N-CSR 1 tm213667d1_ncsr.htm N-CSR

 

 

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 811-22563

 

Mairs & Power Funds Trust
(Exact name of registrant as specified in charter)

 

332 Minnesota Street, Suite W1520, St. Paul, MN 55101
(Address of principal executive offices) (Zip code)

 

Andrea C. Stimmel, Treasurer, 332 Minnesota Street, Suite W1520, St. Paul, MN 55101
(Name and address of agent for service)

 

651-222-8478

Registrant's telephone number, including area code

 

Date of fiscal year end: December 31, 2020

 

Date of reporting period: December 31, 2020

 

 

 

 

 

 

Item 1. Reports to Stockholders.

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2020

- GROWTH FUND (MPGFX)

est. 1958

- BALANCED FUND (MAPOX)

est. 1961

- SMALL CAP FUND (MSCFX)

est. 2011

Beginning in February 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Mairs & Power Funds' shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Mairs & Power Funds or from your Financial Intermediary. Instead, the reports will be made available on the Mairs & Power Funds' website, and you will be notified each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically for the Mairs & Power Funds, you will not be affected by this change and you need not take any action.

Mairs & Power Funds Direct Shareholders

You may elect to receive shareholder reports and other communications electronically or in paper from the Mairs & Power Funds by electing one of the following options:

1.  Receive Fund Communication by Email: Contact Shareholder Services at (800) 304-7404 or consent through the direct shareholder portal online at www.mairsandpower.com. You may also elect to receive account statements, tax forms and confirmations through this means.

2.  Receive Fund Communication by Mail: Contact Shareholder Services at (800) 304-7404.

You may elect to continue receiving paper copies of the shareholder reports and other communications, free of charge, by contacting Shareholder Services at (800) 304-7404.

Mairs & Power Fund Shareholder through a Financial Intermediary (such as broker-dealer or bank)

Contact your Financial Intermediary to make your election. Your election will apply to all Mairs & Power Funds held through your Financial Intermediary.

Mairs & Power W1520 First National Bank Building, 332 Minnesota Street, St. Paul, Minnesota 55101 www.mairsandpower.com



MAIRS & POWER FUNDS MARKET COMMENTARY (unaudited)

December 31, 2020

To say 2020 was far from normal feels like a significant understatement. The COVID-19 pandemic, the ensuing near-crash of the economy, working remotely, nationwide civil unrest, and a wild election season all made for a difficult year. Thankfully, our economy proved to be remarkably resilient, thanks in large part to unprecedented monetary and fiscal stimulus.

Then there was the market. From its February highs, the market took a breathtaking 34% nosedive, which was matched only by its remarkable rebound. And it just kept climbing from there. The S&P 500 Total Return (TR) Index rose 12.15% for the fourth quarter and was up 18.40% for the year. In the last quarter, the Dow Jones Industrial Average TR Index climbed 10.73% and was up 9.72% for all of 2020. In terms of sectors, the strongest performers were Consumer Discretionary and Technology, while Financial, Real Estate and Energy were the weakest.

In the fixed-income market, the Bloomberg Barclays U.S. Government/Credit Bond Index returned 0.82% and 8.93% for the fourth quarter and for all of 2020, respectively.

Future Outlook

Given the low interest rates, we believe overall equity valuations are reasonable. We anticipate seeing accelerating earnings and dividends growth in 2021 and a significant snapback in profitability over the next couple of years. The investment community's current consensus view is that 2021 earnings will be better than what they were in 2019. Previously, the consensus view was that we would get back to 2019 earnings levels by 2022 at the earliest.

Approval of the COVID-19 vaccines in November gave the market tremendous confidence that life would return back to normal more quickly than anticipated – perhaps as soon as mid-2021. The market also responded strongly and positively to the new economic support and stimulus package that the federal government approved in the fourth quarter.

To be sure, the numbers tell a complex story. The economic indicators that stand out in this regard are job losses and job recoveries. April job losses were 20.5 million; since then, 11 million jobs have been recovered, so we still have a long way to go to get back to pre-pandemic levels. The job numbers released in December and January were less optimistic, but the overall direction has been positive.

For equity investors, 2020 ended up being a surprisingly good year. For us, navigating 2020 was a matter of staying the course, looking for opportunities, and not getting caught up in the drama.

Technology was the market's best performing sector in 2020, up 43.9%. Tech companies have played an essential role in keeping the economy going. During the year, we increased positions in several tech companies, particularly as more and more people work and learn from home. To be sure, most employees will return to the office, and most students will return to classrooms. However, companies have seen the benefits of working remotely, and as such, we expect some of them will continue allowing their employees to work from home in some shape or form indefinitely.

By contrast, Financials had a difficult year, down 1.69% in 2020. We saw signs this fall that commercial banks were beginning to demonstrate improved fundamentals. We continue to believe that many of our stocks within this space will survive the current downturn intact and provide compelling investment opportunities at their current prices. Consequently, we added to our positions in the sector.

Meanwhile, fixed income had another good quarter, and it too experienced a very good year overall. Corporate bond spreads have recovered nearly all of the widening that occurred in March and April. Overall bond yields dropped to near-record lows, which in turn caused solid total returns in the bond market in 2020. It appears that the Federal Reserve will remain supportive of risk assets in 2021.


1



MAIRS & POWER FUNDS MARKET COMMENTARY (unaudited) (continued)

This year, Joe Biden becomes president. He'll have the support of both houses of Congress, which will effectively be under the control of the Democratic party. As a result, 2021 is likely to bring many changes at the federal level. Those changes could include increases in corporate tax rates, new infrastructure projects, and renewed efforts to bolster nationwide health insurance coverage.

Past Performance is not a guarantee of future results.

S&P 500 TR (Total Return) Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. It is not possible to invest directly in an index.

Dow Jones Industrial Average TR Index is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. It is not possible to invest directly in an index.

Bloomberg Barclays U.S. Government/Credit Bond Index is a broad-based flagship benchmark that measures the non-securitized component of the U.S. Aggregate Index. It includes investment-grade, U.S. dollar-denominated, fixed-rate Treasuries, government-related and corporate securities. It is not possible to invest directly in an index.


2



MAIRS & POWER GROWTH FUND (unaudited)

To Our Shareholders:  December 31, 2020

The Mairs & Power Growth Fund gained 13.88% in the fourth quarter and was up 16.67% for all of 2020. The S&P 500 Total Return (TR) benchmark was up 12.15% and 18.40% for the same respective periods, while the Lipper Multi Cap Core Funds Index of peers posted gains of 15.69% in the fourth quarter and 21.20% for the entire year.

While we remain stock pickers at heart, the Fund has a number of macro leanings including its heavier weighting in small and mid-cap stocks, as well as a bias toward value investing. Both of these leanings were headwinds to relative performance in 2020 as smaller stocks and value indexes underperformed the S&P 500. In addition, the Fund's emphasis on holding stocks headquartered in the region was a headwind last year. The Piper Sandler Company Minnesota Index was up only 6.83% for all of 2020.

Several of the Fund's long-term sector leanings also detracted from performance in 2020. One headwind was our underweight in Technology, the market's best performing sector last year. We have been reducing our underweight as we see improvement in the competitive position of some of the sector's stocks. Going forward, we expect the Fund's Technology underweight to have less of an impact on relative performance.

Overweights in the Industrial and Healthcare sectors also hurt the Fund's relative performance. We will continue to maintain our relative weights in these sectors, since we believe they offer a number of intriguing opportunities.

While all these macro leanings were headwinds to the Fund in 2020, we are also confident that they will benefit relative performance in the future. In fact, we saw evidence of that in the latter part of the year as positive results from COVID-19 vaccines reversed some of those headwinds. The Fund will always have a Minnesota bias, and it always will be skewed toward value stocks as well as small and mid-cap holdings. Last year, these leanings clouded Fund performance. Over the long term, we believe these headwinds will subside and that the strength of our stock selection will eventually shine through.

MAIRS & POWER GROWTH FUND (MPGFX)

Top Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)  

Year To Date (12/31/19 – 12/31/20)

 

U.S. Bancorp

   

18.99

%

 

NVIDIA Corporation

   

103.90

%

 

Alphabet Inc. Class C

   

7.06

%

 

Bio-Techne Corporation

   

26.99

%

 

Bio-Techne Corporation

   

16.17

%

 

Alphabet Inc. Class C

   

12.63

%

 

Littelfuse, Inc.

   

31.75

%

 

Graco Inc.

   

22.56

%

 

Graco Inc.

   

6.10

%

 

Fastenal Company

   

18.17

%

 

Weak Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)  

Year To Date (12/31/19 – 12/31/20)

 

Jamf Holdings Corporation

   

-32.59

%

 

Amazon.com Inc.

   

-16.85

%

 

C.H. Robinson Worldwide

   

-19.79

%

 

U.S. Bancorp

   

-36.28

%

 

Hormel Foods Corporation

   

-16.36

%

 

Great Western Bancorp, Inc.

   

-56.80

%

 

NVIDIA Corporation

   

-15.63

%

 

Core Laboratories NV

   

-65.49

%

 

Amazon.com Inc.

   

-10.60

%

 

Wells Fargo & Company

   

-60.06

%

 

Performance shown is relative to the S&P 500 TR Index as of December 31, 2020. Relative return is the difference between the absolute return and the performance of the market, in which the position is held. Relative contribution is used for ranking, which considers average daily weightings for each holding. Past performance does not guarantee future results.


3



MAIRS & POWER GROWTH FUND (unaudited) (continued)

Speaking of that selection: The Fund's two biggest relative contributors in 2020 were Nvidia (NVDA) and Bio-Techne (TECH). Nvidia specializes in graphics cards for computers, and it has benefited from updated chips as well as strong market positions in applications and machine learning. Bio-Techne has prospered because of its multiple roles supporting healthcare R&D. We like to describe this Minnesota-based company as the pick-and-shovel supplier for biotechnology.

On the negative side, one of the Fund's biggest detractor in 2020 was U.S. Bancorp (USB). Like all banks, U.S. Bank was hurt by the difficult interest rate environment and credit cycle concerns. We believe banks are strong enough to survive the current sector doldrums, and they remain some of the market's most attractive opportunities.

Also in the Fund's negative column were two companies that actually were powerful performers in 2020: Amazon (AMZN) and Apple (AAPL), which both were up around 70% for the year. Why do we describe these as "negatives"? In the case of Apple, it's because the Fund has no position in the company. We did acquire AMZN in the fourth quarter. But not owning it till then cost the Fund in performance relative to the S&P 500 TR Index.

We had held off taking a position in Amazon largely due to concerns about the company's slim margins. But in 2020, we saw its core margins nearly double as more consumers shopped online, which in turn led to greater utilization and route density within Amazon's delivery network. In addition, Amazon's advertising business, which represents a small portion of its overall sales, has been growing quickly. Advertising could become a third leg of growth for the company along with e-commerce and Amazon Web Services. In short, Amazon checks all of our boxes – it has a strong management team, great growth prospects, and a strong competitive advantage. And last year, we initiated our position at an intriguing valuation.

A final note: The Mairs & Power Growth Fund says a fond farewell to Mark Henneman, who stepped down as the Fund's co-manager at the beginning of 2021. Mark remains our firm's chairman and CEO. He also serves on our Investment Committee, which will allow us to continue tapping his insights and expertise.

Andrew R. Adams
Lead Manager
  Peter J. Johnson
Co-Manager
 

The Fund's investment objective, risks, charges and expenses must be considered carefully before investing. The summary prospectus or full prospectus contains this and other important information about the Fund and they may be obtained by calling Shareholder Services at (800) 304-7404 or by visiting www.mairsandpower.com. Read the summary prospectus or full prospectus carefully before investing.

All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or an offer of a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

All investments have risks. The Growth Fund is designed for long-term investors. Equity investments are subject to market fluctuations and the Fund's share price can fall because of weakness in the broad market, a particular industry or specific holdings. Investments in small and midcap companies generally are more volatile. International investing risks include among others political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices and greater fluctuations in price than U.S. corporations.

This commentary includes forward-looking statements such as economic predictions and portfolio manager opinions. The statements are subject to change at any time based on market and other conditions. No predictions, forecasts, outlooks, expectations or beliefs are guaranteed.

S&P 500 TR (Total Return) Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. It is not possible to invest directly in an index.

Lipper Multi-Cap Core Funds Index measures performance of the 30 largest mutual funds that invest in a variety of capitalization ranges, without concentrating 75% or more of their equity assets in any one market capitalization range over an extended period of time. It is not possible to invest directly in an index.

Piper Sandler Company Minnesota Index is a price-weighted index designed to measure the performance of the Minnesota economy. It is not possible to invest directly in an index.


4



Mairs & Power Growth Fund
PERFORMANCE INFORMATION (unaudited)  December 31, 2020

Ten years of investment performance (through December 31, 2020)

This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund 10 years ago.

Average annual total returns for periods ended December 31, 2020

   

1 year

 

5 years

 

10 years

 

20 years

 

Mairs & Power Growth Fund

   

16.67

%

   

14.01

%

   

12.89

%

   

9.45

%

 

S&P 500 Total Return Index(1)

   

18.40

%

   

15.22

%

   

13.88

%

   

7.47

%

 

Performance data quoted represents past performance and does not guarantee future results. All performance information shown includes the reinvestment of dividend and capital gain distributions, but does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 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. For the most recent month-end performance figures, visit the Fund's website at www.mairsandpower.com or call Shareholder Services at (800) 304-7404. Per the Prospectus dated April 30, 2020, the expense ratio for the Fund is 0.65%.

(1)  The S&P 500 Total Return Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. It tracks both the capital gains of a group of stocks over time and assumes that any cash distributions, such as dividends, are reinvested back into the index. It is not possible to invest directly in an index.


5



Mairs & Power Growth Fund
FUND INFORMATION (unaudited)  December 31, 2020

Portfolio Managers
(Effective as of January 1, 2021)

Andrew R. Adams, CFA, lead manager since April 1, 2019, co-manager from January 1, 2015 through April 1, 2019, University of Wisconsin-Madison, MS Finance 1997

Peter J. Johnson, CFA, co-manager since April 1, 2019, University of Wisconsin-Madison, MBA Applied Security Analysis 2010

General Information

Fund Symbol

    MPGFX    

Net Asset Value (NAV) Per Share

 

$

136.08

   

Expense Ratio

   

0.64

%

 

Portfolio Turnover Rate

   

14.52

%

 

Sales Charge

   

None1

   

Fund Inception Year

   

1958

   

Portfolio Composition

Top Ten Portfolio Holdings
(Percent of Total Net Assets)
2

Alphabet Inc

   

6.6

%

 

Microsoft Corp

   

6.5

   

US Bancorp/MN

   

4.5

   

Medtronic PLC

   

4.2

   

Ecolab Inc

   

3.8

   

UnitedHealth Group Inc

   

3.7

   

Graco Inc

   

3.3

   

NVIDIA Corp

   

3.1

   

Bio-Techne Corp

   

3.1

   

Toro Co/The

   

3.1

   

Portfolio Diversification
(Percent of Total Net Assets)

Common Stocks 99.5%

 

Information Technology

   

23.6

%

 

Health Care

   

20.6

   

Industrials

   

18.4

   

Financials

   

10.6

   

Communication Services

   

9.9

   

Materials

   

6.4

   

Consumer Discretionary

   

4.6

   

Consumer Staples

   

2.7

   

Real Estate

   

2.3

   

Utilities

   

0.4

   

Short-term Investments 0.5%3

   

0.5

   
     

100.0

%

 

1  Although the Fund is no-load, investment management fees and other expenses still apply.

2  All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or offer for a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

3  Represents short-term investments and other assets and liabilities (net).

  The Schedule of Investments and portfolio diversification utilize the Global Industry Classification Standard (GICS®) which 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, Inc. and S&P and has been licensed for use by Mairs & Power, Inc. (the "Adviser").


6



Mairs & Power Growth Fund
SCHEDULE OF INVESTMENTS  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
   

COMMON STOCKS 99.5%

 
   

COMMUNICATION SERVICES 9.9%

 
 

620,000

   

Activision Blizzard Inc

 

$

57,567,000

   
 

183,700

   

Alphabet Inc (a)

   

321,820,356

   
 

565,000

   

Walt Disney Co/The (a)

   

102,366,700

   
     

481,754,056

   
   

CONSUMER DISCRETIONARY 4.6%

 
 

37,500

   

Amazon.com Inc (a)

   

122,134,875

   
 

242,100

   

Gentherm Inc (a)

   

15,789,762

   
 

200,000

   

Home Depot Inc/The

   

53,124,000

   
 

180,000

   

Target Corp

   

31,775,400

   
     

222,824,037

   
   

CONSUMER STAPLES 2.7%

 
 

2,288,592

   

Hormel Foods Corp

   

106,671,273

   
 

315,000

   

Sysco Corp

   

23,391,900

   
     

130,063,173

   
   

FINANCIALS 10.6%

 
 

385,000

   

American Express Co

   

46,550,350

   
 

841,300

   

Charles Schwab Corp/The

   

44,622,552

   
 

1,280,000

   

Great Western Bancorp Inc

   

26,752,000

   
 

1,890,000

   

Principal Financial Group Inc

   

93,762,900

   
 

4,680,000

   

US Bancorp/MN

   

218,041,200

   
 

2,850,000

   

Wells Fargo & Co

   

86,013,000

   
     

515,742,002

   
   

HEALTH CARE 20.6%

 
 

515,000

   

Abbott Laboratories

   

56,387,350

   
 

225,000

   

Baxter International Inc

   

18,054,000

   
 

472,200

   

Bio-Techne Corp

   

149,947,110

   
 

505,527

   

Elanco Animal Health Inc (a)

   

15,504,513

   
 

255,000

   

Eli Lilly & Co

   

43,054,200

   
 

795,000

   

Johnson & Johnson

   

125,117,100

   
 

1,730,000

   

Medtronic PLC (d)

   

202,652,200

   
 

1,010,000

   

Pfizer Inc

   

37,178,100

   
 

3,185,000

   

Roche Holding AG (c)

   

139,630,400

   
 

510,000

   

UnitedHealth Group Inc

   

178,846,800

   
 

235,000

   

Zimmer Holdings Inc

   

36,211,150

   
     

1,002,582,923

   


7



Mairs & Power Growth Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
    COMMON STOCKS (continued)  
   

INDUSTRIALS 18.4%

 
 

615,000

    3M Co  

$

107,495,850

   
 

630,000

   

CH Robinson Worldwide Inc

   

59,138,100

   
 

1,750,000

   

Donaldson Co Inc

   

97,790,000

   
 

1,830,000

   

Fastenal Co

   

89,358,900

   
 

2,245,000

   

Graco Inc

   

162,425,750

   
 

225,000

   

Honeywell International Inc

   

47,857,500

   
 

2,781,066

   

nVent Electric PLC (d)

   

64,771,028

   
 

108,000

   

Proto Labs Inc (a)

   

16,567,200

   
 

125,000

   

Rockwell Automation Inc

   

31,351,250

   
 

949,966

   

Tennant Co (e)

   

66,659,114

   
 

1,570,000

   

Toro Co/The

   

148,898,800

   
     

892,313,492

   
   

INFORMATION TECHNOLOGY 23.6%

 
 

960,000

   

Corning Inc

   

34,560,000

   
 

1,391,333

   

Digi International Inc (a)

   

26,296,194

   
 

1,060,000

   

Fiserv Inc (a)

   

120,691,600

   
 

820,000

   

Jamf Holding Corp (a)

   

24,534,400

   
 

434,404

   

Littelfuse Inc

   

110,625,322

   
 

1,420,000

   

Microsoft Corp

   

315,836,400

   
 

520,000

   

Motorola Solutions Inc

   

88,431,200

   
 

195,500

   

NVE Corp

   

10,983,190

   
 

290,000

   

NVIDIA Corp

   

151,438,000

   
 

605,000

   

QUALCOMM Inc

   

92,165,700

   
 

675,000

   

Visa Inc

   

147,642,750

   
 

266,600

   

Workiva Inc (a)

   

24,425,892

   
     

1,147,630,648

   
   

MATERIALS 6.4%

 
 

860,000

   

Ecolab Inc

   

186,069,600

   
 

1,710,000

   

HB Fuller Co

   

88,714,800

   
 

49,000

   

Sherwin-Williams Co/The

   

36,010,590

   
     

310,794,990

   
   

REAL ESTATE 2.3%

 
 

870,000

   

CoreSite Realty Corp

   

108,993,600

   
   

UTILITIES 0.4%

 
 

390,000

   

Alliant Energy Corp

   

20,096,700

   
        TOTAL COMMON STOCKS
(cost $2,281,074,069)
 

$

4,832,795,621
 


8



Mairs & Power Growth Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
   

SHORT-TERM INVESTMENTS 0.4%

 
 

20,234,435

    First American Government Obligations Fund, Class X, 0.040% (b)
(cost $20,234,435)
 

$

20,234,435
 
        TOTAL INVESTMENTS 99.9%
(cost $2,301,308,504)
 

$

4,853,030,056
 
    OTHER ASSETS AND LIABILITIES (NET) 0.1%    

5,159,096

   
   

TOTAL NET ASSETS 100.0%

 

$

4,858,189,152

   

(a)  Non-income producing.

(b)  The rate quoted is the annualized seven-day effective yield as of December 31, 2020.

(c)  American Depositary Receipt.

(d)  Issuer headquartered overseas but considered domestic. The Adviser defines foreign issuers as those whose operational leadership or headquarters is located in a foreign country; provided, however, if an issuer is believed by the Adviser to be headquartered in a jurisdiction primarily for tax purposes, the Adviser will consider the following additional factors: 1) the location of the primary exchange trading its securities, 2) where it derives the majority of its revenues, and/or 3) where it earns the majority of its profits.

(e)  Affiliated company at December 31, 2020.

See accompanying Notes to Financial Statements.


9



MAIRS & POWER BALANCED FUND (unaudited)

To Our Shareholders:  December 31, 2020

The Mairs & Power Balanced Fund gained 10.11% in the fourth quarter and was up 10.44% for all of 2020. The benchmark composite index (60% S&P 500 Total Return Index and 40% Bloomberg Barclays U.S. Government/Credit Bond Index) gained 7.60% for the quarter and 15.30% for the year, while the Morningstar US Fund Allocation peer group rose 10.06% in the fourth quarter and 11.34% for the year.

Over the long term, the Fund has had a number of macro leanings on the equity side of the portfolio, including its allocation to small and mid-cap stocks, as well as a bias toward value investing. Both of these leanings were headwinds to relative performance in 2020 as smaller stocks and value indexes underperformed the broader S&P 500. In addition, the Fund's emphasis on holding stocks headquartered in the region was a headwind last year. The Piper Sandler Company Minnesota Index was up only 6.83% for all of 2020.

Several of the Fund's long-term sector leanings also detracted from performance in 2020. One headwind was our underweight in Technology, the market's best performing sector last year. We have been narrowing our underweight as we see improvement in the competitive position of some of the sector's stocks. Overweights in the Industrial and Healthcare sectors also hurt the Fund's relative performance. We will continue to maintain our relative weights in these sectors since we believe they offer a number of intriguing opportunities.

While all these macro leanings were headwinds to the Fund in 2020, we also are confident that they will benefit relative performance in the future. In fact, we saw evidence of that in the latter part of the year as positive results from COVID-19 vaccines reversed some of those headwinds. The Fund will always have a Minnesota bias, and it always will be skewed toward value stocks as well as small and mid-cap holdings. Last year, these leanings clouded Fund performance. Over the long term, we believe the strength of our stock selection strategy will shine through.

MAIRS & POWER BALANCED FUND (MAPOX)

Top Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)  

Year To Date (12/31/19 – 12/31/20)

 

U.S. Bancorp

   

18.99

%

 

Alphabet Inc. Class C

   

12.63

%

 

Alphabet Inc. Class C

   

7.06

%

 

QUALCOMM Inc.

   

58.60

%

 

Principal Financial Group, Inc.

   

12.44

%

 

Graco Inc.

   

22.56

%

 

Honeywell International Inc.

   

17.68

%

 

Toro Company

   

2.26

%

 

Graco Inc.

   

6.10

%

 

Eli Lilly & Company

   

12.66

%

 

Weak Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)  

Year To Date (12/31/19 – 12/31/20)

 

C.H. Robinson Worldwide

   

-19.79

%

 

Schlumberger NV

   

-72.21

%

 

Hormel Foods Corporation

   

-16.36

%

 

U.S. Bancorp

   

-36.28

%

 

Microsoft Corporation

   

-6.12

%

 

Great Western Bancorp, Inc.

   

-78.14

%

 

Home Depot, Inc.

   

-15.97

%

 

Wells Fargo & Company

   

-60.06

%

 

General Mills, Inc.

   

-15.71

%

 

Microsoft Corporation

   

24.13

%

 

Performance shown is relative to the S&P 500 TR Index as of December 31, 2020. Relative return is the difference between the absolute return and the performance of the market, in which the position is held. Relative contribution is used for ranking, which considers average daily weightings for each holding. Past performance does not guarantee future results.


10



MAIRS & POWER BALANCED FUND (unaudited) (continued)

The equity side of the Fund's portfolio underperformed the benchmark for the year. The biggest factor was our underweight allocation toward Technology, which was the market's top performing sector. Our security selection in the sector was also unfavorable: Visa (V) underperformed as the pandemic led to lower global payment volumes, while Fiserv (FISV) underperformed as commercial banks tightened their IT budgets. Not owning large tech companies such as Apple (AAPL) was another factor in sector underperformance. That noted, we did add weight to our Technology holdings throughout 2020.

The Fund's equity performance was also negatively impacted by our overweight allocation in the Financial sector. This was among the market's weakest performing sectors as investors became concerned about an unfavorable interest rate environment and the prospects for rising credit losses. These concerns led to underperformance among bank holdings U.S. Bancorp (USB), JPMorgan Chase (JPM), and Wells Fargo (WFC) as well as credit card issuer American Express (AXP).

The Healthcare sector was a source of positive attribution in 2020 primarily due to favorable security selection. Abbott Labs (ABT) outperformed due to strong demand for its COVID-19 diagnostic tests as well as continued success of its glucose monitoring device for patients with diabetes. Eli Lilly (LLY) performed well during the year due to strong demand for its core diabetes drug products as well as recent favorable trial results for a next-generation diabetes product that also could provide cardiovascular benefits.

The Industrial sector was another source of positive attribution primarily because of our strong security selection. Our best relative performer in the sector was Graco (GGG), which is benefiting from its dominant position in the commercial paint spraying industry during the ongoing residential real estate boom.

In the fourth quarter, the Fund added a new position in Activision (ATVI), one of the largest competitors in the video game industry. We believe that Activision has a durable competitive advantage based on the strength of its highly popular game franchises. Its industry leadership position also gives the company scale advantage in terms of marketing costs, customer care, and, most importantly, new game development. We expect the company to enjoy strong long-term earnings growth due to increasing participation in gaming as well as favorable demographic trends.

The Fund exited three of its holdings during the fourth quarter. Great Western Bank (GWB) and General Mills (GIS) were eliminated due to longer-term concerns about competitive advantage positioning as well as long-term earnings growth rates. We also exited Chevron (CVX) because we believe that the rise of renewable energy sources is likely to be a headwind for the company over the long term.

On the fixed income side of the portfolio, the Fund experienced a second consecutive year of good returns. Although both Treasuries and corporate bonds ended the year with strong results, we would note that there was a lot of volatility along the way. Our long-term allocation to corporate bonds hurt performance in the first half of the year as corporate bond spreads widened due to negative market impacts from COVID-19. But thanks to the aggressive actions by the Federal Reserve (FED), corporate bond spreads have tightened back close to the levels where they began in 2020. Our portfolio rallied back nicely as a result. For the full year, our fixed income performance was in line with the benchmark; credit selection added to relative performance while our slightly short duration stance detracted from relative performance.

Overall, the Fund's fixed income portfolio performed well, and we are very comfortable with our positioning as we head into 2021. The FED has stated that it plans to keep short-term interest rates very low until both inflation and unemployment get closer to its objectives. That said, assuming an effective vaccination program and a strong reopening of the economy by the second half of the year, we would not be surprised to see longer-term interest rates move up a bit in 2021.

Kevin V. Earley
Lead Manager
  Robert W. Thompson
Co-Manager
 


11



MAIRS & POWER BALANCED FUND (unaudited) (continued)

The Fund's investment objective, risks, charges and expenses must be considered carefully before investing. The summary prospectus or full prospectus contains this and other important information about the Fund and they may be obtained by calling Shareholder Services at (800) 304-7404 or by visiting www.mairsandpower.com. Read the summary prospectus or full prospectus carefully before investing.

All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or an offer of a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

All investments have risks. The Balanced Fund is designed for long-term investors. Equity investments are subject to market fluctuations and the Fund's share price can fall because of weakness in the broad market, a particular industry or specific holdings. Investments in small and midcap companies generally are more volatile. International investing risks include among others political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices, and greater fluctuations in price than U.S. corporations. The Fund is subject to yield and share price variances with changes in interest rates and market conditions. Investors should note that if interest rates rise significantly from current levels, bond total returns will decline and may even turn negative in the short-term. There is also a chance that some of the Fund's holdings may have their credit rating downgraded or may default.

Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities.

This commentary includes forward-looking statements such as economic predictions and portfolio manager opinions. The statements are subject to change at any time based on market and other conditions. No predictions, forecasts, outlooks, expectations or beliefs are guaranteed.

Composite Index reflects an unmanaged portfolio of 60% of the S&P 500 TR Index and 40% of the Bloomberg Barclays U.S. Government/Credit Bond Index. It is not possible to invest directly in an index.

Morningstar US Fund Allocation – 50%-70% Equity Category is designed to benchmark target-date and target-risk investment products. Index is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company. Index has 60% global equity exposure and 40% global bond exposure. It is not possible to invest directly in an index.

S&P 500 TR (Total Return) Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. It is not possible to invest directly in an index.

Bloomberg Barclays U.S. Government/Credit Bond Index is a broad-based flagship benchmark that measures the non-securitized component of the U.S. Aggregate Index. It includes investment-grade, U.S. dollar-denominated, fixed-rate Treasuries, government-related and corporate securities. It is not possible to invest directly in an index.

Piper Sandler Company Minnesota Index is a price-weighted index designed to measure the performance of the Minnesota economy. It is not possible to invest directly in an index.


12



Mairs & Power Balanced Fund
PERFORMANCE INFORMATION (unaudited)  December 31, 2020

Ten years of investment performance (through December 31, 2020)

This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund 10 years ago.

Average annual total returns for periods ended December 31, 2020

   

1 year

 

5 years

 

10 years

 

20 years

 

Mairs & Power Balanced Fund

   

10.44

%

   

10.00

%

   

9.35

%

   

7.35

%

 

Composite Index(1)

   

15.30

%

   

11.34

%

   

10.17

%

   

6.81

%

 

S&P 500 Total Return Index(2)

   

18.40

%

   

15.22

%

   

13.88

%

   

7.47

%

 
Bloomberg Barclays U.S.
Government/Credit Bond Index(3)
   

8.93

%

   

4.98

%

   

4.19

%

   

5.01

%

 

Performance data quoted represents past performance and does not guarantee future results. All performance information shown includes the reinvestment of dividend and capital gain distributions, but does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 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. For the most recent month-end performance figures, visit the Fund's website at www.mairsandpower.com or call Shareholder Services at (800) 304-7404. Per the Prospectus dated April 30, 2020, the expense ratio for the Fund is 0.71%.

(1)  The Composite Index reflects an unmanaged portfolio comprised of 60% of the S&P 500 Total Return Index and 40% of the Bloomberg Barclays U.S. Government/Credit Bond Index. It is not possible to invest directly in an index.

(2)   The S&P 500 Total Return Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. It tracks both the capital gains of a group of stocks over time and assumes that any cash distributions, such as dividends, are reinvested back into the index. It is not possible to invest directly in an index.

(3)   The Bloomberg Barclays U.S. Government/Credit Bond Index is a broad-based flagship benchmark that measures the non-securitized component of the U.S. Aggregate Index. It includes investment-grade, U.S. dollar-denominated, fixed-rate Treasuries, government-related and corporate securities. It is not possible to invest directly in an index.


13



Mairs & Power Balanced Fund
FUND INFORMATION (unaudited)  December 31, 2020

Portfolio Managers

Kevin V. Earley, CFA, lead manager since April 1, 2018, co-manager from January 1, 2015 through April 1, 2018, University of Minnesota, MBA Finance 1990

Robert W. Thompson, CFA, co-manager since April 1, 2018, University of Minnesota, MBA Finance 1995

General Information

Fund Symbol

 

MAPOX

 

Net Asset Value (NAV) Per Share

 

$

105.23

   

Expense Ratio

   

0.71

%

 

Portfolio Turnover Rate

   

15.96

%

 

Sales Charge

   

None1

   

Fund Inception Year

   

1961

   

Portfolio Composition

Top Ten Common Stock Holdings
(Percent of Total Net Assets)
2

Alphabet Inc

   

4.2

%

 

Microsoft Corp

   

3.3

   

US Bancorp/MN

   

3.1

   

Medtronic PLC

   

2.5

   

UnitedHealth Group Inc

   

2.4

   

Ecolab Inc

   

2.3

   

Visa Inc

   

2.2

   

Graco Inc

   

2.1

   

Toro Co/The

   

2.1

   

Eli Lilly & Co

   

2.1

   

Portfolio Diversification
(Percent of Total Net Assets)

Fixed Income Securities 31.0%

 

Corporate Bonds

   

26.2

%

 

Asset Backed Securities

   

1.9

   

Municipal Bonds

   

1.7

   

U.S. Government Obligations

   

1.2

   

Common Stocks 66.9%

 

Health Care

   

15.1

   

Industrials

   

13.3

   

Information Technology

   

12.1

   

Financials

   

9.6

   

Communications Services

   

5.8

   

Materials

   

4.9

   

Consumer Staples

   

3.2

   

Consumer Discretionary

   

1.8

   

Real Estate

   

0.6

   

Utilities

   

0.5

   

Short-term Investments 2.1%3

   

2.1

   
     

100.0

%

 

1  Although the Fund is no-load, investment management fees and other expenses still apply.

2  All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or offer for a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

3  Represents short-term investments and other assets and liabilities (net).

  The Schedule of Investments and portfolio diversification utilize the Global Industry Classification Standard (GICS®) which 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, Inc. and S&P and has been licensed for use by the Adviser.


14



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
   

FIXED INCOME SECURITIES 31.0%

 
    CORPORATE BONDS 26.2%  
    COMMUNICATION SERVICES 0.9%  

$

1,000,000

   

CBS Corp

   

3.500

%

 

01/15/25

 

$

1,097,029

   
  1,688,000    

Netflix Inc

   

5.875

%

 

11/15/28

   

2,023,490

   
  2,000,000    

Comcast Corp

   

4.250

%

 

01/15/33

   

2,510,124

   
  1,000,000    

Verizon Communications Inc

   

4.400

%

 

11/01/34

   

1,247,930

   
  1,000,000    

AT&T Inc

   

4.500

%

 

05/15/35

   

1,213,435

   
     

8,092,008

   
    CONSUMER DISCRETIONARY 3.2%  
  1,000,000    

Harley-Davidson Financial Services Inc (g)

   

4.050

%

 

02/04/22

   

1,034,930

   
  500,000    

Whirlpool Corp

   

4.700

%

 

06/01/22

   

528,874

   
  1,000,000    

Block Financial LLC

   

5.500

%

 

11/01/22

   

1,062,794

   
  1,000,000    

General Motors Financial Co Inc

   

3.700

%

 

05/09/23

   

1,059,915

   
  1,000,000    

General Motors Financial Co Inc

   

4.250

%

 

05/15/23

   

1,077,771

   
  1,000,000    

General Motors Financial Co Inc

   

3.950

%

 

04/13/24

   

1,089,212

   
  2,000,000    

Coach Inc

   

4.250

%

 

04/01/25

   

2,145,665

   
  250,000    

General Motors Co

   

4.000

%

 

04/01/25

   

276,808

   
  1,000,000    

General Motors Financial Co Inc

   

4.300

%

 

07/13/25

   

1,121,131

   
  1,064,000    

Block Financial LLC

   

5.250

%

 

10/01/25

   

1,216,665

   
  1,500,000    

Ford Motor Co

   

4.346

%

 

12/08/26

   

1,597,500

   
  1,000,000    

Darden Restaurants Inc

   

3.850

%

 

05/01/27

   

1,096,395

   
  2,245,000    

Lear Corp

   

3.800

%

 

09/15/27

   

2,518,498

   
  1,000,000    

General Motors Co

   

4.200

%

 

10/01/27

   

1,133,142

   
  1,000,000    

AutoNation Inc

   

3.800

%

 

11/15/27

   

1,106,123

   
  923,000    

Whirlpool Corp

   

4.750

%

 

02/26/29

   

1,125,527

   
  2,000,000    

Hasbro Inc

   

3.900

%

 

11/19/29

   

2,265,027

   
  2,000,000    

Advance Auto Parts Inc

   

3.900

%

 

04/15/30

   

2,299,882

   
  1,000,000    

Mohawk Industries Inc

   

3.625

%

 

05/15/30

   

1,118,161

   
  1,000,000    

Metropolitan Opera Association Inc

   

4.349

%

 

10/01/32

   

970,310

   
  500,000    

Kohl's Corp

   

6.875

%

 

12/15/37

   

572,638

   
  750,000    

Hasbro Inc

   

5.100

%

 

05/15/44

   

857,918

   
  1,073,000    

Kohl's Corp

   

5.550

%

 

07/17/45

   

1,155,865

   
     

28,430,751

   
    CONSUMER STAPLES 1.4%  
  430,000    

Land O' Lakes Inc (g)

   

6.000

%

 

11/15/22

   

461,523

   
  2,500,000    

Land O' Lakes Inc (h)

   

7.250

%

 

04/04/27

   

2,443,750

   
  1,949,000    

Land O' Lakes Capital Trust I (g)

   

7.450

%

 

03/15/28

   

2,214,551

   
  2,500,000    

Land O' Lakes Inc (h)

   

7.000

%

 

09/18/28

   

2,346,875

   
  250,000    

Smithfield Foods Inc (g)

   

3.000

%

 

10/15/30

   

264,519

   


15



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    CORPORATE BONDS (continued)  
    CONSUMER STAPLES (continued)  

$

1,000,000

   

Walgreens Boots Alliance Inc

   

4.500

%

 

11/18/34

 

$

1,148,502

   
  1,000,000    

Anheuser-Busch Cos LLC / Anheuser-Busch InBev Worldwide Inc

   

4.700

%

 

02/01/36

   

1,270,287

   
  1,000,000    

Walgreens Boots Alliance Inc

   

4.800

%

 

11/18/44

   

1,135,858

   
  1,000,000    

Molson Coors Brewing Co

   

4.200

%

 

07/15/46

   

1,147,461

   
     

12,433,326

   
    CONSUMER, NON-CYCLICAL 0.1%  
  1,000,000    

Wildlife Conservation Society

   

3.414

%

 

08/01/50

   

1,019,150

   
    ENERGY 0.5%  
  1,170,000    

ONEOK Inc

   

4.250

%

 

02/01/22

   

1,204,304

   
  140,000    

Gulf South Pipeline Co LP

   

4.000

%

 

06/15/22

   

144,138

   
  1,500,000    

Sunoco Logistics Partners Operations LP

   

3.450

%

 

01/15/23

   

1,564,818

   
  1,000,000    

Boardwalk Pipelines LP

   

4.950

%

 

12/15/24

   

1,116,080

   
  500,000    

Murphy Oil Corp (f)

   

6.375

%

 

12/01/42

   

440,625

   
     

4,469,965

   
    FINANCIALS 10.7%  
  1,000,000    

Nationwide Financial Services Inc (g)

   

5.375

%

 

03/25/21

   

1,010,864

   
  1,000,000    

Capital One Financial Corp

   

4.750

%

 

07/15/21

   

1,023,332

   
  500,000    

Goldman Sachs Group Inc/The

   

5.250

%

 

07/27/21

   

514,040

   
  3,000,000    

Primerica Inc

   

4.750

%

 

07/15/22

   

3,194,356

   
  2,833,000    

Infinity Property & Casualty Corp

   

5.000

%

 

09/19/22

   

3,005,291

   
  2,000,000    

OneBeacon US Holdings Inc

   

4.600

%

 

11/09/22

   

2,128,368

   
  1,000,000    

Standard Chartered PLC (b) (g)

   

3.950

%

 

01/11/23

   

1,052,066

   
  500,000    

First American Financial Corp

   

4.300

%

 

02/01/23

   

528,298

   
  1,473,000    

Assurant Inc

   

4.000

%

 

03/15/23

   

1,570,336

   
  500,000    

Assurant Inc

   

4.200

%

 

09/27/23

   

546,912

   
  500,000    

CNA Financial Corp

   

7.250

%

 

11/15/23

   

592,883

   
  500,000    

Pacific Life Insurance Co (g)

   

7.900

%

 

12/30/23

   

592,580

   
  1,000,000    

Moody's Corp

   

4.875

%

 

02/15/24

   

1,126,028

   
  1,000,000    

HSBC Holdings PLC (b)

   

4.250

%

 

03/14/24

   

1,103,343

   
  540,000    

Wintrust Financial Corp

   

5.000

%

 

06/13/24

   

578,161

   
  1,250,000    

Assured Guaranty US Holdings Inc

   

5.000

%

 

07/01/24

   

1,429,430

   
  3,088,000    

Legg Mason Inc

   

3.950

%

 

07/15/24

   

3,422,718

   
  1,500,000    

Symetra Financial Corp

   

4.250

%

 

07/15/24

   

1,657,695

   
  1,000,000    

Citigroup Inc

   

4.000

%

 

08/05/24

   

1,112,821

   
  3,000,000    

Synchrony Financial

   

4.250

%

 

08/15/24

   

3,314,750

   
  2,000,000    

Old Republic International Corp

   

4.875

%

 

10/01/24

   

2,280,247

   
  1,627,000    

Associated Banc-Corp

   

4.250

%

 

01/15/25

   

1,762,925

   


16



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    CORPORATE BONDS (continued)  
    FINANCIALS (continued)  

$

4,000,000

   

Kemper Corp

   

4.350

%

 

02/15/25

 

$

4,442,661

   
  1,050,000    

TCF National Bank

   

4.600

%

 

02/27/25

   

1,145,380

   
  1,000,000    

BBVA USA

   

3.875

%

 

04/10/25

   

1,121,390

   
  250,000    

Liberty Mutual Insurance Co (g)

   

8.500

%

 

05/15/25

   

312,822

   
  1,000,000    

Prudential Insurance Co of America/The (g)

   

8.300

%

 

07/01/25

   

1,296,212

   
  3,000,000    

American International Group Inc

   

3.750

%

 

07/10/25

   

3,370,485

   
  1,000,000    

Synchrony Financial

   

4.500

%

 

07/23/25

   

1,124,967

   
  2,000,000    

Janus Capital Group Inc (b)

   

4.875

%

 

08/01/25

   

2,302,425

   
  2,000,000    

HSBC Holdings PLC (b)

   

4.250

%

 

08/18/25

   

2,272,345

   
  4,000,000    

Capital One Financial Corp

   

4.200

%

 

10/29/25

   

4,566,846

   
  1,520,000    

Legg Mason Inc

   

4.750

%

 

03/15/26

   

1,804,917

   
  2,000,000    

Hanover Insurance Group Inc/The

   

4.500

%

 

04/15/26

   

2,334,954

   
  1,000,000    

Wells Fargo & Co

   

4.100

%

 

06/03/26

   

1,146,426

   
  2,000,000    

MSCI Inc (g)

   

4.750

%

 

08/01/26

   

2,084,980

   
  3,290,000    

Old Republic International Corp

   

3.875

%

 

08/26/26

   

3,779,053

   
  500,000    

Morgan Stanley

   

4.350

%

 

09/08/26

   

589,494

   
  500,000    

Raymond James Financial Inc

   

3.625

%

 

09/15/26

   

573,581

   
  1,000,000    

Citigroup Inc

   

4.300

%

 

11/20/26

   

1,164,205

   
  1,000,000    

JPMorgan Chase & Co

   

4.125

%

 

12/15/26

   

1,169,064

   
  4,000,000    

Mercury General Corp

   

4.400

%

 

03/15/27

   

4,429,368

   
  450,000    

Athene Holding Ltd (b)

   

4.125

%

 

01/12/28

   

501,477

   
  250,000    

Provident Cos Inc

   

7.250

%

 

03/15/28

   

318,098

   
  2,000,000    

E*TRADE Financial Corp

   

4.500

%

 

06/20/28

   

2,404,337

   
  500,000    

Farmers Exchange Capital (g)

   

7.050

%

 

07/15/28

   

621,817

   
  1,000,000    

Lazard Group LLC

   

4.375

%

 

03/11/29

   

1,172,640

   
  2,500,000    

Wintrust Financial Corp

   

4.850

%

 

06/06/29

   

2,713,662

   
  2,300,000    

Assurant Inc

   

3.700

%

 

02/22/30

   

2,559,257

   
  500,000    

Park National Corp (f)

   

4.500

%

 

09/01/30

   

505,218

   
  500,000    

Goldman Sachs Group Inc/The

   

4.250

%

 

11/15/30

   

572,184

   
  500,000    

Goldman Sachs Group Inc/The

   

4.000

%

 

02/15/31

   

548,366

   
  500,000    

Goldman Sachs Group Inc/The

   

4.300

%

 

12/15/32

   

552,715

   
  538,000    

Bank of America Corp

   

4.000

%

 

08/15/34

   

608,697

   
  3,000,000    

Fulton Financial Corp (f)

   

3.750

%

 

03/15/35

   

3,009,190

   
  500,000    

Swiss Re Treasury US Corp (g)

   

4.250

%

 

12/06/42

   

629,737

   
  500,000    

Principal Financial Group Inc

   

4.350

%

 

05/15/43

   

621,653

   
  2,500,000    

M&T Bank Corp (f) (h)

   

5.125

%

 

11/01/26

   

2,715,625

   
  20,000    

Wells Fargo & Co (h)

   

4.700

%

 

12/15/25

   

527,600

   

   

95,161,292

   


17



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    CORPORATE BONDS (continued)  
    HEALTH CARE 1.0%  

$

500,000

   

Wyeth LLC

   

6.450

%

 

02/01/24

 

$

589,087

   
  3,000,000    

AbbVie Inc

   

3.800

%

 

03/15/25

   

3,345,535

   
  400,000    

Bristol-Myers Squibb Co

   

3.875

%

 

08/15/25

   

456,317

   
  1,000,000    

Cigna Corp

   

4.500

%

 

02/25/26

   

1,172,360

   
  500,000    

Zimmer Biomet Holdings Inc

   

4.250

%

 

08/15/35

   

564,724

   
  1,400,000    

CVS Health Corp

   

4.780

%

 

03/25/38

   

1,773,773

   
  1,000,000    

UnitedHealth Group Inc

   

3.500

%

 

08/15/39

   

1,189,622

   
     

9,091,418

   
    INDUSTRIALS 2.5%  
  500,000    

IDEX Corp

   

4.200

%

 

12/15/21

   

512,849

   
  500,000    

GATX Corp

   

4.750

%

 

06/15/22

   

528,686

   
  500,000    

Penske Truck Leasing Co Lp / PTL Finance Corp (g)

   

4.875

%

 

07/11/22

   

533,055

   
  1,000,000    

GATX Corp

   

3.900

%

 

03/30/23

   

1,068,339

   
  1,000,000    

Flowserve Corp

   

4.000

%

 

11/15/23

   

1,058,637

   
  2,350,000    

Tennant Co

   

5.625

%

 

05/01/25

   

2,446,937

   
  1,500,000    

Hillenbrand Inc (f)

   

2.500

%

 

09/15/26

   

1,681,875

   
  500,000    

Toro Co/The

   

7.800

%

 

06/15/27

   

659,327

   
  2,000,000    

Kennametal Inc

   

4.625

%

 

06/15/28

   

2,228,131

   
  3,000,000    

Steelcase Inc

   

5.125

%

 

01/18/29

   

3,483,107

   
  1,000,000    

Oshkosh Corp

   

3.100

%

 

03/01/30

   

1,090,645

   
  2,000,000    

GATX Corp

   

4.000

%

 

06/30/30

   

2,363,599

   
  1,000,000    

Flowserve Corp

   

3.500

%

 

10/01/30

   

1,067,439

   
  2,000,000    

Eaton Corp

   

4.000

%

 

11/02/32

   

2,442,932

   
  1,000,000    

FedEx Corp

   

4.100

%

 

04/15/43

   

1,181,980

   
     

22,347,538

   
    INFORMATION TECHNOLOGY 3.3%  
  1,500,000    

Diamond 1 Finance Corp / Diamond 2 Finance Corp (g)

   

5.450

%

 

06/15/23

   

1,659,031

   
  700,000    

DXC Technology Co

   

4.250

%

 

04/15/24

   

763,768

   
  1,031,000    

Arrow Electronics Inc

   

4.000

%

 

04/01/25

   

1,134,061

   
  2,000,000    

Hewlett Packard Enterprise Co (f)

   

4.900

%

 

10/15/25

   

2,339,926

   
  1,500,000    

Dell International LLC / EMC Corp (g)

   

6.020

%

 

06/15/26

   

1,829,918

   
  1,000,000    

DXC Technology Co

   

4.750

%

 

04/15/27

   

1,144,820

   
  2,500,000    

Motorola Solutions Inc

   

4.600

%

 

02/23/28

   

3,016,071

   
  1,500,000    

Trimble Inc

   

4.900

%

 

06/15/28

   

1,794,880

   
  1,000,000    

Fiserv Inc

   

4.200

%

 

10/01/28

   

1,192,297

   
  1,500,000    

Broadcom Inc

   

4.750

%

 

04/15/29

   

1,789,083

   
  1,000,000    

Juniper Networks Inc

   

3.750

%

 

08/15/29

   

1,152,556

   


18



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    CORPORATE BONDS (continued)  
    INFORMATION TECHNOLOGY (continued)  

$

1,000,000

   

Dell International LLC / EMC Corp (g)

   

5.300

%

 

10/01/29

 

$

1,225,950

   
  3,000,000    

Intel Corp

   

4.000

%

 

12/15/32

   

3,735,581

   
  2,000,000    

Leidos Inc

   

5.500

%

 

07/01/33

   

2,451,120

   
  1,500,000    

Western Union Co/The

   

6.200

%

 

11/17/36

   

1,905,954

   
  2,000,000    

Motorola Solutions Inc

   

5.500

%

 

09/01/44

   

2,546,928

   
     

29,681,944

   
    MATERIALS 2.0%  
  175,000    

Mosaic Co/The

   

3.750

%

 

11/15/21

   

178,479

   
  1,000,000    

Domtar Corp

   

4.400

%

 

04/01/22

   

1,028,672

   
  750,000    

RPM International Inc

   

3.450

%

 

11/15/22

   

779,065

   
  756,000    

Eastman Chemical Co

   

3.800

%

 

03/15/25

   

840,553

   
  865,000    

Union Carbide Corp

   

7.500

%

 

06/01/25

   

1,058,185

   
  2,000,000    

DowDuPont Inc

   

4.493

%

 

11/15/25

   

2,334,700

   
  200,000    

Worthington Industries Inc

   

4.550

%

 

04/15/26

   

227,609

   
  1,500,000    

Cabot Corp

   

3.400

%

 

09/15/26

   

1,623,517

   
  782,000    

HB Fuller Co

   

4.000

%

 

02/15/27

   

815,235

   
  3,000,000    

Cabot Corp

   

4.000

%

 

07/01/29

   

3,240,376

   
  1,175,000    

Albemarle Wodgina Pty Ltd (b)

   

3.450

%

 

11/15/29

   

1,250,511

   
  1,250,000    

Dow Chemical Co/The

   

4.250

%

 

10/01/34

   

1,509,302

   
  1,000,000    

Alcoa Inc

   

5.950

%

 

02/01/37

   

1,205,000

   
  1,000,000    

Newmont Mining Corp

   

4.875

%

 

03/15/42

   

1,360,626

   
  325,000    

Albemarle Corp

   

5.450

%

 

12/01/44

   

389,152

   
  250,000    

Steel Dynamics Inc

   

3.250

%

 

10/15/50

   

261,106

   
     

18,102,088

   
    REAL ESTATE 0.1%  
  350,000    

CBRE Services Inc

   

4.875

%

 

03/01/26

   

413,529

   
    UTILITIES 0.5%  
  75,000    

National Fuel Gas Co

   

3.750

%

 

03/01/23

   

78,731

   
  1,060,000    

PSEG Power LLC

   

4.300

%

 

11/15/23

   

1,156,542

   
  250,000    

Jersey Central Power & Light Co (g)

   

4.300

%

 

01/15/26

   

279,559

   
  2,000,000    

National Fuel Gas Co

   

3.950

%

 

09/15/27

   

2,123,853

   
  1,000,000    

National Fuel Gas Co

   

4.750

%

 

09/01/28

   

1,073,509

   
     

4,712,194

   
   

TOTAL CORPORATE BONDS

   

233,955,203

   


19



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    ASSET BACKED SECURITIES 1.9%  

$

292,408

   

American Airlines 2011-1 Class A Pass Through Trust

   

5.250

%

 

07/31/22

 

$

290,701

   
  231,111    

Air Canada 2013-1 Class B Pass Through Trust (b) (g)

   

5.375

%

 

11/15/22

   

231,140

   
  180,477    

Northwest Airlines 2002-1 Class G-2 Pass Through Trust

   

6.264

%

 

05/20/23

   

179,444

   
  250,214    

United Airlines 2014-1 Class B Pass Through Trust

   

4.750

%

 

10/11/23

   

250,853

   
  121,912    

Continental Airlines 2007-1 Class A Pass Through Trust

   

5.983

%

 

10/19/23

   

123,081

   
  139,735    

Southwest Airlines Co 2007-1 Pass Through Trust

   

6.150

%

 

02/01/24

   

145,159

   
  396,156    

Delta Air Lines 2007-1 Class B Pass Through Trust

   

8.021

%

 

02/10/24

   

396,205

   
  40,147    

United Airlines 2014-2 Class B Pass Through Trust

   

4.625

%

 

03/03/24

   

40,077

   
  312,443    

American Airlines 2014-1 Class B Pass Through Trust

   

4.375

%

 

04/01/24

   

253,442

   
  1,000,000    

United Airlines 2015-1 Class A Pass Through Trust

   

3.700

%

 

06/01/24

   

990,004

   
  394,422    

US Airways 2010-1 Class A Pass Through Trust

   

6.250

%

 

10/22/24

   

370,961

   
  999,235    

Delta Air Lines 2015-1 Class B Pass Through Trust

   

4.250

%

 

01/30/25

   

999,414

   
  579,790    

American Airlines 2015-2 Class B Pass Through Trust

   

4.400

%

 

03/22/25

   

467,993

   
  215,892    

US Airways 2011-1 Class A Pass Through Trust

   

7.125

%

 

04/22/25

   

196,618

   
  2,433,355    

American Airlines 2016-1 Class B Pass Through Trust

   

5.250

%

 

07/15/25

   

2,059,084

   
  770,971    

Spirit Airlines Pass Through Trust 2015-1B

   

4.450

%

 

10/01/25

   

713,994

   
  1,716,715    

Hawaiian Airlines 2013-1 Class A Pass Through Certificates

   

3.900

%

 

01/15/26

   

1,511,276

   
  1,209,604    

Continental Airlines 2012-2 Class A Pass Through Trust

   

4.000

%

 

04/29/26

   

1,198,604

   
  842,765    

American Airlines 2017-1 Class B Pass Through Trust

   

4.950

%

 

08/15/26

   

712,505

   
  737,945    

United Airlines 2013-1 Class A Pass Through Trust

   

4.300

%

 

02/15/27

   

740,467

   
  734,849    

American Airlines 2016-3 Class B Pass Through Trust

   

3.750

%

 

04/15/27

   

579,987

   
  580,580    

US Airways 2013-1 Class A Pass Through Trust

   

3.950

%

 

05/15/27

   

531,553

   
  596,322    

United Airlines 2014-1 Class A Pass Through Trust

   

4.000

%

 

10/11/27

   

592,913

   
  499,080    

United Airlines 2014-2 Class A Pass Through Trust

   

3.750

%

 

03/03/28

   

499,061

   
  1,316,864    

American Airlines 2014-1 Class A Pass Through Trust

   

3.700

%

 

04/01/28

   

1,234,519

   
  338,027    

American Airlines 2015-1 Class A Pass Through Trust

   

3.375

%

 

11/01/28

   

314,534

   
  151,077    

American Airlines 2015-2 Class AA Pass Through Trust

   

3.600

%

 

03/22/29

   

148,231

   
  492,576    

American Airlines 2015-2 Class A Pass Through Trust

   

4.000

%

 

03/22/29

   

455,830

   
  95,592    

Spirit Airlines Pass Through Trust 2015-1A

   

4.100

%

 

10/01/29

   

90,766

   
  870,292    

British Airways 2018-1 Class A Pass Through Trust (b) (g)

   

4.125

%

 

03/20/33

   

806,167

   
     

17,124,583

   
    MUNICIPAL BONDS 1.7%  
  650,000    

Glendale Community College District/CA

   

2.113

%

 

08/01/31

   

680,089

   
  500,000    

Socorro Independent School District

   

2.125

%

 

08/15/31

   

530,050

   
  920,000    

Pierre School District No 32-2

   

2.040

%

 

08/01/33

   

928,216

   
  500,000    

Redondo Beach Unified School District

   

2.040

%

 

08/01/34

   

505,995

   
  400,000    

County of Hennepin MN

   

4.800

%

 

12/01/35

   

545,940

   


20



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Par Value/Shares

 

Security Description

 

Fair Value

 
    FIXED INCOME SECURITIES (continued)  
    MUNICIPAL BONDS (continued)  

$

500,000

    DeKalb Kane & LaSalle Counties Etc Community
College District No 523 Kishwaukee
   

3.017

%

 

02/01/36

 

$

513,255

   
  305,000    

State of California

   

4.600

%

 

04/01/38

   

366,720

   
  1,000,000    

Crowley Independent School District

   

3.010

%

 

08/01/38

   

1,080,420

   
  500,000    

Idaho Bond Bank Authority

   

2.354

%

 

09/15/38

   

501,270

   
  850,000    

Worthington Independent School District No 518

   

3.300

%

 

02/01/39

   

895,492

   
  610,000    

Rockwall Independent School District

   

3.091

%

 

02/15/39

   

664,314

   
  750,000    

Allen Independent School District

   

3.148

%

 

02/15/39

   

803,055

   
  1,000,000    

Pierce County School District No 10 Tacoma

   

2.357

%

 

12/01/39

   

1,036,590

   
  945,000    

City of Minnetonka MN

   

3.050

%

 

02/01/40

   

955,697

   
  885,000    

Massachusetts Development Finance Agency

   

2.550

%

 

05/01/40

   

913,754

   
  505,000    

Village of Ashwaubenon WI

   

2.970

%

 

06/01/40

   

533,527

   
  750,000    

Woodbury County Law Enforcement Center Authority

   

3.090

%

 

06/01/40

   

757,995

   
  300,000    

Desert Community College District

   

2.457

%

 

08/01/40

   

301,086

   
  800,000    

Utah Transit Authority

   

3.443

%

 

12/15/42

   

851,840

   
  500,000    

BAC Capital Trust XIV (f) (h)

   

4.000

%

 

02/08/21

   

496,875

   
  600,000    

San Diego Community College District

   

3.336

%

 

08/01/43

   

636,996

   
  1,000,000    

Michigan State University

   

4.496

%

 

08/15/48

   

1,144,510

   
     

15,643,686

   
    U.S. GOVERNMENT OBLIGATIONS 1.2%  
  7,000,000    

United States Treasury Note/Bond

   

2.625

%

 

02/15/29

   

8,035,781

   
  2,000,000    

United States Treasury Note/Bond

   

3.000

%

 

02/15/49

   

2,638,125

   
     

10,673,906

   
  TOTAL FIXED INCOME SECURITIES
(cost $253,308,772)
 

$

277,397,378

 
   

COMMON STOCKS 66.9%

 
    COMMUNICATION SERVICES 5.8%  
  34,000    

Activision Blizzard Inc

                 

$

3,156,900

   
  21,250    

Alphabet Inc (a)

                   

37,227,450

   
  65,000    

Walt Disney Co/The (a)

                   

11,776,700

   
     

52,161,050

   
    CONSUMER DISCRETIONARY 1.8%  
  38,000    

Home Depot Inc/The

                   

10,093,560

   
  36,000    

Target Corp

                   

6,355,080

   
     

16,448,640

   


21



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
    COMMON STOCKS (continued)  
    CONSUMER STAPLES 3.2%  
 

53,000

   

Hershey Co/The

 

$

8,073,490

   
 

269,000

   

Hormel Foods Corp

   

12,538,090

   
 

111,000

   

Sysco Corp

   

8,242,860

   
     

28,854,440

   
    FINANCIALS 9.6%  
 

133,000

   

American Express Co

   

16,081,030

   
 

140,000

   

JPMorgan Chase & Co

   

17,789,800

   
 

317,000

   

Principal Financial Group Inc

   

15,726,370

   
 

591,000

   

US Bancorp/MN

   

27,534,690

   
 

286,000

   

Wells Fargo & Co

   

8,631,480

   
     

85,763,370

   
    HEALTH CARE 15.1%  
 

143,000

   

Abbott Laboratories

   

15,657,070

   
 

62,000

   

Baxter International Inc

   

4,974,880

   
 

29,000

   

Bio-Techne Corp

   

9,208,950

   
 

215,000

   

Elanco Animal Health Inc (a)

   

6,594,050

   
 

109,000

   

Eli Lilly & Co

   

18,403,560

   
 

100,000

   

Johnson & Johnson

   

15,738,000

   
 

192,000

   

Medtronic PLC (e)

   

22,490,880

   
 

141,000

   

Pfizer Inc

   

5,190,210

   
 

352,000

   

Roche Holding AG (d)

   

15,431,680

   
 

60,000

   

UnitedHealth Group Inc

   

21,040,800

   
     

134,730,080

   
    INDUSTRIALS 13.3%  
 

77,000

    3M Co    

13,458,830

   
 

81,000

   

CH Robinson Worldwide Inc

   

7,603,470

   
 

197,000

   

Donaldson Co Inc

   

11,008,360

   
 

234,000

   

Fastenal Co

   

11,426,220

   
 

260,000

   

Graco Inc

   

18,811,000

   
 

59,000

   

Honeywell International Inc

   

12,549,300

   
 

225,000

   

nVent Electric PLC (e)

   

5,240,250

   
 

24,000

   

Rockwell Automation Inc

   

6,019,440

   
 

110,000

   

Tennant Co

   

7,718,700

   
 

195,000

   

Toro Co/The

   

18,493,800

   
 

42,000

   

United Parcel Service Inc, Class B

   

7,072,800

   
     

119,402,170

   


22



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
    COMMON STOCKS (continued)  
    INFORMATION TECHNOLOGY 12.1%  
 

166,000

   

Corning Inc

 

$

5,976,000

   
 

123,000

   

Fiserv Inc (a)

   

14,004,780

   
 

35,000

   

Littelfuse Inc

   

8,913,100

   
 

131,000

   

Microsoft Corp

   

29,137,020

   
 

71,000

   

Motorola Solutions Inc

   

12,074,260

   
 

100,000

   

QUALCOMM Inc

   

15,234,000

   
 

18,000

   

Texas Instruments Inc

   

2,954,340

   
 

90,000

   

Visa Inc

   

19,685,700

   
     

107,979,200

   
    MATERIALS 4.9%  
 

95,000

   

Ecolab Inc

   

20,554,200

   
 

188,000

   

HB Fuller Co

   

9,753,440

   
 

18,000

   

Sherwin-Williams Co/The

   

13,228,380

   
     

43,536,020

   
    REAL ESTATE 0.6%  
 

43,000

   

CoreSite Realty Corp

   

5,387,040

   
    UTILITIES 0.5%  
 

65,000

   

Xcel Energy Inc

   

4,333,550

   
        TOTAL COMMON STOCKS
(cost $314,853,458)
 

$

598,595,560
 
   

SHORT-TERM INVESTMENTS 1.7%

 
 

15,378,696

    First American Government Obligations Fund, Class X, 0.040% (c)
(cost $15,378,696)
 

$

15,378,696
 
        TOTAL INVESTMENTS 99.6%
(cost $583,540,926)
 

$

891,371,634
 
       

OTHER ASSETS AND LIABILITIES (NET) 0.4%

   

3,881,078

   
       

TOTAL NET ASSETS 100.0%

 

$

895,252,712

   

(a)  Non-income producing.

(b)  Foreign security denominated in U.S. dollars. As of December 31, 2020, these securities represented $9,519,474 or 1.1% of total net assets.

(c)  The rate quoted is the annualized seven-day effective yield as of December 31, 2020.

(d)  American Depositary Receipt.

(e)  Issuer headquartered overseas but considered domestic. The Adviser defines foreign issuers as those whose operational leadership or headquarters is located in a foreign country; provided, however, if an issuer is believed by the Adviser to be headquartered in a jurisdiction primarily for tax purposes, the Adviser will consider the following additional factors: 1) the location of the primary exchange trading its securities, 2) where it derives the majority of its revenues, and/or 3) where it earns the majority of its profits.


23



Mairs & Power Balanced Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

(f)  Step Bonds – Securities for which the coupon rate of interest will adjust on specified future date(s). The rate disclosed represents the coupon rate in effect as of December 31, 2020.

(g)  Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under the Fund's Liquidity Risk Management Program. As of December 31, 2020, these securities represented $18,141,421 or 2.0% of total net assets.

(h)  Perpetual maturity; date shown, if applicable, represents next contractual call date.

See accompanying Notes to Financial Statements.


24



MAIRS & POWER SMALL CAP FUND (unaudited)

To Our Shareholders:  December 31, 2020

In the fourth quarter, the Mairs & Power Small Cap Fund gained 27.06%, the benchmark S&P Small Cap 600 Total Return (TR) Index was up 31.31%, and the Fund's peer group of small cap funds as measured by the Morningstar U.S. Fund Small Blend category jumped 28.01%. In 2020, the Fund gained 8.78%, the S&P Small Cap 600 TR index was up 11.29%, and the Morningstar peer group rose 10.66%.

In 2020, the Fund underperformed the S&P 600 by about 2.50%. But the year's story could be described as a tale of two markets. During the downturn, our stock selection provided the portfolio with strong returns, outperforming its benchmark. But during the fourth quarter's strong snapback, the Fund trailed that earlier performance by 4.25%.

This has been the positioning of the Fund for a long time as we find it hard to find companies with strong barriers to entry here. That said, we believe Sleep Number is an exception to that notion. We have been watching and following Sleep Number (SNBR) for a number of years and in the spring sell off we finally got our opportunity to invest at a good value in this company. It has paid off as Sleep Number is up 200% since we purchased it. Although our underweight was a headwind, the performance of Sleep Number and Gentherm (THRM) (up 46% in 2020), were examples of good stock selection for the sector and the Fund.

Many of the Fund's stronger performers were in Healthcare, notably Catalent (CTLT), Bio-Techne (TECH), and Inspire Medical (INSP). Inspire, which focuses on treatments for obstructive sleep apnea, was up 153% in 2020. Our positions in all three companies were trimmed during the year because of valuations, but they remain some of the largest positions in the Fund. And while the Real Estate sector was down 10% in 2020, our holding CoreSite (COR) was positive for the year. This real estate investment trust is leveraged to cloud computing, an industry that continues to be strong, in large part because of the remote workforce's technology needs.

MAIRS & POWER SMALL CAP FUND (MSCFX)

Top Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)

 

Year To Date (12/31/19 – 12/31/20)

 

Wintrust Financial Corporation

  22.02%  

Catalent, Inc.

   

73.56

%

 

Inspire Medical Systems, Inc.

  14.44%  

Inspire Medical Systems, Inc.

   

142.17

%

 

Workiva, Inc. Class A

  33.00%  

Workiva, Inc. Class A

   

106.60

%

 

AAR Corporation

  61.35%  

Bio-Techne Corporation

   

34.10

%

 

Littelfuse, Inc.

  12.59%  

Sleep Number Corporation

   

201.16

%

 

Weak Relative Performers

Fourth Quarter (9/30/20 – 12/31/20)

 

Year To Date (12/31/19 – 12/31/20)

 

Hyliion Holdings Corp. Class A

  -98.24%  

Great Western Bancorp, Inc.

   

-49.69

%

 

CyberOptics Corporation

  -60.05%  

Marcus Corporation

   

-68.59

%

 

Jamf Holdings Corporation

  -51.76%  

United Fire Group, Inc.

   

-51.53

%

 

Calyxt, Inc.

  -54.44%  

AAR Corporation

   

-30.51

%

 

Badger Meter, Inc.

  -4.92%  

Callon Petroleum Company

   

-99.94

%

 

Performance shown is relative to the S&P SmallCap 600 TR Index as of December 31, 2020. Relative return is the difference between the absolute return and the performance of the market, in which the position is held. Relative contribution is used for ranking, which considers average daily weightings for each holding.


25



MAIRS & POWER SMALL CAP FUND (unaudited) (continued)

On the negative side, we'll cite Marcus Corp. (MCS). The movie theater chain was down 57% for the year. The chief reason for this decline was, of course, the pandemic. Though Marcus regained slightly in the fall snapback, we believe a strong recovery is still waiting in the wings. We're confident that this recovery is coming, and we have added a little to our holding, though that addition did hurt Fund performance during 2020.

The Industrial sector also was a weak area for the Fund. For instance, AAR Corp. (AIR), which supplies aftermarket products and services to aviation companies worldwide, was down 20% in 2020. Meanwhile, the Industrial sector was up nearly 11% for the year. The airline industry was under tremendous pressure in 2020, and though the clouds have lifted a little, it has yet to really take off. AAR has been aggressive in cutting costs, which should position it well once the economy opens up and air travel returns. Anticipating a recovery, we have added to our position in the company.

During the fourth quarter, the Fund exited Badger Meter (BMI), whose flow measurement products are used by water utilities, municipalities, and a number of industries. Though the company's business remains strong, we determined that its valuation was exceedingly high, and so we sold our holding.

One final note: This year, we welcome Chris Strom as a Fund co-manager. Chris joined Mairs & Power in 2017, and he has served as an Assistant Vice President and Equity Analyst for the past two years. His Durable Competitive Advantages studies have long provided us with a deep understanding of the companies we follow and the challenges they face. Chris's insights will be of incalculable value as the Fund pursues new opportunities going forward.

Allen D. Steinkopf
Lead Manager
  Andrew R. Adams
Co-Manager
  Chris D. Strom
Co-Manager
 

The Fund's investment objective, risks, charges and expenses must be considered carefully before investing. The summary prospectus or full prospectus contains this and other important information about the Fund and they may be obtained by calling Shareholder Services at (800) 304-7404 or by visiting www.mairsandpower.com. Read the summary prospectus or full prospectus carefully before investing.

All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or an offer of a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

All investments have risks. The Small Cap Fund is designed for long-term investors. Equity investments are subject to market fluctuations and the Fund's share price can fall because of weakness in the broad market, a particular industry or specific holdings. Investments in small and midcap companies generally are more volatile. International investing risks include among others political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices, and greater fluctuations in price than U.S. corporations. The Fund may invest in initial public offerings by small cap companies, which can involve greater risk than investments in companies that are already publicly traded.

This commentary includes forward-looking statements such as economic predictions and portfolio manager opinions. The statements are subject to change at any time based on market and other conditions. No predictions, forecasts, outlooks, expectations or beliefs are guaranteed.

S&P 600 Small Cap Total Return (S&P 600) is an index of small company stocks managed by Standard & Poor's Financial Services LLC that covers a broad range of small cap stocks in the U.S. The index is weighted according to market capitalization and covers about 3-4% of the total market for equities in the U.S. It tracks both the capital gains of a group of stocks over time and assumes that any cash distributions, such as dividends, are reinvested back into the index. It is not possible to invest directly in an index.

Morningstar Small Blend Category, as defined by Morningstar are stocks in the bottom 10% of the capitalization of the U.S. equity market are defined as small cap. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. It is not possible to invest directly in an index.

Russell 2000 TR Index is a small-cap stock market index of the smallest 2,000 stocks in the Russell 3000 Index.


26



Mairs & Power Small Cap Fund
PERFORMANCE INFORMATION (unaudited)  December 31, 2020

Investment performance since commencement of operations (through December 31, 2020)

This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund since commencement of operations.

Average annual total returns for periods ended December 31, 2020

   

1 Year

 

3 Year

 

5 Year

 

Since Inception(2)

 

Mairs & Power Small Cap Fund

   

8.78

%

   

7.05

%

   

10.94

%

   

14.18

%

 

S&P Small Cap 600 Total Return Index(1)

   

11.29

%

   

7.74

%

   

12.37

%

   

13.77

%

 

Performance data quoted represents past performance and does not guarantee future results. All performance information shown includes the reinvestment of dividend and capital gain distributions, but does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 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. For the most recent month-end performance figures, visit the Fund's website at www.mairsandpower.com or call Shareholder Services at (800) 304-7404. Per the Prospectus dated April 30, 2020, the expense ratio is 1.05%.

(1)  The S&P Small Cap 600 Total Return Index is an index of small-company stocks managed by Standard & Poor's Financial Services LLC that covers a broad range of small cap stocks in the U.S. The index is weighted according to market capitalization and covers about 3-4% of the total market for equities in the U.S. It tracks both the capital gains of a group of stocks over time and assumes that any cash distributions, such as dividends, are reinvested back into the index. It is not possible to invest directly in an index.

(2)  Since inception performance is as of August 11, 2011, which is the offering date of the Small Cap Fund.


27



Mairs & Power Small Cap Fund
FUND INFORMATION (unaudited)  December 31, 2020

Portfolio Managers
(Effective as of January 1, 2021)

Allen D. Steinkopf, CFA, lead manager since April 1, 2019, co-manager from January 1, 2015 through April 1, 2019, University of Minnesota, MBA Finance 1986

Andrew R. Adams, CFA, co-manager since April 1, 2019, lead manager from 2011 to April 1, 2019, University of Wisconsin-Madison, MS Finance 1997

Christopher D. Strom, CFA, co-manager since January 1, 2021, University of Wisconsin-Madison, MBA Applied Security Analysis 2010

General Information

Fund Symbol

 

MSCFX

 

Net Asset Value (NAV) Per Share

 

$

28.15

   

Expense Ratio

   

1.04

%

 

Portfolio Turnover Rate

   

16.39

%

 

Sales Charge

   

None1

   

Fund Inception Year

   

2011

   

Portfolio Composition

Top Ten Portfolio Holdings
(Percent of Total Net Assets)
2

Wintrust Financial Corp

   

4.3

%

 

Inspire Medical Systems Inc

   

4.2

   

Littelfuse Inc

   

3.9

   

CMC Materials Inc

   

3.6

   

Cullen/Frost Bankers Inc

   

3.6

   

Catalent Inc

   

3.6

   

Glacier Bancorp Inc

   

3.5

   

Oshkosh Corp

   

3.4

   

Tennant Co

   

3.3

   

Gentherm Inc

   

3.2

   

Portfolio Diversification
(Percent of Total Net Assets)

Common Stocks 99.0%

 

Industrials

   

22.8

%

 

Information Technology

   

18.3

   

Financials

   

17.9

   

Health Care

   

16.3

   

Consumer Discretionary

   

5.5

   

Real Estate

   

5.2

   

Utilities

   

5.0

   

Consumer Staples

   

3.7

   

Materials

   

2.5

   

Communication Services

   

1.3

   

Energy

   

0.5

   

Short-term Investments 1.0%3

   

1.0

   
     

100.0

%

 

1  Although the Fund is no-load, investment management fees and other expenses still apply.

2  All holdings in the portfolio are subject to change without notice and may or may not represent current or future portfolio composition. The mention of specific securities is not intended as a recommendation or offer for a particular security, nor is it intended to be a solicitation for the purchase or sale of any security.

3  Represents short-term investments and other assets and liabilities (net).

  The Schedule of Investments and portfolio diversification utilize the Global Industry Classification Standard (GICS®) which 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, Inc. and S&P and has been licensed for use by the Adviser.


28



Mairs & Power Small Cap Fund
SCHEDULE OF INVESTMENTS  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
   

COMMON STOCKS 99.0%

 
   

COMMUNICATION SERVICES 1.3%

 
 

364,423

   

Marcus Corp/The

 

$

4,912,422

   
   

CONSUMER DISCRETIONARY 5.5%

 
 

178,080

   

Gentherm Inc (a)

   

11,614,377

   
 

99,545

   

Sleep Number Corp (a)

   

8,148,754

   
     

19,763,131

   
   

CONSUMER STAPLES 3.7%

 
 

51,700

   

Casey's General Stores Inc

   

9,234,654

   
 

89,600

   

MGP Ingredients Inc

   

4,216,576

   
     

13,451,230

   
   

ENERGY 0.5%

 
 

64,100

   

Core Laboratories NV (b)

   

1,699,291

   
   

FINANCIALS 17.9%

 
 

445,061

   

Associated Banc-Corp

   

7,588,290

   
 

148,500

   

Cullen/Frost Bankers Inc

   

12,953,655

   
 

274,400

   

Glacier Bancorp Inc

   

12,625,144

   
 

349,900

   

Great Western Bancorp Inc

   

7,312,910

   
 

145,778

   

QCR Holdings Inc

   

5,771,351

   
 

114,987

   

United Fire Group Inc

   

2,886,174

   
 

254,000

   

Wintrust Financial Corp

   

15,516,860

   
     

64,654,384

   
   

HEALTH CARE 16.3%

 
 

31,900

   

Bio-Techne Corp

   

10,129,845

   
 

218,240

   

Calyxt Inc (a)

   

920,973

   
 

128,615

   

Cardiovascular Systems Inc (a)

   

5,628,192

   
 

123,700

   

Catalent Inc (a)

   

12,873,459

   
 

80,100

   

Inspire Medical Systems Inc (a)

   

15,066,009

   
 

376,342

   

IntriCon Corp (a)

   

6,811,790

   
 

192,000

   

Patterson Cos Inc

   

5,688,960

   
 

43,227

   

SurModics Inc (a)

   

1,881,239

   
     

59,000,467

   
   

INDUSTRIALS 22.8%

 
 

292,178

   

AAR Corp

   

10,582,687

   
 

43,800

   

Apogee Enterprises Inc

   

1,387,584

   
 

123,104

   

Donaldson Co Inc

   

6,879,051

   
 

335,410

   

Enerpac Tool Group Corp

   

7,583,620

   


29



Mairs & Power Small Cap Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
    COMMON STOCKS (continued)  
    INDUSTRIALS (continued)  
 

19,772

   

Generac Holdings Inc (a)

 

$

4,496,351

   
 

67,600

   

Graco Inc

   

4,890,860

   
 

91,800

   

Hub Group Inc, Class A (a)

   

5,232,600

   
 

99,700

   

Hyliion Holdings Corp (a)

   

1,643,056

   
 

327,100

   

nVent Electric PLC (d)

   

7,618,159

   
 

142,100

   

Oshkosh Corp

   

12,230,547

   
 

23,100

   

Proto Labs Inc (a)

   

3,543,540

   
 

130,986

   

Raven Industries Inc

   

4,334,327

   
 

169,251

   

Tennant Co

   

11,876,343

   
     

82,298,725

   
   

INFORMATION TECHNOLOGY 18.3%

 
 

86,700

   

CMC Materials Inc

   

13,117,710

   
 

123,578

   

CyberOptics Corp (a)

   

2,803,985

   
 

458,829

   

Digi International Inc (a)

   

8,671,868

   
 

47,200

   

Envestnet Inc (a)

   

3,884,088

   
 

111,150

   

Jamf Holding Corp (a)

   

3,325,608

   
 

54,900

   

Littelfuse Inc

   

13,980,834

   
 

80,798

   

NVE Corp

   

4,539,232

   
 

58,400

   

Plexus Corp (a)

   

4,567,464

   
 

123,580

   

Workiva Inc (a)

   

11,322,399

   
     

66,213,188

   
   

MATERIALS 2.5%

 
 

173,900

   

HB Fuller Co

   

9,021,932

   
   

REAL ESTATE 5.2%

 
 

72,928

   

CoreSite Realty Corp

   

9,136,420

   
 

542,300

   

Physicians Realty Trust

   

9,652,940

   
     

18,789,360

   
   

UTILITIES 5.0%

 
 

168,600

   

Black Hills Corp

   

10,360,470

   
 

135,200

   

NorthWestern Corp

   

7,883,512

   
     

18,243,982

   
        TOTAL COMMON STOCKS
(cost $248,269,957)
 

$

358,048,112
 


30



Mairs & Power Small Cap Fund
SCHEDULE OF INVESTMENTS
(continued)  December 31, 2020

Shares

 

Security Description

 

Fair Value

 
   

SHORT-TERM INVESTMENTS 1.0%

 
 

3,644,123

    First American Government Obligations Fund, Class X, 0.040% (c)
(cost $3,644,123)
 

$

3,644,123
 
        TOTAL INVESTMENTS 100.0%
(cost $251,914,080)
 

$

361,692,235
 
   

OTHER ASSETS AND LIABILITIES (NET) 0.0% (e)

   

(97,826

)

 
   

TOTAL NET ASSETS 100.0%

 

$

361,594,409

   

(a)  Non-income producing.

(b)  Foreign security denominated in U.S. dollars. As of December 31, 2020, these securities represented $1,699,291 or 0.5% of total net assets.

(c)  The rate quoted is the annualized seven-day effective yield as of December 31, 2020.

(d)  Issuer headquartered overseas but considered domestic. The Adviser defines foreign issuers as those whose operational leadership or headquarters is located in a foreign country; provided, however, if an issuer is believed by the Adviser to be headquartered in a jurisdiction primarily for tax purposes, the Adviser will consider the following additional factors: 1) the location of the primary exchange trading its securities, 2) where it derives the majority of its revenues, and/or 3) where it earns the majority of its profits.

(e)  Does not round to 0.1% or (0.1%).

See accompanying Notes to Financial Statements.


31



STATEMENTS OF ASSETS AND LIABILITIES  December 31, 2020

    Mairs & Power
Growth Fund
  Mairs & Power
Balanced Fund
  Mairs & Power
Small Cap Fund
 

ASSETS

 
Investments, at fair value (Note 1) *:  

Unaffiliated securities *

 

$

4,786,370,942

   

$

891,371,634

   

$

361,692,235

   
Affiliated securities (Note 5) *    

66,659,114

     

-

     

-

   
     

4,853,030,056

     

891,371,634

     

361,692,235

   

Receivable for Fund shares sold

   

1,205,267

     

1,288,159

     

615,516

   

Receivable for securities sold

   

3,503,595

     

-

     

-

   

Dividends and interest receivable

   

5,717,694

     

3,635,369

     

135,779

   

Prepaid expenses and other assets

   

108,623

     

41,312

     

24,016

   
     

4,863,565,235

     

896,336,474

     

362,467,546

   

LIABILITIES

 

Payable for Fund shares redeemed

   

2,439,676

     

460,696

     

189,704

   

Payable for securities purchased

   

-

     

-

     

319,337

   
Accrued investment management fees (Note 2)    

2,210,714

     

434,787

     

265,570

   

Accrued Fund administration fees

   

157,229

     

33,313

     

14,350

   

Accrued audit and tax fees

   

30,802

     

37,027

     

29,136

   

Accrued transfer agent fees

   

329,117

     

48,637

     

28,298

   

Other accrued fees

   

208,545

     

69,302

     

26,742

   
     

5,376,083

     

1,083,762

     

873,137

   

NET ASSETS

 

$

4,858,189,152

   

$

895,252,712

   

$

361,594,409

   

NET ASSETS CONSIST OF

 

Paid in capital

 

$

2,200,405,357

   

$

581,735,146

   

$

250,640,962

   

Total distributable earnings

   

2,657,783,795

     

313,517,566

     

110,953,447

   

TOTAL NET ASSETS

 

$

4,858,189,152

   

$

895,252,712

   

$

361,594,409

   

Fund shares, par value

 

$

0.01

   

$

0.01

   

$

0.01

   

Authorized

   

unlimited

     

unlimited

     

unlimited

   

Fund shares issued and outstanding

   

35,701,258

     

8,507,821

     

12,845,195

   

Net asset value per share

 

$

136.08

   

$

105.23

   

$

28.15

   

* Cost of investments

 

Cost of unaffiliated securities

 

$

2,236,924,747

   

$

583,540,926

   

$

251,914,080

   
Cost of affiliated securities (Note 5)    

64,383,757

     

-

     

-

   
   

$

2,301,308,504

   

$

583,540,926

   

$

251,914,080

   

See accompanying Notes to Financial Statements.


32



STATEMENT OF OPERATIONS  Year Ended December 31, 2020

    Mairs & Power
Growth Fund
  Mairs & Power
Balanced Fund
  Mairs & Power
Small Cap Fund
 

INVESTMENT INCOME

 

Income:

 

Dividends from unaffiliated securities *

 

$

75,685,478

   

$

11,577,193

   

$

5,483,040

   
Dividends from affiliated securities (Note 5)    

834,582

     

-

     

-

   

Interest income

   

-

     

11,455,497

     

-

   

TOTAL INCOME

   

76,520,060

     

23,032,690

     

5,483,040

   

Expenses:

 
Investment management fees (Note 2)    

24,245,435

     

5,082,843

     

3,038,879

   

Fund administration fees

   

649,684

     

140,001

     

62,613

   

Fund accounting fees