12/07/2021 | Press release | Distributed by Public on 12/07/2021 12:55
(a)
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[Insert full text of semi-annual or annual report here]
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SEMI-ANNUAL REPORT • SEPTEMBER 30, 2021
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Shareholder Letter
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1
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Sector Allocations
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8
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Schedules of Investments
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10
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Statements of Assets and Liabilities
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17
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Statements of Operations
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18
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Statements of Changes in Net Assets
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19
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Financial Highlights
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23
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Notes to Financial Statements
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28
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Expense Examples
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37
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Statement Regarding Liquidity Risk Management Program
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39
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Approval of Investment Advisory Agreement
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40
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Additional Information
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43
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Privacy Notice
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44
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Since
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||||||
6 Months
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1 Year*
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3 Years*
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5 Years*
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10 Years*
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Inception*
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Hodges Fund (10/09/1992)
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2.86%
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61.59%
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10.40%
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10.42%
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14.63%
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10.18%
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S&P 500® Index
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9.18%
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30.00%
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15.99%
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16.90%
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16.63%
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10.69%
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Hodges Small Cap Fund (12/18/2007)
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1.46%
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71.23%
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10.39%
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12.77%
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13.87%
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10.41%
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Russell 2000® Index
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-0.25%
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47.68%
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10.54%
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13.45%
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14.63%
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9.58%
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Hodges Small Intrinsic Value Fund (12/26/2013)
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1.73%
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66.42%
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10.11%
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11.32%
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-
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9.36%
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Russell 2000® Value Index
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1.44%
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63.92%
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8.58%
|
11.03%
|
-
|
8.48%
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Russell 2000® Index
|
-0.25%
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47.68%
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10.54%
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13.45%
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-
|
10.05%
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Hodges Blue Chip Equity Income Fund (09/10/2009)
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5.95%
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19.76%
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12.48%
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14.85%
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14.24%
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11.92%
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Russell 1000® Index
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8.76%
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30.96%
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16.43%
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17.11%
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16.76%
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14.91%
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HDPMX
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HDPSX
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HDSVX
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HDPBX
|
||
Gross Expense Ratio1
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1.41%
|
1.40%
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2.48%
|
1.64%
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Net Expense Ratio1
|
1.17%^
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1.35%^
|
1.29%^
|
1.30%^
|
1
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These expense ratios are from the most recent prospectus dated July 29, 2021.
|
||
^
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The Advisor has contractually agreed to reduce its fees at least until July 31, 2023. This figure excludes Acquired Fund Fees and Expenses, interest, taxes, and extraordinary expenses. The Advisor is permitted, with Board approval, to be reimbursed for fee reduction and/or expense payments made in the prior three years from the date the fees were waived and/or expenses were paid. Please see prospectus for details. See the Financial Highlights in this report for the most current expense ratios.
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Craig Hodges
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Eric Marshall, CFA
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Co-Portfolio Manager
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Co-Portfolio Manager
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Gary Bradshaw
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Chris Terry, CFA
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Derek Maupin
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Co-Portfolio Manager
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Co-Portfolio Manager
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Co-Portfolio Manager
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SECTOR ALLOCATIONS At September 30, 2021 (Unaudited)
|
SECTOR ALLOCATIONS At September 30, 2021 (Unaudited)
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited)
|
Shares
|
Value
|
||||||
COMMON STOCKS: 94.4%
|
|||||||
Airlines: 2.8%
|
|||||||
250,000
|
Spirit Airlines, Inc. 1
|
$
|
6,485,000
|
||||
Apparel: 1.6%
|
|||||||
125,000
|
On Holding AG - Class A 1
|
3,766,250
|
|||||
Apparel & Shoe Retail: 1.8%
|
|||||||
302,625
|
Duluth Holdings, Inc. - Class B 1
|
4,124,779
|
|||||
Auto Manufacturers: 3.5%
|
|||||||
150,000
|
General Motors Co. 1
|
7,906,500
|
|||||
Banks: 2.8%
|
|||||||
500,000
|
Deutsche Bank AG 1
|
6,350,000
|
|||||
Biotechnology: 5.9%
|
|||||||
35,000
|
Moderna, Inc. 1
|
13,470,100
|
|||||
Building Materials: 8.5%
|
|||||||
100,000
|
The AZEK Co, Inc. - Class A 1
|
3,653,000
|
|||||
135,000
|
Builders FirstSource, Inc. 1
|
6,984,900
|
|||||
40,000
|
Eagle Materials, Inc.
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5,246,400
|
|||||
40,000
|
Owens Corning
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3,420,000
|
|||||
19,304,300
|
|||||||
Computers: 3.4%
|
|||||||
35,000
|
CyberArk Software Ltd. 1
|
5,523,700
|
|||||
60,000
|
NCR Corp. 1
|
2,325,600
|
|||||
7,849,300
|
|||||||
Diversified Financial Services: 1.9%
|
|||||||
115,091
|
Jefferies Financial Group, Inc.
|
4,273,329
|
|||||
Entertainment: 4.0%
|
|||||||
225,000
|
Cinemark Holdings, Inc. 1
|
4,322,250
|
|||||
100,000
|
DraftKings, Inc. - Class A 1
|
4,816,000
|
|||||
9,138,250
|
|||||||
Home Builders: 2.3%
|
|||||||
200,000
|
Taylor Morrison Home Corp. 1
|
5,156,000
|
|||||
Home Furnishings: 2.0%
|
|||||||
100,000
|
Tempur Sealy International, Inc.
|
4,641,000
|
|||||
Insurance: 1.2%
|
|||||||
50,000
|
American International Group, Inc.
|
2,744,500
|
|||||
Internet: 10.8%
|
|||||||
50,000
|
Airbnb, Inc. - Class A 1
|
8,387,500
|
|||||
200,000
|
CarParts.com, Inc. 1
|
3,122,000
|
|||||
125,000
|
Revolve Group, Inc. - Class A 1
|
7,721,250
|
|||||
75,000
|
Snap, Inc. - Class A 1
|
5,540,250
|
|||||
24,771,000
|
|||||||
Iron & Steel: 5.6%
|
|||||||
375,000
|
Cleveland-Cliffs, Inc. 1
|
7,428,750
|
|||||
175,000
|
Commercial Metals Co.
|
5,330,500
|
|||||
12,759,250
|
|||||||
Leisure Time: 6.4%
|
|||||||
275,000
|
Callaway Golf Co. 1
|
7,598,250
|
|||||
115,000
|
Norwegian Cruise
|
||||||
Line Holdings Ltd. 1
|
3,071,650
|
||||||
100,000
|
Vista Outdoor, Inc. 1
|
4,031,000
|
|||||
14,700,900
|
|||||||
Mining: 2.5%
|
|||||||
175,000
|
Freeport-McMoRan, Inc.
|
5,692,750
|
|||||
Office Supplies Retail: 1.4%
|
|||||||
115,000
|
Cricut, Inc. - Class A 1
|
3,171,700
|
|||||
Oil Companies Exploration & Production: 3.3%
|
|||||||
200,000
|
Matador Resources Co.
|
7,608,000
|
|||||
Oil Field Services: 2.3%
|
|||||||
175,000
|
Schlumberger NV
|
5,187,000
|
|||||
Restaurants: 3.9%
|
|||||||
2,134,382
|
Luby's, Inc. 1,2
|
8,921,717
|
|||||
Semiconductors: 8.4%
|
|||||||
35,500
|
Cree, Inc. 1
|
2,865,915
|
|||||
80,000
|
Micron Technology, Inc. 1
|
5,678,400
|
|||||
125,000
|
ON Semiconductor Corp. 1
|
5,721,250
|
|||||
30,000
|
Skyworks Solutions, Inc.
|
4,943,400
|
|||||
19,208,965
|
|||||||
Software: 1.8%
|
|||||||
65,000
|
Motorsport Games, Inc. - Class A 1
|
926,900
|
|||||
10,000
|
Twilio, Inc. - Class A 1
|
3,190,500
|
|||||
4,117,400
|
|||||||
Textiles: 2.1%
|
|||||||
1,000,000
|
The Dixie Group, Inc. 1,2
|
4,860,000
|
|||||
U.S. Royalty Trusts: 4.2%
|
|||||||
8,000
|
Texas Pacific Land Corp.
|
9,674,880
|
|||||
TOTAL COMMON STOCKS
|
|||||||
(Cost $154,841,081)
|
215,882,870
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited) (Continued)
|
Contracts
|
Notional
|
||||||||||
(100 shares per contract)
|
Value
|
Value
|
|||||||||
CALL OPTIONS PURCHASED: 5.3% 1
|
|||||||||||
Diversified Financial Services: 0.6%
|
|||||||||||
500
|
Visa, Inc. - Class A,
|
||||||||||
Expiration:
|
|||||||||||
November 2021,
|
|||||||||||
Exercise Price:
$200.00
|
|||||||||||
$
|
11,137,500
|
$
|
1,267,500
|
||||||||
Healthcare Products: 1.2%
|
|||||||||||
1,000
|
Medtronic PLC,
|
||||||||||
Expiration:
|
|||||||||||
November 2021,
|
|||||||||||
Exercise Price:
$100.00
|
|||||||||||
12,535,000
|
2,650,000
|
||||||||||
Home Furnishings: 0.3%
|
|||||||||||
200
|
Williams-Sonoma, Inc.,
|
||||||||||
Expiration:
|
|||||||||||
January 2022,
|
|||||||||||
Exercise Price:
$150.00
|
|||||||||||
3,546,600
|
660,000
|
||||||||||
Internet: 3.2%
|
|||||||||||
50
|
Alphabet, Inc. -
|
||||||||||
Class A,
|
|||||||||||
Expiration:
|
|||||||||||
October 2021,
|
|||||||||||
Exercise Price:
$2,200.00
|
|||||||||||
13,326,550
|
2,335,000
|
||||||||||
50
|
Amazon.com, Inc.,
|
||||||||||
Expiration:
|
|||||||||||
October 2021,
|
|||||||||||
Exercise Price:
$3,000.00
|
|||||||||||
16,425,200
|
1,506,625
|
||||||||||
375
|
DoorDash, Inc. -
|
||||||||||
Class A,
|
|||||||||||
Expiration:
|
|||||||||||
November 2021,
|
|||||||||||
Exercise Price:
$165.00
|
|||||||||||
7,724,250
|
1,665,000
|
||||||||||
450
|
Facebook, Inc. -
|
||||||||||
Class A,
|
|||||||||||
Expiration:
|
|||||||||||
October 2021,
|
|||||||||||
Exercise Price:
$300.00
|
|||||||||||
15,272,550
|
1,825,875
|
||||||||||
7,332,500
|
|||||||||||
TOTAL CALL OPTIONS PURCHASED
|
|||||||||||
(Cost $12,937,668)
|
11,910,000
|
||||||||||
TOTAL INVESTMENTS IN SECURITIES: 99.7%
|
|||||||||||
(Cost $167,778,749)
|
227,792,870
|
||||||||||
Other Assets in Excess of Liabilities: 0.3%
|
577,985
|
||||||||||
TOTAL NET ASSETS: 100.0%
|
$
|
228,370,855
|
1
|
Non-income producing security.
|
2
|
Company is an "affiliated person" of the Fund, as defined in the Investment Company Act of 1940.
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited)
|
Shares
|
Value
|
||||||
COMMON STOCKS: 100.1%
|
|||||||
Airlines: 3.8%
|
|||||||
150,000
|
Hawaiian Holdings, Inc. 1
|
$
|
3,249,000
|
||||
215,000
|
Spirit Airlines, Inc. 1
|
5,577,100
|
|||||
8,826,100
|
|||||||
Apparel: 1.0%
|
|||||||
188,500
|
Fossil Group, Inc. 1
|
2,233,725
|
|||||
Apparel & Shoe Retail: 4.9%
|
|||||||
280,000
|
American Eagle Outfitters, Inc.
|
7,224,000
|
|||||
130,000
|
Shoe Carnival, Inc.
|
4,214,600
|
|||||
11,438,600
|
|||||||
Automobile Retail: 1.0%
|
|||||||
19,000
|
America's Car-Mart, Inc. 1
|
2,218,820
|
|||||
Banks: 5.3%
|
|||||||
170,000
|
Hilltop Holdings, Inc.
|
5,553,900
|
|||||
30,000
|
Prosperity Bancshares, Inc.
|
2,133,900
|
|||||
46,000
|
Triumph Bancorp, Inc. 1
|
4,605,980
|
|||||
12,293,780
|
|||||||
Building Materials: 4.7%
|
|||||||
100,000
|
The AZEK Co, Inc. - Class A 1
|
3,653,000
|
|||||
55,000
|
Eagle Materials, Inc.
|
7,213,800
|
|||||
10,866,800
|
|||||||
Computers: 1.7%
|
|||||||
100,000
|
NCR Corp. 1
|
3,876,000
|
|||||
Diversified Retail: 0.4%
|
|||||||
50,000
|
Sally Beauty Holdings, Inc. 1
|
842,500
|
|||||
Electrical Components & Equipment: 1.9%
|
|||||||
46,000
|
Encore Wire Corp.
|
4,362,180
|
|||||
Electronics: 1.7%
|
|||||||
155,937
|
Kimball Electronics, Inc. 1
|
4,018,497
|
|||||
Entertainment: 1.2%
|
|||||||
150,000
|
Cinemark Holdings, Inc. 1
|
2,881,500
|
|||||
Food: 3.6%
|
|||||||
155,000
|
BellRing Brands, Inc. - Class A 1
|
4,766,250
|
|||||
400,000
|
SunOpta, Inc. 1
|
3,572,000
|
|||||
8,338,250
|
|||||||
Healthcare Products: 3.1%
|
|||||||
45,000
|
Inmode Ltd. 1
|
7,175,250
|
|||||
Healthcare Services: 1.8%
|
|||||||
65,000
|
Acadia Healthcare Co., Inc. 1
|
4,145,700
|
|||||
Holding Companies - Diversified: 1.1%
|
|||||||
215,000
|
Legato Merger Corp. 1
|
2,586,800
|
|||||
Home Builders: 2.2%
|
|||||||
200,000
|
Taylor Morrison Home Corp. 1
|
5,156,000
|
|||||
Home Furnishings: 6.8%
|
|||||||
160,000
|
Ethan Allen Interiors, Inc.
|
3,792,000
|
|||||
10,000
|
RH 1
|
6,669,100
|
|||||
115,000
|
Tempur Sealy International, Inc.
|
5,337,150
|
|||||
15,798,250
|
|||||||
Insurance: 3.0%
|
|||||||
27,000
|
Goosehead Insurance, Inc. - Class A
|
4,111,830
|
|||||
125,000
|
NMI Holdings, Inc. - Class A 1
|
2,826,250
|
|||||
6,938,080
|
|||||||
Internet: 1.2%
|
|||||||
175,000
|
CarParts.com, Inc. 1
|
2,731,750
|
|||||
Iron & Steel: 7.4%
|
|||||||
300,000
|
Cleveland-Cliffs, Inc. 1
|
5,943,000
|
|||||
285,000
|
Commercial Metals Co.
|
8,681,100
|
|||||
120,000
|
United States Steel Corp.
|
2,636,400
|
|||||
17,260,500
|
|||||||
Leisure Time: 9.1%
|
|||||||
48,000
|
Brunswick Corp.
|
4,572,960
|
|||||
200,000
|
Callaway Golf Co. 1
|
5,526,000
|
|||||
185,000
|
Norwegian Cruise
|
||||||
Line Holdings Ltd. 1
|
4,941,350
|
||||||
150,000
|
Vista Outdoor, Inc. 1
|
6,046,500
|
|||||
21,086,810
|
|||||||
Lodging: 3.1%
|
|||||||
115,000
|
Boyd Gaming Corp. 1
|
7,274,900
|
|||||
Office Supplies Retail: 1.5%
|
|||||||
130,000
|
Cricut, Inc. - Class A 1
|
3,585,400
|
|||||
Oil Companies Exploration & Production: 7.1%
|
|||||||
175,000
|
Matador Resources Co.
|
6,657,000
|
|||||
16,526
|
Pioneer Natural Resources Co.
|
2,751,744
|
|||||
265,000
|
SM Energy Co.
|
6,990,700
|
|||||
16,399,444
|
|||||||
Packaging & Containers: 3.8%
|
|||||||
80,000
|
Berry Global Group, Inc. 1
|
4,870,400
|
|||||
200,000
|
Graphic Packaging Holding Co.
|
3,808,000
|
|||||
8,678,400
|
|||||||
Restaurants: 3.0%
|
|||||||
85,000
|
Brinker International, Inc. 1
|
4,169,250
|
|||||
30,000
|
Texas Roadhouse, Inc.
|
2,739,900
|
|||||
6,909,150
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited) (Continued)
|
Shares
|
Value
|
||||||
Semiconductors: 5.5%
|
|||||||
40,000
|
Kulicke & Soffa Industries, Inc.
|
$
|
2,331,200
|
||||
100,000
|
Silicon Motion Technology
|
||||||
Corp. - ADR
|
6,898,000
|
||||||
115,000
|
Tower Semiconductor Ltd. 1
|
3,438,500
|
|||||
12,667,700
|
|||||||
Software: 1.6%
|
|||||||
110,000
|
Upland Software, Inc. 1
|
3,678,400
|
|||||
Sporting Goods: 1.2%
|
|||||||
70,000
|
Academy Sports & Outdoors, Inc. 1
|
2,801,400
|
|||||
U.S. Royalty Trusts: 4.9%
|
|||||||
9,300
|
Texas Pacific Land Corp.
|
11,247,048
|
|||||
Vision Services: 1.5%
|
|||||||
60,000
|
National Vision Holdings, Inc. 1
|
3,406,200
|
|||||
TOTAL COMMON STOCKS
|
|||||||
(Cost $151,317,791)
|
231,723,934
|
||||||
TOTAL INVESTMENTS IN SECURITIES: 100.1%
|
|||||||
(Cost $151,317,791)
|
231,723,934
|
||||||
Liabilities in Excess of Other Assets: (0.1)%
|
(300,811
|
)
|
|||||
TOTAL NET ASSETS: 100.0%
|
$
|
231,423,123
|
1
|
Non-income producing security.
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited)
|
Shares
|
Value
|
||||||
COMMON STOCKS: 95.8%
|
|||||||
Apparel: 5.9%
|
|||||||
15,000
|
Delta Apparel, Inc. 1
|
$
|
409,650
|
||||
45,000
|
Fossil Group, Inc. 1
|
533,250
|
|||||
942,900
|
|||||||
Apparel & Shoe Retail: 1.6%
|
|||||||
19,000
|
Duluth Holdings, Inc. - Class B 1
|
258,970
|
|||||
Automobile Retail: 1.5%
|
|||||||
2,000
|
America's Car-Mart, Inc. 1
|
233,560
|
|||||
Banks: 12.1%
|
|||||||
4,000
|
BancFirst Corp.
|
240,480
|
|||||
15,000
|
First Foundation, Inc.
|
394,500
|
|||||
13,500
|
Hilltop Holdings, Inc.
|
441,045
|
|||||
4,000
|
Independent Bank Group, Inc.
|
284,160
|
|||||
3,000
|
Prosperity Bancshares, Inc.
|
213,390
|
|||||
3,500
|
Triumph Bancorp, Inc. 1
|
350,455
|
|||||
1,924,030
|
|||||||
Building Materials: 6.6%
|
|||||||
10,000
|
Builders FirstSource, Inc. 1
|
517,400
|
|||||
4,000
|
Eagle Materials, Inc.
|
524,640
|
|||||
1,042,040
|
|||||||
Commercial Services: 4.6%
|
|||||||
15,000
|
H&R Block, Inc.
|
375,000
|
|||||
140,000
|
Research Solutions, Inc. 1
|
362,600
|
|||||
737,600
|
|||||||
Computers: 1.7%
|
|||||||
7,000
|
NCR Corp. 1
|
271,320
|
|||||
Diversified Financial Services: 2.5%
|
|||||||
21,000
|
Westwood Holdings Group, Inc.
|
399,000
|
|||||
Diversified Manufacturing Operations: 1.5%
|
|||||||
9,000
|
Trinity Industries, Inc.
|
244,530
|
|||||
Electronics: 3.2%
|
|||||||
20,000
|
Kimball Electronics, Inc. 1
|
515,400
|
|||||
Engineering & Construction: 4.0%
|
|||||||
5,000
|
Arcosa, Inc.
|
250,850
|
|||||
70,000
|
Orion Group Holdings, Inc. 1
|
380,800
|
|||||
631,650
|
|||||||
Food: 2.0%
|
|||||||
14,000
|
Sprouts Farmers Market, Inc. 1
|
324,380
|
|||||
Holding Companies - Diversified: 2.1%
|
|||||||
25,000
|
Legato Merger Corp. 1
|
328,000
|
|||||
Home Builders: 1.9%
|
|||||||
12,000
|
Taylor Morrison Home Corp. 1
|
309,360
|
|||||
Home Furnishings: 3.9%
|
|||||||
16,000
|
Bassett Furniture Industries, Inc.
|
289,760
|
|||||
12,000
|
Hooker Furnishings Corp.
|
323,880
|
|||||
613,640
|
|||||||
Insurance: 5.8%
|
|||||||
12,000
|
Horace Mann Educators Corp.
|
477,480
|
|||||
45,000
|
Tiptree, Inc.
|
450,900
|
|||||
928,380
|
|||||||
Iron & Steel: 5.8%
|
|||||||
25,000
|
Cleveland-Cliffs, Inc. 1
|
495,250
|
|||||
14,000
|
Commercial Metals Co.
|
426,440
|
|||||
921,690
|
|||||||
Leisure Time: 5.2%
|
|||||||
3,600
|
Brunswick Corp.
|
342,972
|
|||||
12,000
|
Vista Outdoor, Inc. 1
|
483,720
|
|||||
826,692
|
|||||||
Machinery - Diversified: 2.3%
|
|||||||
9,000
|
Ichor Holdings Ltd. - ADR 1
|
369,810
|
|||||
Metal Fabrication & Hardware: 1.0%
|
|||||||
12,000
|
TimkenSteel Corp. 1
|
156,960
|
|||||
Mining: 1.0%
|
|||||||
1,500
|
Kaiser Aluminum Corp.
|
163,440
|
|||||
Oil Companies Exploration & Production: 7.9%
|
|||||||
40,000
|
Comstock Resources, Inc. 1
|
414,000
|
|||||
24,000
|
HighPeak Energy, Inc.
|
216,000
|
|||||
4,000
|
Oasis Petroleum, Inc.
|
397,680
|
|||||
4,000
|
Whiting Petroleum Corp. 1
|
233,640
|
|||||
1,261,320
|
|||||||
Real Estate: 3.2%
|
|||||||
16,000
|
Stratus Properties, Inc. 1
|
515,840
|
|||||
Semiconductors: 1.5%
|
|||||||
1,300
|
Synaptics, Inc. 1
|
233,649
|
|||||
Textiles: 2.6%
|
|||||||
24,000
|
Culp, Inc.
|
309,120
|
|||||
20,000
|
The Dixie Group, Inc. 1,2
|
97,200
|
|||||
406,320
|
|||||||
Transportation: 2.8%
|
|||||||
16,000
|
Covenant Logistics
|
||||||
Group, Inc. - Class A 1
|
442,400
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited) (Continued)
|
Shares
|
Value
|
||||||
Vitamins & Nutritional Supplements: 1.6%
|
|||||||
7,000
|
Franchise Group, Inc.
|
$
|
247,870
|
||||
TOTAL COMMON STOCKS
|
|||||||
(Cost $11,239,292)
|
15,250,751
|
||||||
TOTAL INVESTMENTS IN SECURITIES: 95.8%
|
|||||||
(Cost $11,239,292)
|
15,250,751
|
||||||
Other Assets in Excess of Liabilities: 4.2%
|
667,117
|
||||||
TOTAL NET ASSETS: 100.0%
|
$
|
15,917,868
|
1
|
Non-income producing security.
|
2
|
Company is an "affiliated person" of the Fund, as defined in the Investment Company Act of 1940.
|
SCHEDULE OF INVESTMENTS at September 30, 2021 (Unaudited)
|
Shares
|
Value
|
||||||
COMMON STOCKS: 98.7%
|
|||||||
Banks: 2.6%
|
|||||||
1,900
|
The Goldman Sachs Group, Inc.
|
$
|
718,257
|
||||
Beverages: 3.3%
|
|||||||
6,000
|
PepsiCo, Inc.
|
902,460
|
|||||
Building Products Retail: 6.5%
|
|||||||
3,250
|
The Home Depot, Inc.
|
1,066,845
|
|||||
3,500
|
Lowe's Cos, Inc.
|
710,010
|
|||||
1,776,855
|
|||||||
Commercial Services: 3.8%
|
|||||||
4,000
|
PayPal Holdings, Inc. 1
|
1,040,840
|
|||||
Computers: 10.3%
|
|||||||
15,000
|
Apple, Inc.
|
2,122,500
|
|||||
5,000
|
International Business
|
||||||
Machines Corp.
|
694,650
|
||||||
2,817,150
|
|||||||
Discount Retail: 2.6%
|
|||||||
5,000
|
Walmart, Inc.
|
696,900
|
|||||
Home Furnishings: 3.0%
|
|||||||
4,000
|
Whirlpool Corp.
|
815,440
|
|||||
Insurance: 5.5%
|
|||||||
3,000
|
Berkshire Hathaway, Inc. - Class B 1
|
818,820
|
|||||
4,000
|
Chubb Ltd.
|
693,920
|
|||||
1,512,740
|
|||||||
Internet: 12.2%
|
|||||||
550
|
Amazon.com, Inc. 1
|
1,806,772
|
|||||
4,500
|
Facebook, Inc. - Class A 1
|
1,527,255
|
|||||
3,334,027
|
|||||||
Machinery-Construction & Mining: 2.6%
|
|||||||
3,750
|
Caterpillar, Inc.
|
719,887
|
|||||
Oil Companies Exploration & Production: 3.2%
|
|||||||
13,000
|
ConocoPhillips
|
881,010
|
|||||
Oil Companies Integrated: 9.1%
|
|||||||
10,000
|
Chevron Corp.
|
1,014,500
|
|||||
25,000
|
Exxon Mobil Corp.
|
1,470,500
|
|||||
2,485,000
|
|||||||
Pharmaceuticals: 11.0%
|
|||||||
6,000
|
AbbVie, Inc.
|
647,220
|
|||||
3,000
|
Eli Lilly & Co.
|
693,150
|
|||||
5,500
|
Johnson & Johnson
|
888,250
|
|||||
18,000
|
Pfizer, Inc.
|
774,180
|
|||||
3,002,800
|
|||||||
Pipelines: 4.2%
|
|||||||
20,000
|
ONEOK, Inc.
|
1,159,800
|
|||||
Semiconductors: 4.2%
|
|||||||
6,000
|
Texas Instruments, Inc.
|
1,153,260
|
|||||
Software: 8.2%
|
|||||||
8,000
|
Microsoft Corp.
|
2,255,360
|
|||||
Transportation: 6.4%
|
|||||||
4,000
|
FedEx Corp.
|
877,160
|
|||||
4,500
|
Union Pacific Corp.
|
882,045
|
|||||
1,759,205
|
|||||||
TOTAL COMMON STOCKS
|
|||||||
(Cost $17,513,738)
|
27,030,991
|
||||||
TOTAL INVESTMENTS IN SECURITIES: 98.7%
|
|||||||
(Cost $17,513,738)
|
27,030,991
|
||||||
Other Assets in Excess of Liabilities: 1.3%
|
348,778
|
||||||
TOTAL NET ASSETS: 100.0%
|
$
|
27,379,769
|
1
|
Non-income producing security.
|
STATEMENTS OF ASSETS AND LIABILITIES at September 30, 2021 (Unaudited)
|
Small
|
Blue Chip
|
|||||||||||||||
Small Cap
|
Intrinsic
|
Equity
|
||||||||||||||
Hodges Fund
|
Fund
|
Value Fund
|
Income Fund
|
|||||||||||||
ASSETS
|
||||||||||||||||
Investments in unaffiliated securities, at value
|
$
|
214,011,153
|
$
|
231,723,934
|
$
|
15,153,551
|
$
|
27,030,991
|
||||||||
(Cost $156,881,933, $151,317,791, $11,199,292, and $17,513,738)
|
||||||||||||||||
Investments in affiliated securities, at value
|
13,781,717
|
-
|
97,200
|
-
|
||||||||||||
(Cost $10,896,816, $-, $40,000, and $-)
|
||||||||||||||||
Cash
|
845,925
|
900
|
735,639
|
404,642
|
||||||||||||
Receivables:
|
||||||||||||||||
Investment securities sold
|
1,098,539
|
1,013,458
|
-
|
-
|
||||||||||||
Fund shares sold
|
32,946
|
33,935
|
2,540
|
3,065
|
||||||||||||
Dividends and interest
|
64,324
|
64,220
|
12,685
|
6,200
|
||||||||||||
Prepaid expenses
|
20,013
|
19,621
|
8,059
|
17,030
|
||||||||||||
Total assets
|
229,854,617
|
232,856,068
|
16,009,674
|
27,461,928
|
||||||||||||
LIABILITIES
|
||||||||||||||||
Payables:
|
||||||||||||||||
Investment securities purchased
|
1,035,432
|
154,575
|
-
|
-
|
||||||||||||
Distribution fees
|
147,176
|
110,481
|
10,299
|
17,162
|
||||||||||||
Investment advisory fees, net
|
136,392
|
166,376
|
934
|
9,963
|
||||||||||||
Fund shares redeemed
|
84,757
|
53,567
|
46,276
|
11,817
|
||||||||||||
Fund administration fees
|
22,042
|
26,570
|
5,520
|
7,034
|
||||||||||||
Audit fees
|
15,180
|
15,193
|
13,205
|
13,205
|
||||||||||||
Fund accounting fees
|
12,975
|
16,066
|
1,906
|
2,825
|
||||||||||||
Transfer agent fees
|
11,964
|
12,654
|
5,118
|
5,309
|
||||||||||||
Sub-transfer agent fees
|
6,033
|
10,216
|
347
|
650
|
||||||||||||
Trustee fees
|
4,225
|
4,354
|
3,908
|
3,980
|
||||||||||||
Chief Compliance Officer fees
|
2,736
|
2,734
|
2,736
|
2,736
|
||||||||||||
Custody fees
|
575
|
1,134
|
1,108
|
858
|
||||||||||||
Distribution to shareholders
|
-
|
-
|
-
|
2,194
|
||||||||||||
Loans payable
|
-
|
824,000
|
-
|
-
|
||||||||||||
Other accrued expenses
|
4,275
|
35,025
|
449
|
4,426
|
||||||||||||
Total liabilities
|
1,483,762
|
1,432,945
|
91,806
|
82,159
|
||||||||||||
NET ASSETS
|
$
|
228,370,855
|
$
|
231,423,123
|
$
|
15,917,868
|
$
|
27,379,769
|
||||||||
COMPONENTS OF NET ASSETS
|
||||||||||||||||
Paid-in capital
|
$
|
173,655,771
|
$
|
98,079,894
|
$
|
10,826,790
|
$
|
15,015,966
|
||||||||
Total distributable (accumulated) earnings (losses)
|
54,715,084
|
133,343,229
|
5,091,078
|
12,363,803
|
||||||||||||
Total net assets
|
$
|
228,370,855
|
$
|
231,423,123
|
$
|
15,917,868
|
$
|
27,379,769
|
||||||||
Net Asset Value (unlimited shares authorized):
|
||||||||||||||||
Retail Class:
|
||||||||||||||||
Net assets
|
$
|
228,370,855
|
$
|
179,439,702
|
$
|
15,917,868
|
$
|
27,379,769
|
||||||||
Shares of beneficial interest issued and outstanding
|
3,869,130
|
6,995,843
|
902,419
|
1,328,435
|
||||||||||||
Net asset value, offering price, and redemption price per share
|
$
|
59.02
|
$
|
25.65
|
$
|
17.64
|
$
|
20.61
|
||||||||
Institutional Class:
|
||||||||||||||||
Net assets
|
$
|
51,983,421
|
||||||||||||||
Shares of beneficial interest issued and outstanding
|
1,929,937
|
|||||||||||||||
Net asset value, offering price, and redemption price per share
|
$
|
26.94
|
STATEMENTS OF OPERATIONS For the Six Months Ended September 30, 2021 (Unaudited)
|
Small
|
Blue Chip
|
|||||||||||||||
Small Cap
|
Intrinsic
|
Equity
|
||||||||||||||
Hodges Fund
|
Fund
|
Value Fund
|
Income Fund
|
|||||||||||||
INVESTMENT INCOME
|
||||||||||||||||
Dividends from unaffiliated securities
|
$
|
269,311
|
$
|
878,169
|
$
|
123,863
|
$
|
246,687
|
||||||||
Total investment income
|
269,311
|
878,169
|
123,863
|
246,687
|
||||||||||||
EXPENSES
|
||||||||||||||||
Investment advisory fees
|
1,000,482
|
1,059,044
|
72,322
|
90,190
|
||||||||||||
Distribution fees - Retail Class
|
294,259
|
240,912
|
21,271
|
34,688
|
||||||||||||
Sub-transfer agent fees
|
54,078
|
98,236
|
3,175
|
2,974
|
||||||||||||
Fund administration fees
|
53,076
|
61,088
|
9,075
|
11,037
|
||||||||||||
Fund accounting fees
|
31,944
|
37,399
|
2,601
|
3,612
|
||||||||||||
Transfer agent fees
|
25,551
|
25,406
|
9,425
|
9,752
|
||||||||||||
Miscellaneous expenses
|
22,280
|
21,370
|
3,709
|
5,234
|
||||||||||||
Registration expenses
|
19,430
|
21,213
|
11,844
|
11,847
|
||||||||||||
Audit fees
|
15,182
|
15,189
|
13,205
|
13,205
|
||||||||||||
Trustees fees
|
11,575
|
11,770
|
9,736
|
9,814
|
||||||||||||
Reports to shareholders
|
7,969
|
13,998
|
1,742
|
1,506
|
||||||||||||
Chief Compliance Officer fees
|
5,736
|
5,735
|
5,736
|
5,736
|
||||||||||||
Custody fees
|
5,168
|
6,376
|
2,848
|
2,658
|
||||||||||||
Legal fees
|
3,831
|
3,784
|
3,660
|
5,970
|
||||||||||||
Insurance expenses
|
2,450
|
2,524
|
2,116
|
2,123
|
||||||||||||
Interest expense
|
-
|
2
|
-
|
2
|
||||||||||||
Total expenses
|
1,553,011
|
1,624,046
|
172,465
|
210,348
|
||||||||||||
Less: advisory fees waived per waiver
|
||||||||||||||||
effective September 1, 2020 (Note 3)
|
(29,399
|
)
|
(31,506
|
)
|
-
|
-
|
||||||||||
Less: fees waived
|
(164,589
|
)
|
-
|
(62,703
|
)
|
(29,968
|
)
|
|||||||||
Net expenses
|
1,359,023
|
1,592,540
|
109,762
|
180,380
|
||||||||||||
Net investment income (loss)
|
(1,089,712
|
)
|
(714,371
|
)
|
14,101
|
66,307
|
||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
|
||||||||||||||||
Net realized gain (loss) on transactions from:
|
||||||||||||||||
Unaffiliated investments
|
15,920,047
|
28,179,091
|
890,450
|
1,987,336
|
||||||||||||
Affiliated investments
|
(778,529
|
)
|
-
|
45,025
|
-
|
|||||||||||
Options written
|
318,088
|
-
|
-
|
-
|
||||||||||||
Net realized gain (loss)
|
15,459,606
|
28,179,091
|
935,475
|
1,987,336
|
||||||||||||
Net change in unrealized appreciation/depreciation on:
|
||||||||||||||||
Unaffiliated investments
|
(12,977,601
|
)
|
(23,951,496
|
)
|
(686,260
|
)
|
(505,596
|
)
|
||||||||
Affiliated investments
|
4,610,229
|
-
|
18,400
|
-
|
||||||||||||
Options written
|
(115,866
|
)
|
-
|
-
|
-
|
|||||||||||
Net unrealized appreciation/depreciation
|
(8,483,238
|
)
|
(23,951,496
|
)
|
(667,860
|
)
|
(505,596
|
)
|
||||||||
Net realized and unrealized gain (loss) on investments
|
6,976,368
|
4,227,595
|
267,615
|
1,481,740
|
||||||||||||
Net increase (decrease) in net assets
|
||||||||||||||||
resulting from operations
|
$
|
5,886,656
|
$
|
3,513,224
|
$
|
281,716
|
$
|
1,548,047
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Six Months Ended
|
||||||||
September 30, 2021
|
Year Ended
|
|||||||
(Unaudited)
|
March 31, 2021
|
|||||||
INCREASE (DECREASE) IN NET ASSETS FROM:
|
||||||||
OPERATIONS
|
||||||||
Net investment income (loss)
|
$
|
(1,089,712
|
)
|
$
|
(1,082,193
|
)
|
||
Net realized gain (loss) on transactions from:
|
||||||||
Unaffiliated investments
|
15,920,047
|
(2,548,072
|
)
|
|||||
Affiliated investments
|
(778,529
|
)
|
(1,403,735
|
)
|
||||
Options written
|
318,088
|
(842,449
|
)
|
|||||
Net change in unrealized appreciation/depreciation on:
|
||||||||
Unaffiliated investments
|
(12,977,601
|
)
|
125,993,153
|
|||||
Affiliated investments
|
4,610,229
|
9,486,265
|
||||||
Options written
|
(115,866
|
)
|
115,866
|
|||||
Net increase (decrease) in net assets resulting from operations
|
5,886,656
|
129,718,835
|
||||||
CAPITAL SHARE TRANSACTIONS
|
||||||||
Increase (decrease) in net assets derived from net change
|
||||||||
in outstanding shares - Retail Class 1
|
11,765,969
|
8,432,536
|
||||||
Increase (decrease) in net assets derived from net change
|
||||||||
in outstanding shares - Institutional Class 1
|
-
|
(5,141,841
|
)
|
|||||
Total increase (decrease) in net assets from capital share transactions
|
11,765,969
|
3,290,695
|
||||||
Total increase (decrease) in net assets
|
17,652,625
|
133,009,530
|
||||||
NET ASSETS
|
||||||||
Beginning of period/year
|
210,718,230
|
77,708,700
|
||||||
End of period/year
|
$
|
228,370,855
|
$
|
210,718,230
|
1
|
Summary of share transactions is as follows:
|
Six Months Ended
|
||||||||||||||||
September 30, 2021
|
Year Ended
|
|||||||||||||||
(Unaudited)
|
March 31, 2021
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Retail Class:
|
||||||||||||||||
Shares sold
|
531,170
|
$
|
31,914,579
|
717,355
|
$
|
34,132,599
|
||||||||||
Shares redeemed 2
|
(333,969
|
)
|
(20,148,610
|
)
|
(675,320
|
)
|
(25,700,063
|
)
|
||||||||
Net increase (decrease)
|
197,201
|
$
|
11,765,969
|
42,035
|
$
|
8,432,536
|
2
|
Net of redemption fees of $3,383 and $1,729, respectively.
|
Period Ended
|
||||||||
August 19, 2020 4
|
||||||||
Shares
|
Amount
|
|||||||
Institutional Class:
|
||||||||
Shares sold
|
15,241
|
$
|
462,943
|
|||||
Shares redeemed 3
|
(196,654
|
)
|
(5,604,784
|
)
|
||||
Net increase (decrease)
|
(181,413
|
)
|
$
|
(5,141,841
|
)
|
3
|
Net of redemption fees of $230.
|
4
|
Hodges Fund Institutional Class shares liquidated after close of business on August 19, 2020.
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Six Months Ended
|
||||||||
September 30, 2021
|
Year Ended
|
|||||||
(Unaudited)
|
March 31, 2021
|
|||||||
INCREASE (DECREASE) IN NET ASSETS FROM:
|
||||||||
OPERATIONS
|
||||||||
Net investment income (loss)
|
$
|
(714,371
|
)
|
$
|
(1,213,835
|
)
|
||
Net realized gain (loss) on transactions from:
|
||||||||
Unaffiliated investments
|
28,179,091
|
33,264,243
|
||||||
Options written
|
-
|
227,803
|
||||||
Net change in unrealized appreciation/depreciation on:
|
||||||||
Unaffiliated investments
|
(23,951,496
|
)
|
120,713,457
|
|||||
Net increase (decrease) in net assets resulting from operations
|
3,513,224
|
152,991,668
|
||||||
CAPITAL SHARE TRANSACTIONS
|
||||||||
Increase (decrease) in net assets derived from net change
|
||||||||
in outstanding shares - Retail Class 1
|
(6,355,766
|
)
|
(23,660,942
|
)
|
||||
Increase (decrease) in net assets derived from net change
|
||||||||
in outstanding shares - Institutional Class 1
|
(2,795,223
|
)
|
(15,937,850
|
)
|
||||
Total increase (decrease) in net assets from capital share transactions
|
(9,150,989
|
)
|
(39,598,792
|
)
|
||||
Total increase (decrease) in net assets
|
(5,637,765
|
)
|
113,392,876
|
|||||
NET ASSETS
|
||||||||
Beginning of period/year
|
237,060,888
|
123,668,012
|
||||||
End of period/year
|
$
|
231,423,123
|
$
|
237,060,888
|
1
|
Summary of share transactions is as follows:
|
Six Months Ended
|
||||||||||||||||
September 30, 2021
|
Year Ended
|
|||||||||||||||
(Unaudited)
|
March 31, 2021
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Retail Class:
|
||||||||||||||||
Shares sold
|
744,040
|
$
|
19,617,902
|
778,493
|
$
|
16,384,450
|
||||||||||
Shares redeemed 2
|
(995,524
|
)
|
(25,973,668
|
)
|
(2,589,012
|
)
|
(40,045,392
|
)
|
||||||||
Net increase (decrease)
|
(251,484
|
)
|
$
|
(6,355,766
|
)
|
(1,810,519
|
)
|
$
|
(23,660,942
|
)
|
2
|
Net of redemption fees of $5,628 and $1,500, respectively.
|
Six Months Ended
|
||||||||||||||||
September 30, 2021
|
Year Ended
|
|||||||||||||||
(Unaudited)
|
March 31, 2021
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Institutional Class:
|
||||||||||||||||
Shares sold
|
186,676
|
$
|
5,105,748
|
396,865
|
$
|
6,877,522
|
||||||||||
Shares redeemed 3
|
(287,468
|
)
|
(7,900,971
|
)
|
(1,414,567
|
)
|
(22,815,372
|
)
|
||||||||
Net increase (decrease)
|
(100,792
|
)
|
$
|
(2,795,223
|
)
|
(1,017,702
|
)
|
$
|
(15,937,850
|
)
|
3
|
Net of redemption fees of $1,649 and $679, respectively.
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Six Months Ended
|
||||||||
September 30, 2021
|
Year Ended
|
|||||||
(Unaudited)
|
March 31, 2021
|
|||||||
INCREASE (DECREASE) IN NET ASSETS FROM:
|
||||||||
OPERATIONS
|
||||||||
Net investment income (loss)
|
$
|
14,101
|
$
|
(59,655
|
)
|
|||
Net realized gain (loss) on transactions from:
|
||||||||
Unaffiliated investments
|
890,450
|
2,089,023
|
||||||
Affiliated investments
|
45,025
|
194,392
|
||||||
Net change in unrealized appreciation/depreciation on:
|
||||||||
Unaffiliated investments
|
(686,260
|
)
|
6,878,802
|
|||||
Affiliated investments
|
18,400
|
213,269
|
||||||
Net increase (decrease) in net assets resulting from operations
|
281,716
|
9,315,831
|
||||||
CAPITAL SHARE TRANSACTIONS
|
||||||||
Total increase (decrease) in net assets from capital share transactions 1
|
(523,100
|
)
|
2,803,560
|
|||||
Total increase (decrease) in net assets
|
(241,384
|
)
|
12,119,391
|
|||||
NET ASSETS
|
||||||||
Beginning of period/year
|
16,159,252
|
4,039,861
|
||||||
End of period/year
|
$
|
15,917,868
|
$
|
16,159,252
|
1
|
Summary of share transactions is as follows:
|
Six Months Ended
|
||||||||||||||||
September 30, 2021
|
Year Ended
|
|||||||||||||||
(Unaudited)
|
March 31, 2021
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Retail Class:
|
||||||||||||||||
Shares Sold
|
138,113
|
$
|
2,481,375
|
605,619
|
$
|
5,958,230
|
||||||||||
Shares redeemed 2
|
(167,497
|
)
|
(3,004,475
|
)
|
(264,254
|
)
|
(3,154,670
|
)
|
||||||||
Net increase (decrease)
|
(29,384
|
)
|
$
|
(523,100
|
)
|
341,365
|
$
|
2,803,560
|
2
|
Net of redemption fees of $117 and $76, respectively.
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Six Months Ended
|
||||||||
September 30, 2021
|
Year Ended
|
|||||||
(Unaudited)
|
March 31, 2021
|
|||||||
INCREASE (DECREASE) IN NET ASSETS FROM:
|
||||||||
OPERATIONS
|
||||||||
Net investment income (loss)
|
$
|
66,307
|
$
|
167,121
|
||||
Net realized gain (loss) on transactions from:
|
||||||||
Unaffiliated investments
|
1,987,336
|
1,901,153
|
||||||
Net change in unrealized appreciation/depreciation on:
|
||||||||
Unaffiliated investments
|
(505,596
|
)
|
7,852,494
|
|||||
Net increase (decrease) in net assets resulting from operations
|
1,548,047
|
9,920,768
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS
|
||||||||
Total distributions to shareholders
|
(67,295
|
)
|
(1,262,481
|
)
|
||||
CAPITAL SHARE TRANSACTIONS
|
||||||||
Total increase (decrease) in net assets from capital share transactions 1
|
(196,935
|
)
|
(1,373,678
|
)
|
||||
Total increase (decrease) in net assets
|
1,283,817
|
7,284,609
|
||||||
NET ASSETS
|
||||||||
Beginning of period/year
|
26,095,952
|
18,811,343
|
||||||
End of period/year
|
$
|
27,379,769
|
$
|
26,095,952
|
1
|
Summary of share transactions is as follows:
|
Six Months Ended
|
||||||||||||||||
September 30, 2021
|
Year Ended
|
|||||||||||||||
(Unaudited)
|
March 31, 2021
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Retail Class:
|
||||||||||||||||
Shares Sold
|
35,744
|
$
|
754,579
|
123,186
|
$
|
2,111,141
|
||||||||||
Shares issued in reinvestment of distributions
|
3,050
|
63,666
|
64,553
|
1,195,918
|
||||||||||||
Shares redeemed 2
|
(48,850
|
)
|
(1,015,180
|
)
|
(284,526
|
)
|
(4,680,737
|
)
|
||||||||
Net increase (decrease)
|
(10,056
|
)
|
$
|
(196,935
|
)
|
(96,787
|
)
|
$
|
(1,373,678
|
)
|
2
|
Net of redemption fees of $1 and $56, respectively.
|
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year
|
Six Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
September 30,
|
Year Ended March 31,
|
|||||||||||||||||||||||
2021
|
||||||||||||||||||||||||
(Unaudited)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||||||
Net asset value, beginning of period/year
|
$
|
57.39
|
$
|
20.36
|
$
|
37.76
|
$
|
48.44
|
$
|
46.60
|
$
|
35.68
|
||||||||||||
INCOME FROM INVESTMENT OPERATIONS:
|
||||||||||||||||||||||||
Net investment income (loss) 1
|
(0.28
|
)
|
(0.31
|
)
|
(0.19
|
)
|
(0.36
|
)
|
(0.46
|
)
|
(0.24
|
)
|
||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain (loss) on investments
|
1.91
|
37.34
|
(17.21
|
)
|
(7.15
|
)
|
5.90
|
11.15
|
||||||||||||||||
Total from investment operations
|
1.63
|
37.03
|
(17.40
|
)
|
(7.51
|
)
|
5.44
|
10.91
|
||||||||||||||||
LESS DISTRIBUTIONS:
|
||||||||||||||||||||||||
From net realized gain
|
-
|
-
|
-
|
(3.17
|
)
|
(3.60
|
)
|
-
|
||||||||||||||||
Total distributions
|
-
|
-
|
-
|
(3.17
|
)
|
(3.60
|
)
|
-
|
||||||||||||||||
Paid-in capital from redemption
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.01
|
|||||||||||||
Net asset value, end of period/year
|
$
|
59.02
|
$
|
57.39
|
$
|
20.36
|
$
|
37.76
|
$
|
48.44
|
$
|
46.60
|
||||||||||||
Total return
|
2.86
|
%3
|
181.74
|
%
|
(46.05
|
)%
|
(14.45
|
)%
|
11.88
|
%
|
30.64
|
%
|
||||||||||||
SUPPLEMENTAL DATA:
|
||||||||||||||||||||||||
Net assets, end of period/year (millions)
|
$
|
228.4
|
$
|
210.7
|
$
|
73.9
|
$
|
177.4
|
$
|
251.9
|
$
|
360.8
|
||||||||||||
Portfolio turnover rate
|
43
|
%3
|
220
|
%
|
107
|
%
|
119
|
%
|
142
|
%
|
145
|
%
|
||||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
1.32
|
%4
|
1.40
|
%
|
1.37
|
%
|
1.34
|
%
|
1.33
|
%
|
1.30
|
%
|
||||||||||||
After fees waived and expenses absorbed 5,6
|
1.15
|
%4
|
1.16
|
%
|
1.18
|
%
|
1.18
|
%
|
1.18
|
%
|
1.30
|
%
|
||||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
(1.10
|
)%4
|
(1.03
|
)%
|
(0.75
|
)%
|
(0.97
|
)%
|
(1.11
|
)%
|
(0.56
|
)%
|
||||||||||||
After fees waived and expenses absorbed 5,6
|
(0.93
|
)%4
|
(0.79
|
)%
|
(0.56
|
)%
|
(0.81
|
)%
|
(0.96
|
)%
|
(0.56
|
)%
|
1
|
Calculated using the average shares outstanding method.
|
2
|
Does not round to $0.01 or $(0.01), as applicable.
|
3
|
Not annualized.
|
4
|
Annualized.
|
5
|
Effective April 1, 2017, the Advisor contractually agreed to limit the Retail Class shares' annual ratio of expenses to 1.18% of the Retail Class' daily net assets. See Note 3.
|
6
|
Effective September 1, 2020, the Advisor contractually agreed to limit the Retail Class shares' annual ratio of expenses to 0.90% of the Retail Class' daily net assets. Effective September 1, 2021, the annual ratio of expenses returned to 0.93% of the Retail Class' daily net assets. See Note 3.
|
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year
|
Six Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
September 30,
|
Year Ended March 31,
|
|||||||||||||||||||||||
2021
|
||||||||||||||||||||||||
(Unaudited)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||||||
Net asset value, beginning of period/year
|
$
|
25.28
|
$
|
10.10
|
$
|
18.13
|
$
|
19.51
|
$
|
20.11
|
$
|
17.27
|
||||||||||||
INCOME FROM INVESTMENT OPERATIONS:
|
||||||||||||||||||||||||
Net investment income (loss) 1
|
(0.08
|
)
|
(0.13
|
)
|
(0.07
|
)
|
(0.12
|
)
|
(0.13
|
)
|
(0.01
|
)
|
||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain (loss) on investments
|
0.45
|
15.31
|
(6.58
|
)
|
(0.54
|
)
|
2.35
|
2.91
|
||||||||||||||||
Total from investment operations
|
0.37
|
15.18
|
(6.65
|
)
|
(0.66
|
)
|
2.22
|
2.90
|
||||||||||||||||
LESS DISTRIBUTIONS:
|
||||||||||||||||||||||||
From net investment income
|
-
|
-
|
-
|
-
|
-
|
(0.00
|
)2
|
|||||||||||||||||
From net realized gain
|
-
|
-
|
(1.38
|
)
|
(0.72
|
)
|
(2.82
|
)
|
(0.06
|
)
|
||||||||||||||
Total distributions
|
-
|
-
|
(1.38
|
)
|
(0.72
|
)
|
(2.82
|
)
|
(0.06
|
)
|
||||||||||||||
Paid-in capital from redemption
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
||||||||||||
Net asset value, end of period/year
|
$
|
25.65
|
$
|
25.28
|
$
|
10.10
|
$
|
18.13
|
$
|
19.51
|
$
|
20.11
|
||||||||||||
Total return
|
1.46
|
%3
|
150.30
|
%3
|
(39.59
|
)%
|
(2.96
|
)%
|
12.49
|
%
|
16.81
|
%
|
||||||||||||
SUPPLEMENTAL DATA:
|
||||||||||||||||||||||||
Net assets, end of period/year (millions)
|
$
|
179.4
|
$
|
183.2
|
$
|
91.5
|
$
|
354.5
|
$
|
452.0
|
$
|
756.8
|
||||||||||||
Portfolio turnover rate
|
39
|
%3
|
124
|
%
|
81
|
%
|
81
|
%
|
45
|
%
|
44
|
%
|
||||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
1.36
|
%4
|
1.40
|
%
|
1.33
|
%
|
1.29
|
%
|
1.30
|
%
|
1.28
|
%
|
||||||||||||
After fees waived and expenses absorbed 5
|
1.33
|
%4
|
1.35
|
%
|
1.33
|
%
|
1.29
|
%
|
1.30
|
%
|
1.28
|
%
|
||||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
(0.66
|
)%4
|
(0.83
|
)%
|
(0.43
|
)%
|
(0.60
|
)%
|
(0.68
|
)%
|
(0.08
|
)%
|
||||||||||||
After fees waived and expenses absorbed 5
|
(0.63
|
)%4
|
(0.78
|
)%
|
(0.43
|
)%
|
(0.60
|
)%
|
(0.68
|
)%
|
(0.08
|
)%
|
1
|
Calculated using the average shares outstanding method.
|
2
|
Does not round to $0.01 or $(0.01), as applicable.
|
3
|
Not annualized.
|
4
|
Annualized.
|
5
|
Effective September 1, 2020, the Advisor contractually agreed to limit the Retail Class shares' annual ratio of expenses to 1.12% of the Retail Class' daily net assets. Effective September 1, 2021, the annual ratio of expenses returned to 1.15% of the Retail Class' daily net assets. See Note 3.
|
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year
|
Six Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
September 30,
|
Year Ended March 31,
|
|||||||||||||||||||||||
2021
|
||||||||||||||||||||||||
(Unaudited)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||||||
Net asset value, beginning of period/year
|
$
|
26.51
|
$
|
10.56
|
$
|
18.85
|
$
|
20.21
|
$
|
20.68
|
$
|
17.74
|
||||||||||||
INCOME FROM INVESTMENT OPERATIONS:
|
||||||||||||||||||||||||
Net investment income (loss) 1
|
(0.06
|
)
|
(0.09
|
)
|
(0.03
|
)
|
(0.07
|
)
|
(0.09
|
)
|
0.04
|
|||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain (loss) on investments
|
0.49
|
16.04
|
(6.88
|
)
|
(0.57
|
)
|
2.44
|
3.02
|
||||||||||||||||
Total from investment operations
|
0.43
|
15.95
|
(6.91
|
)
|
(0.64
|
)
|
2.35
|
3.06
|
||||||||||||||||
LESS DISTRIBUTIONS:
|
||||||||||||||||||||||||
From net investment income
|
-
|
-
|
-
|
-
|
-
|
(0.06
|
)
|
|||||||||||||||||
From net realized gain
|
-
|
-
|
(1.38
|
)
|
(0.72
|
)
|
(2.82
|
)
|
(0.06
|
)
|
||||||||||||||
Total distributions
|
-
|
-
|
(1.38
|
)
|
(0.72
|
)
|
(2.82
|
)
|
(0.12
|
)
|
||||||||||||||
Paid-in capital from redemption
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
||||||||||||
Net asset value, end of period/year
|
$
|
26.94
|
$
|
26.51
|
$
|
10.56
|
$
|
18.85
|
$
|
20.21
|
$
|
20.68
|
||||||||||||
Total return
|
1.55
|
%3
|
151.14
|
%
|
(39.46
|
)%
|
(2.76
|
)%
|
12.79
|
%
|
17.21
|
%
|
||||||||||||
SUPPLEMENTAL DATA:
|
||||||||||||||||||||||||
Net assets, end of period/year (millions)
|
$
|
52.0
|
$
|
53.8
|
$
|
32.2
|
$
|
105.0
|
$
|
132.3
|
$
|
414.3
|
||||||||||||
Portfolio turnover rate
|
39
|
%3
|
124
|
%
|
81
|
%
|
81
|
%
|
45
|
%
|
44
|
%
|
||||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
1.11
|
%4
|
1.15
|
%
|
1.09
|
%
|
1.04
|
%
|
1.05
|
%
|
0.98
|
%
|
||||||||||||
After fees waived and expenses absorbed 5
|
1.08
|
%4
|
1.10
|
%
|
1.09
|
%
|
1.04
|
%
|
1.05
|
%
|
0.98
|
%
|
||||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
(0.43
|
)%4
|
(0.58
|
)%
|
(0.18
|
)%
|
(0.35
|
)%
|
(0.44
|
)%
|
0.18
|
%
|
||||||||||||
After fees waived and expenses absorbed 5
|
(0.40
|
)%4
|
(0.53
|
)%
|
(0.18
|
)%
|
(0.35
|
)%
|
(0.44
|
)%
|
0.18
|
%
|
1
|
Calculated using the average shares outstanding method.
|
2
|
Does not round to $0.01 or $(0.01), as applicable.
|
3
|
Not annualized.
|
4
|
Annualized.
|
5
|
Effective September 1, 2020, the Advisor contractually agreed to limit the Institutional Class shares' annual ratio of expenses to 1.12% of the Institutional Class' daily net assets. Effective September 1, 2021, the annual ratio of expenses returned to 1.15% of the Institutional Class' daily net assets. See Note 3.
|
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year
|
Six Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
September 30,
|
Year Ended March 31,
|
|||||||||||||||||||||||
2021
|
||||||||||||||||||||||||
(Unaudited)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||||||
Net asset value, beginning of period/year
|
$
|
17.34
|
$
|
6.84
|
$
|
11.13
|
$
|
13.65
|
$
|
12.83
|
$
|
11.01
|
||||||||||||
INCOME FROM INVESTMENT OPERATIONS:
|
||||||||||||||||||||||||
Net investment income (loss) 1
|
0.01
|
(0.06
|
)
|
(0.01
|
)
|
(0.08
|
)
|
(0.07
|
)
|
(0.00
|
)2
|
|||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain (loss) on investments
|
0.29
|
10.56
|
(4.28
|
)
|
(1.47
|
)
|
1.30
|
1.82
|
||||||||||||||||
Total from investment operations
|
0.30
|
10.50
|
(4.29
|
)
|
(1.55
|
)
|
1.23
|
1.82
|
||||||||||||||||
LESS DISTRIBUTIONS:
|
||||||||||||||||||||||||
From net investment income
|
-
|
-
|
(0.00
|
)2
|
-
|
-
|
-
|
|||||||||||||||||
From net realized gain
|
-
|
-
|
-
|
(0.97
|
)
|
(0.41
|
)
|
-
|
||||||||||||||||
Total distributions
|
-
|
-
|
(0.00
|
)2
|
(0.97
|
)
|
(0.41
|
)
|
-
|
|||||||||||||||
Paid-in capital from redemption
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
||||||||||||
Net asset value, end of period/year
|
$
|
17.64
|
$
|
17.34
|
$
|
6.84
|
$
|
11.13
|
$
|
13.65
|
$
|
12.83
|
||||||||||||
Total return
|
1.73
|
%3
|
153.51
|
%
|
(38.53
|
)%
|
(10.91
|
)%
|
9.55
|
%
|
16.53
|
%
|
||||||||||||
SUPPLEMENTAL DATA:
|
||||||||||||||||||||||||
Net assets, end of period/year (millions)
|
$
|
15.9
|
$
|
16.2
|
$
|
4.0
|
$
|
13.7
|
$
|
81.7
|
$
|
110.0
|
||||||||||||
Portfolio turnover rate
|
29
|
%3
|
136
|
%
|
115
|
%
|
137
|
%
|
103
|
%
|
113
|
%
|
||||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
2.03
|
%4
|
2.48
|
%
|
2.43
|
%
|
1.50
|
%
|
1.38
|
%
|
1.39
|
%
|
||||||||||||
After fees waived and expenses absorbed
|
1.29
|
%4
|
1.29
|
%
|
1.29
|
%
|
1.29
|
%
|
1.29
|
%
|
1.29
|
%
|
||||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
(0.57
|
)%4
|
(1.73
|
)%
|
(1.21
|
)%
|
(0.78
|
)%
|
(0.64
|
)%
|
(0.14
|
)%
|
||||||||||||
After fees waived and expenses absorbed
|
0.17
|
%4
|
(0.54
|
)%
|
(0.07
|
)%
|
(0.57
|
)%
|
(0.55
|
)%
|
(0.04
|
)%
|
1
|
Calculated using the average shares outstanding method.
|
2
|
Does not round to $0.01 or $(0.01), as applicable.
|
3
|
Not annualized.
|
4
|
Annualized.
|
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year
|
Six Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
September 30,
|
Year Ended March 31,
|
|||||||||||||||||||||||
2021
|
||||||||||||||||||||||||
(Unaudited)
|
2021
|
2020
|
2019
|
2018
|
2017
|
|||||||||||||||||||
Net asset value, beginning of period/year
|
$
|
19.50
|
$
|
13.11
|
$
|
15.83
|
$
|
15.86
|
$
|
15.27
|
$
|
14.12
|
||||||||||||
INCOME FROM INVESTMENT OPERATIONS:
|
||||||||||||||||||||||||
Net investment income (loss) 1
|
0.05
|
0.13
|
0.15
|
0.12
|
0.15
|
0.17
|
||||||||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain (loss) on investments
|
1.11
|
7.22
|
(1.56
|
)
|
0.65
|
1.98
|
1.74
|
|||||||||||||||||
Total from investment operations
|
1.16
|
7.35
|
(1.41
|
)
|
0.77
|
2.13
|
1.91
|
|||||||||||||||||
LESS DISTRIBUTIONS:
|
||||||||||||||||||||||||
From net investment income
|
(0.05
|
)
|
(0.12
|
)
|
(0.15
|
)
|
(0.12
|
)
|
(0.15
|
)
|
(0.18
|
)
|
||||||||||||
From net realized gain
|
-
|
(0.84
|
)
|
(1.16
|
)
|
(0.68
|
)
|
(1.39
|
)
|
(0.58
|
)
|
|||||||||||||
Total distributions
|
(0.05
|
)
|
(0.96
|
)
|
(1.31
|
)
|
(0.80
|
)
|
(1.54
|
)
|
(0.76
|
)
|
||||||||||||
Paid-in capital from redemption
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
0.00
|
2
|
||||||||||||
Net asset value, end of period/year
|
$
|
20.61
|
$
|
19.50
|
$
|
13.11
|
$
|
15.83
|
$
|
15.86
|
$
|
15.27
|
||||||||||||
Total return
|
5.95
|
%3
|
56.53
|
%
|
(10.66
|
)%
|
5.52
|
%
|
13.69
|
%
|
13.88
|
%
|
||||||||||||
SUPPLEMENTAL DATA:
|
||||||||||||||||||||||||
Net assets, end of period/year (millions)
|
$
|
27.4
|
$
|
26.1
|
$
|
18.8
|
$
|
24.0
|
$
|
23.3
|
$
|
23.9
|
||||||||||||
Portfolio turnover rate
|
42
|
%3
|
67
|
%
|
51
|
%
|
44
|
%
|
65
|
%
|
59
|
%
|
||||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
1.52
|
%4
|
1.64
|
%
|
1.47
|
%
|
1.48
|
%
|
1.45
|
%
|
1.45
|
%
|
||||||||||||
After fees waived and expenses absorbed
|
1.30
|
%4
|
1.30
|
%
|
1.30
|
%
|
1.30
|
%
|
1.30
|
%
|
1.30
|
%
|
||||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
|
||||||||||||||||||||||||
Before fees waived and expenses absorbed
|
0.26
|
%4
|
0.37
|
%
|
0.73
|
%
|
0.59
|
%
|
0.77
|
%
|
1.03
|
%
|
||||||||||||
After fees waived and expenses absorbed
|
0.48
|
%4
|
0.71
|
%
|
0.90
|
%
|
0.76
|
%
|
0.92
|
%
|
1.18
|
%
|
1
|
Calculated using the average shares outstanding method.
|
2
|
Does not round to $0.01 or $(0.01), as applicable.
|
3
|
Not annualized.
|
4
|
Annualized.
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited)
|
NOTE 1 - ORGANIZATION
|
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
|
A.
|
Security Valuation. All equity securities, which may include Real Estate Investment Trusts ("REITs"), Business Development Companies ("BDCs"), and Master Limited Partnerships ("MLPs"), that are traded on U.S. or foreign national securities exchanges, are valued at the last reported sale price on the exchange on which the security is principally traded or the exchange's official closing price, if applicable. If, on a particular day, an exchange-traded security does not trade, then the mean between the most recent quoted bid and asked prices will be used. All equity securities, which may include REITs, BDCs, and MLPs, that are not traded on a listed exchange are valued at the last sale price in the over-the-counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid and asked price will be used.
|
|
Debt securities are valued by using the evaluated mean price supplied by an approved independent pricing service. The independent pricing service may use various valuation methodologies including, matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. These models generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings and general market conditions.
|
||
Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted, thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates the mean of the highest bid price and lowest ask price across the exchanges where the option is traded.
|
||
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Valuation Committee. When a security is "fair valued," consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board of Trustees (the "Board"). Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations.
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
|
Level 1 -
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.
|
|
Level 2 -
|
Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
|
Level 3 -
|
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds' own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
|
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
|
|
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
|
|
The following are summaries of the inputs used to value the Funds' investments as of September 30, 2021. See the Schedules of Investments for industry breakouts.
|
Hodges Fund:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Common Stocks
|
$
|
215,882,870
|
$
|
-
|
$
|
-
|
$
|
215,882,870
|
|||||||||
Call Options Purchased
|
-
|
11,910,000
|
-
|
11,910,000
|
|||||||||||||
Total Investments in Securities
|
$
|
215,882,870
|
$
|
11,910,000
|
$
|
-
|
$
|
227,792,870
|
|||||||||
Small Cap Fund:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Common Stocks
|
$
|
231,723,934
|
$
|
-
|
$
|
-
|
$
|
231,723,934
|
|||||||||
Total Investments in Securities
|
$
|
231,723,934
|
$
|
-
|
$
|
-
|
$
|
231,723,934
|
|||||||||
Small Intrinsic Value Fund:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Common Stocks
|
$
|
15,250,751
|
$
|
-
|
$
|
-
|
$
|
15,250,751
|
|||||||||
Total Investments in Securities
|
$
|
15,250,751
|
$
|
-
|
$
|
-
|
$
|
15,250,751
|
|||||||||
Blue Chip Equity Income Fund:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Common Stocks
|
$
|
27,030,991
|
$
|
-
|
$
|
-
|
$
|
27,030,991
|
|||||||||
Total Investments in Securities
|
$
|
27,030,991
|
$
|
-
|
$
|
-
|
$
|
27,030,991
|
The Funds have adopted financial reporting rules and regulations that require enhanced disclosure regarding derivatives and hedging activity intending to improve financial reporting of derivative instruments by enabling investors to understand how an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operations and financial position.
|
|
Each Fund may invest in options, traded on U.S. and foreign exchanges, on equities, debt and stock indices as a substitute for a comparable market position in the underlying security, to attempt to hedge or limit the exposure of a Fund's position, and to effect closing transactions. Each Fund may write covered put and call options on securities, securities indices and currencies in which it may invest to serve as a partial hedge against a price decline of the underlying security.
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
Balance Sheet
|
|
Values of derivative instruments as of September 30, 2021:
|
|
Hodges Fund
|
Asset Derivatives as of
|
Liability Derivatives as of
|
|||||||||||
September 30, 2021
|
September 30, 2021
|
|||||||||||
Derivative Instruments
|
Balance Sheet Location
|
Value
|
Balance Sheet Location
|
Value
|
||||||||
Equity Contracts:
|
Investments in unaffiliated
|
|||||||||||
Call Options Purchased
|
securities, at value
|
$
|
11,910,000
|
None
|
$
|
-
|
||||||
Total
|
$
|
11,910,000
|
$
|
-
|
The effect of derivative instruments on the Statements of Operations for the six months ended September 30, 2021:
|
|
Hodges Fund
|
Change in Unrealized
|
||||
Location of Gain
|
Realized Gain
|
Appreciation/Depreciation
|
||
(Loss) on Derivatives
|
(Loss) on Derivatives
|
on Derivatives
|
||
Derivative Instruments
|
Recognized in Income
|
Recognized in Income
|
Recognized in Income
|
|
Equity Contracts:
|
Realized and Unrealized
|
|||
Call Options Purchased
|
Gain (Loss) on Investments
|
$4,871,530
|
$ 41,495
|
|
Equity Contracts:
|
Realized and Unrealized
|
|||
Call Options Written
|
Gain (Loss) on Investments
|
318,088
|
(115,866)
|
The average absolute notional value of options held and written during the six months ended September 30, 2021 was $62,122,029 in the Hodges Fund.
|
||
B.
|
Foreign Currency. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions.
|
|
The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net unrealized and realized gain or loss from investments.
|
||
The Funds do not isolate net realized foreign exchange gains or losses that arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent of the amounts actually received or paid. Such fluctuations are included with the net realized gain or loss from investments. Net fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
|
||
C.
|
Federal Income Taxes. Each Fund has elected to be taxed as a "regulated investment company" and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provision for federal income taxes or excise taxes has been made.
|
|
In order to avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends in each calendar year at least 98.0% of its net investment income (earned during the calendar year) and at least 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
|
||
Net capital losses incurred after October 31 and within the taxable year are deemed to arise on the first business day of each Fund's next taxable year. Net investment losses incurred after December 31, and within the taxable year, are deemed to arise on the first business day of the Funds' next taxable year.
|
||
As of the most recent fiscal year ended March 31, 2021, the Funds did not defer, on a tax basis, any late year or post-October losses.
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
As of the most recent fiscal year ended March 31, 2021, the Funds had the following capital loss carryovers available for federal income tax purposes, which do not expire:
|
Capital Loss Carryovers
|
|||||||||
Short-Term
|
Long-Term
|
||||||||
Hodges Fund
|
$
|
-
|
$
|
17,065,735
|
|||||
Small Cap Fund
|
-
|
-
|
|||||||
Small Intrinsic Value Fund
|
-
|
-
|
|||||||
Blue Chip Equity Income Fund
|
-
|
-
|
As of September 30, 2021, the Funds did not have any tax positions that did not meet the "more likely-than-not" threshold of being sustained by the applicable tax authority. Generally, tax authorities can examine all the tax returns filed for the last three fiscal years. The Funds identify their major tax jurisdictions as U.S. Federal and the Commonwealth of Massachusetts. As of September 30, 2021, the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially.
|
||
D.
|
Securities Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Dividends received from REITs generally are comprised of ordinary income, capital gains, and may include return of capital. Other non-cash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Trust's understanding of the applicable country's tax rules and rates.
|
|
E.
|
Distributions to Shareholders. Distributions to shareholders from net investment income and net realized gains, if any, on securities for the Hodges Fund, Small Cap Fund, and Small Intrinsic Value Fund are normally declared and paid on an annual basis. Distributions to shareholders from net investment income for the Blue Chip Equity Income Fund normally are declared and paid on a quarterly basis. Distributions to shareholders from net realized gains on securities normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date.
|
|
F.
|
Options Contracts. The Funds may purchase call and put options on securities and indices. As the holder of a call option, each Fund has the right to purchase the underlying security at the exercise price at any time until the expiration date. As a holder of a put option, each Fund has the right to sell the underlying security at the exercise price at any time until the expiration date. The Funds may enter into closing sale transactions with respect to such options, exercise such options, or permit such options to expire. If an option expires on the stipulated date or if a Fund enters into a closing sale transaction, a gain or loss is realized. If a Fund exercises a call option, the cost of the security acquired is increased by the premium paid for the call. Each Fund may write (sell) covered put and call options on securities, security indices, and currencies in which it may invest. When a Fund writes an option, an amount equal to the premium received by a Fund is recorded as a liability and is subsequently adjusted to reflect the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether a Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. Each Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option.
|
|
G.
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.
|
|
H.
|
Share Valuation. The net asset value ("NAV") per share of each Fund is calculated by dividing the sum of the value of the securities held by each Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for each Fund, rounded to the nearest cent. The Funds' shares will not be priced on the days on which the New York Stock Exchange is closed for trading. The offering and redemption price per share
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
for each Fund is equal to each Fund's NAV per share. The Hodges Fund, Small Cap Fund Retail Class, Small Intrinsic Value Fund, and Blue Chip Equity Income Fund charge a redemption fee equal to 1% of the net amount of redemptions if redeemed within 30 calendar days after purchase. The Institutional Class of the Small Cap Fund charges a redemption fee equal to 1% of the net amount of redemptions if redeemed within 60 calendar days after purchase. These fees are deducted from the redemption proceeds otherwise payable to the shareholder. Each Fund will retain the fee charged as paid-in capital and such fees become part of that Fund's daily NAV calculation.
|
||
I.
|
Guarantees and Indemnifications. In the normal course of business, each Fund enters into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
|
|
J.
|
Illiquid Securities. Pursuant to Rule 22e-4 under the 1940 Act, the Funds have adopted a Board approved liquidity risk management program (the "program") that requires, among other things, that each Fund limit its illiquid investments that are assets to no more than 15% of net assets. An illiquid investment is any investment that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
|
K.
|
Recently Issued Accounting Pronouncements. In October 2020, the Securities and Exchange Commission (the "SEC") adopted new regulations governing the use of derivatives by registered investment companies ("Rule 18f-4"). The Fund will be required to comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund is currently evaluating the impact, if any, of this provision.
|
|
In October 2020, the SEC adopted new Rule 12d1-4 under the 1940 Act and other regulatory changes which are expected to be effective on or about January 19, 2022. Those changes are intended to streamline and enhance the regulatory framework for investments by one fund into another fund or "fund-of-funds arrangements". These regulatory changes may limit the Fund's ability to pursue its principal investment strategies by investing in other investment companies or pooled investment vehicles or to invest in those investment companies or pooled investment vehicles it believes are most desirable. The Fund is currently assessing the potential impact of the new rule on the Fund's financial statements.
|
||
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices ("Rule 2a-5"). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are "readily available" for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund will be required to comply with the rules by September 8, 2022. The Fund is currently evaluating the impact, if any, of applying this provision.
|
||
L.
|
Subsequent Events. In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The Funds have determined that there were no subsequent events that would need to be disclosed in the Funds' financial statements.
|
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
Hodges Fund
|
0.93
|
% 1
|
||||
Small Cap Fund
|
1.15
|
% 1
|
||||
Small Intrinsic Value Fund
|
1.04
|
%
|
||||
Blue Chip Equity Income Fund
|
1.05
|
%
|
1
|
Prior to the termination of the Management Fee Waiver, these amounts were 0.90% and 1.12% for the Hodges Fund and Small Cap Fund, respectively.
|
March 31, 2022
|
March 31, 2023
|
March 31, 2024
|
September 30, 2024
|
||||||||||||||
Hodges Fund
|
$
|
163,170
|
$
|
312,590
|
$
|
302,379
|
$
|
164,589
|
|||||||||
Small Cap Fund
|
-
|
-
|
61,633
|
-
|
|||||||||||||
Small Intrinsic Value Fund
|
80,984
|
114,621
|
132,627
|
62,703
|
|||||||||||||
Blue Chip Equity Income Fund
|
21,840
|
43,084
|
80,210
|
29,968
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
NOTE 4 - PURCHASES AND SALES OF SECURITIES
|
Purchases
|
Sales
|
||||||||
Hodges Fund
|
$
|
101,311,863
|
$
|
92,276,286
|
|||||
Small Cap Fund
|
96,267,436
|
103,556,722
|
|||||||
Small Intrinsic Value Fund
|
4,675,685
|
4,650,035
|
|||||||
Blue Chip Equity Income Fund
|
11,511,948
|
11,925,990
|
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
|
Blue Chip Equity Income Fund
|
September 30, 2021
|
March 31, 2021
|
|||||||
Distributions paid from:
|
|||||||||
Long-term capital gain 1
|
$
|
-
|
$
|
1,067,304
|
|||||
Ordinary income
|
67,295
|
195,177
|
|||||||
Total
|
$
|
67,295
|
$
|
1,262,481
|
1
|
Designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3).
|
Hodges Fund
|
Small Cap Fund
|
||||||||
Cost of Investments
|
$
|
142,987,699
|
$
|
133,238,963
|
|||||
Gross tax unrealized appreciation
|
76,851,417
|
105,815,690
|
|||||||
Gross tax unrealized depreciation
|
(10,802,684
|
)
|
(2,477,121
|
)
|
|||||
Net unrealized appreciation (depreciation)
|
66,048,733
|
103,338,569
|
|||||||
Undistributed ordinary income (loss)
|
-
|
13,561,868
|
|||||||
Undistributed long-term capital gains (losses)
|
-
|
12,929,568
|
|||||||
Total distributable earnings
|
-
|
26,491,436
|
|||||||
Other distributable (accumulated) gains (losses)
|
(17,220,305
|
)
|
-
|
||||||
Total distributable (accumulated) gains (losses)
|
$
|
48,828,428
|
$
|
129,830,005
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
Small Intrinsic
|
Blue Chip Equity
|
||||||||
Value Fund
|
Income Fund
|
||||||||
Cost of Investments
|
$
|
10,373,282
|
$
|
15,978,861
|
|||||
Gross tax unrealized appreciation
|
4,928,309
|
10,102,670
|
|||||||
Gross tax unrealized depreciation
|
(334,233
|
)
|
(88,140
|
)
|
|||||
Net unrealized appreciation (depreciation)
|
4,594,076
|
10,014,530
|
|||||||
Undistributed ordinary income (loss)
|
98,068
|
313,586
|
|||||||
Undistributed long-term capital gains (losses)
|
117,218
|
554,935
|
|||||||
Total distributable earnings
|
215,286
|
868,521
|
|||||||
Other distributable (accumulated) gains (losses)
|
-
|
-
|
|||||||
Total distributable (accumulated) gains (losses)
|
$
|
4,809,362
|
$
|
10,883,051
|
1
|
The difference between book basis and tax basis unrealized appreciation was primarily attributable to the treatment of wash sale adjustments.
|
NOTE 6 - INVESTMENTS IN AFFILIATES
|
Share
|
Change in
|
||||||||||||||||||||||||||
Balance
|
Value
|
Realized
|
Unrealized
|
Value
|
|||||||||||||||||||||||
Affiliates
|
September 30,
|
March 31,
|
Acqui-
|
Dispo-
|
Gain
|
Appreciation/
|
September 30,
|
Dividend
|
|||||||||||||||||||
Common Stocks
|
2021
|
2021
|
sitions
|
sitions
|
(Loss)
|
Depreciation
|
2021
|
Income
|
|||||||||||||||||||
The Dixie Group, Inc. 1
|
1,000,000
|
$
|
2,970,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,890,000
|
$
|
4,860,000
|
$
|
-
|
||||||||||||
Luby's, Inc. 1
|
2,134,382
|
7,531,887
|
-
|
(551,870
|
)
|
(778,529
|
)
|
2,720,229
|
8,921,717
|
-
|
|||||||||||||||||
Total
|
$
|
(778,529
|
)
|
$
|
4,610,229
|
$
|
13,781,717
|
$
|
-
|
Share
|
Change in
|
||||||||||||||||||||||||||
Balance
|
Value
|
Realized
|
Unrealized
|
Value
|
|||||||||||||||||||||||
Affiliates
|
September 30,
|
March 31,
|
Acqui-
|
Dispo-
|
Gain
|
Appreciation/
|
September 30,
|
Dividend
|
|||||||||||||||||||
Common Stocks
|
2021
|
2021
|
sitions
|
sitions
|
(Loss)
|
Depreciation
|
2021
|
Income
|
|||||||||||||||||||
The Dixie Group, Inc. 1
|
20,000
|
$
|
118,800
|
$
|
-
|
$
|
(85,025
|
)
|
$
|
45,025
|
$
|
18,400
|
$
|
97,200
|
$
|
-
|
1
|
Non-income producing security.
|
NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Unaudited) (Continued)
|
NOTE 7 - CREDIT FACILITY
|
Small
|
Small Intrinsic
|
Blue Chip Equity
|
|||||||||||||||
Hodges Fund
|
Cap Fund
|
Value Fund
|
Income Fund
|
||||||||||||||
Maximum available credit
|
$
|
20,000,000
|
$
|
30,000,000
|
$
|
1,000,000
|
$
|
2,000,000
|
|||||||||
Largest amount outstanding on an individual day
|
-
|
1,877,000
|
-
|
195,000
|
|||||||||||||
Average balance when in use
|
-
|
666,657
|
-
|
39,600
|
|||||||||||||
Credit facility outstanding as of September 30, 2021
|
-
|
824,000
|
-
|
-
|
|||||||||||||
Average interest rate when in use
|
-
|
3.25
|
%
|
-
|
3.25
|
%
|
NOTE 8 - (COVID-19) PANDEMIC
|
EXPENSE EXAMPLES For the Six Months Ended September 30, 2021 (Unaudited)
|
Beginning
|
Ending
|
Expenses Paid
|
||||||||||
Account Value
|
Account Value
|
During the Period
|
||||||||||
4/1/21
|
9/30/21
|
4/1/21 - 9/30/21 1
|
||||||||||
HDPMX:
|
||||||||||||
Actual
|
$
|
1,000.00
|
$
|
1,028.60
|
$
|
5.85
|
||||||
Hypothetical (5% annual return before expenses)
|
1,000.00
|
1,019.30
|
5.82
|
1
|
Expenses are equal to the expense ratio for the most recent six-month period of 1.15% (fee waivers in effect) multiplied by the average account value over the period multiplied by 183/365 (to reflect the one-half year period).
|
EXPENSE EXAMPLES For the Six Months Ended September 30, 2021 (Unaudited)
|
Beginning
|
Ending
|
Expenses Paid
|
||||||||||
Account Value
|
Account Value
|
During the Period
|
||||||||||
4/1/21
|
9/30/21
|
4/1/21 - 9/30/21 2
|
||||||||||
HDPSX:
|
||||||||||||
Retail Class Actual
|
$
|
1,000.00
|
$
|
1,014.60
|
$
|
6.72
|
||||||
Retail Class Hypothetical (5% annual return before expenses)
|
1,000.00
|
1,018.40
|
6.73
|
|||||||||
HDSIX:
|
||||||||||||
Institutional Class Actual
|
1,000.00
|
1,015.50
|
5.46
|
|||||||||
Institutional Class Hypothetical (5% annual return before expenses)
|
1,000.00
|
1,019.65
|
5.47
|
2
|
Expenses are equal to the expense ratio for the most recent six-month period of 1.33% for the Retail Class, and 1.08% for the Institutional Class (fee waivers in effect), multiplied by the average account value over the period multiplied by 183/365 (to reflect the one-half year period).
|
Beginning
|
Ending
|
Expenses Paid
|
||||||||||
Account Value
|
Account Value
|
During the Period
|
||||||||||
4/1/21
|
9/30/21
|
4/1/21- 9/30/21 3
|
||||||||||
HDSVX:
|
||||||||||||
Actual
|
$
|
1,000.00
|
$
|
1,017.30
|
$
|
6.52
|
||||||
Hypothetical (5% annual return before expenses)
|
1,000.00
|
1,018.60
|
6.53
|
3
|
Expenses are equal to the expense ratio for the most recent six-month period of 1.29% (fee waivers in effect) multiplied by the average account value over the period multiplied by 183/365 (to reflect the one-half year period).
|
Beginning
|
Ending
|
Expenses Paid
|
||||||||||
Account Value
|
Account Value
|
During the Period
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||||||||||
4/1/21
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9/30/21
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4/1/21- 9/30/21 4
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||||||||||
HDPBX:
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||||||||||||
Actual
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$
|
1,000.00
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$
|
1,059.50
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$
|
6.71
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||||||
Hypothetical (5% annual return before expenses)
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1,000.00
|
1,018.55
|
6.58
|
4
|
Expenses are equal to the expense ratio for the most recent six-month period of 1.30% (fee waivers in effect) multiplied by the average account value over the period multiplied by 183/365 (to reflect the one-half year period).
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STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM (Unaudited)
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APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited)
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1.
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The nature, extent and quality of the services provided and to be provided by the Advisor under the Advisory Agreement. The Trustees considered the nature, extent and quality of the Advisor's overall services provided to the Funds as well as its specific responsibilities in all aspects of day-to-day investment management of the Funds. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Advisor involved in the day-to-day activities of the Funds. The Board also considered the resources and compliance structure of the Advisor, including information regarding its compliance program, its chief compliance officer and the Advisor's compliance record, as well as the Advisor's cybersecurity program, business continuity plan, and risk management process. Additionally, the Board considered how the Advisor's business continuity plan has operated during the COVID-19 pandemic. The Board also considered the prior relationship between the Advisor and the Trust, as well as the Board's knowledge of the Advisor's operations, and noted that during the course of the prior year they had met with certain personnel of the Advisor by video conference to discuss fund performance and investment outlook, as well as, various marketing and compliance topics. The Board took into account the additional resources dedicated by the Advisor to compliance over the past year. The Board concluded that the Advisor had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreement and that they were satisfied with the nature, overall quality and extent of such management services.
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2.
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The Funds' historical performance and the overall performance of the Advisor. In assessing the quality of the portfolio management delivered by the Advisor, the Board reviewed the short-term and long-term performance of each Fund on both an absolute basis, and in comparison to its peer funds utilizing Morningstar classifications, appropriate securities market benchmarks and the Advisor's similarly managed accounts (in this regard the Board noted that the Advisor does not replicate the Hodges Small Intrinsic Value Fund's investment strategy in other types of accounts), all for periods ended March 31, 2021. The Board also considered performance against a smaller group of peers selected by an independent third-party consultant engaged by the Board to assist it in its 15(c) review (the "Cohort"). While the Board considered both short-term and long-term performance, it placed greater emphasis on longer-term performance. When reviewing each Fund's performance against its comparative peer group universe, the Board took into account that the investment objective and strategies of each Fund, as well as its level of risk tolerance, may differ significantly from funds in its respective peer universe. The Board took into account the relatively high active share of the Funds as compared to peers and noted that the Fund's deep value strategy has been out of favor for certain periods of time during the performance review period. When reviewing the Funds' performance against broad market benchmarks, the Board took into account the differences in portfolio construction between the Funds and such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as objectives and risks. In assessing periods of relative underperformance or outperformance, the Board took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory while others may reflect more significant underlying issues.
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1
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Although the Investment Company Act requires that approval of the continuance of the Advisory Agreement be approved by the in-person vote of a majority of the Independent Trustees, the August 17-18, 2021 meeting was held virtually in reliance on an order issued by the Securities and Exchange Commission, which provided temporary relief from the in-person meeting requirements in response to the COVID-19 pandemic.
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APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued)
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For the Hodges Fund, the Board noted that the Fund strongly outperformed its peer group median for the one-year period and underperformed for the three-year and five-year periods. The Board also noted that the Fund strongly outperformed the average of its Cohort for the one-year period and underperformed the average for the three-year and five-year periods. The Board also considered the performance of the Fund against its broad-based securities market benchmark, noting it outperformed for the one-year period and underperformed for the three-year, five-year periods. The Trustees further considered that the Fund had underperformed the Advisor's composite for the one-year, three-year, and five-year periods ended March 31, 2021, and that such differences were not significant.
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For the Hodges Small Cap Fund, the Board noted that the Fund strongly outperformed its peer group median for the one-year period and outperformed for the three-year, and five-year periods. The Board also noted that the Fund strongly outperformed the average of its Cohort for the one-year period and outperformed for the three-year and five-year periods. The Board also considered the Fund's outperformance against its broad-based securities market benchmark for the one-year period and underperformance for the three-year and five-year periods. The Board considered that the Fund underperformed the Adviser's small cap strategy composite for the one-year, three-year and five-year periods and that such differences were not significant.
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For the Hodges Blue Chip Equity Income Fund, the Board noted that the Fund outperformed its peer group median for the one-year period and underperformed for the three-year and five-year periods. The Board also noted that the Fund outperformed the average of its Cohort for the one-year period and underperformed the average for the three-year and five-year periods The Board also considered the underperformance of the Fund against its broad-based securities market benchmark for the one-year, three-year and five-year periods. The Trustees further considered that the Fund had outperformed the Advisor's composite for the one-year, three-year, and five-year periods ended March 31, 2021.
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For the Hodges Small Intrinsic Value Fund, the Board noted that the Fund outperformed its peer group median for the one-year and three-year periods and underperformed for the five-year period. The Board also noted that the Fund outperformed the average of its Cohort for the one-year, three-year and five-year periods. The Board also considered the performance of the Fund against its broad-based securities market benchmark, noting it outperformed for the one-year period and underperformed for the three-year and five-year periods.
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3.
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The costs of the services to be provided by the Advisor and the structure of the Advisor's fees under the Advisory Agreement. In considering the advisory fee and total fees and expenses of each Fund, the Board reviewed comparisons to the peer funds, as well as all expense waivers and reimbursements. The Trustees noted that the Advisor does not replicate the Hodges Small Intrinsic Value Fund's investment strategy in separately managed accounts.
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For the Hodges Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 0.93% for the Fund (the "Expense Cap"). The Trustees noted that the Fund's advisory fee and net expense ratio was above the median and average. The Board noted that the Fund's net expense ratio was slightly lower than the average of its Cohort. The Board also considered the Advisor's agreement to temporarily further reduce its advisory fee, and the Expense Cap, by 0.03%, for the prior fiscal year, which reduction would not be continued. The Board noted that the fees charged to other similarly managed account clients were higher than, equal to, or lower than those charged to the Hodges Fund depending on the level of assets. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information.
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For the Hodges Small Cap Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.15% for the Fund (the "Expense Cap"). The Trustees noted that the Fund's advisory fee and net expense ratio (less Rule 12b-1 fees) were higher than their peer group median and average. The Board noted that the Fund's net expense ratio (less Rule 12b-1 fees) was above the average of its Cohort. The Board also considered the Advisor's agreement to temporarily further reduce its advisory fee, and the Expense Cap, by 0.03%, for the prior fiscal year, which reduction would not be continued. The Board noted that the fees charged to other similarly managed account clients were higher than, equal to, or lower than those charged to the Hodges Small Cap Fund depending on the level of assets. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information..
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For the Hodges Blue Chip Equity Income Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.05% for the Fund (the "Expense Cap"). The Trustees noted that the Fund's advisory fee and net expense ratio were above their peer group median and average. The Board noted that the Fund's net expense ratio was above the average of its Cohort. The Board noted that the fees charged to other similarly managed account
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APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued)
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clients were higher than, equal to, or lower than those charged to the Hodges Blue Chip Equity Income Fund depending on the level of assets. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information.
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For the Hodges Small Intrinsic Value Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.04% for the Fund (the "Expense Cap"). The Trustees noted that the Fund's advisory fee and the net expense ratio were above their peer group median and average. The Board noted that the Fund's net expense ratio was below the average of its Cohort. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information.
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4.
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Economies of Scale. The Board also considered whether economies of scale were being realized by the Advisor that should be shared with shareholders. The Board noted that the Advisor has contractually agreed to reduce its advisory fees or reimburse Fund expenses so that each Fund does not exceed its specified Expense Cap. The Board noted that at current asset levels, it did not appear that there were additional significant economies of scale being realized by the Advisor that should be shared with shareholders and concluded that it would continue to monitor economies of scale in the future as circumstances changed and assuming asset levels continued to increase.
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5.
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The profits to be realized by the Advisor and its affiliates from their relationship with the Funds. The Board reviewed the Advisor's financial information and took into account both the direct benefits and the indirect benefits to the Advisor from advising the Funds. The Board considered the profitability to the Advisor from its relationship with the Funds and considered any additional material benefits derived by the Advisor from its relationship with the Funds. In particular, the Trustees discussed and considered the fall-out benefits that the Advisor may receive from the Funds as a result of its affiliated broker dealer - First Dallas Securities - selling shares of the Funds and accordingly being able to receive Rule 12b-1 fees. Additionally, the Trustees considered that the Advisor regularly uses First Dallas Securities to execute trades for the Funds and receives commissions from those trades. The Trustees also considered benefits received in exchange for "soft dollars" and Rule 12b-1 fees paid to the Advisor. After such review, the Board determined that the profitability to the Advisor with respect to the Advisory Agreement was not excessive, and that the Advisor had maintained adequate financial resources to support the services it provides to the Funds.
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INFORMATION ABOUT PROXY VOTING (Unaudited)
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INFORMATION ABOUT THE PORTFOLIO HOLDINGS (Unaudited)
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INFORMATION ABOUT HOUSEHOLDING (Unaudited)
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INFORMATION ABOUT THE FUNDS' TRUSTEES (Unaudited)
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PRIVACY NOTICE (Unaudited)
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SEMI-ANNUAL REPORT • SEPTEMBER 30, 2021
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Retail Class
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Institutional Class
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Fund
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Shares
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Shares
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Hodges Fund
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Ticker Symbol
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HDPMX
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N/A
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CUSIP
|
742935109
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N/A
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Small Cap Fund
|
||
Ticker Symbol
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HDPSX
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HDSIX
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CUSIP
|
742935299
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742935224
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Small Intrinsic Value Fund
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||
Ticker Symbol
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HDSVX
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N/A
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CUSIP
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74316J318
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N/A
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Blue Chip Equity Income Fund
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||
Ticker Symbol
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HDPBX
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N/A
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CUSIP
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742935174
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N/A
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(b)
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Not applicable.
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(a)
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The Registrant's President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider.
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(b)
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There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
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(a)
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(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Incorporated by reference to previous Form N-CSR filing.
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(b)
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Certification pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002. Furnished herewith.
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