N-CSRS 1 pff-ncsrs.htm POPLAR FOREST FUNDS SEMIANNUAL REPORT 3-31-2021


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)


Jeffrey T. Rauman, President/Chief Executive Officer
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)



(626) 914-7363
(Registrant's telephone number, including area code)



Date of fiscal year end: September 30, 2021



Date of reporting period: March 31, 2021


Item 1. Reports to Stockholders.

(a)


 
Semi-Annual Report
March 31, 2021

 

 
Poplar Forest Funds
 

 

 
Poplar Forest Partners Fund
Class A (PFPFX)
Class I (IPFPX)

 
Poplar Forest Cornerstone Fund
Investor Class (IPFCX)

POPLAR FOREST FUNDS

TABLE OF CONTENTS

Performance
 
1
     
Letter to Partner
 
2
     
Sector Allocation of Portfolio Assets
 
12
     
Expense Example
 
14
     
Schedules of Investments
 
16
     
Statements of Assets and Liabilities
 
24
     
Statements of Operations
 
26
     
Statements of Changes in Net Assets
 
27
     
Financial Highlights
 
30
     
Notes to Financial Statements
 
33
     
Notice to Shareholders
 
43
     
Approval of Investment Advisory Agreement
 
44
     
Statement Regarding Liquidity Risk Management Program
 
48
     
Privacy Notice
 
49


POPLAR FOREST FUNDS

Performance of each fund class for the 6-month, 1-, 5-, 10-year and since inception periods as of March 31, 2021 is as follows:

 

Returns for periods greater than 1 year have been annualized. The 60/40 blended index comprises 60% S&P 500® Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index.
 
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 Funds may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-877-522-8860. Performance for Class A shares with load reflects a maximum 5.00% sales charge. Class A shares without load do not take into account any sales charges which would reduce performance.
 
As of the Fund’s most recently filed registration statement, the Partners Fund Class A shares gross expense ratio is 1.33%; net expense ratio is 1.21% and is applicable to investors. The Partners Fund Institutional Class shares gross expense ratio is 1.08%; net expense ratio is 0.96% and is applicable to investors. The Cornerstone Fund gross expense ratio is 1.77%; net expense ratio is 0.91% and is applicable to investors. The Adviser has contractually agreed to the fee waiver through at least January 27, 2022.
 



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Portfolio Manager Commentary

Dear Partner,
 
For almost 25 years now, I have used an investment process that focuses on normalized earnings and free cash flow as determinants of business value. The fair value of a business generally evolves slowly over years while stock prices can vary widely from day to day. In the short term, the volatility of prices relative to the stability of underlying value creates opportunities to buy stocks when they are trading at a substantial discount to our assessment of intrinsic value and to sell them after that gap has closed.
 
Intellectually, it’s a fairly simple and straightforward process; in practice, it is far harder. I fell in love with the “treasure hunting” aspect of investing when I was in high school and that challenge continues to fuel me to this day. As I reflect back on the returns generated from my bottom-up stock picking, I can’t help but notice that results are dramatically influenced by prevailing investor attitudes; while I keep doing the same thing, day in and day out, the collective “wisdom” of market participants is anything but stable. For example, in the last 15 months, changes in stock prices (as represented by the S&P 500) simply can’t be explained by changes in long-term business fundamentals:
 
 
Time period
% change in S&P 500
 
 
12/31/19 to 2/19/20
+4.8%
 
 
2/19/20 to 3/23/20
-33.9%
 
 
3/23/20 to 3/31/21
+77.6%
 
 
During these wild market swings, we’ve seen a marked change in the type of companies that investors favor. Former growth darlings are being sold to free up funds to purchase shares of economically-sensitive businesses. Investors want beneficiaries of economic reopening and reflation driven by vaccine deployment and continued fiscal and monetary stimulus. As a result, value stocks have begun to materially outperform growth stocks. I believe this change in market leadership signals the beginning of a multi-year period of outperformance as value stocks deliver the competitive earnings growth needed to narrow the historically wide valuation gap between growth and value stocks.
 

Source: Evercore ISI Research as of 2/28/21 NTMPE: Next Twelve-Month P/E GFC: Great Financial Crisis
 
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Despite Poplar Forest’s recent positive investment results, our portfolio is still valued at just 60% of the S&P 500’s P/E ratio. In short, our portfolio appears to be attractively valued on an absolute basis and even more so relative to a stock market sitting near all-time high levels. With economic growth accelerating, we believe our companies can grow earnings at a very attractive rate that is not reflected in a 13x P/E on consensus 2021 earnings estimates – estimates that we believe will prove too low. Our portfolio also has a 5.5% free cash flow yield (latest 12 months) and we believe that free cash flow can grow 9-10% per year for at least the next three to four years.
 
Some investors worry that rising interest rates will derail the bull market that started in the depths of the COVID crisis. While rising rates may well be a headwind for the most expensively valued stocks, increasing long-term interest rates are a signal that the economy is recovering – and that should be good for value stocks. Historically, interest rates haven’t been a problem for the market until the yield curve inverts (when short-term interest rates are higher than long-term rates). In recent months, long-term interest rates have increased while short-term rates have stayed pinned down by the Fed - the curve has steepened. A steepening curve is a sign that markets are growing increasingly confident that stimulus plus vaccines will lead to a progressively stronger economy. This is a fundamentally bullish outlook for the stocks we own.
 
When contemplating value stocks’ prospects, I think a review of the past can help us as we look to the future. While every market cycle has its own unique characteristics, I continue to see many parallels between the last few years and the late 1990s when I first started managing money in the American Balanced Fund. If the next few years bear any resemblance to the period following the tech bubble, then the strategies we employ at Poplar Forest could be particularly timely. While the pages that follow may be a bit nerdy, I found it useful to delve into the past few market cycles I’ve lived through as a way of framing what the future may hold for value investing.
 
 
1997-1999 – Inflating of the “Tech” Bubble – Goliath Dominates
 
While much attention was given to speculation in tech stocks in the late 1990s, the bubble extended well beyond the tech sector. Yes, Microsoft and Cisco were valued at more than 70x earnings, but it didn’t stop there. More prosaic but large companies, like General Electric and Wal-Mart, traded at more than 45x earnings. In that way, the “tech” bubble was reminiscent of the Nifty 50 era of the 1960s when a small subset of companies was deemed to be dominant and unassailable, and therefore worthy of exorbitantly rich valuation premiums relative to their peers.
 
During the inflating of the “tech” bubble, the Russell 1000 Growth Index beat the Russell 1000 Value Index by more than 15% a year for three years. This period of capital-spending-led ebullience was the culmination of an 11-year expansion that saw the S&P grow earnings by 7.5% per year.
 
 
Earnings Cycle
1989-2000
 
 
GDP Growth
5.5%
 
 
EPS Growth
7.5%
 
 
Core Inflation
3.1%
 
 
Real EPS Growth
4.4%
 

The earnings cycle refers to the period between peaks in earnings on the S&P 500. For
example, earnings peaked at $25.53 in the twelve months ending 9/30/1989 before
falling 23% in the 1990-91 recession and then rising to a $56.79 peak at 9/30/2000.
 
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Given the economic exuberance experienced during the “tech” bubble, it was no surprise to see the Federal Reserve raise interest rates in mid-1999. As was historically typical, the market peaked not long after the yield curve inverted (10-year Treasury yields lower than Fed Funds) about nine months later. For those less involved in investing day-to-day, the yield curve is a representation of the interest rates (yields) on similar quality bonds of different maturities. For example, it could refer to the difference in interest rates of a 10-year Treasury bond relative to the short-term interest rate targeted by the Federal Reserve (so called “Fed Funds”).
 
 
2000-2007 – Value Rebound – Goliath Loses to David
 
When the tech bubble burst, the economy went into a shallow recession that saw a 32% decline in earnings for the S&P 500. The Fed cut interest rates to fight the recession. As it turned out, the “unassailable” market leaders weren’t as bullet proof as expected and the underdog “old economy” stocks held up well. As the bubble deflated (from 2000 to 2002), the Value Index beat the Growth Index by 18.5% per year - enough to recover the prior three years’ underperformance and then some. Value stocks continued to perform well in the recovery and, by the end of 2006, the Russell 1000 Value Index had outperformed its Growth counterpart for seven years in a row.
 
While this economic expansion didn’t last as long as its predecessor, underlying market fundamentals were similar:
 
 
Earnings Cycle
1989-2000
2000-2007
 
 
GDP Growth
5.5%
5.0%
 
 
EPS Growth
7.5%
7.3%
 
 
Core Inflation
3.1%
2.1%
 
 
Real EPS Growth
4.4%
5.2%
 

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A housing market fueled by low interest rates became overheated and, as was typical of past cycles, the Federal Reserve started raising interest rates to combat fears of inflation. As in the late 1990s, the yield curve inverted before the stock market peaked.
 
 
 
2008-2019 – Tepid Recovery from Financial Crisis – followed by a 1990s’ Redux
 
As has been well documented, the aftermath of the bursting of the housing bubble was much more systemically challenging than was the recovery from the capital spending slump that followed the popping of the “tech” bubble. Earnings for companies in the S&P 500 fell by 57% and it took four years for them to recover to their 2007 peak. Earnings took another hit in the 2015 “Industrial Recession,” but the pain was contained to companies that made stuff and the overall economy moved forward.
 
Ultimately, the Trump tax cuts in 2017 led to a renewed burst of activity, yet the resulting economic recovery still paled in comparison to past expansions:
 
 
Earnings Cycles
1989-2000
2000-2007
2007-2019
 
 
GDP Growth
5.5%
5.0%
3.3%
 
 
EPS Growth
7.5%
7.3%
4.3%
 
 
Core Inflation
3.1%
2.1%
1.9%
 
 
Real EPS Growth
4.4%
5.2%
2.4%
 

Given the tepid recovery after the Global Financial Crisis, companies that did have solid growth started to see inflation in their valuation – a so-called growth scarcity premium - and the Russell Growth Index beat the Value Index by about 3% a year from 2008-2016. As we saw in the late 1990s, a subset of these companies was subsequently anointed as incontrovertible winners in what are perceived to be winner-take-all markets. Valuation metrics expanded and though the language was
 
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slightly different, we saw a 1990s redux of “Old” versus “New” economy stocks. The Growth Index trounced the Value Index by 16.9% per year for three years (as compared to 15.3% in ‘97-’99).
 
Meanwhile, as economic growth started to accelerate in response to the Trump tax cuts, the Federal Reserve started on a path to “normalize” interest rates. Yet again, the yield curve inverted. While at the time I rationalized away the inversion, given the apparent lack of bubbles in need of popping, history suggested that the stage was set for a bear market. While COVID will be remembered as the cause of the 2020 bear market, I can’t help but wonder if we’d have had to live through a challenging period regardless of our need to be socially distanced for health reasons.
 
 
 
Looking Ahead – Is the Stage Set for a Replay of 2000-2007?
 
I think the most important observation regarding the current market cycle is that officials from the White House to Congress to the U.S. Treasury to the Federal Reserve are all committed to delivering more robust economic growth than we experienced in the years that followed the Global Financial Crisis. With COVID vaccinations expanding rapidly and unprecedented fiscal and monetary stimulus, earnings appear set to rebound faster than prior recoveries. With more widespread earnings growth, the so-called “growth scarcity premium” seems likely to continue to dissipate while value stocks enjoy a positive re-rating. If the next eight years follow the same pattern as 2000-2007 (just as 2018-2020 was similar to 1997-1999), then Poplar Forest’s investment program could really shine. If value beats growth, I believe that we can beat both because we run concentrated, high-conviction, benchmark-agnostic portfolios.
 
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Market Cycles
1997 to 1999
2000 to 2007
2008 to 2017
1997 to 2017
Value Index
 +18.8%
+6.8%
  +7.1%
+8.5%
Growth Index
+34.1%
 -2.9%
+10.0%
+7.8%
Value vs. Growth
 -15.3%
+9.7%
   -2.9%
+0.7%
Market Cycles
2018 to 2020
2021 to 2028?
   
Value Index
  +6.1%
     
Growth Index
+23.0%
     
Value vs. Growth
 -16.9%
     

Current circumstances – accelerating earnings growth and a wide valuation differential between growth and value stocks – remind me of the early days of the 2000-2007 value cycle. While I’m sure there will be unique characteristics this time around, the situation looks to be full of promise. I’ve used the same investment process for nearly a quarter century, and after comparing the results of that process both at Poplar Forest and at the Capital Group, I strongly believe that the ingredients are in place for several years of rewarding results for the strategies we employ at Poplar Forest!
 

J. Dale Harvey
Founder, CIO and Portfolio Manager
March 31, 2021
 
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Partners Fund Portfolio Review
The Partners Fund Institutional Class shares produced a return of 51.12% while Class A shares (no load) produced an 50.98% return for the six months ended March 31, 2021.  This compared to a return of 19.07% for the S&P 500 Index (“S&P 500”) and 29.34% for the Russell 1000 Value Index. Positive performance was primarily due to security selection rather than sector allocation. Relative to the S&P 500, the Fund’s top contributing sectors were Financials, Consumer Discretionary and Materials; whereas, the bottom contributing sectors were Utilities, Consumer Staples and Healthcare. At the security level, the Fund’s top contributors to overall performance were Tapestry, Equitable Holdings, CNH Industrial, American International Group and ViacomCBS. Bottom contributors included Merck, Kroger, E*TRADE Financial, Noble Energy and Conagra Brands.
 
State of the Economy and Recovery in Value Stocks
 
Due to robust economic activity, the air is starting to come out of the growth bubble. Progress on vaccination efforts and record stimulus injections into the economy fueled continued gains in stocks, and low-expectation value stocks in particular. The Russell 1000 Value Index outperformed both the Russell 1000 Growth and the S&P 500 indices during this fiscal period by 1,694 bps and 1,126 bps, respectively.  So far in 2021 alone, investors have allocated $11.5 billion into U.S. large cap value exchange traded funds, versus almost $4 billion in outflows from growth funds.1
 
We view this value recovery in two tranches: cyclical value and defensive value.  Economically-exposed cyclical businesses- Financials, Energy, and Industrials- are early beneficiaries. However, the defensive half of Value- such as Real Estate or Consumer Staples- has yet to participate. So, we may have more of this “recovery runway” to experience: economists surveyed by the Wall Street Journal predict economic growth will accelerate by almost 6% this year, the fastest pace in nearly four decades.1 Although we don’t know the length of this recovery, we believe that it will be defined by its magnitude. Two critical components we continue to evaluate in gauging the recovery are employment reports and the shape of the yield curve. Employment is improving faster than anyone expected. Most forecasters think the unemployment rate will continue to decline fairly rapidly, and in recent months, the yield curve has steepened, both positive signs for economic strength.
 
Portfolio Positioning
 
Although growth in actual company earnings has rebounded, this reality is not reflected in earnings estimates. The 2022 expected earnings for our portfolio companies are still 10% below actual earnings from 2019. Despite a belief that consensus underestimates the earnings power of our companies, the portfolio still trades at just 13x consensus 2021 earnings expectations. Additionally, our portfolio has a 5.5% free cash flow yield (latest 12 months) and we believe those free cash flows can grow 9-10% per year for the next three to four years.
 
_______________
1
Michael Wursthorn, ‘Stocks Favored in Reopening Trade Hit Turbulence,’ The Wall Street Journal, March 29, 2021, https://www.wsj.com/articles/stocks-favored-in-reopening-trade-hit-turbulence-11617010200?mod=hp_lead_pos4

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We also believe the Fund is well positioned for reflation with Financials, Energy and Materials comprising roughly 42% of the portfolio. Research suggests that only 20-25% of stimulus is making its way into the economy which leaves a tremendous amount of cash and borrowing capacity on the sidelines. Deployment of that cash should further benefit economic activity and the reflation trade. Furthermore, congressional approval of infrastructure spending could further benefit these economically-sensitive companies.
 
 
Future Outlook
 
Although our process is focused on bottom-up, company-specific research, macro activities will influence where we focus our attention. We are looking at opportunities that would benefit from an infrastructure bill, beneficiaries of reflation, and companies that fall into the defensive value category. However, the most important observation right now is that everyone from the White House to Congress to the U.S. Treasury to the Federal Reserve is committed to delivering more robust economic growth. If the next eight years follow the same pattern as 2000-2007, and value stocks outperform growth stocks, then we believe the companies in our concentrated, high-conviction, benchmark-agnostic portfolio could shine.
 
Cornerstone Fund Portfolio Review
The Cornerstone Fund produced a 37.69% return compared to a 10.02% return for a 60/40 blend of the S&P 500® Index and the Bloomberg Barclays U.S. Aggregate Bond Index for the six months ended March 31, 2021.
 
At the security level, the Fund benefitted from top contributing equity investments Tapestry, ViacomCBS, CNH Industrial, Nucor and Equitable Holdings. The bottom contributing equity investments were E*TRADE Financial, Merck, Kroger and Noble Energy.
 
While the overlap between the equities owned in the Cornerstone and Partners Funds is high, the Cornerstone Fund remains far more defensive with roughly 4% in cash and equivalents and roughly 22% in fixed income investments. Normally, we expect the Fund to hold between 25% and 50% in fixed income securities.
 
In the Cornerstone Fund, we remain focused on trying to manage downside risk while also striving to protect our investors’ long-term purchasing power. With equities accounting for approximately 65%-75% of the Fund, the potential draw-down in a weak stock market environment should be less than what we would expect from the Partners Fund. Furthermore, our fixed income investments offer a far different profile than what would commonly be found in a balanced fund. Roughly 56% of our fixed income portfolio is invested in Inflation Protected Treasury bonds (TIPs). Considering the current interest rate environment, we are positioning the portfolio for an increase in income produced by TIPs as inflation rises.
 
As we look ahead, we believe our portfolio is well positioned to generate solid inflation-adjusted returns. The Fund remains focused on high quality companies that are trading at what we believe are discounted valuations, while our bond selections continue to emphasize our goal of capital preservation.
 
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Disclosures
 
Must be preceded or accompanied by a prospectus.
 
Mutual fund investing involves risk. Principal loss is possible. Investing in small and medium-sized companies may involve greater risk than investing in larger, more established companies because they can be subject to greater share price volatility.  The Funds may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods.  These risks are usually greater in emerging markets.  The Funds may invest in debt securities which typically decrease in value when interest rates rise. Asset-backed and mortgage-backed securities include market risk, interest rate risk, credit risk and prepayment risk.  This risk is usually greater for longer-term debt securities.  When a Fund invests in an exchange-traded fund (“ETF”) or mutual fund, it will bear additional expenses based on its pro rata share of the ETF’s or mutual fund’s operating expenses, including the potential duplication of management fees. The Funds may invest in options, which may be subject to greater fluctuations in value than an investment in the underlying securities.
 
Earnings growth is not a measure of a Fund’s future performance.
 
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.  For a complete list of holdings, please refer to the schedule of investments in this report.
 
Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.
 
Poplar Forest Capital LLC is the adviser to the Poplar Forest Funds which are distributed by Quasar Distributors, LLC.
 
The Partners Fund top ten holdings and weightings as of 3/31/21 are as follows:
 
 
Equitable Holdings
5.14
 
 
Nucor
5.09
 
 
American International Group
4.66
 
 
Wells Fargo
4.59
 
 
Ally Financial
4.54
 
 
Advance Auto Parts
4.41
 
 
AmerisourceBergen
4.38
 
 
National Fuel Gas
4.26
 
 
AT&T
4.23
 
 
Citigroup
4.14
 

The Cornerstone Fund top ten equity holdings and weightings as of 3/31/21 are as follows:
 
 
Nucor
3.72
 
 
Advance Auto Parts
3.20
 
 
Equitable Holdings
3.14
 
 
Ally Financial
3.06
 
 
Wells Fargo
2.99
 
 
American International Group
2.96
 
 
Chevron
2.95
 
 
CNH Industrial
2.90
 
 
Murphy Oil
2.86
 
 
AmerisourceBergen
2.73
 

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The S&P 500® Index: is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation.
 
The Russell 1000® Value index: measures the performance of the Russell 1000’s value segment, which is defined to include firms whose share prices have lower price/book ratios and lower expected long-term mean earnings growth rates.
 
The Bloomberg Barclays U.S. Aggregate Bond Index: is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities.
 
Blended index: (also known as a blended benchmark) is a combination of two or more indices in varying percentages. To take a simple example, if an investor’s assets are allocated to 60% stocks and 40% bonds, the portfolio’s performance might be best measured against a blended benchmark consisting of 60% in a stock index (e.g. S&P 500® index) and 40% in a bond index (e.g. Bloomberg Barclays U.S. Aggregate Bond Index).
 
The Consumer Price Index (CPI): is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.  The annual percentage change in a CPI is used as a measure of inflation.
 
The Russell 1000® Growth Index: measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Index is unmanaged.
 
It is not possible to invest directly in an index.
 
Earnings Per Share (EPS): is the net income of a company divided by the total number of shares it has outstanding.
 
Free Cash Flow (cash flow): is equal to the after-tax net income of a company plus depreciation and amortization less capital expenditures.
 
Price /Cash Flow Ratio (P/CF): a stock valuation measure calculated by dividing a firm’s cash flow per share into the current stock price. Financial analysts often prefer to value stocks using cash flow rather than earnings because the latter is more easily manipulated.
 
Price/Earnings (P/E) Ratio: is a common tool for comparing the prices of different common stocks and is calculated by dividing the earnings per share into the current market price of a stock.
 
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SECTOR ALLOCATION OF PORTFOLIO ASSETS at March 31, 2021 (Unaudited)



Percentages represent market value as a percentage of total investments.
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
 
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SECTOR ALLOCATION OF PORTFOLIO ASSETS at March 31, 2021 (Unaudited)


 
Percentages represent market value as a percentage of total investments.
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
 
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EXPENSE EXAMPLE at March 31, 2021 (Unaudited)
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees, and exchange fees, and (2) ongoing costs, including management fees, distribution and/or service fees, and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare 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 and held for the entire period (10/1/20 – 3/31/21).
 
Actual Expenses
For each class of each Fund, two lines are presented in the tables below, with the first line providing information about actual account values and actual expenses.  You will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent.  The Example below includes, but is not limited to, management fees, 12b-1 fees, fund accounting, custody and transfer agent fees.  You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.  Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
 
Hypothetical Example for Comparison Purposes
For each class of each Fund, the second line provides information about hypothetical account values and hypothetical expenses based on the respective Fund’s actual expense ratio and an 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 Funds and other funds.  To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.  Please note that the expenses shown in the 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 second line of the tables for each class of each Fund is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
 
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EXPENSE EXAMPLE at March 31, 2021 (Unaudited), Continued
 
Beginning
Ending
Expenses Paid
Annualized
 
Account Value
Account Value
During Period
Expense
 
10/1/20
3/31/21
10/1/20 – 3/31/21
Ratio*
Poplar Forest Partners Fund
       
         
Class A Shares
       
Actual
$1,000.00
$1,509.80
$7.63
1.22%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,018.85
$6.14
1.22%
         
Institutional Class Shares
       
Actual
$1,000.00
$1,511.20
$6.07
0.97%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,020.09
$4.89
0.97%
         
 
Beginning
Ending
Expenses Paid
Annualized
 
Account Value
Account Value
During Period
Expense
 
10/1/20
3/31/21
10/1/20 – 3/31/21
Ratio*
Poplar Forest Cornerstone Fund
       
         
Investor Class Shares
       
Actual
$1,000.00
$1,376.90
$5.33
0.90%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,020.44
$4.53
0.90%

*
Expenses are equal to the annualized expense ratio of each class, multiplied by the average account value over the period, multiplied by 182 (days in most recent fiscal half-year) / 365 days to reflect the one-half year expense.

Poplar Forest Funds Semi-Annual Report, March 2021
15

POPLAR FOREST PARTNERS FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited)
Shares
 
COMMON STOCKS – 95.8%
 
Value
 
           
   
Aerospace & Defense – 0.9%
     
 
23,500
 
Curtiss-Wright Corp.
 
$
2,787,100
 
               
     
Banks – 8.6%
       
 
170,500
 
Citigroup, Inc.
   
12,403,875
 
 
341,000
 
Wells Fargo & Co.
   
13,322,870
 
           
25,726,745
 
     
Capital Markets – 2.8%
       
 
110,000
 
Morgan Stanley
   
8,542,600
 
               
     
Consumer Finance – 4.4%
       
 
292,500
 
Ally Financial, Inc.
   
13,223,925
 
               
     
Diversified Financial Services – 4.9%
       
 
450,000
 
Equitable Holdings, Inc.
   
14,679,000
 
               
     
Diversified Telecommunication Services – 6.5%
       
 
418,000
 
AT&T, Inc.
   
12,652,860
 
 
515,000
 
Lumen Technologies, Inc.
   
6,875,250
 
           
19,528,110
 
     
Food & Staples Retailing – 7.2%
       
 
164,500
 
CVS Health Corp.
   
12,375,335
 
 
117,500
 
Sysco Corp.
   
9,251,950
 
           
21,627,285
 
     
Food Products – 2.2%
       
 
171,500
 
Conagra Brands, Inc.
   
6,448,400
 
               
     
Gas Utilities – 4.3%
       
 
255,000
 
National Fuel Gas Co.
   
12,747,450
 
               
     
Health Care Providers & Services – 4.4%
       
 
111,000
 
AmerisourceBergen Corp.
   
13,105,770
 
               
     
Household Durables – 3.3%
       
 
370,000
 
Newell Brands, Inc.
   
9,908,600
 
               
     
Insurance – 7.2%
       
 
302,000
 
American International Group, Inc.
   
13,955,420
 
 
123,000
 
Lincoln National Corp.
   
7,659,210
 
           
21,614,630
 
     
IT Services – 6.7%
       
 
336,000
 
DXC Technology Co. (d)
   
10,503,360
 
 
73,000
 
International Business Machines Corp.
   
9,727,980
 
           
20,231,340
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
16

POPLAR FOREST PARTNERS FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited), Continued
Shares
     
Value
 
   
Machinery – 5.2%
     
 
792,000
 
CNH Industrial NV (a)(d)
 
$
12,386,880
 
 
15,800
 
Stanley Black & Decker, Inc.
   
3,154,786
 
           
15,541,666
 
     
Media – 0.8%
       
 
56,000
 
ViacomCBS, Inc. – Class B (b)
   
2,525,600
 
               
     
Metals & Mining – 6.8%
       
 
182,000
 
Nucor Corp.
   
14,609,140
 
 
38,500
 
Reliance Steel & Aluminum Co.
   
5,863,165
 
           
20,472,305
 
     
Oil, Gas & Consumable Fuels – 7.3%
       
 
115,000
 
Chevron Corp.
   
12,050,850
 
 
591,500
 
Murphy Oil Corp.
   
9,706,515
 
           
21,757,365
 
     
Pharmaceuticals – 4.8%
       
 
28,000
 
Eli Lilly & Co.
   
5,230,960
 
 
119,500
 
Merck & Co., Inc.
   
9,212,255
 
           
14,443,215
 
     
Specialty Retail – 4.3%
       
 
71,000
 
Advance Auto Parts, Inc.
   
13,027,790
 
               
     
Textiles, Apparel & Luxury Goods – 3.2%
       
 
230,000
 
Tapestry, Inc. (d)
   
9,478,300
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $190,503,105)
   
287,417,196
 
               
     
 REIT – 1.9%
       
               
     
Equity Real Estate Investment Trust (REIT) – 1.9%
       
 
289,000
 
Brixmor Property Group, Inc.
   
5,846,470
 
     
TOTAL REIT
       
     
  (Cost $3,447,111)
   
5,846,470
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
17

POPLAR FOREST PARTNERS FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited), Continued
Shares
 
MONEY MARKET FUND – 1.1%
 
Value
 
 
3,164,455
 
Morgan Stanley Institutional Liquidity Funds –
     
     
  Treasury Portfolio – Institutional Class, 0.03% (c)
 
$
3,164,455
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $3,164,455)
   
3,164,455
 
     
Total Investments in Securities
       
     
  (Cost $197,114,671) – 98.8%
   
296,428,121
 
     
Other Assets in Excess of Liabilities – 1.2%
   
3,462,899
 
     
NET ASSETS – 100.0%
 
$
299,891,020
 

REIT – Real Estate Investment Trust
(a)
U.S. traded security of a foreign issuer.
(b)
Non-voting shares.
(c)
Rate shown is the 7-day annualized yield at March 31, 2021.
(d)
Non-income producing security.

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

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

Poplar Forest Funds Semi-Annual Report, March 2021
18

POPLAR FOREST CORNERSTONE FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited)
Shares
 
COMMON STOCKS – 72.2%
 
Value
 
           
   
Aerospace & Defense – 0.8%
     
 
1,800
 
Curtiss-Wright Corp.
 
$
213,480
 
               
     
Banks – 5.6%
       
 
10,000
 
Citigroup, Inc.
   
727,500
 
 
21,500
 
Wells Fargo & Co.
   
840,005
 
           
1,567,505
 
     
Biotechnology – 0.9%
       
 
1,500
 
United Therapeutics Corp. (a)
   
250,905
 
               
     
Capital Markets – 2.3%
       
 
8,500
 
Morgan Stanley
   
660,110
 
               
     
Consumer Finance – 3.1%
       
 
19,000
 
Ally Financial, Inc.
   
858,990
 
               
     
Diversified Financial Services – 3.1%
       
 
27,000
 
Equitable Holdings, Inc.
   
880,740
 
               
     
Diversified Telecommunication Services – 4.8%
       
 
23,900
 
AT&T, Inc.
   
723,453
 
 
46,400
 
Lumen Technologies, Inc.
   
619,440
 
           
1,342,893
 
     
Food & Staples Retailing – 5.2%
       
 
9,600
 
CVS Health Corp.
   
722,208
 
 
9,300
 
Sysco Corp.
   
732,282
 
           
1,454,490
 
     
Food Products – 1.7%
       
 
13,000
 
Conagra Brands, Inc.
   
488,800
 
               
     
Gas Utilities – 2.6%
       
 
14,700
 
National Fuel Gas Co.
   
734,853
 
               
     
Health Care Providers & Services – 4.8%
       
 
6,500
 
AmerisourceBergen Corp.
   
767,455
 
 
1,650
 
Anthem, Inc.
   
592,267
 
           
1,359,722
 
     
Household Durables – 2.5%
       
 
25,700
 
Newell Brands, Inc.
   
688,246
 
               
     
Insurance – 5.2%
       
 
18,000
 
American International Group, Inc.
   
831,780
 
 
9,900
 
Lincoln National Corp.
   
616,473
 
           
1,448,253
 
     
IT Services – 4.5%
       
 
19,500
 
DXC Technology Co. (a)
   
609,570
 
 
5,000
 
International Business Machines Corp.
   
666,300
 
           
1,275,870
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
19

POPLAR FOREST CORNERSTONE FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited), Continued
Shares
     
Value
 
   
Machinery – 3.7%
     
 
52,000
 
CNH Industrial NV (a)(e)
 
$
813,280
 
 
1,100
 
Stanley Black & Decker, Inc.
   
219,637
 
           
1,032,917
 
     
Media – 0.8%
       
 
5,100
 
ViacomCBS, Inc. – Class B (d)
   
230,010
 
               
     
Metals & Mining – 5.5%
       
 
13,000
 
Nucor Corp.
   
1,043,510
 
 
3,300
 
Reliance Steel & Aluminum Co.
   
502,557
 
           
1,546,067
 
     
Oil, Gas & Consumable Fuels – 5.8%
       
 
7,900
 
Chevron Corp.
   
827,841
 
 
49,000
 
Murphy Oil Corp.
   
804,090
 
           
1,631,931
 
     
Pharmaceuticals – 3.8%
       
 
2,200
 
Eli Lilly & Co.
   
411,004
 
 
8,600
 
Merck & Co., Inc.
   
662,974
 
           
1,073,978
 
     
Specialty Retail – 3.2%
       
 
4,900
 
Advance Auto Parts, Inc.
   
899,101
 
               
     
Textiles, Apparel & Luxury Goods – 2.3%
       
 
15,600
 
Tapestry, Inc. (a)
   
642,876
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $13,995,152)
   
20,281,737
 
               
     
 REIT – 1.9%
       
               
     
Equity Real Estate Investment Trust (REIT) – 1.9%
       
 
26,500
 
Brixmor Property Group, Inc.
   
536,095
 
     
TOTAL REIT
       
     
  (Cost $371,398)
   
536,095
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
20

POPLAR FOREST CORNERSTONE FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited), Continued
Principal
         
Amount
 
CORPORATE BONDS – 9.7%
 
Value
 
           
   
Banks – 2.6%
     
   
Citizens Financial Group, Inc.
     
$
700,000
 
  3.75%, 7/1/24
 
$
751,735
 
               
     
Oil, Gas Services & Equipment – 2.2%
       
     
Schlumberger Holdings Corp.
       
 
550,000
 
  4.00%, 12/21/25 (c)
   
608,699
 
               
     
Professional Services – 2.8%
       
     
Equifax, Inc.
       
 
750,000
 
  3.30%, 12/15/22
   
780,773
 
               
     
Real Estate – 4.2%
       
     
Brixmor Operating Partnership LP
       
 
550,000
 
  3.25%, 9/15/23
   
581,554
 
     
TOTAL CORPORATE BONDS
       
     
  (Cost $2,560,622)
   
2,722,761
 
               
     
U.S. TREASURY NOTES – 12.2%
       
     
U.S. Treasury Floating Rate Note
       
 
650,000
 
  0.069%, 1/31/23
   
650,354
 
     
U.S. Treasury Note TIPS
       
 
762,782
 
  0.125%, 1/15/22
   
780,335
 
 
771,155
 
  0.125%, 7/15/24
   
834,510
 
 
766,972
 
  0.25%, 7/15/29
   
843,677
 
 
305,235
 
  0.25%, 2/15/50
   
317,555
 
           
2,776,077
 
     
TOTAL U.S. TREASURY NOTES
       
     
  (Cost $3,284,398)
   
3,426,431
 

The accompanying notes are an integral part of these financial statements.
Poplar Forest Funds Semi-Annual Report, March 2021
21

POPLAR FOREST CORNERSTONE FUND

SCHEDULE OF INVESTMENTS at March 31, 2021 (Unaudited), Continued
Shares
 
MONEY MARKET FUND – 3.9%
 
Value
 
 
1,098,025
 
Morgan Stanley Institutional Liquidity Funds –
     
     
  Treasury Portfolio – Institutional Class, 0.03% (b)
 
$
1,098,025
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $1,098,025)
   
1,098,025
 
     
Total Investments in Securities
       
     
  (Cost $21,309,595) – 99.9%
   
28,065,049
 
     
Other Assets in Excess of Liabilities – 0.1%
   
41,446
 
     
NET ASSETS – 100.0%
 
$
28,106,495
 

REIT – Real Estate Investment Trust
TIPS – Treasury Inflation Protected Securities
(a)
Non-income producing security.
(b)
Rate shown is the 7-day annualized yield at March 31, 2021.
(c)
Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of March 31, 2021, the value of these investments was $608,699 or 2.2% of total net assets.
(d)
Non-voting shares.
(e)
U.S. traded security of a foreign issuer.

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

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

Poplar Forest Funds Semi-Annual Report, March 2021
22

POPLAR FOREST FUNDS






(This Page Intentionally Left Blank.)
 





Poplar Forest Funds Semi-Annual Report, March 2021
23

POPLAR FOREST FUNDS

STATEMENTS OF ASSETS AND LIABILITIES at March 31, 2021 (Unaudited)
   
Poplar Forest
   
Poplar Forest
 
   
Partners Fund
   
Cornerstone Fund
 
ASSETS
           
Investments in securities, at value (identified cost
           
  $197,114,671 and $21,309,595, respectively)
 
$
296,428,121
   
$
28,065,049
 
Receivables
               
Investments sold
   
3,810,278
     
 
Fund shares issued
   
784,138
     
40,000
 
Dividends and interest
   
374,769
     
47,605
 
Prepaid expenses
   
16,705
     
5,700
 
Total assets
   
301,414,011
     
28,158,354
 
LIABILITIES
               
Payables
               
Fund shares redeemed
   
1,168,468
     
 
Due to Adviser
   
191,407
     
4,760
 
12b-1 fees
   
13,716
     
8
 
Custody fees
   
7,563
     
1,338
 
Administration and fund accounting fees
   
60,539
     
23,645
 
Transfer agent fees and expenses
   
54,505
     
6,484
 
Audit fees
   
11,177
     
10,927
 
Chief Compliance Officer fee
   
3,085
     
3,085
 
Trustee fees and expenses
   
342
     
 
Accrued expenses
   
12,189
     
1,612
 
Total liabilities
   
1,522,991
     
51,859
 
NET ASSETS
 
$
299,891,020
   
$
28,106,495
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
24

POPLAR FOREST FUNDS

STATEMENTS OF ASSETS AND LIABILITIES at March 31, 2021 (Unaudited), Continued
   
Poplar Forest
   
Poplar Forest
 
   
Partners Fund
   
Cornerstone Fund
 
CALCULATION OF NET ASSET VALUE PER SHARE
           
Class A Shares
           
Net assets applicable to shares outstanding
 
$
23,452,544
   
$
 
Shares issued and outstanding [unlimited number
               
  of shares (par value $0.01) authorized]
   
444,753
     
 
Net asset value and redemption price per share
 
$
52.73
   
$
 
Maximum offering price per share (Net asset value
               
  per share divided by 95.00%)
 
$
55.51
   
$
 
Investor Class Shares
               
Net assets applicable to shares outstanding
 
$
   
$
28,106,495
 
Shares issued and outstanding [unlimited number
               
  of shares (par value $0.01) authorized]
   
     
914,282
 
Net asset value, offering and redemption price per share
 
$
   
$
30.74
 
Institutional Class Shares
               
Net assets applicable to shares outstanding
 
$
276,438,476
   
$
 
Shares issued and outstanding [unlimited number
               
  of shares (par value $0.01) authorized]
   
5,240,078
     
 
Net asset value, offering and redemption price per share
 
$
52.75
   
$
 
COMPONENTS OF NET ASSETS
               
Paid-in capital
 
$
193,372,590
   
$
20,449,969
 
Total distributable earnings
   
106,518,430
     
7,656,526
 
Net assets
 
$
299,891,020
   
$
28,106,495
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
25

POPLAR FOREST FUNDS

STATEMENTS OF OPERATIONS For the Six Months Ended March 31, 2021 (Unaudited)
   
Poplar Forest
   
Poplar Forest
 
   
Partners Fund
   
Cornerstone Fund
 
INVESTMENT INCOME
           
Income
           
Dividends
 
$
3,627,542
   
$
271,997
 
Interest
   
323
     
69,561
 
Total Income
   
3,627,865
     
341,558
 
Expenses
               
Advisory fees (Note 4)
   
1,160,988
     
99,432
 
Administration and fund accounting fees (Note 4)
   
114,290
     
44,892
 
Transfer agent fees and expenses (Note 4)
   
69,248
     
10,971
 
Sub-transfer agent fees
   
29,940
     
546
 
12b-1 fees – Class A shares (Note 5)
   
24,623
     
114
 
Registration fees
   
19,020
     
6,226
 
Custody fees (Note 4)
   
14,953
     
2,976
 
Audit fees
   
11,239
     
10,988
 
Trustees fees and expenses
   
8,654
     
7,262
 
Printing and mailing expense
   
8,216
     
2,247
 
Chief Compliance Officer fee (Note 4)
   
6,243
     
6,243
 
Legal fees
   
2,983
     
3,214
 
Insurance expense
   
2,787
     
1,163
 
Interest expense (Note 7)
   
20
     
36
 
Miscellaneous
   
13,424
     
2,687
 
Total expenses
   
1,486,628
     
198,997
 
Less: Advisory fees waived (Note 4)
   
(226,243
)
   
(87,023
)
Net expenses
   
1,260,385
     
111,974
 
Net investment income
   
2,367,480
     
229,584
 
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
               
Net realized gain from investments
   
9,058,399
     
688,273
 
Net change in unrealized appreciation/(depreciation)
               
  on investments
   
92,547,123
     
6,970,166
 
Net realized and unrealized gain on investments
   
101,605,522
     
7,658,439
 
Net Increase in Net Assets
               
  Resulting from Operations
 
$
103,973,002
   
$
7,888,023
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
26

POPLAR FOREST PARTNERS FUND

STATEMENTS OF CHANGES IN NET ASSETS
   
Six Months Ended
       
   
March 31, 2021
   
Year Ended
 
   
(Unaudited)
   
September 30, 2020
 
NET INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment income
 
$
2,367,480
   
$
6,459,926
 
Net realized gain/(loss) from investments
   
9,058,399
     
(1,642,063
)
Net change in unrealized appreciation/
               
  (depreciation) on investments
   
92,547,123
     
(51,871,595
)
Net increase/(decrease) in net assets
               
  resulting from operations
   
103,973,002
     
(47,053,732
)
DIVIDENDS AND DISTRIBUTIONS
               
  TO SHAREHOLDERS
               
Net dividends and distributions to shareholders –
               
  Class A Shares
   
(415,086
)
   
(405,531
)
Net dividends and distributions to shareholders –
               
  Institutional Class Shares
   
(5,476,997
)
   
(6,068,125
)
Total dividends and distributions to shareholders
   
(5,892,083
)
   
(6,473,656
)
CAPITAL SHARE TRANSACTIONS
               
Net decrease in net assets derived from
               
  net change in outstanding shares (a)
   
(7,605,957
)
   
(128,784,596
)
Total increase/(decrease) in net assets
   
90,474,962
     
(182,311,984
)
NET ASSETS
               
Beginning of period
   
209,416,058
     
391,728,042
 
End of period
 
$
299,891,020
   
$
209,416,058
 

(a)
A summary of share transactions is as follows:

     
Six Months Ended
             
     
March 31, 2021
   
Year Ended
 
     
(Unaudited)
   
September 30, 2020
 
 
Class A Shares
 
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
11,349
   
$
510,479
     
21,332
   
$
784,218
 
 
Shares issued on reinvestments
                               
 
  of distributions
   
8,381
     
359,307
     
8,016
     
345,823
 
 
Shares redeemed
   
(46,759
)
   
(1,914,735
)
   
(252,959
)
   
(9,602,219
)
 
Net decrease
   
(27,029
)
 
$
(1,044,949
)
   
(223,611
)
 
$
(8,472,178
)
                                   
     
Six Months Ended
                 
     
March 31, 2021
   
Year Ended
 
     
(Unaudited)
   
September 30, 2020
 
 
Institutional Class Shares
 
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
429,321
   
$
19,476,761
     
1,181,437
   
$
42,102,878
 
 
Shares issued on reinvestments
                               
 
  of distributions
   
95,132
     
4,077,349
     
111,995
     
4,828,120
 
 
Shares redeemed
   
(671,764
)
   
(30,115,118
)
   
(4,474,461
)
   
(167,243,416
)
 
Net decrease
   
(147,311
)
 
$
(6,561,008
)
   
(3,181,029
)
 
$
(120,312,418
)

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

Poplar Forest Funds Semi-Annual Report, March 2021
27

POPLAR FOREST CORNERSTONE FUND

STATEMENTS OF CHANGES IN NET ASSETS
   
Six Months Ended
       
   
March 31, 2021
   
Year Ended
 
   
(Unaudited)
   
September 30, 2020
 
NET INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment income
 
$
229,584
   
$
472,671
 
Net realized gain/(loss) from investments
   
688,273
     
(414,322
)
Net change in unrealized appreciation/
               
  (depreciation) on investments
   
6,970,166
     
(1,945,718
)
Net increase/(decrease) in net assets
               
  resulting from operations
   
7,888,023
     
(1,887,369
)
DIVIDENDS AND DISTRIBUTIONS
               
  TO SHAREHOLDERS
               
Net dividends and distributions to shareholders –
               
  Class A Shares*
   
     
(25,515
)
Net dividends and distributions to shareholders –
               
  Investor Class Shares**
   
(472,669
)
   
(1,217,092
)
Total dividends and distributions to shareholders
   
(472,669
)
   
(1,242,607
)
CAPITAL SHARE TRANSACTIONS
               
Net decrease in net assets derived from
               
  net change in outstanding shares (a)
   
(1,932,434
)
   
(1,567,148
)
Total increase/(decrease) in net assets
   
5,482,920
     
(4,697,124
)
NET ASSETS
               
Beginning of period
   
22,623,575
     
27,320,699
 
End of period
 
$
28,106,495
   
$
22,623,575
 

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

Poplar Forest Funds Semi-Annual Report, March 2021
28

POPLAR FOREST CORNERSTONE FUND

STATEMENTS OF CHANGES IN NET ASSETS, Continued
(a)
A summary of share transactions is as follows:


     
Six Months Ended
             
     
March 31, 2021
   
Year Ended
 
     
(Unaudited)
   
September 30, 2020
 
 
Class A Shares*
 
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares issued on reinvestments
                       
 
  of distributions
   
   
$
     
1,016
   
$
25,516
 
 
Payment for conversion of
                               
 
  Class A shares
   
(22,671
)
   
(515,549
)
   
     
 
 
Shares redeemed
   
(1,124
)
   
(26,622
)
   
     
 
 
Net increase/(decrease)
   
(23,795
)
 
$
(542,171
)
   
1,016
   
$
25,516
 
                                   
     
Six Months Ended
                 
     
March 31, 2021
   
Year Ended
 
     
(Unaudited)
   
September 30, 2020
 
 
Investor Class Shares**
 
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
1,626
   
$
49,101
     
826
   
$
19,416
 
 
Proceeds from conversion of
                               
 
  Class A shares
   
22,612
     
515,549
     
     
 
 
Shares issued on reinvestments
                               
 
  of distributions
   
17,427
     
457,118
     
45,173
     
1,134,299
 
 
Shares redeemed
   
(97,862
)
   
(2,412,031
)
   
(120,719
)
   
(2,746,379
)
 
Net decrease
   
(56,197
)
 
$
(1,390,263
)
   
(74,720
)
 
$
(1,592,664
)

*
Class A Shares converted to Investor Class Shares on October 30, 2020.  See Note 1 in the Notes to Financial Statements.
**
Formerly Institutional Class Shares.

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

Poplar Forest Funds Semi-Annual Report, March 2021
29

POPLAR FOREST PARTNERS FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Class A Shares
   
Six Months
                               
   
Ended
                               
   
March 31,
   
Year Ended September 30,
 
   
2021
   
2020
   
2019
   
2018
   
2017
   
2016
 
   
(Unaudited)
                               
Net asset value,
                                   
  beginning of period
 
$
35.69
   
$
42.22
   
$
52.65
   
$
50.88
   
$
46.61
   
$
38.76
 
Income from
                                               
  investment operations:
                                               
Net investment income^
   
0.36
     
0.74
     
0.58
     
0.39
     
0.67
     
0.35
 
Net realized and unrealized
                                               
  gain/(loss) on investments
   
17.62
     
(6.65
)
   
(6.50
)
   
3.77
     
4.49
     
7.77
 
Total from
                                               
  investment operations
   
17.98
     
(5.91
)
   
(5.92
)
   
4.16
     
5.16
     
8.12
 
Less distributions:
                                               
From net
                                               
  investment income
   
(0.94
)
   
(0.62
)
   
(0.50
)
   
(0.85
)
   
(0.18
)
   
(0.27
)
From net realized
                                               
  gain on investments
   
     
     
(4.01
)
   
(1.54
)
   
(0.71
)
   
 
Total distributions
   
(0.94
)
   
(0.62
)
   
(4.51
)
   
(2.39
)
   
(0.89
)
   
(0.27
)
Net asset value,
                                               
  end of period
 
$
52.73
   
$
35.69
   
$
42.22
   
$
52.65
   
$
50.88
   
$
46.61
 
                                                 
Total return
   
50.98
%+
   
-14.27
%
   
-10.71
%
   
8.45
%
   
11.06
%
   
21.05
%
                                                 
Ratios/supplemental data:
                                               
Net assets, end
                                               
  of period (thousands)
 
$
23,453
   
$
16,840
   
$
29,359
   
$
48,157
   
$
79,335
   
$
193,598
 
Ratio of expenses to
                                               
  average net assets:
                                               
Before fee waiver
   
1.40
%++
   
1.43
%
   
1.36
%
   
1.28
%
   
1.28
%
   
1.29
%
After fee waiver
   
1.22
%++
   
1.25
%
   
1.25
%
   
1.25
%
   
1.25
%
   
1.25
%
Ratio of net investment income
                                               
  to average net assets:
                                               
Before fee waiver
   
1.46
%++
   
1.75
%
   
1.25
%
   
0.74
%
   
1.33
%
   
0.78
%
After fee waiver
   
1.64
%++
   
1.93
%
   
1.36
%
   
0.77
%
   
1.36
%
   
0.82
%
Portfolio turnover rate
   
19.65
%+
   
40.35
%
   
30.72
%
   
31.83
%
   
31.07
%
   
29.63
%

^
Based on average shares outstanding.
+
Not annualized.
++
Annualized.

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

Poplar Forest Funds Semi-Annual Report, March 2021
30

POPLAR FOREST PARTNERS FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Institutional Class
   
Six Months
                               
   
Ended
                               
   
March 31,
   
Year Ended September 30,
 
   
2021
   
2020
   
2019
   
2018
   
2017
   
2016
 
   
(Unaudited)
                               
Net asset value,
                                   
  beginning of period
 
$
35.75
   
$
42.29
   
$
52.79
   
$
51.06
   
$
46.84
   
$
38.96
 
Income from
                                               
  investment operations:
                                               
Net investment income^
   
0.41
     
0.84
     
0.69
     
0.53
     
1.02
     
0.45
 
Net realized and unrealized
                                               
  gain/(loss) on investments
   
17.63
     
(6.65
)
   
(6.53
)
   
3.77
     
4.30
     
7.81
 
Total from
                                               
  investment operations
   
18.04
     
(5.81
)
   
(5.84
)
   
4.30
     
5.32
     
8.26
 
Less distributions:
                                               
From net
                                               
  investment income
   
(1.04
)
   
(0.73
)
   
(0.65
)
   
(1.03
)
   
(0.39
)
   
(0.38
)
From net realized
                                               
  gain on investments
   
     
     
(4.01
)
   
(1.54
)
   
(0.71
)
   
 
Total distributions
   
(1.04
)
   
(0.73
)
   
(4.66
)
   
(2.57
)
   
(1.10
)
   
(0.38
)
Net asset value,
                                               
  end of period
 
$
52.75
   
$
35.75
   
$
42.29
   
$
52.79
   
$
51.06
   
$
46.84
 
                                                 
Total return
   
51.12
%+
   
-14.03
%
   
-10.49
%
   
8.72
%
   
11.35
%
   
21.35
%
                                                 
Ratios/supplemental data:
                                               
Net assets, end
                                               
  of period (thousands)
 
$
276,438
   
$
192,576
   
$
362,369
   
$
701,542
   
$
692,564
   
$
430,439
 
Ratio of expenses to
                                               
  average net assets:
                                               
Before fee waiver
   
1.15
%++
   
1.18
%
   
1.11
%
   
1.03
%
   
1.03
%
   
1.04
%
After fee waiver
   
0.97
%++
   
1.00
%
   
1.00
%
   
1.00
%
   
1.00
%
   
1.00
%
Ratio of net investment income
                                               
  to average net assets:
                                               
Before fee waiver
   
1.70
%++
   
2.00
%
   
1.50
%
   
1.02
%
   
2.02
%
   
1.03
%
After fee waiver
   
1.88
%++
   
2.18
%
   
1.61
%
   
1.05
%
   
2.05
%
   
1.07
%
Portfolio turnover rate
   
19.65
%+
   
40.35
%
   
30.72
%
   
31.83
%
   
31.07
%
   
29.63
%

^
Based on average shares outstanding.
+
Not annualized.
++
Annualized.

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

Poplar Forest Funds Semi-Annual Report, March 2021
31

POPLAR FOREST CORNERSTONE FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Investor Shares
   
Six Months
                               
   
Ended
                               
   
March 31,
   
Year Ended September 30,
 
   
2021
   
2020
   
2019
   
2018
   
2017
   
2016
 
   
(Unaudited)
                               
Net asset value,
                                   
  beginning of period
 
$
22.76
   
$
25.58
   
$
28.20
   
$
26.70
   
$
25.69
   
$
23.21
 
Income from
                                               
  investment operations:
                                               
Net investment income^
   
0.25
     
0.45
     
0.42
     
0.33
     
0.47
     
0.28
 
Net realized and unrealized
                                               
  gain/(loss) on investments
   
8.24
     
(2.11
)
   
(1.83
)
   
1.81
     
1.53
     
3.29
 
Total from
                                               
  investment operations
   
8.49
     
(1.66
)
   
(1.41
)
   
2.14
     
2.00
     
3.57
 
Less distributions:
                                               
From net
                                               
  investment income
   
(0.51
)
   
(0.34
)
   
(0.42
)
   
(0.40
)
   
(0.22
)
   
(0.18
)
From net realized
                                               
  gain on investments
   
     
(0.82
)
   
(0.79
)
   
(0.24
)
   
(0.77
)
   
(0.91
)
Total distributions
   
(0.51
)
   
(1.16
)
   
(1.21
)
   
(0.64
)
   
(0.99
)
   
(1.09
)
Net asset value,
                                               
  end of period
 
$
30.74
   
$
22.76
   
$
25.58
   
$
28.20
   
$
26.70
   
$
25.69
 
                                                 
Total return
   
37.69
%+
   
-6.89
%
   
-4.71
%
   
8.15
%
   
7.83
%
   
15.95
%
                                                 
Ratios/supplemental data:
                                               
Net assets, end
                                               
  of period (thousands)
 
$
28,106
   
$
22,084
   
$
26,739
   
$
31,005
   
$
28,939
   
$
22,287
 
Ratio of expenses to
                                               
  average net assets:
                                               
Before fee waiver
   
1.60
%++#
   
1.76
%
   
1.64
%
   
1.49
%
   
1.57
%
   
1.97
%
After fee waiver
   
0.90
%++#
   
0.90
%
   
0.90
%
   
0.90
%
   
0.90
%
   
0.90
%
Ratio of net investment income
                                               
  to average net assets:
                                               
Before fee waiver
   
1.15
%++
   
1.05
%
   
0.92
%
   
0.61
%
   
1.12
%
   
0.09
%
After fee waiver
   
1.85
%++
   
1.91
%
   
1.66
%
   
1.20
%
   
1.79
%
   
1.16
%
Portfolio turnover rate
   
15.47
%+
   
39.97
%
   
38.12
%
   
29.88
%
   
24.82
%
   
24.54
%

^
Based on average shares outstanding.
+
Not annualized.
++
Annualized.
#
Includes expenses of Class A Shares which converted to Investor Class Shares (formerly Institutional Class Shares) on October 30, 2020.

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

Poplar Forest Funds Semi-Annual Report, March 2021
32

POPLAR FOREST FUNDS

NOTES TO FINANCIAL STATEMENTS at March 31, 2021 (Unaudited)
NOTE 1 – ORGANIZATION
 
The Poplar Forest Partners Fund (the “Partners Fund”) and the Poplar Forest Cornerstone Fund (“Cornerstone 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, as amended, (the “1940 Act”) as an open-end management investment company.  Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.”
 
The investment objective of the Partners Fund is to seek long-term growth of capital.  The investment objective of the Cornerstone Fund is to seek to achieve current income and long-term growth of capital.  The Partners Fund currently offers Class A shares and Institutional Class shares.  The Cornerstone Fund currently offers Investor Class shares.  Class A shares are subject to a maximum front-end sales load of 5.00%, which decreases depending on the amount invested.  The Partner Fund’s Class A shares and Institutional Class shares commenced operations on December 31, 2009.
 
The Cornerstone Fund’s Class A shares and Institutional Class shares commenced operations on December 31, 2014.  At the close of business on October 30, 2020, the Cornerstone Fund’s Class A shares converted to the Institutional Class shares.  On January 28, 2021, the class name changed from Institutional Class to Investor Class.
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America.
 
 
A.
Security Valuation:  All investments in securities are recorded at their estimated fair value, as described in note 3.
     
 
B.
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 taxable income to its shareholders. Therefore, no Federal income or excise tax provision is required.
     
   
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The tax returns of the Funds’ prior three fiscal years are open for examination. Management has reviewed all open tax years in major jurisdictions and concluded that there is no impact on the Funds’ net assets and no tax liability resulting from unrecognized tax events relating to uncertain income tax positions taken or expected to be taken on a tax return. The Funds identify their major tax jurisdictions as U.S. Federal and the state of Wisconsin. 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.

Poplar Forest Funds Semi-Annual Report, March 2021
33

POPLAR FOREST FUNDS

NOTES TO FINANCIAL STATEMENTS at March 31, 2021 (Unaudited), Continued
 
C.
Security Transactions, Income and Distributions:  Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are calculated on the basis of specific cost.  Interest income is recorded on an accrual basis.  Discounts on securities purchased are accreted over the life of the respective security.  Premiums on securities purchased are amortized to the earliest call date.  Dividend income, income and capital gain distributions from underlying funds, 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.
     
   
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 each Fund 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 the Fund, such as investment advisory, custody and transfer agent fees.  Expenses that are not attributable to a Fund 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.
     
   
The Funds distribute substantially all net investment income, if any, and net realized gains, if any, annually.  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.
     
   
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.
     
 
D.
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.
     
 
E.
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 at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates.

Poplar Forest Funds Semi-Annual Report, March 2021
34

POPLAR FOREST FUNDS

NOTES TO FINANCIAL STATEMENTS at March 31, 2021 (Unaudited), Continued
 
F.
Events Subsequent to the Fiscal Period End:  In preparing the financial statements as of March 31, 2021, management considered the impact of subsequent events for potential recognition or disclosure in the financial statements.  Management has determined there were no subsequent events that would need to be disclosed in the Funds’ financial statements.
 
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 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 each Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

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 (4:00 pm EST).
 
Equity Securities:  The Funds’ investments are carried at fair value. Equity securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter (“OTC”) securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price.  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.
 
Poplar Forest Funds Semi-Annual Report, March 2021
35

POPLAR FOREST FUNDS
 
NOTES TO FINANCIAL STATEMENTS at March 31, 2021 (Unaudited), Continued
Investment Companies:  Investments in open-end mutual funds, including money market funds, are generally priced at their net asset value per share provided by the service agent of the funds and will be classified in level 1 of the fair value hierarchy.
 
Debt Securities:  Debt securities are valued at the mean of the bid and asked prices furnished by an independent pricing service using valuation methods that are designed to represent fair value. These valuation methods can include matrix pricing and other analytical pricing models, market transactions, and dealer-supplied valuations. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Most debt securities are categorized in level 2 of the fair value hierarchy.
 
Short-Term Securities:  Short-term debt securities, including those securities having a maturity of 60 days or less, are valued at the evaluated mean between the bid and asked prices.  To the extent the inputs are observable and timely, these securities would be classified in level 2 of the fair value hierarchy.
 
The Board of Trustees has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from the Funds’ administrator, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).  The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available or the closing price does not represent fair value by following procedures approved by the Board of Trustees.  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 of Trustees.
 
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.
 
Poplar Forest Funds Semi-Annual Report, March 2021
36

POPLAR FOREST FUNDS

NOTES TO FINANCIAL STATEMENTS at March 31, 2021 (Unaudited), Continued
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 March 31, 2021:
 
Partners Fund
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
                       
Communication Services
 
$
22,053,710
   
$
   
$
   
$
22,053,710
 
Consumer Discretionary
   
32,414,690
     
     
     
32,414,690
 
Consumer Staples
   
15,700,350
     
     
     
15,700,350
 
Energy
   
21,757,365
     
     
     
21,757,365
 
Financials
   
83,786,900
     
     
     
83,786,900
 
Health Care
   
39,924,320
     
     
     
39,924,320
 
Industrials
   
18,328,766
     
     
     
18,328,766
 
Information Technology
   
20,231,340
     
     
     
20,231,340
 
Materials
   
20,472,305
     
     
     
20,472,305
 
Utilities
   
12,747,450
     
     
     
12,747,450
 
Total Common Stocks
   
287,417,196
     
     
     
287,417,196
 
REIT
   
5,846,470
     
     
     
5,846,470
 
Money Market Fund
   
3,164,455
     
     
     
3,164,455
 
Total Investments
                               
  in Securities
 
$
296,428,121
   
$
   
$
   
$
296,428,121
 
                                 
Cornerstone Fund
                               
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
                               
Communication Services
 
$
1,572,903
   
$
   
$
   
$
1,572,903
 
Consumer Discretionary
   
2,230,222
     
     
     
2,230,222
 
Consumer Staples
   
1,221,082
     
     
     
1,221,082
 
Energy
   
1,631,931
     
     
     
1,631,931
 
Financials
   
5,415,598
     
     
     
5,415,598