UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file
number: 811-03364
EMPOWER FUNDS, INC.
(Exact name of registrant as specified in charter)
8515 E. Orchard Road, Greenwood Village, Colorado 80111
(Address of principal executive offices)
(Address of principal executive offices)
Jonathan D.
Kreider
President & Chief Executive Officer
Empower Funds, Inc.
Empower Funds, Inc.
8515 E. Orchard Road
Greenwood Village, Colorado 80111
(Name and address of agent for service)
Registrant's telephone number, including area code: (866)
831-7129
Date of fiscal year end: December 31
Date of reporting period: December 31, 2023
Item 1. REPORTS TO STOCKHOLDERS
EMPOWER FUNDS, INC.
Empower International Funds (Institutional Class and Investor
Class)
Annual Report
December 31, 2023
This report and the financial statements attached are
submitted for general information and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein is to be considered an offer of the sale of shares of the Funds. Such
offering is made only by the prospectus of the Funds, which includes details as to offering price and other information.
Empower Emerging Markets Equity Fund
Management Discussion
The Fund’s sub-advisers are Goldman Sachs Asset
Management, L.P. (“Goldman Sachs”) and Lazard Asset Management LLC (“Lazard”). Goldman Sachs replaced UBS Asset Management (Americas) Inc. as a sub-adviser effective June 1, 2023.
Fund
Performance
For the twelve-month period ended
December 31, 2023, the Fund (Investor Class shares) returned 9.67%, relative to a 9.83% return for the MSCI Emerging Markets Index, the Fund’s benchmark index.
Goldman Sachs
Commentary
Overall, emerging market equities
had a bumpy ride in 2023, driven by persistently high rates, the U.S. dollar at near multi-decade highs, volatile geopolitical events, and macroeconomic shocks. While the asset class faced an austere environment, it broadly outperformed expectations
over the year.
China, which makes up roughly 30% of
the benchmark index, significantly underperformed after a short rebound in the first quarter, as optimism around Covid-19 reopening consumption drove markets, but quickly faded in the second quarter as manufacturing and consumption data
disappointed. For the remainder of the year, China’s economic data consistently fell short of expectations. On the other hand, India, which makes up approximately 15% of the benchmark index, had a markedly better year. Continued strong
economic growth translated to both strong realized corporate earnings growth and positive forecasts. Eastern Europe also had a particularly strong 2023. Generally, Latin America inflation was well controlled in 2023, economic growth surprised to the
upside and equity markets performed roughly in line with global markets.
At the country level, holdings in Mexico and South Africa
contributed to performance, while stock selection in China and Taiwan detracted from returns for the Goldman Sachs sub-advised portion of the Fund. At the sector level, holdings in real estate and healthcare contributed the most, while stock
selection in financials and energy detracted from returns.
Lazard
Commentary
Central bank monetary policies
remained a primary driver of 2023’s returns, as hopes of a pause in rate hikes in the beginning of the year were rebuffed by the Federal Reserve. The possibility that key central banks would adopt a “higher for longer” interest
rate policy posture raised fears of a global recession and weak demand. The Federal Reserve’s tone softened in November, however, supported by favorable inflation news that triggered a resurgence in equity buying over the last two months of
the year.
Oil prices continued to ease despite
tensions in the Middle East as inventories rose. Gold prices, by contrast, continued to appreciate, finishing 13.5% higher for the year. The U.S. dollar recorded its first decline since 2020, boosting the market in the fourth quarter; its strength
had served as a headwind for most of the year.
Worries about China’s struggling post-pandemic
economic recovery resulted in the country’s stock market tumbling 11.2% in 2023. Latin America was the best performing region in 2023, with the equity market in Mexico, which advanced over 41%, taking the lead. Equity markets in emerging
Europe were mixed, with Greece and Hungary both rallying by approximately 50%. Turkey gave back some of last
year’s extraordinary gains, as the country’s central bank
raised rates to fight inflation. Equity markets in the Middle East lagged largely due to weaker oil prices in the year. South Africa’s stock market also trailed, as the country’s economy struggles with 30% unemployment and high real
interest rates.
For the Lazard sub-advised portion of
the Fund, stock selection accounted for excess return, supplemented by sector positioning. Operating cash detracted. Overweight exposure to the information technology sector and underweight exposure to the materials sector were the largest
contributors from allocation. Overweight exposures to the communication services and consumer discretionary sectors detracted modestly. Stock selection was strongest in the information technology and energy sectors and underperformed in the
financials and materials sectors. Stock selection was favorable in China and Taiwan. Stock selection in Korea and Poland detracted.
The views and opinions in this report were current as of
December 31, 2023 and are subject to change at any time. They are not guarantees of performance or investment results and should not be taken as investment advice. Fund holdings are subject to change at any time. Fund returns are net of fees unless
otherwise noted.
Growth of $10,000
(unaudited)
This graph compares the value of a
hypothetical $10,000 investment in the Fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records) with the performance of the Fund’s benchmark index. Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, individual retirement accounts (“IRA(s)”), qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
*For the period
from January 5, 2018 (inception) through December 31, 2018.
Note: Performance for the Institutional Class shares may vary
due to their differing fee structure. See returns table below.
Average Annual Total Returns for the Periods Ended December 31,
2023 (unaudited)
| One Year | Five Year | Since Inception(a) | |
| Institutional Class | 10.12% | 3.80% | -0.82% |
| Investor Class | 9.67% | 3.44% | -1.18% |
| (a) Institutional Class and Investor Class inception date was January 05, 2018. |
Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Empower International Growth Fund
Management Discussion
The Fund’s sub-advisers are Franklin Templeton
Institutional, LLC (“Franklin”) and J.P. Morgan Investment Management Inc. (“JPMorgan”)
Fund
Performance
For the twelve-month period ended
December 31, 2023, the Fund (Investor Class shares) returned 16.54%, relative to a 17.58% return for the MSCI EAFE Growth Index, the Fund’s benchmark index.
Franklin
Commentary
2023 began and ended on an upswing,
but there was substantial turbulence along the way due to a series of bank crises in March followed by indications that major central banks would keep interest rates higher for longer in an effort to tame inflation. Financial markets hit low points
in the fourth quarter as sovereign bond prices plunged - driving yields significantly higher - and some bellwether companies announced disappointing earnings and/or guidance. Amid these challenges, the potential of artificial intelligence
(“AI”) thrilled investors, high interest rates did not trigger widespread recession, and inflation continued to moderate. Near year-end, markets surged as indications seemed to point to a soft economic landing in many regions, less
inflationary pressure and a global economy that could continue to provide a backdrop for decent corporate earnings. Due largely to the excitement over AI, the equity market’s rally was heavily concentrated in information technology
(“IT”), which gained 37.5% and was the MSCI EAFE Index’s top-performing sector. International value stocks outperformed their growth counterparts modestly, with both categories notching double-digit percentage returns as measured
by MSCI style indexes.
During the year, the Franklin
sub-advised portion of the Fund underperformed the benchmark index as stock selection in the communication services, industrials and materials sectors held back relative returns. Conversely, stock selection in the consumer discretionary, healthcare
and IT sectors aided relative performance. In terms of sector allocations, an overweight allocation in healthcare and an underweight in financials curbed relative results, while an overweight in IT and underweight exposure to consumer staples lifted
relative returns. On a regional level, stock selection in Europe - and, to a much lesser extent, Asia - hindered relative returns, while off-benchmark exposure to Canada and Brazil helped relative performance.
JPMorgan
Commentary
Global equities rallied in 2023 in
what came as a surprise to many market participants. Sentiment oscillated over the year, driven by recession worries at the start, to resilient growth over the summer, to higher for longer rates in the autumn, and ending the year focused on future
rate cuts. A series of softer inflation prints in the U.S. and Europe led to growing excitement that central banks may cut interest rates sooner than previously expected, with the market now forecasting over 150 basis points of interest rate cuts by
the Federal Reserve (the “Fed”) in 2024.
Market returns were not evenly distributed this year and
were largely driven by a handful of U.S. technology stocks dubbed the “Magnificent Seven”, namely, Alphabet, Apple, Amazon, Meta Platforms, Microsoft, NVIDIA and Tesla. These stocks contributed around 80% of the S&P 500® Index
returns over the year, the largest contribution of the largest seven stocks to total index performance in recent history.
More broadly, growth stocks made a stellar comeback in 2023, driven by AI
frenzy amongst investors. The catalyst was the launch of generative AI chatbot, ChatGPT, that spurred the imagination of investors and will result in higher demand for advanced AI chips, helping the chip leader NVIDIA’s stock price to more
than triple in 2023. As a result, the U.S. markets, with their growth-tilt, performed very strongly, thanks to a combination of better-than-expected consumer spending, resilient corporate profits, and enthusiasm around the advancements in AI.
International performance varied across regions in 2023,
with emerging market equities trailing their developed market counterparts. China faced difficulties with consumption and its property market reflected in its negative equity performance this year, while Japanese stocks witnessed strong gains fueled
by structural improvements in corporate governance and balance sheet management. In Europe, governments have effectively managed energy supply problems, but cautious consumers and softer manufacturing activity continued to weaken the macro backdrop.
On a positive note, Europe and the UK witnessed a downtrend in inflation.
At the sector level, stock selection in industrials and an
underweight exposure to consumer staples contributed to performance for the JPMorgan sub-advised portion of the Fund. On the downside, stock selection in IT and communication services detracted from performance. At the regional level, stock
selection in Japan and the UK contributed to relative returns, while stock selection in continental Europe and an overweight exposure to emerging markets detracted from performance.
The views and opinions in this report were current as of
December 31, 2023 and are subject to change at any time. They are not guarantees of performance or investment results and should not be taken as investment advice. Fund holdings are subject to change at any time. Fund returns are net of fees unless
otherwise noted.
Growth of $10,000
(unaudited)
This graph compares the value of a
hypothetical $10,000 investment in the Fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records) with the performance of the Fund’s benchmark index. Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, individual retirement accounts (“IRA(s)”), qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Note: Performance
for the Institutional Class shares may vary due to their differing fee structure. See returns table below.
Average Annual Total Returns for the Periods Ended December 31,
2023 (unaudited)
| One Year | Five Year | Ten
Year / Since Inception(a) | |
| Institutional Class | 16.93% | 8.58% | 4.38% |
| Investor Class | 16.54% | 8.17% | 3.94% |
| (a) Institutional Class inception date was May 1, 2015. |
Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Empower International Index Fund
Management Discussion
The Fund’s sub-adviser is Irish Life Investment Managers
Limited (“ILIM”)
Fund Performance
For the twelve-month period ended December 31, 2023, the Fund
(Investor Class shares) returned 17.52%, relative to an 18.24% return for the MSCI EAFE Index, the Fund’s benchmark index.
ILIM
Commentary
Global equities rallied over the
past twelve months, buoyed by hopes for a soft landing whereby while growth slows, a recession is avoided and inflation continues to fall, enabling central banks to begin cutting interest rates in 2024. The development and implementation of
artificial intelligence was also supportive as it led investors to believe the technology had the potential to boost productivity and company profit margins significantly in the medium term.
There were several key factors that affected the
performance of the Fund throughout the year. European ex-UK equities rose by 22.7% over the period, aided by a reversal of some severe headwinds following the outbreak of the war in Ukraine, including the collapse in natural gas prices, which eased
inflation and growth pressures in the Eurozone. UK equities underperformed and energy and financials acted as headwinds, with the former hampering the fall in oil prices. Brent crude was down by 10.3% over the period, ending 2023 at $77 a barrel.
Meanwhile, Japanese equities outperformed, rising by 20.8%. The market was supported by a weaker yen, relatively loose monetary policy, cheap valuations, and an improved corporate governance backdrop.
The views and opinions in this report were current as of
December 31, 2023 and are subject to change at any time. They are not guarantees of performance or investment results and should not be taken as investment advice. Fund holdings are subject to change at any time. Fund returns are net of fees unless
otherwise noted.
Growth of $10,000
(unaudited)
This graph compares the value of a
hypothetical $10,000 investment in the Fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records) with the performance of the Fund’s benchmark index. Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, individual retirement accounts (“IRA(s)”), qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Note: Performance
for the Institutional Class shares may vary due to their differing fee structure. See returns table below.
Average Annual Total Returns for the Periods Ended December 31,
2023 (unaudited)
| One Year | Five Year | Ten
Year / Since Inception(a) | |
| Institutional Class | 17.96% | 8.08% | 4.46% |
| Investor Class | 17.52% | 7.66% | 3.79% |
| (a) Institutional Class inception date was May 1, 2015. |
Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Empower International Value Fund
Management Discussion
The Fund’s sub-advisers are LSV Asset Management
(“LSV”) and Massachusetts Financial Services Company (“MFS”)
Fund
Performance
For the twelve-month period ended
December 31, 2023, the Fund (Investor Class shares) returned 18.03%, relative to an 18.95% return for the MSCI EAFE Value Index, the Fund’s benchmark index.
LSV
Commentary
Value stocks modestly outperformed
growth stocks in 2023 so LSV’s style was slightly in favor during the year. Relative to the benchmark index, the LSV sub-advised portion of the Fund had a deeper value style bias that was a positive contributor, while the smaller cap bias was
a negative contributor for the year since smaller cap stocks lagged the overall market during 2023. The portfolio is essentially country neutral relative to the benchmark index; however, a slight overweight in Switzerland and underweight in the UK
were helpful. Sector selection was also helpful due to overweight positions in industrials and consumer discretionary, two of the best performing sectors for the year. Stock selection was best in the UK, France, and Denmark while selection in
Germany and the Netherlands lagged.
MFS Commentary
During the reporting period, central banks around the world
had to combat the strongest inflationary pressures in four decades, fueled by the global fiscal response to the pandemic, disrupted supply chains and the dislocations to energy markets stemming from the war in Ukraine. Interest rates rose
substantially, but the effects of a tighter monetary policy may not have been fully experienced yet, given that monetary policy works with long and variable lags. Strains resulting from the abrupt tightening of monetary policy began to affect some
parts of the economy, most acutely among small and regional U.S. banks, which suffered from deposit flight as depositors sought higher yields on their savings. Additionally, activity in the U.S. housing sector has slowed as a result of higher
mortgage rates. China’s abandonment of its zero-Covid policy ushered in a brief uptick in economic activity in early 2023, although its momentum soon stalled as the focus turned to the country’s highly indebted property development
sector. In developed markets, consumer demand for services remained stronger than the demand for goods.
For the MFS sub-advised portion of the Fund, stock
selection and, to a lesser extent, an underweight position in the financials sector detracted from performance relative to the benchmark index. An overweight position in the consumer staples sector also dampened relative results. An underweight
position and stock selection in the consumer discretionary sector further weakened relative performance. The cash and/or cash equivalents position during the period was also a detractor from relative performance. In a period when equity markets
rose, as measured by the benchmark index, holding cash hurt performance. Stock selection in the information technology sector contributed to relative performance and security selection and an underweight position in the real estate sector also
supported relative returns. An overweight position in the industrials sector bolstered relative returns. During the reporting period, relative currency exposure was a contributor to relative performance.
The views and opinions in this report were current as of
December 31, 2023 and are subject to change at any time. They are not guarantees of performance or investment results and should not be taken as investment advice. Fund holdings are subject to change at any time. Fund returns are net of fees unless
otherwise noted.
Growth of $10,000
(unaudited)
This graph compares the value of a
hypothetical $10,000 investment in the Fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records) with the performance of the Fund’s benchmark index. Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, individual retirement accounts (“IRA(s)”), qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Note: Performance
for the Institutional Class shares may vary due to their differing fee structure. See returns table below.
Average Annual Total Returns for the Periods Ended December 31,
2023 (unaudited)
| One Year | Five Year | Ten
Year / Since Inception(a) | |
| Institutional Class | 18.44% | 8.64% | 6.02% |
| Investor Class | 18.03% | 8.25% | 5.89% |
| (a) Institutional Class inception date was May 1, 2015. |
Results include the reinvestment of all dividends and
capital gains distributions. Past performance is no guarantee of future results. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance does not include any
fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs. If such fees and expenses were included, returns would be lower.
Summary of Investments by Sector as of December 31, 2023
(unaudited)
Empower Emerging Markets Equity Fund
| Sector | Percentage
of Fund Investments |
| Financial | 22.82% |
| Technology | 21.12 |
| Communications | 15.23 |
| Consumer, Non-cyclical | 11.18 |
| Consumer, Cyclical | 10.70 |
| Industrial | 7.40 |
| Energy | 4.28 |
| Basic Materials | 3.54 |
| Exchange Traded Funds | 1.68 |
| Utilities | 1.32 |
| Short Term Investments | 0.73 |
| Total | 100.00% |
Empower International Growth
Fund
| Sector | Percentage
of Fund Investments |
| Consumer, Non-cyclical | 28.12% |
| Industrial | 17.28 |
| Technology | 16.10 |
| Consumer, Cyclical | 14.56 |
| Financial | 10.21 |
| Basic Materials | 5.31 |
| Communications | 5.02 |
| Utilities | 0.58 |
| Short Term Investments | 2.82 |
| Total | 100.00% |
Empower International Index
Fund
| Sector | Percentage
of Fund Investments |
| Consumer, Non-cyclical | 23.62% |
| Financial | 20.19 |
| Industrial | 13.87 |
| Consumer, Cyclical | 13.47 |
| Technology | 6.57 |
| Basic Materials | 6.39 |
| Energy | 4.41 |
| Communications | 4.21 |
| Utilities | 3.24 |
| Diversified | 0.06 |
| Short Term Investments | 3.97 |
| Total | 100.00% |
Empower International Value Fund
| Sector | Percentage
of Fund Investments |
| Financial | 20.56% |
| Consumer, Non-cyclical | 19.75 |
| Industrial | 17.47 |
| Consumer, Cyclical | 12.60 |
| Technology | 8.92 |
| Basic Materials | 7.38 |
| Energy | 6.71 |
| Communications | 2.70 |
| Utilities | 1.01 |
| Short Term Investments | 2.90 |
| Total | 100.00% |
Shareholder Expense Example (unaudited)
As a shareholder of a Fund, you incur two types of
costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
Each
Fund Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2023 to December 31, 2023).
Actual Expenses
The first row of each Fund's table below provides
information about actual account values and actual expenses. You may use the information in this row, 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 row 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 row of each Fund's table below provides
information about hypothetical account values and hypothetical expenses based on such 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 each 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 each Fund's table
are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second row of each Fund's 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.
| Empower Emerging Markets Equity Fund | Beginning
Account Value |
Ending
Account Value |
Expenses
Paid During Period* | ||
| (07/01/23) | (12/31/23) | (07/01/23 – 12/31/23) | |||
| Institutional Class | |||||
| Actual | $1,000.00 | $1,037.78 | $4.62 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,020.67 | $4.58 | ||
| Investor Class | |||||
| Actual | $1,000.00 | $1,035.50 | $6.41 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,018.90 | $6.36 |
| * Expenses are equal to the Fund's annualized expense ratio of 0.90% for the Institutional Class shares and 1.25% for the Investor Class shares, multiplied by the average account value over the period, multiplied by 184/365 days to reflect the one-half year period. Performance does not include any fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs, if applicable. If such fees or expenses were included, returns would be lower. |
| Empower International Growth Fund | Beginning
Account Value |
Ending
Account Value |
Expenses
Paid During Period* | ||
| (07/01/23) | (12/31/23) | (07/01/23 – 12/31/23) | |||
| Institutional Class | |||||
| Actual | $1,000.00 | $1,026.60 | $4.34 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,020.92 | $4.33 | ||
| Investor Class | |||||
| Actual | $1,000.00 | $1,024.10 | $6.12 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,019.16 | $6.11 |
| * Expenses are equal to the Fund's annualized expense ratio of 0.85% for the Institutional Class shares and 1.20% for the Investor Class shares, multiplied by the average account value over the period, multiplied by 184/365 days to reflect the one-half year period. Performance does not include any fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs, if applicable. If such fees or expenses were included, returns would be lower. |
| Empower International Index Fund | Beginning
Account Value |
Ending
Account Value |
Expenses
Paid During Period* | ||
| (07/01/23) | (12/31/23) | (07/01/23 – 12/31/23) | |||
| Institutional Class | |||||
| Actual | $1,000.00 | $1,053.90 | $1.35 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,023.90 | $1.33 | ||
| Investor Class | |||||
| Actual | $1,000.00 | $1,052.40 | $3.21 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,022.10 | $3.16 |
| * Expenses are equal to the Fund's annualized expense ratio of 0.26% for the Institutional Class shares and 0.62% for the Investor Class shares, multiplied by the average account value over the period, multiplied by 184/365 days to reflect the one-half year period. Performance does not include any fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs, if applicable. If such fees or expenses were included, returns would be lower. |
| Empower International Value Fund | Beginning
Account Value |
Ending
Account Value |
Expenses
Paid During Period* | ||
| (07/01/23) | (12/31/23) | (07/01/23 – 12/31/23) | |||
| Institutional Class | |||||
| Actual | $1,000.00 | $1,063.70 | $3.69 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,021.60 | $3.62 | ||
| Investor Class | |||||
| Actual | $1,000.00 | $1,061.30 | $5.56 | ||
| Hypothetical
(5% return before expenses) |
$1,000.00 | $1,019.80 | $5.45 |
| * Expenses are equal to the Fund's annualized expense ratio of 0.71% for the Institutional Class shares and 1.07% for the Investor Class shares, multiplied by the average account value over the period, multiplied by 184/365 days to reflect the one-half year period. Performance does not include any fees or expenses of variable insurance contracts, IRAs, qualified retirement plans or college savings programs, if applicable. If such fees or expenses were included, returns would be lower. |
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
| (a) | All or a portion of the security is on loan at December 31, 2023. |
| (b) | Non-income producing security. |
| (c) | Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. |
| (d) | Collateral received for securities on loan. |
| ADR | American Depositary Receipt |
| ETF | Exchange Traded Fund |
| GDR | Global Depositary Receipt |
| NVDR | Non-Voting Depository Receipt |
| REIT | Real Estate Investment Trust |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Schedule of Investments
As of December 31, 2023
Summary
of Investments by Country as of December 31, 2023.
| Country | Fair Value | Percentage
of Fund Investments | |
| China | $221,431,733 | 25.53% | |
| India | 143,779,973 | 16.58 | |
| Taiwan | 138,745,574 | 16.00 | |
| South Korea | 113,007,797 | 13.03 | |
| Brazil | 39,702,995 | 4.58 | |
| Saudi Arabia | 27,154,829 | 3.13 | |
| Mexico | 26,978,446 | 3.11 | |
| Indonesia | 25,352,370 | 2.92 | |
| United States | 23,160,106 | 2.67 | |
| South Africa | 15,201,932 | 1.75 | |
| Thailand | 14,888,611 | 1.72 | |
| Greece | 10,514,031 | 1.21 | |
| Philippines | 9,720,220 | 1.12 | |
| Poland | 9,206,068 | 1.06 | |
| United Arab Emirates | 8,491,202 | 0.98 | |
| Ireland | 7,623,921 | 0.88 | |
| Turkey | 5,185,656 | 0.60 | |
| Malaysia | 5,126,898 | 0.59 | |
| Uruguay | 4,095,433 | 0.47 | |
| Hong Kong | 3,889,457 | 0.45 | |
| Slovenia | 2,446,978 | 0.28 | |
| Hungary | 2,206,589 | 0.25 | |
| Chile | 1,974,517 | 0.23 | |
| Peru | 1,613,547 | 0.18 | |
| Colombia | 1,100,735 | 0.13 | |
| Qatar | 1,010,090 | 0.12 | |
| Luxembourg | 861,491 | 0.10 | |
| Netherlands | 856,185 | 0.10 | |
| Singapore | 797,735 | 0.09 | |
| Egypt | 699,682 | 0.08 | |
| Kuwait | 503,152 | 0.06 | |
| Total | $867,327,953 | 100.00% |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL GROWTH FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL GROWTH FUND
Schedule of Investments
As of December 31, 2023
| (a) | Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. |
| (b) | Non-income producing security. |
| (c) | All or a portion of the security is on loan at December 31, 2023. |
| (d) | Collateral received for securities on loan. |
| ADR | American Depositary Receipt |
| REIT | Real Estate Investment Trust |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL GROWTH FUND
Schedule of Investments
As of December 31, 2023
Summary
of Investments by Country as of December 31, 2023.
| Country | Fair Value | Percentage
of Fund Investments | |
| Japan | $ 76,115,708 | 15.54% | |
| Switzerland | 58,696,012 | 11.98 | |
| United Kingdom | 58,251,001 | 11.89 | |
| France | 46,445,655 | 9.48 | |
| Germany | 44,898,376 | 9.16 | |
| Denmark | 30,757,725 | 6.28 | |
| Netherlands | 28,377,467 | 5.79 | |
| Australia | 23,059,851 | 4.71 | |
| United States | 18,993,789 | 3.88 | |
| Israel | 17,307,060 | 3.53 | |
| Ireland | 16,128,884 | 3.29 | |
| Canada | 13,091,229 | 2.67 | |
| Sweden | 12,679,989 | 2.59 | |
| Spain | 12,467,392 | 2.55 | |
| Uruguay | 6,283,017 | 1.28 | |
| China | 5,810,563 | 1.19 | |
| Taiwan | 4,636,216 | 0.95 | |
| Singapore | 4,577,279 | 0.93 | |
| India | 3,110,884 | 0.64 | |
| Indonesia | 2,854,465 | 0.58 | |
| Belgium | 2,612,388 | 0.53 | |
| South Korea | 1,518,999 | 0.31 | |
| Italy | 1,237,326 | 0.25 | |
| Total | $489,911,275 | 100.00% |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
| (a) | Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. |
| (b) | Non-income producing security. |
| (c) | All or a portion of the security is on loan at December 31, 2023. |
| (d) | Security is fair valued using significant unobservable inputs. |
| (e) | Represents less than 0.005% of net assets. |
| (f) | Zero coupon bond; the interest rate shown is the effective yield on date of purchase. |
| (g) | Collateral received for securities on loan. |
| ADR | American Depositary Receipt |
| REIT | Real Estate Investment Trust |
| At December 31, 2023 the Fund held the following outstanding exchange traded futures contracts: | |||||
| Description | Number
of Contracts |
Notional
Amount (000) |
Expiration
Date |
Fair
Value and Net Unrealized Appreciation | |
| Long | |||||
| MSCI EAFE Index Futures | 463 | USD | 52,143 | Mar 2024 | $1,727,921 |
| Net Appreciation | $1,727,921 | ||||
| At December 31, 2023 the Fund held the following over-the-counter (OTC) forward foreign currency contracts: | ||||||
| Counterparty | Currency
Purchased |
Quantity
of Currency Purchased |
Currency
Sold |
Quantity
of Currency Sold |
Settlement Date | Net
Unrealized Appreciation/ (Depreciation) |
| CGM | USD | 57,717 | AUD | 84,220 | 02/13/2024 | $240 |
| CGM | USD | 15,887 | AUD | 23,176 | 02/23/2024 | 66 |
| CGM | USD | 54,122 | AUD | 78,939 | 02/29/2024 | 226 |
| CGM | USD | 20,638 | AUD | 30,089 | 03/14/2024 | 86 |
| CGM | USD | 15,665 | EUR | 14,099 | 01/02/2024 | 98 |
| CGM | USD | 121,158 | EUR | 110,972 | 02/02/2024 | (1,531) |
| CGM | USD | 8,823 | GBP | 7,063 | 01/02/2024 | (180) |
| CGM | USD | 16,943 | GBP | 13,370 | 01/10/2024 | (101) |
| CGM | USD | 172,178 | GBP | 138,047 | 01/11/2024 | (3,800) |
| CGM | USD | 56,845 | GBP | 45,066 | 01/12/2024 | (604) |
| CGM | USD | 9,502 | GBP | 7,588 | 01/26/2024 | (172) |
| CGM | USD | 182,166 | GBP | 143,766 | 02/01/2024 | (1,128) |
| CGM | USD | 25,254 | GBP | 19,797 | 02/02/2024 | 14 |
| CGM | USD | 5,289 | GBP | 4,173 | 02/06/2024 | (32) |
| CGM | USD | 7,202 | JPY | 1,054,699 | 02/15/2024 | (333) |
| CGM | USD | 5,274 | JPY | 742,900 | 03/06/2024 | (51) |
| CGM | USD | 8,286 | JPY | 1,166,965 | 03/08/2024 | (80) |
| CGM | USD | 4,245 | JPY | 597,550 | 03/11/2024 | (41) |
| CGM | USD | 11,246 | JPY | 1,582,530 | 03/13/2024 | (109) |
| CGM | USD | 19,032 | JPY | 2,677,330 | 03/15/2024 | (185) |
| CGM | USD | 21,124 | JPY | 2,967,137 | 03/25/2024 | (207) |
| CGM | USD | 128,957 | JPY | 18,107,975 | 03/27/2024 | (1,269) |
| CGM | USD | 225,020 | JPY | 31,592,205 | 03/28/2024 | (2,216) |
| MEL | USD | 3,095,628 | CHF | 2,789,000 | 01/11/2024 | (225,174) |
| MEL | USD | 1,449,381 | EUR | 1,371,000 | 01/11/2024 | (64,980) |
| MEL | USD | 19,332 | GBP | 15,425 | 01/03/2024 | (330) |
| Net Depreciation | $(301,793) | |||||
| Counterparty Abbreviations | ||
| CGM | Citigroup Global Markets | |
| MEL | Mellon Capital | |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
Schedule of Investments
As of December 31, 2023
| Currency Abbreviations | ||
| AUD | Australian Dollar | |
| CHF | Swiss Franc | |
| EUR | Euro Dollar | |
| GBP | British Pound | |
| JPY | Japanese Yen | |
| USD | U.S. Dollar | |
Summary of Investments by
Country as of December 31, 2023.
| Country | Fair Value | Percentage
of Fund Investments | |
| Japan | $ 388,856,836 | 21.49% | |
| United Kingdom | 235,725,341 | 13.03 | |
| France | 206,328,560 | 11.40 | |
| Switzerland | 183,307,366 | 10.13 | |
| Germany | 148,032,573 | 8.18 | |
| Australia | 129,260,552 | 7.14 | |
| Netherlands | 85,504,224 | 4.72 | |
| United States | 71,912,138 | 3.97 | |
| Denmark | 58,206,910 | 3.22 | |
| Sweden | 55,830,017 | 3.08 | |
| Spain | 47,164,438 | 2.61 | |
| Hong Kong | 40,490,770 | 2.24 | |
| Italy | 39,463,971 | 2.18 | |
| Singapore | 24,009,512 | 1.33 | |
| Ireland | 22,711,204 | 1.25 | |
| Finland | 18,812,084 | 1.04 | |
| Belgium | 14,129,303 | 0.78 | |
| Israel | 11,985,330 | 0.66 | |
| Norway | 11,732,430 | 0.65 | |
| New Zealand | 4,311,024 | 0.24 | |
| Luxembourg | 3,413,393 | 0.19 | |
| Austria | 3,259,835 | 0.18 | |
| Portugal | 3,258,290 | 0.18 | |
| Chile | 884,778 | 0.05 | |
| Macau | 745,791 | 0.04 | |
| Jordan | 414,267 | 0.02 | |
| United Arab Emirates | 458 | 0.00 | |
| Total | $1,809,751,395 | 100.00% |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
Schedule of Investments
As of December 31, 2023
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
Schedule of Investments
As of December 31, 2023
| (a) | Non-income producing security. |
| (b) | All or a portion of the security is on loan at December 31, 2023. |
| (c) | Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. |
| (d) | Collateral received for securities on loan. |
| ADR | American Depositary Receipt |
| REIT | Real Estate Investment Trust |
Summary of
Investments by Country as of December 31, 2023.
| Country | Fair Value | Percentage
of Fund Investments | |
| Japan | $ 233,726,446 | 18.38% | |
| France | 174,413,874 | 13.72 | |
| United Kingdom | 153,821,196 | 12.10 | |
| Switzerland | 124,772,350 | 9.81 | |
| Germany | 108,694,942 | 8.55 | |
| United States | 82,559,032 | 6.49 | |
| Australia | 53,521,839 | 4.21 | |
| Netherlands | 48,637,770 | 3.83 | |
| Ireland | 46,923,768 | 3.69 | |
| Spain | 38,149,735 | 3.00 | |
| Sweden | 30,375,925 | 2.39 | |
| Canada | 26,085,292 | 2.05 | |
| Denmark | 23,860,939 | 1.88 | |
| South Korea | 16,692,607 | 1.31 | |
| Italy | 16,555,706 | 1.30 | |
| Hong Kong | 13,087,329 | 1.03 | |
| Taiwan | 13,048,152 | 1.03 | |
| Norway | 12,891,922 | 1.01 | |
| Finland | 12,847,319 | 1.01 | |
| Singapore | 8,619,296 | 0.68 | |
| Austria | 7,838,868 | 0.62 | |
| Portugal | 5,686,851 | 0.45 | |
| Israel | 5,074,174 | 0.40 | |
| Brazil | 4,358,712 | 0.34 | |
| Belgium | 4,254,871 | 0.33 | |
| Bermuda | 3,021,250 | 0.24 | |
| Malta | 1,889,665 | 0.15 | |
| Total | $1,271,409,830 | 100.00% |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Assets and Liabilities
As of December 31, 2023
| Empower
Emerging Markets Equity Fund |
Empower
International Growth Fund |
Empower
International Index Fund | |||
| ASSETS: | |||||
| Investments in securities, fair value(a)(b) | $860,968,448 | $476,117,075 | $1,762,456,062 | ||
| Repurchase agreements, fair value(c) | 6,359,505 | 13,794,200 | 47,295,333 | ||
| Cash | 7,328,018 | 3,798,391 | 16,176,472 | ||
| Cash denominated in foreign currencies, fair value(d) | 1,667,683 | 89,686 | 3,719,525 | ||
| Cash pledged on futures contracts | - | - | 2,581,639 | ||
| Dividends receivable | 2,192,993 | 1,657,345 | 6,330,466 | ||
| Subscriptions receivable | 367,933 | 42,408 | 1,552,189 | ||
| Receivable for investments sold | 3,973 | - | - | ||
| Variation margin on futures contracts | - | - | 27,780 | ||
| Unrealized appreciation on forward foreign currency contracts | - | - | 730 | ||
| Total Assets | 878,888,553 | 495,499,105 | 1,840,140,196 | ||
| LIABILITIES: | |||||
| Payable for director fees | 7,018 | 7,018 | 7,018 | ||
| Payable for investments purchased | 2,063,152 | - | - | ||
| Payable for other accrued fees | 204,739 | 86,866 | 174,925 | ||
| Payable for shareholder services fees | 126,724 | 5,973 | 323,123 | ||
| Payable to investment adviser | 754,011 | 321,250 | 338,445 | ||
| Payable upon return of securities loaned | 6,359,505 | 13,794,200 | 47,295,333 | ||
| Redemptions payable | 1,668,042 | 726,957 | 2,394,940 | ||
| Unrealized depreciation on forward foreign currency contracts | - | - | 302,523 | ||
| Total Liabilities | 11,183,191 | 14,942,264 | 50,836,307 | ||
| NET ASSETS | $867,705,362 | $480,556,841 | $1,789,303,889 | ||
| NET ASSETS REPRESENTED BY: | |||||
| Capital stock, $0.10 par value | $10,289,418 | $5,173,885 | $15,556,642 | ||
| Paid-in capital in excess of par | 952,726,682 | 414,963,129 | 1,575,341,496 | ||
| Undistributed/accumulated earnings (deficit) | (95,310,738) | 60,419,827 | 198,405,751 | ||
| NET ASSETS | $867,705,362 | $480,556,841 | $1,789,303,889 | ||
| NET ASSETS BY CLASS | |||||
| Investor Class | $441,799,873 | $20,290,137 | $1,124,570,056 | ||
| Institutional Class | $425,905,489 | $460,266,704 | $664,733,833 | ||
| CAPITAL STOCK: | |||||
| Authorized | |||||
| Investor Class | 235,000,000 | 20,000 | 385,000,000 | ||
| Institutional Class | 230,000,000 | 250,000 | 350,000,000 | ||
| Issued and Outstanding | |||||
| Investor Class | 52,848,531 | 1,591,132 | 91,065,857 | ||
| Institutional Class | 50,045,650 | 50,147,715 | 64,500,563 | ||
| NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE: | |||||
| Investor Class | $8.36 | $12.75 | $12.35 | ||
| Institutional Class | $8.51 | $9.18 | $10.31 | ||
| (a) Cost of investments | $816,712,612 | $409,735,294 | $1,551,322,997 | ||
| (b) Including fair value of securities on loan | $5,950,802 | $12,909,808 | $44,113,026 | ||
| (c) Cost of repurchase agreements | $6,359,505 | $13,794,200 | $47,295,333 | ||
| (d) Cost of cash denominated in foreign currencies | $1,668,612 | $85,826 | $3,347,779 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Assets and Liabilities
As of December 31, 2023
| Empower
International Value Fund | |
| ASSETS: | |
| Investments in securities, fair value(a)(b) | $1,234,504,880 |
| Repurchase agreements, fair value(c) | 36,904,950 |
| Cash | 18,863,530 |
| Cash denominated in foreign currencies, fair value(d) | 1,308,137 |
| Dividends receivable | 6,472,996 |
| Subscriptions receivable | 500,369 |
| Receivable for investments sold | 111,108 |
| Total Assets | 1,298,665,970 |
| LIABILITIES: | |
| Payable for director fees | 7,018 |
| Payable for investments purchased | 248,277 |
| Payable for other accrued fees | 160,803 |
| Payable for shareholder services fees | 85,625 |
| Payable to investment adviser | 735,925 |
| Payable upon return of securities loaned | 36,904,950 |
| Redemptions payable | 3,001,333 |
| Total Liabilities | 41,143,931 |
| NET ASSETS | $1,257,522,039 |
| NET ASSETS REPRESENTED BY: | |
| Capital stock, $0.10 par value | $14,038,031 |
| Paid-in capital in excess of par | 1,133,349,009 |
| Undistributed/accumulated earnings | 110,134,999 |
| NET ASSETS | $1,257,522,039 |
| NET ASSETS BY CLASS | |
| Investor Class | $293,534,462 |
| Institutional Class | $963,987,577 |
| CAPITAL STOCK: | |
| Authorized | |
| Investor Class | 350,000,000 |
| Institutional Class | 560,000,000 |
| Issued and Outstanding | |
| Investor Class | 24,393,795 |
| Institutional Class | 115,986,510 |
| NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE: | |
| Investor Class | $12.03 |
| Institutional Class | $8.31 |
| (a) Cost of investments | $1,114,098,099 |
| (b) Including fair value of securities on loan | $33,010,996 |
| (c) Cost of repurchase agreements | $36,904,950 |
| (d) Cost of cash denominated in foreign currencies | $1,250,723 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Operations
For the fiscal year ended December 31, 2023
| Empower
Emerging Markets Equity Fund |
Empower
International Growth Fund |
Empower
International Index Fund | |||
| INVESTMENT INCOME: | |||||
| Interest | $- | $121,095 | $899,742 | ||
| Income from securities lending | 36,859 | 18,969 | 310,475 | ||
| Dividends | 17,270,449 | 7,050,875 | 50,608,515 | ||
| Foreign withholding tax | (2,302,190) | (611,419) | (4,971,024) | ||
| Total Income | 15,005,118 | 6,579,520 | 46,847,708 | ||
| EXPENSES: | |||||
| Management fees | 5,935,734 | 3,605,756 | 3,671,480 | ||
| Shareholder services fees – Investor Class | 986,285 | 75,458 | 3,280,228 | ||
| Audit and tax fees | 89,460 | 57,830 | 51,647 | ||
| Custodian fees | 486,281 | 116,395 | 260,372 | ||
| Directors fees | 31,396 | 31,396 | 31,396 | ||
| Legal fees | 9,915 | 9,914 | 9,914 | ||
| Pricing fees | 25,286 | 2,700 | 34,470 | ||
| Registration fees | 37,059 | 28,424 | 87,093 | ||
| Shareholder report fees | 30,077 | 426 | 51,835 | ||
| Transfer agent fees | 8,796 | 9,061 | 10,334 | ||
| Other fees | 17,701 | 17,222 | 19,427 | ||
| Total Expenses | 7,657,990 | 3,954,582 | 7,508,196 | ||
| Less amount waived by investment adviser | 927,371 | 141,113 | - | ||
| Net Expenses | 6,730,619 | 3,813,469 | 7,508,196 | ||
| NET INVESTMENT INCOME | 8,274,499 | 2,766,051 | 39,339,512 | ||
| NET REALIZED AND UNREALIZED GAIN (LOSS): | |||||
| Net realized gain (loss) on investments and foreign currency transactions | (57,030,658) | 4,278,516 | 34,341,152 | ||
| Net realized gain on futures contracts | - | - | 4,758,083 | ||
| Net realized gain (loss) on forward foreign currency contracts | (23,082) | - | 83,604 | ||
| Net Realized Gain (Loss) | (57,053,740) | 4,278,516 | 39,182,839 | ||
| Net change in unrealized appreciation on investments and foreign currency translations | 120,560,541 | 65,546,303 | 193,589,060 | ||
| Net change in unrealized appreciation on futures contracts | - | - | 1,961,464 | ||
| Net change in unrealized depreciation on forward foreign currency contracts | - | - | (27,318) | ||
| Net Change in Unrealized Appreciation | 120,560,541 | 65,546,303 | 195,523,206 | ||
| Net Realized and Unrealized Gain | 63,506,801 | 69,824,819 | 234,706,045 | ||
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $71,781,300 | $72,590,870 | $274,045,557 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Operations
For the fiscal year ended December 31, 2023
| Empower
International Value Fund | |
| INVESTMENT INCOME: | |
| Interest | $509,292 |
| Income from securities lending | 385,651 |
| Dividends | 50,794,698 |
| Foreign withholding tax | (5,723,034) |
| Total Income | 45,966,607 |
| EXPENSES: | |
| Management fees | 9,281,434 |
| Shareholder services fees – Investor Class | 1,787,156 |
| Audit and tax fees | 60,079 |
| Custodian fees | 300,322 |
| Directors fees | 31,396 |
| Legal fees | 9,915 |
| Pricing fees | 13,277 |
| Registration fees | 64,962 |
| Shareholder report fees | 52,681 |
| Transfer agent fees | 15,664 |
| Other fees | 19,085 |
| Total Expenses | 11,635,971 |
| NET INVESTMENT INCOME | 34,330,636 |
| NET REALIZED AND UNREALIZED GAIN (LOSS): | |
| Net realized gain on investments and foreign currency transactions | 22,958,849 |
| Net Realized Gain | 22,958,849 |
| Net change in unrealized appreciation on investments and foreign currency translations | 165,661,063 |
| Net Change in Unrealized Appreciation | 165,661,063 |
| Net Realized and Unrealized Gain | 188,619,912 |
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $222,950,548 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Changes in Net Assets
For the fiscal years ended December 31, 2023 and December 31, 2022
| Empower Emerging Markets Equity Fund | 2023 | 2022 | |
| OPERATIONS: | |||
| Net investment income | $8,274,499 | $14,311,731 | |
| Net realized loss | (57,053,740) | (70,033,894) | |
| Net change in unrealized appreciation (depreciation) | 120,560,541 | (96,639,202) | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 71,781,300 | (152,361,365) | |
| DISTRIBUTIONS TO SHAREHOLDERS: | |||
| From net investment income and net realized gains | |||
| Investor Class | (6,545,764) | (5,272,152) | |
| Institutional Class | (6,514,135) | (5,581,629) | |
| From Net Investment Income and Net Realized Gains | (13,059,899) | (10,853,781) | |
| CAPITAL SHARE TRANSACTIONS: | |||
| Shares sold | |||
| Investor Class | 319,990,833 | 231,759,005 | |
| Institutional Class | 126,003,934 | 84,759,543 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 6,545,764 | 5,272,152 | |
| Institutional Class | 6,514,135 | 5,581,629 | |
| Shares redeemed | |||
| Investor Class | (238,492,245) | (95,675,102) | |
| Institutional Class | (70,437,383) | (77,900,595) | |
| Net Increase in Net Assets Resulting from Capital Share Transactions | 150,125,038 | 153,796,632 | |
| Total Increase (Decrease) in Net Assets | 208,846,439 | (9,418,514) | |
| NET ASSETS: | |||
| Beginning of year | 658,858,923 | 668,277,437 | |
| End of year | $867,705,362 | $658,858,923 | |
| CAPITAL SHARE TRANSACTIONS - SHARES: | |||
| Shares sold | |||
| Investor Class | 39,994,070 | 28,065,311 | |
| Institutional Class | 15,438,927 | 9,948,822 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 798,525 | 678,003 | |
| Institutional Class | 781,340 | 709,583 | |
| Shares redeemed | |||
| Investor Class | (29,871,761) | (11,650,053) | |
| Institutional Class | (8,487,019) | (8,835,580) | |
| Net Increase | 18,654,082 | 18,916,086 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Changes in Net Assets
For the fiscal years ended December 31, 2023 and December 31, 2022
| Empower International Growth Fund | 2023 | 2022 | |
| OPERATIONS: | |||
| Net investment income | $2,766,051 | $1,379,693 | |
| Net realized gain (loss) | 4,278,516 | (9,051,497) | |
| Net change in unrealized appreciation (depreciation) | 65,546,303 | (155,857,263) | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 72,590,870 | (163,529,067) | |
| DISTRIBUTIONS TO SHAREHOLDERS: | |||
| From net investment income and net realized gains | |||
| Investor Class | - | (266,437) | |
| Institutional Class | (3,471,235) | (7,129,784) | |
| From Net Investment Income and Net Realized Gains | (3,471,235) | (7,396,221) | |
| CAPITAL SHARE TRANSACTIONS: | |||
| Shares sold | |||
| Investor Class | 9,878,717 | 9,503,751 | |
| Institutional Class | 101,440,091 | 140,670,108 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | - | 266,437 | |
| Institutional Class | 3,471,235 | 7,129,784 | |
| Shares redeemed | |||
| Investor Class | (13,483,048) | (11,327,710) | |
| Institutional Class | (111,631,791) | (73,168,787) | |
| Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions | (10,324,796) | 73,073,583 | |
| Total Increase (Decrease) in Net Assets | 58,794,839 | (97,851,705) | |
| NET ASSETS: | |||
| Beginning of year | 421,762,002 | 519,613,707 | |
| End of year | $480,556,841 | $421,762,002 | |
| CAPITAL SHARE TRANSACTIONS - SHARES: | |||
| Shares sold | |||
| Investor Class | 818,748 | 832,112 | |
| Institutional Class | 12,017,372 | 16,308,712 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | - | 25,570 | |
| Institutional Class | 377,308 | 948,109 | |
| Shares redeemed | |||
| Investor Class | (1,128,921) | (928,515) | |
| Institutional Class | (12,955,855) | (8,907,420) | |
| Net Increase (Decrease) | (871,348) | 8,278,568 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Changes in Net Assets
For the fiscal years ended December 31, 2023 and December 31, 2022
| Empower International Index Fund | 2023 | 2022 | |
| OPERATIONS: | |||
| Net investment income | $39,339,512 | $33,615,239 | |
| Net realized gain | 39,182,839 | 3,930,321 | |
| Net change in unrealized appreciation (depreciation) | 195,523,206 | (241,607,411) | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 274,045,557 | (204,061,851) | |
| DISTRIBUTIONS TO SHAREHOLDERS: | |||
| From net investment income and net realized gains | |||
| Investor Class | (46,911,906) | (14,925,612) | |
| Institutional Class | (35,425,781) | (15,819,143) | |
| From Net Investment Income and Net Realized Gains | (82,337,687) | (30,744,755) | |
| CAPITAL SHARE TRANSACTIONS: | |||
| Shares sold | |||
| Investor Class | 595,360,594 | 546,458,905 | |
| Institutional Class | 91,988,206 | 122,967,658 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 46,911,906 | 14,925,612 | |
| Institutional Class | 35,425,781 | 15,819,143 | |
| Shares redeemed | |||
| Investor Class | (472,181,095) | (233,488,499) | |
| Institutional Class | (168,475,314) | (144,705,376) | |
| Net Increase in Net Assets Resulting from Capital Share Transactions | 129,030,078 | 321,977,443 | |
| Total Increase in Net Assets | 320,737,948 | 87,170,837 | |
| NET ASSETS: | |||
| Beginning of year | 1,468,565,941 | 1,381,395,104 | |
| End of year | $1,789,303,889 | $1,468,565,941 | |
| CAPITAL SHARE TRANSACTIONS - SHARES: | |||
| Shares sold | |||
| Investor Class | 50,476,990 | 48,507,315 | |
| Institutional Class | 9,132,761 | 12,981,207 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 3,796,085 | 1,374,005 | |
| Institutional Class | 3,435,083 | 1,731,593 | |
| Shares redeemed | |||
| Investor Class | (39,365,918) | (20,872,432) | |
| Institutional Class | (16,745,845) | (15,102,645) | |
| Net Increase | 10,729,156 | 28,619,043 |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
Statement of Changes in Net Assets
For the fiscal years ended December 31, 2023 and December 31, 2022
| Empower International Value Fund | 2023 | 2022 | |
| OPERATIONS: | |||
| Net investment income | $34,330,636 | $25,566,991 | |
| Net realized gain | 22,958,849 | 37,453,837 | |
| Net change in unrealized appreciation (depreciation) | 165,661,063 | (241,110,888) | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 222,950,548 | (178,090,060) | |
| DISTRIBUTIONS TO SHAREHOLDERS: | |||
| From net investment income and net realized gains | |||
| Investor Class | (11,526,819) | (16,314,868) | |
| Institutional Class | (60,824,301) | (35,292,444) | |
| From Net Investment Income and Net Realized Gains | (72,351,120) | (51,607,312) | |
| CAPITAL SHARE TRANSACTIONS: | |||
| Shares sold | |||
| Investor Class | 167,857,849 | 438,145,993 | |
| Class L(a) | - | 13,619 | |
| Institutional Class | 209,330,770 | 148,049,727 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 11,526,819 | 16,314,868 | |
| Institutional Class | 60,824,301 | 35,292,444 | |
| Shares redeemed | |||
| Investor Class | (522,867,132) | (78,318,980) | |
| Class L(a) | - | (149,593) | |
| Institutional Class | (235,471,334) | (176,289,230) | |
| Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions | (308,798,727) | 383,058,848 | |
| Total Increase (Decrease) in Net Assets | (158,199,299) | 153,361,476 | |
| NET ASSETS: | |||
| Beginning of year | 1,415,721,338 | 1,262,359,862 | |
| End of year | $1,257,522,039 | $1,415,721,338 | |
| CAPITAL SHARE TRANSACTIONS - SHARES: | |||
| Shares sold | |||
| Investor Class | 14,672,132 | 41,356,733 | |
| Class L(a) | - | 1,168 | |
| Institutional Class | 25,816,618 | 19,001,412 | |
| Shares issued in reinvestment of distributions | |||
| Investor Class | 969,088 | 1,563,041 | |
| Institutional Class | 7,305,376 | 4,751,513 | |
| Shares redeemed | |||
| Investor Class | (46,306,033) | (7,224,556) | |
| Class L(a) | - | (13,166) | |
| Institutional Class | (28,729,562) | (22,560,307) | |
| Net Increase (Decrease) | (26,272,381) | 36,875,838 |
| (a) | Class L ceased operations on April 22, 2022. |
See Notes to Financial Statements.
Annual Report - December 31, 2023
EMPOWER FUNDS, INC.
EMPOWER EMERGING MARKETS EQUITY FUND
Financial Highlights
Selected data for a share of capital stock of the Fund throughout the periods
indicated.
| Income (Loss) from Investment Operations: | Less Distributions: | ||||||||||
| Net
asset value, beginning of year |
Net
investment income(a) |
Net
realized and unrealized gain (loss) |
Total
from investment operations |
From
return of capital |
From
net investment income |
From
net realized gains |
Total
Distributions |
Net
asset value, end of year |
Total
Return(b)(c) | ||
| Investor Class | |||||||||||
| 12/31/2023 | $ 7.78 | 0.08 | 0.67 | 0.75 | — | (0.17) | — | (0.17) | $ 8.36 | 9.67% | |
| 12/31/2022 | $10.18 | 0.17 | (2.44) | (2.27) | — | (0.11) | (0.02) | (0.13) | $ 7.78 | (22.34%) | |
| 12/31/2021 | $11.02 | 0.09 | (0.58) | (0.49) | — | (0.14) | (0.21) | (0.35) | $10.18 | (4.43%) | |
| 12/31/2020 | $ 9.39 | 0.16 | 1.67 | 1.83 | (0.01) | (0.19) | — | (0.20) | $11.02 | 19.57% | |
| 12/31/2019 | $ 7.79 | 0.10 | 1.59 | 1.69 | (0.01) | (0.08) | — | (0.09) | $ 9.39 | 21.67% | |
| Institutional Class | |||||||||||
| 12/31/2023 | $ 7.86 | 0.13 | 0.66 | 0.79 | — | (0.14) | — | (0.14) | $ 8.51 | 10.12% | |
| 12/31/2022 | $10.26 | 0.21 | (2.47) | (2.26) | — | (0.12) | (0.02) | (0.14) | $ 7.86 | (22.09%) | |
| 12/31/2021 | $11.03 | 0.15 | (0.60) | (0.45) | — | (0.11) | (0.21) | (0.32) | $10.26 | (4.08%) | |
| 12/31/2020 | $ 9.35 | 0.13 | 1.74 | 1.87 | (0.01) | (0.18) | — | (0.19) | $11.03 | 20.05% | |
| 12/31/2019 | $ 7.78 | 0.14 | 1.57 | 1.71 | (0.01) | (0.13) | — | (0.14) | $ 9.35 | 21.97% | |
| Net
assets, end of year (000) |
Ratio
of expenses to average net assets (before reimbursement and/or waiver, if applicable) |
Ratio
of expenses to average net assets (after reimbursement and/or waiver, if applicable) |
Ratio
of net investment income to average net assets (after reimbursement and/or waiver, if applicable) |
Portfolio
turnover rate(d) | ||
| Investor Class | ||||||
| 12/31/2023 | $441,800 | 1.40% | 1.25% | 0.97% | 93% | |
| 12/31/2022 | $326,138 | 1.41% | 1.23% | 2.04% | 53% | |
| 12/31/2021 | $252,800 | 1.41% | 1.23% | 0.83% | 84% | |
| 12/31/2020 | $ 51,824 | 1.49% | 1.23% | 1.59% | 78% | |
| 12/31/2019 | $ 10,129 | 1.50% | 1.23% | 1.21% | 66% | |
| Institutional Class | ||||||
| 12/31/2023 | $425,905 | 1.04% | 0.90% | 1.55% | 93% | |
| 12/31/2022 | $332,721 | 1.05% | 0.88% | 2.40% | 53% | |
| 12/31/2021 | $415,478 | 1.02% | 0.88% | 1.35% | 84% | |
| 12/31/2020 | $382,081 | 1.03% | 0.88% | 1.39% | 78% | |
| 12/31/2019 | $355,796 | 1.01% | 0.88% | 1.63% | 66% | |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not include any fees or expenses of variable insurance contracts, if applicable. If such fees or expenses were included, the return shown would have been lower. |
| (c) | Total return shown net of expenses reimbursed and/or waived, if applicable. Without the expense reimbursement and/or waiver, the return shown would have been lower. |
| (d) | Portfolio turnover is calculated at the Fund level. |
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL GROWTH FUND
EMPOWER INTERNATIONAL GROWTH FUND
Financial Highlights
Selected data for a share of capital stock of the Fund throughout the periods
indicated.
| Income (Loss) from Investment Operations: | Less Distributions: | ||||||||||
| Net
asset value, beginning of year |
Net
investment income (loss)(a) |
Net
realized and unrealized gain (loss) |
Total
from investment operations |
From
return of capital |
From
net investment income |
From
net realized gains |
Total
Distributions |
Net
asset value, end of year |
Total
Return(b)(c) | ||
| Investor Class | |||||||||||
| 12/31/2023 | $10.94 | 0.04 | 1.77 | 1.81 | — | — | — | — | $12.75 | 16.54% | |
| 12/31/2022 | $15.92 | (0.00) (d)(e) | (4.84) | (4.84) | — | — | (0.14) | (0.14) | $10.94 | (30.35%) | |
| 12/31/2021 | $16.07 | (0.04) (e) | 1.02 | 0.98 | — | (0.02) | (1.11) | (1.13) | $15.92 | 6.04% | |
| 12/31/2020 | $12.63 | (0.02) (e) | 3.60 | 3.58 | — | — | (0.14) | (0.14) | $16.07 | 28.35% | |
| 12/31/2019 | $ 9.44 | 0.04 | 3.17 | 3.21 | (0.00) (d) | (0.01) | (0.01) | (0.02) | $12.63 | 34.07% | |
| Institutional Class | |||||||||||
| 12/31/2023 | $ 7.91 | 0.06 | 1.28 | 1.34 | — | (0.07) | — | (0.07) | $ 9.18 | 16.93% | |
| 12/31/2022 | $11.53 | 0.03 | (3.51) | (3.48) | — | — | (0.14) | (0.14) | $ 7.91 | (30.11%) | |
| 12/31/2021 | $11.93 | 0.01 | 0.77 | 0.78 | — | (0.07) | (1.11) | (1.18) | $11.53 | 6.45% | |
| 12/31/2020 | $ 9.38 | 0.02 | 2.69 | 2.71 | — | (0.02) | (0.14) | (0.16) | $11.93 | 28.88% | |
| 12/31/2019 | $ 7.03 | 0.06 | 2.37 | 2.43 | (0.00) (d) | (0.07) | (0.01) | (0.08) | $ 9.38 | 34.57% | |
| Net
assets, end of year (000) |
Ratio
of expenses to average net assets (before reimbursement and/or waiver, if applicable) |
Ratio
of expenses to average net assets (after reimbursement and/or waiver, if applicable) |
Ratio
of net investment income (loss) to average net assets (after reimbursement and/or waiver, if applicable) |
Portfolio
turnover rate(f) | ||
| Investor Class | ||||||
| 12/31/2023 | $ 20,290 | 1.36% | 1.20% | 0.30% | 63% | |
| 12/31/2022 | $ 20,804 | 1.36% | 1.20% | (0.04%) | 33% | |
| 12/31/2021 | $ 31,403 | 1.28% | 1.20% | (0.23%) | 34% | |
| 12/31/2020 | $ 42,126 | 1.28% | 1.20% | (0.19%) | 27% | |
| 12/31/2019 | $ 40,066 | 1.28% | 1.20% | 0.34% | 30% | |
| Institutional Class | ||||||
| 12/31/2023 | $460,267 | 0.88% | 0.85% | 0.65% | 63% | |
| 12/31/2022 | $400,958 | 0.88% | 0.85% | 0.33% | 33% | |
| 12/31/2021 | $488,211 | 0.86% | 0.85% | 0.09% | 34% | |
| 12/31/2020 | $437,865 | 0.86% | 0.85% | 0.17% | 27% | |
| 12/31/2019 | $435,749 | 0.85% | 0.85% | 0.71% | 30% | |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not include any fees or expenses of variable insurance contracts, if applicable. If such fees or expenses were included, the return shown would have been lower. |
| (c) | Total return shown net of expenses reimbursed and/or waived, if applicable. Without the expense reimbursement and/or waiver, the return shown would have been lower. |
| (d) | Amount was less than $0.01 per share. |
| (e) | The per share amount does not correspond to activity reflected in the Statement of Operations due to class specific expenses during the period. |
| (f) | Portfolio turnover is calculated at the Fund level. |
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL INDEX FUND
EMPOWER INTERNATIONAL INDEX FUND
Financial Highlights
Selected data for a share of capital stock of the Fund throughout the periods
indicated.
| Income (Loss) from Investment Operations: | Less Distributions: | ||||||||
| Net
asset value, beginning of year |
Net
investment income(a) |
Net
realized and unrealized gain (loss) |
Total
from investment operations |
From
net investment income |
From
net realized gains |
Total
Distributions |
Net
asset value, end of year |
Total
Return(b)(c) | |
| Investor Class | |||||||||
| 12/31/2023 | $10.96 | 0.28 | 1.65 | 1.93 | (0.28) | (0.26) | (0.54) | $12.35 | 17.52% |
| 12/31/2022 | $13.10 | 0.24 | (2.18) | (1.94) | (0.20) | — | (0.20) | $10.96 | (14.74%) |
| 12/31/2021 | $12.50 | 0.20 | 1.15 | 1.35 | (0.29) | (0.46) | (0.75) | $13.10 | 10.75% |
| 12/31/2020 | $11.92 | 0.19 | 0.69 | 0.88 | (0.19) | (0.11) | (0.30) | $12.50 | 7.52% |
| 12/31/2019 | $10.09 | 0.29 | 1.86 | 2.15 | (0.28) | (0.04) | (0.32) | $11.92 | 21.25% |
| Institutional Class | |||||||||
| 12/31/2023 | $ 9.22 | 0.27 | 1.40 | 1.67 | (0.32) | (0.26) | (0.58) | $10.31 | 17.96% |
| 12/31/2022 | $11.06 | 0.25 | (1.86) | (1.61) | (0.23) | — | (0.23) | $ 9.22 | (14.41%) |
| 12/31/2021 | $10.61 | 0.24 | 0.96 | 1.20 | (0.29) | (0.46) | (0.75) | $11.06 | 11.24% |
| 12/31/2020 | $10.16 | 0.21 | 0.57 | 0.78 | (0.22) | (0.11) | (0.33) | $10.61 | 7.84% |
| 12/31/2019 | $ 8.64 | 0.28 | 1.61 | 1.89 | (0.33) | (0.04) | (0.37) | $10.16 | 21.80% |
| Net
assets, end of year (000) |
Ratio
of expenses to average net assets (before reimbursement and/or waiver, if applicable) |
Ratio
of expenses to average net assets (after reimbursement and/or waiver, if applicable) |
Ratio
of net investment income to average net assets (after reimbursement and/or waiver, if applicable) |
Portfolio
turnover rate(d) | ||
| Investor Class | ||||||
| 12/31/2023 | $1,124,570 | 0.62% | 0.62% | 2.35% | 19% | |
| 12/31/2022 | $ 835,079 | 0.65% | 0.65% | 2.19% | 13% | |
| 12/31/2021 | $ 617,570 | 0.65% | 0.65% | 1.49% | 13% | |
| 12/31/2020 | $ 271,563 | 0.65% | 0.65% | 1.76% | 6% | |
| 12/31/2019 | $ 197,206 | 0.64% | 0.64% | 2.57% | 8% | |
| Institutional Class | ||||||
| 12/31/2023 | $ 664,734 | 0.26% | 0.26% | 2.67% | 19% | |
| 12/31/2022 | $ 633,487 | 0.28% | 0.28% | 2.61% | 13% | |
| 12/31/2021 | $ 763,825 | 0.28% | 0.28% | 2.10% | 13% | |
| 12/31/2020 | $ 739,271 | 0.28% | 0.28% | 2.22% | 6% | |
| 12/31/2019 | $ 769,900 | 0.27% | 0.27% | 2.91% | 8% | |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not include any fees or expenses of variable insurance contracts, if applicable. If such fees or expenses were included, the return shown would have been lower. |
| (c) | Total return shown net of expenses reimbursed and/or waived, if applicable. Without the expense reimbursement and/or waiver, the return shown would have been lower. |
| (d) | Portfolio turnover is calculated at the Fund level. |
EMPOWER FUNDS, INC.
EMPOWER INTERNATIONAL VALUE FUND
EMPOWER INTERNATIONAL VALUE FUND
Financial Highlights
Selected data for a share of capital stock of the Fund throughout the periods
indicated.
| Income (Loss) from Investment Operations: | Less Distributions: | ||||||||
| Net
asset value, beginning of year |
Net
investment income(a) |
Net
realized and unrealized gain (loss) |
Total
from investment operations |
From
net investment income |
From
net realized gains |
Total
Distributions |
Net
asset value, end of year |
Total
Return(b)(c) | |
| Investor Class | |||||||||
| 12/31/2023 | $10.53 | 0.27 | 1.62 | 1.89 | (0.17) | (0.22) | (0.39) | $12.03 | 18.03% |
| 12/31/2022 | $12.79 | 0.17 | (2.12) | (1.95) | (0.13) | (0.18) | (0.31) | $10.53 | (15.18%) |
| 12/31/2021 | $12.03 | 0.20 | 1.10 | 1.30 | (0.21) | (0.33) | (0.54) | $12.79 | 10.83% |
| 12/31/2020 | $11.19 | 0.13 | 0.95 | 1.08 | (0.11) | (0.13) | (0.24) | $12.03 | 9.73% |
| 12/31/2019 | $ 9.39 | 0.21 | 1.86 | 2.07 | (0.14) | (0.13) | (0.27) | $11.19 | 22.06% |
| Institutional Class | |||||||||
| 12/31/2023 | $ 7.49 | 0.21 | 1.17 | 1.38 | (0.34) | (0.22) | (0.56) | $ 8.31 | 18.44% |
| 12/31/2022 | $ 9.19 | 0.18 | (1.56) | (1.38) | (0.14) | (0.18) | (0.32) | $ 7.49 | (14.90%) |
| 12/31/2021 | $ 8.81 | 0.18 | 0.81 | 0.99 | (0.28) | (0.33) | (0.61) | $ 9.19 | 11.26% |
| 12/31/2020 | $ 8.27 | 0.13 | 0.70 | 0.83 | (0.16) | (0.13) | (0.29) | $ 8.81 | 10.21% |
| 12/31/2019 | $ 7.04 | 0.18 | 1.40 | 1.58 | (0.22) | (0.13) | (0.35) | $ 8.27 | 22.43% |
| Net
assets, end of year (000) |
Ratio
of expenses to average net assets (before reimbursement and/or waiver, if applicable) |
Ratio
of expenses to average net assets (after reimbursement and/or waiver, if applicable) |
Ratio
of net investment income to average net assets (after reimbursement and/or waiver, if applicable) |
Portfolio
turnover rate(d) | ||
| Investor Class | ||||||
| 12/31/2023 | $ 293,534 | 1.07% | 1.07% | 2.38% | 18% | |
| 12/31/2022 | $ 579,880 | 1.09% | 1.07% | 1.63% | 30% | |
| 12/31/2021 | $ 247,738 | 1.06% | 1.06% | 1.57% | 17% | |
| 12/31/2020 | $ 220,602 | 1.07% | 1.07% | 1.27% | 20% | |
| 12/31/2019 | $ 216,315 | 1.06% | 1.06% | 2.02% | 24% | |
| Institutional Class | ||||||
| 12/31/2023 | $ 963,988 | 0.71% | 0.71% | 2.54% | 18% | |
| 12/31/2022 | $ 835,841 | 0.71% | 0.71% | 2.27% | 30% | |
| 12/31/2021 | $1,014,470 | 0.70% | 0.70% | 1.93% | 17% | |
| 12/31/2020 | $ 906,166 | 0.70% | 0.70% | 1.66% | 20% | |
| 12/31/2019 | $ 885,852 | 0.69% | 0.69% | 2.32% | 24% | |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not include any fees or expenses of variable insurance contracts, if applicable. If such fees or expenses were included, the return shown would have been lower. |
| (c) | Total return shown net of expenses reimbursed and/or waived, if applicable. Without the expense reimbursement and/or waiver, the return shown would have been lower. |
| (d) | Portfolio turnover is calculated at the Fund level. |
EMPOWER FUNDS, INC.
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING
POLICIES
Empower Funds, Inc. (Empower Funds), a
Maryland corporation, was organized on December 7, 1981 and is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. Empower Funds presently consists of forty-five
funds. Interests in the Empower Emerging Markets Equity Fund,Empower International Growth Fund, Empower International Index Fund, and Empower International Value Fund (each a Fund, collectively the Funds) are included herein. Each
Fund is diversified as defined in the 1940 Act. The Funds are available as an investment option to insurance company separate accounts for certain variable annuity contracts and variable life insurance policies, to individual retirement account
custodians or trustees, to plan sponsors of qualified retirement plans, to college savings programs, and to asset allocation funds that are a series of Empower Funds.
Investment
Objectives
Empower Emerging Markets Equity Fund -
seeks long-term capital appreciation
Empower
International Growth Fund - seeks long-term growth of capital
Empower International Index Fund - seeks investment
results that track the total return of the common stocks that comprise the MSCI EAFE Index
Empower International Value Fund - seeks long-term capital
growth
The Funds each offer two share classes,
referred to as Investor Class and Institutional Class shares. All shares of each Fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, expenses (other than those attributable to a specific class) and realized and unrealized
gains and losses are allocated daily to each class of shares based on the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against operations of that class.
Expenses incurred by Empower Funds, which are not Fund specific, are allocated based on relative net assets or other appropriate allocation methods.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America (U.S. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is also an investment company and accordingly follows the
investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services - Investment Companies. The following is a summary of the significant
accounting policies of the Funds.
Security Valuation
The board of directors of Empower Funds (Board of
Directors) has adopted policies and procedures for the valuation of each Fund's securities and assets, and has appointed the Fair Value Pricing Committee of the investment adviser, Empower Capital Management, LLC (ECM or the Adviser), to
complete valuation determinations under those policies and procedures. Pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors approved the Adviser as the Funds' valuation designee to make all fair value determinations with respect to
the Funds' investments, subject to oversight by the Board of Directors.
Each Fund generally values its securities, including
Exchange Traded Funds, based on market prices determined at the close of regular trading on the New York Stock Exchange (NYSE) on each day the NYSE is open for trading. The net asset value (NAV) of each class of a Fund's shares is determined by
dividing the net assets attributable to each class of shares of the Fund by the number of issued and outstanding shares of each class of the Fund on each valuation date.
Annual Report - December 31, 2023
For securities that are traded on only one exchange, the
last sale price as of the close of business of that exchange will be used. If the closing price is not available, the current bid as of the close of business will be used. For securities traded on more than one exchange, or upon one or more
exchanges and in the over-the-counter (OTC) market, the last sale price as of the close of business on the market which the security is traded most extensively will be used. If the closing price is not available, the current bid as of the close of
business will be used. For securities that principally trade on the NASDAQ National Market System, the NASDAQ official closing price will be used.
For private equity securities that are not traded on an
exchange, an appropriate source, which may include the use of an internally developed or approved valuation model, a different external pricing vendor, or sourcing a price from a broker will be used. Valuation of these securities will be reviewed
regularly by the Fair Value Pricing Committee.
Short
term securities purchased with less than 60 days remaining until maturity and all U.S. Treasury Bills are valued on the basis of amortized cost, which has been determined to approximate fair value. Short term securities purchased with more than 60
days remaining until maturity are valued using pricing services, or in the event a price is not available from a pricing service, may be priced using other methodologies approved by the Board of Directors, including model pricing or pricing on the
basis of quotations from brokers or dealers, and will continue to be priced until final maturity.
Foreign equity securities are generally valued using an
adjusted systematic fair value price from an independent pricing service. Foreign exchange rates are determined at a time that corresponds to the closing of the NYSE.
For derivatives that are traded on an exchange, the last
sale price as of the close of business of the exchange will be used. For derivatives traded OTC, independent pricing services will be utilized when possible. If a price cannot be located from the primary source, other appropriate
sources, which may include the use of an internally developed valuation model, another external pricing vendor or sourcing a price from a broker, may be used.
Independent pricing services are approved by the Board of
Directors and are utilized for all investment types when available. In some instances valuations from independent pricing services are not available or do not reflect events in the market between the time the market closed and the valuation time and
therefore fair valuation procedures are implemented. The fair value for some securities may be obtained from pricing services or other pricing sources. The inputs used by the pricing services are reviewed quarterly or when the pricing vendor issues
updates to its pricing methodologies. Broker quotes are analyzed through an internal review process, which includes a review of known market conditions and other relevant data. Developments that might trigger fair value pricing could be natural
disasters, government actions or fluctuations in domestic and foreign markets.
The following table provides examples of the inputs that are
commonly used for valuing particular classes of securities. These classifications are not exclusive, and any inputs may be used to value any other security class.
| Class | Inputs |
| Common Stock | Exchange traded close price, bids, evaluated bids, open and close price of the local exchange, exchange rates, fair values based on significant market movement and various index data |
| Preferred Stock | Benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, evaluated bids, offers and reference data including market research publications. Inputs also may include exchange prices. |
| Rights | Exchange traded close price, bids and evaluated bids |
| Exchange Traded Funds | Exchange traded close price |
| Short Term Investments | Maturity date, credit quality and interest rates |
| Futures Contracts | Exchange traded close price |
| Forward Foreign Currency Contracts | Foreign currency spot and forward rates |
The Funds classify their valuations into three levels based
upon the observability of inputs to the valuation of each Fund’s investments. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. Classification is based on the lowest
level of input significant to the fair value measurement. The three levels are defined as follows:
Level 1 – Unadjusted quoted prices for identical
securities in active markets.
Annual Report - December 31, 2023
Level 2 – Inputs other than quoted prices included in
Level 1 that are observable either directly or indirectly. These may include quoted prices for similar assets in active markets.
Level 3 – Unobservable inputs to the extent
observable inputs are not available and may include prices obtained from single broker quotes. Unobservable inputs reflect a Fund’s own assumptions and would be based on the best information available under the circumstances.
As of December 31, 2023, the inputs used to value each
Fund’s investments are detailed in the following table. More information regarding the sector or geography classifications, as applicable, are included in the Schedule of Investments.
Empower Emerging Markets Equity Fund
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets | |||||||
| Investments, at fair value: | |||||||
| Common Stock | |||||||
| Basic Materials | $ 9,032,140 | $ 21,666,144 | $ — | $ 30,698,284 | |||
| Communications | 28,149,749 | 103,920,077 | — | 132,069,826 | |||
| Consumer, Cyclical | 19,079,421 | 73,692,796 | — | 92,772,217 | |||
| Consumer, Non-cyclical | 27,776,316 | 69,182,687 | — | 96,959,003 | |||
| Energy | 9,751,707 | 27,397,293 | — | 37,149,000 | |||
| Financial | 39,310,158 | 158,645,785 | — | 197,955,943 | |||
| Industrial | 8,295,666 | 55,890,484 | — | 64,186,150 | |||
| Technology | 5,196,337 | 178,013,636 | — | 183,209,973 | |||
| Utilities | 4,390,175 | 7,008,210 | — | 11,398,385 | |||
| 150,981,669 | 695,417,112 | — | 846,398,781 | ||||
| Exchange Traded Funds | 14,569,667 | — | — | 14,569,667 | |||
| Short Term Investments | — | 6,359,505 | — | 6,359,505 | |||
| Total Assets | $ 165,551,336 | $ 701,776,617 | $ — | $ 867,327,953 |
Empower International Growth Fund
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets | |||||||
| Investments, at fair value: | |||||||
| Common Stock | |||||||
| Basic Materials | $ 5,199,589 | $ 20,819,511 | $ — | $ 26,019,100 | |||
| Communications | 17,341,337 | 7,228,505 | — | 24,569,842 | |||
| Consumer, Cyclical | 4,117,852 | 67,222,174 | — | 71,340,026 | |||
| Consumer, Non-cyclical | 3,390,443 | 134,376,195 | — | 137,766,638 | |||
| Financial | 3,110,884 | 46,901,715 | — | 50,012,599 | |||
| Industrial | — | 84,663,943 | — | 84,663,943 | |||
| Technology | 32,339,091 | 46,555,310 | — | 78,894,401 | |||
| Utilities | — | 2,850,526 | — | 2,850,526 | |||
| 65,499,196 | 410,617,879 | — | 476,117,075 | ||||
| Short Term Investments | — | 13,794,200 | — | 13,794,200 | |||
| Total Assets | $ 65,499,196 | $ 424,412,079 | $ — | $ 489,911,275 |
Annual Report - December 31, 2023
Empower International Index Fund
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets | |||||||
| Investments, at fair value: | |||||||
| Common Stock | |||||||
| Basic Materials | $ 816,336 | $ 114,901,423 | $ — | $ 115,717,759 | |||
| Communications | 10,144,300 | 65,952,451 | — | 76,096,751 | |||
| Consumer, Cyclical | — | 238,462,316 | — | 238,462,316 | |||
| Consumer, Non-cyclical | 3,974,096 | 421,928,751 | 458 | 425,903,305 | |||
| Diversified | 721,607 | 389,604 | — | 1,111,211 | |||
| Energy | — | 79,883,937 | — | 79,883,937 | |||
| Financial | 1,915,774 | 363,403,964 | — | 365,319,738 | |||
| Industrial | 5,370,515 | 244,630,859 | — | 250,001,374 | |||
| Technology | 3,440,816 | 115,399,438 | — | 118,840,254 | |||
| Utilities | 325,448 | 58,383,084 | — | 58,708,532 | |||
| 26,708,892 | 1,703,335,827 | 458 | 1,730,045,177 | ||||
| Preferred Stock | — | 7,774,790 | — | 7,774,790 | |||
| Rights | — | — | 19,290 | 19,290 | |||
| Short Term Investments | — | 71,912,138 | — | 71,912,138 | |||
| Total investments, at fair value: | 26,708,892 | 1,783,022,755 | 19,748 | 1,809,751,395 | |||
| Other Financial Investments: | |||||||
| Forward Foreign Currency Contracts(a) | — | 730 | — | 730 | |||
| Futures Contracts(a) | 1,727,921 | — | — | 1,727,921 | |||
| Total Assets | $ 28,436,813 | $ 1,783,023,485 | $ 19,748 | $ 1,811,480,046 | |||
| Liabilities | |||||||
| Other Financial Investments: | |||||||
| Forward Foreign Currency Contracts(a) | — | (302,523) | — | (302,523) | |||
| Total Liabilities | $ 0 | $ (302,523) | $ — | $ (302,523) |
| (a) | Forward Foreign Currency Contracts and Futures Contracts are reported at the security's unrealized appreciation (depreciation), which represents the change in the contract's value from trade date. |
Empower
International Value Fund
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets | |||||||
| Investments, at fair value: | |||||||
| Common Stock | |||||||
| Basic Materials | $ 26,085,292 | $ 67,709,174 | $ — | $ 93,794,466 | |||
| Communications | 6,102,746 | 28,235,824 | — | 34,338,570 | |||
| Consumer, Cyclical | 7,627,764 | 146,408,851 | — | 154,036,615 | |||
| Consumer, Non-cyclical | 18,087,859 | 233,062,607 | — | 251,150,466 | |||
| Energy | 4,358,712 | 80,895,266 | — | 85,253,978 | |||
| Financial | 7,999,618 | 253,362,211 | — | 261,361,829 | |||
| Industrial | 14,125,849 | 207,949,433 | — | 222,075,282 | |||
| Technology | 44,180,155 | 69,297,361 | — | 113,477,516 | |||
| Utilities | 2,754,012 | 10,140,656 | — | 12,894,668 | |||
| 131,322,007 | 1,097,061,383 | — | 1,228,383,390 | ||||
| Preferred Stock | — | 6,121,490 | — | 6,121,490 | |||
| Short Term Investments | — | 36,904,950 | — | 36,904,950 | |||
| Total Assets | $ 131,322,007 | $ 1,140,087,823 | $ — | $ 1,271,409,830 |
Annual Report - December 31, 2023
Repurchase
Agreements
A Fund may engage in repurchase
agreement transactions with institutions that the Funds’ investment adviser has determined are creditworthy. A Fund that engages in repurchase agreement transactions will purchase securities at a specified price with an agreement to sell the
securities to the same counterparty at a specified time, price and interest rate. The Funds' custodian and/or securities lending agent receives delivery of the underlying securities collateralizing a repurchase agreement. Collateral is at least
equal to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon a
Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Foreign Currency
Translations and Transactions
The accounting
records of the Funds are maintained in U.S. dollars. Investment securities, and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate. Purchases and sales of
securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions.
The Fund(s) do not isolate the portion of the results of
operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss.
Net realized foreign exchange gains or losses arise from
sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded by the Fund(s)
and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period
end, resulting from changes in exchange rates. These gains and losses are included in net realized gain or loss and change in net unrealized appreciation or depreciation on the Statement of Operations.
Security
Transactions
Security transactions are
accounted for on the date the security is purchased or sold (trade date). Realized gains and losses from investments sold are determined on a specific lot selection. Dividend income for a Fund is accrued as of the ex-dividend date
and interest income, including amortization of discounts and premiums, is recorded daily.
Federal Income Taxes
and Distributions to Shareholders
The Funds
intend to comply with provisions under Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its net taxable income, including any net realized gain on investments not offset by
capital loss carryforwards, if any, to shareholders. Therefore, no provision of federal income or excise tax is required. The Funds file income tax returns in U.S. federal and applicable state jurisdictions. The statute of
limitations on each Fund’s tax return filings generally remains open for the three preceding fiscal reporting period ends. State tax returns may remain open for an additional fiscal year.
Distributions to shareholders from net investment income of
the Funds, if any, are declared and paid semi-annually. Capital gain distributions of the Funds, if any, are declared and paid annually. Distributions are reinvested in additional shares of the Funds at net asset value and are declared
separately for each class. Distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
The tax character of distributions paid during the years ended
December 31, 2023 and 2022 were as follows:
| Empower Emerging Markets Equity Fund | 2023 | 2022 | |
| Ordinary income | $13,059,899 | $9,420,033 | |
| Long-term capital gain | - | 1,433,748 | |
| $13,059,899 | $10,853,781 |
Annual Report - December 31, 2023
| Empower International Growth Fund | 2023 | 2022 | |
| Ordinary income | $3,471,235 | $- | |
| Long-term capital gain | - | 7,396,221 | |
| $3,471,235 | $7,396,221 |
| Empower International Index Fund | 2023 | 2022 | |
| Ordinary income | $44,280,701 | $30,744,755 | |
| Long-term capital gain | 38,056,986 | - | |
| $82,337,687 | $30,744,755 |
| Empower International Value Fund | 2023 | 2022 | |
| Ordinary income | $41,620,359 | $22,117,380 | |
| Long-term capital gain | 30,730,761 | 29,489,932 | |
| $72,351,120 | $51,607,312 |
Net investment income (loss) and
net realized gain (loss) for federal income tax purposes may differ from those reported on the financial statements because of temporary and permanent book-tax basis differences. Book-tax differences may include but are not limited to the following:
wash sales, distribution adjustments, adjustments to the accounting treatment of partnerships, adjustments for passive foreign investment corporations and foreign currency reclassifications.
The tax components of capital shown in the following tables
represent distribution requirements each Fund must satisfy under the income tax regulations, losses each Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation for federal income
tax purposes. At December 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Empower Emerging Markets Equity Fund | |
| Undistributed net investment income | $5,190,943 |
| Undistributed long-term capital gains | — |
| Capital loss carryforwards | (119,629,551) |
| Post-October losses | — |
| Net unrealized appreciation | 19,127,870 |
| Tax composition of capital | $(95,310,738) |
| Empower International Growth Fund | |
| Undistributed net investment income | $3,116,744 |
| Undistributed long-term capital gains | — |
| Capital loss carryforwards | (2,843,185) |
| Post-October losses | — |
| Net unrealized appreciation | 60,146,268 |
| Tax composition of capital | $60,419,827 |
| Empower International Index Fund | |
| Undistributed net investment income | $4,979,501 |
| Undistributed long-term capital gains | 2,524,064 |
| Capital loss carryforwards | — |
| Post-October losses | — |
| Net unrealized appreciation | 190,902,186 |
| Tax composition of capital | $198,405,751 |
Annual Report - December 31, 2023
| Empower International Value Fund | |
| Undistributed net investment income | $2,575,584 |
| Undistributed long-term capital gains | 731,233 |
| Capital loss carryforwards | — |
| Post-October losses | — |
| Net unrealized appreciation | 106,828,182 |
| Tax composition of capital | $110,134,999 |
At December 31, 2023, the Funds
had capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. Capital loss carryforwards with no expiration, if any, must be utilized prior to those with
expiration dates. During the year ended December 31, 2023, the Empower International Index Fund utilized $(934,829) of capital loss carryforwards to offset capital gains realized in that fiscal year. Details of the capital loss
carryforwards as of December 31, 2023, were as follows:
| No Expiration | |
| Empower Emerging Markets Equity Fund | $(119,629,551) |
| Empower International Growth Fund | $(2,843,185) |
The aggregate cost of securities
and other investments and the composition of unrealized appreciation and depreciation for federal income tax purposes as of December 31, 2023 were as follows:
| Federal
Tax Cost of Investments |
Gross
Unrealized Appreciation on Investments |
Gross
Unrealized Depreciation on Investments |
Net
Unrealized Appreciation on Investments | ||||
| Empower Emerging Markets Equity Fund | $848,200,083 | $81,573,352 | $(62,445,482) | $19,127,870 | |||
| Empower International Growth Fund | 429,765,007 | 77,317,502 | (17,171,234) | 60,146,268 | |||
| Empower International Index Fund | 1,620,275,337 | 326,931,033 | (136,028,847) | 190,902,186 | |||
| Empower International Value Fund | 1,164,581,648 | 191,764,557 | (84,936,375) | 106,828,182 |
2. DERIVATIVE FINANCIAL
INSTRUMENTS
The Funds' investment objectives allow each
Fund to enter into various types of derivative contracts as outlined in each Fund's prospectus.
In pursuit of the Funds' investment objectives, each Fund may
seek to use derivatives to increase or decrease their exposure to the following market risks:
Equity Risk - The risk that relates to the change in value of
equity securities as they relate to increases or decreases in the general market.
Foreign Exchange Risk - The risk that adverse fluctuations in
exchange rates between the U.S. dollar and other currencies may cause a Fund to lose money on investments denominated in foreign currencies.
A Fund may be exposed to additional risks from investing in
derivatives, such as liquidity and counterparty credit risk. Liquidity risk is the risk that a Fund may be unable to sell or close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty
will not be able to fulfill its obligations to a Fund, if applicable. Investing in derivatives may also involve greater risks than investing directly in the underlying assets, such as losses in excess of any initial investment and collateral
received. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Annual Report - December 31, 2023
Futures
Contracts
A Fund may use futures contracts in
order to capitalize on expected changes in the shape of the yield curve and to control overall interest rate exposure. A futures contract is an agreement between two parties to buy or sell a specified underlying investment for a fixed price at
a specified future date. Futures contracts are generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. The use of futures contracts may involve risks such as the possibility of
illiquid markets or imperfect correlation between the value of the contracts and the underlying securities that comprise the index, or that the clearinghouse will fail to perform its obligations.
Futures contracts are reported in a table following the
Schedule of Investments. Upon entering into a futures contract, a Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Receipts or
payments, known as variation margin, are made or received by a Fund each day, depending on the daily fluctuations in the fair value of the underlying security. This is recorded as variation margin on futures contracts on the Statement of Assets and
Liabilities. When a Fund enters into a closing transaction, it will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contract at the time it was opened or purchased and its value at the time
it was closed, and is reflected in net realized gain or loss on the Statement of Operations.
Forward Foreign
Currency Contracts
A Fund may enter into OTC
forward foreign currency contracts (forward contracts) primarily to capture potential returns from changes in currency exchange rates or to reduce the risk of undesired currency exposure. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated rate.
Forward contracts are reported in a table following the
Schedule of Investments. The unrealized appreciation or depreciation is reported on the Statement of Assets and Liabilities and on the Statement of Operations within the net change in unrealized appreciation or depreciation. Upon the
closing of such contract the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars is recorded as net realized gain or loss on the Statement of Operations.
The following tables represent the average month-end volume of
each Fund’s derivative transactions, if any, during the reporting period:
| Empower Emerging Markets Equity Fund | |
| Forward Currency Exchange Contracts: | |
| Average notional amount | $104,513 |
| Empower International Index Fund | |
| Futures Contracts: | |
| Average long contracts | 388 |
| Average notional long | $40,701,645 |
| Forward Currency Exchange Contracts: | |
| Average notional amount | $7,092,774 |
Annual Report - December 31, 2023
Derivative Financial Instruments
Categorized by Risk Exposure
Valuation of
derivative investments as of December 31, 2023 is as follows:
Empower International
Index Fund
| Asset Derivatives | Liability Derivatives | |||||||
| Risk Exposure | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||
| Equity contracts (futures contracts) | Net unrealized appreciation on futures contracts | $1,727,921 (a) | ||||||
| Foreign exchange contracts (forwards) | Unrealized appreciation on forward foreign currency contracts | $ 730 | Unrealized depreciation on forward foreign currency contracts | $(302,523) | ||||
| (a)Includes cumulative appreciation of futures contracts as reported in the Fund’s Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. |
The effect of derivative investments for the year ended
December 31, 2023 is as follows:
Empower Emerging Markets Equity Fund
| Net Change in Unrealized Gain (Loss) | ||||
| Risk Exposure | Statement of Operations Location | Fair Value | ||
| Foreign exchange contracts (forwards) | Net realized loss on forward foreign currency contracts | $(23,082) | ||
Empower International Index Fund
| Realized Gain or (Loss) | Change in Unrealized Appreciation or (Depreciation) | |||||
| Risk Exposure | Statement of Operations Location | Statement of Operations Location | ||||
| Equity contracts (futures contracts) | Net realized gain on futures contracts | $4,758,083 | Net change in unrealized appreciation on futures contracts | $1,961,464 | ||
| Foreign exchange contracts (forwards) | Net realized gain on forward foreign currency contracts | $ 83,604 | Net change in unrealized depreciation on forward foreign currency contracts | $ (27,318) | ||
Concentration
Risk
A Fund may have elements of risk due to
concentrated investments in foreign issuers located in a specific country. Such concentrations may subject a Fund to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity.
3. OFFSETTING ASSETS AND LIABILITIES
The Empower International Index Fund may enter into
derivative transactions with several approved counterparties. Certain transactions are effected under agreements which include master netting arrangements which provide for the netting of payment obligations and/or netting in situations of
counterparty default. The following table summarizes this Fund's financial investments that are subject to an enforceable master netting arrangement at December 31, 2023.
Empower International
Index Fund
| Investments: | Gross
Amount Presented in the Statement of Assets and Liabilities (a) |
Financial
Instruments Available for Offset |
Financial
Instruments Collateral Received |
Cash
Collateral Pledged (Received) |
Net Amount |
| Derivative Assets (forward contracts) | $ 730 | $(730) | $— | $— | $ — |
| Derivative Liabilities (forward contracts) | $(302,523) | $ 730 | $— | $— | $(301,793) |
| (a) OTC derivatives are reported gross on the Statement of Assets and Liabilities. | |||||
Annual Report - December 31, 2023
4. INVESTMENT ADVISORY AGREEMENT AND OTHER
TRANSACTIONS WITH AFFILIATES
Empower Funds entered
into an investment advisory agreement with ECM, a wholly-owned subsidiary of Empower Annuity Insurance Company of America (Empower of America) as of December 31, 2023. As compensation for its services to Empower Funds, the Adviser receives
the below monthly compensation at the described annual rate of each Fund’s average daily net assets. Certain administration and accounting services fees for each Fund are included in the investment advisory agreement.
| Fund Name | Annual Advisory Rate |
| Empower Emerging Markets Equity Fund | 0.93% up to $1 billion dollars |
| 0.88% over $1 billion dollars | |
| 0.83% over $2 billion dollars | |
| Empower International Growth Fund | 0.82% up to $1 billion dollars |
| 0.77% over $1 billion dollars | |
| 0.72% over $2 billion dollars | |
| Empower International Index Fund | 0.25% up to $1 billion dollars |
| 0.20% over $1 billion dollars | |
| 0.15% over $2 billion dollars | |
| Empower International Value Fund | 0.67% |
The Adviser contractually agreed
to waive fees or reimburse expenses that exceed the annual rate, shown in the table below, of each Fund’s average daily net assets attributable to each Class, including management fees and expenses paid directly by each Fund, excluding
shareholder service fees, distribution fees (if applicable) and certain extraordinary expenses (the “Expense Limit”). The agreement's current term ends on April 30, 2024 and automatically renews for one-year unless terminated upon
written notice within 90 days of the end of the current term or upon termination of the investment advisory agreement. The amount waived or reimbursed, if any, is reflected in the Statement of Operations.
| Fund Name | Expense Limit Annual Rate |
| Empower Emerging Markets Equity Fund(a) | 0.91% |
| Empower International Growth Fund | 0.85% |
| Empower International Index Fund | 0.32% |
| Empower International Value Fund | 0.72% |
(a) Prior to April 28, 2023, the Empower Emerging Markets Equity Fund expense limit annual rate was 0.88%
The Adviser is permitted upon approval by the Board of
Directors to recoup amounts waived or reimbursed by each Fund in future periods, not exceeding three years following the particular waiver/reimbursement, provided the total annual operating expenses of each Class of each Fund plus such recoupment do
not exceed the lesser of the Expense Limit that was in place at the time of the waiver/reimbursement or the Expense Limit in place at the time of recoupment. At December 31, 2023, the amounts subject to recoupment were as follows:
Empower Emerging
Markets Equity Fund
| Expires December 31, 2024 | Expires December 31, 2025 | Expires December 31, 2026 | Recoupment
of Past Reimbursed Fees by the Adviser | |||
| $791,665 | $1,124,036 | $927,371 | $0 |
Annual Report - December 31, 2023
Empower International Growth
Fund
| Expires December 31, 2024 | Expires December 31, 2025 | Expires December 31, 2026 | Recoupment
of Past Reimbursed Fees by the Adviser | |||
| $80,917 | $149,953 | $141,113 | $0 |
Empower International Index Fund
| Expires December 31, 2024 | Expires December 31, 2025 | Expires December 31, 2026 | Recoupment
of Past Reimbursed Fees by the Adviser | |||
| $0 | $0 | $0 | $0 |
Empower International Value Fund
| Expires December 31, 2024 | Expires December 31, 2025 | Expires December 31, 2026 | Recoupment
of Past Reimbursed Fees by the Adviser | |||
| $4,090 | $63,952 | $0 | $0 |
The Adviser and Empower Funds
entered into a sub-advisory agreement with and is responsible for compensating the Sub-Advisers below for their services:
Empower Emerging Markets Equity Fund - Lazard Asset Management
LLC and Goldman Sachs Asset Management, L.P. Effective June 1, 2023, GSAM replaced UBS Asset Management (Americas) Inc. as sub-adviser to the Fund.
Empower International Growth Fund - Franklin Templeton
Institutional, LLC and J.P. Morgan Investment Management, Inc.
Empower International Index Fund - Irish Life Investment
Managers Limited ILIM, is an affiliate of the Adviser and Empower of America and receives monthly compensation for its services at the annual rate of 0.02% of the Fund's net assets.
Empower International Value Fund - LSV Asset Management and
Massachusetts Financial Services Company.
Empower
Funds entered into a shareholder services agreement with Empower Retirement, LLC (Empower), an affiliate of ECM and subsidiary of Empower of America. Pursuant to the shareholder services agreement, Empower provides various recordkeeping,
administrative and shareholder services to shareholders and receives from the Investor Class shares of each Fund a fee equal to 0.35% of the average daily net asset value of the applicable share class.
Empower Financial Services, Inc (the Distributor), is a
wholly-owned subsidiary of Empower of America and the principal underwriter to distribute and market each Fund.
Certain officers of Empower Funds are also directors and/or
officers of Empower of America or its subsidiaries. No officer or interested director of Empower Funds receives any compensation directly from Empower Funds. The total compensation paid to the independent directors with respect to all
forty-five funds for which they serve as directors was $1,223,500 for the fiscal year ended December 31, 2023.
5. PURCHASES AND SALES OF INVESTMENTS
For the year ended December 31, 2023, the aggregate cost of
purchases and proceeds from sales of investments (excluding all U.S. Government securities and short-term securities) were as follows:
| Purchases | Sales | ||
| Empower Emerging Markets Equity Fund | $741,372,588 | $589,826,602 | |
| Empower International Growth Fund | 268,980,031 | 273,392,256 | |
| Empower International Index Fund | 365,442,140 | 295,171,668 | |
| Empower International Value Fund | 243,372,321 | 560,301,828 |
For the same period, there were no
purchases or sales of long-term U.S. Government securities.
Annual Report - December 31, 2023
6. SECURITIES LOANED
Each Fund has entered into a securities lending agreement
with its custodian as securities lending agent. Under the terms of the agreement each Fund receives income after deductions of other amounts payable to the securities lending agent or to the borrower from lending transactions. In exchange for such
fees, the securities lending agent is authorized to loan securities on behalf of each Fund against receipt of cash collateral at least equal in value at all times to the value of the securities loaned plus accrued interest. The fair value of the
loaned securities is determined daily at the close of business of each Fund and necessary collateral adjustments are made between such Fund and its counterparties on the next business day through the delivery or receipt of additional collateral.
Each Fund also continues to receive interest or dividends on the securities loaned. Cash collateral is invested in securities approved by the Board of Directors. Each Fund bears the risk of any deficiency in the amount of collateral available for
return to a borrower due to a loss in an approved investment.
Collateral was invested in Repurchase Agreements
collateralized by U.S. Government or U.S. Government Agency securities. The Repurchase Agreements can be jointly purchased with other lending agent clients and in the event of a default by the counterparty, all lending agent clients would share
ratably in the collateral. As of December 31, 2023, each Fund's securities on loan value and collateral received, as reported on the Statement of Assets and Liabilities, were as follows:
| Market Value | Collateral Received | ||
| Empower Emerging Markets Equity Fund | $5,950,802 | $6,359,505 | |
| Empower International Growth Fund | 12,909,808 | 13,794,200 | |
| Empower International Index Fund | 44,113,026 | 47,295,333 | |
| Empower International Value Fund | 33,010,996 | 36,904,950 | |
Under the securities lending agreement, the collateral
pledged is, by definition, the securities loaned against the cash borrowed. The following tables summarizes the cash collateral liability under the securities lending agreement by class of securities loaned as of December 31, 2023.
Additional information regarding each Fund's securities on loan is included in the Schedule of Investments.
| Empower Emerging Markets Equity Fund | Total (a) |
| Common Stocks | $6,359,505 |
| Total secured borrowings | $6,359,505 |
| Empower International Growth Fund | Total (a) |
| Common Stocks | $13,794,200 |
| Total secured borrowings | $13,794,200 |
| Empower International Index Fund | Total (a) |
| Common Stocks | $47,295,333 |
| Total secured borrowings | $47,295,333 |
| Empower International Value Fund | Total (a) |
| Common Stocks | $36,904,950 |
| Total secured borrowings | $36,904,950 |
| (a) | The remaining contractual maturity of the secured borrowing related to each class of collateral is overnight and continuous. |
7. INDEMNIFICATIONS
The Funds' organizational documents provide current and
former officers and directors with a limited indemnification against liabilities arising in connection with the performance of their duties to the Funds. In the normal course of business, a Fund may also enter into contracts that provide
general indemnifications. A Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report - December 31, 2023
8. SUBSEQUENT EVENTS
Management has reviewed all events subsequent to December
31, 2023, including the estimates inherent in the process of preparing these financial statements through the date the financial statements were issued. No subsequent events requiring adjustments or disclosures have occurred.
Annual Report - December 31, 2023
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Empower
Funds, Inc.
Opinion on the Financial Statements and
Financial Highlights
We have audited the accompanying
statements of assets and liabilities, including the schedules of investments, of Empower Emerging Markets Equity Fund, Empower International Growth Fund, Empower International Index Fund, and Empower International Value Fund (the
“Funds”), four of the funds comprising Empower Funds, Inc., as of December 31, 2023, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then
ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of
the Funds as of December 31, 2023, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period
then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the
responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or
fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the
risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2023, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 23, 2024
February 23, 2024
We have served as the auditor of one or more Empower
investment companies since 1982.
TAX INFORMATION (unaudited)
Each Fund intends to pass through foreign tax credits and
have derived gross income from sources within foreign countries. For the year ended December 31, 2023, the following are the foreign taxes credits and gross income from foreign countries amounts for each Fund.
| Foreign
Tax Credits |
Gross
Income from Foreign Countries | ||
| Empower Emerging Markets Equity Fund | $18,273,944 | $2,263,567 | |
| Empower International Growth Fund | 486,356 | 6,962,069 | |
| Empower International Index Fund | 50,675,050 | 4,029,957 | |
| Empower International Value Fund | 50,708,133 | 4,662,816 |
Dividends paid by each Fund from
net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders. Of the ordinary income distributions declared for the year ended December 31, 2023,
the following are the percentages that qualify for the dividend received deduction available to each Fund's corporate shareholders.
| Percent
of Ordinary Income Distributions Qualifying for Dividends Received | |
| Empower Emerging Markets Equity Fund | 2% |
| Empower International Growth Fund | 0% |
| Empower International Index Fund | 0% |
| Empower International Value Fund | 0% |
Fund Directors and Officers
Empower Funds is organized under Maryland law, and is governed
by the Board of Directors. The following table provides information about each of the Directors and executive officers of Empower Funds.
| Independent Directors* | |||||
| Name,
Address, and Age |
Positions(s)
Held with Empower Funds |
Term
of Office and Length of Time Served** |
Principal
Occupation(s) During Past 5 Years |
Number
of Funds in Fund Complex Overseen by Director |
Other
Directorships Held by Director |
| Gail
H. Klapper 8515 East Orchard Road, Greenwood Village, CO 80111 80 |
Chair
& Independent Director |
Since
2016 (as Chair) Since 2007 (as Independent Director) |
Managing Attorney, Klapper Law Firm; Member/Director, The Colorado Forum; Manager, 6K Ranch, LLC; and former Director, Guaranty Bancorp | 45 | Director, Gold, Inc. |
| James
A. Hillary*** 8515 East Orchard Road, Greenwood Village, CO 80111 60 |
Independent Director | Since 2017 | Principal and Founding Partner, Fios Capital, LLC; Member, Fios Partners LLC, Fios Holdings LLC; Sole Member, Fios Companies LLC, Resolute Capital Asset Partners; Manager, Applejack Holdings, LLC; and Manager and Member, Prestige Land Holdings, LLC | 45 | N/A |
| R.
Timothy Hudner**** 8515 East Orchard Road, Greenwood Village, CO 80111 64 |
Independent Director | Since 2017 | Director, Colorado State Housing Board; and former Director, Grand Junction Housing Authority; Counseling and Education Center | 45 | N/A |
| Steven
A. Lake 8515 East Orchard Road, Greenwood Village, CO 80111 69 |
Independent Director | Since 2017 | Managing Member, Lake Advisors, LLC; Member, Gart Capital Partners, LLC; and Executive Member, Sage Enterprise Holdings, LLC | 45 | N/A |
| Stephen
G. McConahey 8515 East Orchard Road, Greenwood Village, CO 80111 80 |
Independent Director & Audit Committee Chair | Since
2011 (as Independent Director) Since 2015 (as Audit Committee Chair) |
Chairman, SGM Capital, LLC; Partner, Iron Gate Capital, LLC; Director, The IMA Financial Group, Inc.; and former Director, Guaranty Bancorp | 45 | N/A |
| Interested Director***** | |||||
| Name,
Address, and Age |
Positions(s)
Held with Empower Funds |
Term
of Office and Length of Time Served |
Principal
Occupation(s) During Past 5 Years |
Number
of Funds in Fund Complex Overseen by Director |
Other
Directorships Held by Director |
| Jonathan
D. Kreider 8515 East Orchard Road, Greenwood Village, CO 80111 40 |
Director,
President & Chief Executive Officer |
Since 2020 | Executive Vice President & Head of Empower Investments, Empower, Empower of America and Empower Life & Annuity Insurance Company of New York (“Empower of NY”); President, Chief Executive Officer & Manager, ECM; formerly, Vice President, Empower Funds Investment Products and Empower Advisory Group, LLC (“EAG”) | 45 | N/A |
| Officers | |||||
| Name,
Address, and Age |
Positions(s)
Held with Empower Funds |
Term
of Office and Length of Time Served |
Principal
Occupation(s) During Past 5 Years |
Number
of Fund in Fund Complex Overseen by Director |
Other
Directorships Held by Director |
| Jonathan
D. Kreider 8515 East Orchard Road, Greenwood Village, CO 80111 40 |
Director,
President & Chief Executive Officer |
Since 2020 | Executive Vice President & Head of Empower Investments, Empower, Empower of America and Empower of NY; President, Chief Executive Officer & Manager, ECM; formerly, Vice President, Empower Funds Investment Products and EAG | 45 | N/A |
| Katherine
Stoner 8515 East Orchard Road, Greenwood Village, CO 80111 67 |
Chief Compliance Officer | Since 2016 | Vice President, Compliance Empower Investments, Empower; Chief Compliance Officer, ECM and EAG | N/A | N/A |
| Ryan
L. Logsdon 8515 East Orchard Road, Greenwood Village, CO 80111 49 |
Chief
Legal Officer & Secretary |
Since
2010 (as Secretary) Since 2021 (as Chief Legal Officer) |
Vice President, Deputy General Counsel & Corporate Secretary, Empower, Empower of America & Empower of NY; Vice President & Counsel, ECM; formerly, Vice President & Counsel, Empower Funds; Vice President, Counsel & Secretary, EAG & EFSI | N/A | N/A |
| Kelly
B. New 8515 East Orchard Road, Greenwood Village, CO 80111 48 |
Chief
Financial Officer & Treasurer |
Since 2021 | Vice President, Fund Administration, Empower; Chief Financial Officer & Treasurer, ECM; Vice President & Treasurer, CITs, Empower Trust Company, LLC (“ETC”); formerly, Assistant Treasurer Empower Funds, ECM & ETC | N/A | N/A |
| Officers | |||||
| Name,
Address, and Age |
Positions(s)
Held with Empower Funds |
Term
of Office and Length of Time Served |
Principal
Occupation(s) During Past 5 Years |
Number
of Fund in Fund Complex Overseen by Director |
Other
Directorships Held by Director |
| John
A. Clouthier 8515 East Orchard Road, Greenwood Village, CO 80111 56 |
Assistant
Treasurer |
Since 2007 | Vice President, Fund Administration, Empower; Assistant Treasurer, ECM; Assistant Vice President and Assistant Treasurer, ETC | N/A | N/A |
| Abhijit
Dande 8515 East Orchard Road, Greenwood Village, CO 80111 43 |
Derivatives
Risk Manager |
Since 2022 | Vice President, Financial Risk Management, Empower; Derivatives Risk Manager, ECM | N/A | N/A |
* A Director who is not an
“interested person” of Empower Funds (as defined in Section 2(a)(19) of the 1940 Act, as amended) is referred to as an “Independent Director.”
** Each Director serves until the next shareholders’
meeting (and until the election and qualification of a successor), or until death, resignation, removal or retirement which takes effect no later than May 1 following his or her 75th birthday unless otherwise determined by the remaining directors.
The remaining Independent Directors determined that Ms. Klapper and Mr. McConahey should continue on the Board until at least May 1, 2024. Officers are elected by the Board on an annual basis to serve until their successors have been elected and
qualified.
*** Mr. Hillary is the sole member of
Resolute Capital Asset Partners LLC, which is the general partner for Resolute Capital Asset Partners Fund I LP. Goldman Sachs & Co. LLC, the clearing agent and custodian for Resolute Capital Asset Partners Fund I LP, is the parent company of
Goldman Sachs Asset Management, LP, the Sub-Adviser of the Empower Inflation-Protected Securities Fund, Empower Mid Cap Value Fund and other series of Empower Funds; and a Sub-Adviser of the Empower Core Bond Fund. Mr. Hillary has personal banking
accounts with an affiliate of J.P. Morgan Investment Management Inc., a Sub-Adviser of the Empower International Growth Fund, Empower Large Cap Growth Fund and other series of Empower Funds. Mr. Hillary receives no special treatment due to the
relationship.
**** Mr. Hudner’s daughter is
employed by JP Morgan Chase, N.A., an affiliate of J.P. Morgan Investment Management Inc., a Sub-Adviser of the Empower International Growth Fund, Empower Large Cap Growth Fund and other series of Empower Funds. Mr. Hudner has personal investments
in the following: (1) a mutual fund advised by Lazard Asset Management LLC, a Sub-Adviser of the Empower Emerging Markets Equity Fund, (2) a mutual fund advised by Massachusetts Financial Services Company, a Sub-Adviser of the Empower International
Value Fund, and (3) a mutual fund advised by Virtus Investment Advisers, Inc., an affiliate of Virtus Fixed Income Advisers, LLC, a Sub-Adviser of the Empower Multi-Sector Bond Fund. Mr. Hudner receives no special treatment due to his ownership of
such mutual funds.
***** An “Interested Director” refers to a
Director who is an “interested person” of Empower Funds (as defined in Section 2(a)(19) of the 1940 Act, as amended) by virtue of their affiliation with ECM.
There are no arrangements or understandings between any
Director or officer and any other person(s) pursuant to which s/he was elected as Director or officer.
Additional information about Empower Funds and its
Directors is available in the Empower Funds’ Statement of Additional Information (“SAI”), which can be obtained free of charge upon request to: Secretary, Empower Funds, Inc., 8525 East Orchard Road, Greenwood Village, Colorado
80111; (866) 831-7129. The SAI is also available on the Fund’s web site at https://www.empower.com.
Availability of Quarterly Portfolio Schedule
Empower Funds files its complete schedule of portfolio
holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Empower Funds’ Form N-PORT reports are available on the Commission’s website at
http://www.sec.gov.
Availability of Proxy Voting Policies
and Procedures
A description of the policies and
procedures that Empower Funds uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (866) 831-7129, and on the Securities and Exchange Commission’s website at
http://www.sec.gov.
Availability of Proxy Voting
Record
Information regarding how Empower Funds voted
proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling (866) 831-7129, and on the Securities and Exchange Commission’s website
at http://www.sec.gov.
ITEM 2. CODE OF ETHICS.
(a) As of the end of the period covered by this report, the registrant has adopted a Code of Ethics (the “Code of Ethics”) that applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) For purposes of this Item, "code of ethics" means written standards that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and
ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2) Full, fair,
accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3) Compliance with applicable
governmental laws, rules, and regulations;
(4) The prompt
internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5) Accountability for adherence to the
code.
(c) During the period covered by this report, there have been no amendments to the registrant’s Code of Ethics.
(d) During the period covered by this report, the registrant has not granted any express or implicit waivers from the provisions of the Code of Ethics.
(e)
Registrant’s Code of Ethics is attached hereto.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Mr. Stephen A.
Lake is the audit committee financial expert and is "independent," pursuant to general instructions on Form N-CSR, Item 3.
An “audit committee financial expert” is not an
“expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933, as a result of being designated as an “audit committee financial expert.” Further, the designation of a person as an
“audit committee financial expert” does not mean that the person has any greater duties, obligations, or liability than those imposed on the person without the “audit committee financial expert” designation. Similarly,
the designation of a person as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the Audit Committee or Board of Directors.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were: $1,031,500 for
fiscal year 2022 and $1,050,700 for fiscal year 2023.
(b) Audit-Related Fees. The aggregate fees billed in each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were: $42,000 for fiscal year 2022 and $44,680 for fiscal year
2023. The nature of the services comprising the fees disclosed under this category involved performance of 17f-2 (self-custody) audits and administrative services related to the audit.
(c) Tax Fees. The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning were: $0 for fiscal year 2022 and $0 for fiscal year 2023.
(d) All Other Fees. There were no fees billed in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs ((a) through (c) of this Item).
(e)
(1) Audit Committee’s Pre-Approval Policies and
Procedures.
Pre-Approval
of Audit Services. The Audit Committee must approve prior to retention all audit, review or attest engagements required under the securities laws that are provided to Empower Funds by its independent auditors. The Audit Committee will
not grant such approval to any auditors that are proposed to perform an audit for Empower Funds if a chief executive officer, controller, chief financial officer, chief accounting officer or any person serving in an equivalent position for Empower
Funds that is responsible for the financial reporting or operations of Empower Funds was employed by those auditors and participated in any capacity in an audit of Empower Funds during the year period (or such other period proscribed under
Securities Exchange Commission rules) preceding the date of initiation of such audit.
Pre-Approval
of Non-Audit Services. The Audit Committee must pre-approve any non-audit services, including tax services, to be provided to Empower Funds by its independent auditors (except those within applicable de minimis statutory or regulatory
exceptions)1 provided that Empower Funds’ auditors will not provide the following non-audit services to Empower Funds: (a) bookkeeping or other services related to the accounting records or financial statements of Empower Funds; (b) financial
information systems design and implementation; (c) appraisal or valuation services, fairness opinions, or contribution-in-kind reports; (d) actuarial services; (e) internal audit outsourcing services; (f) management functions or human resources; (g)
broker-dealer, investment adviser, or investment banking services; (h) legal services; (i) expert services unrelated to the audit; and (j) any other service that the Public Company Accounting Oversight Board determines, by regulation, is
impermissible. 2
Pre-approval with respect to Non-Empower Funds Entities. The Audit Committee must pre-approve any non-audit services that relate directly to the operations and financial reporting of Empower Funds (except
those within applicable de minimis statutory or regulatory exceptions)3 to be provided by Empower Funds’ auditors to (a) Empower Funds’ investment adviser; and (b) any entity controlling, controlled by, or under common control with the
investment adviser if that entity provides ongoing services to Empower Funds.4 The Audit Committee may approve audit and non-audit services on a case-by-case basis or adopt pre-approval policies and procedures that are detailed as to a
particular service, provided that the Audit Committee is informed promptly of each service, or use a combination of these approaches.
Delegation
. The Audit Committee may delegate pre-approval authority to one or more of the Audit Committee's members. Any member or members to whom such pre-approval authority is delegated
must report any pre-approval decisions to the Audit
Committee at its next scheduled meeting.
(f) (2) 100% of the services described pursuant to paragraphs (b) through (d) of this Item 4 of Form N-CSR were approved by the Audit Committee, and no such services were approved by the Audit Committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(g)
Not Applicable.
(h) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant
for fiscal year 2022 equaled $1,022,840 and for fiscal year 2023 equaled $1,795,449.
(i) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any
subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a)
The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
(b)
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES
FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not
applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END
MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
There have been no material changes to
the procedures by which shareholders may recommend nominees to the registrant’s board of directors that were implemented after the registrant last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of
the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed,
summarized and reported, within the time periods specified in the commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal
financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.
(b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF
LENDING ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a)
Not applicable.
ITEM 13. EXHIBITS.
(3) Not applicable.
(4) Not applicable.
1No pre-approval is required as to non-audit services
provided to Empower Funds if: (a) the aggregate amount of all non-audit services provided to Empower Funds constitute not more than 5% of the total amount of revenues paid by Empower Funds to the independent auditors during the fiscal year in which
the services are provided; (b) these services were not recognized by Empower Funds at the time of the engagement to be non-audit services; and (c) the services are promptly brought to the attention of the Audit Committee and approved by the Audit
Committee prior to the completion of the audit.
2With respect to the prohibitions on (a) bookkeeping;
(b) financial information systems design and implementation; (c) appraisal, valuation, fairness opinions, or contribution-in-kind reports; (d) actuarial; and (e) internal audit outsourcing, such services are permitted to be provided if it is
reasonable to conclude that the results of these services will not be subject to audit procedures during an audit of the audit client's financial statements.
3For non-audit services provided to the adviser and
entities in a control relationship with the adviser, no pre-approval is required if: (a) the aggregate amount of all non-audit services provided constitute not more than 5% of the total amount of revenues paid to the independent auditors during the
fiscal year in which the services are provided to Empower Funds, Empower Funds’ investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser if that entity provides ongoing services to
Empower Funds; (b) these services were not recognized by Empower Funds at the time of the engagement to be non-audit services; and (c) the services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee
prior to the completion of the audit.
4No pre-approval is required by the Audit Committee as to
non-audit services provided to any Empower Funds sub-adviser that primarily provides portfolio management services and is under the direction of another investment adviser and is not affiliated with Empower Funds’ primary investment
adviser.
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.
EMPOWER FUNDS, INC.
| By: | /s/ Jonathan D. Kreider |
Jonathan D. Kreider
Director, President & Chief Executive Officer
Director, President & Chief Executive Officer
Date:February 23,
2024
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/ Jonathan D. Kreider |
Jonathan D. Kreider
Director, President & Chief Executive Officer
Director, President & Chief Executive Officer
Date:February 23,
2024
| By: | /s/ Kelly B. New |
Kelly B. New
Chief Financial Officer & Treasurer
Chief Financial Officer & Treasurer
Date:February 23,
2024