMENTS – 2.15%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/30/16), due 10/03/16, 0.01% [Collateralized
by $625,000 US Treasury Note, 3.500%, 05/15/20,
(Market Value $689,063)] (proceeds $673,450)

 $673,450   $673,450  
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $673,450)

  $673,450  
  

 

 

 

Total Investments (Cost $30,339,376) – 99.07%

  $31,055,603  

Other Assets in Excess of Liabilities – 0.93%

   292,410  
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $31,348,013  
  

 

 

 

 

Percentages are stated as a percent of total net assets.

 

(a)Non-income producing security.
(b)Securities were purchased exempt from registration in the U.S. pursuant to Rule 144A of the Securities Act of 1933 (the “Act”) or were acquired in a private placement, and, unless registered under the Act, may only be sold to “qualified institutional buyers” (as defined in the Act) or pursuant to another exemption from registration. The market values of these securities total $2,992,709 which represents 9.55% of the Fund’s net assets.
(c)These securities have limited liquidity and represent $1,139,870 or 3.64% of the Fund’s net assets and are classified as Level 2 securities. See Note 2 in the Notes to Schedule of Investments.
(d)In default.

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

91


Brandes Investment Trust

STATEMENTS OF ASSETS AND LIABILITIES — September 30, 2016

 

 

 

       
Brandes
International
Equity Fund
     Brandes
Global
Equity Fund
 

ASSETS

      

Investment in securities, at value(1)

      

Unaffiliated issuers

  $689,433,996      $54,062,040  

Affiliated issuers

            

Cash

   270,920         

Restricted cash

            

Foreign Currency(1)

   289,309       21,430  

Receivables:

      

Securities sold

   3,205,022         

Fund shares sold

   12,783,617       17,436  

Dividends and interest

   2,742,558       124,254  

Foreign currency spot trade

   2,984         

Tax reclaims

   345,200       23,177  

Due from Advisor

            

Prepaid expenses and other assets

   37,714       24,106  
  

 

 

     

 

 

 

Total Assets

   709,111,320       54,272,443  
  

 

 

     

 

 

 

LIABILITIES

      

Payables:

      

Securities purchased

   2,869,405       68,914  

Fund shares redeemed

   1,257,239       116,853  

Due to Advisor

   463,298       18,810  

12b-1 Fee

   10,942       2,186  

Trustee Fees

   21,180       4,438  

Due to Custodian

          46,979  

Foreign currency spot payable

            

Dividends payable

   130,784       1,311  

Foreign tax withholding

   213,867       5,804  

Accrued expenses

   231,616       72,772  
  

 

 

     

 

 

 

Total Liabilities

   5,198,331       338,067  
  

 

 

     

 

 

 

NET ASSETS

  $703,912,989      $53,934,376  
  

 

 

     

 

 

 

COMPONENTS OF NET ASSETS

      

Paid-in capital

  $840,050,307      $53,593,726  

Undistributed net investment income (loss)

   3,026,620       (54,425

Accumulated net realized gain (loss) on investments and foreign currency

   (64,441,005     (505,237

Net unrealized appreciation (depreciation) on:

      

Investments

   (74,719,871     901,480  

Foreign currency

   (3,062     (1,168
  

 

 

     

 

 

 

Total Net Assets

  $703,912,989      $53,934,376  
  

 

 

     

 

 

 

Net asset value, offering price and redemption proceeds per share

      

Class A Shares

      

Net Assets

  $14,333,347      $4,626,882  

Shares outstanding (unlimited shares authorized without par value)

   913,107       218,138  

Offering and redemption price

  $15.70      $21.21  
  

 

 

     

 

 

 

Maximum offering price per share*

  $16.65      $22.50  
  

 

 

     

 

 

 

Class C Shares

      

Net Assets

  $13,080,640      $1,970,553  

Shares outstanding (unlimited shares authorized without par value)

   839,731       93,437  

Offering and redemption price

  $15.58      $21.09  
  

 

 

     

 

 

 

Class E Shares

      

Net Assets

  $553,991      $57,098  

Shares outstanding (unlimited shares authorized without par value)

   35,310       2,739  

Offering and redemption price

  $15.69      $20.85  
  

 

 

     

 

 

 

Class I Shares

      

Net Assets

  $648,280,838      $47,279,843  

Shares outstanding (unlimited shares authorized without par value)

   41,231,963       2,216,111  

Offering and redemption price

  $15.72      $21.33  
  

 

 

     

 

 

 

Class R6 Shares

      

Net Assets

  $27,664,173       N/A  

Shares outstanding (unlimited shares authorized without par value)

   1,757,167       N/A  

Offering and redemption price

  $15.74       N/A  
  

 

 

     

 

 

 

(1)  Cost of:

      

Investments in securities

      

Unaffiliated issuers

  $764,153,867      $53,160,560  

Affiliated issuers

            

Foreign currency

   290,529       21,468  

 

*Includes a sales load of 5.75% for the International, Global, Global Equity Income, Global Opportunities Value, Emerging Markets Value, and International Small Cap Funds and 3.75% for the Core Plus Fixed Income and Credit Focus Yield Funds (see Note 7 of the Notes to Financial Statements).

 

The accompanying notes to financial statements are an integral part of this statement.

 

92


Brandes Investment Trust

STATEMENTS OF ASSETS AND LIABILITIES — September 30, 2016 (continued)

 

 

 

Brandes
Global Equity
Income Fund
  Brandes
Global
Opportunities
Value Fund
  Brandes
Emerging
Markets
Value Fund
  Brandes
International
Small Cap
Equity Fund
  Brandes
Core Plus Fixed
Income Fund
  Brandes
Credit Focus
Yield Fund
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
$848,876   $5,714,398   $1,153,728,201   $1,329,119,493   $100,270,545   $31,055,603  
             31,601,033          
 45,596    1,000        1,157,266          
             2,379,265          
 422        4,353,959    121,138          
     
         529,135    1,329,182        331,926  
     24,272    2,443,341    3,814,235    48,676      
 2,685    19,379    868,853    4,631,032    803,632    352,879  
         1,128              
 189    4,196    28,964    290,251          
 11,789    10,897                1,535  
 3,414    24    59,417    43,238    9,879    10,656  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 912,971    5,774,166    1,162,012,998    1,374,486,133    101,132,732    31,752,599  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
     13,637    273,908    1,377,007    1,337,107    347,648  
     733    2,958,100    1,425,138    82,533    96  
         846,889    1,065,318    10,287      
 9    114    77,459    36,292    492    620  
 6,026    5,512    42,233    45,107    9,422    4,121  
         529,636        78,044      
     16        822          
 109    363    483,177    46,507    2,653    2,770  
 152    850    44,563    318,026          
 43,657    53,745    398,999    330,106    69,546    49,331  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 49,953    74,970    5,654,964    4,644,323    1,590,084    404,586  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$863,018   $5,699,196   $1,156,358,034   $1,369,841,810   $99,542,648   $31,348,013  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$817,029   $5,860,475   $1,446,043,311   $1,337,047,477   $96,558,380   $30,381,098  
     2,079    (882,529  (5,517,699      (7,293
 21,085    (426,117  (161,419,034  19,504,706    175,439    257,981  
     
 24,836    262,317    (127,379,178  19,003,319    2,808,829    716,227  
 68    442    (4,536  (195,993        

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$863,018   $5,699,196   $1,156,358,034   $1,369,841,810   $99,542,648   $31,348,013  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
$5,138   $573,982   $304,961,421   $121,109,345   $2,046,151   $2,351,451  
 476    56,451    38,539,130    8,999,682    217,945    227,275  
$10.79   $10.17   $7.91   $13.46   $9.39   $10.35  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$11.45   $10.79   $8.40   $14.28   $9.75   $10.75  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$11,039   $34,119   $22,405,350   $19,768,345    N/A    N/A  
 1,030    3,362    2,849,553    1,492,705          
$10.72   $10.15   $7.86   $13.24    N/A    N/A  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 N/A    N/A    N/A    N/A   $323,639    N/A  
                 34,170      
 N/A    N/A    N/A    N/A   $9.47    N/A  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$846,841   $5,091,095   $828,991,157   $1,212,484,724   $97,172,858   $28,996,562  
 79,303    501,712    104,382,492    89,842,105    10,290,169    2,803,067  
$10.68   $10.15   $7.94   $13.50   $9.44   $10.34  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 N/A    N/A   $106   $16,479,396    N/A    N/A  
 N/A    N/A    13    1,220,851    N/A    N/A  
 N/A    N/A   $7.93   $13.50    N/A    N/A  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
$824,040   $5,452,081   $1,281,107,379   $1,304,376,882   $97,461,716   $30,339,376  
             37,340,325          
 424        4,354,148    2,642,426          

 

The accompanying notes to financial statements are an integral part of this statement.

 

93


Brandes Investment Trust

STATEMENTS OF OPERATIONS — For the Year Ended September 30, 2016

 

 

 

       
Brandes
International
Equity Fund
     Brandes
Global
Equity Fund
 

INVESTMENT INCOME

      

Income

      

Dividend income

      

Unaffiliated issuers

  $24,182,787      $1,653,241  

Affiliated issuers

            

Less: foreign taxes withheld

   (2,345,014     (106,833

Interest income

   3,210       42,587  

Less: foreign taxes withheld

            

Income from securities lending

   193,401       24,915  

Miscellaneous Income

   21,550         
  

 

 

     

 

 

 

Total Income

   22,055,934       1,613,910  
  

 

 

     

 

 

 

Expenses

      

Advisory fees (Note 3)

   5,062,610       403,096  

Custody fees

   136,972       9,951  

Administration fees (Note 3)

   148,068       13,223  

Insurance expense

   16,544       1,373  

Legal fees

   31,410       5,114  

Printing fees

   53,308       7,119  

Miscellaneous

   23,220       4,236  

Registration expense

   88,129       53,177  

Trustee fees

   73,279       6,406  

Transfer agent fees

   136,130       63,826  

12b-1 Fees – Class A

   34,478       9,461  

12b-1 Fees – Class C

   99,114       15,938  

Shareholder Service Fees – Class C

   33,038       5,313  

Shareholder Service Fees – Class E

   2,186         

Sub-Transfer Agency Fees – Class I

   299,118       22,191  

Accounting fees

   81,514       63,971  

Auditing fees

   42,811       37,134  

Organizational costs

            
  

 

 

     

 

 

 

Total expenses

   6,361,929       721,529  

Expense recoupment (reimbursement / waiver)

   108,603       (186,480
  

 

 

     

 

 

 

Total expenses net of recoupment (reimbursement / waiver)

   6,470,532       535,049  
  

 

 

     

 

 

 

Net investment income

   15,585,402       1,078,861  
  

 

 

     

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

      

Net realized gain (loss) on:

      

Unaffiliated investments

   (3,759,302     (224,516

Foreign currency transactions

   (98,428     (20,745
  

 

 

     

 

 

 

Net realized gain (loss)

   (3,857,730     (245,261
  

 

 

     

 

 

 

Net change in unrealized appreciation (depreciation) on:

      

Investments

   36,944,553       1,898,143  

Foreign currency transactions

   50,697       1,386  
  

 

 

     

 

 

 

Net unrealized appreciation

   36,995,250       1,899,529  
  

 

 

     

 

 

 

Net realized and unrealized gain on investments and foreign currency transactions

   33,137,520       1,654,268  
  

 

 

     

 

 

 

Net increase in net assets resulting from operations

  $48,722,922      $2,733,129  
  

 

 

     

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

94


Brandes Investment Trust

STATEMENTS OF OPERATIONS — For the Year Ended September 30, 2016 (continued)

 

 

 

Brandes
Global Equity
Income Fund

  Brandes
Global
Opportunities
Value Fund
  Brandes
Emerging
Markets
Value Fund
  Brandes
International
Small Cap
Equity Fund
  Brandes
Core Plus Fixed
Income Fund
  Brandes
Credit Focus
Yield Fund
 
     
     
     
$28,785   $194,721   $35,503,955   $25,018,173   $71,231   $55,862  
             421,064          
 (1,476  (15,394  (3,324,619  (1,901,859        
 2    20,989    2,520    114,468    2,451,592    1,055,320  
             (4,966        
             19,857          
             24,899    11,428    6,455  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 27,311    200,316    32,181,856    23,691,636    2,534,251    1,117,637  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 5,587    64,943    9,839,223    11,084,132    289,257    147,677  
 3,900    6,454    618,055    232,913    12,116    5,365  
 1,127    3,297    236,497    271,768    19,755    7,309  
 15    84    31,761    25,783    2,006    821  
 2,847    3,129    51,325    54,747    6,514    4,209  
 2,352    3,064    111,247    118,926    11,101    3,035  
 2,436    2,727    45,888    38,286    4,962    2,751  
 12,194    57,734    137,612    96,786    49,981    35,049  
 3,384    3,568    126,595    142,386    13,995    4,301  
 41,792    42,125    465,267    210,294    52,134    31,923  
 5    954    731,308    226,192    5,741    5,126  
 39    234    145,826    134,677    N/A    N/A  
 13    78    48,609    44,893    N/A    N/A  
 N/A    N/A    N/A    N/A    1,597    N/A  
 346    3,212    361,870    528,170    39,855      
 54,314    60,116    73,466    81,200    57,979    45,890  
 33,267    36,363    36,933    36,770    33,967    37,006  
 4,094    4,094                  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 167,712    292,176    13,061,482    13,327,923    600,960    330,462  
 (160,670  (212,240  (535,375  206,287    (181,891  (138,659

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 7,042    79,936    12,526,107    13,534,210    419,069    191,803  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 20,269    120,380    19,655,749    10,157,426    2,115,182    925,834  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
 24,436    (399,349  (125,575,989  27,969,963    275,403    (76,678
 (291  (2,745  (1,608,216  (772,696        

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 24,145    (402,094  (127,184,205  27,197,267    275,403    (76,678

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 64,664    680,460    380,769,626    84,984,537    2,095,921    1,053,459  
 153    536    12,415    (182,673        

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 64,817    680,996    380,782,041    84,801,864    2,095,921    1,053,459  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 
 
    
88,962
 
  
  278,902    253,597,836    111,999,131    2,371,324    976,781  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$109,231   $399,282   $273,253,585   $122,156,557   $4,486,506   $1,902,615  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

95


Brandes Investment Trust

STATEMENTS OF CHANGES IN NET ASSETS

 

 

 

  Brandes International
Equity Fund
  Brandes Global
Equity Fund
 
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $15,585,402   $11,788,240   $1,078,861   $816,216  

Net realized gain (loss) on:

    

Investments

  (3,759,302  30,830,886    (224,516  2,652,631  

Foreign currency transactions

  (98,428  (339,603  (20,745  (6,526

Net unrealized appreciation (depreciation) on:

  

   

Investments

  36,944,553    (102,057,414  1,898,143    (7,122,486

Foreign currency transactions

  50,697    (59,332  1,386    (334
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  48,722,922    (59,837,223  2,733,129    (3,660,499
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (326,735  (252,436  (83,326  (27,075

Class C

  (217,328  (147,039  (25,407  (17,646

Class E

  (16,845  (32,004  (1,382  (4,102

Class I

  (15,332,614  (11,055,569  (991,951  (755,709

Class R6

  (458,693  N/A    N/A    N/A  

From net realized gains

    

Class A

          (117,360  (138,191

Class C

          (144,639  (95,408

Class E

          (13,647  (17,354

Class I

          (2,617,644  (3,049,426

Class R6

      N/A    N/A    N/A  
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (16,352,215  (11,487,048  (3,995,356  (4,104,911
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  278,842,419    297,808,360    12,290,688    17,889,572  

Net asset value of shares issued on reinvestment of distributions

  15,725,407    10,943,349    3,952,436    4,042,087  

Cost of shares redeemed

  (212,318,638  (195,676,939  (11,550,515  (12,125,187
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  82,249,188    113,074,770    4,692,609    9,806,472  
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  114,619,895    41,750,499    3,430,382    2,041,062  
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  589,293,094    547,542,595    50,503,994    48,462,932  
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $703,912,989   $589,293,094   $53,934,376   $50,503,994  
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $3,026,620   $46,560   $(54,425 $(16,286
 

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

96


Brandes Investment Trust

STATEMENTS OF CHANGES IN NET ASSETS (continued)

 

 

 

  Brandes Global Equity
Income Fund
  Brandes Global Opportunities
Value Fund
 
  

Year Ended
September 30,
2016

  Period Ended
September 30,
2015*
  Year Ended
September 30,
2016
  Period Ended
September 30,
2015*
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $20,269   $13,809   $120,380   $31,468  

Net realized gain (loss) on:

    

Investments

  24,436    9,317    (399,349  67,349  

Foreign currency transactions

  (291  (882  (2,745  (3,635

Net unrealized appreciation (depreciation) on:

  

   

Investments

  64,664    (39,828  680,460    (418,143

Foreign currency transactions

  153    (85  536    (94
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  109,231    (17,669  399,282    (323,055
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (76  (1  (10,894  (1,909

Class C

  (122  (1  (463  (90

Class E

  N/A    N/A    N/A    N/A  

Class I

  (20,233  (12,859  (124,679  (25,605

Class R6

  N/A    N/A    N/A    N/A  

From net realized gains

    

Class A

  (2      (3,623    

Class C

  (2      (304    

Class E

  N/A    N/A    N/A    N/A  

Class I

  (12,640      (70,302    

Class R6

  N/A    N/A    N/A    N/A  
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (33,075  (12,861  (210,265  (27,604
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  150,238    622,809    6,590,086    3,665,181  

Net asset value of shares issued on reinvestment of distributions

  31,963    12,382    149,850    27,160  

Cost of shares redeemed

          (4,571,439    
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  182,201    635,191    2,168,497    3,692,341  
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  258,357    604,661    2,357,514    3,341,682  
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  604,661        3,341,682      
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $863,018   $604,661   $5,699,196   $3,341,682  
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $   $429   $2,079   $6,305  
 

 

 

  

 

 

  

 

 

  

 

 

 

 

*Commenced operations on December 31, 2014.

 

The accompanying notes to financial statements are an integral part of this statement.

 

97


Brandes Investment Trust

STATEMENTS OF CHANGES IN NET ASSETS (continued)

 

 

 

  Brandes Emerging Markets
Value Fund
  Brandes International
Small Cap Equity Fund
 
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $19,655,749   $19,080,666   $10,157,426   $4,208,745  

Net realized gain (loss) on:

    

Investments

  (125,575,989  (33,870,174  27,969,963    24,636,722  

Foreign currency transactions

  (1,608,216  (1,133,847  (772,696  (237,021

Net unrealized appreciation (depreciation) on:

  

   

Investments

  380,769,626    (468,102,778  84,984,537    (60,332,960

Foreign currency transactions

  12,415    (39,521  (182,673  8,916  
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  273,253,585    (484,065,654  122,156,557    (31,715,598
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (3,653,585  (5,101,168  (1,623,052  (701,245

Class C

  (95,247  (239,742  (237,168  (141,085

Class E

  N/A    N/A    N/A    N/A  

Class I

  (10,871,960  (16,727,079  (18,992,579  (9,854,648

Class R6

      N/A    (26,169  N/A  

From net realized gains

    

Class A

      (6,331,579  (1,347,940  (1,474,067

Class C

      (637,122  (268,103  (411,606

Class E

  N/A    N/A    N/A    N/A  

Class I

      (29,027,390  (14,618,967  (17,794,096

Class R6

      N/A        N/A  
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (14,620,792  (58,064,080  (37,113,978  (30,376,747
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  465,356,191    972,112,934    620,532,710    676,989,096  

Net asset value of shares issued on reinvestment of distributions

  12,848,337    48,481,410    36,267,289    29,204,882  

Cost of shares redeemed

  (619,619,751  (875,791,522  (343,843,528  (302,592,645
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  (141,415,223  144,802,822    312,956,471    403,601,333  
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  117,217,570    (397,326,912  397,999,050    341,508,988  
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  1,039,140,464    1,436,467,376    971,842,760    630,333,772  
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $1,156,358,034   $1,039,140,464   $1,369,841,810   $971,842,760  
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $(882,529 $(4,339,531 $(5,517,699 $2,455,405  
 

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

98


Brandes Investment Trust

STATEMENTS OF CHANGES IN NET ASSETS (continued)

 

 

 

  Brandes Core Plus
Fixed Income Fund
  Brandes Credit
Focus Yield Fund
 
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
  Year Ended
September 30,
2016
  Year Ended
September 30,
2015
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $2,115,182   $1,447,080   $925,834   $740,223  

Net realized gain (loss) on:

    

Investments

  275,403    57,956    (76,678  (17,869

Foreign currency transactions

                

Net unrealized appreciation (depreciation) on:

  

   

Investments

  2,095,921    (459,241  1,053,459    (583,671

Foreign currency transactions

                
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  4,486,506    1,045,795    1,902,615    138,683  
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (55,764  (47,510  (59,334  (47,030

Class C

  N/A    N/A    N/A    N/A  

Class E

  (15,343  (40,927  N/A    N/A  

Class I

  (2,076,681  (1,406,481  (866,362  (708,709

Class R6

  N/A    N/A    N/A    N/A  

From net realized gains

    

Class A

  (1,614  (11,199      (1,320

Class C

  N/A    N/A    N/A    N/A  

Class E

  (1,430  (9,854  N/A    N/A  

Class I

  (64,614  (268,927      (17,275

Class R6

  N/A    N/A    N/A    N/A  
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (2,215,446  (1,784,898  (925,696  (774,334
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  38,192,598    42,844,221    520,078    535,825  

Net asset value of shares issued on reinvestment of distributions

  2,175,810    1,757,928    894,878    754,855  

Cost of shares redeemed

  (19,193,056  (15,036,102  (419,739  (335,206
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  21,175,352    29,566,047    995,217    955,474  
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  23,446,412    28,826,944    1,972,136    319,823  
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  76,096,236    47,269,292    29,375,877    29,056,054  
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $99,542,648   $76,096,236   $31,348,013   $29,375,877  
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $   $   $(7,293 $(7,999
 

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

99


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
      
    
Net
realized and
unrealized
gain/(loss) on
investments
  Total from
investment
operations
  Dividends
from net
investment
income
 

Brandes International Equity Fund

     

Class A(8)

     

9/30/2016

 $14.90    0.35    0.81    1.16    (0.36

9/30/2015

 $16.58    0.35    (1.73  (1.38  (0.30

9/30/2014

 $16.03    0.33    0.56    0.89    (0.34

9/30/2013

 $13.50    0.34    3.02    3.36    (0.83

9/30/2012

 $13.00    0.38    0.76    1.14    (0.64

Class C

     

9/30/2016

 $14.79    0.23    0.81    1.04    (0.25

9/30/2015

 $16.48    0.24    (1.73  (1.49  (0.20

9/30/2014

 $15.98    0.20    0.55    0.75    (0.25

1/31/2013(3) – 9/30/2013

 $14.30    0.15    1.84    1.99    (0.31

Class E

     

9/30/2016

 $14.89    0.35    0.80    1.15    (0.35

9/30/2015

 $16.56    0.18    (1.58  (1.40  (0.27

9/30/2014

 $16.01    0.33    0.54    0.87    (0.32

9/30/2013

 $13.48    0.33    3.03    3.36    (0.84

9/30/2012

 $12.97    0.41    0.74    1.15    (0.64

Class I

     

9/30/2016

 $14.92    0.38    0.81    1.19    (0.39

9/30/2015

 $16.60    0.35    (1.70  (1.35  (0.33

9/30/2014

 $16.05    0.36    0.56    0.92    (0.37

9/30/2013

 $13.50    0.35    3.04    3.39    (0.84

9/30/2012

 $12.99    0.41    0.76    1.17    (0.66

Class R6

     

2/1/2016(3) – 9/30/2016

 $14.41    0.27    1.39    1.66    (0.33

 

 

(1)Not annualized.
(2)Annualized.
(3)Commencement of operations.
(4)After fees waived and expenses absorbed or recouped by the Advisor, where applicable.
(5)Net investment income (loss) per share has been calculated based on average shares outstanding during the period.
(6)The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).
(7)The total return figure is the since inception return for the class.
(8)Prior to January 31, 2013, Class A shares were known as Class S shares.
(9)Amount is less than $50,000.

 

The accompanying notes to financial statements are an integral part of this statement.

 

100


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average
net assets
  Portfolio
turnover
rate
 
       
       
$15.70    7.90 $14.3    1.18  2.30  1.18  2.30  17.60
$14.90    (8.47)%  $13.1    1.18  2.08  1.18  2.08  27.50
$16.58    5.47 $9.0    1.19  1.92  1.18  1.93  39.53
$16.03    26.06 $0.7    1.23  2.25  1.31  2.17  19.43
$13.50    8.94 $(9)   1.40  2.86  1.45  2.81  13.47
       
$15.58    7.10 $13.1    1.93  1.55  1.93  1.55  17.60
$14.79    (9.14)%  $12.0    1.93  1.43  1.93  1.43  27.50
$16.48    4.64 $4.3    1.93  1.19  1.93  1.19  39.53
$15.98    14.17%(7)  $0.1    1.95%(2)   1.53%(2)   1.97%(2)   1.51%(2)   19.43%(1) 
       
$15.69    7.87 $0.6    1.18  2.30  1.18  2.30  17.60
$14.89    (8.59)%  $1.7    1.18  1.13  1.18  1.13  27.50
$16.56    5.38 $12.3    1.19  1.93  1.18  1.94  39.53
$16.01    26.15 $22.0    1.22  2.26  1.23  2.25  19.43
$13.48    9.05 $6.6    1.18  3.09  1.23  3.04  13.47
       
$15.72    8.10 $648.3    1.00  2.48  0.98  2.50  17.60
$14.92    (8.30)%  $562.5    1.00  2.10  0.98  2.12  27.50
$16.60    5.61 $521.9    1.00  2.12  0.99  2.13  39.53
$16.05    26.43 $404.4    1.03  2.45  1.15  2.33  19.43
$13.50    9.09 $352.7    1.16  3.11  1.21  3.06  13.47
       
$15.74    11.60%(7)  $27.7    0.82%(2)   2.67%(2)   0.93%(2)   2.56%(2)   17.60%(1) 

 

The accompanying notes to financial statements are an integral part of this statement.

 

101


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
      
    
Net
realized and
unrealized
gain/(loss) on
investments
  Total from
investment
operations
  Dividends
from net
investment
income
 

Brandes Global Equity Fund

     

Class A(8)

     

9/30/2016

 $21.85    0.40    0.67    1.07    (0.42

9/30/2015

 $25.43    0.27    (1.90  (1.63  (0.33

9/30/2014

 $24.20    0.43    2.00    2.43    (0.44

9/30/2013

 $20.27    0.38    4.80    5.18    (0.91

9/30/2012

 $19.19    0.43    2.22    2.65    (0.44

Class C

     

9/30/2016

 $21.73    0.25    0.66    0.91    (0.26

9/30/2015

 $25.31    0.16    (1.92  (1.76  (0.20

9/30/2014

 $24.14    0.24    1.99    2.23    (0.30

1/31/2013(3) – 9/30/2013

 $21.21    0.15    3.12    3.27    (0.34

Class E

     

9/30/2016

 $21.55    0.41    0.65    1.06    (0.47

9/30/2015

 $25.16    0.32    (1.93  (1.61  (0.38

9/30/2014

 $24.00    0.43    1.99    2.42    (0.50

9/30/2013

 $20.17    0.37    4.77    5.14    (0.97

9/30/2012

 $19.13    0.44    2.20    2.64    (0.47

Class I

     

9/30/2016

 $21.95    0.46    0.67    1.13    (0.46

9/30/2015

 $25.52    0.39    (1.97  (1.58  (0.37

9/30/2014

 $24.26    0.50    2.00    2.50    (0.48

9/30/2013

 $20.33    0.43    4.81    5.24    (0.98

9/30/2012

 $19.22    0.49    2.22    2.71    (0.47

 

 

(1)Not annualized.
(2)Annualized.
(3)Commencement of operations.
(4)After fees waived and expenses absorbed or recouped by the Advisor, where applicable.
(5)Net investment income (loss) per share has been calculated based on average shares outstanding during the period.
(6)The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).
(7)The total return figure is the since inception return for the class which commenced operations on January 31, 2013.
(8)Prior to January 31, 2013, Class A shares were known as Class S shares.
(9)Amount is less than $50,000.

 

The accompanying notes to financial statements are an integral part of this statement.

 

102


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Dividends
from net
realized
gains
  Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average
net assets
  Portfolio
turnover
rate
 
        
        
 (1.29 $21.21    5.01 $4.6    1.25  1.95  1.58  1.62  15.68
 (1.62 $21.85    (6.99)%  $1.8    1.25  1.15  1.66  0.74  25.06
 (0.76 $25.43    10.18 $1.2    1.25  1.67  1.71  1.21  30.33
 (0.34 $24.20    26.81 $0.3    1.25  1.72  1.97  1.00  24.37
 (1.13 $20.27    14.38 $0.1    1.25  2.23  2.00  1.47  18.00
        
 (1.29 $21.09    4.20 $2.0    2.00  1.20  2.32  0.88  15.68
 (1.62 $21.73    (7.62)%  $2.4    2.00  0.66  2.42  0.24  25.06
 (0.76 $25.31    9.34 $1.1    2.00  0.92  2.46  0.46  30.33
    $24.14    15.50%(7)  $0.1    2.00%(2)   0.97%(2)   2.71%(2)   0.26%(2)   24.37%(1) 
        
 (1.29 $20.85    5.03 $(9)   1.25  1.95  1.32  1.88  15.68
 (1.62 $21.55    (6.97)%  $0.3    1.25  1.33  1.42  1.16  25.06
 (0.76 $25.16    10.20 $0.3    1.25  1.68  1.48  1.45  30.33
 (0.34 $24.00    26.80 $0.2    1.25  1.71  1.76  1.20  24.37
 (1.13 $20.17    14.35 $0.2    1.25  2.23  1.69  1.78  18.00
        
 (1.29 $21.33    5.26 $47.3    1.00  2.20  1.38  1.82  15.68
 (1.62 $21.95    (6.75)%  $46.0    1.00  1.61  1.47  1.14  25.06
 (0.76 $25.52    10.46 $45.9    1.00  1.93  1.53  1.40  30.33
 (0.34 $24.26    27.12 $39.4    1.00  1.96  1.75  1.21  24.37
 (1.13 $20.33    14.67 $30.1    1.00  2.47  1.68  1.79  18.00

 

The accompanying notes to financial statements are an integral part of this statement.

 

103


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
      
    
Net
realized and
unrealized
gain/(loss) on
investments
  Total from
investment
operations
  Dividends
from net
investment
income
 

Brandes Global Equity Income Fund

  

   

Class A

     

9/30/2016

 $9.62    0.28    1.35    1.63    (0.26

12/31/2014(3) – 9/30/2015

 $10.00    0.23    (0.46  (0.23  (0.15

Class C

     

9/30/2016

 $9.60    0.20    1.31    1.51    (0.19

12/31/2014(3) – 9/30/2015

 $10.00    0.23    (0.52  (0.29  (0.11

Class I

     

9/30/2016

 $9.57    0.29    1.30    1.59    (0.28

12/31/2014(3) – 9/30/2015

 $10.00    0.23    (0.45  (0.22  (0.21

Brandes Global Opportunities Value Fund

  

  

Class A

     

9/30/2016

 $9.36    0.15    0.96    1.11    (0.21

12/31/2014(3) – 9/30/2015

 $10.00    0.12    (0.68  (0.56  (0.08

Class C

     

9/30/2016

 $9.33    0.07    0.98    1.05    (0.14

12/31/2014(3) – 9/30/2015

 $10.00    0.12    (0.75  (0.63  (0.04

Class I

     

9/30/2016

 $9.33    0.17    0.97    1.14    (0.23

12/31/2014(3) – 9/30/2015

 $10.00    0.12    (0.71  (0.59  (0.08

 

 

(1)Not annualized.
(2)Annualized.
(3)Commencement of operations.
(4)After fees waived and expenses absorbed or recouped by the Advisor, where applicable.
(5)Net investment income (loss) per share has been calculated based on average shares outstanding during the period.
(6)The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).
(7)The total return figure is the since inception return for the class which commenced operations on December 31, 2014.
(8)Amount is less than $50,000.

 

The accompanying notes to financial statements are an integral part of this statement.

 

104


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Dividends
from net
realized
gains
  Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average
net assets
  Portfolio
turnover
rate
 
        
        
 (0.20 $10.79    17.35 $(8)   1.25  2.67  20.41  (16.49)%   22.38
    $9.62    (2.44)%(7)  $(8)   1.25%(2)   2.90%(2)   570.42%(2)   (566.27)%(2)   16.78%(1) 
        
 (0.20 $10.72    16.01 $(8)   2.00%   1.91%   21.51%   (17.60)%   22.38
    $9.60    (2.99)%(7)  $(8)   2.00%(2)   2.90%(2)   572.75%(2)   (567.85)%(2)   16.78%(1) 
        
 (0.20 $10.68    16.98 $0.9    1.00%   2.91%   24.04%   (20.13)%   22.38
    $9.57    (2.36)%(7)  $0.6    1.00%(2)   2.90%(2)   37.61%(2)   (33.71)%(2)   16.78%(1) 
        
        
 (0.09 $10.17    12.13 $0.6    1.40%   1.53%   4.57%   (1.64)%   71.20
    $9.36    (5.66)%(7)  $0.3    1.40%(2)   1.29%(2)   9.85%(2)   (7.16)%(2)   15.12%(1) 
        
 (0.09 $10.15    11.42 $(8)   2.15%   0.78%   5.32%   (2.39)%   71.20
    $9.33    (6.33)%(7)  $(8)   2.15%(2)   1.86%(2)   13.79%(2)   (9.78)%(2)   15.12%(1) 
        
 (0.09 $10.15    12.45 $5.1    1.15%   1.78%   4.25%   (1.32)%   71.20
    $9.33    (5.92)%(7)  $3.0    1.15%(2)   1.55%(2)   11.77%(2)   (9.07)%(2)   15.12%(1) 

 

The accompanying notes to financial statements are an integral part of this statement.

 

105


Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
      
    
Net
realized and
unrealized
gain/(loss) on
investments
  Total from
investment
operations
  Dividends
from net
investment
income
 

Brandes Emerging Markets Value Fund

  

 

Class A(8)

     

9/30/2016

 $6.19    0.12    1.69    1.81    (0.09

9/30/2015

 $9.56    0.11    (3.12  (3.01  (0.13

9/30/2014

 $9.23    0.11    0.53    0.64    (0.10

9/30/2013

 $8.96    0.11    0.59    0.70    (0.22

9/30/2012

 $7.85    0.17    1.10    1.27    (0.08

Class C

     

9/30/2016

 $6.15    0.07    1.67    1.74    (0.03

9/30/2015

 $9.51    0.05    (3.10  (3.05  (0.08

9/30/2014

 $9.19    0.03    0.54    0.57    (0.04

1/31/2013(3) – 9/30/2013

 $9.54    0.02    (0.30  (0.28  (0.07

Class I

     

9/30/2016

 $6.21    0.14    1.70    1.84    (0.11

9/30/2015

 $9.58    0.13    (3.12  (2.99  (0.15

9/30/2014

 $9.24    0.13    0.54    0.67    (0.12

9/30/2013

 $8.99    0.13    0.56    0.69    (0.23

9/30/2012

 $7.86    0.20    1.10    1.30    (0.09

Class R6

     

7/11/2016(3) – 9/30/2016

 $7.54    0.04    0.38    0.42    (0.03

Brandes International Small Cap Fund

  

  

Class A(8)

     

9/30/2016

 $12.58    0.09    1.22    1.31    (0.23

9/30/2015

 $13.55    0.04    (0.43  (0.39  (0.17

9/30/2014

 $13.72    0.06    1.02    1.08    (0.36

9/30/2013

 $10.56    0.06    3.36    3.42    (0.14

1/31/2012(3) – 9/30/2012

 $10.00    0.10    0.46    0.56      

Class C

     

9/30/2016

 $12.42    0.00    1.19    1.19    (0.17

9/30/2015

 $13.45    (0.04  (0.44  (0.48  (0.14

9/30/2014

 $13.68    (0.04  1.02    0.98    (0.32

1/31/2013(3) – 9/30/2013

 $11.90    (0.02  1.83    1.81    (0.03

Class I

     

9/30/2016

 $12.61    0.12    1.22    1.34    (0.25

9/30/2015

 $13.58    0.08    (0.44  (0.36  (0.20

9/30/2014

 $13.74    0.09    1.03    1.12    (0.39

9/30/2013

 $10.56    0.09    3.37    3.46    (0.16

1/31/2012(3) – 9/30/2012

 $10.00    0.10    0.46    0.56      

Class R6