INVESTMENTS

As of March 31, 2015, the Company held investments with a fair value of approximately $20.7 million and a cost basis of approximately $22.0 million. In addition, the Company held other investments of $2.4 million. Total investments are approximately 70.1 percent of the Company’s total assets. On March 31, 2015, the Company had $17.5 million and $465,000 at fair value invested in USGIF and an offshore fund the Company advises, respectively. These amounts were included in the Consolidated Balance Sheet as “trading securities” and “available-for-sale securities.”

Investments in securities classified as trading are reflected as current assets on the Consolidated Balance Sheets at their fair value. Unrealized holding gains and losses on trading securities are included in earnings in the Consolidated Statements of Operations.

Investments in securities classified as available-for-sale, which may not be readily marketable, are reflected as non-current assets on the Consolidated Balance Sheets at their fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported in other comprehensive income as a separate component of shareholders’ equity until realized.

Other investments consist of equity investments in entities over which the Company is unable to exercise significant influence and which do not have readily determinable fair values. These investments are accounted for under the cost method of accounting and evaluated for impairment.

The Company considers many factors in determining impairment, including the severity and duration of the decline in value below cost, the Company’s interest and ability to hold the security for a period of time sufficient for an anticipated recovery in value, and the financial condition and specific events related to the issuer. When an impairment of a security is determined to be other-than-temporary, the impairment is recognized in earnings.

In December 2013, the shareholders of the U.S. Government Securities Savings Fund approved a proposal resulting in the conversion of the fund from a money market fund to a U.S. Government ultra-short bond fund that is not a money market fund. The fund was renamed U.S. Government Securities Ultra-Short Bond Fund (“Government Fund”). Prior to the conversion, while the fund was a money market fund, the amount held in the fund was classified as a cash equivalent. After the conversion, the amount held in the fund is classified as a trading mutual fund investment. The amount held in the fund by the Company as of the conversion date was $14.1 million.

The Company records security transactions on trade date. Realized gains (losses) from security transactions are calculated on the first-in/first-out cost basis, unless otherwise identifiable, and are recorded in earnings on the date of sale.

The following details the components of the Company’s investments recorded as fair value as of March 31, 2015, and June 30, 2014.



	March 31, 2015
			Gross Unrealized
(dollars in thousands)	Cost		Gains		(Losses)			Fair Value
Trading securities ¹
Offshore fund	$	1,184	$	—	$	(719	)	$	465
Mutual funds - Fixed income	15,441		140		(1		)	15,580
Mutual funds - Domestic equity	535		—		(137		)	398
Other	81		—		(81		)	—
Total trading securities	$	17,241	$	140	$	(938	)	$	16,443

Available-for-sale securities ²
Common stock - Domestic	$	575	$	367	$	(13	)	$	929
Common stock - International	652		219		(32		)	839
Corporate debt	1,582		—		(912		)	670
Mutual funds - Fixed income	1,228		14		(13		)	1,229
Mutual funds - Domestic equity	543		—		(75		)	468
Other	170		3		(5		)	168
Total available-for-sale securities ³	$	4,750	$	603	$	(1,050	)	$	4,303



	June 30, 2014
			Gross Unrealized
(dollars in thousands)	Cost		Gains		(Losses)			Fair Value
Trading securities ¹
Offshore fund	$	1,184	$	—	$	(186	)	$	998
Mutual funds - Fixed income	16,241		92		—			16,333
Mutual funds - Domestic equity	535		—		(76		)	459
Other	107		—		(80		)	27
Total trading securities	$	18,067	$	92	$	(342	)	$	17,817

Available-for-sale securities ²
Common stock - Domestic	$	535	$	586	$	(3	)	$	1,118
Common stock - International	607		802		—			1,409
Corporate debt	1,706		—		(74		)	1,632
Mutual funds - Fixed income	1,228		21		(2		)	1,247
Mutual funds - Domestic equity	543		7		—			550
Other	232		9		(1		)	240
Total available-for-sale securities ³	$	4,851	$	1,425	$	(80	)	$	6,196


¹	Unrealized and realized gains and losses on trading securities are included in earnings in the statement of operations.


²	Unrealized gains and losses on available-for-sale securities are excluded from earnings and recorded in other comprehensive income as a separate component of shareholders’ equity until realized.


³	Net unrealized gains (losses) on available-for-sale securities gross and net of tax as of March 31, 2015, are $(447) and $(295), respectively, and as of June 30, 2014, are $1,345 and $888, respectively.

The following tables show the gross unrealized losses and fair values of available-for-sale investment securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:



	March 31, 2015
	Less Than 12 Months					12 Months or Greater					Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-sale securities
Common stock - Domestic	$	45	$	(3	)	$	98	$	(10	)	$	143	$	(13	)
Common stock - International	75		(18		)	42		(14		)	117		(32		)
Corporate debt	425		(912		)	—		—			425		(912		)
Mutual funds - Fixed income	166		(10		)	50		(3		)	216		(13		)
Mutual funds - Domestic equity	467		(75		)	—		—			467		(75		)
Other	9		(5		)	—		—			9		(5		)
Total available-for-sale securities	$	1,187	$	(1,023	)	$	190	$	(27	)	$	1,377	$	(1,050	)



	June 30, 2014
	Less Than 12 Months					12 Months or Greater				Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale securities
Common stock - Domestic	$	125	$	(3	)	$	—	$	—	$	125	$	(3	)
Corporate debt	1,382		(74		)	—		—		1,382		(74		)
Mutual funds - Fixed income	151		(2		)	—		—		151		(2		)
Other	118		(1		)	—		—		118		(1		)
Total available-for-sale securities	$	1,776	$	(80	)	$	—	$	—	$	1,776	$	(80	)

Investment income can be volatile and varies depending on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.

Investment income (loss) from the Company’s investments includes:


•	realized gains and losses on sales of securities;


•	unrealized gains and losses on trading securities;


•	realized foreign currency gains and losses;


•	other-than-temporary impairments on available-for-sale securities; and


•	dividend and interest income.

The following summarizes investment income reflected in earnings for the periods discussed:



(dollars in thousands)	Nine Months Ended March 31,						Three Months Ended March 31,
Investment Income (Loss)	2015			2014			2015			2014
Realized gains on sales of available-for-sale securities	$	591		$	999		$	209		$	307
Realized gains (losses) on sales of trading securities	(3		)	(168		)	3			—
Unrealized gains (losses) on trading securities	(548		)	284			(21		)	5
Realized foreign currency gains	82			6			58			2
Other-than-temporary declines in available-for sale securities	(105		)	(3		)	(105		)	(3		)
Dividend and interest income	505			364			105			62
Total Investment Income	$	522		$	1,482		$	249		$	373

Included in investment income were other-than temporary declines in value on available-for-sale corporate debt securities of approximately $105,000 for the three and nine months ended March 31, 2015. The impairment loss resulted from the issuers defaulting on scheduled payments. One security with a cost basis of $44,000 was written down to its fair value of $15,000. Another security, which has resumed interest payments, was written down to the net present value of estimated cash flows. This security had a cost basis of $310,000 and was written down to $234,000. In making these determinations, the Company considered the length of time and extent to which the fair value has been less than cost basis, financial condition and prospects of the issuers and the Company's ability to hold the investment until recovery.