N-CSR 1 sf-ncsra.htm SHENKMAN FUNDS ANNUAL REPORT 9-30-16

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549


FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES




Investment Company Act file number 811-07959



Advisors Series Trust
 (Exact name of registrant as specified in charter)



615 East Michigan Street
Milwaukee, WI 53202
 (Address of principal executive offices) (Zip code)


Douglas G. Hess, President
Advisors Series Trust
c/o U.S. Bancorp Fund Services, LLC
777 East Wisconsin Avenue, 5th Floor
Milwaukee, WI 53202
 (Name and address of agent for service)



(414) 765-6609
(Registrant's telephone number, including area code)



Date of fiscal year end:  September 30, 2016



Date of reporting period:  September 30, 2016
 
 
Item 1. Reports to Stockholders.

 

 

 
Annual
     SHENKMAN FLOATING RATE
 
Report
     HIGH INCOME FUND
         
 
September 30, 2016
    
SHENKMAN SHORT DURATION
HIGH INCOME FUND
 
 
Each a series of Advisors Series Trust (the “Trust”)
  
             
 
SHENKMAN
Institutional
        
 
FLOATING RATE
Class
        
 
HIGH INCOME FUND
(SFHIX)
        
             
 
SHENKMAN
      
Institutional
  
 
SHORT DURATION
Class A
Class C
Class F
Class
  
 
HIGH INCOME FUND
(SCFAX)
(SCFCX)
(SCFFX)
(SCFIX)
  
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
  c/o U.S. Bancorp Fund Services, LLC
  P.O. Box 701
  Milwaukee, Wisconsin 53201-0701
  1-855-SHENKMAN (1-855-743-6562)
              
               
 


SHENKMAN FLOATING RATE HIGH INCOME FUND

SHAREHOLDER LETTER
September 30, 2016

Dear Shareholder,
 
The past twelve months have represented two very different markets in terms of performance for loans as well as most other credit and equity asset classes. During the fourth quarter of 2015 leveraged loans continued to experience the heightened volatility from earlier in the year as a result of the global decline of commodity prices, increased geopolitical uncertainty, currency volatility, and deflation fears. The selloff continued into early 2016, and for the five months ended February 29, 2016, the S&P/LSTA Leveraged Loan Index (the “Index”) was down over 3%. However, increased demand from investors looking for bargains as the commodity prices stabilized, diminishment of fears of a US recession, and the Federal Reserve’s willingness to slow its plans on increasing rates, among other factors, combined to help fuel a massive rally in all risk markets. From its low on February 17th to September 30th, the Index gained 9.37%. Following these market swings, the last twelve months ended September 30, 2016 return for the Index stands at 5.46%.
 
Fund Performance
 
The Shenkman Floating Rate High Income Fund (the “Fund”) seeks to generate high current income through active selection of investments in the leveraged loan universe. For liquidity purposes, the Fund targets an allocation of approximately 15% of assets in cash and shorter duration bonds. As of September 30, 2016, 86% of the Fund’s assets were invested in bank loans, 13% in high yield bonds, and 1% in cash.
 
The Fund had a net return of 4.63% from October 1, 2015 through September 30, 2016. As mentioned above, the market took a downturn in the beginning of this annual period with the Index returning -3.25% for the five months ended February 29, 2016. The Fund outperformed by 49 basis points during this period with a return of -2.76%. During the rally over the next seven months, the Fund returned 7.61%.
 
Not surprisingly during the strong rally, high yield bonds outperformed leveraged loans. Therefore, the Fund’s allocation to High Yield Bonds contributed to the overall performance of the Fund. Within bank loans, from a sector standpoint, the Healthcare and Chemicals sectors drove positive performance, while Steel and Forest Products detracted from returns. The Fund’s three largest industry sectors included Business Equipment & Services, Electronics, and Healthcare. As of September 30, 2016, the Fund’s average price was $97.91, about 2.5 points higher since a year earlier, and the Fund had a yield of 5.33% and a discount margin of 414bp.  The Fund remains well-diversified, with investments in 232 issuers across 31 industries.
 
1

 
SHENKMAN FLOATING RATE HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
Market Commentary
 
The loan market was characterized by a clear bifurcation of risk during the past year. That is, most of the market held up relatively well during the downturn early in the year as the risk was concentrated in certain portions of the market—mostly lower credit quality and commodity-related sectors. Naturally, these sectors have rallied the most in the past few months. The stratification of performance by rating demonstrates this market phenomenon as lower-rated credits significantly outperformed for the past year. Loans rated CCC in the Index returned +10.87%, while Single-Bs and Double-Bs gained 5.72% and 4.90%, respectively.
 
Further evidence of this market bifurcation can be seen by examining sector level returns for the one-year ended September 30, 2016. Of the 38 sectors in the Index, only three sectors had a negative return, which is largely due to three specific credits—one within each of those industries. The commodity-related sectors exhibited the highest volatility, but most of them ended the year in positive territory. Oil & Gas has been particularly volatile with monthly returns as low as -11.92% last December and as high as 13.58% in April. Another commodity sector, Metals/Mining, is the best performer this past year with a return of +10.35%. It was one of the worst performers last year. Conversely, Forest Products and Utilities were the worst performing industries with returns of -18.31% (led by Newpage) and -1.06% (led by TXU), respectively.
 
New institutional loan volume totaled $280.9 billion (bn) for the 12 months ended September 30, 20161. This figure compares to $250.5bn during the equivalent period a year earlier. The pace of new supply reflected the volatility of the overall market as volume was slower at the beginning of the year and increased dramatically in early summer. In fact, September 2016’s $58.1bn is the highest monthly institutional issuance volume ever.
 
Mergers and Acquisitions (“M&A”) have proven to be a major driver of the primary loan market. For the 12 months ended September 30, 2016, nearly half of all new issues were used for an acquisition-related purpose, including leveraged buyouts, or “LBOs”. Conversely, refinancing activity was also one of the top uses of proceeds for loans with just over a third of all loans this past year used to repay older debt. This volume represents a marked increase from the same period last year when 19% was used for refinancing.
 
As a result of the healthy pace of refinancing, repayments increased year-over-year. For the trailing 12-month period ended September 30, 2016, $204bn of loans were repaid, representing a rate of 24.25%. This compares to $172bn of repayments (21.50%) for the same period a year earlier.
 
Despite the healthy pace of new issuance, the usage of new loans to refinance older debt as well as repayments and scheduled amortizations, helped keep the size of the market relatively flat. The total par amount
 
2

 
SHENKMAN FLOATING RATE HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
outstanding grew $37bn during the last twelve months. As of September 30, 2016, the loan market totaled $881.7bn, a modest increase from $844.3bn a year earlier. Again, despite some relatively strong months for the primary market more recently, new issue volumes remained relatively muted in late 2015 and early 2016.
 
Along with the strong performance in recent months, demand in the loan market has seen a pick up both from retail and institutional sources. Most of the earlier months in the past twelve months saw outflows from bank loan mutual funds. However, the last quarter saw a relatively significant turnaround with $3.15bn of inflows as investors once again seek a possible safe haven from potential rate increases. The total outflow in the past twelve months totaled $19.6bn. Similarly, new formations of Collateralized Loan Obligations (“CLOs”) had a slower start to the year, with only $8.3bn in 1Q16, but volume has steadily picked up since then. For the one-year period ended September 30, 2016, new CLO volume totaled $65.8bn, roughly a 40% decline from the prior year. Nonetheless, CLOs remain the largest buyers of new issue loans. Over 60% of all new issue institutional loans are sold to a CLO1. We expect CLO underwriting may slow in the near term as heightened government oversight squeeze equity returns for investors. However, we believe this dynamic will likely favor established CLO managers like Shenkman Capital.
 
Despite the increased market volatility in the recent past, the default environment has thus far remained relatively benign. Only 29 companies have defaulted on $19.2bn in the 12-month period ended September 30, 2016, bringing the LTM default rate to 2.25%, a relatively small increase from 1.84% the previous year. Moreover, roughly half of all defaults (measured by issuer count as well as defaulted volume) are from the Energy sector. Excluding Energy names, the loan market default rate would be just over 1% for the trailing twelve-month period.
 
Outlook
 
Strong technicals are continuing to drive the market as demand increased from retail and institutional investors. Questions remain on when and if the Fed will raise rates, but relatively strong economic data, increasing LIBOR, and the relative scarcity of investment alternatives will likely continue to drive demand. Regardless, our view is that any hike should not be disruptive to the leveraged finance markets, the economy will not derail, and inflation will remain muted. In addition, the loan market may also see interest from high yield investors as the yield difference between loans and bonds has fallen to a multi-year low. The forward calendar is large, but we believe there is enough demand to meet it. While we remain cautious in our investments and selective in new issues, we continue to believe there are opportunities in the loan market.
 
3

 
SHENKMAN FLOATING RATE HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
The market certainly experienced a turbulent few months, and loans may continue to exhibit heightened volatility as investors continue to differentiate between better quality credits and credits with idiosyncratic or sector-related risks. However, the primary market should continue to bring a variety of new issues, and we believe there remains the opportunity for investors to capture favorable relative value for the creditworthy issuers and enter positions in attractively-priced and structured new deals. Historically, leveraged loans have generally exhibited some strength at year-end going into the next year. Therefore, we remain constructive on the overall market while remaining conservatively positioned.
 
Thank you again for your continued support and trust in our strategy.  We look forward to growing with you.
 
Notes:
 
 
1.
Data sourced from S&P LCD

 
Past performance does not guarantee future results.
 
Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.
 
Mutual fund investing involves risk. Principal loss is possible. There can be no assurance that the Fund will achieve its stated objective. In addition to the normal risks associated with investing, bonds and bank loans, and the funds that invest in them are subject to interest rate risk and can be expected to decline in value as interest rates rise. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities.
 
The Fund invests in foreign securities which involve political, economic and currency risks, greater volatility and differences in accounting methods. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. Leverage may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the fund to be more volatile than if leverage was not used.
 
Investments in CLOs carry additional risks, including the possibility that distributions from collateral securities will not be adequate to make interest payments and that the quality of the collateral may decline in value or default.
 
Diversification does not assure a profit, nor does it protect against a loss in a declining market.
 
4

 
SHENKMAN FLOATING RATE HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
The credit rating is a financial indicator to potential investors of debt securities such as bonds. These are assigned by credit rating agencies such as Moody’s and Standard & Poor’s to have letter designations (such as AAA, B, CC) which represent the quality of a bond. Moody’s assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, with WR and NR as withdrawn and not rated.  Standard & Poor’s assigns bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.
 
The S&P/LSTA Leveraged Loan Index is a daily total return index that tracks the current outstanding balance and spread over LIBOR for fully funded term loans. The facilities included in the S&P/LSTA Leveraged Loan Index represent a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers.
 
You cannot invest directly in an index.
 
Basis points (bps) are equivalent to one-one hundredths of a percentage point.
 
Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years.
 
Yield is defined as the income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value.
 
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.  Please refer to the Schedule of Investments for a complete list of fund holdings.
 
Par amount refers to the amount at which a security is issued or can be redeemed.
 
Must be preceded or accompanied by a prospectus.
 
These materials contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor’s.  Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party.  Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content.  THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT,
 
5

 
SHENKMAN FLOATING RATE HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS.  Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities.  They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice
 
The Shenkman Floating Rate High Income Fund is distributed by Quasar Distributors, LLC, which is not affiliated with Shenkman Capital Management, Inc.
 
 
 
 

6

SHENKMAN SHORT DURATION HIGH INCOME FUND

SHAREHOLDER LETTER
September 30, 2016

Dear Shareholder,
 
The Shenkman Short Duration High Income Fund (the “Fund”) continued to seek a high level of current income by focusing on investments within the non-investment grade universe believed to be high quality yet short duration. The Fund’s Institutional Class (SCFIX) returned 3.97% for the fiscal year from September 30, 2015 through September 30, 2016, and ended the year with a duration-to-worst of 0.86 years and average final maturity of 3.81 years. The Fund’s Class A shares returned 3.61% (without sales load) and 0.47% (with maximum sales load imposed on purchases of 3.00%) and the Class F shares returned 3.88%. Additionally, the Class C shares returned 2.77% (without sales load) and 1.77% (with maximum deferred sales load of 1.00%). The Fund’s benchmark, the BofAML 0-2 Year Duration BB-B U.S. HY Constrained Index (H42C), returned 5.72% for the same one year period.
 
The Fund’s sector positioning is largely a function of its focus on bottom-up, individual security selection and fundamental analysis as opposed to top-down, sector driven allocations. That said, Healthcare remained the Fund’s largest exposure while Support-Services remained the second largest. Those sectors were also the two largest contributors to returns for the period. Conversely, Oil & Gas and Utilities: Gas were the two largest detractors to performance resulting from the Fund’s negative selection and underweight positioning. In particular, the Oil & Gas sector faced extreme volatility throughout the period given the record drop in oil prices which also precipitated a significant uptick in defaults and restructurings within the sector.  The latter half of the period saw the sector rebound significantly as oil prices and enterprise valuations recovered in conjunction with capital markets cooperating to allow issuers to improve balance sheets and liquidity.  The Fund’s exposure to bank loans, which ended the period at 16.09%, was a positive contributor to performance as bank loan returns outpaced short duration for the period. As of September 30, 2016, the Fund’s average price was $103.34 with a current yield of 4.80%, yield-to-maturity of 4.27% and a yield-to-worst of 2.89%.  As diversification remains a key factor in helping to mitigate risk, the portfolio was well-diversified, with investments in 185 issuers across 35 industries as of September 30, 2016.
 
Market Commentary
 
High yield bonds opened the fourth quarter of 2015 with their highest monthly return since January 2012, sparked by hopes of further monetary stimulus in Europe, signs of stabilization in China’s economy, better-than-anticipated third quarter earnings, an equity market rally, and a successful compromise in the U.S. budget standoff.  The market surrendered its gains in the final two months of 2015, however, as nervousness around a Federal Reserve interest rate hike, general risk aversion, a resumption in the decline of crude oil prices, fears of rising default rates and fears of contagion following
 
7

 
SHENKMAN SHORT DURATION HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
Third Avenue Management’s announcement that it would freeze redemptions and liquidate their Focused Credit Fund left high yield unsettled.  The BofA Merrill Lynch U.S. High Yield Index (H0A0) weakened by 2.17%  for the quarter, its third consecutive quarterly decline.   Given the tumultuous market backdrop, triple-C rated credits bore the lion’s share of the deterioration, falling 8.48%, whereas single-B and double-B rated credits fared considerably better with returns of -2.40% and -0.11%, respectively.  In the quarter, high-yield bond yields and spreads widened by 67 bps and 33 bps, respectively, leaving the year-end yield and spread at 8.76% and 698 bps, respectively. Mutual funds, meanwhile, suffered redemptions of $3.5 billion for the quarter, according to Lipper. Default rates, meanwhile, ended 2015 at just 3.40% as 52 companies experienced defaults, totaling $50.84 billion.
 
2016 got off to a rocky start as collapsing commodity prices, a plunging equity market, rising political tensions, accumulating stress in European financials, and concerns that a sagging global economy would spill over into the U.S. pressured the high yield market. Through February 11th, the H0A0 slumped by 5.14% for 2016. Starting in mid-February, as if a light switch was flicked on, high yield experienced an extraordinary rally, posting eight consecutive monthly gains that came from a multitude of factors including oil’s recovery off of multi-year lows, the fading of U.S. recessionary fears, accommodative global central bank policies, equity markets hovering near all-time highs, and a resumption of the global reach for yield in a negative rate environment, particularly in the riskier segments of the market. For the year-to-date period through September, the H0A0 rocketed by 15.32%, up over 21.5% from its mid-February nadir. If the year had ended on September 30th, the gain would mark the fourth largest advance in 20 years. Single-B and double-B rated bonds posted advances that approximated the market return at +14.52% and +12.45%, respectively, while triple-C rated credits were, by a wide margin, the best performing rating category with a +28.81% return. As a result of the continuing market rally, high yield bond yields and spreads decreased to 6.25% and +510bps, respectively, their tightest levels since mid-2015, and approximately 250bps and 190bps, respectively, tighter than at the end of 2015.  The returns for the higher quality short duration segment of the high yield market proved more defensive than broader high yield given the shorter tenor and higher ratings mix as well as its lack of downside to recover from a relatively stronger fourth quarter 2015. For the year-to-date period ended September 30, 2016, the BofA Merrill Lynch 0-2 Year Duration BB-B High Yield Constrained Index (H42C) posted an increase of 5.66%, trailing the broader market’s risk rally.  Default activity, meanwhile, remained subdued and ended the period at 3.54%, up slightly from the end of 2015, but approximately in-line with the long-term average for the asset class. Not surprisingly, Energy and Metals/Mining accounted for over 89% of 2016’s defaults. With both debt and equity capital markets more open now than earlier in 2016, many companies have successfully
 
8

 
SHENKMAN SHORT DURATION HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
tapped both the debt market to extend maturities and the equity market to deleverage their balance sheets, which could cause a stabilization of default rates at or near current levels. The primary market saw $233 billion of issuance across 338 tranches in the year-to-date period, down 7.1% from the comparable period in 2015. Although new issue volume continues to be skewed towards higher rated credits (96% single-B or double-B) and the use-of-proceeds is primarily for refinancing purposes (57%), we saw an intermittent deterioration in quality late in the third quarter as several triple-C rated companies tapped the market, a development that warrants close attention. Meanwhile, retail investors continued to express interest in corporate credit following sustained central bank dovish commentary. High yield mutual funds reported a $9.6 billion inflow for the period year-to-date through September 30, 2016, a significant reversal versus full year 2015 which saw a $16.6 billion outflow.
 
Outlook
 
As we begin the fourth quarter 2016, both the technical backdrop and the fundamental environment appear supportive of high yield valuations. Although volatility may kick up going into the election, as we approach the Federal Reserve’s next meeting, and as headlines surrounding Deutsche Bank persist, foreign investors continue to be compelled by the attractive yield and duration characteristics of high yield, especially in a low and negative interest rate environment. Moreover, as year-over-year earnings expectations improve versus generally easy comparisons last year, as oil stabilizes, and as the U.S. consumer and GDP experience slow-but steady growth, we expect high yield to remain an attractive investment sweet spot.  This environment should also benefit the shorter duration segment of the high yield market, which we believe remains an appealing area to capture attractive risk-adjusted returns.
 
Thank you again for your continued support and trust in our strategy. We look forward to growing with you.
 
 
Past performance does not guarantee future results.
 
Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.
 
Mutual fund investing involves risk. Principal loss is possible. There can be no assurance that the Fund will achieve its stated objective. In addition to the normal risks associated with investing, bonds and bank loans, and the funds that invest in them are subject to interest rate risk and can be expected to decline in value as interest rates rise. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-
 
9

 
SHENKMAN SHORT DURATION HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
rated securities. The Fund invests in foreign securities which involve political, economic and currency risks, greater volatility and differences in accounting methods. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. Leverage may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the fund to be more volatile than if leverage was not used.
 
Diversification does not assure a profit, nor does it protect against a loss in a declining market.
 
The BofA Merrill Lynch U.S. High Yield Index (H0A0) has an inception date of August 31, 1986 and tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. The BofA Merrill Lynch High Yield Indices are unmanaged, not available for direct investment, and do not reflect deductions for fees or expenses.
 
The BofAML 0-2 Year Duration BB-B U.S. HY Constrained Index (H42C) consists of all securities in the BofA Merrill Lynch BB-B U.S. High Yield Index (HUC4) that have a duration-to-worst of 2 years or less. The BofA Merrill Lynch U.S. High Yield, BB/B Rated, Constrained Index (HUC4) has an inception date of December 31, 1996, and is a subset of the BofA Merrill Lynch U.S. High Yield Index (H0A0) that consists of all securities rated BB1 through B3, based on an average of Moody’s, S&P and Fitch, but caps issuer exposure at 2%.
 
You cannot invest directly in an index.
 
Basis points (bps) are equivalent to one-one hundredths of a percentage point.
 
Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years.
 
Duration-to-worst is the duration of a bond computed using either the final maturity date, or a call date within the bond’s call schedule, whichever would result in the lowest yield to the investor.
 
Yield-to-worst is the lowest potential yield that can be received on a bond without the issuer actually defaulting.
 
Yield-to-Maturity is the rate of return anticipated on a bond if held until the end of its lifetime. YTM is considered a long-term bond yield expressed as an annual rate. The YTM calculation takes into account the bond’s current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupon payments are reinvested at the same rate as the bond’s current yield. YTM is a complex but accurate calculation of a bond’s return that helps investors compare bonds with different maturities and coupons.
 
10

 
SHENKMAN SHORT DURATION HIGH INCOME FUND
 
SHAREHOLDER LETTER – Continued
September 30, 2016
 
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please refer to the Schedule of Investments for a complete list of fund holdings.
 
Must be preceded or accompanied by a prospectus.
 
Diversification does not assure a profit nor protect against loss in a declining market.
 
The credit rating is a financial indicator to potential investors of debt securities such as bonds. These are assigned by credit rating agencies such as Moody’s and Standard & Poor’s to have letter designations (such as AAA, B, CC) which represent the quality of a bond. Moody’s assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, with WR and NR as withdrawn and not rated.  Standard & Poor’s assigns bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.
 
These materials contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor’s.  Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party.  Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content.  THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS.  Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities.  They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice
 
The Shenkman Short Duration High Income Fund is distributed by Quasar Distributors, LLC.
 
 

11

SHENKMAN FLOATING RATE HIGH INCOME FUND

Comparison of the change in value of a hypothetical $1,000,000
investment in the Shenkman Floating Rate High Income Fund –
Institutional Class vs the S&P/LSTA Leveraged Loan Index
and the S&P/LSTA B- & Above Leveraged Loan Index



Total Return Period ended September 30, 2016
 
   
Average Annual
   
Since Inception
 
One Year
10/15/2014
Institutional Class
4.63%
2.68%
S&P/LSTA Leveraged Loan Index
5.46%
3.35%
S&P/LSTA B- & Above Leveraged Loan Index
5.27%
3.82%
 
Total Annual Fund Operating Expenses: 0.73% (Institutional Class)
 
Performance data quoted represents past performance; past performance does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling 1-855-743-6562
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions, or redemption of Fund shares. Indices do not incur expenses and are not available for investment.
 
The S&P/LSTA Leveraged Loan Index is a daily total return index that tracks the current outstanding balance and spread over LIBOR for fully funded term loans. The facilities included in the S&P/LSTA Leveraged Loan Index represent a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers. It is not indicative of the investment strategies employed by Shenkman Capital and may contain different facilities than the facilities in the Shenkman Capital Bank Loan Composite.
 
The S&P LSTA B- & Above Leveraged Loan Index consists of all securities in the S&P/LSTA Leveraged Loan Index that have a B- and above S&P Rating.
 

12

SHENKMAN SHORT DURATION HIGH INCOME FUND

Comparison of the change in value of a hypothetical $1,000,000 investment
in the Shenkman Short Duration High Income Fund – Institutional Class vs
the BofA Merrill Lynch 0-3 US Treasury Index and the BofA Merrill Lynch
0-2 Year Duration BB-B U.S. High Yield Constrained Index



Total Return Period ended September 30, 2015
 
   
Average Annual
   
Since Inception
 
One Year
10/31/2012
5/17/2013
1/28/2014
Class A (without sales load)
3.61%
2.95%
—
—
Class A (with sales load)
0.47%
2.15%
—
—
Class C (without
       
  deferred sales load)
2.77%
—
—
1.35%
Class C (with
       
  deferred sales load)
1.77%
—
—
1.35%
Class F
3.88%
—
2.75%
—
Institutional Class
3.97%
3.29%
—
—
BofA Merrill Lynch 0-3 Year
       
  US Treasury Index
0.74%
0.59%
0.62%
0.70%
BofA Merrill Lynch 0-2 Year
       
  Duration BB-B U.S. High
       
  Yield Constrained Index
5.72%
4.16%
3.63%
3.49%
 
Total Annual Fund Operating Expenses: 1.37% (Class A), 2.14% (Class C), 1.13 (Class F), 1.05% (Institutional Class)
 
Performance data quoted represents past performance; past performance does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling 1-855-743-6562
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. Class A shares may be subject to a 3.00% sales load. Class A shares do not have a contingent deferred
 

 
13
SHENKMAN SHORT DURATION HIGH INCOME FUND

 
sales charge (“CDSC”) except that a charge of 1% applies to certain redemptions made within thirty calendar days.  Class C shares may be subject to a CDSC of 1.00% on redemptions held for twelve months or less after purchase. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions, or redemption of Fund shares. Indices do not incur expenses and are not available for investment.
 
The BofA Merrill Lynch 0-3 Year US Treasury Index (G1QA) tracks the performance of US dollar denominated sovereign debt publicly issued by the US government in its domestic market with maturities less than three years.
 
The BofA Merrill Lynch 0-2 Year Duration BB-B U.S. HY Constrained Index (H42C) consists of all securities in the BofA Merrill Lynch BB-B U.S. High Yield Index (HUC4) that have a duration-to-worst of 2 years or less. The HUC4 index is a subset of the BofA Merrill Lynch U.S. High Yield Index (H0A0) that includes all securities in the H0A0 rated BB1 through B3, inclusive. The HUC4 index is unmanaged, not available for direct investment and does not reflect deductions for fees or expenses.
 
 

14

SHENKMAN FUNDS

EXPENSE EXAMPLE
September 30, 2016 (Unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs including sales charges (loads), if applicable; redemption fees, if applicable; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1 fees); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
 
The Example is based on an investment of $1,000 invested at the beginning of the period indicated and held for the entire period from April 1, 2016 to September 30, 2016.
 
Actual Expenses
 
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns 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 row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.  There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts (generally, a $15 fee is charged to the account annually) that would increase the amount of expenses paid on your account.  The example below does not include portfolio trading commissions and related expenses, and other extraordinary expenses as determined under generally accepted accounting principles.
 
Hypothetical Example for Comparison Purposes
 
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and assumed rate of return of 5% per year before expenses, which is not the Fund’s 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 Fund 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.  As noted above, there are some account fees that are charged to certain types of accounts that would increase the amount of expense paid on your account.
 
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the information under the heading “Hypothetical (5% return before expenses)” is
 
15

 
SHENKMAN FUNDS
 
EXPENSE EXAMPLE – Continued
September 30, 2016 (Unaudited)
 
useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
 
Beginning
Ending
Expenses Paid
 
Account Value
Account Value
During Period(1)
Shenkman Floating Rate High Income Fund
      
Actual
      
Institutional Class
$1,000.00
$1,050.40
$2.77
       
Hypothetical (5% return
     
  before expenses)
      
Institutional Class
$1,000.00
$1,022.30
$2.73
 
(1)
Shenkman Floating Rate High Income Fund expenses are equal to the Funds’ annualized expense ratio of 0.54%, multiplied by the average account value over the period, multiplied by 183 days/366 days (to reflect the six-month period of operation). The Fund’s ending account values in the table are based on its six-month total return of (5.04)% as of September 30, 2016.
 
 
Beginning
Ending
Expenses Paid
 
Account Value
Account Value
During Period(2)
Shenkman Short Duration High Income Fund
      
Actual
      
Class A
$1,000.00
$1,030.30
$4.92
Class C
$1,000.00
$1,025.60
$8.86
Class F
$1,000.00
$1,030.60
$3.81
Institutional Class
$1,000.00
$1.031.10
$3.30
       
Hypothetical (5% return
     
  before expenses)
      
Class A
$1,000.00
$1,020.15
$4.90
Class C
$1,000.00
$1,016.25
$8.82
Class F
$1,000.00
$1,021.25
$3.79
Institutional Class
$1,000.00
$1,021.75
$3.29
 
(2)
Shenkman Short Duration High Income Fund Class A, Class C, Class F, and Institutional Class expenses are equal to the fund shares’ annualized expense ratio of 0.97%, 1.75%, 0.75% and 0.65%, respectively, multiplied by the average account value over the period, multiplied by 183 days/366 days (to reflect the six-month period of operation). The Fund’s ending account values in the table are based on its six-month total return of (3.03)% for Class A, (2.56)% for Class C, (3.06)% for Class F, and (3.11)% for the Institutional Class as of September 30, 2016.
 

 
16

SHENKMAN FLOATING RATE HIGH INCOME FUND

PORTFOLIO ALLOCATION
September 30, 2016 (Unaudited)
 



 
 
TOP TEN HOLDINGS
% Net Assets
Patheon, Inc., 4.25%, 03/11/2021
1.12%
MPH Acquisition Holdings, LLC, 5.00%, 06/07/2023
1.10%
Brickman Group Ltd., LLC, 4.00%, 12/18/2020
1.05%
Cablevision Systems Corp., 8.625%, 09/15/2017
0.99%
Amaya B.V., 5.00%, 08/02/2021
0.97%
T-Mobile USA, Inc., 6.464%, 04/28/2019
0.96%
Formula One Group, 4.75%, 07/30/2021
0.93%
Scientific Games International, Inc., 6.00%, 10/18/2020
0.93%
Sequa Corp., 5.25%, 06/19/2017
0.86%
IMG Worldwide, Inc., 5.25%, 05/06/2021
0.84%


The portfolio’s holdings and allocations are subject to change, and exclude short term investments. The percentages are of total net assets as of September 30, 2016.
 

17

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS
September 30, 2016

         
Fair
  
   
Shares
    
Value
  
COMMON STOCKS – 0.15%
            
             
Finance – Services – 0.05%
            
RCS Capital Corp. (a)(h)
    
17,405
    
$
130,538
  
                 
Forestry & Paper – 0.10%
                
Verso Corp. (a)
    
40,879
      
263,669
  
                 
Utilities – Gas – 0.00%
                
Southcross Energy Partners, L.P. (a)(h)
    
63
      
473
  
Southcross Energy Partners, L.P. (a)(h)
    
63
      
472
  
             
945
  
TOTAL COMMON STOCKS
               
  (Cost $1,987,680)
            
395,152
  
                 
   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14%
                
                 
Aerospace & Defense – 2.81%
                
Abacus Innovations Corp.
               
  3.274%, 06/15/2023 (b)
  
$
615,000
      
619,293
  
B/E Aerospace, Inc.
               
  3.787%, 12/16/2021 (b)
    
1,525,000
      
1,544,779
  
CAMP International Holding Co.
                
  4.75%, 08/18/2023 (b)(e)
    
845,000
      
845,634
  
  8.25%, 08/12/2024 (b)(e)
    
205,000
      
205,897
  
CPI International, Inc.
               
  4.25%, 11/17/2017 (b)
    
1,202,739
      
1,198,229
  
Sequa Corp. 5.25%, 06/19/2017 (b)
    
2,599,105
      
2,289,239
  
TransDigm Group, Inc.
               
  3.75%, 06/04/2021 (b)
    
488,750
      
489,769
  
TransDigm, Inc. 3.75%, 05/13/2022 (b)
    
251,227
      
251,855
  
             
7,444,695
  
Automotive – 2.39%
                
American Tire Distributors, Inc.
               
  5.25%, 09/01/2021 (b)
    
692,965
      
686,122
  
Camping World 5.75%, 02/20/2020 (e)
    
1,234,440
      
1,238,106
  
Federal-Mogul Corp. 4.75%, 04/15/2021 (b)
    
292,026
      
283,004
  


The accompanying notes are an integral part of these financial statements.

18

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Automotive – 2.39% – Continued
            
KAR Auction Services, Inc.
           
  4.375%, 03/09/2023 (b)
  
$
646,750
    
$
656,251
  
Metaldyne, LLC 3.75%, 10/20/2021 (b)
    
443,593
      
445,851
  
Midas Intermediate Holdco II, LLC
               
  4.50%, 08/18/2021 (b)
    
447,716
      
452,193
  
Navistar, Inc. 6.50%, 08/07/2020 (b)
    
868,438
      
871,967
  
Tower Automotive Holdings USA, LLC
               
  4.00%, 04/23/2020 (b)
    
848,480
      
849,010
  
TRADER Corp. 5.00%, 08/09/2023 (b)(e)
    
850,000
      
855,848
  
             
6,338,352
  
Beverage & Food – 1.35%
                
AdvancePierre Foods, Inc.
               
  4.50%, 09/02/2023 (b)
    
442,212
      
446,468
  
Dole Food Co., Inc. 4.508%, 11/01/2018 (b)
    
864,690
      
868,399
  
KFC Holding Co. 3.281%, 06/16/2023 (b)
    
783,038
      
790,625
  
Pinnacle Foods Finance, LLC
               
  3.275%, 01/13/2023 (b)
    
862,827
      
871,132
  
US Foods, Inc. 4.00%, 06/27/2023 (b)
    
608,475
      
614,179
  
             
3,590,803
  
Building Materials – 2.07%
                
American Builders & Contractors
               
  Supply Company, Inc.
               
  3.50%, 10/31/2023 (b)(e)
    
655,000
      
657,784
  
CPG International, Inc.
               
  4.75%, 09/30/2020 (b)
    
1,560,322
      
1,565,197
  
Floor and Decor Outlets of America, Inc.
               
  5.25%, 10/31/2023 (b)(e)
    
775,000
      
775,969
  
HD Supply, Inc.
                
  3.75%, 08/13/2021 (b)
    
702,900
      
705,388
  
  3.592%, 10/16/2023 (b)(e)
    
100,000
      
100,313
  
Headwaters, Inc. 4.00%, 03/24/2022 (b)
    
1,178,952
      
1,187,057
  
Henry Company, LLC
               
  5.50%, 09/30/2023 (b)(e)
    
500,000
      
497,500
  
             
5,489,208
  


The accompanying notes are an integral part of these financial statements.

19

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Chemicals – 3.45%
            
Allnex S.à.r.l. 5.25%, 09/13/2023 (b)(e)
  
$
300,773
    
$
304,159
  
Allnex USA, Inc. 5.25%, 09/13/2023 (b)(e)
    
399,227
      
403,720
  
Chemours Co. 3.75%, 05/12/2022 (b)
    
691,128
      
685,948
  
ColourOz MidCo S.à.r.l. – Term Loan B2
               
  4.50%, 09/07/2021 (b)
    
1,167,088
      
1,165,337
  
ColourOz MidCo S.à.r.l. – Term Loan C
               
  4.50%, 09/07/2021 (b)
    
192,933
      
192,644
  
Ineos Stryoultion US Holdings, LLC
               
  4.75%, 09/30/2021 (b)(e)
    
775,000
      
784,207
  
Kronos Worldwide, Inc.
               
  4.00%, 02/18/2020 (b)
    
1,202,739
      
1,174,173
  
MacDermid, Inc. 5.50%, 06/05/2020 (b)
    
979,159
      
984,667
  
Nexeo Solutions, LLC
               
  5.25%, 06/09/2023 (b)
    
897,750
      
904,066
  
Orion Engineered Carbons
               
  4.00%, 07/23/2021 (b)
    
705,000
      
708,197
  
Road Infrastructure Investment, LLC
               
  5.00%, 06/13/2023 (b)
    
510,000
      
515,312
  
Solenis International, LP
                
  4.25%, 07/31/2021 (b)
    
604,454
      
604,502
  
  7.75%, 07/29/2022 (b)
    
750,184
      
734,243
  
             
9,161,175
  
Consumer Products – 1.58%
                
1-800 Contacts 5.25%, 01/22/2023 (b)
    
388,050
      
391,042
  
Atrium Innovations, Inc.
               
  4.25%, 02/16/2021 (b)
    
132,526
      
131,532
  
Energizer Holdings, Inc.
               
  3.25%, 06/30/2022 (b)
    
1,113,750
      
1,117,927
  
KIK Custom Products, Inc.
               
  6.00%, 08/26/2022 (b)
    
1,782,000
      
1,786,455
  
NBTY, Inc. 5.00%, 05/05/2023 (b)
    
753,113
      
757,680
  
             
4,184,636
  
Environmental – 1.91%
                
ADS Waste Holdings, Inc.
               
  3.75%, 10/09/2019 (b)
    
1,319,345
      
1,322,438
  


The accompanying notes are an integral part of these financial statements.

20

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Environmental – 1.91% – Continued
            
Waste Industries USA, Inc.
           
  3.50%, 02/27/2020 (b)
  
$
1,970,000
    
$
1,981,386
  
Wheelabrator Technologies – Term Loan
                
  B (First Lien) 8.25%, 12/19/2022 (b)
    
550,000
      
521,582
  
Wheelabrator Technologies – Term Loan
               
  B (Second Lien) 5.00%, 12/17/2021 (b)
    
1,207,904
      
1,198,089
  
Wheelabrator Technologies – Term Loan
               
  C 5.00%, 12/17/2021 (b)
    
54,094
      
53,655
  
             
5,077,150
  
Finance – Insurance – 1.66%
                
Acrisure, LLC
                
  6.50%, 05/19/2022 (b)
    
1,752,992
      
1,762,861
  
  6.50%, 05/19/2022 (b)
    
137,593
      
138,368
  
AssuredPartners, Inc.
               
  5.75%, 10/21/2022 (b)
    
1,653,429
      
1,665,309
  
Hub International Ltd.
               
  4.00%, 10/02/2020 (b)
    
364,119
      
364,772
  
USI, Inc. 4.25%, 12/27/2019 (b)
    
465,956
      
467,237
  
             
4,398,547
  
Finance – Services – 2.18%
                
AlixPartners LLP 4.50%, 07/28/2022 (b)
    
1,829,510
      
1,835,227
  
Aretech Group, Inc.
               
  2.00%, 05/21/2021 (b)(h)
    
1,433,005
      
1,117,744
  
Duff & Phelps Corp. 4.75%, 04/23/2020 (b)
    
695,247
      
697,746
  
Frank Russell Co. 6.75%, 06/01/2023 (b)
    
543,638
      
540,580
  
RCS Capital Corp. 8.00%, 11/23/2020 (b)
    
557,118
      
557,814
  
Virtu Financial 5.25%, 11/08/2019 (b)
    
501,223
      
505,140
  
Walter Investment Management Corp.
               
  4.75%, 12/18/2020 (b)
    
590,088
      
542,459
  
             
5,796,710
  
Food & Drug Retailers – 1.26%
                
Albertson’s, LLC
                
  4.50%, 08/25/2021 (b)
    
835,296
      
842,747
  
  4.75%, 12/21/2022 (b)
    
569,867
      
576,281
  


The accompanying notes are an integral part of these financial statements.

21

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Food & Drug Retailers – 1.26% – Continued
            
BJ’s Warehouse Club, Inc.
           
  4.50%, 09/26/2019 (b)
  
$
1,919,866
    
$
1,927,065
  
             
3,346,093
  
Gaming – 4.25%
                
Amaya B.V. 5.00%, 08/02/2021 (b)
    
2,579,800
      
2,583,025
  
American Casino & Entertainment
               
  Properties, LLC 4.75%, 07/07/2022 (b)
    
1,086,070
      
1,099,651
  
Aristocrat International Pty Ltd.
               
  3.50%, 10/20/2021 (b)
    
572,056
      
574,968
  
Graton Economic Development Authority
               
  4.75%, 09/01/2022 (b)
    
461,657
      
465,120
  
MGM Growth Properties Operating
               
  Partnership LP 4.00%, 04/25/2023 (b)
    
1,044,750
      
1,055,527
  
Mohegan Tribal Gaming Authority
               
  5.50%, 06/15/2018 (b)
    
1,514,444
      
1,517,473
  
Pinnacle Entertainment, Inc.
               
  3.75%, 04/28/2023 (b)
    
783,063
      
788,935
  
Scientific Games International, Inc.
               
  6.00%, 10/18/2020 (b)
    
2,455,921
      
2,466,850
  
Station Casinos, LLC 3.75%, 06/08/2023 (b)
    
723,188
      
729,063
  
             
11,280,612
  
General Industrial Manufacturing – 3.71%
                
Aclara Technologies, LLC
               
  6.75%, 08/17/2023 (b)
    
800,000
      
800,000
  
Cortes NP Acquisition Corp.
               
  6.00%, 09/30/2023 (b)(e)
    
960,000
      
931,200
  
Doosan Infracore International, Inc.
               
  4.50%, 05/28/2021 (b)
    
424,762
      
430,071
  
Filtration Group Corp.
               
  4.25%, 11/20/2020 (b)
    
910,730
      
916,081
  
Gardner Denver, Inc.
               
  4.25%, 07/30/2020 (b)
    
1,422,321
      
1,380,639
  
Manitowoc Foodservice, Inc.
               
  5.75%, 03/03/2023 (b)
    
928,205
      
941,933
  
MTS Systems Corp. 5.00%, 07/05/2023 (b)
    
915,000
      
923,583
  


The accompanying notes are an integral part of these financial statements.

22

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
General Industrial Manufacturing – 3.71% – Continued
            
North American Lifting Holdings, Inc.
           
  5.50%, 11/27/2020 (b)
  
$
988,800
    
$
805,872
  
Penn Engineering & Manufacturing Corp.
               
  4.00%, 08/30/2021 (b)(e)
    
630,000
      
631,733
  
Sensus USA, Inc. 6.50%, 04/05/2023 (b)
    
738,150
      
741,841
  
WTG Holdings III Corp.
               
  4.75%, 01/15/2021 (b)
    
1,337,367
      
1,340,709
  
             
9,843,662
  
Healthcare – 11.97%
                
Acadia Healthcare 3.75%, 02/22/2022 (b)
    
945,190
      
950,313
  
Air Medical Group Holdings, Inc.
               
  4.25%, 04/28/2022 (b)
    
1,061,935
      
1,054,305
  
Albany Molecular Research, Inc.
               
  5.75%, 07/16/2021 (b)
    
573,552
      
577,136
  
Alere, Inc. 4.25%, 06/18/2022 (b)
    
473,801
      
471,135
  
Avantor Performance Materials
               
  Holdings, Inc. – Delayed Draw Term Loan
               
  6.00%, 06/21/2022 (b)
    
116,048
      
116,556
  
Avantor Performance Materials
               
  Holdings, Inc. – Incremental Term Loan
               
  6.00%, 06/21/2022 (b)
    
453,952
      
455,938
  
BSN Medical International
               
  Holding GmbH & Co. KG
               
  4.00%, 08/28/2019 (b)
    
296,806
      
296,929
  
Catalent Pharma Solutions
               
  4.25%, 05/20/2021 (b)
    
1,309,279
      
1,320,127
  
CHG Healthcare Services, Inc.
               
  4.75%, 06/07/2023 (b)
    
422,875
      
427,434
  
CHS/Community Health Systems, Inc.
                
  3.75%, 12/31/2019 (b)
    
224,124
      
220,342
  
  4.00%, 01/27/2021 (b)
    
610,000
      
600,127
  
Concentra, Inc. 4.005%, 06/01/2022 (b)(e)
    
298,889
      
298,889
  
Concordia Healthcare Corp.
               
  5.25%, 10/21/2021 (b)
    
569,693
      
510,667
  
Endo Financial, LLC/Endo Finco, Inc.
               
  3.75%, 09/26/2022 (b)
    
1,538,375
      
1,536,875
  


The accompanying notes are an integral part of these financial statements.

23

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Healthcare – 11.97% – Continued
            
Envision Healthcare Corp.
           
  4.50%, 10/28/2022 (b)
  
$
565,725
    
$
569,060
  
ExamWorks Group, Inc.
               
  4.75%, 07/27/2023 (b)
    
310,000
      
312,908
  
Greatbatch Ltd. 5.25%, 10/27/2022 (b)
    
828,738
      
819,588
  
HC Group Holdings III, Inc.
               
  6.00%, 04/07/2022 (b)
    
688,050
      
695,791
  
HCA, Inc. 3.588%, 02/09/2024 (b)
    
540,000
      
545,889
  
inVentiv Health, Inc.
               
  4.75%, 11/09/2023 (b)(e)
    
1,075,000
      
1,079,477
  
Mallinckrodt International Finance S.A.
               
  3.588%, 03/19/2021 (b)
    
680,200
      
681,159
  
MPH Acquisition Holdings, LLC
               
  5.00%, 06/07/2023 (b)
    
2,884,669
      
2,924,779
  
NMSC Holdings, Inc.
               
  6.00%, 04/19/2023 (b)
    
442,528
      
448,059
  
One Call Medical/Opal Acquisition, Inc.
               
  5.00%, 11/27/2020 (b)
    
849,674
      
797,100
  
Patheon, Inc. 4.25%, 03/11/2021 (b)
    
2,965,503
      
2,966,111
  
Pharmaceutical Product Development, LLC
               
  4.25%, 08/18/2022 (b)
    
1,385,112
      
1,391,795
  
Phibro Animal Health Corp.
               
  4.00%, 04/16/2021 (b)
    
439,875
      
439,325
  
Press Ganey Holdings, Inc.
                
  4.25%, 10/21/2023 (b)(e)
    
640,000
      
636,800
  
  8.25%, 10/21/2024 (b)(e)
    
550,000
      
544,500
  
Quintiles Transnational Corp.
               
  3.388%, 05/12/2022 (b)
    
926,249
      
927,601
  
RPI Finance Trust 3.588%, 11/09/2020 (b)
    
1,035,981
      
1,042,083
  
Sterigenics-Nordion Holdings, LLC
               
  4.25%, 05/15/2022 (b)
    
769,173
      
773,019
  
Surgical Care Affiliates, Inc.
               
  4.25%, 03/17/2022 (b)
    
792,011
      
798,450
  
Team Health, Inc.
               
  3.837%, 11/23/2022 (b)
    
776,100
      
781,440
  


The accompanying notes are an integral part of these financial statements.

24

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Healthcare – 11.97% – Continued
            
Valeant Pharmaceuticals International, Inc.
            
  4.28%, 10/20/2018 (b)
  
$
60,580
    
$
60,618
  
  5.00%, 02/13/2019 (b)
    
329,990
      
330,737
  
  5.25%, 12/11/2019 (b)
    
280,000
      
280,776
  
  5.25%, 08/05/2020 (b)
    
1,013,427
      
1,016,670
  
  5.50%, 04/01/2022 (b)
    
1,427,083
      
1,433,176
  
VCVH Holding Corp. 6.00%, 06/01/2023 (b)
    
648,375
      
645,947
  
             
31,779,631
  
Hotels – 0.34%
                
ESH Hospitality, Inc. 3.75%, 08/30/2023 (b)
    
895,000
      
902,751
  
                 
Leisure & Entertainment – 1.60%
                
CDS U.S. Intermediate Holdings, Inc.
               
  5.00%, 06/25/2022 (b)
    
990,000
      
992,678
  
Formula One Group 4.75%, 07/30/2021 (b)
    
2,466,427
      
2,473,789
  
UFC Holdings, LLC 5.00%, 08/18/2023 (b)
    
780,000
      
788,046
  
             
4,254,513
  
Media – Broadcast – 4.36%
                
Cumulus Media Holdings, Inc.
               
  4.25%, 12/23/2020 (b)
    
2,169,370
      
1,515,847
  
Hubbard Radio, LLC 4.25%, 05/27/2022 (b)
    
1,045,000
      
1,028,891
  
Ion Media Networks, Inc.
               
  4.75%, 12/18/2020 (b)
    
1,549,659
      
1,557,408
  
Media General, Inc. 4.00%, 07/31/2020 (b)
    
370,032
      
370,682
  
Mission Broadcasting, Inc.
               
  3.75%, 10/01/2020 (b)
    
670,165
      
673,851
  
Nexstar Broadcasting, Inc.
                
  3.75%, 10/01/2020 (b)
    
759,977
      
764,157
  
  4.00%, 09/26/2023 (b)(e)
    
1,745,000
      
1,755,540
  
Quincy Newspapers, Inc.
               
  5.506%, 11/02/2022 (b)
    
657,662
      
661,772
  
Tribune Media Co. 3.75%, 12/27/2020 (b)
    
1,481,250
      
1,495,366
  
Univision Communications, Inc.
               
  4.00%, 03/01/2020 (b)
    
1,739,607
      
1,744,913
  
             
11,568,427
  


The accompanying notes are an integral part of these financial statements.

25

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Media – Cable – 3.72%
            
Block Communications, Inc.
           
  4.088%, 11/05/2021 (b)
  
$
1,470,026
    
$
1,481,051
  
Charter Communications Operating LLC
               
  3.50%, 01/24/2023 (b)
    
918,941
      
926,022
  
CSC Holdings, LLC
                
  5.00%, 10/11/2022 (b)
    
698,250
      
701,232
  
  4.00%, 10/31/2024 (b)(e)
    
500,000
      
502,063
  
RCN Corp. 4.25%, 02/28/2020 (b)
    
708,406
      
710,032
  
Telenet Financing, LLC
               
  4.357%, 06/30/2024 (b)
    
725,000
      
732,207
  
UPC Financing Partnership
               
  4.08%, 08/31/2024 (b)
    
790,000
      
794,017
  
WaveDivision Holdings, LLC
               
  4.00%, 10/15/2019 (b)
    
1,156,507
      
1,159,519
  
WideOpenWest Finance, LLC
               
  4.50%, 08/19/2023 (b)
    
1,995,000
      
1,989,494
  
Ziggo B.V. – Term Loan B1
               
  3.652%, 01/15/2022 (b)
    
490,528
      
490,878
  
Ziggo B.V. – Term Loan B2
               
  3.652%, 01/15/2022 (b)
    
290,704
      
290,912
  
Ziggo B.V. – Term Loan B3
               
  3.701%, 01/15/2022 (b)
    
90,330
      
90,394
  
             
9,867,821
  
Media Diversified & Services – 3.76%
                
Ancestry.com, Inc. 5.00%, 08/29/2022 (b)
    
1,411,494
      
1,417,231
  
Catalina Marketing Corp.
               
  4.50%, 04/09/2021 (b)
    
1,039,576
      
947,964
  
Creative Artists Agency, LLC
               
  5.004%, 12/17/2021 (b)
    
273,625
      
275,906
  
EMI Music Publishing Group
               
  4.00%, 08/19/2022 (b)
    
569,568
      
572,240
  
IMG Worldwide, Inc.
               
  5.25%, 05/06/2021 (b)
    
2,208,986
      
2,221,963
  
Learfield Communications, Inc.
               
  4.25%, 10/09/2020 (b)
    
1,799,990
      
1,804,111
  
Match Group, Inc. 5.50%, 11/16/2022 (b)
    
536,250
      
540,106
  


The accompanying notes are an integral part of these financial statements.

26

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Media Diversified & Services – 3.76% – Continued
            
Nielsen Finance, LLC
           
  3.50%, 10/04/2023 (b)(e)
  
$
590,000
    
$
593,366
  
Warner Music Group
               
  3.75%, 07/01/2020 (b)
    
1,598,984
      
1,601,551
  
             
9,974,438
  
Metals & Mining Excluding Steel – 0.59%
                
Novelis, Inc. 4.072%, 06/02/2022 (b)
    
689,889
      
694,204
  
Westmoreland Coal Co.
               
  7.50%, 12/16/2020 (b)(e)
    
1,119,390
      
878,721
  
             
1,572,925
  
Non-Food & Drug Retailers – 3.50%
                
ABG Intermediate Holdings
               
  5.50%, 05/27/2021 (b)
    
1,270,545
      
1,273,721
  
Ascena Retail Group, Inc.
               
  5.25%, 08/21/2022 (b)
    
1,124,719
      
1,087,536
  
Harbor Freight Tools USA, Inc.
               
  4.00%, 08/16/2023 (b)
    
820,000
      
825,638
  
Jo-Ann Stores, LLC
               
  6.00%, 09/29/2023 (b)(e)
    
585,000
      
576,225
  
Michaels Stores, Inc.
               
  3.75%, 01/27/2023 (b)(e)
    
425,000
      
427,259
  
National Vision, Inc.
               
  4.00%, 03/12/2021 (b)
    
700,644
      
694,513
  
Neiman Marcus Group, Inc.
               
  4.25%, 10/23/2020 (b)
    
1,890,962
      
1,745,595
  
Petco Animal Supplies
               
  5.00%, 01/26/2023 (b)
    
786,050
      
795,329
  
PetSmart, Inc. 4.25%, 03/11/2022 (b)
    
1,851,563
      
1,857,432
  
             
9,283,248
  
Oil & Gas – 1.00%
                
American Energy – Marcellus, LLC
               
  8.50%, 08/04/2021 (b)(g)
    
1,204,382
      
112,911
  
Floatel Delaware, LLC
               
  6.00%, 06/29/2020 (b)
    
1,860,924
      
1,296,449
  


The accompanying notes are an integral part of these financial statements.

27

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Oil & Gas – 1.00% – Continued
            
HGIM Corp. 5.50%, 06/18/2020 (b)
  
$
1,511,334
    
$
955,919
  
Seadrill Partners, LLC
               
  4.00%, 02/21/2021 (b)
    
599,828
      
301,162
  
             
2,666,441
  
Packaging – 2.48%
                
Anchor Glass Container Corp.
               
  4.75%, 07/01/2022 (b)
    
462,675
      
466,242
  
Berry Plastics Corp. 3.50%, 02/10/2020 (b)
    
692,821
      
694,445
  
BWAY Intermediate Co., Inc.
               
  5.50%, 08/14/2020 (b)
    
571,965
      
576,040
  
Husky Injection Molding Systems Ltd.
               
  4.25%, 06/30/2021 (b)
    
528,894
      
528,857
  
Mauser U.S. Holdings, Inc.
                
  4.50%, 07/31/2021 (b)
    
604,454
      
605,303
  
  8.75%, 07/29/2022 (b)(e)
    
866,789
      
859,205
  
Reynolds Group Holdings, Inc.
               
  4.25%, 02/05/2023 (b)(e)
    
990,000
      
994,485
  
SIG Combibloc US Acquisition, Inc.
               
  4.00%, 03/11/2022 (b)(e)
    
1,060,000
      
1,062,799
  
Signode Industrial Group Lux S.A.
               
  3.75%, 04/30/2021 (b)
    
789,112
      
788,867
  
             
6,576,243
  
Printing & Publishing – 1.43%
                
Cengage Learning, Inc.
               
  5.25%, 06/07/2023 (b)
    
498,750
      
499,196
  
Harland Clarke Holdings Corp.
                
  6.993%, 08/02/2019 (b)
    
372,500
      
367,067
  
  7.00%, 12/31/2019 (b)
    
355,875
      
349,736
  
LSC Communications, Inc.
               
  7.00%, 09/26/2022 (b)(e)
    
815,000
      
804,813
  
McGraw Hill Global Education Holdings, LLC
               
  5.00%, 05/04/2022 (b)
    
907,725
      
914,986
  
Tribune Publishing Co.
               
  5.75%, 08/04/2021 (b)
    
865,642
      
863,478
  
             
3,799,276
  


The accompanying notes are an integral part of these financial statements.

28

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Steel Producers & Products – 0.46%
            
MRC Global (US), Inc.
           
  5.00%, 11/08/2019 (b)
  
$
704,692
    
$
689,718
  
JMC Steel
                
  6.00%, 06/14/2021 (b)
    
523,688
      
529,909
  
             
1,219,627
  
Support – Services – 11.37%
                
Abb Con-Cise Optical Group, LLC
               
  6.004%, 06/14/2023 (b)
    
330,000
      
333,713
  
Access CIG, LLC 6.004%, 10/18/2021 (b)
    
1,228,143
      
1,227,221
  
Advantage Sales & Marketing, Inc.
               
  4.25%, 07/23/2021 (b)
    
1,583,739
      
1,567,078
  
Aramark Corp. 3.25%, 02/24/2021 (b)
    
982,487
      
989,860
  
Asurion Incremental 5.00%, 05/24/2019 (b)
    
1,355,475
      
1,361,975
  
Asurion, LLC 5.00%, 08/04/2022 (b)
    
1,244,937
      
1,253,029
  
Brand Energy & Infrastructure Services, Inc.
               
  4.75%, 11/26/2020 (b)
    
1,645,933
      
1,629,474
  
Brickman Group Ltd., LLC
               
  4.00%, 12/18/2020 (b)
    
2,798,381
      
2,797,513
  
Camelot Finance LP
               
  4.75%, 09/15/2023 (b)(e)
    
1,705,000
      
1,709,689
  
Coinmach Corp. 4.253%, 11/14/2019 (b)
    
2,137,244
      
2,131,099
  
Garda World Security Corp. –
               
  Delayed Draw Term Loan
               
  4.004%, 11/06/2020 (b)
    
161,002
      
159,995
  
Garda World Security Corp. – Term Loan B
               
  4.004%, 11/06/2020 (b)
    
629,370
      
625,436
  
Hertz Corp. 3.50%, 06/30/2023 (b)
    
1,182,038
      
1,194,106
  
Information Resources, Inc.
               
  4.750%, 09/30/2020
    
891,833
      
896,297
  
Learning Care Group, Inc.
               
  5.00%, 05/05/2021 (b)
    
524,345
      
525,494
  
Moneygram International, Inc.
               
  4.25%, 03/27/2020 (b)
    
818,025
      
795,530
  
Pods, Inc., LLC 4.50%, 02/02/2022 (b)
    
1,477,479
      
1,487,326
  
Renaissance Learning, Inc.
               
  4.50%, 04/09/2021 (b)
    
1,202,739
      
1,200,737
  


The accompanying notes are an integral part of these financial statements.

29

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Support – Services – 11.37% – Continued
            
Safway Group Holding, LLC
           
  5.75%, 08/19/2023 (b)
  
$
775,000
    
$
781,297
  
Sedgwick Claims Management Services
               
  3.75%, 03/01/2021 (b)
    
1,213,319
      
1,207,004
  
SiteOne Supply Holding, LLC
               
  6.25%, 04/29/2022 (b)
    
402,478
      
406,754
  
The ServiceMaster Co., LLC
               
  4.25%, 07/01/2021 (b)
    
1,551,256
      
1,568,848
  
TransUnion, LLC 3.588%, 04/09/2021 (b)
    
1,664,228
      
1,671,975
  
TriMark USA/TMK Hawk Parent Corp.
               
  5.25%, 10/01/2021 (b)
    
323,979
      
325,801
  
USAGM HoldCo, LLC 5.50%, 07/28/2022 (b)
    
521,523
      
523,479
  
USAGM HoldCo, LLC – Term DD
               
  5.50%, 07/28/2022 (b)
    
103,477
      
103,865
  
West Corp.
                
  3.50%, 06/17/2021 (b)
    
274,313
      
275,769
  
  3.838%, 06/19/2023 (b)
    
922,688
      
927,993
  
WEX, Inc. 4.25%, 07/01/2023 (b)
    
488,775
      
495,290
  
             
30,173,647
  
Technology – 6.57%
                
Avago Technologies Cayman Finance Ltd.
               
  3.524%, 02/01/2023 (b)
    
1,771,138
      
1,794,136
  
BMC Foreign Holding Co.
               
  5.00%, 09/10/2020 (b)(e)
    
398,856
      
386,725
  
BMC Software Finance, Inc.
               
  5.00%, 09/10/2020 (b)
    
413,915
      
400,140
  
Cavium, Inc. 3.75%, 08/16/2022 (b)
    
665,000
      
673,313
  
Dell International, LLC
               
  4.00%, 09/04/2023 (b)
    
1,600,000
      
1,611,359
  
Diebold, Inc. 5.25%, 11/06/2023 (b)
    
790,000
      
799,713
  
First Data Corp. 4.525%, 03/24/2021 (b)
    
370,326
      
373,488
  
Global Payments, Inc.
               
  4.024%, 04/22/2023 (b)
    
523,688
      
529,841
  
Genesys Telecom
                
  4.00%, 02/10/2020 (b)
    
1,190,404
      
1,189,285
  
Infor (US), Inc. 3.75%, 06/03/2020 (b)
    
73,618
      
73,305
  


The accompanying notes are an integral part of these financial statements.

30

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Technology – 6.57% – Continued
            
Informatica Corp. 4.50%, 08/06/2022 (b)
  
$
693,000
    
$
675,963
  
JDA Software Group, Inc.
               
  4.50%, 10/31/2023 (b)(e)
    
565,000
      
566,413
  
Kronos, Inc. 4.50%, 10/30/2019 (b)
    
540,484
      
542,943
  
Landslide Holdings, Inc.
                
  5.50%, 09/30/2022 (b)
    
525,000
      
529,266
  
  9.50%, 09/18/2023 (b)(e)
    
354,000
      
353,115
  
Linxens France S.A. 5.00%, 07/11/2022 (b)
    
649,614
      
653,674
  
Mitel U.S. Holdings, Inc.
               
  5.50%, 04/29/2022 (b)
    
648,850
      
653,820
  
ON Semiconductor Corp.
               
  4.25%, 03/31/2023 (b)(e)
    
780,000
      
784,668
  
Solarwinds Holdings, Inc.
               
  5.50%, 02/03/2023 (b)
    
1,236,900
      
1,250,506
  
Solera LLC 5.75%, 03/03/2023 (b)
    
646,750
      
654,362
  
Sybil Software, LLC
               
  5.00%, 08/03/2022 (b)(e)
    
820,000
      
825,896
  
TTM Technologies, Inc.
               
  5.103%, 05/31/2021 (b)
    
390,000
      
392,925
  
VF Holdings Corp. 4.75%, 06/17/2023 (b)
    
565,000
      
568,045
  
Western Digital Corp. 4.50%, 04/29/2023 (b)
    
658,350
      
666,102
  
Zebra Technologies Corp.
               
  4.089%, 10/27/2021 (b)
    
483,376
      
489,993
  
             
17,438,996
  
Telecommunications – Satellites – 0.24%
                
Xplornet Communications, Inc.
               
  7.00%, 09/30/2021 (b)(e)
    
625,000
      
627,344
  
                 
Telecommunications – Wireline/Wireless – 2.40%
                
Communications Sales & Leasing, Inc.
               
  5.00%, 10/24/2022 (b)
    
1,283,750
      
1,292,094
  
Consolidated Communications, Inc.
               
  4.00%, 10/05/2023 (b)(e)
    
315,000
      
317,462
  
Equinix, Inc. 4.00%, 01/09/2023 (b)
    
497,500
      
502,475
  
Level 3 Financing, Inc.
               
  3.50%, 05/31/2022 (b)
    
689,082
      
693,882
  


The accompanying notes are an integral part of these financial statements.

31

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 87.14% – Continued
            
             
Telecommunications – Wireline/Wireless – 2.40% – Continued
            
Lightower Fiber Networks
           
  4.00%, 04/13/2020 (b)
  
$
1,563,436
    
$
1,568,814
  
Peak 10, Inc. 5.00%, 06/17/2021 (b)
    
557,912
      
560,701
  
SFR Group S.A. 5.002%, 01/15/2024 (b)
    
1,421,438
      
1,438,495
  
             
6,373,923
  
Transportation Excluding Air & Rail – 0.47%
                
XPO Logistics, Inc. 4.25%, 10/30/2021 (b)
    
1,236,900
      
1,245,923
  
                 
Utilities – Electric – 2.24%
                
Calpine Corp. 3.590%, 05/27/2022 (b)
    
1,580,000
      
1,586,731
  
Dynegy, Inc. 5.00%, 06/27/2023 (b)
    
550,000
      
555,123
  
Eastern Power, LLC 5.00%, 10/02/2021 (b)
    
1,114,054
      
1,126,727
  
Sandy Creek Energy Associates, LP
               
  5.00%, 11/09/2020 (b)
    
1,125,641
      
954,690
  
Texas Competitive Electric Holdings –
               
  Term Loan B 5.00%, 10/31/2017 (b)
    
1,384,286
      
1,396,523
  
Texas Competitive Electric Holdings –
               
  Term Loan C 5.00%, 10/31/2017 (b)
    
315,714
      
318,505
  
             
5,938,299
  
Utilities – Gas – 0.02%
                
Southcross Holdings Borrower LP
               
  3.50%, 04/13/2023 (b)
    
56,631
      
47,994
  
TOTAL BANK LOANS
               
  (Cost $232,464,428)
            
231,263,110
  
                 
CORPORATE BONDS – 12.38%
                
                 
Aerospace & Defense – 0.44%
                
Bombardier, Inc. 7.50%, 03/15/2018 (c)(d)
    
500,000
      
530,000
  
TransDigm, Inc. 6.00%, 07/15/2022
    
600,000
      
636,000
  
             
1,166,000
  
Automotive – 0.20%
                
ZF North America Capital, Inc.
               
  4.75%, 04/29/2025 (d)
    
500,000
      
526,875
  


The accompanying notes are an integral part of these financial statements.

32

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 12.38% – Continued
            
             
Beverage & Food – 0.49%
            
Post Holdings, Inc. 6.75%, 12/01/2021 (d)
  
$
1,200,000
    
$
1,288,500
  
                 
Environmental – 0.23%
                
Covanta Holding Corp. 7.25%, 12/01/2020
    
600,000
      
619,650
  
                 
Finance – Banking – 1.55%
                
Ally Financial, Inc.
                
  5.50%, 02/15/2017
    
800,000
      
810,732
  
  4.75%, 09/10/2018
    
1,300,000
      
1,348,750
  
CIT Group, Inc. 6.625%, 04/01/2018 (d)
    
1,850,000
      
1,967,937
  
             
4,127,419
  
General Industrial Manufacturing – 0.58%
                
CNH Industrial Capital LLC
               
  3.875%, 07/16/2018
    
800,000
      
816,000
  
SPX Corp. 5.625%, 08/15/2024 (d)
    
700,000
      
712,250
  
             
1,528,250
  
Healthcare – 0.76%
                
MPT Operating Partnership LP /
               
  MPT Finance Corp. 6.375%, 02/15/2022
    
900,000
      
941,625
  
Tenet Healthcare Corp. 6.25%, 11/01/2018
    
1,000,000
      
1,072,500
  
             
2,014,125
  
Leisure & Entertainment – 0.23%
                
Viking Cruises Ltd.
               
  8.50%, 10/15/2022 (c)(d)
    
600,000
      
618,000
  
                 
Media – Cable – 2.08%
                
Cablevision Systems Corp.
               
  8.625%, 09/15/2017
    
2,500,000
      
2,621,874
  
Cequel Communications Holdings I
               
  LLC/Cequel Capital Corp.
               
  6.375%, 09/15/2020 (d)
    
650,000
      
671,938
  
DISH DBS Corp. 4.25%, 04/01/2018
    
1,500,000
      
1,545,000
  
Virgin Media Finance PLC
               
  6.00%, 10/15/2024 (c)(d)
    
650,000
      
675,194
  
             
5,514,006
  


The accompanying notes are an integral part of these financial statements.

33

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 12.38% – Continued
            
             
Media Diversified & Services – 0.21%
            
Clear Channel Worldwide Holdings, Inc.
           
  7.625%, 03/15/2020
  
$
550,000
    
$
547,938
  
                 
Packaging – 0.89%
                
Ardagh Packaging Finance PLC /
               
  Ardagh Holdings USA, Inc.
                
  3.85%, 12/15/2019 (b)(c)(d)
    
900,000
      
914,670
  
  4.067%, 05/15/2021 (b)(c)(d)
    
400,000
      
407,000
  
Reynolds Group Holdings, Inc.
               
  6.875%, 02/15/2021
    
1,000,000
      
1,037,502
  
             
2,359,172
  
Real Estate Investment Trusts – 0.31%
                
VEREIT Operating Partnership LP
               
  4.125%, 06/01/2021
    
800,000
      
830,000
  
                 
Support – Services – 1.06%
                
Hertz Corp. 6.75%, 04/15/2019
    
1,400,000
      
1,432,536
  
United Rentals North America, Inc.
               
  7.625%, 04/15/2022
    
600,000
      
642,000
  
West Corp. 4.75%, 07/15/2021 (d)
    
725,000
      
748,563
  
             
2,823,099
  
Technology – 0.83%
                
Diamond 1 Finance Corp / Diamond 2
               
  Finance Corp. 4.420%, 06/15/2021 (d)
    
750,000
      
784,656
  
First Data Corp. 6.75%, 11/01/2020 (d)
    
500,000
      
517,596
  
NCR Corp. 4.625%, 02/15/2021
    
900,000
      
912,375
  
             
2,214,627
  
Telecommunications – Satellites – 0.76%
                
Telesat Canada/Telesat, LLC
               
  6.00%, 05/15/2017 (c)(d)
    
2,000,000
      
2,005,000
  
                 
Telecommunications – Wireline/Wireless – 1.43%
                
Sprint Communications, Inc.
               
  9.00%, 11/15/2018 (d)
    
650,000
      
719,875
  
T-Mobile USA, Inc. 6.464%, 04/28/2019
    
2,500,000
      
2,549,999
  


The accompanying notes are an integral part of these financial statements.

34

SHENKMAN FLOATING RATE HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 12.38% – Continued
            
             
Telecommunications – Wireline/Wireless – 1.43% – Continued
            
Wind Acquisition Finance S.A.
           
  6.50%, 04/30/2020 (c)(d)
  
$
500,000
    
$
525,000
  
             
3,794,874
  
Utilities – Electric – 0.33%
                
NRG Energy, Inc. 7.625%, 01/15/2018
    
827,000
      
884,890
  
TOTAL CORPORATE BONDS
               
  (Cost $32,270,860)
            
32,862,425
  
                 
   
Shares
          
SHORT-TERM INVESTMENTS – 5.43%
                
                 
Money Market Fund – 5.43%
                
Fidelity Government Portfolio –
               
  Institutional Class, 0.27% (b)(f)
    
14,402,769
      
14,402,769
  
TOTAL SHORT-TERM INVESTMENTS
               
  (Cost $14,402,769)
            
14,402,769
  
Total Investments (Cost $281,125,737) – 105.10%
            
278,923,456
  
Liabilities in Excess of Other Assets  – (5.10%)
            
(13,544,631
)
TOTAL NET ASSETS – 100.00%
          
$
265,378,825
  

Percentages are stated as a percent of net assets.
(a)
Non-Income producing security.
(b)
Variable rate securities, the coupon rate shown is the effective interest rate as of September 30, 2016.
(c)
U.S. traded security of a foreign issuer.
(d)
Rule 144a Security which is restricted as to resale to institutional investors.  The Fund Advisor has deemed this security to be liquid based upon procedures approved by the Board of Trustees.  As of September 30, 2016 the value of these investments was $13,613,054 or 5.13% of net assets.
(e)
Illiquid security, a security may be considered illiquid if it lacks a readily available market.  As of September 30, 2016 the value of these investments was $24,817,524 or 9.35% of net assets.
(f)
Rate shown is the 7-day yield as of September 30, 2016.
(g)
Represents a security in default.
(h)
Security valued at fair value using methods determined in good faith by or at the direction of the Board of Trustees of Advisors Series Trust.

 
The accompanying notes are an integral part of these financial statements.

35

SHENKMAN SHORT DURATION HIGH INCOME FUND

PORTFOLIO ALLOCATION
September 30, 2016
 



 
 
TOP TEN HOLDINGS
% Net Assets
HD Supply, Inc., 7.50%, 07/15/2020
1.01%
Cequel Communications Holdings I, LLC/
  
  Cequel Capital Corp, 6.375%, 09/15/2020
0.96%
Level 3 Financing, Inc., 6.125%, 01/15/2021
0.92%
Lynx I Corp., 5.375%, 04/15/2021
0.87%
ViaSat, Inc., 6.875%06/15/2020
0.84%
Hertz Corp., 6.75%, 04/15/2019
0.84%
Match Group, Inc., 6.75%, 12/15/2022
0.83%
First Data Corp., 6.75%, 11/01/2020
0.83%
Hughes Satellite Systems Corp., 6.50%, 06/15/2019
0.80%
IMS Health, Inc., 6.00%, 11/01/2020
0.79%


The portfolio’s holdings and allocations are subject to change, and exclude short term investments. The percentages are of total net assets as of September 30, 2016.
 

36

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 15.58%
            
             
Aerospace & Defense – 1.01%
            
B/E Aerospace, Inc.
           
  3.787%, 12/16/2021 (a)
  
$
900,000
    
$
911,673
  
CAMP International Holding Co.
               
  4.75%, 08/18/2023 (a)(d)
    
1,000,000
      
1,000,750
  
TransDigm, Inc. 3.794%, 02/28/2020 (a)
    
494,859
      
495,923
  
             
2,408,346
  
Automotive – 0.01%
                
The Goodyear Tire & Rubber Co.
               
  3.86%, 04/30/2019 (a)
    
25,000
      
25,254
  
                 
Beverage & Food – 0.61%
                
AdvancePierre Foods, Inc.
               
  4.50%, 06/02/2023 (a)
    
758,077
      
765,373
  
Allflex Holdings III, Inc.
               
  4.25%, 07/17/2020 (a)
    
687,595
      
687,021
  
             
1,452,394
  
Chemicals – 0.56%
                
Nexeo Solutions, LLC
               
  5.25%, 06/09/2023 (a)
    
897,750
      
904,066
  
Orion Engineered Carbons
               
  4.00%, 07/25/2021 (a)
    
425,000
      
426,927
  
             
1,330,993
  
Consumer Products – 0.32%
                
NBTY, Inc. 5.00%, 05/05/2023 (a)(c)
    
748,125
      
752,662
  
                 
Environmental – 1.06%
                
Advanced Disposal Services, Inc.
               
  3.75%, 10/09/2019 (a)
    
900,000
      
902,110
  
Waste Industries USA, Inc.
               
  3.50%, 02/27/2020 (a)
    
492,500
      
495,347
  
Wheelabrator Technologies – Term Loan
               
  B (Second Lien) 5.00%, 12/17/2021 (a)
    
1,089,669
      
1,080,815
  
Wheelabrator Technologies – Term Loan C
               
  5.00%, 12/17/2021 (a)
    
48,799
      
48,403
  
             
2,526,675
  


The accompanying notes are an integral part of these financial statements.

37

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 15.58% – Continued
            
             
Finance – Insurance – 0.40%
            
HUB International Ltd.
           
  4.00%, 10/02/2020 (a)
  
$
492,443
    
$
493,327
  
National Financial Partners Corp.
               
  4.50%, 07/01/2020 (a)
    
442,110
      
443,722
  
             
937,049
  
Finance – Services – 0.42%
                
AlixPartners LLP 4.50%, 07/28/2022 (a)
    
792,000
      
794,475
  
Virtu Financial 5.25%, 11/8/2019 (a)
    
192,199
      
193,701
  
             
988,176
  
Food & Drug Retailers – 0.24%
                
BJ’s Wholesale Club, Inc.
               
  4.50%, 09/26/2019 (a)
    
576,734
      
578,897
  
                 
Gaming – 0.93%
                
Amaya B.V. 5.00%, 08/01/2021 (a)
    
836,797
      
837,843
  
Aristocrat International Pty Ltd.
               
  3.50%, 10/20/2021 (a)
    
461,538
      
463,888
  
Station Casinos, LLC
               
  3.75%, 06/08/2023 (a)
    
897,750
      
905,044
  
             
2,206,775
  
General Industrial Manufacturing – 0.41%
                
Gardner Denver, Inc. 4.25%, 07/30/2020 (a)
    
194,000
      
188,315
  
Sensus USA, Inc. 6.50%, 04/05/2023 (a)
    
498,750
      
501,244
  
WTG Holdings III Corp.
               
  4.75%, 01/15/2021 (a)
    
291,750
      
292,479
  
             
982,038
  
Healthcare – 2.13%
                
Acadia Healthcare 3.75%, 02/11/2022 (a)
    
795,949
      
800,263
  
Air Medical Group Holdings, Inc.
               
  4.25%, 04/28/2022 (a)
    
746,222
      
740,860
  
MPH Acquisition Holdings, LLC
               
  5.00%, 06/07/2023 (a)
    
1,339,481
      
1,358,107
  
Patheon, Inc. 4.25%, 03/11/2021 (a)(d)
    
250,000
      
250,051
  


The accompanying notes are an integral part of these financial statements.

38

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 15.58% – Continued
            
             
Healthcare – 2.13% – Continued
            
Pharmaceutical Product Development, LLC
           
  4.25%, 08/18/2022 (a)
  
$
994,962
    
$
999,763
  
Team Health, Inc. 3.838%, 11/23/2022 (a)
    
895,500
      
901,661
  
             
5,050,705
  
Leisure & Entertainment – 0.36%
                
Formula One Group
               
  4.75%, 07/30/2021 (a)(d)
    
850,000
      
852,537
  
                 
Media – Broadcast – 0.54%
                
Cumulus Media Holdings, Inc.
               
  4.25%, 12/23/2020 (a)
    
400,000
      
279,500
  
Univision Communications, Inc.
               
  4.00%, 03/01/2020 (a)
    
992,057
      
995,082
  
             
1,274,582
  
Media – Cable – 0.42%
                
WideOpenWest Finance, LLC
               
  4.50%, 08/19/2023 (a)
    
1,000,000
      
997,240
  
                 
Media Diversified & Services – 0.61%
                
IMG Worldwide, Inc. 5.25%, 05/06/2021 (a)
    
1,433,045
      
1,441,464
  
                 
Non-Food & Drug Retailers – 0.25%
                
PetSmart, Inc. 4.25%, 03/10/2022 (a)
    
596,977
      
598,870
  
                 
Packaging – 0.58%
                
Husky Injection Moldings Systems Ltd.
               
  4.25%, 06/30/2021 (a)
    
639,336
      
639,291
  
Mauser Group 4.50%, 07/31/2021 (a)
    
343,000
      
343,482
  
Signode Industrial Group Lux S.A.
               
  3.75%, 05/01/2021 (a)
    
403,141
      
403,017
  
             
1,385,790
  
Printing & Publishing – 0.17%
                
McGraw Hill Global Education Holdings, LLC
               
  5.00%, 05/04/2022 (a)
    
399,000
      
402,192
  


The accompanying notes are an integral part of these financial statements.

39

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 15.58% – Continued
            
             
Steel Producers & Products – 0.21%
            
Zekelman Industries, Inc.
           
  6.00%, 06/14/2021 (a)
  
$
498,750
    
$
504,675
  
                 
Support – Services – 2.03%
                
Advantage Sales & Marketing, Inc.
               
  4.25%, 07/25/2021 (a)
    
740,592
      
732,801
  
Asurion, LLC
                
  5.00%, 05/24/2019 (a)
    
197,820
      
198,768
  
  5.00%, 08/04/2022 (a)
    
558,883
      
562,516
  
Camelot Finance LP
               
  4.75%, 09/16/2023 (a)(d)
    
970,000
      
972,667
  
Coinmach Service Corp.
               
  4.253%, 11/08/2019 (a)
    
589,500
      
587,805
  
Garda World Security Corp.
                
  4.75%, 11/08/2020 (a)
    
211,910
      
210,586
  
  4.75%, 11/08/2020 (a)
    
36,811
      
36,581
  
Moneygram International, LLC
               
  4.25%, 03/28/2020 (a)
    
542,688
      
527,764
  
TransUnion, LLC 3.838%, 04/09/2021 (a)
    
994,906
      
999,537
  
             
4,829,025
  
Technology – 0.64%
                
Avago Technologies Cayman Finance Ltd.
               
  3.524%, 02/01/2023 (a)
    
674,719
      
683,480
  
Zebra Technologies Corp.
               
  4.089%, 10/27/2021 (a)
    
828,645
      
839,989
  
             
1,523,469
  
Telecommunications – Wireline/Wireless – 1.08%
                
Communications Sales & Leasing, Inc.
               
  5.00%, 10/24/2022 (a)
    
493,750
      
496,960
  
Equinix, Inc. 4.00%, 01/09/2023 (a)
    
895,500
      
904,455
  
Lightower Fiber Networks
               
  4.00%, 04/13/2020 (a)
    
145,125
      
145,624
  
SFR Group S.A. 5.002%, 01/15/2024 (a)
    
997,500
      
1,009,470
  
             
2,556,509
  


The accompanying notes are an integral part of these financial statements.

40

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
BANK LOANS – 15.58% – Continued
            
             
Transportation Excluding Air & Rail – 0.59%
            
XPO Logistics, Inc.
           
  4.25%, 10/30/2021 (a)
  
$
1,396,500
    
$
1,406,688
  
TOTAL BANK LOANS
               
  (Cost $36,737,200)
            
37,013,005
  
                 
CORPORATE BONDS – 76.39%
                
                 
Aerospace & Defense – 1.22%
                
Bombardier, Inc.
                
  7.50%, 03/15/2018 (b)(c)
    
450,000
      
477,000
  
  5.50%, 09/15/2018 (b)(c)
    
500,000
      
510,000
  
Kratos Defense & Security Solutions, Inc.
               
  7.00%, 05/15/2019 (d)
    
108,000
      
100,980
  
Orbital ATK, Inc. 5.25%, 10/01/2021
    
725,000
      
755,813
  
TransDigm, Inc. 7.50%, 07/15/2021
    
1,000,000
      
1,060,625
  
             
2,904,418
  
Automotive – 2.40%
                
American Axle & Manufacturing, Inc.
               
  7.75%, 11/15/2019
    
600,000
      
682,500
  
General Motors Financial Company, Inc.
               
  4.75%, 08/15/2017
    
1,250,000
      
1,284,080
  
Goodyear Tire & Rubber Co/The
               
  7.00%, 05/15/2022
    
1,200,000
      
1,275,000
  
IHO Verwaltungs GmbH
               
  4.125%, 09/15/2021 (c)
    
375,000
      
379,688
  
Schaeffler Holding Finance B.V.
                
  6.875%, 08/15/2018 (b)(c)
    
196,970
      
200,929
  
  6.25%, 11/15/2019 (b)(c)
    
1,100,000
      
1,142,625
  
Sonic Automotive, Inc.
               
  7.00%, 07/15/2022
    
700,000
      
742,000
  
             
5,706,822
  
Beverage & Food – 1.22%
                
B&G Foods, Inc. 4.625%, 06/01/2021
    
600,000
      
621,000
  
Constellation Brands, Inc.
               
  7.25%, 05/15/2017
    
700,000
      
724,500
  


The accompanying notes are an integral part of these financial statements.

41

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Beverage & Food – 1.22% – Continued
            
Dean Foods Co. 6.90%, 10/15/2017
  
$
100,000
    
$
105,000
  
Post Holdings, Inc.
                
  6.75%, 12/01/2021 (c)
    
600,000
      
644,250
  
  6.00%, 12/15/2022 (c)
    
750,000
      
795,000
  
             
2,889,750
  
Building & Construction – 2.17%
                
Lennar Corp.
                
  4.75%, 12/15/2017
    
1,100,000
      
1,133,000
  
  4.125%, 12/01/2018
    
950,000
      
980,875
  
Standard Pacific Corp.
               
  8.375%, 05/15/2018
    
950,000
      
1,045,000
  
Toll Brothers Finance Corp.
               
  4.00%, 12/31/2018
    
750,000
      
779,063
  
TRI Pointe Group Inc / TRI Pointe
               
  Homes, Inc. 4.375%, 06/15/2019
    
1,175,000
      
1,214,656
  
             
5,152,594
  
Building Materials – 2.94%
                
American Builders & Contractors Supply
               
  Co, Inc. 5.625%, 04/15/2021 (c)
    
1,250,000
      
1,300,000
  
HD Supply, Inc. 7.50%, 07/15/2020
    
2,300,000
      
2,391,655
  
Standard Industries, Inc.
               
  5.125%, 02/15/2021 (c)
    
600,000
      
633,000
  
USG Corp.
                
  6.30%, 11/15/2016
    
400,000
      
401,914
  
  9.50%, 01/15/2018 (a)(e)
    
150,000
      
163,650
  
  7.875%, 03/30/2020 (c)
    
500,000
      
521,875
  
  5.875%, 11/01/2021 (c)
    
1,500,000
      
1,571,250
  
             
6,983,344
  
Consumer Products – 0.60%
                
ACCO Brands Corp. 6.75%, 04/30/2020
    
325,000
      
344,500
  
NBTY, Inc. 7.625%, 05/15/2021 (c)
    
525,000
      
538,030
  
Spectrum Brands, Inc.
               
  6.625%, 11/15/2022
    
500,000
      
542,500
  
             
1,425,030
  


The accompanying notes are an integral part of these financial statements.

42

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Environmental – 2.63%
            
Advanced Disposal Services, Inc.
           
  8.25%, 10/01/2020
  
$
1,553,000
    
$
1,632,591
  
Casella Waste Systems, Inc.
               
  7.75%, 02/15/2019 (d)
    
628,000
      
640,952
  
Clean Harbors, Inc. 5.25%, 08/01/2020
    
1,620,000
      
1,665,360
  
Covanta Holding Corp.
               
  7.25%, 12/01/2020
    
1,425,000
      
1,471,669
  
GFL Environmental, Inc.
               
  9.875%, 02/01/2021 (b)(c)
    
750,000
      
825,000
  
             
6,235,572
  
Finance – Banking – 3.40%
                
Ally Financial, Inc.
                
  5.50%, 02/15/2017
    
50,000
      
50,671
  
  6.25%, 12/01/2017
    
1,175,000
      
1,223,469
  
  4.75%, 09/10/2018
    
1,325,000
      
1,374,687
  
  3.50%, 01/27/2019
    
500,000
      
505,625
  
  4.125%, 03/30/2020
    
950,000
      
969,000
  
  4.25%, 04/15/2021
    
350,000
      
357,437
  
CIT Group, Inc.
                
  5.00%, 05/15/2017
    
700,000
      
714,000
  
  5.25%, 03/15/2018
    
950,000
      
992,750
  
  6.625%, 04/01/2018 (c)
    
732,000
      
778,665
  
  5.50%, 02/15/2019 (c)
    
750,000
      
795,938
  
Lincoln Finance, Ltd.
               
  7.375%, 04/15/2021 (b)(c)
    
300,000
      
324,750
  
             
8,086,992
  
Finance – Services – 3.24%
                
AerCap Aviation Solutions B.V.
               
  6.375%, 05/30/2017 (b)
    
950,000
      
976,818
  
AerCap Ireland Capital Ltd./AerCap Global
               
  Aviation Trust 4.25%, 07/01/2020 (b)
    
1,125,000
      
1,170,000
  
Aircastle Ltd.
                
  6.75%, 04/15/2017 (b)
    
950,000
      
970,262
  
  4.625%, 12/15/2018 (b)
    
800,000
      
836,000
  


The accompanying notes are an integral part of these financial statements.

43

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Finance – Services – 3.24% – Continued
            
International Lease Finance Corp.
            
  8.75%, 03/15/2017 (a)
  
$
100,000
    
$
102,989
  
  8.875%, 09/01/2017
    
800,000
      
849,000
  
  7.125%, 09/01/2018 (c)
    
225,000
      
246,093
  
  6.25%, 05/15/2019
    
675,000
      
733,219
  
Navient Corp.
                
  6.00%, 01/25/2017
    
250,000
      
252,694
  
  5.50%, 01/15/2019
    
600,000
      
610,500
  
Springleaf Finance Corp.
               
  6.90%, 12/15/2017
    
900,000
      
948,375
  
             
7,695,950
  
Food & Drug Retailers – 0.58%
                
Rite Aid Corp. 6.75%, 06/15/2021
    
1,300,000
      
1,373,368
  
                 
Gaming – 1.44%
                
Churchill Downs, Inc.
               
  5.375%, 12/15/2021
    
1,000,000
      
1,045,000
  
GLP Capital LP / GLP Financing II, Inc.
               
  4.375%, 04/15/2021
    
350,000
      
369,250
  
GLP Capital LP/GLP Financing II, Inc.
               
  4.375%, 11/01/2018
    
1,400,000
      
1,466,500
  
Isle of Capri Casinos, Inc.
               
  8.875%, 06/15/2020
    
500,000
      
528,750
  
             
3,409,500
  
General Industrial Manufacturing – 1.95%
                
Anixter, Inc. 5.625%, 05/01/2019
    
1,700,000
      
1,812,625
  
Case New Holland Industrial, Inc.
               
  7.875%, 12/01/2017
    
1,300,000
      
1,387,750
  
CNH Industrial America, LLC
               
  6.25%, 11/01/2016
    
675,000
      
677,151
  
CNH Industrial Capital LLC
               
  3.875%, 07/16/2018
    
750,000
      
765,000
  
             
4,642,526
  


The accompanying notes are an integral part of these financial statements.

44

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Healthcare – 8.89%
            
Alere, Inc. 7.25%, 07/01/2018
  
$
355,000
    
$
363,209
  
Capsugel S.A. 7.00%, 05/15/2019 (b)(c)
    
464,000
      
465,451
  
Centene Corp. 5.625%, 02/15/2021
    
1,150,000
      
1,221,875
  
CHS/Community Health Systems, Inc.
               
  5.125%, 08/15/2018
    
511,000
      
516,161
  
DaVita HealthCare Partners, Inc.
               
  5.75%, 08/15/2022
    
1,050,000
      
1,103,813
  
Endo Finance LLC / Endo Finco, Inc.
               
  7.25%, 01/15/2022 (c)(e)
    
1,100,000
      
1,061,500
  
Fresenius Medical Care US Finance, Inc.
               
  6.875%, 07/15/2017
    
950,000
      
990,375
  
HCA, Inc.
                
  3.75%, 03/15/2019
    
1,000,000
      
1,036,250
  
  4.25%, 10/15/2019
    
1,550,000
      
1,619,750
  
  6.50%, 02/15/2020
    
1,000,000
      
1,110,000
  
IMS Health, Inc. 6.00%, 11/01/2020 (c)
    
1,850,000
      
1,878,906
  
LifePoint Health, Inc. 5.50%, 12/01/2021
    
350,000
      
365,750
  
Mallinckrodt International Finance S.A.
                
  3.50%, 04/15/2018 (b)
    
1,025,000
      
1,028,844
  
  4.875%, 04/15/2020 (b)(c)
    
450,000
      
461,250
  
MPT Operating Partnership LP / MPT
               
  Finance Corp. 6.375%, 02/15/2022
    
1,350,000
      
1,412,438
  
Mylan NV 3.00%, 12/15/2018 (b)(c)
    
550,000
      
562,424
  
Sabra Health Care LP/Sabra Capital Corp.
               
  5.50%, 02/01/2021
    
300,000
      
314,625
  
Service Corp. International
               
  7.625%, 10/01/2018
    
175,000
      
195,781
  
Tenet Healthcare Corp.
                
  6.25%, 11/01/2018
    
600,000
      
643,500
  
  5.00%, 03/01/2019
    
250,000
      
245,625
  
  4.35%, 06/15/2020 (a)
    
600,000
      
606,060
  
  6.00%, 10/01/2020
    
450,000
      
477,000
  
Universal Health Services, Inc.
               
  4.75%, 08/01/2022 (c)
    
1,000,000
      
1,035,000
  
VPI Escrow Corp. 6.375%, 10/15/2020 (c)
    
350,000
      
329,875
  
VPII Escrow Corp.
               
  6.75%, 08/15/2018 (b)(c)
    
1,650,000
      
1,666,500
  


The accompanying notes are an integral part of these financial statements.

45

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Healthcare – 8.89% – Continued
            
VRX Escrow Corp.
           
  5.375%, 03/15/2020 (b)(c)
  
$
425,000
    
$
395,250
  
             
21,107,212
  
Hotels – 0.46%
                
Hilton Worldwide Finance, LLC/
                
  Hilton Worldwide Finance Corp.
               
  5.625%, 10/15/2021
    
1,050,000
      
1,081,577
  
                 
Leisure & Entertainment – 0.72%
                
Cedar Fair LP/Canada’s Wonderland Co./
                
  Magnum Management Corp.
               
  5.25%, 03/15/2021
    
500,000
      
518,070
  
Live Nation Entertainment, Inc.
               
  7.00%, 09/01/2020 (c)
    
1,150,000
      
1,193,333
  
             
1,711,403
  
Media – Broadcast – 4.18%
                
Entercom Radio, LLC 10.50%, 12/01/2019
    
350,000
      
364,875
  
TEGNA, Inc.
                
  7.125%, 09/01/2018
    
83,000
      
83,208
  
  5.125%, 10/15/2019
    
1,650,000
      
1,695,375
  
LIN Television Corp. 6.375%, 01/15/2021
    
1,000,000
      
1,038,750
  
Nexstar Broadcasting, Inc.
                
  6.875%, 11/15/2020
    
725,000
      
754,906
  
  6.125%, 02/15/2022 (c)
    
550,000
      
570,625
  
Sinclair Television Group, Inc.
                
  5.375%, 04/01/2021
    
1,050,000
      
1,090,688
  
  6.125%, 10/01/2022
    
50,000
      
53,000
  
Sirius XM Radio, Inc.
                
  5.875%, 10/01/2020 (c)
    
1,450,000
      
1,492,601
  
  5.75%, 08/01/2021 (c)
    
950,000
      
994,911
  
TEGNA, Inc. 5.125%, 07/15/2020
    
600,000
      
620,250
  
Univision Communications, Inc.
               
  6.75%, 09/15/2022 (c)
    
1,100,000
      
1,171,500
  
             
9,930,689
  


The accompanying notes are an integral part of these financial statements.

46

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Media – Cable – 5.87%
            
Cablevision Systems Corp.
            
  8.625%, 09/15/2017
  
$
1,100,000
    
$
1,153,625
  
  7.75%, 04/15/2018
    
1,150,000
      
1,219,000
  
CCO Holdings LLC / CCO Holdings
               
  Capital Corp. 6.625%, 01/31/2022
    
1,000,000
      
1,050,000
  
Cequel Communications Holdings I LLC/
                
  Cequel Capital Corp.
               
  6.375%, 09/15/2020 (c)
    
2,200,000
      
2,274,250
  
CSC Holdings, LLC 7.625%, 07/15/2018
    
800,000
      
864,000
  
DISH DBS Corp.
                
  4.625%, 07/15/2017
    
900,000
      
918,000
  
  4.25%, 04/01/2018
    
950,000
      
978,500
  
  5.125%, 05/01/2020
    
425,000
      
442,000
  
Lynx I Corp. 5.375%, 04/15/2021 (b)(c)
    
1,980,000
      
2,071,575
  
Mediacom Broadband, LLC/Mediacom
               
  Broadband Corp. 5.50%, 04/15/2021
    
1,000,000
      
1,038,750
  
STARZ, LLC/STARZ Financial Corp.
               
  5.00%, 09/15/2019
    
1,250,000
      
1,268,456
  
UPCB Finance VI Ltd
               
  6.875%, 01/15/2022 (b)(c)
    
640,000
      
672,000
  
             
13,950,156
  
Media Diversified & Services – 3.47%
                
Activision Blizzard, Inc.
               
  5.625%, 09/15/2021 (c)
    
1,300,000
      
1,356,434
  
Ancestry.com, Inc. 11.00%, 12/15/2020
    
1,000,000
      
1,072,500
  
Clear Channel Worldwide Holdings, Inc.
               
  7.625%, 03/15/2020
    
500,000
      
498,125
  
Lamar Media Corp. 5.875%, 02/01/2022
    
900,000
      
941,625
  
Match Group, Inc. 6.75%, 12/15/2022
    
1,850,000
      
1,974,875
  
Nielsen Finance, LLC/Nielsen Finance Co.
                
  4.50%, 10/01/2020 (b)
    
600,000
      
614,250
  
  5.50%, 10/01/2021 (b)(c)
    
1,700,000
      
1,778,625
  
             
8,236,434
  
Metals & Mining Excluding Steel – 0.09%
                
Novelis, Inc. 8.375%, 12/15/2017 (b)
    
200,000
      
202,125
  


The accompanying notes are an integral part of these financial statements.

47

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Non-Food & Drug Retailers – 1.32%
            
Dollar Tree, Inc. 5.25%, 03/01/2020
  
$
800,000
    
$
834,000
  
Dufry Finance SCA
               
  5.50%, 10/15/2020 (b)(c)
    
1,000,000
      
1,027,548
  
Michaels Stores, Inc.
               
  5.875%, 12/15/2020 (c)
    
1,075,000
      
1,116,656
  
QVC, Inc. 3.125%, 04/01/2019
    
160,000
      
164,151
  
             
3,142,355
  
PACKAGING – 2.91%
                
Ardagh Packaging Finance PLC/
               
  Ardagh Holdings USA, Inc.
                
  3.85%, 12/15/2019 (a)(b)(c)
    
1,350,000
      
1,372,005
  
  4.067%, 05/15/2021 (a)(b)(c)
    
500,000
      
508,750
  
Ball Corp. 4.375%, 12/15/2020
    
350,000
      
375,375
  
Beverage Packaging Holdings
               
  Luxembourg II S.A./Beverage
               
  Packaging Holdings II Issuer, Inc.
               
  5.625%, 12/15/2016 (b)(c)
    
150,000
      
149,640
  
Greif, Inc. 6.75%, 02/01/2017
    
750,000
      
760,312
  
Reynolds Group Holdings, Inc.
               
  6.875%, 02/15/2021
    
1,300,000
      
1,348,753
  
Reynolds Group Issuer, Inc./Reynolds Group
               
  Issuer, LLC/Reynolds Group Issuer Lu
                
  5.75%, 10/15/2020
    
1,150,000
      
1,187,375
  
  4.127%, 07/15/2021 (a)(c)
    
650,000
      
661,375
  
Signode Industrial Group Lux S.A.
               
  6.375%, 05/01/2022 (c)
    
550,000
      
559,625
  
             
6,923,210
  
Real Estate Development & Management – 0.57%
                
Realogy Group, LLC 4.50%, 04/15/2019 (c)
    
1,300,000
      
1,358,500
  
                 
Real Estate Investment Trusts – 0.86%
                
VEREIT Operating Partnership LP
                
  3.00%, 02/06/2019
    
1,000,000
      
1,016,120
  
  4.125%, 06/01/2021
    
1,000,000
      
1,037,500
  
             
2,053,620
  


The accompanying notes are an integral part of these financial statements.

48

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Restaurants – 0.53%
            
1011778 B.C. Unlimited Liability Co./
            
  New Red Finance, Inc.
           
  6.00%, 04/01/2022 (b)(c)
  
$
1,200,000
    
$
1,260,000
  
                 
Support – Services – 5.97%
                
AECOM 5.750%, 10/15/2022
    
800,000
      
844,248
  
Alliance Data Systems Corp.
                
  5.25%, 12/01/2017 (c)
    
1,593,000
      
1,630,834
  
  6.375%, 04/01/2020 (c)
    
800,000
      
818,000
  
Aramark Services, Inc. 5.75%, 03/15/2020
    
411,000
      
422,559
  
Ashtead Capital, Inc. 6.50%, 07/15/2022 (c)
    
950,000
      
1,003,438
  
Avis Budget Car Rental, LLC/Avis Budget
               
  Finance, Inc. 3.592%, 12/01/2017 (a)
    
500,000
      
501,199
  
Carlson Wagonlit B.V.
               
  6.875%, 06/15/2019 (b)(c)
    
525,000
      
544,297
  
Hertz Corp.
                
  6.75%, 04/15/2019
    
1,950,000
      
1,995,318
  
  5.875%, 10/15/2020
    
1,600,000
      
1,654,000
  
Iron Mountain, Inc.
                
  6.00%, 10/01/2020 (c)
    
1,600,000
      
1,692,000
  
  4.375%, 06/01/2021 (c)
    
900,000
      
934,594
  
United Rentals North America, Inc.
               
  7.625%, 04/15/2022
    
550,000
      
588,500
  
West Corp. 4.75%, 07/15/2021 (c)
    
1,500,000
      
1,548,750
  
             
14,177,737
  
Technology – 3.50%
                
CDW LLC / CDW Finance Corp.
               
  6.00%, 08/15/2022
    
1,050,000
      
1,122,187
  
CommScope, Inc. 4.375%, 06/15/2020 (c)
    
225,000
      
232,312
  
Dell, Inc. 5.65%, 04/15/2018
    
500,000
      
523,750
  
Diamond 1 Finance Corp /
               
  Diamond 2 Finance Corp.
                
  4.42%, 06/15/2021 (c)
    
500,000
      
523,104
  
  5.875%, 06/15/2021 (c)
    
500,000
      
531,450
  
First Data Corp. 6.75%, 11/01/2020 (c)
    
1,900,000
      
1,966,863
  
NCR Corp. 4.625%, 02/15/2021
    
950,000
      
963,063
  


The accompanying notes are an integral part of these financial statements.

49

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Technology – 3.50% – Continued
            
Nuance Communications, Inc.
           
  5.375%, 08/15/2020 (c)
  
$
600,000
    
$
616,500
  
NXP B.V./NXP Funding, LLC
                
  7.875%, 05/15/2021 (b)(c)
    
728,000
      
750,750
  
  4.125%, 06/01/2021 (b)(c)
    
1,000,000
      
1,073,750
  
             
8,303,729
  
Telecommunications – Satellites – 2.70%
                
Hughes Satellite Systems Corp.
                
  6.50%, 06/15/2019
    
1,723,000
      
1,890,993
  
  7.625%, 06/15/2021
    
1,050,000
      
1,123,500
  
Telesat Canada/Telesat, LLC
               
  6.00%, 05/15/2017 (b)(c)
    
1,400,000
      
1,403,500
  
ViaSat, Inc. 6.875%, 06/15/2020
    
1,925,000
      
1,995,984
  
             
6,413,977
  
Telecommunications – Wireline/Wireless – 6.24%
                
CenturyLink, Inc. 6.00%, 04/01/2017
    
325,000
      
332,719
  
CyrusOne LP/CyrusOne Finance Corp.
               
  6.375%, 11/15/2022
    
700,000
      
744,843
  
DuPont Fabros Technology LP
               
  5.875%, 09/15/2021
    
850,000
      
889,844
  
Frontier Communications Corp.
               
  8.25%, 04/15/2017
    
525,000
      
547,706
  
Level 3 Financing, Inc.
                
  4.762%, 01/15/2018 (a)
    
150,000
      
150,656
  
  6.125%, 01/15/2021
    
2,100,000
      
2,181,375
  
SBA Communications Corp.
               
  5.625%, 10/01/2019
    
1,759,000
      
1,808,481
  
SFR Group S.A. 6.00%, 05/15/2022
    
650,000
      
665,437
  
Sprint Communications, Inc.
                
  8.375%, 08/15/2017
    
800,000
      
834,000
  
  9.00%, 11/15/2018 (c)
    
700,000
      
775,250
  
  6.90%, 05/01/2019
    
550,000
      
569,938
  
T-Mobile USA, Inc.
                
  6.464%, 04/28/2019
    
1,175,000
      
1,198,500
  
  6.542%, 04/28/2020
    
350,000
      
362,250
  
  6.633%, 04/28/2021
    
1,335,000
      
1,410,094
  
  6.125%, 01/15/2022
    
575,000
      
613,094
  


The accompanying notes are an integral part of these financial statements.

50

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
CORPORATE BONDS – 76.39% – Continued
            
             
Telecommunications – Wireline/Wireless – 6.24% – Continued
            
Wind Acquisition Finance S.A.
            
  6.50%, 04/30/2020 (b)(c)
  
$
1,050,000
    
$
1,102,500
  
  7.375%, 04/23/2021 (b)(c)
    
600,000
      
628,500
  
             
14,815,187
  
Utilities – Electric – 2.32%
                
AES Corp. 3.842%, 06/01/2019 (a)
    
1,661,000
      
1,669,305
  
Calpine Corp. 6.00%, 01/15/2022 (c)
    
1,300,000
      
1,362,562
  
Dynegy, Inc. 6.75%, 11/01/2019
    
550,000
      
566,500
  
NRG Energy, Inc.
                
  7.625%, 01/15/2018
    
500,000
      
535,000
  
  7.875%, 05/15/2021
    
850,000
      
892,500
  
Talen Energy Supply, LLC
               
  4.625%, 07/15/2019 (e)(c)
    
500,000
      
472,500
  
             
5,498,367
  
Utilities – Gas – 2.00%
                
AmeriGas Finance, LLC/AmeriGas
               
  Finance Corp. 7.00%, 05/20/2022
    
1,050,000
      
1,115,625
  
NGL Energy Partners LP/NGL Energy
               
  Finance Corp. 5.125%, 07/15/2019 (d)
    
50,000
      
47,250
  
Suburban Propane Partners LP/
                
  Suburban Energy Finance Corp.
               
  7.375%, 08/01/2021
    
600,000
      
624,375
  
Sunoco LP / Sunoco Finance Corp.
                
  5.50%, 08/01/2020 (c)
    
1,000,000
      
1,017,500
  
  6.25%, 04/15/2021 (c)
    
350,000
      
361,375
  
Tesoro Logistics LP/Tesoro
               
  Logistics Finance Corp.
                
  5.50%, 10/15/2019
    
450,000
      
481,500
  
  5.875%, 10/01/2020
    
291,000
      
300,093
  
  6.125%, 10/15/2021
    
775,000
      
810,844
  
             
4,758,562
  
TOTAL CORPORATE BONDS
               
  (Cost $179,529,910)
            
181,430,706
  


The accompanying notes are an integral part of these financial statements.

51

SHENKMAN SHORT DURATION HIGH INCOME FUND

SCHEDULE OF INVESTMENTS – Continued
September 30, 2016

   
Principal
    
Fair
  
   
Amount
    
Value
  
SHORT-TERM INVESTMENTS – 5.92%
            
             
Money Market Fund – 5.92%
            
Fidelity Government Portfolio –
           
  Institutional Class, 0.27% (a)(f)
    
14,054,065
    
$
14,054,065
  
TOTAL SHORT-TERM INVESTMENTS
               
  (Cost $14,054,065)
            
14,054,065
  
Total Investments (Cost $230,321,175) – 97.89%
            
232,497,776
  
Other Assets in Excess of  Liabilities – 2.11%
            
5,022,343
  
TOTAL NET ASSETS – 100.00%
          
$
237,520,119
  

Percentages are stated as a percent of net assets.
(a)
Variable rate securities, the coupon rate shown is the effective interest rate as of September 30, 2016.
(b)
U.S. traded security of a foreign issuer.
(c)
Rule 144a Security which is restricted as to resale to institutional investors.  The Fund Advisor has deemed these securities to be liquid based upon procedures approved by the Board of Trustees.  As of September 30, 2016 the value of these investments as $62,785,971 or 26.43% of net assets.
(d)
Illiquid security, a security may be considered illiquid if it lacks a readily available market.  As of September 30, 2016 the value of these investments was $3,865,187 or 1.63% of net assets.
(e)
Represents a step bond.  The rate shown represents the rate as of September 30, 2016.
(f)
Rate shown is the 7-day yield as of September 30, 2016.




The accompanying notes are an integral part of these financial statements.

52










 


(This Page Intentionally Left Blank.)
 






 








53

SHENKMAN FUNDS

STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2016

   
Shenkman
    
Shenkman
  
   
Floating
    
Short
  
   
Rate High
    
Duration High
  
   
Income Fund
    
Income Fund
  
ASSETS:
            
Investments, at value (cost $281,125,737
           
  and $230,321,175)
  
$
278,923,456
    
$
232,497,776
  
Cash
    
4,722,996
      
792,301
  
Securities sold
    
5,508,635
      
—
  
Interest
    
1,011,046
      
3,165,542
  
Fund shares sold
    
—
      
7,523,529
  
Prepaid expenses and other assets
    
4,259
      
32,748
  
Total Assets
    
290,170,392
      
244,011,896
  
LIABILITIES:
                
Securities purchased
    
24,624,338
      
5,880,293
  
Fund shares redeemed
    
—
      
269,710
  
Distribution fees
    
—
      
30,744
  
Shareholder servicing fees
    
—
      
7,090
  
Advisory fees
    
68,521
      
66,589
  
Administration and accounting expenses
    
58,411
      
54,827
  
Audit
    
21,300
      
25,800
  
Printing and mailing
    
7,902
      
7,239
  
Transfer agent fees and expenses
    
4,063
      
14,396
  
Custody fees
    
1,533
      
5,909
  
Compliance fees
    
1,500
      
1,500
  
Distributions
    
1,619
      
123,138
  
Other accrued expenses and other liabilities
    
2,380
      
4,542
  
Total Liabilities
    
24,791,567
      
6,491,777
  
NET ASSETS
  
$
265,378,825
    
$
237,520,119
  
NET ASSETS CONSIST OF:
                
Capital stock
  
$
273,352,189
    
$
238,119,418
  
Accumulated net investment income
    
264,391
      
28,307
  
Accumulated net realized loss on investments
    
(6,035,474
)
    
(2,804,207
)
Unrealized net appreciation/(depreciation)
               
  on investments
    
(2,202,281
)
    
2,176,601
  
Total Net Assets
  
$
265,378,825
    
$
237,520,119
  


The accompanying notes are an integral part of these financial statements.

54

SHENKMAN FUNDS

STATEMENTS OF ASSETS AND LIABILITIES – Continued
September 30, 2016

   
Shenkman
    
Shenkman
  
   
Floating
    
Short
  
   
Rate High
    
Duration High
  
   
Income Fund
    
Income Fund
  
NET ASSETS
            
Class A:
            
Net assets applicable to outstanding
           
  Class A shares
  
$
—
    
$
8,730,267
  
Shares issued and outstanding
    
—
      
875,148
  
Net asset value, redemption price per share
  
$
—
    
$
9.98
  
Maximum offering price per share
                
  (net asset value divided by 97.00%)
  
$
—
    
$
10.29
  
Class C:
                
Net assets applicable to outstanding
               
  Class C shares
  
$
—
    
$
10,913,385
  
Shares issued and outstanding
    
—
      
1,097,486
  
Net asset value, offering price
               
  and redemption price per share
  
$
—
    
$
9.94
  
Class F:
                
Net assets applicable to outstanding
               
  Class F shares
  
$
—
    
$
69,045,225
  
Shares issued and outstanding
    
—
      
6,939,233
  
Net asset value, offering price
               
  and redemption price per share
  
$
—
    
$
9.95
  
Institutional Class:
                
Net assets applicable to outstanding
               
  Institutional Class shares
  
$
265,378,825
    
$
148,831,242
  
Shares issued and outstanding
    
27,390,765
      
14,947,005
  
Net asset value, offering price
               
  and redemption price per share
  
$
9.69
    
$
9.96
  


The accompanying notes are an integral part of these financial statements.

55

SHENKMAN FUNDS

STATEMENTS OF OPERATIONS
For the Year Ended September 30, 2016

   
Shenkman
    
Shenkman
  
   
Floating
    
Short
  
   
Rate High
    
Duration High
  
   
Income Fund
    
Income Fund
  
INVESTMENT INCOME:
            
Interest income
  
$
13,006,168
    
$
5,996,229
  
Consent and term loan fee income
    
75,494
      
43,639
  
Total investment income
    
13,081,662
      
6,039,868
  
EXPENSES:
                
Investment advisory fees (Note 4)
    
1,331,281
      
846,534
  
Administration and accounting fees (Note 4)
    
345,612
      
271,074
  
Distribution fees – Class A (Note 5)
    
—
      
16,516
  
Distribution fees – Class C (Note 5)
    
—
      
83,044
  
Service fees – Class A (Note 6)
    
—
      
6,606
  
Service fees – Class C (Note 6)
    
—
      
8,304
  
Service fees – Class F (Note 6)
    
—
      
48,929
  
Federal and state registration fees
    
87,502
      
65,230
  
Transfer agent fees and expenses (Note 4)
    
31,392
      
81,637
  
Audit fees
    
21,252
      
25,728
  
Trustees’ fees and expenses
    
10,890
      
11,305
  
Chief Compliance Officer fees and expenses (Note 4)
    
9,030
      
9,010
  
Legal fees
    
8,209
      
7,133
  
Insurance expense
    
7,334
      
3,408
  
Custody fees (Note 4)
    
7,031
      
15,122
  
Other expenses
    
27,030
      
20,988
  
Total expenses before
               
  reimbursement from Advisor
    
1,886,563
      
1,520,568
  
Expense reimbursement from Advisor (Note 4)
    
(448,779
)
    
(368,819
)
Net expenses
    
1,437,784
      
1,151,749
  
NET INVESTMENT INCOME
    
11,643,878
      
4,888,119
  
NET REALIZED AND UNREALIZED GAIN/(LOSS):
                
Net realized loss on investments
    
(5,978,402
)
    
(2,236,158
)
Change in unrealized appreciation
                
  on investments
    
5,798,592
      
4,255,786
  
Net realized and unrealized
               
  gain/(loss) on investments
    
(179,810
)
    
2,019,628
  
NET INCREASE IN NET ASSETS
               
  RESULTING FROM OPERATIONS
  
$
11,464,068
    
$
6,907,747
  


The accompanying notes are an integral part of these financial statements.

56

SHENKMAN FLOATING RATE HIGH INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS

         
October 15,
  
         
2014(1)
  
   
Year Ended
    
through
  
   
September 30,
    
September 30,
  
   
2016
    
2015
  
OPERATIONS:
            
Net investment income
  
$
11,643,878
    
$
11,116,092
  
Net realized loss on investments
    
(5,978,402
)
    
(57,072
)
Change in unrealized appreciation/(depreciation)
               
  on securities
    
5,798,592
      
(8,000,873
)
Net increase in net assets
               
  resulting from operations
    
11,464,068
      
3,058,147
  
DISTRIBUTIONS TO SHAREHOLDERS FROM:
                
Net investment income:
                
Institutional Class
    
(11,427,094
)
    
(10,798,330
)
Total distributions
    
(11,427,094
)
    
(10,798,330
)
CAPITAL SHARE TRANSACTIONS:
                
Proceeds from shares sold:
                
Institutional Class
    
10,650,218
      
24,397,239
  
Proceeds from transfer-in-kind
    
—
      
260,232,895
  
Proceeds from shares issued to
               
  holders in reinvestment of dividends:
                
Institutional Class
    
11,396,002
      
10,696,154
  
Cost of shares redeemed:
                
Institutional Class
    
(39,295,337
)
    
(4,995,137
)
Redemption fees retained:
                
Institutional Class
    
—
      
—
  
Net increase/(decrease) in net assets
               
  derived from capital share transactions
    
(17,249,117
)
    
290,331,151
  
TOTAL INCREASE/(DECREASE) IN NET ASSETS
    
(17,212,143
)
    
282,590,968
  
NET ASSETS:
                
Beginning of period
    
282,590,968
      
—
  
End of period
  
$
265,378,825
    
$
282,590,968
  
Accumulated net investment
               
  income, end of period
  
$
264,391
    
$
47,607
  
CHANGES IN SHARES OUTSTANDING:
                
Shares sold:
                
Institutional Class
    
1,110,354
      
28,643,440
  
Shares issued to holders as reinvestment of dividends:
                
Institutional Class
    
1,199,019
      
1,076,838
  
Shares redeemed:
                
Institutional Class
    
(4,130,373
)
    
(508,513
)
Net increase/(decrease) in shares outstanding
    
(1,821,000
)
    
29,211,765
  

(1)
Commencement of operations.


The accompanying notes are an integral part of these financial statements.

57

SHENKMAN SHORT DURATION HIGH INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS

   
Year Ended
    
Year Ended
  
   
September 30,
    
September 30,
  
   
2016
    
2015
  
OPERATIONS:
            
Net investment income
  
$
4,888,119
    
$
2,945,271
  
Net realized loss on investments
    
(2,236,158
)
    
(548,495
)
Change in unrealized appreciation/(depreciation)
               
  on securities
    
4,255,786
      
(1,635,401
)
Net increase in net assets
               
  resulting from operations
    
6,907,747
      
761,375
  
DISTRIBUTIONS TO SHAREHOLDERS FROM:
                
Net investment income:
                
Class A
    
(190,547
)
    
(49,938
)
Class C
    
(180,123
)
    
(79,709
)
Class F
    
(1,543,872
)
    
(673,691
)
Institutional Class
    
(2,955,068
)
    
(2,153,614
)
Net realized gain:
                
Class A
    
—
      
(988
)
Class C
    
—
      
(5,520
)
Class F
    
—
      
(27,699
)
Institutional Class
    
—
      
(114,885
)
Total distributions
    
(4,869,610
)
    
(3,106,044
)
CAPITAL SHARE TRANSACTIONS:
                
Proceeds from shares sold:
                
Class A
    
5,611,070
      
4,815,515
  
Class C
    
5,351,045
      
4,395,911
  
Class F
    
60,992,303
      
38,151,263
  
Institutional Class
    
128,109,876
      
47,113,852
  
Proceeds from shares issued to
               
  holders in reinvestment of dividends:
                
Class A
    
118,973
      
42,327
  
Class C
    
98,319
      
75,794
  
Class F
    
971,237
      
624,936
  
Institutional Class
    
2,665,908
      
1,951,437
  
Cost of shares redeemed:
                
Class A
    
(1,930,074
)
    
(566,984
)
Class C
    
(758,708
)
    
(291,453
)
Class F
    
(29,555,394
)
    
(10,362,297
)
Institutional Class
    
(47,686,820
)
    
(34,070,496
)


The accompanying notes are an integral part of these financial statements.

58

SHENKMAN SHORT DURATION HIGH INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS – Continued

   
Year Ended
    
Year Ended
  
   
September 30,
    
September 30,
  
   
2016
    
2015
  
CAPITAL SHARE TRANSACTIONS – Continued:
            
Redemption fees retained:
            
Class A
  
$
494
    
$
190
  
Class C
    
1
      
—
  
Class F
    
104
      
—
  
Institutional Class
    
150
      
101
  
Net increase in net assets derived from
               
  capital share transactions
    
123,988,484
      
51,880,096
  
TOTAL INCREASE IN NET ASSETS
    
126,026,621
      
49,535,427
  
NET ASSETS:
                
Beginning of year
    
111,493,498
      
61,958,071
  
End of year
  
$
237,520,119
    
$
111,493,498
  
Accumulated net investment
               
  income, end of year
  
$
28,307
    
$
9,798
  
CHANGES IN SHARES OUTSTANDING:
                
Shares sold:
                
Class A
    
568,723
      
476,611
  
Class C
    
542,833
      
436,097
  
Class F
    
6,200,032
      
3,780,299
  
Institutional Class
    
12,979,423
      
4,678,272
  
Shares issued to holders as
               
  reinvestment of dividends:
                
Class A
    
12,043
      
4,209
  
Class C
    
9,979
      
7,539
  
Class F
    
98,465
      
62,176
  
Institutional Class
    
269,922
      
193,767
  
Shares redeemed:
                
Class A
    
(195,557
)
    
(56,074
)
Class C
    
(77,117
)
    
(28,892
)
Class F
    
(2,993,990
)
    
(1,030,218
)
Institutional Class
    
(4,831,829
)
    
(3,393,092
)
Net increase in shares outstanding
    
12,582,927
      
5,130,694
  


The accompanying notes are an integral part of these financial statements.

59

SHENKMAN FLOATING RATE HIGH INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period
 
Institutional Class
         
October 15,
  
         
2014*
 
   
Year Ended
    
through
  
   
September 30,
    
September 30,
  
   
2016
    
2015
  
PER SHARE DATA:
              
Net asset value, beginning of period
  
$
9.67
    
$
10.00
  
                 
Income from investment operations:
                
Net investment income
    
0.42
      
0.41
  
Net realized and unrealized
               
  gain/(loss) on securities
    
0.01
      
(0.34
)
Total from investment operations
    
0.43
      
0.07
  
                 
Less distributions:
                
Dividends from net investment income
    
(0.41
)
    
(0.40
)
Total distributions
    
(0.41
)
    
(0.40
)
                 
Net asset value, end of period
  
$
9.69
    
$
9.67
  
                 
TOTAL RETURN
    
4.63
%
    
0.66
%†
                 
SUPPLEMENTAL DATA AND RATIOS:
                
Net assets, end of period (thousands)
  
$
265,379
    
$
282,591
  
Ratio of expenses to average net assets:
                
Before advisory fee waiver
    
0.71
%
    
0.72
%‡
After advisory fee waiver
    
0.54
%
    
0.54
%‡
Ratio of net investment income
               
  to average net assets:
                
Before advisory fee waiver
    
4.20
%
    
4.26
%‡
After advisory fee waiver
    
4.37
%
    
4.44
%‡
Portfolio turnover rate
    
60
%
    
70
%†

*
Commencement of operations.
†
Not Annualized.
‡
Annualized.


The accompanying notes are an integral part of these financial statements.

60

SHENKMAN SHORT DURATION HIGH INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period
 
Class A
                     
October 31,
  
                     
2012*
 
                     
through
  
   
Year Ended September 30,
    
September 30,
  
   
2016
    
2015
    
2014
    
2013
  
PER SHARE DATA:
                          
Net asset value,
                         
  beginning of period
  
$
9.91
    
$
10.10
    
$
10.12
    
$
10.00
  
                                 
Income from
                               
  investment operations:
                                
Net investment income
    
0.29
      
0.27
      
0.30
      
0.25
  
Net realized and unrealized
                               
  gain/(loss) on securities
    
0.06
      
(0.14
)
    
(0.01
)
    
0.13
  
Total from
                               
  investment operations
    
0.35
      
0.13
      
0.29
      
0.38
  
                                 
Less distributions:
                                
Dividends from
                               
  net investment income
    
(0.28
)
    
(0.30
)
    
(0.30
)
    
(0.26
)
Dividends from
                               
  net realized gains
    
—
      
(0.02
)
    
(0.01
)
    
—
  
Total distributions
    
(0.28
)
    
(0.32
)
    
(0.31
)
    
(0.26
)
                                 
Net asset value, end of period
  
$
9.98
    
$
9.91
    
$
10.10
    
$
10.12
  
                                 
TOTAL RETURN
    
3.61
%
    
1.25
%
    
2.92
%
    
3.79
%†
                                 
SUPPLEMENTAL DATA AND RATIOS:
                                
Net assets, end
                               
  of period (thousands)
  
$
8,730
    
$
4,853
    
$
658
    
$
72
  
Ratio of expenses
                               
  to average net assets:
                                
Before advisory fee waiver
    
1.24
%
    
1.36
%
    
1.73
%
    
2.34
%‡
After advisory fee waiver
    
0.98
%
    
1.00
%
    
1.00
%
    
1.00
%‡
Ratio of net investment income
                               
  to average net assets:
                                
Before advisory fee waiver
    
2.69
%
    
2.63
%
    
1.84
%
    
1.56
%‡
After advisory fee waiver
    
2.95
%
    
2.99
%
    
2.56
%
    
2.90
%‡
Portfolio turnover rate
    
53
%
    
57
%
    
57
%
    
78
%†

*
Commencement of operations.
†
Not Annualized.
‡
Annualized.


The accompanying notes are an integral part of these financial statements.

61

SHENKMAN SHORT DURATION HIGH INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period
 
Class C
               
January 28,
  
               
2014*
 
   
Year Ended
    
through
  
   
September 30,
    
September 30,
  
   
2016
    
2015
    
2014
  
PER SHARE DATA:
                    
Net asset value,
                   
  beginning of period
  
$
9.88
    
$
10.08
    
$
10.23
  
                         
Income from
                       
  investment operations:
                        
Net investment income
    
0.22
      
0.22
      
0.18
  
Net realized and unrealized
                       
  gain/(loss) on securities
    
0.05
      
(0.17
)
    
(0.14
)
Total from
                       
  investment operations
    
0.27
      
0.05
      
0.04
  
                         
Less distributions:
                        
Dividends from
                       
  net investment income
    
(0.21
)
    
(0.23
)
    
(0.19
)
Dividends from
                       
  net realized gains
    
—
      
(0.02
)
    
—
  
Total distributions
    
(0.21
)
    
(0.25
)
    
(0.19
)
                         
Net asset value, end of period
  
$
9.94
    
$
9.88
    
$
10.08
  
                         
TOTAL RETURN
    
2.77
%
    
0.45
%
    
0.38
%†
                         
SUPPLEMENTAL DATA AND RATIOS:
                        
Net assets, end
                       
  of period (thousands)
  
$
10,913
    
$
6,142
    
$
2,086
  
Ratio of expenses
                       
  to average net assets:
                        
Before advisory fee waiver
    
1.99
%
    
2.13
%
    
2.49
%‡
After advisory fee waiver
    
1.73
%
    
1.75
%
    
1.75
%‡
Ratio of net investment income
                       
  to average net assets:
                        
Before advisory fee waiver
    
1.95
%
    
1.86
%
    
1.24
%‡
After advisory fee waiver
    
2.21
%
    
2.24
%
    
1.98
%‡
Portfolio turnover rate
    
53
%
    
57
%
    
57
%†

*
Commencement of operations.
†
Not Annualized.
‡
Annualized.


The accompanying notes are an integral part of these financial statements.

62

SHENKMAN SHORT DURATION HIGH INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period
 
Class F
                     
May 17, 2013*
  
                     
through
  
                     
September 30,
  
   
Year Ended September 30,
    
2013
  
   
2016
    
2015
    
2014
    
(Unaudited)
  
PER SHARE DATA:
                        
Net asset value,
                       
  beginning of period
  
$
9.88
    
$
10.08
    
$
10.11
    
$
10.16
  
                                 
Income from
                               
  investment operations:
                                
Net investment income
    
0.31
      
0.31
      
0.32
      
0.12
  
Net realized and unrealized
                               
  gain/(loss) on securities
    
0.06
      
(0.17
)
    
—
      
(0.04
)
Total from
                               
  investment operations
    
0.37
      
0.14
      
0.32
      
0.08
  
                                 
Less distributions:
                                
Dividends from
                               
  net investment income
    
(0.30
)
    
(0.32
)
    
(0.34
)
    
(0.13
)
Dividends from
                               
  net realized gains
    
—
      
(0.02
)
    
(0.01
)
    
—
  
Total distributions
    
(0.30
)
    
(0.34
)
    
(0.35
)
    
(0.13
)
                                 
Net asset value, end of period
  
$
9.95
    
$
9.88
    
$
10.08
    
$
10.11
  
                                 
TOTAL RETURN
    
3.88
%
    
1.41
%
    
3.22
%
    
0.77
%†
                                 
SUPPLEMENTAL DATA AND RATIOS:
                                
Net assets, end
                               
  of period (thousands)
  
$
69,045
    
$
35,917
    
$
8,287
    
$
10
  
Ratio of expenses
                               
  to average net assets:
                                
Before advisory fee waiver
    
0.98
%
    
1.12
%
    
1.55
%
    
2.06
%‡
After advisory fee waiver
    
0.73
%
    
0.75
%
    
0.75
%
    
0.75
%‡
Ratio of net investment income
                               
  to average net assets:
                                
Before advisory fee waiver
    
2.95
%
    
2.87
%
    
2.64
%
    
1.83
%‡
After advisory fee waiver
    
3.20
%
    
3.24
%
    
3.44
%
    
3.14
%‡
Portfolio turnover rate
    
53
%
    
57
%
    
57
%
    
78
%†

*
Commencement of operations.
†
Not Annualized.
‡
Annualized.


The accompanying notes are an integral part of these financial statements.

63

SHENKMAN SHORT DURATION HIGH INCOME FUND

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period
 
Institutional Class
                     
October 31,
  
                     
2012*
 
                     
through
  
   
Year Ended September 30,
    
September 30,
  
   
2016
    
2015
    
2014
    
2013
  
PER SHARE DATA:
                          
Net asset value,
                         
  beginning of period
  
$
9.89
    
$
10.08
    
$
10.12
    
$
10.00
  
                                 
Income from
                               
  investment operations:
                                
Net investment income
    
0.31
      
0.33
      
0.32
      
0.29
  
Net realized and unrealized
                               
  gain/(loss) on securities
    
0.07
      
(0.17
)
    
—
      
0.12
  
Total from
                               
  investment operations
    
0.38
      
0.16
      
0.32
      
0.41
  
                                 
Less distributions:
                                
Dividends from
                               
  net investment income
    
(0.31
)
    
(0.33
)
    
(0.35
)
    
(0.29
)
Dividends from
                               
  Dividends net realized gains
    
—
      
(0.02
)
    
(0.01
)
    
—
  
Total distributions
    
(0.31
)
    
(0.35
)
    
(0.36
)
    
(0.29
)
                                 
Net asset value, end of period
  
$
9.96
    
$
9.89
    
$
10.08
    
$
10.12
  
                                 
TOTAL RETURN
    
3.97
%
    
1.60
%
    
3.21
%
    
4.12
%†
                                 
SUPPLEMENTAL DATA AND RATIOS:
                                
Net assets, end
                               
  of period (thousands)
  
$
148,831
    
$
64,581
    
$
50,927
    
$
28,547
  
Ratio of expenses
                               
  to average net assets:
                                
Before advisory fee waiver
    
0.88
%
    
1.04
%
    
1.60
%
    
2.00
%‡
After advisory fee waiver
    
0.65
%
    
0.65
%
    
0.65
%
    
0.65
%‡
Ratio of net investment income
                               
  to average net assets:
                                
Before advisory fee waiver
    
3.04
%
    
2.95
%
    
2.30
%
    
1.83
%‡
After advisory fee waiver
    
3.27
%
    
3.34
%
    
3.25
%
    
3.18
%‡
Portfolio turnover rate
    
53
%
    
57
%
    
57
%
    
78
%†

*
Commencement of operations.
†
Not Annualized.
‡
Annualized.


The accompanying notes are an integral part of these financial statements.

64

SHENKMAN FUNDS

NOTES TO FINANCIAL STATEMENTS
September 30, 2016

NOTE 1 – ORGANIZATION
 
The Shenkman Short Duration High Income Fund (the “Short Duration High Income Fund”) and the Shenkman Floating Rate High Income Fund (the “Floating Rate High Income Fund”)(each a “Fund” and collectively, the “Funds”) are diversified series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company.  The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.”  The Short Duration High Income Fund commenced operations on October 31, 2012. The Floating Rate High Income Fund commenced operations on October 15, 2014. The primary investment objective of the Funds is to seek a high level of current income.
 
Currently, the Short Duration High Income Fund offers the Class A, Class C, Class F, and Institutional Class shares.  Class F shares became available for purchase on May 17, 2013, while Class C shares became available for purchase on January 28, 2014.
 
The Floating Rate High Income Fund offers Institutional Class shares. Institutional Class shares became available for purchase on October 15, 2014. The initial purchase included a transfer in-kind of securities and cash. The transfer in-kind was nontaxable, whereby the Fund issued 12,794,119 shares on October 15, 2014. The fair value and cost of securities, for tax purposes, received by the Fund was $127,869,966 and $129,652,584 respectively. In addition, the Fund received $1,871,223 of cash and interest receivable. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value.
 
Each class of shares differs principally in its respective distribution expenses and sales charges.  Each class of shares has identical rights to earnings, assets and voting privileges, except for class-specific expenses and exclusive rights to vote on matters affecting only individual classes.
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of the financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
 
Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
 
Federal Income Taxes – It is the Funds’ policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its
 
65

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
taxable income to its shareholders.  Therefore, no Federal income or excise tax provision is required.
 
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities.  Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions to be taken in on returns for the Short Duration High Income Fund’s open tax years ended 2013-2015 and for the Floating Rate High Income Fund’s 2015 open tax year, or expected to be taken in each Fund’s 2016 tax returns.  Each Fund identifies its major tax jurisdictions as U.S. Federal and the state of Wisconsin; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
 
Securities Transactions, Income, and Distributions – Securities transactions are accounted for on the trade date.  Securities sold are determined on a specific identification process.  Interest income is recorded on an accrual basis.  Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.  Dividend income and distributions to shareholders are recorded on the ex-dividend date.  Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.
 
Each Fund distributes substantially all of its net investment income, if any, and net realized capital gains, if any, annually.  The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations, which differ from accounting principles generally accepted in the United States of America.  To the extent these book/tax differences are permanent, such amounts are reclassified within the capital accounts based on their Federal tax treatment.  Distributions from net realized gains for book purposes may include short-term capital gains.  All short-term capital gains are included in ordinary income for tax purposes.
 
Investment income, expenses (other than those specific to the class of shares), and realized and unrealized gains and losses on investments are allocated to the separate classes of the Funds’ shares based upon their relative net assets on the date income is earned or expensed and realized and unrealized gains and losses are incurred.
 
Each Fund is charged for those expenses that are directly attributable to that Fund, such as investment advisory, custody and transfer agent fees.  Expenses that are not attributable to the Funds are typically allocated among the Funds in proportion to their respective net assets.  Common expenses of the Trust are typically allocated among the funds in the Trust based on a Fund’s respective net assets, or by other equitable means.
 
66

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
Securities Purchased on a When-Issued Basis – The Funds may purchase securities on a when-issued basis, for payment and delivery at a later date, generally within one month. The price and yield are generally fixed on the date of commitment to purchase, and the value of the security is thereafter reflected in the Funds’ NAV. During the period between purchase and settlement, no payment is made by the Funds and no interest accrues to the Funds. At the time of settlement, the market value of the security may be more or less than the purchase price.
 
Redemption Fees – The Funds charge a 1% redemption fee to shareholders who redeem shares held for 30 days or less.  Such fees are retained by the Funds and accounted for as an addition to paid-in capital.  During the year ended September 30, 2016, the Short Duration High Income Fund retained $749 in redemption fees.
 
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 increases and decreases in net assets from operation during the reporting period.  Actual results could differ from those estimates.
 
Events Subsequent to the Fiscal Period End – In preparing the financial statements as of September 30, 2016, management considered the impact of subsequent events for the potential recognition or disclosure in these financial statements.
 
Derivatives – The Funds have adopted the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification (“FASB ASC”).  The Funds are required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s result of operations and financial position.  During the year ended September 30, 2016 the Funds did not hold any derivative instruments.
 
Reclassification of Capital Accounts – Accounting principles generally accepted in the United States of America require 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.
 
NOTE 3 – SECURITIES VALUATION
 
The Funds have adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value.  These standards require additional
 
67

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types.  These inputs are summarized in the three broad levels listed below:
 
 
Level 1 –
Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.
 
 
Level 2 –
Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
 
 
Level 3 –
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
 
Following is a description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis.
 
Each fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00pm EST).
 
Bank Loan Obligations – Bank loan obligations are valued at market on the basis of valuations furnished by an independent pricing service which utilizes quotations obtained from dealers in bank loans.  These securities will generally be classified in Level 2 of the fair value hierarchy.
 
Debt Securities – Debt securities, such as corporate bonds, asset backed securities, mortgage backed securities, municipal bonds, U.S. Treasuries and U.S. government agency issues are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques.  The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer.  In addition, the model may incorporate market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data.  Certain securities are valued principally using dealer quotations.  Debt securities having a maturity of 60 days or less are valued at the evaluated
 
68

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
mean between the bid and asked price.  These securities will generally be classified in Level 2 of the fair value hierarchy.
 
Investment Companies – Investments in open-end mutual funds are valued at their net asset value per share.  To the extent, these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
 
Short-Term Securities – Short-term securities having a maturity of less than 60 days are valued at the evaluated mean between bid and asked price.  To the extent the inputs are observable and timely, these securities would be classified in Level 2 of the fair value hierarchy.
 
Illiquid Securities – A security may be considered illiquid if it lacks a readily available market.  Securities are generally considered liquid if they can be sold or disposed of in the ordinary course of business within seven days at approximately the price at which the security is valued by the Funds.  Illiquid securities may be valued under methods approved by the Funds’ Board of Trustees as reflecting fair value.  The Funds intend to hold no more than 15% of its net assets in illiquid securities.
 
Certain restricted securities may be considered illiquid.  Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and may be valued under methods approved by the Funds’ Board of Trustees as reflecting fair value.  Certain restricted securities eligible for resale to qualified institutional investors, including Rule 144A securities, are not subject to the limitation on the Funds’ investments in illiquid securities if they are determined to be liquid in accordance with procedures adopted by the Funds’ Board of Trustees.  As of September 30, 2016, Shenkman Capital Management, Inc. (the “Advisor”) has determined that certain securities held by the Fund are considered illiquid.  See the Schedule of Investments for additional information.
 
Securities for which market quotations are not readily available, or if the closing price does not represent fair value, are valued following procedures approved by the Board of Trustees (“Board”).  These procedures consider many factors, including the type of security, size of holding, trading volume and news events.  There can be no assurance that the Funds could obtain the fair value assigned to a security if they were to sell the security at approximately the time at which the Fund determines its net asset value per share.
 
The Board of Trustees (“Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from U.S. Bancorp Fund Services, LLC, the Funds’ administrator.  The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available or the closing price does
 
69

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
not represent fair value by following procedures approved by the Board.  These procedures consider many factors, including the type of security, size of holding, trading volume and news events.  All actions taken by the Valuation Committee are subsequently reviewed and ratified by the Board.
 
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.
 
The 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’ securities as of September 30, 2016:
 
Floating Rate High Income Fund
 
     
Level 1
    
Level 2
    
Level 3
    
Total
  
 
Common Stock
                        
 
  Finance and
                       
 
    Insurance
  
$
—
    
$
—
    
$
130,538
    
$
130,538
  
 
  Manufacturing
    
263,669
      
—
      
—
      
263,669
  
 
  Utilities
    
—
      
—
      
945
      
945
  
 
Total
                               
 
  Common Stock
    
263,669
      
—
      
131,483
      
395,152
  
 
Fixed Income
                                
 
  Bank Loan
                               
 
    Obligations
    
—
      
230,145,366
      
1,117,744
      
231,263,110
  
 
  Corporate Bonds
    
—
      
32,862,425
      
—
      
32,862,425
  
 
Total Fixed
                               
 
  Income
    
—
      
263,007,791
      
1,117,744
      
264,125,535
  
 
Short-Term
                               
 
  Investments
    
14,402,769
      
—
      
—
      
14,402,769
  
 
Total
                               
 
  Investments
  
$
14,666,438
    
$
263,007,791
    
$
1,249,227
    
$
278,923,456
  

 
70
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
Short Duration High Income Fund
 
     
Level 1
    
Level 2
    
Level 3
    
Total
  
 
Fixed Income
                        
 
  Bank Loan
                       
 
    Obligations
  
$
—
    
$
37,013,005
    
$
—
    
$
37,013,005
  
 
  Corporate Bonds
    
—
      
181,430,706
      
—
      
181,430,706
  
 
Total Fixed Income
    
—
      
218,443,711
      
—
      
218,443,711
  
 
Short-Term
                               
 
  Investments
    
14,054,065
      
—
      
—
      
14,054,065
  
 
Total Investments
  
$
14,054,065
    
$
218,443,711
    
$
—
    
$
232,497,776
  
 
Refer to the Funds’ Schedule of Investments for a detailed break-out of securities.  Transfers between levels are recognized at September 30, 2016, the end of the reporting period.
 
The following is a reconciliation of the Floating Rate High Income Fund’s level 3 investments for which significant unobservable inputs were used in determining fair value.
 
Level 3 Reconciliation Disclosure
 
     
Common
    
Bank
        
     
Stocks
    
Loan
    
Total
  
 
Balance as of September 30, 2015
  
$
—
    
$
—
    
$
—
  
 
  Accrued discounts/premiums
    
—
      
1,609
      
1,609
  
 
  Realized gain (loss)
    
—
      
—
      
—
  
 
  Change in unrealized
                       
 
    appreciation (depreciation)
    
(1,316
)
    
(284,150
)
    
(285,466
)
 
  Received in exchange offer
    
132,799
      
1,377,936
      
1,510,735
  
 
  Purchases
    
—
      
22,349
      
22,349
  
 
  (Sales)
    
—
      
—
      
—
  
 
  Transfer in and/or out of Level 3
    
—
      
—
      
—
  
 
Balance as of September 30, 2016
  
$
131,483
    
$
1,117,744
    
$
1,249,227
  
 
The Level 3 investments as of September 30, 2016 represented 0.47% of net assets and did not warrant a disclosure of significant unobservable valuation inputs.
 
NOTE 4 – INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
 
The Funds have an investment advisory agreement with Shenkman Capital Management, Inc. pursuant to which the Advisor is responsible for providing investment management services to each Fund.  The Advisor furnished all investment advice, office space and facilities, and provides most of the personnel needed by the Funds.  As compensation for its services,
 
71
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
Shenkman Capital Management, Inc. is entitled to a fee, computed daily and payable monthly based upon the average daily net assets of the Funds at the annual rates of:
 
 
Floating Rate High Income Fund
0.50%
  
 
Short Duration High Income Fund
0.55%
  
 
For the year ended September 30, 2016, the Floating Rate High Income Fund and the Short Duration High Income Fund incurred $1,331,281 and $846,534, respectively, in advisory fees. Advisory fees payable to the Advisor at September 30, 2016 for the Floating Rate High Income Fund and the Short Duration High Income Fund were $68,521 and $66,589, respectively.  The amounts shown on the Statements of Assets and Liabilities are net amounts due to the Advisor.
 
Each Fund is responsible for its own operating expenses.  The Advisor has contractually agreed to waive its fees and/or absorb expenses of the Funds to the extent necessary to limit the Funds’ aggregate annual operating expenses (excluding Acquired Fund Fees and Expenses, taxes, interest, dividends in securities sold short, and extraordinary expenses) to the following amounts of the average daily net assets for each class of shares:
 
 
Floating Rate High Income Fund:
    
 
Institutional Class
0.54%
  
       
 
Short Duration High Income Fund:
    
 
Class A
1.00%
  
 
Class C
1.75%
  
 
Class F
0.75%
  
 
Institutional Class
0.65%
  
 
Any such reduction made by the Advisor in its fees or payment of expenses which are the Funds’ obligation are subject to reimbursement by the Funds to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Funds toward the operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the applicable limitation on Fund expenses. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years.  Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Funds’ payment of current ordinary operating expenses. For the year ended September 30, 2016, the Advisor reduced its fees in the amount of $448,779 for the Floating Rate High Income Fund and in the amount of $368,819 for the Short Duration High Income Fund.  No amounts were reimbursed to the Advisor for either Fund.  Cumulative expenses subject to recapture pursuant to the aforementioned conditions expire as follows:
 
72

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
     
2017
    
2018
    
2019
    
Total
  
 
Floating Rate High
                       
 
  Income Fund
  
$
—
    
$
442,934
    
$
448,779
    
$
891,713
  
 
Short Duration High
                               
 
  Income Fund
    
350,708
      
345,681
      
368,819
      
1,065,208
  
 
U.S. Bancorp Fund Services, LLC (the “Administrator”) acts as each of the Fund’s Administrator under an Administration Agreement.  The Administrator prepares various federal and state regulatory filings, reports and returns for the Funds; prepares reports and materials to be supplied to the Trustees; monitors the activities of the Funds’ custodian, transfer agent and accountants; coordinates the preparation and payment of the Funds’ expenses and reviews the Funds’ expense accruals.  U.S. Bancorp Fund Services, LLC also serves as the fund accountant, Chief Compliance Officer and transfer agent to the Funds.  U.S. Bank N.A. an affiliate of U.S. Bancorp Fund Services, serves as the Funds’ custodian.  For the period ended March 31, 2016, the Funds incurred the following expenses for administration, fund accounting, transfer agency, custody and Chief Compliance Officer fees:
 
   
Floating Rate
  
Short Duration
   
High Income Fund
  
High Income Fund
 
Administration & accounting
  
$
345,612
      
$
271,074
  
 
Custody
    
7,031
        
15,122
  
 
Transfer agency(a)
    
18,944
        
73,385
  
 
Chief Compliance Officer
    
9,030
        
9,010
  
                     
 
(a) Does not include out-of-pocket expenses
                  
 
At September 30, 2016, the Funds had payables due to U.S. Bancorp Fund Services, LLC for administration, fund accounting, transfer agency and Chief Compliance Officer fees and to U.S. Bank N.A. for custody fees in the following amounts:

   
Floating Rate
  
Short Duration
   
High Income Fund
  
High Income Fund
 
Administration & accounting
  
$
58,411
      
$
54,827
  
 
Custody
    
1,533
        
5,909
  
 
Transfer agency(a)
    
2,682
        
11,996
  
 
Chief Compliance Officer
    
1,500
        
1,500
  
                     
 
(a) Does not include out-of-pocket expenses
                  
 
Quasar Distributors, LLC (the “Distributor”) acts as each of the Fund’s principal underwriter in a continuous public offering of the Funds’ shares.  The Distributor is an affiliate of the Administrator.
 
Certain officers of the Funds are employees of the Administrator.  The Trust’s Chief Compliance Officer is also an employee of USBFS.  A Trustee of the Trust is affiliated with USBFS and U.S. Bank N.A.  This same Trustee is an interested person of the Distributor.
 
73

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
NOTE 5 – DISTRIBUTION AGREEMENT AND PLAN
 
The Short Duration High Income Fund adopted a Distribution Plan pursuant to Rule 12b-1 (the “Plan”).  The Plan permits the Fund to pay for distribution and related expenses at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class A shares and up to 1.00% of the average net assets of the Fund’s Class C shares.  The expenses covered by the Plan may include the cost in connection with the promotion and distribution of shares and the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, and the printing and mailing of sales literature.  Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred.  For the year ended September 30, 2016, the Short Duration High Income Fund incurred distribution expenses on their Class A and Class C shares of $16,516 and $83,044, respectively.
 
NOTE 6 – SHAREHOLDER SERVICING FEE
 
The Short Duration High Income Fund entered into a shareholder servicing agreement (the “Agreement”) with the Advisor, under which the Advisor will provide, or arrange for others to provide, certain specified shareholder services.  As compensation for the provision of shareholder services, the Short Duration High Income Fund may pay servicing fees at an annual rate of 0.10% of the average daily net assets of the Class A, Class C, and Class F shares. Payments to the Advisor under the Agreement may reimburse the Advisor for payments it makes to selected brokers, dealers and administrators which have entered into service agreements with the Advisor for services provided to shareholders of the Short Duration High Income Fund.  The services provided by such intermediaries are primarily designed to assist shareholders of the Fund and include the furnishing of office space and equipment, telephone facilities, personnel, and assistance to the Fund in servicing such shareholders.  Services provided by such intermediaries also include the provision of support services to the Fund and include establishing and maintaining shareholders’ accounts and record processing, purchase and redemption transactions, answering routine client inquiries regarding the Fund, and providing such other personal services to shareholders as the Fund may reasonably request.  For the year ended September 30, 2016, the Class A, Class C and Class F shares of the Short Duration High Income Fund incurred $6,606, $8,304 and $48,929, respectively, in shareholder servicing fees.
 
NOTE 7 – PURCHASES AND SALES OF SECURITIES
 
For the year ended September 30, 2016, the cost of purchases and the proceeds from sales of securities (excluding short-term securities) were as follows:

 
74

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
     
Purchases
    
Sales
  
 
Floating Rate High Income Fund
  
$
153,754,517
    
$
160,454,486
  
 
Short Duration High Income Fund
    
190,814,150
      
77,632,247
  
 
There were no purchases or sales of U.S. government obligations during the year ended September 30, 2016. During the year ended September 30, 2016, the Short Duration High Income Fund purchased five bonds from an affiliate of the Advisor in the amount of $2,594,528. The purchase transactions complied with Rule 17a-7 under the 1940 Act and the 17a-7 procedures adopted by the Trust.
 
NOTE 8 – LINE OF CREDIT
 
The Short Duration High Income Fund and the Floating Rate High Income Fund have a line of credit in the amount of $25,000,000 and $50,000,000, respectively.  They are intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions.  The credit facility is with its custodian bank, U.S. Bank, N.A.  Borrowings under this arrangement bear interest at the bank’s prime rate.  During the year ended September 30, 2016 the Short Duration High Income Fund had a maximum amount borrowed of $898,000.  During the year ended September 30, 2016 the Short Duration High Income Fund had an outstanding average day balance of $2,637, a weighted average interest rate of 3.45%, and paid $87 in interest.  During the year ended September 30, 2016, the Floating Rate High Income Fund did not draw upon its line of credit.
 
NOTE 9 – INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
 
As of September 30, 2016, the components of accumulated earnings/(losses) on a tax basis were as follows:
 
   
Floating Rate
  
Short Duration
   
High Income Fund
  
High Income Fund
 
Cost of investments(a)
  
$
281,126,130
      
$
230,321,287
  
 
Gross unrealized appreciation
    
3,849,744
        
2,525,668
  
 
Gross unrealized depreciation
    
(6,052,418
)
      
(349,179
)
 
Net unrealized appreciation
    
(2,202,674
)
      
2,176,489
  
 
Undistributed ordinary income
    
264,391
        
28,140
  
 
Total distributable earnings
    
264,391
        
28,140
  
 
Other accumulated gains/(losses)
    
(6,035,081
)
      
(2,803,928
)
 
Total accumulated
                 
 
  earnings/(losses)
  
$
(7,973,364
)
    
$
(599,299
)
 
   (a)
The difference between book-basis and tax-basis unrealized depreciation is attributable primarily to the tax deferral of losses on wash sales adjustments and tax adjustments related to the transfer-in-kind.

 
75
 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
At September 30, 2016, the Funds had tax basis capital losses to offset future gains as follows:
 
     
Capital Loss Carryover
           
     
Long-Term
    
Short-Term
    
Total
  
Expiration Date
 
Floating Rate High
                       
 
  Income Fund
  
$
454,998
    
$
957,705
    
$
1,412,703
  
No Expiration
 
Short Duration High
                             
 
  Income Fund
    
467,245
      
200,617
      
667,862
  
No Expiration
 
At September 30, 2016, the following funds deferred, on a tax basis, post-October losses of:
 
   
Capital Deferral
 
Floating Rate High Income Fund
$4,622,378
 
Short Duration High Income Fund
  2,136,066
 
The tax character of distributions paid during the fiscal years ended September 30, 2016 and September 30, 2015 were as follows:
 
Floating Rate High Income Fund
 
     
Year Ended
      
Period Ended
  
   
September 30, 2016
  
September 30, 2015
 
Ordinary income
  
$
11,427,094
      
$
10,798,330
  
 
Total distributions Paid
  
$
11,427,094
      
$
10,798,330
  
 
Short Duration High Income Fund
 
     
Year Ended
      
Year Ended
  
   
September 30, 2016
  
September 30, 2015
 
Ordinary income
  
$
4,869,610
      
$
3,103,936
  
 
Long Term Capital Gains
    
—
        
2,108
  
 
Total distributions Paid
  
$
4,869,610
      
$
3,106,044
  
 
The Fund designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Fund related to net capital gain to zero for the tax year ended September 30, 2016.
 
NOTE 10 – PRINCIPAL RISKS
 
Below is a summary of some, but not all, of the principal risk of investing in the Funds, each of which may adversely affect a Fund’s net asset value and total return. The Funds’ most recent prospectus provides further descriptions of each Fund’s investment objective, principal investment strategies and principal risks. The following risks apply to all Funds.
 
Bank Loan Risk – A Fund’s investments in assignments of secured and unsecured bank loans may create substantial risk. In making investments in such loans, which are made by banks or other financial intermediaries to
 
76
SHENKMAN FUNDS
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
borrowers, a Fund will depend primarily upon the creditworthiness of the borrower, whose financial condition may be troubled or highly leveraged, for payment of principal and interest. If a Fund does not receive scheduled interest or principal payments on such indebtedness, such Fund’s share price could be adversely affected. A Fund may invest in loans that are rated by a nationally recognized statistical rating organization or are unrated, and may invest in loans of any credit quality, including “distressed” companies with respect to which there is a substantial risk of losing the entire amount invested. In addition, certain bank loans in which a Fund may invest may be illiquid and, therefore, difficult to value and/or sell at a price that is beneficial to the Funds. A Fund, as a participant in a loan, has no direct claim on the loan and would be a creditor of the lender, and not the borrower, in the event of a borrower’s insolvency or default. Transactions in many loans settle on a delayed basis, and a Fund may not receive the proceeds from the sale of a loan for a substantial period after the sale (i.e., more than seven days after the sale). As a result, sale proceeds related to the sale of loans may not be available to make additional investments or to meet a Fund’s redemption obligations until potentially a substantial period after the sale of the loans. In addition, loans are not registered under the federal securities laws like stocks and bonds, so investors in loans have less protection against improper practices than investors in registered securities.
 
Credit Risk – A company may not be able to repay its debt. The Funds invest primarily in “high yield” securities and loans (i.e., rated below Baa3 or BBB- by one or more nationally recognized statistical rating organizations or are unrated but are of comparable credit quality to obligations rated below investment-grade). High yield securities and loans have greater credit risk than more highly rated debt obligations and have a greater possibility that an adverse change in the financial condition of the issuer or the economy may impair the ability of the issuer to make payments of principal and interest. Bankruptcy and similar laws applicable to issuers of the high yield securities and loans may also limit the amount of a Fund’s recovery if the issuer becomes insolvent. High yield securities and loans have historically experienced greater default rates than has been the case for investment-grade securities.
 
High Yield Risk – Bonds and loans rated below BBB by S&P or Baa by Moody’s (commonly referred to as “junk bonds or loans”) typically carry higher coupon rates than investment grade bonds, but also are described as speculative by both S&P and Moody’s and may be subject to greater market price fluctuations, less liquidity and greater risk of income or principal including greater possibility of default and bankruptcy of the issuer of such securities than more highly rated bonds and loans. Lower-rated bonds and loans also are more likely to be sensitive to adverse economic or company developments and more subject to price fluctuations in response to changes
 
77

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
in interest rates. The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit a Fund’s ability to sell such securities at fair value in response to changes in the economy or financial markets. During periods of economic downturn or rising interest rates, highly leveraged issuers of lower-rated securities may experience financial stress which could adversely affect their ability to make payments of interest and principal and increase the possibility of default.
 
Interest Rate Risk – Bond prices generally rise when interest rates decline and decline when interest rates rise. The longer the duration of a bond, the more a change in interest rates affects the bond’s price. Short-term and long-term interest rates may not move the same amount and may not move in the same direction. It is likely there will be less governmental action in the near future to maintain low interest rates, or that governmental actions will be less effective in maintaining low interest rates. The negative impact on fixed income securities from the resulting rate increases for that and other reasons could be swift and significant, including falling market values and reduced liquidity. Substantial redemptions from bond and other income funds may worsen that impact. Other types of securities also may be adversely affected from an increase in interest rates.
 
Investment Risk – The Funds invest primarily in debt obligations issued by non-investment grade companies that may have significant risks as a result of business, financial, market or legal uncertainties. There can be no assurance that the Advisor will correctly evaluate the nature and magnitude of the various factors that could affect the value of, and return on, a Fund’s investments. Prices of the investments held by the Funds may be volatile, and a variety of other factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of a Fund’s activities and the value of its investments.
 
Liquidity Risk – Low or lack of trading volume may make it difficult to sell securities held by the Funds at quoted market prices. The Funds’ investments may at any time consist of significant amounts of securities that are thinly traded or for which no market exists. For example, the investments held by a Fund may not be liquid in all circumstances so that, in volatile markets, the Advisor may not be able to close out a position without incurring a loss. The foregoing risks may be accentuated when the Funds are required to liquidate positions to meet withdrawal requests. Additionally, floating rate loans generally are subject to legal or contractual restrictions on resale, may trade infrequently, and their value may be impaired when the Funds need to liquidate such loans. High yield bonds and loans generally trade only in the over-the-counter market rather than on an organized exchange and may be more difficult to purchase or sell at a fair price, which could have a negative impact on a Fund’s performance.
 
78

 
SHENKMAN FUNDS
 
NOTES TO FINANCIAL STATEMENTS – Continued
September 30, 2016
 
Market Risk – The prices of some or all of the securities in which the Funds invest may decline for a number of reasons, including in response to economic developments and perceptions about the creditworthiness of individual issuers. There can be no assurance that what is perceived as an investment opportunity will not, in fact, result in substantial losses. There is more risk that prices will go down for investors investing over short time horizons.
 
Rule 144A Securities Risk – Rule 144A securities are purchased in transactions exempt from the registration requirements of the Securities Act of 1933, as amended, (the “Securities Act”) pursuant to Rule 144A of the Securities Act. Rule 144A securities may only be sold to qualified institutional buyers, such as the Funds. The market for Rule 144A securities typically is less active than the market for public securities. Rule 144A securities carry the risk that the trading market may not continue and the Funds might be unable to dispose of these securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requirements.
 
 
 
 
 
 

79

SHENKMAN FUNDS

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Board of Trustees
Advisors Series Trust and
Shareholders of:
Shenkman Floating Rate High Income Fund
Shenkman Short Duration High Income Fund
 
We have audited the accompanying statements of assets and liabilities of the Shenkman Floating Rate High Income Fund and Shenkman Short Duration High Income Fund (each a “Fund” and collectively, the “Funds”), each a series of Advisors Series Trust (the “Trust”), including the schedules of investments, as of September 30, 2016, and with respect to the Shenkman Floating Rate High Income Fund, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year then ended and for the period October 15, 2014 (commencement of operations) through September 30, 2015, with respect to the Shenkman Short Duration High Income Fund the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended and for the period October 31, 2012 (commencement of operations) through September 30, 2013.  These financial statements and financial highlights are the responsibility of the Trust’s management.  Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.  The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  Our procedures included confirmation of securities owned as of September 30, 2016, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Shenkman Floating Rate High Income Fund and Shenkman Short Duration High Income Fund, as of September 30, 2016, and the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.
 
 
TAIT, WELLER & BAKER LLP
 
Philadelphia, Pennsylvania
November 29, 2016
 

80

SHENKMAN FUNDS

INFORMATION ABOUT TRUSTEES AND OFFICERS
(Unaudited)

This chart provides information about the Trustees and Officers who oversee the Funds.  Officers elected by the Trustees manage the day-to-day operations of the Funds and execute policies formulated by the Trustees.
 
Independent Trustees(1)
       
Number
  
       
of
  
   
Term of
 
Portfolios
  
   
Office
  
in Fund
Other
 
Position
and
Principal
Complex
Directorships
 
Held
Length
Occupation
Overseen
Held
Name, Address
with the
of Time
During Past
by
During Past
and Age
Trust
Served
Five Years
Trustee(2)
Five Years(3)
Gail S. Duree
Trustee
Indefinite
Director, Alpha
2
Trustee,
(age 70)
  
term
Gamma Delta
 
Advisors
615 E. Michigan St.
  
since
Housing
  
Series Trust
Milwaukee, WI
 
March
Corporation
  
(for series not
53202
  
2014.
(collegiate
 
affiliated with
     
housing
 
the Funds);
     
management)
 
Independent
     
(2012 to present);
 
Trustee from
     
Trustee and Chair
 
1999 to 2012,
     
(2000 to 2012),
 
New Covenant
     
New Covenant
 
Mutual Funds
     
Mutual Funds
 
(an open-end
     
(1999-2012);
 
investment
     
Director and
 
company with
     
Board Member,
 
4 portfolios).
     
Alpha Gamma
   
     
Delta Foundation
   
     
(philanthropic
   
     
organization)
   
     
(2005 to 2011).
    
           
George J. Rebhan
Trustee
Indefinite
Retired;
2
Trustee,
(age 82)
  
term
formerly
  
Advisors
615 E. Michigan St.
  
since
President,
 
Series Trust
Milwaukee, WI
 
May
Hotchkis and
 
(for series not
53202
  
2002.
Wiley Funds
 
affiliated with
     
(mutual funds)
 
the Funds);
     
(1985 to 1993).
  
Independent
         
Trustee from
         
1999 to 2009,
         
E*TRADE
         
Funds.

 
81

 
SHENKMAN FUNDS
 
INFORMATION ABOUT TRUSTEES AND OFFICERS – Continued
(Unaudited)
 
       
Number
  
       
of
  
   
Term of
 
Portfolios
  
   
Office
  
in Fund
Other
 
Position
and
Principal
Complex
Directorships
 
Held
Length
Occupation
Overseen
Held
Name, Address
with the
of Time
During Past
by
During Past
and Age
Trust
Served
Five Years
Trustee(2)
Five Years(3)
George T. Wofford
Trustee
Indefinite
Retired;
2
Trustee,
(age 76)
  
term
formerly Senior
 
Advisors
615 E. Michigan St.
  
since
Vice President,
 
Series Trust
Milwaukee, WI
 
February
Federal Home
 
(for series not
53202
  
1997.
Loan Bank of
 
affiliated with
     
San Francisco.
  
the Funds).
           
Raymond B. Woolson
Trustee
Indefinite
President,
2
Trustee,
(age 57)
  
term*;
Apogee Group,
 
Advisors
615 E. Michigan St.
  
since
Inc. (financial
 
Series Trust
Milwaukee, WI
 
January
consulting firm)
 
(for series not
53202
  
2016.
(1998 to present).
  
affiliated with
         
the Funds);
         
Independent
         
Trustee,
         
Doubleline
         
Funds Trust
         
(an open-end
         
investment
         
company with
         
13 portfolios),
         
Doubleline
         
Equity Funds,
         
Doubleline
         
Opportunistic
         
Credit Fund
         
and
         
Doubleline
         
Income
         
Solutions
         
Fund, from
         
2010 to
         
present.
Interested Trustee
          
           
Joe D. Redwine(4)
Interested
Indefinite
President, CEO,
2
Trustee,
(age 69)
Trustee
term
U.S. Bancorp
 
Advisors
615 E. Michigan St.
  
since
Fund Services,
 
Series Trust
Milwaukee, WI
 
September
LLC (May 1991
 
(for series
53202
  
2008.
to present).
  
not affiliated
         
with the
         
Funds).

 
82
SHENKMAN FUNDS
 
INFORMATION ABOUT TRUSTEES AND OFFICERS – Continued
(Unaudited)
 
Officers
 
   
Term of
 
   
Office
  
 
Position
and
  
 
Held
Length
  
Name, Address
with the
of Time
Principal Occupation
and Age
Trust
Served
During Past Five Years
Joe D. Redwine
Chairman
Indefinite
President, CEO, U.S. Bancorp Fund
(age 69)
and
term
Services, LLC (May 1991 to present).
615 E. Michigan St.
Chief
since
  
Milwaukee, WI
Executive
September
  
53202
Officer
2007.
  
       
Douglas G. Hess
President
Indefinite
Senior Vice President, Compliance and
(age 49)
and
term
Administration, U.S. Bancorp Fund
615 E. Michigan St.
Principal
since
Services, LLC (March 1997 to present).
Milwaukee, WI
Executive
June
  
53202
Officer
2003.
  
       
Cheryl L. King
Treasurer
Indefinite
Vice President, Compliance and
(age 55)
and
term
Administration, U.S. Bancorp Fund
615 E. Michigan St.
Principal
since
Services, LLC (October 1998 to present).
Milwaukee, WI
Financial
December
  
53202
Officer
2007.
  
       
Kevin J. Hayden
Assistant
Indefinite
Assistant Vice President, Compliance
(age 45)
Treasurer
term
and Administration, U.S. Bancorp Fund
615 E. Michigan St.
  
since
Services, LLC (June 2005 to present).
Milwaukee, WI
 
September
  
53202
  
2013.
  
       
Albert Sosa
Assistant
Indefinite
Assistant Vice President, Compliance
(age 45)
Treasurer
term
and Administration, U.S. Bancorp Fund
615 E. Michigan St.
  
since
Services, LLC (June 2004 to present).
Milwaukee, WI
 
September
  
53202
  
2013.
  
       
Michael L. Ceccato
Vice
Indefinite
Senior Vice President, U.S. Bancorp
(age 59)
President,
term
Fund Services, LLC (February
615 E. Michigan St.
Chief
since
2008 to present).
Milwaukee, WI
Compliance
September
  
53202
Officer and
2009.
  
 
AML Officer
    

 
83
 
SHENKMAN FUNDS
 
INFORMATION ABOUT TRUSTEES AND OFFICERS – Continued
(Unaudited)
 
   
Term of
 
   
Office
  
 
Position
and
  
 
Held
Length
  
Name, Address
with the
of Time
Principal Occupation
and Age
Trust
Served
During Past Five Years
Jeanine M.
Secretary
Indefinite
Senior Vice President and Counsel,
  Bajczyk, Esq.
  
term
U.S. Bancorp Fund Services, LLC
(age 51)
  
since
(May 2006 to present).
615 E. Michigan St.
  
September
  
Milwaukee, WI
 
2015.
  
53202
      
       
Emily R.
Assistant
Indefinite
Assistant Vice President, U.S. Bancorp
  Enslow, Esq.
Secretary
term
Fund Services, LLC (July 2013 to
(age 29)
  
since
present); Proxy Voting Coordinator and
615 E. Michigan St.
  
September
Class Action Administrator, Artisan
Milwaukee, WI
 
2015.
Partners Limited Partnership
53202
    
(September 2012 to July 2013);
     
Legal Internship, Artisan Partners
     
Limited Partnership (February 2012 to
     
September 2012); J.D. Graduate,
     
Marquette University Law School
     
(2009 to 2012).

(1)
The Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
(2)
As of September 30, 2016, the Trust was comprised of 48 active portfolios managed by unaffiliated investment advisors.  The term “Fund Complex” applies only to the Fund.  The Fund does not hold itself out as related to any other series within the Trust for investment purposes, nor does it share the same investment adviser with any other series.
(3)
“Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the Securities Exchange Act of 1934, as amended, (that is, “public companies”) or other investment companies registered under the 1940 Act.
(4)
Mr. Redwine is an “interested person” of the Trust as defined by the 1940 Act.  Mr. Redwine is an interested Trustee of the Trust by virtue of the fact that he is an interested person of Quasar Distributors, LLC who acts as principal underwriter to the series of the Trust.
 
The Statement of Additional Information includes additional information about the Fund’s Trustees and Officers and is available, without charge, upon request by calling 1-855-743-6562.
 

84

SHENKMAN FUNDS

NOTICE TO SHAREHOLDERS
September 30, 2016

How to Obtain a Copy of the Funds’ Proxy Voting Policies
 
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-855-SHENKMAN (1-855-743-6562) or on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
 
How to Obtain a Copy of the Funds’ Proxy Voting Records for the 12-Month Period Ended June 30, 2016
 
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-855-SHENKMAN (1-855-743-6562). Furthermore, you can obtain the Funds’ proxy voting records on the SEC’s website at http://www.sec.gov.
 
Quarterly Filings on Form N-Q
 
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090. Information included in the Funds’ Form N-Q is also available, upon request, by calling 1-855-SHENKMAN (1-855-743-6562).
 
Trustees and Officers
 
The Fund’s Statement of Additional Information includes additional information about the Fund’s Trustees and Officers and is available, without charge, upon request by calling 1-855-SHENKMAN (1-855-743-6562) or by visiting the Fund’s website at www.shenkmanfunds.com.
 
Householding
 
In an effort to decrease costs, the Funds intend to reduce the number of duplicate prospectuses, annual and semi-annual reports, proxy statements and other regulatory documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Transfer Agent reasonably believes are from the same family or household.  Once implemented, if you would like to discontinue householding for your accounts, please call toll-free at 1-855-SHENKMAN (1-855-743-6562) to request individual copies of these documents.  Once the Transfer Agent receives notice to stop householding, the Transfer Agent will begin sending individual copies thirty days after receiving your request.  This policy does not apply to account statements.
 

85

SHENKMAN FUNDS

PRIVACY NOTICE

 
The Funds collect non-public information about you from the following sources:
 
• Information we receive about you on applications or other forms;
 
• Information you give us orally; and/or
 
• Information about your transactions with us or others.
 
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Funds.  We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities.  We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
 
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
 







86













(This Page Intentionally Left Blank.)





 











Adviser
Shenkman Capital Management, Inc.
461 Fifth Avenue, 22nd Floor
New York, NY  10017

Distributor
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, WI  53202

Transfer Agent
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI  53202
(877) 273-8635

Custodian
U.S. Bank N.A.
1555 N. River Center Drive, Suite 302
Milwaukee, WI  53212

Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400
Philadelphia, PA  19103

Legal Counsel
Schiff Hardin LLP
666 Fifth Avenue, Suite 1700
New York, NY  10103







This report is intended for shareholders of the Fund and may not be used as sales literature unless preceded or accompanied by a current prospectus.
 
Past performance results shown in this report should not be considered a representation of future performance.  Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.  Statements and other information herein are dated and are subject to change.
 

 

 
SJ-ANNUAL
 




Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer.  The registrant has not made any amendments to its code of ethics during the period covered by this report.  The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.

A copy of the registrant’s Code of Ethics is filed herewith.

Item 3. Audit Committee Financial Expert.

The registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee.  Ms. Gail S. Duree is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N‑CSR.

Item 4. Principal Accountant Fees and Services.

The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years.  “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.  “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit.  “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.  There were no “other services” provided by the principal accountant.  The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.

 
FYE  9/30/2016
FYE  9/30/2015
Audit Fees
          $40.300
          $33,200
Audit-Related Fees
          N/A
          N/A
Tax Fees
          $6,800
          $6,600
All Other Fees
          N/A
          N/A

The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre‑approve all audit and non‑audit services of the registrant, including services provided to any entity affiliated with the registrant.

The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

 
FYE  9/30/2016
FYE  9/30/2015
Audit-Related Fees
0%
0%
Tax Fees
0%
0%
All Other Fees
0%
0%

All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full‑time permanent employees of the principal accountant.

The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years.  The audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.

Non-Audit Related Fees
FYE  9/30/2016
FYE  9/30/2015
Registrant
N/A
N/A
Registrant’s Investment Adviser
N/A
N/A
 
Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Investments.

(a)
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
 
(b)   Not Applicable.
 
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a)
The Registrant’s President/Principal Executive Officer and Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934.  Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

(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 fourth fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Exhibits.

(a)
(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Filed herewith.

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.  Not applicable to open-end investment companies.

(b)
Certification pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.  Furnished herewith.
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)  Advisors Series Trust 

By (Signature and Title)*   /s/ Douglas G. Hess
Douglas G. Hess, President

Date  12/5/16 



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/ Douglas G. Hess
Douglas G. Hess, President

Date  12/5/16 

By (Signature and Title)*    /s/ Cheryl L. King
Cheryl L. King, Treasurer

Date  12/5/16 

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