N-Q 1 d602090dnq.htm THE MOTLEY FOOL FUNDS TRUST THE MOTLEY FOOL FUNDS TRUST

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             811-22264                                 

                                                 The Motley Fool Funds Trust                                              

(Exact name of registrant as specified in charter)

Motley Fool Asset Management, LLC

2000 Duke Street, Suite 175

                                                     Alexandria, VA 22314                                                 

(Address of principal executive offices) (Zip code)

Peter E. Jacobstein

Motley Fool Asset Management, LLC

2000 Duke Street, Suite 175

                                         Alexandria, VA 22314                                    

(Name and address of agent for service)

Registrant’s telephone number, including area code: (703) 302-1100

Date of fiscal year end: October 31    

Date of reporting period: July 31, 2013

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.

The Motley Fool Funds Trust

Motley Fool Independence Fund

Schedule of Investments

at July 31, 2013

(Unaudited)

 

  Issues

 

     

 

 Shares

 

   

 

   

 

 
 

 

 

Value
(Note 1)

 

 

 
  

 

   

Equity Securities — 87.51%

      

Beverages — 1.61%

      

Coca-Cola HBC AG (Switzerland)

      189,606       $ 4,914,807   
     

 

 

  

Capital Markets — 1.97%

      

INTL FCStone, Inc. (United States)*

      85,513         1,582,846   

TD Ameritrade Holding Corp. (United States)

      165,000         4,459,950   
     

 

 

  
        6,042,796   
     

 

 

  

Chemicals — 1.32%

      

Innophos Holdings, Inc. (United States)

      81,164         4,045,214   
     

 

 

  

Commercial Banks — 4.92%

      

Banco Latinoamericano de Comercio Exterior SA (Panama)

      226,265         5,699,615   

Credicorp Ltd. (Bermuda)

      42,000         4,989,180   

Monarch Financial Holdings, Inc. (United States)

      145,000         1,586,300   

Siam Commercial Bank PCL (Thailand)(a)

      550,000         2,785,439   
     

 

 

  
        15,060,534   
     

 

 

  

Commercial Services & Supplies — 4.96%

      

De La Rue PLC (United Kingdom)

      275,900         4,146,809   

Depa Ltd. (United Arab Emirates)*

      5,815,390         2,384,310   

KAR Auction Services, Inc. (United States)

      117,708         2,994,491   

Multiplus SA (Brazil)

      416,600         5,659,120   
     

 

 

  
        15,184,730   
     

 

 

  

Communications Equipment — 2.88%

      

Cisco Systems, Inc. (United States)

      105,000         2,682,750   

Infinera Corp. (United States)*

      561,100         6,121,601   
     

 

 

  
        8,804,351   
     

 

 

  

Computers & Peripherals — 1.63%

      

Apple, Inc. (United States)

      11,000         4,977,500   
     

 

 

  

Consumer Finance — 2.27%

      

Compartamos SAB de CV (Mexico)

      3,850,000         6,962,870   
     

 

 

  

Diversified Telecommunication Services — 0.85%

      

Level 3 Communications, Inc. (United States)*

      117,500         2,590,875   
     

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Independence Fund    1

  Issues

 

     

 

 Shares

 

   

 

   

 

 
 

 

 

Value
(Note 1)

 

 

 
  

 

   

Equity Securities (continued)

      

Electric Utilities — 1.12%

      

Brookfield Infrastructure Partners LP (Bermuda)

      92,127       $ 3,434,495   
     

 

 

  

Electronic Equipment, Instruments & Components — 1.03%

      

CrucialTec Co., Ltd. (South Korea)*

      252,000         3,162,665   
     

 

 

  

Energy Equipment & Services — 1.85%

      

CGG (France)(b)

      89,000         2,225,000   

Geospace Technologies Corp. (United States)*

      46,400         3,452,624   
     

 

 

  
        5,677,624   
     

 

 

  

Food & Staples Retailing — 1.53%

      

Costco Wholesale Corp. (United States)

      29,558         3,466,858   

Olam International Ltd. (Singapore)

      910,139         1,213,966   
     

 

 

  
        4,680,824   
     

 

 

  

Food Products — 3.54%

      

BRF - Brasil Foods SA (Brazil)(b)

      108,704         2,329,527   

Nestle SA (Switzerland)

      53,694         3,634,152   

PT Nippon Indosari Corpindo Tbk (Indonesia)

      6,906,960         4,872,136   
     

 

 

  
        10,835,815   
     

 

 

  

Health Care Equipment & Supplies — 5.04%

      

Covidien PLC (Ireland)

      56,000         3,451,280   

Natus Medical, Inc. (United States)*

      268,900         3,439,231   

Nihon Kohden Corp. (Japan)

      133,481         5,608,412   

Zimmer Holdings, Inc. (United States)

      35,000         2,921,800   
     

 

 

  
        15,420,723   
     

 

 

  

Health Care Providers & Services — 2.62%

      

WellPoint, Inc. (United States)

      93,697         8,016,715   
     

 

 

  

Hotels, Restaurants & Leisure — 5.32%

      

Ajisen China Holdings Ltd. (Hong Kong)

      3,550,000         3,108,605   

Chipotle Mexican Grill, Inc. (United States)*

      14,400         5,936,688   

Penn National Gaming, Inc. (United States)*

      52,083         2,603,629   

Wynn Macau Ltd. (Macau)

      500,000         1,416,473   

Yum! Brands, Inc. (United States)

      44,132         3,218,105   
     

 

 

  
        16,283,500   
     

 

 

  

Insurance — 8.64%

      

Berkshire Hathaway, Inc. (United States)*

      45         7,825,500   

HCC Insurance Holdings, Inc. (United States)

      140,200         6,243,106   

 

See Notes to Schedules of Investments.

 
2    Motley Fool Independence Fund

  Issues

 

     

 

 Shares

 

   

 

   

 

 
 

 

 

Value
(Note 1)

 

 

 
  

 

   

Equity Securities (continued)

      

Insurance (continued)

      

Loews Corp. (United States)

      141,690       $ 6,453,980   

Markel Corp. (United States)*

      11,200         5,936,000   
     

 

 

  
        26,458,586   
     

 

 

  

Internet & Catalog Retail — 2.01%

      

CJ O Shopping Co., Ltd. (South Korea)

      18,949         6,168,902   
     

 

 

  

Internet Software & Services — 4.83%

      

Baidu, Inc. (China)*(b)

      61,500         8,137,065   

Google, Inc. (United States)*

      7,500         6,657,000   
     

 

 

  
        14,794,065   
     

 

 

  

IT Services — 1.36%

      

Paychex, Inc. (United States)

      105,702         4,168,887   
     

 

 

  

Leisure Equipment & Products — 2.15%

      

Shimano, Inc. (Japan)

      73,000         6,580,703   
     

 

 

  

Media — 0.69%

      

DreamWorks Animation SKG, Inc. (United States)*

      85,000         2,104,600   
     

 

 

  

Multiline Retail — 0.79%

      

Dollar Tree, Inc. (United States)*

      45,000         2,414,250   
     

 

 

  

Oil, Gas & Consumable Fuels — 4.83%

      

Denbury Resources, Inc. (United States)*

      262,200         4,588,500   

Lukoil OAO (Russia)(b)

      62,350         3,707,331   

Occidental Petroleum Corp. (United States)

      49,145         4,376,362   

Total Gabon SA (Gabon)

      3,670         2,123,634   
     

 

 

  
        14,795,827   
     

 

 

  

Pharmaceuticals — 1.43%

      

Dr. Reddy’s Laboratories Ltd. (India)(b)

      110,177         4,106,297   

Mallinckrodt PLC (Ireland)*

      6,125         281,076   
     

 

 

  
        4,387,373   
     

 

 

  

Real Estate Investment Trusts — 2.63%

      

American Tower Corp. (United States)

      40,500         2,866,995   

Annaly Capital Management, Inc. (United States)

      206,989         2,467,309   

Lippo Malls Indonesia Retail Trust (Singapore)

      7,000,000         2,724,759   
     

 

 

  
        8,059,063   
     

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Independence Fund    3

  Issues

 

     

 

 Shares

 

   

 

   

 

 
 

 

 

Value
(Note 1)

 

 

 
  

 

   

Equity Securities (continued)

      

Real Estate Management & Development — 4.43%

      

Brookfield Asset Management, Inc. (Canada)

      156,374       $ 5,781,147   

Cheung Kong Holdings Ltd. (Hong Kong)

      235,337         3,303,252   

Henderson Land Development Co., Ltd. (Hong Kong)

      721,767         4,495,267   
     

 

 

  
        13,579,666   
     

 

 

  

Semiconductors & Semiconductor Equipment — 1.55%

      

FormFactor, Inc. (United States)*

      128,479         934,042   

Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan)(b)

      225,000         3,820,500   
     

 

 

  
        4,754,542   
     

 

 

  

Software — 1.08%

      

DuzonBizon Co., Ltd. (South Korea)

      328,180         3,297,218   
     

 

 

  

Textiles, Apparel & Luxury Goods — 5.18%

      

Swatch Group SA (Switzerland)

      6,000         3,565,513   

Tod’s S.p.A. (Italy)

      42,000         6,842,363   

Under Armour, Inc. (United States)*

      81,410         5,465,053   
     

 

 

  
        15,872,929   
     

 

 

  

Wireless Telecommunication Services — 1.45%

      

SBA Communications Corp. (United States)*

      60,000         4,445,400   
     

 

 

  

Total Equity Securities (Cost $ 202,158,265)

         267,978,049   
     

 

 

  

Participatory Notes — 3.65%

      

Commercial Banks — 1.78%

      

Al Rajhi Banking & Investment Co. (Saudi Arabia)(c)

      268,000         5,466,543   
     

 

 

  

Food Products — 1.87%

      

Almarai Co. (Saudi Arabia)(c)

      257,173         5,725,700   
     

 

 

  

Total Participatory Notes (Cost $ 9,675,985)

         11,192,243   
     

 

 

  

 

See Notes to Schedules of Investments.

 
4    Motley Fool Independence Fund

Issues

 

     

 

 Shares

 

   

 

   

 

 
 

 

 

Value
(Note 1)

 

 

 
  

 

   

Other Investments — 8.36%

      

Temporary Cash Investment — 8.36%

      

BNY Mellon Cash Reserve

      25,588,742       $ 25,588,742   
     

 

 

  

Total Other Investments (Cost $25,588,742)

         25,588,742   
     

 

 

  

Total Investment Portfolio (Cost 237,422,992) — 99.52%

         304,759,034   

Liabilities in Excess of Other Assets — 0.48%

         1,468,357   
     

 

 

  

NET ASSETS — 100.00%

      

(Applicable to 16,947,930 shares outstanding)

       $ 306,227,391   
     

 

 

  
     

 

 

  

 

* Non-income producing security.
(a) NVDR — Non-Voting Depository Receipts
(b) ADR — American Depositary Receipts
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities is $11,192,243 and represents 3.65% of net assets as of July 31, 2013.

LP — Limited Partnership

PCL — Public Company Limited

PLC — Public Limited Company

 

See Notes to Schedules of Investments.

 
Motley Fool Independence Fund    5

The following tables show the top 11 holdings, sector allocation and top 11 countries in which the Fund was invested at July 31, 2013. Portfolio holdings are subject to change without notice.

 

  Top Eleven Holdings*

 

        

 

 
 

 

 

% of Net
Assets

 

 

  
  

 

   

Baidu, Inc.

         2.66 % 

WellPoint, Inc.

         2.62   

Berkshire Hathaway, Inc.

         2.56   

Compartamos SAB de CV

         2.27   

Tod’s S.p.A.

         2.23   

Google, Inc.

         2.17   

Shimano, Inc.

         2.15   

Loews Corp.

         2.11   

HCC Insurance Holdings, Inc.

         2.04   

CJ O Shopping Co., Ltd.

         2.01   

Infinera Corp.

         2.00   
     

 

 

  
        24.82 % 
     

 

 

  
     

 

 

  

* As of the date of the report, the fund had a holding of 8.36% in the BNY Mellon Cash Reserve.

 

  Sector Allocation

 

        

 

 
 

 

 

% of Net
Assets

 

 

  
  

 

   

Financials

         26.66 % 

Consumer Discretionary

         16.14   

Information Technology

         14.35   

Health Care

         9.09   

Consumer Staples

         8.54   

Energy

         6.68   

Industrials

         4.96   

Telecommunication Services

         2.30   

Materials

         1.32   

Utilities

         1.12   
     

 

 

  
        91.16 % 
     

 

 

  
     

 

 

  

 

See Notes to Schedules of Investments.

 
6    Motley Fool Independence Fund

  Top Eleven Countries

 

        

 

 
 

 

 

% of Net
Assets

 

 

  
  

 

   

United States*

         42.79 % 

South Korea

         4.13   

Japan

         3.98   

Switzerland

         3.96   

Saudi Arabia

         3.66   

Hong Kong

         3.56   

Bermuda

         2.75   

China

         2.66   

Brazil

         2.61   

Mexico

         2.27   

Italy

         2.23   
     

 

 

  
        74.60 % 
     

 

 

  
     

 

 

  

 

* As of the date of the report, the fund had a holding of 8.36% in the BNY Mellon Cash Reserve.

 

See Notes to Schedules of Investments.

 
Motley Fool Independence Fund    7

The Motley Fool Funds Trust

Motley Fool Great America Fund

Schedule of Investments

at July 31, 2013

(Unaudited)

 

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

Value

(Note 1)

 

 

  

  

 

   

Equity Securities — 92.56%

      

Air Freight & Logistics — 1.98%

      

XPO Logistics, Inc. (United States)*

      100,000       $ 2,446,000   
     

 

 

  

Auto Components — 1.66%

      

Drew Industries, Inc. (United States)

      50,311         2,054,198   
     

 

 

  

Automobiles — 2.62%

      

Thor Industries, Inc. (United States)

      59,988         3,242,351   
     

 

 

  

Beverages — 0.83%

      

Crimson Wine Group Ltd. (United States)*

      114,687         1,032,183   
     

 

 

  

Building Products — 2.22%

      

American Woodmark Corp. (United States)*

      79,200         2,747,448   
     

 

 

  

Capital Markets — 4.65%

      

Diamond Hill Investment Group, Inc. (United States)

      29,023         3,004,751   

INTL FCStone, Inc. (United States)*

      64,300         1,190,193   

TD Ameritrade Holding Corp. (United States)

      58,000         1,567,740   
     

 

 

  
        5,762,684   
     

 

 

  

Commercial Banks — 4.68%

      

Access National Corp. (United States)

      55,529         845,707   

Carter Bank & Trust (United States)

      115,928         1,321,579   

Monarch Financial Holdings, Inc. (United States)

      200,853         2,197,332   

Suffolk Bancorp. (United States)*

      78,646         1,427,425   
     

 

 

  
        5,792,043   
     

 

 

  

Commercial Services & Supplies — 1.75%

      

KAR Auction Services, Inc. (United States)

      85,000         2,162,400   
     

 

 

  

Communications Equipment — 1.85%

      

Infinera Corp. (United States)*

      209,500         2,285,645   
     

 

 

  

Computers & Peripherals — 1.85%

      

Apple, Inc. (United States)

      5,050         2,285,125   
     

 

 

  

Diversified Telecommunication Services — 0.93%

      

Level 3 Communications, Inc. (United States)*

      52,418         1,155,817   
     

 

 

  

Energy Equipment & Services — 5.33%

      

CARBO Ceramics, Inc. (United States)

      31,200         2,741,232   

Geospace Technologies Corp. (United States)*

      43,500         3,236,835   

 

See Notes to Schedules of Investments.

 
8    Motley Fool Great America Fund

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

Value

(Note 1)

 

 

  

  

 

   

Equity Securities (continued)

      

Energy Equipment & Services (continued)

      

Nuverra Environmental Solutions, Inc. (United States)*

      211,000       $ 622,450   
     

 

 

  
        6,600,517   
     

 

 

  

Food & Staples Retailing — 1.89%

      

Costco Wholesale Corp. (United States)

      20,000         2,345,800   
     

 

 

  

Health Care Equipment & Supplies — 3.66%

      

Natus Medical, Inc. (United States)*

      167,700         2,144,883   

Varian Medical Systems, Inc. (United States)*

      33,000         2,392,500   
     

 

 

  
        4,537,383   
     

 

 

  

Health Care Providers & Services — 2.35%

      

Quest Diagnostics, Inc. (United States)

      24,000         1,399,440   

WellPoint, Inc. (United States)

      17,700         1,514,412   
     

 

 

  
        2,913,852   
     

 

 

  

Hotels, Restaurants & Leisure — 8.76%

      

Chipotle Mexican Grill, Inc. (United States)*

      4,800         1,978,896   

Penn National Gaming, Inc. (United States)*

      41,117         2,055,439   

Red Robin Gourmet Burgers, Inc. (United States)*

      35,000         1,990,800   

Texas Roadhouse, Inc. (United States)

      99,000         2,419,560   

Wynn Resorts Ltd. (United States)

      18,000         2,396,340   
     

 

 

  
        10,841,035   
     

 

 

  

Household Durables — 1.71%

      

TRI Pointe Homes, Inc. (United States)*

      140,000         2,112,600   
     

 

 

  

Insurance — 8.97%

      

Berkshire Hathaway, Inc. (United States)*

      22         3,825,800   

HCC Insurance Holdings, Inc. (United States)

      35,000         1,558,550   

Loews Corp. (United States)

      43,500         1,981,425   

Markel Corp. (United States)*

      7,050         3,736,500   
     

 

 

  
        11,102,275   
     

 

 

  

Internet & Catalog Retail — 1.15%

      

Liberty Interactive Corp. (United States)*

      58,150         1,422,349   
     

 

 

  

IT Services — 1.47%

      

Paychex, Inc. (United States)

      46,000         1,814,240   
     

 

 

  

Machinery — 6.03%

      

Actuant Corp. (United States)

      56,500         1,995,015   

Flow International Corp. (United States)*

      473,400         1,827,324   

Trimas Corp. (United States)*

      98,300         3,640,049   
     

 

 

  
        7,462,388   
     

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Great America Fund    9

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

Value

(Note 1)

 

 

  

  

 

   

Equity Securities (continued)

      

Media — 1.79%

      

DreamWorks Animation SKG, Inc. (United States)*

      89,600       $ 2,218,496   
     

 

 

  

Metals & Mining — 1.61%

      

Horsehead Holding Corp. (United States)*

      163,200         1,999,200   
     

 

 

  

Oil, Gas & Consumable Fuels — 2.44%

      

Cloud Peak Energy, Inc. (United States)*

      30,000         480,900   

Denbury Resources, Inc. (United States)*

      145,300         2,542,750   
     

 

 

  
        3,023,650   
     

 

 

  

Paper & Forest Products — 3.87%

      

KapStone Paper and Packaging Corp. (United States)

      47,200         2,079,160   

Schweitzer-Mauduit International, Inc. (United States)

      50,000         2,707,000   
     

 

 

  
        4,786,160   
     

 

 

  

Real Estate Investment Trusts — 6.70%

      

American Tower Corp. (United States)

      30,700         2,173,253   

Annaly Capital Management, Inc. (United States)

      194,000         2,312,480   

Capstead Mortgage Corp. (United States)

      100,000         1,182,000   

Retail Opportunity Investments Corp. (United States)

      151,560         2,076,372   

Sunstone Hotel Investors, Inc. (United States)*

      43,000         556,420   
     

 

 

  
        8,300,525   
     

 

 

  

Software — 0.34%

      

Ansys, Inc. (United States)*

      5,300         423,152   
     

 

 

  

Specialty Retail — 4.88%

      

Autozone, Inc. (United States)*

      4,300         1,928,894   

Tractor Supply Co. (United States)

      22,400         2,713,312   

Williams-Sonoma, Inc. (United States)

      23,800         1,400,868   
     

 

 

  
        6,043,074   
     

 

 

  

Textiles, Apparel & Luxury Goods — 1.76%

      

Under Armour, Inc. (United States)*

      32,500         2,181,725   
     

 

 

  

Thrifts & Mortgage Finance — 0.60%

      

New Hampshire Thrift Bancshares, Inc. (United States)

      53,450         746,697   
     

 

 

  

Wireless Telecommunication Services — 2.23%

      

SBA Communications Corp. (United States)*

      37,250         2,759,852   
     

 

 

  

Total Equity Securities (Cost $ 89,502,817)

         114,600,864   
     

 

 

  

 

See Notes to Schedules of Investments.

 
10    Motley Fool Great America Fund

  Issues

 

     

 

 Par

 

   

 

   

 

 

 

 

 

 

 

Value

(Note 1)

 

 

 

  

  

 

   

Corporate Bond — 0.87%

      

Metals & Mining — 0.87%

      

Horsehead Holding Corp.

      

10.50%, 06/01/17 (United States)(a)

    $ 1,000,000       $ 1,070,000   
     

 

 

  

Total Corporate Bond (Cost $ 1,045,000)

         1,070,000   
     

 

 

  
     Shares      
  

 

 

     
  

 

 

     

Other Investments — 6.65%

      

Temporary Cash Investment — 6.65%

      

BNY Mellon Cash Reserve

      8,233,685         8,233,685   
     

 

 

  

Total Other Investments (Cost $ 8,233,685)

         8,233,685   
     

 

 

  

Total Investment Portfolio (Cost $98,781,502) — 100.08%

         123,904,549   

Liabilities in Excess of Other Assets — (0.08)%

         (95,042 ) 
     

 

 

  

NET ASSETS — 100.00%

      

(Applicable to 7,826,555 shares outstanding)

       $ 123,809,507   
     

 

 

  
     

 

 

  

 

* Non-income producing security.

 

(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities is $1,070,000 and represents 0.87% of net assets as of July 31, 2013.

 

See Notes to Schedules of Investments.

 
Motley Fool Great America Fund    11

The following tables show the top 11 holdings and sectors in which the Fund was invested at July 31, 2013. Portfolio holdings are subject to change without notice.

 

  Top Eleven Holdings*

 

       

 

 

 
 

 

 

 

% of Net
Assets

 

 

 

  
  

 

   

Berkshire Hathaway, Inc.

        3.09 % 

Markel Corp.

        3.02   

Trimas Corp.

        2.94   

Thor Industries, Inc.

        2.62   

Geospace Technologies Corp.

        2.61   

Diamond Hill Investment Group, Inc.

        2.43   

SBA Communications Corp.

        2.23   

American Woodmark Corp.

        2.22   

CARBO Ceramics, Inc.

        2.21   

Tractor Supply Co.

        2.19   

Schweitzer-Mauduit International, Inc.

        2.19   
    

 

 

  
       27.75 % 
    

 

 

  
    

 

 

  

 

* As of the date of the report, the fund had a holding of 6.65% in the BNY Mellon Cash Reserve.

 

  Sector Allocation

 

       

 

 
 

 

 

% of Net
Assets

 

 

  
  

 

   

Financials

        25.61 % 

Consumer Discretionary

        24.32   

Industrials

        11.97   

Energy

        7.77   

Health Care

        6.02   

Information Technology

        5.50   

Materials

        5.48   

Telecommunication Services

        3.16   

Consumer Staples

        2.73   
    

 

 

  
       92.56 % 
    

 

 

  
    

 

 

  

 

See Notes to Schedules of Investments.

 
12    Motley Fool Great America Fund

The Motley Fool Funds Trust

Motley Fool Epic Voyage Fund

Schedule of Investments

at July 31, 2013

(Unaudited)

 

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

 

 

Value

(Note 1)

 

 

 

  

  

 

   

Equity Securities — 87.11%

      

Beverages — 4.15%

      

Coca-Cola HBC AG (Switzerland)

      21,802       $ 565,133   

Corp Lindley SA (Peru)

      242,214         251,223   

Guinness Nigeria PLC (Nigeria)

      305,000         465,310   
     

 

 

  
        1,281,666   
     

 

 

  

Capital Markets — 2.96%

      

City of London Investment Group PLC (United Kingdom)

      89,028         325,756   

Tarpon Investimentos SA (Brazil)

      90,000         587,810   
     

 

 

  
        913,566   
     

 

 

  

Commercial Banks — 8.24%

      

Banco Latinoamericano de Comercio Exterior SA (Panama)

      35,600         896,764   

Credicorp Ltd. (Bermuda)

      6,000         712,740   

Gronlandsbanken AB (Denmark)

      2,353         238,956   

HDFC Bank Ltd. (India)(a)

      11,050         363,545   

Siam Commercial Bank PCL (Thailand)(b)

      65,000         329,188   
     

 

 

  
        2,541,193   
     

 

 

  

Commercial Services & Supplies — 4.70%

      

De La Rue PLC (United Kingdom)

      27,111         407,481   

Depa Ltd. (United Arab Emirates)*

      691,600         283,556   

Multiplus SA (Brazil)

      55,800         757,991   
     

 

 

  
        1,449,028   
     

 

 

  

Consumer Finance — 3.58%

      

Compartamos SAB de CV (Mexico)

      610,853         1,104,751   
     

 

 

  

Containers & Packaging — 1.34%

      

Crown Seal PCL (Thailand)(b)

      219,900         414,699   
     

 

 

  

Electronic Equipment, Instruments & Components — 1.41%

      

CrucialTec Co., Ltd. (South Korea)*

      34,750         436,121   
     

 

 

  

Energy Equipment & Services — 1.91%

      

CGG (France)(a)

      23,500         587,500   
     

 

 

  

Food & Staples Retailing — 0.83%

      

Olam International Ltd. (Singapore)

      191,000         254,761   
     

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Epic Voyage Fund    13

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

 

 

Value

(Note 1)

 

 

 

  

  

 

   

Equity Securities (continued)

      

Food Products — 6.09%

      

Flour Mills of Nigeria PLC (Nigeria)

      440,000       $ 236,302   

Industrias Bachoco SAB de CV (Mexico)(a)

      12,000         482,040   

Nestle SA (Switzerland)

      4,385         296,788   

PT Nippon Indosari Corpindo Tbk (Indonesia)

      1,224,540         863,784   
     

 

 

  
        1,878,914   
     

 

 

  

Health Care Equipment & Supplies — 2.85%

      

Covidien PLC (Ireland)

      11,128         685,819   

Nihon Kohden Corp. (Japan)

      4,597         193,150   
     

 

 

  
        878,969   
     

 

 

  

Health Care Provider & Services — 1.56%

      

Odontoprev SA (Brazil)

      117,000         482,083   
     

 

 

  

Hotels, Restaurants & Leisure — 3.16%

      

Ajisen China Holdings Ltd. (Hong Kong)

      790,000         691,774   

Wynn Macau Ltd. (Macau)

      100,000         283,295   
     

 

 

  
        975,069   
     

 

 

  

Internet & Catalog Retail — 2.11%

      

CJ O Shopping Co., Ltd. (South Korea)

      2,002         651,757   
     

 

 

  

Internet Software & Services — 4.15%

      

Baidu, Inc. (China)*(a)

      9,686         1,281,555   
     

 

 

  

Leisure Equipment & Products — 2.50%

      

Shimano, Inc. (Japan)

      8,550         770,753   
     

 

 

  

Media — 1.92%

      

BrainJuicer Group PLC (United Kingdom)

      151,336         591,853   
     

 

 

  

Metals & Mining — 0.82%

      

Sterlite Industries India Ltd. (India)(a)

      50,080         251,902   
     

 

 

  

Oil, Gas & Consumable Fuels — 4.16%

      

Lukoil OAO (Russia)(a)

      4,687         278,689   

Statoil ASA (Norway)(a)

      26,000         561,340   

Total Gabon SA (Gabon)

      768         444,401   
     

 

 

  
        1,284,430   
     

 

 

  

Pharmaceuticals — 3.54%

      

Dr. Reddy’s Laboratories Ltd. (India)(a)

      14,779         550,813   

Roche Holding AG (Switzerland)

      230         56,600   

 

See Notes to Schedules of Investments.

 
14    Motley Fool Epic Voyage Fund

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

 

 

Value

(Note 1)

 

 

 

  

  

 

   

Equity Securities (continued)

      

Pharmaceuticals (continued)

      

Teva Pharmaceutical Industries Ltd. (Israel)(a)

      12,201       $ 484,380   
     

 

 

  
        1,091,793   
     

 

 

  

Real Estate Investment Trusts — 1.86%

      

Lippo Malls Indonesia Retail Trust (Singapore)

      1,475,000         574,146   
     

 

 

  

Real Estate Management & Development — 4.90%

      

Brookfield Asset Management, Inc. (Canada)

      18,100         669,157   

Cheung Kong Holdings Ltd. (Hong Kong)

      27,188         381,618   

Henderson Land Development Co., Ltd. (Hong Kong)

      74,235         462,346   
     

 

 

  
        1,513,121   
     

 

 

  

Semiconductors & Semiconductor Equipment — 1.24%

      

Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan)(a)

      22,500         382,050   
     

 

 

  

Software — 1.38%

      

DuzonBizon Co., Ltd. (South Korea)

      42,400         425,992   
     

 

 

  

Specialty Retail — 4.78%

      

Asahi Co., Ltd. (Japan)

      38,000         608,208   

Fast Retailing Co., Ltd. (Japan)

      500         170,767   

Halfords Group PLC (United Kingdom)

      124,475         695,892   
     

 

 

  
        1,474,867   
     

 

 

  

Textiles, Apparel & Luxury Goods — 7.66%

      

Adidas AG (Germany)

      5,015         558,998   

Swatch Group SA (Switzerland)

      1,200         713,103   

Tod’s S.p.A. (Italy)

      6,700         1,091,520   
     

 

 

  
        2,363,621   
     

 

 

  

Tobacco — 1.81%

      

Philip Morris CR AS (Czech Republic)

      977         559,682   
     

 

 

  

Transportation Infrastructure — 1.36%

      

International Container Terminal Services, Inc. (Philippines)

      50,000         105,516   

SATS Ltd. (Singapore)

      120,000         313,080   
     

 

 

  
        418,596   
     

 

 

  

Wireless Telecommunication Services — 0.14%

      

Tower Bersama Infrastructure Tbk PT (Indonesia)*

      80,000         44,344   
     

 

 

  

Total Equity Securities (Cost $ 23,685,774)

         26,878,782   
     

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Epic Voyage Fund    15

  Issues

 

     

 

 Shares

 

   

 

   

 

 

 

 

 

 

 

Value

(Note 1)

 

 

 

  

  

 

   

Participatory Notes — 8.08%

      

Commercial Banks — 2.65%

      

Al Rajhi Banking & Investment Co. (Saudi Arabia)(c)

      40,000       $ 815,902   
     

 

 

  

Food Products — 4.50%

      

Almarai Co. (Saudi Arabia)(c)

      62,391         1,389,073   
     

 

 

  

Metals & Mining — 0.93%

      

Aluminum Bahrain BSC (Bahrain)(c)

      196,998         287,390   
     

 

 

  

Total Participatory Notes (Cost $ 2,148,992)

         2,492,365   
     

 

 

  

Other Investments — 3.86%

      

Temporary Cash Investment — 3.86%

      

BNY Mellon Cash Reserve

      1,192,867         1,192,867   
     

 

 

  

Total Other Investments (Cost $ 1,192,867)

         1,192,867   
     

 

 

  

Total Investment Portfolio (Cost $ 27,027,633) — 99.05%

         30,564,014   

Other Assets in Excess of Liabilities — 0.95%

         292,313   
     

 

 

  

NET ASSETS — 100.00%

      

(Applicable to 2,564,901 shares outstanding)

       $ 30,856,327   
     

 

 

  
     

 

 

  

 

* Non-income producing security.
(a) ADR — American Depositary Receipts
(b) NVDR — Non-Voting Depository Receipts
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities is $2,492,365 and represents 8.08% of net assets as of July 31, 2013.

PCL — Public Company Limited

PLC — Public Limited Company

 

See Notes to Schedules of Investments.

 
16    Motley Fool Epic Voyage Fund

The following tables show the top 11 holdings, sector allocation and top 11 countries in which the Fund was invested at July 31, 2013. Portfolio holdings are subject to change without notice.

 

  Top Eleven Holdings*

 

   

 

 

 
 

 

 

 

% of Net
Assets

 

 

 

  
  

 

   

Almarai Co.

      4.50 % 

Baidu, Inc.

      4.15   

Compartamos SAB de CV

      3.58   

Tod’s S.p.A.

      3.54   

Banco Latinoamericano de Comercio Exterior SA

      2.91   

PT Nippon Indosari Corpindo Tbk

      2.80   

Al Rajhi Banking & Investment Co.

      2.64   

Shimano, Inc.

      2.50   

Multiplus SA

      2.46   

Swatch Group AG

      2.31   

Credicorp Ltd.

      2.31   
  

 

 

  
     33.70 % 
  

 

 

  
  

 

 

  

*  As of the date of the report, the fund had a holding of 3.86% in the BNY Mellon Cash Reserve.

 

   

  Sector Allocation

 

   

 

 

 
 

 

 

 

% of Net
Assets

 

 

 

  
  

 

   

Financials

      24.18 % 

Consumer Discretionary

      22.13   

Consumer Staples

      17.38   

Information Technology

      8.19   

Health Care

      7.95   

Energy

      6.07   

Industrials

      6.05   

Materials

      3.09   

Telecommunication Services

      0.15   
  

 

 

  
     95.19 % 
  

 

 

  
  

 

 

  

 

See Notes to Schedules of Investments.

 
Motley Fool Epic Voyage Fund    17

  Top Eleven Countries

 

   

 

 

 
 

 

 

 

% of Net
Assets

 

 

 

  
  

 

   

Saudi Arabia

      7.15 % 

United Kingdom

      6.55   

Brazil

      5.92   

Japan

      5.65   

Switzerland

      5.29   

Mexico

      5.14   

Hong Kong

      4.98   

South Korea

      4.91   

China

      4.15   

India

      3.78   

Singapore

      3.70   
  

 

 

  
     57.22 % 
  

 

 

  
  

 

 

  

 

See Notes to Schedules of Investments.

 
18    Motley Fool Epic Voyage Fund

Notes to Schedules of Investments (Unaudited)

1. Security Valuation:

Securities held by the Trust are generally valued at fair value as of the close of regular trading on each business day (generally 4 pm Eastern time) that the New York Stock Exchange (“NYSE”) is open. Securities, other than stock options, listed on the NYSE or other exchanges are valued on the basis of the last quoted sale price on the exchange on which they are primarily traded. However, if the last sale price on the NYSE is different from the last sale price on any other exchange, the NYSE price will be used. If there are no sales on that day, then the securities are valued at the bid price on the NYSE or other primary exchange for that day. Securities traded in the OTC market are valued on the basis of the last sales price as reported by NASDAQ. If there are no sales on that day, then the securities are valued at the mean between the closing bid and ask prices as reported by NASDAQ. Stock options and stock index options traded on national securities exchanges or on NASDAQ are valued at the mean between the latest bid and asked prices for such options. Securities for which market quotations are not readily available or whose values have been affected by events occurring before the Funds’ pricing time but after the close of the securities markets, and other assets are valued at fair value as determined pursuant to procedures adopted in good faith by the Board of Trustees (the “Board”). Debt securities that mature in fewer than 60 days are valued at amortized cost (unless the Board determines that this method does not represent fair value), if their original maturity was 60 days or less or by amortizing the value as of the 61st day before maturity, if their original term to maturity exceeded 60 days.

When fair value pricing is employed, the prices of securities used by a fund to calculate its net asset value (the “NAV”) may differ from quoted or published prices for the same securities.

The values of securities held by the Funds and other assets used in computing NAV are generally determined as of the time trading in such securities is completed each day, which, in the case of foreign securities, generally occurs at various times before the close of the NYSE. Trading in securities listed on foreign securities exchanges are valued at the last sale or, if no sales are reported, at the bid price as of the close of the exchange, subject to possible adjustment as described in the Prospectus. Foreign currency exchange rates are also generally determined before the close of the NYSE. On occasion, the values of such securities and exchange rates may be affected by events occurring between the time as of which determinations of such values or exchange rates are made and the close of the NYSE. When such events materially affect the value of securities held by the Funds or their liabilities, such securities and liabilities will be valued at fair value in accordance with procedures adopted in good faith by the Board. In this regard, the Trust has retained a third party fair value pricing service to quantitatively analyze the price movement of the Funds’ holdings on foreign exchanges and to automatically determine fair value if the variation from the prior day’s closing price exceeds specified parameters. As of July 31, 2013, such price movements for certain securities had exceeded specified parameters and the third party fair value service quantitatively fair valued the affected securities. The Board will review and monitor the methods used by

 

 

 
The Motley Fool Funds Trust    19

the service to assure itself that securities are valued at their fair values. The values of any assets and liabilities initially expressed in foreign currencies will be converted to U.S. dollars based on exchange rates supplied by a quotation service.

Fair Value Measurements

The Financial Accounting Standards Board (“FASB”) “Fair Value Measurements and Disclosures” defines fair value as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment. Valuation techniques should maximize the use of observable market data and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Fair value measurements utilize a hierarchy based on the observability of inputs used to establish fair value.

Investment assets reported at fair value are classified based on the lowest level input that is significant to fair value:

Level 1 — quoted prices in active markets for identical securities

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed domestic and foreign equity securities.

Level 2 — observable inputs other than Level 1 (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations, or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include investment grade corporate bonds and less liquid listed domestic and foreign equity securities.

Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all.

 

 

 
20    The Motley Fool Funds Trust

The Funds did not have any significant transfers between Level 1 and Level 2 during the period ended July 31, 2013.

 

    

 

Independence Fund

 

 

     

 

   

Valuation Inputs

 

    Value

 

   

 

   

Level 1 — Quoted Prices

      

 

  

U.S. Common Stocks

       $ 131,044,162     

 

  

Foreign Common Stocks

         62,968,813     

 

  

Temporary Cash Investment

         25,588,742     

 

  

Level 2 — Other Significant Observable Inputs

      

 

  

Foreign Common Stocks

         73,965,074     

 

  

Participatory Notes

         11,192,243     

 

  

Level 3 — Significant Unobservable Inputs

         —     

 

  

Total Value of Investments

       $ 304,759,034     

 

  

 

 

  
    

 

Great America

Fund

 

 

  

  

 

   

Valuation Inputs

 

    Value

 

   

 

   

Level 1 — Quoted Prices

      

 

  

U.S. Common Stocks

       $ 114,600,864     

 

  

Temporary Cash Investment

         8,233,685     

 

  

Level 2 — Other Significant Observable Inputs

      

 

  

U.S. Common Stocks

         —     

 

  

Corporate Bond

         1,070,000     

 

  

Level 3 — Significant Unobservable Inputs

         —     

 

  

Total Value of Investments

       $ 123,904,549     

 

  
     

 

  

 

 

 
The Motley Fool Funds Trust    21

    

 

Epic Voyage Fund

 

 

     

 

   

Valuation Inputs

 

    Value

 

   

 

   

Level 1 — Quoted Prices

      

 

  

Foreign Common Stocks

       $ 11,655,707     

 

  

Temporary Cash Investment

         1,192,867     

 

  

Level 2 — Other Significant Observable Inputs

      

 

  

Foreign Common Stocks

         15,223,075     

 

  

Participatory Notes

         2,492,365     

 

  

Level 3 — Significant Unobservable Inputs

         —     

 

  

Total Value of Investments

       $ 30,564,014     

 

  

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

2. Investment Policies and Practices:

The sections below describe some of the different types of investments that may be made by the Funds and the investment practices in which the Funds may engage.

Foreign Securities

The Independence Fund and the Epic Voyage Fund invest, and the Great America Fund may invest, in equity and fixed-income securities of foreign companies, including companies located in both developed and emerging-market countries. Investment in foreign securities may include the purchase of American Depositary Receipts (“ADRs”) and other depositary receipts (European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”)) that represent indirect interests in securities of foreign issuers. A significant portion of a Fund’s exposure to foreign investments may be composed of such investments. Investments in foreign securities are affected by risk factors generally not associated with investments in the securities of U.S. companies in the U.S. With respect to such securities, there may be more limited information publicly available concerning the issuer than would be the case with respect to domestic securities, foreign issuers may use different accounting standards, and foreign trading markets may not be as liquid as are U.S. markets. Foreign securities also involve such risks as currency risks, possible imposition of withholding or confiscatory taxes, possible currency transfer restrictions, expropriation or other adverse political or economic developments, and the difficulty of enforcing obligations in other countries. These risks may be greater in emerging-market countries and in less-developed countries.

The purchase of securities denominated in foreign currencies will subject the value of the Funds’ investments in those securities to fluctuations caused by changes in foreign

 

 

 
22    The Motley Fool Funds Trust

exchange rates. To hedge against the effects of changes in foreign exchange rates, the Funds may enter into forward foreign currency exchange contracts (“forward contracts”). These contracts represent agreements to exchange an amount of currency at an agreed-upon future date and rate. The Funds will generally use forward contracts only to “lock in” the price in U.S. dollars of a foreign security that a Fund plans to purchase or to sell, but in certain limited cases, it may use such contracts to hedge against an anticipated substantial decline in the price of a foreign currency against the U.S. dollar that would adversely affect the U.S. dollar value of foreign securities held by the Fund. Forward contracts will not be used in all cases and, in any event, cannot completely protect the Funds against all changes in the values of foreign securities resulting from fluctuations in foreign exchange rates. The Funds will not enter into a forward contract if, as a result, forward contracts would represent more than 20% of a Fund’s total assets. For hedging purposes, the Funds may also use options on foreign currencies, which expose the Funds to certain risks.

Some foreign securities are traded in the U.S. in the form of ADRs. ADRs are receipts typically issued by a U.S. bank or trust company evidencing ownership of the underlying securities of foreign issuers. EDRs and GDRs are receipts typically issued by foreign banks or trust companies, evidencing ownership of underlying securities issued by either a foreign or U.S. issuer. Generally, depositary receipts in registered form are designed for use in the U.S. and depositary receipts in bearer form are designed for use in securities markets outside the U.S. Depositary receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted. Depositary receipts generally involve the same risks as other investments in foreign securities. However, holders of ADRs and other depositary receipts may not have all the legal rights of shareholders and may experience difficulty in receiving shareholder communications.

Types of Fixed-Income Securities

A Fund may invest in bonds and other types of debt obligations of U.S. and foreign issuers. Fixed income securities purchased by a Fund may include, among others, bonds, notes, and debentures issued by corporations; debt securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities (“U.S. Government Securities”); municipal securities; mortgage-backed and asset-backed securities; and debt securities issued or guaranteed by foreign governments, their agencies, instrumentalities, or political subdivisions, or by government-owned, -controlled, or -sponsored entities, including central banks. These investments also include money market instruments and other types of obligations. Investors should recognize that, although securities ratings issued by Standard & Poor’s® Ratings Services (“S&P”), a division of The McGraw-Hill Companies, Inc., and Moody’s Investors Services©, Inc. (“Moody’s”), provide a generally useful guide as to credit risks, they do not offer any criteria to evaluate interest rate risk. Changes in interest rate levels generally cause fluctuations in the prices of fixed-income securities and will, therefore, cause fluctuations in the NAV per share of a Fund. Subsequent to the purchase of a

 

 

 
The Motley Fool Funds Trust    23

fixed-income security by a Fund, the ratings or credit quality of such security may deteriorate. Any such subsequent adverse changes in the rating or quality of a security held by a Fund would not require a Fund to sell the security.

Participatory Notes

A participatory note, as used by a Fund, is an instrument used by investors to obtain exposure to an equity investment, including common stocks and warrants, in a local market where direct ownership is not permitted (or is impractical.) In countries where direct ownership by a foreign investor, such as a Fund, is not allowed by local law, such as Saudi Arabia, an investor may gain exposure to the market through a participatory note, which derives its value from a group of underlying equity securities. A participatory note is intended (disregarding the effect of any fees and expenses) to reflect the performance of the underlying equity securities on a one-to-one basis so that investors will not normally gain more in absolute terms than they would have made had they invested in the underlying securities directly, and will not normally lose more than they would have lost had they invested in the underlying securities directly.

In addition to providing access to otherwise closed markets, participatory notes can also provide a less expensive option to direct investment (where ownership by foreign investors is permitted) by reducing registration and transaction costs in acquiring and selling local registered shares. The Funds’ investment manager also believes that participatory notes can offer greater liquidity in markets that restrict the ability of the Funds to dispose of an investment by either restricting transactions by size or requiring registration and/or regulatory approvals.

The purchase of participatory notes involves risks that are in addition to the risks normally associated with a direct investment in the underlying securities. A Fund that holds a participatory note is subject to the risk that the issuer of the participatory note (i.e., the issuing bank or broker-dealer), which is the only responsible party under the note, is unable or refuses to perform under the terms of the participatory note, also known as counterparty risk.

While the holder of a participatory note is entitled to receive from the bank or broker-dealer any dividends or other distributions paid on the underlying securities, the holder is not entitled to the same rights as an owner of the underlying securities, such as voting rights.

Participatory notes may not be traded on exchanges, are privately issued, and may be illiquid. To the extent a participatory note is determined to be illiquid, it would be subject to the Fund’s limitation on investments in illiquid securities. There can be no assurance that the trading price or value of participatory notes will equal the value of the underlying value of the equity securities they seek to replicate.

 

 

 
24    The Motley Fool Funds Trust

Real Estate Investment Trusts

Real estate investment trusts (“REITs”) are pooled investment vehicles that manage a portfolio of real estate or real estate-related loans to earn profits for their shareholders. REITs are generally classified as equity REITs, mortgage REITs, or a combination of equity and mortgage REITs. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of the borrower on any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property type, and are subject to heavy cash-flow dependency, default by borrowers, and self-liquidation. REITs must also meet certain requirements under the Internal Revenue Code of 1986, as amended (the “Code”), to avoid entity level tax and be eligible to pass through certain tax attributes of their income to shareholders. REITs are consequently subject to the risk of failing to meet these requirements for favorable tax treatment and of failing to maintain their exemptions from registration under the 1940 Act. REITs are also subject to the risks of changes in the Code affecting their tax status.

REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT’s investment in fixed-rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT’s investment in fixed-rate obligations can be expected to decline. In contrast, as interest rates on adjustable-rate mortgage loans are reset periodically, yields on a REIT’s investments in such loans will gradually align themselves to reflect changes in market interest rates, causing the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed-rate obligations.

The management of a REIT may be subject to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through joint ventures or in other circumstances in which a REIT may not have control over its investments. REITs may use significant amounts of leverage.

REITs often do not provide complete tax information until after the end of the calendar year. Consequently, because of the delay, it may be necessary for a Fund, if invested in REITs, to request permission to extend the deadline for issuance of Forms 1099-DIV beyond January 31. Alternatively, amended Forms 1099-DIV may be sent. During the period ended July 31, 2013, the Independence, the Great America and the Epic Voyage Fund invested in REITs.

Temporary Investments

During periods of adverse market or economic conditions, a Fund may temporarily invest all or a substantial portion of its assets in high-quality, fixed-income securities, money market instruments, and shares of money market mutual funds, or it may hold cash. At such times, a Fund would not be pursuing its stated investment objective with

 

 

 
The Motley Fool Funds Trust    25

its usual investment strategies. A Fund may also hold these investments for liquidity purposes. Fixed-income securities will be deemed to be of high quality if they are rated “A” or better by S&P or Moody’s or, if unrated, are determined to be of comparable quality by the Adviser. Money market instruments are high-quality, short-term fixed income obligations (which generally have remaining maturities of one year or less), and may include U.S. Government Securities, commercial paper, certificates of deposit and banker’s acceptances issued by domestic branches of United States banks that are members of the Federal Deposit Insurance Corporation, and repurchase agreements for U.S. Government Securities. In lieu of purchasing money market instruments, a Fund may purchase shares of money market mutual funds that invest primarily in U.S. Government Securities and repurchase agreements involving those securities, subject to certain limitations imposed by the 1940 Act. A Fund, as an investor in a money market fund, will indirectly bear the fees and expenses of the money market fund. These indirect fees and expenses will be in addition to the fees and expenses of the Funds. Repurchase agreements involve certain risks not associated with direct investments in debt securities.

3. Federal Income Taxes:

As of July 31, 2013, the aggregate cost of investment securities for federal income tax purposes (excluding foreign currency, securities sold short, and derivative related items) and the net unrealized appreciation from investments for those securities having an excess of value over cost and net unrealized depreciation from investments for those securities having an excess of cost over value (based on cost for federal income tax purposes) were as follows:

 

 

  Independence Fund

 

                      

 

  

  Federal Tax Cost

 

   

 

Net Unrealized
Appreciation
(Depreciation)

 

   

Appreciated
Securities

 

     

Depreciated
Securities

 

  

 

  

      $237,698,506

    $67,060,528    $ 71,297,431       $ (4,236,903 ) 

 

  

 

 

  Great America Fund

 

                      

 

  

  Federal Tax Cost

 

   

 

Net Unrealized
Appreciation
(Depreciation)

 

   

Appreciated
Securities

 

     

Depreciated
Securities

 

  

 

  

      $98,781,502

    $25,123,047    $ 26,663,217       $ (1,540,170 ) 

 

  

 

 

 
26    The Motley Fool Funds Trust

  Epic Voyage Fund

 

                      

 

  

  Federal Tax Cost

 

   

Net Unrealized
Appreciation
(Depreciation)

 

   

Appreciated
Securities

 

     

Depreciated
Securities

 

  

 

  

      $27,027,633

    $3,536,381      $4,674,809         $(1,138,428)   

 

  

4. Recent Accounting Pronouncements:

In December 2011, the FASB issued Accounting Standards Update (“ASU”) “Disclosures about Offsetting Assets and Liabilities” requiring disclosure of both gross and net information related to offsetting and related arrangements enabling users of its financial statements to understand the effect of those arrangements on the entity’s financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. Generally Accepted Accounting Principles and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. ASU No. 2011-11 is effective for interim and annual periods beginning on or after January 1, 2013. Management is evaluating any impact ASU No. 2011-11 may have on the financial statements.

5. Subsequent Events:

Subsequent events have been evaluated through the date that the financial statements were issued. All subsequent events determined to be relevant and material to the financial statements have been appropriately recorded or disclosed.

 

 

 
The Motley Fool Funds Trust    27

Item 2. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  (b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) 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 pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 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.

(Registrant)     The Motley Fool Funds Trust                                                                 

 

By (Signature and Title)*       /s/ Peter E. Jacobstein                                                       
      Peter E. Jacobstein, President
      (principal executive officer)

Date    09/19/13                                                                                                                  

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 (Signature and Title)*       /s/ Peter E. Jacobstein                                                       
      Peter E. Jacobstein, President
      (principal executive officer)

Date    09/19/13                                                                                                                  

 

By (Signature and Title)*       /s/ Philip J. Biedronski                                                     
      Philip J. Biedronski, Treasurer
      (principal financial officer)

Date    09/19/13                                                                                                                  

* Print the name and title of each signing officer under his or her signature.