Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (n-q)
May 09 2013 - 2:33PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-22394
CHOU AMERICA MUTUAL FUNDS
Three Canal Plaza, Suite 600
Portland, Maine 04101
Michael J. McKeen, Principal Financial Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Kathy K. Ingber, Esq.
K&L Gates LLP
1601 K Street, N.W.
Washington, D.C. 20006-1600
Date of fiscal year end: December 31
Date of reporting period: January 1, 2013 – March 31, 2013
Item 1. Schedule of Investments.
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CHOU OPPORTUNITY FUND
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SCHEDULE OF INVESTMENTS
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MARCH 31, 2013 (Unaudited)
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Security
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Shares
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Description
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Value
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Common Stock - 50.1%
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Communications - 19.0%
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795,931
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Overstock.com, Inc. (a)(b)
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$
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9,805,870
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519,507
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UTStarcom Holdings Corp. (a)
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1,454,620
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11,260,490
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Consumer Discretionary - 5.5%
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2,190
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Orchard Supply Hardware Stores Corp., Class A (a)
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8,672
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37,904
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Sears Canada, Inc.
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366,153
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57,500
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Sears Holdings Corp. (a)
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2,873,275
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3,248,100
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Financials - 7.1%
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157,480
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Asta Funding, Inc.
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1,511,808
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260,000
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MBIA, Inc. (a)
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2,670,200
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4,182,008
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Information Technology - 1.0%
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43,200
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Dell, Inc.
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619,056
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Materials - 17.5%
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638,539
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Resolute Forest Products (a)(b)
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10,331,561
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Total Common Stock
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(Cost $24,681,321)
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29,641,215
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Security
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Shares
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Description
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Rate
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Value
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Preferred Stock - 0.0%
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Consumer Discretionary - 0.0%
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2,190
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Orchard Supply Hardware Stores Corp., Series A (c) (Cost $4,413)
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0.00
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%
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2,781
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Total Equity Securities
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(Cost $24,685,734)
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29,643,996
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Warrants - 8.8%
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377,430
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Bank of America Corp. (a)
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2,151,351
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150,000
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JPMorgan Chase & Co. (a)
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2,137,500
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77,400
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Wells Fargo & Co. (a)
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925,704
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Total Warrants
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(Cost $2,940,002)
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5,214,555
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Security
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Principal
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Description
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Rate
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Maturity
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Value
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Corporate Convertible Bonds - 4.3%
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Consumer Staples - 4.3%
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$
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2,800,000
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MannKind Corp. (Cost $2,248,644)
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3.75
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%
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12/15/13
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2,520,000
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Total Fixed Income Securities
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(Cost $2,248,644)
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2,520,000
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Total Investments in Securities - 63.2%
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(Cost $29,874,380)*
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$
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37,378,551
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Security
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Strike
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Exp.
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Contracts
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Description
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Price
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Date
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Value
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Written Options - (0.3)%
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Call Options Written - (0.3)%
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(900)
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Overstock.com, Inc.
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$
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17.50
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06/13
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(900)
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(738)
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Overstock.com, Inc.
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15.00
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06/13
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(20,295)
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(44)
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Overstock.com, Inc.
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17.50
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09/13
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(1,210)
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(78)
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Overstock.com, Inc.
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15.00
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09/13
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(4,875)
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(2,511)
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Resolute Forest Products
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20.00
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10/13
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(150,660)
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Total Call Options Written - (0.3)%
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(Premiums Received $(493,569))*
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(177,940
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)
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Other Assets & Liabilities, Net – 37.1%
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21,905,332
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Net Assets – 100.0%
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$
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59,105,943
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(a)
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Non-income producing security.
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(b)
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Subject to call option written by the Fund.
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(c)
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Zero coupon bond. Interest rate presented is yield to maturity.
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* Cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized appreciation consists of:
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Gross Unrealized Appreciation
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$
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8,338,373
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Gross Unrealized Depreciation
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(518,573
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)
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Net Unrealized Appreciation
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$
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7,819,800
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The Fund has a three-tier fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical assets
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments and other financial instruments as of March 31, 2013.
Valuation Inputs
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Investments in Securities
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Other Financial Instruments**
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Level 1 - Quoted Prices
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$
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34,858,551
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$
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(177,940
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)
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Level 2 - Other Significant Observable Inputs
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2,520,000
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-
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Level 3 - Significant Unobservable Inputs
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-
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-
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Total
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$
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37,378,551
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$
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(177,940
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)
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** Other Financial Instruments are derivative instruments not reflected in the Total Investments in Securities, such as written options, which are valued at their market value at period end.
The Level 1 value displayed in this table is Common Stock, Preferred Stock and Warrants. The Level 2 value displayed is a Corporate Convertible Bond. Refer to the Schedule of Investments for a further breakout of each security by type.
There were no transfers between Level 1 and Level 2 for the period ended March 31, 2013.
THE PORTFOLIO OF INVESTMENTS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS WHICH ARE INCLUDED IN THE FUND’S AUDITED ANNUAL REPORT OR SEMI-ANNUAL REPORT. THESE REPORTS INCLUDE ADDITIONAL INFORMATION ABOUT THE FUND’S SECURITY VALUATION POLICIES AND ABOUT CERTAIN SECURITY TYPES INVESTED BY THE FUND.
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CHOU INCOME FUND
|
SCHEDULE OF INVESTMENTS
|
MARCH 31, 2013 (Unaudited)
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|
Security
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Shares
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Description
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Value
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Common Stock - 11.5%
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Materials - 11.5%
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3,745
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Catalyst Paper Corp. (a)
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$
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8,479
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|
145,851
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Emerald Plantation Holdings, Ltd. (a)
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67,821
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42,045
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Resolute Forest Products (a)
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680,288
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756,588
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Total Common Stock
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(Cost $182,493)
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756,588
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Security
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Shares
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Description
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Rate
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Value
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Preferred Stock - 2.0%
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Financials - 2.0%
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8,900
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Sears Roebuck Acceptance Corp. (Cost $117,925)
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7.00
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%
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133,222
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Total Equity Securities
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(Cost $300,418)
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889,810
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|
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|
|
Security
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|
|
|
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Principal
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Description
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Rate
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Maturity
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|
Value
|
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Fixed Income Securities - 67.8%
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|
|
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Corporate Convertible Bonds - 35.8%
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Communications - 0.6%
|
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|
|
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|
$
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30,000
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Level 3 Communications, Inc.
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6.50
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|
10/01/16
|
|
39,881
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|
|
|
|
|
|
|
|
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Consumer Discretionary - 4.1%
|
|
|
|
|
|
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|
275,000
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RadioShack Corp. (b)
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|
2.50
|
|
08/01/13
|
|
268,813
|
|
|
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|
|
|
|
|
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Consumer Staples - 23.7%
|
|
|
|
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|
|
1,737,000
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MannKind Corp.
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|
3.75
|
|
12/15/13
|
|
1,563,300
|
|
|
|
|
|
|
|
|
|
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Financials - 5.3%
|
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|
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|
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|
850,000
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Atlanticus Holdings Corp.
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5.88
|
|
11/30/35
|
|
348,500
|
|
|
|
|
|
|
|
|
|
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Materials - 2.1%
|
|
|
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|
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|
|
|
400,000
|
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USEC, Inc.
|
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3.00
|
|
10/01/14
|
|
138,000
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|
Total Corporate Convertible Bonds
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|
|
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|
|
(Cost $2,503,330)
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2,358,494
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Corporate Non-Convertible Bonds - 11.5%
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Communications - 3.7%
|
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|
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|
|
|
|
42,849
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|
Dex One Corp. (c)(d)
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|
14.00
|
|
01/29/17
|
|
18,854
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|
|
200,000
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Media General, Inc.
|
|
11.75
|
|
02/15/17
|
|
227,500
|
|
|
|
|
|
|
|
|
|
|
246,354
|
|
Energy - 0.5%
|
|
|
|
|
|
|
|
|
400,000
|
|
ATP Oil & Gas Corp. (d)
|
|
11.88
|
|
05/01/15
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Financials - 1.6%
|
|
|
|
|
|
|
|
|
450,000
|
|
MBIA Insurance Corp. (b)(d)(e)
|
|
11.56
|
|
01/15/33
|
|
108,000
|
|
|
|
|
|
|
|
|
|
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|
Materials - 5.7%
|
|
|
|
|
|
|
|
|
314,899
|
|
Catalyst Paper Corp. (c)
|
|
11.00
|
|
10/30/17
|
|
251,919
|
|
|
157,677
|
|
Emerald Plantation Holdings, Ltd.
|
|
6.00
|
|
01/30/20
|
|
115,104
|
|
|
125,000
|
|
Sino-Forest Corp. (d)
|
|
10.25
|
|
07/28/14
|
|
1,188
|
|
|
193,000
|
|
Sino-Forest Corp. (d)
|
|
10.25
|
|
07/28/14
|
|
1,834
|
|
|
225,000
|
|
Sino-Forest Corp. (d)
|
|
6.25
|
|
10/21/17
|
|
2,137
|
|
|
400,000
|
|
Sino-Forest Corp. (d)
|
|
6.25
|
|
10/21/17
|
|
3,800
|
|
|
|
|
|
|
|
|
|
|
375,982
|
|
Total Corporate Non-Convertible Bonds
|
|
|
|
|
|
|
|
(Cost $1,034,206)
|
|
|
|
|
|
760,336
|
|
|
|
|
|
|
|
|
|
Municipal Bonds - 1.2%
|
|
|
|
|
|
|
|
Tennessee - 1.2%
|
|
|
|
|
|
|
|
|
15,480,000
|
|
McMinn County Industrial Development Board Poll (d) (Cost $7,515)
|
0.00
|
|
03/01/16
|
|
80,496
|
|
|
|
|
|
|
|
|
|
|
|
|
Syndicated Loans - 19.3%
|
|
|
|
|
|
|
|
|
324,542
|
|
Dex Media West, LLC (e)
|
|
7.00
|
|
10/24/14
|
|
247,869
|
|
|
1,450,063
|
|
RH Donnelley, Inc. (e)
|
|
0.00
|
|
10/24/14
|
|
1,027,732
|
|
Total Syndicated Loans
|
|
|
|
|
|
|
|
(Cost $1,544,338)
|
|
|
|
|
|
1,275,601
|
|
Total Fixed Income Securities
|
|
|
|
|
|
|
|
(Cost $5,089,389)
|
|
|
|
|
|
4,474,927
|
|
Total Investments - 81.3%
|
|
|
|
|
|
|
|
(Cost $5,389,807)*
|
|
|
|
|
$
|
5,364,737
|
|
Other Assets & Liabilities, Net – 18.7%
|
|
|
|
|
|
1,235,635
|
|
Net Assets – 100.0%
|
|
|
|
|
$
|
6,600,372
|
|
|
|
|
|
|
|
|
|
|
|
|
LLC
|
Limited Liability Company
|
(a)
|
Non-income producing security.
|
(b)
|
Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $376,813 or 5.7% of net assets.
|
(c)
|
Payment in-Kind Bond. Security that gives the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities.
|
(d)
|
Security is currently in default and is on scheduled interest or principal payment.
|
(e)
|
Variable rate security. Rate presented is as of March 31, 2013.
|
|
* Cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized depreciation consists of:
|
Gross Unrealized Appreciation
|
|
$
|
786,873
|
|
Gross Unrealized Depreciation
|
|
|
(811,943
|
)
|
Net Unrealized Depreciation
|
|
$
|
(25,070
|
)
|
The Fund has a three-tier fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical assets
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2013.
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
T
otal
|
|
Investments At Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials
|
|
$
|
756,588
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
756,588
|
|
Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financials
|
|
|
133,222
|
|
|
|
-
|
|
|
|
-
|
|
|
|
133,222
|
|
Corporate Convertible Bonds
|
|
|
-
|
|
|
|
2,358,494
|
|
|
|
-
|
|
|
|
2,358,494
|
|
Corporate Non-Convertible Bonds
|
|
|
-
|
|
|
|
760,336
|
|
|
|
-
|
|
|
|
760,336
|
|
Municipal Bonds
|
|
|
-
|
|
|
|
80,496
|
|
|
|
-
|
|
|
|
80,496
|
|
Syndicated Loans
|
|
|
-
|
|
|
|
1,275,601
|
|
|
|
-
|
|
|
|
1,275,601
|
|
Total Investments At Value
|
|
$
|
889,810
|
|
|
$
|
4,474,927
|
|
|
$
|
-
|
|
|
$
|
5,364,737
|
|
There were no transfers between Level 1 and Level 2 for the period ended March 31, 2013.
THE PORTFOLIO OF INVESTMENTS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS WHICH ARE INCLUDED IN THE FUND’S AUDITED ANNUAL REPORT OR SEMI-ANNUAL REPORT. THESE REPORTS INCLUDE ADDITIONAL INFORMATION ABOUT THE FUND’S SECURITY VALUATION POLICIES AND ABOUT CERTAIN SECURITY TYPES INVESTED BY THE FUND.
Item 2. Controls and Procedures.
(a) The registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b)
under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3. Exhibits
Certifications as required by Rule 30a-2(a) under the Act are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHOU AMERICA MUTUAL FUNDS
|
|
|
|
By:
|
|
/s/ Francis S.M. Chou
|
|
|
|
Francis S.M. Chou, Principal Executive Officer
|
|
|
|
|
Date:
|
|
May 7, 2013
|
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
|
|
|
By:
|
|
/s/ Francis S.M. Chou
|
|
|
|
Francis S.M. Chou, Principal Executive Officer
|
|
|
|
|
Date:
|
|
May 7, 2013
|
|
|
|
|
|
By:
|
|
/s/ Michael J. McKeen
|
|
|
|
Michael J. McKeen, Principal Financial Officer
|
|
|
|
|
Date:
|
|
May 7, 2013
|
|
|
|
|
|
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