Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper
copies of the Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website
www.funds.leutholdgroup.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not
take any action. You may elect to receive shareholder reports and other communications from the Funds electronically anytime by contacting your financial intermediary (such as a broker-dealer or a bank) or, if you are a direct investor, by
calling 1-800-273-6886, sending an e-mail request to publicinfo@sec.gov, or by enrolling at www.funds.leutholdgroup.com.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can
contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Funds, you can call 1-800-273-6886 or send an email request to publicinfo@sec.gov to let the
Funds know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Funds held in your account if you invest through your financial intermediary or all Funds held with
the fund complex if you invest directly with the Funds.
The Securities and Exchange Commission has not approved or disapproved these securities or determined if
this semi-annual report is accurate or complete. Any representation to the contrary is a criminal offense. An investment in the Funds is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
(b) All or a portion of the assets have been committed as collateral for open securities sold short.
(b) The rate quoted is the annualized seven-day effective yield as of March 31, 2020.
All classes of shares in a Fund have identical voting, dividend, liquidation, and other rights, and the same terms and conditions, except that certain fees
and expenses, including distribution and shareholder servicing fees, may differ among classes. Each class has exclusive voting rights on any matters relating to that class’s servicing or distribution arrangements.
The following is a summary of significant accounting policies consistently followed by the Funds.
The Funds may invest in foreign securities. Foreign securities may be priced at the closing price reported on the foreign exchange on which they
are principally traded. Trading in foreign securities may be completed at times that vary from the closing of the New York Stock Exchange (“NYSE”). The Directors have approved the use of their independent pricing provider’s proprietary fair value
pricing model to assist in determining current valuation for foreign securities traded in markets that close prior to the NYSE. Foreign securities quoted in foreign currencies are translated into U.S. dollars at current exchange rates.
Occasionally, events that affect these values and exchange rates may occur between the times at which they are determined and the closing of the NYSE. If these events materially affect the value of portfolio securities, then these securities may
be valued as determined in good faith by the Directors. Some of the factors which may be considered by the Directors and the Funds’ Fair Value Pricing Committee in determining fair value are fundamental analytical data relating to the investment,
the nature and duration of any restrictions on disposition, trading in similar securities of the same issuer or comparable companies, information from broker-dealers, and an evaluation of the forces that influence the market in which the
securities are purchased and sold. 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.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Funds’ investments and securities sold short as of March 31, 2020:
* Unrealized appreciation is due to a change in foreign currency exchange rate.
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
* Unrealized appreciation is due to a change in foreign currency exchange rate.
The Leuthold Core ETF has provided additional disclosures below regarding derivatives and hedging activity intending to improve
financial reporting by enabling investors to understand how and why the Fund uses futures contracts (a type of derivative), how they are accounted for, and how they affect an entity’s results of operations and financial position. The Fund may use
derivatives for risk management purposes or as part of its investment strategies. Derivatives are financial contracts whose values depend on, or are derived from, the value of an underlying asset, reference rate, or index. The Fund may use
derivatives to earn income and enhance returns, to hedge or adjust the risk profile of its portfolio, to replace more traditional direct investments, and to obtain exposure to otherwise inaccessible markets.
The average notional amount for futures contracts is based on the monthly notional amounts. The notional amount for futures
contracts represents the U.S. dollar value of the contract as of the day of opening the transaction or latest contract reset date. The Leuthold Core ETF’s average notional value of futures contracts outstanding during the six months ended March
31, 2020, was $380,032. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statements of Assets and Liabilities and Statements of Operations is presented in the summary below.
Leuthold Core ETF
Statements of Assets and Liabilities
Fair value of derivative instruments as of March 31, 2020:
|
|
|
Asset Derivatives
|
|
|
Liability Derivatives
|
|
|
|
|
as of March 31, 2020
|
|
|
as of March 31, 2020
|
|
|
|
|
Balance Sheet
|
|
|
|
|
|
Balance Sheet
|
|
|
|
|
|
Instrument
|
|
location
|
|
Fair value
|
|
|
location
|
|
|
Fair value
|
|
|
Equity Index Contracts - Futures
|
|
None
|
|
$
|
—
|
|
|
None
|
|
$
|
—
|
|
There was no variation margin receivable or payable as of March 31, 2020.
|
48
|
The Leuthold Funds - 2020 Semi-Annual Report
|
Leuthold Funds
Statements of Operations
The effect of derivative instruments on the Statements of Operations for the six months ended March 31, 2020:
|
|
|
|
|
|
|
|
|
Change in Unrealized
|
|
|
|
|
|
|
Realized
|
|
|
Appreciation
|
|
|
|
|
Location of Gain (Loss)
|
|
Gain (Loss)
|
|
|
(Depreciation)
|
|
|
|
|
on Derivatives
|
|
on Derivatives
|
|
|
on Derivatives
|
|
|
Instrument
|
|
Recognized in Income
|
|
Recognized in Income
|
|
|
Recognized in Income
|
|
|
Equity Index Contracts - Futures
|
|
Net Realized and Net Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
on Futures Contracts
|
|
$
|
129,844
|
|
|
$
|
(22,598
|
)
|
The Leuthold Core Investment Fund, Leuthold Global Fund, Leuthold Select Industries Fund, and Grizzly Short Fund did not have derivatives activity
during the six months ended March 31, 2020.
For further information regarding security characteristics, see the Schedules of Investments, Schedules of Securities Sold Short, and Schedule of
Futures Contracts.
|
c)
|
Federal Income Taxes – Provision for federal income taxes or excise taxes has not been made since the Funds have elected to be taxed as
“regulated investment companies” and intend to distribute substantially all taxable income to shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Funds also designate as distributions of long-term gains, to the extent necessary to
fully distribute such capital gains, earnings and profits distributed to shareholders on the redemption of shares.
|
The tax character of distributions paid during the fiscal years ended September 30, 2019 and 2018 was as follows:
|
Year Ended September 30, 2019
|
|
|
|
|
Leuthold
|
|
|
|
|
|
Leuthold
|
|
|
|
|
|
|
|
Core
|
|
|
Leuthold
|
|
Select
|
|
|
Grizzly
|
|
|
|
|
Investment
|
|
|
Global
|
|
|
Industries
|
|
|
Short
|
|
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
$
|
2,916,524
|
|
|
$
|
198,337
|
|
|
$
|
—
|
|
|
$
|
838,199
|
|
|
Long-term capital gain*
|
|
|
72,654,792
|
|
|
|
5,455,871
|
|
|
|
1,295,440
|
|
|
|
—
|
|
|
Total Distribution Paid
|
|
$
|
75,571,316
|
|
|
$
|
5,654,208
|
|
|
$
|
1,295,440
|
|
|
$
|
838,199
|
|
|
Year Ended September 30, 2018
|
|
|
|
|
Leuthold
|
|
|
|
|
|
Leuthold
|
|
|
|
|
|
|
|
Core
|
|
|
Leuthold
|
|
Select
|
|
|
Grizzly
|
|
|
|
|
Investment
|
|
|
Global
|
|
|
Industries
|
|
|
Short
|
|
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
$
|
2,274,796
|
|
|
$
|
3,573,894
|
|
|
$
|
5,625
|
|
|
$
|
—
|
|
|
Long-term capital gain*
|
|
|
26,947,936
|
|
|
|
5,318,043
|
|
|
|
735,816
|
|
|
|
—
|
|
|
Total Distribution Paid
|
|
$
|
29,222,732
|
|
|
$
|
8,891,937
|
|
|
$
|
741,441
|
|
|
$
|
—
|
|
|
*
|
The funds designate these distributions as long-term capital gain dividends per IRC Sec. 852(b)(3)(C) in the 20-percent group (which may be taxed at a
20-percent rate, a 15-percent rate or 0-percent rate, depending on the shareholder’s taxable income).
|
The Leuthold Funds - 2020 Semi-Annual Report 49
Leuthold Funds
At September 30, 2019, the components of accumulated earnings (deficit) on a tax basis were as follows:
|
|
|
Leuthold
|
|
|
|
|
Leuthold
|
|
|
|
|
|
|
Core
|
|
|
Leuthold
|
|
|
Select
|
|
|
Grizzly
|
|
|
|
|
Investment
|
|
|
Global
|
|
|
Industries
|
|
|
Short
|
|
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Undistributed ordinary income
|
|
$
|
494,580
|
|
|
$
|
82,739
|
|
|
$
|
—
|
|
|
$
|
52,038
|
|
|
Undistributed long-term gains
|
|
|
8,866,887
|
|
|
|
—
|
|
|
|
88,381
|
|
|
|
—
|
|
|
Distributable earnings
|
|
|
9,361,467
|
|
|
|
82,739
|
|
|
|
88,381
|
|
|
|
52,038
|
|
|
Capital loss carryover and late-year losses
|
|
|
—
|
|
|
|
(1,534,826
|
)
|
|
|
(10,192
|
)
|
|
|
(236,828,465
|
)
|
|
Other accumulated gains (losses)
|
|
|
(4,409
|
)
|
|
|
(13,854
|
)
|
|
|
1
|
|
|
|
(1
|
)
|
|
Unrealized appreciation
|
|
|
94,242,172
|
|
|
|
1,244,770
|
|
|
|
2,798,808
|
|
|
|
6,865,963
|
|
|
Total accumulated earnings (deficit)
|
|
$
|
103,599,230
|
|
|
$
|
(221,171
|
)
|
|
$
|
2,876,998
|
|
|
$
|
(229,910,465
|
)
|
Net investment income and realized gains and losses for federal income tax purposes may differ from that reported on the
financial statements because of permanent book-to-tax differences. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) requires that permanent differences between financial reporting and tax reporting be reclassified between various
components of net assets. These differences are primarily due to partnership adjustments, securities sold short, earnings and profits distributed to shareholders on the redemption of shares, net operating losses, and expiration of capital losses.
Additionally, U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between
financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended September 30, 2019, the following table shows the reclassifications made:
|
|
|
Distributable
|
|
|
Paid
|
|
|
|
|
Earnings
|
|
|
in Capital
|
|
|
Leuthold Core Investment Fund
|
|
$
|
(8,700,938
|
)
|
|
$
|
8,700,938
|
|
|
Leuthold Global Fund
|
|
|
141
|
|
|
|
(141
|
)
|
|
Leuthold Select Industries Fund
|
|
|
(111,385
|
)
|
|
|
111,385
|
|
|
Grizzly Short Fund
|
|
|
25,380,935
|
|
|
|
(25,380,935
|
)
|
Under current law, the Funds may carry forward net capital losses indefinitely to use to offset capital gains realized in future
years. Previous law limited the carry forward of capital losses to the eight tax years following the year the capital loss was realized. If a Fund has capital losses that are subject to current law and also has capital losses subject to prior
law, the losses realized under current law will be utilized to offset capital gains before any of the losses governed by prior law can be used. As a result of these ordering rules, capital losses realized under previous law may be more likely to
expire unused. Capital losses realized under current law will carry forward retaining their classification as long-term or short-term losses, whereas under prior law all capital losses were carried forward as short-term capital losses.
|
|
|
Leuthold
|
|
|
|
|
Leuthold
|
|
|
|
|
|
|
Core
|
|
|
Leuthold
|
|
|
Select
|
|
|
Grizzly
|
|
|
|
|
Investment
|
|
|
Global
|
|
|
Industries
|
|
|
Short
|
|
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Fund
|
|
|
Unlimited Short-Term
|
|
$
|
—
|
|
|
$
|
(1,534,826
|
)
|
|
$
|
—
|
|
|
$
|
(236,828,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
The Leuthold Funds - 2020 Semi-Annual Report
|
The Leuthold Select Industries Fund intends to defer and treat $10,192 of qualified late-year losses
incurred during the fiscal year ended September 30, 2019 as arising on the first day of the fiscal year ending September 30, 2020.
As of March 31, 2020, the Funds had no 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 years. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as
income tax expense in the Statements of Operations. During the period ended March 31, 2020, the Funds did not incur any interest or penalties.
|
d)
|
Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid quarterly for the Leuthold Core Investment Fund, Leuthold
Global Fund, Leuthold Select Industries Fund, and Grizzly Short Fund, and are declared and paid annually for the Leuthold Core ETF. Distributions of net realized capital gains, if any, are declared and paid at least annually.
|
|
e)
|
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
|
|
f)
|
Basis for Consolidation for the Leuthold Core Investment Fund and Leuthold Global Fund – Leuthold Core, Ltd. and Leuthold Global, Ltd. (the “Subsidiaries”) acted
as investment vehicles in order to enter into certain investments for the Leuthold Core Investment Fund and Leuthold Global Fund, respectively. The Subsidiaries were liquidated in May 2018.
|
|
g)
|
Securities Sold Short – For financial statement purposes, an amount equal to the required amount of collateral to be segregated for securities sold short is
included in the Statements of Assets and Liabilities as an asset. The amount of the securities sold short, shown as a liability, is subsequently marked-to-market to reflect the current value of the securities sold short. Subsequent
fluctuations in the market prices of securities sold short may require purchasing the securities at prices which could differ from the amount reflected in the Statements of Assets and Liabilities. The Funds are liable for any dividends or
interest payable on securities sold short. As collateral for their securities sold short, the Funds are required under the 1940 Act to maintain segregated assets consisting of cash, cash equivalents, or liquid securities. These segregated
assets are valued consistent with Note 1a. The amount of segregated assets is required to be adjusted daily to reflect changes in the fair value of the securities sold short. The Leuthold Core Investment Fund, Leuthold Global Fund, and
Grizzly Short Fund’s collateral at broker for securities sold short is with one major security dealer.
|
With regard to the cash collateral that is posted with counterparties, the Funds have established a
collateral account for each respective counterparty with its custodian (the “Account”) and have entered into a tri-party agreement with the custodian and the respective counterparty regarding the transfer of assets to and from the Account.
The Adviser reviews each Account on a daily basis to ensure that the Account does not maintain a
material amount of cash collateral in excess of what is required by the applicable counterparty (the amount of collateral required by such counterparty is subject to change and generally not known until the next business day, which necessitates
the maintenance of a minimum amount of excess cash collateral). In the event that the excess cash collateral in an Account is equal to or in excess of the greater of $250,000 or 1% of the total assets of the applicable Fund calculated at each
month end, then the applicable Fund, pursuant to the tri-party agreement, will instruct the custodian to sweep such excess cash collateral into the Fund’s interest bearing account with the custodian. The amount of collateral held related to this
tri-party agreement is included in the Statement of Assets and Liabilities as an asset.
|
The Leuthold Funds - 2020 Semi-Annual Report 51
|
|
h)
|
Other – Investment and shareholder transactions are recorded on the trade date. The Funds determine the gain or loss realized from the investment transactions by
comparing the original cost of the security lot sold with the net sales proceeds. The Funds utilize an identified lot approach to transactions. Dividend income is recognized on the ex-dividend date or as soon as information is available to
the Funds, and interest income is recognized on an accrual basis. Discounts and premiums on bonds are amortized using the yield to maturity method over the life of the respective bond. For financial reporting purposes, the Funds isolate
changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for realized gains and losses.
|
|
i)
|
Expenses – Expenses that directly relate to one of the Funds are charged directly to that Fund. Other operating expenses of the Funds, such as Directors’ fees
and expenses, insurance expense, and legal fees are allocated between the Funds based on the relative net asset value of the individual Funds.
|
|
j)
|
Counterparty risk – Counterparty risk may arise as the result of the failure of a counterparty to a securities contract to comply with the terms of the contract.
Potential counterparty risk is measured by the creditworthiness of the counterparty and additional risk may arise from unanticipated events affecting the value of the underlying security.
|
|
k)
|
Managed Futures Strategy/Commodities Risk (Leuthold Core ETF only) – The Fund may invest in underlying investments that principally invest in the commodities
markets through investment in managed futures programs. Such investments may subject an underlying investment to greater volatility than investments in traditional securities. Commodities are real assets such as oil, agriculture, livestock,
industrial metals, and precious metals such as gold or silver. Prices of commodities and related contracts may fluctuate significantly over short periods for a variety of reasons, including weather and natural disasters; pandemics and other
global health emergencies; governmental, agricultural, trade, fiscal, monetary, and exchange control programs and policies; acts of terrorism; tariffs; and U.S. and international economic, political, military, and regulatory developments.
The demand and supply of these commodities may also fluctuate widely based on such factors as interest rates, investors’ expectations with respect to the rate of inflation, currency exchange rates, the production and cost levels of the
producers and/or forward selling by such producers, global or regional political, economic, or financial events, purchases and sales by central banks, and trading activities by hedge funds and other commodity funds. Commodity underlying
investments may use derivatives, such as futures, options, and swaps, which expose them to further risks, including counterparty risk (i.e., the risk that the institution on the other side of the trade will default).
|
|
l)
|
Shares May Trade at Prices Other Than NAV (Leuthold Core ETF only) – As with all ETFs, shares may be bought and sold in the secondary market at market prices.
Although it is expected that the market price of shares will approximate the Fund’s net asset value (“NAV”), there may be times when the market price of shares is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for shares in
the secondary market, in which case such premiums or discounts may be significant.
|
|
m)
|
Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk (Leuthold Core ETF only) – The Fund has a limited number of financial
institutions that may act as authorized participants (“APs”). In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, shares may trade at
a material discount to NAV and possibly face delisting: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.
|
|
52 The Leuthold Funds - 2020 Semi-Annual Report
|
|
n)
|
Recent Accounting Pronouncements – In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the
Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of Topic 820. The amendments in ASU No. 2018-13 are the result of a broader disclosure project called FASB Concept
Statement, Conceptual Framework for Financial Reporting-Chapter 8: Notes to Financial Statements. The objective and primary focus of the project are to improve the effectiveness of disclosures in the notes to the financial statements by
facilitating clear communication of the information required by U.S. GAAP that is most important to users of the financial statements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019,
including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU No. 2018-13. Management has chosen to early adopt the eliminated or modified disclosures for the year
ended September 30, 2019.
|
|
o)
|
Subsequent Events – In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the
date the financial statements were issued. The recent global outbreak of coronavirus disease 2019 (“COVID-19”) has disrupted global economic markets and adversely affected individual companies and investment products. The prolonged economic
impact of COVID-19 is uncertain. The operational and financial performance of the issuers of securities in which the Fund invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in
turn impact the value of the Fund’s investments.
|
|
2.
|
INVESTMENT TRANSACTIONS
|
|
|
Purchases and sales of investment securities, other than short-term investments and securities sold short, for the period ended March 31, 2020 are summarized below.
|
|
|
|
Leuthold
Core
Investment
Fund
|
|
|
Leuthold
Global
Fund
|
|
|
Leuthold
Select
Industries
Fund
|
|
|
Leuthold
Core
ETF
|
|
|
Purchases
|
|
$
|
146,982,509
|
|
|
$
|
9,237,441
|
|
|
$
|
4,809,413
|
|
|
$
|
3,658,721
|
|
|
Sales
|
|
|
225,849,139
|
|
|
|
30,008,110
|
|
|
|
8,001,287
|
|
|
|
197,715
|
|
There were no purchases or sales of investment securities in the Grizzly Short Fund because this Fund invests only in
securities sold short.
At September 30, 2019, gross unrealized appreciation and depreciation of investments and securities sold short and cost of
investments and cost of securities sold short for tax purposes were as follows:
|
|
|
Leuthold
Core
Investment
Fund
|
|
|
Leuthold
Global
Fund
|
|
|
Leuthold
Select
Industries
Fund
|
|
|
Grizzly
Short
Fund
|
|
|
Tax cost of investments
|
|
$
|
468,490,490
|
|
|
$
|
49,209,470
|
|
|
$
|
9,009,470
|
|
|
$
|
(26,594,744
|
)
|
|
Unrealized Appreciation
|
|
|
100,665,735
|
|
|
|
3,610,620
|
|
|
|
2,934,363
|
|
|
|
8,931,361
|
|
|
Unrealized Depreciation
|
|
|
(6,423,563
|
)
|
|
|
(2,365,850
|
)
|
|
|
(135,555
|
)
|
|
|
(2,065,398
|
)
|
|
Net unrealized appreciation
|
|
$
|
94,242,172
|
|
|
$
|
1,244,770
|
|
|
$
|
2,798,808
|
|
|
$
|
6,865,963
|
|
|
The Leuthold Funds - 2020 Semi-Annual Report 53
|
The differences between book and tax basis of unrealized appreciation (depreciation) are primarily
attributable to the tax deferral of losses on wash sales and passive foreign investment company transactions.
The Leuthold Core Investment Fund owned 5% or more of the voting securities of the following
companies during the period ended March 31, 2020. As a result, these companies are deemed to be affiliates of the Leuthold Core Investment Fund as defined by the 1940 Act. Transactions during the period in these securities of affiliated companies
were as follows:
|
|
Leuthold Core Investment Fund
|
|
|
Security Name
|
|
|
Share
Balance
03/31/20
|
|
|
|
Fair Value
at
09/30/19
|
|
|
|
Purchases
|
|
|
|
Sales
|
|
|
|
Realized
Gain
(loss)
|
|
|
|
Change in
Unrealized
Appreciation
|
|
|
|
Fair Value
at
03/31/20
|
|
|
|
Dividend
Income
|
|
|
Invesco Currency Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Japanese Yen Trust
|
|
|
194,533
|
|
|
$
|
19,614,081
|
|
|
$
|
––
|
|
|
$
|
(2,500,855
|
)
|
|
$
|
16,036
|
|
|
$
|
26,603
|
|
|
$
|
17,155,865
|
|
|
$
|
––
|
|
|
3.
|
INVESTMENT ADVISORY AND OTHER AGREEMENTS
|
Each of the Funds has entered into an Investment Advisory Agreement (“advisory agreement”) with the Adviser.
Pursuant to its advisory agreement with the Funds, the Adviser is entitled to receive a fee, calculated daily as applied to each Fund’s average daily net assets and payable monthly, at annual rates of:
Leuthold
Core
Investment
Fund
|
|
|
Leuthold
Global
Fund
|
|
|
Leuthold
Select
Industries
Fund
|
|
|
Grizzly
Short
Fund
|
|
|
Leuthold
Core
ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.90%
|
|
|
|
0.90%
|
|
|
|
1.00%
|
|
|
|
1.25%
|
|
|
|
.50%
|
|
The Adviser has agreed to waive its advisory fee and/or reimburse the Funds’ other expenses, to the extent
necessary to ensure that the Funds’ total operating expenses (exclusive of interest, taxes, brokerage commissions, dividends and interest on securities sold short, and extraordinary items) do not exceed the following rates, based on each Fund’s
average daily net assets:
Leuthold
Core
Investment
Fund
|
|
|
Leuthold
Global
Fund
|
|
|
Leuthold
Select
Industries
Fund
|
|
|
Grizzly
Short
Fund
|
|
|
Leuthold
Core
ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.25%
|
|
|
|
1.85%
|
|
|
|
1.50%
|
|
|
|
2.50%
|
|
|
|
0.65%
|
|
Any waiver or reimbursement is subject to later adjustments to allow the Adviser to recoup amounts previously
waived or reimbursed to the extent actual fees and expenses for a fiscal period are less than each Fund’s expense limitation, provided, however, that the recoupment period for the Adviser is limited to three years from the time the expenses were
waived or incurred and is limited to the lesser of (1) the expense cap in effect at the time of the waiver, and (2) the expense cap in effect at the time of recapture.
|
54 The Leuthold Funds - 2020 Semi-Annual Report
|
Amounts subject to future recoupment as of March 31, 2020 are as follows:
|
Leuthold Global Fund
|
|
|
Leuthold Select Industries Fund
|
|
|
|
|
|
|
Year of Expiration
|
|
|
Recoverable Amount
|
|
|
Year of Expiration
|
|
Recoverable Amount
|
|
|
|
3/31/2023
|
|
|
$
|
1,885
|
|
|
9/30/2020
|
|
$
|
20,076
|
|
|
|
|
|
|
|
|
|
|
9/30/2021
|
|
|
28,151
|
|
|
|
|
|
|
|
|
|
|
9/30/2022
|
|
|
39,650
|
|
|
|
|
|
|
|
|
|
|
3/31/2023
|
|
|
73,562
|
|
|
Leuthold Core ETF
|
|
|
|
|
|
Year of Expiration
|
|
|
Recoverable Amount
|
|
|
|
3/31/2023
|
|
|
$
|
23,248
|
|
U.S. Bancorp Fund Services, LLC (“Fund Services”), doing business as U.S. Bank Global Fund Services, serves as
transfer agent, administrator, and accounting services agent for the Funds. U.S. Bank, N.A. serves as custodian for the Funds.
The Leuthold Global Fund – Retail Class has adopted a distribution plan pursuant to Rule 12b-1 under the 1940
Act, whereby Rafferty Capital Markets, LLC serves as distributor. This plan allows the Fund to use up to 0.25% of its average daily net assets to pay sales, distribution, and other fees for the sale of its shares and for services provided to
investors. The Fund may pay all or a portion of this fee to any securities dealer, financial institution, or any other person who renders personal service to the Fund’s shareholders, assists in the maintenance of the Fund’s shareholder accounts,
or who renders assistance in distributing or promoting the sale of shares of the Fund pursuant to a written agreement approved by the Directors. To the extent such fee is not paid to such persons, the Fund may use the fee for its expenses of
distribution of its shares, including, but not limited to, payment by the Fund of the cost of preparing, printing, and distributing Prospectuses and Statements of Additional Information to prospective investors and of implementing and operating
the plan.
|
5.
|
SUB-TRANSFER AGENT & SHAREHOLDER SERVICING FEE PLANS
|
The Funds are permitted to pay sub-transfer agent fees for various platform agreement not to exceed 0.15% of the
Funds’ average daily net assets. In addition, the Retail Class shares of the Leuthold Core Investment Fund, Leuthold Select Industries Fund, and Grizzly Short Fund have adopted a Shareholder Servicing Fee Plan not to exceed 0.15% of these Funds’
Retail Class shares average daily net assets. These fees are used to finance certain activities related to servicing and maintaining shareholder accounts. Sub-transfer agent and shareholder servicing fees incurred by the Funds are disclosed in
the Statements of Operations.
The Funds enter into contracts that contain a variety of indemnifications. The Funds’ maximum exposure under
these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
|
The Leuthold Funds - 2020 Semi-Annual Report 55
|
Each Fund may invest up to 15% of net assets in illiquid investments. An “illiquid investment” is any investment that a Fund
reasonably expects 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. A Fund will take into account relevant market,
trading, and investment specific consideration when determining whether an investment is an illiquid investment. The illiquidity status of an investment is generally evaluated monthly. The 15% limitation may include securities whose disposition
would be subject to legal restrictions (“restricted securities”). Restricted securities often have a market value lower than the market price of unrestricted securities of the same issuer and are not readily marketable without some time delay.
This could result in a Fund being unable to realize a favorable price upon disposition of restricted securities and in some cases might make disposition of such securities at the time desired by the Fund impossible.
|
8.
|
LENDING PORTFOLIO SECURITIES
|
The Funds may lend portfolio securities constituting up to 30% of total assets to unaffiliated broker dealers, banks, or other
recognized institutional borrowers of securities, provided that the borrower at all times maintains cash, U.S. government securities, or equivalent collateral or provides an irrevocable letter of credit in favor of the Funds equal in value to at
least 100% of the value of the securities loaned. During the time portfolio securities are on loan, the borrower pays the lending Fund an amount equivalent to any dividends or interest paid on such securities, and the Fund may receive an
agreed-upon amount of interest income from the borrower who delivered equivalent collateral or provided a letter of credit. Loans are subject to termination at the option of the lending Fund or the borrower. The lending Fund may pay reasonable
administrative and custodial fees in connection with a loan of portfolio securities and may pay a negotiated portion of the interest earned on the cash or equivalent collateral to the borrower or placing broker. The lending Fund does not have the
right to vote securities on loan but could terminate the loan and regain the right to vote if that were considered important with respect to the investment.
The primary risk in securities lending is a default by the borrower during a sharp rise in price of the borrowed security
resulting in a deficiency in the collateral posted by the borrower. The Funds will seek to minimize this risk by requiring that the value of the securities loaned will be computed each day and additional collateral be furnished each day if
required.
As of March 31, 2020, the Funds did not engage in securities lending.
|
56 The Leuthold Funds - 2020 Semi-Annual Report
|
|
Leuthold Core Investment Fund - Retail - LCORX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31,
2020
|
|
|
Year Ended
September 30,
2019
|
|
|
Year Ended
September 30,
2018
(Consolidated)
|
|
|
Year Ended
September 30,
2017
(Consolidated)
|
|
|
Year Ended
September 30,
2016
(Consolidated)
|
|
|
Year Ended
September 30,
2015
(Consolidated)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
18.77
|
|
|
$
|
20.50
|
|
|
$
|
20.54
|
|
|
$
|
18.06
|
|
|
$
|
18.44
|
|
|
$
|
18.85
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)(2)
|
|
|
0.03
|
|
|
|
0.09
|
|
|
|
0.05
|
|
|
|
0.04
|
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
Net realized and unrealized gain (loss) on investments and securities sold short
|
|
|
(1.51
|
)
|
|
|
0.08
|
|
|
|
0.61
|
|
|
|
2.53
|
|
|
|
0.32
|
|
|
|
0.76
|
|
|
Total from investment operations
|
|
|
(1.48
|
)
|
|
|
0.17
|
|
|
|
0.66
|
|
|
|
2.57
|
|
|
|
0.31
|
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.04
|
)
|
|
|
(0.07
|
)
|
|
|
(0.05
|
)
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
From net realized gain
|
|
|
(0.27
|
)
|
|
|
(1.83
|
)
|
|
|
(0.65
|
)
|
|
|
(0.08
|
)
|
|
|
(0.69
|
)
|
|
|
(1.13
|
)
|
|
Redemption fees(3)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Total distributions
|
|
|
(0.31
|
)
|
|
|
(1.90
|
)
|
|
|
(0.70
|
)
|
|
|
(0.09
|
)
|
|
|
(0.69
|
)
|
|
|
(1.16
|
)
|
|
Net asset value, end of period
|
|
$
|
16.98
|
|
|
$
|
18.77
|
|
|
$
|
20.50
|
|
|
$
|
20.54
|
|
|
$
|
18.06
|
|
|
$
|
18.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(8.02
|
)%
|
|
|
1.21
|
%
|
|
|
3.23
|
%
|
|
|
14.31
|
%
|
|
|
1.76
|
%
|
|
|
4.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
252,074,778
|
|
|
$
|
316,887,197
|
|
|
$
|
403,095,456
|
|
|
$
|
464,660,913
|
|
|
$
|
524,731,192
|
|
|
$
|
564,608,599
|
|
|
Ratio of expenses to average net assets (4)
|
|
|
1.34
|
%(7)
|
|
|
1.32
|
%
|
|
|
1.38
|
%
|
|
|
1.21
|
%
|
|
|
1.29
|
%
|
|
|
1.30
|
%
|
|
Ratio of net investment income (loss) to average net assets (5)
|
|
|
0.31
|
%(7)
|
|
|
0.48
|
%
|
|
|
0.26
|
%
|
|
|
0.20
|
%
|
|
|
(0.08
|
)%
|
|
|
(0.05
|
)%
|
|
Portfolio turnover rate (6)
|
|
|
29.68
|
%
|
|
|
66.68
|
%
|
|
|
79.00
|
%
|
|
|
52.36
|
%
|
|
|
109.32
|
%
|
|
|
78.96
|
%
|
|
(1)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(2)
|
Net investment income (loss) per share is calculated based on average shares outstanding.
|
|
(3)
|
Amount represents less than $0.005 per share.
|
|
(4)
|
The ratio of expenses to average net assets includes dividends and interest on securities sold short. The expense ratios excluding dividends and interest on securities
sold short were 1.21% for the period ended March 31, 2020, 1.20% for the year ended September 30, 2019, 1.19% for the year ended September 30, 2018, 1.19% for the year ended September 30, 2017, 1.17% for the year ended September 30, 2016,
and 1.16% for the year ended September 30, 2015.
|
|
(5)
|
The net investment income ratios include dividends and interest on securities sold short.
|
|
(6)
|
The portfolio turnover rate excludes purchases and sales of securities sold short.
|
|
(7)
|
Annualized.
|
|
See Notes to the Financial Statements.
|
The Leuthold Funds - 2020 Semi-Annual Report 57
|
|
Leuthold Core Investment Fund - Institutional - LCRIX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31,
2020
|
|
|
Year Ended
September 31,
2019
|
|
|
Year Ended
September 30,
2018
(Consolidated)
|
|
|
Year Ended
September 30,
2017
(Consolidated)
|
|
|
Year Ended
September 30,
2016
(Consolidated)
|
|
|
Year Ended
September 30,
2015
(Consolidated)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
18.81
|
|
|
$
|
20.53
|
|
|
$
|
20.56
|
|
|
$
|
18.08
|
|
|
$
|
18.43
|
|
|
$
|
18.85
|
|
|
Income from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income(2)
|
|
|
0.04
|
|
|
|
0.11
|
|
|
|
0.08
|
|
|
|
0.06
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
Net realized and unrealized gain (loss) on investments and securities sold short
|
|
|
(1.52
|
)
|
|
|
0.09
|
|
|
|
0.60
|
|
|
|
2.53
|
|
|
|
0.33
|
|
|
|
0.74
|
|
|
Total from investment operations
|
|
|
(1.48
|
)
|
|
|
0.20
|
|
|
|
0.68
|
|
|
|
2.59
|
|
|
|
0.34
|
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.05
|
)
|
|
|
(0.09
|
)
|
|
|
(0.06
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
(0.04
|
)
|
|
From net realized gain
|
|
|
(0.27
|
)
|
|
|
(1.83
|
)
|
|
|
(0.65
|
)
|
|
|
(0.08
|
)
|
|
|
(0.69
|
)
|
|
|
(1.13
|
)
|
|
Redemption fees(3)
|
|
|
0.00
|
|
|
|
0.00
|
)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Total distributions
|
|
|
(0.32
|
)
|
|
|
(1.92
|
)
|
|
|
(0.71
|
)
|
|
|
(0.11
|
)
|
|
|
(0.69
|
)
|
|
|
(1.17
|
)
|
|
Net asset value, end of period
|
|
$
|
17.01
|
|
|
$
|
18.81
|
|
|
$
|
20.53
|
|
|
$
|
20.56
|
|
|
$
|
18.08
|
|
|
$
|
18.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(8.00
|
)%
|
|
|
1.33
|
%
|
|
|
3.35
|
%
|
|
|
14.43
|
%
|
|
|
1.93
|
%
|
|
|
4.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
251,896,665
|
|
|
$
|
301,387,112
|
|
|
$
|
434,163,780
|
|
|
$
|
385,390,357
|
|
|
$
|
378,962,827
|
|
|
$
|
293,666,347
|
|
|
Ratio of expenses to average net assets(4)
|
|
|
1.25
|
%(7)
|
|
|
1.22
|
%
|
|
|
1.27
|
%
|
|
|
1.10
|
%
|
|
|
1.17
|
%
|
|
|
1.20
|
%
|
|
Ratio of net investment income to average net assets(5)
|
|
|
0.41
|
%(7)
|
|
|
0.58
|
%
|
|
|
0.37
|
%
|
|
|
0.30
|
%
|
|
|
0.04
|
%
|
|
|
0.05
|
%
|
|
Portfolio turnover rate (6)
|
|
|
29.68
|
%
|
|
|
66.68
|
%
|
|
|
79.00
|
%
|
|
|
52.36
|
%
|
|
|
109.32
|
%
|
|
|
78.96
|
%
|
|
(1)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(2)
|
Net investment income per share is calculated based on average shares outstanding.
|
|
(3)
|
Amount represents less than $0.005 per share.
|
|
(4)
|
The ratio of expenses to average net assets includes dividends and interest on securities sold short. The expense ratios excluding dividends and interest on securities
sold short were 1.12% for the period ended March 31, 2020, 1.10% for the year ended September 30, 2019, 1.08% for the year ended September 30, 2018, 1.08% for the year ended September 30, 2017, 1.05% for the year ended September 30, 2016,
and 1.06% for the year ended September 30, 2015.
|
|
(5)
|
The net investment income ratios include dividends and interest on securities sold short.
|
|
(6)
|
The portfolio turnover rate excludes purchases and sales of securities sold short.
|
|
(7)
|
Annualized.
|
|
58 The Leuthold Funds - 2020 Semi-Annual Report
|
See Notes to the Financial Statements.
|
|
Leuthold Global Fund - Retail - GLBLX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31,
2020
|
|
|
Year Ended
September 31,
2019
|
|
|
Year Ended
September 30,
2018
(Consolidated)
|
|
|
Year Ended
September 30,
2017
(Consolidated)
|
|
|
Year Ended
September 30,
2016
(Consolidated)
|
|
|
Year Ended
September 30,
2015
(Consolidated)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
8.09
|
|
|
$
|
9.11
|
|
|
$
|
10.05
|
|
|
$
|
9.86
|
|
|
$
|
10.03
|
|
|
$
|
11.29
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)(2)
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.03
|
|
|
|
0.04
|
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
Net realized and unrealized gain (loss) on investments and securities sold short
|
|
|
(0.83
|
)
|
|
|
(0.39
|
)
|
|
|
(0.07
|
)
|
|
|
1.02
|
|
|
|
0.21
|
|
|
|
(0.11
|
)
|
|
Total from investment operations
|
|
|
(0.82
|
)
|
|
|
(0.37
|
)
|
|
|
(0.04
|
)
|
|
|
1.06
|
|
|
|
0.20
|
|
|
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.06
|
)
|
|
|
((0.01)01)
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
From net realized gain
|
|
|
—
|
|
|
|
(0.64
|
)
|
|
|
(0.88
|
)
|
|
|
(0.87
|
)
|
|
|
(0.37
|
)
|
|
|
(1.09
|
)
|
|
Redemption fees(3)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Total distributions
|
|
|
(0.06
|
)
|
|
|
(0.65
|
)
|
|
|
(0.90
|
)
|
|
|
(0.87
|
)
|
|
|
(0.37
|
)
|
|
|
(1.12
|
)
|
|
Net asset value, end of period
|
|
$
|
7.21
|
|
|
$
|
8.09
|
|
|
$
|
9.11
|
|
|
$
|
10.05
|
|
|
$
|
9.86
|
|
|
$
|
10.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(10.26
|
)%
|
|
|
(3.97
|
)%
|
|
|
(0.67
|
)%
|
|
|
12.02
|
%
|
|
|
1.89
|
%
|
|
|
(1.41
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
4,699,444
|
|
|
$
|
7,485,374
|
|
|
$
|
18,362,218
|
|
|
$
|
24,040,140
|
|
|
$
|
78,743,516
|
|
|
$
|
95,026,857
|
|
|
Ratio of expenses to average net assets(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
1.85
|
%(7)
|
|
|
1.88
|
%
|
|
|
1.75
|
%
|
|
|
1.56
|
%
|
|
|
1.82
|
%
|
|
|
1.71
|
%
|
|
After expense reimbursement or recovery
|
|
|
1.84
|
%(7)
|
|
|
1.88
|
%
|
|
|
1.75
|
%
|
|
|
1.56
|
%
|
|
|
1.82
|
%
|
|
|
1.71
|
%
|
|
Ratio of net investment income (loss) to average net assets(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
0.35
|
%(7)
|
|
|
0.27
|
%
|
|
|
0.28
|
%
|
|
|
0.38
|
%
|
|
|
(0.15
|
)%
|
|
|
(0.29
|
)%
|
|
After expense reimbursement or recovery
|
|
|
0.36
|
%(7)
|
|
|
0.27
|
%
|
|
|
0.28
|
%
|
|
|
0.38
|
%
|
|
|
(0.15
|
)%
|
|
|
(0.29
|
)%
|
|
Portfolio turnover rate (6)
|
|
|
29.48
|
%
|
|
|
93.77
|
%
|
|
|
79.09
|
%
|
|
|
63.13
|
%
|
|
|
102.93
|
%
|
|
|
78.37
|
%
|
|
(1)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(2)
|
Net investment income (loss) per share is calculated based on average shares outstanding.
|
|
(3)
|
Amount represents less than $0.005 per share.
|
|
(4)
|
The ratio of expenses to average net assets includes dividends and interest on securities sold short. The expense ratios excluding dividends and interest on securities
sold short before and after expense reimbursement or recovery were 1.66% and 1.65% for the period ended March 31, 2020, 1.62% and 1.62% for the year ended September 30, 2019, 1.54% and 1.54% for the year ended September 30, 2018, 1.56% and
1.56% for the year ended September 30, 2017, 1.61% and 1.61% for the year ended September 30, 2016, and 1.54% and 1.54% for the year ended September 30, 2015, respectively.
|
|
(5)
|
The net investment income ratios include dividends and interest on securities sold short.
|
|
(6)
|
The portfolio turnover rate excludes purchases and sales of securities sold short.
|
|
(7)
|
Annualized.
|
|
See Notes to the Financial Statements.
|
The Leuthold Funds - 2020 Semi-Annual Report 59
|
|
Leuthold Global Fund - Institutional - GLBIX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31,
2020
|
|
|
Year Ended
September 31,
2019
|
|
|
Year Ended
September 30,
2018
(Consolidated)
|
|
|
Year Ended
September 30,
2017
(Consolidated)
|
|
|
Year Ended
September 30,
2016
(Consolidated)
|
|
|
Year Ended
September 30,
2015
(Consolidated)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
8.21
|
|
|
$
|
9.23
|
|
|
$
|
10.16
|
|
|
$
|
9.95
|
|
|
$
|
10.10
|
|
|
$
|
11.34
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)(2)
|
|
|
0.03
|
|
|
|
0.04
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.01
|
|
|
|
(0.01
|
)
|
|
Net realized and unrealized gain (loss) on investments and securities sold short
|
|
|
(0.85
|
)
|
|
|
(0.39
|
)
|
|
|
(0.07
|
)
|
|
|
1.03
|
|
|
|
0.21
|
|
|
|
(0.11
|
)
|
|
Total from investment operations
|
|
|
(0.82
|
)
|
|
|
(0.35
|
)
|
|
|
(0.02
|
)
|
|
|
1.09
|
|
|
|
0.22
|
|
|
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.06
|
)
|
|
|
(0.03
|
)
|
|
|
(0.03
|
)
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
From net realized gain
|
|
|
—
|
|
|
|
(0.64
|
)
|
|
|
(0.88
|
)
|
|
|
(0.87
|
)
|
|
|
(0.37
|
)
|
|
|
(1.09
|
)
|
|
Redemption fees (3)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Total distributions
|
|
|
(0.06
|
)
|
|
|
(0.67
|
)
|
|
|
(0.91
|
)
|
|
|
(0.88
|
)
|
|
|
(0.37
|
)
|
|
|
(1.12
|
)
|
|
Net asset value, end of period
|
|
$
|
7.33
|
|
|
$
|
8.21
|
|
|
$
|
9.23
|
|
|
$
|
10.16
|
|
|
$
|
9.95
|
|
|
$
|
10.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(10.09
|
)%
|
|
|
(3.70
|
)%
|
|
|
(0.43
|
)%
|
|
|
12.28
|
%
|
|
|
2.18
|
%
|
|
|
(1.30
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
20,702,390
|
|
|
$
|
45,677,014
|
|
|
$
|
64,388,940
|
|
|
$
|
78,614,144
|
|
|
$
|
103,921,200
|
|
|
$
|
218,497,272
|
|
|
Ratio of expenses to average net assets(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
1.60
|
%(7)
|
|
|
1.63
|
%
|
|
|
1.50
|
%
|
|
|
1.36
|
%
|
|
|
1.57
|
%
|
|
|
1.50
|
%
|
|
After expense reimbursement or recovery
|
|
|
1.59
|
%(7)
|
|
|
1.63
|
%
|
|
|
1.50
|
%
|
|
|
1.36
|
%
|
|
|
1.57
|
%
|
|
|
1.50
|
%
|
|
Ratio of net investment income (loss) to average net assets(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
0.60
|
%(7)
|
|
|
0.52
|
%
|
|
|
0.53
|
%
|
|
|
0.58
|
%
|
|
|
0.10
|
%
|
|
|
`(0.09)%
|
|
|
After expense reimbursement or recovery
|
|
|
0.61
|
%(7)
|
|
|
0.52
|
%
|
|
|
0.53
|
%
|
|
|
0.58
|
%
|
|
|
0.10
|
%
|
|
|
(0.09
|
)%
|
|
Portfolio turnover rate (6)
|
|
|
29.48
|
%
|
|
|
93.77
|
%
|
|
|
79.09
|
%
|
|
|
63.13
|
%
|
|
|
102.93
|
%
|
|
|
78.37
|
%
|
|
(1)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(2)
|
Net investment income (loss) per share is calculated based on average shares outstanding.
|
|
(3)
|
Amount represents less than $0.005 per share.
|
|
(4)
|
The ratio of expenses to average net assets includes dividends and interest on securities sold short. The expense ratios excluding dividends and interest on securities
sold short before and after expense reimbursement or recovery were 1.41% and 1.40% for the period ended March 31, 2020, 1.37% and 1.37% for the year ended September 30, 2019, 1.29% and 1.29% for the year ended September 30, 2018, 1.36% and
1.36% for the year ended September 30, 2017, 1.36% and 1.36% for the year ended September 30, 2016, and 1.33% and 1.33% for the year ended September 30, 2015, respectively.
|
|
(5)
|
The net investment income ratios include dividends and interest on securities sold short.
|
|
(6)
|
The portfolio turnover rate excludes purchases and sales of securities sold short.
|
|
(7)
|
Annualized.
|
|
60 The Leuthold Funds - 2020 Semi-Annual Report
|
See Notes to the Financial Statements.
|
|
Leuthold Select Industries Fund - LSLTX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31, 2020
|
|
|
Year Ended
September 30,
2019
|
|
|
Year Ended
September 30,
2018
|
|
|
Year Ended
September 30,
2017
|
|
|
Year Ended
September 30,
2016
|
|
|
Year Ended
September 30,
2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
25.02
|
|
|
$
|
27.31
|
|
|
$
|
26.32
|
|
|
$
|
21.41
|
|
|
$
|
21.27
|
|
|
$
|
20.02
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)(2)
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
0.00
|
(3)
|
|
|
(0.03
|
)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(4.53
|
)
|
|
|
(0.16
|
)
|
|
|
2.28
|
|
|
|
4.93
|
|
|
|
0.45
|
|
|
|
1.28
|
|
|
Total from investment operations
|
|
|
(4.54
|
)
|
|
|
(0.19
|
)
|
|
|
2.27
|
|
|
|
4.91
|
|
|
|
0.45
|
|
|
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
From net realized gain
|
|
|
(0.73
|
)
|
|
|
(2.10
|
)
|
|
|
(1.27
|
)
|
|
|
—
|
|
|
|
(0.28
|
)
|
|
|
—
|
|
|
Total distributions
|
|
|
(0.73
|
)
|
|
|
(2.10
|
)
|
|
|
(1.28
|
)
|
|
|
—
|
|
|
|
(0.31
|
)
|
|
|
—
|
|
|
Net asset value, end of period
|
|
$
|
19.75
|
|
|
$
|
25.02
|
|
|
$
|
27.31
|
|
|
$
|
26.32
|
|
|
$
|
21.41
|
|
|
$
|
21.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(18.75
|
)%
|
|
|
(0.19
|
)%
|
|
|
8.89
|
%
|
|
|
22.93
|
%
|
|
|
2.09
|
%
|
|
|
6.24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
6,982,854
|
|
|
$
|
11,783,884
|
|
|
$
|
18,111,932
|
|
|
$
|
15,045,866
|
|
|
$
|
12,630,891
|
|
|
$
|
12,624,145
|
|
|
Ratio of expenses to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
2.86
|
%(4)
|
|
|
1.77
|
%
|
|
|
1.65
|
%
|
|
|
1.80
|
%
|
|
|
1.72
|
%
|
|
|
1.73
|
%
|
|
After expense reimbursement or recovery
|
|
|
1.50
|
%(4)
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
Ratio of net investment income (loss) to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
(1.44
|
)%(4)
|
|
|
(0.39
|
)%
|
|
|
(0.17
|
)%
|
|
|
(0.39
|
)%
|
|
|
(0.20
|
)%
|
|
|
(0.35
|
)%
|
|
After expense reimbursement or recovery
|
|
|
(0.08
|
)%(4)
|
|
|
(0.12
|
)%
|
|
|
(0.02
|
)%
|
|
|
(0.09
|
)%
|
|
|
0.02
|
%
|
|
|
(0.12
|
)%
|
|
Portfolio turnover rate
|
|
|
45.98
|
%
|
|
|
72.87
|
%
|
|
|
104.00
|
%
|
|
|
62.72
|
%
|
|
|
118.26
|
%
|
|
|
77.42
|
%
|
|
(1)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(2)
|
Net investment income (loss) per share is calculated based on average shares outstanding.
|
|
(3)
|
Amount represents less than $0.005 per share.
|
|
(4)
|
Annualized.
|
|
See Notes to the Financial Statements.
|
The Leuthold Funds - 2020 Semi-Annual Report 61
|
|
Grizzly Short Fund - GRZZX
|
|
Financial Highlights
|
|
|
|
Six Months
Ended
March 31, 2020
|
|
|
Year Ended
September 30,
2019
|
|
|
Year Ended
September 30,
2018
|
|
|
Year Ended
September 30,
2017(1)
|
|
|
Year Ended
September 30,
2016(1)
|
|
|
Year Ended
September 30,
2015(1)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
16.15
|
|
|
$
|
17.65
|
|
|
$
|
21.48
|
|
|
$
|
24.68
|
|
|
$
|
31.96
|
|
|
$
|
29.48
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)(3)
|
|
|
(0.09
|
)
|
|
|
0.19
|
|
|
|
(0.03
|
)
|
|
|
(0.40
|
)
|
|
|
(0.72
|
)
|
|
|
(0.80
|
)
|
|
Net realized and unrealized gain (loss) on investments and securities sold short
|
|
|
1.79
|
|
|
|
(1.54
|
)
|
|
|
(3.80
|
)
|
|
|
(2.80
|
)
|
|
|
(6.56
|
)
|
|
|
3.28
|
|
|
Total from investment operations
|
|
|
1.70
|
|
|
|
(1.35
|
)
|
|
|
(3.83
|
)
|
|
|
(3.20
|
)
|
|
|
(7.28
|
)
|
|
|
2.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.01
|
)
|
|
|
(0.15
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
From net realized gain
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total distributions
|
|
|
(0.01
|
)
|
|
|
(0.15
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net asset value, end of period
|
|
$
|
17.84
|
|
|
$
|
16.15
|
|
|
$
|
17.65
|
|
|
$
|
21.48
|
|
|
$
|
24.68
|
|
|
$
|
31.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
10.54
|
%
|
|
|
(7.62
|
)%
|
|
|
(17.83
|
)%
|
|
|
(12.97
|
)%
|
|
|
(22.78
|
)%
|
|
|
8.41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
183,227,741
|
|
|
$
|
92,238,086
|
|
|
$
|
98,948,757
|
|
|
$
|
205,698,273
|
|
|
$
|
178,211,844
|
|
|
$
|
265,843,184
|
|
|
Ratio of expenses to average net assets(4)
|
|
|
3.16
|
%(7)
|
|
|
2.61
|
%
|
|
|
2.64
|
%
|
|
|
2.63
|
%
|
|
|
2.65
|
%
|
|
|
2.81
|
%
|
|
Ratio of net investment income (loss) to average net assets(5)
|
|
|
(1.15
|
)%(7)
|
|
|
1.08
|
%
|
|
|
(0.54
|
)%
|
|
|
(1.78
|
)%
|
|
|
(2.50
|
)%
|
|
|
(2.81
|
)%
|
|
Portfolio turnover rate (6)
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
(1)
|
Per share data adjusted for 1:4 reverse split completed as of May 18, 2018.
|
|
(2)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(3)
|
Net investment income (loss) per share is calculated based on average shares outstanding.
|
|
(4)
|
The ratio of expenses to average net assets includes dividends and interest on securites sold short. The expense ratios excluding dividends and interest on securities sold
short were 1.59% for the period ended March 31, 2020, 1.60% for the year ended September 30, 2019, 1.53% for the year ended September 30, 2018, 1.54% for the year ended September 30, 2017, 1.52% for the year ended September 30, 2016, and
1.55% for the year ended September 30, 2015.
|
|
(5)
|
The net investment income (loss) ratios include dividends and interest on securities sold short.
|
|
(6)
|
The portfolio turnover rate excludes purchases and sales of securities sold short.
|
|
(7)
|
Annualized.
|
|
62 The Leuthold Funds - 2020 Semi-Annual Report
|
See Notes to the Financial Statements.
|
Leuthold Core ETF - LCR
Financial Highlights
|
|
|
Period from
|
|
|
|
|
January 6, 2020(1)
|
|
|
|
|
through
|
|
|
|
|
March 31, 2020
|
|
|
|
|
(Unaudited)
|
|
|
Per Share Data(2):
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
25.00
|
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
Net investment income (3)
|
|
|
0.05
|
|
|
Net realized and unrealized loss on investments and futures contracts
|
|
|
(2.38
|
)
|
|
Total from investment operations
|
|
|
(2.33
|
)
|
|
|
|
|
|
|
|
Less distributions:
|
|
|
|
|
|
From net investment income
|
|
|
––
|
|
|
From net realized gain
|
|
|
––
|
|
|
Total distributions
|
|
|
––
|
|
|
Net asset value, end of period
|
|
$
|
22.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
(9.31
|
)%
|
|
|
|
|
|
|
|
Supplemental data and ratios:
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
3,967,495
|
|
|
Ratio of expenses to average net assets:
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
3.50
|
%(4)
|
|
After expense reimbursement or recovery
|
|
|
0.65
|
%(4)
|
|
Ratio of net investment income (loss) to average net assets:
|
|
|
|
|
|
Before expense reimbursement or recovery
|
|
|
(2.02
|
)%(4)
|
|
After expense reimbursement or recovery
|
|
|
0.83
|
%(4)
|
|
Portfolio turnover rate
|
|
|
7.18%
|
|
|
(1)
|
Commencement of operations.
|
|
(2)
|
For a share outstanding throughout the period. Rounded to the nearest cent.
|
|
(3)
|
Net investment income per share is calculated based on average shares outstanding.
|
|
See Notes to the Financial Statements.
|
The Leuthold Funds - 2020 Semi-Annual Report
|
63
|
|
64
|
The Leuthold Funds - 2020 Semi-Annual Report
|
See Notes to the Financial Statements.
|
Leuthold Funds
Expense Examples – March 31, 2020 (Unaudited)
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees and exchange fees; and (2) ongoing costs,
including management fees; distribution and/or service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare costs with the ongoing costs of
investing in other mutual funds.
The Actual Examples are based on an investment of $1,000 invested at the beginning of the period and held the entire period (October 1, 2019 - March 31, 2020
for the Leuthold Core Investment Fund, Leuthold Global Fund, Leuthold Select Industries Fund, and Grizzly Short Fund and January 6, 2020 - March 31, 2020 for the Leuthold Core ETF). The Hypothetical Examples are based on an investment of $1,000
invested at the beginning of the period and held the entire period, October 1, 2019 - March 31, 2020.
Actual Expenses
The first line of the following tables provides information about actual account values and actual expenses. Although the Funds charge no sales load (the
Leuthold Core Investment Fund and Leuthold Global Fund charge a 2% redemption fee for redemptions made within five business days after a purchase), you will be assessed fees for outgoing wire transfers, returned checks, or stop payment orders at
prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request a redemption be made by wire transfer, currently a $15.00 fee is charged by the Funds’ transfer agent. To the extent that the Funds invest in
shares of other investment companies as part of its investment strategy, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which a Fund invests in addition to the expenses of the Fund.
Actual expenses of the underlying funds are expected to vary by fund. These expenses are not included in the following examples. The examples include, but are not limited to, management fees, shareholder servicing fees, fund accounting, custody,
and transfer agent fees. However, the following examples do not include portfolio trading commissions and related expenses, and extraordinary expenses as determined under generally accepted accounting principles. You may use the information in
this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Examples for Comparison Purposes
The second line of the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense
ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the tables is useful in comparing ongoing costs only and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
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The Leuthold Funds - 2020 Semi-Annual Report
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65
|
Leuthold Funds
Expense Example Tables (Unaudited)
Leuthold Core Investment Fund - Retail Class - LCORX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual**
|
|
$
|
1,000.00
|
|
|
$
|
919.80
|
|
|
$
|
6.43
|
|
|
Hypothetical (5% return before expenses)***
|
|
|
1,000.00
|
|
|
|
1,018.30
|
|
|
|
6.76
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 1.34%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
|
**
|
Excluding dividends and interest on securities sold short, your actual cost of investment in the Fund would be $5.81 and the Fund's annualized expense ratio would be
1.21%.
|
|
***
|
Excluding dividends and interest on securities sold short, your hypothetical cost of investment in the Fund would be $6.11 and the Fund's annualized expense ratio would be
1.21%.
|
Leuthold Core Investment Fund - Institutional Class - LCRIX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual**
|
|
$
|
1,000.00
|
|
|
$
|
920.00
|
|
|
$
|
6.00
|
|
|
Hypothetical (5% return before expenses)***
|
|
|
1,000.00
|
|
|
|
1,018.75
|
|
|
|
6.31
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 1.25%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
|
**
|
Excluding dividends and interest on securities sold short, your actual cost of investment in the Fund would be $5.38 and the Fund's annualized expense ratio would be
1.12%.
|
|
***
|
Excluding dividends and interest on securities sold short, your hypothetical cost of investment in the Fund would be $5.65 and the Fund's annualized expense ratio would be
1.12%.
|
Leuthold Global Fund - Retail Class - GLBLX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual**
|
|
$
|
1,000.00
|
|
|
$
|
897.40
|
|
|
$
|
8.73
|
|
|
Hypothetical (5% return before expenses)***
|
|
|
1,000.00
|
|
|
|
1,015.80
|
|
|
|
9.27
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 1.84%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
|
**
|
Excluding dividends and interest on securities sold short, your actual cost of investment in the Fund would be $7.83 and the Fund's annualized expense ratio would be
1.65%.
|
|
***
|
Excluding dividends and interest on securities sold short, your hypothetical cost of investment in the Fund would be $8.32 and the Fund's annualized expense ratio would be
1.65%.
|
Leuthold Global Fund - Institutional Class - GLBIX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual**
|
|
$
|
1,000.00
|
|
|
$
|
899.10
|
|
|
$
|
7.55
|
|
|
Hypothetical (5% return before expenses)***
|
|
|
1,000.00
|
|
|
|
1,017.05
|
|
|
|
8.02
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 1.59%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
|
**
|
Excluding dividends and interest on securities sold short, your actual cost of investment in the Fund would be $6.65 and the Fund's annualized expense ratio would be
1.40%.
|
|
***
|
Excluding dividends and interest on securities sold short, your hypothetical cost of investment in the Fund would be $7.06 and the Fund's annualized expense ratio would be
1.40%.
|
|
66
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The Leuthold Funds - 2020 Semi-Annual Report
|
Leuthold Funds
Expense Example Tables (Unaudited) (continued)
Leuthold Select Industries Fund - LSLTX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
812.20
|
|
|
$
|
6.80
|
|
|
Hypothetical (5% return before expenses)
|
|
|
1,000.00
|
|
|
|
1,017.50
|
|
|
|
7.57
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 1.50%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
Grizzly Short Fund - GRZZX
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
October 1, 2019 - March 31, 2020
|
|
|
Actual**
|
|
$
|
1,000.00
|
|
|
$
|
1,105.40
|
|
|
$
|
16.63
|
|
|
Hypothetical (5% return before expenses)***
|
|
|
1,000.00
|
|
|
|
1,009.20
|
|
|
|
15.87
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 3.16%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
|
|
**
|
Excluding dividends and interest on securities sold short, your actual cost of investment in the Fund would be $8.37 and the Fund's annualized expense ratio would be
1.59%.
|
|
***
|
Excluding dividends and interest on securities sold short, your hypothetical cost of investment in the Fund would be $8.02 and the Fund's annualized expense ratio would be
1.59%.
|
Leuthold Core ETF - LCR
|
|
|
Beginning
Account Value
January 6, 2020
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
January 6, 2020 - March 31, 2020
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
906.90
|
|
|
$
|
1.46
|
|
|
|
|
Beginning
Account Value
October 1, 2019
|
|
|
Ending
Account Value
March 31, 2020
|
|
|
Expenses Paid
During Period*
January 6, 2020 - March 31, 2020
|
|
|
Hypothetical (5% return before expenses)**
|
|
$
|
1,000.00
|
|
|
$
|
1,021.75
|
|
|
$
|
3.29
|
|
|
*
|
Expenses are equal to the Fund's annualized expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 86/366 to reflect the period
from January 6, 2020 to March 31, 2020, the commencement of operations date to the end of the period.
|
|
**
|
Expenses are equal to the Fund's annualized expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 183/366 to reflect the most
recent six-month period.
|
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The Leuthold Funds - 2020 Semi-Annual Report
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67
|
|
68
|
The Leuthold Funds - 2020 Semi-Annual Report
|
Leuthold Funds
DISCLOSURE APPROVAL CONTINUATION INVESTMENT ADVISORY AGREEMENTS
On November 15, 2019, the Board of Directors of Leuthold Funds, Inc. (the “Directors”) approved the continuation of the investment advisory
agreements for the Leuthold Core Investment Fund, the Grizzly Short Fund, the Leuthold Select Industries Fund, and the Leuthold Global Fund (collectively the “Funds,” or each, a “Fund”) with the investment adviser to the Funds, The Leuthold
Group, LLC, doing business as Leuthold Weeden Capital Management (the “Adviser”). As part of the process of approving the continuation of the advisory agreements, the Directors reviewed the fiduciary duties of the Directors with respect to
approving the advisory agreements and the relevant factors for the Directors to consider, and the members of the Board of Directors who are not deemed “interested persons” (as that term is defined by the Investment Company Act of 1940) of the
Funds (the “Independent Directors”) met in executive session to discuss the approval of the advisory agreements.
In advance of the meeting, the Adviser sent detailed information to the Directors to assist them in their evaluation of the investment
advisory agreements. This information included, but was not limited to, a memorandum from Fund counsel that summarized the legal standards applicable to the Directors’ consideration of the advisory agreements; detailed comparative information
relating to the Funds’ management fees and other expenses of the Funds; information regarding fees paid by the Funds and other Fund payments; information on the Adviser’s profitability; information about brokerage commissions; detailed
comparative information relating to the Funds’ performance; information about sales and redemptions of the Funds; information about the Funds’ compliance program; and other information the Directors believed was useful in evaluating the approval
of advisory agreements.
All of the factors discussed by the Directors were considered as a whole, and were considered separately by the Independent Directors, meeting
in executive session. The factors were viewed in their totality by the Directors, with no single factor being the principal or determinative factor in the Directors’ determination of whether to approve the continuation of the investment advisory
agreements. The Directors recognized that the management and fee arrangements for the Funds are the result of years of review and discussion between the Independent Directors and the Adviser, that certain aspects of such arrangements may receive
greater scrutiny in some years than in others and that the Directors’ conclusions may be based, in part, on their consideration of these same arrangements and information received during the course of the year and in prior years.
Prior to approving the continuation of the investment advisory agreements, the Directors and the Independent Directors in executive session
considered, among other items:
|
•
|
The nature and quality of the investment advisory services provided by the Adviser, including the Adviser’s organization and operations, financial
condition and stability and ownership structure; and the terms of the investment advisory agreements and how the services performed by the Adviser under the investment advisory agreements differ from those performed for other accounts
managed by the Adviser.
|
|
•
|
A comparison of the fees and expenses of the Funds to other similar funds, including a comparison of the Funds’ total expenses and the total expense
ratios.
|
|
•
|
A comparison of the fee structures of other accounts managed by the Adviser.
|
|
•
|
Whether economies of scale are recognized by the Funds.
|
|
•
|
The costs and profitability of the Funds to the Adviser.
|
|
|
The Leuthold Funds - 2020 Semi-Annual Report 69
|
Leuthold Funds
|
•
|
The independence, expertise, care, and conscientiousness of the Board of Directors.
|
|
•
|
Short-term and long-term investment performance of the Funds.
|
|
•
|
The other benefits to the Adviser from serving as investment adviser to the Funds (in addition to the advisory fee under the investment advisory
agreements).
|
The material considerations and determinations of the Board of Directors, including all of the Independent Directors, are as follows:
Nature and Quality of Investment Advisory Services
The Directors noted that the Adviser supervises the investment portfolios of the Funds, directing the day-to-day management of the Funds’
portfolios, including the purchase and sale of investment securities. They discussed with management the nature of the investment process employed by the portfolio managers of the Funds, which is highly research intensive. The Directors also
discussed staffing at the Adviser and concluded that the Adviser is well staffed to conduct the research needed to meet the investment objectives of the Funds.
The Directors also considered the background and experience of the Adviser’s senior management and expertise of, and the amount of attention
given to the Funds by investment personnel of the Adviser, concluding that the Adviser devotes substantial resources and personnel to managing the Funds. In addition, the Directors considered the quality of the material service providers to the
Funds, who provide administrative and distribution services on behalf of the Funds and are overseen by the Adviser, determining that they believe the service providers are well managed and provide quality services to the Funds, and that the
Adviser’s oversight of these service providers is beneficial to the Funds and their shareholders. Based on their review, the Directors believe that the Adviser provides high quality services to the Funds. The Directors also concluded that they
were satisfied with the nature, extent, and quality of the investment advisory services provided to the Funds by the Adviser, and that the nature and extent of the services provided by the Adviser are appropriate to assure that each Fund’s
operations are conducted in compliance with applicable laws, rules and regulations.
Comparative Fees and Expenses
The Directors then discussed with management the variables, in addition to the management fees, such as administrative and transaction fees
that impact costs to the shareholders of the Funds. Management reviewed with the Directors the comparison of the Funds’ expense ratios to other similar funds. As part of the discussion with management, the Directors ensured that they understood
and were comfortable with the criteria used by the Adviser to determine the mutual funds that make up the peer universes for purposes of the materials presented at the meeting.
The Directors compared the Funds’ expense ratios to those of other comparable mutual funds, concluding that the peer groups used were in line
with what the Adviser uses for its internal reporting and that the categories used to compare the Funds to their peer groups were appropriate. The Directors also assessed the impact on the Funds’ expense ratio of the Funds’ assets under
management as compared to the peer groups. After review and discussion, the Directors concluded that the expense ratios of the Funds were within a reasonable range of comparable mutual funds, and that the fees and expenses of the Funds are
reasonable.
|
70 The Leuthold Funds - 2020 Semi-Annual Report
|
|
Leuthold Funds
Comparison of Fee Structures of Other Accounts
The Directors then inquired of management regarding the distinction between the services performed by the Adviser for separately managed
accounts (“SMAs”) or private investment companies and those performed by the Adviser for the Funds. The Directors concluded that the services performed by the Adviser for the Funds require a higher level of service and oversight than the services
performed by the Adviser for SMAs or private investment companies. Based on this determination, the Directors believe that the differential in advisory fees between the Funds and the SMAs and private investment companies are reasonable and
concluded that the fee rates charged to the Funds in comparison to those charged to the Adviser’s other clients are reasonable.
Performance
The Directors reviewed the Adviser’s quality of investment management, management history, and ability to successfully market the Funds. They
noted that while the Funds have had periods of underperformance, it is their expectation that the Adviser’s discipline will lead to more favorable results in the long-term and concluded that renewal of the advisory agreements was in the best
interest of the Funds’ shareholders.
The Directors also considered the presentation from the Adviser on the investment strategies for the Funds and reviewed the investment
performance of the Funds compared with those of the Funds’ peer groups and relevant benchmarks. The Board concluded that these materials demonstrated that the performance of the Funds was satisfactory in comparison to the performance of similar
funds.
Costs and Profitability
The Directors considered the costs of services provided and the profits realized by the Adviser, by reviewing reports provided by the Funds’
administrator that compared the Funds’ investment advisory fees to those of other comparable mutual funds. They also considered the Funds’ overall expense ratios compared to peer group funds and the Adviser’s proactive efforts to keep the overall
expenses of the Funds lower, and they considered the resources and revenues that the Adviser has put into managing and distributing the Funds. The Directors concluded that the level of profitability realized by the Adviser from its provision of
services to the Funds is reasonable, and that the overall expense ratios and investment advisory fees were fair and within a reasonable range of industry averages.
Economies of Scale
The Directors then discussed with management whether economies of scale are recognized by the Funds. They noted that as Fund assets grow,
certain fixed costs are spread over the larger asset base, which may lead to some economies of scale. On the other hand, the Directors noted that many of the Funds’ expenses are subject to diseconomies of scale. For example, the intermediary
service fees generally increase as the Funds’ assets grow. Given the size of the Funds the Directors determined that economies of scale were not being recognized, and they noted that the Funds have benefitted from the Adviser’s consistent efforts
to keep overall expenses low. They concluded that the exisiting fee schedules were reasonable.
|
|
The Leuthold Funds - 2020 Semi-Annual Report 71
|
Leuthold Funds
Fall-Out Benefits
The Directors then considered other benefits to the Adviser from serving as adviser to the Funds (in addition to the advisory fee). The
Directors noted that the Adviser derives ancillary benefits from its association with the Funds in the form of proprietary and third-party research products and services received from broker dealers that execute portfolio trades for the Funds.
Specifically, they discussed the manner in which portfolio transactions for the Funds would be conducted, including the use of soft dollars. Based on these discussions, the Directors concluded that the research and services obtained by the
Adviser would be beneficial to the Funds. The Directors determined such products and services have been used for legitimate purposes relating to the Funds by providing assistance in the investment decision- making process. Further, the Directors
noted the following: (1) although the Adviser could derive benefits from the conversion of Fund shareholders into separate account clients, the Funds also could benefit from potential institutional shareholders who might choose to invest in the
Funds because they want the Adviser’s services, but do not meet minimum separate account size requirements; (2) the Directors concluded that the research, analytical, statistical, and other information and services provided by brokers are merely
supplemental to the Adviser’s own efforts in the performance of its duties under the investment advisory agreements; and (3) the Directors concluded that the allocation methodology for soft-dollars is appropriate. After this review and
discussion, the Directors determined that the other benefits realized by the Adviser from its relationship with the Funds were reasonable.
Conclusion
After reviewing the materials provided at the meeting, management’s presentation, as well as other information regularly provided at the
Board’s quarterly meetings throughout the year regarding the quality of services provided by the Adviser, the performance of the Funds, expense information, regulatory compliance issues, trading information and related matters, and other factors
deemed relevant by the Board, the Directors, including all of the Independent Directors, approved the continuation of the investment advisory agreements.
|
72 The Leuthold Funds - 2020 Semi-Annual Report
|
|
Leuthold Funds
DISCLOSURE APPROVAL INVESTMENT ADVISORY AGREEMENT CORE ETF
On November 15, 2019, the Board of Directors of Leuthold Funds, Inc. (the “Directors”) approved the investment advisory agreement for the
Leuthold Core ETF (the “New Fund”) with the investment adviser to the New Fund, The Leuthold Group, LLC, doing business as Leuthold Weeden Capital Management (the “Adviser”). As part of the process of approving the new advisory agreement, the
Directors reviewed the fiduciary duties of the Directors with respect to approving the advisory agreement and the relevant factors for the Directors to consider, and the members of the Board of Directors who are not deemed “interested persons”
(as that term is defined by the Investment Company Act of 1940) of the Funds (the “Independent Directors”) met in executive session to discuss the approval of the new advisory agreement.
In advance of the meeting, the Adviser sent detailed information to the Directors to assist them in their evaluation of the new investment
advisory agreement. This information included, but was not limited to, a memorandum from Fund counsel that summarized the legal standards applicable to the Directors’ consideration of the advisory agreements; information on the Adviser’s
profitability; information about brokerage commissions; information about the Funds’ compliance program; and other information the Directors believed was useful in evaluating the approval of the new advisory agreement.
All of the factors discussed by the Directors were considered as a whole, and were considered separately by the Independent Directors, meeting
in executive session. The factors were viewed in their totality by the Directors, with no single factor being the principal or determinative factor in the Directors’ determination of whether to approve the new investment advisory agreement.
Prior to approving the new investment advisory agreement, the Directors and the Independent Directors in executive session considered, among
other items:
|
•
|
The nature and quality of the investment advisory services to be provided by the Adviser, including the Adviser’s organization and operations,
financial condition and stability and ownership structure; and the terms of the investment advisory agreement and how the services to be performed by the Adviser under the investment advisory agreement differ from those performed for other
accounts managed by the Adviser.
|
|
•
|
A comparison of the fees and estimated expenses of the New Fund to other similar funds, including a comparison of the New Fund’s estimated total
expenses and the total expense ratios.
|
|
•
|
A comparison of the fee structures of other accounts managed by the Adviser.
|
|
•
|
Whether economies of scale are recognized by the New Fund.
|
|
•
|
The expected costs and profitability of the New Fund to the Adviser.
|
|
•
|
The independence, expertise, care, and conscientiousness of the Board of Directors.
|
|
•
|
The other benefits to the Adviser from serving as investment adviser to the New Fund (in addition to the advisory fee under the investment advisory
agreement).
|
|
|
The Leuthold Funds - 2020 Semi-Annual Report 73
|
Leuthold Funds
The material considerations and determinations of the Board of Directors, including all of the Independent Directors, are as follows:
Nature and Quality of Investment Advisory Services
The Directors discussed the efforts of the Adviser in supervising the investment portfolios of the operating funds, directing the day-to-day
management of the operating funds’ portfolios, including the purchase and sale of investment securities, and the performance of the Adviser in these efforts. They noted that the investment process employed is highly research intensive.
Noting the research intensive process of the Adviser, the Directors considered the background and experience of the Adviser’s senior
management and expertise of, and the level of attention given to the operating funds by investment personnel of the Adviser, and determined that the personnel that will service the New Fund are well qualified. In addition, the Directors
deliberated on the quality of the material service providers to the New Fund, who will provide administrative and distribution services on behalf of the New Fund and are overseen by the Adviser, and the overall reputation and capabilities of the
Adviser, concluding that they believe the services providers are respected in the industry and will provide valuable services to the New Fund, as they currently do for the operating funds.
The Directors concluded, based on the well qualified personnel who will serve the New Fund, that the nature, extent, and quality of the
investment advisory services to be provided to the New Fund by the Adviser are good.
Comparative Fees and Expenses
The Directors reviewed and assessed the fees and expenses of other funds similar to the New Fund. They determined that the estimated expense
ratio of the New Fund are within the range of comparable mutual funds, and that the New Fund’s proposed fees are reasonable.
Comparison of Fee Structures of Other Accounts
The Directors believe that management of the New Fund involves more comprehensive and substantive duties than the management of separately
managed accounts (“SMAs”) or private investment companies. The New Fund requires considerable compliance, third-party oversight, and shareholder services that institutional accounts do not, due to the more retail nature of the fund shareholder
and the legal and regulatory burdens associated with managing the New Fund.
In summary, the Directors noted the following: (1) management of the New Fund involves more comprehensive and substantive duties than the
management of SMAs or private investment companies; and (2) SMAs and private investment companies do not present equivalent compliance or litigation risk to the Adviser. Based on the materials and information discussed above, the Directors
concluded that the differential in the proposed advisory fee between the New Fund and the SMAs and private investment companies managed by the Adviser is reasonable.
Performance
The Directors noted that the New Fund has not yet begun operations, and has no performance.
Costs and Profitability
The Directors considered and discussed the expected costs of the services to be provided and the profits expected to be realized by the
Adviser with regard to the New Fund. They noted that during the initial few years it is not expected that the New Fund will generate significant profits, and that the Adviser is willing to bear much of the burden of operating the New Fund because
it believes that the New Fund is a product that will be beneficial for shareholders and should eventually attract investors. The Directors concluded that the level of expected profitability to be realized by the Adviser from its provision of
services to the Funds is reasonable, and that the expected expense ratio and proposed investment advisory fee are fair and within a reasonable range of industry averages.
|
74 The Leuthold Funds - 2020 Semi-Annual Report
|
|
Leuthold Funds
Economies of Scale
The Directors discussed the possibility that as fund assets grow, certain fixed costs are spread over the larger asset base leading to some
economies of scale, which should benefit the New Fund’s shareholders. Additionally, some variable costs, such as accounting, administration, custody, and management fees are on a sliding scale relative to asset size. Following their discussion,
the Directors concluded that the proposed advisory fee is.
Fall-Out Benefits
The Directors then considered other benefits to the Adviser from serving as adviser to the New Fund (in addition to the advisory fee).The
Directors noted that the Adviser may derive ancillary benefits from its association with the Fund in the form of proprietary and third-party research products and services to be received from broker dealers that execute portfolio trades for the
New Fund. In this regard, the Directors determined that the allocation methodology used by the Adviser for soft-dollars is appropriate, and noted the following: (1) although the Adviser could derive benefits from the conversion of New Fund
shareholders into separate account clients, the New Fund also could benefit from potential institutional shareholders who might choose to invest in the New Fund because they want the Adviser’s services, but do not meet minimum separate account
size requirements; and (2) the Directors concluded that the research, analytical, statistical, and other information and services provided by brokers are expected to be merely supplemental to the Adviser’s own efforts in the performance of its
duties under the investment advisory agreement. After this review and discussion, the Directors determined that the other benefits to be realized by the Adviser from its relationship with the Funds are reasonable.
Conclusion
After reviewing the materials provided at the meeting, management’s presentation, as well as other information provided at prior meetings of
the Board, the Directors, including all of the Independent Directors, approved the new investment advisory agreement.
|
|
The Leuthold Funds - 2020 Semi-Annual Report 75
|
Leuthold Funds