N-CSR 1 form.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

 

 

 

 

811-4577

 

(Investment Company Act File Number)

 

Federated Hermes Income Securities Trust

_______________________________________________________________

 

(Exact Name of Registrant as Specified in Charter)

 

 

 

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 15086-7561

(Address of Principal Executive Offices)

 

 

(412) 288-1900

(Registrant's Telephone Number)

 

 

Peter J. Germain, Esquire

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

 

 

 

 

 

 

Date of Fiscal Year End: 11/30/20

 

 

Date of Reporting Period: 11/30/20

 

 

 

 

 

 

 

 

 

Item 1.Reports to Stockholders

 

Annual Shareholder Report
November 30, 2020
Share Class | Ticker
A | CAPAX
B | CAPBX
C | CAPCX
 
F | CAPFX
R | CAPRX
Institutional | CAPSX

Federated Hermes Capital Income Fund
(formerly, Federated Capital Income Fund)
Fund Established 1988

A Portfolio of Federated Hermes Income Securities Trust
(formerly, Federated Income Securities Trust)
Dear Valued Shareholder,
I am pleased to present the Annual Shareholder Report for your fund covering the period from December 1, 2019 through November 30, 2020.
While Covid-19 continues to present challenges to our lives, families and businesses, I want you to know that Federated Hermes remains dedicated to helping you successfully navigate the markets ahead. You can count on us for the insights, investment management knowledge and client service that you have come to expect. Please refer to our website, FederatedInvestors.com, for timely updates on this and other economic and market matters.
Thank you for investing with us. I hope you find this information useful and look forward to keeping you informed.
Sincerely,
J. Christopher Donahue, President

Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee

Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Capital Income Fund (the “Fund”), based on net asset value for the 12-month reporting period ended November 30, 2020, was 8.57% for Class A Shares, 7.51% for Class B Shares, 7.53% for Class C Shares, 8.44% for Class F Shares, 8.37% for Class R Shares and 8.84% for Institutional Shares. The 8.84% total return of the Institutional Shares consisted of 4.65% in price appreciation and 4.19% in reinvested dividends. The total return of the Russell 1000® Value Index (R1000V) was 1.72% for the same period. The Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index (BBHY2%ICI) returned 7.17%, the Bloomberg Barclays U.S. Mortgage Backed Securities Index (BBMB) returned 3.94% and the Bloomberg Barclays Emerging Markets USD Aggregate Index (BBEMAI) returned 6.53%. Weighting these benchmarks (40% R1000V, 20% BBHY2%ICI, 20% BBMB and 20% BBEMAI), the blended benchmark (Blended Index)1 return was 4.90% for the reporting period. The total return of the Morningstar Allocation Funds Average30% to 50% Equity (M30-50),2 a peer group for the Fund, was 8.02% for the same period. The Fund’s and M30-50’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses which were not reflected in the total returns of any index.
The Fund’s investment strategy focused on income-earning investments, specifically income producing equity securities and credit-sensitive fixed-income securities through: (1) portfolio allocation; (2) sector and security selection for equities; and (3) sector and security selection for fixed income to achieve the Fund’s primary current income investment objective and secondary capital appreciation investment objective. These were the most significant factors affecting the Fund’s performance relative to the Blended Index.
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the Blended Index.
MARKET OVERVIEW
The outbreak and spread of the Covid-19 virus in the 1st quarter of 2020 significantly disrupted an otherwise healthy U.S. economy, resulting in significant market volatility. Fear and uncertainty in the early days of the outbreak drove investor sentiment to growth companies. During the reporting period, stocks of larger companies and growth companies fared better than value stocks, with strong gains for broad U.S. equity indices like the S&P 500 Index3 and slightly positive returns for the R1000V. The stock market underwent a significant sell-off during the first quarter of 2020 due to the coronavirus pandemic and value stocks were hit particularly hard. The Federal Reserve (the “Fed”) lowered interest rates and provided stimulus packages that helped cushion the downturn on businesses and individuals. The R1000V
Annual Shareholder Report
1

produced positive performance in the 2nd and 3rd quarters but lagged that of the broad equity market and large growth, as both fiscal and monetary stimulus poured into the economy and signs of the economy reopening emerged. Large value outperformed the broad market and large growth in September, October and November. The removal of the Presidential election overhang at the beginning of November coupled with the Pfizer vaccine announcement the following week unleashed a large November rally and rotation into value stocks.
The S&P 500 returned 17.46% for the reporting period. During this time, growth stocks significantly outperformed value stocks. The S&P 500’s performance in the Information Technology, Consumer Discretionary and Communication Services sectors outweighed weaker performance in the Energy, Financials and Real Estate sectors.
U.S. Treasury yields ended the reporting period with a steeper curve with short rates, as measured by the 2-year U.S. Treasury yield, falling 152 basis points and long rates, as measured by the 10-year U.S. Treasury yield, falling 94 basis points. The Covid-19 pandemic caused the Fed to cut rates to a range of 0-0.25% as well as restart asset purchases, which resulted in the yield curve steepening during the reporting period due to short-term interest rates falling faster than long-term rates and a corresponding higher spread between the two rates.
PORTFOLIO ALLOCATION
During the reporting period, the Fund’s portfolio was allocated primarily between dividend-paying4 stocks and fixed-income securities in a manner reflecting the Fund’s primary investment objective of current income and its secondary objective of capital appreciation. Factors used in making this allocation were: (1) the Fund’s ability to pay and maintain an attractive level of dividends; and (2) the expected relative total return of fixed-income securities and equities. The allocation at the end of the reporting period was 54.9% fixed-income securities and 45.1% equities. Relative to the Blended Index, the overweight equity allocation had a negative effect on Fund performance. During the reporting period, the Fund used various types of derivative instruments5 including options, equity futures, credit default swaps and interest rate futures to manage the Fund’s duration and to protect the Fund from volatile market conditions. Credit default swaps contributed 0.06%, equity options detracted -0.22%, equity futures detracted -0.31%, and interest rate futures detracted -0.64% to the Fund’s performance for the reporting period.
SECTOR AND SECURITY SELECTIONEQUITY
The equity component of the portfolio was positioned primarily within a diversified10 portfolio of dividend-paying securities with favorable valuations, strong balance sheets and improving business fundamentals. The portfolio continued to pursue current income and long-term growth of income by
Annual Shareholder Report
2

investing in stocks of market-leading companies across all equity sectors. During the reporting period, the equity component of the portfolio significantly outperformed the R1000V.
Both stock selection and sector allocation contributed positively to the overall performance of the Fund relative to the R1000V during the reporting period. Positive stock selection in the Information Technology, Consumer Discretionary and Health Care sectors contributed to performance while partially offset by negative stock selection in the Industrials and Communication Services sectors. An overweight position in the Information Technology and Consumer Discretionary sectors and an underweight position in the Financials sector contributed to the Fund’s performance while partially offset by the underweight in the Materials sector.
SECTOR AND SECURITY SELECTIONBOND6
During the reporting period, the total return of the high-yield7 benchmark (BBHY2%ICI) and the emerging-market8 benchmark (BBEMAI) outperformed the Fund’s fixed-income blended benchmark while the mortgage9 benchmark (BBMB) underperformed due primarily to the strong rebound of credit after the Covid-19 sell-off in the first quarter of 2020. The Fed’s stepping in to buy bonds and multiple fiscal packages from Congress removed the worst case scenarios as the government in effect provided a bridge loan to the economy. The income from both the high-yield and emerging-market sectors contributed to the Fund’s primary objective of current income. During the reporting period, the fixed-income component of the portfolio outperformed the Fund’s fixed-income blended benchmark.
Sector positioning was the largest contributor to performance. The portfolio was positioned with an underweight to high yield, a slight underweight to emerging markets and an overweight to investment-grade securities.11 The overweight to investment-grade securities drove the positive contribution to sector performance and timely allocation changes to emerging markets also had a positive contribution. The high yield underweight partially offset the positive performance as credit bounced back strongly in the 2nd half of the reporting period and the portfolio remained underweight. The management of the Fund’s duration, which was neutral to the benchmark duration over the course of the reporting period, detracted from performance as some tactical shifts did not work out while the Fund’s yield curve positioning was a slight contributor to Fund performance. Security selection was a positive contributor to Fund performance with strong security selection in high yield being partially offset with negative selection in emerging markets.
Annual Shareholder Report
3

1
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index. At the end of the reporting period, the Fund’s investment adviser elected to change the emerging market component of the Blended Index from the Bloomberg Barclays Emerging Markets USD Aggregate Index (BBEMAI) to the Bloomberg Barclays Emerging Markets Seasoned ex Aggregate/Eurodollar Index (BBEMSAE). The BBEMSAE is more reflective of the emerging market component of the Fund’s investment strategies.
2
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the M30-50.
3
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the S&P 500, the Fund’s broad-based securities market index.
4
There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience the same capital appreciation potential as non-dividend paying stocks.
5
The Fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments.
6
Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
7
High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks, and may be more volatile than investment-grade securities.
8
International investing involves special risks including currency risk, increased volatility of foreign securities, political risks and differences in auditing and other financial standards. Prices of emerging markets securities can be significantly more volatile than the prices of securities in developed countries and currency risk and political risks are accentuated in emerging markets.
9
The value of some mortgage-backed securities may be particularly sensitive to changes in the prevailing interest rates, and although the securities are generally supported by some form of government or private insurance, there is no assurance that private guarantors or insurers will meet their obligations.
10
Diversification does not assure a profit nor protect against loss.
11
Investment-grade securities are securities that are rated at least “BBB” or unrated securities of a comparable quality. Noninvestment-grade securities are securities that are not rated at least “BBB” or unrated securities of a comparable quality. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
Annual Shareholder Report
4

FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes Capital Income Fund from November 30, 2010 to November 30, 2020, compared to the Standard & Poor’s 500 Index (S&P 500),2,3 a broad-based securities market index, a blend of indexes comprised of 40% Russell 1000® Value Index (R1000V)/20% Bloomberg Barclays Emerging Markets USD Aggregate Index (BBEMAI)/20% Bloomberg Barclays U.S. High Yield 2% Issuer Capped Index (BBHY2%ICI)/20% Bloomberg Barclays U.S. Mortgage Backed Securities Index (BBMB) (the “Old Blended Index”),2,3 a blend of indexes comprised of 40% R1000V/20% Bloomberg Barclays Emerging Markets Seasoned ex Aggregate/Eurodollar Index (BBEMSAE)/20% BBHY2%ICI/20% BBMB (the “New Blended Index”)4 and the Morningstar Allocation Funds Average30% to 50% Equity (M30-50).5 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of November 30, 2020
■ Total returns shown for the Class A Shares include the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450).
■ Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00%, as applicable.
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the graph above.
Annual Shareholder Report
5

Average Annual Total Returns for the Period Ended 11/30/2020
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1)
 
1 Year
5 Years
10 Years
Class A Shares
2.63%
4.59%
5.25%
Class B Shares
2.01%
4.58%
5.21%
Class C Shares
6.53%
4.95%
5.04%
Class F Shares
6.36%
5.54%
5.74%
Class R Shares6
8.37%
5.56%
5.64%
Institutional Shares7
8.84%
6.05%
6.04%
S&P 500
17.46%
13.99%
14.19%
Old Blended Index
4.90%
7.02%
7.66%
New Blended Index
4.49%
6.95%
7.74%
M30-50
8.02%
6.15%
6.11%
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450); for Class B Shares, the maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date; for Class C Shares, a 1.00% contingent deferred sales charge would be applied on any redemption less than one year from the purchase date; for Class F Shares, the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900) and a contingent deferred sales charge of 1.00% would be applied on any redemption less than four years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500, Old Blended Index, New Blended Index and M30-50 have been adjusted to reflect reinvestment of dividends and distributions on securities in the indexes and average.
2
The S&P 500, Old Blended Index and New Blended Index are not adjusted to reflect sales loads, expenses or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. The indexes are unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index.
3
The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The BBEMAI tracks total returns for external-currency-denominated debt instruments of the emerging markets. The BBHY2%ICI is an issuer-constrained version of the Bloomberg Barclays U.S. Corporate High-Yield Index that
Annual Shareholder Report
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measures the market of USD-denominated, noninvestment-grade, fixed-rate, taxable corporate bonds. The index follows the same rules as the uncapped index but limits the exposure of each issuer to 2% of the total market value and redistributes any excess market value index-wide on a pro-rata basis. The BBMB covers agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). The R1000V measures the performance of the large-cap value segment of the U.S. equity universe.
4
The BBEMSAE is the emerging markets debt component of the Bloomberg Barclay U.S. Universal Bond Index and is generally at least 80% noninvestment-grade. At the end of the reporting period, the Fund’s investment adviser elected to change the emerging market component of the Blended Index (Old Blended Index to New Blended Index) from the BBEMAI to the BBEMSAE. The BBEMSAE is more reflective of the emerging market component of the Fund’s investment strategies. The BBEMSAE is not adjusted to reflect sales charges, expenses or other fees that the SEC requires to be reflected in the Fund’s performance. The index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
5
The Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
6
The Fund’s R class commenced operations on June 28, 2013. For the period prior to the commencement of operations of the R class, the R class performance information shown is for the A class adjusted to reflect the expenses of the Fund’s R class for each year for which the Fund’s R class expenses would have exceeded the actual expenses paid by the Fund’s A class. Additionally, the performance shown has been adjusted to reflect the absence of sales charges and to remove any voluntary waiver of Fund expenses related to the A class that may have occurred during the period prior to the commencement of operations of the R class.
7
The Fund’s Institutional Shares commenced operations on March 30, 2012. For the period prior to the commencement of operations of the Institutional Shares, the performance information shown is for the Fund’s A class. The performance of the A class has not been adjusted to reflect the expenses of the Institutional Shares, since the Institutional Shares have a lower expense ratio than the expenses of the A class. The performance of the A class has been adjusted to reflect the absence of sales charges and to remove any voluntary waiver of Fund expenses related to the A class that may have occurred during the period prior to the commencement of operations of the Institutional Shares.
Annual Shareholder Report
7

Portfolio of Investments Summary Tables (unaudited)
At November 30, 2020, the Fund’s portfolio composition1 was as follows:
Portfolio Composition
Percentage of
Total Net Assets
Domestic Equity Securities
43.4%
Domestic Fixed-Income Securities
19.6%
U.S. Government Agency Mortgage-Backed Securities
10.6%
International Fixed-Income Securities
10.3%
Foreign Government Securities
5.3%
Non-Agency Mortgage-Backed Securities
1.4%
Asset-Backed Securities
1.3%
International Equity Securities
0.9%
Bank Loan Core Fund
1.5%
Cash Equivalents2
2.6%
Other Security Types3,4
0.0%
Derivative Contracts4,5
(0.0)%
Other Assets and Liabilities—Net6
3.1%
TOTAL
100%
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8

At November 30, 2020, the Fund’s sector composition7 for its equity securities (excluding exchange-traded funds) was as follows:
Sector Composition
Percentage of
Equity Securities
Information Technology
15.7%
Financials
15.0%
Health Care
13.1%
Consumer Discretionary
12.5%
Industrials
10.8%
Communication Services
9.3%
Consumer Staples
8.5%
Utilities
4.9%
Real Estate
3.7%
Energy
3.4%
Materials
3.1%
Total
100%
1
See the Fund’s Prospectus for a description of the principal types of securities in which the Fund
invests. As of the date specified above, the Fund owned shares of one or more affiliated
investment companies. For purposes of this table, affiliated investment companies (other than an
affiliated money market mutual fund) in which the Fund invested greater than 10% of its net
assets are not treated as a single portfolio security, but rather the Fund is treated as owning a
pro rata portion of each security and each other asset and liability owned by the affiliated
investment company. Accordingly, the percentages of total net assets shown in the table will
differ from those presented on the Portfolio of Investments. Affiliated investment companies
(other than an affiliated money market mutual fund) in which the Fund invested less than 10% of
its net assets are listed individually in the table.
2
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements.
3
Other Security Types consist of purchased options.
4
Represents less than 0.1%.
5
Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as
applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact
of a derivative contract on the Fund’s performance may be larger than its unrealized
appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of
a derivative contract may provide a better indication of the contract’s significance to the
portfolio. More complete information regarding the Fund’s direct investments in derivative
contracts, including unrealized appreciation (depreciation), value and notional values or amounts
of such contracts, can be found in the table at the end of the Portfolio of Investments included
in this Report.
6
Assets, other than investments in securities and derivative contracts, less liabilities. See
Statement of Assets and Liabilities.
7
Sector classifications are based upon, and individual portfolio securities are assigned to, the
classifications of the Global Industry Classification Standard (GICS) except that the Adviser
assigns a classification to securities not classified by the GICS and to securities for which the
Adviser does not have access to the classification made by the GICS.
Annual Shareholder Report
9

Portfolio of Investments
November 30, 2020
Shares,
Principal
Amount
or Contracts
 
 
Value
          
 
COMMON STOCKS—   38.5%
 
 
 
Communication Services—   3.7%
 
5,888
1
Alphabet, Inc., Class A
$10,329,907   
209,537
 
AT&T, Inc.
6,024,189    
170,067
 
Comcast Corp., Class A
8,544,166    
8,925
1
Facebook, Inc.
2,471,957    
64,616
 
Verizon Communications, Inc.
3,903,453    
40,609
 
Walt Disney Co.
6,010,538    
 
 
TOTAL
37,284,210
 
 
Consumer Discretionary—   5.0%
 
3,976
1
Amazon.com, Inc.
12,596,127   
230,523
 
American Eagle Outfitters, Inc.
4,147,109    
52,584
 
Aramark
1,840,440    
162,229
 
Boyd Gaming Corp.
6,244,194    
18,766
 
Home Depot, Inc.
5,205,876    
89,241
 
Las Vegas Sands Corp.
4,971,616    
58,992
 
Levi Strauss & Co.
1,084,863    
11,527
 
McDonald’s Corp.
2,506,431    
45,375
 
Pulte Group, Inc.
1,979,711    
24,673
 
Target Corp.
4,429,544    
121,289
 
Wyndham Destinations, Inc.
5,101,415    
 
 
TOTAL
50,107,326
 
 
Consumer Staples—   3.8%
 
11,364
 
Constellation Brands, Inc., Class A
2,339,166    
23,780
 
Costco Wholesale Corp.
9,316,291    
71,788
 
Mondelez International, Inc.
4,124,220    
40,920
 
Philip Morris International, Inc.
3,099,690    
38,886
 
Procter & Gamble Co.
5,400,099    
141,193
 
The Coca-Cola Co.
7,285,559    
15,371
 
Walgreens Boots Alliance, Inc.
584,252      
35,895
 
WalMart, Inc.
5,484,397    
 
 
TOTAL
37,633,674
 
 
Energy—   1.5%
 
78,145
 
Chevron Corp.
6,812,681    
64,238
 
ConocoPhillips
2,541,255    
32,770
 
Phillips 66
1,985,207    
Annual Shareholder Report
10

Shares,
Principal
Amount
or Contracts
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Energy—   continued
 
71,452
 
Valero Energy Corp.
$3,841,974    
 
 
TOTAL
15,181,117
 
 
Financials—   6.3%
 
324,111
 
Bank of America Corp.
9,126,966    
4,133
 
BlackRock, Inc.
2,886,281    
85,051
 
Capital One Financial Corp.
7,283,768    
221,158
 
Citizens Financial Group, Inc.
7,223,020    
20,104
 
Everest Re Group Ltd.
4,570,242    
28,756
 
Goldman Sachs Group, Inc.
6,630,559    
90,599
 
JPMorgan Chase & Co.
10,679,810   
57,778
 
LPL Investment Holdings, Inc.
5,244,509    
49,501
 
Reinsurance Group of America
5,706,475    
9,239
 
S&P Global, Inc.
3,250,095    
 
 
TOTAL
62,601,725
 
 
Health Care—   4.3%
 
33,068
 
Abbott Laboratories
3,578,618    
33,770
 
AbbVie, Inc.
3,531,667    
13,826
 
Eli Lilly & Co.
2,013,757    
59,065
1
Horizon Therapeutics PLC
4,159,948    
29,435
 
Johnson & Johnson
4,258,656    
39,374
 
Medtronic PLC
4,476,824    
26,371
 
Merck & Co., Inc.
2,119,965    
58,699
 
Pfizer, Inc.
2,248,759    
5,885
 
Thermo Fisher Scientific, Inc.
2,736,407    
28,360
 
UnitedHealth Group, Inc.
9,538,602    
27,495
 
Zimmer Biomet Holdings, Inc.
4,100,054    
 
 
TOTAL
42,763,257
 
 
Industrials—   4.0%
 
281,636
 
General Electric Co.
2,867,054    
12,531
 
Honeywell International, Inc.
2,555,321    
98,354
1
Ingersoll-Rand, Inc.
4,354,132    
35,857
 
Jacobs Engineering Group, Inc.
3,866,819    
12,576
 
Parker-Hannifin Corp.
3,361,062    
55,709
 
TransUnion
5,074,533    
38,145
 
Union Pacific Corp.
7,784,632    
21,136
1
United Rentals, Inc.
4,797,449    
48,146
1
XPO Logistics, Inc.
5,136,215    
 
 
TOTAL
39,797,217
Annual Shareholder Report
11

Shares,
Principal
Amount
or Contracts
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   6.4%
 
32,980
1
Akamai Technologies, Inc.
$3,413,760    
31,152
 
Analog Devices, Inc.
4,332,620    
109,507
 
Apple, Inc.
13,036,808   
50,645
 
Fidelity National Information Services, Inc.
7,516,224    
100,670
 
Genpact Ltd.
4,092,235    
12,073
 
Mastercard, Inc.
4,062,685    
65,010
 
Microsoft Corp.
13,916,691   
4,995
 
NVIDIA Corp.
2,677,620    
38,909
 
NXP Semiconductors NV
6,163,964    
23,637
 
Visa, Inc., Class A
4,972,043    
 
 
TOTAL
64,184,650
 
 
Materials—   1.3%
 
40,237
 
DuPont de Nemours, Inc.
2,552,635    
164,373
 
Freeport-McMoRan, Inc.
3,844,685    
12,126
 
Linde PLC
3,109,349    
26,083
 
PPG Industries, Inc.
3,828,202    
 
 
TOTAL
13,334,871
 
 
Real Estate—   1.6%
 
25,813
 
Cyrusone, Inc.
1,804,587    
3,644
 
Equinix, Inc.
2,542,747    
81,388
 
Invitation Homes, Inc.
2,326,069    
43,596
 
National Retail Properties, Inc.
1,643,569    
45,815
 
ProLogis, Inc.
4,583,791    
23,334
 
Sun Communities, Inc.
3,243,426    
 
 
TOTAL
16,144,189
 
 
Utilities—   0.6%
 
26,498
 
Atmos Energy Corp.
2,540,893    
38,746
 
NextEra Energy, Inc.
2,851,318    
 
 
TOTAL
5,392,211
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $330,194,230)
384,424,447
 
 
PREFERRED STOCKS—   5.7%
 
 
 
Communication Services—   0.4%
 
3,000
 
2020 Cash Mandatory Exchangeable Trust, Conv. Pfd., 5.250%, 6/1/2023
3,644,100    
 
 
Consumer Discretionary—   0.5%
 
36,400
 
Aptiv PLC, Conv. Pfd., Series A, 5.500%, 6/15/2023, Annual
Dividend $5.50
5,089,448    
 
 
Financials—   0.4%
 
30,640
 
Assurant, Inc., Conv. Pfd., 6.500%, 3/15/2021, Annual Dividend $6.50
3,765,656    
Annual Shareholder Report
12

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
PREFERRED STOCKS—   continued
 
 
 
Health Care—   1.5%
 
49,296
 
Avantor, Inc., Conv. Pfd., Series A, 6.250%, 5/15/2022, Annual
Dividend $3.12
$4,256,217    
50,000
 
Becton Dickinson & Co., Conv. Pfd., 6.000%, 6/1/2023, Annual
Dividend $3.00
2,593,000    
2,950
 
Danaher Corp., Conv. Pfd., Series A, 4.750%, 4/15/2022, Annual
Dividend $47.50
4,545,625    
73,991
 
Elanco Animal Health, Inc., Conv. Bond, 5.000%, 2/1/2023, Annual
Dividend $2.50
3,511,613    
 
 
TOTAL
14,906,455
 
 
Industrials—   0.8%
 
71,126
 
Stanley Black & Decker, Inc., Conv. Pfd., 5.250%, 11/15/2022, Annual
Dividend $5.25
7,900,676    
 
 
Information Technology—   0.5%
 
3,700
 
Broadcom, Inc., Conv. Pfd., 8.000%, 9/30/2022, Annual Dividend $80.00
4,923,627    
 
 
Utilities—   1.6%
 
58,380
 
American Electric Power Co., Inc., Conv. Pfd., 6.125%, 3/15/2022,
Annual Dividend $3.06
2,949,941    
39,243
 
Dominion Energy, Inc., Conv. Pfd., 7.250%, 6/1/2022, Annual
Dividend $7.25
3,943,922    
59,953
 
Essential Utilities, Inc., Conv. Pfd., 6.000%, 4/30/2022, Annual
Dividend $3.00
3,525,836    
21,089
 
Sempra Energy, Conv. Pfd., 6.750%, 7/15/2021, Annual Dividend $6.75
2,181,024    
69,188
 
Southern Co., Conv. Pfd., 6.750%, 8/1/2022, Annual Dividend $3.38
3,444,871    
 
 
TOTAL
16,045,594
 
 
PREFERRED STOCKS
(IDENTIFIED COST $48,756,223)
56,275,556
 
 
CORPORATE BONDS—   4.5%
 
 
 
Basic Industry - Chemicals—   0.0%
 
$   175,000
 
Albemarle Corp., 4.150%, 12/1/2024
194,123      
 
 
Capital Goods - Aerospace & Defense—   0.2%
 
   200,000
 
BAE Systems PLC, Sr. Unsecd. Note, 144A, 3.400%, 4/15/2030
226,158      
   150,000
 
Boeing Co., Sr. Unsecd. Note, 2.950%, 2/1/2030
151,380      
   150,000
 
Boeing Co., Sr. Unsecd. Note, 3.625%, 2/1/2031
158,652      
    30,000
 
Boeing Co., Sr. Unsecd. Note, 3.950%, 8/1/2059
30,787       
   320,000
 
Huntington Ingalls Industries, Inc., Sr. Unsecd. Note, 3.483%, 12/1/2027
357,838      
    50,000
 
Leidos, Inc., Unsecd. Note, 144A, 3.625%, 5/15/2025
55,672       
   130,000
 
Leidos Inc., Unsecd. Note, 144A, 4.375%, 5/15/2030
154,872      
   300,000
 
Lockheed Martin Corp., Sr. Unsecd. Note, 2.900%, 3/1/2025
327,088      
   170,000
 
Northrop Grumman Corp., Sr. Unsecd. Note, 3.250%, 1/15/2028
192,018      
 
 
TOTAL
1,654,465
Annual Shareholder Report
13

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Capital Goods - Building Materials—   0.0%
 
$    40,000
 
Allegion PLC, Sr. Unsecd. Note, 3.500%, 10/1/2029
$44,062       
   180,000
 
Allegion US Holdings Co., Inc., Sr. Unsecd. Note, 3.550%, 10/1/2027
197,243      
 
 
TOTAL
241,305
 
 
Capital Goods - Construction Machinery—   0.0%
 
   240,000
 
CNH Industrial NV, Sr. Unsecd. Note, Series MTN, 3.850%, 11/15/2027
266,761      
 
 
Capital Goods - Diversified Manufacturing—   0.0%
 
   125,000
 
General Electric Co., Sr. Unsecd. Note, 3.625%, 5/1/2030
140,283      
    50,000
 
Otis Worldwide Corp., Sr. Unsecd. Note, Series WI, 2.565%, 2/15/2030
53,738       
    60,000
 
Wabtec Corp., Sr. Unsecd. Note, 3.200%, 6/15/2025
64,356       
    95,000
 
Xylem, Inc., Sr. Unsecd. Note, 2.250%, 1/30/2031
100,241      
 
 
TOTAL
358,618
 
 
Communications - Cable & Satellite—   0.1%
 
    95,000
 
Charter Communications Operating, LLC/Charter Communications
Operating Capital Corp., 5.050%, 3/30/2029
115,116      
   150,000
 
Charter Communications Operating, LLC/Charter Communications
Operating Capital Corp., Sec. Fac. Bond, 2.800%, 4/1/2031
158,807      
   150,000
 
Charter Communications, Inc., 4.200%, 3/15/2028
172,347      
   400,000
 
Comcast Corp., Sr. Unsecd. Note, 3.150%, 2/15/2028
450,542      
   200,000
 
Comcast Corp., Sr. Unsecd. Note, 3.300%, 2/1/2027
226,078      
   200,000
 
Comcast Corp., Sr. Unsecd. Note, 3.950%, 10/15/2025
229,415      
 
 
TOTAL
1,352,305
 
 
Communications - Media & Entertainment—   0.1%
 
    50,000
 
Alphabet, Inc., Sr. Unsecd. Note, 1.900%, 8/15/2040
49,583       
   150,000
 
Discovery Communications LLC, Sr. Unsecd. Note, 4.650%, 5/15/2050
184,712      
   135,000
 
Fox Corp, Sr. Unsecd. Note, Series WI, 4.709%, 1/25/2029
163,445      
   100,000
 
Omnicom Group, Inc., Sr. Unsecd. Note, 4.200%, 6/1/2030
120,659      
   150,000
 
ViacomCBS Inc., Sr. Unsecd. Note, 4.950%, 1/15/2031
186,382      
    40,000
 
Walt Disney Co., Sr. Unsecd. Note, 3.600%, 1/13/2051
47,442       
    45,000
 
Walt Disney Co., Sr. Unsecd. Note, 3.800%, 5/13/2060
55,804       
 
 
TOTAL
808,027
 
 
Communications - Telecom Wireless—   0.1%
 
   175,000
 
American Tower Corp., Sr. Unsecd. Note, 5.000%, 2/15/2024
198,429      
   150,000
 
Crown Castle International Corp., Sr. Unsecd. Note, 5.200%, 2/15/2049
205,338      
    75,000
 
T-Mobile USA, Inc., Sec. Fac. Bond, 144A, 3.875%, 4/15/2030
86,111       
    40,000
 
T-Mobile USA, Inc., Sec. Fac. Bond, 144A, 4.500%, 4/15/2050
50,057       
 
 
TOTAL
539,935
 
 
Communications - Telecom Wirelines—   0.1%
 
    85,000
 
AT&T, Inc., Sr. Unsecd. Note, 3.850%, 6/1/2060
90,247       
   190,000
 
AT&T, Inc., Sr. Unsecd. Note, Series WI, 5.300%, 8/15/2058
251,642      
Annual Shareholder Report
14

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Communications - Telecom Wirelines—   continued
 
$   150,000
 
Telefonica Emisiones SAU, Sr. Unsecd. Note, 5.213%, 3/8/2047
$192,005      
   206,000
 
Verizon Communications, Inc., Sr. Unsecd. Note, 4.672%, 3/15/2055
284,263      
 
 
TOTAL
818,157
 
 
Communications Equipment—   0.3%
 
3,569,488
 
Liberty Media Group, Conv. Bond, 3.500%, 1/15/2031
3,276,754    
 
 
Consumer Cyclical - Automotive—   0.1%
 
   150,000
 
American Honda Finance Corp., Sr. Unsecd. Note, Series MTN,
0.875%, 7/7/2023
151,776      
   100,000
 
General Motors Co., Sr. Unsecd. Note, 5.200%, 4/1/2045
121,977      
    75,000
 
General Motors Co., Sr. Unsecd. Note, 6.125%, 10/1/2025
90,421       
    60,000
 
Hyundai Capital America, Sr. Unsecd. Note, 144A, 2.375%, 2/10/2023
61,906       
    50,000
 
Hyundai Capital America, Sr. Unsecd. Note, 144A, 2.375%, 10/15/2027
51,637       
   220,000
 
Toyota Motor Credit Corp., Sr. Unsecd. Note, Series GMTN,
2.700%, 1/11/2023
230,881      
   200,000
 
Volkswagen Group of America Finance LLC, Sr. Unsecd. Note, 144A,
3.125%, 5/12/2023
211,412      
 
 
TOTAL
920,010
 
 
Consumer Cyclical - Retailers—   0.1%
 
   150,000
 
Advance Auto Parts, Inc., Sr. Unsecd. Note, Series WI,
3.900%, 4/15/2030
172,596      
   150,000
 
Alimentation Couche-Tard, Inc., Sr. Unsecd. Note, 144A,
3.800%, 1/25/2050
176,355      
    70,000
 
AutoNation, Inc., Sr. Unsecd. Note, 4.750%, 6/1/2030
84,282       
   250,000
 
CVS Health Corp., Sr. Unsecd. Note, 5.050%, 3/25/2048
338,319      
   200,000
 
Home Depot, Inc., Sr. Unsecd. Note, 2.500%, 4/15/2027
218,816      
   150,000
 
Home Depot, Inc., Sr. Unsecd. Note, 2.950%, 6/15/2029
169,869      
    95,000
 
O’Reilly Automotive, Inc., Sr. Unsecd. Note, 1.750%, 3/15/2031
94,695       
 
 
TOTAL
1,254,932
 
 
Consumer Cyclical - Services—   0.1%
 
   200,000
 
Cintas Corp. No. 2, Sr. Unsecd. Note, 3.700%, 4/1/2027
230,307      
   150,000
 
IHS Markit Ltd., Sr. Unsecd. Note, 4.750%, 8/1/2028
181,505      
    80,000
 
Visa, Inc., Sr. Unsecd. Note, 2.750%, 9/15/2027
89,239       
 
 
TOTAL
501,051
 
 
Consumer Non-Cyclical - Food/Beverage—   0.2%
 
   250,000
 
Anheuser-Busch Cos LLC / Anheuser-Busch InBev Worldwide Inc., Sr.
Unsecd. Note, Series, 4.900%, 2/1/2046
327,058      
   150,000
 
Campbell Soup Co., Sr. Unsecd. Note, 2.375%, 4/24/2030
157,357      
   150,000
 
Coca-Cola Femsa S.A.B. de C.V., Sr. Unsecd. Note, 2.750%, 1/22/2030
162,430      
    45,000
 
Constellation Brands, Inc., Sr. Unsecd. Note, 3.750%, 5/1/2050
53,030       
   200,000
 
Grupo Bimbo S.A.B. de CV, Sr. Unsecd. Note, 144A, 3.875%, 6/27/2024
219,064      
Annual Shareholder Report
15

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Consumer Non-Cyclical - Food/Beverage—   continued
 
$   150,000
 
Keurig Dr Pepper, Inc., Sr. Unsecd. Note, 5.085%, 5/25/2048
$211,565      
    50,000
 
McCormick & Co., Inc., Sr. Unsecd. Note, 2.500%, 4/15/2030
53,708       
    70,000
 
Mondelez International, Inc., Sr. Unsecd. Note, 1.500%, 5/4/2025
72,529       
   200,000
 
PepsiCo, Inc., 2.750%, 4/30/2025
217,962      
    75,000
 
PepsiCo, Inc., Sr. Unsecd. Note, 3.625%, 3/19/2050
95,088       
    95,000
 
Tyson Foods, Inc., Sr. Unsecd. Note, 3.550%, 6/2/2027
108,729      
 
 
TOTAL
1,678,520
 
 
Consumer Non-Cyclical - Health Care—   0.0%
 
    55,000
 
Agilent Technologies, Inc., Sr. Unsecd. Note, 2.100%, 6/4/2030
57,449       
    55,000
 
Dentsply Sirona, Inc., Sr. Unsecd. Note, 3.250%, 6/1/2030
60,581       
   200,000
 
PerkinElmer, Inc., Sr. Unsecd. Note, 3.300%, 9/15/2029
223,896      
    35,000
 
Thermo Fisher Scientific, Inc., Sr. Unsecd. Note, 4.133%, 3/25/2025
39,812       
 
 
TOTAL
381,738
 
 
Consumer Non-Cyclical - Pharmaceuticals—   0.2%
 
   435,000
 
AbbVie, Inc., Sr. Unsecd. Note, 3.200%, 11/21/2029
495,113      
   200,000
 
Amgen, Inc., Sr. Unsecd. Note, 2.450%, 2/21/2030
214,870      
   300,000
 
AstraZeneca PLC, Sr. Unsecd. Note, 4.000%, 1/17/2029
361,946      
   200,000
 
Bristol-Myers Squibb Co., Sr. Unsecd. Note, Series WI,
4.350%, 11/15/2047
272,956      
   175,000
 
Eli Lilly & Co., Sr. Unsecd. Note, 3.375%, 3/15/2029
203,612      
   135,000
 
Royalty Pharma PLC, Sr. Unsecd. Note, 144A, 1.750%, 9/2/2027
137,938      
 
 
TOTAL
1,686,435
 
 
Consumer Non-Cyclical - Products—   0.0%
 
   100,000
 
Procter & Gamble Co., Sr. Unsecd. Note, 3.000%, 3/25/2030
115,879      
 
 
Consumer Non-Cyclical - Supermarkets—   0.0%
 
   100,000
 
Kroger Co., Sr. Unsecd. Note, 4.450%, 2/1/2047
128,188      
 
 
Consumer Non-Cyclical - Tobacco—   0.1%
 
   115,000
 
Philip Morris International, Inc., Sr. Unsecd. Note, 2.100%, 5/1/2030
119,004      
   320,000
 
Reynolds American, Inc., Sr. Unsecd. Note, 7.000%, 8/4/2041
428,845      
 
 
TOTAL
547,849
 
 
Diversified Financial Services—   0.5%
 
4,100,000
 
AXA SA, Conv. Bond, 144A, 7.250%, 5/15/2021
4,734,516    
 
 
Energy - Independent—   0.1%
 
   280,000
 
Cimarex Energy Co., Sr. Unsecd. Note, 4.375%, 3/15/2029
315,768      
   300,000
 
EOG Resources, Inc., Sr. Unsecd. Note, 4.150%, 1/15/2026
347,303      
 
 
TOTAL
663,071
 
 
Energy - Integrated—   0.1%
 
   300,000
 
Exxon Mobil Corp., Sr. Unsecd. Note, 3.482%, 3/19/2030
347,404      
Annual Shareholder Report
16

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Energy - Integrated—   continued
 
$   205,000
 
Shell International Finance B.V., Sr. Unsecd. Note, 4.000%, 5/10/2046
$254,456      
 
 
TOTAL
601,860
 
 
Energy - Midstream—   0.1%
 
   205,000
 
Boardwalk Pipeline Partners LP, Sr. Unsecd. Note, 4.800%, 5/3/2029
231,255      
   155,000
 
Energy Transfer Partners LP, Sr. Unsecd. Note, 4.050%, 3/15/2025
166,763      
    80,000
 
Energy Transfer Partners LP, Sr. Unsecd. Note, Series 30Y,
6.000%, 6/15/2048
90,063       
   150,000
 
Enterprise Products Operating LLC, Sr. Unsecd. Note,
3.700%, 1/31/2051
163,351      
   250,000
 
Kinder Morgan, Inc., 5.050%, 2/15/2046
301,393      
   200,000
 
ONEOK, Inc., Sr. Unsecd. Note, 4.550%, 7/15/2028
220,471      
   230,000
 
TC Pipelines, LP, Sr. Unsecd. Note, 3.900%, 5/25/2027
255,643      
 
 
TOTAL
1,428,939
 
 
Energy - Refining—   0.0%
 
   140,000
 
Valero Energy Corp., Sr. Unsecd. Note, 4.000%, 4/1/2029
156,500      
 
 
Financial Institution - Banking—   0.9%
 
   400,000
 
Bank of America Corp., Sr. Unsecd. Note, 2.592%, 4/29/2031
426,678      
   200,000
 
Bank of America Corp., Sr. Unsecd. Note, Series MTN,
2.884%, 10/22/2030
218,754      
   500,000
 
Bank of America Corp., Sub. Note, Series MTN, 4.000%, 1/22/2025
559,741      
   200,000
 
Bank of New York Mellon Corp., Sr. Unsecd. Note, Series MTN,
2.661%, 5/16/2023
206,601      
   125,000
 
Capital One Financial Corp., Sr. Unsecd. Note, 3.900%, 1/29/2024
137,116      
   350,000
 
Citigroup, Inc., Sr. Unsecd. Note, 2.876%, 7/24/2023
363,546      
   800,000
 
Citigroup, Inc., Sr. Unsecd. Note, 3.200%, 10/21/2026
888,177      
   250,000
 
Citizens Bank N.A., Sr. Unsecd. Note, Series BKNT, 3.750%, 2/18/2026
285,176      
   250,000
 
Compass Bank, Birmingham, Sub. Note, Series BKNT,
3.875%, 4/10/2025
277,940      
   200,000
 
Fifth Third Bancorp, Sr. Unsecd. Note, 3.950%, 3/14/2028
234,755      
    80,000
 
FNB Corp. (PA), Sr. Unsecd. Note, 2.200%, 2/24/2023
81,111       
   500,000
 
Goldman Sachs Group, Inc., Sr. Unsecd. Note, 3.500%, 4/1/2025
554,477      
   300,000
 
Goldman Sachs Group, Inc., Sr. Unsecd. Note, 3.691%, 6/5/2028
343,323      
   500,000
 
HSBC Holdings PLC, Sr. Unsecd. Note, 3.900%, 5/25/2026
566,476      
   250,000
 
JPMorgan Chase & Co., Sr. Unsecd. Note, 2.083%, 4/22/2026
262,175      
   150,000
 
JPMorgan Chase & Co., Sr. Unsecd. Note, 3.509%, 1/23/2029
170,334      
   600,000
 
JPMorgan Chase & Co., Sr. Unsecd. Note, 3.782%, 2/1/2028
688,207      
   400,000
 
Manufacturers & Traders Trust Co., Sr. Unsecd. Note, Series BKNT,
2.500%, 5/18/2022
412,327      
   300,000
 
Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 4.431%, 1/23/2030
365,653      
   350,000
 
Morgan Stanley, Sr. Unsecd. Note, Series MTN, 6.250%, 8/9/2026
446,591      
Annual Shareholder Report
17

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Financial Institution - Banking—   continued
 
$   150,000
 
Northern Trust Corp., Sr. Unsecd. Note, 1.950%, 5/1/2030
$157,760      
   150,000
 
US Bancorp, Sr. Unsecd. Note, Series MTN, 1.375%, 7/22/2030
150,757      
   210,000
 
Wells Fargo & Co., Sr. Unsecd. Note, 2.188%, 4/30/2026
220,048      
   550,000
 
Wells Fargo & Co., Sr. Unsecd. Note, 3.000%, 10/23/2026
606,052      
   100,000
 
Wells Fargo & Co., Sr. Unsecd. Note, Series MTN, 2.879%, 10/30/2030
108,564      
 
 
TOTAL
8,732,339
 
 
Financial Institution - Broker/Asset Mgr/Exchange—   0.0%
 
    50,000
 
BlackRock, Inc., Sr. Unsecd. Note, 1.900%, 1/28/2031
52,155       
    50,000
 
Jefferies Group LLC, Sr. Unsecd. Note, 2.750%, 10/15/2032
52,494       
 
 
TOTAL
104,649
 
 
Financial Institution - Insurance - Life—   0.1%
 
   200,000
 
AIA Group Ltd., Sr. Unsecd. Note, 144A, 3.600%, 4/9/2029
226,622      
   150,000
 
American International Group, Inc., Sr. Unsecd. Note, 4.375%, 1/15/2055
192,639      
   200,000
 
Massachusetts Mutual Life Insurance Co., Sub. Note, 144A,
4.900%, 4/1/2077
269,974      
   340,000
 
Pacific Life Insurance Co., Sub. Note, 144A, 4.300%, 10/24/2067
367,416      
   150,000
 
Prudential Financial, Inc., Sr. Unsecd. Note, Series MTN,
4.600%, 5/15/2044
196,238      
 
 
TOTAL
1,252,889
 
 
Financial Institution - Insurance - P&C—   0.1%
 
    89,000
 
Liberty Mutual Group, Inc., Sr. Unsecd. Note, 144A, 4.250%, 6/15/2023
97,384       
   250,000
 
Nationwide Mutual Insurance Co., Sub. Note, 144A, 9.375%, 8/15/2039
439,946      
    60,000
 
Travelers Cos., Inc., Sr. Unsecd. Note, 2.550%, 4/27/2050
63,428       
 
 
TOTAL
600,758
 
 
Financial Institution - REIT - Apartment—   0.1%
 
   195,000
 
Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN,
3.350%, 5/15/2027
218,308      
    40,000
 
Camden Property Trust, Sr. Unsecd. Note, 2.800%, 5/15/2030
44,062       
   250,000
 
Mid-America Apartment Communities LP, Sr. Unsecd. Note,
3.750%, 6/15/2024
271,236      
   150,000
 
UDR, Inc., Sr. Unsecd. Note, Series MTN, 2.100%, 8/1/2032
151,553      
 
 
TOTAL
685,159
 
 
Financial Institution - REIT - Healthcare—   0.0%
 
   200,000
 
Physicians Realty Trust, Sr. Unsecd. Note, 4.300%, 3/15/2027
217,321      
   110,000
 
Welltower, Inc., Sr. Unsecd. Note, 2.750%, 1/15/2031
115,382      
 
 
TOTAL
332,703
 
 
Financial Institution - REIT - Office—   0.1%
 
   130,000
 
Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 1.875%, 2/1/2033
128,501      
Annual Shareholder Report
18

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Financial Institution - REIT - Office—   continued
 
$   300,000
 
Boston Properties LP, Sr. Unsecd. Note, 4.500%, 12/1/2028
$358,071      
 
 
TOTAL
486,572
 
 
Financial Institution - REIT - Other—   0.0%
 
   115,000
 
WP Carey, Inc., Sr. Unsecd. Note, 3.850%, 7/15/2029
129,429      
 
 
Financial Institution - REIT - Retail—   0.0%
 
   160,000
 
Regency Centers LP, Sr. Unsecd. Note, 4.125%, 3/15/2028
181,547      
 
 
Technology—   0.2%
 
   100,000
 
Broadcom, Inc., Sr. Unsecd. Note, 4.150%, 11/15/2030
116,233      
    75,000
 
Broadcom, Inc., Sr. Unsecd. Note, 4.700%, 4/15/2025
85,888       
   155,000
 
Dell International LLC / EMC Corp., Sec. Fac. Bond, 144A,
5.850%, 7/15/2025
184,665      
   135,000
 
Equifax, Inc., Sr. Unsecd. Note, 2.600%, 12/1/2024
144,603      
   200,000
 
Experian Finance PLC., Sr. Unsecd. Note, 144A, 4.250%, 2/1/2029
236,309      
   150,000
 
Fiserv, Inc., Sr. Unsecd. Note, 3.500%, 7/1/2029
172,050      
   245,000
 
Lam Research Corp., Sr. Unsecd. Note, 4.000%, 3/15/2029
294,024      
    50,000
 
Micron Technology, Inc., Sr. Unsecd. Note, 2.497%, 4/24/2023
52,257       
   155,000
 
Total System Services, Inc., Sr. Unsecd. Note, 4.800%, 4/1/2026
183,483      
 
 
TOTAL
1,469,512
 
 
Technology Services—   0.0%
 
    40,000
 
Global Payments, Inc., Sr. Unsecd. Note, 2.900%, 5/15/2030
43,741       
 
 
Transportation - Airlines—   0.2%
 
2,000,000
 
American Airlines Group, Inc., Conv. Bond, 6.500%, 7/1/2025
2,220,460    
    40,000
 
Southwest Airlines Co., Sr. Unsecd. Note, 4.750%, 5/4/2023
43,399       
    65,000
 
Southwest Airlines Co., Sr. Unsecd. Note, 5.250%, 5/4/2025
74,191       
 
 
TOTAL
2,338,050
 
 
Transportation - Railroads—   0.0%
 
   105,000
 
Kansas City Southern Industries, Inc., Sr. Unsecd. Note,
3.500%, 5/1/2050
115,781      
    65,000
 
Union Pacific Corp., Sr. Unsecd. Note, 2.400%, 2/5/2030
70,471       
 
 
TOTAL
186,252
 
 
Transportation - Services—   0.0%
 
   200,000
 
FedEx Corp., Sr. Unsecd. Note, 4.050%, 2/15/2048
242,696      
   135,000
 
Penske Truck Leasing Co. LP & PTL Finance Corp., Sr. Unsecd. Note,
144A, 4.000%, 7/15/2025
152,822      
 
 
TOTAL
395,518
 
 
Utility - Electric—   0.3%
 
    85,000
 
Avangrid, Inc., Sr. Unsecd. Note, 3.200%, 4/15/2025
93,129       
    75,000
 
Black Hills Corp., Sr. Unsecd. Note, 2.500%, 6/15/2030
78,473       
Annual Shareholder Report
19

Shares,
Principal
Amount
or Contracts
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Utility - Electric—   continued
 
$   300,000
 
Enel Finance International SA, Company Guarantee, 144A,
6.000%, 10/7/2039
$422,489      
   290,000
 
Exelon Corp., Sr. Unsecd. Note, 3.400%, 4/15/2026
326,087      
    80,000
 
FirstEnergy Transmission LLC, Sr. Unsecd. Note, 144A, 4.550%, 4/1/2049
93,513       
   280,000
 
Kansas City Power and Light Co., Sr. Unsecd. Note, 4.200%, 3/15/2048
354,812      
   230,000
 
National Rural Utilities Cooperative Finance Corp., Sr. Unsecd. Note,
2.950%, 2/7/2024
245,956      
   130,000
 
NiSource Finance Corp., Sr. Unsecd. Note, 4.375%, 5/15/2047
167,371      
   150,000
 
Northeast Utilities, Sr. Unsecd. Note, Series H, 3.150%, 1/15/2025
163,214      
   300,000
 
PPL Capital Funding, Inc., Sr. Unsecd. Note, 3.100%, 5/15/2026
333,816      
   175,000
 
Southern Co., Jr. Sub. Note, Series B, 4.000%, 1/15/2051
183,429      
   280,000
 
Virginia Electric & Power Co., Sr. Unsecd. Note, Series A,
3.500%, 3/15/2027
321,076      
 
 
TOTAL
2,783,365
 
 
Utility - Natural Gas—   0.0%
 
   150,000
 
National Fuel Gas Co., Sr. Unsecd. Note, 5.500%, 1/15/2026
168,464      
   250,000
 
Southern Natural Gas, Sr. Unsecd. Note, 144A, 4.800%, 3/15/2047
293,708      
 
 
TOTAL
462,172
 
 
TOTAL CORPORATE BONDS
(IDENTIFIED COST $38,430,383)
44,494,593
 
 
COMMERCIAL MORTGAGE-BACKED SECURITIES—   1.4%
 
 
 
Agency Commercial Mortgage-Backed Securities—   0.3%
 
1,025,000
 
Federal Home Loan Mortgage Corp. REMIC, Series K054, Class A2,
2.745%, 1/25/2026
1,123,036    
   600,000
 
Federal Home Loan Mortgage Corp. REMIC, Series K109, Class A2,
1.558%, 4/25/2030
621,860      
   996,063
 
FHLMC REMIC, Series K105, Class A1, 1.536%, 9/25/2029
1,022,438    
 
 
TOTAL