N-Q 1 centerstonenq.htm N-Q

united states
securities and exchange commission
washington, d.c. 20549

form n-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-231128

 

Centerstone Investors Trust

(Exact name of registrant as specified in charter)

 

135 5th Avenue, New York, NY 10010

(Address of principal executive offices) (Zip code)

 

Philip Santopadre, Gemini Fund Services, LLC

80 Arkay Drive, Hauppauge, NY 11788

(Name and address of agent for service)

 

Registrant's telephone number, including area code: 212-503-5789

 

Date of fiscal year end: 3/31

 

Date of reporting period: 6/30/18

 

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

 

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

Item 1. Schedule of Investments.

 

Centerstone Investors Fund
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2018
Shares   Security       Market Value
             
    COMMON STOCK - 67.50 %    
    CANADA - 2.91 %    
 140,812   TransCanada Corp.        $6,092,410
 115,242   Metro, Inc.        3,917,518
             10,009,928
    CHILE - 1.24 %        
 130,374   Cia Cervecerias Unidas SA        3,251,527
 102,546,552   Vina San Pedro Tarapaca SA        1,020,137
             4,271,664
    DENMARK - 1.69 %    
 113,151   ISS A/S        3,889,374
 190,576   Matas A/S        1,547,322
 8,247   Topdanmark A/S        361,165
             5,797,861
    FINLAND - 0.73 %    
 145,387   Tikkurila Oyj        2,495,811
             
    FRANCE - 6.69 %    
 46,839   Air Liquide SA        5,891,041
 18,350   Unibail-Rodamco-Westfield        4,040,465
 35,979   Schneider Electric SE        3,000,804
 28,695   Sodexo SA        2,869,130
 28,962   Danone SA        2,126,379
 17,666   Eiffage SA        1,922,338
 30,703   Valeo SA        1,678,730
 4,402   LVMH Moet Hennessy Louis Vuitton SE        1,466,116
             22,995,003
    GERMANY - 5.33 %    
 87,577   Brenntag AG        4,880,443
 43,082   Bayerische Motoren Werke AG        3,905,658
 173,497   Hamburger Hafen und Logistik AG        3,768,544
 25,998   Fraport AG Frankfurt Airport Services Worldwide        2,508,383
 31,720   Hornbach Holding AG & Co. KGaA        2,289,235
 31,591   Hornbach Baumarkt AG        975,793
             18,328,056
    HONG KONG - 3.23 %    
 3,905,926   Kerry Logistics Network Ltd.        5,446,471
 343,000   Hongkong Land Holdings Ltd.        2,452,450
 296,900   Hysan Development Co. Ltd.        1,657,518
 671,517   Mandarin Oriental International Ltd.        1,564,635
             11,121,074
    INDONESIA - 0.74 %        
 2,668,562   Indocement Tunggal Prakarsa Tbk PT        2,541,931
             
    ISRAEL - 0.59 %        
 448,400   Israel Chemicals LTd.        2,046,957
             
    JAPAN - 4.90 %        
 214,275   Mitsubishi Estate Co. Ltd.        3,748,821
 135,051   Nagaileben Co. Ltd. *        3,434,978
 271,995   Ichiyoshi Securities Co. Ltd. *        2,948,056
 42,573   Aica Kogyo Co. Ltd. *        1,495,813
 97,000   Astellas Pharma, Inc.        1,479,772
 9,752   Shimano, Inc.        1,432,213
 65,330   Sekisui Jushi Corp. *        1,371,331
 4,796   FANUC Corp.        953,222
             16,864,206
    MALAYSIA - 0.94 %        
 1,545,000   Genting Bhd.        3,216,599
             
    MEXICO - 1.06 %        
 131,480   Fresnillo PLC        1,984,211
 435,016   Grupo Televisa SAB *        1,650,017
             3,634,228
    NETHERLANDS - 2.19 %        
 109,793   Koninklijke Vopak NV        5,073,521
 102,927   Koninklijke Ahold Delhaize NV        2,464,665
             7,538,186
Centerstone Investors Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
Shares   Security       Market Value
             
    COMMON STOCK - 67.50 % (continued)    
    SINGAPORE - 1.03 %        
 1,040,366   ComfortDelGro Corp. Ltd.        $1,794,393
 203,369   Oversea-Chinese Banking Corp. Ltd.        1,737,406
             3,531,799
    SOUTH KOREA - 0.60 %        
 21,700   KT&G Corp.        2,083,356
             
    SWEDEN - 4.39 %        
 186,969   ICA Gruppen AB        5,734,266
 347,738   Mekonomen AB *        4,806,427
 130,637   Loomis AB        4,541,866
             15,082,559
    SWITZERLAND - 4.33 %        
 51,173   Novartis AG        3,890,037
 43,050   Nestle SA        3,342,972
 14,999   Roche Holding AG        3,340,432
 4,954   Swatch Group AG        2,356,689
 23,117   Cie Financiere Richemont SA        1,963,649
             14,893,779
    THAILAND - 2.84 %        
 6,318,000   Krung Thai Bank PCL        3,184,745
 500,160   Siam City Cement PCL        3,034,475
 264,400   Bangkok Bank PCL        1,584,165
 2,942,100   Thai Beverage PCL        1,554,724
 65,350   Bangkok Bank PCL (NVDR)        385,630
             9,743,739
    UNITED KINGDOM - 1.71 %        
 785,000   Merlin Entertainments PLC        4,006,231
 45,330   Spectris PLC        1,561,415
 71,483   Rotork PLC        315,755
             5,883,401
    UNITED STATES - 20.36 %    
 104,294   Henry Schein, Inc. *        7,575,916
 89,716   Colgate-Palmolive Co.        5,814,494
 100,963   Tapestry, Inc.        4,715,982
 165,856   Mosaic Co.        4,652,261
 16,808   O'Reilly Automotive, Inc. *        4,598,165
 13,139   WW Grainger, Inc.        4,052,068
 45,518   Target Corp.        3,464,830
 27,455   United Technologies Corp.        3,432,699
 31,400   Carlisle Cos, Inc.        3,400,934
 251,794   NOW, Inc. *        3,356,414
 42,818   Omnicom Group, Inc.        3,265,729
 46,900   Emerson Electric Co.        3,242,666
 33,053   TJX Cos, Inc.        3,145,984
 35,558   CarMax, Inc. *        2,591,111
 12,629   3M Co.        2,484,377
 46,826   Sonoco Products Co.        2,458,365
 29,040   Scotts Miracle-Gro Co.        2,414,966
 29,988   EnerSys        2,238,304
 10,536   McDonald's Corp.        1,650,886
 7,000   FleetCor Technologies, Inc. *        1,474,550
             70,030,701
             
    TOTAL COMMON STOCK (Cost - $227,841,230)        232,110,838
             
Principal   Security   Coupon Maturity Market Value
    BONDS & NOTES - 7.53 %    
    LUXEMBOURG - 0.45 %        
 $1,550,000   Allergan Funding SCS   2.45% 6/15/2019  $1,542,491
             
    NETHERLANDS - 0.21 %        
 701,000   LyondellBasell Industries NV   5.00% 4/15/2019  707,931
             
    SWITZERLAND - 0.21 %        
 700,000   UBS Group Funding Switzerland AG, Quarterly US LIBOR +1.7800 144A ** 4.13% 4/14/2021  722,638
             
    UNITED KINGDOM - 0.08 %        
 276,000   Vodafone Group PLC   4.63% 7/15/2018  276,173
             
Centerstone Investors Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
Principal   Security   Coupon Maturity Market Value
             
    BONDS & NOTES - 7.53 % (Continued)    
    UNITED STATES - 6.58 %        
 $2,550,000   PHI, Inc.   5.25% 3/15/2019  $2,492,625
 2,083,000   American Electric Power Co., Inc.   2.15% 11/13/2020  2,032,115
 2,000,000   Apple, Inc., Quarterly US LIBOR +0.5000 **   2.87% 2/9/2022  2,024,225
 1,700,000   Goldman Sachs Group, Inc., Quarterly US LIBOR +1.6000 ** 3.92% 11/29/2023  1,756,116
 1,500,000   CVS Health Corp., Quarterly US LIBOR +0.6300 **   2.96% 3/9/2020  1,505,781
 1,500,000   Xilinx, Inc.   2.13% 3/15/2019  1,493,411
 1,500,000   Ford Moror Credit Co. LLC   2.68% 1/9/2020  1,485,931
 1,500,000   JM Smucker Co.   2.50% 3/15/2020  1,484,267
 1,146,000   Wells Fargo & Co., Quarterly US LIBOR +1.3400 **   3.66% 3/4/2021  1,172,868
 1,000,000   Synchrony Financial   2.60% 1/15/2019  998,078
 1,000,000   Newell Brands, Inc.   2.88% 12/1/2019  996,318
 1,000,000   United Technologies Corp.   1.90% 5/4/2020  980,866
 961,000   Kraft Heinz Foods Co.   2.00% 7/2/2018  961,000
 812,000   Ford Motor Credit Co. LLC   2.55% 10/5/2018  811,490
 800,000   Mondelez International, Inc., Quarterly US LIBOR +0.5200 ** 2.88% 2/1/2019  801,311
 500,000   Wells Fargo & Co., Quarterly US LIBOR +0.6800 **   3.04% 1/30/2020  503,302
 450,000   SUPERVALU, Inc.   6.75% 6/1/2021  457,740
 350,000   Clear Channel Worldwide Holdings, Inc.   7.63% 3/15/2020  347,914
 245,000   Verizon Communications, Inc., Quarterly US LIBOR +1.7500 ** 4.09% 9/14/2018  245,847
 80,000   Spectra Energy Partners LP   2.95% 9/25/2018  80,019
             22,631,224
             
    TOTAL BONDS & NOTES (Cost - $25,907,547)        25,880,457
             
Shares            
    EXCHANGE TRADED FUND - COMMODITY - 3.57 %    
 103,341   SPDR Gold Shares *        12,261,410
             
    TOTAL EXCHANGE TRADED FUND - COMMODITY (Cost - $12,482,845)    12,261,410
             
        Coupon Maturity  
    PREFERRED STOCK - 2.83 %        
 161,780   Bank of America Corp., Quarterly US LIBOR +0.5000 **   4.00% 9/9/2018  3,840,657
 134,729   Goldman Sachs Group, Quarterly US LIBOR +0.7500 **   4.00% 9/9/2018  3,240,232
 70,684   Pacific Gas & Electric Co.   5.50% Perpetual  1,636,335
 48,424   Pacific Gas & Electric Co.   5.00% Perpetual  1,009,640
             
    TOTAL PREFERRED STOCK - (Cost - $9,491,677)        9,726,864
             
    PRIVATE INVESTMENT FUND - 1.74 %        
 5,609,778   Coast Capital Mercury Fund LP *#        6,002,462
             
    TOTAL PRIVATE INVESTMENT FUND (Cost - $7,800,000)      6,002,462
             
    REAL ESTATE INVESTMENT TRUSTS - 2.11 %    
 65,590   Ventas, Inc.        3,735,350
 213,952   Monmouth Real Estate Investment Corp.        3,536,627
             
    TOTAL REAL ESTATE INVESTMENT TRUSTS (Cost - $6,412,209)      7,271,977
             
Principal       Coupon Maturity  
             
    US GOVERNMENT & AGENCY OBLIGATIONS - 9.03 %      
    US TREASURY NOTES - 9.03 %        
 $25,700,000   United States Treasury Note   1.38% 7/31/2019  25,421,918
 3,000,000   United States Treasury Note   1.25% 8/31/2019  2,959,922
 2,700,000   United States Treasury Note   1.38% 9/30/2019  2,664,879
             
    TOTAL US GOVERNMENT & AGENCY OBLIGATIONS (Cost - $31,404,316)    31,046,719
             
Centerstone Investors Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
Shares   Security       Market Value
    SHORT-TERM INVESTMENT - 5.20 %    
    MONEY MARKET FUND - 5.20 %    
 17,899,703   State Street Institutional Treasury Plus Money Market Fund, Trust Class, 1.74% ^    17,899,703
             
    TOTAL SHORT-TERM INVESTMENTS (Cost - $17,899,703)      17,899,703
             
    TOTAL INVESTMENTS - 99.51 % (Cost - $339,239,527)      342,200,430
    OTHER ASSETS IN EXCESS OF LIABILITES - 0.49 %      1,669,925
    NET ASSETS - 100.00 %        343,870,355
             
NVDR-Non-Voting Depository Receipt        
PCL-Public Company Limited        
PLC-Public Limited Company        
* Non-income producing security        
** Floating rate security
144A - Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The aggregate value of such securities is $722,638 or 0.21% of net assets
# Security fair valued as of June 30, 2018 in accordance the with the procedures approved by the Board of Trustees. Total value of all such securities as June 30, 2018 amounted to $6,002,462, which represents approximately 1.74% of the net assets of the Fund.
^ Interest rate reflects seven-day effective yield on June 30, 2018

 

 

Centerstone Investors Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
               
As of June 30, 2018 the following Forward Foreign Currency Contracts were open:    
               
FORWARD FOREIGN CURRENCY CONTRACTS        
              Unrealized
  Settlement       Local Currency Amount US $ US $ Appreciation/
Foreign Currency Date   Counterparty Purchased/Sold Equivalent Value at June 30, 2018 (Depreciation) *
To Buy:              
Danish Krone 7/3/2018   State Street Bank  508,968  $79,330  $79,786  $456
Euro 7/3/2018   State Street Bank  645,916  754,159  754,471  312
Swedish Krona 7/9/2018   State Street Bank  21,923,521  2,475,560  2,449,298  (26,262)
Swiss Franc 10/19/2018   State Street Bank  1,200,000  1,225,212  1,223,983  (1,229)
           $4,534,261  $4,507,538  $(26,723)
               
To Sell:              
British Pound 7/3/2018   State Street Bank  517,222  $680,495  $682,669  $(2,174)
Canadian Dollar 10/19/2018   State Street Bank  2,300,000  1,823,486  1,752,912  70,574
Chilean Peso 12/13/2018   State Street Bank  1,000,000,000  1,581,200  1,530,306  50,894
Danish Krone 7/9/2018   State Street Bank  7,700,000  1,278,069  1,207,763  70,306
Euro 7/9/2018   State Street Bank  7,360,382  9,089,384  8,601,188  488,196
Japanese Yen 7/24/2018   State Street Bank  236,500,000  2,165,612  2,139,631  25,981
Singapore Dollar 7/24/2018   State Street Bank  965,000  733,540  708,586  24,954
Swedish Krona 7/9/2018   State Street Bank  20,200,000  2,528,781  2,256,828  271,953
Swiss Franc 10/19/2018   State Street Bank  1,200,000  1,260,743  1,223,983  36,760
           $21,141,310  $20,103,866  $1,037,444
               
* The amount represents fair value derivative instruments subject to foreign currency risk exposure as of June 30, 2018
Sector Allocation (based on total value of investments as of June 30, 2018) ^  
         
Consumer Discretionary     21.46%  
Consumer Staples       19.88%  
Financial     12.16%  
Industrial     12.07%  
US Government & Agency Obligations     9.07%  
Basic Materials     7.46%  
Short-Term Investments     5.23%  
Energy     5.00%  
Gold     3.58%  
Communications     1.69%  
Utilities     1.37%  
Technology     1.03%  
Total           100.00%  
               
^ Percentages may differ from Portfolio of Investments which are based on Fund net assets    

 

 

 

Centerstone International Fund
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2018
Shares   Security       Market Value
    COMMON STOCK - 77.40 %    
    CANADA - 4.47 %        
 109,040   TransCanada Corp.        $4,717,754
 87,751   Metro, Inc.        2,982,993
             7,700,747
    CHILE - 2.06 %        
 108,423   Cia Cervecerias Unidas SA        2,704,070
 84,677,397   Vina San Pedro Tarapaca SA        842,374
             3,546,444
    DENMARK - 2.68 %        
 84,671   ISS A/S        2,910,423
 168,593   Matas A/S        1,368,838
 7,474   Topdanmark A/S        327,312
             4,606,573
    FINLAND - 1.32 %        
 132,782   Tikkurila Oyj        2,279,425
             
    FRANCE - 11.21 %        
 38,311   Air Liquide SA        4,818,456
 14,250   Unibail-Rodamco-Westfield        3,137,691
 26,289   Sodexo SA        2,628,561
 29,619   Schneider Electric SE        2,470,353
 23,964   Danone SA        1,759,428
 16,026   Eiffage SA        1,743,880
 4,147   LVMH Moet Hennessy Louis Vuitton SE        1,381,186
 24,896   Valeo SA        1,361,224
             19,300,779
    GERMANY - 7.90 %        
 69,576   Brenntag AG        3,877,293
 33,226   Bayerische Motoren Werke AG        3,012,148
 122,750   Hamburger Hafen und Logistik AG        2,666,264
 17,699   Fraport AG Frankfurt Airport Services Worldwide        1,707,665
 22,710   Hornbach Holding AG & Co. KGaA        1,638,983
 22,893   Hornbach Baumarkt AG        707,127
             13,609,480
    HONG KONG - 4.95 %        
 2,631,377   Kerry Logistics Network Ltd.        3,669,224
 253,350   Hongkong Land Holdings Ltd.        1,811,452
 280,900   Hysan Development Co. Ltd.        1,568,194
 632,083   Mandarin Oriental International Ltd.        1,472,753
             8,521,623
    INDONESIA - 1.10 %        
 1,982,613   Indocement Tunggal Prakarsa Tbk PT        1,888,532
             
    ISRAEL - 1.02 %        
 384,127   Israel Chemicals Ltd.        1,753,549
             
    JAPAN - 8.33 %    
 177,025   Mitsubishi Estate Co. Ltd.        3,097,118
 111,024   Nagaileben Co. Ltd. *        2,823,859
 224,605   Ichiyoshi Securities Co. Ltd.  *        2,434,413
 45,442   Aica Kogyo Co. Ltd. *        1,596,616
 84,000   Astellas Pharma, Inc.        1,281,452
 8,438   Shimano, Inc.        1,239,235
 54,020   Sekisui Jushi Corp. *        1,133,925
 3,714   FANUC Corp.        738,171
             14,344,789
    MALAYSIA - 1.51 %        
 1,253,000   Genting Bhd.        2,608,672
             
    MEXICO - 1.69 %        
 101,464   Fresnillo PLC        1,531,229
 365,939   Grupo Televisa SAB *        1,388,008
             2,919,237
    NETHERLANDS - 3.54 %        
 86,357   Koninklijke Vopak NV        3,990,546
 87,784   Koninklijke Ahold Delhaize NV        2,102,054
             6,092,600
Centerstone International Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
Shares   Security       Market  Value
    COMMON STOCK - 77.40 % (continued)    
    SINGAPORE - 1.87 %    
 190,901   Oversea-Chinese Banking Corp. Ltd.        $1,630,890
 921,634   ComfortDelGro Corp. Ltd.        1,589,607
             3,220,497
    SOUTH KOREA - 0.99 %        
 17,700   KT&G Corp.        1,699,327
             
    SWEDEN - 6.89 %        
 150,310   ICA Gruppen AB        4,609,949
 106,268   Loomis AB        3,694,628
 257,348   Mekonomen AB *        3,557,058
             11,861,635
    SWITZERLAND - 6.55 %        
 12,245   Roche Holding AG        2,727,087
 35,579   Novartis AG        2,704,622
 33,455   Nestle SA        2,597,889
 19,853   Cie Financiere Richemont SA        1,686,392
 3,275   Swatch Group AG        1,557,965
             11,273,955
    THAILAND - 4.33 %        
 4,416,000   Krung Thai Bank PCL        2,225,995
 347,204   Siam City Cement PCL        2,106,490
 281,300   Bangkok Bank PCL        1,685,423
 2,171,200   Thai Beverage PCL        1,147,350
 49,450   Bangkok Bank PLC (NVDR)        291,804
             7,457,062
    UNITED KINGDOM - 2.95 %        
 678,012   Merlin Entertainment PLC        3,460,220
 38,675   Spectris PLC        1,332,180
 66,105   Rotork PLC        291,999
             5,084,399
    UNITED STATES - 2.04 %        
 125,634   Mosaic, Co.        3,524,034
             
    TOTAL COMMON STOCK (Cost - $135,706,249)        133,293,359
             
Principal       Coupon Maturity  
    BONDS & NOTES - 0.07 %    
    UNITED KINGDOM - 0.07 %        
 $124,000   Vodafone Group PLC   4.63% 7/15/2018  124,078
             
    TOTAL BONDS & NOTES (Cost - $124,152)        124,078
             
Shares            
    EXCHANGE TRADED FUND - COMMODITY - 3.90 %    
 56,595   SPDR Gold Shares *        6,714,997
             
    TOTAL EXCHANGE TRADED FUND - COMMODITY (Cost - $6,821,485)        6,714,997
             
    PRIVATE INVESTMENT FUND - 1.87 %        
 3,003,562   Coast Capital Mercury Fund LP *#        3,213,811
             
    TOTAL PRIVATE INVESTMENT FUND (Cost - $4,200,000)        3,213,811
Principal       Coupon Maturity  
    US GOVERNMENT & AGENCY OBLIGATIONS - 10.79 %    
    US TREASURY NOTE - 10.79 %        
 $12,000,000   United States Treasury Note   1.38% 7/31/2019  11,870,156
 4,500,000   United States Treasury Note   1.25% 8/31/2019  4,439,883
 2,300,000   United States Treasury Note   1.38% 9/30/2019  2,270,082
             18,580,121
             
    TOTAL US GOVERNMENT & AGENCY OBLIGATIONS (Cost - $18,797,392)      18,580,121
             
             
Centerstone International Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
Shares   Security       Market  Value
    SHORT-TERM INVESTMENT - 5.04 %    
    MONEY MARKET FUND - 5.04 %    
 8,673,402   State Street Institutional Treasury Plus Money Market Fund, Trust Class, 1.74% ^      $8,673,402
             
    TOTAL SHORT-TERM INVESTMENTS (Cost - $8,673,402)        8,673,402
             
    TOTAL INVESTMENTS - 99.07 % (Cost - $ 174,322,680)      170,599,768
    OTHER ASSETS IN EXCESS OF LIABILITITES - 0.93 %        1,608,209
    NET ASSETS - 100.00 %        172,207,977
             
NVDR-Non-Voting Depository Receipt        
PCL-Public Company Limited        
PLC-Public Limited Company        
* Non-income producing security        
# Security fair valued as of June 30, 2018 in accordance with the procedures approved by the Board of Trustees.  Total value of all such securities as June 30, 2018 amounted to $3,213,811, which represents approximately 1.87% of the net assets of the Fund.
^ Interest rate reflects seven-day effective yield on June 30, 2018        

 

 

 

Centerstone International Fund
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
               
As of June 30, 2018 the following Forward Foreign Currency Contracts were open:      
               
FORWARD FOREIGN CURRENCY CONTRACTS        
              Unrealized
  Settlement       Local Currency Amount US $ US $ Appreciation/
Foreign Currency Date   Counterparty Purchased/Sold Equivalent Value at June 30, 2018 (Depreciation) *
To Buy:              
Euro 7/3/2018   State Street Bank  373,030  $435,543  $435,723  $180
Swedish Krona 7/9/2018   State Street Bank 16,000,000.00  1,808,464  1,787,587  (20,877)
Swiss Franc 10/19/2018   State Street Bank 1,050,000.00  1,072,061  1,070,985  (1,076)
           $3,316,068  $3,294,295  $(21,773)
               
To Sell:              
British Pound 7/2/2018   State Street Bank  478,316  $629,307  $631,318  $(2,011)
Canadian Dollar 10/19/2018   State Street Bank  2,000,000  1,585,640  1,524,271  61,369
Chilean Peso 12/13/2018   State Street Bank  800,000,000  1,264,960  1,224,245  40,715
Danish Krone 7/9/2018   State Street Bank  6,772,631  1,121,281  1,062,278  59,003
Euro 7/9/2018   State Street Bank  5,960,400  7,365,123  6,965,206  399,917
Japanese Yen 7/24/2018   State Street Bank  220,000,000  2,015,140  1,990,354  24,786
Singapore Dollar 7/24/2018   State Street Bank  900,000  684,103  660,857  23,246
Swedish Krona 7/9/2018   State Street Bank  16,000,000  2,003,160  1,787,587  215,573
Swiss Franc 10/19/2018   State Street Bank  1,050,000  1,103,150  1,070,985  32,165
           $17,771,864  $16,917,101  $854,763
               
* The amount represents fair value derivative instruments subject to foreign currency risk exposure as of June 30, 2018
Sector Allocation (based on total value of investments as of June 30, 2018) ^  
Consumer Staples     21.35%  
Consumer Discretionary     19.76%  
Basic Materials     12.02%  
US Government & Agency Obligations     10.89%  
Financial     10.67%  
Industrial     10.28%  
Energy     5.11%  
Short-Term Investments     5.09%  
Gold     3.94%  
Communications     0.89%  
Total           100.00%  
               
^ Percentages may differ from Portfolio of Investments which are based on Fund net assets    
               

 

 

Centerstone Funds
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
           
Note 1 - Organization and Significant Accounting Policies
           
The Centerstone Investors Fund and the Centerstone International Fund (each a “Fund” and collectively the “Funds”) are each a series of Centerstone Investors Trust, (the “Trust”) a Delaware statutory trust. The Trust is an open-ended management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust is governed by its Board of Trustees (the “Board” or “Trustees”). Each Fund is a diversified series of the Trust. The Centerstone Investors Fund seeks long-term growth of capital by investing in a range of securities and asset classes from markets around the world, including the U.S. market. The Centerstone International Fund seeks long-term growth of capital by investing in a range of securities and asset classes primarily from foreign (non-U.S.) markets.
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Funds are investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies” including FASB Accounting Standard Update ASU 2013-08.
 
The following is a summary of significant accounting policies followed by the Funds in preparation of their financial statements.
           
Investment Valuation – In determining each Fund’s Net Asset Value (“NAV”) per share, securities traded on one or more securities exchanges for which market quotations are readily available are valued at current market value using the last reported sales price. NASDAQ traded securities are valued using the NASDAQ Official Closing Price (“NOCP”). If no sale price is reported, the mean between the current bid and ask is used. If market quotations are not readily available, then securities will be valued at fair value as determined by the Board (or its delegate). In this case, the Board has approved the use of a fair valuation pricing committee (the “Fair Value Committee” or the “Committee”), to which it has delegated certain responsibilities. Securities not traded or dealt in on any securities exchange and for which over-the-counter market (whether domestic or foreign) quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the current mean price on such over-the-counter market, (and if there is only a bid or only an ask price on such date, valuation will be at such bid or ask price for long or short positions, respectively). Debt securities, whether listed on an exchange or traded in the over the counter market for which market quotations are readily available, are generally priced at the current bid price. Debt securities may be valued at prices supplied by the relevant pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity. Absent special circumstances, valuations for a specific type of instrument will all be made through the same pricing agent.
 
The value of foreign currencies and of foreign securities whose value is quoted or calculated in a foreign currency shall be converted into US dollars based on foreign exchange rates provided by a major banking institution(s) or currency dealer(s) selected by the pricing agent providing such price, or by the Fair Value Committee in the case of securities for which the Fair Value Committee provides a fair value determination, at 4:00 pm Eastern Time (“ET”) or the nearest time prior to the close of the New York Stock Exchange (“NYSE”), currently 4:00 pm ET, at which such foreign currency quotations are available.
 
Money market-type instruments that have a remaining maturity of 60 days or less are valued at bid prices from a pricing vendor, unless the Fair Value Committee believes another valuation is more appropriate.
 
Forward currency contracts shall be valued at the forward currency contract rates, determined at 4:00 pm ET or the nearest time prior to the close of the NYSE, provided by a bank or dealer that the pricing agent or, if applicable, the Fair Value Committee believes to be reliable.
 
Securities in which the Funds invest may be traded in markets that close before 4:00 pm ET. Normally, developments that occur between the close of the foreign markets and 4:00 pm ET will not be reflected in a Fund’s NAV. However, the Funds may determine that such developments are so significant that they will affect the value of a Fund’s securities, and the Fund may adjust the previous local closing prices to reflect fair value for these securities as of 4:00 pm ET. The Trustees have authorized the use of an independent fair valuation service. If the movement in a designated US market index, after foreign markets close, is greater than predetermined levels, the Funds may use a systematic valuation model to fair value its foreign securities. The values assigned to a Fund’s foreign securities therefore may differ on occasion from reported market values. The Trustees and the Advisor believe relying on the procedures as just described will result in prices that are more reflective of the actual market value of portfolio securities held by the Funds as of 4:00 pm ET.
 
Fair Valuation Process - If market quotations are not readily available, or if, in the opinion of the Advisor, the prices or values available do not represent fair value, securities will be valued at their fair market value as determined in good faith by the Trust’s Fair Value Committee in accordance with procedures approved by the Board and evaluated by the Board as to the reliability of the fair value method used. The Committee is composed of one or more representatives from each of the (i) Trust, (ii) Administrator, and (iii) Advisor. The procedures consider, among others, the following factors to determine a security’s fair value: the nature and pricing history (if any) of the security; whether any dealer quotations for the security are available; and possible valuation methodologies that could be used to determine the fair value of the security. The Committee may also enlist third party consultants such as a valuation specialist at a public accounting firm, valuation consultant, or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.
 
As noted, the Committee is composed of one or more representatives from each of the (i) Trust, (ii) Administrator, and (iii) Advisor. The applicable investments are valued collectively via inputs from each of these groups. For example, fair value determinations are required for the following securities: (i) securities for which market quotations are insufficient or not readily available on a particular business day (including securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source); (ii) securities for which, in the opinion of the Advisor, the prices or values available do not represent the fair value of the instrument based upon factors that may include, but are not limited to, the following: only a bid price or an ask price is available; the spread between bid and ask prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets or regulators, such as the suspension or limitation of trading; (iii) securities determined to be illiquid; (iv) securities with respect to which an event that will affect the value thereof has occurred since the closing prices were established on the principal exchange on which they are traded, but prior to the Funds’ calculation of its net asset value; (v) stale prices — securities whose prices have been stale for 20 or more consecutive business days; (vi) mutual funds that do not provide timely NAV information; (vii) interests in a commodity pool or a managed futures pool; and (viii) restricted securities, such as private investments or non-traded securities. The Committee may determine the fair value of such restricted security using the following factors: (a) the type of security; (b) the cost at date of purchase; (c) the size and nature of the Funds’ holdings; (d) the discount from market value of unrestricted securities of the same class at the time of purchase and subsequent thereto; (e) information as to any transactions or offers with respect to the security; (f) the nature and duration of restrictions on disposition of the security and the existence of any registration rights; (g) how the yield of the security compares to similar securities of companies of similar or equal creditworthiness; (h) the level of recent trades of similar or comparable securities; (i) the liquidity characteristics of the security; (j) current market conditions; (k) the market value of any securities into which the security is convertible or exchangeable; (l) the security’s embedded option values; and (m) information about the financial condition of the issuer and it’s prospects.                                                          
 
Centerstone Funds
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
The Funds utilize various methods to measure the fair value of most of their investments on a recurring basis.  GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:
 
Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities.
 
Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
 
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
 
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
 
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.  The following tables summarize the inputs used for the year ended as of June 30, 2018, for the Funds’ assets and liabilities measured at fair value:

 

 

         
Centerstone Investors Fund      
Assets Level 1 Level 2 Level 3 Total
Common Stock  $232,110,838  $-     $-     $232,110,838
Bonds & Notes  -     25,880,457  -     25,880,457
Exchange Traded Fund - Commodity  12,261,410  -     -     12,261,410
Preferred Stock  9,726,864  -     -     9,726,864
Private Investment Fund  -     6,002,462  -     6,002,462
Real Estate Investment Trusts  7,271,977  -     -     7,271,977
US Government & Agency Obligations  -     31,046,719  -     31,046,719
Short-Term Investment  17,899,703  -     -     17,899,703
Forward Foreign Currency Contracts  *  -     1,040,386  -     1,040,386
Total  $279,270,792  $63,970,024  $-     $343,240,816
Liabilities - Derivatives        
Forward Foreign Currency Contracts  *  $-     $29,665  $-     $29,665
         
Centerstone International Fund      
Assets Level 1 Level 2 Level 3 Total
Common Stock  $133,293,359  $-     $-     $133,293,359
Bonds & Notes  -     124,078  -     124,078
Exchange Traded Fund - Commodity  6,714,997  -     -     6,714,997
Private Investment Fund  -     3,213,811  -     3,213,811
US Government & Agency Obligations  -     18,580,121  -     18,580,121
Short-Term Investment  8,673,402  -     -     8,673,402
Forward Foreign Currency Contracts  *  -     856,954  -     856,954
Total  $148,681,758  $22,774,964  $-     $171,456,722
Liabilities - Derivatives        
Forward Foreign Currency Contracts  *  $-     $23,964  $-     $23,964

 

 

           
* Forward Foreign Currency Contracts are valued at gross unrealized appreciation (depreciation) on the investment.  
The Funds did not hold any level 3 securities during the period.
 
Transfers in and out of levels 1, 2 and 3 of the fair value hierarchy are recognized as of the beginning of the reporting period. Of the level 1 investments presented above, equity investments amounting to $136,696,190 and $110,863,369 for the Centerstone Investors Fund and Centerstone International Fund, respectively, were considered level 2 investments at the beginning of the period.
           
Foreign Currency Translations – The books and records of the Funds are maintained in US dollars. The market values of securities which are not traded in US currency are recorded in the financial statements after translation to US dollars based on the applicable exchange rates at the end of the period. The costs of such securities are translated at exchange rates prevailing when acquired. Related interest, dividends and withholding taxes are accrued at the rates of exchange prevailing on the respective dates of such transactions.
 
Net realized gains and losses on foreign currency transactions represent net gains and losses from currency realized between the trade and settlement dates on securities transactions and the difference between income accrued versus income received. The effects of changes in foreign currency exchange rates on investments in securities are included with the net realized and unrealized gain or loss on investment securities.
Centerstone Funds
PORTFOLIO OF INVESTMENTS (Unaudited) (Continued)
June 30, 2018
           
Forward Foreign Currency Contracts - As foreign securities are purchased and sold, the Funds may enter into forward currency exchange contracts in order to hedge against foreign currency exchange rate risks. The market value of the contracts fluctuate with changes in currency exchange rates. The contract is marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. As foreign securities are sold, a portion of the contract is generally closed and the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Funds may also enter into forward currency contracts as an investment strategy consistent with the Fund’s investment objective. As of June 30, 2018, the amount of unrealized gain on forward foreign currency exchange contracts subject to currency price risk amounted to $1,10,721 and $832,990 for the Centerstone Investors Fund and Centerstone International Fund, respectively.
 
Funds investing in foreign exchange contracts are exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the Fund is unable to enter into a closing position.
 
Forward foreign currency contracts outstanding, as of June 30, 2018, are listed after each Fund’s Portfolio of Investments. For the period ended June 30, 2018, the average monthly outstanding currency purchased or sold in US dollars for forward foreign currency contracts totaled $23,026,080 and $19,161,007 for the Centerstone Investors Fund and Centerstone International Fund, respectively.
 
Aggregate Unrealized Appreciation and Depreciation - Tax Basis
 
Represents cost for financial reporting purposes and is substantially identical for both book and federal income tax purposes.  Net unrealized appreciation (depreciation) consisted of:
           
Centerstone Investors Fund      
Gross unrealized appreciation:   $16,010,013      
Gross unrealized depreciation:   (13,049,110)      
Net unrealized appreciation:   $2,960,903      
           
Centerstone International Fund      
Gross unrealized appreciation:   $5,954,925      
Gross unrealized depreciation:   (9,677,837)      
Net unrealized depreciation:   ($3,722,912)      
           

 

Item 2. Controls and Procedures.

 

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

 

(b)       There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

Certifications required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) (and Item 3 of Form N-Q) are filed herewith.

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Centerstone Investors Trust

 

By

/s/ Abhay Deshpande

Abhay Deshpande, Principal Executive Officer/President

 

Date 8/28/2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By

/s/ Abhay Deshpande

Abhay Deshpande, Principal Executive Officer/President

 

Date 8/28/2018

 

By

/s/ Philip Santopadre

Philip Santopadre, Principal Financial Officer/Treasurer

 

Date 8/28/2018