SiM Dynamic Allocation Funds
Notes to Schedule of Investments
January 31, 2014 (Unaudited)
Note 1 – Securities Valuation
The SiM Dynamic Allocation Funds’ (the “Funds”) investments in securities are carried at their fair value. Equity securities, including common stocks, REITs, and exchange-traded funds, that are primarily traded on a national securities exchange shall be valued at the last sales price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale price on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price. Investments in open-end mutual funds are valued at their net asset value per share. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy.
Corporate bonds, including listed issues, are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Most corporate bonds are categorized in level 2 of the fair value hierarchy.
Short-term securities having a maturity of 60 days or less are valued at their amortized cost, which approximates market value. To the extent the inputs are observable and timely, these securities would be classified in level 2 of the fair value hierarchy.
The Board of Trustees (“Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from U.S. Bancorp Fund Services, LLC, the Funds’ administrator. The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available or the closing price does not represent fair value by following procedures approved by the Board. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation Committee are subsequently reviewed and ratified by the Board.
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either level 2 or level 3 of the fair value hierarchy.
The Funds have adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for majority security types. These inputs are summarized in the three broad levels listed below:
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·
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Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.
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·
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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.
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·
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Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s 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.
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The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Funds’ securities as of January 31, 2014:
SiM Dynamic Allocation Diversified Income Fund
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Level 1
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Level 2
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Level 3
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Total
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Exchanged-Traded Funds
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Equity
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$
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4,705,762
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$
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-
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|
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$
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-
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|
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$
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4,705,762
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Fixed Income
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|
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7,074,651
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|
|
-
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|
|
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-
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|
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7,074,651
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Total Exchange-Traded Funds
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11,780,413
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-
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-
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|
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11,780,413
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Corporate Bonds
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|
|
-
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870,963
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-
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870,963
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Short-Term Investments
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194,507
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|
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-
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-
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|
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194,507
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Total Investments in Securities
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$
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11,974,920
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|
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$
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870,963
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|
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$
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-
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|
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$
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12,845,883
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SiM Dynamic Allocation Equity Income Fund
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Level 1
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Level 2
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Level 3
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Total
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Exchanged-Traded Funds
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Equity
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$
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32,175,736
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|
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$
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-
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|
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$
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-
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|
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$
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32,175,736
|
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Fixed Income
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|
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3,881,905
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|
|
|
-
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-
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|
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3,881,905
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Total Exchange-Traded Funds
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36,057,641
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-
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-
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|
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36,057,641
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Corporate Bonds
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-
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382,513
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-
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382,513
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Short-Term Investments
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1,263,706
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-
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-
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1,263,706
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Total Investments in Securities
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$
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37,321,347
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$
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382,513
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$
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-
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$
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37,703,860
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Refer to the Funds’ Schedule of Investments for a detailed break-out of securities. Transfers between levels are recognized at January 31, 2014, the end of the reporting period. The Funds recognized no transfers to/from Level 1 or Level 2. There were no Level 3 securities held in the Funds during the period ended January 31, 2014.
Note 2 – Federal Income Taxes
The cost basis of investments for federal income tax purposes at January 31, 2014 was as follows*:
SiM Dynamic Allocation Diversified Income Fund
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Cost of investments
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$
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12,002,143
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Gross unrealized appreciation
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$
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1,070,551
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Gross unrealized depreciation
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(226,811
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)
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Net unrealized appreciation
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$
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843,740
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SiM Dynamic Allocation Equity Income Fund
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Cost of investments
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$
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29,841,756
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Gross unrealized appreciation
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$
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8,145,773
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Gross unrealized depreciation
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(283,669
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)
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Net unrealized appreciation
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$
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7,862,104
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*
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Because tax adjustments are calculated annually, the above tables reflect the tax adjustments outstanding at the Funds’ previous fiscal year end. For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Funds’ most recent annual or semi-annual report.
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