1290 Funds N-CSR

N-CSR 1 d850552dncsr.htm 1290 FUNDS N-CSR 1290 Funds 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 811-22959

1290 FUNDS

(Exact name of registrant as specified in charter)

1290 Avenue of the Americas

New York, New York 10104

(Address of principal executive offices)

SHANE DALY.

Executive Vice President, General Counsel and Secretary

Equitable Investment Management, LLC

1345 Avenue of the Americas

New York, New York 10105

(Name and Address of Agent for Service)

Copies to:

MARK C. AMOROSI, ESQ.

K&L Gates LLP

1601 K Street N.W.

Washington, D.C. 20006

Registrant’s telephone number, including area code: (212) 554-1234

Date of fiscal year end: October 31

Date of reporting period: October 31, 2023

Item 1.

Reports to Stockholders.

Item 1(a):

The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).

LOGO

Annual Report

October 31, 2023

1290 Funds

Annual Report

October 31, 2023

Table of Contents



Notes on Performance (Unaudited)		2

Funds

1290 Diversified Bond		5
1290 Essex Small Cap Growth		18
1290 GAMCO Small/Mid Cap Value		28
1290 High Yield Bond		41
1290 Loomis Sayles Multi-Asset Income		55
1290 Multi-Alternative Strategies		75
1290 Retirement 2020		83
1290 Retirement 2025		90
1290 Retirement 2030		97
1290 Retirement 2035		104
1290 Retirement 2040		110
1290 Retirement 2045		116
1290 Retirement 2050		122
1290 Retirement 2055		128
1290 Retirement 2060		134
1290 SmartBeta Equity		140

Notes to Financial Statements		152

Report of Independent Registered Public Accounting Firm		175

Approvals of Investment Advisory and Sub-Advisory Agreements (Unaudited)		176

Federal Income Tax Information (Unaudited)		194

Management of the Trust (Unaudited)		195

Shareholder Meeting Voting Results		199

Control Person and Principal Holders of Securities (Unaudited)		200

Proxy Voting Policies and Procedures (Unaudited)		200

Quarterly Portfolio Holdings Information (Unaudited)		200

Market Overview for the year ended October 31, 2023

Bonds

In the past year, 10-year U.S. Treasury rates went up almost 90 basis points, a major headwind for fixed-income assets. At the beginning of the reporting period, investment-grade credit spreads, a measure of perceived risk in the bond market, signaled a more benign outlook, narrowing as the third quarter of 2022’s GDP was revised higher despite tighter monetary policy aimed at cooling economic activity, adding to hopes a recession would be avoidable. The market began 2023 on a positive note, due to signs of moderating inflation and hopes that the world’s central banks would be less aggressive in terms of tightening monetary policy. Investor sentiment reversed course in February, however, as robust economic data — and an increase in inflation numbers — renewed higher rate fears. Volatility intensified in March when the instability in small regional banks unnerved investors. Nonetheless, the 10-year U.S. Treasury yield fell from 3.9% to 3.5% over the first quarter of 2023 and the Bloomberg U.S. Aggregate Bond Index returned 3.0%.

The U.S. fixed-income market was volatile and weakened during the second quarter of 2023. As recession concerns began to moderate, the 10-year U.S. Treasury rate moved higher over the quarter, ending at 3.81%, and the Bloomberg U.S. Aggregate Bond Index returned -0.84%. As the reporting period came to an end, the market initially rallied given signs of moderating inflation, expectations for less monetary policy tightening, and hopes for a soft economic landing—but was disappointed that the U.S. Federal Reserve later signaled that it wouldn’t start cutting rates until June 2024. The U.S. bond market’s gains for the year were almost completely erased, and the Bloomberg Aggregate was roughly flat for the year ended 10/31/2023, with a gain of 0.3%.

Stocks

Global equities recovered over the past 12 months as investors were able to shake off recession concerns in the world’s largest economies, a jittery U.S. banking sector, US debt-ceiling concerns, a faltering recovery in China, and generally stubbornly high inflation. Returns were thus positive, with the MSCI All Country World Index up 10.5% for the year ended 10/31/2023. Nearly all the return has been driven by the so-called “Magnificent Seven” U.S. stocks (NVIDIA, Apple, Microsoft, Meta, Amazon, Tesla, and Alphabet) amid enthusiasm for the prospects for Artificial Intelligence with mega-cap technology stocks being the main perceived beneficiaries.

The market’s behavior was not without volatility, however. Initially, investors appeared to anticipate that central banks would soon be able to shift monetary policy towards a reduction in interest rates. The Fed’s mid-Summer pause in its rate-hiking cycle provided strong support to equity markets through the end of July, and markets went into August with attractive gains, led by a 20.7% in year-to-date rise in the S&P 500 Index. But as summer unfolded, it became clear that inflation remained elevated, which brought a general consensus that interest rates would have to stay at high levels for a longer period than anticipated. This led to a souring of sentiment late summer as surging oil prices, Chinese economic uncertainty and a rising risk of default in its beleaguered property sector, and a steep rise in borrowing costs caused havoc. Equity markets around the world gave back 9.6% of their value from August through the end of October. Even the technology giants which had dominated market returns so far, benefitting from the hype around artificial intelligence (AI), went into reverse.

The year saw a strong divergence in returns across sectors, countries and styles. Communication services and technology delivered the strongest returns, supported by expected strong growth in demand for artificial intelligence technologies. Energy recovered in the final part of the period under review, delivering strong returns as oil prices surge amid production cuts in the Middle East and Russia. More defensive and interest-rate sensitive sectors such as utilities, consumer staples, healthcare and real estate lagged. From a country standpoint, as concerns for the strength of the Chinese economy grew, Asian developed and emerging markets lagged. Japan equities delivered by far the strongest returns for investors supported by currency depreciation and stock market reforms.

NOTES ON PERFORMANCE (Unaudited)

Total Returns

Performance of the 1290 Funds as shown on the following pages compares each Fund’s performance to that of a broad-based securities index and, with respect to certain Funds, customized composite benchmarks. Each Fund’s rates of return are net of investment advisory fees and expenses of the Fund. Each Fund has a separate investment objective it seeks to achieve by following a separate investment policy. There is no guarantee that these objectives will be attained. The objectives and policies of each Fund will affect its return and its risk. Keep in mind that past performance is not an indication of future results.

Benchmarks

1290 Diversified Bond Fund

Bloomberg U.S. Aggregate Bond Index covers the U.S. dollar denominated investment-grade, fixed-rate, taxable bond market of securities. The index includes bonds from the Treasury, government-related and corporate securities, agency fixed rate and hybrid adjustable mortgage pass through securities, asset-backed securities and commercial mortgage-backed securities.

1290 Essex Small Cap Growth Fund

Russell 2000^® Growth Index measures the performance of those Russell 2000^® Index companies with higher price-to-book ratios and higher forecasted growth values. It is market-capitalization weighted.

1290 GAMCO Small/Mid Cap Value Fund

Russell 2500^TM Value Index measures the performance of those Russell 2500^TM Index companies with lower price-to-book ratios and lower forecasted growth values. It is market-capitalization weighted.

1290 High Yield Bond Fund

ICE BofA U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. Qualifying securities must have at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. It is capitalization-weighted.

1290 Loomis Sayles Multi-Asset Income Fund

20% MSCI World High Dividend Yield Index/20% Cboe S&P 500 BuyWrite Index^SM/30% Bloomberg U.S. Corporate High Yield Index/30% Bloomberg U.S. Aggregate Bond Index is a hypothetical combination of unmanaged indexes. The composite or “blended” index combines the total return of the MSCI World High Dividend Yield Index at a weighting of 20%, the Cboe S&P500 BuyWrite Index^SM at a weighing of 20%, the Bloomberg U.S. Corporate High Yield Index at a weighting of 30% and the Bloomberg U.S. Aggregate Bond Index at a weighting of 30%.

Morgan Stanley Capital International (MSCI) World High Dividend Yield Index is based on the MSCI World Index, its parent index, and includes large and mid-cap stocks across 23 Developed Markets countries. The index is designed to reflect the performance of equities in the parent index (excluding REITs) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent. The index also applies quality screens and reviews 12-month past performance to omit stocks with potentially deteriorating fundamentals that could force them to cut or reduce dividends. The MSCI World High Dividend Yield Index is net of withholding taxes for dividend payments.

The Cboe S&P 500 BuyWrite Index^SM is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index^®.

Bloomberg U.S. Corporate High Yield Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on the indices’ EM country definition, are excluded. The Bloomberg U.S. Corporate High Yield Index is a component of the US Universal and Global High Yield Indices.

Prior to August 19, 2022 the benchmark was a blend of the S&P 500^® Index (60%) and the Bloomberg U.S. Aggregate Bond Index (40%)

Standard & Poor’s 500^® Composite Stock Price Index (“S&P 500^® Index”) is a weighted index of common stocks of 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The index is capitalization weighted, thereby giving greater weight to companies with the largest market capitalizations.

NOTES ON PERFORMANCE (Unaudited)

corporate securities, agency fixed rate and hybrid adjustable mortgage pass through securities, asset-backed securities and commercial mortgage-backed securities.

1290 Multi-Alternative Strategies Fund

ICE BofA U.S. 3-Month Treasury Bill Index measures the returns of negotiable debt obligations issued by the U.S. government and backed by its full faith and credit, having a maturity of three months.

1290 Retirement Fund Series

S&P Target Date^® Index Series comprises eleven multi-asset class indices, each corresponding to a particular target retirement date. The asset allocation for each index in the series is determined once a year through survey of large fund management companies that offer target date products. Each index is fully investable, with varying levels of exposure to equities, fixed income and commodities.

1290 SmartBeta Equity Fund

MSCI World (net) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The index consists of 23 developed market country indexes.

Other indices mentioned:

Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from twenty- four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers.

MSCI Emerging Markets Index^SM is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 24 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.”

Russell 1000^® Index measures the performance of approximately 1,000 of the largest companies in the Russell 3000^® Index and represents approximately 92% of the total market capitalization of the Russell 3000^® Index. It is market-capitalization weighted.

Russell 2000^® Index is an unmanaged index which measures the performance of approximately 2000 of the smallest companies in the Russell 3000^® Index, which represents approximately 10% of the total market capitalization of the Russell 3000^® Index. It is market-capitalization weighted.

Glossary

Credit ratings: Investment grade is a rating that signifies a municipal or corporate bond presents a relatively low risk of default. Bond rating firms like Standard & Poor’s and Moody’s use different designations, consisting of the upper- and lower-case letters “A” and “B,” to identify a bond’s credit quality rating. “AAA” and “AA” (high credit quality) and “A” and “BBB” (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations (“BB,” “BBB-,” “B,” “CCC,” etc.) are considered low credit quality, and are commonly referred to as “junk bonds.”

Corporate bonds are a type of debt security that is issued by a firm and sold to investors. Corporate bonds are typically seen as somewhat riskier than U.S. government bonds, so they usually have higher interest rates to compensate for this additional risk.

Derivative is a financial instrument with a price that is dependent upon or derived from one or more underlying assets.

Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates.

Factor returns are the return attributable to a particular common factor.

Federal funds rate is the target interest rate set by the Federal Open Market Committee (FOMC) at which commercial banks borrow and lend their excess reserves to each other overnight.

Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. drawdown

Inflation is the decline of purchasing power of a given currency over time.

Mortgage backed security (MBS) is a type of asset- backed security that is secured by a mortgage or collection of mortgages.

Swap is a derivative contract through which two parties exchange financial instruments.

NOTES ON PERFORMANCE (Unaudited)

Treasury securities, or Treasuries, are debt obligations of the U.S. government. When you buy a U.S. Treasury security, you are lending money to the federal government for a specified period of time.

Yield refers to the earnings generated and realized on an investment over a particular period of time.

Yield spread is the difference between yields on differing debt instruments of varying maturities, credit ratings, issuer, or risk level, calculated by deducting the yield of one instrument from the other.

1290 DIVERSIFIED BOND FUND (Unaudited)

INVESTMENT ADVISER

_Ø

Equitable Investment Management, LLC

INVESTMENT SUB-ADVISER

_Ø

Brandywine Global Investment Management, LLC (Brandywine Global)

PERFORMANCE RESULTS

LOGO



Annualized Total Returns as of 10/31/23

		1 Year			5 Years			Since Incept.
Fund – Class A Shares*	without Sales Charge		(1.50	)%		0.48	%		0.83	%
	with Sales Charge (a)		(5.91	)		(0.45	)		0.27
Fund – Class I Shares*			(1.23	)		0.69			1.06
Fund – Class R Shares*			(1.66	)		0.21			0.57
Bloomberg U.S. Aggregate Bond Index			0.36			(0.06	)		0.45

* Date of inception 7/6/15. (a)A 4.50% front-end sales charge was deducted. Returns for periods greater than one year are annualized.

The performance quoted is past performance and is not a guarantee of future results. Mutual funds are subject to certain market risks. Investment returns 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 may be higher or lower than the performance data shown. For the most current month-end performance data please call 1-888-310-0416 or visit www.1290Funds.com.

The graph illustrates comparative performance for $10,000 invested in the Class I shares of the 1290 Diversified Bond Fund and the Bloomberg U.S. Aggregate Bond Index from 7/6/15 to 10/31/23. The performance of the Bloomberg U.S. Aggregate Bond Index reflects an initial investment at the end of the month closest to the Fund’s inception. The performance of the Fund assumes reinvestment of all dividends and capital gain distributions, if any, and does not include a sales charge. The performance of the Bloomberg U.S. Aggregate Bond Index does not reflect the deduction of expenses or a sales charge associated with a mutual fund and has been adjusted to reflect reinvestment of all dividends, capital gain distributions, and interest of the securities included in the benchmark.

As of March 1, 2023, the gross expense ratios for Class A, I and R shares were 1.20%, 0.95% and 1.46%, respectively. The net expense ratios for Class A, I and R shares were 0.75%, 0.50% and 1.00%, respectively. The net expense ratios reflect the Adviser’s decision to contractually limit expenses through April 30, 2024. Fund Performance may also reflect the waiver of the Fund’s fees and reimbursement of expenses for certain periods since the inception date. Without these waivers and reimbursements, performance would have been lower.

In addition, performance shown in this section does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

PERFORMANCE SUMMARY

The Fund’s Class I shares returned (1.23)% for the year ended October 31, 2023. The Fund’s benchmark, the Bloomberg U.S. Aggregate Bond Index, returned 0.36% over the same year.

Overview — Brandywine Global Investment Management, LLC (Brandywine Global)

Market notes

At the beginning of the reporting period, the 10-year U.S. Treasury rate was volatile, but overall rose a modest five bps from 3.83% to 3.88%. Investment-grade credit spreads managed to narrow as the third quarter of 2022’s Gross Domestic Product, or GDP, was revised higher, despite tighter monetary policy aimed at cooling economic activity, in addition to hopes that a recession might be avoidable. The market began 2023 on a positive note, due to signs of moderating inflation and hopes that central banks would be less aggressive in terms of tightening monetary policy. Investor sentiment then reversed course in February as robust economic data, including an increase in inflation, triggered higher rate expectations. Volatility intensified in March when the instability in small regional banks unnerved investors. All told, the 10-year U.S. Treasury yield fell from 3.9% to 3.5% over the first quarter of 2023 and the Bloomberg U.S. Aggregate Bond Index returned 3.0%.

The U.S. fixed income market was volatile and weakened during the second quarter of 2023. As recession concerns began to moderate, the 10-year U.S. Treasury rate moved higher over the quarter, ending at 3.81%, and the Bloomberg U.S. Aggregate Bond Index returned -0.84%. After rising over the first half of 2023, the U.S. bond market’s gains were erased during the third

1290 DIVERSIFIED BOND FUND (Unaudited)

quarter of 2023. The market initially rallied given signs of moderating inflation, expectations for less monetary policy tightening, and hopes for a soft economic landing — but was disappointed that the Federal Reserve later signaled that it wouldn’t start cutting rates until June 2024.

What helped performance during the year?

•

Over the 12-month period, the largest contributor to relative performance was an overweight position in select emerging market debt, with the largest additive performance coming from Colombian and Brazilian debt, where central banks in the region have toned down their hawkish rhetoric with expectations for rate cuts. Other emerging market debt in Peru and Poland also added to performance.

•

Overweight positioning in U.S. corporate bonds was additive to relative and absolute performance over the 12-month period. Investment-grade and high-yield spreads, a measure of the market’s assessment of risk, have been mixed over the past 12 months.

•

Among currencies, positioning in the Colombian peso was the largest individual contributor over the past twelve months as the Colombian peso had very strong gains to start 2023. Also contributing positively were emerging market currencies like the Polish zloty and Thai baht.

What hurt performance during the year?

•

An overweight to long-dated U.S. Treasuries was the key detractor on both a relative and absolute basis, as U.S. rates continued to increase, with the market pricing in a “higher-for-longer” environment — a reference to expectations for the Federal Reserve’s interest-rate policy. While this safe-haven duration detracted from performance, we continue to believe that this ballast against a meaningful downturn in growth is warranted given the dangers in the macroeconomic outlook.

•

An overweight to agency mortgage-backed securities detracted from relative performance over the last 12 months. Spreads have widened since October 2022, mostly due to interest-rate volatility and the exit of the largest mortgage-backed security (MBS) buyer, the Federal Reserve.

•

Among currencies, on a one-year basis, an overweight in the Japanese yen was the largest detractor from relative performance. The Japanese yen’s 2023 performance year to date has prompted speculation that the Japanese government may intervene to prop up its currency; given Japan’s high inflation, we believe the Japanese government prefers a strong yen.

The primary use of derivatives by the Fund is for its various currency exposures where we utilize currency forwards. We may also use futures or other derivatives for additional exposures where we choose to not hold actual bonds.



Fund Characteristics As of October 31, 2023
Weighted Average Life (Years)			14.18
Weighted Average Coupon (%)			4.80
Weighted Average Effective Duration (Years)*			9.09
Weighted Average Rating**			AA

* Effective duration is a measure of the price sensitivity of the Fund to interest rate movements, taking into account specific features of the securities in which it invests. ** Weighted Average Rating has been provided by the Investment Sub-Adviser. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice.



Sector Weightings as of October 31, 2023	% of Net Assets
Mortgage-Backed Securities		37.0	%
U.S. Treasury Obligations		35.8
Foreign Government Securities		12.9
Energy		2.7
Investment Companies		2.6
Financials		1.9
Information Technology		1.1
Communication Services		1.0
Real Estate		0.8
Health Care		0.5
Materials		0.2
Cash and Other		3.5

		100.0	%

Holdings are subject to change without notice.

UNDERSTANDING YOUR EXPENSES:

As a shareholder of the Fund, you incur two types of costs:

(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A and Class R shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

1290 DIVERSIFIED BOND FUND (Unaudited)

The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended October 31, 2023 and held for the entire six-month period.

Actual Expenses

The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, 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

The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the 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 Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table 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 transactional costs were included, your costs would have been higher.

EXAMPLE



	Beginning Account Value 5/1/23		Ending Account Value 10/31/23		Expenses Paid During Period* 5/1/23 - 10/31/23
Class A
Actual		$1,000.00		$884.60		$3.56
Hypothetical (5% average annual return before expenses)		1,000.00		1,021.42		3.82
Class I
Actual		1,000.00		885.30		2.38
Hypothetical (5% average annual return before expenses)		1,000.00		1,022.68		2.55
Class R
Actual		1,000.00		883.60		4.75
Hypothetical (5% average annual return before expenses)		1,000.00		1,020.16		5.09

* Expenses are equal to the Fund’s A, I and R shares annualized expense ratio of 0.75%, 0.50% and 1.00%, respectively, multiplied by the average account value over the period, and multiplied by 184/365 (to reflect the one-half year period).

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS

October 31, 2023



	Principal Amount		Value (Note 1)
LONG-TERM DEBT SECURITIES:
Convertible Bond (0.6%)
Information Technology (0.6%)
*Technology Hardware, Storage & Peripherals (0.6%)*
Western Digital Corp. 1.500%, 2/1/24 (e)	$	3,450,000	$	3,406,875

Total Information Technology				3,406,875

Total Convertible Bond				3,406,875

Corporate Bonds (7.6%)
Communication Services (1.0%)
*Diversified Telecommunication Services (0.5%)*
Altice France SA 5.500%, 1/15/28§		3,800,000		2,812,000

*Media (0.5%)*
Charter Communications Operating LLC 6.484%, 10/23/45		3,330,000		2,809,721

Total Communication Services				5,621,721

Energy (2.7%)
*Oil, Gas & Consumable Fuels (2.7%)*
Baytex Energy Corp. 8.500%, 4/30/30 (x)§		2,219,000		2,196,810
Devon Energy Corp. 7.875%, 9/30/31		1,190,000		1,274,451
Petroleos Mexicanos 5.350%, 2/12/28		14,860,000		11,937,781

Total Energy				15,409,042

Financials (1.9%)
*Capital Markets (1.2%)*
Ares Capital Corp. 4.250%, 3/1/25 (x)		1,070,000		1,029,374
Golub Capital BDC, Inc. 2.500%, 8/24/26		5,275,000		4,614,811
UBS Group AG (US Treasury Yield Curve Rate T Note Constant Maturity 1 Year + 2.00%), 6.301%, 9/22/34 (k)§		1,670,000		1,583,157

				7,227,342

*Financial Services (0.7%)*
Freedom Mortgage Corp. 6.625%, 1/15/27§		3,210,000		2,775,526
United Wholesale Mortgage LLC 5.500%, 4/15/29§		1,271,000		1,067,640

				3,843,166

Total Financials				11,070,508

Health Care (0.5%)
*Health Care Providers & Services (0.5%)*
DaVita, Inc. 4.625%, 6/1/30§		3,530,000		2,743,869

Total Health Care				2,743,869

Information Technology (0.5%)
*Technology Hardware, Storage & Peripherals (0.5%)*
Dell International LLC 3.375%, 12/15/41		4,790,000		3,088,723

Total Information Technology				3,088,723

Materials (0.2%)
*Metals & Mining (0.2%)*
First Quantum Minerals Ltd. 7.500%, 4/1/25§		1,380,000		1,286,988

Total Materials				1,286,988

Real Estate (0.8%)
*Specialized REITs (0.8%)*
Equinix, Inc. (REIT) 2.500%, 5/15/31		5,925,000		4,523,452

Total Real Estate				4,523,452

Total Corporate Bonds				43,744,303

Foreign Government Securities (12.9%)
Mex Bonos Desarr Fix Rt
Series M 8.000%, 7/31/53	MXN	391,500,000		17,419,133
Republic of South Africa
Series 2048 8.750%, 2/28/48	ZAR	940,050,000		35,268,008
Titulos de Tesoreria
Series B 7.250%, 10/26/50	COP	139,480,000,000		21,149,045

Total Foreign Government Securities				73,836,186

Mortgage-Backed Securities (37.0%)
FHLMC UMBS 4.000%, 7/1/52	$	30,128,728		26,085,637
FNMA UMBS 5.000%, 10/1/52		1,897,686		1,751,668
5.000%, 11/1/52		30,635,941		28,278,652
5.500%, 12/1/52		3,795,173		3,606,702
5.500%, 1/1/53		30,282,444		28,769,130
GNMA 5.000%, 10/20/52		3,290,940		3,066,523
5.500%, 10/20/52		27,598,648		26,403,359
5.000%, 2/20/53		12,535,264		11,684,372
5.500%, 2/20/53		7,380,428		7,067,703
5.000%, 3/20/53		13,569,940		12,657,295
5.500%, 4/20/53		22,711,735		21,742,291
5.500%, 5/20/53		16,301,798		15,595,772
5.000%, 6/20/53		10,313,254		9,605,939
5.500%, 6/20/53		5,982,298		5,723,207
6.000%, 8/20/53		10,170,996		9,973,301

Total Mortgage-Backed Securities				212,011,551

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023



	Principal Amount		Value (Note 1)
U.S. Treasury Obligations (35.8%)
U.S. Treasury Bonds 2.875%, 5/15/52	$	110,040,000	$	74,001,757
U.S. Treasury Notes 3.875%, 8/15/33		142,030,000		131,045,641

Total U.S. Treasury Obligations				205,047,398

Total Long-Term Debt Securities (93.9%) (Cost $579,734,419)				538,046,313


	Number of Shares		Value (Note 1)
SHORT-TERM INVESTMENTS:
Investment Companies (2.6%)
Invesco Government & Agency Portfolio, Institutional Shares 5.27% (7 day yield) (xx)		114,350		114,350
JPMorgan Prime Money Market Fund, IM Shares 5.64% (7 day yield)		14,897,596		14,903,555

Total Investment Companies				15,017,905

Total Short-Term Investments (2.6%) (Cost $15,017,905)				15,017,905

Total Investments in Securities (96.5%) (Cost $594,752,324)				553,064,218
Other Assets Less Liabilities (3.5%)				20,055,549

Net Assets (100%)			$	573,119,767

§	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold to qualified institutional buyers. At October 31, 2023, the market value of these securities amounted to $14,465,990 or 2.5% of net assets.

(e)

Step Bond — Coupon rate increases or decreases in increments to maturity. Rate disclosed is as of October 31, 2023. Maturity date disclosed is the ultimate maturity date.

(k)

Variable or floating rate security, linked to the referenced benchmark. The interest rate shown was the current rate as of October 31, 2023.

(x)

All or a portion of security is on loan at October 31, 2023.

(xx)

At October 31, 2023, the Fund had loaned securities with a total value of $112,023. This was collateralized by cash of $114,350 which was subsequently invested in investment companies as detailed in the Notes to the Financial Statements.

Glossary:

CHF

— Swiss Franc

CLP

— Chilean Peso

COP

— Colombian Peso

CZK

— Czech Koruna

EUR

— European Currency Unit

FHLMC

— Federal Home Loan Mortgage Corp.

FNMA

— Federal National Mortgage Association

GBP

— British Pound

GNMA

— Government National Mortgage Association

HUF

— Hungarian Forint

JPY

— Japanese Yen

MXN

— Mexican Peso

NOK

— Norwegian Krone

REIT

— Real Estate Investment Trust

UMBS

— Uniform Mortgage-Backed Securities

USD

— United States Dollar

ZAR

— South African Rand



Country Diversification As a Percentage of Total Net Assets
Canada	0.4	%
Colombia	3.7
France	0.5
Mexico	5.1
South Africa	6.1
Switzerland	0.3
United States	80.2
Zambia	0.2
Cash and Other	3.5

	100.0	%

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023

Futures contracts outstanding as of October 31, 2023 (Note 1):


Description	Number of Contracts			Expiration Date		Trading Currency		Notional Amount ($)			Value and Unrealized Appreciation (Depreciation) ($)
Long Contracts
U.S. Treasury 5 Year Note		4,983			12/2023		USD		520,606,713			(9,219,688	)
U.S. Treasury 10 Year Ultra Note		165			12/2023		USD		17,956,641			(207,608	)
U.S. Treasury Ultra Bond		213			12/2023		USD		23,975,813			(1,334,248	)

												(10,761,544	)

Short Contracts
Japan 10 Year Bond		(177	)		12/2023		JPY		(167,862,444	)		2,925,911

												2,925,911

												(7,835,633	)

Forward Foreign Currency Contracts outstanding as of October 31, 2023 (Note 1):


Currency Purchased		Currency Sold			Counterparty	Settlement Date		Unrealized Appreciation (Depreciation) ($)
EUR	3,380,000		USD	3,570,125	JPMorgan Chase Bank		11/7/2023		6,958
USD	16,693,539		EUR	15,090,000	JPMorgan Chase Bank		11/7/2023		723,662
HUF	6,520,000,000		USD	17,780,687	Barclays Bank plc		11/14/2023		219,312
ZAR	22,900,000		USD	1,206,802	Barclays Bank plc		11/15/2023		20,492
ZAR	63,200,000		USD	3,333,953	Goldman Sachs Bank USA		11/15/2023		53,165
ZAR	296,800,000		USD	15,803,542	Morgan Stanley		11/15/2023		103,052
USD	892,231		GBP	710,000	Citibank NA		12/8/2023		29,041
USD	79,151,756		GBP	62,950,000	JPMorgan Chase Bank		12/8/2023		2,619,627
CHF	1,070,000		USD	1,172,904	JPMorgan Chase Bank		12/12/2023		8,840
CHF	560,000		USD	617,787	Morgan Stanley		12/12/2023		696
USD	62,912,164		CHF	55,570,000	Goldman Sachs Bank USA		12/12/2023		1,538,763
USD	18,461,397		JPY	2,728,000,000	Barclays Bank plc		12/15/2023		329,027
USD	30,597,379		JPY	4,444,000,000	Citibank NA		12/15/2023		1,059,164
USD	1,288,853		JPY	190,000,000	Goldman Sachs Bank USA		12/15/2023		25,968
USD	579,116		JPY	86,000,000	HSBC Bank plc		12/15/2023		7,494
USD	36,173,896		JPY	5,396,000,000	Morgan Stanley		12/15/2023		307,963
USD	43,391,753		NOK	471,100,000	Morgan Stanley		1/18/2024		1,124,872
CLP	15,960,000,000		USD	17,168,051	Morgan Stanley^**		1/26/2024		569,303
MXN	313,500,000		USD	16,851,939	Citibank NA		1/29/2024		268,804

Total unrealized appreciation									9,016,203

EUR	11,710,000		USD	12,783,104	Morgan Stanley		11/7/2023		(390,311	)
CLP	16,850,000,000		USD	19,612,864	HSBC Bank plc^**		11/8/2023		(792,358	)
USD	18,616,098		CLP	16,850,000,000	HSBC Bank plc^**		11/8/2023		(204,408	)
HUF	12,450,000,000		USD	34,756,044	Morgan Stanley		11/14/2023		(384,881	)
USD	33,041,401		HUF	12,450,000,000	Barclays Bank plc		11/14/2023		(1,329,762	)
USD	38,592,220		ZAR	729,200,000	Goldman Sachs Bank USA		11/15/2023		(488,267	)
CZK	1,128,000,000		USD	49,352,908	Citibank NA		11/16/2023		(799,509	)
CZK	434,000,000		USD	18,951,634	Morgan Stanley		11/16/2023		(270,628	)
USD	23,996,761		CZK	563,000,000	Barclays Bank plc		11/16/2023		(236,895	)
USD	23,712,708		CZK	554,000,000	Goldman Sachs Bank USA		11/16/2023		(133,553	)
USD	17,950,655		CZK	423,000,000	Morgan Stanley		11/16/2023		(256,870	)
USD	943,188		CZK	22,000,000	UBS AG		11/16/2023		(3,775	)
GBP	16,530,000		USD	20,988,554	Barclays Bank plc		12/8/2023		(892,031	)
GBP	37,020,000		USD	45,193,268	HSBC Bank plc		12/8/2023		(185,810	)
GBP	10,110,000		USD	12,860,678	JPMorgan Chase Bank		12/8/2023		(569,339	)
CHF	510,000		USD	567,772	Morgan Stanley		12/12/2023		(4,511	)
USD	18,548,696		CHF	16,960,000	Goldman Sachs Bank USA		12/12/2023		(182,506	)

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023


Currency Purchased		Currency Sold			Counterparty	Settlement Date		Unrealized Appreciation (Depreciation) ($)
JPY	20,218,000,000		USD	139,169,581	JPMorgan Chase Bank		12/15/2023		(4,785,327	)
NOK	471,100,000		USD	43,817,549	Morgan Stanley		1/18/2024		(1,550,668	)
USD	3,586,400		EUR	3,380,000	JPMorgan Chase Bank		2/7/2024		(6,795	)

Total unrealized depreciation									(13,468,204	)

Net unrealized depreciation									(4,452,001	)

**	Non-deliverable forward.

The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of October 31, 2023:

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



Investment Type	Level 1 Quoted Prices in Active Markets for Identical Securities			Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)			Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments)		Total
Assets:
Convertible Bonds
Information Technology	$	—		$	3,406,875		$	—	$	3,406,875
Corporate Bonds
Communication Services		—			5,621,721			—		5,621,721
Energy		—			15,409,042			—		15,409,042
Financials		—			11,070,508			—		11,070,508
Health Care		—			2,743,869			—		2,743,869
Information Technology		—			3,088,723			—		3,088,723
Materials		—			1,286,988			—		1,286,988
Real Estate		—			4,523,452			—		4,523,452
Foreign Government Securities		—			73,836,186			—		73,836,186
Forward Currency Contracts		—			9,016,203			—		9,016,203
Futures		2,925,911			—			—		2,925,911
Mortgage-Backed Securities		—			212,011,551			—		212,011,551
Short-Term Investments
Investment Companies		15,017,905			—			—		15,017,905
U.S. Treasury Obligations		—			205,047,398			—		205,047,398

Total Assets	$	17,943,816		$	547,062,516		$	—	$	565,006,332

Liabilities:
Forward Currency Contracts	$	—		$	(13,468,204	)	$	—	$	(13,468,204	)
Futures		(10,761,544	)		—			—		(10,761,544	)

Total Liabilities	$	(10,761,544	)	$	(13,468,204	)	$	—	$	(24,229,748	)

Total	$	7,182,272		$	533,594,312		$	—	$	540,776,584

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023

Fair Values of Derivative Instruments as of October 31, 2023:


	Statement of Assets and Liabilities
Derivatives Contracts^	Asset Derivatives	Fair Value
Interest rate contracts	Receivables, Net assets – Unrealized appreciation	$	2,925,911	*
Foreign exchange contracts	Receivables		9,016,203

Total		$	11,942,114


	Liability Derivatives
Interest rate contracts	Payables, Net assets – Unrealized depreciation	$	(10,761,544	)*
Foreign exchange contracts	Payables		(13,468,204	)

Total		$	(24,229,748	)

*	Includes cumulative appreciation/depreciation of futures contracts as reported in the Portfolio of Investments. Only variation margin is reported within the Statement of Assets & Liabilities.

The Effect of Derivative Instruments on the Statement of Operations for the year ended October 31, 2023:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives Contracts^	Futures			Forward Foreign Currency Contracts			Swaps		Total
Interest rate contracts	$	(22,438,763	)	$	—		$	1,120,641	$	(21,318,122	)
Foreign exchange contracts		—			(18,117,300	)		—		(18,117,300	)
Credit contracts		—			—			3,345,844		3,345,844

Total	$	(22,438,763	)	$	(18,117,300	)	$	4,466,485	$	(36,089,578	)


Amount of Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives Contracts^	Futures		Forward Foreign Currency Contracts			Swaps			Total
Interest rate contracts	$	3,933,486	$	—		$	—		$	3,933,486
Foreign exchange contracts		—		(9,152,753	)		—			(9,152,753	)
Credit contracts		—		—			(444,642	)		(444,642	)

Total	$	3,933,486	$	(9,152,753	)	$	(444,642	)	$	(5,663,909	)

^ The Fund held forward foreign currency contracts, futures contracts and swaps contracts as a substitute for investing in conventional securities, hedging and in an attempt to enhance returns.


Average Balances of Outstanding Derivative Financial Instruments
Futures contracts
Average notional value of contracts — long	$	353,372,000
Average notional value of contracts — short		306,227,000
Forward foreign currency exchange contracts
Average amounts purchased — in USD	$	536,297,000
Average amounts sold — in USD		509,033,000
Credit index swaps
Average notional value — sell protection	$	44,463,000
Average notional value — buy protection		92,717,000
Interest rate swaps
Average notional value — pays fixed rate	$	38,536,000

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023

The following table presents the Fund’s gross derivative assets and liabilities by counterparty net of amounts available for offset under netting arrangements and any related collateral received or pledged by the Fund as of October 31, 2023:


Counterparty	Gross Amount of Derivative Assets Presented in the Statement of Assets and Liabilities (a)		Derivatives Available for Offset			Collateral Received		Net Amount Due from Counterparty
Barclays Bank plc	$	568,831	$	(568,831	)	$	—	$	—
Citibank NA		1,357,009		(799,509	)		—		557,500
Goldman Sachs Bank USA		1,617,896		(804,326	)		—		813,570
HSBC Bank plc		7,494		(7,494	)		—		—
JPMorgan Chase Bank		3,359,087		(3,359,087	)		—		—
Morgan Stanley		2,105,886		(2,105,886	)		—		—

Total	$	9,016,203	$	(7,645,133	)	$	—	$	1,371,070


Counterparty	Gross Amount of Derivative Liabilities Presented in the Statement of Assets and Liabilities (a)		Derivatives Available for Offset			Collateral Pledged			Net Amount Due to Counterparty
Barclays Bank plc	$	2,458,688	$	(568,831	)	$	—		$	1,889,857
Citibank NA		799,509		(799,509	)		—			—
Goldman Sachs Bank USA		804,326		(804,326	)		—			—
HSBC Bank plc		1,182,576		(7,494	)		(1,000,000	)		175,082
JPMorgan Chase Bank		5,361,461		(3,359,087	)		—			2,002,374
Morgan Stanley		2,857,869		(2,105,886	)		—			751,983
UBS AG		3,775		—			—			3,775

Total	$	13,468,204	$	(7,645,133	)	$	(1,000,000	)	$	4,823,071

(a)

For financial reporting purposes the Fund does not offset derivative assets and derivative liabilities subject to master netting arrangements in the Statement of Assets and Liabilities.

Investment security transactions for the year ended October 31, 2023 were as follows:


Cost of Purchases:
Long-term investments other than U.S. government debt securities	$	470,309,696
Long-term U.S. government debt securities		656,877,962

	$	1,127,187,658

Net Proceeds of Sales and Redemptions:
Long-term investments other than U.S. government debt securities	$	528,703,248
Long-term U.S. government debt securities		612,721,480

	$	1,141,424,728

As of October 31, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:


Aggregate gross unrealized appreciation	$	12,320,061
Aggregate gross unrealized depreciation		(57,305,531	)

Net unrealized depreciation	$	(44,985,470	)

Federal income tax cost of investments in securities and derivative instruments, if applicable	$	585,762,054

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2023



ASSETS
Investments in Securities, at value (x) (Cost $594,752,324)	$	553,064,218
Cash		878,000
Cash held as collateral for forward foreign currency contracts		1,000,000
Due from broker for futures variation margin		14,809,949
Unrealized appreciation on forward foreign currency contracts		9,016,203
Dividends, interest and other receivables		5,524,606
Receivable for securities sold		4,074,723
Receivable for Fund shares sold		2,168,776
Prepaid registration and filing fees		33,906
Securities lending income receivable		135
Other assets		5,249

Total assets		590,575,765

LIABILITIES
Unrealized depreciation on forward foreign currency contracts		13,468,204
Payable for securities purchased		2,622,833
Payable for Fund shares repurchased		716,771
Foreign currency overdraft payable		119,891
Payable for return of collateral on securities loaned		114,350
Administrative fees payable		74,681
Transfer agent fees payable		57,266
Investment advisory fees payable		47,159
Trustees’ fees payable		1,618
Distribution fees payable – Class A		1,106
Distribution fees payable – Class R		1,000
Accrued expenses		231,119

Total liabilities		17,455,998

Commitments and contingent liabilities^
NET ASSETS	$	573,119,767

Net assets were comprised of:
Paid in capital	$	773,857,359
Total distributable earnings (loss)		(200,737,592	)

Net assets	$	573,119,767

Class A
Net asset value and redemption price per share, $5,061,717 / 639,134 shares outstanding (unlimited amount authorized: $0.001 par value)	$	7.92
Maximum sales charge (4.50% of offering price)		0.37

Maximum offering price per share	$	8.29

Class I
Net asset value, offering and redemption price per share, $565,647,058 / 71,062,746 shares outstanding (unlimited amount authorized: $0.001 par value)	$	7.96

Class R
Net asset value, offering and redemption price per share, $2,410,992 / 306,792 shares outstanding (unlimited amount authorized: $0.001 par value)	$	7.86

(x)

Includes value of securities on loan of $112,023.

^	See Note 2 in Notes to the Financial Statements.

STATEMENT OF OPERATIONS

For the Year Ended October 31, 2023



INVESTMENT INCOME
Interest (net of $253,666 foreign withholding tax)	$	36,607,038
Dividends		673,129
Securities lending (net)		42,764

Total income		37,322,931

EXPENSES
Investment advisory fees		3,861,791
Administrative fees		965,448
Professional fees		465,604
Transfer agent fees		376,900
Custodian fees		256,300
Printing and mailing expenses		137,149
Registration and filing fees		68,800
Trustees’ fees		18,730
Distribution fees – Class A		16,422
Distribution fees – Class R		10,862
Miscellaneous		96,991

Gross expenses		6,274,997
Waiver from investment adviser		(3,030,013	)

Net expenses		3,244,984

NET INVESTMENT INCOME (LOSS)		34,077,947

REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on:
Investments in securities		(40,035,596	)
Futures contracts		(22,438,763	)
Forward foreign currency contracts		(18,117,300	)
Foreign currency transactions		632,858
Swaps		4,466,485

Net realized gain (loss)		(75,492,316	)

Change in unrealized appreciation (depreciation) on:
Investments in securities		38,818,236
Futures contracts		3,933,486
Forward foreign currency contracts		(9,152,753	)
Foreign currency translations		170,862
Swaps		(444,642	)

Net change in unrealized appreciation (depreciation)		33,325,189

NET REALIZED AND UNREALIZED GAIN (LOSS)		(42,167,127	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(8,089,180	)

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended October 31,
	2023			2022
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)	$	34,077,947		$	20,245,867
Net realized gain (loss)		(75,492,316	)		(95,477,364	)
Net change in unrealized appreciation (depreciation)		33,325,189			(72,757,596	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(8,089,180	)		(147,989,093	)

Distributions to shareholders:
Class A		(163,937	)		(188,400	)
Class I		(15,397,087	)		(15,568,311	)
Class R		(45,660	)		(32,711	)

Total distributions to shareholders		(15,606,684	)		(15,789,422	)

Tax return of capital:
Class A		(88,150	)		—
Class I		(8,279,101	)		—
Class R		(24,551	)		—

Total tax return of capital		(8,391,802	)		—

CAPITAL SHARES TRANSACTIONS:
Class A
Capital shares sold [ 83,483 and 344,531 shares, respectively ]		742,404			3,530,170
Capital shares issued in reinvestment of dividends [ 24,703 and 17,771 shares, respectively ]		224,297			179,508
Capital shares repurchased [ (262,790) and (367,977) shares , respectively]		(2,310,066	)		(3,633,376	)

Total Class A transactions		(1,343,365	)		76,302

Class I
Capital shares sold [ 17,626,727 and 23,508,727 shares, respectively ]		156,148,768			233,550,194
Capital shares issued in reinvestment of dividends [ 2,592,764 and 1,540,016 shares, respectively ]		23,622,504			15,545,930
Capital shares repurchased [ (18,330,147) and (18,709,408) shares , respectively]		(160,540,380	)		(183,231,555	)

Total Class I transactions		19,230,892			65,864,569

Class R
Capital shares sold [ 200,824 and 122,727 shares, respectively ]		1,767,395			1,171,008
Capital shares issued in reinvestment of dividends [ 7,726 and 3,248 shares, respectively ]		69,671			32,335
Capital shares repurchased [ (120,330) and (26,149) shares , respectively]		(1,083,042	)		(238,047	)

Total Class R transactions		754,024			965,296

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS		18,641,551			66,906,167

TOTAL INCREASE (DECREASE) IN NET ASSETS		(13,446,115	)		(96,872,348	)
NET ASSETS:
Beginning of year		586,565,882			683,438,230

End of year	$	573,119,767		$	586,565,882

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

FINANCIAL HIGHLIGHTS


Class A	Year Ended October 31,
Class A	2023			2022			2021			2020			2019
Net asset value, beginning of year	$	8.33		$	10.70		$	10.68		$	10.34		$	9.52

Income (loss) from investment operations:
Net investment income (loss) (e)		0.45			0.27			0.29			0.39			0.41	**
Net realized and unrealized gain (loss)		(0.54	)		(2.41	)		0.44			0.43			0.80

Total from investment operations		(0.09	)		(2.14	)		0.73			0.82			1.21

Less distributions:
Dividends from net investment income		(0.21	)		(0.23	)		(0.47	)		(0.15	)		(0.39	)
Distributions from net realized gains		—			—			(0.22	)		(0.33	)		—
Return of capital		(0.11	)		—			(0.02	)		—			—

Total dividends and distributions		(0.32	)		(0.23	)		(0.71	)		(0.48	)		(0.39	)

Net asset value, end of year	$	7.92		$	8.33		$	10.70		$	10.68		$	10.34

Total return		(1.50	)%		(20.39	)%		6.73	%		8.32	%		12.97	%

Ratios/Supplemental Data:
Net assets, end of year (000’s)	$	5,062		$	6,608		$	8,550		$	7,796		$	3,848
Ratio of expenses to average net assets:
After waivers and reimbursements (f)		0.75	%		0.75	%		0.75	%		0.75	%		0.75	%
Before waivers and reimbursements (f)		1.22	%		1.20	%		1.22	%		1.42	%		1.55	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (f)		5.07	%		2.75	%		2.62	%		3.76	%*		4.00	%**
Before waivers and reimbursements (f)		4.60	%		2.31	%		2.15	%		3.09	%*		3.19	%**
Portfolio turnover rate ^		193	%		244	%		165	%		200	%		194	%

Class I	Year Ended October 31,
Class I	2023			2022			2021			2020			2019
Net asset value, beginning of year	$	8.36		$	10.72		$	10.71		$	10.37		$	9.53

Income (loss) from investment operations:
Net investment income (loss) (e)		0.47			0.30			0.31			0.41			0.42	**
Net realized and unrealized gain (loss)		(0.54	)		(2.42	)		0.43			0.41			0.84

Total from investment operations		(0.07	)		(2.12	)		0.74			0.82			1.26

Less distributions:
Dividends from net investment income		(0.21	)		(0.24	)		(0.49	)		(0.15	)		(0.42	)
Distributions from net realized gains		—			—			(0.22	)		(0.33	)		—
Return of capital		(0.12	)		—			(0.02	)		—			—

Total dividends and distributions		(0.33	)		(0.24	)		(0.73	)		(0.48	)		(0.42	)

Net asset value, end of year	$	7.96		$	8.36		$	10.72		$	10.71		$	10.37

Total return		(1.23	)%		(20.18	)%		6.85	%		8.34	%		13.43	%

Ratios/Supplemental Data:
Net assets, end of year (000’s)	$	565,647		$	578,149		$	673,625		$	169,409		$	81,249
Ratio of expenses to average net assets:
After waivers and reimbursements (f)		0.50	%		0.50	%		0.50	%		0.50	%		0.50	%
Before waivers and reimbursements (f)		0.97	%		0.95	%		0.96	%		1.17	%		1.34	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (f)		5.30	%		3.04	%		2.79	%		3.95	%*		4.12	%**
Before waivers and reimbursements (f)		4.83	%		2.59	%		2.33	%		3.28	%*		3.28	%**
Portfolio turnover rate ^		193	%		244	%		165	%		200	%		194	%

See Notes to Financial Statements.

1290 FUNDS

1290 DIVERSIFIED BOND FUND

FINANCIAL HIGHLIGHTS (Continued)


Class R	Year Ended October 31,
Class R	2023			2022			2021			2020			2019
Net asset value, beginning of year	$	8.27		$	10.64		$	10.63		$	10.34		$	9.51

Income (loss) from investment operations:
Net investment income (loss) (e)		0.42			0.26			0.25			0.35	*		0.35	**
Net realized and unrealized gain (loss)		(0.52	)		(2.42	)		0.45			0.41			0.85

Total from investment operations		(0.10	)		(2.16	)		0.70			0.76			1.20

Less distributions:
Dividends from net investment income		(0.20	)		(0.21	)		(0.45	)		(0.14	)		(0.37	)
Distributions from net realized gains		—			—			(0.22	)		(0.33	)		—
Return of capital		(0.11	)		—			(0.02	)		—			—

Total dividends and distributions		(0.31	)		(0.21	)		(0.69	)		(0.47	)		(0.37	)

Net asset value, end of year	$	7.86		$	8.27		$	10.64		$	10.63		$	10.34

Total return		(1.66	)%		(20.60	)%		6.44	%		7.77	%		12.84	%

Ratios/Supplemental Data:
Net assets, end of year (000’s)	$	2,411		$	1,808		$	1,264		$	298		$	145
Ratio of expenses to average net assets:
After waivers and reimbursements (f)		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%
Before waivers and reimbursements (f)		1.47	%		1.46	%		1.47	%		1.67	%		1.88	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (f)		4.79	%		2.68	%		2.24	%		3.43	%*		3.51	%**
Before waivers and reimbursements (f)		4.32	%		2.22	%		1.77	%		2.75	%*		2.63	%**
Portfolio turnover rate ^		193	%		244	%		165	%		200	%		194	%

*	Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.08 lower and the ratios for each class would have been 0.73 lower.

**	Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.07 lower and the ratios for each class would have been 0.65 lower.

^	Portfolio turnover rate excludes derivatives, if any.

(e)

Net investment income (loss) per share is based on average shares outstanding.

(f)

Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.

See Notes to Financial Statements.

1290 ESSEX SMALL CAP GROWTH FUND (Unaudited)

INVESTMENT ADVISER

_Ø

Equitable Investment Management, LLC

INVESTMENT SUB-ADVISER

_Ø

Essex Investment Management Company, LLC (“Essex”)

PERFORMANCE RESULTS

LOGO



Annualized Total Returns as of 10/31/23

		1 Year			Since Incept.
Fund – Class A Shares*	without Sales Charge		(15.28	)%		(8.24	)%
	with Sales Charge (a)		(19.91	)		(12.11	)
Fund – Class I Shares*			(15.08	)		(8.00	)
Fund – Class R Shares*			(15.49	)		(8.47	)
Russell 2000^® Growth Index			(7.63	)		(0.58	)

* Date of inception 7/11/22. (a) A 5.50% front-end sales charge was deducted. Returns for periods greater than one year are annualized.

The graph illustrates comparative performance for $10,000 invested in the Class I shares of the 1290 Essex Small Cap Growth Fund and the Russell 2000^® Growth Index from 7/11/22 to 10/31/23. The performance of the Russell 2000^® Growth Index reflects an initial investment at the end of the month closest to the Fund’s inception. The performance of the Fund assumes reinvestment of all dividends and capital gain distributions, if any, and does not include a sales charge. The performance of the Russell 2000^® Growth Index does not reflect the deduction of expenses or a sales charge associated with a mutual fund and has been adjusted to reflect reinvestment of all dividends, capital gain distributions, and interest of the securities included in the benchmark.

As of March 1, 2023, the gross expense ratios for Class A, I and R shares were 5.74%, 5.45% and 5.95%, respectively. The net expense ratios for Class A, I and R shares were 1.13%, 0.88% and 1.38%, respectively. The net expense ratios reflect the Adviser’s decision to contractually limit expenses through April 30, 2024. Fund Performance may also reflect the waiver of the Fund’s fees and reimbursement of expenses for certain periods since the inception date. Without these waivers and reimbursements, performance would have been lower.

In addition, performance shown in this section does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

PERFORMANCE SUMMARY

The Fund’s Class I shares returned (15.08)% for the year ended October 31, 2023. The Fund’s benchmarks, the Russell 2000^® Growth Index returned (7.63)% over the same year.

Overview — Essex Investment Management Company, LLC

Market performance in the small-cap sector was impacted by disproportionate strength in the largest-cap members of those indices, especially companies that touted their potential exposure to Artificial Intelligence (AI). Overall, the Russell 2000^® Growth Index was down 7.6% while the Russell Microcap Growth Index was down 18.0% for the same period. This was also an extremely narrow market within the small and microcap segments with only consumer staples and energy having positive returns. Performance was also heavily weighted toward the larger-cap end of the benchmark as only the segment above $2.5 billion in market cap had a positive return for the period.

Fund Highlights

What helped performance during the year?

•

Stock selection was particularly strong in industrials with contributions from a focus on infrastructure (Sterling Infrastructure, Inc.), smart defense (Leonardo DRS, Inc.), and a resilient home buying market (Builders FirstSource, Inc.) as well as contributions from holdings related to environmental solutions and energy service.

•

Financials also had strong stock selection from financial payment processors (PaymentUS Holdings, Inc. and Payoneer Global, Inc.) and insurance (HCI Group, Inc.

1290 ESSEX SMALL CAP GROWTH FUND (Unaudited)

and Heritage Insurance Holdings, Inc.), combined with minimal exposure to regional banks.

•

Sector allocation added value broadly with particular strength in an overweight position in industrials and technology combined with an underweight position in financials.

What hurt performance during the year?

•

Market-cap positioning detracted the most from performance with a significant overweight position in stocks under $1 billion (51.7% in the portfolio versus less than 10% in the Russell 2000^® Growth Index). Stock selection added value versus the index in all market-cap buckets, but the overall impact was negative due to the smaller market-cap footprint.

•

Stock selection detracted from performance in technology as companies related to semiconductors and communications hardware struggled with a buildup of inventory in the channel. This inventory cycle also caused weakness in semiconductor equipment suppliers as the U.S. Government has been slow to award CHIPS ACT grants. Names that were impacted include Digi International, Inc., Cambium Networks Corp., DZS, Inc., and Amtech Systems, Inc.

•

Healthcare was also a detractor as aesthetics companies (Cutera, Inc., Apyx Medical Corp., and Revance Therapeutics, Inc.), diagnostics companies (NanoString Technologies, Inc., ViewRay, Inc., Akoya Biosciences, Inc.), and suppliers to biotech companies (Inotiv, Inc. and Codexis, Inc.) came under pressure following the collapse of Silicon Valley Bank in March.

Portfolio Positioning and Outlook

The good news is that the market started to broaden in June, as investors grew more comfortable that inflation was moderating, the U.S. Federal Reserve was pausing, and a potential soft landing might be possible for the economy. In fact, the number of companies priced at new highs is expanding, and more sectors are participating. To us, valuations were very attractive in the small and microcap sectors of the market, both in absolute and relative terms, earnings growth has remained solid, and these sectors have significant exposure to what we believe are the positive themes of: infrastructure spending, sustainable solutions, reshoring of manufacturing, and smart defense spending.



Sector Weightings as of October 31, 2023	% of Net Assets
Industrials		32.0	%
Health Care		19.8
Information Technology		19.7
Consumer Discretionary		11.1
Financials		8.1
Energy		3.7
Investment Companies		2.7
Consumer Staples		2.1
Materials		2.1
Exchange Traded Fund		0.2
Cash and Other		(1.5	)

		100.0	%

Holdings are subject to change without notice.

UNDERSTANDING YOUR EXPENSES:

As a shareholder of the Fund, you incur two types of costs:

The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended October 31, 2023 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

1290 ESSEX SMALL CAP GROWTH FUND (Unaudited)

return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

EXAMPLE



	Beginning Account Value 5/1/23†		Ending Account Value 10/31/23		Expenses Paid During Period* 5/1/23 - 10/31/23
Class A
Actual		$1,000.00		$874.10		$5.33
Hypothetical (5% average annual return before expenses)		1,000.00		1,019.52		5.75
Class I
Actual		1,000.00		875.40		4.16
Hypothetical (5% average annual return before expenses)		1,000.00		1,020.77		4.48
Class R
Actual		1,000.00		872.90		6.51
Hypothetical (5% average annual return before expenses)		1,000.00		1,018.25		7.02

† The Fund commenced operations for July 11, 2022. * Expenses are equal to the Fund’s Class A, Class I and Class R shares annualized expense ratio of 1.13%, 0.88% and 1.38%, respectively, multiplied by the average account value over the period, and multiplied by 184/365 (to reflect the one-half year period).

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

PORTFOLIO OF INVESTMENTS

October 31, 2023



	Number of Shares		Value (Note 1)
COMMON STOCKS:
Consumer Discretionary (11.1%)
*Automobile Components (2.3%)*
Patrick Industries, Inc.		7,657	$	575,423
Superior Industries International, Inc.*		164,619		455,995

				1,031,418

*Diversified Consumer Services (2.7%)*
Coursera, Inc.*		30,929		536,309
Lincoln Educational Services Corp.*		79,488		679,622

				1,215,931

*Hotels, Restaurants & Leisure (1.6%)*
Kura Sushi USA, Inc., Class A (x)*		5,692		325,241
Sweetgreen, Inc., Class A*		37,830		390,784

				716,025

*Household Durables (2.4%)*
Century Communities, Inc.		7,153		439,910
Lifetime Brands, Inc.		4,821		25,744
Skyline Champion Corp.*		10,226		599,550

				1,065,204

*Specialty Retail (2.1%)*
CarParts.com, Inc.*		81,957		231,938
Revolve Group, Inc., Class A (x)*		18,839		259,036
Stitch Fix, Inc., Class A*		68,205		223,713
ThredUp, Inc., Class A (x)*		70,472		226,920

				941,607

Total Consumer Discretionary				4,970,185

Consumer Staples (2.1%)
*Food Products (0.8%)*
SunOpta, Inc.*		95,205		365,587

*Personal Care Products (1.3%)*
e.l.f. Beauty, Inc.*		6,196		573,936

Total Consumer Staples				939,523

Energy (3.7%)
*Energy Equipment & Services (2.4%)*
Expro Group Holdings NV*		22,315		351,461
TETRA Technologies, Inc.*		156,660		742,568

				1,094,029

*Oil, Gas & Consumable Fuels (1.3%)*
Matador Resources Co.		9,168		565,574

Total Energy				1,659,603

Financials (8.1%)
*Banks (1.3%)*
Bancorp, Inc. (The)*		14,558		518,993
Brookline Bancorp, Inc.		5,185		42,206

				561,199

*Capital Markets (1.3%)*
Evercore, Inc., Class A		4,382		570,449

*Financial Services (3.1%)*
Paymentus Holdings, Inc., Class A (x)*		52,539		764,968
Payoneer Global, Inc.*		111,022		642,817

				1,407,785

*Insurance (2.4%)*
HCI Group, Inc.		11,838		698,087
Heritage Insurance Holdings, Inc.*		65,837		389,096

				1,087,183

Total Financials				3,626,616

Health Care (19.8%)
*Biotechnology (3.8%)*
Insmed, Inc.*		27,655		693,034
Kiniksa Pharmaceuticals Ltd., Class A*		35,412		540,033
Veracyte, Inc.*		23,373		484,289

				1,717,356

*Health Care Equipment & Supplies (7.9%)*
Accuray, Inc.*		139,130		367,303
Alphatec Holdings, Inc.*		56,770		521,148
Apyx Medical Corp.*		74,099		169,687
AtriCure, Inc.*		13,500		467,640
Axogen, Inc.*		58,785		221,032
Cutera, Inc.*		34,254		106,530
Inari Medical, Inc.*		9,168		556,589
Orthofix Medical, Inc.*		29,972		330,891
PROCEPT BioRobotics Corp. (x)*		15,263		408,896
Stereotaxis, Inc. (x)*		249,346		376,512

				3,526,228

*Health Care Providers & Services (3.5%)*
Biodesix, Inc.*		172,577		245,059
PetIQ, Inc., Class A*		26,345		494,496
Talkspace, Inc.*		280,930		500,055
Viemed Healthcare, Inc. (x)*		52,287		329,931

				1,569,541

*Health Care Technology (2.2%)*
Augmedix, Inc.*		86,037		378,563
Evolent Health, Inc., Class A*		16,724		408,567
Phreesia, Inc.*		15,213		207,810

				994,940

*Life Sciences Tools & Services (0.6%)*
Adaptive Biotechnologies Corp.*		53,647		238,193

*Pharmaceuticals (1.8%)*
Evolus, Inc.*		51,934		394,699
EyePoint Pharmaceuticals, Inc. (x)*		40,903		246,236
Revance Therapeutics, Inc.*		21,308		168,120

				809,055

Total Health Care				8,855,313

Industrials (32.0%)
*Aerospace & Defense (4.7%)*
Kratos Defense & Security Solutions, Inc.*		50,071		853,710
Leonardo DRS, Inc.*		66,895		1,275,688

				2,129,398

*Building Products (2.4%)*
Builders FirstSource, Inc.*		3,627		393,602
Caesarstone Ltd.*		36,923		148,430
Griffon Corp.		13,349		533,159

				1,075,191

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023



	Number of Shares		Value (Note 1)
*Commercial Services & Supplies (3.9%)*
CECO Environmental Corp.*		43,069	$	696,856
Enviri Corp.*		71,026		407,689
Performant Financial Corp.*		120,845		281,569
Perma-Fix Environmental Services, Inc.*		39,492		367,276

				1,753,390

*Construction & Engineering (7.9%)*
Argan, Inc.		10,427		476,931
Great Lakes Dredge & Dock Corp.*		61,556		467,825
Matrix Service Co.*		61,606		717,710
Orion Group Holdings, Inc.*		44,379		213,019
Sterling Infrastructure, Inc.*		22,668		1,651,364

				3,526,849

*Electrical Equipment (3.5%)*
American Superconductor Corp.*		47,250		296,021
Babcock & Wilcox Enterprises, Inc.*		100,343		263,902
Beam Global (x)*		15,364		84,195
FTC Solar, Inc.*		117,570		125,800
LSI Industries, Inc.		55,259		822,254

				1,592,172

*Machinery (2.8%)*
3D Systems Corp.*		46,192		172,296
Commercial Vehicle Group, Inc.*		43,976		306,513
Graham Corp.*		33,296		519,085
Manitex International, Inc.*		64,427		258,352

				1,256,246

*Professional Services (3.2%)*
BlackSky Technology, Inc., Class A*		199,426		237,317
DLH Holdings Corp.*		20,653		282,533
Fiverr International Ltd.*		19,091		404,157
Willdan Group, Inc.*		28,360		500,270

				1,424,277

*Trading Companies & Distributors (3.6%)*
Alta Equipment Group, Inc.		34,757		319,417
MRC Global, Inc.*		55,158		579,711
Transcat, Inc.*		7,858		707,377

				1,606,505

Total Industrials				14,364,028

Information Technology (19.7%)
*Communications Equipment (2.5%)*
Ceragon Networks Ltd.*		226,426		384,924
Digi International, Inc.*		13,450		338,671
Lantronix, Inc.*		85,281		389,734

				1,113,329

*Electronic Equipment, Instruments & Components (4.9%)*
Identiv, Inc.*		83,065		505,866
Luna Innovations, Inc. (x)*		74,955		425,744
Mirion Technologies, Inc., Class A*		65,837		456,251
Novanta, Inc.*		4,181		552,143
Vuzix Corp. (x)*		82,561		268,323

				2,208,327

*IT Services (2.1%)*
BigCommerce Holdings, Inc.*		49,768		442,438
Endava plc (ADR)*		9,672		485,147

				927,585

*Semiconductors & Semiconductor Equipment (3.7%)*
Aehr Test Systems (x)*		17,379		409,449
Amtech Systems, Inc.*		68,759		492,658
Ichor Holdings Ltd.*		16,321		395,947
Kopin Corp. (x)*		280,124		344,553

				1,642,607

*Software (5.2%)*
American Software, Inc., Class A		33,951		372,443
Cognyte Software Ltd.*		70,824		296,044
Docebo, Inc. (x)*		15,263		599,531
Domo, Inc., Class B*		22,819		186,203
EverCommerce, Inc.*		47,149		451,687
Zeta Global Holdings Corp., Class A*		57,677		449,881

				2,355,789

*Technology Hardware, Storage & Peripherals (1.3%)*
Stratasys Ltd.*		34,455		350,407
Turtle Beach Corp.*		29,770		245,603

				596,010

Total Information Technology				8,843,647

Materials (2.1%)
*Chemicals (2.1%)*
AdvanSix, Inc.		17,631		485,734
Aspen Aerogels, Inc.*		56,669		437,485

Total Materials				923,219

Total Common Stocks (98.6%) (Cost $50,357,526)				44,182,134

EXCHANGE TRADED FUND (ETF):
*Equity (0.2%)*
iShares Russell 2000 Growth ETF(x)		375		77,621

Total Exchange Traded Fund (0.2%) (Cost $78,660)				77,621

SHORT-TERM INVESTMENTS:
Investment Companies (2.7%)
Dreyfus Treasury Obligations Cash Management Fund 5.24% (7 day yield) (xx)		100,000		100,000
Goldman Sachs Financial Square Government Fund 5.26% (7 day yield) (xx)		150,000		150,000
Invesco Government & Agency Portfolio, Institutional Shares 5.27% (7 day yield) (xx)		866,899		866,899
JPMorgan Prime Money Market Fund, IM Shares 5.64% (7 day yield)		107,258		107,301

Total Investment Companies				1,224,200

Total Short-Term Investments (2.7%) (Cost $1,224,194)				1,224,200

Total Investments in Securities (101.5%) (Cost $51,660,380)				45,483,955
Other Assets Less Liabilities (-1.5%)				(654,852	)

Net Assets (100%)			$	44,829,103

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023

*	Non-income producing.

(x)

All or a portion of security is on loan at October 31, 2023.

(xx)

At October 31, 2023, the Fund had loaned securities with a total value of $1,155,606. This was collateralized by $27,664 of various U.S. Government Treasury Securities, ranging from 0.000% – 5.435%, maturing 11/16/23 – 5/15/52 and by cash of $1,116,899 which was subsequently invested in investment companies as detailed in the Notes to the Financial Statements.

Glossary:

ADR

— American Depositary Receipt

The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of October 31, 2023:

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



Investment Type	Level 1 Quoted Prices in Active Markets for Identical Securities		Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)		Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments)		Total
Assets:
Common Stocks
Consumer Discretionary	$	4,970,185	$	—	$	—	$	4,970,185
Consumer Staples		939,523		—		—		939,523
Energy		1,659,603		—		—		1,659,603
Financials		3,626,616		—		—		3,626,616
Health Care		8,855,313		—		—		8,855,313
Industrials		14,364,028		—		—		14,364,028
Information Technology		8,843,647		—		—		8,843,647
Materials		923,219		—		—		923,219
Exchange Traded Fund		77,621		—		—		77,621
Short-Term Investments
Investment Companies		1,224,200		—		—		1,224,200

Total Assets	$	45,483,955	$	—	$	—	$	45,483,955

Total Liabilities	$	—	$	—	$	—	$	—

Total	$	45,483,955	$	—	$	—	$	45,483,955

The Fund held no derivatives contracts during the year ended October 31, 2023.

Investment security transactions for the year ended October 31, 2023 were as follows:


Cost of Purchases:
Long-term investments other than U.S. government debt securities	$	68,734,865
Net Proceeds of Sales and Redemptions:
Long-term investments other than U.S. government debt securities	$	25,820,565


Aggregate gross unrealized appreciation	$	4,112,979
Aggregate gross unrealized depreciation		(10,307,298	)

Net unrealized depreciation	$	(6,194,319	)

Federal income tax cost of investments in securities and derivative instruments, if applicable	$	51,678,274

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2023



ASSETS
Investments in Securities, at value (x) (Cost $51,660,380)	$	45,483,955
Cash		300,000
Receivable for securities sold		186,218
Receivable for Fund shares sold		49,659
Prepaid registration and filing fees		21,907
Receivable from investment adviser		6,695
Securities lending income receivable		2,783
Dividends, interest and other receivables		1,991
Other assets		1,083

Total assets		46,054,291

LIABILITIES
Payable for return of collateral on securities loaned		1,116,899
Payable for Fund shares repurchased		15,643
Payable for securities purchased		11,737
Transfer agent fees payable		9,377
Distribution fees payable – Class R		51
Distribution fees payable – Class A		27
Accrued expenses		71,454

Total liabilities		1,225,188

Commitments and contingent liabilities^
NET ASSETS	$	44,829,103

Net assets were comprised of:
Paid in capital	$	53,263,874
Total distributable earnings (loss)		(8,434,771	)

Net assets	$	44,829,103

Class A
Net asset value and redemption price per share, $121,624 / 13,683 shares outstanding (unlimited amount authorized: $0.001 par value)	$	8.89
Maximum sales charge (5.50% of offering price)		0.52

Maximum offering price per share	$	9.41

Class I
Net asset value, offering and redemption price per share, $44,594,171 / 5,000,823 shares outstanding (unlimited amount authorized: $0.001 par value)	$	8.92

Class R
Net asset value, offering and redemption price per share, $113,308 / 12,789 shares outstanding (unlimited amount authorized: $0.001 par value)	$	8.86

(x)

Includes value of securities on loan of $1,155,606.

^	See Note 2 in Notes to the Financial Statements.

STATEMENT OF OPERATIONS

For the Year Ended October 31, 2023



INVESTMENT INCOME
Dividends	$	193,327
Interest		12,161
Securities lending (net)		41,526

Total income		247,014

EXPENSES
Investment advisory fees		291,757
Offering costs		143,382
Professional fees		94,479
Registration and filing fees		62,908
Administrative fees		58,352
Transfer agent fees		50,800
Printing and mailing expenses		26,738
Custodian fees		12,499
Trustees’ fees		977
Distribution fees – Class R		589
Distribution fees – Class A		320
Miscellaneous		12,300

Gross expenses		755,101
Less: Waiver from investment adviser		(350,109	)
Reimbursement from investment adviser		(61,978	)

Net expenses		343,014

NET INVESTMENT INCOME (LOSS)		(96,000	)

REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on:
Net realized gain (loss) on investments in securities		(2,166,435	)

Net change in unrealized appreciation (depreciation) on investments in securities		(6,673,955	)

NET REALIZED AND UNREALIZED GAIN (LOSS)		(8,840,390	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(8,936,390	)

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended October 31, 2023			July 11, 2022* to October 31, 2022
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)	$	(96,000	)	$	(11,760	)
Net realized gain (loss)		(2,166,435	)		74,961
Net change in unrealized appreciation (depreciation)		(6,673,955	)		497,530

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(8,936,390	)		560,731

Distributions to shareholders:
Class A		(663	)		—
Class I		(72,415	)		—
Class R		(559	)		—

Total distributions to shareholders		(73,637	)		—

CAPITAL SHARES TRANSACTIONS:
Class A
Capital shares sold [ 2,339 and 11,877 shares, respectively ]		25,259			119,798
Capital shares issued in reinvestment of dividends [ 10 and 0 shares ]		105			—
Capital shares repurchased [ (543) and 0 shares ]		(6,000	)		—

Total Class A transactions		19,364			119,798

Class I
Capital shares sold [ 4,556,929 and 980,000 shares, respectively ]		48,783,568			9,800,000
Capital shares issued in reinvestment of dividends [ 1,695 and 0 shares ]		17,682			—
Capital shares repurchased [ (537,801) and 0 shares ]		(5,591,615	)		—

Total Class I transactions		43,209,635			9,800,000

Class R
Capital shares sold [ 2,789 and 10,000 shares, respectively ]		29,602			100,000

Total Class R transactions		29,602			100,000

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS		43,258,601			10,019,798

TOTAL INCREASE (DECREASE) IN NET ASSETS		34,248,574			10,580,529
NET ASSETS:
Beginning of period		10,580,529			—

End of period	$	44,829,103		$	10,580,529

* Commencement of operations.

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

FINANCIAL HIGHLIGHTS


Class A	Year Ended October 31, 2023			July 11, 2022* to October 31, 2022
Net asset value, beginning of period	$	10.55		$	10.00

Income (loss) from investment operations:
Net investment income (loss) (e)		(0.05	)(1)		(0.02	)
Net realized and unrealized gain (loss)		(1.55	)		0.57

Total from investment operations		(1.60	)		0.55

Less distributions:
Distributions from net realized gains		(0.06	)		—

Net asset value, end of period	$	8.89		$	10.55

Total return (b)		(15.28	)%		5.50	%

Ratios/Supplemental Data:
Net assets, end of period (000’s)	$	122		$	125
Ratio of expenses to average net assets:
After waivers and reimbursements (a)(f)		1.13	%		1.13	%
Before waivers and reimbursements (a)(f)		2.38	%		6.32	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (a)(f)		(0.49	)%(aa)		(0.61	)%(l)
Before waivers and reimbursements (a)(f)		(1.74	)%(aa)		(5.80	)%(l)
Portfolio turnover rate ^		69	%		29	%(z)

Class I	Year Ended October 31, 2023			July 11, 2022* to October 31, 2022
Net asset value, beginning of period	$	10.56		$	10.00

Income (loss) from investment operations:
Net investment income (loss) (e)		(0.03	)(1)		(0.01	)
Net realized and unrealized gain (loss)		(1.55	)		0.57

Total from investment operations		(1.58	)		0.56

Less distributions:
Distributions from net realized gains		(0.06	)		—

Net asset value, end of period	$	8.92		$	10.56

Total return (b)		(15.08	)%		5.60	%

Ratios/Supplemental Data:
Net assets, end of period (000’s)	$	44,594		$	10,350
Ratio of expenses to average net assets:
After waivers and reimbursements (a)(f)		0.88	%		0.88	%
Before waivers and reimbursements (a)(f)		1.94	%		6.03	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (a)(f)		(0.24	)%(aa)		(0.35	)%(l)
Before waivers and reimbursements (a)(f)		(1.30	)%(aa)		(5.50	)(l)
Portfolio turnover rate ^		69	%		29	%(z)

See Notes to Financial Statements.

1290 FUNDS

1290 ESSEX SMALL CAP GROWTH FUND

FINANCIAL HIGHLIGHTS (Continued)


Class R	Year Ended October 31, 2023			July 11, 2022* to October 31, 2022
Net asset value, beginning of period	$	10.54		$	10.00

Income (loss) from investment operations:
Net investment income (loss) (e)		(0.08	)(1)		(0.03	)
Net realized and unrealized gain (loss)		(1.54	)		0.57

Total from investment operations		(1.62	)		0.54

Less distributions:
Distributions from net realized gains		(0.06	)		—

Net asset value, end of period	$	8.86		$	10.54

Total return (b)		(15.49	)%		5.40	%

Ratios/Supplemental Data:
Net assets, end of period (000’s)	$	113		$	105
Ratio of expenses to average net assets:
After waivers and reimbursements (a)(f)		1.38	%		1.38	%
Before waivers and reimbursements (a)(f)		2.59	%		6.53	%
Ratio of net investment income (loss) to average net assets:
After waivers and reimbursements (a)(f)		(0.74	)%(aa)		(0.85	)%(l)
Before waivers and reimbursements (a)(f)		(1.95	)%(aa)		(6.00	)(l)
Portfolio turnover rate ^		69	%		29	%(z)

(1)

Includes income resulting from a special dividend. Without this dividend, the per share income amounts would be $(0.06), $(0.03) and $(0.08) for Class A, Class I and Class R, respectively.

*	Commencement of operations.

^	Portfolio turnover rate excludes derivatives, if any.

(a)

Ratios for periods less than one year are annualized. Certain non-recurring expenses incurred by the Fund are not annualized for periods less than one year.

(b)

Total returns for periods less than one year are not annualized.

(e)

Net investment income (loss) per share is based on average shares outstanding.

(f)

Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.

(l)

The annualized ratio of net investment income to average net assets may not be indicative of operating results for a full year.

(z)

Portfolio turnover rate for periods less than one year is not annualized

(aa)

Includes income resulting from a special dividend. Without this dividend, the ratios for each class would have been 0.06% lower.

See Notes to Financial Statements.

1290 GAMCO SMALL/MID CAP VALUE FUND (Unaudited)

INVESTMENT ADVISER

_Ø

Equitable Investment Management, LLC

INVESTMENT SUB-ADVISER

_Ø

GAMCO Asset Management, Inc.

PERFORMANCE RESULTS

LOGO



Annualized Total Returns as of 10/31/23

		1 Year			5 Years			Since Incept.
Fund – Class A Shares*	without Sales Charge		3.88	%		5.86	%		6.50	%
	with Sales Charge (a)		(1.81	)		4.66			5.83
Fund – Class I Shares*			4.11			6.11			6.76
Fund – Class R Shares*			3.62			5.59			6.24
Fund – Class T Shares*†	without Sales Charge		4.18			6.13			6.77
	with Sales Charge (b)		1.56			5.59			6.47
Russell 2500^{TM Value Index}			(4.94	)		4.65			5.35

* Date of inception 11/12/14. † Class T Shares currently are not offered for sale. (a) A 5.50% front-end sales charge was deducted. (b) A 2.50% front-end sales charge was deducted. Returns for periods greater than one year are annualized.

The graph illustrates comparative performance for $10,000 invested in the Class I shares of the 1290 GAMCO Small/Mid Cap Value Fund and the Russell 2500^TM Value Index from 11/12/14 to 10/31/23. The performance of the Russell 2500^TM Value Index reflects an initial investment at the end of the month closest to the Fund’s inception. The performance of the Fund assumes reinvestment of all dividends and capital gain distributions, if any, and does not include a sales charge. The performance of the Russell 2500^TM Value Index does not reflect the deduction of expenses or a sales charge associated with a mutual fund and has been adjusted to reflect reinvestment of all dividends, capital gain distributions, and interest of the securities included in the benchmark.

As of March 1, 2023, the gross expense ratios including acquired fund fees for Class A, I, R and T shares were 1.51%, 1.25%, 1.76% and 1.51%, respectively. The net expense ratios for Class A, I, R and T shares were 1.20%, 0.95%, 1.45% and 0.95%, respectively. The net expense ratios reflect the Adviser’s decision to contractually limit expenses through April 30, 2024. Fund Performance may also reflect the waiver of the Fund’s fees and reimbursement of expenses for certain periods since the inception date. Without these waivers and reimbursements, performance would have been lower.

In addition, performance shown in this section does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

PERFORMANCE SUMMARY

The Fund’s Class I shares returned 4.11% for the year ended October 31, 2023. The Fund’s benchmark, the Russell 2500^TM Value Index, returned (4.94)% over the same year.

Overview — GAMCO Asset Management, Inc.

What helped performance during the year?

•

The Fund’s industrial sector performance was the largest contributor to relative returns by sector during the trailing year ended in October. Importantly, security selection and interaction had an even stronger impact on performance than the effect of the Fund’s larger weighting in the sector. Companies including CIRCOR International, Inc. (no longer in portfolio as deal closed in October) and Core Molding Technologies, Inc. (1.5%) had robust performance in the trailing year. Pump & valve company CIRCOR benefited from a bidding war for the company, concluding with KKR’s sweetened offer, which went from an initial $49/share to $56/share at the end of the second quarter.

•

Shares of financial companies sold off earlier in the year over bank contagion fears after regional banks Silicon Valley Bank and Signature Bank collapsed due to poor risk management. The Fund’s underweighting in the financial sector helped returns relative to the benchmark.

•

Financial engineering continues to be used to surface value in the Fund, including a split-off of Atlanta Braves Holdings, Inc. (Class A: 1.3%; Class C: 0.5%) and the spin-offs of payments business Crane NXT Co. (0.3%) from aerospace supplier Crane Co. (1.5%) earlier this year and Sphere Entertainment Co. (which opened with headliner U2 to much fanfare in Las Vegas at the end of September) from Madison Square Garden Entertainment Corp. (0.5%). Two of

1290 GAMCO SMALL/MID CAP VALUE FUND (Unaudited)

the holdings spun off during the second quarter, Crane NXT (0.3%) and Sphere (0.5%), were up more than 45% during the trailing year ended in October.

What hurt performance during the year?

•

The Fund’s exposure to small-capitalization companies defined as companies with under $3 billion market capitalization at the time of purchase, was a detractor from relative returns over the trailing year from a purely allocation perspective. However, the underlying stock selection within small-capitalization companies in the Fund more than outweighed the allocation impact resulting in a positive overall contribution to return relative to the index within this category.

•

The Fund’s lower allocation to the energy sector was a detractor from relative performance for the trailing year.

•

Shares of Grupo Televisa SAB (0.8%) fell during the period along with other media companies facing slowing advertising and accelerating cord cutting. The company’s 45%-owned TelevisaUnivision’s high leverage and exposure to emerging markets magnified these trends. In addition, Televisa has faced increased competition from fiber overbuilders in its Mexican broadband business. Grupo Televisa’s possible upcoming catalysts include a monetization of Univision (likely via a 2024 IPO), Sky business turnaround and eventual consolidation of the cable unit with peer Megacable.

Portfolio Positioning and Outlook — GAMCO Asset Management, Inc.

The Fund is significantly different from its benchmark index, and performance will often not closely track it. Holdings tend to be domestically focused with strong franchises and often pricing power. We have never been top-down allocators, trying to chase every trend. Rather, we rely on fundamental bottom-up research informed by our view of the shifting political and economic tides. We purchase and hold securities trading at discounts to their Private Market Values appropriate for their level of risk and seek to identify one or more catalysts that could close that valuation gap. Industry consolidation, financial engineering (e.g., spin-offs), changes in management and changes in regulation are just a few long-term catalysts in which the Fund is well positioned.

While this is not a pretty picture for financial markets, there are positives. The unemployment rate continues to sit near an all-time low at 3.9%, and the U.S. consumer has been remarkably resilient. Demand for experiences such as live sporting events and concerts remains robust. Consumer branded goods companies in attractive categories have demonstrated significant pricing power to offset inflation and are increasing spending on advertising in order to spur volume growth for new products. Political advertising should be as strong as ever in 2024. Long-term tailwinds for aerospace and defense companies are still intact. Finally, the challenging macroeconomic backdrop has created opportunities in the market: the S&P 500 Index trades at just over 18x expected next twelve months’ earnings, slightly below the average over the last five years, but excluding the so-called “Maginificent 7” of mega-cap stocks that dominate the current rally, the benchmark multiple is under 16x. Small cap stocks are even cheaper, with the Russell 2000 Value Index trading at just over 14x expected next twelve months’ earnings.



Sector Weightings as of October 31, 2023	% of Net Assets
Industrials		36.7	%
Consumer Discretionary		14.6
Communication Services		13.9
Consumer Staples		10.0
Materials		7.4
Investment Companies		7.0
Utilities		2.8
Health Care		2.7
Information Technology		2.3
Financials		1.9
Energy		1.7
Real Estate		0.8
Cash and Other		(1.8	)

		100.0	%

Holdings are subject to change without notice.

UNDERSTANDING YOUR EXPENSES:

As a shareholder of the Fund, you incur two types of costs:

(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A, Class R and Class T shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended October 31, 2023 and held for the entire six-month period.

1290 GAMCO SMALL/MID CAP VALUE FUND (Unaudited)

Actual Expenses

Hypothetical Example for Comparison Purposes

EXAMPLE



	Beginning Account Value 5/1/23		Ending Account Value 10/31/23		Expenses Paid During Period* 5/1/23 - 10/31/23
Class A
Actual		$1,000.00		$973.90		$5.95
Hypothetical (5% average annual return before expenses)		1,000.00		1,019.18		6.08
Class I
Actual		1,000.00		974.60		4.71
Hypothetical (5% average annual return before expenses)		1,000.00		1,020.44		4.82
Class R
Actual		1,000.00		972.30		7.19
Hypothetical (5% average annual return before expenses)		1,000.00		1,017.92		7.35
Class T
Actual		1,000.00		975.30		4.71
Hypothetical (5% average annual return before expenses)		1,000.00		1,020.43		4.82

* Expenses are equal to the Fund’s A, I, R and T shares annualized expense ratio of 1.20%, 0.95%, 1.45% and 0.95%, respectively, multiplied by the average account value over the period, and multiplied by 184/365 (to reflect the one-half year period).

1290 FUNDS

1290 GAMCO SMALL/MID CAP VALUE FUND

PORTFOLIO OF INVESTMENTS

October 31, 2023



	Number of Shares		Value (Note 1)

COMMON STOCKS:
Communication Services (13.9%)
*Diversified Telecommunication Services (1.0%)*
EchoStar Corp., Class A*		4,500	$	62,370
Telesat Corp.*		110,000		1,122,000

				1,184,370

*Entertainment (4.2%)*
Atlanta Braves Holdings, Inc., Class A (x)*		40,500		1,535,355
Atlanta Braves Holdings, Inc., Class C*		19,000		660,820
Liberty Media Corp.-Liberty Live, Class A*		1,000		31,240
Madison Square Garden Entertainment Corp., Class A*		18,500		563,880
Madison Square Garden Sports Corp.*		10,500		1,765,470
Sphere Entertainment Co.*		19,500		641,745

				5,198,510

*Media (6.7%)*
Altice USA, Inc., Class A*		4,500		13,005
AMC Networks, Inc., Class A*		20,000		236,000
Clear Channel Outdoor Holdings, Inc. (x)*		313,000		344,300
Corus Entertainment, Inc., Class B (x)		135,000		62,304
EW Scripps Co. (The), Class A*		28,000		153,160
Grupo Televisa SAB (ADR)		415,000		958,650
JCDecaux SE*		29,000		452,909
Liberty Media Corp.-Liberty SiriusXM, Class A*		4,000		97,960
News Corp., Class B		13,000		278,720
Nexstar Media Group, Inc., Class A		10,200		1,428,816
Paramount Global, Class A (x)		109,500		1,522,050
Sinclair, Inc. (x)		145,000		1,576,150
Sirius XM Holdings, Inc. (x)		27,760		118,813
TEGNA, Inc.		48,000		696,480
WideOpenWest, Inc.*		28,000		197,120

				8,136,437

*Wireless Telecommunication Services (2.0%)*
Gogo, Inc.*		12,900		135,450
Millicom International Cellular SA (x)*		42,000		659,820
Telephone and Data Systems, Inc.		30,000		545,700
United States Cellular Corp.*		27,200		1,143,216

				2,484,186

Total Communication Services				17,003,503

Consumer Discretionary (14.6%)
*Automobile Components (5.6%)*
Dana, Inc.		98,000		1,125,040
Garrett Motion, Inc.*		10,000		70,600
Gentex Corp.		24,000		688,320
Gentherm, Inc.*		2,800		112,616
Goodyear Tire & Rubber Co. (The)*		140,000		1,666,000
Modine Manufacturing Co.*		55,800		2,204,100
Strattec Security Corp.*		43,000		978,250

				6,844,926


*Diversified Consumer Services (0.3%)*
Graham Holdings Co., Class B		500		289,360
H&R Block, Inc.		3,000		123,150

				412,510

*Hotels, Restaurants & Leisure (3.3%)*
Bally’s Corp.*		19,000		173,280
Caesars Entertainment, Inc.*		32,000		1,276,480
Churchill Downs, Inc.		4,000		439,360
GAN Ltd.*		15,000		13,147
Golden Entertainment, Inc.		23,000		721,280
Nathan’s Famous, Inc.		19,500		1,276,470
Wynn Resorts Ltd.		800		70,224

				3,970,241

*Household Durables (1.0%)*
Bassett Furniture Industries, Inc.		24,000		369,360
Lennar Corp., Class B		9,000		887,490

				1,256,850

*Leisure Products (1.8%)*
Brunswick Corp.		14,500		1,007,315
Johnson Outdoors, Inc., Class A		21,000		998,550
Mattel, Inc.*		12,900		246,132

				2,251,997

*Specialty Retail (2.6%)*
Advance Auto Parts, Inc.		17,000		884,510
AutoNation, Inc.*		7,500		975,600
Lands’ End, Inc.*		10,000		62,800
Monro, Inc.		36,000		893,520
Valvoline, Inc.		10,000		296,700

				3,113,130

Total Consumer Discretionary				17,849,654

Consumer Staples (10.0%)
*Beverages (1.7%)*
Boston Beer Co., Inc. (The), Class A*		500		166,975
National Beverage Corp.*		19,000		881,220
Remy Cointreau SA		9,400		1,065,729

				2,113,924

*Consumer Staples Distribution & Retail (0.3%)*
Ingles Markets, Inc., Class A		2,000		160,440
Village Super Market, Inc., Class A		8,900		217,783

				378,223

*Food Products (3.7%)*
Bunge Ltd.		3,500		370,930
Calavo Growers, Inc.		30,500		772,870
Farmer Bros Co.*		96,000		241,920
Hain Celestial Group, Inc. (The)*		44,000		486,200
J M Smucker Co. (The)		13,000		1,479,920
Maple Leaf Foods, Inc. (x)		47,000		935,763
McCormick & Co., Inc. (Non-Voting)		2,900		186,325

				4,473,928

*Household Products (3.5%)*
Energizer Holdings, Inc.		62,000		1,957,960
Spectrum Brands Holdings, Inc.		31,000		2,334,920

				4,292,880

See Notes to Financial Statements.

1290 FUNDS

1290 GAMCO SMALL/MID CAP VALUE FUND

PORTFOLIO OF INVESTMENTS (Continued)

October 31, 2023



	Number of Shares		Value (Note 1)

*Personal Care Products (0.8%)*
Edgewell Personal Care Co.		27,300	$	952,770

Total Consumer Staples				12,211,725

Energy (1.7%)
*Energy Equipment & Services (1.7%)*
Dril-Quip, Inc.*		56,500		1,223,790
RPC, Inc.		104,000		865,280

Total Energy				2,089,070

Financials (1.9%)
*Banks (1.4%)*
Cadence Bank		9,000		190,620
Flushing Financial Corp.		27,000		333,180
SouthState Corp.		4,500		297,450
Synovus Financial Corp.		37,000		964,590

				1,785,840

*Capital Markets (0.3%)*
Affiliated Managers Group, Inc.		1,200		147,312
Janus Henderson Group plc		8,000		184,560

				331,872

*Financial Services (0.2%)*
NCR Atleos Corp.*		10,500		231,630

Total Financials				2,349,342

Health Care (2.7%)
*Health Care Equipment & Supplies (0.3%)*
Cutera, Inc. (x)*		29,500		91,745
QuidelOrtho Corp.*		4,600		280,968

				372,713

*Health Care Providers & Services (0.9%)*
Option Care Health, Inc.*		17,500		485,275
Patterson Cos., Inc.		20,000		609,200

				1,094,475

*Health Care Technology (0.4%)*
Evolent Health, Inc., Class A*		17,000		415,310
Teladoc Health, Inc.*		3,400		56,236

				471,546

*Life Sciences Tools & Services (0.1%)*
Bio-Rad Laboratories, Inc., Class A*		300		82,584

*Pharmaceuticals (1.0%)*
Perrigo Co. plc		31,000		856,840
Teva Pharmaceutical Industries Ltd. (ADR)*		48,000		411,840

				1,268,680

Total Health Care				3,289,998

Industrials (36.7%)
*Aerospace & Defense (5.8%)*
AAR Corp.*		18,100		1,074,416
Kaman Corp.		64,000		1,191,040
Moog, Inc., Class A		10,500		1,218,525
Moog, Inc., Class B		12,900		1,497,045
Park Aerospace Corp.		2,000		29,360
Textron, Inc.		27,300		2,074,800

				7,085,186


*Building Products (2.5%)*
AZZ, Inc.		31,000		1,465,370
Griffon Corp.		38,000		1,517,720

				2,983,090

*Commercial Services & Supplies (1.6%)*
Matthews International Corp., Class A		47,000		1,665,680
OPENLANE, Inc.*		20,000		268,600

				1,934,280

*Construction & Engineering (1.5%)*
Arcosa, Inc.		13,500		932,445
MDU Resources Group, Inc.		2,400		44,664
Valmont Industries, Inc.		4,500		886,095

				1,863,204

*Machinery (22.3%)*
Astec Industries, Inc.		48,000		1,921,920
CNH Industrial NV		31,300		343,674
Commercial Vehicle Group, Inc.*		91,100		634,967
Crane Co.		18,500		1,800,605
Donaldson Co., Inc.		800		46,128
Eastern Co. (The)		26,900		437,125
Enerpac Tool Group Corp., Class A		22,000		622,600
EnPro Industries, Inc.		21,000		2,332,260
Flowserve Corp.		43,000		1,578,960
Gorman-Rupp Co. (The)		11,500		339,825
Graco, Inc.		3,000