N-CSR 1 hf-ncsra.htm HODGES FUNDS ANNUAL REPORT 3-31-22
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES




Investment Company Act file number (811-05037)



Professionally Managed Portfolios
(Exact name of registrant as specified in charter)



615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)



Jason Hadler
Professionally Managed Portfolios
c/o U.S. Bank Global Fund Services
777 E. Wisconsin Avenue
Milwaukee, WI 53202
(Name and address of agent for service)



(414) 765-4324
Registrant's telephone number, including area code



Date of fiscal year end: March 31


Date of reporting period:  March 31, 2022


Item 1. Report to Stockholders.

(a)





ANNUAL REPORT • MARCH 31, 2022



Hodges Fund

Small Cap Fund

Small Intrinsic Value Fund

Blue Chip Equity Income Fund













www.hodgesfunds.com
Hodges Capital — Managing Equity Funds Since 1992


Table of Contents
 

 
Shareholder Letter
1
Sector Allocations
8
Performance Charts and Analysis
10
Schedules of Investments
15
Statements of Assets and Liabilities
23
Statements of Operations
24
Statements of Changes in Net Assets
25
Financial Highlights
29
Notes to Financial Statements
34
Report of Independent Registered Public Accounting Firm
43
Expense Examples
44
Trustees and Executive Officers
46
Additional Information
49
Privacy Notice
51





Hodges Mutual Funds


March 31, 2022
 
Dear Shareholder:
 
In recent months volatility once again returned to U.S. stocks, as global economic uncertainty arose from inflationary pressures, supply chain challenges, and the Russian invasion of Ukraine. Despite eye-popping inflation numbers and the likelihood of several interest rate increases this year, the S&P 500® Index posted a modest loss of 5.79% for the twelve months ending March 31, 2022.  Three out of the four of the Hodges Funds beat their respective benchmarks during the past twelve months, which reflected the continued shift in market leadership that seemed to favor fundamental investing and rewarded individual stock selection.
 
Today, we face an entirely different market environment than just a few months ago. The ongoing earnings recovery that appeared to be building momentum at the end of calendar 2021 now seems more uncertain due to a jagged global economic reopening, a likely recession in Europe, continued supply chain headwinds, significant commodity inflation, and higher interest rates. We believe active portfolio management becomes essential to navigate quickly changing business conditions across many sectors in this environment. Furthermore, prevailing inflation and higher interest rates favored stocks with solid balance sheets and whose underlying assets can produce stable cash flow and earnings. Specific sectors such as materials, agriculture, and energy have recently benefited from the commodities boom, while consumer discretionary and homebuilders have seen meaningful corrections in the past few months.  Furthermore, it is important to note that higher interest rates create a headwind for PE (price/earnings) multiples for stocks.  According to the most recent data published by FactSet, the S&P 500® is trading at approximately 19.5X forward earnings estimates compared to 21.9X a year ago and the five-year average of 18.6X. Although PE multiples have contracted for some growth stocks, the inverse of the S&P 500® quarter-end PE multiple is an earnings yield of 5.13%, which was still well above the rising 10-year Treasury yield of 2.33% at March 31, 2022. Although many industries hardest hit by the pandemic have experienced a meaningful recovery, we still see opportunities for earnings improvement in the months ahead. We acknowledge that some businesses are more likely to experience difficulties associated with rising commodity prices, higher interest rates, and curtailed consumer discretionary spending. However, such challenges can result in new investment opportunities. With this in mind, the Hodges Capital Management investment team has positioned our portfolios to benefit from shifting economic trends and secular and structural changes across different industries.
 
To fight inflation, the Federal Reserve has signaled plans to decrease liquidity over the next 12 months through fewer asset purchases and additional increases in the Fed funds rate. In recent months, capital markets have started to price in this reality, resulting in lower PE multiples for stocks and lower bond prices. As we have mentioned, we spend little time predicting interest rates, foreign currency fluctuations, or future commodity prices. However, we pay close attention to prices and, more importantly, the pricing power that our portfolio companies exhibit within the goods and services they produce. For many businesses, inflation and logistical challenges will adversely impact profit margins and revenues in the months ahead. Companies that exhibit pricing power and a low threat from substitute products can often pass on higher costs and see profit margins benefit from an inflationary environment. As a result, we are overweighting our portfolios with both growth and value stocks that can pass on higher prices, maintain/improve margins, and inflate their earnings in the year ahead.
 
Recent geopolitical turmoil and cost pressures have broken Wallstreet’s crystal ball, which never worked anyway. Investor sentiment is now far less bullish than it was three months ago. Specific sectors of U.S. stocks such as housing, transportation, retail, semiconductors, and other cyclicals have priced in a meaningful slowdown in the months ahead. Recent fund flows into equities and overall cash levels do not indicate that investors are far from the point of euphoria, which we believe creates the ideal condition for active portfolio management.  The big question is: What will investors be willing to pay for future earnings in a rising interest rate environment, and what earnings expectations are priced into individual stock prices? We believe the PE multiple for the broader market has no room to expand if interest rates continue their ascent. However, this is not true for every stock, as we see the potential to unlock value for many under-the-radar companies in our portfolios.
 
We are using the current period of increased volatility to find bargains in well-run businesses that control their own destiny by relying on ingenuity and well-calculated business decisions. Investors in the Hodges Funds can be assured that we are not changing our core investment discipline, designed to seek out quality companies running great businesses with excellent management teams trading at reasonable prices. Furthermore, we see this as an ideal environment for active portfolio managers to carefully select individual stocks that we believe can generate long-term value for shareholders.
 


1

Hodges Mutual Funds


Returns (Retail Class) as of 03/31/2022:
 
         
Since
 
1 Yr
3 Yrs
5 Yrs
10 Yrs
Inception
Hodges Fund
         
  (HDPMX) 10/09/1992
  2.70%
16.00%
  8.36%
12.52%
  9.99%
Russell 2000® Return Index
15.65%
18.92%
15.99%
14.64%
10.72%
           
Hodges Small Cap Fund
         
  (HDPSX) 12/18/2007
  1.12%
15.20%
10.79%
10.84%
10.00%
S&P 500® Index
 -5.79%
11.74%
  9.74%
11.04%
  8.80%
           
Small Intrinsic Value Fund
         
  (HDSVX) 12/26/2013
12.56%
20.60%
11.35%
10.11%
Russell 2000® Value Return Index
  3.32%
12.73%
  8.57%
  8.19%
Russell 2000® Index
 -5.79%
11.74%
  9.74%
  8.66%
           
Blue Chip Equity Income Fund (HDPBX) 09/10/2009
17.59%
18.04%
14.56%
13.37%
12.34%
Russell 1000® Index
13.27%
18.71%
15.82%
14.53%
14.64%
 
Average Annualized
       
 
HDPMX
HDPSX
HDSVX
HDPBX
Gross Expense Ratio
1.41%
1.40%
2.48%
1.64%
Net Expense Ratio
  1.17%*
  1.35%*
  1.29%*
  1.30%*

*
The Advisor has contractually agreed to reduce its fees at least until July 31, 2023.  This figure excludes Acquired Fund Fees and Expenses, interest, taxes, and extraordinary expenses.  The Advisor is permitted, with Board approval, to be reimbursed for fee reduction and/or expense payments made in the prior three years from the date the fees were waived and/or expenses were paid.  Please see prospectus for details.

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The current performance of the Funds may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 866-811-0224. The Funds impose a 1.00% redemption fee on shares held for thirty days or less (60 days or less for Institutional Class shares). Performance data quoted does not reflect the redemption fee. If reflected, total returns would be reduced. See the Financial Highlights in this report for the most current expense ratios.
 

 


2

Hodges Mutual Funds


Hodges Fund (HDPMX)
 
The Hodges Fund’s (the“Hodges Fund”) total return for the trailing twelve months ending March 31, 2022, amounted to 2.70%, compared to 15.65% for the S&P 500® Index. Relative performance lagged over the past twelve months due to weakness among several transportation, consumer discretionary and technology stocks. Furthermore, the Hodges Fund’s turnover has recently picked up to take advantage of volatile market conditions. We have upgraded many portfolio holdings into companies that we expect to generate above-average returns over the next twelve to eighteen months.
 
While we are encouraged with the Fund’s performance over the past three months, the Hodges Fund’s portfolio managers remain laser-focused on investments where we have the highest conviction based on fundamentals and relative valuations.  The number of positions held in the Fund at March 31, 2022 was 43 down from 47 positions a year ago. On March 31, 2022, the top ten holdings represented 41.39% of the Fund’s holdings. They included Cleveland-Cliffs Inc. (CLF), Matador Resources Company (MTDR), Texas Pacific Land Corporation (TPL), Freeport-McMoRan Inc (FCX), Chesapeake Energy Corporation (CHK), Callaway Golf Company (ELY), Uber Technologies, Inc. (UBER), ON Semiconductor Corporation (ON), Commercial Metals Company (CMC), and Frontier Group Holdings Inc (ULCC).
 
Hodges Fund vs S&P 500® Index
As of 3/31/2022


3

Hodges Mutual Funds


Hodges Small Cap Fund (HDPSX)
 
As of March 31, 2022, the Hodges Small Cap Fund’s (the “Small Cap Fund”) one-year return amounted to gains of 1.12% compared to a loss of 5.79% for the Russell 2000® Index during the same period. Several of the Fund’s energy and material names contributed to relative outperformance over the past year.  Although small-caps underperformed large-cap stocks over the past twelve months, we view the current risk-reward for holding quality small-cap stocks as attractive. While small-cap stocks tend to experience greater volatility during market turmoil, we expect this segment to generate above-average relative risk-adjusted returns over the long term.
 
The Small Cap Fund remains well diversified across industrials, transportation, financial services, technology, and consumer-related names, which we expect to contribute to the Fund’s long-term performance. The Fund recently took profits in several stocks that appeared overvalued relative to their underlying fundamentals and established several new positions with an attractive risk/reward profile. The total number of stocks held in the Fund was reduced from 54 to 47 during the past twelve months. The top ten holdings amounted to 39.56% of the Fund’s holdings and included Commercial Metals Company (CMC), Texas Pacific Land Corporation (TPL), SM Energy Co (SM), Cleveland-Cliffs Inc. (CLF), Matador Resources Company (MTDR), Eagle Materials, Inc. (EXP), Silicon Motion Technology Corporation (SIMO), Boyd Gaming Corporation (BYD), Pacira BioSciences, Inc. (PCRX), and Vista Outdoor Inc. (VSTO).
 
Small Cap Fund vs Russell 2000® Return Index
As of 3/31/2022

 

4

Hodges Mutual Funds


Hodges Small Intrinsic Value Fund (HDSVX)
 
The Hodges Small Intrinsic Value Fund (the “Small Intrinsic Value Fund”) experienced a returned 12.56% compared to a 3.32% return for the Russell 2000® Value Index over the past twelve months. The Small Intrinsic Value Fund’s solid relative performance over the past year was attributed to several of the Fund’s energy and industrial stocks. The top ten holdings represented 37.76% of the Fund’s holdings and included Cleveland-Cliffs Inc. (CLF), Stratus Properties Inc. (STRS), Oasis Petroleum Inc. (OAS), Commercial Metals Company (CMC), Horace Mann Educators Corporation (HMN), Vista Outdoor Inc. (VSTO), HighPeak Energy, Inc. (HPK), Comstock Resources Inc (CRK), and Builders FirstSource, Inc. (BLDR).
 
Small Intrinsic Value Fund vs
Russell 2000® Value Return Index & Russell 2000® Index
As of 3/31/2022

 

5

Hodges Mutual Funds


Hodges Blue Chip Equity Income Fund (HDPBX)
 
The Hodges Blue Chip Equity Income Fund (the “Blue Chip Equity Income Fund”) was up 17.59% compared to a 13.27% return for the Russell 1000® Index for the 12 months ending March 31, 2022. Positive relative performance was attributed to stock selection among a handful of the energy and technology names. Although large-cap stocks have made an impressive move in recent years, we still see the current investing landscape as offering plenty of attractive, high-quality dividend-paying stocks with solid upside potential. We also expect stable corporate profits to support potential dividend increases in the months ahead. The Blue-Chip Equity Income Fund remains well-diversified in companies that we believe can generate above-average income and total returns on a risk-adjusted basis. The top ten holdings represented 48.77% of the Fund’s holdings and included Microsoft Corporation (MSFT), Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), Exxon Mobil Corporation (XOM), Deere & Company (DE), Union Pacific Corporation (UNP), Eli Lilly And Co (LLY), Texas Instruments Incorporated (TXN), NVIDIA Corporation (NVDA), and ONEOK, Inc. (OKE).
 
Blue Chip Equity Income Fund vs Russell 1000® Index
As of 3/31/2022



6

Hodges Mutual Funds


In conclusion, we remain optimistic regarding the long-term investment opportunities surrounding the Hodges Mutual Funds. By offering four distinct mutual fund strategies covering most segments of the domestic equity market, we can serve most financial advisors’ and individual investors’ diverse needs. Our entire investment team is rigorously studying companies, meeting with management teams, observing trends, and navigating today’s ever-changing financial markets. Feel free to contact us directly if we can address any specific questions.
 
Sincerely,

 
Craig Hodges
Eric Marshall, CFA
Co-Portfolio Manager
Co-Portfolio Manager
   
   
Gary Bradshaw
Chris Terry, CFA
Derek Maupin
Co-Portfolio Manager
Co-Portfolio Manager
Co-Portfolio Manager

 
The above discussion is based on the opinions of Eric Marshall, CFA, and is subject to change. It is not intended to be a forecast of future events, a guarantee of future results, and is not a recommendation to buy or sell any security. Portfolio composition and company ownership in the Hodges Funds are subject to daily change.
 
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the Hodges Funds, and it may be obtained by calling 866-811-0224, or visiting www.hodgesmutualfunds.com. Read it carefully before investing.
 
Mutual Fund investing involves risk.  Principal loss is possible. Investments in foreign securities involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. Options and future contracts have the risks of unlimited losses of the underlying holdings due to unanticipated market movements and failure to correctly predict the direction of securities prices, interest rates and currency exchange rates. These risks may be greater than risks associated with more traditional investments. Short sales of securities involve the risk that losses may exceed the original amount invested. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer term debt securities. Investments in small and medium-capitalization companies involve additional risks such as limited liquidity and greater volatility. Non-diversified funds are more exposed to individual stock volatility than a diversified fund.  Investments in companies that demonstrate special situations or turnarounds, meaning companies that have experienced significant business problems but are believed to have favorable prospects for recovery, involve greater risk.
 
Value investing carries the risk that the market will not recognize a security’s inherent value for a long time, or that a stock judged to be undervalued may be appropriately priced or overvalued.
 
Diversification does not assure a profit or protect against a loss in a declining market.
 
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.
 
Investment performance reflects fee waivers in effect.  In the absence of such waivers, total return would be reduced.
 
The S&P 500® Index is a broad-based unmanaged index of 500 stocks that is widely recognized as representative of the equity market in general.  The Russell 1000® Index is a subset of the Russell 3000® Index and consists of the 1,000 largest companies comprising over 90% of the total market capitalization of all listed stocks.  The Russell 2000® Index consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000® Index, as ranked by market capitalization. The Russell 2500® Index consists of the smallest 2,500 companies in a group of 3,000 U.S. companies in the Russell 3000® Index, as ranked by market capitalization. The Russell 3000® Index is a stock index consisting of the 3000 largest publicly listed companies, representing about 98% of the total capitalization of the entire U.S. stock market.  You cannot invest directly in an index.  The Russell 2000® Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000® Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect value characteristics.
 
Cash Flow: A revenue or expense stream that changes a cash account over a given period.
 
Price/earnings (P/E): The most common measure of how expensive a stock is.
 
Earnings Growth is not a measure of the Fund’s future performance.
 
Hodges Capital Management is the Advisor to the Hodges Funds.
 
Hodges Funds are distributed by Quasar Distributors LLC.
 

7

Hodges Mutual Funds

SECTOR ALLOCATIONS At March 31, 2022 (Unaudited)

(as a percentage of net assets)

Hodges Fund
(HDPMX)
 
               
 

Small Cap Fund
(HDPSX & HDSIX)
 
      
 

 
1  Other assets in excess of liabilities.
8

Hodges Mutual Funds

SECTOR ALLOCATIONS At March 31, 2022 (Unaudited)

(as a percentage of net assets)

Small Intrinsic Value Fund
(HDSVX)
 
                                       
 

Blue Chip Equity Income Fund
(HDPBX)
 
                     
 


1  Other assets in excess of liabilities.

9

Hodges Fund – Retail Class (Unaudited)
Value of $10,000 vs. S&P 500® Index



Annualized Returns for the periods ended March 31, 2022
 
         
Since Inception
Ending Value
 
One Year
Three Year
Five Year
Ten Year
(10/9/92)
(3/31/2022)
Hodges Fund – Retail Class
  2.70%
16.00%
  8.36%
12.52%
  9.99%
$32,523
S&P 500® Index
15.65%
18.92%
15.99%
14.64%
10.72%
  39,197

This chart illustrates the performance of a hypothetical $10,000 investment made on March 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.  The returns reflect fee waivers in effect.  In the absence of such waivers, total return would be reduced.  The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling (866) 811-0224.
 
The Fund imposes a 1.00% redemption fee on Retail shares held for less than 30 days. Performance does not reflect the redemption fee.  If reflected, total returns would be reduced.
 


10

Small Cap Fund – Retail Class (Unaudited)
Value of $10,000 vs. Russell 2000® Index


 
Annualized Returns for the periods ended March 31, 2022
 
         
Since Inception
Ending Value
 
One Year
Three Year
Five Year
Ten Year
(12/18/07)
(3/31/2022)
Small Cap Fund – Retail Class
  1.12%
15.20%
10.79%
10.84%
10.00%
$27,976
Russell 2000® Index
-5.79%
11.74%
  9.74%
11.04%
  8.80%
  28,500

This chart illustrates the performance of a hypothetical $10,000 investment made on March 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.  The returns reflect fee waivers in effect.  In the absence of such waivers, total return would be reduced.  The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling (866) 811-0224.
 
The Fund imposes a 1.00% redemption fee on Retail shares held for less than 30 days. Performance does not reflect the redemption fee.  If reflected, total returns would be reduced.
 


11

Small Cap Fund – Institutional Class (Unaudited)
Value of $1,000,000 vs. Russell 2000® Index


 
Annualized Returns for the periods ended March 31, 2022
 
         
Since Inception
Ending Value
 
One Year
Three Year
Five Year
Ten Year
(12/12/08)
(3/31/2022)
Small Cap Fund – Institutional Class
  1.34%
15.50%
11.06%
11.15%
16.32%
$2,879,033
Russell 2000® Index
-5.79%
11.74%
  9.74%
11.04%
13.34%
  2,849,987

This chart illustrates the performance of a hypothetical $1,000,000 investment made on March 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.  The returns reflect fee waivers in effect.  In the absence of such waivers, total return would be reduced.  The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling (866) 811-0224.
 
The Fund imposes a 1.00% redemption fee on Institutional shares held for less than 60 days. Performance does not reflect the redemption fee.  If reflected, total returns would be reduced.
 


12

Small Intrinsic Value Fund (Unaudited)
Value of $10,000 vs. Russell 2000® Index & Russell 2000® Value Index



Annualized Returns for the periods ended March 31, 2022
 
       
Since Inception
Ending Value
 
One Year
Three Year
Five Year
(12/26/13)
(3/31/2022)
Small Intrinsic Value Fund
12.56%
20.60%
11.35%
10.11%
$22,155
Russell 2000® Index
 -5.79%
11.74%
  9.74%
  8.66%
  19,865
Russell 2000® Value Index
  3.32%
12.73%
  8.57%
  8.19%
  19,160

This chart illustrates the performance of a hypothetical $10,000 investment made on December 26, 2013, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.  The returns reflect fee waivers in effect.  In the absence of such waivers, total return would be reduced.  The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling (866) 811-0224.
 
The Fund imposes a 1.00% redemption fee on Retail shares held for less than 30 days. Performance does not reflect the redemption fee.  If reflected, total returns would be reduced.
 


13

Blue Chip Equity Income Fund (Unaudited)
Value of $10,000 vs. Russell 1000® Index


 
Annualized Returns for the periods ended March 31, 2022
 
         
Since Inception
Ending Value
 
One Year
Three Year
Five Year
Ten Year
(9/10/09)
(3/31/2022)
Blue Chip Equity Income Fund
17.59%
18.04%
14.56%
13.37%
12.34%
$35,070
Russell 1000® Index
13.27%
18.71%
15.82%
14.53%
14.64%
  38,841

This chart illustrates the performance of a hypothetical $10,000 investment made on March 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.  The returns reflect fee waivers in effect.  In the absence of such waivers, total return would be reduced.  The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Fund may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling (866) 811-0224.
 
The Fund imposes a 1.00% redemption fee on Retail shares held for less than 30 days. Performance does not reflect the redemption fee.  If reflected, total returns would be reduced.
 


14

Hodges Fund

SCHEDULE OF INVESTMENTS at March 31, 2022

Shares
     
Value
 
COMMON STOCKS: 93.7%
     
       
Airlines: 3.0%
     
 
500,000
 
Frontier Group Holdings, Inc. 1
 
$
5,665,000
 
         
Apparel: 2.3%
       
 
170,000
 
On Holding AG - Class A 1
   
4,290,800
 
         
Apparel & Shoe Retail: 1.0%
       
 
150,000
 
Duluth Holdings, Inc. - Class B 1
   
1,834,500
 
         
Auto Manufacturers: 2.0%
       
 
85,000
 
General Motors Co. 1
   
3,717,900
 
         
Banks: 2.6%
       
 
100,000
 
Wells Fargo & Co.
   
4,846,000
 
         
Building Materials: 6.0%
       
 
100,000
 
The AZEK Co., Inc. - Class A 1
   
2,484,000
 
 
85,000
 
Builders FirstSource, Inc. 1
   
5,485,900
 
 
25,000
 
Eagle Materials, Inc.
   
3,209,000
 
           
11,178,900
 
Computers: 4.5%
       
 
32,500
 
CyberArk Software Ltd. 1
   
5,484,375
 
 
70,000
 
NCR Corp. 1
   
2,813,300
 
           
8,297,675
 
Energy - Alternate Sources: 2.2%
       
 
185,000
 
Archaea Energy, Inc. - Class A 1
   
4,057,050
 
         
Entertainment: 1.4%
       
 
150,000
 
Cinemark Holdings, Inc. 1
   
2,592,000
 
         
Insurance: 3.0%
       
 
90,000
 
American International Group, Inc.
   
5,649,300
 
         
Internet: 8.8%
       
 
32,500
 
Airbnb, Inc. - Class A 1
   
5,582,200
 
 
80,000
 
Revolve Group, Inc. - Class A 1
   
4,295,200
 
 
180,000
 
Uber Technologies, Inc. 1
   
6,422,400
 
           
16,299,8000
 
Internet Gambling: 1.7%
       
 
450,000
 
Golden Nugget
       
     
  Online Gaming, Inc. 1
   
3,199,500
 
Iron & Steel: 9.6%
       
 
360,000
 
Cleveland-Cliffs, Inc. 1
   
11,595,600
 
 
150,000
 
Commercial Metals Co.
   
6,243,000
 
           
17,838,600
 
Leisure Time: 8.2%
       
 
278,000
 
Callaway Golf Co. 1
   
6,510,760
 
 
200,000
 
Norwegian Cruise
       
     
  Line Holdings Ltd. 1
   
4,376,000
 
 
125,000
 
Vista Outdoor, Inc. 1
   
4,461,250
 
           
15,348,010
 
Mining: 4.0%
       
 
150,000
 
Freeport-McMoRan, Inc.
   
7,461,000
 
         
Oil & Gas Exploration & Production: 3.7%
       
 
80,000
 
Chesapeake Energy Corp.
   
6,960,000
 
         
Oil Companies Exploration & Production: 5.7%
       
 
200,000
 
Matador Resources Co.
   
10,596,000
 
         
Restaurants: 3.5%
       
 
50,000
 
Dutch Bros, Inc. 1
   
2,763,500
 
 
1,636,980
 
Luby’s, Inc. 1,2
   
3,732,314
 
           
6,495,814
 
Semiconductors: 8.8%
       
 
60,000
 
Micron Technology, Inc.
   
4,673,400
 
 
100,000
 
ON Semiconductor Corp. 1
   
6,261,000
 
 
20,000
 
Skyworks Solutions, Inc.
   
2,665,600
 
 
25,000
 
Wolfspeed, Inc. 1
   
2,846,500
 
           
16,446,500
 
Software: 3.4%
       
 
20,000
 
Twilio, Inc. - Class A 1
   
3,296,200
 
 
175,000
 
Upland Software, Inc. 1
   
3,081,750
 
           
6,377,950
 
Sporting Goods: 1.6%
       
 
75,000
 
Academy Sports & Outdoors, Inc.
   
2,955,000
 
         
Textiles: 1.7%
       
 
1,000,000
 
The Dixie Group, Inc. 1,2
   
3,100,000
 
         
U.S. Royalty Trusts: 5.1%
       
 
7,000
 
Texas Pacific Land Corp.
   
9,464,770
 
         
TOTAL COMMON STOCKS
       
  (Cost $120,276,605)
   
174,672,069
 


The accompanying notes are an integral part of these financial statements.

15

Hodges Fund

SCHEDULE OF INVESTMENTS at March 31, 2022 (Continued)

        
Notional
       
Shares
     
Value
   
Value
 
CALL OPTIONS PURCHASED: 4.4% 1
           
             
Biotechnology: 1.5%
           
 
500
 
Moderna, Inc.
           
     
  Expiration:
           
     
  June 2022
           
     
  Exercise Price:
  $120.00
           
       
$
8,613,000
   
$
2,840,000
 
                 
Electrical Components & Equipment: 0.9%
               
 
560
 
Encore Wire Corp.
               
     
  Expiration:
               
     
  May 2022
               
     
  Exercise Price:
  $85.00
               
                     
           
6,387,920
     
1,674,400
 
Oil & Gas Exploration & Production: 1.2%
               
 
750
 
ConocoPhillips
               
     
  Expiration:
               
     
  April 2022
               
     
  Exercise Price:
  $70.00
               
         
7,500,000
     
2,248,125
 
                 
Semiconductors: 0.8%
               
 
250
 
NVIDIA Corp.
               
     
  Expiration:
               
     
  June 2022
               
     
  Exercise Price:
  $225.00
               
         
6,821,500
     
1,426,250
 
                 
TOTAL CALL OPTIONS PURCHASED
               
  (Cost $6,366,891)
           
8,188,775
 
                 
TOTAL INVESTMENTS IN SECURITIES: 98.1%
               
  (Cost $126,643,495)
           
182,860,844
 
Other Assets in Excess of Liabilities: 1.9%
           
3,521,753
 
TOTAL NET ASSETS: 100.0%
         
$
186,382,597
 

1
Non-income producing security.
2
Company is an “affiliated person” of the Fund, as defined in the Investment Company Act of 1940.


The accompanying notes are an integral part of these financial statements.

16

Hodges Fund

SCHEDULE OF OPTIONS WRITTEN at March 31, 2022

Contracts
     
Notional
       
(100 shares per contract)
 
Value
   
Value
 
CALL OPTIONS WRITTEN: 0.0% 1,2
           
             
Iron & Steel: 0.0% 2
           
 
750
 
Commercial Metals Co.,
           
     
  Expiration:
           
     
  April 2022,
           
     
  Exercise Price:
  $43.00
           
       
$
3,121,500
   
$
50,625
 
                 
Oil Companies Exploration
               
  & Production: 0.0% 2
               
 
500
 
Matador Resources Co.,
               
     
  Expiration:
               
     
  April 2022,
               
     
  Exercise Price:
  $57.50
               
         
2,649,000
     
35,000
 
 
250
 
Matador Resources Co.,
               
     
  Expiration:
               
     
  April 2022,
               
     
  Exercise Price:
  $60.00
               
         
1,324,500
     
10,000
 
                   
45,000
 
TOTAL CALL OPTIONS WRITTEN
               
  (Proceeds $275,748)
         
$
95,625
 

Percentages are stated as a percent of net assets.
1
Non-income producing security.
2
Does not round to 0.1% or (0.1)%, as applicable.


The accompanying notes are an integral part of these financial statements.

17

Small Cap Fund

SCHEDULE OF INVESTMENTS at March 31, 2022

Shares
     
Value
 
COMMON STOCKS: 98.7%
     
       
Airlines: 3.3%
     
 
250,000
 
Frontier Group Holdings, Inc. 1
 
$
2,832,500
 
 
200,000
 
Hawaiian Holdings, Inc. 1
   
3,940,000
 
           
6,772,500
 
Apparel & Shoe Retail: 1.8%
       
 
125,000
 
Shoe Carnival, Inc.
   
3,645,000
 
         
Automobile Retail: 0.9%
       
 
22,000
 
America’s Car-Mart, Inc. 1
   
1,772,320
 
         
Banks: 3.9%
       
 
160,000
 
Hilltop Holdings, Inc.
   
4,704,000
 
 
50,000
 
Prosperity Bancshares, Inc.
   
3,469,000
 
           
8,173,000
 
Building Materials: 3.4%
       
 
55,000
 
Eagle Materials, Inc.
   
7,059,800
 
         
Commercial Services: 2.5%
       
 
176,000
 
European Wax Center, Inc. 1
   
5,202,560
 
         
Computers: 3.2%
       
 
100,000
 
NCR Corp. 1
   
4,019,000
 
 
70,000
 
Super Micro Computer, Inc. 1
   
2,664,900
 
           
6,683,900
 
Electrical Components & Equipment: 2.0%
       
 
37,000
 
Encore Wire Corp.
   
4,220,590
 
         
Electronics: 1.6%
       
 
170,000
 
Kimball Electronics, Inc. 1
   
3,398,300
 
         
Entertainment: 1.8%
       
 
220,000
 
Cinemark Holdings, Inc. 1
   
3,801,600
 
         
Food: 1.4%
       
 
90,000
 
Sprouts Farmers Market, Inc. 1
   
2,878,200
 
         
Healthcare Products: 1.3%
       
 
75,000
 
Inmode Ltd. 1
   
2,768,250
 
         
Healthcare Services: 1.5%
       
 
48,000
 
Acadia Healthcare Co., Inc. 1
   
3,145,440
 
         
Home Builders: 2.4%
       
 
180,000
 
Taylor Morrison Home Corp. 1
   
4,899,600
 
         
Home Furnishings: 4.0%
       
 
195,000
 
Ethan Allen Interiors, Inc.
   
5,083,650
 
 
10,000
 
RH 1
   
3,260,900
 
           
8,344,550
 
Insurance: 1.2%
       
 
17,000
 
The Hanover Insurance Group, Inc.
   
2,541,840
 
         
Internet: 0.6%
       
 
35,000
 
RumbleON, Inc. 1
   
1,197,350
 
               
Iron & Steel: 12.4%
       
 
300,000
 
Cleveland-Cliffs, Inc. 1
   
9,663,000
 
 
270,000
 
Commercial Metals Co.
   
11,237,400
 
 
130,000
 
United States Steel Corp.
   
4,906,200
 
           
25,806,600
 
Leisure Time: 6.8%
       
 
48,000
 
Brunswick Corp.
   
3,882,720
 
 
220,000
 
Norwegian Cruise
       
     
  Line Holdings Ltd. 1
   
4,813,600
 
 
150,000
 
Vista Outdoor, Inc. 1
   
5,353,500
 
           
14,049,820
 
Lodging: 3.2%
       
 
100,000
 
Boyd Gaming Corp.
   
6,578,000
 
         
Metal Fabrication & Hardware: 1.9%
       
 
100,000
 
Lawson Products, Inc. 1
   
3,854,000
 
         
Office Supplies Retail: 0.1%
       
 
10,000
 
Cricut, Inc. - Class A 1
   
130,900
 
         
Oil Companies Exploration & Production: 11.4%
       
 
175,000
 
Matador Resources Co.
   
9,271,500
 
 
16,526
 
Pioneer Natural Resources Co.
   
4,131,996
 
 
265,000
 
SM Energy Co.
   
10,321,750
 
           
23,725,246
 
Packaging & Containers: 2.1%
       
 
75,000
 
Berry Global Group, Inc. 1
   
4,347,000
 
         
Pharmaceuticals: 2.8%
       
 
75,000
 
Pacira Pharmaceuticals, Inc. 1
   
5,724,000
 
         
Restaurants: 4.1%
       
 
30,000
 
Cracker Barrel Old
       
     
  Country Store, Inc.
   
3,561,900
 
 
60,000
 
Texas Roadhouse, Inc.
   
5,023,800
 
           
8,585,700
 
Semiconductors: 6.7%
       
 
60,000
 
Kulicke & Soffa Industries, Inc.
   
3,361,200
 
 
100,000
 
Silicon Motion
       
     
  Technology Corp. - ADR
   
6,682,000
 
 
80,000
 
Tower Semiconductor Ltd. 1
   
3,872,000
 
           
13,915,200
 
Software: 0.6%
       
 
65,000
 
Upland Software, Inc. 1
   
1,144,650
 
         
Sporting Goods: 2.1%
       
 
110,000
 
Academy Sports & Outdoors, Inc.
   
4,334,000
 
         
Transportation: 3.0%
       
 
35,000
 
Kirby Corp. 1
   
2,526,650
 
 
30,000
 
Matson, Inc.
   
3,618,600
 
           
6,145,250
 


The accompanying notes are an integral part of these financial statements.

18

Small Cap Fund

SCHEDULE OF INVESTMENTS at March 31, 2022 (Continued)


Shares
     
Value
 
U.S. Royalty Trusts: 5.0%
     
 
7,700
 
Texas Pacific Land Corp.
 
$
10,411,247
 
         
TOTAL COMMON STOCKS
       
  (Cost $128,166,587)
   
205,256,413
 
         
TOTAL INVESTMENTS IN SECURITIES: 98.7%
       
  (Cost $128,166,587)
   
205,256,413
 
Other Assets in Excess of Liabilities: 1.3%
   
2,626,045
 
TOTAL NET ASSETS: 100.0%
 
$
207,882,458
 

ADR - American Depositary Receipt
1
Non-income producing security.



SCHEDULE OF OPTIONS WRITTEN at March 31, 2022

Contracts
     
Notional
       
(100 shares per contract)
 
Value
   
Value
 
CALL OPTIONS WRITTEN: 0.0% 1,2
           
             
Iron & Steel: 0.0% 2
           
 
300
 
Commercial Metals Co.,
           
     
  Expiration:
           
     
  April 2022,
           
     
  Exercise Price:
  $41.00
           
       
$
1,248,600
   
$
47,250
 
TOTAL CALL OPTIONS WRITTEN
               
  (Proceeds $38,240)
         
$
47,250
 

Percentages are stated as a percent of net assets.
1
Non-income producing security.
2
Does not round to 0.1% or (0.1)%, as applicable.


The accompanying notes are an integral part of these financial statements.

19

Small Intrinsic Value Fund

SCHEDULE OF INVESTMENTS at March 31, 2022

Shares
     
Value
 
COMMON STOCKS: 95.2%
     
       
Apparel: 3.5%
     
 
11,000
 
Delta Apparel, Inc. 1
 
$
327,690
 
 
30,000
 
Fossil Group, Inc. 1
   
289,200
 
           
616,890
 
Banks: 11.2%
       
 
4,000
 
BancFirst Corp.
   
332,840
 
 
15,000
 
First Foundation, Inc.
   
364,350
 
 
13,000
 
Hilltop Holdings, Inc.
   
382,200
 
 
3,000
 
Prosperity Bancshares, Inc.
   
208,140
 
 
6,000
 
Texas Capital BancShares, Inc. 1
   
343,860
 
 
3,500
 
Triumph Bancorp, Inc. 1
   
329,070
 
           
1,960,460
 
Beverages: 1.2%
       
 
30,000
 
Farmer Brothers Co. 1
   
213,600
 
         
Building Materials: 5.9%
       
 
8,000
 
Builders FirstSource, Inc. 1
   
516,320
 
 
4,000
 
Eagle Materials, Inc.
   
513,440
 
           
1,029,760
 
Commercial Services: 5.7%
       
 
7,000
 
Franchise Group, Inc.
   
290,010
 
 
15,000
 
H&R Block, Inc.
   
390,600
 
 
150,000
 
Research Solutions, Inc. 1
   
319,500
 
           
1,000,110
 
Computers: 1.8%
       
 
8,000
 
NCR Corp. 1
   
321,520
 
         
Diversified Financial Services: 3.7%
       
 
2,000
 
B Riley Financial, Inc.
   
139,920
 
 
40,000
 
U.S. Global Investors, Inc.
   
208,000
 
 
20,000
 
Westwood Holdings Group, Inc.
   
306,400
 
           
654,320
 
Diversified Manufacturing Operations: 1.6%
       
 
8,000
 
Trinity Industries, Inc.
   
274,880
 
         
Electrical Components & Equipment: 0.9%
       
 
1,400
 
Encore Wire Corp.
   
159,698
 
         
Electronics: 2.7%
       
 
24,000
 
Kimball Electronics, Inc. 1
   
479,760
 
         
Environmental Control: 0.8%
       
 
11,000
 
Pure Cycle Corp. 1
   
132,220
 
         
Food: 1.0%
       
 
35,000
 
SunOpta, Inc. 1
   
175,700
 
               
Holding Companies - Diversified: 2.9%
       
 
50,000
 
Legato Merger Corp II 1
   
503,500
 
         
Home Builders: 1.6%
       
 
10,000
 
Taylor Morrison Home Corp. 1
   
272,200
 
         
Home Furnishings: 1.5%
       
 
16,000
 
Bassett Furniture Industries, Inc.
   
264,960
 
         
Insurance: 6.0%
       
 
13,000
 
Horace Mann Educators Corp.
   
543,790
 
 
40,000
 
Tiptree, Inc.
   
514,000
 
           
1,057,790
 
Internet: 1.1%
       
 
30,000
 
CarParts.com, Inc. 1
   
201,000
 
         
Iron & Steel: 8.8%
       
 
30,000
 
Cleveland-Cliffs, Inc. 1
   
966,300
 
 
14,000
 
Commercial Metals Co.
   
582,680
 
           
1,548,980
 
Leisure Time: 4.9%
       
 
4,000
 
Brunswick Corp.
   
323,560
 
 
15,000
 
Vista Outdoor, Inc. 1
   
535,350
 
           
858,910
 
Machinery - Diversified: 1.6%
       
 
8,000
 
Ichor Holdings Ltd. 1
   
284,960
 
         
Metal Fabrication & Hardware: 1.0%
       
 
8,000
 
TimkenSteel Corp. 1
   
175,040
 
         
Oil & Gas Exploration & Production: 1.7%
       
 
3,500
 
Chesapeake Energy Corp.
   
304,500
 
         
Oil Companies Exploration & Production: 11.2%
       
 
40,000
 
Comstock Resources, Inc. 1
   
522,000
 
 
24,000
 
HighPeak Energy, Inc.
   
532,800
 
 
4,000
 
Oasis Petroleum, Inc.
   
585,200
 
 
4,000
 
Whiting Petroleum Corp.
   
326,040
 
           
1,966,040
 
Pharmaceuticals: 1.3%
       
 
3,000
 
Pacira Pharmaceuticals, Inc. 1
   
228,960
 
         
Real Estate: 6.1%
       
 
3,500
 
The St. Joe Co.
   
207,340
 
 
20,000
 
Stratus Properties, Inc. 1
   
861,600
 
           
1,068,940
 
Semiconductors: 2.3%
       
 
6,000
 
Silicon Motion
       
     
  Technology Corp. - ADR
   
400,920
 


The accompanying notes are an integral part of these financial statements.

20

Small Intrinsic Value Fund

SCHEDULE OF INVESTMENTS at March 31, 2022 (Continued)


Shares
     
Value
 
Telecommunications: 0.8%
     
 
10,000
 
DZS, Inc. 1
 
$
138,700
 
         
Transportation: 2.5%
       
 
6,000
 
Kirby Corp. 1
   
433,140
 
         
TOTAL COMMON STOCKS
       
  (Cost $11,853,667)
   
16,727,458
 
         
TOTAL INVESTMENTS IN SECURITIES: 95.2%
       
  (Cost $11,853,667)
   
16,727,458
 
Other Assets in Excess of Liabilities: 4.8%
   
849,337
 
TOTAL NET ASSETS: 100.0%
 
$
17,576,795
 

ADR - American Depository Receipt
1
Non-income producing security.


The accompanying notes are an integral part of these financial statements.

21

Blue Chip Equity Income Fund

SCHEDULE OF INVESTMENTS at March 31, 2022

Shares
     
Value
 
COMMON STOCKS: 99.6%
     
       
Banks: 4.4%
     
 
12,500
 
Bank of America Corp.
 
$
515,250
 
 
6,000
 
JPMorgan Chase & Co.
   
817,920
 
           
1,333,170
 
Beverages: 3.3%
       
 
6,000
 
PepsiCo, Inc.
   
1,004,280
 
         
Building Products Retail: 5.6%
       
 
3,250
 
The Home Depot, Inc.
   
972,823
 
 
3,500
 
Lowe’s Cos, Inc.
   
707,665
 
           
1,680,488
 
Computers: 7.0%
       
 
12,000
 
Apple, Inc.
   
2,095,320
 
         
Discount Retail: 2.8%
       
 
4,000
 
Target Corp.
   
848,880
 
         
Diversified Financial Services: 3.1%
       
 
5,000
 
American Express Co.
   
935,000
 
         
Gardening Production Retail: 2.3%
       
 
3,000
 
Tractor Supply Co.
   
700,110
 
         
Internet: 9.3%
       
 
550
 
Amazon.com, Inc. 1
   
1,792,972
 
 
4,500
 
Facebook, Inc. - Class A 1
   
1,000,620
 
           
2,793,592
 
Machinery-Construction & Mining: 3.5%
       
 
4,750
 
Caterpillar, Inc.
   
1,058,395
 
         
Machinery-Diversified: 4.1%
       
 
3,000
 
Deere & Co.
   
1,246,380
 
         
Media: 2.8%
       
 
18,000
 
Comcast Corp.
   
842,760
 
         
Oil Companies Exploration & Production: 1.7%
       
 
5,000
 
ConocoPhillips
   
500,000
 
         
Oil Companies Integrated: 4.8%
       
 
17,500
 
Exxon Mobil Corp.
   
1,445,325
 
         
Oil Refining & Marketing: 2.0%
       
 
7,000
 
Phillips 66
   
604,730
 
         
Pharmaceuticals: 9.7%
       
 
5,000
 
AbbVie, Inc.
   
810,550
 
 
4,000
 
Eli Lilly & Co.
   
1,145,480
 
 
5,500
 
Johnson & Johnson
   
974,765
 
           
2,930,795
 
Pipelines: 3.5%
       
 
15,000
 
ONEOK, Inc.
   
1,059,450
 
         
Restaurants: 1.8%
       
 
4,000
 
Darden Restaurants, Inc.
   
531,800
 
         
Semiconductors: 9.8%
       
 
4,000
 
NVIDIA Corp.
   
1,091,440
 
 
5,000
 
QUALCOMM, Inc.
   
764,100
 
 
6,000
 
Texas Instruments, Inc.
   
1,100,880
 
           
2,956,420
 
Software: 8.2%
       
 
8,000
 
Microsoft Corp.
   
2,466,480
 
         
Transportation: 9.9%
       
 
10,000
 
Canadian Pacific Railway Ltd.
   
825,400
 
 
4,000
 
FedEx Corp.
   
925,560
 
 
4,500
 
Union Pacific Corp.
   
1,229,445
 
           
2,980,405
 
TOTAL COMMON STOCKS
       
  (Cost $19,765,286)
   
30,013,780
 
         
TOTAL INVESTMENTS IN SECURITIES: 99.6%
       
  (Cost $19,765,286)
   
30,013,780
 
Other Assets in Excess of Liabilities: 0.4%
   
126,620
 
TOTAL NET ASSETS: 100.0%
 
$
30,140,400
 

1
Non-income producing security.


The accompanying notes are an integral part of these financial statements.

22

Hodges Mutual Funds

STATEMENTS OF ASSETS AND LIABILITIES at March 31, 2022

               
Small
   
Blue Chip
 
         
Small Cap
   
Intrinsic
   
Equity
 
   
Hodges Fund
   
Fund
   
Value Fund
   
Income Fund
 
                         
ASSETS
                       
Investments in unaffiliated securities, at value
 
$
176,028,530
   
$
205,256,413
   
$
16,727,458
   
$
30,013,780
 
  (Cost $121,847,426, $128,166,587, $11,853,667, and $19,765,286)
                               
Investments in affiliated securities, at value
   
6,832,314
     
     
     
 
  (Cost $4,796,069, $—, $— and $—)
                               
Cash
   
5,014,438
     
3,692,438
     
987,875
     
349,564
 
Receivables:
                               
Investment securities sold
   
5,459,324
     
3,791,107
     
     
 
Fund shares sold
   
19,541
     
17,713
     
3,903
     
13,903
 
Dividends and interest
   
54,199
     
111,835
     
41,413
     
8,941
 
Prepaid expenses
   
28,131
     
29,688
     
16,051
     
12,134
 
Total assets
   
193,436,477
     
212,899,194
     
17,776,700
     
30,398,322
 
                                 
LIABILITIES
                               
Payables:
                               
Written option contracts, at value
                               
(premiums $275,748, $38,240, $—, and $—)
   
95,625
     
47,250
     
     
 
Investment securities purchased
   
6,608,193
     
4,526,594
     
137,865
     
171,990
 
Distribution fees
   
123,832
     
93,415
     
10,965
     
18,130
 
Investment advisory fees
   
97,006
     
139,148
     
1,112
     
11,350
 
Sub-transfer agent fees
   
26,931
     
6,437
     
25
     
25
 
Audit fees
   
25,797
     
25,804
     
23,800
     
23,800
 
Fund administration fees
   
20,868
     
20,436
     
3,114
     
3,753
 
Fund shares redeemed
   
18,869
     
88,985
     
6,430
     
4,886
 
Fund accounting fees
   
12,758
     
12,500
     
902
     
1,269
 
Transfer agent fees
   
7,556
     
7,487
     
3,256
     
3,342
 
Trustee fees
   
5,247
     
5,237
     
4,396
     
4,446
 
Custody fees
   
3,401
     
2,132
     
876
     
894
 
Chief Compliance Officer fees
   
1,875
     
1,874
     
1,875
     
1,875
 
Distribution to shareholders
   
     
     
     
3,651
 
Other accrued expenses
   
5,922
     
39,437
     
5,289
     
8,511
 
Total liabilities
   
7,053,880
     
5,016,736
     
199,905
     
257,922
 
NET ASSETS
 
$
186,382,597
   
$
207,882,458
   
$
17,576,795
   
$
30,140,400
 
                                 
COMPONENTS OF NET ASSETS
                               
Paid-in capital
 
$
131,264,441
   
$
121,323,477
   
$
12,008,818
   
$
17,897,525
 
Total distributable (accumulated) earnings (losses)
   
55,118,156
     
86,558,981
     
5,567,977
     
12,242,875
 
Total net assets
 
$
186,382,597
   
$
207,882,458
   
$
17,576,795
   
$
30,140,400
 
Net Asset Value (unlimited shares authorized):
                               
Retail Class:
                               
Net assets
 
$
186,382,597
   
$
161,077,402
   
$
17,576,795
   
$
30,140,400
 
Shares of beneficial interest issued and outstanding
   
3,163,798
     
7,545,303
     
957,040
     
1,459,157
 
Net asset value, offering price, and redemption price per share
 
$
58.91
   
$
21.35
   
$
18.37
   
$
20.66
 
Institutional Class:
                               
Net assets
 
$
   
$
46,805,056
   
$
   
$
 
Shares of beneficial interest issued and outstanding
   
     
2,065,618
     
     
 
Net asset value, offering price, and redemption price per share
 
$
   
$
22.66
   
$
   
$
 


The accompanying notes are an integral part of these financial statements.

23

Hodges Mutual Funds

STATEMENTS OF OPERATIONS For the Year Ended March 31, 2022

               
Small
   
Blue Chip
 
         
Small Cap
   
Intrinsic
   
Equity
 
   
Hodges Fund
   
Fund
   
Value Fund
   
Income Fund
 
                         
INVESTMENT INCOME
                       
Dividends from unaffiliated securities
 
$
899,572
   
$
1,790,507
   
$
234,352
   
$
537,627
 
  (net of $—, $—, $—, and $227 foreign withholding tax, respectively)
                               
Total investment income
   
899,572
     
1,790,507
     
234,352
     
537,627
 
                                 
EXPENSES
                               
Investment advisory fees
   
1,892,434
     
2,002,205
     
144,230
     
185,605
 
Distribution fees - Retail Class
   
556,598
     
455,941
     
42,421
     
71,387
 
Sub-transfer agent fees
   
125,896
     
193,644
     
6,471
     
5,491
 
Fund administration fees
   
119,356
     
127,406
     
18,401
     
22,495
 
Fund accounting fees
   
72,611
     
78,178
     
5,381
     
7,575
 
Transfer agent fees
   
48,739
     
48,765
     
19,470
     
19,917
 
Miscellaneous expenses
   
35,975
     
45,891
     
8,670
     
11,615
 
Registration expenses
   
35,122
     
43,708
     
22,216
     
22,649
 
Audit fees
   
25,799
     
25,800
     
23,800
     
23,800
 
Trustees fees
   
25,103
     
25,210
     
20,897
     
21,052
 
Reports to shareholders
   
17,164
     
19,625
     
5,939
     
5,257
 
Custody fees
   
14,051
     
13,007
     
5,327
     
5,304
 
Chief Compliance Officer fees
   
11,437
     
11,438
     
11,437
     
11,437
 
Interest expense
   
11,355
     
1,959
     
     
58
 
Legal fees
   
7,964
     
7,964
     
7,890
     
7,890
 
Insurance expenses
   
5,378
     
5,691
     
4,744
     
4,665
 
Total expenses
   
3,004,982
     
3,106,432
     
347,294
     
426,197
 
Less: advisory fees waived
   
(29,399
)
   
(31,506
)
   
     
 
Less: fees waived
   
(378,323
)
   
(10,317
)
   
(128,404
)
   
(54,986
)
Net expenses
   
2,597,260
     
3,064,609
     
218,890
     
371,211
 
Net investment income (loss)
   
(1,697,688
)
   
(1,274,102
)
   
15,462
     
166,416
 
                                 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
                               
Net realized gain (loss) on transactions from:
                               
  Unaffiliated investments
   
20,597,653
     
31,320,456
     
1,628,225
     
4,150,051
 
  Affiliated investments
   
(403,591
)
   
     
118,588
     
 
  Options written
   
318,088
     
     
     
 
Net realized gain (loss)
   
20,512,150
     
31,320,456
     
1,746,813
     
4,150,051
 
Net change in unrealized appreciation/depreciation on:
                               
  Unaffiliated investments
   
(15,925,717
)
   
(27,267,813
)
   
233,272
     
225,645
 
  Affiliated investments
   
3,761,573
     
     
(38,800
)
   
 
  Options written
   
64,257
     
(9,010
)
   
     
 
Net unrealized appreciation/depreciation
   
(12,099,887
)
   
(27,276,823
)
   
194,472
     
225,645
 
Net realized and unrealized gain (loss) on investments
   
8,412,263
     
4,043,633
     
1,941,285
     
4,375,696
 
Net increase (decrease) in net
                               
  assets resulting from operations
 
$
6,714,575
   
$
2,769,531
   
$
1,956,747
   
$
4,542,112
 


The accompanying notes are an integral part of these financial statements.

24

Hodges Fund

STATEMENTS OF CHANGES IN NET ASSETS

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
INCREASE (DECREASE) IN NET ASSETS FROM:
           
             
OPERATIONS
           
Net investment income (loss)
 
$
(1,697,688
)
 
$
(1,082,193
)
Net realized gain (loss) on transactions from:
               
  Unaffiliated investments
   
20,597,653
     
(2,548,072
)
  Affiliated investments
   
(403,591
)
   
(1,403,735
)
  Options written
   
318,088
     
(842,449
)
Net change in unrealized appreciation/depreciation on:
               
  Unaffiliated investments
   
(15,925,717
)
   
125,993,153
 
  Affiliated investments
   
3,761,573
     
9,486,265
 
  Options written
   
64,257
     
115,866
 
Net increase in net assets resulting from operations
   
6,714,575
     
129,718,835
 
                 
CAPITAL SHARE TRANSACTIONS
               
Increase (decrease) in net assets derived from net change
               
  in outstanding shares – Retail Class 1
   
(31,050,208
)
   
8,432,536
 
Increase (decrease) in net assets derived from net change
               
  in outstanding shares – Institutional Class 1
   
     
(5,141,841
)
Total increase (decrease) in net assets from capital share transactions
   
(31,050,208
)
   
3,290,695
 
Total increase (decrease) in net assets
   
(24,335,633
)
   
133,009,530
 
                 
NET ASSETS
               
Beginning of year
   
210,718,230
     
77,708,700
 
End of year
 
$
186,382,597
   
$
210,718,230
 

1
Summary of share transactions is as follows:

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Retail Class:
                       
Shares sold
   
588,658
   
$
35,381,517
     
717,355
   
$
34,132,599
 
Shares redeemed 2
   
(1,096,789
)
   
(66,431,725
)
   
(675,320
)
   
(25,700,063
)
Net increase (decrease)
   
(508,131
)
 
$
(31,050,208
)
   
42,035
   
$
8,432,536
 

2
Net of redemption fees of $4,557 and $1,729, respectively.

   
Period Ended
             
   
August 19, 2020
             
   
Shares
   
Amount
             
Institutional Class:
                       
Shares sold
   
15,241
   
$
462,943
     
     
 
Shares redeemed 3
   
(196,654
)
   
(5,604,784
)
               
Net increase (decrease)
   
(181,413
)
 
$
(5,141,841
)
               

3
Net of redemption fees of $230.
4
Hodges Fund Institutional Class shares liquidated after close of business on August 19, 2020.


The accompanying notes are an integral part of these financial statements.

25

Small Cap Fund

STATEMENTS OF CHANGES IN NET ASSETS

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
INCREASE (DECREASE) IN NET ASSETS FROM:
           
             
OPERATIONS
           
Net investment income (loss)
 
$
(1,274,102
)
 
$
(1,213,835
)
Net realized gain (loss) on transactions from:
               
  Unaffiliated investments
   
31,320,456
     
33,264,243
 
  Options written
   
     
227,803
 
Net change in unrealized appreciation/depreciation on:
               
  Unaffiliated investments
   
(27,276,823
)
   
120,713,457
 
Net increase in net assets resulting from operations
   
2,769,531
     
152,991,668
 
                 
DISTRIBUTIONS TO SHAREHOLDERS
               
Net distributions to shareholders – Retail Class
   
(29,838,464
)
   
 
Net distributions to shareholders – Institutional Class
   
(8,325,118
)
   
 
Total distributions to shareholders
   
(38,163,582
)
   
 
                 
CAPITAL SHARE TRANSACTIONS
               
Increase (decrease) in net assets derived from net change
               
  in outstanding shares – Retail Class 1
   
5,764,730
     
(23,660,942
)
Increase (decrease) in net assets derived from net change
               
  in outstanding shares – Institutional Class 1
   
450,891
     
(15,937,850
)
Total increase (decrease) in net assets from capital share transactions
   
6,215,621
     
(39,598,792
)
Total increase (decrease) in net assets
   
(29,178,430
)
   
113,392,876
 
                 
NET ASSETS
               
Beginning of year
   
237,060,888
     
123,668,012
 
End of year
 
$
207,882,458
   
$
237,060,888
 

1
Summary of share transactions is as follows:

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Retail Class:
                       
Shares sold
   
938,955
   
$
24,307,825
     
778,493
   
$
16,384,450
 
Shares issued in reinvestment of distributions
   
1,329,539
     
29,263,158
     
     
 
Shares redeemed 2
   
(1,970,518
)
   
(47,806,253
)
   
(2,589,012
)
   
(40,045,392
)
Net increase (decrease)
   
297,976
   
$
5,764,730
     
(1,810,519
)
 
$
(23,660,942
)

2
Net of redemption fees of $7,785 and $1,500, respectively.

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Institutional Class:
                       
Shares sold
   
336,797
   
$
8,610,140
     
396,865
   
$
6,877,522
 
Shares issued in reinvestment of distributions
   
336,027
     
7,842,879
     
     
 
Shares redeemed 3
   
(637,935
)
   
(16,002,128
)
   
(1,414,567
)
   
(22,815,372
)
Net increase (decrease)
   
34,889
   
$
450,891
     
(1,017,702
)
 
$
(15,937,850
)

3
Net of redemption fees of $2,273 and $679, respectively.


The accompanying notes are an integral part of these financial statements.

26

Small Intrinsic Value Fund

STATEMENTS OF CHANGES IN NET ASSETS

   
Year Ended
   
Year Ended
 
   
March 31, 2022
   
March 31, 2021
 
INCREASE (DECREASE) IN NET ASSETS FROM:
           
             
OPERATIONS
           
Net investment income (loss)
 
$
15,462
   
$
(59,655
)
Net realized gain (loss) on transactions from:
               
  Unaffiliated investments
   
1,628,225
     
2,089,023
 
  Affiliated investments
   
118,588
     
194,392
 
  Options written
   
     
 
Net change in unrealized appreciation/depreciation on:
               
  Unaffiliated investments
   
233,272
     
6,878,802
 
  Affiliated investments
   
(38,800
)
   
213,269