N-CSRS 1 d735256dncsrs.htm RS INVESTMENT TRUST RS Investment Trust
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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 811-05159

 

 

RS Investment Trust

(Exact name of registrant as specified in charter)

 

 

 

One Bush Street, Suite 900

San Francisco, CA

   94104
(Address of principal executive offices)   (Zip code)

 

 

Matthew H. Scanlan

c/o RS Investments

One Bush Street, Suite 900

San Francisco, CA 94104

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: 800-766-3863

Date of fiscal year end: December 31

Date of reporting period: June 30, 2014

 

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

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

 

 

 

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Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

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LOGO

 

RS GROWTH FUNDS

Class A, C, K and Y Shares

RS SMALL CAP GROWTH FUND

RS SELECT GROWTH FUND

RS MID CAP GROWTH FUND

RS GROWTH FUND

RS TECHNOLOGY FUND

RS SMALL CAP EQUITY FUND

 

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

 

LOGO

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TABLE OF CONTENTS

 

 

RS Investments

 

Value | Growth | International | Natural Resources | Fixed Income

RS Funds provide clients with access to distinct and experienced investment teams — each pursuing investment opportunities consistent with its particular style. The dedicated research team approach assures that our clients benefit from process consistency, investment excellence, and choice across disciplines.

 

Value   RS Technology Fund   Natural Resources
RS Partners Fund*   RS Small Cap Equity Fund*   RS Global Natural Resources Fund*
RS Value Fund    
RS Large Cap Alpha Fund   International   Fixed Income
RS Investors Fund   RS International Fund   RS Investment Quality Bond Fund
  RS Global Fund   RS Low Duration Bond Fund
Growth   RS Emerging Markets Fund   RS High Yield Fund
RS Small Cap Growth Fund   RS Emerging Markets Small Cap Fund   RS Tax-Exempt Fund
RS Select Growth Fund   RS China Fund   RS High Income Municipal Bond Fund

RS Mid Cap Growth Fund

     RS Floating Rate Fund

RS Growth Fund

     RS Strategic Income Fund

 

* Closed to most new investments. Please see the prospectus for more information.

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CEO’S LETTER

 

LOGO  

Matthew H. Scanlan

CEO, RS Investments

Dear RS Funds Shareholder,

Despite clear evidence of economic recovery, investors are still reeling from 2008. Though caution remains a high priority, investors are finally beginning to overcome inertia and to realize the need to act with more conviction in this low-return environment.

Thus, the hunt for alpha (a measure of performance on a risk-adjusted basis) continues. We’ve noticed that the concept of high-conviction investing is gaining interest among investors, many of whom are exploring new approaches to produce alpha for their equity portfolios.

I spent most of my career in a quantitative investment environment, so I’ve had to do some serious soul searching over the last two years, asking myself: “Why am I leading a fundamental active investment firm?” I recently co-authored a white paper with my colleague Larry Siegel, Director of Research at the CFA Institute Research Foundation, which explores this concept and provides some answers.

Decades of experience have taught us that portfolios must be broadly diversified to meet long-term investment goals. But that doesn’t mean all managers must be diversified. In “No Fear of Commitment: The Role of High-Conviction Active Management,” we study the role of concentrated managers within a diversified portfolio and how investors should evaluate them.

We started with a philosophical review of active management. There’s a behavioral finance concept called “bounded rationality” that tells us that most managers should specialize, focusing their efforts on segments of the market where they are most confident in their ability to apply insights and earn significant alpha. Why? Because in the end, you can’t be an expert on everything, but you can know a great deal about a few things. Specialization — and conviction — matter!

In our white paper, which will appear in the fall issue of the Journal of Investing, we also took a look at implementation to find out which characteristics matter most with high-conviction managers and how those influence portfolio construction techniques. One key takeaway is that investors can blend the best of index and active exposures to create an optimal portfolio. That includes high-conviction managers, in those cases where the investor has confidence that the manager will exceed expectations.

We appreciate the confidence you’ve placed in us. In the pages that follow, you’ll find an update on the RS Funds. It includes important information about your investment with our firm.

Please visit www.rsinvestments.com for additional insights and the latest commentary from our investment teams.

Sincerely,

Matthew H. Scanlan

Chief Executive Officer

 

 

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CEO’S LETTER

 

 

 

As with all mutual funds, the value of an investment in a Fund could decline, so you could lose money.

RS Funds are sold by prospectus only. You should carefully consider the investment objectives, risks, charges, and expenses of the RS Funds before making an investment decision. The prospectus contains this and other important information. Please read it carefully before investing or sending money. To obtain a copy, please call 800.766.3863 or visit www.rsinvestments.com.

RS Funds are distributed by RS Funds Distributor LLC, member: FINRA, SIPC. ©2014 RS Investment Management Co. LLC

 

2   www.rsinvestments.com   THIS PAGE NOT PART OF YOUR FUND REPORT

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IMPORTANT INFORMATION CONCERNING FUND PERFORMANCE

 

Important Information Concerning Fund Performance

 

Except as otherwise specifically stated, all information, including portfolio security positions, is as of June 30, 2014. Any mention of specific securities should not be considered a recommendation to buy or sell those securities. A Fund may buy, sell, or hold any security identified herein, on the basis of factors described herein or the basis of other factors or other considerations. Fund holdings will change.

Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double-digit returns are highly unusual and cannot be sustained. Class A performance quoted “with maximum sales charge” reflects the current maximum sales charge of 4.75%. Please read a Fund’s prospectus carefully for more information on sales charges as they do not apply in all cases, and if applied, are reduced for larger purchases. Certain share classes are subject to contingent deferred sales charges which are typically paid at time of sale. The Class C share performance quoted “with sales charge” takes into account the applicable contingent deferred sales charge of 1% for periods of 1 year or less. There are no sales charges for Class K and Class Y shares. Any sales charges are in addition to the Fund’s fees and expenses as detailed in the Financial Highlights section of this report. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures include the effect of expense limitations in effect during the periods shown, if applicable; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month-end performance information, which may be lower or higher than that cited, is available by contacting RS Investments at 800.766.3863 and is periodically updated on our website: www.rsinvestments.com.

 

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RS SMALL CAP GROWTH FUND

 

RS Small Cap Growth Fund

Characteristics (unaudited)

 

Total Net Assets: $1,087,221,166   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

LogMeIn, Inc.

     2.38%   

Proofpoint, Inc.

     2.27%   

Euronet Worldwide, Inc.

     2.09%   

Microsemi Corp.

     1.99%   

Portfolio Recovery Associates, Inc.

     1.98%   

Restoration Hardware Holdings, Inc.

     1.75%   

Cytec Industries, Inc.

     1.70%   

The Ultimate Software Group, Inc.

     1.66%   

The Hain Celestial Group, Inc.

     1.61%   

Pacira Pharmaceuticals, Inc.

     1.60%   

Total

     19.03%   
   
Sector Allocation2       
 
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 2000® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2000® Index with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, it does not incur fees and expenses.

 

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RS SMALL CAP GROWTH FUND

 

Performance Update (unaudited)

 

     
Average Annual Total Returns                
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (11/30/87)              
without sales charge     -0.14%        22.60%        13.79%        21.94%        9.02%        13.69%   
with sales charge     -4.89%        16.78%        11.96%        20.76%        8.50%        13.48%   
Class C Shares (9/6/07)              
without sales charge     -0.53%        21.59%        12.62%        20.59%        —        7.04%   
with sales charge     -1.52%        20.59%        12.62%        20.59%        —        7.04%   
Class K Shares (1/22/07)     -0.36%        22.04%        13.18%        21.23%        —        8.76%   
Class Y Shares (5/1/07)     0.00%        22.93%        14.13%        22.34%        —        9.34%   
Russell 2000® Growth Index3     2.22%        24.73%        14.49%        20.50%        9.04%        9.20% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Small Cap Growth Fund and in the Russell 2000® Growth Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (9/6/07), Class K shares (1/22/07), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $15,895 (Class C), $18,677 (Class K), and $18,958 (Class Y). While Class C and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS SELECT GROWTH FUND

 

RS Select Growth Fund

Characteristics (unaudited)

 

Total Net Assets: $991,868,521   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

Euronet Worldwide, Inc.

     3.16%   

Portfolio Recovery Associates, Inc.

     3.16%   

LogMeIn, Inc.

     2.93%   

Cytec Industries, Inc.

     2.70%   

Jazz Pharmaceuticals PLC

     2.36%   

Clean Harbors, Inc.

     2.33%   

Restoration Hardware Holdings, Inc.

     2.27%   

Ligand Pharmaceuticals, Inc.

     2.24%   

Huron Consulting Group, Inc.

     2.23%   

Hexcel Corp.

     2.18%   

Total

     25.56%   
   
Sector Allocation2       
 
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 2500® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2500® Index with higher price-to-book ratios and higher forecasted growth values. (The Russell 2500® Index measures the performance of the 2,500 smallest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

4

The Russell 2000® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2000® Index with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS SELECT GROWTH FUND

 

Performance Update (unaudited)

 

   
Average Annual Total Returns         
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (8/1/96)              
without sales charge     -2.08%        17.83%        13.90%        22.73%        8.31%        11.80%   
with sales charge     -6.73%        12.22%        12.08%        21.54%        7.78%        11.50%   
Class C Shares (11/15/07)              
without sales charge     -2.44%        16.89%        12.94%        21.66%        —        8.04%   
with sales charge     -3.42%        15.89%        12.94%        21.66%        —        8.04%   
Class K Shares (2/12/07)     -2.18%        17.43%        13.13%        21.76%        —        8.78%   
Class Y Shares (5/1/09)     -1.95%        18.14%        14.22%        23.07%        —        23.04%   
Russell 2500® Growth Index3     3.97%        26.26%        14.88%        21.65%        9.94%        8.55% * 
Russell 2000® Growth Index4     2.22%        24.73%        14.49%        20.50%        9.04%        6.97% * 

 

* Since Class A shares inception.

 

 
Results of  a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Select Growth Fund and in the Russell 2500® Growth Index and the Russell 2000® Growth Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (11/15/07), Class K shares (2/12/07), and Class Y shares (5/1/09) would have the following values as of June 30, 2014: $16,687 (Class C), $18,613 (Class K), and $29,170 (Class Y). While Class C and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS MID CAP GROWTH FUND

 

RS Mid Cap Growth Fund

Characteristics (unaudited)

 

Total Net Assets: $185,057,956   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

Affiliated Managers Group, Inc.

     2.43%   

Chipotle Mexican Grill, Inc.

     2.28%   

Jazz Pharmaceuticals PLC

     2.26%   

Hexcel Corp.

     2.20%   

Keurig Green Mountain, Inc.

     2.06%   

Micron Technology, Inc.

     2.05%   

Teledyne Technologies, Inc.

     2.02%   

The Kroger Co.

     2.00%   

Gentex Corp.

     1.96%   

Williams-Sonoma, Inc.

     1.94%   

Total

     21.20%   
   
Sector Allocation2       
 

LOGO  

  

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell Midcap® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell Midcap® Index with higher price-to-book ratios and higher forecasted growth values. (The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000® Index, which consists of the 1,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, it does not incur fees and expenses.

 

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RS MID CAP GROWTH FUND

 

Performance Update (unaudited)

 

           
Average Annual Total Returns                                     
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (7/12/95)              
without sales charge     1.75%        25.72%        14.84%        21.97%        7.85%        9.76%   
with sales charge     -3.09%        19.75%        12.99%        20.80%        7.32%        9.48%   
Class C Shares (5/21/07)              
without sales charge     1.42%        24.72%        13.81%        20.75%        —        4.35%   
with sales charge     0.42%        23.72%        13.81%        20.75%        —        4.35%   
Class K Shares (12/4/06)     1.55%        25.10%        14.23%        21.29%        —        5.79%   
Class Y Shares (5/1/07)     1.93%        26.03%        15.12%        22.27%        —        6.31%   
Russell Midcap® Growth Index3     6.51%        26.04%        14.54%        21.16%        9.83%        9.33% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Mid Cap Growth Fund and in the Russell Midcap® Growth Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (5/21/07), Class K shares (12/4/06), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $13,539 (Class C), $15,315 (Class K), and $15,505 (Class Y). While Class C and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS GROWTH FUND

 

RS Growth Fund

Characteristics (unaudited)

 

Total Net Assets: $260,161,696   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

Gilead Sciences, Inc.

     4.91%   

Micron Technology, Inc.

     3.08%   

Facebook, Inc., Class A

     3.07%   

Affiliated Managers Group, Inc.

     3.06%   

Google, Inc., Class C

     3.06%   

Jazz Pharmaceuticals PLC

     2.82%   

Advance Auto Parts, Inc.

     2.55%   

Schlumberger Ltd.

     2.53%   

EOG Resources, Inc.

     2.52%   

The Home Depot, Inc.

     2.49%   

Total

     30.09%   
   
Sector Allocation2       
 
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 1000® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 1000® Index (which consists of the 1,000 largest U.S. companies based on total market capitalization) with higher price-to-book ratios and higher forecasted growth values. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS GROWTH FUND

 

Performance Update (unaudited)

 

   
Average Annual Total Returns         
   
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (5/12/92)              
without sales charge     4.09%        32.11%        16.69%        18.75%        7.87%        9.98%   
with sales charge     -0.84%        25.83%        14.82%        17.62%        7.35%        9.74%   
Class C Shares (6/29/07)              
without sales charge     3.65%        30.91%        15.46%        17.41%        —        4.60%   
with sales charge     2.65%        29.91%        15.46%        17.41%        —        4.60%   
Class K Shares (11/27/06)     3.78%        31.38%        15.96%        18.05%        —        6.01%   
Class Y Shares (5/1/07)     4.24%        32.49%        16.97%        19.02%        —        6.57%   
Russell 1000® Growth Index3     6.31%        26.92%        16.26%        19.24%        8.20%        8.52% * 

 

* Since Class A shares inception.

 

 
Results of a  Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Growth Fund and in the Russell 1000® Growth Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (6/29/07), Class K shares (11/27/06), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $13,699 (Class C), $15,571 (Class K), and $15,779 (Class Y). While Class C and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS TECHNOLOGY FUND

 

RS Technology Fund

Characteristics (unaudited)

 

Total Net Assets: $206,408,395   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

Google, Inc., Class C

     7.15%   

Facebook, Inc., Class A

     3.96%   

Apple, Inc.

     3.31%   

Mavenir Systems, Inc.

     3.26%   

Micron Technology, Inc.

     3.13%   

Finisar Corp.

     2.13%   

LogMeIn, Inc.

     2.12%   

Amazon.com, Inc.

     2.08%   

Bazaarvoice, Inc.

     2.04%   

NXP Semiconductor N.V.

     2.04%   

Total

     31.22%   
   
Sector Allocation2       
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The S&P North American Technology Sector IndexTM is a modified capitalization–weighted index based on a universe of technology-related stocks. Since inception return for the S&P North American Technology Sector IndexTM reflects, for periods after August 29, 1996, the reinvestment of dividends paid on the securities constituting the index; for periods through August 29, 1996, index return does not reflect the reinvestment of dividends. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

4

The S&P 500® Index is an unmanaged market-capitalization-weighted index generally considered to be representative of U.S. equity market activity. The index consists of 500 stocks representing leading industries of the U.S. economy. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS TECHNOLOGY FUND

 

Performance Update (unaudited)

 

   
Average Annual Total Returns         
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (11/15/95)              
without sales charge     -3.43%        26.35%        8.22%        18.07%        8.15%        9.13%   
with sales charge     -8.04%        20.36%        6.49%        16.93%        7.63%        8.85%   
Class C Shares (5/2/07)              
without sales charge     -3.84%        25.26%        7.36%        17.07%        —        7.58%   
with sales charge     -4.80%        24.26%        7.36%        17.07%        —        7.58%   
Class K Shares (1/19/07)     -3.69%        25.63%        7.65%        17.35%        —        8.77%   
Class Y Shares (5/1/07)     -3.30%        26.70%        8.55%        18.43%        —        9.04%   
S&P North American Technology Sector IndexTM 3     7.01%        30.19%        16.88%        19.09%        8.57%        8.79% * 
S&P 500® Index4     7.14%        24.61%        16.58%        18.83%        7.78%        8.61% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Technology Fund and in the S&P North American Technology Sector IndexTM and the S&P 500® Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (5/2/07), Class K shares (1/19/07), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $16,875 (Class C), $18,692 (Class K), and $18,585 (Class Y). While Class C and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS SMALL CAP EQUITY FUND

 

RS Small Cap Equity Fund

Characteristics (unaudited)

 

Total Net Assets: $122,142,982   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  

LogMeIn, Inc.

     2.55%   

Proofpoint, Inc.

     2.23%   

Euronet Worldwide, Inc.

     2.11%   

Portfolio Recovery Associates, Inc.

     2.04%   

Microsemi Corp.

     1.96%   

Restoration Hardware Holdings, Inc.

     1.82%   

The Ultimate Software Group, Inc.

     1.71%   

Cytec Industries, Inc.

     1.69%   

Pacira Pharmaceuticals, Inc.

     1.65%   

Ligand Pharmaceuticals, Inc.

     1.64%   

Total

     19.40%   
   
Sector Allocation2       
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 2000® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2000® Index with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, it does not incur fees and expenses.

 

14   www.rsinvestments.com  

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RS SMALL CAP EQUITY FUND

 

Performance Update (unaudited)

 

       
Average Annual Total Returns                       
   
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (5/1/97)              
without sales charge     0.09%        23.20%        13.88%        21.72%        9.81%        9.89%   
with maximum sales charge     -4.66%        17.33%        12.05%        20.53%        9.28%        9.58%   
Class C Shares (8/7/00)              
without sales charge     -0.38%        22.19%        12.86%        20.61%        8.82%        5.96%   
with sales charge     -1.38%        21.22%        12.86%        20.61%        8.82%        5.96%   
Class K Shares (5/15/01)     -0.10%        22.82%        13.50%        21.33%        9.45%        8.78%   
Class Y Shares (5/1/07)     0.28%        23.56%        14.19%        21.96%        —        8.92%   
Russell 2000® Growth Index3     2.22%        24.73%        14.49%        20.50%        9.04%        7.29% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Small Cap Equity Fund and in the Russell 2000® Growth Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (5/1/07) would have the following values as of June 30, 2014: $23,290 (Class C), $24,667 (Class K), and $18,442 (Class Y). While Class C, and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian Park Avenue Small Cap Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including, as applicable, sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including investment advisory fees; distribution (12b-1) fees; and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2014, to June 30, 2014. The following table shows the Funds’ expenses in two ways:

Expenses based on actual return

This section of the table provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled “Expenses Paid During Period” for your Fund to estimate the expenses you paid on your account during this period. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the following table. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Expenses based on hypothetical 5% return for comparison purposes

This section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds with the costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the following table. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or exchange fees. Therefore the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

 

Based on Actual

Return

   Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During  Period*
1/1/14-6/30/14		     Expense Ratio
During  Period
1/1/14-6/30/14		  

RS Small Cap Growth Fund

   Class A     $1,000.00        $998.60        $6.79        1.37%   
  Class C     $1,000.00        $994.70        $10.58        2.14%   
    Class K     $1,000.00        $996.40        $9.01        1.82%   
    Class Y     $1,000.00        $1,000.00        $5.36        1.08%   

 

16   www.rsinvestments.com  

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

Based on Actual

Return

   Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During  Period*
1/1/14-6/30/14		     Expense Ratio
During  Period
1/1/14-6/30/14		  

RS Select Growth Fund

   Class A     $1,000.00        $979.20        $6.72        1.37%   
    Class C     $1,000.00        $975.60        $10.53        2.15%   
    Class K     $1,000.00        $978.20        $9.22        1.88%   
    Class Y     $1,000.00        $980.50        $5.45        1.11%   

RS Mid Cap Growth Fund

   Class A     $1,000.00        $1,017.50        $6.45        1.29%   
  Class C     $1,000.00        $1,014.20        $10.44        2.09%   
    Class K     $1,000.00        $1,015.50        $8.90        1.78%   
    Class Y     $1,000.00        $1,019.30        $5.06        1.01%   

RS Growth Fund

   Class A     $1,000.00        $1,040.90        $5.92        1.17%   
    Class C     $1,000.00        $1,036.50        $10.15        2.01%   
    Class K     $1,000.00        $1,037.80        $8.69        1.72%   
    Class Y     $1,000.00        $1,042.40        $4.56        0.90%   

RS Technology Fund

   Class A     $1,000.00        $965.70        $7.26        1.49%   
    Class C     $1,000.00        $961.60        $11.33        2.33%   
    Class K     $1,000.00        $963.10        $9.83        2.02%   
    Class Y     $1,000.00        $967.00        $5.85        1.20%   

RS Small Cap Equity Fund

   Class A     $1,000.00        $1,000.90        $6.25        1.26%   
  Class C     $1,000.00        $996.20        $10.79        2.18%   
    Class K     $1,000.00        $999.00        $8.13        1.64%   
    Class Y     $1,000.00        $1,002.80        $5.02        1.01%   

Based on Hypothetical Return

(5% Return Before Expenses)

         

RS Small Cap Growth Fund

   Class A     $1,000.00        $1,018.00        $6.85        1.37%   
  Class C     $1,000.00        $1,014.18        $10.69        2.14%   
    Class K     $1,000.00        $1,015.77        $9.10        1.82%   
    Class Y     $1,000.00        $1,019.44        $5.41        1.08%   

RS Select Growth Fund

   Class A     $1,000.00        $1,018.00        $6.85        1.37%   
    Class C     $1,000.00        $1,014.13        $10.74        2.15%   
    Class K     $1,000.00        $1,015.47        $9.39        1.88%   
    Class Y     $1,000.00        $1,019.29        $5.56        1.11%   

RS Mid Cap Growth Fund

   Class A     $1,000.00        $1,018.40        $6.46        1.29%   
  Class C     $1,000.00        $1,014.43        $10.44        2.09%   
    Class K     $1,000.00        $1,015.97        $8.90        1.78%   
    Class Y     $1,000.00        $1,019.79        $5.06        1.01%   

RS Growth Fund

   Class A     $1,000.00        $1,018.99        $5.86        1.17%   
    Class C     $1,000.00        $1,014.83        $10.04        2.01%   
    Class K     $1,000.00        $1,016.27        $8.60        1.72%   
    Class Y     $1,000.00        $1,020.33        $4.51        0.90%   

RS Technology Fund

   Class A     $1,000.00        $1,017.41        $7.45        1.49%   
    Class C     $1,000.00        $1,013.24        $11.63        2.33%   
    Class K     $1,000.00        $1,014.78        $10.09        2.02%   
    Class Y     $1,000.00        $1,018.84        $6.01        1.20%   

RS Small Cap Equity Fund

   Class A     $1,000.00        $1,018.55        $6.31        1.26%   
  Class C     $1,000.00        $1,013.98        $10.89        2.18%   
    Class K     $1,000.00        $1,016.66        $8.20        1.64%   
    Class Y     $1,000.00        $1,019.79        $5.06        1.01%   
* Expenses are equal to the Fund’s annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

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Table of Contents

Financial Information

Six-Month Period Ended June 30, 2014

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 93.9%         
Advertising Agencies – 0.0%         

Constant Contact, Inc.(1)

     3,800         $ 122,018   
        

 

 

  
                 122,018   
Aerospace – 2.5%         

HEICO Corp., Class A

     326,898           13,272,059   

Teledyne Technologies, Inc.(1)

     148,162           14,396,901   
        

 

 

  
                 27,668,960   
Air Transport – 1.0%         

Spirit Airlines, Inc.(1)

     172,700           10,921,548   
        

 

 

  
                 10,921,548   
Asset Management & Custodian – 0.8%         

Financial Engines, Inc.

     180,600           8,177,568   
        

 

 

  
                 8,177,568   
Auto Parts – 0.8%         

Dorman Products, Inc.(1)

     172,031           8,484,569   
        

 

 

  
                 8,484,569   
Back Office Support, HR and Consulting – 2.4%         

Huron Consulting Group, Inc.(1)

     241,419           17,097,293   

WageWorks, Inc.(1)

     182,523           8,799,434   
        

 

 

  
                 25,896,727   
Banks: Diversified – 2.0%         

Customers Bancorp, Inc.(1)

     482,385           9,652,524   

Signature Bank(1)

     95,160           12,007,289   
        

 

 

  
                 21,659,813   
Biotechnology – 8.3%         

Bluebird Bio, Inc.(1)

     200,700           7,740,999   

Chimerix, Inc.(1)

     362,500           7,953,250   

KYTHERA Biopharmaceuticals, Inc.(1)

     189,400           7,267,278   

Ligand Pharmaceuticals, Inc.(1)

     273,800           17,055,002   

NanoString Technologies, Inc.(1)

     391,300           5,849,935   

Orexigen Therapeutics, Inc.(1)

     1,450,685           8,965,233   

Receptos, Inc.(1)

     248,892           10,602,799   

Revance Therapeutics, Inc.(1)

     235,700           8,013,800   

Ultragenyx Pharmaceutical, Inc.(1)

     136,914           6,146,070   

Vital Therapies, Inc.(1)

     381,065           10,380,211   
        

 

 

  
                 89,974,577   
Building Materials – 1.0%         

Simpson Manufacturing Co., Inc.

     302,200           10,987,992   
        

 

 

  
                 10,987,992   

 

20   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Casinos & Gambling – 1.3%         

Multimedia Games Holding Co., Inc.(1)

     483,811         $ 14,340,158   
        

 

 

  
                 14,340,158   
Chemicals: Diversified – 1.7%         

Cytec Industries, Inc.

     175,255           18,475,382   
        

 

 

  
                 18,475,382   
Chemicals: Specialty – 1.0%         

Quaker Chemical Corp.

     139,042           10,677,035   
        

 

 

  
                 10,677,035   
Communications Technology – 3.5%         

Aruba Networks, Inc.(1)

     420,819           7,372,749   

Finisar Corp.(1)

     781,723           15,439,029   

RingCentral, Inc., Class A(1)

     981,500           14,850,095   
        

 

 

  
                 37,661,873   
Computer Services, Software & Systems – 7.0%         

comScore, Inc.(1)

     123,100           4,367,588   

Infoblox, Inc.(1)

     241,991           3,182,182   

LogMeIn, Inc.(1)

     555,500           25,897,410   

Proofpoint, Inc.(1)

     658,185           24,655,610   

The Ultimate Software Group, Inc.(1)

     130,478           18,028,145   
        

 

 

  
                 76,130,935   
Consumer Lending – 2.0%         

Portfolio Recovery Associates, Inc.(1)

     362,407           21,574,089   
        

 

 

  
                 21,574,089   
Diversified Materials & Processing – 1.4%         

Hexcel Corp.(1)

     383,366           15,679,669   
        

 

 

  
                 15,679,669   
Education Services – 2.4%         

Capella Education Co.

     215,800           11,737,362   

Grand Canyon Education, Inc.(1)

     308,121           14,164,322   
        

 

 

  
                 25,901,684   
Electronic Components – 0.3%         

InvenSense, Inc.(1)

     144,253           3,273,101   
        

 

 

  
                 3,273,101   
Entertainment – 1.2%         

IMAX Corp.(1)

     456,387           12,997,902   
        

 

 

  
                 12,997,902   
Financial Data & Systems – 3.0%         

Euronet Worldwide, Inc.(1)

     470,500           22,696,920   

WEX, Inc.(1)

     91,900           9,646,743   
        

 

 

  
                 32,343,663   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   21

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Foods – 4.3%         

Boulder Brands, Inc.(1)

     618,594         $ 8,771,663   

Pinnacle Foods, Inc.

     116,235           3,824,132   

The Hain Celestial Group, Inc.(1)

     197,280           17,506,627   

The WhiteWave Foods Co.(1)

     530,120           17,159,984   
        

 

 

  
                 47,262,406   
Health Care Facilities – 0.8%         

Surgical Care Affiliates, Inc.(1)

     310,100           9,017,708   
        

 

 

  
                 9,017,708   
Health Care Services – 2.3%         

Acadia Healthcare Co., Inc.(1)

     289,382           13,166,881   

ExamWorks Group, Inc.(1)

     370,200           11,746,446   
        

 

 

  
                 24,913,327   
Hotel/Motel – 0.9%         

Belmond Ltd., Class A(1)

     686,200           9,977,348   
        

 

 

  
                 9,977,348   
Household Furnishings – 1.7%         

Restoration Hardware Holdings, Inc.(1)

     204,600           19,038,030   
        

 

 

  
                 19,038,030   
Machinery: Industrial – 0.8%         

The Middleby Corp.(1)

     106,230           8,787,346   
        

 

 

  
                 8,787,346   
Medical & Dental Instruments & Supplies – 2.1%         

AtriCure, Inc.(1)

     555,338           10,207,112   

West Pharmaceutical Services, Inc.

     291,842           12,309,896   
        

 

 

  
                 22,517,008   
Medical Equipment – 6.8%         

Cyberonics, Inc.(1)

     169,039           10,558,176   

DexCom, Inc.(1)

     356,774           14,149,657   

Fluidigm Corp.(1)

     351,300           10,328,220   

K2M Group Holdings, Inc.(1)

     562,000           8,362,560   

NxStage Medical, Inc.(1)

     1,145,100           16,455,087   

Zeltiq Aesthetics, Inc.(1)

     898,000           13,640,620   
        

 

 

  
                 73,494,320   
Office Supplies & Equipment – 1.5%         

Steelcase, Inc., Class A

     1,076,769           16,291,515   
        

 

 

  
                 16,291,515   
Oil Well Equipment & Services – 2.7%         

Geospace Technologies Corp.(1)

     138,810           7,645,655   

Matrix Service Co.(1)

     249,700           8,187,663   

RigNet, Inc.(1)

     256,711           13,816,186   
        

 

 

  
                 29,649,504   

 

22   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Oil: Crude Producers – 2.8%         

Athlon Energy, Inc.(1)

     186,100         $ 8,876,970   

Bonanza Creek Energy, Inc.(1)

     208,000           11,895,520   

Carrizo Oil & Gas, Inc.(1)

     147,350           10,205,461   
        

 

 

  
                 30,977,951   
Pharmaceuticals – 2.1%         

Aratana Therapeutics, Inc.(1)

     381,400           5,953,654   

Pacira Pharmaceuticals, Inc.(1)

     189,916           17,445,684   
        

 

 

  
                 23,399,338   
Production Technology Equipment – 1.0%         

FEI Co.

     118,143           10,719,114   
        

 

 

  
                 10,719,114   
Recreational Vehicles & Boats – 0.5%         

Drew Industries, Inc.

     113,508           5,676,535   
        

 

 

  
                 5,676,535   
Restaurants – 2.2%         

Red Robin Gourmet Burgers, Inc.(1)

     152,100           10,829,520   

Sonic Corp.(1)

     605,700           13,373,856   
        

 

 

  
                 24,203,376   
Scientific Instruments: Electrical – 2.6%         

GrafTech International Ltd.(1)

     1,269,900           13,283,154   

Littelfuse, Inc.

     160,100           14,881,295   
        

 

 

  
                 28,164,449   
Scientific Instruments: Pollution Control – 2.6%         

Clean Harbors, Inc.(1)

     255,600           16,422,300   

Darling Ingredients, Inc.(1)

     559,720           11,698,148   
        

 

 

  
                 28,120,448   
Securities Brokerage & Services – 0.6%         

MarketAxess Holdings, Inc.

     120,283           6,502,499   
        

 

 

  
                 6,502,499   
Semiconductors & Components – 4.1%         

Ambarella, Inc.(1)

     401,700           12,525,006   

Microsemi Corp.(1)

     808,412           21,633,105   

Spansion, Inc., Class A(1)

     479,400           10,100,958   
        

 

 

  
                 44,259,069   
Specialty Retail – 3.7%         

Burlington Stores, Inc.(1)

     433,079           13,797,897   

Lithia Motors, Inc., Class A

     140,400           13,207,428   

Vitamin Shoppe, Inc.(1)

     301,275           12,960,850   
        

 

 

  
                 39,966,175   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   23

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Steel – 0.8%         

Steel Dynamics, Inc.

     459,500         $ 8,248,025   
        

 

 

  
                 8,248,025   
Textiles, Apparel & Shoes – 1.6%         

G-III Apparel Group Ltd.(1)

     207,813           16,970,010   
        

 

 

  
                 16,970,010   
Truckers – 1.1%         

Old Dominion Freight Line, Inc.(1)

     182,464           11,619,307   
        

 

 

  
                 11,619,307   
Utilities: Telecommunications – 0.7%         

Cogent Communications Holdings, Inc.

     218,800           7,559,540   
        

 

 

  
                 7,559,540   
Total Common Stocks
(Cost $832,718,067)		                1,020,283,611   
      
      Principal
Amount		        Value  
Repurchase Agreements – 5.8%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $63,388,000, due 7/1/2014(2)

   $ 63,388,000           63,388,000   
Total Repurchase Agreements
(Cost $63,388,000)		                63,388,000   
Total Investments – 99.7%
(Cost $896,106,067)		                1,083,671,611   
Other Assets, Net – 0.3%                3,549,555   
Total Net Assets – 100.0%              $ 1,087,221,166   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     3.75%           11/15/2043         $ 64,658,750   

 

24   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP GROWTH FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                         Valuation Inputs                              
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3      Total  
   

Common Stocks

   $ 1,020,283,611       $ —       $     —       $ 1,020,283,611   
   

Repurchase Agreements

     —         63,388,000         —         63,388,000   
   
Total   $ 1,020,283,611       $ 63,388,000       $ —       $ 1,083,671,611   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   25

Table of Contents

SCHEDULE OF INVESTMENTS — RS SELECT GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 98.5%         
Advertising Agencies – 0.0%         

Constant Contact, Inc.(1)

     5,402         $ 173,458   
        

 

 

  
                 173,458   
Aerospace – 4.0%         

HEICO Corp., Class A

     478,583           19,430,470   

Teledyne Technologies, Inc.(1)

     209,552           20,362,168   
        

 

 

  
                 39,792,638   
Air Transport – 1.6%         

Spirit Airlines, Inc.(1)

     251,100           15,879,564   
        

 

 

  
                 15,879,564   
Asset Management & Custodian – 1.2%         

Financial Engines, Inc.

     261,000           11,818,080   
        

 

 

  
                 11,818,080   
Auto Parts – 3.3%         

Dorman Products, Inc.(1)

     267,437           13,189,993   

Gentex Corp.

     656,400           19,094,676   
        

 

 

  
                 32,284,669   
Back Office Support, HR and Consulting – 2.9%         

Huron Consulting Group, Inc.(1)

     311,663           22,071,974   

WageWorks, Inc.(1)

     148,992           7,182,904   
        

 

 

  
                 29,254,878   
Banks: Diversified – 1.3%         

SVB Financial Group(1)

     113,715           13,261,443   
        

 

 

  
                 13,261,443   
Biotechnology – 3.8%         

Cubist Pharmaceuticals, Inc.(1)

     217,758           15,203,864   

Ligand Pharmaceuticals, Inc.(1)

     356,370           22,198,287   
        

 

 

  
                 37,402,151   
Casinos & Gambling – 1.6%         

Multimedia Games Holding Co., Inc.(1)

     553,269           16,398,893   
        

 

 

  
                 16,398,893   
Chemicals: Diversified – 2.7%         

Cytec Industries, Inc.

     253,900           26,766,138   
        

 

 

  
                 26,766,138   
Chemicals: Specialty – 1.6%         

Quaker Chemical Corp.

     212,009           16,280,171   
        

 

 

  
                 16,280,171   
Communications Technology – 1.7%         

Finisar Corp.(1)

     849,801           16,783,570   
        

 

 

  
                 16,783,570   

 

26   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SELECT GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Computer Services, Software & Systems – 7.7%         

AOL, Inc.(1)

     351,700         $ 13,994,143   

Infoblox, Inc.(1)

     226,941           2,984,274   

LogMeIn, Inc.(1)

     624,137           29,097,267   

Rackspace Hosting, Inc.(1)

     267,800           9,014,148   

The Ultimate Software Group, Inc.(1)

     151,181           20,888,679   
        

 

 

  
                 75,978,511   
Consumer Lending – 3.2%         

Portfolio Recovery Associates, Inc.(1)

     525,830           31,302,660   
        

 

 

  
                 31,302,660   
Diversified Financial Services – 1.1%         

LPL Financial Holdings, Inc.

     227,792           11,330,374   
        

 

 

  
                 11,330,374   
Diversified Materials & Processing – 2.2%         

Hexcel Corp.(1)

     529,638           21,662,194   
        

 

 

  
                 21,662,194   
Education Services – 3.2%         

Capella Education Co.

     258,000           14,032,620   

Grand Canyon Education, Inc.(1)

     380,429           17,488,321   
        

 

 

  
                 31,520,941   
Electronic Components – 0.3%         

InvenSense, Inc.(1)

     138,311           3,138,277   
        

 

 

  
                 3,138,277   
Entertainment – 1.6%         

IMAX Corp.(1)

     544,315           15,502,091   
        

 

 

  
                 15,502,091   
Financial Data & Systems – 4.6%         

Euronet Worldwide, Inc.(1)

     650,700           31,389,768   

WEX, Inc.(1)

     134,100           14,076,477   
        

 

 

  
                 45,466,245   
Foods – 3.7%         

The Hain Celestial Group, Inc.(1)

     229,623           20,376,745   

The WhiteWave Foods Co.(1)

     515,600           16,689,972   
        

 

 

  
                 37,066,717   
Health Care Services – 2.8%         

ExamWorks Group, Inc.(1)

     544,811           17,286,853   

Premier, Inc., Class A(1)

     347,400           10,074,600   
        

 

 

  
                 27,361,453   
Hotel/Motel – 1.4%         

Belmond Ltd., Class A(1)

     948,200           13,786,828   
        

 

 

  
                 13,786,828   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   27

Table of Contents

SCHEDULE OF INVESTMENTS — RS SELECT GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Household Furnishings – 2.3%         

Restoration Hardware Holdings, Inc.(1)

     242,408         $ 22,556,064   
        

 

 

  
                 22,556,064   
Machinery: Industrial – 1.3%         

The Middleby Corp.(1)

     150,981           12,489,148   
        

 

 

  
                 12,489,148   
Medical & Dental Instruments & Supplies – 1.5%   

West Pharmaceutical Services, Inc.

     351,638           14,832,091   
        

 

 

  
                 14,832,091   
Medical Equipment – 3.9%         

Cyberonics, Inc.(1)

     241,075           15,057,545   

IDEXX Laboratories, Inc.(1)

     99,865           13,338,968   

PerkinElmer, Inc.

     228,900           10,721,676   
        

 

 

  
                 39,118,189   
Oil Well Equipment & Services – 1.1%         

Geospace Technologies Corp.(1)

     199,413           10,983,668   
        

 

 

  
                 10,983,668   
Oil: Crude Producers – 4.5%         

Athlon Energy, Inc.(1)

     269,000           12,831,300   

Bonanza Creek Energy, Inc.(1)

     294,900           16,865,331   

Carrizo Oil & Gas, Inc.(1)

     215,500           14,925,530   
        

 

 

  
                 44,622,161   
Pharmaceuticals – 2.4%         

Jazz Pharmaceuticals PLC(1)

     159,217           23,406,491   
        

 

 

  
                 23,406,491   
Production Technology Equipment – 1.0%         

FEI Co.

     114,900           10,424,877   
        

 

 

  
                 10,424,877   
Recreational Vehicles & Boats – 1.5%         

Brunswick Corp.

     349,800           14,737,074   
        

 

 

  
                 14,737,074   
Restaurants – 2.0%         

Sonic Corp.(1)

     911,500           20,125,920   
        

 

 

  
                 20,125,920   
Scientific Instruments: Electrical – 3.9%         

GrafTech International Ltd.(1)

     1,764,102           18,452,507   

Littelfuse, Inc.

     220,686           20,512,764   
        

 

 

  
                 38,965,271   
Scientific Instruments: Pollution Control – 4.1%         

Clean Harbors, Inc.(1)

     359,800           23,117,150   

Darling Ingredients, Inc.(1)

     820,120           17,140,508   
        

 

 

  
                 40,257,658   

 

28   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SELECT GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Securities Brokerage & Services – 0.9%         

MarketAxess Holdings, Inc.

     170,533         $ 9,219,014   
        

 

 

  
                 9,219,014   
Semiconductors & Components – 3.2%         

Atmel Corp.(1)

     1,135,900           10,643,383   

Microsemi Corp.(1)

     788,813           21,108,636   
        

 

 

  
                 31,752,019   
Specialty Retail – 3.8%         

Vitamin Shoppe, Inc.(1)

     420,412           18,086,124   

Williams-Sonoma, Inc.

     266,922           19,159,661   
        

 

 

  
                 37,245,785   
Steel – 1.1%         

Steel Dynamics, Inc.

     636,900           11,432,355   
        

 

 

  
                 11,432,355   
Telecommunications Equipment – 0.8%         

Ubiquiti Networks, Inc.(1)

     172,812           7,809,374   
        

 

 

  
                 7,809,374   
Truckers – 1.7%         

Old Dominion Freight Line, Inc.(1)

     257,997           16,429,249   
        

 

 

  
                 16,429,249   
Total Common Stocks
(Cost $806,753,241)		                976,618,352   
      
      Principal
Amount		        Value  
Repurchase Agreements – 1.6%         
   

Fixed Income Clearing Corp. Repurchase
Agreement, 0.00%, dated 6/30/2014, maturity
value of $16,198,000, due 7/1/2014(2)

   $ 16,198,000           16,198,000   
Total Repurchase Agreements
(Cost $16,198,000)		                16,198,000   
Total Investments – 100.1%
(Cost $822,951,241)		                992,816,352   
Other Liabilities, Net – (0.1)%                (947,831 ) 
Total Net Assets – 100.0%              $ 991,868,521   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     3.375%           5/15/2044         $ 16,523,325   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   29

Table of Contents

SCHEDULE OF INVESTMENTS — RS SELECT GROWTH FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                         Valuation Inputs                                
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 976,618,352       $ —       $     —         $ 976,618,352   
   

Repurchase Agreements

     —         16,198,000         —           16,198,000   
   
Total   $ 976,618,352       $ 16,198,000       $ —         $ 992,816,352   

 

30   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS MID CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 97.9%         
Aerospace – 2.9%         

B/E Aerospace, Inc.(1)

     18,000         $ 1,664,820   

Teledyne Technologies, Inc.(1)

     38,435           3,734,729   
        

 

 

  
                 5,399,549   
Air Transport – 1.6%         

American Airlines Group, Inc.(1)

     68,900           2,959,944   
        

 

 

  
                 2,959,944   
Asset Management & Custodian – 3.9%         

Affiliated Managers Group, Inc.(1)

     21,902           4,498,671   

WisdomTree Investments, Inc.(1)

     214,300           2,648,748   
        

 

 

  
                 7,147,419   
Auto Parts – 3.8%         

Gentex Corp.

     124,900           3,633,341   

LKQ Corp.(1)

     127,940           3,414,719   
        

 

 

  
                 7,048,060   
Banks: Diversified – 2.5%         

First Republic Bank

     40,000           2,199,600   

SVB Financial Group(1)

     21,020           2,451,352   
        

 

 

  
                 4,650,952   
Beverage: Brewers & Distillers – 1.8%         

Constellation Brands, Inc., Class A(1)

     38,400           3,384,192   
        

 

 

  
                 3,384,192   
Beverage: Soft Drinks – 2.1%         

Keurig Green Mountain, Inc.

     30,550           3,806,835   
        

 

 

  
                 3,806,835   
Biotechnology – 2.7%         

Cubist Pharmaceuticals, Inc.(1)

     25,900           1,808,338   

Intercept Pharmaceuticals, Inc.(1)

     3,214           760,529   

Ligand Pharmaceuticals, Inc.(1)

     37,810           2,355,185   
        

 

 

  
                 4,924,052   
Chemicals: Diversified – 1.7%         

Cytec Industries, Inc.

     29,905           3,152,585   
        

 

 

  
                 3,152,585   
Commercial Services: Rental & Leasing – 1.6%         

United Rentals, Inc.(1)

     28,955           3,032,457   
        

 

 

  
                 3,032,457   
Computer Services, Software & Systems – 6.5%         

Akamai Technologies, Inc.(1)

     48,000           2,930,880   

AOL, Inc.(1)

     55,400           2,204,366   

F5 Networks, Inc.(1)

     25,372           2,827,456   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   31

Table of Contents

SCHEDULE OF INVESTMENTS — RS MID CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Computer Services, Software & Systems (continued)         

Rackspace Hosting, Inc.(1)

     49,500         $ 1,666,170   

Salesforce.com, Inc.(1)

     41,800           2,427,744   
        

 

 

  
                 12,056,616   
Computer Technology – 1.2%         

Western Digital Corp.

     24,200           2,233,660   
        

 

 

  
                 2,233,660   
Consumer Lending – 1.2%         

FleetCor Technologies, Inc.(1)

     16,435           2,166,133   
        

 

 

  
                 2,166,133   
Containers & Packaging – 1.8%         

Rock-Tenn Co., Class A

     30,600           3,231,054   
        

 

 

  
                 3,231,054   
Cosmetics – 1.2%         

The Estee Lauder Companies, Inc., Class A

     29,500           2,190,670   
        

 

 

  
                 2,190,670   
Diversified Financial Services – 1.0%         

LPL Financial Holdings, Inc.

     38,800           1,929,912   
        

 

 

  
                 1,929,912   
Diversified Materials & Processing – 2.2%         

Hexcel Corp.(1)

     99,330           4,062,597   
        

 

 

  
                 4,062,597   
Diversified Media – 1.5%         

Discovery Communications, Inc., Class C(1)

     37,200           2,700,348   
        

 

 

  
                 2,700,348   
Diversified Retail – 1.9%         

Macy’s, Inc.

     59,900           3,475,398   
        

 

 

  
                 3,475,398   
Drug & Grocery Store Chains – 2.0%         

The Kroger Co.

     75,000           3,707,250   
        

 

 

  
                 3,707,250   
Financial Data & Systems – 3.8%         

Alliance Data Systems Corp.(1)

     10,063           2,830,219   

Vantiv, Inc., Class A(1)

     38,500           1,294,370   

WEX, Inc.(1)

     27,110           2,845,736   
        

 

 

  
                 6,970,325   
Foods – 1.6%         

The WhiteWave Foods Co.(1)

     91,700           2,968,329   
        

 

 

  
                 2,968,329   

 

32   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS MID CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Health Care Services – 3.6%         

Cerner Corp.(1)

     40,620         $ 2,095,180   

Envision Healthcare Holdings, Inc.(1)

     77,000           2,765,070   

Premier, Inc., Class A(1)

     63,900           1,853,100   
        

 

 

  
                 6,713,350   
Hotel/Motel – 1.3%         

Wynn Resorts Ltd.

     11,962           2,482,833   
        

 

 

  
                 2,482,833   
Leisure Time – 1.7%         

Expedia, Inc.

     40,900           3,221,284   
        

 

 

  
                 3,221,284   
Machinery: Industrial – 1.1%         

The Middleby Corp.(1)

     24,690           2,042,357   
        

 

 

  
                 2,042,357   
Medical & Dental Instruments & Supplies – 2.9%         

West Pharmaceutical Services, Inc.

     55,882           2,357,103   

Zimmer Holdings, Inc.

     28,830           2,994,284   
        

 

 

  
                 5,351,387   
Medical Equipment – 3.1%         

IDEXX Laboratories, Inc.(1)

     14,645           1,956,133   

Illumina, Inc.(1)

     10,350           1,847,889   

PerkinElmer, Inc.

     42,600           1,995,384   
        

 

 

  
                 5,799,406   
Oil Well Equipment & Services – 2.9%         

Cameron International Corp.(1)

     41,000           2,776,110   

Superior Energy Services, Inc.

     70,700           2,555,098   
        

 

 

  
                 5,331,208   
Oil: Crude Producers – 3.4%         

Oasis Petroleum, Inc.(1)

     31,800           1,777,302   

Pioneer Natural Resources Co.

     9,450           2,171,704   

Southwestern Energy Co.(1)

     52,700           2,397,323   
        

 

 

  
                 6,346,329   
Pharmaceuticals – 2.3%         

Jazz Pharmaceuticals PLC(1)

     28,435           4,180,229   
        

 

 

  
                 4,180,229   
Recreational Vehicles & Boats – 1.5%         

Brunswick Corp.

     65,200           2,746,876   
        

 

 

  
                 2,746,876   
Restaurants – 2.3%         

Chipotle Mexican Grill, Inc.(1)

     7,114           4,215,116   
        

 

 

  
                 4,215,116   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   33

Table of Contents

SCHEDULE OF INVESTMENTS — RS MID CAP GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Scientific Instruments: Control & Filter – 1.3%         

Flowserve Corp.

     33,400         $ 2,483,290   
        

 

 

  
                 2,483,290   
Scientific Instruments: Electrical – 1.5%         

AMETEK, Inc.

     54,595           2,854,227   
        

 

 

  
                 2,854,227   
Semiconductors & Components – 5.0%         

Avago Technologies Ltd.

     38,400           2,767,488   

Micron Technology, Inc.(1)

     115,100           3,792,545   

NXP Semiconductor N.V.(1)

     41,700           2,759,706   
        

 

 

  
                 9,319,739   
Specialty Retail – 6.6%         

Advance Auto Parts, Inc.

     24,625           3,322,405   

Burlington Stores, Inc.(1)

     86,300           2,749,518   

Tractor Supply Co.

     41,150           2,485,460   

Williams-Sonoma, Inc.

     50,000           3,589,000   
        

 

 

  
                 12,146,383   
Steel – 1.2%         

Steel Dynamics, Inc.

     118,100           2,119,895   
        

 

 

  
                 2,119,895   
Telecommunications Equipment – 0.8%         

Ubiquiti Networks, Inc.(1)

     31,964           1,444,453   
        

 

 

  
                 1,444,453   
Textiles, Apparel & Shoes – 2.3%         

Michael Kors Holdings Ltd.(1)

     31,780           2,817,297   

PVH Corp.

     12,417           1,447,822   
        

 

 

  
                 4,265,119   
Tobacco – 1.1%         

Lorillard, Inc.

     34,200           2,085,174   
        

 

 

  
                 2,085,174   
Truckers – 1.5%         

Old Dominion Freight Line, Inc.(1)

     44,155           2,811,790   
        

 

 

  
                 2,811,790   
Total Common Stocks
(Cost $153,591,701)		                181,158,782   
      

 

34   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS MID CAP GROWTH FUND

 

June 30, 2014 (unaudited)  

Principal
Amount

        Value  
Repurchase Agreements – 1.8%         
   

State Street Bank and Trust Co.
Repurchase Agreement, 0.00%,
dated 6/30/2014, maturity value of $3,288,000,
due 7/1/2014(2)

   $ 3,288,000         $ 3,288,000   
Total Repurchase Agreements
(Cost $3,288,000)		                3,288,000   
Total Investments – 99.7%
(Cost $156,879,701)		                184,446,782   
Other Assets, Net – 0.3%                611,174   
Total Net Assets – 100.0%              $ 185,057,956   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Note

     1.50%           8/31/2018         $ 3,358,250   

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                        Valuation Inputs                               

Investments in Securities

(unaudited)

   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 181,158,782       $ —       $     —         $ 181,158,782   
   

Repurchase Agreements

     —         3,288,000         —           3,288,000   
   
Total   $ 181,158,782       $ 3,288,000       $ —         $ 184,446,782   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   35

Table of Contents

SCHEDULE OF INVESTMENTS – RS GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 99.8%         
Aerospace – 1.0%         

B/E Aerospace, Inc.(1)

     28,500         $ 2,635,965   
        

 

 

  
                 2,635,965   
Air Transport – 1.9%         

American Airlines Group, Inc.(1)

     117,300           5,039,208   
        

 

 

  
                 5,039,208   
Asset Management & Custodian – 3.1%         

Affiliated Managers Group, Inc.(1)

     38,772           7,963,769   
        

 

 

  
                 7,963,769   
Auto Parts – 2.3%         

LKQ Corp.(1)

     220,000           5,871,800   
        

 

 

  
                 5,871,800   
Beverage: Brewers & Distillers – 2.3%         

Constellation Brands, Inc., Class A(1)

     68,600           6,045,718   
        

 

 

  
                 6,045,718   
Beverage: Soft Drinks – 2.1%         

Keurig Green Mountain, Inc.

     44,345           5,525,831   
        

 

 

  
                 5,525,831   
Biotechnology – 4.2%         

Biogen Idec, Inc.(1)

     15,322           4,831,180   

Celgene Corp.(1)

     70,990           6,096,621   
        

 

 

  
                 10,927,801   
Casinos & Gambling – 1.6%         

Las Vegas Sands Corp.

     53,500           4,077,770   
        

 

 

  
                 4,077,770   
Chemicals: Diversified – 1.4%         

Ecolab, Inc.

     33,667           3,748,484   
        

 

 

  
                 3,748,484   
Commercial Services: Rental & Leasing – 1.8%         

United Rentals, Inc.(1)

     44,965           4,709,184   
        

 

 

  
                 4,709,184   
Computer Services, Software & Systems – 13.0%         

Akamai Technologies, Inc.(1)

     63,300           3,865,098   

F5 Networks, Inc.(1)

     21,696           2,417,802   

Facebook, Inc., Class A(1)

     118,700           7,987,323   

Google, Inc., Class C(1)

     13,838           7,960,725   

Microsoft Corp.

     110,600           4,612,020   

Oracle Corp.

     112,000           4,539,360   

VMware, Inc., Class A(1)

     23,930           2,316,663   
        

 

 

  
                 33,698,991   

 

36   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Computer Technology – 3.1%         

Apple, Inc.

     54,137         $ 5,030,951   

Western Digital Corp.

     34,000           3,138,200   
        

 

 

  
                 8,169,151   
Consumer Lending – 1.5%         

FleetCor Technologies, Inc.(1)

     28,680           3,780,024   
        

 

 

  
                 3,780,024   
Containers & Packaging – 2.2%         

Rock-Tenn Co., Class A

     53,615           5,661,208   
        

 

 

  
                 5,661,208   
Cosmetics – 1.5%         

The Estee Lauder Companies, Inc., Class A

     51,400           3,816,964   
        

 

 

  
                 3,816,964   
Diversified Manufacturing Operations – 1.8%         

Danaher Corp.

     59,411           4,677,428   
        

 

 

  
                 4,677,428   
Diversified Media – 1.6%         

Discovery Communications, Inc., Class C(1)

     57,295           4,159,044   
        

 

 

  
                 4,159,044   
Diversified Retail – 5.8%         

Amazon.com, Inc.(1)

     9,421           3,059,752   

Costco Wholesale Corp.

     49,168           5,662,187   

Macy’s, Inc.

     109,200           6,335,784   
        

 

 

  
                 15,057,723   
Drug & Grocery Store Chains – 3.1%         

The Kroger Co.

     74,600           3,687,478   

Walgreen Co.

     58,800           4,358,844   
        

 

 

  
                 8,046,322   
Financial Data & Systems – 3.7%         

Alliance Data Systems Corp.(1)

     17,558           4,938,188   

Visa, Inc., Class A

     21,707           4,573,882   
        

 

 

  
                 9,512,070   
Foods – 1.6%         

Mondelez International, Inc., Class A

     110,030           4,138,228   
        

 

 

  
                 4,138,228   
Health Care Management Services – 1.2%         

UnitedHealth Group, Inc.

     38,230           3,125,303   
        

 

 

  
                 3,125,303   
Health Care Services – 1.1%         

Cerner Corp.(1)

     53,426           2,755,713   
        

 

 

  
                 2,755,713   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   37

Table of Contents

SCHEDULE OF INVESTMENTS – RS GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Hotel/Motel – 1.6%         

Wynn Resorts Ltd.

     20,309         $ 4,215,336   
        

 

 

  
                 4,215,336   
Leisure Time – 0.8%         

The Priceline Group, Inc.(1)

     1,717           2,065,551   
        

 

 

  
                 2,065,551   
Medical & Dental Instruments & Supplies – 1.4%   

Zimmer Holdings, Inc.

     34,420           3,574,861   
        

 

 

  
                 3,574,861   
Metal Fabricating – 1.6%         

Precision Castparts Corp.

     16,794           4,238,806   
        

 

 

  
                 4,238,806   
Oil Well Equipment & Services – 2.5%         

Schlumberger Ltd.

     55,800           6,581,610   
        

 

 

  
                 6,581,610   
Oil: Crude Producers – 2.5%         

EOG Resources, Inc.

     56,140           6,560,520   
        

 

 

  
                 6,560,520   
Pharmaceuticals – 7.7%         

Gilead Sciences, Inc.(1)

     153,980           12,766,482   

Jazz Pharmaceuticals PLC(1)

     49,935           7,340,944   
        

 

 

  
                 20,107,426   
Restaurants – 1.6%         

Starbucks Corp.

     53,300           4,124,354   
        

 

 

  
                 4,124,354   
Scientific Instruments: Control & Filter – 1.6%         

Flowserve Corp.

     56,900           4,230,515   
        

 

 

  
                 4,230,515   
Scientific Instruments: Electrical – 1.7%         

AMETEK, Inc.

     82,394           4,307,558   
        

 

 

  
                 4,307,558   
Semiconductors & Components – 6.5%         

Avago Technologies Ltd.

     62,000           4,468,340   

Micron Technology, Inc.(1)

     243,100           8,010,145   

NXP Semiconductor N.V.(1)

     67,400           4,460,532   
        

 

 

  
                 16,939,017   
Specialty Retail – 5.0%         

Advance Auto Parts, Inc.

     49,110           6,625,921   

The Home Depot, Inc.

     79,990           6,475,991   
        

 

 

  
                 13,101,912   
Textiles, Apparel & Shoes – 1.0%         

PVH Corp.

     22,900           2,670,140   
        

 

 

  
                 2,670,140   

 

38   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS GROWTH FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Tobacco – 1.4%         

Lorillard, Inc.

     60,100         $ 3,664,297   
        

 

 

  
                 3,664,297   
Total Common Stocks
(Cost $192,934,021)		                259,525,602   
      
      Principal
Amount		        Value  
Repurchase Agreements – 0.1%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity
value of $325,000, due 7/1/2014(2)

   $ 325,000           325,000   
Total Repurchase Agreements
(Cost $325,000)		                325,000   
Total Investments – 99.9%
(Cost $193,259,021)		                259,850,602   
Other Assets, Net – 0.1%                311,094   
Total Net Assets – 100.0%              $ 260,161,696   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     3.75%           11/15/2043         $ 335,188   

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             

Investments in Securities

(unaudited)

   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 259,525,602       $ —       $     —         $ 259,525,602   
   

Repurchase Agreements

     —         325,000         —           325,000   
   
Total   $ 259,525,602       $ 325,000       $ —         $ 259,850,602   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   39

Table of Contents

SCHEDULE OF INVESTMENTS — RS TECHNOLOGY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 96.6%         
Advertising Agencies – 1.2%         

Nielsen N.V.

     53,100         $ 2,570,571   
        

 

 

  
                 2,570,571   
Cable Television Services – 1.7%         

Comcast Corp., Special Class A

     66,000           3,519,780   
        

 

 

  
                 3,519,780   
Communications Technology – 7.4%         

Aruba Networks, Inc.(1)

     81,708           1,431,524   

DigitalGlobe, Inc.(1)

     67,200           1,868,160   

Finisar Corp.(1)

     222,700           4,398,325   

Infinera Corp.(1)

     251,100           2,310,120   

JDS Uniphase Corp.(1)

     140,900           1,757,023   

RingCentral, Inc., Class A(1)

     169,000           2,556,970   

ShoreTel, Inc.(1)

     145,200           946,704   
        

 

 

  
                 15,268,826   
Computer Services, Software & Systems – 46.5%         

Akamai Technologies, Inc.(1)

     54,200           3,309,452   

AOL, Inc.(1)

     57,400           2,283,946   

Bazaarvoice, Inc.(1)

     533,900           4,212,471   

Concur Technologies, Inc.(1)

     23,600           2,202,824   

Criteo S.A., ADR(1)

     42,500           1,435,225   

Endurance International Group Holdings, Inc.(1)

     201,400           3,079,406   

F5 Networks, Inc.(1)

     27,903           3,109,510   

Facebook, Inc., Class A(1)

     121,600           8,182,464   

Google, Inc., Class C(1)

     25,664           14,763,986   

Guidewire Software, Inc.(1)

     78,700           3,199,942   

Infoblox, Inc.(1)

     47,218           620,917   

Informatica Corp.(1)

     49,300           1,757,545   

Infosys Ltd., ADR

     37,100           1,994,867   

LinkedIn Corp., Class A(1)

     20,465           3,509,133   

LogMeIn, Inc.(1)

     93,900           4,377,618   

Mavenir Systems, Inc.(1)

     444,100           6,728,115   

Microsoft Corp.

     100,400           4,186,680   

Oracle Corp.

     101,600           4,117,848   

Proofpoint, Inc.(1)

     110,510           4,139,705   

PTC, Inc.(1)

     45,700           1,773,160   

Qihoo 360 Technology Co. Ltd., ADR(1)

     15,505           1,427,080   

Rackspace Hosting, Inc.(1)

     68,948           2,320,790   

RetailMeNot, Inc.(1)

     75,900           2,019,699   

salesforce.com, Inc.(1)

     38,000           2,207,040   

ServiceNow, Inc.(1)

     35,100           2,174,796   
                    

 

40   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS TECHNOLOGY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Computer Services, Software & Systems (continued)         

The Ultimate Software Group, Inc.(1)

     10,030         $ 1,385,845   

Twitter, Inc.(1)

     63,800           2,613,886   

VMware, Inc., Class A(1)

     30,200           2,923,662   
        

 

 

  
                 96,057,612   
Computer Technology – 5.6%         

Apple, Inc.

     73,598           6,839,462   

Silicon Graphics International Corp.(1)

     266,300           2,561,806   

Synaptics, Inc.(1)

     23,600           2,139,104   
        

 

 

  
                 11,540,372   
Consumer Electronics – 1.0%         

Garmin Ltd.

     32,800           1,997,520   
        

 

 

  
                 1,997,520   
Diversified Retail – 2.1%         

Amazon.com, Inc.(1)

     13,194           4,285,147   
        

 

 

  
                 4,285,147   
Electronic Components – 0.3%         

InvenSense, Inc.(1)

     28,500           646,665   
        

 

 

  
                 646,665   
Energy Equipment – 1.0%         

JA Solar Holdings Co. Ltd., ADR(1)

     188,600           2,048,196   
        

 

 

  
                 2,048,196   
Entertainment – 1.1%         

IMAX Corp.(1)

     80,300           2,286,944   
        

 

 

  
                 2,286,944   
Leisure Time – 2.6%         

Expedia, Inc.

     39,800           3,134,648   

The Priceline Group, Inc.(1)

     1,929           2,320,587   
        

 

 

  
                 5,455,235   
Pharmaceuticals – 1.4%         

Gilead Sciences, Inc.(1)

     35,100           2,910,141   
        

 

 

  
                 2,910,141   
Production Technology Equipment – 2.4%         

FEI Co.

     23,400           2,123,082   

Nanometrics, Inc.(1)

     151,800           2,770,350   
        

 

 

  
                 4,893,432   
Radio & TV Broadcasters – 1.1%         

Pandora Media, Inc.(1)

     73,600           2,171,200   
        

 

 

  
                 2,171,200   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   41

Table of Contents

SCHEDULE OF INVESTMENTS — RS TECHNOLOGY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Semiconductors & Components – 18.2%         

Ambarella, Inc.(1)

     93,400         $ 2,912,212   

Atmel Corp.(1)

     386,500           3,621,505   

Avago Technologies Ltd.

     39,400           2,839,558   

Micrel, Inc.

     301,425           3,400,074   

Micron Technology, Inc.(1)

     195,800           6,451,610   

Microsemi Corp.(1)

     97,600           2,611,776   

Monolithic Power Systems, Inc.

     65,300           2,765,455   

NXP Semiconductor N.V.(1)

     63,600           4,209,048   

O2Micro International Ltd., ADR(1)

     242,312           826,284   

OmniVision Technologies, Inc.(1)

     138,173           3,037,043   

Spansion, Inc., Class A(1)

     94,500           1,991,115   

Tower Semiconductor Ltd.(1)

     324,600           2,947,368   
        

 

 

  
                 37,613,048   
Technology: Miscellaneous – 1.2%         

Fabrinet(1)

     122,700           2,527,620   
        

 

 

  
                 2,527,620   
Telecommunications Equipment – 1.8%         

Applied Optoelectronics, Inc.(1)

     89,000           2,064,800   

Ubiquiti Networks, Inc.(1)

     35,632           1,610,210   
        

 

 

  
                 3,675,010   
Total Common Stocks
(Cost $164,957,882)		                199,467,319   
      
      Principal
Amount		        Value  
Repurchase Agreements – 3.1%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $6,303,000, due 7/1/2014(2)

   $ 6,303,000           6,303,000   
Total Repurchase Agreements
(Cost $6,303,000)		                6,303,000   
Total Investments – 99.7%
(Cost $171,260,882)		                205,770,319   
Other Assets, Net – 0.3%                638,076   
Total Net Assets – 100.0%              $ 206,408,395   

 

(1) 

Non-income-producing security.

 

42   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS TECHNOLOGY FUND

 

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     2.75%           11/15/2042         $ 6,430,575   

Legend:

ADR – American Depositary Receipt.

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                        Valuation Inputs                               
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 199,467,319       $ —       $     —         $ 199,467,319   
   

Repurchase Agreements

     —         6,303,000         —           6,303,000   
   
Total   $ 199,467,319       $ 6,303,000       $ —         $ 205,770,319   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   43

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP EQUITY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 98.0%         
Advertising Agencies – 0.0%         

Constant Contact, Inc.(1)

     400         $ 12,844   
        

 

 

  
                 12,844   
Aerospace – 2.7%         

HEICO Corp., Class A

     38,391           1,558,674   

Teledyne Technologies, Inc.(1)

     17,770           1,726,711   
        

 

 

  
                 3,285,385   
Air Transport – 1.0%         

Spirit Airlines, Inc.(1)

     20,100           1,271,124   
        

 

 

  
                 1,271,124   
Asset Management & Custodian – 0.8%         

Financial Engines, Inc.

     20,900           946,352   
        

 

 

  
                 946,352   
Auto Parts – 1.1%         

Dorman Products, Inc.(1)

     26,600           1,311,912   
        

 

 

  
                 1,311,912   
Back Office Support, HR and Consulting – 3.7%         

Huron Consulting Group, Inc.(1)

     26,300           1,862,566   

Robert Half International, Inc.

     36,316           1,733,726   

WageWorks, Inc.(1)

     20,100           969,021   
        

 

 

  
                 4,565,313   
Banks: Diversified – 2.1%         

Customers Bancorp, Inc.(1)

     56,457           1,129,704   

Signature Bank(1)

     10,976           1,384,952   
        

 

 

  
                 2,514,656   
Biotechnology – 8.5%         

Bluebird Bio, Inc.(1)

     23,400           902,538   

Chimerix, Inc.(1)

     41,700           914,898   

KYTHERA Biopharmaceuticals, Inc.(1)

     21,400           821,118   

Ligand Pharmaceuticals, Inc.(1)

     32,160           2,003,247   

NanoString Technologies, Inc.(1)

     45,800           684,710   

Orexigen Therapeutics, Inc.(1)

     166,900           1,031,442   

Receptos, Inc.(1)

     28,600           1,218,360   

Revance Therapeutics, Inc.(1)

     26,000           884,000   

Ultragenyx Pharmaceutical, Inc.(1)

     15,897           713,616   

Vital Therapies, Inc.(1)

     43,950           1,197,198   
        

 

 

  
                 10,371,127   
Building Materials – 1.0%         

Simpson Manufacturing Co., Inc.

     35,100           1,276,236   
        

 

 

  
                 1,276,236   

 

44   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP EQUITY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Casinos & Gambling – 1.3%         

Multimedia Games Holding Co., Inc.(1)

     54,465         $ 1,614,343   
        

 

 

  
                 1,614,343   
Chemicals: Diversified – 1.7%         

Cytec Industries, Inc.

     19,530           2,058,853   
        

 

 

  
                 2,058,853   
Chemicals: Specialty – 1.4%         

Quaker Chemical Corp.

     21,400           1,643,306   
        

 

 

  
                 1,643,306   
Communications Technology – 3.6%         

Aruba Networks, Inc.(1)

     48,784           854,695   

Finisar Corp.(1)

     90,377           1,784,946   

RingCentral, Inc., Class A(1)

     112,400           1,700,612   
        

 

 

  
                 4,340,253   
Computer Services, Software & Systems – 7.2%         

comScore, Inc.(1)

     14,400           510,912   

Infoblox, Inc.(1)

     27,985           368,003   

LogMeIn, Inc.(1)

     66,900           3,118,878   

Proofpoint, Inc.(1)

     72,800           2,727,088   

The Ultimate Software Group, Inc.(1)

     15,083           2,084,018   
        

 

 

  
                 8,808,899   
Consumer Lending – 2.0%         

Portfolio Recovery Associates, Inc.(1)

     41,918           2,495,378   
        

 

 

  
                 2,495,378   
Diversified Materials & Processing – 1.5%         

Hexcel Corp.(1)

     43,510           1,779,559   
        

 

 

  
                 1,779,559   
Education Services – 2.4%         

Capella Education Co.

     24,900           1,354,311   

Grand Canyon Education, Inc.(1)

     34,180           1,571,255   
        

 

 

  
                 2,925,566   
Electronic Components – 0.3%         

InvenSense, Inc.(1)

     16,800           381,192   
        

 

 

  
                 381,192   
Entertainment – 1.3%         

IMAX Corp.(1)

     53,500           1,523,680   
        

 

 

  
                 1,523,680   
Financial Data & Systems – 3.0%         

Euronet Worldwide, Inc.(1)

     53,500           2,580,840   

WEX, Inc.(1)

     10,800           1,133,676   
        

 

 

  
                 3,714,516   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   45

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP EQUITY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Foods – 4.3%         

Boulder Brands, Inc.(1)

     70,800         $ 1,003,944   

Pinnacle Foods, Inc.

     13,400           440,860   

The Hain Celestial Group, Inc.(1)

     22,150           1,965,591   

The WhiteWave Foods Co.(1)

     58,600           1,896,882   
        

 

 

  
                 5,307,277   
Health Care Facilities – 0.8%         

Surgical Care Affiliates, Inc.(1)

     33,900           985,812   
        

 

 

  
                 985,812   
Health Care Services – 2.4%         

Acadia Healthcare Co., Inc.(1)

     33,900           1,542,450   

ExamWorks Group, Inc.(1)

     43,300           1,373,909   
        

 

 

  
                 2,916,359   
Hotel/Motel – 0.9%         

Belmond Ltd., Class A(1)

     77,500           1,126,850   
        

 

 

  
                 1,126,850   
Household Furnishings – 1.8%         

Restoration Hardware Holdings, Inc.(1)

     23,900           2,223,895   
        

 

 

  
                 2,223,895   
Machinery: Industrial – 0.8%         

The Middleby Corp.(1)

     12,096           1,000,581   
        

 

 

  
                 1,000,581   
Medical & Dental Instruments & Supplies – 2.2%         

AtriCure, Inc.(1)

     67,529           1,241,183   

West Pharmaceutical Services, Inc.

     33,370           1,407,547   
        

 

 

  
                 2,648,730   
Medical Equipment – 7.0%         

Cyberonics, Inc.(1)

     19,621           1,225,527   

DexCom, Inc.(1)

     42,577           1,688,604   

Fluidigm Corp.(1)

     40,900           1,202,460   

K2M Group Holdings, Inc.(1)

     65,500           974,640   

NxStage Medical, Inc.(1)

     132,900           1,909,773   

Zeltiq Aesthetics, Inc.(1)

     104,200           1,582,798   
        

 

 

  
                 8,583,802   
Office Supplies & Equipment – 1.5%         

Steelcase, Inc., Class A

     119,000           1,800,470   
        

 

 

  
                 1,800,470   
Oil Well Equipment & Services – 2.8%         

Geospace Technologies Corp.(1)

     15,788           869,603   

Matrix Service Co.(1)

     29,100           954,189   

RigNet, Inc.(1)

     29,979           1,613,470   
        

 

 

  
                 3,437,262   

 

46   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP EQUITY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Oil: Crude Producers – 2.9%         

Athlon Energy, Inc.(1)

     21,600         $ 1,030,320   

Bonanza Creek Energy, Inc.(1)

     24,200           1,383,998   

Carrizo Oil & Gas, Inc.(1)

     17,040           1,180,190   
        

 

 

  
                 3,594,508   
Pharmaceuticals – 2.2%         

Aratana Therapeutics, Inc.(1)

     42,400           661,864   

Pacira Pharmaceuticals, Inc.(1)

     21,900           2,011,734   
        

 

 

  
                 2,673,598   
Production Technology Equipment – 1.0%         

FEI Co.

     13,795           1,251,620   
        

 

 

  
                 1,251,620   
Recreational Vehicles & Boats – 0.6%         

Drew Industries, Inc.

     13,800           690,138   
        

 

 

  
                 690,138   
Restaurants – 2.3%         

Red Robin Gourmet Burgers, Inc.(1)

     17,500           1,246,000   

Sonic Corp.(1)

     71,200           1,572,096   
        

 

 

  
                 2,818,096   
Scientific Instruments: Electrical – 2.7%         

GrafTech International Ltd.(1)

     146,800           1,535,528   

Littelfuse, Inc.

     18,300           1,700,985   
        

 

 

  
                 3,236,513   
Scientific Instruments: Pollution Control – 2.6%         

Clean Harbors, Inc.(1)

     28,500           1,831,125   

Darling Ingredients, Inc.(1)

     65,010           1,358,709   
        

 

 

  
                 3,189,834   
Securities Brokerage & Services – 0.6%         

MarketAxess Holdings, Inc.

     13,882           750,461   
        

 

 

  
                 750,461   
Semiconductors & Components – 4.1%         

Ambarella, Inc.(1)

     46,900           1,462,342   

Microsemi Corp.(1)

     89,256           2,388,491   

Spansion, Inc., Class A(1)

     55,900           1,177,813   
        

 

 

  
                 5,028,646   
Specialty Retail – 3.7%         

Burlington Stores, Inc.(1)

     48,900           1,557,954   

Lithia Motors, Inc., Class A

     16,400           1,542,748   

Vitamin Shoppe, Inc.(1)

     33,383           1,436,137   
        

 

 

  
                 4,536,839   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   47

Table of Contents

SCHEDULE OF INVESTMENTS — RS SMALL CAP EQUITY FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Steel – 0.8%         

Steel Dynamics, Inc.

     52,100         $ 935,195   
        

 

 

  
                 935,195   
Textiles, Apparel & Shoes – 1.6%         

G-III Apparel Group Ltd.(1)

     23,700           1,935,342   
        

 

 

  
                 1,935,342   
Truckers – 1.1%         

Old Dominion Freight Line, Inc.(1)

     20,823           1,326,009   
        

 

 

  
                 1,326,009   
Utilities: Telecommunications – 0.7%         

Cogent Communications Holdings, Inc.

     25,700           887,935   
        

 

 

  
                 887,935   
Total Common Stocks
(Cost $96,269,344)		                119,726,266   
      
      Principal
Amount		        Value  
Repurchase Agreements – 1.8%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $2,140,000, due 7/1/2014(2)

   $ 2,140,000           2,140,000   
Total Repurchase Agreements
(Cost $2,140,000)		                2,140,000   
Total Investments – 99.8%
(Cost $98,409,344)		                121,866,266   
Other Assets, Net – 0.2%                276,716   
Total Net Assets – 100.0%              $ 122,142,982   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     2.75%           11/15/2042         $ 2,183,800   

 

48   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS SMALL CAP EQUITY FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                        Valuation Inputs                               
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 119,726,266       $ —       $     —         $ 119,726,266   
   

Repurchase Agreements

     —         2,140,000         —           2,140,000   
   
Total   $ 119,726,266       $ 2,140,000       $ —         $ 121,866,266   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   49

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Assets and Liabilities

As of June 30, 2014 (unaudited)

    RS Small Cap
Growth		  
Assets   

Investments, at value

    $ 1,083,671,611   

Cash

      172   

Receivable for investments sold

      12,020,399   

Receivable for fund shares subscribed

      2,025,069   

Dividends/interest receivable

      153,340   

Prepaid expenses

      82,424   
    

 

 

  

Total Assets

      1,097,953,015   
    

 

 

  
Liabilities   

Payable for investments purchased

      8,833,330   

Payable for fund shares redeemed

      906,181   

Payable to adviser

      800,187   

Payable to distributor

      22,088   

Accrued trustees’ fees

      13,692   

Accrued expenses/other liabilities

      156,371   
    

 

 

  

Total Liabilities

      10,731,849   
    

 

 

  

Total Net Assets

    $ 1,087,221,166   
    

 

 

  
Net Assets Consist of:   

Paid-in capital

    $ 859,682,039   

Accumulated net investment loss

      (5,145,234 ) 

Accumulated net realized gain/(loss) from investments

      45,118,817   

Net unrealized appreciation on investments

      187,565,544   
    

 

 

  

Total Net Assets

    $ 1,087,221,166   
    

 

 

  

Investments, at Cost

    $ 896,106,067   
    

 

 

  
Pricing of Shares   

Net Assets:

   

Class A

    $ 600,859,071   

Class C

      10,174,967   

Class K

      2,325,683   

Class Y

      473,861,445   

Shares of Beneficial Interest Outstanding with No Par Value:

   

Class A

      9,448,722   

Class C

      173,830   

Class K

      38,411   

Class Y

      7,283,763   

Net Asset Value Per Share:

   

Class A

    $ 63.59   

Class C

      58.53   

Class K

      60.55   

Class Y

      65.06   

Sales Charge Class A (Load)

      4.75 % 

Maximum Offering Price Per Class A Share

    $ 66.76   

 

50   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS Select
Growth		          RS Mid Cap
Growth		     RS Growth     RS Technology     RS Small Cap
Equity		  
           
$ 992,816,352        $ 184,446,782      $ 259,850,602      $ 205,770,319      $ 121,866,266   
  905          54        665        41,430        561   
  3,258,624          849,186        2,666,485        1,089,713        1,376,206   
  2,725,625          1,038,975        96,689        307,818        112,353   
  180,566          54,030        117,047        37,609        16,027   
  74,057          45,680        35,627        30,808        37,114   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  999,056,129          186,434,707        262,767,115        207,277,697        123,408,527   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
           
  1,900,792          1,110,591        2,232,437        415,200        993,402   
  4,242,821          99,595        137,661        215,021        122,023   
  764,928          116,141        139,174        165,908        73,638   
  27,408          4,800        9,244        7,089        2,827   
  16,190          1,914        4,304        3,723        2,178   
  235,469          43,710        82,599        62,361        71,477   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  7,187,608          1,376,751        2,605,419        869,302        1,265,545   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
$ 991,868,521        $ 185,057,956      $ 260,161,696      $ 206,408,395      $ 122,142,982   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
           
$ 798,853,192        $ 223,064,522      $ 173,144,652      $ 148,778,792      $ 84,322,925   
  (5,373,038 )        (595,480 )      (547,699 )      (1,293,545 )      (630,761 ) 
  28,523,256          (64,978,167 )      20,973,162        24,413,711        14,993,896   
  169,865,111          27,567,081        66,591,581        34,509,437        23,456,922   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
$ 991,868,521        $ 185,057,956      $ 260,161,696      $ 206,408,395      $ 122,142,982   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
$ 822,951,241        $ 156,879,701      $ 193,259,021      $ 171,260,882      $ 98,409,344   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
           
           
$ 411,956,781        $ 104,895,866      $ 214,287,947      $ 146,085,512      $ 67,385,326   
  97,123,789          8,034,814        13,177,313        14,612,202        1,021,304   
  1,377,660          1,593,025        1,315,405        1,483,104        4,363,565   
  481,410,291          70,534,251        31,381,031        44,227,577        49,372,787   
           
  8,486,124          5,474,207        10,651,382        7,424,821        3,137,133   
  2,130,262          451,255        703,969        809,536        64,914   
  30,365          87,108        67,415        79,952        219,704   
  9,772,762          3,606,500        1,539,316        2,185,648        2,279,899   
           
$ 48.54        $ 19.16      $ 20.12      $ 19.68      $ 21.48   
  45.59          17.81        18.72        18.05        15.73   
  45.37          18.29        19.51        18.55        19.86   
  49.26          19.56        20.39        20.24        21.66   
  4.75 %        4.75 %      4.75 %      4.75 %      4.75 % 
$ 50.96          $ 20.12      $ 21.12      $ 20.66      $ 22.55   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   51

Table of Contents

FINANCIAL INFORMATION

 

Statements of Operations

For the Six-Month Period Ended June 30, 2014 (unaudited)

    RS Small Cap
Growth		  
Investment Income   

Dividends

    $ 699,353   

Interest

      3,490   

Withholding taxes on foreign dividends

      —   
    

 

 

  

Total Investment Income

      702,843   
    

 

 

  
 
Expenses   

Investment advisory fees

      4,399,064   

Distribution fees

      738,876   

Transfer agent fees

      542,955   

Shareholder reports

      57,153   

Professional fees

      55,650   

Custodian fees

      51,311   

Administrative service fees

      49,108   

Trustees’ fees

      25,267   

Registration fees

      21,302   

Insurance expense

      10,982   

Other expenses

      8,900   
    

 

 

  

Total Expenses

      5,960,568   
 

Less: Fee waiver by adviser

      (112,491 ) 
    

 

 

  

Total Expenses, Net

      5,848,077   
    

 

 

  

Net Investment Loss

      (5,145,234 ) 
    

 

 

  
 

Realized Gain/(Loss) and Change in
Unrealized Appreciation/Depreciation on Investments

   

Net realized gain from investments

      37,942,049   

Net change in unrealized appreciation/depreciation on investments

      (37,068,514 ) 
    

 

 

  
 

Net Gain/(Loss) on Investments

      873,535   
    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

    $ (4,271,699 ) 
    

 

 

  
          

 

52   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

RS Select
Growth		          RS Mid Cap
Growth		     RS Growth     RS Technology     RS Small Cap
Equity		  
           
$ 1,135,964        $ 321,071      $ 922,533      $ 274,808      $ 104,431   
  —          —        —        —        —   
  —          (1,103 )      (2,434 )      (2,006 )      —   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  1,135,964          319,968        920,099        272,802        104,431   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
 
           
  4,945,126          624,777        970,313        1,050,315        466,849   
  996,887          155,663        322,004        268,731        106,185   
  552,209          85,126        118,315        145,001        73,339   
  66,294          9,124        8,553        16,101        9,641   
  60,140          22,177        26,280        24,796        20,232   
  52,878          19,693        19,527        18,089        28,589   
  58,352          7,267        14,428        12,709        7,598   
  29,855          3,760        7,299        6,462        3,870   
  25,202          20,914        16,961        15,826        17,416   
  5,032          1,478        1,225        5,295        2,179   
  8,621          2,014        3,520        3,022        1,701   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  6,800,596          951,993        1,508,425        1,566,347        737,599   
 
  (291,594 )        (36,545 )      (40,627 )      —        (2,407 ) 

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  6,509,002          915,448        1,467,798        —        735,192   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
  (5,373,038 )        (595,480 )      (547,699 )      (1,293,545 )      (630,761 ) 

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
 
           
  20,153,636          2,733,860        22,500,506        19,966,389        10,839,063   
  (36,889,826 )        1,274,709        (11,932,172 )      (27,011,498 )      (10,315,916 ) 

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
 
  (16,736,190 )        4,008,569        10,568,334        (7,045,109 )      523,147   

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
$ (22,109,228 )      $ 3,413,089      $ 10,020,635      $ (8,338,654 )    $ (107,614 ) 

 

 

      

 

 

    

 

 

    

 

 

    

 

 

  
                                         

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   53

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

   RS Small Cap Growth  
 
     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  
    

 

  
Operations    

Net investment loss

   $ (5,145,234 )    $ (7,286,234 ) 

Net realized gain from investments

     37,942,049        157,211,064   

Net change in unrealized appreciation/depreciation on investments

     (37,068,514 )      120,211,968   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

     (4,271,699 )      270,136,798   
   

 

 

    

 

 

  
Distributions to Shareholders    

Net investment income

    

Class A

     —        (6,180,068 ) 

Class C

     —        (72,164 ) 

Class K

     —        (17,652 ) 

Class Y

     —        (4,310,468 ) 

Net realized gain on investments

    

Class A

     —        (35,295,329 ) 

Class C

     —        (477,868 ) 

Class K

     —        (131,082 ) 

Class Y

     —        (19,745,294 ) 
   

 

 

    

 

 

  

Total Distributions

     —        (66,229,925 ) 
   

 

 

    

 

 

  
Capital Share Transactions    

Proceeds from sales of shares

     432,024,520        287,724,268   

Reinvestment of distributions

     —        63,778,678   

Cost of shares redeemed

     (133,862,903 )      (249,016,004 ) 

In-kind redemptions

     —        (131,313,791 ) 

Proceeds from shares issued upon reorganization1

     —        —   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

     298,161,617        (28,826,849 ) 
   

 

 

    

 

 

  

Net Increase in Net Assets

     293,889,918        175,080,024   
   

 

 

    

 

 

  
 
Net Assets    

Beginning of period

     793,331,248        618,251,224   
   

 

 

    

 

 

  

End of period

   $ 1,087,221,166      $ 793,331,248   
   

 

 

    

 

 

  

Accumulated Undistributed Net Investment Loss Included in Net Assets

   $ (5,145,234 )    $ —   
   

 

 

    

 

 

  
Other Information:    

Shares

    

Sold

     6,718,192        4,691,808   

Reinvested

     —        1,039,621   

Redeemed

     (2,146,845 )      (4,238,649 ) 

In-kind redemptions

     —        (2,321,262 ) 

Issued upon reorganization1

     —        —   
   

 

 

    

 

 

  

Net Increase/(Decrease)

     4,571,347        (828,482 ) 
   

 

 

    

 

 

  
                 

 

1 

RS Capital Appreciation Fund was reorganized into RS Growth Fund on March 25, 2013.

 

54   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS Select Growth

     RS Mid Cap Growth     RS Growth  
 
For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  

 

    

 

    

 

  
           
$ (5,373,038 )    $ (7,123,534 )    $ (595,480 )    $ (616,112 )    $ (547,699 )    $ (933,705 ) 
  20,153,636        43,484,579        2,733,860        15,346,938        22,500,506        29,921,677   
  (36,889,826 )      169,051,504        1,274,709        13,475,012        (11,932,172 )   

 

38,434,903

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  (22,109,228 )      205,412,549        3,413,089        28,205,838        10,020,635     

 

67,422,875

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
           
  —        —        —        —        —        —   
  —        —        —        —        —        —   
  —        —        —        —        —        —   
  —        —        —        —        —        —   
           
  —        (6,229,982 )      —        —        —        —   
  —        (1,320,265 )      —        —        —        —   
  —        (16,089 )      —        —        —        —   
  —        (6,495,856 )      —        —        —        —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  —        (14,062,192 )      —        —        —        —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
  250,939,347        721,361,109        95,839,828        29,817,066        22,735,964        31,685,064   
  —        12,286,226        —        —        —        —   
  (226,561,473 )      (237,845,175 )      (17,922,652 )      (20,427,435 )      (18,627,042 )      (49,227,529 ) 
  —        (8,570,989 )      —        —        —        —   
  —        —        —        —        —        94,358,747   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

24,377,874

  

     487,231,171        77,917,176        9,389,631        4,108,922        76,816,282   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  2,268,646        678,581,528        81,330,265        37,595,469        14,129,557        144,239,157   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
           
  989,599,875        311,018,347        103,727,691        66,132,222        246,032,139        101,792,982   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 991,868,521      $ 989,599,875      $ 185,057,956      $ 103,727,691      $ 260,161,696      $ 246,032,139   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

$

(5,373,038

) 

   $ —      $ (595,480 )    $ —      $ (547,699 )    $ —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
           
  5,138,687        16,889,031        5,070,856        1,798,549        1,177,273        1,929,385   
  —        257,222        —        —        —        —   
  (4,668,631 )      (5,511,383 )      (964,896 )      (1,348,438 )      (965,609 )      (3,166,855 ) 
  —        (205,244 )      —        —        —        —   
  —        —        —        —        —        6,425,370   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  470,056        11,429,626        4,105,960        450,111        211,664        5,187,900   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   55

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets (continued)

Six-Months-Ended Numbers are unaudited

    RS Technology  
 
      For the
Six Months
Ended
6/30/14		    

For the

Year Ended
12/31/13

  
     

 

  
Operations     

Net investment loss

    $ (1,293,545 )    $ (2,113,387 ) 

Net realized gain from investments

      19,966,389        44,498,273   

Net change in unrealized appreciation/depreciation on investments

      (27,011,498 )      25,734,231   
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

      (8,338,654 )      68,119,117   
    

 

 

    

 

 

  
Distributions to Shareholders     

Net investment income

     

Class A

      —        (228,161 ) 

Class C

      —        —   

Class K

      —        —   

Class Y

      —        (144,627 ) 

Net realized gain on investments

     

Class A

      —        (25,932,975 ) 

Class C

      —        (2,907,577 ) 

Class K

      —        (250,373 ) 

Class Y

      —        (6,420,710 ) 
    

 

 

    

 

 

  

Total Distributions

      —        (35,884,423 ) 
    

 

 

    

 

 

  
Capital Share Transactions     

Proceeds from sales of shares

      32,068,356        73,683,893   

Reinvestment of distributions

      —        31,742,555   

Cost of shares redeemed

      (31,509,018 )      (91,708,312 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

      559,338        13,718,136   
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets

      (7,779,316 )      45,952,830   
    

 

 

    

 

 

  
 
Net Assets     

Beginning of period

      214,187,711        168,234,881   
    

 

 

    

 

 

  

End of period

    $ 206,408,395      $ 214,187,711   
    

 

 

    

 

 

  

Accumulated Undistributed Net Investment Loss Included in Net Assets

    $ (1,293,545 )    $ —   
    

 

 

    

 

 

  
Other Information:     

Shares

     

Sold

      1,570,094        3,537,170   

Reinvested

      —        1,639,773   

Redeemed

      (1,602,016 )      (4,594,765 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease)

      (31,922 )      582,178   
    

 

 

    

 

 

  
                  

 

56   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

 

FINANCIAL INFORMATION

 

 

RS Small Cap Equity

  
 
For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  

 

  
   
$ (630,761 )    $ (1,068,820 ) 
  10,839,063        26,462,954   

 

(10,315,916

) 

     19,157,521   

 

 

    

 

 

  
 
  (107,614 )      44,551,655   

 

 

    

 

 

  
   
   
  —        —   
  —        —   
  —        —   
  —        —   
   
  —        (11,321,374 ) 
  —        (220,457 ) 
  —        (818,391 ) 
  —        (8,018,987 ) 

 

 

    

 

 

  
  —        (20,379,209 ) 

 

 

    

 

 

  
   
  10,871,192        23,313,823   
  —        20,067,386   
  (19,246,658 )      (31,805,832 ) 

 

 

    

 

 

  
 
  (8,375,466 )      11,575,377   

 

 

    

 

 

  
  (8,483,080 )      35,747,823   

 

 

    

 

 

  
 
   
  130,626,062        94,878,239   

 

 

    

 

 

  
$ 122,142,982      $ 130,626,062   

 

 

    

 

 

  
 
$ (630,761 )    $ —   

 

 

    

 

 

  
   
   
  506,715        1,079,276   
  —        981,468   
  (912,901 )      (1,536,740 ) 

 

 

    

 

 

  
  (406,186 )      524,004   

 

 

    

 

 

  
             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   57

Table of Contents

FINANCIAL INFORMATION

 

The Financial Highlights table is intended to help you understand each Fund’s financial performance for the past six reporting periods. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in each Fund (assuming reinvestment of all distributions).

 

Financial Highlights

Six-Months-Ended Numbers are unaudited

                       
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Loss

    

Net Realized
and

Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		    

Distributions
From Net
Realized
Capital
Gains

    

Total

Distributions

  
RS Small Cap Growth Fund   

Class A

              

Six Months Ended 6/30/141

   $ 63.68      $ (0.38 )2    $ 0.29      $ (0.09 )    $ —      $ —      $ —   

Year Ended 12/31/13

     46.71        (0.64 )2      23.37        22.73        (0.86 )      (4.90 )      (5.76 ) 

Year Ended 12/31/12

     40.70        (0.43 )2      6.44        6.01        —        —        —   

Year Ended 12/31/11

     41.67        (0.48 )2      (0.53 )      (1.01 )      —        —        —   

Year Ended 12/31/10

     32.63        (0.35 )2      9.39        9.04        —        —        —   

Year Ended 12/31/09

     22.10        (0.33 )      10.54        10.21        —        —        —   
 

Class C

              

Six Months Ended 6/30/141

   $ 58.84      $ (0.57 )2    $ 0.26      $ (0.31 )    $ —      $ —      $ —   

Year Ended 12/31/13

     43.78        (1.09 )2      21.79        20.70        (0.74 )      (4.90 )      (5.64 ) 

Year Ended 12/31/12

     38.38        (0.66 )2      6.06        5.40        —        —        —   

Year Ended 12/31/11

     39.97        (1.12 )2      (0.51 )      (1.63 )      —        —        —   

Year Ended 12/31/10

     31.66        (0.73 )2      9.04        8.31        —        —        —   

Year Ended 12/31/09

     21.74        (0.60 )      10.20        9.60        —        —        —   
 

Class K

              

Six Months Ended 6/30/141

   $ 60.77      $ (0.50 )2    $ 0.28      $ (0.22 )    $ —      $ —      $ —   

Year Ended 12/31/13

     44.85        (0.90 )2      22.38        21.48        (0.66 )      (4.90 )      (5.56 ) 

Year Ended 12/31/12

     39.29        (0.64 )2      6.20        5.56        —        —        —   

Year Ended 12/31/11

     40.47        (0.71 )2      (0.51 )      (1.22 )      —        —        —   

Year Ended 12/31/10

     31.86        (0.53 )2      9.14        8.61        —        —        —   

Year Ended 12/31/09

     21.76        (0.34 )      10.12        9.78        —        —        —   
 

Class Y

              

Six Months Ended 6/30/141

   $ 65.06      $ (0.30 )2    $ 0.30      $ —      $ —      $ —      $ —   

Year Ended 12/31/13

     47.65        (0.52 )2      23.90        23.38        (1.07 )      (4.90 )      (5.97 ) 

Year Ended 12/31/12

     41.38        (0.24 )2      6.51        6.27        —        —        —   

Year Ended 12/31/11

     42.24        (0.35 )2      (0.55 )      (0.90 )      —        —        —   

Year Ended 12/31/10

     32.93        (0.22 )2      9.53        9.31        —        —        —   

Year Ended 12/31/09

     22.23        (0.32 )      10.70        10.38        —        —        —   

See notes to Financial Highlights on pages 68-69.

 

58   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

 

                                                            

Increase

From
Regulatory
Settlements

    

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		    

Gross

Ratio of
Expenses
to Average

Net Assets

    

Net Ratio

of Net
Investment
Loss to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Loss to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 63.59        (0.14)%      $ 600,859        1.37%        1.39%        (1.21)%        (1.23)%        49%   
  —        63.68        49.22%        499,282        1.35%        1.41%        (1.12)%        (1.18)%        115% 6 
  —        46.71        14.77%        523,193        1.35%        1.48%        (0.94)%        (1.07)%        106%   
  0.04        40.70        (2.33)% 5      452,050        1.35%        1.45%        (1.11)%        (1.21)%        105%   
  —        41.67        27.70%        497,638        1.35%        1.47%        (1.00)%        (1.12)%        120%   
  0.32        32.63        47.65% 5      415,040        1.59%        1.59%        (1.43)%        (1.43)%        142%   
 
                 
$ —      $ 58.53        (0.53)%      $ 10,175        2.14%        2.21%        (1.99)%        (2.06)%        49%   
  —        58.84        47.86%        6,608        2.27%        2.32%        (1.98)%        (2.03)%        115% 6 
  —        43.78        14.07%        1,881        1.97%        2.10%        (1.56)%        (1.69)%        106%   
  0.04        38.38        (3.98)% 5      1,328        2.97%        3.07%        (2.73)%        (2.83)%        105%   
  —        39.97        26.25%        937        2.51%        2.63%        (2.14)%        (2.26)%        120%   
  0.32        31.66        45.63% 5      492        2.98%        2.98%        (2.82)%        (2.82)%        142%   
 
                 
$ —      $ 60.55        (0.36)%      $ 2,326        1.82%        1.85%        (1.68)%        (1.71)%        49%   
  —        60.77        48.45%        1,782        1.87%        1.92%        (1.62)%        (1.67)%        115% 6 
  —        44.85        14.15%        1,056        1.88%        2.01%        (1.46)%        (1.59)%        106%   
  0.04        39.29        (2.92)% 5      969        1.94%        2.04%        (1.70)%        (1.80)%        105%   
  —        40.47        27.02%        931        1.89%        2.01%        (1.54)%        (1.66)%        120%   
  0.32        31.86        46.42% 5      639        2.44%        2.44%        (2.28)%        (2.28)%        142%   
 
                 
$ —      $ 65.06        0.00%      $ 473,861        1.08%        1.11%        (0.93)%        (0.96)%        49%   
  —        65.06        49.63%        285,659        1.11%        1.17%        (0.85)%        (0.91)%        115% 6 
  —        47.65        15.15%        92,121        1.01%        1.14%        (0.52)%        (0.65)%        106%   
  0.04        41.38        (2.04)% 5      51,200        1.05%        1.15%        (0.81)%        (0.91)%        105%   
  —        42.24        28.27%        38,644        0.98%        1.10%        (0.60)%        (0.72)%        120%   
  0.32        32.93        48.13% 5      13,912        1.22%        1.22%        (1.05)%        (1.05)%        142%   

See notes to Financial Highlights on pages 68-69.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   59

Table of Contents

FINANCIAL INFORMATION

 

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                       
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Loss

    

Net Realized
and

Unrealized
Gain

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital
Gains		    

Total

Distributions

  
RS Select Growth Fund   

Class A

              

Six Months Ended 6/30/141

   $ 49.57      $ (0.27 )2    $ (0.76 )    $ (1.03 )    $     —      $ —      $ —   

Year Ended 12/31/13

     36.52        (0.50 )2      14.27        13.77        —        (0.72 )      (0.72 ) 

Year Ended 12/31/12

     30.79        (0.25 )2      5.98        5.73        —        —        —   

Year Ended 12/31/11

     29.24        (0.33 )3      1.84        1.51        —        —        —   

Year Ended 12/31/10

     22.23        (0.24 )2      7.25        7.01        —        —        —   

Year Ended 12/31/09

     15.08        (0.24 )      7.36        7.12        —        —        —   
 

Class C

              

Six Months Ended 6/30/141

   $ 46.73      $ (0.43 )2    $ (0.71 )    $ (1.14 )    $ —      $ —      $ —   

Year Ended 12/31/13

     34.74        (0.82 )2      13.53        12.71        —        (0.72 )      (0.72 ) 

Year Ended 12/31/12

     29.51        (0.47 )2      5.70        5.23        —        —        —   

Year Ended 12/31/11

     28.32        (0.58 )2      1.73        1.15        —        —        —   

Year Ended 12/31/10

     21.77        (0.43 )2      6.98        6.55        —        —        —   

Year Ended 12/31/09

     14.99        (0.16 )      6.91        6.75        —        —        —   
 

Class K

              

Six Months Ended 6/30/141

   $ 46.38      $ (0.37 )2    $ (0.64 )    $ (1.01 )    $ —      $ —      $ —   

Year Ended 12/31/13

     34.43        (0.71 )2      13.38        12.67        —        (0.72 )      (0.72 ) 

Year Ended 12/31/12

     29.30        (0.57 )2      5.70        5.13        —        —        —   

Year Ended 12/31/11

     28.02        (0.51 )2      1.75        1.24        —        —        —   

Year Ended 12/31/10

     21.47        (0.40 )2      6.95        6.55        —        —        —   

Year Ended 12/31/09

     14.77        (0.40 )      7.07        6.67        —        —        —   
 

Class Y

              

Six Months Ended 6/30/141

   $ 50.24      $ (0.21 )2    $ (0.77 )    $ (0.98 )    $ —      $ —      $ —   

Year Ended 12/31/13

     36.90        (0.39 )2      14.45        14.06        —        (0.72 )      (0.72 ) 

Year Ended 12/31/12

     31.02        (0.13 )2      6.01        5.88        —        —        —   

Year Ended 12/31/11

     29.37        (0.22 )2      1.83        1.61        —        —        —   

Year Ended 12/31/10

     22.24 8      (0.14 )2      7.27        7.13        —        —        —   

Period From 5/1/097 to 12/31/091

     17.14        (0.09 )      5.16        5.07        —        —        —   

See notes to Financial Highlights on pages 68-69.

 

60   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            

Increase

From
Regulatory
Settlements

    

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		    

Gross

Ratio of
Expenses
to Average

Net Assets

    

Net Ratio

of Net
Investment
Loss to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Loss to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 48.54        (2.08)%      $ 411,957        1.37%        1.42%        (1.14)%        (1.19)%        50%   
  —        49.57        37.79%        438,084        1.35%        1.45%        (1.14)%        (1.24)%        105% 6 
  —        36.52        18.61%        192,954        1.35%        1.55%        (0.72)%        (0.92)%        112%   
  0.04        30.79        5.30% 5      90,223        1.35%        1.61%        (1.07)%        (1.33)%        104%   
  —        29.24        31.53%        70,100        1.35%        1.66%        (0.98)%        (1.29)%        137%   
  0.03        22.23        47.41% 5      61,480        1.85%        1.86%        (1.25)%        (1.26)%        149%   
 
                 
$ —      $ 45.59        (2.44)%      $ 97,124        2.15%        2.22%        (1.92)%        (1.99)%        50%   
  —        46.73        36.67%        88,208        2.16%        2.26%        (1.94)%        (2.04)%        105% 6 
  —        34.74        17.72%        21,322        2.15%        2.35%        (1.43)%        (1.63)%        112%   
  0.04        29.51        4.20% 5      2,253        2.26%        2.52%        (1.94)%        (2.20)%        104%   
  —        28.32        30.09%        223        2.23%        2.54%        (1.80)%        (2.11)%        137%   
  0.03        21.77        45.23% 5      78        2.38%        2.39%        (1.65)%        (1.66)%        149%   
 
                 
$ —      $ 45.37        (2.18)%      $ 1,378        1.88%        1.93%        (1.65)%        (1.70)%        50%   
  —        46.38        36.89%        1,052        1.92%        2.02%        (1.71)%        (1.81)%        105% 6 
  —        34.43        17.51%        302        2.31%        2.51%        (1.75)%        (1.95)%        112%   
  0.04        29.30        4.57% 5      170        1.99%        2.25%        (1.72)%        (1.98)%        104%   
  —        28.02        30.51%        128        2.11%        2.42%        (1.73)%        (2.04)%        137%   
  0.03        21.47        45.36% 5      96        3.36%        3.37%        (2.71)%        (2.72)%        149%   
 
                 
$ —      $ 49.26        (1.95)%      $ 481,410        1.11%        1.16%        (0.88)%        (0.93)%        50%   
  —        50.24        38.19%        462,256        1.09%        1.19%        (0.87)%        (0.97)%        105% 6 
  —        36.90        18.96%        96,440        1.07%        1.27%        (0.37)%        (0.57)%        112%   
  0.04        31.02        5.62% 5      17,504        1.04%        1.30%        (0.72)%        (0.98)%        104%   
  —        29.37        32.06%        3,192        0.97%        1.28%        (0.58)%        (0.89)%        137%   
 
 		     
0.03		  
  		     22.248        29.75% 5      2,518        1.41%        1.42%        (0.69)%        (0.70)%        149%   

See notes to Financial Highlights on pages 68-69.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   61

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                              
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Loss

    

Net Realized
and

Unrealized
Gain

     Total
Operations		     Distributions
From Net
Investment
Income		    

Distributions
From Net
Realized
Capital
Gains

     Total
Distributions		  
RS Mid Cap Growth Fund           

Class A

              

Six Months Ended 6/30/141

   $ 18.83      $ (0.08 )2    $ 0.41      $ 0.33      $     —      $     —      $     —   

Year Ended 12/31/13

     13.07        (0.12 )2      5.88        5.76        —        —        —   

Year Ended 12/31/12

     11.38        (0.08 )2      1.77        1.69        —        —        —   

Year Ended 12/31/11

     11.26        (0.09 )2      0.21        0.12        —        —        —   

Year Ended 12/31/10

     9.00        (0.06 )2      2.32        2.26        —        —        —   

Year Ended 12/31/09

     6.46        (0.06 )      2.60        2.54        —        —        —   
 

Class C

              

Six Months Ended 6/30/141

   $ 17.56      $ (0.14 )2    $ 0.39      $ 0.25      $ —      $ —      $ —   

Year Ended 12/31/13

     12.30        (0.24 )2      5.50        5.26        —        —        —   

Year Ended 12/31/12

     10.81        (0.18 )2      1.67        1.49        —        —        —   

Year Ended 12/31/11

     10.79        (0.19 )2      0.21        0.02        —        —        —   

Year Ended 12/31/10

     8.73        (0.16 )2      2.22        2.06        —        —        —   

Year Ended 12/31/09

     6.36        (0.16 )      2.53        2.37        —        —        —   
 

Class K

              

Six Months Ended 6/30/141

   $ 18.01      $ (0.12 )2    $ 0.40      $ 0.28      $ —      $ —      $ —   

Year Ended 12/31/13

     12.56        (0.19 )2      5.64        5.45        —        —        —   

Year Ended 12/31/12

     11.00        (0.15 )2      1.71        1.56        —        —        —   

Year Ended 12/31/11

     10.94        (0.15 )2      0.21        0.06        —        —        —   

Year Ended 12/31/10

     8.80        (0.11 )2      2.25        2.14        —        —        —   

Year Ended 12/31/09

     6.37        (0.07 )      2.50        2.43        —        —        —   
 

Class Y

              

Six Months Ended 6/30/141

   $ 19.19      $ (0.05 )2    $ 0.42      $ 0.37      $ —      $ —      $ —   

Year Ended 12/31/13

     13.29        (0.09 )2      5.99        5.90        —        —        —   

Year Ended 12/31/12

     11.54        (0.02 )2      1.77        1.75        —        —        —   

Year Ended 12/31/11

     11.39        (0.07 )2      0.22        0.15        —        —        —   

Year Ended 12/31/10

     9.08        (0.03 )2      2.34        2.31        —        —        —   

Year Ended 12/31/09

     6.50        (0.04 )      2.62        2.58        —        —        —   

See notes to Financial Highlights on pages 68-69.

 

62   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                     

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		     Gross
Ratio of
Expenses
to Average
Net Assets		    

Net Ratio

of Net
Investment
Loss to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Loss to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
               
               
$ 19.16        1.75%      $ 104,896        1.29%        1.35%        (0.86)%        (0.92)%        75%   
  18.83        44.07%        78,612        1.28%        1.45%        (0.78)%        (0.95)%        119%   
  13.07        14.85%        55,023        1.34%        1.51%        (0.60)%        (0.77)%        110%   
  11.38        1.07%        50,540        1.48%        1.48%        (0.81)%        (0.81)%        85%   
  11.26        25.11%        56,677        1.49%        1.51%        (0.66)%        (0.68)%        125%   
  9.00        39.32%        58,218        1.46%        1.51%        (0.68)%        (0.73)%        144%   
 
               
$ 17.81        1.42%      $ 8,035        2.09%        2.15%        (1.66)%        (1.72)%        75%   
  17.56        42.76%        4,851        2.14%        2.31%        (1.63)%        (1.80)%        119%   
  12.30        13.78%        2,071        2.30%        2.47%        (1.52)%        (1.69)%        110%   
  10.81        0.19%        1,178        2.41%        2.41%        (1.73)%        (1.73)%        85%   
  10.79        23.60%        786        2.71%        2.73%        (1.79)%        (1.81)%        125%   
  8.73        37.26%        496        2.83%        2.88%        (2.01)%        (2.06)%        144%   
 
               
$ 18.29        1.55%      $ 1,593        1.78%        1.83%        (1.35)%        (1.40)%        75%   
  18.01        43.39%        1,451        1.77%        1.94%        (1.27)%        (1.44)%        119%   
  12.56        14.18%        797        1.92%        2.09%        (1.18)%        (1.35)%        110%   
  11.00        0.55%        804        2.00%        2.00%        (1.31)%        (1.31)%        85%   
  10.94        24.32%        854        2.08%        2.10%        (1.19)%        (1.21)%        125%   
  8.80        38.15%        615        2.23%        2.28%        (1.36)%        (1.41)%        144%   
 
               
$ 19.56        1.93%      $ 70,534        1.01%        1.04%        (0.57)%        (0.60)%        75%   
  19.19        44.39%        18,814        1.05%        1.23%        (0.55)%        (0.73)%        119%   
  13.29        15.16%        8,241        1.07%        1.24%        (0.13)%        (0.30)%        110%   
  11.54        1.32%        2,685        1.24%        1.24%        (0.55)%        (0.55)%        85%   
  11.39        25.44%        2,508        1.16%        1.18%        (0.27)%        (0.29)%        125%   
  9.08        39.69%        1,459        1.21%        1.26%        (0.39)%        (0.44)%        144%   

See notes to Financial Highlights on pages 68-69.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   63

Table of Contents

FINANCIAL INFORMATION

 

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Income/
(Loss)

    

Net Realized
and

Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		    

Distributions
From Net
Realized
Capital
Gains

     Total
Distributions		  
RS Growth Fund   

Class A

              

Six Months Ended 6/30/141

   $ 19.33      $ (0.04 )    $ 0.83      $ 0.79      $     —      $     —      $     —   

Year Ended 12/31/13

     13.46        (0.07 )      5.94        5.87        —        —        —   

Year Ended 12/31/12

     11.77        —9        1.69        1.69        —        —        —   

Year Ended 12/31/11

     11.85        (0.05 )      (0.04 )      (0.09 )      —        —        —   

Year Ended 12/31/10

     10.47        (0.04 )      1.42        1.38        —        —        —   

Year Ended 12/31/09

     7.96        (0.01 )      2.51        2.50        —        —        —   
 

Class C

              

Six Months Ended 6/30/141

   $ 18.06      $ (0.08 )    $ 0.74      $ 0.66      $ —      $ —      $ —   

Year Ended 12/31/13

     12.70        0.20        5.16        5.36        —        —        —   

Year Ended 12/31/12

     11.20        (0.02 )      1.52        1.50        —        —        —   

Year Ended 12/31/11

     11.44        (0.15 )      (0.10 )      (0.25 )      —        —        —   

Year Ended 12/31/10

     10.23        (0.13 )      1.34        1.21        —        —        —   

Year Ended 12/31/09

     7.91        (0.09 )      2.40        2.31        —        —        —   
 

Class K

              

Six Months Ended 6/30/141

   $ 18.80      $ (0.12 )    $ 0.83      $ 0.71      $ —      $ —      $ —   

Year Ended 12/31/13

     13.18        (0.10 )      5.72        5.62        —        —        —   

Year Ended 12/31/12

     11.59        (0.16 )      1.75        1.59        —        —        —   

Year Ended 12/31/11

     11.73        (0.21 )      0.06        (0.15 )      —        —        —   

Year Ended 12/31/10

     10.43        (0.06 )      1.36        1.30        —        —        —   

Year Ended 12/31/09

     7.98        (0.04 )      2.48        2.44        —        —        —   
 

Class Y

              

Six Months Ended 6/30/141

   $ 19.56      $ (0.02 )    $ 0.85      $ 0.83      $ —      $ —      $ —   

Year Ended 12/31/13

     13.60        (0.09 )      6.05        5.96        —        —        —   

Year Ended 12/31/12

     11.85        (0.05 )      1.80        1.75        —        —        —   

Year Ended 12/31/11

     11.91        (0.02 )      (0.05 )      (0.07 )      —        —        —   

Year Ended 12/31/10

     10.49        (0.02 )      1.44        1.42        —        —        —   

Year Ended 12/31/09

     7.98        (0.01 )      2.51        2.50        —        —        —   

See notes to Financial Highlights on pages 68-69.

 

64   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            

Increase

From
Regulatory
Settlements

    

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		    

Gross

Ratio of
Expenses
to Average
Net Assets

    

Net Ratio

of Net
Investment
Income/
(Loss) to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 20.12        4.09%      $ 214,288        1.17%        1.21%        (0.43)%        (0.47)%        68%   
  —        19.33        43.61%        208,309        1.26%        1.26%        (0.49)%        (0.49)%        101%   
  —        13.46        14.36%        95,563        1.37%        1.37%        (0.01)%        (0.01)%        93%   
  0.01        11.77        (0.68)%5        92,825        1.34%        1.34%        (0.38)%        (0.38)%        86%   
  —        11.85        13.18%        104,758        1.35%        1.35%        (0.35)%        (0.35)%        109%   
  0.01        10.47        31.53%5        109,272        1.40%        1.40%        (0.10)%        (0.10)%        128%   
 
                 
$ —      $ 18.72        3.65%      $ 13,177        2.01%        2.04%        (1.25)%        (1.28)%        68%   
  —        18.06        42.20%        10,415        2.15%        2.16%        (1.39)%        (1.40)%        101%   
  —        12.70        13.39%        756        2.32%        2.32%        (0.92)%        (0.92)%        93%   
  0.01        11.20        (2.10)%5        529        2.81%        2.81%        (1.81)%        (1.81)%        86%   
  —        11.44        11.83%        475        2.51%        2.51%        (1.51)%        (1.51)%        109%   
  0.01        10.23        29.33%5        375        3.06%        3.06%        (1.78)%        (1.78)%        128%   
 
                 
$ —      $ 19.51        3.78%      $ 1,316        1.72%        1.82%        (0.99)%        (1.09)%        68%   
  —        18.80        42.64%        1,340        1.74%        1.84%        (1.11)%        (1.21)%        101%   
  —        13.18        13.72%        674        1.94%        1.94%        (0.63)%        (0.63)%        93%   
  0.01        11.59        (1.19)%5        741        1.86%        1.86%        (0.91)%        (0.91)%        86%   
  —        11.73        12.46%        1,087        1.91%        1.91%        (0.92)%        (0.92)%        109%   
  0.01        10.43        30.70%5        692        2.10%        2.10%        (0.81)%        (0.81)%        128%   
 
                 
$ —      $ 20.39        4.24%      $ 31,381        0.90%        0.93%        (0.15)%        (0.18)%        68%   
  —        19.56        43.82%        25,968        0.98%        0.98%        (0.24)%        (0.24)%        101%   
  —        13.60        14.77%        4,800        1.13%        1.13%        0.49%        0.49%        93%   
  0.01        11.85        (0.50)%5        1,508        1.11%        1.11%        (0.13)%        (0.13)%        86%   
  —        11.91        13.54%        1,431        1.03%        1.03%        (0.04)%        (0.04)%        109%   
  0.01        10.49        31.45%5        1,074        1.45%        1.45%        (0.17)%        (0.17)%        128%   

See notes to Financial Highlights on pages 68-69.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   65

Table of Contents

FINANCIAL INFORMATION

 

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                       
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Loss

    

Net Realized
and

Unrealized
Gain/(Loss)

     Total
Operations		    

Distributions
From Net
Investment
Income

     Distributions
From Net
Realized
Capital
Gains		     Total
Distributions		  
RS Technology Fund     

Class A

              

Six Months Ended 6/30/141

   $ 20.38      $ (0.12 )2    $ (0.58 )    $ (0.70 )    $     —      $     —      $     —   

Year Ended 12/31/13

     16.95        (0.23 )2      7.76        7.53        (0.04 )      (4.06 )      (4.10 ) 

Year Ended 12/31/12

     16.54        (0.20 )2      1.56        1.36        —        (0.95 )      (0.95 ) 

Year Ended 12/31/11

     19.60        (0.24 )2      (2.10 )      (2.34 )      —        (0.72 )      (0.72 ) 

Year Ended 12/31/10

     14.89        (0.20 )2      5.58        5.38        —        (0.67 )      (0.67 ) 

Year Ended 12/31/09

     8.50        (0.13 )      6.52        6.39        —        —        —   
 

Class C

              

Six Months Ended 6/30/141

   $ 18.77      $ (0.19 )2    $ (0.53 )    $ (0.72 )    $ —      $ —      $ —   

Year Ended 12/31/13

     15.96        (0.37 )2      7.24        6.87        —        (4.06 )      (4.06 ) 

Year Ended 12/31/12

     15.74        (0.33 )2      1.50        1.17        —        (0.95 )      (0.95 ) 

Year Ended 12/31/11

     18.83        (0.36 )2      (2.01 )      (2.37 )      —        (0.72 )      (0.72 ) 

Year Ended 12/31/10

     14.45        (0.33 )2      5.38        5.05        —        (0.67 )      (0.67 ) 

Year Ended 12/31/09

     8.37        (0.02 )      6.10        6.08        —        —        —   
 

Class K

              

Six Months Ended 6/30/141

   $ 19.26      $ (0.16 )2    $ (0.55 )    $ (0.71 )    $ —      $ —      $ —   

Year Ended 12/31/13

     16.24        (0.32 )2      7.40        7.08        —        (4.06 )      (4.06 ) 

Year Ended 12/31/12

     15.96        (0.28 )2      1.51        1.23        —        (0.95 )      (0.95 ) 

Year Ended 12/31/11

     19.06        (0.35 )2      (2.03 )      (2.38 )      —        (0.72 )      (0.72 ) 

Year Ended 12/31/10

     14.59        (0.31 )2      5.45        5.14        —        (0.67 )      (0.67 ) 

Year Ended 12/31/09

     8.39        (0.21 )      6.41        6.20        —        —        —   
 

Class Y

              

Six Months Ended 6/30/141

   $ 20.93      $ (0.09 )2    $ (0.60 )    $ (0.69 )    $ —      $ —      $ —   

Year Ended 12/31/13

     17.32        (0.18 )2      7.94        7.76        (0.09 )      (4.06 )      (4.15 ) 

Year Ended 12/31/12

     16.82        (0.15 )2      1.60        1.45        —        (0.95 )      (0.95 ) 

Year Ended 12/31/11

     19.86        (0.18 )2      (2.14 )      (2.32 )      —        (0.72 )      (0.72 ) 

Year Ended 12/31/10

     15.04        (0.14 )2      5.63        5.49        —        (0.67 )      (0.67 ) 

Year Ended 12/31/09

     8.55        (0.17 )      6.66        6.49        —        —        —   

See notes to Financial Highlights on pages 68-69.

.

 

66   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                     

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		    

Gross

Ratio of
Expenses
to Average
Net Assets

    

Net Ratio

of Net
Investment
Loss to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Loss to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
               
               
$ 19.68        (3.43)%      $ 146,085        1.49%        1.49%        (1.23)%        (1.23)%        92%   
  20.38        45.59%        156,011        1.49%        1.49%        (1.15)%        (1.15)%        141%   
  16.95        8.30%        123,343        1.59%        1.59%        (1.11)%        (1.11)%        84%   
  16.54        (11.91)%        156,795        1.53%        1.53%        (1.21)%        (1.21)%        121%   
  19.60        36.15%        278,856        1.52%        1.52%        (1.21)%        (1.21)%        117%   
  14.89        75.18%        170,830        1.60%        1.60%        (1.35)%        (1.35)%        128%   
 
               
$ 18.05        (3.84)%      $ 14,612        2.33%        2.33%        (2.07)%        (2.07)%        92%   
  18.77        44.30%        16,402        2.34%        2.34%        (2.00)%        (2.00)%        141%   
  15.96        7.51%        15,660        2.36%        2.36%        (1.88)%        (1.88)%        84%   
  15.74        (12.56)%        15,977        2.32%        2.32%        (1.99)%        (1.99)%        121%   
  18.83        34.97%        6,210        2.38%        2.38%        (2.02)%        (2.02)%        117%   
  14.45        72.64%        1,386        2.81%        2.81%        (2.60)%        (2.60)%        128%   
 
               
$ 18.55        (3.69)%      $ 1,483        2.02%        2.02%        (1.76)%        (1.76)%        92%   
  19.26        44.82%        1,438        2.02%        2.02%        (1.68)%        (1.68)%        141%   
  16.24        7.79%        1,077        2.08%        2.08%        (1.60)%        (1.60)%        84%   
  15.96        (12.46)%        998        2.16%        2.16%        (1.84)%        (1.84)%        121%   
  19.06        35.25%        1,016        2.18%        2.18%        (1.89)%        (1.89)%        117%   
  14.59        73.90%        415        2.47%        2.47%        (2.23)%        (2.23)%        128%   
 
               
$ 20.24        (3.30)%      $ 44,228        1.20%        1.20%        (0.93)%        (0.93)%        92%   
  20.93        46.00%        40,337        1.22%        1.22%        (0.88)%        (0.88)%        141%   
  17.32        8.70%        28,154        1.27%        1.27%        (0.79)%        (0.79)%        84%   
  16.82        (11.66)%        29,709        1.24%        1.24%        (0.91)%        (0.91)%        121%   
  19.86        36.52%        16,674        1.19%        1.19%        (0.81)%        (0.81)%        117%   
  15.04        75.91%        1,572        1.39%        1.39%        (1.15)%        (1.15)%        128%   

See notes to Financial Highlights on pages 68-69.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   67

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                
    

Net Asset
Value,
Beginning

of Period

    

Net

Investment
Loss

    

Net Realized
and

Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		    

Distributions
From Net
Realized
Capital
Gains

     Total
Distributions		  
RS Small Cap Equity Fund   

Class A

              

Six Months Ended 6/30/141

   $ 21.46      $ (0.11 )2    $ 0.13      $ 0.02      $     —      $ —      $ —   

Year Ended 12/31/13

     17.12        (0.22 )2      8.51        8.29        —        (3.95 )      (3.95 ) 

Year Ended 12/31/12

     15.54        (0.16 )2      2.44        2.28        —        (0.70 )      (0.70 ) 

Year Ended 12/31/11

     15.92        (0.17 )2      (0.23 )      (0.40 )      —        —        —   

Year Ended 12/31/10

     12.44        (0.12 )2      3.60        3.48        —        —        —   

Year Ended 12/31/09

     9.10        (0.07 )      3.41        3.34        —        —        —   

Class C

              

Six Months Ended 6/30/141

   $ 15.79      $ (0.16 )2    $ 0.10      $ (0.06 )    $ —      $ —      $ —   

Year Ended 12/31/13

     13.43        (0.30 )2      6.61        6.31        —        (3.95 )      (3.95 ) 

Year Ended 12/31/12

     12.43        (0.25 )2      1.95        1.70        —        (0.70 )      (0.70 ) 

Year Ended 12/31/11

     12.86        (0.26 )2      (0.19 )      (0.45 )      —        —        —   

Year Ended 12/31/10

     10.14        (0.20 )2      2.92        2.72        —        —        —   

Year Ended 12/31/09

     7.49        (1.87 )      4.52        2.65        —        —        —   

Class K

              

Six Months Ended 6/30/141

   $ 19.88      $ (0.14 )2    $ 0.12      $ (0.02 )    $ —      $ —      $ —   

Year Ended 12/31/13

     16.12        (0.27 )2      7.98        7.71        —        (3.95 )      (3.95 ) 

Year Ended 12/31/12

     14.70        (0.20 )2      2.32        2.12        —        (0.70 )      (0.70 ) 

Year Ended 12/31/11

     15.12        (0.21 )2      (0.23 )      (0.44 )      —        —        —   

Year Ended 12/31/10

     11.85        (0.16 )2      3.43        3.27        —        —        —   

Year Ended 12/31/09

     8.69        (0.20 )      3.36        3.16        —        —        —   

Class Y

              

Six Months Ended 6/30/141

   $ 21.60      $ (0.09 )2    $ 0.15      $ 0.06      $ —      $ —      $ —   

Year Ended 12/31/13

     17.17        (0.16 )2      8.54        8.38        —        (3.95 )      (3.95 ) 

Year Ended 12/31/12

     15.54        (0.12 )2      2.45        2.33        —        (0.70 )      (0.70 ) 

Year Ended 12/31/11

     15.88        (0.11 )2      (0.25 )      (0.36 )      —        —        —   

Year Ended 12/31/10

     12.40        (0.12 )2      3.60        3.48        —        —        —   

Year Ended 12/31/09

     9.06        (0.10 )      3.44        3.34        —        —        —   

 

Distributions reflect actual per-share amounts distributed for the period.

 

1 

Ratios for periods less than one year have been annualized, except for total return and portfolio turnover rate.

 

2 

Calculated based on the average shares outstanding during the period.

 

3 

Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total return.

 

4 

Net Ratio of Expenses to Average Net Assets and Net Ratio of Net Investment Income/(Loss) to Average Net Assets include the effect of fee waivers and expense limitations and exclude the effect of custody credits, if applicable.

 

5 

Without the effect of the income from the regulatory settlements, the total returns would have been for RS Small Cap Growth Fund for 2011 (2.44)%, (4.07)%, (3.02)%, and (2.18)%; for 2009 46.38%, 44.39%, 45.40%, and 47.10% for Class A, Class C, Class K and Class Y, respectively; for

 

68   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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FINANCIAL INFORMATION

 

                                                            

Increase

From
Regulatory
Settlements

    

Net Asset
Value, End

of Period

     Total Return3     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets4		    

Gross

Ratio of
Expenses
to Average
Net Assets

    

Net Ratio

of Net
Investment
Loss to
Average Net
Assets4

    

Gross

Ratio of Net
Investment
Loss to
Average Net
Assets

     Portfolio
Turnover
Rate		  
                 
                 
$ —      $ 21.48        0.09%      $ 67,385        1.26%        1.26%        (1.09)%        (1.09)%        46%   
  —        21.46        49.48%        72,843        1.29%        1.29%        (1.03)%        (1.03)%        107%   
  —        17.12        14.78%        54,669        1.35%        1.35%        (0.93)%        (0.93)%        98%   
  0.02        15.54        (2.39)% 5      55,180        1.26%        1.26%        (1.05)%        (1.05)%        100%   
  —        15.92        27.97%        95,631        1.27%        1.36%        (0.92)%        (1.01)%        121%   
  —        12.44        36.70%        81,629        1.27%        1.40%        (0.74)%        (0.87)%        177%   
                 
$ —      $ 15.73        (0.38)%      $ 1,021        2.18%        2.31%        (2.01)%        (2.14)%        46%   
  —        15.79        48.32%        1,091        2.08%        2.08%        (1.85)%        (1.85)%        107%   
  —        13.43        13.81%        1,904        2.22%        2.24%        (1.78)%        (1.80)%        98%   
  0.02        12.43        (3.34)% 5      1,523        2.19%        2.19%        (1.97)%        (1.97)%        100%   
  —        12.86        26.82%        1,804        2.19%        2.19%        (1.84)%        (1.84)%        121%   
  —        10.14        35.38%        1,529        2.10%        2.10%        (1.58)%        (1.58)%        177%   
                 
$ —      $ 19.86        (0.10)%      $ 4,364        1.64%        1.72%        (1.48)%        (1.56)%        46%   
  —        19.88        48.95%        4,898        1.60%        1.69%        (1.35)%        (1.44)%        107%   
  —        16.12        14.53%        4,714        1.60%        1.77%        (1.23)%        (1.40)%        98%   
  0.02        14.70        (2.78)% 5      9,717        1.60%        1.78%        (1.38)%        (1.56)%        100%   
  —        15.12        27.59%        11,020        1.60%        1.76%        (1.25)%        (1.41)%        121%   
  —        11.85        36.36%        9,168        1.60%        1.82%        (1.09)%        (1.31)%        177%   
                 
$ —      $ 21.66        0.28%      $ 49,373        1.01%        1.01%        (0.84)%        (0.84)%        46%   
  —        21.60        49.84%        51,794        1.00%        1.00%        (0.74)%        (0.74)%        107%   
  —        17.17        15.10%        33,591        1.08%        1.08%        (0.67)%        (0.67)%        98%   
  0.02        15.54        (2.14)% 5      32,690        0.96%        0.96%        (0.68)%        (0.68)%        100%   
  —        15.88        28.06%        504        1.29%        1.29%        (0.91)%        (0.91)%        121%   
  —        12.40        36.87%        460        1.24%        1.24%        (0.84)%        (0.84)%        177%   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   69
  RS Select Growth Fund for 2011 5.21%, 4.14%, 4.49% and 5.55%; for 2009 47.15%, 45.23%, 45.16% and 29.58% for Class A, Class C, Class K and Class Y, respectively; for RS Growth Fund for 2011 (0.78)%, (2.18)%, (1.27)% and (0.57)%; for 2009 31.53%, 29.20%, 30.58% and 31.45% for Class A, Class C, Class K and Class Y, respectively; for RS Small Cap Equity Fund (2.51)%, (3.46)%, (2.87)% and (2.26)% for Class A, Class C, Class K and Class Y, respectively.

 

6 

Excludes portfolio securities delivered as a result of processing in-kind redemptions.

 

7 

Inception date.

 

8 

The NAV, as presented, has been adjusted from the NAV, as reported on December 31, 2009, due to a reprocessing of shareholder transactions.

 

9 

Rounds to $0.00 per share.

Table of Contents

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Notes to Financial Statements

June 30, 2014 (unaudited)

RS Investment Trust (the “Trust”), a Massachusetts business trust organized on May 11, 1987, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. These financial statements relate to six series offered by the Trust: RS Small Cap Growth Fund, RS Select Growth Fund, RS Mid Cap Growth Fund, RS Growth Fund, RS Technology Fund and RS Small Cap Equity Fund (each a “Fund,” collectively the “Funds”). All of the Funds are diversified funds. The financial statements for the other remaining series of the Trust are presented in separate reports.

The Funds offer Class A, C, K and Y shares. The various classes differ principally in their respective sales charges, transfer agent expenses, and other expenses. In general, all classes of shares have identical rights to earnings, assets and voting privileges, except for certain differences, including class-specific expenses and voting rights with respect to matters affecting fewer than all classes or in which the interests of one class differ from the interests of any other class.

The Trust has an unlimited number of authorized shares of beneficial interest with no par value. Shares are bought and sold at closing net asset value (“NAV”) less any applicable sales charge.

Note 1 Significant Accounting Policies

The following policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

a. Investment Valuations Marketable securities are valued at the last reported sale price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the mean between the closing bid and ask prices. Securities traded on the NASDAQ Stock Market, LLC (“NASDAQ”) are generally valued at the NASDAQ official closing price, which may not be the last sale price. If the NASDAQ official closing price is not available for a security, that security is generally valued using the last reported sale price, or, if no sales are reported, at the mean between the closing bid and ask prices. Short-term investments that will mature in 60 days or less are valued at amortized cost, which approximates market value. Repurchase agreements are carried at cost, which approximates market value (see Note 5d). Foreign securities are valued in the currencies of the markets in which they trade and then converted to U.S. dollars using the prevailing exchange rates at the close of the New York Stock Exchange (“NYSE”).

Securities for which market quotations are not readily available or for which market quotations may be considered unreliable are valued at their fair values as determined in accordance with guidelines and procedures adopted by the Trust’s Board of Trustees.

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Securities whose values have been materially affected by events occurring before the Funds’ valuation time but after the close of the securities’ principal exchange or market may be fair valued in accordance with guidelines and procedures adopted by the Board of Trustees. In addition, if there has been a movement in the U.S. markets that exceeds a specified threshold, the values of a Fund’s investments in foreign securities are generally determined by a pricing service using pricing models designed to estimate likely changes in the values of those securities.

In accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 820 (“ASC Topic 820”), fair value is defined as the price that the Funds would receive upon selling an investment in an “arm’s length” transaction to a willing buyer in the principal or most advantageous market for the investment. ASC Topic 820 established a hierarchy for classification of fair value measurements for disclosure purposes. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy of inputs is summarized in the three broad levels listed below.

 

Ÿ  

Level 1 — unadjusted quoted prices in active markets for identical investments

 

Ÿ  

Level 2 — inputs other than unadjusted quoted prices that are observable either directly or indirectly (including adjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)

 

Ÿ  

Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A security’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Trust. The Trust considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, and provided by independent sources that are actively involved in the relevant market. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an investment’s assigned level within the hierarchy.

The FASB requires reporting entities to make disclosures about purchases, sales, issuances and settlements of Level 3 securities on a gross basis. For the six months ended June 30, 2014, the Funds had no securities classified as Level 3.

The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the reporting period. For the six months ended June 30, 2014, there were no transfers between Level 1, Level 2 and Level 3.

In determining a security’s placement within the hierarchy, the Trust separates the Funds’ investment portfolios into two categories: investments and derivatives (e.g., futures).

 

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Table of Contents

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Investments Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include certain U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, state, municipal and provincial obligations, and certain foreign equity securities, including securities whose prices may have been affected by events occurring after the close of trading on their principal exchange or market and, as a result, whose values are determined by a pricing service as described above, or securities whose values are otherwise determined using fair valuation methods approved by the Funds’ Board of Trustees.

Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently or not at all. Level 3 investments include, among others, private placement securities. When observable prices are not available for these securities, the Trust uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the Trust in estimating the value of Level 3 investments include, for example, the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations, and other transactions across the capital structure. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Trust in the absence of market information. Assumptions used by the Trust due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Derivatives Exchange-traded derivatives, such as futures contracts and exchange- traded option contracts, are typically classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. Certain derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within Level 2.

b. Taxes The Funds intend to continue complying with the requirements of the Internal Revenue Code to qualify as regulated investment companies and to distribute substantially all net investment income and realized net capital gains, if any, to shareholders. Therefore, the Funds do not expect to be subject to income tax, and no provision for such tax has been made.

From time to time, however, a Fund may choose to pay an excise tax if the cost of making the required distribution exceeds the amount of the excise tax.

As of June 30, 2014, the Trust has reviewed the tax positions for open periods, as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements. The Trust is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statement of

 

72   www.rsinvestments.com  

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Operations. For the six months ended June 30, 2014, the Funds did not incur any such interest or penalties. The Funds are not subject to examination by U.S. federal tax authorities for tax years before 2010 and by state authorities for tax years before 2009.

c. Securities Transactions Securities transactions are accounted for on the date securities are purchased or sold (trade date). Realized gains or losses on securities transactions are determined on the basis of specific identification.

d. Foreign Currency Translation The accounting records of the Funds are maintained in U.S. dollars. Investment securities and all other assets and liabilities of the Funds denominated in a foreign currency are generally translated into U.S. dollars at the exchange rates quoted at the close of the NYSE on each business day. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates in effect on the dates of the respective transactions. The Funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

e. Investment Income Dividend income is generally recorded on the ex-dividend date. Interest income, which includes amortization/accretion of premium/discount, is accrued and recorded daily.

In calculating net asset value per share for each class, investment income, realized and unrealized gains and losses, and expenses other than class-specific expenses are allocated daily to each class of shares based upon the proportion of net assets attributable to each class at the beginning of the day.

f. Expenses Many expenses of the Trust can be directly attributed to a specific Fund. Expenses that cannot be directly attributed to a specific Fund are generally apportioned among all the series in the Trust, based on relative net assets.

g. Distributions to Shareholders Each Fund intends to declare and distribute substantially all net investment income, if any, at least once a year. Distributions of net realized capital gains, if any, are declared and paid at least once a year. Distributions to shareholders are recorded on the ex-dividend date.

h. Capital Accounts Due to the timing of dividend distributions and the differences in accounting for income and realized gains/(losses) for financial statement purposes versus federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains/(losses) were recorded by the Funds.

Note 2 Transactions with Affiliates

a. Advisory Fee and Expense Limitation Under the terms of the advisory agreement, which is reviewed and approved annually by the Board of Trustees, each Fund pays an investment advisory fee to RS Investment Management Co. LLC (“RS Investments”). Guardian Investor Services LLC (“GIS”), a subsidiary of The Guardian Life Insurance

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Company of America, holds a majority interest in RS Investments. RS Investments receives an investment advisory fee based on the average daily net assets of the Funds, at the following annual rates:

 

Fund   

Investment Advisory

Fee Percentage

  

RS Small Cap Growth Fund

      0.95%   

RS Select Growth Fund

      1.00%   

RS Mid Cap Growth Fund

      0.85%   

RS Growth Fund

      0.75% * 

RS Technology Fund

      1.00%   

RS Small Cap Equity Fund

      0.75%   
* The investment advisory fee in effect from January 1, 2014, through April 30, 2014, was 0.80%.

Expense limitations have been imposed pursuant to a written agreement between RS Investments and the Trust in effect from May 1, 2014, through April 30, 2015, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) to the following rates:

 

Fund        
Expense Limitation		  
      Class A      Class C      Class K      Class Y  

RS Small Cap Growth Fund

      1.40%         2.16%         1.86%         1.13%   

RS Select Growth Fund

      1.40%         2.18%         1.91%         1.14%   

RS Mid Cap Growth Fund

      1.30%         2.11%         1.80%         1.05%   

RS Growth Fund

      1.10%         1.93%         1.71%         0.83%   

RS Small Cap Equity Fund

      1.35%         2.10%         1.75%         1.10%   

The expense limitation in effect for RS Small Cap Growth Fund and RS Select Growth Fund from January 1, 2014, through April 30, 2014, was 1.35% for Class A shares, and the fee waiver for each of the other classes of the Fund was equal to the level of fee waiver for Class A shares.

The expense limitation in effect for RS Mid Cap Growth Fund from January 1, 2014, through April 30, 2014, was 1.28% for Class A shares, and the fee waiver for each of the other classes of the Fund was equal to the level of fee waiver for Class A shares.

The expense limitations in effect for RS Growth Fund and RS Small Cap Equity Fund from January 1, 2014, through April 30, 2014, were at the following rates:

 

Fund        
Expense Limitation		  
      Class A      Class C      Class K      Class Y  

RS Growth Fund

      1.25%         2.13%         1.72%         0.99%   

RS Small Cap Equity Fund

      1.35%         2.22%         1.60%         N/A   

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

RS Investments and GIS do not intend to recoup any reimbursed expenses or waived advisory fees from a prior year under expense limitations then in effect for a Fund.

b. Compensation of Trustees and Officers Trustees and officers of the Trust who are interested persons, as defined in the 1940 Act, of RS Investments receive no compensation from the Funds for acting as such. Trustees of the Trust who are not interested persons of RS Investments receive compensation and reimbursement of expenses from the Trust.

c. Distribution Fees RS Funds Distributor LLC (“RSFD”), a wholly owned subsidiary of RS Investments, serves as the principal underwriter for shares of the Funds. The Funds have entered into an agreement with RSFD for distribution services with respect to their shares and have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, whose continuance is reviewed annually by the Trust’s Board of Trustees. Under the plan, RSFD is compensated for services in such capacity, including its expenses in connection with the promotion and distribution of shares of each Fund. Prior to June 1, 2014, GIS served as the principal underwriter for shares of the Funds. For the six months ended June 30, 2014, RSFD and GIS received distribution fees as follows:

 

Fund           Annual Rate       

Distribution Fees

Received by RSFD

       

Distribution Fees

Received by GIS

  

RS Small Cap
Growth Fund

   Class A        0.25%           $120,721           $568,733   
  Class C        1.00%           8,120           34,538   
    Class K        0.65%           1,203           5,561   
    Class Y        0.00%           —           —   

RS Select
Growth Fund

   Class A        0.25%           83,986           443,606   
  Class C        1.00%           78,724           386,511   
    Class K        0.65%           719           3,341   
    Class Y        0.00%           —           —   

RS Mid Cap
Growth Fund

   Class A        0.25%           21,189           97,271   
  Class C        1.00%           6,224           25,893   
    Class K        0.65%           858           4,228   
    Class Y        0.00%           —           —   

RS Growth Fund

   Class A        0.25%           43,570           214,911   
    Class C        1.00%           10,688           48,575   
    Class K        0.65%           687           3,573   
    Class Y        0.00%           —           —   

RS Technology Fund

   Class A        0.25%           $29,259           $157,726   
    Class C        1.00%           11,855           65,221   
    Class K        0.65%           764           3,906   
    Class Y        0.00%           —           —   

RS Small Cap Equity Fund

   Class A        0.25%           13,564           72,395   
  Class C        1.00%           841           4,425   
    Class K        0.65%           2,266           12,694   
    Class Y        0.00%           —           —   

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

RS Investments may perform certain services and incur certain expenses with respect to the promotion of the Funds’ shares and the servicing of shareholder accounts, which expenses are allocable to RSFD. RS Investments compensates RSFD for its services in connection with the promotion of Fund shares and reimburses RSFD for its expenses, including payments made by RSFD to third parties in respect of the promotion of Fund shares in excess of amounts received by RSFD under the distribution plan. In addition to payments under the distribution plan, the Funds reimburse RSFD for payments RSFD makes to financial intermediaries that provide certain administrative, recordkeeping, and account maintenance services. The amount of the reimbursement is calculated in a manner reviewed by the Board of Trustees periodically. Such amounts are included in the Statement of Operations under the caption “Transfer agent fees.”

Park Avenue Securities LLC (“PAS”), a wholly owned subsidiary of The Guardian Insurance & Annuity Company, Inc. (“GIAC”) and an affiliate of GIS, distributes the Funds’ shares as a retail broker-dealer. For the six months ended June 30, 2014, PAS informed the Trust it received $885,200 directly or indirectly from RSFD and GIS as continuing compensation for its services relating to its distribution of shares of all series in the Trust.

For the six months ended June 30, 2014, aggregate front-end sales charges for the sale of Class A shares paid to RSFD and GIS were as follows:

 

Fund   

Sales Charges
Received by RSFD

     

Sales Charges
Received by GIS

  

RS Small Cap Growth Fund

    $ 1,690       $ 9,567   

RS Select Growth Fund

      1,975         24,478   

RS Mid Cap Growth Fund

      1,366         5,752   

RS Growth Fund

      832         6,535   

RS Technology Fund

      991         8,025   

RS Small Cap Equity Fund

      141         718   

RSFD and GIS are entitled to retain any contingent deferred sales load (“CDSL”) imposed on certain share redemptions. For the six months ended June 30, 2014, RSFD and GIS received CDSL charges as follows:

 

Fund    CDSL Received
by RSFD 		     CDSL Received
by GIS 		 

RS Small Cap Growth Fund

    $     —       $ 3,080   

RS Select Growth Fund

      —         14,124   

RS Mid Cap Growth Fund

      —         917   

RS Growth Fund

      —         1,606   

RS Technology Fund

      —         622   

RS Small Cap Equity Fund

      —         —   

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Note 3 Federal Income Taxes

a. Distributions to Shareholders The tax character of distributions paid to shareholders during the year ended December 31, 2013, which is the most recently completed tax year, was as follows:

 

Fund    Ordinary Income      Long-Term
Capital Gains		  

RS Small Cap Growth Fund

    $ 11,095,755       $ 55,134,170   

RS Select Growth Fund

      1,436,346         12,625,847   

RS Technology Fund

      14,455,969         21,428,454   

RS Small Cap Equity Fund

      4,007,968         16,371,241   

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences, and differing characterizations of distributions made by the Funds.

Permanent book and tax basis differences will result in reclassifications to paid-in capital, undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions. Undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions may include temporary book and tax differences, which will reverse in a subsequent period.

As of December 31, 2013, the Funds made the following reclassifications of permanent book and tax basis differences:

 

Fund   

Paid-in

Capital

      Undistributed
Net Investment
Loss		      Accumulated
Net Realized
Gain/(Loss)		  

RS Small Cap Growth Fund

    $ 40,444,022       $ 17,866,586       $ (58,310,608 ) 

RS Select Growth Fund

      3,384,004         7,123,534         (10,507,538 ) 

RS Mid Cap Growth Fund

      (618,158 )       616,112         2,046   

RS Growth Fund

      (916,201 )       933,705         (17,504 ) 

RS Technology Fund

      —         2,486,175         (2,486,175 ) 

RS Small Cap Equity Fund

      —         1,068,820         (1,068,820 ) 

The tax basis of distributable earnings as of December 31, 2013, was as follows:

 

Fund    Undistributed
Ordinary
Income		     

Undistributed
Long-Term

Capital Gains

  

RS Small Cap Growth Fund

    $     —       $ 9,492,420   

RS Select Growth Fund

      9,089,513         3,717,465   

RS Technology Fund

      3,650,233         1,377,337   

RS Small Cap Equity Fund

      1,425,870         3,208,831   

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

During any particular year, net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Funds if not distributed and, therefore, are normally distributed to shareholders annually.

During the year ended December 31, 2013, the Funds utilized capital loss carryovers as follows:

 

Fund        
Amount		  

RS Small Cap Growth Fund

    $ 27,424,861   

RS Select Growth Fund

      7,308,308   

RS Mid Cap Growth Fund

      15,074,908   

RS Growth Fund

      28,928,877   

See the chart below for capital loss carryovers available to the Funds at December 31, 2013.

 

                                 Expiring                                       
Fund       
2016		          
2017		      No
Expiration*		        Total  

RS Mid Cap
Growth Fund

   $ 20,571,595       $ 46,802,596       $ —         $ 67,374,191   

RS Growth Fund

     —         807,953         —           807,953   
* For tax years beginning in 2011, revisions to capital loss carryforward rules allow for capital losses to be carried forward to one or more subsequent taxable years without expiration.

In determining their taxable income, current tax law permits the Funds to elect to treat all or a portion of any net capital or currency loss realized after October 31 as occurring on the first day of the following fiscal year. For the year ended December 31, 2013, the Funds had no such losses.

b. Tax Basis of Investments The cost of investments for federal income tax purposes at June 30, 2014, for each Fund is listed in the chart below. The net unrealized appreciation/(depreciation) on investments, which consists of gross unrealized appreciation and depreciation, is also disclosed in the chart below:

 

Fund   Cost of
Investments		     Net Unrealized
Appreciation on
Investments		     Gross Unrealized
Appreciation		     Gross Unrealized
Depreciation		  

RS Small Cap Growth Fund

   $ 896,106,067      $ 187,565,544      $ 210,023,033      $ (22,457,489 ) 

RS Select Growth Fund

     822,951,241        169,865,111        191,025,476        (21,160,365 ) 

RS Mid Cap Growth Fund

     156,879,701        27,567,081        28,762,787        (1,195,706 ) 

RS Growth Fund

     193,259,021        66,591,581        67,071,979        (480,398 ) 

RS Technology Fund

     171,260,882        34,509,437        39,235,645        (4,726,208 ) 

RS Small Cap Equity Fund

     98,409,344        23,456,922        26,461,656        (3,004,734 ) 

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Note 4 Capital Shares

a. Transactions The Funds have authorized an unlimited number of shares of beneficial interest with no par value. Transactions, including conversions and exchanges, in capital shares for the Funds were as follows:

Transactions in Capital Shares

 

RS Small Cap Growth Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     2,734,349       $ 176,030,181           1,240,617       $ 74,951,264   

Shares reinvested

     —         —           656,416         39,988,855   

Shares redeemed

     (1,126,347 )       (69,656,567 )         (5,258,181 )1       (300,232,523 )1 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     1,608,002       $ 106,373,614           (3,361,148 )     $ (185,292,404 ) 
                                      
Class C               

Shares sold

     76,068       $ 4,455,362           76,525       $ 4,571,103   

Shares reinvested

     —         —           7,868         443,015   

Shares redeemed

     (14,543 )       (821,628 )         (15,063 )       (811,952 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     61,525       $ 3,633,734           69,330       $ 4,202,166   
                                      
Class K               

Shares sold

     13,928       $ 842,385           15,175       $ 859,633   

Shares reinvested

     —         —           2,558         148,734   

Shares redeemed

     (4,839 )       (284,701 )         (11,951 )       (661,666 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     9,089       $ 557,684           5,782       $ 346,701   
                                      
Class Y               

Shares sold

     3,893,847       $ 250,696,592           3,359,491       $ 207,342,268   

Shares reinvested

     —         —           372,779         23,198,074   

Shares redeemed

     (1,001,116 )       (63,100,007 )         (1,274,716 )       (78,623,654 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     2,892,731       $ 187,596,585           2,457,554       $ 151,916,688   
                                      
1 

Includes in-kind redemptions of 2,321,262 shares amounting to $131,313,791.

 

RS Select Growth Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     1,520,206       $ 73,808,250           6,671,590       $ 280,587,668   

Shares reinvested

     —         —           124,340         5,937,213   

Shares redeemed

     (1,871,674 )       (90,318,642 )         (3,242,183 )1       (135,511,199 )1 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (351,468 )     $ (16,510,392 )         3,553,747       $ 151,013,682   
                                      

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Transactions in Capital Shares (continued)

 

RS Select Growth Fund — continued  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class C               

Shares sold

     420,004       $ 19,269,924           1,403,845       $ 58,476,338   

Shares reinvested

     —         —           23,433         1,055,205   

Shares redeemed

     (177,172 )       (7,991,649 )         (153,693 )       (6,442,304 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     242,832       $ 11,278,275           1,273,585       $ 53,089,239   
                                      
Class K               

Shares sold

     8,139       $ 369,568           18,485       $ 756,075   

Shares reinvested

     —         —           360         16,089   

Shares redeemed

     (455 )       (20,681 )         (4,936 )       (197,634 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     7,684       $ 348,887           13,909       $ 574,530   
                                      
Class Y               

Shares sold

     3,190,338       $ 157,491,605           8,795,111       $ 381,541,028   

Shares reinvested

     —         —           109,089         5,277,719   

Shares redeemed

     (2,619,330 )       (128,230,501 )         (2,315,815 )       (104,265,027 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     571,008       $ 29,261,104           6,588,385       $ 282,553,720   
                                      
1 

Includes in-kind redemptions of 205,244 shares amounting to $8,570,989.

 

RS Mid Cap Growth Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     1,805,204       $ 33,731,942           790,074       $ 13,019,353   

Shares redeemed

     (506,737 )       (9,425,256 )         (825,352 )       (12,625,072 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     1,298,467       $ 24,306,686           (35,278 )     $ 394,281   
                                      
Class C               

Shares sold

     235,832       $ 4,132,175           161,986       $ 2,532,024   

Shares redeemed

     (60,757 )       (1,054,584 )         (54,226 )       (802,900 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     175,075       $ 3,077,591           107,760       $ 1,729,124   
                                      
Class K               

Shares sold

     24,961       $ 448,817           47,426       $ 709,576   

Shares redeemed

     (18,441 )       (328,277 )         (30,313 )       (478,535 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     6,520       $ 120,540           17,113       $ 231,041   
                                      
Class Y               

Shares sold

     3,004,859       $ 57,526,894           799,063       $ 13,556,113   

Shares redeemed

     (378,961 )       (7,114,535 )         (438,547 )       (6,520,928 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     2,625,898       $ 50,412,359           360,516       $ 7,035,185   
                                      

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

 

RS Growth Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     502,673       $ 9,761,618           933,678       $ 15,089,943   

Shares redeemed

     (626,440 )       (12,110,320 )         (1,436,999 )       (23,064,839 ) 

Shares issued upon reorganization1

     —         —           4,179,658         61,615,671   
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (123,767 )     $ (2,348,702 )         3,676,337       $ 53,640,775   
                                      
Class C               

Shares sold

     186,694       $ 3,362,329           369,994       $ 5,895,040   

Shares redeemed

     (59,370 )       (1,059,004 )         (392,354 )       (5,802,589 ) 

Shares issued upon reorganization1

     —         —           539,447         7,480,622   
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     127,324       $ 2,303,325           517,087       $ 7,573,073   
                                      
Class K               

Shares sold

     10,700       $ 201,916           42,239       $ 672,560   

Shares redeemed

     (14,594 )       (269,127 )         (315,505 )       (4,645,420 ) 

Shares issued upon reorganization1

     —         —           293,470         4,231,873   
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (3,894 )     $ (67,211 )         20,204       $ 259,013   
                                      
Class Y               

Shares sold

     477,206       $ 9,410,101           583,474       $ 10,027,521   

Shares redeemed

     (265,205 )       (5,188,591 )         (1,021,997 )       (15,714,681 ) 

Shares issued upon reorganization1

     —         —           1,412,795         21,030,581   
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     212,001       $ 4,221,510           974,272       $ 15,343,421   
                                      
1 

RS Capital Appreciation Fund was reorganized into RS Growth Fund on March 25, 2013.

 

RS Technology Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     754,568       $ 15,256,990           2,101,189       $ 44,422,488   

Shares reinvested

     —         —           1,290,818         25,054,842   

Shares redeemed

     (985,705 )       (19,309,893 )         (3,012,617 )       (60,361,820 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (231,137 )     $ (4,052,903 )         379,390       $ 9,115,510   
                                      

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Transactions in Capital Shares (continued)

 

RS Technology Fund — continued  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class C               

Shares sold

     58,175       $ 1,070,957           164,943       $ 3,178,342   

Shares reinvested

     —         —           119,708         2,140,368   

Shares redeemed

     (122,364 )       (2,210,067 )         (392,355 )       (6,839,099 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (64,189 )     $ (1,139,110 )         (107,704 )     $ (1,520,389 ) 
                                      
Class K               

Shares sold

     20,383       $ 388,061           21,902       $ 425,193   

Shares reinvested

     —         —           13,644         250,373   

Shares redeemed

     (15,103 )       (288,750 )         (27,175 )       (524,254 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     5,280       $ 99,311           8,371       $ 151,312   
                                      
Class Y               

Shares sold

     736,968       $ 15,352,348           1,249,136       $ 25,657,870   

Shares reinvested

     —         —           215,603         4,296,972   

Shares redeemed

     (478,844 )       (9,700,308 )         (1,162,618 )       (23,983,139 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     258,124       $ 5,652,040           302,121       $ 5,971,703   
                                      

 

RS Small Cap Equity Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     89,363       $ 1,899,611           298,310       $ 6,361,004   

Shares reinvested

     —         —           547,722         11,244,801   

Shares redeemed

     (347,226 )       (7,332,526 )         (644,100 )       (13,320,305 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (257,863 )     $ (5,432,915 )         201,932       $ 4,285,500   
                                      
Class C               

Shares sold

     258       $ 4,147           20,058       $ 383,758   

Shares reinvested

     —         —           13,617         205,757   

Shares redeemed

     (4,434 )       (68,709 )         (106,337 )       (1,981,460 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (4,176 )     $ (64,562 )         (72,662 )     $ (1,391,945 ) 
                                      
Class K               

Shares sold

     17,793       $ 351,453           40,710       $ 792,929   

Shares reinvested

     —         —           43,028         818,391   

Shares redeemed

     (44,514 )       (855,368 )         (129,834 )       (2,755,036 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (26,721 )     $ (503,915 )         (46,096 )     $ (1,143,716 ) 
                                      
Class Y               

Shares sold

     399,301       $ 8,615,981           720,198       $ 15,776,132   

Shares reinvested

     —         —           377,101         7,798,437   

Shares redeemed

     (516,727 )       (10,990,055 )         (656,469 )       (13,749,031 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (117,426 )     $ (2,374,074 )         440,830       $ 9,825,538   
                                      

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

b. Shareholder Concentration As of June 30, 2014, the number of shareholders and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders) who owned of record 5% or more of the net assets of a Fund is summarized in the following table:

 

Fund    Number of
Shareholders		      Percentage of
Net Assets		  

RS Small Cap Growth Fund

      2         46.95%   

RS Select Growth Fund

      7         68.44%   

RS Mid Cap Growth Fund

      5         46.75%   

RS Growth Fund

      2         24.49%   

RS Technology Fund

      5         47.15%   

RS Small Cap Equity Fund

      3         60.67%   

Note 5 Investments

a. Investment Purchases and Sales The cost of investments purchased and the proceeds from investments sold (excluding short-term investments) for the six months ended June 30, 2014, were as follows:

 

Fund    Cost of Investments
Purchased		      Proceeds from Investments
Sold		  

RS Small Cap Growth Fund

    $ 690,210,490       $ 447,630,970   

RS Select Growth Fund

      520,499,289         481,801,376   

RS Mid Cap Growth Fund

      187,412,949         109,155,030   

RS Growth Fund

      175,306,868         169,749,868   

RS Technology Fund

      190,363,620         190,142,194   

RS Small Cap Equity Fund

      56,636,214         66,859,916   

b. Foreign Securities Foreign securities investments involve special risks and considerations not typically associated with U.S. investments. These risks include, but are not limited to, currency risk; adverse political, regulatory, social, and economic developments; and less reliable information about issuers. Moreover, securities of some foreign companies may be less liquid and their prices more volatile than those of comparable U.S. companies.

c. Industry or Sector Concentration In their normal course of business, some of the Funds may invest a significant portion of their assets in companies within a limited number of industries or sectors. As a result, these Funds may be subject to a greater risk of loss than that of a fund invested in a wider spectrum of industries or sectors because the stocks of many or all of the companies in the industry, group of industries, sector, or sectors may decline in value due to developments adversely affecting the industry, group of industries, sector, or sectors.

d. Repurchase Agreements The collateral for repurchase agreements is either cash or fully negotiable U.S. government securities (including U.S. government agency securities). Repurchase agreements are fully collateralized (including the interest

 

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accrued thereon) and such collateral is marked to market daily while the agreements remain in force. If the value of the collateral falls below the repurchase price plus accrued interest, the Fund will typically require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults, the Fund maintains the right to sell the collateral (although it may be prevented or delayed from doing so in certain circumstances) and may be required to claim any resulting loss against the seller.

Note 6 Temporary Borrowings

The Funds, with other funds managed by RS Investments, share in a $400 million committed revolving credit facility from State Street Bank and Trust Company for temporary borrowing purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is calculated based on market rates at the time of borrowing.

For the six months ended June 30, 2014, the Funds which borrowed under the facility were as follows:

 

Fund    Amount Outstanding
at 6/30/14		      Average
Borrowing*		      Days Borrowings
Outstanding		      Average
Interest Rate*		  

RS Growth Fund

    $     —         139,257         1         1.34%   

RS Technology Fund

      —         115,171         1         1.35%   

RS Small Cap
Equity Fund

      —         92,291         2         1.34%   
* For the six months ended June 30, 2014, based on the number of days borrowings were outstanding.

Note 7 In-Kind Redemptions

In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the Funds recognize a gain on an in-kind redemption to the extent the values of the distributed securities exceed their costs; the Funds recognize a loss if cost exceeds value. Gains and losses realized on in-kind redemptions are not recognized for tax purposes, and are reclassified from accumulated realized gain (loss) to paid-in capital. During the six months ended June 30, 2014, the Funds had no in-kind redemptions.

Note 8 Review for Subsequent Events

Management has evaluated subsequent events through the issuance of the Funds’ financial statements and determined that no material events have occurred that require disclosure.

 

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Note 9 Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote.

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

Supplemental Information (unaudited)

Approval of the Investment Advisory Agreements for RS Investment Trust

The investment advisory agreements (the “Investment Advisory Agreements”) between the RS Funds (the “Funds”) and RS Investment Management Co. LLC (“RS Investments”) are subject to annual approval by (i) the vote of the Trustees or of a majority of the outstanding voting securities (as defined in the Investment Company Act of 1940) of each affected Fund, and (ii) the vote of a majority of the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940) of RS Investment Trust or RS Variable Products Trust (together, the “Trusts”) or RS Investments (the “Independent Trustees”). Each Investment Advisory Agreement is terminable with respect to a Fund by RS Investments, the applicable Trust, or a vote of a majority of the outstanding voting securities of the affected Fund, without penalty, on 60 days’ written notice and will terminate automatically in the event of its assignment.

The Investment Advisory Agreements also provide that RS Investments may, at its own expense, delegate certain of its responsibilities under the Investment Advisory Agreements to sub-advisers for the Funds, who would be required to furnish an investment program and make investment decisions for the Funds. The sub-advisory agreements (the “Sub-Advisory Agreements, and collectively with the Investment Advisory Agreements, the “Advisory Agreements”) between RS Investments and Guardian Investor Services LLC (“GIS”), the sub-adviser with respect to various Funds that employ certain fixed income strategies, are also subject to annual approval by (i) the vote of the Trustees or of a majority of the outstanding voting securities (as defined in the Investment Company Act of 1940) of each affected Fund, and (ii) the vote of a majority of the Independent Trustees.

The Trustees meet over the course of the year with investment advisory personnel from RS Investments and GIS, and regularly review detailed information regarding the investment program and performance of each Fund.

The Board of Trustees of the Trusts, including all the Independent Trustees, met in person on August 1, 2013, to consider the continuation of the Advisory Agreements for all of the Funds, for the one-year period commencing August 31, 2013. Before the Board meeting on August 1, the Independent Trustees met among themselves and with the Independent Trustees’ counsel several times to prepare for the meeting. The Trustees considered and reviewed the information they requested from RS Investments and confirmed their view that no further requests for information from RS Investments were necessary at that time and that RS Investments appeared to have provided complete responses to all of the Trustees’ information requests and questions in connection with their consideration of the annual continuation of the Advisory Agreements.

The Trustees were assisted in their review by the Chief Compliance Officer of the Trusts, who previously reviewed a preliminary copy of all of the information presented to the Trustees and, with the Independent Trustees’ counsel’s assistance, prepared a written report on the key factors for the Trustees to consider in determining whether to

 

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continue the Advisory Agreements. The Chief Compliance Officer concluded in the written report that the information that RS Investments had provided to the Trustees provided a reasonable basis for the Trustees to conclude that the advisory fees proposed in connection with the continuation of the Advisory Agreements were reasonable with respect to each Fund. The Independent Trustees took that report into consideration, along with the other information presented for their review, but did not regard it as conclusive or determinative.

The Trustees considered the nature, extent, and quality of the services provided and expected to be provided by RS Investments and GIS. In this regard, the Trustees took into account the experience of the Funds’ portfolio management teams and of RS Investments’ senior management, and the time and attention devoted by each to the Funds. The Trustees considered RS Investments’ significant responsibilities in monitoring the services provided by GIS and by other service providers such as the custodian, transfer agent, fund accountant and others.

The Trustees also considered that RS Investments had explained its view that the fees charged by RS Investments to the Funds reflect a number of factors, such as, for example, the generally high quality of the investment management teams at RS Investments, the research-intensive styles employed for various strategies, the high levels of compensation that are needed to retain the firm’s investment professionals and that are needed to fall within the ranges for compensation in this industry, and the alternative employment opportunities available to many of those professionals. The Trustees also noted that RS Investments had reported that, in the case of the Funds sub-advised by GIS, RS Investments had traditionally paid the majority, in most cases the large majority, of the advisory fees it received to GIS, but that an amendment to the Sub-Advisory Agreements, effective as of January 1, 2013, changed the allocation of the advisory fees for such sub-advised Funds to increase the portion of the advisory fees retained by RS Investments with respect to those Funds. The Trustees approved that re-allocation as requested by RS Investments based on its explanation that the new allocation would better reflect the current and expected respective responsibilities of RS Investments and GIS, as well as the commitment of The Guardian Life Insurance Company of America, RS Investments’ ultimate parent company, to supporting RS Investments as it grows and enhances its services.

The Trustees were assisted in their review by an independent consultant retained by the Independent Trustees. The Trustees reviewed information compiled by the independent consultant from the independent Morningstar organization showing a comparison of RS Investments’ advisory fee rate (which includes the sub-advisory fee paid to GIS for the sub-advised Funds) for each Fund compared to peer mutual funds having similar objectives and strategies, and within the same broad range of asset sizes. The Trustees were assisted in developing what they considered generally to be a representative group of comparable mutual funds, and in analyzing the resulting comparisons, by an analysis prepared by the independent consultant. The independent consultant’s report provided data showing RS Investments’ advisory fees generally to be within the range of comparable mutual funds, with a few exceptions analyzed in more depth by the Independent Trustees. The Trustees noted that certain of the Funds with advisory fees at the higher end of the range were already subject to expense limitations on those

 

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Funds’ total expenses, and they planned to continue to monitor the relevant Funds. For those few Funds at the highest end of the range, the Independent Trustees considered supplemental information presented by RS Investments that management considered relevant in demonstrating the appropriateness of the advisory fees for those Funds, such as favorable performance, total expense levels, and whether the Fund is closed to new investors.

The Trustees reviewed information from the independent consultant’s report showing total expenses for the Funds in comparison to peer funds. The Trustees considered the total expense ratios of the Funds and the various components of those expenses. For the RS Floating Rate Fund, which was identified as having an advisory fee at the highest end of the range, the Trustees noted that RS Investments had agreed to competitive limitations on the Fund’s total expenses that resulted in total expenses below the peer group median, even with the recent increase to the maximum expense ratio. For the RS Global Natural Resources Fund, which was identified as having an advisory fee and total expenses within the most expensive quartile of its peer group, the Trustees noted that there would remain in place an expense limitation and that the Fund has enjoyed a strong long and near term relative performance record. For the RS Partners Fund, which was identified as having an advisory fee and total expenses within the most expensive quartile of its peer group, the Trustees noted that the Fund’s expense limitation was increased further (lowering the Fund’s net expenses) on May 1, 2013, and it has enjoyed a strong long and near term relative performance record. The Independent Trustees also noted that the RS Partners Fund is closed to new investors. The Trustees noted that the RS Small Cap Growth Fund has an advisory fee within the most expensive quartile of its peer group, but its expense limitation places it at the median of its peer group for total expenses based on the level stated in the prospectus.

The Trustees considered information provided by RS Investments as to the fees charged by RS Investments to clients other than the Funds, including institutional separate accounts. The information provided by RS Investments shows that those accounts generally pay a lower overall fee rate but that, in a number of cases, such an account pays fees at the same rate as the comparable Fund on assets up to a specified level, and then at lower rates on additional assets; in some cases, an account’s fee rate will be lower at all levels than that of the comparable Fund. The Trustees considered that RS Investments had reported that administrative, compliance, reporting, and other legal burdens of providing investment advice to mutual funds exceed those required to provide advisory services to non-mutual fund clients such as institutional accounts for retirement or pension plans. The Trustees also considered that RS Investments had explained that there are substantially greater legal and other responsibilities and risks to RS Investments in managing public mutual funds than in managing institutional private accounts, and that the services and resources required of RS Investments are substantially less than in the case of the Funds because many of the administrative and compliance responsibilities related to the management function are retained by the institutional account and its other service providers.

The Trustees reviewed performance information for each Fund for various periods. Their review included an examination of comparisons of the performance of the Funds to relevant securities indexes and various peer groups of mutual funds prepared by the

 

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independent consultant and based on data from Morningstar with respect to various periods, and relative rankings of the Funds compared to peer funds during various periods. The Trustees noted that in the reports presented to them no Fund appeared to have substantially lagged all peer mutual funds and indexes for all relevant periods, but that several Funds had experienced relatively low performance for multiple periods, including: (1) RS Emerging Markets Fund, which was ranked in the lowest quartile for the one and three-year periods and below the median for the five-year period, but above the median for the ten-year period; (2) RS High Income Municipal Bond Fund, which was ranked in the lowest quartile for the one and three-year periods, (3) RS Tax-Exempt Fund, which was ranked in the lowest quartile for the one and three-year periods, but near the top quartile for the five and ten-year periods; and (4) RS Value Fund, which was ranked in the lowest quartile for the three and five-year periods, but in the top quartile for the one-year and ten-year periods. The Trustees agreed to monitor closely the performance of these Funds, taking into consideration the following additional considerations: The RS Emerging Markets Fund had recently undergone a change in portfolio management responsibility, which would be followed closely by the Trustees. The Independent Trustees accepted management’s explanation that the RS High Income Municipal Bond Fund and the RS Tax-Exempt Fund have experienced underperformance largely related to the Funds’ generally higher credit quality and shorter duration portfolios than those of many of their peers, which management believes is prudent to avoid excessive risk. The Trustees noted that the RS Value Fund’s performance has improved substantially over the past year, reflecting, in part, management’s substantial efforts in that regard, with the one-year and year-to-date relative performance well into the top quartile. RS Investments has assured the Independent Trustees that performance of all the Funds, particularly those showing periods of below median results, remains a high priority for RS Investments, and that good success in improving the performance of certain Funds had been shown over the past year.

The Trustees reviewed financial information provided to them by RS Investments, showing the substantial costs to RS Investments of providing services to the Funds. The Trustees reviewed the information presented by RS Investments describing the basis for the allocation of RS Investments’ expenses in the cost analysis for the Funds and did not object to management’s view that the allocation methodology and resulting allocations were reasonable. The Trustees also considered RS Investments’ detailed profitability analysis with respect to each Fund for the year ended December 31, 2012, and for the three months ended March 31, 2013. RS Investments stated that it continued to invest in the business to maintain high quality services for the Funds. The Trustees also took into account management’s view that a comparable or higher profit margin relating to RS Investments’ services to the Funds compared to institutional separate accounts appeared justified by the higher risk and responsibilities associated with the mutual fund business. The Trustees also considered the information that had been provided to them regarding the profitability of GIS, as the sub-adviser to certain Funds. The Independent Trustees additionally reviewed pro forma profitability information intended to show the effect on profitability of the new allocation of advisory fees between RS Investments and GIS.

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

The Trustees discussed with RS Investments whether economies of scale would likely be realized as the Funds grow and whether a reduction in the advisory fees paid by the Funds by means of breakpoints would be appropriate. The Independent Trustees noted information presented by the independent consultant that a majority of mutual funds within the applicable peer groups do not necessarily have advisory fee breakpoints, and that the popularity of breakpoints for mutual funds has declined somewhat because some groups recognize that an appropriately set limitation on overall expenses can be equally effective in sharing economies of scale and maintaining a competitive position for a mutual fund. The Independent Trustees also noted management’s discussion of the substantial resources devoted over the past year to additional portfolio management professionals and analysts, such as for the RS Emerging Markets Fund, as well as senior operational and legal professionals. For larger Funds such as the RS Global Natural Resources Fund, the RS Floating Rate Fund and the RS Partners Fund, the Trustees and RS Investments agreed that an appropriately structured total expense limitation can provide an acceptable sharing of economies of scale to substitute for a breakpoint in the advisory fee.

The Trustees considered the research and other similar services RS Investments receives from many of the broker-dealers with which it places the Funds’ (as well as other RS Investments clients’) portfolio transactions and from third parties with which these broker-dealers have arrangements. The Trustees considered the benefit to RS Investments and its affiliates from such services including that (1) the services are of value to RS Investments and its affiliates in advising RS Investments’ clients (including the Funds) and (2) RS Investments might otherwise be required to purchase some of these services for cash. On the basis of the information provided to the Trustees at the meeting and throughout the year, the Trustees concluded that the benefit to RS Investments of these “soft dollar” relationships did not appear unreasonable and that the Funds appeared to benefit from them.

The Trustees reviewed the detailed information provided to them regarding GIS, as the sub-adviser to various Funds, including information as to capabilities and experience of portfolio management personnel, certain financial and profitability information, information as to trading practices, and general information as to investment strategies and resources, compliance activities and resources, contingency planning, and various other areas. On the basis of that information, information provided to them throughout the year, and their periodic meetings with representatives of GIS, the Trustees determined that the services provided by GIS as the sub-adviser to certain Funds were generally acceptable.

The Trustees considered generally the nature and quality of the administrative services provided to the Funds by RS Investments and by GIS, including, among other things, their performance during the course of the preceding year and the responsiveness of senior management to the Trustees’ requests. The Trustees were generally satisfied with the administrative services currently being provided by the two firms.

After reviewing and considering all of the information described above, including the Chief Compliance Officer’s written report, the Trustees voted unanimously to approve the continuation of the various Advisory Agreements, including the advisory fees proposed in connection with that continuation, for the one-year period commencing August 31, 2013.

 

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Meeting of Shareholders

A special meeting of the shareholders of RS Investment Trust (the “Trust”) was held on May 23, 2014. At the meeting, the shareholders of the Trust elected Judson Bergman, Dennis M. Bushe, Margherita L. DiManni, Kenneth R. Fitzsimmons, Anne M. Goggin, Lawrence E. Harris, Christopher C. Melvin, Jr., Gloria S. Nelund, and Matthew H. Scanlan as trustees of the Trust.

Proposal to Elect Trustees

 

Nominee   Votes For     Votes Against/
Withheld		     Abstentions  

Judson Bergman

     550,801,232.965        9,280,122.985        0.000   

Dennis M. Bushe

     550,597,774.166        9,483,581.784        0.000   

Margherita L. DiManni

     550,787,370.938        9,293,985.012        0.000   

Kenneth R. Fitzsimmons

     550,425,719.024        9,655,636.926        0.000   

Anne M. Goggin

     550,954,630.766        9,126,725.184        0.000   

Lawrence E. Harris

     550,636,278.980        9,445,076.970        0.000   

Christopher C. Melvin, Jr.

     550,776,574.483        9,304,781.467        0.000   

Gloria S. Nelund

     550,067,457.888        9,013,898.888        0.000   

Matthew H. Scanlan

     550,564,139.160        9,517,216.790        0.000   

Portfolio Holdings and Proxy Voting Procedures

The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. This information is also available, without charge, upon request, by calling toll-free 800-766-3863.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) without charge, upon request, by calling toll-free 800-766-3863; (ii) on RS Investments’ website at http://www.rsinvestments.com; and (iii) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

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The Statement of Additional Information includes information about the Trust’s Trustees and Officers and is available, without charge, upon request by calling toll-free 800.766.3863.

This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless accompanied or preceded by that Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

 

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LOGO

 

One Bush Street, Suite 900

San Francisco, CA 94104

 

  

PRSRT STD

U.S. POSTAGE

PAID

RS INVESTMENTS

 

 

WWW.RSINVESTMENTS.COM // 800.766.3863   

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EB 015097 (06/14)

Table of Contents

LOGO

 

RS VALUE FUNDS

Class A, C, K, and Y Shares

RS PARTNERS FUND

RS VALUE FUND

RS LARGE CAP ALPHA FUND

RS INVESTORS FUND

RS GLOBAL NATURAL RESOURCES FUND

 

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

 

LOGO

Table of Contents

TABLE OF CONTENTS

 

RS Investments Overview  
CEO’s Letter     1   
RS Value Funds  
Important Information Concerning Fund Performance     3   
RS Partners Fund     4   
RS Value Fund     6   
RS Large Cap Alpha Fund     8   
RS Investors Fund     10   
RS Global Natural Resources Fund     12   
Understanding Your Fund’s Expenses     14   
Financial Information  
Schedules of Investments     18   
Statements of Assets and Liabilities     38   
Statements of Operations     40   
Statements of Changes in Net Assets     42   
Financial Highlights     46   
Notes to Financial Statements     56   
Supplemental Information     72   
 

RS Investments

 

Value | Growth | International | Natural Resources | Fixed Income

RS Funds provide clients with access to distinct and experienced investment teams—each pursuing investment opportunities consistent with its particular style. The dedicated research team approach assures that our clients benefit from process consistency, investment excellence, and choice across disciplines.

 

Value   RS Growth Fund   Natural Resources
RS Partners Fund*   RS Technology Fund   RS Global Natural Resources Fund*
RS Value Fund   RS Small Cap Equity Fund*  
RS Large Cap Alpha Fund     Fixed Income
RS Investors Fund   International   RS Investment Quality Bond Fund
  RS International Fund   RS Low Duration Bond Fund
Growth   RS Global Fund   RS High Yield Fund
RS Small Cap Growth Fund   RS Emerging Markets Fund   RS Tax-Exempt Fund
RS Select Growth Fund   RS Emerging Markets Small Cap Fund   RS High Income Municipal Bond Fund
RS Mid Cap Growth Fund   RS China Fund   RS Floating Rate Fund
    RS Strategic Income Fund

 

* Closed to most new investments. Please see the prospectus for more information.

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CEO’S LETTER

 

LOGO  

Matthew H. Scanlan

CEO, RS Investments

Dear RS Funds Shareholder,

Despite clear evidence of economic recovery, investors are still reeling from 2008. Though caution remains a high priority, investors are finally beginning to overcome inertia and to realize the need to act with more conviction in this low-return environment.

Thus, the hunt for alpha (a measure of performance on a risk-adjusted basis) continues. We’ve noticed that the concept of high-conviction investing is gaining interest among investors, many of whom are exploring new approaches to produce alpha for their equity portfolios.

I spent most of my career in a quantitative investment environment, so I’ve had to do some serious soul searching over the last two years, asking myself: “Why am I leading a fundamental active investment firm?” I recently co-authored a white paper with my colleague Larry Siegel, Director of Research at the CFA Institute Research Foundation, which explores this concept and provides some answers.

Decades of experience have taught us that portfolios must be broadly diversified to meet long-term investment goals. But that doesn’t mean all managers must be diversified. In “No Fear of Commitment: The Role of High-Conviction Active Management,” we study the role of concentrated managers within a diversified portfolio and how investors should evaluate them.

We started with a philosophical review of active management. There’s a behavioral finance concept called “bounded rationality” that tells us that most managers should specialize, focusing their efforts on segments of the market where they are most confident in their ability to apply insights and earn significant alpha. Why? Because in the end, you can’t be an expert on everything, but you can know a great deal about a few things. Specialization — and conviction — matter!

In our white paper, which will appear in the fall issue of the Journal of Investing, we also took a look at implementation to find out which characteristics matter most with high-conviction managers and how those influence portfolio construction techniques. One key takeaway is that investors can blend the best of index and active exposures to create an optimal portfolio. That includes high-conviction managers, in those cases where the investor has confidence that the manager will exceed expectations.

We appreciate the confidence you’ve placed in us. In the pages that follow, you’ll find an update on the RS Funds. It includes important information about your investment with our firm.

Please visit www.rsinvestments.com for additional insights and the latest commentary from our investment teams.

Sincerely,

Matthew H. Scanlan

Chief Executive Officer

 

 

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CEO’S LETTER

 

 

As with all mutual funds, the value of an investment in a Fund could decline, so you could lose money.

RS Funds are sold by prospectus only. You should carefully consider the investment objectives, risks, charges, and expenses of the RS Funds before making an investment decision. The prospectus contains this and other important information. Please read it carefully before investing or sending money. To obtain a copy, please call 800.766.3863 or visit www.rsinvestments.com.

RS Funds are distributed by RS Funds Distributor LLC, member: FINRA, SIPC.

©2014 RS Investment Management Co. LLC

 

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IMPORTANT INFORMATION CONCERNING FUND PERFORMANCE

 

Important Information Concerning Fund Performance

 

Except as otherwise specifically stated, all information, including portfolio security positions, is as of June 30, 2014. Any mention of specific securities should not be considered a recommendation to buy or sell those securities. A Fund may buy, sell, or hold any security identified herein, on the basis of factors described herein or the basis of other factors or other considerations. Fund holdings will change.

Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double-digit returns are highly unusual and cannot be sustained. Class A performance quoted “with maximum sales charge” reflects the current maximum sales charge of 4.75%. Please read a Fund’s prospectus carefully for more information on sales charges as they do not apply in all cases, and if applied, are reduced for larger purchases. Certain share classes are subject to contingent deferred sales charges which are typically paid at time of sale. The Class C share performance quoted “with sales charge” takes into account the applicable contingent deferred sales charge of 1% for periods of 1 year or less. There are no sales charges for Class K and Class Y shares. Any sales charges are in addition to the Fund’s fees and expenses as detailed in the Financial Highlights section of this report. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures include the effect of expense limitations in effect during the periods shown, if applicable; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month-end performance and other information, which may be lower or higher than that cited, is available by contacting RS Investments at 800.766.3863 and is periodically updated on our website: www.rsinvestments.com.

 

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RS PARTNERS FUND

 

RS Partners Fund

Characteristics (unaudited)

Total Net Assets: $2,159,499,858

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  
SeaWorld Entertainment, Inc.     3.94%   
Dana Holding Corp.     3.68%   
HMS Holdings Corp.     3.33%   
Peyto Exploration & Development Corp.     3.05%   
First American Financial Corp.     2.91%   
First Horizon National Corp.     2.88%   
Questar Corp.     2.79%   
StanCorp Financial Group, Inc.     2.55%   
AOL, Inc.     2.36%   
Rosetta Resources, Inc.     2.33%   

Total

     29.82%   
   
Sector Allocation2       
 

LOGO

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 2000® Value Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2000® Index with lower price-to-book ratios and lower forecasted growth values. (The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS PARTNERS FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (7/12/95)              
without sales charge     3.67%        24.64%        16.03%        20.59%        10.30%        12.82%   
with maximum sales charge     -1.26%        18.73%        14.17%        19.42%        9.76%        12.53%   
Class K Shares (10/13/06)     3.48%        24.26%        15.55%        20.08%        —        7.86%   
Class Y Shares (5/1/07)     3.84%        25.13%        16.40%        20.98%        —        7.44%   
Russell 2000® Value Index3     4.20%        22.54%        14.65%        19.88%        8.24%        10.70% * 

 

* Since Class A shares inception.

 

   
Results of a Hypothetical $10,000 Investment     
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Partners Fund and in the Russell 2000® Value Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class K shares (10/13/06) and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $17,929 (Class K) and $16,722 (Class Y). While Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS VALUE FUND

 

RS Value Fund

Characteristics (unaudited)

 

Total Net Assets: $1,332,591,884   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  
Liberty Interactive Corp., Class A     5.15%   
Actavis PLC     4.38%   
Clean Harbors, Inc.     4.05%   
Iron Mountain, Inc.     3.75%   
Intuitive Surgical, Inc.     3.15%   
Dollar Tree, Inc.     3.11%   
Fidelity National Financial, Inc., Class A     2.85%   
Questar Corp.     2.85%   
Dolby Laboratories, Inc., Class A     2.79%   
TRW Automotive Holdings Corp.     2.78%   

Total

     34.86%   
   
Sector Allocation2       
 
LOGO

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell Midcap® Value Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell Midcap® Index with lower price-to-book ratios and lower forecasted growth values. (The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000® Index, which consists of the 1,000 largest U.S. companies based on total market capitalization.) Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS VALUE FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (6/30/93)              
without sales charge     7.31%        25.28%        13.64%        18.22%        9.61%        7.91%   
with maximum sales charge     2.22%        19.34%        11.81%        17.08%        9.08%        7.66%   
Class C Shares (5/1/07)              
without sales charge     6.87%        24.32%        12.78%        17.35%        —        4.30%   
with sales charge     5.87%        23.32%        12.78%        17.35%        —        4.30%   
Class K Shares (12/4/06)     7.09%        24.75%        13.19%        17.76%        —        5.69%   
Class Y Shares (5/1/07)     7.40%        25.55%        13.90%        18.56%        —        5.39%   
Russell Midcap® Value Index3     11.14%        27.76%        17.56%        22.97%        10.66%        11.82% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Value Fund and in the Russell Midcap® Value Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (5/1/07), Class K shares (12/4/06), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $13,522 (Class C), $15,206 (Class K), and $14,569 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS LARGE CAP ALPHA FUND

 

RS Large Cap Alpha Fund

Characteristics (unaudited)

 

Total Net Assets: $864,147,546   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  
Liberty Interactive Corp., Class A     5.17%   
Actavis PLC     4.91%   
Microsoft Corp.     4.41%   
Twenty-First Century Fox, Inc., Class A     4.00%   
Prudential Financial, Inc.     3.78%   
Pfizer, Inc.     3.07%   
Occidental Petroleum Corp.     2.88%   
JPMorgan Chase & Co.     2.79%   
DIRECTV     2.68%   
Aflac, Inc.     2.64%   

Total

     36.33%   
   
Sector Allocation2     

 

LOGO

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 1000® Value Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 1000® Index (which consists of the 1,000 largest U.S. companies based on total market capitalization) with lower price-to-book ratios and lower forecasted growth values. Index results assume the reinvestment of dividends paid on stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

4

The S&P 500® Index is an unmanaged market-capitalization-weighted index generally considered to be representative of U.S. equity market activity. The index consists of 500 stocks representing leading industries of the U.S. economy. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS LARGE CAP ALPHA FUND

 

Performance Update (unaudited)

 

   
Average Annual Total Returns     
Inception Date   Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (6/1/72)              
without sales charge     7.13%        25.37%        15.47%        17.23%        8.97%        12.10%   
with maximum sales charge     2.03%        19.41%        13.61%        16.09%        8.44%        11.97%   
Class C Shares (8/7/00)              
without sales charge     6.69%        24.33%        14.54%        16.31%        8.03%        1.41%   
with sales charge     5.69%        23.33%        14.54%        16.31%        8.03%        1.41%   
Class K Shares (5/15/01)     6.92%        24.87%        15.03%        16.78%        8.56%        5.00%   
Class Y Shares (5/1/07)     7.25%        25.68%        15.79%        17.55%        —        8.07%   
Russell 1000® Value Index3     8.28%        23.81%        16.92%        19.23%        8.03%        n/a   
S&P 500® Index4     7.14%        24.61%        16.58%        18.83%        7.78%        10.41% * 

 

*

Since Class A shares inception. Since inception performance of the S&P 500® Index is measured from 5/31/72, the month end prior to the Fund’s commencement of operations.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Large Cap Alpha Fund and in the Russell 1000® Value Index and the S&P 500® Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made 10 years ago in Class C Shares and Class K shares, and upon the inception of Class Y shares (5/1/07) would have the following values as of June 30, 2014: $21,641 (Class C), $22,725 (Class K), and $17,435 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS INVESTORS FUND

 

RS Investors Fund

Characteristics (unaudited)

 

Total Net Assets: $251,173,334   

 

   
Top Ten Holdings1       
   
Holding   % of Total
Net Assets		  
Liberty Interactive Corp., Class A     5.64%   
SeaWorld Entertainment, Inc.     4.90%   
HMS Holdings Corp.     4.75%   
Actavis PLC     4.31%   
Twenty-First Century Fox, Inc., Class A     4.10%   
Clean Harbors, Inc.     4.08%   
Owens Corning     3.64%   
Iron Mountain, Inc.     3.38%   
First American Financial Corp.     3.32%   
Dana Holding Corp.     3.20%   

Total

     41.32%   
   
Sector Allocation2       
 
LOGO     

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The Russell 3000® Value Index measures the performance of those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000® Value or the Russell 2000® Value indexes. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS INVESTORS FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (11/15/05)              
without sales charge     8.29%        31.33%        20.07%        22.31%        —        9.11%   
with maximum sales charge     3.15%        25.07%        18.15%        21.13%        —        8.49%   
Class C Shares (7/24/07)              
without sales charge     7.90%        30.33%        19.16%        21.31%        —        6.20%   
with sales charge     6.90%        29.33%        19.16%        21.31%        —        6.20%   
Class K Shares (1/3/07)     8.05%        30.69%        19.55%        21.81%        —        6.92%   
Class Y Shares (5/1/07)     8.46%        31.66%        20.40%        22.49%        —        7.11%   
Russell 3000® Value Index3     7.95%        23.71%        16.73%        19.28%        —        7.40% * 

 

* Since Class A shares inception.

 

   
Results of a Hypothetical $10,000 Investment     

 

LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 11/15/05 in Class A shares of RS Investors Fund and the Russell 3000® Value Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (7/24/07), Class K shares (1/3/07), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $15,172 (Class C), $16,505 (Class K), and $16,353 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS GLOBAL NATURAL RESOURCES FUND

 

RS Global Natural Resources Fund

Characteristics (unaudited)

Total Net Assets: $5,208,319,839

 

Top Ten Holdings1       
Holding   % of Total
Net Assets		  
Turquoise Hill Resources Ltd.     6.21%   
First Quantum Minerals Ltd.     6.11%   
Sociedad Quimica y Minera de Chile S.A., ADR     5.57%   
The Mosaic Co.     4.68%   
Goldcorp, Inc.     4.65%   
Cabot Oil & Gas Corp.     4.58%   
Peyto Exploration & Development Corp.     4.02%   
Noble Energy, Inc.     3.97%   
Rosetta Resources, Inc.     3.90%   
Denbury Resources, Inc.     3.76%   

Total

     47.45%   
Sector Allocation2     
 
LOGO

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities.
2 The Fund’s holdings are allocated to each sector based on their Russell Global Sector classification. If a holding is not classified by Russell, it is assigned a Russell designation by RS Investments. Cash includes short-term investments and net other assets and liabilities.
3

The S&P North American Natural Resources Sector IndexTM is a modified capitalization-weighted index designed as a benchmark for U.S.-traded securities in the natural resources sector. The index includes companies involved in the following categories: extractive industries, energy companies, owners and operators of timber tracts, forestry services, producers of pulp and paper, and owners of plantations. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

4

The MSCI World Commodity Producers Index is an equity-based index designed to reflect the performance related to commodity producers stocks. The index is a free float-adjusted market- capitalization-weighted index composed of commodity producer companies based on the Global Industry Classification Standard (GICS®). “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

5

The S&P 500® Index is an unmanaged market-capitalization-weighted index generally considered to be representative of U.S. equity market activity. The index consists of 500 stocks representing leading industries of the U.S. economy. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

 

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RS GLOBAL NATURAL RESOURCES FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (11/15/95)              
without sales charge    
 10.45%
   
     13.03%        1.11%        11.43%        10.66%        9.98%   
with maximum sales charge    
 5.19%
   
     7.67%        -0.52%        10.35%        10.12%        9.70%   
Class C Shares (5/1/07)              
without sales charge     10.02%        12.13%        0.36%        10.60%        —        2.30%   
with sales charge     9.02%        11.13%        0.36%        10.60%        —        2.30%   
Class K  Shares (12/4/06)     10.25%        12.62%        0.74%        10.97%        —        3.64%   
Class Y Shares (5/1/07)     10.63%        13.38%        1.46%        11.81%        —        3.45%   
S&P North American Natural Resources Sector IndexTM 3     16.43%        33.14%        6.73%        14.76%        12.01%        n/a   
MSCI World Commodity Producers Index (Gross)4     10.83%        28.07%        2.60%        9.65%        10.15%        n/a   
S&P 500® Index5     7.14%        24.61%        16.58%        18.83%        7.78%        8.61% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Global Natural Resources Fund, the S&P North American Natural Resources Sector IndexTM, the MSCI World Commodity Producers Index (Gross), and the S&P 500® Index. The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75% that an investor may have to pay when purchasing Class A shares of the Fund. Hypothetical $10,000 investments made upon the inception of Class C shares (5/1/07), Class K shares (12/4/06), and Class Y shares (5/1/07) would have the following values as of June 30, 2014: $11,767 (Class C), $13,106 (Class K), and $12,749 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, Including, as applicable, sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including investment advisory fees; distribution (12b-1) fees; and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2014, to June 30, 2014. The following table shows the Funds’ expenses in two ways:

Expenses based on actual return

This section of the table provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled “Expenses Paid During Period” for your Fund to estimate the expenses you paid on your account during this period. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the following table. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Expenses based on hypothetical 5% return for comparison purposes

This section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds with the costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the following table. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or exchange fees. Therefore the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

 

Based on Actual
Return		        Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During Period*
1/1/14-6/30/14		     Expense Ratio
During Period
1/1/14-6/30/14		  

RS Partners Fund

   Class A     $1,000.00        $1,036.70        $7.32        1.45%   
    Class K     $1,000.00        $1,034.80        $9.08        1.80%   
    Class Y     $1,000.00        $1,038.40        $5.61        1.11%   

RS Value Fund

   Class A     $1,000.00        $1,073.10        $6.63        1.29%   
    Class C     $1,000.00        $1,068.70        $10.46        2.04%   
    Class K     $1,000.00        $1,070.90        $8.63        1.68%   
    Class Y     $1,000.00        $1,074.00        $5.35        1.04%   

RS Large Cap Alpha Fund

   Class A     $1,000.00        $1,071.30        $4.67        0.91%   
  Class C     $1,000.00        $1,066.90        $8.87        1.73%   
    Class K     $1,000.00        $1,069.20        $6.77        1.32%   
    Class Y     $1,000.00        $1,072.50        $3.49        0.68%   

RS Investors Fund

   Class A     $1,000.00        $1,082.90        $6.77        1.31%   
    Class C     $1,000.00        $1,079.00        $10.62        2.06%   
    Class K     $1,000.00        $1,080.50        $9.34        1.81%   
    Class Y     $1,000.00        $1,084.60        $5.43        1.05%   

RS Global Natural Resources Fund

   Class A     $1,000.00        $1,104.50        $7.62        1.46%   
  Class C     $1,000.00        $1,100.20        $11.66        2.24%   
    Class K     $1,000.00        $1,102.50        $9.54        1.83%   
    Class Y     $1,000.00        $1,106.30        $5.90        1.13%   

Based on Hypothetical Return

(5% Return Before Expenses)

                            

RS Partners Fund

   Class A     $1,000.00        $1,017.60        $7.25        1.45%   
    Class K     $1,000.00        $1,015.87        $9.00        1.80%   
    Class Y     $1,000.00        $1,019.29        $5.56        1.11%   

RS Value Fund

   Class A     $1,000.00        $1,018.40        $6.46        1.29%   
    Class C     $1,000.00        $1,014.68        $10.19        2.04%   
    Class K     $1,000.00        $1,016.46        $8.40        1.68%   
    Class Y     $1,000.00        $1,019.64        $5.21        1.04%   

RS Large Cap Alpha Fund

   Class A     $1,000.00        $1,020.28        $4.56        0.91%   
  Class C     $1,000.00        $1,016.22        $8.65        1.73%   
    Class K     $1,000.00        $1,018.25        $6.61        1.32%   
    Class Y     $1,000.00        $1,021.42        $3.41        0.68%   

RS Investors Fund

   Class A     $1,000.00        $1,018.30        $6.56        1.31%   
    Class C     $1,000.00        $1,014.58        $10.29        2.06%   
    Class K     $1,000.00        $1,015.82        $9.05        1.81%   
    Class Y     $1,000.00        $1,019.59        $5.26        1.05%   

RS Global Natural Resources Fund

   Class A     $1,000.00        $1,017.55        $7.30        1.46%   
  Class C     $1,000.00        $1,013.69        $11.18        2.24%   
    Class K     $1,000.00        $1,015.72        $9.15        1.83%   
    Class Y     $1,000.00        $1,019.19        $5.66        1.13%   
* Expenses are equal to the Fund's annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

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Table of Contents

Financial Information

Six-Month Period Ended June 30, 2014

Table of Contents

SCHEDULE OF INVESTMENTS — RS PARTNERS FUND

 

June 30, 2014 (unaudited)         Shares      Value  
Common Stocks – 95.6%   
Air Transport – 1.8%   

Bristow Group, Inc.

        475,305       $ 38,319,089   
         

 

 

  
         38,319,089   

Auto Parts – 3.7%

          

Dana Holding Corp.

        3,252,585         79,428,126   
         

 

 

  
         79,428,126   
Back Office Support, HR and Consulting – 1.0%        

Performant Financial Corp.(1)

        2,222,303         22,445,260   
         

 

 

  
         22,445,260   
Banks: Diversified – 8.4%          

Associated Banc-Corp.

        2,674,791         48,360,221   

Banner Corp.

        264,281         10,473,456   

Boston Private Financial Holdings., Inc.

        836,951         11,248,622   

First Horizon National Corp.

        5,240,573         62,153,196   

FirstMerit Corp.

        657,536         12,986,336   

Hancock Holding Co.

        129,497         4,573,834   

Synovus Financial Corp.

        858,914         20,940,323   

UMB Financial Corp.

        184,283         11,681,699   
         

 

 

  
         182,417,687   
Building Materials – 1.4%          

Masonite International Corp.(1)

        536,596         30,188,891   
         

 

 

  
         30,188,891   
Chemicals: Diversified – 1.4%          

Olin Corp.

        1,156,369         31,129,453   
         

 

 

  
         31,129,453   
Commercial Services: Rental & Leasing – 0.7%        

PHH Corp.(1)

        643,915         14,797,167   
         

 

 

  
         14,797,167   
Commercial Vehicles & Parts – 1.4%          

Navistar International Corp.(1)

        812,525         30,453,437   
         

 

 

  
         30,453,437   
Computer Services, Software & Systems – 3.9%        

Acxiom Corp.(1)

        378,200         8,203,158   

AOL, Inc.(1)

        1,280,174         50,938,124   

TIBCO Software, Inc.(1)

        1,295,513         26,130,497   
         

 

 

  
         85,271,779   
Containers & Packaging – 1.7%          

Sealed Air Corp.

        1,059,065         36,188,251   
         

 

 

  
         36,188,251   

 

18   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS PARTNERS FUND

 

June 30, 2014 (unaudited)         Shares      Value  
Cosmetics – 0.8%          

Elizabeth Arden, Inc.(1)

        772,443       $ 16,545,729   
         

 

 

  
         16,545,729   
Diversified Manufacturing Operations – 2.6%        

ITT Corp.

        816,446         39,271,053   

TriMas Corp.(1)

        435,809         16,617,397   
         

 

 

  
         55,888,450   
Electronic Entertainment – 2.0%          

Dolby Laboratories, Inc., Class A(1)

        991,211         42,820,315   
         

 

 

  
         42,820,315   
Financial Data & Systems – 1.2%   

Euronet Worldwide, Inc.(1)

        557,217         26,880,148   
         

 

 

  
         26,880,148   
Gold – 0.7%   

New Gold, Inc.(1)

        2,467,874         15,720,358   
         

 

 

  
         15,720,358   
Health Care Management Services – 1.6%        

Magellan Health Services, Inc.(1)

        565,333         35,186,326   
         

 

 

  
         35,186,326   
Health Care Services – 6.1%          

Allscripts Healthcare Solutions, Inc.(1)

        2,969,013         47,652,659   

Healthways, Inc.(1)

        692,280         12,142,591   

HMS Holdings Corp.(1)

        3,524,520         71,935,453   
         

 

 

  
         131,730,703   
Home Building – 0.7%          

William Lyon Homes, Class A(1)

        469,304         14,285,614   
         

 

 

  
         14,285,614   
Household Equipment & Products – 2.1%        

Tupperware Brands Corp.

        540,380         45,229,806   
         

 

 

  
         45,229,806   
Insurance: Life – 5.4%          

StanCorp Financial Group, Inc.

        860,243         55,055,552   

Symetra Financial Corp.

        800,377         18,200,573   

Torchmark Corp.

        522,150         42,774,528   
         

 

 

  
         116,030,653   
Insurance: Multi-Line – 1.8%          

eHealth, Inc.(1)(2)

        1,003,440         38,100,617   
         

 

 

  
         38,100,617   
Insurance: Property-Casualty – 5.5%          

Endurance Specialty Holdings Ltd.

        598,333         30,867,999   

Essent Group Ltd.(1)

        1,056,313         21,221,328   
                       

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   19

Table of Contents

SCHEDULE OF INVESTMENTS — RS PARTNERS FUND

 

June 30, 2014 (unaudited)   Foreign
Currency		      Shares      Value  
Insurance: Property-Casualty (continued)          

First American Financial Corp.

        2,264,925       $ 62,942,266   

Stewart Information Services Corp.

        140,769         4,365,247   
         

 

 

  
         119,396,840   
Leisure Time – 3.9%          

SeaWorld Entertainment, Inc.

        3,006,386         85,170,915   
         

 

 

  
         85,170,915   
Metal Fabricating – 1.8%          

MRC Global, Inc.(1)

        1,343,222         37,999,750   
         

 

 

  
         37,999,750   
Office Supplies & Equipment – 1.8%          

Avery Dennison Corp.

        770,856         39,506,370   
         

 

 

  
         39,506,370   
Oil Well Equipment & Services – 1.0%          

TETRA Technologies, Inc.(1)

        1,810,504         21,327,737   
         

 

 

  
         21,327,737   
Oil: Crude Producers – 8.1%          

Approach Resources, Inc.(1)

        937,781         21,315,762   

Laredo Petroleum, Inc.(1)

        1,214,084         37,612,322   

Peyto Exploration & Development Corp.

     CAD         1,746,175         65,965,338   

Rosetta Resources, Inc.(1)

        918,637         50,387,240   
         

 

 

  
         175,280,662   
Pharmaceuticals – 1.1%   

Impax Laboratories, Inc.(1)

        525,041         15,745,980   

The Medicines Co.(1)

        275,399         8,003,095   
         

 

 

  
         23,749,075   
Precious Metals & Minerals – 1.9%          

Horsehead Holding Corp.(1)

        2,205,574         40,273,781   
         

 

 

  
         40,273,781   
Real Estate Investment Trusts – 3.3%          

Ares Commercial Real Estate Corp.

        982,498         12,192,800   

CBL & Associates Properties, Inc.

        1,097,153         20,845,907   

MFA Financial, Inc.

        1,191,442         9,781,739   

PennyMac Mortgage Investment Trust

        339,375         7,445,888   

Washington Prime Group, Inc.(1)

        1,108,700         20,777,038   
         

 

 

  
         71,043,372   
Real Estate Services – 2.0%          

Jones Lang LaSalle, Inc.

        349,433         44,164,837   
         

 

 

  
         44,164,837   
Scientific Instruments: Electrical – 0.8%          

GrafTech International Ltd.(1)

        1,566,922         16,390,004   
         

 

 

  
         16,390,004   

 

20   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS PARTNERS FUND

 

June 30, 2014 (unaudited)         Shares      Value  
Scientific Instruments: Pollution Control – 2.8%        

Clean Harbors, Inc.(1)

        411,137       $ 26,415,552   

Waste Connections, Inc.

        696,295         33,805,123   
         

 

 

  
         60,220,675   
Securities Brokerage & Services – 1.8%          

Interactive Brokers Group, Inc., Class A

        1,660,332         38,669,132   
         

 

 

  
         38,669,132   
Semiconductors & Components – 0.7%          

Integrated Device Technology, Inc.(1)

        942,137         14,565,438   
         

 

 

  
         14,565,438   
Shipping – 0.7%          

Huntington Ingalls Industries, Inc.

        168,430         15,931,794   
         

 

 

  
         15,931,794   
Specialty Retail – 3.1%          

FTD Cos., Inc.(1)(2)

        1,306,841         41,544,475   

Vitamin Shoppe, Inc.(1)

        608,249         26,166,872   
         

 

 

  
         67,711,347   
Utilities: Gas Distributors – 2.8%          

Questar Corp.

        2,429,039         60,240,167   
         

 

 

  
         60,240,167   
Utilities: Miscellaneous – 2.1%          

Calpine Corp.(1)

        1,878,817         44,734,633   
         

 

 

  
         44,734,633   

Total Common Stocks

(Cost $1,574,343,861)

                   2,065,434,388   
       
            Principal
Amount		      Value  
Repurchase Agreements – 4.6%          
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $98,321,000, due 7/1/2014(3)

    $ 98,321,000         98,321,000   

Total Repurchase Agreements

(Cost $98,321,000)

                   98,321,000   

Total Investments – 100.2%

(Cost $1,672,664,861)

                   2,163,755,388   
Other Liabilities, Net – (0.2)%                   (4,255,530 ) 
Total Net Assets – 100.0%                 $ 2,159,499,858   

 

(1) 

Non-income-producing security.

(2) 

Affiliated issuer. See 2d in Notes to Financial Statements.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   21

Table of Contents

SCHEDULE OF INVESTMENTS — RS PARTNERS FUND

 

(3) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     2.75%           11/15/2042         $ 100,289,225   

Legend:

Foreign-Denominated Security

CAD – Canadian Dollar

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                          Valuation Inputs                               

Investments in Securities

(unaudited)

   Level 1      Level 2      Level 3      Total  
   

Common Stocks

   $ 2,065,434,388       $ —       $     —       $ 2,065,434,388   
   

Repurchase Agreements

     —         98,321,000         —         98,321,000   
   
Total   $ 2,065,434,388       $ 98,321,000       $ —       $ 2,163,755,388   

 

22   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS VALUE FUND

 

June 30, 2014 (unaudited)       
Shares		        Value  
Common Stocks – 98.6%   
Advertising Agencies – 1.9%   

The Interpublic Group of Companies, Inc.

     1,325,315         $ 25,856,896   
        

 

 

  
           25,856,896   
Auto Parts – 2.8%         

TRW Automotive Holdings Corp.(1)

     413,963           37,057,968   
        

 

 

  
           37,057,968   
Back Office Support, HR and Consulting – 3.7%          

Iron Mountain, Inc.

     1,408,677           49,937,600   
        

 

 

  
           49,937,600   
Banks: Diversified – 5.4%         

Comerica, Inc.

     449,900           22,566,984   

First Horizon National Corp.

     1,164,105           13,806,285   

KeyCorp

     1,596,861           22,883,018   

Zions Bancorporation

     454,200           13,385,274   
        

 

 

  
           72,641,561   
Biotechnology – 1.9%         

Charles River Laboratories International, Inc.(1)

     464,100           24,838,632   
        

 

 

  
           24,838,632   
Building Materials – 2.5%         

Owens Corning

     852,530           32,975,860   
        

 

 

  
           32,975,860   
Chemicals: Diversified – 1.8%         

Axiall Corp.

     499,405           23,606,874   
        

 

 

  
           23,606,874   
Commercial Vehicles & Parts – 2.6%         

Allison Transmission Holdings, Inc.

     256,900           7,989,590   

Navistar International Corp.(1)

     718,540           26,930,879   
        

 

 

  
           34,920,469   
Computer Services, Software & Systems – 2.1%          

AOL, Inc.(1)

     295,915           11,774,458   

TIBCO Software, Inc.(1)

     803,800           16,212,646   
        

 

 

  
           27,987,104   
Containers & Packaging – 2.4%         

Crown Holdings, Inc.(1)

     631,152           31,406,123   
        

 

 

  
           31,406,123   
Diversified Financial Services – 3.7%         

Ameriprise Financial, Inc.

     239,272           28,712,640   

Raymond James Financial, Inc.

     394,134           19,994,418   
        

 

 

  
           48,707,058   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   23

Table of Contents

SCHEDULE OF INVESTMENTS — RS VALUE FUND

 

June 30, 2014 (unaudited)       
Shares		        Value  
Diversified Media – 2.0%         

Liberty Media Corp., Class A(1)

     197,984         $ 27,060,453   
        

 

 

  
           27,060,453   
Diversified Retail – 8.3%         

Dollar Tree, Inc.(1)

     762,100           41,503,966   

Liberty Interactive Corp., Class A(1)

     2,337,280           68,622,541   
        

 

 

  
           110,126,507   
Drug & Grocery Store Chains – 2.4%         

GNC Holdings, Inc., Class A

     955,968           32,598,509   
        

 

 

  
           32,598,509   
Electronic Entertainment – 2.8%   

Dolby Laboratories, Inc., Class A(1)

     859,580           37,133,856   
        

 

 

  
           37,133,856   
Fertilizers – 1.9%         

The Mosaic Co.

     510,446           25,241,555   
        

 

 

  
           25,241,555   
Financial Data & Systems – 2.5%         

Fidelity National Information Services, Inc.

     614,632           33,644,956   
        

 

 

  
           33,644,956   
Gas Pipeline – 2.1%         

Kinder Morgan Management LLC(1)

     353,048           27,866,079   
        

 

 

  
                 27,866,079   
Home Building – 2.0%         

NVR, Inc.(1)

     23,163           26,651,348   
        

 

 

  
           26,651,348   
Insurance: Multi-Line – 1.9%         

Reinsurance Group of America, Inc.

     167,196           13,191,764   

Voya Financial, Inc.

     333,035           12,102,492   
        

 

 

  
           25,294,256   
Insurance: Property-Casualty – 5.5%         

Fidelity National Financial, Inc., Class A

     1,161,260           38,042,878   

XL Group PLC

     1,082,461           35,428,948   
        

 

 

  
           73,471,826   
Leisure Time – 0.6%         

SeaWorld Entertainment, Inc.

     260,200           7,371,466   
        

 

 

  
           7,371,466   
Machinery: Engines – 1.2%         

Cummins, Inc.

     105,500           16,277,595   
        

 

 

  
           16,277,595   

 

24   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS VALUE FUND

 

June 30, 2014 (unaudited)       
Shares		        Value  
Medical Equipment – 3.2%         

Intuitive Surgical, Inc.(1)

     102,046         $ 42,022,543   
        

 

 

  
           42,022,543   
Oil Well Equipment & Services – 0.7%         

Rowan Companies PLC, Class A

     304,008           9,706,975   
        

 

 

  
           9,706,975   
Oil: Crude Producers – 4.6%         

Concho Resources, Inc.(1)

     146,059           21,105,525   

Denbury Resources, Inc.

     1,124,998           20,767,463   

Rosetta Resources, Inc.(1)

     364,160           19,974,176   
        

 

 

  
           61,847,164   
Pharmaceuticals – 8.0%         

Actavis PLC(1)

     261,953           58,428,617   

Cardinal Health, Inc.

     280,214           19,211,472   

Zoetis, Inc.

     892,012           28,785,227   
        

 

 

  
           106,425,316   
Real Estate Investment Trusts – 4.6%         

American Campus Communities, Inc.

     504,079           19,275,981   

Gaming and Leisure Properties, Inc.

     878,605           29,846,212   

Washington Prime Group, Inc.(1)

     685,800           12,851,892   
        

 

 

  
           61,974,085   
Real Estate Services – 1.8%         

CBRE Group, Inc., Class A(1)

     760,519           24,367,029   
        

 

 

  
           24,367,029   
Rental & Leasing Services: Consumer – 1.0%         

Avis Budget Group, Inc.(1)

     228,800           13,657,072   
        

 

 

  
                 13,657,072   
Scientific Instruments: Pollution Control – 4.1%         

Clean Harbors, Inc.(1)

     840,907           54,028,275   
        

 

 

  
                 54,028,275   
Utilities: Electrical – 1.1%         

NRG Energy, Inc.

     383,400           14,262,480   
        

 

 

  
                 14,262,480   
Utilities: Gas Distributors – 2.8%         

Questar Corp.

     1,529,432           37,929,913   
        

 

 

  
                 37,929,913   
Utilities: Miscellaneous – 2.7%         

Calpine Corp.(1)

     1,488,912           35,450,995   
        

 

 

  
                 35,450,995   

Total Common Stocks

(Cost $1,013,442,030)

                1,314,346,398   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   25

Table of Contents

SCHEDULE OF INVESTMENTS — RS VALUE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Repurchase Agreements – 1.7%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $22,753,000, due 7/1/2014(2)

   $ 22,753,000         $ 22,753,000   

Total Repurchase Agreements

(Cost $22,753,000)

                22,753,000   

Total Investments – 100.3%

(Cost $1,036,195,030)

                1,337,099,398   
Other Liabilities, Net – (0.3)%                (4,507,514 ) 
Total Net Assets – 100.0%              $ 1,332,591,884   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     2.75%           11/15/2042         $ 12,471,825   

U.S. Treasury Bond

     3.75%           11/15/2043           10,736,813   

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                          Valuation Inputs                               
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3      Total  
   

Common Stocks

   $ 1,314,346,398       $ —       $     —       $ 1,314,346,398   
   

Repurchase Agreements

     —         22,753,000         —         22,753,000   
   
Total   $ 1,314,346,398       $ 22,753,000       $ —       $ 1,337,099,398   

 

26   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS LARGE CAP ALPHA FUND

 

June 30, 2014 (unaudited)         Shares      Value  
Common Stocks – 95.8%   
Advertising Agencies – 1.5%   

The Interpublic Group of Companies, Inc.

        667,600       $ 13,024,876   
         

 

 

  
         13,024,876   
Aerospace – 0.8%          

Lockheed Martin Corp.

        41,677         6,698,744   
         

 

 

  
         6,698,744   
Asset Management & Custodian – 1.5%          

State Street Corp.

        197,213         13,264,546   
         

 

 

  
         13,264,546   
Automobiles – 2.1%          

General Motors Co.

        494,200         17,939,460   
         

 

 

  
         17,939,460   
Back Office Support, HR and Consulting – 2.5%        

Iron Mountain, Inc.

        599,300         21,245,185   
         

 

 

  
         21,245,185   
Banks: Diversified – 5.6%          

KeyCorp

        1,378,438         19,753,017   

The PNC Financial Services Group, Inc.

        142,300         12,671,815   

Wells Fargo & Co.

        302,400         15,894,144   
         

 

 

  
         48,318,976   
Cable Television Services – 2.7%          

DIRECTV(1)

        272,300         23,148,223   
         

 

 

  
         23,148,223   
Cement – 1.2%          

Cemex S.A.B. de C.V., ADR(1)

        775,564         10,260,712   
         

 

 

  
         10,260,712   
Chemicals: Specialty – 1.4%          

Praxair, Inc.

        93,939         12,478,857   
         

 

 

  
         12,478,857   
Computer Services, Software & Systems – 4.4%        

Microsoft Corp.

        913,400         38,088,780   
         

 

 

  
         38,088,780   
Diversified Financial Services – 6.7%          

Capital One Financial Corp.

        105,689         8,729,911   

Citigroup, Inc.

        340,500         16,037,550   

JPMorgan Chase & Co.

        418,000         24,085,160   

Raymond James Financial, Inc.

        179,900         9,126,327   
         

 

 

  
         57,978,948   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   27

Table of Contents

SCHEDULE OF INVESTMENTS — RS LARGE CAP ALPHA FUND

 

June 30, 2014 (unaudited)         Shares      Value  
Diversified Media – 4.0%          

Twenty-First Century Fox, Inc., Class A

        982,775       $ 34,544,541   
         

 

 

  
         34,544,541   
Diversified Retail – 6.1%          

Dollar General Corp.(1)

        144,400         8,282,784   

Liberty Interactive Corp., Class A(1)

        1,521,721         44,677,729   
         

 

 

  
         52,960,513   
Drug & Grocery Store Chains – 2.3%          

CVS Caremark Corp.

        260,225         19,613,158   
         

 

 

  
         19,613,158   
Fertilizers – 2.2%   

The Mosaic Co.

        378,415         18,712,622   
         

 

 

  
         18,712,622   
Financial Data & Systems – 2.1%          

Fidelity National Information Services, Inc.

        331,950         18,170,943   
         

 

 

  
         18,170,943   
Foods – 2.6%          

Mondelez International, Inc., Class A

        600,500         22,584,805   
         

 

 

  
         22,584,805   
Gas Pipeline – 2.2%          

Kinder Morgan Management LLC(1)

        243,500         19,219,455   
         

 

 

  
                    19,219,455   
Gold – 1.3%          

Goldcorp, Inc.

        385,986         10,772,869   
         

 

 

  
         10,772,869   
Health Care Management Services – 1.7%          

UnitedHealth Group, Inc.

        176,722         14,447,024   
         

 

 

  
         14,447,024   
Insurance: Life – 6.4%          

Aflac, Inc.

        365,800         22,771,050   

Prudential Financial, Inc.

        367,500         32,622,975   
         

 

 

  
         55,394,025   
Insurance: Property-Casualty – 3.8%          

Fidelity National Financial, Inc., Class A

        358,900         11,757,564   

The Allstate Corp.

        365,100         21,438,672   
         

 

 

  
         33,196,236   
Machinery: Engines – 1.6%          

Cummins, Inc.

        89,290         13,776,554   
         

 

 

  
         13,776,554   

 

28   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS LARGE CAP ALPHA FUND

 

June 30, 2014 (unaudited)   Foreign
Currency		      Shares      Value  
Medical Equipment – 2.1%          

Intuitive Surgical, Inc.(1)

        44,218       $ 18,208,972   
         

 

 

  
         18,208,972   
Oil: Crude Producers – 8.1%          

ARC Resources Ltd.

     CAD         406,690         12,383,073   

Cabot Oil & Gas Corp.

        320,100         10,928,214   

Concho Resources, Inc.(1)

        96,514         13,946,273   

Occidental Petroleum Corp.

        242,080         24,844,670   

Southwestern Energy Co.(1)

        180,193         8,196,980   
         

 

 

  
         70,299,210   
Oil: Integrated – 0.9%          

Marathon Oil Corp.

        204,400         8,159,648   
         

 

 

  
         8,159,648   
Pharmaceuticals – 12.6%          

Actavis PLC(1)

        190,411         42,471,174   

Merck & Co., Inc.

        366,804         21,219,611   

Pfizer, Inc.

        892,605         26,492,516   

Zoetis, Inc.

        584,439         18,859,847   
         

 

 

  
         109,043,148   
Rental & Leasing Services: Consumer – 1.4%           

Hertz Global Holdings, Inc.(1)

        442,300         12,397,669   
         

 

 

  
         12,397,669   
Scientific Instruments: Control & Filter – 2.0%           

Parker Hannifin Corp.

        134,545         16,916,343   
         

 

 

  
         16,916,343   
Securities Brokerage & Services – 1.0%          

CME Group, Inc.

        116,651         8,276,388   
         

 

 

  
                        8,276,388   
Utilities: Electrical – 1.0%          

NRG Energy, Inc.

        238,200         8,861,040   
         

 

 

  
                        8,861,040   

Total Common Stocks

(Cost $636,895,910)

                       828,002,470   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   29

Table of Contents

SCHEDULE OF INVESTMENTS — RS LARGE CAP ALPHA FUND

 

June 30, 2014 (unaudited)         Principal
Amount		      Value  
Repurchase Agreements – 3.1%          
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $26,830,000, due 7/1/2014(2)

        $ 26,830,000       $ 26,830,000   

Total Repurchase Agreements

(Cost $26,830,000)

                   26,830,000   

Total Investments – 98.9%

(Cost $663,725,910)

                   854,832,470   
Other Assets, Net – 1.1%                   9,315,076   
Total Net Assets – 100.0%                 $ 864,147,546   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     3.75%           11/15/2043         $ 27,371,844   

Legend:

ADR – American Depositary Receipt.

Foreign-Denominated Security

CAD – Canadian Dollar

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                         Valuation Inputs                                
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 828,002,470       $ —       $     —         $ 828,002,470   
   

Repurchase Agreements

     —         26,830,000         —           26,830,000   
   
Total   $ 828,002,470       $ 26,830,000       $ —         $ 854,832,470   

 

30   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTORS FUND

 

June 30, 2014 (unaudited)             
Shares		        Value  
Common Stocks – 95.0%            
Advertising Agencies – 1.7%            

The Interpublic Group of Companies, Inc.

        221,400         $ 4,319,514   
           

 

 

  
                      4,319,514   
Auto Parts – 3.2%            

Dana Holding Corp.

        329,223           8,039,626   
           

 

 

  
                      8,039,626   
Back Office Support, HR and Consulting – 6.4%            

Iron Mountain, Inc.

        239,400           8,486,730   

Performant Financial Corp.(1)

        747,353           7,548,265   
           

 

 

  
                      16,034,995   
Banks: Diversified – 6.0%            

First Horizon National Corp.

        627,800           7,445,708   

KeyCorp

        540,000           7,738,200   
           

 

 

  
                      15,183,908   
Building Materials – 3.6%            

Owens Corning

        236,600           9,151,688   
           

 

 

  
                      9,151,688   
Computer Services, Software & Systems – 2.9%            

Microsoft Corp.

        174,700           7,284,990   
           

 

 

  
                      7,284,990   
Diversified Financial Services – 4.9%            

JPMorgan Chase & Co.

        130,700           7,530,934   

Raymond James Financial, Inc.

        95,400           4,839,642   
           

 

 

  
                      12,370,576   
Diversified Media – 4.1%            

Twenty-First Century Fox, Inc., Class A

        293,300           10,309,495   
           

 

 

  
                      10,309,495   
Diversified Retail – 8.6%            

Dollar Tree, Inc.(1)

        134,700           7,335,762   

Liberty Interactive Corp., Class A(1)

        482,600           14,169,136   
           

 

 

  
                      21,504,898   
Fertilizers – 1.7%            

The Mosaic Co.

        85,137           4,210,025   
           

 

 

  
                      4,210,025   
Health Care Services – 7.9%            

Allscripts Healthcare Solutions, Inc.(1)

        490,208           7,867,838   

HMS Holdings Corp.(1)

        584,662           11,932,952   
           

 

 

  
                      19,800,790   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   31

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTORS FUND

 

June 30, 2014 (unaudited)    
 		 Foreign
Currency		   
  		     
 		     
Shares		  
  		        Value   
Insurance: Multi-Line – 2.6%            

eHealth, Inc.(1)

        169,521         $ 6,436,712   
           

 

 

  
                          6,436,712   
Insurance: Property-Casualty – 8.9%            

Fidelity National Financial, Inc., Class A

        194,400           6,368,544   

First American Financial Corp.

        300,300           8,345,337   

XL Group PLC

        231,900           7,590,087   
           

 

 

  
                          22,303,968   
Leisure Time – 4.9%            

SeaWorld Entertainment, Inc.

        434,823           12,318,536   
           

 

 

  
                          12,318,536   
Medical Equipment – 3.2%            

Intuitive Surgical, Inc.(1)

        19,416           7,995,509   
           

 

 

  
                          7,995,509   
Metal Fabricating – 2.4%            

MRC Global, Inc.(1)

        213,700           6,045,573   
           

 

 

  
                          6,045,573   
Oil: Crude Producers – 5.7%            

Occidental Petroleum Corp.

        72,775           7,468,898   

Peyto Exploration & Development Corp.

     CAD         181,080           6,840,668   
           

 

 

  
                          14,309,566   
Pharmaceuticals – 6.3%            

Actavis PLC(1)

        48,527           10,823,947   

Pfizer, Inc.

        166,500           4,941,720   
           

 

 

  
                          15,765,667   
Precious Metals & Minerals – 3.1%            

Horsehead Holding Corp.(1)

        422,779           7,719,944   
           

 

 

  
                          7,719,944   
Real Estate Investment Trusts – 2.8%            

Gaming and Leisure Properties, Inc.

        210,537           7,151,942   
           

 

 

  
                          7,151,942   
Scientific Instruments: Pollution Control – 4.1%             

Clean Harbors, Inc.(1)

        159,553           10,251,280   
           

 

 

  
                          10,251,280   
Total Common Stocks
(Cost $221,225,486)		                         238,509,202   

 

32   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTORS FUND

 

June 30, 2014 (unaudited)         Principal
Amount		        Value  
Repurchase Agreements – 4.4%            
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $11,061,000, due 7/1/2014(2)

        $ 11,061,000         $ 11,061,000   
Total Repurchase Agreements
(Cost $11,061,000)		                     11,061,000   
Total Investments – 99.4%
(Cost $232,286,486)		                     249,570,202   
Other Assets, Net – 0.6%                     1,603,132   
Total Net Assets – 100.0%                   $ 251,173,334   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Bond

     2.75%           11/15/2042         $ 11,285,950   

Legend:

Foreign-Denominated Security

CAD – Canadian Dollar

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                         Valuation Inputs                                
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks

   $ 238,509,202       $ —       $     —         $ 238,509,202   
   

Repurchase Agreements

     —         11,061,000         —           11,061,000   
   
Total   $ 238,509,202       $ 11,061,000       $ —         $ 249,570,202   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   33

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL NATURAL RESOURCES FUND

 

June 30, 2014 (unaudited)   Foreign
Currency		          
Shares		      Value  
Common Stocks – 94.0%          
Chemicals: Diversified – 5.6%          

Sociedad Quimica y Minera de Chile S.A., ADR(1)

        9,888,968       $ 289,845,652   
         

 

 

  
                        289,845,652   
Copper – 12.2%          

Antofagasta PLC

     GBP         12,711,832         165,990,855   

First Quantum Minerals Ltd.

     CAD         14,890,660         318,452,613   

HudBay Minerals, Inc.(1)

        9,888,981         91,868,633   

Taseko Mines Ltd.(1)(2)

        23,460,435         58,651,088   
         

 

 

  
                        634,963,189   
Fertilizers – 4.7%          

The Mosaic Co.

        4,929,814         243,779,302   
         

 

 

  
                        243,779,302   
Gold – 7.7%          

Goldcorp, Inc.

        8,675,994         242,146,992   

New Gold, Inc.(2)

        25,036,664         159,483,550   
         

 

 

  
                        401,630,542   
Metals & Minerals: Diversified – 16.1%          

Compass Minerals International, Inc.(1)

        1,788,565         171,237,213   

Iluka Resources Ltd.(1)

     AUD         25,382,463         194,586,549   

Mineral Resources Ltd.(1)

     AUD         16,559,820         149,748,585   

Turquoise Hill Resources Ltd.(2)

        96,824,272         323,393,069   
         

 

 

  
                        838,965,416   
Oil: Crude Producers – 44.0%          

Antero Resources Corp.(2)

        812,600         53,330,938   

ARC Resources Ltd.

     CAD         2,595,477         79,028,206   

Cabot Oil & Gas Corp.

        6,992,024         238,707,699   

Concho Resources, Inc.(2)

        729,597         105,426,767   

Denbury Resources, Inc.

        10,604,928         195,766,971   

Kosmos Energy Ltd.(2)

        7,338,177         82,407,728   

Laredo Petroleum, Inc.(2)

        4,113,549         127,437,748   

Noble Energy, Inc.

        2,666,865         206,575,363   

Oil Search Ltd.

     AUD         15,062,697         137,346,540   

Ophir Energy PLC(1)(2)

     GBP         36,557,285         137,828,779   

Painted Pony Petroleum Ltd.(1)(2)

     CAD         3,207,900         41,036,348   

Painted Pony Petroleum Ltd.(1)(2)(3)(4)

     CAD         2,681,890         34,307,482   

Peyto Exploration & Development Corp.

     CAD         5,546,900         209,545,512   

Range Resources Corp.

        1,772,453         154,114,788   

Rosetta Resources, Inc.(1)(2)

        3,700,891         202,993,871   

Salamander Energy PLC(1)(2)

     GBP         23,989,659         57,478,257   
                           

 

34   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS GLOBAL NATURAL RESOURCES FUND

 

June 30, 2014 (unaudited)   Foreign
Currency		          
Shares		      Value  
Oil: Crude Producers (continued)          

Southwestern Energy Co.(2)

        2,191,538       $ 99,693,064   

Tourmaline Oil Corp.(2)

     CAD         114,800         6,052,807   

Tullow Oil PLC

     GBP         8,281,384         120,964,498   
         

 

 

  
                        2,290,043,366   
Precious Metals & Minerals – 0.5%          

Stillwater Mining Co.(2)

        1,502,180         26,363,259   
         

 

 

  
                        26,363,259   
Utilities: Miscellaneous – 3.2%          

Calpine Corp.(2)

        7,033,236         167,461,349   
         

 

 

  
                        167,461,349   
Total Common Stocks
(Cost $4,420,029,509)		                       4,893,052,075   
       
              Principal
Amount		      Value  
Repurchase Agreements – 6.3%          
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $330,328,000, due 7/1/2014(5)

    

    $ 330,328,000         330,328,000   
Total Repurchase Agreements
(Cost $330,328,000)		                       330,328,000   
Total Investments – 100.3%
(Cost $4,750,357,509)		                       5,223,380,075   
Other Liabilities, Net – (0.3)%                       (15,060,236 ) 
Total Net Assets – 100.0%                     $ 5,208,319,839   

 

(1) 

Affiliated issuer. See 2d in Notes to Financial Statements.

(2) 

Non-income-producing security.

(3) 

Fair valued security. See 1a in Notes to Financial Statements.

(4) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $34,307,482, representing 0.7% of net assets. These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.

(5) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity
Date		        Value  

U.S. Treasury Bond

     3.75%           11/15/2043         $ 324,056,031   

U.S. Treasury Bond

     3.375%           5/15/2044           12,881,738   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   35

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL NATURAL RESOURCES FUND

 

Legend:

ADR – American Depositary Receipt.

Foreign-Denominated Security

AUD – Australian Dollar

CAD – Canadian Dollar

GBP – Great British Pound

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                         Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1     Level 2     Level 3     Total  
   

Common Stocks

                                
   

Other

   $ 4,858,744,593      $     —      $     —      $ 4,858,744,593   
   

Painted Pony Petroleum Ltd.

     —        34,307,482        —        34,307,482   
   

Repurchase Agreements

     —        330,328,000        —        330,328,000   
   
Total   $ 4,858,744,593      $ 364,635,482      $ —      $ 5,223,380,075   

 

36   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

 

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  www.rsinvestments.com   37

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Assets and Liabilities

As of June 30, 2014 (unaudited)

    RS Partners  
Assets   

Investments in unaffiliated issuers, at value

    $ 2,084,110,296   

Investments in affiliated issuers, at value

      79,645,092   
    

 

 

  

Investments in securities, at value

      2,163,755,388   

Cash

      631   

Foreign currency, at value

      —   

Receivable for investments sold

      3,563,297   

Dividends receivable

      2,396,816   

Receivable for fund shares subscribed

      2,159,890   

Prepaid expenses

      76,785   

Other receivables

      —   
    

 

 

  

Total Assets

      2,171,952,807   
    

 

 

  
Liabilities   

Payable for investments purchased

      5,017,406   

Payable for fund shares redeemed

      4,715,500   

Payable to adviser

      1,633,475   

Payable to distributor

      43,634   

Accrued trustees’ fees

      36,932   

Accrued expenses/other liabilities

      1,006,002   
    

 

 

  

Total Liabilities

      12,452,949   
    

 

 

  

Total Net Assets

    $ 2,159,499,858   
    

 

 

  
Net Assets Consist of:   

Paid-in capital

    $ 1,313,802,041   

Accumulated net investment income/(loss)

      (3,631,059 ) 

Accumulated net realized gain from investments, foreign currency transactions and in-kind redemptions

      358,237,868   

Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies

      491,091,008   
    

 

 

  

Total Net Assets

    $ 2,159,499,858   
    

 

 

  

Investments in Unaffiliated Issuers, at Cost

    $ 1,606,203,852   
    

 

 

  

Investments in Affiliated Issuers, at Cost

    $ 66,461,009   
    

 

 

  

Foreign Currency, at Cost

    $ —   
    

 

 

  
Pricing of Shares   

Net Assets:

   

Class A

    $ 1,265,684,668   

Class C

      —   

Class K

      4,903,565   

Class Y

      888,911,625   

Shares of Beneficial Interest Outstanding with No Par Value:

   

Class A

      30,451,757   

Class C

      —   

Class K

      122,067   

Class Y

      20,952,333   

Net Asset Value Per Share:

   

Class A

    $ 41.56   

Class C

      —   

Class K

      40.17   

Class Y

      42.43   

Sales Charge Class A (Load)

      4.75 % 

Maximum Offering Price Per Class A Share

    $ 43.63   
          

 

38   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

     RS Value     RS Large Cap
Alpha		     RS Investors     RS Global Natural
Resources		  
         
  $ 1,337,099,398      $ 854,832,470      $ 249,570,202      $ 3,793,797,618   
    —        —        —        1,429,582,457   
 

 

 

    

 

 

    

 

 

    

 

 

  
    1,337,099,398        854,832,470        249,570,202        5,223,380,075   
    173,425        773        34,019        919   
    —        —        —        7   
    11,698,014        10,102,486        —        10,837,880   
    771,560        807,243        248,826        686,241   
    968,606        327,131        2,142,218        12,546,758   
    68,988        46,796        37,968        152,108   
    —        —        8,732        —   
 

 

 

    

 

 

    

 

 

    

 

 

  
    1,350,779,991        866,116,899        252,041,965        5,247,603,988   
 

 

 

    

 

 

    

 

 

    

 

 

  
         
    9,003,890        506,817        478,461        22,380,084   
    7,792,258        853,060        196,222        11,243,028   
    869,333        353,350        174,159        4,218,042   
    25,898        28,057        6,674        59,709   
    21,177        14,106        1,099        84,478   
    475,551        213,963        12,016        1,298,808   
 

 

 

    

 

 

    

 

 

    

 

 

  
    18,188,107        1,969,353        868,631        39,284,149   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ 1,332,591,884      $ 864,147,546      $ 251,173,334      $ 5,208,319,839   
 

 

 

    

 

 

    

 

 

    

 

 

  
         
  $ 888,790,469      $ 620,023,942      $ 225,559,927      $ 4,479,146,625   
    5,918,225        2,598,116        1,423,193        (5,588,103 ) 
 

 

136,978,822

  

     50,418,816        6,906,448        261,734,554   
 

 

300,904,368

  

     191,106,672        17,283,766        473,026,763   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ 1,332,591,884      $ 864,147,546      $ 251,173,334      $ 5,208,319,839   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ 1,036,195,030      $ 663,725,910      $ 232,286,486      $ 3,178,478,367   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ —      $ —      $ —      $ 1,571,879,142   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ —      $ —      $ —      $ 7   
 

 

 

    

 

 

    

 

 

    

 

 

  
         
         
  $ 619,314,487      $ 633,426,235      $ 89,809,298      $ 1,235,072,783   
    31,801,733        35,219,012        25,819,135        123,343,617   
    4,452,460        17,074,090        1,815,756        8,151,222   
    677,023,204        178,428,209        133,729,145        3,841,752,217   
         
    16,605,242        10,011,114        6,369,591        31,933,031   
    889,079        606,448        1,929,866        3,383,178   
    121,768        270,822        135,157        218,348   
    18,015,569        2,823,752        9,398,413        97,108,927   
         
  $ 37.30      $ 63.27      $ 14.10      $ 38.68   
    35.77        58.07        13.38        36.46   
    36.57        63.05        13.43        37.33   
    37.58        63.19        14.23        39.56   
    4.75 %      4.75 %      4.75 %      4.75 % 
  $ 39.16      $ 66.43      $ 14.80      $ 40.61   
                                 

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   39

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Operations

For the Six-Month Period Ended June 30, 2014 (unaudited)

    RS Partners  
Investment Income   

Dividends

    $ 10,993,487   

Dividends from affiliated issuers

      —   

Interest

      —   

Withholding taxes on foreign dividends

      (124,150 ) 
    

 

 

  

Total Investment Income

      10,869,337   
    

 

 

  
 
Expenses   

Investment advisory fees

      11,102,813   

Transfer agent fees

      1,997,239   

Distribution fees

      1,594,600   

Shareholder reports

      144,257   

Administrative service fees

      133,336   

Professional fees

      121,608   

Custodian fees

      109,992   

Trustees’ fees

      67,360   

Insurance expense

      39,221   

Registration fees

      12,745   

Other expenses

      26,425   
    

 

 

  

Total Expenses

      15,349,596   
 

Less: Fee waiver by adviser

      (877,503 ) 
    

 

 

  

Total Expenses, Net

      14,472,093   
    

 

 

  

Net Investment Income/(Loss)

      (3,602,756 ) 
    

 

 

  
 

Realized Gain/(Loss) and Change in
Unrealized Appreciation/Depreciation on Investments,
Foreign Currency Transactions and In-Kind Redemptions

   

Net realized gain from investments

      255,670,630   

Net realized gain from investments in affiliated issuers

      1,408,190   

Net realized gain/(loss) from foreign currency transactions

      (24,175 ) 

Net realized gain from in-kind redemptions

      38,277,220   

Net change in unrealized appreciation/depreciation on investments

      (198,119,965 ) 

Net change in unrealized appreciation/depreciation on investments
in affiliated issuers

      (16,878,058 ) 

Net change in unrealized appreciation/depreciation on translation of assets and liabilities in foreign currencies

      (117 ) 
    

 

 

  
 

Net Gain on Investments, Foreign Currency Transactions
and In-Kind Redemptions

      80,333,725   
    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $ 76,730,969   
    

 

 

  
          

 

40   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

     RS Value     RS Large Cap
Alpha		     RS Investors     RS Global Natural
Resources		  
         
  $ 13,567,840      $ 6,429,496      $ 2,511,305      $ 26,313,734   
    —        —        —        7,921,886   
    10,543        194        —        26   
    —        (55,592 )      (11,155 )      (1,586,394 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  
    13,578,383        6,374,098        2,500,150        32,649,252   
 

 

 

    

 

 

    

 

 

    

 

 

  
 
         
    5,509,252        2,085,932        874,937        24,479,687   
    1,230,848        435,798        53,095        2,580,392   
    928,414        987,808        151,220        2,157,749   
    87,905        49,950        6,367        295,626   
    77,206        49,398        7,233        280,671   
    76,860        52,967        23,222        235,168   
    60,365        45,443        15,595        355,970   
    38,457        25,062        3,438        143,481   
    34,009        13,885        1,077        48,655   
    20,824        16,321        22,249        34,152   
    14,337        8,851        1,811        54,840   
 

 

 

    

 

 

    

 

 

    

 

 

  
    8,078,477        3,771,415        1,160,244        30,666,391   
 
    (418,319 )      —        (85,048 )      (375,596 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  
    7,660,158        3,771,415        1,075,196        30,290,795   
 

 

 

    

 

 

    

 

 

    

 

 

  
    5,918,225        2,602,683        1,424,954        2,358,457   
 

 

 

    

 

 

    

 

 

    

 

 

  
 
         
    109,603,014        51,122,354        7,185,744        126,727,094   
    —        —        —        —   
    —        (1,902 )      2,461        (101,630 ) 
    —        —        —        —   
    (22,539,295 )      4,582,240        7,978,591        285,190,380   
   
 		     
—		  
  		     —        —        83,368,265   
   
 		     
—		  
  		     (98 )      3        (1,043 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  
 
   
 		     
87,063,719		  
  		     55,702,594        15,166,799        495,183,066   
 

 

 

    

 

 

    

 

 

    

 

 

  
  $ 92,981,944      $ 58,305,277      $ 16,591,753      $ 497,541,523   
 

 

 

    

 

 

    

 

 

    

 

 

  
                                 

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   41

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

   RS Partners  
 
     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  
    

 

  
Operations    

Net investment income/(loss)

   $ (3,602,756 )    $ (5,017,413 ) 

Net realized gain from investments, foreign currency transactions and in-kind redemptions

     295,331,865        308,912,788   

Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities in foreign currencies

     (214,998,140 )      398,954,686   
   

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

     76,730,969        702,850,061   
   

 

 

    

 

 

  
Distributions to Shareholders    

Net investment income

    

Class A

     —        —   

Class C

     —        —   

Class K

     —        —   

Class Y

     —        (806,086 ) 

Net realized gain on investments

    

Class A

     —        (153,254,449 ) 

Class C

     —        —   

Class K

     —        (590,584 ) 

Class Y

     —        (109,159,197 ) 
   

 

 

    

 

 

  

Total Distributions

     —        (263,810,316 ) 
   

 

 

    

 

 

  
Capital Share Transactions    

Proceeds from sales of shares

     177,776,223        464,351,284   

Reinvestment of distributions

     —        256,798,544   

Cost of shares redeemed

     (285,263,317 )      (610,085,790 ) 

In-kind redemptions

     (120,417,164 )      —   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

     (227,904,258 )      111,064,038   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets

     (151,173,289 )      550,103,783   
   

 

 

    

 

 

  
Net Assets    

Beginning of period

     2,310,673,147        1,760,569,364   
   

 

 

    

 

 

  

End of period

   $ 2,159,499,858      $ 2,310,673,147   
   

 

 

    

 

 

  

Distributions in Excess of Net Investment Income Included in Net Assets

   $ —      $ (28,303 ) 
   

 

 

    

 

 

  

Accumulated Undistributed Net Investment Income/(Loss) Included in Net Assets

   $ (3,631,059 )    $ —   
   

 

 

    

 

 

  
Other Information:    

Shares

    

Sold

     4,393,556        12,023,911   

Reinvested

     —        6,511,481   

Redeemed

     (7,097,081 )      (16,224,329 ) 

In-kind redemptions

     (2,954,297 )      —   
   

 

 

    

 

 

  

Net Increase/(Decrease)

     (5,657,822 )      2,311,063   
   

 

 

    

 

 

  
                 

 

42   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS Value

     RS Large Cap Alpha  
 
For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  

 

    

 

  
       
$ 5,918,225      $ (918,710 )    $ 2,602,683      $ 6,752,629   

 

109,603,014

  

     187,317,981        51,120,452        101,705,070   

 

(22,539,295

) 

     196,624,646        4,582,142        136,970,302   

 

 

    

 

 

    

 

 

    

 

 

  

 

92,981,944

  

     383,023,917        58,305,277        245,428,001   

 

 

    

 

 

    

 

 

    

 

 

  
       
       
  —        (1,053,473 )      —        (4,752,909 ) 
  —        —        —        (68,116 ) 
  —        —        —        (70,679 ) 
  —        (2,539,539 )      —        (1,857,804 ) 
       
  —        (15,480,455 )      —        (11,780,767 ) 
  —        (761,575 )      —        (709,927 ) 
  —        (97,799 )      —        (335,747 ) 
  —        (15,310,507 )      —        (3,474,882 ) 

 

 

    

 

 

    

 

 

    

 

 

  
  —        (35,243,348 )      —        (23,050,831 ) 

 

 

    

 

 

    

 

 

    

 

 

  
       
  91,884,884        301,163,964        29,620,222        81,874,599   
  —        34,084,571        —        22,203,055   
  (172,702,945 )      (445,489,560 )      (69,437,445 )      (143,726,504 ) 
  —        —        —        —   

 

 

    

 

 

    

 

 

    

 

 

  

 

(80,818,061

) 

     (110,241,025 )      (39,817,223 )      (39,648,850 ) 

 

 

    

 

 

    

 

 

    

 

 

  
  12,163,883        237,539,544        18,488,054        182,728,320   

 

 

    

 

 

    

 

 

    

 

 

  
       
  1,320,428,001        1,082,888,457        845,659,492        662,931,172   

 

 

    

 

 

    

 

 

    

 

 

  
$ 1,332,591,884      $ 1,320,428,001      $ 864,147,546      $ 845,659,492   

 

 

    

 

 

    

 

 

    

 

 

  

$

—

  

   $ —      $ —      $ (4,567 ) 

 

 

    

 

 

    

 

 

    

 

 

  

$

5,918,225

  

   $ —      $ 2,598,116      $ —   

 

 

    

 

 

    

 

 

    

 

 

  
       
       
  2,599,403        9,646,048        498,957        1,584,994   
  —        1,005,649        —        387,267   
  (4,869,129 )      (14,440,666 )      (1,162,532 )      (2,734,202 ) 
  —        —        —        —   

 

 

    

 

 

    

 

 

    

 

 

  
  (2,269,726 )      (3,788,969 )      (663,575 )      (761,941 ) 

 

 

    

 

 

    

 

 

    

 

 

  
                             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   43

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

  

RS Investors

  
 
    

For the

Six Months
Ended
6/30/14

    

For the

Year Ended
12/31/13

  
    

 

  
Operations    

Net investment income/(loss)

   $ 1,424,954      $ (57,808 ) 

Net realized gain from investments and foreign currency transactions

     7,188,205        4,893,251   

Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities in foreign currencies

     7,978,594        7,170,100   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

     16,591,753        12,005,543   
   

 

 

    

 

 

  
Distributions to Shareholders    

Net investment income

    

Class A

     —        (507 ) 

Class C

     —        (88 ) 

Class K

     —        (10 ) 

Class Y

     —        (55,843 ) 

Net realized gain on investments

    

Class A

     —        (159,171 ) 

Class C

     —        (27,593 ) 

Class K

     —        (3,059 ) 

Class Y

     —        (333,997 ) 
   

 

 

    

 

 

  

Total Distributions

     —        (580,268 ) 
   

 

 

    

 

 

  
Capital Share Transactions    

Proceeds from sales of shares

     143,572,703        99,663,148   

Reinvestment of distributions

     —        544,826   

Cost of shares redeemed

     (22,993,861 )      (12,994,813 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

     120,578,842        87,213,161   
   

 

 

    

 

 

  

Net Increase in Net Assets

     137,170,595        98,638,436   
   

 

 

    

 

 

  
Net Assets    

Beginning of period

     114,002,739        15,364,303   
   

 

 

    

 

 

  

End of period

   $ 251,173,334      $ 114,002,739   
   

 

 

    

 

 

  

Distributions in Excess of Net Investment Income Included in Net Assets

   $ —      $ (1,761 ) 
   

 

 

    

 

 

  

Accumulated Undistributed Net Investment Income/(Loss) Included in Net Assets

   $ 1,423,193      $ —   
   

 

 

    

 

 

  
Other Information:    

Shares

    

Sold

     10,817,693        8,125,153   

Reinvested

     —        42,997   

Redeemed

     (1,724,754 )      (1,145,196 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease)

     9,092,939        7,022,954   
   

 

 

    

 

 

  
                 

 

44   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

RS Global Natural Resources

  
 

For the

Six Months
Ended
6/30/14

    

For the

Year Ended
12/31/13

  

 

  
   
$ 2,358,457      $ 364,373   
 
 		     
126,625,464		  
  		     274,961,268   

 

368,557,602

  

     (310,673,217 ) 

 

 

    

 

 

  

 

497,541,523

  

     (35,347,576 ) 

 

 

    

 

 

  
   
   
  —        —   
  —        —   
  —        —   
  —        —   
   
  —        (45,921,954 ) 
  —        (5,022,226 ) 
  —        (284,620 ) 
  —        (120,136,747 ) 

 

 

    

 

 

  
  —        (171,365,547 ) 

 

 

    

 

 

  
   
  644,996,399        2,648,854,448   
  —        154,071,166   
  (721,718,478 )      (1,949,378,341 ) 

 

 

    

 

 

  

 

(76,722,079

) 

     853,547,273   

 

 

    

 

 

  
  420,819,444        646,834,150   

 

 

    

 

 

  
   
  4,787,500,395        4,140,666,245   

 

 

    

 

 

  
$ 5,208,319,839      $ 4,787,500,395   

 

 

    

 

 

  

$

—

  

   $ —   

 

 

    

 

 

  

$

(5,588,103

) 

   $ (7,946,560 ) 

 

 

    

 

 

  
   
   
  17,395,006        70,559,651   
  —        4,508,492   
  (19,660,103 )      (52,356,575 ) 

 

 

    

 

 

  
  (2,265,097 )      22,711,568   

 

 

    

 

 

  
             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   45

Table of Contents

FINANCIAL INFORMATION

 

The Financial Highlights table is intended to help you understand each Fund’s financial performance for the past six reporting periods. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in each Fund (assuming reinvestment of all distributions).

 

Financial Highlights

Six-Months-Ended Numbers are unaudited

         
    

 

 

 

 

    
    
Net Asset
Value,
Beginning
of Period

    

Net

Investment
Income/
(Loss)

     Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Partners Fund            

Class A

            

Six Months Ended 6/30/141

   $ 40.09      $ (0.10 )    $ 1.57      $ 1.47      $ —      $ —   

Year Ended 12/31/13

     31.93        (0.15 )      13.48        13.33        —        (5.17 ) 

Year Ended 12/31/12

     29.28        (0.09 )      5.74        5.65        —        (3.00 ) 

Year Ended 12/31/11

     33.09        (0.27 )      (2.28 )      (2.55 )      —        (1.26 ) 

Year Ended 12/31/10

     25.86        (0.33 )      7.56        7.23        —        —   

Year Ended 12/31/09

     18.00        (0.16 )      8.02        7.86        —        —   
 

Class K

            

Six Months Ended 6/30/141

   $ 38.82      $ (0.16 )    $ 1.51      $ 1.35      $ —      $ —   

Year Ended 12/31/13

     31.14        (0.18 )      13.03        12.85        —        (5.17 ) 

Year Ended 12/31/12

     28.75        (0.39 )      5.78        5.39        —        (3.00 ) 

Year Ended 12/31/11

     32.67        (0.51 )      (2.15 )      (2.66 )      —        (1.26 ) 

Year Ended 12/31/10

     25.66        (1.21 )      8.22        7.01        —        —   

Year Ended 12/31/09

     17.91        (0.22 )      7.97        7.75        —        —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 40.86      $ (0.03 )    $ 1.60      $ 1.57      $ —      $ —   

Year Ended 12/31/13

     32.38        (0.06 )      13.75        13.69        (0.04 )      (5.17 ) 

Year Ended 12/31/12

     29.58        0.02        5.78        5.80        —        (3.00 ) 

Year Ended 12/31/11

     33.31        (0.16 )      (2.31 )      (2.47 )      —        (1.26 ) 

Year Ended 12/31/10

     25.95        (0.21 )      7.57        7.36        —        —   

Year Ended 12/31/09

     17.99        (0.09 )      8.05        7.96        —        —   
                                                 

 

 

See notes to Financial Highlights on pages 54–55.

 

46   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income/
(Loss) to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 41.56        3.67%      $ 1,265,685        1.45%        1.53%        (0.46)%        (0.54)%        29%   
  (5.17)        40.09        42.15%        1,335,819        1.45%        1.51%        (0.39)%        (0.45)%        49%   
  (3.00)        31.93        19.39%        1,137,349        1.45%        1.48%        (0.21)%        (0.24)%        39%   
  (1.26)        29.28        (7.59)%        1,290,313        1.47%        1.47%        (0.77)%        (0.77)%        40%   
  —        33.09        27.96%        1,675,852        1.49%        1.50%        (1.07)%        (1.08)%        61%   
  —        25.86        43.67%        1,442,762        1.49%        1.56%        (0.72)%        (0.79)%        64%   
 
                 
$ —      $ 40.17        3.48%      $ 4,903        1.80%        1.87%        (0.80)%        (0.87)%        29%   
  (5.17)        38.82        41.68%        4,920        1.79%        1.85%        (0.73)%        (0.79)%        49%   
  (3.00)        31.14        18.84%        3,770        1.90%        1.93%        (0.65)%        (0.68)%        39%   
  (1.26)        28.75        (8.03)%        3,976        1.96%        1.96%        (1.25)%        (1.25)%        40%   
  —        32.67        27.32%        4,905        1.86%        1.87%        (1.44)%        (1.45)%        61%   
  —        25.66        43.27%        12,508        1.82%        1.89%        (1.05)%        (1.12)%        64%   
 
                 
$ —      $ 42.43        3.84%      $ 888,912        1.11%        1.18%        (0.14)%        (0.21)%        29%   
  (5.21)        40.86        42.68%        969,934        1.11%        1.17%        (0.04)%        (0.10)%        49%   
  (3.00)        32.38        19.70%        619,450        1.16%        1.19%        0.13%        0.10%        39%   
  (1.26)        29.58        (7.30)%        507,063        1.18%        1.18%        (0.47)%        (0.47)%        40%   
  —        33.31        28.36%        538,428        1.13%        1.14%        (0.71)%        (0.72)%        61%   
  —        25.95        44.25%        270,892        1.10%        1.17%        (0.31)%        (0.38)%        64%   
                                                                     

 

See notes to Financial Highlights on pages 54–55.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   47

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income/(Loss)

    

Net Realized
and
Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Value Fund            

Class A

            

Six Months Ended 6/30/141

   $ 34.76      $ 0.15      $ 2.39      $ 2.54      $ —      $ —   

Year Ended 12/31/13

     25.93        (0.07 )      9.82        9.75        (0.06 )      (0.86 ) 

Year Ended 12/31/12

     23.04        0.26        2.92        3.18        (0.29 )      —   

Year Ended 12/31/11

     25.91        (0.14 )      (2.73 )      (2.87 )      —        —   

Year Ended 12/31/10

     20.65        (0.13 )      5.39        5.26        —        —   

Year Ended 12/31/09

     14.99        —        5.70        5.70        (0.04 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 33.47      $ 0.01      $ 2.29      $ 2.30      $ —      $ —   

Year Ended 12/31/13

     25.13        (0.35 )      9.55        9.20        —        (0.86 ) 

Year Ended 12/31/12

     22.35        (0.04 )      2.94        2.90        (0.12 )      —   

Year Ended 12/31/11

     25.33        (0.27 )      (2.71 )      (2.98 )      —        —   

Year Ended 12/31/10

     20.33        (0.21 )      5.21        5.00        —        —   

Year Ended 12/31/09

     14.86        (0.06 )      5.57        5.51        (0.04 )      —   
 

Class K

            

Six Months Ended 6/30/141

   $ 34.15      $ 0.07      $ 2.35      $ 2.42      $ —      $ —   

Year Ended 12/31/13

     25.54        (0.31 )      9.78        9.47        —        (0.86 ) 

Year Ended 12/31/12

     22.73        0.21        2.83        3.04        (0.23 )      —   

Year Ended 12/31/11

     25.66        (0.16 )      (2.77 )      (2.93 )      —        —   

Year Ended 12/31/10

     20.53        (0.13 )      5.26        5.13        —        —   

Year Ended 12/31/09

     14.95        (0.06 )      5.68        5.62        (0.04 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 34.99      $ 0.19      $ 2.40      $ 2.59      $ —      $ —   

Year Ended 12/31/13

     26.09        0.02        9.88        9.90        (0.14 )      (0.86 ) 

Year Ended 12/31/12

     23.19        0.43        2.84        3.27        (0.37 )      —   

Year Ended 12/31/11

     26.01        (0.02 )      (2.80 )      (2.82 )      —        —   

Year Ended 12/31/10

     20.66        (0.05 )      5.40        5.35        —        —   

Year Ended 12/31/09

     14.93        0.08        5.69        5.77        (0.04 )      —   

 

See notes to Financial Highlights on pages 54–55.

 

48   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income/
(Loss) to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 37.30        7.31%      $ 619,315        1.29%        1.34%        0.83%        0.78%        29%   
  (0.92)        34.76        37.68%        642,364        1.28%        1.35%        (0.17)%        (0.24)%        48%   
  (0.29)        25.93        13.83%        584,056        1.28%        1.37%        0.94%        0.85%        58%   
  —        23.04        (11.08)%        805,042        1.28%        1.31%        (0.35)%        (0.38)%        40%   
  —        25.91        25.47%        1,484,732        1.28%        1.38%        (0.49)%        (0.59)%        51%   
  (0.04)        20.65        38.01%        1,641,551        1.41%        1.45%        (0.02)%        (0.06)%        63%   
 
                 
$ —      $ 35.77        6.87%      $ 31,802        2.04%        2.10%        0.04%        (0.02)%        29%   
  (0.86)        33.47        36.69%        30,534        2.03%        2.11%        (0.92)%        (1.00)%        48%   
  (0.12)        25.13        12.98%        25,402        2.03%        2.11%        0.28%        0.20%        58%   
  —        22.35        (11.76)%        27,851        2.03%        2.10%        (1.07)%        (1.14)%        40%   
  —        25.33        24.59%        31,447        2.03%        2.09%        (1.23)%        (1.29)%        51%   
  (0.04)        20.33        37.07%        19,890        2.10%        2.14%        (0.77)%        (0.81)%        63%   
 
                 
$ —      $ 36.57        7.09%      $ 4,452        1.68%        1.72%        0.40%        0.36%        29%   
  (0.86)        34.15        37.16%        3,948        1.68%        1.70%        (0.55)%        (0.57)%        48%   
  (0.23)        25.54        13.38%        4,116        1.68%        1.74%        0.71%        0.65%        58%   
  —        22.73        (11.42)%        3,184        1.68%        1.81%        (0.71)%        (0.84)%        40%   
  —        25.66        24.99%        3,298        1.68%        1.77%        (0.87)%        (0.96)%        51%   
  (0.04)        20.53        37.58%        1,940        1.77%        1.82%        (0.39)%        (0.44)%        63%   
 
                 
$ —      $ 37.58        7.40%      $ 677,023        1.04%        1.11%        1.03%        0.96%        29%   
  (1.00)        34.99        38.05%        643,582        1.03%        1.14%        0.08%        (0.03)%        48%   
  (0.37)        26.09        14.12%        469,314        1.03%        1.12%        1.23%        1.14%        58%   
  —        23.19        (10.84)%        613,636        1.03%        1.14%        (0.06)%        (0.17)%        40%   
  —        26.01        25.90%        566,518        0.95%        0.95%        (0.17)%        (0.17)%        51%   
  (0.04)        20.66        38.63%        109,121        0.99%        1.01%        (0.39)%        (0.37)%        63%   

See notes to Financial Highlights on pages 54–55.

 

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   49

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income/
(Loss)

    

Net Realized
and
Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		     Total
Distributions		  
RS Large Cap Alpha Fund              

Class A

              

Six Months Ended 6/30/141

   $ 59.06      $ 0.18 4    $ 4.03      $ 4.21      $ —      $ —      $ —   

Year Ended 12/31/13

     43.95        0.45 4      16.28        16.73        (0.47 )      (1.15 )      (1.62 ) 

Year Ended 12/31/12

     38.48        0.67 4      5.58        6.25        (0.78 )      —        (0.78 ) 

Year Ended 12/31/11

     42.51        0.24 4      (4.09 )      (3.85 )      (0.23 )      —        (0.23 ) 

Year Ended 12/31/10

     37.04        0.12 4      6.03        6.15        (0.68 )      —        (0.68 ) 

Year Ended 12/31/09

     29.70        0.36        7.02        7.38        (0.05 )      —        (0.05 ) 
 

Class C

              

Six Months Ended 6/30/141

   $ 54.43      $ (0.06 )4    $ 3.70      $ 3.64      $ —      $ —      $ —   

Year Ended 12/31/13

     40.66        0.02 4      15.01        15.03        (0.11 )      (1.15 )      (1.26 ) 

Year Ended 12/31/12

     35.63        0.30 4      5.17        5.47        (0.44 )      —        (0.44 ) 

Year Ended 12/31/11

     39.44        (0.08 )4      (3.78 )      (3.86 )      —        —        —   

Year Ended 12/31/10

     34.57        (0.15 )4      5.59        5.44        (0.57 )      —        (0.57 ) 

Year Ended 12/31/09

     27.93        0.18        6.50        6.68        (0.05 )      —        (0.05 ) 
 

Class K

              

Six Months Ended 6/30/141

   $ 58.97      $ 0.06 4    $ 4.02      $ 4.08      $ —      $ —      $ —   

Year Ended 12/31/13

     43.88        0.25 4      16.23        16.48        (0.24 )      (1.15 )      (1.39 ) 

Year Ended 12/31/12

     38.42        0.53 4      5.55        6.08        (0.62 )      —        (0.62 ) 

Year Ended 12/31/11

     42.35        0.06 4      (4.04 )      (3.98 )      —        —        —   

Year Ended 12/31/10

     36.94        (0.01 )4      5.99        5.98        (0.57 )      —        (0.57 ) 

Year Ended 12/31/09

     29.75        0.14        7.09        7.23        (0.05 )      —        (0.05 ) 
 

Class Y

              

Six Months Ended 6/30/141

   $ 58.92      $ 0.25 4    $ 4.02      $ 4.27      $ —      $ —      $ —   

Year Ended 12/31/13

     43.83        0.59 4      16.27        16.86        (0.62 )      (1.15 )      (1.77 ) 

Year Ended 12/31/12

     38.38        0.77 4      5.59        6.36        (0.91 )      —        (0.91 ) 

Year Ended 12/31/11

     42.46        0.38 4      (4.12 )      (3.74 )      (0.39 )      —        (0.39 ) 

Year Ended 12/31/10

     37.00        0.25 4      6.03        6.28        (0.82 )      —        (0.82 ) 

Year Ended 12/31/09

     29.62        0.31        7.11        7.42        (0.05 )      —        (0.05 ) 

 

See notes to Financial Highlights on pages 54–55.

 

50   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            

Increase

From
Regulatory
Settlements

     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses
to Average
Net Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income/
(Loss) to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 

$

—

  

   $ 63.27        7.13%      $ 633,427        0.91%        0.91%        0.62%        0.62%        19%   
  —        59.06        38.17%        618,893        0.92%        0.92%        0.86%        0.86%        48%   
  —        43.95        16.26%        491,082        0.98%        0.98%        1.59%        1.59%        51%   
  0.05        38.48        (8.92)%5        485,820        0.92%        0.92%        0.58%        0.58%        41%   
  —        42.51        16.63%        734,834        0.95%        0.96%        0.31%        0.30%        50%   
  0.01        37.04        24.89%5        698,280        0.93%        1.04%        0.98%        0.87%        145%   
 
                 

$

—

  

   $ 58.07        6.69%      $ 35,219        1.73%        1.73%        (0.21)%        (0.21)%        19%   
  —        54.43        37.06%        34,506        1.74%        1.74%        0.04%        0.04%        48%   
  —        40.66        15.37%        23,824        1.75%        1.75%        0.78%        0.78%        51%   
  0.05        35.63        (9.66)%5        27,323        1.69%        1.69%        (0.22)%        (0.22)%        41%   
  —        39.44        15.76%        48,829        1.70%        1.70%        (0.42)%        (0.42)%        50%   
  0.01        34.57        23.97%5        38,885        1.77%        1.77%        0.06%        0.06%        145%   
 
                 

$

—

  

   $ 63.05        6.92%      $ 17,074        1.32%        1.32%        0.20%        0.20%        19%   
  —        58.97        37.66%        16,785        1.31%        1.31%        0.48%        0.48%        48%   
  —        43.88        15.84%        13,911        1.33%        1.33%        1.26%        1.26%        51%   
  0.05        38.42        (9.28)%5        13,667        1.33%        1.33%        0.13%        0.13%        41%   
  —        42.35        16.21%        28,458        1.30%        1.33%        (0.02)%        (0.05)%        50%   
  0.01        36.94        24.35%5        22,179        1.28%        1.40%        0.52%        0.40%        145%   
 
                 

$

—

  

   $ 63.19        7.25%      $ 178,428        0.68%        0.68%        0.85%        0.85%        19%   
  —        58.92        38.58%        175,475        0.65%        0.65%        1.13%        1.13%        48%   
  —        43.83        16.58%        134,114        0.69%        0.69%        1.84%        1.84%        51%   
  0.05        38.38        (8.65)%5        144,642        0.63%        0.63%        0.98%        0.98%        41%   
  —        42.46        17.01%        22,250        0.63%        0.63%        0.65%        0.65%        50%   
  0.01        37.00        25.10%5        3,239        0.76%        0.76%        1.12%        1.12%        145%   

See notes to Financial Highlights on pages 54–55.

 

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   51

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

         
         
    
Net Asset
Value,
Beginning
of  Period		    

Net

Investment
Income/
(Loss)

     Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Investors Fund            
 

Class A

            

Six Months Ended 6/30/141

   $ 13.02      $ 0.09 4    $ 0.99      $ 1.08      $ —      $ —   

Year Ended 12/31/13

     8.96        (0.02 )4      4.14        4.12        — 6      (0.06 ) 

Year Ended 12/31/12

     7.48        0.12 4      1.48        1.60        (0.12 )      —   

Year Ended 12/31/11

     7.88        (0.01 )4      (0.39 )      (0.40 )      —        —   

Year Ended 12/31/10

     6.31        (0.01 )4      1.58        1.57        —        —   

Year Ended 12/31/09

     4.17        (0.08 )      2.22        2.14        —        —   
 

Class C

            

Six Months Ended 6/30/141

   $ 12.40      $ 0.02 4    $ 0.96      $ 0.98      $ —      $ —   

Year Ended 12/31/13

     8.60        (0.11 )4      3.97        3.86        — 6      (0.06 ) 

Year Ended 12/31/12

     7.16        0.05 4      1.42        1.47        (0.03 )      —   

Year Ended 12/31/11

     7.60        (0.06 )4      (0.38 )      (0.44 )      —        —   

Year Ended 12/31/10

     6.09        (0.03 )4      1.54        1.51        —        —   

Year Ended 12/31/09

     4.21        (0.22 )      2.10        1.88        —        —   
 

Class K

            

Six Months Ended 6/30/141

   $ 12.43      $ 0.06 4    $ 0.94      $ 1.00      $ —      $ —   

Year Ended 12/31/13

     8.59        (0.07 )4      3.97        3.90        — 6      (0.06 ) 

Year Ended 12/31/12

     7.16        0.09 4      1.42        1.51        (0.08 )      —   

Year Ended 12/31/11

     7.57        (0.03 )4      (0.38 )      (0.41 )      —        —   

Year Ended 12/31/10

     6.07        (0.01 )4      1.51        1.50        —        —   

Year Ended 12/31/09

     4.06        (0.11 )      2.12        2.01        —        —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 13.12      $ 0.13 4    $ 0.98      $ 1.11      $ —      $ —   

Year Ended 12/31/13

     9.01        0.01 4      4.17        4.18        (0.01 )      (0.06 ) 

Year Ended 12/31/12

     7.52        0.11 4      1.53        1.64        (0.15 )      —   

Year Ended 12/31/11

     7.92        — 4,6      (0.40 )      (0.40 )      —        —   

Year Ended 12/31/10

     6.35        (0.01 )4      1.58        1.57        —        —   

Year Ended 12/31/09

     4.18        (0.14 )      2.31        2.17        —        —   

 

See notes to Financial Highlights on pages 54–55.

 

52   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Loss to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Loss to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
 
                 
$ —      $ 14.10        8.29%      $ 89,809        1.31%        1.44%        1.35%        1.22%        43%   
  (0.06)        13.02        46.04%        35,159        1.30%        1.89%        (0.23)%        (0.82)%        128%   
  (0.12)        8.96        21.46%        12,183        1.30%        2.28%        1.42%        0.44%        97%   
  —        7.48        (5.08)%        11,715        1.22%        2.07%        (0.11)%        (0.96)%        55%   
  —        7.88        24.88%        13,004        1.05%        2.18%        (0.18)%        (1.31)%        62%   
  —        6.31        51.32%        10,696        2.22%        2.34%        (1.44)%        (1.56)%        84%   
 
                 
$ —      $ 13.38        7.90%      $ 25,819        2.06%        2.19%        0.34%        0.21%        43%   
  (0.06)        12.40        44.94%        6,473        2.05%        2.66%        (0.99)%        (1.59)%        128%   
  (0.03)        8.60        20.59%        588        2.05%        3.31%        0.62%        (0.64)%        97%   
  —        7.16        (5.79)%        642        1.87%        2.99%        (0.75)%        (1.87)%        55%   
  —        7.60        24.79%        548        1.34%        3.57%        (0.43)%        (2.66)%        62%   
  —        6.09        44.66%        139        4.57%        5.15%        (3.83)%        (4.41)%        84%   
 
                 
$ —      $ 13.43        8.05%      $ 1,816        1.81%        1.97%        0.96%        0.80%        43%   
  (0.06)        12.43        45.46%        628        1.70%        2.56%        (0.66)%        (1.51)%        128%   
  (0.08)        8.59        21.04%        211        1.70%        3.22%        1.17%        (0.35)%        97%   
  —        7.16        (5.42)%        151        1.52%        2.65%        (0.40)%        (1.53)%        55%   
  —        7.57        24.71%        133        1.05%        2.83%        (0.16)%        (1.94)%        62%   
  —        6.07        49.51%        97        3.46%        3.90%        (2.70)%        (3.14)%        84%   
 
                 
$ —      $ 14.23        8.46%      $ 133,729        1.05%        1.12%        1.99%        1.92%        43%   
  (0.07)        13.12        46.45%        71,743        1.05%        1.44%        0.04%        (0.34)%        128%   
  (0.15)        9.01        21.86%        2,382        1.05%        1.91%        1.38%        0.52%        97%   
  —        7.52        (5.05)%        2,954        1.05%        1.72%        0.05%        (0.62)%        55%   
  —        7.92        24.72%        3,778        1.05%        1.80%        (0.17)%        (0.92)%        62%   
  —        6.35        51.91%        2,519        1.94%        2.04%        (1.16)%        (1.26)%        84%   

See notes to Financial Highlights on pages 54–55.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   53

Table of Contents

FINANCIAL INFORMATION

 

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                
         
    
    
Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income/(Loss)

     Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Global Natural Resources Fund             

Class A

            

Six Months Ended 6/30/141

   $ 35.02      $ (0.02 )4    $ 3.68      $ 3.66      $ —      $ —   

Year Ended 12/31/13

     36.60        (0.07 )4      (0.20 )      (0.27 )      —        (1.31 ) 

Year Ended 12/31/12

     34.60        (0.10 )4      2.21        2.11        —        (0.11 ) 

Year Ended 12/31/11

     37.58        (0.15 )4      (2.60 )      (2.75 )      —        (0.23 ) 

Year Ended 12/31/10

     29.94        (0.14 )4      7.78        7.64        —        —   

Year Ended 12/31/09

     20.05        (0.04 )      9.93        9.89        —        —   

Class C

            

Six Months Ended 6/30/141

   $ 33.14      $ (0.16 )4    $ 3.48      $ 3.32      $ —      $ —   

Year Ended 12/31/13

     34.98        (0.34 )4      (0.19 )      (0.53 )      —        (1.31 ) 

Year Ended 12/31/12

     33.30        (0.33 )4      2.12        1.79        —        (0.11 ) 

Year Ended 12/31/11

     36.45        (0.40 )4      (2.52 )      (2.92 )      —        (0.23 ) 

Year Ended 12/31/10

     29.26        (0.38 )4      7.57        7.19        —        —   

Year Ended 12/31/09

     19.75        0.06        9.45        9.51        —        —   

Class K

            

Six Months Ended 6/30/141

   $ 33.86      $ (0.09 )4    $ 3.56      $ 3.47      $ —      $ —   

Year Ended 12/31/13

     35.57        (0.18 )4      (0.22 )      (0.40 )      —        (1.31 ) 

Year Ended 12/31/12

     33.74        (0.22 )4      2.16        1.94        —        (0.11 ) 

Year Ended 12/31/11

     36.81        (0.30 )4      (2.54 )      (2.84 )      —        (0.23 ) 

Year Ended 12/31/10

     29.46        (0.28 )4      7.63        7.35        —        —   

Year Ended 12/31/09

     19.84        (0.05 )      9.67        9.62        —        —   

Class Y

            

Six Months Ended 6/30/141

   $ 35.76      $ 0.044      $ 3.76      $ 3.80      $ —      $ —   

Year Ended 12/31/13

     37.23        0.064        (0.22 )      (0.16 )      —        (1.31 ) 

Year Ended 12/31/12

     35.10        0.044        2.25        2.29        (0.05 )      (0.11 ) 

Year Ended 12/31/11

     38.00        (0.01 )4      (2.66 )      (2.67 )      —        (0.23 ) 

Year Ended 12/31/10

     30.17        (0.02 )4      7.85        7.83        —        —   

Year Ended 12/31/09

     20.14        (0.05 )      10.08        10.03        —        —   

 

Distributions reflect actual per-share amounts distributed for the period.

 

1 

Ratios for periods less than one year have been annualized, except for total return and portfolio turnover rate.

 

2 

Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total return.

 

3 

Net Ratio of Expenses to Average Net Assets and Net Ratio of Net Investment Income/(Loss) to Average Net Assets include the effect of fee waivers and expense limitations and exclude the effect of custody credits, if applicable.

 

54   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income/
(Loss) to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ —      $ 38.68        10.45%      $ 1,235,073        1.46%        1.48%        (0.13)%        (0.15)%        12%   
  (1.31)        35.02        (0.60)%        1,254,213        1.43%        1.46%        (0.18)%        (0.21)%        39%   
  (0.11)        36.60        6.10%        1,561,862        1.45%        1.52%        (0.27)%        (0.34)%        36%   
  (0.23)        34.60        (7.31)%        1,397,688        1.45%        1.48%        (0.41)%        (0.44)%        25%   
  —        37.58        25.52%        1,341,020        1.45%        1.47%        (0.44)%        (0.46)%        27%   
  —        29.94        49.33%        998,909        1.46%        1.50%        (0.10)%        (0.14)%        34%   
                 
$ —      $ 36.46        10.02%      $ 123,344        2.24%        2.25%        (0.91)%        (0.92)%        12%   
  (1.31)        33.14        (1.37)%        128,948        2.21%        2.24%        (0.95)%        (0.98)%        39%   
  (0.11)        34.98        5.38%        147,154        2.14%        2.21%        (0.96)%        (1.03)%        36%   
  (0.23)        33.30        (8.01)%        105,206        2.18%        2.21%        (1.11)%        (1.14)%        25%   
  —        36.45        24.57%        57,883        2.23%        2.25%        (1.23)%        (1.25)%        27%   
  —        29.26        48.15%        13,467        2.27%        2.29%        (0.99)%        (1.01)%        34%   
                 
$ —      $ 37.33        10.25%      $ 8,151        1.83%        1.84%        (0.49)%        (0.50)%        12%   
  (1.31)        33.86        (0.98)%        7,596        1.79%        1.82%        (0.51)%        (0.54)%        39%   
  (0.11)        35.57        5.75%        8,892        1.80%        1.87%        (0.64)%        (0.71)%        36%   
  (0.23)        33.74        (7.71)%        5,439        1.87%        1.90%        (0.83)%        (0.86)%        25%   
  —        36.81        24.95%        5,542        1.90%        1.92%        (0.89)%        (0.91)%        27%   
  —        29.46        48.49%        2,685        2.02%        2.05%        (0.70)%        (0.73)%        34%   
                 
$ —      $ 39.56        10.63%      $ 3,841,752        1.13%        1.14%        0.21%        0.20%        12%   
  (1.31)        35.76        (0.29)%        3,396,743        1.12%        1.15%        0.14%        0.11%        39%   
  (0.16)        37.23        6.52%        2,422,758        1.06%        1.13%        0.12%        0.05%        36%   
  (0.23)        35.10        (7.02)%        1,581,690        1.12%        1.15%        (0.03)%        (0.06)%        25%   
  —        38.00        25.95%        613,662        1.11%        1.13%        (0.08)%        (0.10)%        27%   
  —        30.17        49.80%        130,968        1.10%        1.12%        0.19%        0.17%        34%   
4 

Calculated based on the average shares outstanding during the period.

 

5 

Without the effect of the increase from the regulatory settlements, the total returns would have been for RS Large Cap Alpha Fund for 2011 (9.05)%, (9.78)%, (9.42)% and (8.79)%; for 2009 24.86%, 23.93%, 24.32% and 25.10% for Class A, Class C, Class K and Class Y, respectively.

 

6 

Rounds to $0.00 per share.

 

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Notes to Financial Statements

June 30, 2014 (unaudited)

RS Investment Trust (the “Trust”), a Massachusetts business trust organized on May 11, 1987, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. These financial statements relate to five series offered by the Trust: RS Partners Fund, RS Value Fund, RS Large Cap Alpha Fund, RS Investors Fund and RS Global Natural Resources Fund (each a “Fund,” collectively the “Funds”). All of the Funds are diversified funds, other than RS Investors Fund, which is a non-diversified fund. The financial statements for the other remaining series of the Trust are presented in separate reports.

RS Partners Fund offers Class A, K and Y shares. RS Value Fund, RS Large Cap Alpha Fund, RS Investors Fund and RS Global Natural Resources Fund offer Class A, C, K and Y shares. The various classes differ principally in their respective sales charges, transfer agent expenses, and other expenses. In general, all classes of shares have identical rights to earnings, assets and voting privileges, except for certain differences, including class-specific expenses and voting rights with respect to matters affecting fewer than all classes or in which the interests of one class differ from the interests of any other class.

The Trust has an unlimited number of authorized shares of beneficial interest with no par value. Shares are bought and sold at closing net asset value (“NAV”) less any applicable sales charge.

Note 1 Significant Accounting Policies

The following policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

a. Investment Valuations Marketable securities are valued at the last reported sale price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the mean between the closing bid and ask prices. Securities traded on the NASDAQ Stock Market, LLC (“NASDAQ”) are generally valued at the NASDAQ official closing price, which may not be the last sale price. If the NASDAQ official closing price is not available for a security, that security is generally valued using the last reported sale price, or, if no sales are reported, at the mean between the closing bid and ask prices. Short-term investments that will mature in 60 days or less are valued at amortized cost, which approximates market value. Repurchase agreements are carried at cost, which approximates market value (see Note 5d). Foreign securities are valued in the currencies of the markets in which they trade and then converted to U.S. dollars using the prevailing exchange rates at the close of the New York Stock Exchange (“NYSE”).

 

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Securities for which market quotations are not readily available or for which market quotations may be considered unreliable are valued at their fair values as determined in accordance with guidelines and procedures adopted by the Trust’s Board of Trustees.

Securities whose values have been materially affected by events occurring before the Funds’ valuation time but after the close of the securities’ principal exchange or market may be fair valued in accordance with guidelines and procedures adopted by the Board of Trustees. In addition, if there has been a movement in the U.S. markets that exceeds a specified threshold, the values of a Fund’s investments in foreign securities are generally determined by a pricing service using pricing models designed to estimate likely changes in the values of those securities.

In accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 820 (“ASC Topic 820”), fair value is defined as the price that the Funds would receive upon selling an investment in an “arm’s length” transaction to a willing buyer in the principal or most advantageous market for the investment. ASC Topic 820 established a hierarchy for classification of fair value measurements for disclosure purposes. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy of inputs is summarized in the three broad levels listed below.

 

Ÿ  

Level 1 — unadjusted quoted prices in active markets for identical investments

 

Ÿ  

Level 2 — inputs other than unadjusted quoted prices that are observable either directly or indirectly (including adjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)

 

Ÿ  

Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A security’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Trust. The Trust considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, and provided by independent sources that are actively involved in the relevant market. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an investment’s assigned level within the hierarchy.

The FASB requires reporting entities to make disclosures about purchases, sales, issuances and settlements of Level 3 securities on a gross basis. For the six months ended June 30, 2014, the Funds had no securities classified as Level 3.

The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the reporting period. Transfers between Levels 1 and 2 related to certain

 

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exchange-traded foreign securities whose prices may have been affected by events occurring after the close of trading on the exchange and, as a result, whose values were determined by a pricing service using pricing models in accordance with methods approved by the Funds’ Board of Trustees. For the six months ended June 30, 2014, there were no transfers between Level 1, Level 2 and Level 3.

In determining a security’s placement within the hierarchy, the Trust separates the Funds’ investment portfolios into two categories: investments and derivatives (e.g., futures).

Investments Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include certain U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, state, municipal and provincial obligations, and certain foreign equity securities, including securities whose prices may have been affected by events occurring after the close of trading on their principal exchange or market and, as a result, whose values are determined by a pricing service as described above, or securities whose values are otherwise determined using fair valuation methods approved by the Funds’ Board of Trustees.

Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently or not at all. Level 3 investments include, among others, private placement securities. When observable prices are not available for these securities, the Trust uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the Trust in estimating the value of Level 3 investments include, for example, the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations, and other transactions across the capital structure. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Trust in the absence of market information. Assumptions used by the Trust due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Derivatives Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. Certain derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within Level 2.

b. Taxes The Funds intend to continue complying with the requirements of the Internal Revenue Code to qualify as regulated investment companies and to distribute substantially all net investment income and realized net capital gains, if any, to shareholders. Therefore, the Funds do not expect to be subject to income tax, and no provision for such tax has been made.

 

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From time to time, however, a Fund may choose to pay an excise tax if the cost of making the required distribution exceeds the amount of the excise tax.

As of June 30, 2014, the Trust has reviewed the tax positions for open periods, as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements. The Trust is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statement of Operations. For the six months ended June 30, 2014, the Funds did not incur any such interest or penalties. The Funds are not subject to examination by U.S. federal tax authorities for tax years before 2010 and by state authorities for tax years before 2009.

c. Securities Transactions Securities transactions are accounted for on the date securities are purchased or sold (trade date). Realized gains or losses on securities transactions are determined on the basis of specific identification.

d. Foreign Currency Translation The accounting records of the Funds are maintained in U.S. dollars. Investment securities and all other assets and liabilities of the Funds denominated in a foreign currency are generally translated into U.S. dollars at the exchange rates quoted at the close of the NYSE on each business day. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates in effect on the dates of the respective transactions. The Funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

e. Investment Income Dividend income is generally recorded on the ex-dividend date. Interest income, which includes amortization/accretion of premium/discount, is accrued and recorded daily.

In calculating net asset value per share for each class, investment income, realized and unrealized gains and losses, and expenses other than class-specific expenses are allocated daily to each class of shares based upon the proportion of net assets attributable to each class at the beginning of the day.

f. Expenses Many expenses of the Trust can be directly attributed to a specific Fund. Expenses that cannot be directly attributed to a specific Fund are generally apportioned among all the series in the Trust, based on relative net assets.

g. Distributions to Shareholders Each Fund intends to declare and distribute substantially all net investment income, if any, at least once a year. Distributions of net realized capital gains, if any, are declared and paid at least once a year. Distributions to shareholders are recorded on the ex-dividend date.

 

 

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h. Capital Accounts Due to the timing of dividend distributions and the differences in accounting for income and realized gains/(losses) for financial statement purposes versus federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains/(losses) were recorded by the Funds.

Note 2 Transactions with Affiliates

a. Advisory Fee and Expense Limitation Under the terms of the advisory agreement, which is reviewed and approved annually by the Board of Trustees, each Fund pays an investment advisory fee to RS Investment Management Co. LLC (“RS Investments”). Guardian Investor Services LLC (“GIS”), a subsidiary of The Guardian Life Insurance Company of America, holds a majority interest in RS Investments. RS Investments receives an investment advisory fee based on the average daily net assets of the Funds, at the following annual rates:

 

Fund   

Investment Advisory

Fee Percentage

  

RS Partners Fund

      1.00%   

RS Value Fund

      0.85%   

RS Large Cap Alpha Fund

      0.50%   

RS Investors Fund

      1.00%   

RS Global Natural Resources Fund

      1.00%   

On June 1, 2014, SailingStone Capital Partners LLC (“SailingStone”) began serving as sub-adviser to RS Global Natural Resources Fund, and in that capacity is responsible for the day-to-day portfolio management of the Fund subject to the oversight of the Board of Trustees of the Trust and RS Investments. SailingStone was recently organized by individuals who were, through May 31, 2014, members of the Fund’s portfolio management team at RS Investments responsible for the day-to-day management of the Fund. RS Investments pays sub-advisory fees to SailingStone out of the investment advisory fees RS Investments receives from the Fund.

Expense limitations have been imposed pursuant to a written agreement between RS Investments and the Trust in effect from May 1, 2014, through April 30, 2015, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) to the following rates:

 

Fund   Expense Limitation  
     Class A     Class C     Class K     Class Y  

RS Partners Fund

     1.45%        N/A        1.81%        1.12%   

RS Value Fund

     1.30%        2.07%        1.69%        1.06%   

RS Investors Fund

     1.33%        2.07%        1.95%        1.05%   

RS Global Natural Resources Fund

     1.48%        2.28%        1.86%        1.15%   

 

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The expense limitations in effect for RS Value Fund and RS Investors Fund from January 1, 2014, through April 30, 2014, were at the following rates:

 

Fund        
Expense Limitation		  
      Class A      Class C      Class K      Class Y  

RS Value Fund

      1.28%         2.03%         1.68%         1.03%   

RS Investors Fund

      1.30%         2.05%         1.70%         1.05%   

Expense limitations were imposed pursuant to a written agreement between RS Investments and the Trust in effect from January 1, 2014, through April 30, 2014, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) for Class A or Y shares to the rates shown in the table below and to limit the total annual fund operating expenses of each of the other classes of the Fund so that each of those classes benefits from a level of fee waiver and/or expense reimbursement (as expressed in basis points) that is the same as the level of fee waiver and/or expense reimbursement for Class A or Y shares during the period.

 

Fund   

Expense

Limitation

  

RS Partners Fund, Class A

      1.45%   

RS Large Cap Alpha Fund, Class A

      0.99%   

RS Global Natural Resources Fund, Class Y

      1.12%   

RS Investments and GIS do not intend to recoup any reimbursed expenses or waived advisory fees from a prior year under expense limitations then in effect for a Fund.

b. Compensation of Trustees and Officers Trustees and officers of the Trust who are interested persons, as defined in the 1940 Act, of RS Investments receive no compensation from the Funds for acting as such. Trustees of the Trust who are not interested persons of RS Investments receive compensation and reimbursement of expenses from the Trust.

c. Distribution Fees RS Funds Distributor LLC (“RSFD”), a wholly owned subsidiary of RS Investments, serves as the principal underwriter for shares of the Funds. The Funds have entered into an agreement with RSFD for distribution services with respect to their shares and have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, whose continuance is reviewed annually by the Trust’s Board of Trustees. Under the plan, RSFD is compensated for services in such capacity, including its expenses in connection with the promotion and distribution of shares of each Fund. Prior to June 1, 2014, GIS served as the principal underwriter for shares of the Funds. For the six months ended June 30, 2014, RSFD and GIS received distribution fees as follows:

 

Fund           Annual Rate     

Distribution Fees

Received by RSFD

     

Distribution Fees

Received by GIS

  

RS Partners Fund

   Class A        0.25%         $258,431         $1,320,649   
    Class K        0.65%         2,581         12,939   
    Class Y        0.00%         —         —   

 

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Fund           Annual Rate     

Distribution Fees

Received by RSFD

     

Distribution Fees

Received by GIS

  

RS Value Fund

   Class A        0.25%         $126,235         $637,990   
    Class C        1.00%         25,782         125,380   
    Class K        0.65%         2,343         10,684   
    Class Y        0.00%         —         —   

RS Large Cap Alpha Fund

   Class A        0.25%         $129,464         $633,446   
  Class C        1.00%         29,054         142,820   
    Class K        0.65%         9,022         44,002   
    Class Y        0.00%         —         —   

RS Investors Fund

   Class A        0.25%         $17,523         $57,502   
    Class C        1.00%         19,418         53,514   
    Class K        0.65%         909         2,354   
    Class Y        0.00%         —         —   

RS Global Natural Resources Fund

   Class A        0.25%         $252,772         $1,259,514   
  Class C        1.00%         101,652         518,683   
    Class K        0.65%         4,297         20,831   
    Class Y        0.00%         —         —   

RS Investments may perform certain services and incur certain expenses with respect to the promotion of the Funds’ shares and the servicing of shareholder accounts, which expenses are allocable to RSFD. RS Investments compensates RSFD for its services in connection with the promotion of Fund shares and reimburses RSFD for its expenses, including payments made by RSFD to third parties in respect of the promotion of Fund shares in excess of amounts received by RSFD under the distribution plan. In addition to payments under the distribution plan, the Funds reimburse RSFD for payments RSFD makes to financial intermediaries that provide certain administrative, recordkeeping, and account maintenance services. The amount of the reimbursement is calculated in a manner reviewed by the Board of Trustees periodically. Such amounts are included in the Statement of Operations under the caption “Transfer agent fees.”

Park Avenue Securities LLC (“PAS”), a wholly owned subsidiary of The Guardian Insurance & Annuity Company, Inc. (“GIAC”) and an affiliate of GIS, distributes the Funds’ shares as a retail broker-dealer. For the six months ended June 30, 2014, PAS informed the Trust it received $885,200 directly or indirectly from RSFD and GIS as continuing compensation for its services relating to its distribution of shares of all series in the Trust.

For the six months ended June 30, 2014, aggregate front-end sales charges for the sale of Class A shares paid to RSFD and GIS were as follows:

 

Fund   

Sales Charges

Received by RSFD

     

Sales Charges

Received by GIS

  

RS Partners Fund

    $ 295       $ 3,793   

RS Value Fund

      1,062         8,030   

RS Large Cap Alpha Fund

      1,908         12,621   

RS Investors Fund

      6,486         26,670   

RS Global Natural Resources Fund

      398         6,370   

 

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RSFD and GIS are entitled to retain any contingent deferred sales load (“CDSL”) imposed on certain share redemptions. For the six months ended June 30, 2014, RSFD and GIS received CDSL charges as follows:

 

Fund   

CDSL Received

by RSFD

     

CDSL Received

by GIS

  

RS Partners Fund

    $     —       $ 1   

RS Value Fund

      —         1,307   

RS Large Cap Alpha Fund

      —         1,896   

RS Investors Fund

      —         31,574   

RS Global Natural Resources Fund

      —         18,174   

d. Affiliated Issuers If a Fund owns 5% or more of the outstanding voting shares of an issuer, the Fund’s investment represents an investment in an affiliated person as defined by the 1940 Act. A summary of the Funds with transactions in the securities of affiliated issuers for the six months ended June 30, 2014, is listed below:

 

Fund   Issuer   Number of
Shares
Held at
Beginning of
Period		     Gross
Additions		     Gross
Reductions		     Number of
Shares
Held at
End of
Period		     Income     Value at
End of
Period		  

RS Partners Fund

   eHealth, Inc.     588,585        473,287        58,432        1,003,440      $ —      $ 38,100,617   
    FTD Cos., Inc.     983,583        407,058        83,800        1,306,841        —        41,544,475   
    Integrated Device
Technology, Inc.		     7,779,713        —        6,837,576        942,137        —        *   
                                                $ 79,645,092   

RS Global Natural Resources Fund

   Compass
Minerals
International, Inc.		     1,788,565        —        —        1,788,565      $ 2,146,278      $ 171,237,213   
    HudBay
Minerals, Inc.		     9,888,981        —        —        9,888,981        75,512        91,868,633   
    Iluka Resources
Ltd.		     23,032,815        2,349,648        —        25,382,463        822,963        194,586,549   
    Mineral
Resources Ltd.		     14,185,372        2,374,448        —        16,559,820        3,846,435        149,748,585   
    Ophir Energy
PLC		     29,593,197        6,964,088        —        36,557,285        —        137,828,779   
    Painted Pony
Petroleum Ltd.		     5,889,790        —        —        5,889,790        —        75,343,830   
    Rosetta
Resources, Inc.		     3,259,984        440,907        —        3,700,891        —        202,993,871   
    Salamander
Energy PLC		     23,989,659        —        —        23,989,659        —        57,478,257   
    Sociedad
Quimica y Minera
de Chile S.A.,
ADR		     9,878,268        10,700        —        9,888,968        1,030,698        289,845,652   
    Taseko Mines
Ltd.		     23,460,435        —        —        23,460,435        —        58,651,088   
                                                $ 1,429,582,457   
* Issuer was not an affiliated issuer at end of period.

 

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Note 3 Federal Income Taxes

a. Distributions to Shareholders The tax character of distributions paid to shareholders during the year ended December 31, 2013, which is the most recently completed tax year, was as follows:

 

Fund    Ordinary Income      Long-Term
Capital Gains		  

RS Partners Fund

    $ 100,232,158       $ 163,578,158   

RS Value Fund

      3,593,012         31,650,336   

RS Large Cap Alpha Fund

      6,749,508         16,301,323   

RS Investors Fund

      56,448         523,820   

RS Global Natural Resources Fund

      44,273,138         127,092,409   

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences, and differing characterizations of distributions made by the Funds.

Permanent book and tax basis differences will result in reclassifications to paid-in capital, undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions. Undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions may include temporary book and tax differences, which will reverse in a subsequent period.

As of December 31, 2013, the Funds made the following reclassifications of permanent book and tax basis differences:

 

Fund   

Paid-in

Capital

      Undistributed
Net Investment
Income/(Loss)		      Accumulated
Net Realized
Gain/(Loss)		  

RS Partners Fund

    $ (39,069 )     $ 5,852,886       $ (5,813,817 ) 

RS Value Fund

      (4,732,061 )       4,461,912         270,149   

RS Large Cap Alpha Fund

      —         (7,688 )       7,688   

RS Investors Fund

      (113,717 )       111,476         2,241   

RS Global Natural Resources Fund

      —         (1,010,050 )       1,010,050   

The tax basis of distributable earnings as of December 31, 2013, was as follows:

 

Fund  

Undistributed

Ordinary
Income

    

Undistributed

Long-Term
Capital Gains

  

RS Partners Fund

   $ 24,173,140      $ 38,991,486   

RS Value Fund

     —        27,375,871   

RS Large Cap Alpha Fund

     —        6,809,226   

RS Investors Fund

     —        197,442   

RS Global Natural Resources Fund

     6,166,094        147,540,728   

 

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During any particular year, net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Funds if not distributed and, therefore, are normally distributed to shareholders annually.

During the year ended December 31, 2013, the Funds utilized capital loss carryovers as follows:

 

Fund    Amount  

RS Value Fund

    $ 128,237,521   

RS Large Cap Alpha Fund

      79,304,409   

RS Investors Fund

      4,359,019   

See the chart below for capital loss carryovers available to the Funds at December 31, 2013.

 

     -  Expiring  -         
Fund    2016      Total  

RS Large Cap Alpha Fund

    $ 6,563,778       $ 6,563,778   

In determining their taxable income, current tax law permits the Funds to elect to treat all or a portion of any net capital or currency loss realized after October 31 as occurring on the first day of the following fiscal year. For the year ended December 31, 2013, the Funds elected to defer net capital and currency losses as follows:

 

Fund  

Deferred Net

Capital Losses

  

RS Partners Fund

   $ 28,303   

RS Large Cap Alpha Fund

     4,248   

RS Investors Fund

     1,761   

b. Tax Basis of Investments The cost of investments (excluding foreign currency related transactions) for federal income tax purposes at June 30, 2014, for each Fund is listed in the chart below. The net unrealized appreciation/(depreciation) on investments, which consists of gross unrealized appreciation and depreciation, is also disclosed in the chart below:

 

Fund   Cost of
Investments		     Net Unrealized
Appreciation on
Investments		     Gross
Unrealized
Appreciation		     Gross
Unrealized
Depreciation		  

RS Partners Fund

   $ 1,672,923,464      $ 490,831,924      $ 518,937,171      $ (28,105,247 ) 

RS Value Fund

     1,038,229,661        298,869,737        313,733,449        (14,863,712 ) 

RS Large Cap Alpha Fund

     663,852,105        190,980,365        198,648,233        (7,667,868 ) 

RS Investors Fund

     233,208,777        16,361,425        18,896,139        (2,534,714 ) 

RS Global Natural Resources Fund

     4,779,362,695        444,017,380        818,597,226        (374,579,846 ) 

 

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Note 4 Capital Shares

a. Transactions The Funds have authorized an unlimited number of shares of beneficial interest with no par value. Transactions, including conversions and exchanges, in capital shares for the Funds were as follows:

 

RS Partners Fund  
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class A             

Shares sold

     1,902,713       $ 76,042,514         4,920,082       $ 186,781,456   

Shares reinvested

     —         —         3,849,057         150,652,098   

Shares redeemed

     (4,767,674 )       (190,514,482 )       (11,075,633 )       (412,851,322 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (2,864,961 )     $ (114,471,968 )       (2,306,494 )     $ (75,417,768 ) 
                                    
Class K             

Shares sold

     7,836       $ 302,455         22,764       $ 830,010   

Shares reinvested

     —         —         15,587         590,584   

Shares redeemed

     (12,508 )       (481,074 )       (32,710 )       (1,220,553 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase/(decrease)

     (4,672 )     $ (178,619 )       5,641       $ 200,041   
                                    
Class Y             

Shares sold

     2,483,007       $ 101,431,254         7,081,065       $ 276,739,818   

Shares reinvested

     —         —         2,646,837         105,555,862   

Shares redeemed

     (5,271,196 )1       (214,684,925 )1       (5,115,986 )       (196,013,915 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase/(decrease)

     (2,788,189 )     $ (113,253,671 )       4,611,916       $ 186,281,765   
                                    
1 

Includes in-kind redemptions of 2,954,297 shares amounting to $120,417,164 (see Note 7).

 

RS Value Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     550,156       $ 19,373,550           2,708,920       $ 80,650,680   

Shares reinvested

     —         —           472,755         15,983,853   

Shares redeemed

     (2,422,780 )       (85,466,943 )         (7,230,385 )       (222,546,043 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (1,872,624 )     $ (66,093,393 )         (4,048,710 )     $ (125,911,510 ) 
                                      
Class C               

Shares sold

     69,492       $ 2,354,357           95,107       $ 2,867,668   

Shares reinvested

     —         —           21,267         692,433   

Shares redeemed

     (92,812 )       (3,120,090 )         (214,874 )       (6,371,390 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (23,320 )     $ (765,733 )         (98,500 )     $ (2,811,289 ) 
                                      

 

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RS Value Fund — continued  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class K               

Shares sold

     17,937       $ 615,187           33,353       $ 1,017,390   

Shares reinvested

     —         —           2,944         97,800   

Shares redeemed

     (11,781 )       (404,798 )         (81,856 )       (2,509,849 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     6,156       $ 210,389           (45,559 )     $ (1,394,659 ) 
                                      
Class Y               

Shares sold

     1,961,818       $ 69,541,790           6,808,668       $ 216,628,226   

Shares reinvested

     —         —           508,683         17,310,485   

Shares redeemed

     (2,341,756 )       (83,711,114 )         (6,913,551 )       (214,062,278 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (379,938 )     $ (14,169,324 )         403,800       $ 19,876,433   
                                      

 

RS Large Cap Alpha Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     258,465       $ 15,425,810           770,222       $ 39,863,641   

Shares reinvested

     —         —           279,779         16,087,204   

Shares redeemed

     (726,089 )       (43,522,421 )         (1,746,067 )       (91,479,380 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (467,624 )     $ (28,096,611 )         (696,066 )     $ (35,528,535 ) 
                                      
Class C               

Shares sold

     42,670       $ 2,359,392           118,542       $ 5,844,907   

Shares reinvested

     —         —           11,716         621,052   

Shares redeemed

     (70,152 )       (3,895,683 )         (82,261 )       (3,960,342 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (27,482 )     $ (1,536,291 )         47,997       $ 2,505,617   
                                      
Class K               

Shares sold

     27,253       $ 1,630,050           90,115       $ 4,631,831   

Shares reinvested

     —         —           7,078         406,427   

Shares redeemed

     (41,064 )       (2,446,691 )         (129,586 )       (6,911,987 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (13,811 )     $ (816,641 )         (32,393 )     $ (1,873,729 ) 
                                      
Class Y               

Shares sold

     170,569       $ 10,204,970           606,115       $ 31,534,220   

Shares reinvested

     —         —           88,694         5,088,372   

Shares redeemed

     (325,227 )       (19,572,650 )         (776,288 )       (41,374,795 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (154,658 )     $ (9,367,680 )         (81,479 )     $ (4,752,203 ) 
                                      

 

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Transactions in Capital Shares (continued)

 

 

RS Investors Fund          
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class A             

Shares sold

     4,624,150       $ 61,443,951         2,138,974       $ 25,576,182   

Shares reinvested

     —         —         10,883         137,449   

Shares redeemed

     (954,988 )       (12,644,839 )       (809,323 )       (9,290,055 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase

     3,669,162       $ 48,799,112         1,340,534       $ 16,423,576   
                                    
Class C             

Shares sold

     1,435,112       $ 18,208,367         476,299       $ 5,415,512   

Shares reinvested

     —         —         1,806         21,734   

Shares redeemed

     (27,307 )       (343,159 )       (24,383 )       (253,293 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase

     1,407,805       $ 17,865,208         453,722       $ 5,183,953   
                                    
Class K             

Shares sold

     86,282       $ 1,104,264         36,992       $ 393,733   

Shares reinvested

     —         —         255         3,068   

Shares redeemed

     (1,593 )       (20,497 )       (11,335 )       (122,380 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase

     84,689       $ 1,083,767         25,912       $ 274,421   
                                    
Class Y             

Shares sold

     4,672,149       $ 62,816,121         5,472,888       $ 68,277,721   

Shares reinvested

     —         —         30,053         382,575   

Shares redeemed

     (740,866 )       (9,985,366 )       (300,155 )       (3,329,085 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase

     3,931,283       $ 52,830,755         5,202,786       $ 65,331,211   
                                    

 

RS Global Natural Resources Fund          
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class A             

Shares sold

     2,287,363       $ 83,677,346         11,551,050       $ 430,041,427   

Shares reinvested

     —         —         1,286,043         43,391,080   

Shares redeemed

     (6,166,784 )       (223,090,936 )       (19,693,027 )       (731,678,879 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (3,879,421 )     $ (139,413,590 )       (6,855,934 )     $ (258,246,372 ) 
                                    
Class C             

Shares sold

     121,936       $ 4,201,996         927,207       $ 33,078,644   

Shares reinvested

     —         —         126,597         4,042,266   

Shares redeemed

     (629,834 )       (21,698,571 )       (1,369,068 )       (47,815,297 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (507,898 )     $ (17,496,575 )       (315,264 )     $ (10,694,387 ) 
                                    

 

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RS Global Natural Resources Fund — continued          
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class K             

Shares sold

     25,454       $ 899,874         76,086       $ 2,744,077   

Shares reinvested

     —         —         7,800         254,440   

Shares redeemed

     (31,425 )       (1,101,520 )       (109,577 )       (3,976,650 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (5,971 )     $ (201,646 )       (25,691 )     $ (978,133 ) 
                                    
Class Y             

Shares sold

     14,960,253       $ 556,217,183         58,005,308       $ 2,182,990,300   

Shares reinvested

     —         —         3,088,052         106,383,380   

Shares redeemed

     (12,832,060 )       (475,827,451 )       (31,184,903 )       (1,165,907,515 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net increase

     2,128,193       $ 80,389,732         29,908,457       $ 1,123,466,165   
                                    

b. Shareholder Concentration As of June 30, 2014, the number of shareholders and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders) who owned of record 5% or more of the net assets of a Fund is summarized in the following table:

 

Fund    Number of
Shareholders		      Percentage of
Net Assets		  

RS Partners Fund

      3         53.56%   

RS Value Fund

      4         65.20%   

RS Large Cap Alpha Fund

      2         24.32%   

RS Investors Fund

      6         64.85%   

RS Global Natural Resources Fund

      3         46.21%   

Note 5 Investments

a. Investment Purchases and Sales The cost of investments purchased and the proceeds from investments sold (excluding short-term investments) for the six months ended June 30, 2014, were as follows:

 

Fund   Cost of Investments
Purchased		     Proceeds from Investments
Sold		  

RS Partners Fund

   $ 600,736,456      $ 671,679,411 * 

RS Value Fund

     368,670,615        389,010,316   

RS Large Cap Alpha Fund

     154,910,203        201,440,707   

RS Investors Fund

     187,826,716        71,254,242   

RS Global Natural Resources Fund

     570,405,939        632,048,965   
* Excludes in-kind redemptions (see Note 7).

b. Foreign Securities Foreign securities investments involve special risks and considerations not typically associated with U.S. investments. These risks include, but are not limited to, currency risk; adverse political, regulatory, social, and economic

 

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developments; and less reliable information about issuers. Moreover, securities of some foreign companies may be less liquid and their prices more volatile than those of comparable U.S. companies.

c. Industry or Sector Concentration In their normal course of business, some of the Funds may invest a significant portion of their assets in companies within a limited number of industries or sectors. As a result, these Funds may be subject to a greater risk of loss than that of a fund invested in a wider spectrum of industries or sectors because the stocks of many or all of the companies in the industry, group of industries, sector, or sectors may decline in value due to developments adversely affecting the industry, group of industries, sector, or sectors.

d. Repurchase Agreements The collateral for repurchase agreements is either cash or fully negotiable U.S. government securities (including U.S. government agency securities). Repurchase agreements are fully collateralized (including the interest accrued thereon) and such collateral is marked to market daily while the agreements remain in force. If the value of the collateral falls below the repurchase price plus accrued interest, the Fund will typically require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults, the Fund maintains the right to sell the collateral (although it may be prevented or delayed from doing so in certain circumstances) and may be required to claim any resulting loss against the seller.

e. Restricted and Illiquid Securities A restricted security cannot be resold to the general public without prior registration under the Securities Act of 1933 (except pursuant to an applicable exemption). The values of these securities may be highly volatile. If the security is subsequently registered and resold, the issuer would typically bear the expense of all registrations at no cost to a Fund. Restricted and illiquid securities are valued according to the guidelines and procedures adopted by the Trust’s Board of Trustees and are noted, if any, in the Funds’ Schedule of Investments.

Note 6 Temporary Borrowings

The Funds, with other funds managed by RS Investments, share in a $400 million committed revolving credit facility from State Street Bank and Trust Company for temporary borrowing purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is calculated based on market rates at the time of borrowing. For the six months ended June 30, 2014, the Funds did not borrow from the facility.

Note 7 In-Kind Redemptions

In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the Funds recognize a gain on an in-kind redemption to the extent the values of the distributed securities exceed their costs; the Funds recognize a loss if cost exceeds value. Gains and losses realized on in-kind redemptions are not recognized for tax purposes, and are reclassified from accumulated realized gain (loss) to paid-in capital. During the six months ended June 30, 2014, RS Partners Fund realized $38,277,220 of net capital gain attributable to an in-kind redemption.

 

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Note 8 Review for Subsequent Events

Management has evaluated subsequent events through the issuance of the Funds’ financial statements and determined that no material events have occurred that require disclosure.

Note 9 Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote.

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

Supplemental Information (unaudited)

Approval of the Investment Advisory Agreements for RS Investment Trust

The investment advisory agreements (the “Investment Advisory Agreements”) between the RS Funds (the “Funds”) and RS Investment Management Co. LLC (“RS Investments”) are subject to annual approval by (i) the vote of the Trustees or of a majority of the outstanding voting securities (as defined in the Investment Company Act of 1940) of each affected Fund, and (ii) the vote of a majority of the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940) of RS Investment Trust or RS Variable Products Trust (together, the “Trusts”) or RS Investments (the “Independent Trustees”). Each Investment Advisory Agreement is terminable with respect to a Fund by RS Investments, the applicable Trust, or a vote of a majority of the outstanding voting securities of the affected Fund, without penalty, on 60 days’ written notice and will terminate automatically in the event of its assignment.

The Investment Advisory Agreements also provide that RS Investments may, at its own expense, delegate certain of its responsibilities under the Investment Advisory Agreements to sub-advisers for the Funds, who would be required to furnish an investment program and make investment decisions for the Funds. The sub-advisory agreements (the “Sub-Advisory Agreements, and collectively with the Investment Advisory Agreements, the “Advisory Agreements”) between RS Investments and Guardian Investor Services LLC (“GIS”), the sub-adviser with respect to various Funds that employ certain fixed income strategies, are also subject to annual approval by (i) the vote of the Trustees or of a majority of the outstanding voting securities (as defined in the Investment Company Act of 1940) of each affected Fund, and (ii) the vote of a majority of the Independent Trustees.

The Trustees meet over the course of the year with investment advisory personnel from RS Investments and GIS, and regularly review detailed information regarding the investment program and performance of each Fund.

The Board of Trustees of the Trusts, including all the Independent Trustees, met in person on August 1, 2013, to consider the continuation of the Advisory Agreements for all of the Funds, for the one-year period commencing August 31, 2013. Before the Board meeting on August 1, the Independent Trustees met among themselves and with the Independent Trustees’ counsel several times to prepare for the meeting. The Trustees considered and reviewed the information they requested from RS Investments and confirmed their view that no further requests for information from RS Investments were necessary at that time and that RS Investments appeared to have provided complete responses to all of the Trustees’ information requests and questions in connection with their consideration of the annual continuation of the Advisory Agreements.

The Trustees were assisted in their review by the Chief Compliance Officer of the Trusts, who previously reviewed a preliminary copy of all of the information presented to the Trustees and, with the Independent Trustees’ counsel’s assistance, prepared a written report on the key factors for the Trustees to consider in determining whether to

 

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continue the Advisory Agreements. The Chief Compliance Officer concluded in the written report that the information that RS Investments had provided to the Trustees provided a reasonable basis for the Trustees to conclude that the advisory fees proposed in connection with the continuation of the Advisory Agreements were reasonable with respect to each Fund. The Independent Trustees took that report into consideration, along with the other information presented for their review, but did not regard it as conclusive or determinative.

The Trustees considered the nature, extent, and quality of the services provided and expected to be provided by RS Investments and GIS. In this regard, the Trustees took into account the experience of the Funds’ portfolio management teams and of RS Investments’ senior management, and the time and attention devoted by each to the Funds. The Trustees considered RS Investments’ significant responsibilities in monitoring the services provided by GIS and by other service providers such as the custodian, transfer agent, fund accountant and others.

The Trustees also considered that RS Investments had explained its view that the fees charged by RS Investments to the Funds reflect a number of factors, such as, for example, the generally high quality of the investment management teams at RS Investments, the research-intensive styles employed for various strategies, the high levels of compensation that are needed to retain the firm’s investment professionals and that are needed to fall within the ranges for compensation in this industry, and the alternative employment opportunities available to many of those professionals. The Trustees also noted that RS Investments had reported that, in the case of the Funds sub-advised by GIS, RS Investments had traditionally paid the majority, in most cases the large majority, of the advisory fees it received to GIS, but that an amendment to the Sub-Advisory Agreements, effective as of January 1, 2013, changed the allocation of the advisory fees for such sub-advised Funds to increase the portion of the advisory fees retained by RS Investments with respect to those Funds. The Trustees approved that re-allocation as requested by RS Investments based on its explanation that the new allocation would better reflect the current and expected respective responsibilities of RS Investments and GIS, as well as the commitment of The Guardian Life Insurance Company of America, RS Investments’ ultimate parent company, to supporting RS Investments as it grows and enhances its services.

The Trustees were assisted in their review by an independent consultant retained by the Independent Trustees. The Trustees reviewed information compiled by the independent consultant from the independent Morningstar organization showing a comparison of RS Investments’ advisory fee rate (which includes the sub-advisory fee paid to GIS for the sub-advised Funds) for each Fund compared to peer mutual funds having similar objectives and strategies, and within the same broad range of asset sizes. The Trustees were assisted in developing what they considered generally to be a representative group of comparable mutual funds, and in analyzing the resulting comparisons, by an analysis prepared by the independent consultant. The independent consultant’s report provided data showing RS Investments’ advisory fees generally to be within the range of comparable mutual funds, with a few exceptions analyzed in more depth by the Independent Trustees. The Trustees noted that certain of the Funds with advisory fees

 

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at the higher end of the range were already subject to expense limitations on those Funds’ total expenses, and they planned to continue to monitor the relevant Funds. For those few Funds at the highest end of the range, the Independent Trustees considered supplemental information presented by RS Investments that management considered relevant in demonstrating the appropriateness of the advisory fees for those Funds, such as favorable performance, total expense levels, and whether the Fund is closed to new investors.

The Trustees reviewed information from the independent consultant’s report showing total expenses for the Funds in comparison to peer funds. The Trustees considered the total expense ratios of the Funds and the various components of those expenses. For the RS Floating Rate Fund, which was identified as having an advisory fee at the highest end of the range, the Trustees noted that RS Investments had agreed to competitive limitations on the Fund’s total expenses that resulted in total expenses below the peer group median, even with the recent increase to the maximum expense ratio. For the RS Global Natural Resources Fund, which was identified as having an advisory fee and total expenses within the most expensive quartile of its peer group, the Trustees noted that there would remain in place an expense limitation and that the Fund has enjoyed a strong long and near term relative performance record. For the RS Partners Fund, which was identified as having an advisory fee and total expenses within the most expensive quartile of its peer group, the Trustees noted that the Fund’s expense limitation was increased further (lowering the Fund’s net expenses) on May 1, 2013, and it has enjoyed a strong long and near term relative performance record. The Independent Trustees also noted that the RS Partners Fund is closed to new investors. The Trustees noted that the RS Small Cap Growth Fund has an advisory fee within the most expensive quartile of its peer group, but its expense limitation places it at the median of its peer group for total expenses based on the level stated in the prospectus.

The Trustees considered information provided by RS Investments as to the fees charged by RS Investments to clients other than the Funds, including institutional separate accounts. The information provided by RS Investments shows that those accounts generally pay a lower overall fee rate but that, in a number of cases, such an account pays fees at the same rate as the comparable Fund on assets up to a specified level, and then at lower rates on additional assets; in some cases, an account’s fee rate will be lower at all levels than that of the comparable Fund. The Trustees considered that RS Investments had reported that administrative, compliance, reporting, and other legal burdens of providing investment advice to mutual funds exceed those required to provide advisory services to non-mutual fund clients such as institutional accounts for retirement or pension plans. The Trustees also considered that RS Investments had explained that there are substantially greater legal and other responsibilities and risks to RS Investments in managing public mutual funds than in managing institutional private accounts, and that the services and resources required of RS Investments are substantially less than in the case of the Funds because many of the administrative and compliance responsibilities related to the management function are retained by the institutional account and its other service providers.

The Trustees reviewed performance information for each Fund for various periods. Their review included an examination of comparisons of the performance of the Funds to

 

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relevant securities indexes and various peer groups of mutual funds prepared by the independent consultant and based on data from Morningstar with respect to various periods, and relative rankings of the Funds compared to peer funds during various periods. The Trustees noted that in the reports presented to them no Fund appeared to have substantially lagged all peer mutual funds and indexes for all relevant periods, but that several Funds had experienced relatively low performance for multiple periods, including: (1) RS Emerging Markets Fund, which was ranked in the lowest quartile for the one and three-year periods and below the median for the five-year period, but above the median for the ten-year period; (2) RS High Income Municipal Bond Fund, which was ranked in the lowest quartile for the one and three-year periods, (3) RS Tax-Exempt Fund, which was ranked in the lowest quartile for the one and three-year periods, but near the top quartile for the five and ten-year periods; and (4) RS Value Fund, which was ranked in the lowest quartile for the three and five-year periods, but in the top quartile for the one-year and ten-year periods. The Trustees agreed to monitor closely the performance of these Funds, taking into consideration the following additional considerations: The RS Emerging Markets Fund had recently undergone a change in portfolio management responsibility, which would be followed closely by the Trustees. The Independent Trustees accepted management’s explanation that the RS High Income Municipal Bond Fund and the RS Tax-Exempt Fund have experienced underperformance largely related to the Funds’ generally higher credit quality and shorter duration portfolios than those of many of their peers, which management believes is prudent to avoid excessive risk. The Trustees noted that the RS Value Fund’s performance has improved substantially over the past year, reflecting, in part, management’s substantial efforts in that regard, with the one-year and year-to-date relative performance well into the top quartile. RS Investments has assured the Independent Trustees that performance of all the Funds, particularly those showing periods of below median results, remains a high priority for RS Investments, and that good success in improving the performance of certain Funds had been shown over the past year.

The Trustees reviewed financial information provided to them by RS Investments, showing the substantial costs to RS Investments of providing services to the Funds. The Trustees reviewed the information presented by RS Investments describing the basis for the allocation of RS Investments’ expenses in the cost analysis for the Funds and did not object to management’s view that the allocation methodology and resulting allocations were reasonable. The Trustees also considered RS Investments’ detailed profitability analysis with respect to each Fund for the year ended December 31, 2012, and for the three months ended March 31, 2013. RS Investments stated that it continued to invest in the business to maintain high quality services for the Funds. The Trustees also took into account management’s view that a comparable or higher profit margin relating to RS Investments’ services to the Funds compared to institutional separate accounts appeared justified by the higher risk and responsibilities associated with the mutual fund business. The Trustees also considered the information that had been provided to them regarding the profitability of GIS, as the sub-adviser to certain Funds. The Independent Trustees additionally reviewed pro forma profitability information intended to show the effect on profitability of the new allocation of advisory fees between RS Investments and GIS.

 

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The Trustees discussed with RS Investments whether economies of scale would likely be realized as the Funds grow and whether a reduction in the advisory fees paid by the Funds by means of breakpoints would be appropriate. The Independent Trustees noted information presented by the independent consultant that a majority of mutual funds within the applicable peer groups do not necessarily have advisory fee breakpoints, and that the popularity of breakpoints for mutual funds has declined somewhat because some groups recognize that an appropriately set limitation on overall expenses can be equally effective in sharing economies of scale and maintaining a competitive position for a mutual fund. The Independent Trustees also noted management’s discussion of the substantial resources devoted over the past year to additional portfolio management professionals and analysts, such as for the RS Emerging Markets Fund, as well as senior operational and legal professionals. For larger Funds such as the RS Global Natural Resources Fund, the RS Floating Rate Fund and the RS Partners Fund, the Trustees and RS Investments agreed that an appropriately structured total expense limitation can provide an acceptable sharing of economies of scale to substitute for a breakpoint in the advisory fee.

The Trustees considered the research and other similar services RS Investments receives from many of the broker-dealers with which it places the Funds’ (as well as other RS Investments clients’) portfolio transactions and from third parties with which these broker-dealers have arrangements. The Trustees considered the benefit to RS Investments and its affiliates from such services including that (1) the services are of value to RS Investments and its affiliates in advising RS Investments’ clients (including the Funds) and (2) RS Investments might otherwise be required to purchase some of these services for cash. On the basis of the information provided to the Trustees at the meeting and throughout the year, the Trustees concluded that the benefit to RS Investments of these “soft dollar” relationships did not appear unreasonable and that the Funds appeared to benefit from them.

The Trustees reviewed the detailed information provided to them regarding GIS, as the sub-adviser to various Funds, including information as to capabilities and experience of portfolio management personnel, certain financial and profitability information, information as to trading practices, and general information as to investment strategies and resources, compliance activities and resources, contingency planning, and various other areas. On the basis of that information, information provided to them throughout the year, and their periodic meetings with representatives of GIS, the Trustees determined that the services provided by GIS as the sub-adviser to certain Funds were generally acceptable.

The Trustees considered generally the nature and quality of the administrative services provided to the Funds by RS Investments and by GIS, including, among other things, their performance during the course of the preceding year and the responsiveness of senior management to the Trustees’ requests. The Trustees were generally satisfied with the administrative services currently being provided by the two firms.

After reviewing and considering all of the information described above, including the Chief Compliance Officer’s written report, the Trustees voted unanimously to approve the continuation of the various Advisory Agreements, including the advisory fees proposed in connection with that continuation, for the one-year period commencing August 31, 2013.

 

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Approval of the Sub-Advisory Agreement for RS Global Natural Resources Fund

The Board of Trustees of RS Investment Trust (the “Trust”), including all of the Independent Trustees, met in person on February 13, 2014 to consider the approval of the sub-advisory agreement (the “Sub-Advisory Agreement”) in respect of RS Global Natural Resources Fund (the “Fund”) for a two-year period commencing on its date of execution. Before the meeting, the Independent Trustees met among themselves and with independent counsel to prepare for the meeting. In determining to approve the Sub-Advisory Agreement, the Trustees considered and reviewed all of the information provided to them in connection with this matter by RS Investment Management Co. LLC (“RS Investments”) and SailingStone Capital Partners LLC (“SailingStone”) prior to and at their February 13, 2014 meeting. In all of their deliberations, the Independent Trustees were advised by independent counsel for the Independent Trustees.

The Trustees met with representatives of RS Investments and SailingStone, who discussed with the Trustees the capabilities of SailingStone. Those representatives also discussed with the Trustees their expectations as to the management and operations of the Fund by members of the “Global Natural Resources Team” (the “GNR Team”), which had been managing the day-to-day investment activities of the Fund, (i) as employees of RS Investments prior to the separation of the investment management business of the GNR Team from the investment management business of RS Investments (the “Separation”) and (ii) the continuing role of the GNR Team in the management of the Fund as employees and managers of SailingStone after the Separation. In this regard, the Trustees recognized the potential benefits to RS Investments of the continuous portfolio management services of the GNR Team before and SailingStone after the Separation.

The Trustees considered the terms of the Sub-Advisory Agreement. The Trustees also took into consideration other arrangements agreed to by RS Investments and SailingStone with respect to SailingStone’s services as sub-adviser to RS Investments.

The Trustees received and considered various data and information regarding the expected nature, extent, and quality of services to be provided to the Fund by SailingStone under the Sub-Advisory Agreement. This information included, among other things, information about the background and experience of the portfolio managers and other investment professionals at SailingStone, as well as the investment strategies that SailingStone would utilize as sub-adviser to the Fund. Specifically, the Trustees were advised that the investment strategies that SailingStone would utilize were expected to be the same as those that were being utilized by the GNR Team in providing advisory services to the Fund.

Because SailingStone would be led by the same portfolio managers and other investment professionals that were leading the GNR Team under RS Investments, the Trustees took into consideration information prepared by the independent Morningstar organization with respect to various periods, and the relative ranking of the Fund compared to various peer groups of mutual funds during those periods, which was originally provided to the Trustees in connection with the annual approval of the continuation of the investment advisory agreements between RS Investments and shareholders of all series of the Trust, including the Fund. The review included

 

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comparisons of the performance of the Fund to relevant securities indices. The Trustees also noted that the Fund had enjoyed long-term favorable performance. The Trustees determined that because the investment professionals that were leading the GNR Team would continue to manage the Fund pursuant to the Sub-Advisory Agreement and no change was anticipated in the investment strategy or program of the Fund, the sub-advisory services to be provided by SailingStone, and the Fund’s prospects for satisfactory performance under the Sub-Advisory Agreement, appeared reasonable.

The Trustees considered the nature and extent of SailingStone’s compliance program, the qualifications of the firm’s compliance and financial personnel, and the legal and compliance resources otherwise available to the firm. They also considered information as to back-office and operational resources currently available to SailingStone and as to steps SailingStone was taking to ensure the availability to it of the full complement of resources necessary for SailingStone’s performance of its obligations to the Fund as of the date SailingStone would commence service as the Fund’s sub-adviser, and discussions with SailingStone regarding its internal control environment. The Trustees determined that the back-office and operational resources expected to be fully in place by the date SailingStone would commence service as the Fund’s sub-adviser appeared adequate to permit SailingStone to meet its obligations to the Fund, and determined in addition to meet with representatives of RS Investments and SailingStone before such date to obtain final confirmation of the nature and extent of those resources.

The Trustees also considered the sub-advisory fee rates payable by RS Investments to SailingStone for the sub-advisory services to be provided to the Fund. The Trustees considered that the investment advisory fee rate payable by the Fund to RS Investments would not change, and that the sub-advisory fees payable to SailingStone would be paid by RS Investments out of the investment advisory fees received by RS Investments for the Fund.

The Trustees noted that the sub-advisory fee rates payable by RS Investments under the Sub-Advisory Agreement contain breakpoints that reduce the sub-advisory fee rate on assets above specified levels. The Trustees considered statements by RS Investments and SailingStone that those sub-advisory fee breakpoints were proposed not in respect of economies of scale that the Fund might achieve, but rather to achieve an overall level of compensation for RS Investments and SailingStone at anticipated asset levels, using a fee structure that is consistent with other fee arrangements implemented by SailingStone.

The Trustees also considered preliminary estimates provided by SailingStone regarding its profitability and profit margins generally, but noted that the estimates were of limited utility in light of the fact that the firm was only just commencing operations. On the basis of these factors and considerations, the Trustees determined that the fee to be paid under the Sub-Advisory Agreement appeared reasonable and appropriate.

The Trustees also considered the resources RS Investments intended to devote to the oversight of SailingStone’s services to the Fund and steps RS Investments intended to take in the oversight process in light of SailingStone’s status as a recently organized investment advisory company, and concluded that these resources appeared to be appropriate.

 

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On the basis of these factors, the Board of Trustees of the Trust voted unanimously, including the unanimous vote of the Independent Trustees, to approve the Sub-Advisory Agreement, including the sub-advisory fees set forth in the Sub-Advisory Agreement, for a two-year period from its date of execution.

Meeting of Shareholders

A special meeting of the shareholders of RS Investment Trust (the “Trust”) was held on May 23, 2014. At the meeting, the shareholders of the Trust elected Judson Bergman, Dennis M. Bushe, Margherita L. DiManni, Kenneth R. Fitzsimmons, Anne M. Goggin, Lawrence E. Harris, Christopher C. Melvin, Jr., Gloria S. Nelund, and Matthew H. Scanlan as trustees of the Trust.

The shareholders of RS Global Natural Resources Fund approved a sub-advisory agreement between RS Investment Management Co. LLC and SailingStone Capital Partners LLC (“SailingStone”), pursuant to which SailingStone would serve as sub-adviser to RS Global Natural Resources Fund.

Proposal 1: Election of Trustees

 

Nominee   Votes For     Votes Against/
Withheld		     Abstentions  

Judson Bergman

     550,801,232.965        9,280,122.985        0.000   

Dennis M. Bushe

     550,597,774.166        9,483,581.784        0.000   

Margherita L. DiManni

     550,787,370.938        9,293,985.012        0.000   

Kenneth R. Fitzsimmons

     550,425,719.024        9,655,636.926        0.000   

Anne M. Goggin

     550,954,630.766        9,126,725.184        0.000   

Lawrence E. Harris

     550,636,278.980        9,445,076.970        0.000   

Christopher C. Melvin, Jr.

     550,776,574.483        9,304,781.467        0.000   

Gloria S. Nelund

     550,067,457.888        9,013,898.888        0.000   

Matthew H. Scanlan

     550,564,139.160        9,517,216.790        0.000   

Proposal 2: Approval of sub-advisory agreement (RS Global Natural Resources Fund)

 

Votes For     Votes Against/
Withheld		     Broker
Non-Votes		     Abstentions  
  62,608,193.113        535,294.646        25,433,033.901        804,126.203   

Portfolio Holdings and Proxy Voting Procedures

The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the

 

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operation of the Public Reference Room may be obtained by calling 800-SEC-0330. This information is also available, without charge, upon request, by calling toll-free 800-766-3863.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) without charge, upon request, by calling toll-free 800-766-3863; (ii) on RS Investments’ website at http://www.rsinvestments.com; and (iii) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

 

The Statement of Additional Information includes information about the Trust’s Trustees and Officers and is available, without charge, upon request by calling toll-free 800-766-3863.

This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless accompanied or preceded by that Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

 

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One Bush Street, Suite 900

San Francisco, CA 94104

  

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PAID

RS INVESTMENTS

 

 

WWW.RSINVESTMENTS.COM // 800.766.3863   

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EB 015096 (06/14)

Table of Contents

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RS FIXED INCOME FUNDS

Class A, C, K, and Y Shares

RS INVESTMENT QUALITY BOND FUND

RS LOW DURATION BOND FUND

RS HIGH YIELD FUND

RS TAX-EXEMPT FUND

RS HIGH INCOME MUNICIPAL BOND FUND

RS FLOATING RATE FUND

RS STRATEGIC INCOME FUND

 

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

 

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Table of Contents

TABLE OF CONTENTS

 

RS Investments Overview    
CEO’s Letter     1     
RS Fixed Income Funds    
Important Information Concerning Fund Performance     3     
RS Investment Quality Bond Fund     4     
RS Low Duration Bond Fund     7     
RS High Yield Fund     10     
RS Tax-Exempt Fund     12     
RS High Income Municipal Bond Fund     15     
RS Floating Rate Fund     18     
RS Strategic Income Fund     20     
Understanding Your Fund’s Expenses     23     
Financial Information  
Schedules of Investments     26   
Statements of Assets and Liabilities     116   
Statements of Operations     118   
Statements of Changes in Net Assets     120   
Financial Highlights     124   
Notes to Financial Statements     138   
Supplemental Information     162   

 

 

RS Investments

 

Value | Growth | International | Natural Resources | Fixed Income

RS Funds provide clients with access to distinct and experienced investment teams — each pursuing investment opportunities consistent with its particular style. The dedicated research team approach assures that our clients benefit from process consistency, investment excellence, and choice across disciplines.

 

Value   International   Fixed Income
RS Partners Fund*  

RS International Fund

   RS Investment Quality Bond Fund
RS Value Fund  

RS Global Fund

   RS Low Duration Bond Fund
RS Large Cap Alpha Fund  

RS Emerging Markets Fund

   RS High Yield Fund
RS Investors Fund  

RS Emerging Markets Small Cap Fund

   RS Tax-Exempt Fund
  RS China Fund   RS High Income Municipal Bond Fund
Growth     RS Floating Rate Fund
RS Small Cap Growth Fund  

Natural Resources

   RS Strategic Income Fund
RS Select Growth Fund   RS Global Natural Resources Fund*  
RS Mid Cap Growth Fund    
RS Growth Fund    
RS Technology Fund    
RS Small Cap Equity Fund*    

 

* Closed to most new investments. Please see prospectus for more information.

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CEO’S LETTER

 

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Matthew H. Scanlan

CEO, RS Investments

Dear RS Funds Shareholder,

Despite clear evidence of economic recovery, investors are still reeling from 2008. Though caution remains a high priority, investors are finally beginning to overcome inertia and to realize the need to act with more conviction in this low-return environment.

Thus, the hunt for alpha (a measure of performance on a risk-adjusted basis) continues. We’ve noticed that the concept of high-conviction investing is gaining interest among investors, many of whom are exploring new approaches to produce alpha for their equity portfolios.

I spent most of my career in a quantitative investment environment, so I’ve had to do some serious soul searching over the last two years, asking myself: “Why am I leading a fundamental active investment firm?” I recently co-authored a white paper with my colleague Larry Siegel, Director of Research at the CFA Institute Research Foundation, which explores this concept and provides some answers.

Decades of experience have taught us that portfolios must be broadly diversified to meet long-term investment goals. But that doesn’t mean all managers must be diversified. In “No Fear of Commitment: The Role of High-Conviction Active Management,” we study the role of concentrated managers within a diversified portfolio and how investors should evaluate them.

We started with a philosophical review of active management. There’s a behavioral finance concept called “bounded rationality” that tells us that most managers should specialize, focusing their efforts on segments of the market where they are most confident in their ability to apply insights and earn significant alpha. Why? Because in the end, you can’t be an expert on everything, but you can know a great deal about a few things. Specialization — and conviction — matter!

In our white paper, which will appear in the fall issue of the Journal of Investing, we also took a look at implementation to find out which characteristics matter most with high-conviction managers and how those influence portfolio construction techniques. One key takeaway is that investors can blend the best of index and active exposures to create an optimal portfolio. That includes high-conviction managers, in those cases where the investor has confidence that the manager will exceed expectations.

We appreciate the confidence you’ve placed in us. In the pages that follow, you’ll find an update on the RS Funds. It includes important information about your investment with our firm.

Please visit www.rsinvestments.com for additional insights and the latest commentary from our investment teams.

Sincerely,

Matthew H. Scanlan

Chief Executive Officer

 

 

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CEO’S LETTER

 

 

 

As with all mutual funds, the value of an investment could decline, so you could lose money.

RS Funds are sold by prospectus only. You should carefully consider the investment objectives, risks, charges, and expenses of the RS Funds before making an investment decision. The prospectus contains this and other important information. Please read it carefully before investing or sending money. To obtain a copy, please call 800.766.3863 or visit www.rsinvestments.com.

RS Funds are distributed by RS Funds Distributor LLC, member: FINRA, SIPC.

©2014 RS Investment Management Co. LLC

 

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IMPORTANT INFORMATION CONCERNING FUND PERFORMANCE

 

Important Information Concerning Fund Performance

 

Except as otherwise specifically stated, all information, including portfolio security positions, is as of June 30, 2014. Any mention of specific securities should not be considered a recommendation to buy or sell those securities. A Fund may buy, sell, or hold any security identified herein, on the basis of factors described herein or on the basis of other factors or other considerations. Fund holdings will change.

Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double-digit returns are highly unusual and cannot be sustained. Class A performance quoted “with maximum sales charge” reflects the current maximum sales charge of 3.75% (2.25% for RS Low Duration Bond Fund and RS Floating Rate Fund). Please read a Fund’s prospectus carefully for more information on sales charges as they do not apply in all cases, and if applied, are reduced for larger purchases. Certain share classes are subject to contingent deferred sales charges which are typically paid at time of sale. The Class C share performance quoted “with sales charge” takes into account the applicable contingent deferred sales charge of 1% for periods of 1 year or less. There are no sales charges for Class K and Class Y shares. Any sales charges are in addition to the Fund’s fees and expenses as detailed in the Financial Highlights section of this report. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures include the effect of expense limitations in effect during the periods shown, if applicable; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month-end performance and other information, which may be lower or higher than that cited, is available by contacting RS Investments at 800.766.3863 and is periodically updated on our website: www.rsinvestments.com.

 

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RS INVESTMENT QUALITY BOND FUND

 

RS Investment Quality Bond Fund

Characteristics (unaudited)

Total Net Assets: $120,569,153

 

 
Sector Allocation
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Bond Quality Allocation2
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RS INVESTMENT QUALITY BOND FUND

 

 

 

       
Top Ten Holdings3                     
   
Holding   Coupon Rate     Maturity Date     % of Total
Net Assets		  
U.S. Treasury Bonds     0.875%        9/15/2016        3.34%   
FNMA — Mortgage Pass-Through     4.500%        7/14/2044        1.62%   
Crown Castle Towers LLC     6.113%        1/15/2020        1.46%   
FNMA — Mortgage Pass-Through     3.000%        5/1/2043        1.38%   
JPMorgan Chase Commercial Mortgage Securities Corp.     3.364%        11/13/2044        1.35%   
Morgan Stanley Capital I Trust     5.230%        9/15/2042        1.31%   
Citigroup, Inc.     1.700%        7/25/2016        1.26%   
Morgan Stanley     5.950%        12/28/2017        1.25%   
Fairway Outdoor Funding LLC     4.212%        10/15/2042        1.20%   
Verizon Communications, Inc.     6.550%        9/15/2043        1.20%   

Total

                     15.37%   

 

1 The Barclays U.S. Aggregate Bond Index is generally considered to be representative of U.S. bond market activity. The Barclays U.S. Aggregate Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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RS INVESTMENT QUALITY BOND FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (2/16/93)              
without sales charge     4.62%        6.16%        4.31%        5.83%        4.89%        5.38%   
with maximum sales charge     0.70%        2.19%        2.98%        5.02%        4.49%        5.19%   
Class C Shares (8/7/00)              
without sales charge     4.21%        5.36%        3.52%        5.06%        4.11%        4.68%   
with sales charge     3.21%        4.36%        3.52%        5.06%        4.11%        4.68%   
Class K Shares (5/15/01)     4.41%        5.74%        3.89%        5.41%        4.47%        4.77%   
Class Y Shares (5/12/09)     4.72%        6.48%        4.54%        6.05%        —        6.12%   
Barclays U.S Aggregate Bond Index1     3.93%        4.37%        3.67%        4.85%        4.93%        5.89% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Investment Quality Bond Fund and in the Barclays U.S. Aggregate Bond Index. The starting point of $9,625 for Class A shares reflects the current maximum sales charge of 3.75%. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (5/12/09) would have the following values as of June 30, 2014: $14,954 (Class C), $15,488 (Class K), and $13,565 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian Investment Quality Bond Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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RS LOW DURATION BOND FUND

 

RS Low Duration Bond Fund

Characteristics (unaudited)

Total Net Assets: $1,147,690,815

 

 
Sector Allocation
LOGO
 
Bond Quality Allocation2
LOGO

 

 

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RS LOW DURATION BOND FUND

 

 

       
Top Ten Holdings3                     
   
Holding   Coupon Rate     Maturity Date     % of Total
Net Assets		  
U.S. Treasury Notes     1.500%        5/31/2019        2.19%   
Bear Stearns Commercial Mortgage Securities Trust     5.405%        12/11/2040        1.28%   
American Express Credit Account Master Trust     0.680%        3/15/2018        1.27%   
Banc of America Merrill Lynch Commercial Mortgage, Inc.     5.115%        10/10/2045        1.26%   
GE Capital Credit Card Master Note Trust     1.360%        8/17/2020        1.20%   
CS Commercial Mortgage Trust     5.982%        6/15/2038        1.18%   
JPMorgan Chase Commercial Mortgage Securities Corp.     5.440%        6/12/2047        1.14%   
Wachovia Bank Commercial Mortgage Trust     5.308%        11/15/2048        1.14%   
SBA Tower Trust     2.240%        4/16/2018        1.12%   
Avis Budget Rental Car Funding AESOP LLC     2.054%        8/20/2016        1.08%   

Total

                     12.86%   

 

1 The Barclays U.S. Government 1-3 Year Bond Index is generally considered to be representative of U.S. government bonds with maturities between one and three years. The Barclays U.S. Government 1-3 Year Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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RS LOW DURATION BOND FUND

 

Performance Update (unaudited)

 

   
Average Annual Total Returns         
     Year-to-Date     1 Year    

3 Year

    

5 Year

    

10 Year

    

Since

Inception

  
Class A Shares (7/30/03)              
without sales charge     1.03%         1.64%        1.44%        2.58%        3.09%        2.94%   
with maximum sales charge     -1.21%        -0.61%        0.67%        2.11%        2.85%        2.72%   
Class C Shares (7/30/03)              
without sales charge     0.64%         0.85%        0.67%        1.80%        2.31%        2.17%   
with sales charge     -0.36%        -0.15%        0.67%        1.80%        2.31%        2.17%   
Class K Shares (7/30/03)     0.81%         1.20%        1.02%        2.16%        2.67%        2.52%   
Class Y Shares (5/12/09)     1.16%         1.89%        1.66%        2.79%        —        2.86%   
Barclays U.S. Government 1-3 Year Bond Index1     0.42%         0.78%        0.66%        1.24%        2.72%        2.57% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Low Duration Bond Fund and in the Barclays U.S. Government 1-3 Year Bond Index. The starting point of $9,775 for Class A shares reflects the current maximum sales charge of 2.25%. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (5/12/09) would have the following values as of June 30, 2014: $12,571 (Class C), $13,018 (Class K) and $11,560 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian Low Duration Bond Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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Table of Contents

RS HIGH YIELD FUND

 

RS High Yield Fund

Characteristics (unaudited)

Total Net Assets: $114,834,665

 

       
Bond Quality Allocation1                     
LOGO     
   
Top Ten Holdings3                
   
Holding   Coupon Rate     Maturity Date     % of Total
Net Assets		  
First Data Corp.     12.625%        1/15/2021        1.88%   
AES Corp.     7.375%        7/1/2021        1.58%   
Tenet Healthcare Corp.     8.125%        4/1/2022        1.46%   
Calumet Specialty Products Partners LP     7.625%        1/15/2022        1.45%   
Energy XXI Gulf Coast, Inc.     6.875%        3/15/2024        1.42%   
Hexion U.S. Finance Corp.     8.875%        2/1/2018        1.40%   
DaVita HealthCare Partners, Inc.     5.125%        7/15/2024        1.40%   
Monitronics International, Inc.     9.125%        4/1/2020        1.39%   
Golden Nugget Escrow, Inc.     8.500%        12/1/2021        1.37%   
JLL/Delta Dutch Newco B.V.     7.500%        2/1/2022        1.35%   

Total

                     14.70%   

 

1 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
2 The Barclays U.S. Corporate High-Yield Index is generally considered to be representative of the investable universe of the U.S.-dominated high yield debt market. The Barclays U.S. Corporate High-Yield Index is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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RS HIGH YIELD FUND

 

Performance Update (unaudited)

 

           
Average Annual Total Returns                                     
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (9/1/98)              
without sales charge     5.42%        11.68%        8.87%        12.35%        7.65%        6.46%   
with maximum sales charge     1.53%        7.45%        7.50%        11.49%        7.25%        6.20%   
Class C Shares (8/7/00)              
without sales charge     5.03%        10.85%        8.06%        11.49%        6.84%        5.96%   
with sales charge     4.03%        9.85%        8.06%        11.49%        6.84%        5.96%   
Class K Shares (5/15/01)     5.21%        11.23%        8.43%        11.91%        7.21%        6.99%   
Class Y Shares (5/12/09)     5.54%        11.96%        9.05%        12.52%        —        12.92%   
Barclays U.S. Corporate High-Yield Index2     5.46%        11.73%        9.49%        13.98%        9.05%        7.62% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS High Yield Fund and in the Barclays U.S. Corporate High-Yield Index. The starting point of $9,625 for Class A shares reflects the current maximum sales charge of 3.75%. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (5/12/09) would have the following values as of June 30, 2014: $19,380 (Class C), $20,064 (Class K) and $18,659 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian High Yield Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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RS TAX-EXEMPT FUND

 

RS Tax-Exempt Fund

Characteristics (unaudited)

 

Total Net Assets: $254,659,525   

 

     
Sector Allocation                 
LOGO     
   
Revenue Bond Allocation   % of Total
Net Assets		        % Index  

Special Tax

     2.9%           11.2%   

Housing

     1.1%           1.3%   

Education

     7.2%           7.3%   

Water and Sewer

     10.4%           8.8%   

Transportation

     21.9%           16.5%   

Power

     3.5%           6.4%   

Leasing

     8.7%           6.8%   

Resource Recovery

     0.0%           0.2%   

Hospital / Nursing Home / Health Care

     7.3%           8.9%   

Industrial Revenue

     2.2%           3.0%   
                    

Revenue Total

     65.2%           70.4%   

AA Insured Bonds

     0.0%           0.3%   

Prerefunded

     6.4%           4.6%   

Total Insured Bonds

     2.2%           18.4%   

 

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RS TAX-EXEMPT FUND

 

       
Bond Quality Allocation2                     
 
LOGO     
   
Top Ten Holdings3                     
   
Holding   Coupon Rate     Maturity Date     % of Total
Net Assets		  
Illinois St. G.O.     5.000%        1/1/2019        1.48%   
Tex. Private Activity Bd. Surface Transn. Corp. Rev.     6.875%        12/31/2039        1.44%   
Illinois St. G.O.     5.000%        3/1/2017        1.29%   
Wayne Cnty. MI Arpt. Auth. Rev.     5.000%        12/1/2020        1.19%   
Prince Georges Cnty. MD G.O.     5.000%        9/15/2029        1.04%   
North Tex. Twy. Auth. Dallas North Twy. Sys. Rev.     6.000%        1/1/2025        1.02%   
New Jersey St. Economic Dev. Auth. Rev.     1.310%        9/1/2025        0.97%   
California St. Var. Purp. G.O.     6.000%        3/1/2033        0.96%   
California St. Var. Purp. G.O.     6.500%        4/1/2033        0.96%   
Charleston Cnty. SC G.O.     5.000%        11/1/2022        0.94%   

Total

                     11.29%   

 

1 The Barclays Municipal Bond Index is generally considered to be representative of the municipal bond market. The Barclays Municipal Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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Table of Contents

RS TAX-EXEMPT FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (2/16/93)              
without sales charge     5.57%        4.76%        4.76%        5.18%        4.71%        4.88%   
with maximum sales charge     1.62%        0.84%        3.42%        4.38%        4.31%        4.69%   
Class C Shares (8/7/00)              
without sales charge     5.06%        3.83%        3.89%        4.33%        3.89%        4.30%   
with sales charge     4.06%        2.83%        3.89%        4.33%        3.89%        4.30%   
Class Y Shares (5/12/09)     5.63%        4.86%        4.85%        5.30%        —        4.94%   
Barclays Municipal Bond Index1     6.00%        6.14%        5.35%        5.81%        4.97%        5.56% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Tax-Exempt Fund and in the Barclays Municipal Bond Index. The starting point of $9,625 for Class A shares reflects the maximum sales charge of 3.75%. A hypothetical $10,000 investment made 10 years ago in Class C shares and upon the inception of Class Y shares (5/12/09) would have the following values as of June 30, 2014: $14,649 (Class C) and $12,806 (Class Y). While Class C shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian Tax-Exempt Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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RS HIGH INCOME MUNICIPAL BOND FUND

 

RS High Income Municipal Bond Fund

Characteristics (unaudited)

Total Net Assets: $111,427,110

 

   
Sector Allocation     
LOGO
   
Bond Quality Allocation2     
LOGO

 

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RS HIGH INCOME MUNICIPAL BOND FUND

 

 

Top Ten Holdings3                        

Holding

     Coupon Rate        Maturity Date       
 		 % of Total
Net Assets		   
  
Tex. Private Activity Bd. Surface Transn. Corp.     7.000%        6/30/2040        3.31%   
Tex. Private Activity Bd. Surface Transn. Corp.     7.500%        6/30/2033        2.20%   
Village Cmnty. Dev. Dist. No. 8 FLA Spl. Assessment Rev.     6.125%        5/1/2040        2.11%   
Village Cmnty. Dev. Dist. No. 8 FLA Spl. Assessment Rev.     6.125%        5/1/2039        2.09%   
District of Columbia Rev.     6.875%        7/1/2040        2.07%   
Colorado Regl. Trans. Dist. Private Activity Rev.     6.000%        1/15/2034        1.99%   
North Tex. Twy. Auth. Rev.     5.750%        1/1/2033        1.99%   
Farmington NM Poll. Ctrl. Rev.     5.900%        6/1/2040        1.98%   
New Jersey Economic Dev. Auth. Rev.     5.875%        6/1/2042        1.96%   
Tulare Calif. Redev. Agy. Tax Allocation     6.125%        8/1/2035        1.95%   

Total

                     21.65%   

 

1 The Barclays Municipal Bond Index is generally considered to be representative of the municipal bond market. The Barclays Municipal Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.
4 The Barclays High Yield Municipal Bond Index is generally considered to be representative of the investable universe of the U.S high-yield municipal debt market. The Barclays High Yield Municipal Bond Index is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. Statistical data for the index is as of December 31, 2013.

 

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RS HIGH INCOME MUNICIPAL BOND FUND

 

Performance Update (unaudited)

 

         
Average Annual Total Returns                              
   
     Year-to-Date    

1 Year

     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (12/31/09)              
without sales charge     8.02%        4.39%        5.91%        —        —        6.01%   
with maximum sales charge     3.97%        0.50%        4.58%        —        —        5.12%   
Class C Shares (12/31/09)              
without sales charge     7.61%        3.68%        5.10%        —        —        5.35%   
with sales charge     6.61%        2.68%        5.10%        —        —        5.35%   
Class Y Shares (12/31/09)     8.26%        4.71%        6.19%        —        —        6.22%   
Barclays Municipal Bond Index1     6.00%        6.14%        5.35%        —        —        5.08%   
Barclays High Yield Municipal Bond Index4     7.53%        3.87%        7.70%        —        —        7.99% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 12/31/09 in Class A shares of RS High Income Municipal Bond Fund, the Barclays Municipal Bond Index, and the Barclays High Yield Municipal Bond Index. The starting point of $9,625 for Class A shares reflects the current maximum sales charge of 3.75%. Hypothetical $10,000 investments made on 12/31/09 in Class C shares and Class Y shares would have the following values as of June 30, 2014: $12,641 (Class C) and $13,116 (Class Y). While Class C shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS FLOATING RATE FUND

 

RS Floating Rate Fund

Characteristics (unaudited)

 

Total Net Assets: $2,631,094,858   

 

       
Sector Allocation                     
LOGO     
   
Top Ten Holdings2                     
   
Holding   Coupon Rate     Maturity Date     % of Total
Net Assets		  
Big Heart Pet Brands     3.500%        3/8/2020        1.38%   
Seadrill Partners Finco LLC     4.000%        2/21/2021        1.35%   
Tribune Co.     4.000%        12/27/2020        1.33%   
Univision Communications, Inc.     4.000%        3/1/2020        1.27%   
Viva Alamo LLC     4.750%        2/20/2021        1.20%   
Millennium Laboratories, Inc.     5.250%        4/16/2021        1.15%   
Drillships Financing Holding, Inc.     6.000%        3/31/2021        1.15%   
Kindred Healthcare, Inc.     4.000%        4/9/2021        1.14%   
The Neiman Marcus Group, Inc.     4.250%        10/25/2020        1.13%   
Rexnord LLC     4.000%        8/21/2020        1.13%   

Total

                     12.23%   

 

1 The S&P/LSTA (Loan Syndications and Trading Association) U.S. Leveraged Loan Index covers more than 1,100 loan facilities and reflects the market-value-weighted performance of U.S. dollar denominated institutional leveraged loans. The S&P/LSTA U.S. Leveraged Loan Index is not available for direct investment and there are no expenses associated with it, while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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RS FLOATING RATE FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (12/31/09)              
without sales charge     2.12%        5.54%        5.23%        —        —        5.87%   
with maximum sales charge     -0.20%        3.12%        4.43%        —        —        5.33%   
Class C Shares (12/31/09)              
without sales charge     1.71%        4.70%        4.39%        —        —        5.20%   
with sales charge     0.71%        3.70%        4.39%        —        —        5.20%   
Class K Shares (12/31/09)     1.85%        5.03%        4.70%        —        —        5.45%   
Class Y Shares (12/31/09)     2.23%        5.76%        5.47%        —        —        6.01%   
S&P/LSTA U.S. Leveraged Loan Index1     2.60%        5.59%        5.43%        —        —        6.45% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 12/31/09 in Class A shares of RS Floating Rate Fund and in the S&P/LSTA U.S. Leveraged Loan Index. The starting point of $9,775 for Class A shares reflects the current maximum sales charge of 2.25%. Hypothetical $10,000 investments made on 12/31/09 in Class C shares, Class K shares and Class Y shares would have the following values as of June 30, 2014: $12,559 (Class C), $12,696 (Class K) and $13,002 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS STRATEGIC INCOME FUND

 

RS Strategic Income Fund

Characteristics (unaudited)

 

Total Net Assets: $86,186,727   

 

   
Sector Allocation     
LOGO
   
Bond Quality Allocation2     
LOGO

 

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RS STRATEGIC INCOME FUND

 

 

 
Top Ten Holdings3  
   
Holding   Coupon Rate     Maturity Date    

% of Total

Net Assets

  
U.S. Treasury Notes     0.875%        12/31/2016        2.33%   
Sinopec Group Overseas Development 2014 Ltd.     1.750%        4/10/2017        1.74%   
AT&T, Inc.     6.300%        1/15/2038        1.40%   
Energy Transfer Partners LP     6.700%        7/1/2018        1.36%   
Bank of America Corp.     5.875%        1/5/2021        1.36%   
HSBC Holdings PLC     5.100%        4/5/2021        1.32%   
Petroleous Mexicanos     5.750%        3/1/2008        1.31%   
Republic Of Panama     5.200%        1/30/2020        1.29%   
Morgan Stanley     5.500%        7/28/2021        1.27%   
Petrobras International Finance Co.     5.875%        3/1/2018        1.26%   

Total

                     14.64%   

 

1 The Barclays U.S. Aggregate Bond Index is generally considered to be representative of U.S. bond market activity. The Barclays U.S. Aggregate Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index while there are expenses associated with the Fund. Statistical data for the index is as of June 30, 2014.
2 The Bond Quality Allocation chart displays the percentage of fund assets allocated to each rating. Rating agencies’ independent ratings of individual securities are aggregated by Barclays and market weights are reported using Standard & Poor’s letter rating conventions. Rating methodology uses the middle rating of Moody’s, Standard & Poor’s and Fitch. When a rating from only two of the rating agencies is available the lower rating is used. Credit quality ratings assigned by a rating agency are subject to change periodically and are not absolute standards of credit quality. Rating agencies may fail to make timely changes in credit ratings, and an issuer’s current financial condition may be better or worse than a rating indicates. In formulating investment decisions for the Funds, GIS develops its own analysis of the credit quality and risks associated with individual debt instruments, rather than relying exclusively on rating agency ratings.
3 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Top ten holdings are determined at the unique security level. For this reason, the securities included above, their order, and the percentages they represent of the Fund’s total net assets may differ from similar data calculated directly from the Schedule of Investments, where certain securities of the same issuer with the same coupon rate may be aggregated.

 

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RS STRATEGIC INCOME FUND

 

Performance Update (unaudited)

 

           
Average Annual Total Returns                                     
   
     Year-to-Date     1 Year    

3 Year

    

5 Year

     10 Year    

Since
Inception

  
Class A Shares (12/31/09)              
without sales charge     3.27%        6.30%        5.05%        —        —        6.02%   
with maximum sales charge     -0.58%        2.30%        3.73%        —        —        5.12%   
Class C Shares (12/31/09)              
without sales charge     2.86%        5.50%        4.19%        —        —        5.39%   
with sales charge     1.86%        4.50%        4.19%        —        —        5.39%   
Class K Shares (12/31/09)     3.04%        5.81%        4.58%        —        —        5.68%   
Class Y Shares (12/31/09)     3.38%        6.56%        5.23%        —        —        6.19%   
Barclays U.S Aggregate Bond Index1     3.93%        4.37%        3.67%        —        —        4.50% * 

 

* Since Class A shares inception.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 12/31/09 in Class A shares of RS Strategic Income Fund and in the Barclays U.S. Aggregate Bond Index. The starting point of $9,625 for Class A shares reflects the current maximum sales charge of 3.75%. Hypothetical $10,000 investments made on 12/31/09 in Class C shares, Class K shares and Class Y shares would have the following values as of June 30, 2014: $12,663 (Class C), $12,820 (Class K) and $13,097 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including, as applicable, sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including investment advisory fees, distribution (12b-1) fees, and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2014, to June 30, 2014. The table below shows the Funds’ expenses in two ways:

Expenses based on actual return

This section of the table provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled “Expenses Paid During Period” for your Fund to estimate the expenses you paid on your account during this period. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Expenses based on hypothetical 5% return for comparison purposes

This section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds with the costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or exchange fees. Therefore the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

 

Based on Actual
Return		   Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During Period*
1/1/14-6/30/14		     Expense Ratio
During Period
1/1/14-6/30/14		  

RS Investment Quality Bond Fund

   Class A     $1,000.00        $1,046.20        $4.41        0.87%   
  Class C     $1,000.00        $1,042.10        $8.41        1.66%   
    Class K     $1,000.00        $1,044.10        $6.44        1.27%   
    Class Y     $1,000.00        $1,047.20        $3.35        0.66%   

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

Based on Actual
Return		   Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During Period*
1/1/14-6/30/14		     Expense Ratio
During Period
1/1/14-6/30/14		  

RS Low Duration Bond Fund

   Class A     $1,000.00        $1,010.30        $4.44        0.89%   
  Class C     $1,000.00        $1,006.40        $8.26        1.66%   
    Class K     $1,000.00        $1,008.10        $6.62        1.33%   
    Class Y     $1,000.00        $1,011.60        $3.09        0.62%   

RS High Yield Fund

   Class A     $1,000.00        $1,054.20        $4.94        0.97%   
    Class C     $1,000.00        $1,050.30        $8.64        1.70%   
    Class K     $1,000.00        $1,052.10        $6.87        1.35%   
    Class Y     $1,000.00        $1,055.40        $3.87        0.76%   

RS Tax-Exempt Fund

   Class A     $1,000.00        $1,055.70        $4.08        0.80%   
    Class C     $1,000.00        $1,050.60        $8.13        1.60%   
    Class Y     $1,000.00        $1,056.30        $3.52        0.69%   

RS High Income Municipal Bond Fund

   Class A     $1,000.00        $1,080.20        $3.97        0.77%   
  Class C     $1,000.00        $1,076.10        $7.88        1.53%   
    Class Y     $1,000.00        $1,082.60        $2.63        0.51%   

RS Floating Rate Fund

   Class A     $1,000.00        $1,021.20        $4.96        0.99%   
    Class C     $1,000.00        $1,017.10        $8.95        1.79%   
    Class K     $1,000.00        $1,018.50        $7.71        1.54%   
    Class Y     $1,000.00        $1,022.30        $3.86        0.77%   

RS Strategic Income Fund

   Class A     $1,000.00        $1,032.70        $4.44        0.88%   
  Class C     $1,000.00        $1,028.60        $8.40        1.67%   
    Class K     $1,000.00        $1,030.40        $6.44        1.28%   
    Class Y     $1,000.00        $1,033.80        $3.33        0.66%   
Based on Hypothetical Return
(5% Return Before Expenses) 		                      

RS Investment Quality Bond Fund

   Class A     $1,000.00        $1,020.48        $4.36        0.87%   
  Class C     $1,000.00        $1,016.56        $8.30        1.66%   
    Class K     $1,000.00        $1,018.50        $6.36        1.27%   
    Class Y     $1,000.00        $1,021.52        $3.31        0.66%   

RS Low Duration Bond Fund

   Class A     $1,000.00        $1,020.38        $4.46        0.89%   
  Class C     $1,000.00        $1,016.56        $8.30        1.66%   
    Class K     $1,000.00        $1,018.20        $6.66        1.33%   
    Class Y     $1,000.00        $1,021.72        $3.11        0.62%   

RS High Yield Fund

   Class A     $1,000.00        $1,019.98        $4.86        0.97%   
    Class C     $1,000.00        $1,016.36        $8.50        1.70%   
    Class K     $1,000.00        $1,018.10        $6.76        1.35%   
    Class Y     $1,000.00        $1,021.03        $3.81        0.76%   

RS Tax-Exempt Fund

   Class A     $1,000.00        $1,020.83        $4.01        0.80%   
    Class C     $1,000.00        $1,016.86        $8.00        1.60%   
    Class Y     $1,000.00        $1,021.37        $3.46        0.69%   

RS High Income Municipal Bond Fund

   Class A     $1,000.00        $1,020.98        $3.86        0.77%   
  Class C     $1,000.00        $1,017.21        $7.65        1.53%   
    Class Y     $1,000.00        $1,022.27        $2.56        0.51%   

RS Floating Rate Fund

   Class A     $1,000.00        $1,019.89        $4.96        0.99%   
    Class C     $1,000.00        $1,015.92        $8.95        1.79%   
    Class K     $1,000.00        $1,017.16        $7.70        1.54%   
    Class Y     $1,000.00        $1,020.98        $3.86        0.77%   

RS Strategic Income Fund

   Class A     $1,000.00        $1,020.43        $4.41        0.88%   
  Class C     $1,000.00        $1,016.51        $8.35        1.67%   
    Class K     $1,000.00        $1,018.45        $6.41        1.28%   
    Class Y     $1,000.00        $1,021.52        $3.31        0.66%   
* Expenses are equal to the Fund’s annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

 

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Financial Information

Six-Month Period Ended June 30, 2014

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Asset-Backed Securities – 2.0%         

Ameriquest Mortgage Securities, Inc.
2003-5 A6
4.452% due 4/25/2033(1)

   $ 288,849         $ 294,961   

CitiFinancial Mortgage Securities, Inc.
2003-3 AF5
5.053% due 8/25/2033(1)

     100,844           105,856   

Domino’s Pizza Master Issuer LLC
2012-1A A2
5.216% due 1/25/2042(2)

     1,072,538           1,152,572   

Miramax LLC
2011-1A A
6.25% due 10/20/2021(2)(3)

     808,066           830,843   
Total Asset-Backed Securities
(Cost $2,293,049) 		               2,384,232   
      
      Principal
Amount		        Value  
Collateralized Mortgage Obligations – 11.5%         

Banc of America Alternative Loan Trust
2004-1 2A1
6.00% due 2/25/2034

     681,189           721,999   

Banc of America Funding Corp.
2004-2 1CB1
5.75% due 9/20/2034

     875,438           944,349   

Countrywide Alternative Loan Trust
2006-19CB A15
6.00% due 8/25/2036

     290,353           254,311   

Countrywide Home Loans Trust
2002-19 1A1
6.25% due 11/25/2032

     157,200           158,951   

2003-11 A31
5.50% due 5/25/2033

     405,503           417,676   

2003-J7 2A12
5.00% due 8/25/2033

     349,726           362,357   

2004-5 2A9
5.25% due 5/25/2034

     507,984           533,938   

FHLMC
1534 Z
5.00% due 6/15/2023

     129,768           140,194   

2663 VQ
5.00% due 6/15/2022

     56,526           56,635   

3227 PR
5.50% due 9/15/2035(3)

     1,310,880           1,394,419   

FNMA
2002-77 QG
5.50% due 12/25/2032

     537,366           593,627   
                    

 

26   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Collateralized Mortgage Obligations (continued)         

GSR Mortgage Loan Trust
2004-10F 6A1
5.00% due 9/25/2034

   $ 54,530         $ 56,466   

JPMorgan Mortgage Trust
2004-S2 1A3
4.75% due 11/25/2019

     271,248           273,193   

2005-A3 11A2
2.917% due 6/25/2035(1)

     812,615           818,285   

Master Adjustable Rate Mortgages Trust
2004-13 3A7
2.636% due 11/21/2034(1)

     781,045           797,033   

Master Asset Securitization Trust
2003-10 3A7
5.50% due 11/25/2033

     205,858           215,937   

2003-5 2A1
5.00% due 6/25/2018

     113,923           118,037   

2003-7 4A33
5.25% due 9/25/2033(3)

     623,203           653,977   

Merrill Lynch Mortgage Investors Trust
2005-A2 A2
2.47% due 2/25/2035(1)

     311,053           311,816   

Prime Mortgage Trust
2003-3 A9
5.50% due 1/25/2034

     536,911           536,501   

2004-2 A3
5.25% due 11/25/2019

     78,134           81,479   

Residential Asset Mortgage Products, Inc.
2005-SL1 A4
6.00% due 5/25/2032

     74,878           76,938   

Residential Funding Mortgage Securities I
2005-S3 A1
4.75% due 3/25/2020

     333,422           339,133   

Structured Adjustable Rate Mortgage Loan Trust
2004-5 3A1
2.414% due 5/25/2034(1)

     870,139           877,510   

Structured Asset Securities Corp.
2004-20 7A1
5.25% due 11/25/2034

     769,119           779,845   

2004-21XS 2A6A
4.74% due 12/25/2034(1)

     85,123           87,069   

Wells Fargo Mortgage Backed Securities Trust
2003-17 1A14
5.25% due 1/25/2034

     318,553           338,490   

2004-6 A4
5.50% due 6/25/2034

     138,995           145,871   

2004-Y 3A1
2.616% due 11/25/2034(1)

     376,251           381,140   
                    

 

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Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Collateralized Mortgage Obligations (continued)         

2005-2 2A1
4.75% due 4/25/2020(3)

   $ 159,838         $ 165,517   

2005-AR12 2A6
2.618% due 6/25/2035(1)(3)

     694,668           700,947   

2006-1 A3
5.00% due 3/25/2021

     220,346           225,374   

2007-13 A7
6.00% due 9/25/2037

     276,517           274,792   
Total Collateralized Mortgage Obligations
(Cost $13,555,116) 		               13,833,806   
      
      Principal
Amount		        Value  
Senior Secured Loans – 6.5%         
Building Materials – 0.5%         

Generac Power Systems, Inc.
Term Loan B
3.25% due 5/31/2020(1)

     294,750           292,392   

Quikrete Holdings, Inc.
1st Lien Term Loan
4.00% due 9/28/2020(1)

     372,187           372,303   
        

 

 

  
                 664,695   
Finance Companies – 0.2%         

Guggenheim Partners LLC
Term Loan
4.25% due 7/22/2020(1)

     297,750           298,197   
        

 

 

  
                 298,197   
Food And Beverage – 0.5%         

Big Heart Pet Brands
New Term Loan
3.50% due 3/8/2020(1)

     257,505           255,171   

H.J. Heinz Co.
Term Loan B1
3.25% due 6/7/2019(1)

     345,507           345,867   
        

 

 

  
                 601,038   
Gaming – 1.4%         

Bally Technologies, Inc.
Term Loan B
4.25% due 11/25/2020(1)

     299,065           300,187   

MGM Resorts International
Term Loan B
3.50% due 12/20/2019(1)

     742,462           739,908   

Scientific Games International, Inc.
New Term Loan B
4.25% due 10/18/2020(1)

     597,000           590,188   
        

 

 

  
                 1,630,283   

 

28   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Healthcare – 0.6%         

Fresenius Medical Care AG & Co. KGaA
USD Term Loan A
1.975% due 10/30/2017(1)

   $ 738,462         $ 738,462   
        

 

 

  
                 738,462   
Pharmaceuticals – 2.0%         

Amgen, Inc.
Term Loan
1.234% due 9/18/2018(1)

     740,000           738,150   

RPI Finance Trust
Term Loan B1
2.484% due 11/9/2016(1)

     1,427,399           1,429,783   

Term Loan B2
3.25% due 5/9/2018(1)

     194,380           194,525   
        

 

 

  
                 2,362,458   
Refining – 0.3%         

Tesoro Corp.
Term Loan B
2.401% due 5/30/2016(1)

     318,000           318,397   
        

 

 

  
                 318,397   
Wireless – 0.8%         

Crown Castle Operating Co.
Term Loan B2
3.00% due 1/31/2021(1)

     990,017           989,532   
        

 

 

  
                 989,532   
Wirelines – 0.2%         

Windstream Corp.
Term Loan B4
3.50% due 1/23/2020(1)

     296,985           296,242   
        

 

 

  
                 296,242   
Total Senior Secured Loans
(Cost $7,900,491) 		               7,899,304   
      
      Principal
Amount		        Value  
Commercial Mortgage-Backed Securities – 15.1%         

Banc of America Commercial Mortgage Trust
2006-2 A4
5.919% due 5/10/2045(1)

     927,000           993,436   

Bear Stearns Commercial Mortgage Securities
2005-PW10 AM
5.449% due 12/11/2040(1)(3)

     810,000           855,032   

Chase Commercial Mortgage Securities Corp.
1998-1 F
6.56% due 5/18/2030(1)(2)

     10,831           10,816   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   29

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SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Commercial Mortgage-Backed Securities (continued)          

Citigroup Commercial Mortgage Trust
2006-C5 A4
5.431% due 10/15/2049

   $ 409,000         $ 443,633   

2013-375P B
3.635% due 5/10/2035(1)(2)(3)

     900,000           908,260   

2014-388G B
1.205% due 6/15/2033(1)(2)

     600,000           601,509   

Crown Castle Towers LLC
Sr. Sec. Nt.
6.113% due 1/15/2040(2)(3)

     1,500,000           1,765,539   

CS Commercial Mortgage Trust
2006-C3 A3
5.982% due 6/15/2038(1)

     771,580           828,614   

CS First Boston Mortgage Securities Corp.
2005-C5 AM
5.10% due 8/15/2038(1)(3)

     335,000           349,922   

DBUBS Mortgage Trust
2011-LC1A A3
5.002% due 11/10/2046(2)(3)

     500,000           565,987   

Fairway Outdoor Funding LLC
2012-1A A2
4.212% due 10/15/2042(2)

     1,431,325           1,451,822   

GMAC Commercial Mortgage Securities, Inc.
2006-C1 AM
5.29% due 11/10/2045(1)(3)

     572,000           600,597   

JPMorgan Chase Commercial Mortgage Securities Corp.
2006-LDP7 AM
6.057% due 4/15/2045(1)

     960,000           1,045,710   

2011-PLSD A2
3.364% due 11/13/2044(2)(3)

     1,550,000           1,622,193   

2012-HSBC A
3.093% due 7/5/2032(2)(3)

     1,150,000           1,159,498   

LB UBS Commercial Mortgage Trust
2006-C6 AM
5.413% due 9/15/2039(3)

     455,000           494,900   

Morgan Stanley Capital I Trust
2005-IQ10 A4A
5.23% due 9/15/2042(1)(3)

     1,528,398           1,580,492   

NCUA Guaranteed Notes Trust
2010-C1 A2
2.90% due 10/29/2020(3)

     560,000           581,181   

Queens Center Mortgage Trust
2013-QCA A
3.275% due 1/11/2037(2)

     1,150,000           1,131,636   
                    

 

30   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Commercial Mortgage-Backed Securities (continued)          

SBA Tower Trust
2.24% due 4/15/2043(2)

   $ 500,000         $ 496,109   

Wachovia Bank Commercial Mortgage Trust
2005-C18 A4
4.935% due 4/15/2042(3)

     705,000           718,714   
                    
Total Commercial Mortgage-Backed Securities
(Cost $17,866,445) 		               18,205,600   
      
      Principal
Amount		        Value  
Corporate Bonds – 48.5%         
Aerospace & Defense – 0.2%         

Northrop Grumman Space & Mission Systems Corp.
7.75% due 6/1/2029

     150,000           196,427   
        

 

 

  
                 196,427   
Automotive – 1.0%         

BorgWarner, Inc.
Sr. Nt.
4.625% due 9/15/2020

     500,000           545,369   

Ford Motor Credit Co. LLC
Sr. Nt.
4.25% due 9/20/2022

     250,000           266,658   

RCI Banque S.A.
Sr. Nt.
4.60% due 4/12/2016(2)

     350,000           370,704   
        

 

 

  
                 1,182,731   
Banking – 11.6%         

Bank of America Corp.
Sr. Nt.
5.70% due 1/24/2022(3)

     850,000           986,326   

Citigroup, Inc.
Sr. Nt.
1.70% due 7/25/2016

     1,500,000           1,519,716   

4.50% due 1/14/2022

     400,000           434,801   

6.125% due 11/21/2017

     350,000           400,311   

Credit Suisse/New York NY
Sr. Nt.
5.30% due 8/13/2019

     350,000           400,383   

Discover Bank
Sub. Nt.
7.00% due 4/15/2020

     400,000           480,465   

Huntington BancShares, Inc.
Sub. Nt.
7.00% due 12/15/2020

     400,000           485,128   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   31

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Banking (continued)         

Intesa Sanpaolo S.p.A.
Sr. Nt.
3.875% due 1/16/2018

   $ 600,000         $ 632,362   

JPMorgan Chase & Co.
Sub. Nt.
3.375% due 5/1/2023(3)

     300,000           294,456   

Lloyds Bank PLC
5.80% due 1/13/2020(2)

     350,000           406,315   

Macquarie Bank Ltd.
Sr. Nt.
2.00% due 8/15/2016(2)(3)

     1,000,000           1,018,162   

Morgan Stanley
Sr. Nt.
3.75% due 2/25/2023

     300,000           305,184   

5.95% due 12/28/2017(3)

     1,325,000           1,508,471   

Rabobank Nederland
3.95% due 11/9/2022(3)

     400,000           406,651   

Regions Bank
Sub. Nt.
7.50% due 5/15/2018(3)

     500,000           595,106   

Royal Bank of Scotland Group PLC
Sub. Nt.
6.125% due 12/15/2022

     400,000           437,494   

Standard Chartered PLC
Sub. Nt.
3.95% due 1/11/2023(2)(3)

     600,000           596,849   

The Goldman Sachs Group, Inc.
Sub. Nt.
5.625% due 1/15/2017

     680,000           748,367   

Sr. Nt.
5.75% due 1/24/2022(3)

     500,000           578,592   

The Huntington National Bank
Sr. Nt.
1.35% due 8/2/2016(3)

     1,300,000           1,309,131   

UBS AG/Stamford CT
Sr. Nt.
4.875% due 8/4/2020(3)

     400,000           448,398   
        

 

 

  
                 13,992,668   
Brokerage – 0.6%         

KKR Group Finance Co.
6.375% due 9/29/2020(2)(3)

     600,000           706,614   
        

 

 

  
                 706,614   

 

32   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Building Materials – 0.7%         

CRH America, Inc.
6.00% due 9/30/2016

   $ 350,000         $ 388,329   

Owens Corning, Inc.
4.20% due 12/15/2022(3)

     500,000           513,420   
        

 

 

  
                 901,749   
Cable Satellite – 0.8%         

Comcast Corp.
6.45% due 3/15/2037

     250,000           318,873   

Time Warner Cable, Inc.
5.85% due 5/1/2017(3)

     550,000           618,568   
        

 

 

  
                 937,441   
Chemicals – 2.3%         

Cabot Corp.
Sr. Nt.
3.70% due 7/15/2022

     500,000           502,207   

Celanese U.S. Holdings LLC
5.875% due 6/15/2021(3)

     750,000           826,875   

Ecolab, Inc.
Sr. Nt.
5.50% due 12/8/2041

     200,000           233,259   

FMC Corp.
Sr. Nt.
5.20% due 12/15/2019

     100,000           111,523   

LyondellBasell Industries N.V.
Sr. Nt.
5.00% due 4/15/2019(3)

     700,000           789,583   

NOVA Chemicals Corp.
Sr. Nt.
5.25% due 8/1/2023(2)

     250,000           273,125   
        

 

 

  
                 2,736,572   
Diversified Manufacturing – 0.6%         

ABB Finance U.S.A., Inc.
2.875% due 5/8/2022(3)

     500,000           496,478   

Siemens Financieringsmat N.V.
6.125% due 8/17/2026(2)

     200,000           248,558   
        

 

 

  
                 745,036   
Electric – 1.0%         

Alabama Power Co.
Sr. Nt.
5.65% due 3/15/2035(3)

     300,000           308,430   

Nevada Power Co.
6.65% due 4/1/2036(3)

     250,000           336,324   

PPL Electric Utilities Corp.
6.25% due 5/15/2039

     220,000           286,739   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   33

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Electric (continued)         

Virginia Electric and Power Co.
Sr. Nt.
8.875% due 11/15/2038

   $ 200,000         $ 331,675   
        

 

 

  
                 1,263,168   
Energy - Integrated – 0.3%         

Suncor Energy, Inc.
Sr. Nt.
6.50% due 6/15/2038

     300,000           385,325   
        

 

 

  
                 385,325   
Finance Companies – 2.4%         

AerCap Ireland Capital Ltd.
3.75% due 5/15/2019(2)

     400,000           403,000   

CIT Group, Inc.
Sr. Nt.
4.75% due 2/15/2015(2)

     800,000           816,000   

General Electric Capital Corp.
Sr. Nt.
6.75% due 3/15/2032(3)

     200,000           263,832   

International Lease Finance Corp.
Sr. Nt.
4.625% due 4/15/2021

     950,000           980,875   

4.875% due 4/1/2015

     400,000           410,000   
        

 

 

  
                 2,873,707   
Food And Beverage – 1.3%         

Anheuser-Busch InBev Worldwide, Inc.
3.75% due 7/15/2042(3)

     625,000           567,437   

Constellation Brands, Inc.
4.25% due 5/1/2023

     700,000           702,625   

Mead Johnson Nutrition Co.
Sr. Nt.
4.90% due 11/1/2019

     300,000           333,345   
        

 

 

  
                 1,603,407   
Government Related – 2.6%         

Dolphin Energy Ltd.
Sr. Sec. Nt.
5.888% due 6/15/2019(2)

     463,125           512,911   

Petrobras International Finance Co.
5.875% due 3/1/2018(3)

     800,000           871,719   

Petroleos Mexicanos
5.75% due 3/1/2018

     1,000,000           1,127,500   

Ras Laffan Liquefied Natural Gas Co. Ltd. III
Sr. Sec. Nt.
6.75% due 9/30/2019(2)

     550,000           662,750   
        

 

 

  
                 3,174,880   

 

34   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Health Insurance – 0.1%         

UnitedHealth Group, Inc.
Sr. Nt.
6.50% due 6/15/2037

   $ 125,000         $ 163,555   
        

 

 

  
                 163,555   
Healthcare – 0.9%         

Amsurg Corp.
5.625% due 11/30/2020

     500,000           505,000   

Bio-Rad Laboratories, Inc.
Sr. Nt.
4.875% due 12/15/2020

     200,000           211,782   

Fresenius Medical Care U.S. Finance, Inc.
6.875% due 7/15/2017

     300,000           339,750   
        

 

 

  
                 1,056,532   
Home Construction – 0.7%         

Toll Brothers Finance Corp.
5.875% due 2/15/2022(3)

     750,000           815,625   
        

 

 

  
                 815,625   
Independent Energy – 3.4%         

Anadarko Petroleum Corp.
Sr. Nt.
5.95% due 9/15/2016(3)

     1,000,000           1,107,557   

Bonanza Creek Energy, Inc.
6.75% due 4/15/2021

     500,000           535,000   

Chesapeake Energy Corp.
7.25% due 12/15/2018

     650,000           767,000   

Kodiak Oil & Gas Corp.
5.50% due 2/1/2022

     720,000           747,000   

Talisman Energy, Inc.
Sr. Nt.
5.50% due 5/15/2042

     500,000           542,120   

Whiting Petroleum Corp.
6.50% due 10/1/2018

     400,000           417,000   
        

 

 

  
                 4,115,677   
Insurance - Life – 1.3%         

American International Group, Inc.
Sr. Nt.
5.85% due 1/16/2018

     250,000           285,395   

MetLife, Inc.
Jr. Sub. Nt.
6.40% due 12/15/2066

     125,000           139,688   

Prudential Financial, Inc.
Sr. Nt.
7.375% due 6/15/2019

     300,000           371,520   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   35

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Insurance - Life (continued)         

Symetra Financial Corp.
Sr. Nt.
6.125% due 4/1/2016(2)

   $ 300,000         $ 321,970   

Teachers Insurance & Annuity Association of America
Sub. Nt.
6.85% due 12/16/2039(2)

     300,000           400,081   
        

 

 

  
                 1,518,654   
Insurance: Property - Casualty – 0.9%         

Berkshire Hathaway Finance Corp.
5.75% due 1/15/2040

     225,000           269,759   

Markel Corp.
Sr. Nt.
3.625% due 3/30/2023

     500,000           498,829   

ZFS Finance U.S.A. Trust II
Jr. Sub. Nt.
6.45% due 12/15/2065(1)(2)

     300,000           323,250   
        

 

 

  
                 1,091,838   
Media - Entertainment – 0.4%         

Time Warner Cos., Inc.
7.57% due 2/1/2024

     350,000           453,261   
        

 

 

  
                 453,261   
Metals And Mining – 1.3%         

Allegheny Technologies, Inc.
Sr. Nt.
9.375% due 6/1/2019

     400,000           496,247   

Freeport-McMoRan Copper & Gold, Inc.
Sr. Nt.
3.55% due 3/1/2022

     450,000           445,635   

Steel Dynamics, Inc.
5.25% due 4/15/2023

     250,000           258,750   

Vale Overseas Ltd.
6.25% due 1/23/2017

     300,000           335,700   
        

 

 

  
                 1,536,332   
Midstream – 2.1%         

Atlas Pipeline Partners LP
4.75% due 11/15/2021

     560,000           548,800   

El Paso Pipeline Partners Operating Co. LLC
5.00% due 10/1/2021

     400,000           437,299   

Energy Transfer Partners LP
Sr. Nt.
5.15% due 2/1/2043

     275,000           282,451   

Enterprise Products Operating LLC
Series A
8.375% due 8/1/2066(1)

     400,000           450,240   
                    

 

36   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Midstream (continued)         

Williams Partners LP
Sr. Nt.
5.25% due 3/15/2020(3)

   $ 750,000         $ 846,001   
        

 

 

  
                 2,564,791   
Oil Field Services – 1.7%         

Nabors Industries, Inc.
4.625% due 9/15/2021(3)

     750,000           812,389   

Transocean, Inc.
6.00% due 3/15/2018(3)

     500,000           564,764   

Weatherford Bermuda
5.125% due 9/15/2020

     350,000           392,012   

6.50% due 8/1/2036

     250,000           297,165   
        

 

 

  
                 2,066,330   
Packaging – 1.3%         

Ball Corp.
5.00% due 3/15/2022(3)

     900,000           922,500   

Sealed Air Corp.
8.125% due 9/15/2019(2)

     120,000           132,150   

Silgan Holdings, Inc.
Sr. Nt.
5.00% due 4/1/2020

     500,000           512,500   
        

 

 

  
                 1,567,150   
Paper – 1.6%         

Fibria Overseas Finance Ltd.
5.25% due 5/12/2024

     250,000           248,750   

Georgia-Pacific LLC
5.40% due 11/1/2020(2)(3)

     670,000           773,344   

Rock Tenn Co.
4.90% due 3/1/2022(3)

     800,000           873,197   
        

 

 

  
                 1,895,291   
Railroads – 0.2%         

CSX Corp.
Sr. Nt.
4.75% due 5/30/2042

     175,000           183,410   
        

 

 

  
                 183,410   
REITs – 1.7%         

CommonWealth REIT
Sr. Nt.
5.875% due 9/15/2020

     300,000           326,662   

DDR Corp.
Sr. Nt.
4.75% due 4/15/2018(3)

     1,000,000           1,088,330   

ProLogis LP
6.875% due 3/15/2020

     145,000           174,216   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   37

Table of Contents

SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
REITs (continued)         

Simon Property Group LP
Sr. Nt.
4.125% due 12/1/2021(3)

   $ 400,000         $ 433,207   
        

 

 

  
                 2,022,415   
Technology – 1.8%         

Apple, Inc.
Sr. Nt.
3.85% due 5/4/2043(3)

     500,000           459,914   

First Data Corp.
Sr. Sec. Nt.
7.375% due 6/15/2019(2)(3)

     620,000           665,725   

Hewlett-Packard Co.
Sr. Nt.
3.75% due 12/1/2020(3)

     1,000,000           1,045,249   
        

 

 

  
                 2,170,888   
Wireless – 1.3%         

America Movil S.A.B. de C.V.
5.00% due 10/16/2019(3)

     700,000           786,982   

Sprint Communications, Inc.
Sr. Nt.
6.00% due 12/1/2016(3)

     648,000           705,510   

Vodafone Group PLC
Sr. Nt.
6.15% due 2/27/2037(3)

     100,000           118,826   
        

 

 

  
                 1,611,318   
Wirelines – 2.4%         

AT&T, Inc.
Sr. Nt.
6.30% due 1/15/2038

     300,000           363,053   

Deutsche Telekom International Finance B.V.
8.75% due 6/15/2030

     250,000           365,624   

Orange S.A.
Sr. Nt.
9.00% due 3/1/2031

     115,000           173,081   

Telecom Italia Capital S.A.
5.25% due 10/1/2015

     150,000           156,750   

Verizon Communications, Inc.
Sr. Nt.
6.40% due 2/15/2038

     350,000           427,468   

6.55% due 9/15/2043(3)

     1,150,000           1,447,207   
        

 

 

  
                 2,933,183   
Total Corporate Bonds
(Cost $54,543,099) 		               58,465,975   

 

38   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Hybrid ARMS – 0.2%         

FNMA
2.41% due 12/1/2036(1)(3)

   $ 129,875         $ 139,598   

2.44% due 8/1/2046(1)

     73,698           74,112   
Total Hybrid ARMS
(Cost $204,746) 		               213,710   
      
      Principal
Amount		        Value  
Mortgage Pass-Through Securities – 4.0%         

FHLMC
5.50% due 6/1/2038

     134,369           149,776   

7.00% due 9/1/2038

     42,298           48,073   

FNMA
3.00% due 5/1/2043

     1,677,189           1,658,821   

3.50% due 11/1/2042

     7,487           7,719   

4.50% due 7/14/2044(4)

     1,800,000           1,949,344   

5.00% due 12/1/2034 - 11/1/2036

     60,266           67,066   

5.50% due 4/1/2022 - 1/1/2038(3)

     544,530           607,926   

6.00% due 8/1/2021

     84,041           90,968   

7.00% due 9/1/2014 - 6/1/2032

     58,831           66,562   

7.50% due 12/1/2029 - 2/1/2031

     80,960           92,550   

8.00% due 6/1/2030 - 9/1/2030

     34,586           39,985   

GNMA
6.00% due 12/15/2033

     47,132           53,018   
Total Mortgage Pass-Through Securities
(Cost $4,697,228)		                4,831,808   
      
      Principal
Amount		        Value  
Municipal Bonds – 2.3%         

Chicago Illinois Metropolitan Wtr. Reclamation Dist. Greater Chicago G.O.
Build America Bonds Taxable Direct Payment
5.72% due 12/1/2038

     400,000           479,508   

Illinois St. Toll Hwy. Auth. Toll Hwy. Rev.
Build America Bonds Ser. A
6.184% due 1/1/2034

     300,000           376,209   

Massachusetts Bay Transn. Auth. Rev.
Ser. A
5.25% due 7/1/2034

     600,000           679,686   

Massachusetts St. Health & Ed. Facs. Auth. Rev.
Harvard Univ. Ser. A
5.50% due 11/15/2036

     340,000           394,301   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   39

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SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Municipal Bonds (continued)         

New York City Muni. Wtr. Fin. Auth. Wtr. & Swr. Rev.
Build America Bonds Ser. EE
6.011% due 6/15/2042

   $ 300,000         $ 387,639   

San Diego Cnty. California Wtr. Auth. Fing. Agcy. Wtr. Rev.
Build America Bonds Ser. B
6.138% due 5/1/2049

     400,000           525,528   
Total Municipal Bonds
(Cost $2,372,943)		                2,842,871   
      
      Principal
Amount		        Value  
U.S. Government Securities – 5.6%         

U.S. Treasury Bonds

         

3.625% due 2/15/2044

     1,200,000           1,266,374   

3.75% due 11/15/2043

     700,000           756,000   

U.S. Treasury Notes

         

0.875% due 9/15/2016

     4,000,000           4,029,064   

2.50% due 5/15/2024

     700,000           699,016   
Total U.S. Government Securities
(Cost $6,706,718)		                6,750,454   
      
      Principal
Amount		        Value  
Repurchase Agreements – 5.1%         
   

State Street Bank and Trust Co. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity
value of $6,119,000, due 7/1/2014(5)

     6,119,000           6,119,000   
Total Repurchase Agreements
(Cost $6,119,000)		                6,119,000   
Total Investments – 100.8%
(Cost $116,258,835)		                121,546,760   
Other Liabilities, Net – (0.8)%                (977,607 ) 
Total Net Assets – 100.0%              $ 120,569,153   

 

(1) 

Variable rate securities, which may include step-up bonds or adjustable rate mortgages. The rate shown is the rate in effect at June 30, 2014.

(2) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $20,328,292, representing 16.9% of net assets. These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.

 

40   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS INVESTMENT QUALITY BOND FUND

 

(3) 

Securities are segregated to cover anticipated or existing derivative positions or to be announced securities (TBA).

(4) 

TBA — To be announced.

(5) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

FNMA

     1.375%           6/30/2018         $ 6,241,681   

The table below presents futures contracts as of June 30, 2014:

 

Description

(unaudited)

   Counterparty   Number of
Contracts		     Expiration     Face Value
(000s)		     Unrealized
Appreciation
(Depreciation)		  

Purchased Futures Contracts

          

10 YR U.S. Treasury Notes

   Goldman
Sachs & Co.		     70        9/19/2014      $ 8,762      $ 15,691   

5 YR U.S. Treasury Notes

   Goldman
Sachs & Co.		     80        9/30/2014        9,557        (10,594 ) 

U.S. Long Bond

   Goldman
Sachs & Co.		     7        9/19/2014        960        3,859   

U.S. Ultra Bond

   Goldman
Sachs & Co.		     7        9/19/2014        1,050        21,632   
Total                               $ 30,588   

At June 30, 2014, the Fund had entered into the following open option contracts:

 

Number of
Contracts		   Written
Call Options		   Expiration
Date		     Premiums
Received		     Current
Value		     Unrealized
Depreciation		  

60

   10 YR U.S. Treasury Note, strike @ $126     August 2014      $ 20,414      $ (26,250 )    $ (5,836 ) 

 

Number of
Contracts		   Written
Put Options		   Expiration
Date		     Premiums
Received		     Current
Value		     Unrealized
Appreciation		  

20

   30 YR U.S. Treasury Note, strike @ $129     August 2014      $ 10,242      $ (937 )    $ 9,305   

 

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SCHEDULE OF INVESTMENTS — RS INVESTMENT QUALITY BOND FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Asset-Backed Securities

   $ —       $ 2,384,232       $     —         $ 2,384,232   

Collateralized Mortgage Obligations

     —         13,833,806         —           13,833,806   

Senior Secured Loans

     —         7,899,304         —           7,899,304   

Commercial Mortgage-Backed Securities

     —         18,205,600         —           18,205,600   

Corporate Bonds

     —         58,465,975         —           58,465,975   

Hybrid ARMS

     —         213,710         —           213,710   

Mortgage Pass-Through Securities

     —         4,831,808         —           4,831,808   

Municipal Bonds

     —         2,842,871         —           2,842,871   

U.S. Government Securities

     —         6,750,454         —           6,750,454   

Repurchase Agreements

     —         6,119,000         —           6,119,000   
Other Financial Instruments:               

Financial Futures Contracts

     30,588         —         —           30,588   

Written Call Options

     (26,250 )       —         —           (26,250 ) 

Written Put Options

     (937 )       —         —           (937 ) 
Total   $ 3,401       $ 121,546,760       $ —         $ 121,550,161   

 

42   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Asset-Backed Securities – 10.9%         

Ally Master Owner Trust
2012-1 A2
1.44% due 2/15/2017

   $ 3,900,000         $ 3,923,946   

American Express Credit Account Master Trust
2012-2 A
0.68% due 3/15/2018(1)

     14,500,000           14,547,690   

Ameriquest Mortgage Securities, Inc.
2003-5 A6
4.452% due 4/25/2033(2)

     65,691           67,081   

Avis Budget Rental Car Funding AESOP LLC
2012-1A A
2.054% due 8/20/2016(1)(3)

     12,275,000           12,433,667   

2014-1A A
2.46% due 7/20/2020(3)

     6,000,000           6,043,014   

Barclays Dryrock Issuance Trust
2012-2 A
0.64% due 8/15/2018

     6,200,000           6,201,054   

BMW Vehicle Lease Trust
2013-1 A4
0.66% due 6/20/2016

     4,500,000           4,507,394   

Capital Auto Receivables Asset Trust
2013-1 A3
0.79% due 6/20/2017

     6,300,000           6,313,293   

Citibank Credit Card Issuance Trust
2014-A2 A2
1.02% due 2/22/2019

     3,000,000           2,998,476   

CitiFinancial Mortgage Securities, Inc.
2003-3 AF5
5.053% due 8/25/2033(2)

     75,579           79,335   

CNH Equipment Trust
2014-B A4
1.61% due 5/17/2021

     4,500,000           4,500,369   

Enterprise Fleet Financing LLC
2012-2 A2
0.72% due 4/20/2018(3)

     3,624,590           3,626,403   

Ford Credit Floorplan Master Owner Trust
2010-3 A2
1.852% due 2/15/2017(2)(3)

     6,015,000           6,073,460   

GE Capital Credit Card Master Note Trust
2012-6 A
1.36% due 8/17/2020(1)

     13,805,000           13,744,272   

Hertz Fleet Lease Funding LP
2014-1 A
0.554% due 4/10/2028(2)(3)

     6,500,000           6,503,185   

Hertz Vehicle Financing LLC
2009-2A A2
5.29% due 3/25/2016(1)(3)

     8,200,000           8,397,333   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   43

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SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Asset-Backed Securities (continued)         

Hyundai Auto Lease Securitization Trust
2014-B A4
1.26% due 9/17/2018(3)

   $ 3,600,000         $ 3,607,045   

Kubota Credit Owner Trust
2014-1A A3
1.16% due 5/15/2018(3)

     5,400,000           5,401,404   

Mercedes-Benz Auto Lease Trust
2013-B A4
0.76% due 7/15/2019

     4,500,000           4,511,074   

Miramax LLC
2011-1A A
6.25% due 10/20/2021(3)

     6,712,162           6,901,358   

Nissan Auto Receivables Owner Trust
2013-A A3
0.50% due 5/15/2017

     2,560,000           2,562,022   

Residential Asset Mortgage Products, Inc.
2002-RS4 AI5
6.163% due 8/25/2032(2)

     25,408           22,728   

Wheels SPV LLC
2012-1 A2
1.19% due 3/20/2021(3)

     1,768,178           1,772,687   
Total Asset-Backed Securities
(Cost $124,735,661)		                124,738,290   
      
      Principal
Amount		        Value  
Collateralized Mortgage Obligations – 13.6%         

Banc of America Funding Corp.
2004-2 1CB1
5.75% due 9/20/2034

     1,598,121           1,723,919   

2005-D A1
2.689% due 5/25/2035(2)

     3,980,205           4,082,572   

Banc of America Mortgage Securities Trust
2003-J 2A2
2.846% due 11/25/2033(2)

     1,582,347           1,590,446   

Bear Stearns ALT-A Trust
2003-3 2A
2.599% due 10/25/2033(2)

     5,349,959           5,416,261   

2004-4 A1
0.752% due 6/25/2034(2)

     4,156,069           3,994,930   

2004-7 2A1
2.493% due 8/25/2034(2)

     3,032,537           3,071,757   

Chase Mortgage Finance Corp.
2007-A1 2A1
2.498% due 2/25/2037(2)

     2,404,311           2,416,597   

Countrywide Home Loans Mortgage
Pass-Through Trust
2003-11 A31
5.50% due 5/25/2033

     1,786,161           1,839,778   
                    

 

44   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Collateralized Mortgage Obligations (continued)         

CS First Boston Mortgage Securities Corp.
2003-11 1A31
5.50% due 6/25/2033

   $ 820,164         $ 855,741   

2003-23 2A8
4.50% due 10/25/2018

     402,430           404,276   

2003-8 2A1
5.00% due 4/25/2018

     340,477           343,759   

2004-5 5A1
5.00% due 8/25/2019

     595,043           606,870   

2004-AR5 3A1
2.448% due 6/25/2034(2)

     5,366,933           5,396,113   

2004-AR5 6A1
2.561% due 6/25/2034(2)

     9,076,936           9,130,880   

2004-AR7 4A1
2.507% due 11/25/2034(2)

     5,566,997           5,711,628   

FHLMC
1534 Z
5.00% due 6/15/2023

     54,240           58,598   

20 H
5.50% due 10/25/2023

     28,578           31,082   

First Horizon Asset Securities, Inc.
2004-4 2A3
4.50% due 7/25/2019

     310,416           317,487   

GSR Mortgage Loan Trust
2004-15F 5A1
5.50% due 1/25/2020

     1,270,641           1,305,481   

Impac CMB Trust
2004-7 1A1
0.892% due 11/25/2034(2)

     5,977,737           5,753,129   

JPMorgan Mortgage Trust
2004-S1 1A7
5.00% due 9/25/2034

     904,991           943,038   

2004-S2 1A3
4.75% due 11/25/2019

     491,034           494,555   

2005-A1 3A1
2.971% due 2/25/2035(2)

     2,228,491           2,242,938   

2005-A1 6T1
2.952% due 2/25/2035(2)

     739,404           734,648   

2006-A2 5A1
2.547% due 11/25/2033(2)

     2,984,996           3,006,139   

Master Adjustable Rate Mortgages Trust
2004-13 2A1
2.642% due 4/21/2034(2)

     3,228,684           3,267,038   

2004-13 3A7
2.636% due 11/21/2034(2)

     6,560,498           6,694,785   

Master Asset Securitization Trust
2003-2 2A10
4.50% due 3/25/2018

     644,616           644,953   
                    

 

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Table of Contents

SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Collateralized Mortgage Obligations (continued)         

2003-5 2A1
5.00% due 6/25/2018

   $ 263,636         $ 273,156   

2003-9 5A2
4.75% due 10/25/2018

     3,263,956           3,330,645   

Merrill Lynch Mortgage Investors Trust
2005-A2 A2
2.47% due 2/25/2035(2)

     10,140,090           10,164,974   

Morgan Stanley Mortgage Loan Trust
2004-1 1A9
4.50% due 11/25/2018

     537,431           545,333   

2004-7AR 2A1
2.461% due 9/25/2034(2)

     7,190,942           7,158,755   

MortgageIT Trust
2004-1 A1
0.932% due 11/25/2034(2)

     3,752,605           3,657,037   

Prime Mortgage Trust
2003-3 A9
5.50% due 1/25/2034

     1,119,171           1,118,318   

2004-2 A2
4.75% due 11/25/2019

     459,024           476,228   

2004-2 A3
5.25% due 11/25/2019

     274,225           285,963   

Residential Asset Mortgage Products, Inc.
2005-SL1 A4
6.00% due 5/25/2032

     12,420           12,761   

Residential Asset Securitization Trust
2003-A2 A1
4.25% due 5/25/2033(1)

     1,301,462           1,302,168   

Residential Funding Mortgage Securities I, Inc.
2005-S3 A1
4.75% due 3/25/2020

     1,213,939           1,234,732   

Structured Adjustable Rate Mortgage Loan Trust
2004-6 4A1
2.387% due 6/25/2034(2)

     7,407,592           7,513,120   

Structured Asset Mortgage Investments II Trust
2004-AR7 A1A
0.855% due 4/19/2035(2)

     2,257,002           2,247,925   

Structured Asset Securities Corp.
2003-29 2A1
5.25% due 9/25/2023

     1,730,223           1,755,727   

2004-21XS 2A6A
4.74% due 12/25/2034(2)

     441,439           451,528   

2004-3 3A1
5.50% due 3/25/2019

     895,932           918,771   

Thornburg Mortgage Securities Trust
2003-4 A1
0.792% due 9/25/2043(2)

     5,965,459           5,864,887   
                    

 

46   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Collateralized Mortgage Obligations (continued)         

2004-4 3A
2.018% due 12/25/2044(2)

   $ 7,727,924         $ 7,761,332   

Wells Fargo Mortgage Backed Securities Trust
2003-J 2A1
2.504% due 10/25/2033(2)

     635,702           646,263   

2003-N 2A1
2.491% due 12/25/2033(2)

     1,283,203           1,284,241   

2004-M A7
2.615% due 8/25/2034(2)

     4,873,088           4,975,437   

2004-O A1
4.857% due 8/25/2034(2)

     2,397,891           2,446,566   

2004-Z 2A2
2.615% due 12/25/2034(2)

     2,515,182           2,561,854   

2005-2 2A1
4.75% due 4/25/2020

     235,056           243,407   

2005-AR10 2A6
2.614% due 6/25/2035(2)

     5,671,414           5,741,439   

2005-AR12 2A5
2.618% due 6/25/2035(2)

     4,632,833           4,685,629   

2005-AR12 2A6
2.618% due 6/25/2035(2)

     5,162,493           5,209,157   
Total Collateralized Mortgage Obligations
(Cost $154,789,102)		                155,946,751   
      
      Principal
Amount		        Value  
Senior Secured Loans – 10.1%         
Building Materials – 0.7%         

ABC Supply Co., Inc.
Term Loan
3.50% due 4/16/2020(2)

     4,218,125           4,203,615   

Quikrete Holdings, Inc.
1st Lien Term Loan
4.00% due 9/28/2020(2)

     3,424,125           3,425,186   
        

 

 

  
                 7,628,801   
Consumer Products – 0.6%         

Bombardier Recreational Products, Inc.
New Term Loan B
4.00% due 1/30/2019(2)

     6,794,286           6,796,188   
        

 

 

  
                 6,796,188   
Finance Companies – 0.2%         

Guggenheim Partners LLC
Term Loan
4.25% due 7/22/2020(2)

     2,779,000           2,783,168   
        

 

 

  
                 2,783,168   

 

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SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Food And Beverage – 0.6%         

H.J. Heinz Co.
Term Loan B1
3.25% due 6/7/2019(2)

   $ 7,227,000         $ 7,234,516   
        

 

 

  
                 7,234,516   
Gaming – 2.2%         

Bally Technologies, Inc.
Term Loan B
4.25% due 11/25/2020(2)

     3,887,843           3,902,423   

Boyd Gaming Corp.
Term Loan B
4.00% due 8/14/2020(2)

     4,935,667           4,946,772   

MGM Resorts International
Term Loan B
3.50% due 12/20/2019(2)

     7,028,643           7,004,465   

Pinnacle Entertainment, Inc.
Term Loan B2
3.75% due 8/13/2020(2)

     3,297,049           3,302,522   

Scientific Games International, Inc.
New Term Loan B
4.25% due 10/18/2020(2)

     5,970,000           5,901,882   
        

 

 

  
                 25,058,064   
Healthcare – 1.4%         

DaVita HealthCare Partners, Inc.
Term Loan B
3.50% due 6/24/2021(2)

     3,000,000           3,012,270   

Fresenius Medical Care AG & Co. KGaA
USD Term Loan A
1.975% due 10/30/2017(2)

     3,780,996           3,780,996   

Fresenius SE & Co. KGaA
USD Term Loan B
2.234% due 8/7/2019(2)

     8,932,500           8,947,417   
        

 

 

  
                 15,740,683   
Leisure – 1.0%         

Kasima LLC
New Term Loan B
3.25% due 5/17/2021(2)

     7,050,000           7,019,191   

WMG Acquisition Corp.
New Term Loan
3.75% due 7/1/2020(2)

     5,210,625           5,122,722   
        

 

 

  
                 12,141,913   
Media - Entertainment – 0.4%         

CBS Outdoor Americas Capital LLC
Term Loan B
3.00% due 1/31/2021(2)

     1,000,000           996,000   
                    

 

48   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Media - Entertainment (continued)         

Tribune Co.
2013 Term Loan
4.00% due 12/27/2020(2)

   $ 3,482,500         $ 3,487,933   
        

 

 

  
                 4,483,933   
Pharmaceuticals – 1.6%         

Amgen, Inc.
Term Loan
1.234% due 9/18/2018(2)

     8,325,000           8,304,188   

Quintiles Transnational Corp.
Term Loan B3
3.75% due 6/8/2018(2)

     3,250,000           3,246,750   

RPI Finance Trust
Term Loan A
2.234% due 8/9/2016(2)

     3,180,748           3,174,800   

Term Loan B2
3.25% due 5/9/2018(2)

     3,833,658           3,836,533   
        

 

 

  
                 18,562,271   
Refining – 0.5%         

Citgo Petroleum Corp.
Term Loan C
9.00% due 6/23/2017(2)

     2,096,429           2,122,634   

Tesoro Corp.
Term Loan B
2.401% due 5/30/2016(2)

     3,577,500           3,581,972   
        

 

 

  
                 5,704,606   
Wireless – 0.7%         

Crown Castle Operating Co.
Term Loan B2
3.00% due 1/31/2021(2)

     7,605,943           7,602,216   
        

 

 

  
                 7,602,216   
Wirelines – 0.2%         

Windstream Corp.
Term Loan B4
3.50% due 1/23/2020(2)

     2,771,859           2,764,930   
        

 

 

  
                 2,764,930   
Total Senior Secured Loans
(Cost $116,625,837)		                116,501,289   
      
      Principal
Amount		        Value  
Commercial Mortgage-Backed Securities – 21.9%   

American Tower Trust I
13 1A
1.551% due 3/15/2043(1)(3)

     7,000,000           6,971,517   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   49

Table of Contents

SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Commercial Mortgage-Backed Securities (continued)   

Banc of America Commercial Mortgage Trust
2006-1 A4
5.372% due 9/10/2045(2)

   $ 255,000         $ 268,930   

2007-3 AM
5.775% due 6/10/2049(2)

     4,050,000           4,461,168   

Banc of America Merrill Lynch Commercial Mortgage, Inc.
2005-4 A5B
4.997% due 7/10/2045(1)(2)

     10,000,000           10,383,390   

2005-5 A4
5.115% due 10/10/2045(1)(2)

     13,879,174           14,445,402   

Bear Stearns Commercial Mortgage Securities Trust
2005-PW10 A4
5.405% due 12/11/2040(1)(2)

     14,110,000           14,677,448   

2006-T24 AM
5.568% due 10/12/2041(2)

     9,300,000           10,105,222   

2007-PW16 AM
5.898% due 6/11/2040(2)

     2,800,000           3,107,205   

Chase Commercial Mortgage Securities Corp.
1998-1 F
6.56% due 5/18/2030(2)(3)

     13,988           13,968   

Citigroup Commercial Mortgage Trust
2006-C5 A4
5.431% due 10/15/2049

     4,515,000           4,897,317   

2014-388G B
1.205% due 6/15/2033(2)(3)

     4,775,000           4,787,009   

Commercial Mortgage Trust
2005-C6 AJ
5.209% due 6/10/2044(2)

     2,443,000           2,536,999   

Crown Castle Towers LLC
Sr. Sec. Nt.
3.214% due 8/15/2015(3)

     3,650,000           3,708,196   

CS Commercial Mortgage Trust
2006-C3 A3
5.982% due 6/15/2038(2)

     12,569,807           13,498,954   

Hilton U.S.A. Trust
2013-HLT AFX
2.662% due 11/5/2030(2)(3)

     8,000,000           8,101,800   

JPMorgan Chase Commercial Mortgage Securities Corp.
2005-LDP1 A4
5.038% due 3/15/2046(2)

     6,067,238           6,113,367   

2005-LDP5 AM
5.447% due 12/15/2044(2)

     2,420,000           2,569,154   

2006-LDP7 AM
6.057% due 4/15/2045(2)

     6,400,000           6,971,398   

2007-CB18 A4
5.44% due 6/12/2047

     12,044,212           13,137,959   
                    

 

50   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Commercial Mortgage-Backed Securities (continued)   

JPMorgan Chase Commercial Mortgage Securities Trust
2007-LD12 AM
6.218% due 2/15/2051(2)

   $ 4,000,000         $ 4,487,376   

LB-UBS Commercial Mortgage Trust
2005-C3 AJ
4.843% due 7/15/2040

     2,520,000           2,587,879   

2006-C6 A4
5.372% due 9/15/2039

     11,250,000           12,175,954   

Merrill Lynch Mortgage Trust
2005-LC1 A4
5.291% due 1/12/2044(2)

     2,736,691           2,879,418   

Morgan Stanley Bank of America Merrill Lynch Trust
2013-C8 A2
1.689% due 12/15/2048

     8,500,000           8,411,073   

Morgan Stanley Capital I Trust
2005-IQ10 A4A
5.23% due 9/15/2042(1)(2)

     10,660,575           11,023,930   

2006-HQ8 A4
5.598% due 3/12/2044(2)

     9,156,457           9,630,267   

Motel 6 Trust
2012-MTL6 A2
1.948% due 10/5/2025(3)

     11,600,000           11,613,178   

SBA Tower Trust
2.24% due 4/16/2018(3)

     13,000,000           12,898,847   

2.933% due 12/15/2017(3)

     5,000,000           5,095,520   

Wachovia Bank Commercial Mortgage Trust
2004-C11 A5
5.215% due 1/15/2041(2)

     1,285,676           1,287,258   

2005-C18 A4
4.935% due 4/15/2042

     4,500,000           4,587,534   

2005-C18 AJ2
5.022% due 4/15/2042(2)

     4,000,000           4,121,656   

2005-C21 A4
5.414% due 10/15/2044(2)

     4,758,305           4,967,313   

2006-C28 AM
5.603% due 10/15/2048(2)

     5,000,000           5,398,885   

2006-C29 A4
5.308% due 11/15/2048

     12,080,031           13,091,855   

2007-C33 AM
6.14% due 2/15/2051(2)

     5,250,000           5,854,795   
Total Commercial Mortgage-Backed Securities
(Cost $257,591,167)		                250,869,141   
      

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   51

Table of Contents

SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Corporate Bonds – 37.8%         
Aerospace & Defense – 0.7%         

Bombardier, Inc.
Sr. Nt.
4.25% due 1/15/2016(3)

   $ 3,250,000         $ 3,355,625   

Textron, Inc.
Sr. Nt.
6.20% due 3/15/2015

     4,600,000           4,787,616   
        

 

 

  
                 8,143,241   
Automotive – 0.9%         

Ford Motor Credit Co. LLC
Sr. Nt.
1.70% due 5/9/2016

     2,600,000           2,633,106   

2.75% due 5/15/2015

     4,000,000           4,076,796   

General Motors Financial Co., Inc.
3.25% due 5/15/2018

     4,000,000           4,060,000   
        

 

 

  
                 10,769,902   
Banking – 10.3%         

Ally Financial, Inc.
2.75% due 1/30/2017

     2,900,000           2,932,625   

3.125% due 1/15/2016

     2,000,000           2,052,500   

Amsouth Bank
Sub. Nt. Series AI
5.20% due 4/1/2015

     3,000,000           3,094,791   

Bank of America Corp.
Sr. Nt.
4.50% due 4/1/2015

     6,500,000           6,693,888   

Barclays Bank PLC
Sub. Nt.
6.05% due 12/4/2017(3)

     4,500,000           5,104,863   

Capital One Financial Corp.
Sr. Nt.
1.00% due 11/6/2015

     3,000,000           3,008,226   

Capital One N.A.
Sr. Nt.
1.50% due 3/22/2018

     4,000,000           3,962,704   

Citigroup, Inc.
Sr. Nt.
1.25% due 1/15/2016

     8,500,000           8,551,195   

Sub. Nt.
5.00% due 9/15/2014

     1,500,000           1,513,281   

Credit Agricole S.A.
Sr. Nt.
1.625% due 4/15/2016(3)

     4,500,000           4,559,711   

Intesa Sanpaolo S.p.A.
3.125% due 1/15/2016

     9,000,000           9,251,136   
                    

 

52   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Banking (continued)         

JPMorgan Chase & Co.
Sr. Nt.
1.10% due 10/15/2015

   $ 4,000,000         $ 4,016,624   

Macquarie Bank Ltd.
Sr. Nt.
3.45% due 7/27/2015(3)

     4,750,000           4,887,085   

Morgan Stanley
Sr. Nt.
1.75% due 2/25/2016

     4,700,000           4,766,749   

3.45% due 11/2/2015

     3,750,000           3,880,129   

Regions Bank
Sub. Nt.
7.50% due 5/15/2018

     4,500,000           5,355,954   

Royal Bank of Scotland Group PLC
Sr. Nt.
1.875% due 3/31/2017

     3,750,000           3,783,409   

2.55% due 9/18/2015

     7,000,000           7,144,368   

Standard Chartered PLC
Sr. Nt.
3.85% due 4/27/2015(3)

     4,500,000           4,616,550   

Sumitomo Mitsui Banking Corp.
Sr. Nt.
1.90% due 1/12/2015(3)

     4,500,000           4,526,483   

SunTrust Banks, Inc.
Sr. Nt.
3.60% due 4/15/2016

     4,600,000           4,822,511   

The Goldman Sachs Group, Inc.
Sr. Nt.
1.60% due 11/23/2015

     2,500,000           2,525,940   

3.30% due 5/3/2015

     6,750,000           6,899,917   

The Huntington National Bank
Sr. Nt.
1.30% due 11/20/2016

     4,000,000           4,017,400   

U.S. Bancorp
Jr. Sub. Nt.
3.442% due 2/1/2016

     5,000,000           5,207,495   

Wells Fargo Bank N.A.
Sub. Nt.
5.75% due 5/16/2016

     800,000           872,422   
        

 

 

  
                 118,047,956   
Brokerage – 1.6%         

E*Trade Financial Corp.
Sr. Nt.
6.75% due 6/1/2016(1)

     5,000,000           5,425,000   

Jefferies Group LLC
Sr. Nt.
3.875% due 11/9/2015

     6,000,000           6,191,700   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   53

Table of Contents

SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Brokerage (continued)         

Nomura Holdings, Inc.
Sr. Nt.
2.00% due 9/13/2016

   $ 7,000,000         $ 7,114,240   
        

 

 

  
                 18,730,940   
Building Materials – 0.5%         

Martin Marietta Materials, Inc.
Sr. Nt.
6.60% due 4/15/2018

     4,500,000           5,155,376   
        

 

 

  
                 5,155,376   
Cable Satellite – 0.7%         

DISH DBS Corp.
6.625% due 10/1/2014

     3,500,000           3,543,750   

Time Warner Cable, Inc.
5.85% due 5/1/2017

     4,000,000           4,498,676   
        

 

 

  
                 8,042,426   
Chemicals – 0.6%         

Ashland, Inc.
Sr. Nt.
3.00% due 3/15/2016

     2,700,000           2,754,000   

Yara International ASA
Sr. Nt.
5.25% due 12/15/2014(3)

     4,500,000           4,593,983   
        

 

 

  
                 7,347,983   
Construction Machinery – 0.5%         

CNH Industrial Capital LLC

         

3.25% due 2/1/2017

     2,500,000           2,534,375   

3.875% due 11/1/2015

     2,750,000           2,805,000   
        

 

 

  
                 5,339,375   
Consumer Cyclical Services – 0.4%         

The ADT Corp.
Sr. Nt.
2.25% due 7/15/2017

     4,500,000           4,443,750   
        

 

 

  
                 4,443,750   
Diversified Manufacturing – 0.5%         

Pentair Finance S.A.

         

1.35% due 12/1/2015

     1,750,000           1,763,556   

1.875% due 9/15/2017

     3,750,000           3,790,841   
        

 

 

  
                 5,554,397   
Electric – 1.1%         

DPL, Inc.
Sr. Nt.
6.50% due 10/15/2016

     1,800,000           1,939,500   
                    

 

54   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Electric (continued)         

FirstEnergy Corp.
Sr. Nt. Series A
2.75% due 3/15/2018

   $ 2,400,000         $ 2,428,721   

GenOn Energy, Inc.
Sr. Nt.
7.875% due 6/15/2017

     2,750,000           2,921,875   

The Dayton Power & Light Co.
1.875% due 9/15/2016(3)

     5,800,000           5,898,234   
        

 

 

  
                 13,188,330   
Finance Companies – 0.6%         

AerCap Ireland Capital Ltd.
2.75% due 5/15/2017(3)

     2,900,000           2,918,125   

CIT Group, Inc.
Sr. Nt.
4.25% due 8/15/2017

     3,250,000           3,390,156   
        

 

 

  
                 6,308,281   
Financial - Other – 0.2%         

Icahn Enterprises LP
3.50% due 3/15/2017

     2,700,000           2,730,375   
        

 

 

  
                 2,730,375   
Food And Beverage – 0.5%         

Pernod Ricard S.A.
Sr. Nt.
2.95% due 1/15/2017(3)

     5,000,000           5,199,640   
        

 

 

  
                 5,199,640   
Government Related – 1.8%         

Abu Dhabi National Energy Co.
Sr. Nt.
2.50% due 1/12/2018(3)

     4,500,000           4,565,484   

CNOOC Nexen Finance ULC
1.625% due 4/30/2017

     8,500,000           8,521,819   

Petrobras Global Finance B.V.

         

2.00% due 5/20/2016

     1,000,000           1,001,444   

3.25% due 3/17/2017

     4,250,000           4,357,482   

Petrobras International Finance Co.
2.875% due 2/6/2015

     2,250,000           2,274,008   
        

 

 

  
                 20,720,237   
Healthcare – 0.9%         

McKesson Corp.
Sr. Nt.
0.95% due 12/4/2015

     1,750,000           1,757,061   

Owens & Minor, Inc.
6.35% due 4/15/2016

     4,100,000           4,416,934   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   55

Table of Contents

SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Healthcare (continued)         

Thermo Fisher Scientific, Inc.
Sr. Nt.
1.30% due 2/1/2017

   $ 4,500,000         $ 4,506,633   
        

 

 

  
                 10,680,628   
Home Construction – 0.7%         

DR Horton, Inc.
3.625% due 2/15/2018

     4,500,000           4,606,875   

MDC Holdings, Inc.
5.375% due 7/1/2015

     3,500,000           3,640,000   
        

 

 

  
                 8,246,875   
Industrial - Other – 0.4%         

URS Corp.
3.85% due 4/1/2017

     4,500,000           4,690,035   
        

 

 

  
                 4,690,035   
Insurance - Life – 0.5%         

Lincoln National Corp.
Sr. Nt.
4.30% due 6/15/2015

     2,965,000           3,064,120   

Prudential Financial, Inc.
Sr. Nt.
4.75% due 9/17/2015

     3,000,000           3,148,545   
        

 

 

  
                 6,212,665   
Insurance: Property - Casualty – 1.6%         

Assurant, Inc.
Sr. Nt.
2.50% due 3/15/2018

     4,500,000           4,533,345   

Axis Capital Holdings Ltd.
Sr. Nt.
5.75% due 12/1/2014

     4,700,000           4,799,997   

Willis Group Holdings PLC
4.125% due 3/15/2016

     4,500,000           4,705,205   

XLIT Ltd.
2.30% due 12/15/2018

     4,000,000           3,978,212   
        

 

 

  
                 18,016,759   
Media - Entertainment – 1.1%         

21st Century Fox America, Inc.
5.30% due 12/15/2014

     4,500,000           4,601,304   

RR Donnelley & Sons Co.
Sr. Nt.
5.50% due 5/15/2015

     3,000,000           3,097,500   

Time Warner, Inc.
3.15% due 7/15/2015

     4,500,000           4,624,106   
        

 

 

  
                 12,322,910   

 

56   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Metals And Mining – 1.9%         

ArcelorMittal
Sr. Nt.
4.25% due 2/25/2015

   $ 3,900,000         $ 3,963,375   

FMG Resources August 2006 Pty. Ltd.
6.00% due 4/1/2017(3)

     3,000,000           3,097,500   

Freeport-McMoRan Copper & Gold, Inc.
Sr. Nt.
1.40% due 2/13/2015

     2,700,000           2,710,687   

Glencore Finance Canada Ltd.
2.05% due 10/23/2015(3)

     750,000           758,496   

2.85% due 11/10/2014(3)

     3,500,000           3,520,058   

Plains Exploration & Production Co.
8.625% due 10/15/2019

     4,275,000           4,574,250   

Steel Dynamics, Inc.
7.625% due 3/15/2020

     2,500,000           2,678,125   
        

 

 

  
                 21,302,491   
Midstream – 1.7%         

Buckeye Partners LP
Sr. Nt.
2.65% due 11/15/2018

     3,400,000           3,456,698   

Enterprise Products Operating LLC
Series A
8.375% due 8/1/2066(2)

     1,800,000           2,026,080   

Midcontinent Express Pipeline LLC
Sr. Nt.
5.45% due 9/15/2014(3)

     4,500,000           4,527,207   

Rockies Express Pipeline LLC
Sr. Nt.
3.90% due 4/15/2015(3)

     4,700,000           4,747,000   

Williams Partners LP
Sr. Nt.
3.80% due 2/15/2015

     4,500,000           4,586,558   
        

 

 

  
                 19,343,543   
Office - REITs – 0.2%         

BioMed Realty LP
3.85% due 4/15/2016

     1,700,000           1,778,564   
        

 

 

  
                 1,778,564   
Oil Field Services – 1.1%         

Nabors Industries, Inc.
2.35% due 9/15/2016

     3,400,000           3,470,951   

Transocean, Inc.
2.50% due 10/15/2017

     5,000,000           5,105,960   

Weatherford International LLC
6.35% due 6/15/2017

     4,000,000           4,545,112   
        

 

 

  
                 13,122,023   

 

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SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Pharmaceuticals – 1.4%         

AbbVie, Inc.
Sr. Nt.
1.20% due 11/6/2015

   $ 6,500,000         $ 6,543,888   

Mallinckrodt International Finance S.A.
3.50% due 4/15/2018

     3,500,000           3,482,500   

Mylan, Inc.
Sr. Nt.
1.35% due 11/29/2016

     2,250,000           2,253,749   

Zoetis, Inc.
Sr. Nt.
1.15% due 2/1/2016

     3,400,000           3,421,355   
        

 

 

  
                 15,701,492   
Refining – 0.2%         

Phillips 66
1.95% due 3/5/2015

     2,700,000           2,727,019   
        

 

 

  
                 2,727,019   
Retail - REITs – 1.5%         

ARC Properties Operating Partnership LP
2.00% due 2/6/2017(3)

     3,500,000           3,508,421   

Realty Income Corp.
Sr. Nt.
5.375% due 9/15/2017

     4,000,000           4,450,264   

Tanger Properties LP
Sr. Nt.
6.15% due 11/15/2015

     4,500,000           4,824,756   

WEA Finance LLC
5.75% due 9/2/2015(3)

     4,600,000           4,974,389   
        

 

 

  
                 17,757,830   
Retailers – 0.2%         

CVS Caremark Corp.
Sr. Nt.
1.20% due 12/5/2016

     2,500,000           2,515,280   
        

 

 

  
                 2,515,280   
Supermarkets – 0.2%         

Tesco PLC
Sr. Nt.
2.00% due 12/5/2014(3)

     1,800,000           1,810,422   
        

 

 

  
                 1,810,422   
Technology – 1.1%         

Avnet, Inc.
Sr. Nt.
6.00% due 9/1/2015

     3,650,000           3,855,572   
                    

 

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RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Technology (continued)         

Hewlett-Packard Co.
Sr. Nt.
2.35% due 3/15/2015

   $ 5,500,000         $ 5,571,692   

NXP B.V.
3.50% due 9/15/2016(3)

     3,400,000           3,463,750   
        

 

 

  
                 12,891,014   
Transportation Services – 0.6%         

Heathrow Funding Ltd.
Sr. Sec. Nt.
2.50% due 6/25/2015(3)

     3,846,000           3,908,801   

Ryder System, Inc.
Sr. Nt.
3.60% due 3/1/2016

     2,500,000           2,614,840   
        

 

 

  
                 6,523,641   
Wireless – 1.1%         

America Movil S.A.B. de C.V.
3.625% due 3/30/2015

     8,500,000           8,682,750   

American Tower Corp.
Sr. Nt.
4.50% due 1/15/2018

     3,602,000           3,924,710   
        

 

 

  
                 12,607,460   
Wirelines – 0.5%         

Verizon Communications, Inc.
Sr. Nt.
2.50% due 9/15/2016

     5,800,000           5,978,309   
        

 

 

  
                 5,978,309   
Total Corporate Bonds
(Cost $427,248,840)		                433,951,169   
      
      Principal
Amount		        Value  
Hybrid ARMS – 0.0%         

FNMA
2.44% due 8/1/2046(2)

     25,808           25,953   
                    
Total Hybrid ARMS
(Cost $26,023)		                25,953   
      
      Principal
Amount		        Value  
Mortgage-Backed Securities – 0.0%         

FHLMC
7.00% due 9/1/2038

     20,303           23,075   
                    
Total Mortgage-Backed Securities
(Cost $21,032)		                23,075   

 

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SCHEDULE OF INVESTMENTS — RS LOW DURATION BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Municipal Bonds – 0.4%         

Illinois St. G.O.
4.511% due 3/1/2015

   $ 4,400,000         $ 4,516,600   
                    
Total Municipal Bonds
(Cost $4,456,389)		                4,516,600   
      
      Principal
Amount		        Value  
U.S. Agencies – 0.0%         

FHLMC
2.00% due 8/25/2016

     400,000           412,041   
                    
Total U.S. Agencies
(Cost $406,970)		                412,041   
      
      Principal
Amount		        Value  
U.S. Government Securities – 4.3%         

U.S. Treasury Notes
0.375% due 3/31/2016

     3,250,000           3,250,634   

1.50% due 5/31/2019

     25,250,000           25,123,750   

1.625% due 3/31/2019 - 6/30/2019

     21,000,000           21,034,692   
Total U.S. Government Securities
(Cost $49,431,135)		                49,409,076   
      
      Principal
Amount		        Value  
Repurchase Agreements – 1.6%         
   

State Street Bank and Trust Co. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $17,922,000, due 7/1/2014(4)

     17,922,000           17,922,000   
Total Repurchase Agreements
(Cost $17,922,000)		                17,922,000   
Total Investments – 100.6%
(Cost $1,153,254,156)		                1,154,315,385   
Other Liabilities, Net – (0.6)%                (6,624,570 ) 
Total Net Assets – 100.0%              $ 1,147,690,815   

 

(1) 

Securities are segregated to cover anticipated or existing derivative positions or to be announced securities (TBA).

(2) 

Variable rate securities, which may include step-up bonds or adjustable rate mortgages. The rate shown is the rate in effect at June 30, 2014.

(3) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $198,491,418, representing 17.3% of net assets.

 

60   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS LOW DURATION BOND FUND

 

  These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.
(4) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Note

     1.375%           6/30/2018         $ 18,284,219   

The table below presents futures contracts as of June 30, 2014:

 

Description

(unaudited)

   Counterparty   Number of
Contracts		     Expiration     Face Value
(000s)		     Unrealized
Depreciation		  

Purchased Futures Contracts

  

   

2 YR U.S. Treasury Note

   Goldman Sachs & Co.     280        9/30/2014      $ 61,486      $ (62,238 ) 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                       Valuation Inputs                              
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Asset-Backed Securities

   $     —       $ 124,738,290       $     —         $ 124,738,290   

Collateralized Mortgage Obligations

     —         155,946,751         —           155,946,751   

Senior Secured Loans

     —         116,501,289         —           116,501,289   

Commercial Mortgage-Backed Securities

     —         250,869,141         —           250,869,141   

Corporate Bonds

     —         433,951,169         —           433,951,169   

Hybrid ARMS

     —         25,953         —           25,953   

Mortgage-Backed Securities

     —         23,075         —           23,075   

Municipal Bonds

     —         4,516,600         —           4,516,600   

U.S. Agencies

     —         412,041         —           412,041   

U.S. Government Securities

     —         49,409,076             —           49,409,076   

Repurchase Agreements

     —         17,922,000         —           17,922,000   
Other Financial Instruments:                

Financial Futures Contracts

     (62,238 )       —         —           (62,238 ) 
Total   $ (62,238 )     $ 1,154,315,385       $     —         $ 1,154,253,147   

 

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SCHEDULE OF INVESTMENTS — RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Senior Secured Loans – 30.9%         
Cable Satellite – 1.0%         

Grande Communications Holdings
Term Loan B
4.50% due 5/22/2020(1)

   $ 1,196,981         $ 1,192,493   
        

 

 

  
                 1,192,493   
Chemicals – 1.2%         

Arysta LifeScience Corp.
2nd Lien Term Loan
8.25% due 11/30/2020(1)

     1,350,000           1,370,250   
        

 

 

  
                 1,370,250   
Electric – 1.3%         

Viva Alamo LLC
Term Loan B
4.75% due 2/20/2021(1)

     1,496,250           1,511,212   
        

 

 

  
                 1,511,212   
Food And Beverage – 3.1%         

Aramark Corp.
USD Term Loan F
3.25% due 2/24/2021(1)

     1,197,000           1,188,023   

Big Heart Pet Brands
New Term Loan
3.50% due 3/8/2020(1)

     1,197,000           1,186,155   

H.J. Heinz Co.
Term Loan B2
3.50% due 6/5/2020(1)

     1,189,496           1,197,870   
        

 

 

  
                 3,572,048   
Healthcare – 3.8%         

CareCore National LLC
Term Loan B
5.50% due 3/5/2021(1)

     1,496,250           1,508,415   

Connolly Corp.
2nd Lien Term Loan
8.00% due 5/14/2022(1)

     1,500,000           1,521,255   

Phillips-Medisize Corp.
2nd Lien Term Loan
8.25% due 5/30/2022(1)

     1,350,000           1,355,062   
        

 

 

  
                 4,384,732   
Independent Energy – 2.6%         

Chief Exploration & Development LLC
2nd Lien Term Loan
7.50% due 5/12/2021(1)

     1,500,000           1,530,000   

Fieldwood Energy LLC
2nd Lien Term Loan
8.375% due 9/30/2020(1)

     1,350,000           1,391,175   
        

 

 

  
                 2,921,175   

 

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RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Industrial - Other – 0.9%         

Road Infrastructure Investment LLC
New 2nd Lien Term Loan
7.75% due 9/21/2021(1)

   $ 1,000,000         $ 993,330   
        

 

 

  
                 993,330   
Insurance: Property - Casualty – 2.5%         

Asurion LLC
New 2nd Lien Term Loan
8.50% due 3/3/2021(1)

     1,350,000           1,399,275   

USI, Inc.
Term Loan B
4.25% due 12/27/2019(1)

     1,496,231           1,497,174   
        

 

 

  
                 2,896,449   
Leisure – 1.0%         

WMG Acquisition Corp.
New Term Loan
3.75% due 7/1/2020(1)

     1,196,985           1,176,792   
        

 

 

  
                 1,176,792   
Media - Entertainment – 3.3%         

Deluxe Entertainment Services Group, Inc.
Term Loan 2014
6.50% due 2/28/2020(1)

     993,750           990,023   

IMG Worldwide Holdings LLC
2nd Lien Term Loan
8.25% due 5/1/2022(1)

     1,350,000           1,371,938   

Media General, Inc.
Delayed Draw Term Loan B
4.25% due 7/31/2020(1)

     1,448,824           1,454,242   
        

 

 

  
                 3,816,203   
Oil Field Services – 5.4%         

Caelus Energy Alaska O3 LLC
2nd Lien Term Loan
8.75% due 4/2/2021(1)

     1,000,000           983,330   

Drillships Financing Holding, Inc.
Term Loan B1
6.00% due 3/31/2021(1)

     1,400,000           1,421,882   

Floatel international Ltd.
USD Term Loan B
6.00% due 5/2/2020(1)

     1,500,000           1,508,445   

Stallion Oilfield Services Ltd.
Term Loan B
8.00% due 6/19/2018(1)

     725,315           735,288   

UTEX Industries, Inc.
2nd Lien Term Loan 2014
8.25% due 5/22/2022(1)

     1,500,000           1,513,125   
        

 

 

  
                 6,162,070   

 

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SCHEDULE OF INVESTMENTS — RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Technology – 4.8%         

Applied Systems, Inc.
New 2nd Lien Term Loan
7.50% due 1/23/2022(1)

   $ 500,000         $ 509,000   

Avaya, Inc.
Term Loan B6
6.50% due 3/30/2018(1)

     997,074           997,213   

Interactive Data Corp.
2014 Term Loan
4.75% due 5/2/2021(1)

     1,350,000           1,360,975   

ION Trading Technologies S.a.r.l.
New 2nd Lien Term Loan
7.25% due 5/15/2022(1)

     1,350,000           1,354,496   

Renaissance Learning, Inc.
New 2nd Lien Term Loan
8.00% due 4/1/2022(1)

     1,250,000           1,243,750   
        

 

 

  
                 5,465,434   
Total Senior Secured Loans
(Cost $35,238,924)		                35,462,188   
      
      Principal
Amount		        Value  
Corporate Bonds – 65.6%         
Automotive – 0.7%         

American Axle & Manufacturing, Inc.
7.75% due 11/15/2019(2)

     730,000           841,325   
        

 

 

  
                 841,325   
Cable Satellite – 2.2%         

Cequel Communications Holdings I LLC
Sr. Nt.
6.375% due 9/15/2020(3)

     1,200,000           1,275,000   

Intelsat Luxembourg S.A.
8.125% due 6/1/2023

     1,200,000           1,297,500   
        

 

 

  
                 2,572,500   
Chemicals – 2.1%         

Axalta Coating Systems U.S. Holdings, Inc.
7.375% due 5/1/2021(2)(3)

     750,000           817,500   

Hexion U.S. Finance Corp.
Sr. Sec. Nt.
8.875% due 2/1/2018

     1,550,000           1,612,000   
        

 

 

  
                 2,429,500   
Consumer Cyclical Services – 1.4%         

Monitronics International, Inc.
9.125% due 4/1/2020(2)

     1,500,000           1,601,250   
        

 

 

  
                 1,601,250   

 

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RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Consumer Products – 0.6%         

PC Nextco Holdings LLC
Sr. Nt.
8.75% due 8/15/2019(3)(4)

   $ 670,000         $ 684,238   
        

 

 

  
                 684,238   
Diversified Manufacturing – 1.2%         

Gates Global LLC
Sr. Nt.
6.00% due 7/15/2022(3)

     1,330,000           1,330,000   
        

 

 

  
                 1,330,000   
Electric – 2.7%         

AES Corp.
Sr. Nt.
7.375% due 7/1/2021

     1,550,000           1,813,500   

Calpine Corp.
Sr. Sec. Nt.
5.875% due 1/15/2024(3)

     1,200,000           1,266,000   
        

 

 

  
                 3,079,500   
Gaming – 3.7%         

Boyd Gaming Corp.
9.00% due 7/1/2020

     1,400,000           1,543,500   

Golden Nugget Escrow, Inc.
Sr. Nt.
8.50% due 12/1/2021(2)(3)

     1,500,000           1,575,000   

Scientific Games International, Inc.
6.625% due 5/15/2021(3)

     1,200,000           1,188,000   
        

 

 

  
                 4,306,500   
Government Related – 0.9%         

Citgo Petroleum Corp.
Sr. Sec. Nt.
11.50% due 7/1/2017(3)

     945,000           1,001,700   
        

 

 

  
                 1,001,700   
Healthcare – 6.8%         

Amsurg Corp.
5.625% due 11/30/2020(2)

     1,300,000           1,313,000   

ConvaTec Finance International S.A.
Sr. Nt.
8.25% due 1/15/2019(3)(4)

     1,200,000           1,227,000   

DaVita HealthCare Partners, Inc.
5.125% due 7/15/2024

     1,600,000           1,610,000   

INC Research LLC
Sr. Nt.
11.50% due 7/15/2019(3)

     630,000           715,050   

Tenet Healthcare Corp.
Sr. Nt.
8.125% due 4/1/2022

     1,450,000           1,678,375   
                    

 

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SCHEDULE OF INVESTMENTS — RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Healthcare (continued)         

Universal Hospital Services, Inc.
Sec. Nt.
7.625% due 8/15/2020

   $ 1,200,000         $ 1,257,000   
        

 

 

  
                 7,800,425   
Home Construction – 4.4%         

Meritage Homes Corp.
7.15% due 4/15/2020

     850,000           947,750   

WCI Communities, Inc.
6.875% due 8/15/2021

     1,000,000           1,030,000   

6.875% due 8/15/2021(3)

     670,000           690,100   

Weekley Homes LLC
Sr. Nt.
6.00% due 2/1/2023

     1,200,000           1,200,000   

Woodside Homes Co. LLC
Sr. Nt.
6.75% due 12/15/2021(2)(3)

     1,200,000           1,224,000   
        

 

 

  
                 5,091,850   
Independent Energy – 11.2%         

Alta Mesa Holdings LP
9.625% due 10/15/2018

     1,120,000           1,176,000   

Bonanza Creek Energy, Inc.
6.75% due 4/15/2021

     420,000           449,400   

BreitBurn Energy Partners LP
7.875% due 4/15/2022

     560,000           606,200   

Eagle Rock Energy Partners LP
8.375% due 6/1/2019

     780,000           842,400   

Energy XXI Gulf Coast, Inc.
6.875% due 3/15/2024(3)

     1,600,000           1,632,000   

EV Energy Partners LP
8.00% due 4/15/2019

     680,000           714,000   

Halcon Resources Corp.
9.75% due 7/15/2020

     1,310,000           1,429,538   

Linn Energy LLC
Sr. Nt.
6.25% due 11/1/2019

     600,000           628,500   

Memorial Production Partners LP
7.625% due 5/1/2021

     800,000           837,000   

Midstates Petroleum Co., Inc.
9.25% due 6/1/2021

     1,365,000           1,498,087   

Northern Blizzard Resources, Inc.
7.25% due 2/1/2022(3)

     600,000           618,000   

Samson Investment Co.
10.75% due 2/15/2020(2)(3)

     1,470,000           1,549,012   

Sanchez Energy Corp.
6.125% due 1/15/2023(3)

     330,000           340,725   
                    

 

66   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
Independent Energy (continued)         

SandRidge Energy, Inc.
7.50% due 3/15/2021

   $ 500,000         $ 541,875   
        

 

 

  
                 12,862,737   
Industrial - Other – 0.7%         

Safway Group Holding LLC
Sec. Nt.
7.00% due 5/15/2018(3)

     800,000           848,000   
        

 

 

  
                 848,000   
Insurance: Property - Casualty – 1.1%         

Hockey Merger Sub 2, Inc.
Sr. Nt.
7.875% due 10/1/2021(3)

     1,200,000           1,285,500   
        

 

 

  
                 1,285,500   
Media - Entertainment – 4.2%         

AMC Networks, Inc.
4.75% due 12/15/2022

     1,200,000           1,200,000   

Getty Images, Inc.
Sr. Nt.
7.00% due 10/15/2020(3)

     1,200,000           1,099,500   

Netflix, Inc.
Sr. Nt.
5.75% due 3/1/2024(2)(3)

     1,100,000           1,149,500   

Univision Communications, Inc.
Sr. Sec. Nt.
6.75% due 9/15/2022(3)

     1,214,000           1,342,987   
        

 

 

  
                 4,791,987   
Metals And Mining – 0.6%         

TMS International Corp.
7.625% due 10/15/2021(3)

     600,000           640,500   
        

 

 

  
                 640,500   
Midstream – 3.3%         

Gibson Energy, Inc.
Sr. Nt.
6.75% due 7/15/2021(2)(3)

     800,000           866,000   

Martin Midstream Partners LP
7.25% due 2/15/2021

     850,000           901,000   

NGL Energy Partners LP
6.875% due 10/15/2021(3)

     450,000           479,250   

Targa Resources Partners LP
6.875% due 2/1/2021

     500,000           541,250   

Tesoro Logistics LP
5.875% due 10/1/2020(3)

     928,000           979,040   
        

 

 

  
                 3,766,540   

 

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SCHEDULE OF INVESTMENTS — RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Oil Field Services – 1.4%         

Exterran Partners LP
6.00% due 4/1/2021

   $ 1,050,000         $ 1,060,500   

Offshore Group Investment Ltd.
Sr. Sec. Nt.
7.125% due 4/1/2023

     500,000           507,500   
        

 

 

  
                 1,568,000   
Paper – 1.1%         

Millar Western Forest Products Ltd.
Sr. Nt.
8.50% due 4/1/2021

     1,200,000           1,281,000   
        

 

 

  
                 1,281,000   
Pharmaceuticals – 2.0%         

JLL/Delta Dutch Newco B.V.
Sr. Nt.
7.50% due 2/1/2022(3)

     1,500,000           1,552,500   

Par Pharmaceutical Cos., Inc.
7.375% due 10/15/2020

     670,000           720,250   
        

 

 

  
                 2,272,750   
Refining – 2.1%         

Calumet Specialty Products Partners LP
7.625% due 1/15/2022(2)

     1,550,000           1,666,250   

Northern Tier Energy LLC
Sr. Sec. Nt.
7.125% due 11/15/2020

     670,000           726,113   
        

 

 

  
                 2,392,363   
REITs – 0.8%         

Sabra Health Care LP
5.50% due 2/1/2021

     850,000           892,500   
        

 

 

  
                 892,500   
Retailers – 2.1%         

Neiman Marcus Group Ltd. LLC
8.75% due 10/15/2021(3)(4)

     1,050,000           1,144,500   

The Pantry, Inc.
8.375% due 8/1/2020

     1,200,000           1,296,000   
        

 

 

  
                 2,440,500   
Supermarkets – 1.1%         

BI-LO LLC
Sr. Nt.
8.625% due 9/15/2018(3)(4)

     1,200,000           1,218,000   
        

 

 

  
                 1,218,000   
Technology – 3.8%         

Advanced Micro Devices, Inc.
Sr. Nt.
7.00% due 7/1/2024(3)

     1,200,000           1,225,500   
                    

 

68   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS HIGH YIELD FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Technology (continued)         

Amkor Technology, Inc.
7.375% due 5/1/2018

   $ 250,000         $ 259,375   

Avaya, Inc.
Sec. Nt.
10.50% due 3/1/2021(3)

     830,000           765,675   

First Data Corp.
12.625% due 1/15/2021(2)

     1,750,000           2,154,687   
        

 

 

  
                 4,405,237   
Wireless – 2.3%         

SBA Communications Corp.
Sr. Nt.
4.875% due 7/15/2022(3)

     1,370,000           1,352,875   

Wind Acquisition Finance S.A.
Sr. Sec. Nt.
4.75% due 7/15/2020(3)

     1,330,000           1,339,975   
        

 

 

  
                 2,692,850   
Wirelines – 1.1%         

EarthLink Holdings Corp.
Sr. Sec. Nt.
7.375% due 6/1/2020

     1,200,000           1,279,500   
        

 

 

  
                 1,279,500   
Total Corporate Bonds
(Cost $73,113,939)		                75,376,752   
      
      Principal
Amount		        Value  
Repurchase Agreements – 6.4%         
   

State Street Bank and Trust Co. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $7,339,000, due 7/1/2014(5)

     7,339,000           7,339,000   
Total Repurchase Agreements
(Cost $7,339,000)		                7,339,000   
Total Investments – 102.9%
(Cost $115,691,863)		                118,177,940   
Other Liabilities, Net – (2.9)%                (3,343,275 ) 
Total Net Assets – 100.0%              $ 114,834,665   

 

(1) 

Variable rate security. The rate shown is the rate in effect at June 30, 2014.

(2) 

Securities are segregated to cover anticipated or existing derivative positions or to be announced securities (TBA).

(3) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $34,422,627, representing 30.0% of net assets.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   69

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SCHEDULE OF INVESTMENTS — RS HIGH YIELD FUND

 

  These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.
(4) 

Payment-in-kind security, for which interest payments may be made in additional principal ranging from 0% to 100% of the full stated interest rate. As of June 30, 2014, interest payments had been made in cash.

(5) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Note

     1.375%           6/30/2018         $ 7,489,016   

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                    Valuation Inputs                           
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Senior Secured Loans

   $     —       $ 35,462,188       $     —         $ 35,462,188   

Corporate Bonds

     —         75,376,752         —           75,376,752   

Repurchase Agreements

     —         7,339,000         —           7,339,000   
Total   $ —       $ 118,177,940       $ —         $ 118,177,940   

 

70   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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SCHEDULE OF INVESTMENTS — RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Municipal Bonds – 98.6%         
Arizona – 0.7%         

Chandler AZ G.O.
5.00% due 7/1/2021

   $ 1,500,000         $ 1,723,560   
        

 

 

  
                 1,723,560   
California – 7.6%         

California St. Pub. Wrks. Brd. Lease Rev.
Dept. Dev. Svcs. Porterville Ser. C
6.50% due 4/1/2029

     1,500,000           1,788,270   

Dept. Gen. Svcs. Bldgs. 8 & 9 Ser. A
6.125% due 4/1/2028

     1,000,000           1,180,320   

Trustees Calif. St. Univ. Ser. D
6.125% due 4/1/2028

     1,245,000           1,481,276   

Var. Cap. Projs. Sub. Ser. I-1
6.125% due 11/1/2029

     1,875,000           2,237,813   

California St. Var. Purp. G.O.
6.00% due 3/1/2033 - 11/1/2035

     5,000,000           6,032,730   

6.50% due 4/1/2033

     2,000,000           2,434,720   

San Diego Cnty. CA Regl. Arpt. Auth. Rev.
AMT-Senior-Ser. B
5.00% due 7/1/2038

     1,200,000           1,289,904   

San Francisco City & Cnty. Arpt. Commn. Intl. Rev.
Ref-AMT-Second-Ser. C
5.00% due 5/1/2025

     1,500,000           1,678,020   

Univ. of California Revs.
Ser. O
5.75% due 5/15/2029

     1,000,000           1,189,410   
        

 

 

  
                 19,312,463   
Colorado – 1.2%         

Colorado Hsg. & Fin. Auth. Rev.
Single Family Mtg. Ser. A
FHA Insured
5.50% due 11/1/2029

     885,000           924,701   

Colorado St. Health Facs. Auth. Rev.
Catholic Health-Ser. A
5.25% due 2/1/2031

     2,000,000           2,237,640   
        

 

 

  
                 3,162,341   
Connecticut – 3.9%         

Connecticut St. G.O.
Ser. C
5.75% due 11/1/2019

     1,500,000           1,804,545   

Ser. D
0.83% due 9/15/2018(1)

     1,000,000           1,014,650   

5.00% due 11/1/2030

     2,000,000           2,265,520   

Ser. E
5.00% due 9/15/2032

     1,000,000           1,128,110   

Sifma Index Ser. A
0.91% due 3/1/2022(1)

     2,000,000           2,009,620   
                    

 

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SCHEDULE OF INVESTMENTS — RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Connecticut (continued)         

Connecticut St. Spl. Tax Oblig. Rev.
Transn. Infrastructure Ser. A
5.00% due 11/1/2027

   $ 1,500,000         $ 1,676,385   
        

 

 

  
                 9,898,830   
Delaware – 0.6%         

Wilmington Delaware G.O.
Ser. A
5.00% due 12/1/2018(2)

     1,195,000           1,398,496   

5.00% due 12/1/2028

     55,000           61,390   
        

 

 

  
                 1,459,886   
District Of Columbia – 0.6%         

Metropolitan Washington DC Arpt. Auth. Sys. Rev.
AMT-Ser.C
5.00% due 10/1/2028

     1,500,000           1,658,970   
        

 

 

  
                 1,658,970   
Florida – 2.7%         

Brevard Cnty. FLA Health Facs. Auth. Health Care Facs. Rev.
Health First Inc. Proj.
7.00% due 4/1/2039

     1,500,000           1,712,070   

Florida St. G.O.
Dept. Trans. Right of Way
5.375% due 7/1/2027

     1,500,000           1,705,770   

Miami-Dade Cnty. FLA Aviation Rev.
Ser. A
6.00% due 10/1/2027

     1,500,000           1,784,085   

Palm Beach Cnty. FLA Wtr. & Swr. Rev.
FPL Reclaimed Wtr. Proj.
5.25% due 10/1/2033

     1,500,000           1,718,190   
        

 

 

  
                 6,920,115   
Georgia – 3.8%         

Atlanta GA Arpt. Rev.
Ref-Gen-Ser. C
5.25% due 1/1/2030

     1,000,000           1,144,560   

Atlanta GA Wtr. & Wastewtr. Rev.
Ser. A
6.00% due 11/1/2027 - 11/1/2029

     3,000,000           3,582,585   

Gwinnett Cnty. GA Sch. Dist. G.O.
5.00% due 2/1/2018(2)

     1,760,000           2,018,843   

5.00% due 2/1/2032 - 2/1/2036

     2,740,000           3,005,407   
        

 

 

  
                 9,751,395   
Illinois – 5.7%         

Cook Cnty. IL G.O.
Ref-Ser. C
5.00% due 11/15/2019

     1,000,000           1,158,540   
                    

 

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RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Illinois (continued)         

Illinois St. G.O.
5.00% due 3/1/2017 - 1/1/2019

   $ 6,350,000         $ 7,057,666   

5.50% due 7/1/2027

     2,000,000           2,274,940   

Illinois St. Toll Hwy. Auth. Toll Hwy. Rev.
Ref. Ser. A-1
5.25% due 1/1/2030

     2,000,000           2,239,280   

Ser. B
5.50% due 1/1/2033

     1,500,000           1,681,740   
        

 

 

  
                 14,412,166   
Indiana – 0.9%         

Indiana Fin. Auth. Health Sys. Rev.
Sisters of St. Francis Health
5.00% due 11/1/2025

     2,000,000           2,210,040   
        

 

 

  
                 2,210,040   
Kansas – 1.3%         

Kansas St. Dept. Transn. Hwy. Rev.
Ser. B-2
5.00% due 9/1/2022

     1,500,000           1,734,630   

Kansas St. Dev. Fin. Auth. Hosp. Rev.
Adventist Health
5.50% due 11/15/2029

     1,500,000           1,690,095   
        

 

 

  
                 3,424,725   
Louisiana – 1.8%         

Louisiana Loc. Govt. Environmental Facs. & Cmnty. Dev. Auth. Rev.
Jefferson Parish Ser. A
5.25% due 4/1/2022

     1,525,000           1,676,326   

Louisiana St. G.O.
Ser. A
5.00% due 9/1/2025

     1,500,000           1,751,070   

Louisiana St. Pub. Facs. Auth. Rev.
Ochsner Clinic Foundation Proj. Ser. A
5.375% due 5/15/2043

     1,200,000           1,257,132   
        

 

 

  
                 4,684,528   
Maine – 0.7%         

Maine St. Tpk. Auth. Rev.
6.00% due 7/1/2034

     1,500,000           1,760,445   
        

 

 

  
                 1,760,445   
Maryland – 3.1%         

Anne Arundel Cnty. MD G.O.
Cons. Gen. Impt.
5.00% due 4/1/2028

     1,500,000           1,743,495   

Baltimore Cnty. MD G.O. Met. Dist.
71st Issue
5.00% due 2/1/2022

     1,500,000           1,710,345   
                    

 

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
Maryland (continued)         

Maryland St. Dept. Transn. Cons. Transn. Rev.
5.25% due 12/15/2017

   $ 1,500,000         $ 1,731,120   

Prince Georges Cnty. MD G.O.
Cons. Pub. Impt. Ser. A
5.00% due 9/15/2029

     2,285,000           2,647,767   
        

 

 

  
                 7,832,727   
Massachusetts – 4.9%         

Massachusetts Bay Transn. Auth. Rev.
Ser. A
5.25% due 7/1/2034

     1,500,000           1,699,215   

Massachusetts St. College Bldg. Auth. Rev.
Ser. B
5.00% due 5/1/2030

     1,500,000           1,686,555   

Massachusetts St. Dept. Transn. Met Hwy. Sys. Rev.
Ser. B
5.00% due 1/1/2027

     2,000,000           2,183,220   

Massachusetts St. Health & Ed. Facs. Auth. Rev.
Harvard Univ. Ser. A
5.50% due 11/15/2036

     1,500,000           1,739,565   

Ser. O, M.I.T.
6.00% due 7/1/2036

     1,500,000           1,780,635   

Massachusetts St. Wtr. Res. Auth. Rev.
Ref-Gen-Ser. B
5.00% due 8/1/2031

     2,000,000           2,267,000   

Univ. of Massachusetts Bldg. Auth. Proj. Rev.
Senior-Ser. 1
5.00% due 11/1/2039

     1,000,000           1,129,950   
        

 

 

  
                 12,486,140   
Michigan – 3.5%         

Michigan Mun. Bd. Auth. Dept. of Treasury Rev.
St. Clean Wtr. Revolving Fd.
5.00% due 10/1/2019

     2,000,000           2,271,240   

Michigan St. Hsg. Dev. Auth. Rental Hsg. Rev.
Ser. B
5.00% due 10/1/2018

     1,820,000           1,961,705   

Wayne Cnty. MI Arpt. Auth. Rev.
AMT-Arpt. Rev. Ref-Ser. A
5.00% due 12/1/2022

     1,500,000           1,681,050   

Arpt. Rev. Ref-Ser. B
5.00% due 12/1/2020

     2,595,000           3,022,137   
        

 

 

  
                 8,936,132   
Minnesota – 2.3%         

Minnesota St. G.O.
Hwy. & Var. Purp.
5.00% due 8/1/2022

     1,500,000           1,685,775   
                    

 

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
Minnesota (continued)         

Ref-St. Var. Purp. Ser. D
5.00% due 8/1/2022 - 8/1/2024

   $ 3,500,000         $ 4,123,230   
        

 

 

  
                 5,809,005   
Missouri – 2.6%         

Metropolitan St. Louis MO Swr. Dist. Wastewtr. Sys. Rev.
Ser. A
5.75% due 5/1/2038

     1,500,000           1,674,495   

Missouri St. Environmental Impt. & Energy Res. Auth. Wtr. Poll. Rev.
St. Revolving Fds. Pgs. Ser. A
5.75% due 1/1/2029

     1,500,000           1,710,825   

Missouri St. Hwys & Trans Commn. St. Rd. Rev.
(1st Lein)
5.00% due 5/1/2016(2)

     1,500,000           1,631,295   

(2nd Lein)
5.25% due 5/1/2017(2)

     1,500,000           1,702,530   
        

 

 

  
                 6,719,145   
Nevada – 0.9%         

Clark Cnty. NV Wtr. Reclamation Dist. G.O.
Ser. A
5.25% due 7/1/2038

     2,000,000           2,287,020   
        

 

 

  
                 2,287,020   
New Jersey – 8.3%         

Essex Cnty. NJ Impt. Auth. Proj. Rev.
AMBAC Insured
5.00% due 12/15/2023

     2,000,000           2,213,140   

Middlesex Cnty. NJ Impt. Auth. Lease Rev.
Regl. Ed. Svc. Commn.
5.25% due 12/15/2033

     1,500,000           1,672,680   

New Jersey Environmental Infrastructure Tr. Rev.
AMT-Ser. B
5.00% due 9/1/2028

     1,355,000           1,515,446   

New Jersey Garden St. Preservation Tr. Rev.
Ser. A
FSA Insured
5.50% due 11/1/2015

     1,500,000           1,604,940   

New Jersey St. Economic Dev. Auth. Rev.
Ref
5.00% due 6/15/2017

     1,500,000           1,669,335   

Ref-Sch. Facs. Constr. Sifma Ser. I
1.31% due 9/1/2025(1)

     2,500,000           2,457,475   

Sch. Facs. Constr. Ser. O
5.25% due 3/1/2015(2)

     1,500,000           1,550,535   

New Jersey St. G.O. Var. Purp.
5.00% due 6/1/2021

     2,000,000           2,303,560   
                    

 

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
New Jersey (continued)         

New Jersey St. Transn. Tr. Fd. Auth. Rev.
Transn. Sys. Ser. C
FSA Insured
5.50% due 12/15/2016

   $ 1,500,000         $ 1,679,265   

Transn. Sys. Ser. D
5.00% due 6/15/2015(2)

     2,000,000           2,091,660   

New Jersey St. Turnpike Auth. Rev.
Ser. B
5.00% due 1/1/2021

     2,000,000           2,357,040   
        

 

 

  
                 21,115,076   
New York – 8.9%         

New York NY G.O.
Ref-Ser. F
5.00% due 8/1/2027

     1,000,000           1,136,090   

Subser. A-1
5.25% due 8/1/2025

     1,610,000           1,925,640   

Subser. J-4
0.61% due 8/1/2025(1)

     2,000,000           2,000,200   

New York St. Dorm. Auth. Lease Rev.
Mental Health Svcs. Facs. Ser. A
5.00% due 8/15/2021

     2,000,000           2,327,500   

New York St. Environmental Facs. Corp. St. Clean Wtr. & Drinking Rev. Revolving Fds. NYC Muni. Wtr. Fin.

         

Auth. Projs-2nd Res-Ser. D
5.00% due 6/15/2024 - 6/15/2027

     3,000,000           3,531,550   

New York St. Liberty Dev. Corp. Liberty Rev.

         

Ref-7 World Trade Ctr. Class 1
5.00% due 9/15/2029 - 9/15/2031

     3,425,000           3,880,598   

New York St.Thruway Auth. Second Gen. Hwy. & Bridge Tr. Fd. Rev.
Ser. A-1
5.00% due 4/1/2028

     1,500,000           1,695,570   

Port Authority of NY & NJ Rev.
AMT-Ser. 178
5.00% due 12/1/2032

     1,000,000           1,101,660   

Consol-Ser. 172
5.00% due 10/1/2030

     2,000,000           2,200,440   

Triborough NY Bridge. & Tunl. Auth. Revs.
Ref-Gen-Ser. B
5.00% due 11/15/2029

     1,000,000           1,147,780   

Utility Debt Securitization Auth. NY Rev.
Restructuring-Ser. TE
5.00% due 12/15/2041

     1,500,000           1,689,975   
        

 

 

  
                 22,637,003   

 

76   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
North Carolina – 3.5%         

Charlotte NC G.O.
Ref-Ser. A
5.00% due 7/1/2022

   $ 1,000,000         $ 1,220,630   

Charlotte NC Wtr. & Swr. Sys. Rev.
Ser. B
5.00% due 7/1/2033

     1,750,000           1,976,555   

University NC Univ. Revs.
5.00% due 12/1/2027

     1,500,000           1,695,855   

Wake Cnty. NC G.O.
5.00% due 3/1/2017(2)

     1,500,000           1,680,750   

Pub. Impt. Ser. A
5.00% due 4/1/2018

     2,000,000           2,301,240   
        

 

 

  
                 8,875,030   
Ohio – 0.7%         

Ohio St. Hosp. Fac. Rev.
Cleveland Clinic Health Ser. B
5.50% due 1/1/2034

     1,500,000           1,686,780   
        

 

 

  
                 1,686,780   
Oklahoma – 0.7%         

Oklahoma St. Wtr. Res. Brd. Revolving Fd. Rev.
Master Tr.
5.00% due 4/1/2029

     1,635,000           1,864,668   
        

 

 

  
                 1,864,668   
Oregon – 2.3%         

Deschutes & Jefferson Cnty. OR Sch. Dist. G.O.
6.125% due 6/15/2018(2)

     1,500,000           1,800,870   

Oregon St. Dept. Administrative Svcs. Lottery Rev.
Ser. A
5.25% due 4/1/2030

     1,480,000           1,735,122   

Oregon St. Dept. Transn. Hwy. User Tax Rev.
Ser. A
5.00% due 11/15/2038

     1,000,000           1,134,260   

Oregon St. G.O. St. Brd. Ed.
Ser. D
5.00% due 8/1/2025

     1,000,000           1,154,150   
        

 

 

  
                 5,824,402   
Pennsylvania – 2.6%         

Franklin Cnty. PA Ind. Dev. Auth. Rev. Chambersburg
Hosp. Proj.
5.30% due 7/1/2030

     1,000,000           1,076,400   

Pennsylvania St. Higher Edl. Facs. Auth. Rev.
Univ. Pittsburgh Med. Ctr. Ser. E
5.00% due 5/15/2031

     1,000,000           1,089,410   

Pennsylvania St. Tpk. Commn. Tpk. Rev.
Ser. A
5.00% due 12/1/2044

     2,000,000           2,190,300   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   77

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SCHEDULE OF INVESTMENTS — RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Pennsylvania (continued)         

Sub-Spl-Motor License Fd. Enhanced Ser. A
6.00% due 12/1/2036

   $ 1,000,000         $ 1,159,220   

St. Mary Hosp. Auth. PA Health Sys. Rev.
Catholic Health East Ser. A
5.00% due 11/15/2018

     1,000,000           1,150,130   
        

 

 

  
                 6,665,460   
Rhode Island – 1.1%         

Rhode Island St. & Providence Plantations G.O.
Cons. Cap. Dev. Lien-Ser. A
5.50% due 8/1/2031

     1,500,000           1,734,390   

Tobacco Settlement Fing. Corp. RI
Asset Bkd. Ser. A
6.125% due 6/1/2032

     1,015,000           1,015,305   
        

 

 

  
                 2,749,695   
South Carolina – 1.6%         

Charleston Cnty. SC G.O.
Cap. Impt. Transn. Sales Tax
5.00% due 11/1/2022

     2,000,000           2,399,480   

South Carolina St. Pub. Svc. Auth. Rev.
Ser. B
5.25% due 1/1/2034

     1,500,000           1,660,200   
        

 

 

  
                 4,059,680   
Tennessee – 3.2%         

Johnson City Health & Edl. Facs. Brd. Hosp. Rev.
Mountain Sts. Health Alliance
5.625% due 7/1/2030

     1,500,000           1,654,815   

Metropolitan Govt. Nashville & Davidson Cnty. Tenn Health & Ed. Facs. Brd. Rev.
Vanderbilt Univ. Ser. A
5.00% due 10/1/2034

     1,250,000           1,389,663   

Vanderbilt Univ. Ser. B
5.50% due 10/1/2034

     1,500,000           1,747,095   

Tennessee St. G.O.
Ser. C
5.00% due 5/1/2018(2)

     1,425,000           1,651,917   

Tennessee St. Sch. Bd. Auth. Higher Ed. Facs. Rev.
Ser. B
5.125% due 5/1/2033

     1,500,000           1,673,040   
        

 

 

  
                 8,116,530   
Texas – 9.7%         

Austin, Tex. Elec. Utility Sys. Rev.
Ser. A
5.00% due 11/15/2026

     2,000,000           2,278,660   
                    

 

78   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Texas (continued)         

Canadian River Tex. Mun. Wtr. Auth. Rev.
Sub Lien-Conjunctive Use Groundwater Supply Proj.
5.00% due 2/15/2026

   $ 2,000,000         $ 2,280,860   

Harris Cnty. Tex. G.O.
Ser. B
5.00% due 10/1/2024

     1,500,000           1,747,560   

Lower Colorado River Tex. Auth. Rev
Ref.
5.50% due 5/15/2032

     1,000,000           1,152,110   

Montgomery Cnty. Tex. G.O.
5.125% due 3/1/2031

     1,500,000           1,654,110   

North Tex. Twy. Auth. Dallas North Twy. Sys. Rev.
Ser. C
6.00% due 1/1/2023 - 1/1/2025

     4,250,000           4,945,877   

North Tex. Twy. Auth. Rev.
Sr. Projs. Sys. Ser. A
5.50% due 9/1/2036

     1,500,000           1,733,700   

Round Rock Tex. Indpt. Sch. Dist. G.O.
Sch. Bldg.
5.25% due 8/1/2034

     1,500,000           1,706,370   

Seguin Tex. Indpt. Sch. Dist. G.O.
Sch. Bldg.
5.00% due 8/15/2037

     1,500,000           1,694,265   

Tex. Private Activity Bd. Surface Transn. Corp. Rev.
Sr. Lien
6.875% due 12/31/2039

     3,130,000           3,667,515   

Texas St. Univ. Sys. Fing. Rev.
5.25% due 3/15/2027

     1,500,000           1,745,415   
        

 

 

  
                 24,606,442   
Virginia – 4.0%         

Fairfax Cnty. VA Indl. Dev. Auth. Rev.
Health Care Inova Ser. C
5.00% due 5/15/2025

     500,000           558,385   

Tobacco Settlement Fin. Corp. VA Rev.
Asset Bkd.
5.50% due 6/1/2026(2)

     725,000           759,822   

Virginia St. Comwlth. Transn. Brd. Rev.
Fed. Transn. Grant Antic. Nts. Ser. B-Garvee
5.00% due 3/15/2027

     1,835,000           2,130,343   

Virginia St. Pub. Sch. Auth. Rev.
Sch. Fing. Ser. B
5.00% due 8/1/2028

     1,500,000           1,689,780   

5.25% due 8/1/2033

     1,000,000           1,124,560   
                    

 

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Table of Contents

SCHEDULE OF INVESTMENTS — RS TAX-EXEMPT FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Virginia (continued)         

Virginia St. Res. Auth. Infrastructure Rev.
Pooled Fing. Prog. Ser. B
5.00% due 11/1/2030

   $ 1,375,000         $ 1,578,019   

Ref-Pooled Fing. Prog. Ser. A
5.00% due 11/1/2038

     2,095,000           2,390,667   
        

 

 

  
                 10,231,576   
Washington – 3.2%         

Clark Cnty. WA Pub. Utility Dist. No. 001 Generating Sys. Rev.
5.00% due 1/1/2024

     2,000,000           2,259,580   

King Cnty. WA Swr. Rev.
5.50% due 1/1/2030

     1,815,000           2,051,985   

Port of Seattle WA Rev.
AMT-Ref-Ser. B
5.00% due 9/1/2024

     1,500,000           1,689,915   

Washington St. G.O.
Motor Vehicle Tax-Senior 520 Corridor Prog. Toll- Ser. C
5.00% due 6/1/2033

     2,000,000           2,247,940   
        

 

 

  
                 8,249,420   
Total Municipal Bonds
(Cost $231,036,293)		                251,131,395   
Total Investments – 98.6%
(Cost $231,036,293)		                251,131,395   
Other Assets, Net – 1.4%                3,528,130   
Total Net Assets – 100.0%              $ 254,659,525   

 

(1) 

Variable rate security. The rate shown is the rate in effect at June 30, 2014.

(2) 

Pre-refunded.

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                     Valuation Inputs                            
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Municipal Bonds

   $     —       $ 251,131,395       $     —         $ 251,131,395   
Total   $ —       $ 251,131,395       $ —         $ 251,131,395   

 

80   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Municipal Bonds – 94.8%         
Arizona – 0.9%         

Tempe AZ Indl. Dev. Auth. Rev.
Ref-Friendship Vlg. Ser. A
6.25% due 12/1/2042

   $ 1,000,000         $ 1,045,090   
        

 

 

  
                 1,045,090   
California – 8.4%         

California Hlth. Facs. Fing. Auth. Rev.
Episcopal Home Ser. B
6.00% due 2/1/2020(1)

     1,500,000           1,869,870   

California St. Hsg. Fin. Agy. Rev.
AMT-Home Mtge. Ser. K
5.50% due 2/1/2042

     775,000           788,555   

California St. Muni. Fin. Auth. Rev.
Emerson College
5.75% due 1/1/2033

     1,300,000           1,467,596   

California St. Pub. Wrks. Brd. Lease Rev.
Var. Cap. Projs. Sub. Ser. I-1
6.125% due 11/1/2029

     1,500,000           1,790,250   

6.625% due 11/1/2034

     200,000           201,318   

San Diego Calif. Redev. Agy. Tax Allocation Rev.
Naval Training Ctr. Ser. A
5.75% due 9/1/2040

     1,000,000           1,111,960   

Tulare Calif. Redev. Agy. Tax Allocation
Merged Tulare Redev. Ser. A
6.125% due 8/1/2035

     1,970,000           2,172,595   
        

 

 

  
                 9,402,144   
Colorado – 2.7%         

Colorado Regl. Trans. Dist. Private Activity Rev.
Denver Trans. Partners
6.00% due 1/15/2034

     2,000,000           2,221,560   

Regl. Transn. Dist. CO Private Activity Rev.
Denver Trans. Partners
6.00% due 1/15/2026

     670,000           760,772   
        

 

 

  
                 2,982,332   
District Of Columbia – 3.6%         

District of Columbia Rev.
Utd. Negro College Fund
6.875% due 7/1/2040

     2,000,000           2,307,240   

District of Columbia Tobacco Settlement Fing. Corp.
Asset Bkd. Bds.
6.50% due 5/15/2033

     1,500,000           1,687,890   
        

 

 

  
                 3,995,130   

 

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SCHEDULE OF INVESTMENTS — RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Florida – 11.7%         

Brevard Cnty. FLA Hlth. Facs. Auth.
Hlth. Care Facs. Rev. Hlth. First Inc. Proj.
7.00% due 4/1/2039

   $ 1,500,000         $ 1,712,070   

Highlands Cnty. FLA Hlth. Facs. Auth. Rev.
Adventist Hlth./Sunbelt Ser. B
6.00% due 11/15/2037

     1,600,000           1,830,256   

Miami-Dade Cnty. FLA Hlth. Facs. Auth. Hosp. Rev.
Ref-Miami Children’s Hosp.
5.875% due 8/1/2042

     975,000           1,104,012   

Ref-Miami Children’s Hosp. Ser. A
6.125% due 8/1/2042

     1,895,000           2,161,816   

Village Cmnty. Dev. Dist. No. 10 FLA Spl. Assessment Rev.
5.75% due 5/1/2031

     1,500,000           1,569,570   

Village Cmnty. Dev. Dist. No. 8 FLA Spl. Assessment Rev.
Ref-Phase II
6.125% due 5/1/2039

     2,120,000           2,332,318   

Ref-Phase III
6.125% due 5/1/2040

     2,175,000           2,346,172   
        

 

 

  
                 13,056,214   
Georgia – 1.3%         

Atlanta GA Wtr. & Wastewtr. Rev.
Ser. A
6.25% due 11/1/2039

     1,250,000           1,458,637   
        

 

 

  
                 1,458,637   
Illinois – 6.5%         

Chicago IL O’Hare Intl. Arpt. Rev.
Gen-Third Lien-Ser. A
5.75% due 1/1/2039

     1,500,000           1,716,075   

Illinois Fin. Auth. Rev.
Ref-Roosevelt Univ. Proj.
6.50% due 4/1/2044

     755,000           791,708   

Temps-50-Park Place Elmhurst Ser. D-3
6.25% due 8/15/2015

     575,000           410,625   

Temps-75-Admiral at Lake-D-1
7.00% due 5/15/2018

     1,000,000           1,001,410   

Illinois St. G.O.
5.50% due 7/1/2025 - 7/1/2038

     3,000,000           3,343,650   
        

 

 

  
                 7,263,468   
Indiana – 1.8%         

Indiana Hlth. & Edl. Fac. Fing. Auth. Hosp. Rev.
Cmnty. Fndtn. Northwest Indiana
5.50% due 3/1/2037

     1,900,000           2,006,552   
        

 

 

  
                 2,006,552   

 

82   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Iowa – 0.9%         

Iowa St. Fin. Auth. Midwestern Disaster Area Rev.
St. Fertilizer Co. Proj.
5.50% due 12/1/2022

   $ 1,000,000         $ 1,042,410   
        

 

 

  
                 1,042,410   
Kentucky – 3.0%         

Kentucky St. Economic Dev. Fin. Auth. Rev.
Owensboro Medical Hlth Sys. Ser. A
6.50% due 3/1/2045

     1,500,000           1,679,700   

Ref-Owensboro Medical Hlth. Ser. B
6.375% due 3/1/2040

     1,500,000           1,675,545   
        

 

 

  
                 3,355,245   
Louisiana – 1.6%         

Louisiana Pub. Facs. Auth. Rev.
Ochsner Clinic Fndtn. Proj.
6.50% due 5/15/2037

     1,500,000           1,746,615   
        

 

 

  
                 1,746,615   
Maryland – 1.5%         

Gaithersburg MD Economic Dev. Rev.
Ref-Asbury MD Oblig. Ser. B
6.00% due 1/1/2023

     1,500,000           1,685,175   
        

 

 

  
                 1,685,175   
Massachusetts – 3.3%         

Massachusetts Edl. Fing. Auth. Ed. Loan Rev.
Ser. J
5.625% due 7/1/2028 - 7/1/2033

     3,345,000           3,630,169   
        

 

 

  
                 3,630,169   
Michigan – 1.4%         

Michigan St. Hsg. Dev. Auth. Single Fam. Homeownership Rev.
AMT-Ser. C
5.50% due 12/1/2028

     950,000           1,002,820   

Wayne Cnty. MI Arpt. Auth. Rev.
AMT-Arpt. Rev. Ref-Ser. A
5.00% due 12/1/2022

     500,000           560,350   
        

 

 

  
                 1,563,170   
New Jersey – 4.5%         

New Jersey Economic Dev. Auth. Rev.
MSU Student Hsg. Proj. Provident Group Montclair LLC
5.875% due 6/1/2042

     2,000,000           2,183,500   

New Jersey St. Higher Ed. Assistance Auth. Student Loan Rev.
Ser. 1
5.75% due 12/1/2028

     1,500,000           1,643,595   
                    

 

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Table of Contents

SCHEDULE OF INVESTMENTS — RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
New Jersey (continued)         

New Jersey St. Trans. Trust Fund Auth. Rev.
Transn. Ser. B
5.25% due 6/15/2036

   $ 1,060,000         $ 1,157,817   
        

 

 

  
                 4,984,912   
New Mexico – 3.6%         

Farmington NM Poll. Ctrl. Rev.
Ref- Pub. Svc. N Mex Ser. F
6.25% due 6/1/2040

     1,600,000           1,766,528   

Ref-AMT-Pub. Svc. N Mex San Juan Ser. D
5.90% due 6/1/2040

     2,000,000           2,204,840   
        

 

 

  
                 3,971,368   
New York – 6.2%         

Albany NY Cap. Res. Corp. Rev.
St. Peter’s Hosp.
6.25% due 11/15/2038

     1,500,000           1,691,550   

Hempstead Town NY Loc. Dev. Corp. Rev.
Molloy College Proj.
5.75% due 7/1/2039

     1,500,000           1,652,700   

New York City Indl. Dev. Agy. Spl. Fac. Rev.
AMT-Jetblue Airways Corp. Project
5.125% due 5/15/2030

     1,825,000           1,826,807   

Port Auth. of New York & New Jersey Spl. Oblig. Rev.
JFK Intl. Air Terminal LLC
6.00% due 12/1/2036

     1,500,000           1,716,405   
        

 

 

  
                 6,887,462   
Ohio – 1.4%         

Bowling Green OH Student Hsg. Rev.
CFP I LLC St. Univ. Proj.
6.00% due 6/1/2045

     1,500,000           1,555,680   
        

 

 

  
                 1,555,680   
Oklahoma – 3.2%         

Oklahoma Dev. Fin. Auth. CCRC Rev.
Ref-Inverness Vlg. Cmnty.
6.00% due 1/1/2032

     1,885,000           1,952,766   

Tulsa Cnty. OKLA Indl. Auth. Sr. Living Cmnty. Rev.
Montereau Inc. Proj. Ser. A
7.25% due 11/1/2040

     1,500,000           1,640,145   
        

 

 

  
                 3,592,911   
Pennsylvania – 6.8%         

Cumberland Cnty. PA Mun. Auth. Rev.
Asbury PA Oblig. Group
6.00% due 1/1/2030

     1,300,000           1,388,127   

Diakon Lutheran
6.125% due 1/1/2029

     1,500,000           1,636,380   
                    

 

84   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Pennsylvania (continued)         

Dauphin Cnty. PA Gen. Auth. Hlth. Sys. Rev.
Pinnacle Hlth. Sys. Proj. Ser. A
6.00% due 6/1/2036

   $ 1,500,000         $ 1,649,340   

Pennsylvania St. Tpk. Commn. Tpk. Rev.
Sub. Ser. A
5.625% due 12/1/2031

     1,500,000           1,702,770   

6.50% due 12/1/2036

     1,000,000           1,175,300   
        

 

 

  
                 7,551,917   
Rhode Island – 2.1%         

Rhode Island St. & Providence Plantations G.O.
Cons. Cap. Dev. Lien-Ser. A
5.50% due 8/1/2031

     1,500,000           1,734,390   

Tobacco Settlement Fing. Corp. RI
Asset Bkd. Ser. A
6.125% due 6/1/2032

     600,000           600,180   
        

 

 

  
                 2,334,570   
South Carolina – 1.5%         

South Carolina Jobs-Economic Dev. Auth. Student Hsg. Rev.
Coastal Hsg. Fndtn. Ser. A
6.00% due 4/1/2030

     1,500,000           1,658,985   
        

 

 

  
                 1,658,985   
Tennessee – 1.5%         

Johnson City Hlth. & Edl. Facs. Brd. Hosp. Rev.
Mountain Sts. Hlth. Alliance
5.625% due 7/1/2030

     1,500,000           1,654,815   
        

 

 

  
                 1,654,815   
Texas – 15.4%         

Central Tex. Regl. Mobility Auth. Rev.
Sr. Lien
6.00% due 1/1/2041

     1,500,000           1,694,790   

Lower Colorado River Tex. Auth. Rev
Ref.
5.50% due 5/15/2032

     1,500,000           1,728,165   

North Tex. Twy. Auth. Rev.
Toll 2nd Tier Ref. Ser. F
5.75% due 1/1/2033

     2,000,000           2,219,740   

Seguin TX Indpt. Sch. Dist. G.O.
Sch. Bldg.
5.00% due 8/15/2038

     1,500,000           1,689,240   

Tarrant Cnty. Tex. Cultural Ed. Facs. Fin. Corp. Ret. Fac.
CC Young Memorial Home Ser. B-1
7.25% due 2/15/2016

     126,000           126,262   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   85

Table of Contents

SCHEDULE OF INVESTMENTS — RS HIGH INCOME MUNICIPAL BOND FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Texas (continued)         

Tex. Private Activity Bd. Surface Transn. Corp.
Sr. Lien-LBJ Infrastructure
7.00% due 6/30/2040

   $ 3,110,000         $ 3,690,046   

7.50% due 6/30/2033

     2,000,000           2,450,840   

Sr. Lien-NTE Mobility
6.875% due 12/31/2039

     1,500,000           1,757,595   

7.50% due 12/31/2031

     1,500,000           1,820,940   
        

 

 

  
                 17,177,618   
Total Municipal Bonds
(Cost $96,312,586)		                105,602,589   
Total Investments – 94.8%
(Cost $96,312,586)		                105,602,589   
Other Assets, Net – 5.2%                5,824,521   
Total Net Assets – 100.0%              $ 111,427,110   

 

(1)

Pre-refunded.

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                     Valuation Inputs                            
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Municipal Bonds

   $     —       $ 105,602,589       $     —         $ 105,602,589   
Total   $ —       $ 105,602,589       $ —         $ 105,602,589   

 

86   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Senior Secured Loans – 84.1%         
Airlines – 2.3%         

Air Canada
Term Loan B
5.50% due 9/20/2019(1)

   $ 20,500,000         $ 20,910,000   

American Airlines, Inc.
Exit Term Loan
3.75% due 6/27/2019(1)

     25,702,406           25,727,337   

Delta Air Lines, Inc.
New Term Loan B
3.50% due 4/20/2017(1)

     14,071,602           14,061,611   
        

 

 

  
                 60,698,948   
Automotive – 2.9%         

INA Beteiligungsgesellschaft mbH
USD Term Loan E
3.75% due 5/15/2020(1)

     21,000,000           21,074,340   

Navistar International Corp.
Term Loan B
5.75% due 8/17/2017(1)

     16,198,599           16,502,323   

The Goodyear Tire & Rubber Co.
New 2nd Lien Term Loan
4.75% due 4/30/2019(1)

     25,000,000           25,125,000   

TI Group Automotive Systems LLC
Term Loan B
5.50% due 3/28/2019(1)

     13,825,000           13,825,000   
        

 

 

  
                 76,526,663   
Building Materials – 2.5%         

ABC Supply Co., Inc.
Term Loan
3.50% due 4/16/2020(1)

     12,840,063           12,795,893   

Generac Power Systems, Inc.
Term Loan B
3.25% due 5/31/2020(1)

     26,001,250           25,793,240   

Quikrete Holdings, Inc.
1st Lien Term Loan
4.00% due 9/28/2020(1)

     25,805,000           25,813,000   

2nd Lien Term Loan
7.00% due 3/26/2021(1)

     2,000,000           2,048,760   
        

 

 

  
                 66,450,893   
Cable Satellite – 2.6%         

Grande Communications Holdings
Term Loan B
4.50% due 5/22/2020(1)

     20,010,784           19,935,744   

Virgin Media Bristol LLC
USD Term Loan B
3.50% due 6/5/2020(1)

     20,000,000           19,931,200   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   87

Table of Contents

SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Cable Satellite (continued)         

Yankee Cable Acquisition LLC
Term Loan B
4.50% due 3/2/2020(1)

   $ 28,961,991         $ 29,097,822   
        

 

 

  
                 68,964,766   
Chemicals – 2.9%         

Arysta LifeScience Corp.
1st Lien Term Loan
4.50% due 5/29/2020(1)

     17,324,985           17,346,641   

2nd Lien Term Loan
8.25% due 11/30/2020(1)

     5,000,000           5,075,000   

Axalta Coating Systems U.S. Holdings, Inc.
USD Term Loan
4.00% due 2/1/2020(1)

     29,700,000           29,682,774   

Minerals Technologies, Inc.
Term Loan B
4.00% due 5/9/2021(1)

     24,000,000           24,090,000   
        

 

 

  
                 76,194,415   
Consumer Cyclical Services – 0.5%         

Monitronics International, Inc.
New Term Loan B
4.25% due 3/23/2018(1)

     12,708,789           12,728,615   
        

 

 

  
                 12,728,615   
Consumer Products – 2.9%         

Bombardier Recreational Products, Inc.
New Term Loan B
4.00% due 1/30/2019(1)

     29,051,557           29,059,691   

KIK Custom Products, Inc.
New 1st Lien Term Loan
5.50% due 4/29/2019(1)

     19,800,175           19,862,150   

New 2nd Lien Term Loan
9.50% due 10/29/2019(1)

     10,000,000           10,112,500   

Party City Holdings, Inc.
Term Loan
4.00% due 7/27/2019(1)

     17,698,886           17,579,949   
        

 

 

  
                 76,614,290   
Diversified Manufacturing – 0.7%         

Silver II U.S. Holdings LLC
Term Loan
4.00% due 12/13/2019(1)

     19,152,985           19,091,504   
        

 

 

  
                 19,091,504   
Electric – 3.0%         

Calpine Corp.
Term Loan B1
4.00% due 4/1/2018(1)

     10,618,105           10,647,942   
                    

 

88   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Electric (continued)         

Term Loan B3
4.00% due 10/9/2019(1)

   $ 21,148,374         $ 21,192,363   

Dynegy Holdings, Inc.
Term Loan B2
4.00% due 4/23/2020(1)

     14,469,231           14,498,603   

Viva Alamo LLC
Term Loan B
4.75% due 2/20/2021(1)

     31,181,850           31,493,668   
        

 

 

  
                 77,832,576   
Environmental – 0.7%         

ADS Waste Holdings, Inc.
New Term Loan
3.75% due 10/9/2019(1)

     19,700,000           19,592,635   
        

 

 

  
                 19,592,635   
Financial Other – 1.5%         

Delos Finance S.a.r.l.
Term Loan B
3.50% due 3/6/2021(1)

     5,000,000           4,993,750   

Fly Funding II S.a.r.l.
Term Loan B
4.50% due 8/9/2019(1)

     28,443,417           28,668,689   

Flying Fortress, Inc.
New Term Loan
3.50% due 6/30/2017(1)

     5,000,000           4,990,650   
        

 

 

  
                 38,653,089   
Food And Beverage – 2.7%         

Big Heart Pet Brands
New Term Loan
3.50% due 3/8/2020(1)

     36,630,594           36,298,721   

H.J. Heinz Co.
Term Loan B2
3.50% due 6/5/2020(1)

     18,412,878           18,542,504   

New HB Acquisition LLC
Term Loan
6.75% due 4/9/2020(1)

     14,962,500           15,504,891   
        

 

 

  
                 70,346,116   
Gaming – 3.7%         

Bally Technologies, Inc.
Term Loan B
4.25% due 11/25/2020(1)

     22,056,034           22,138,744   

Boyd Gaming Corp.
Term Loan B
4.00% due 8/14/2020(1)

     9,677,778           9,699,553   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   89

Table of Contents

SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Gaming (continued)         

Peninsula Gaming LLC
Term Loan
4.25% due 11/20/2017(1)

   $ 14,556,364         $ 14,578,053   

Pinnacle Entertainment, Inc.
Term Loan B2
3.75% due 8/13/2020(1)

     5,113,791           5,122,279   

Scientific Games International, Inc.
New Term Loan B
4.25% due 10/18/2020(1)

     17,910,000           17,705,647   

Station Casinos LLC
Term Loan B
4.25% due 3/2/2020(1)

     26,784,076           26,851,037   
        

 

 

  
                 96,095,313   
Healthcare – 9.4%         

CareCore National LLC
Term Loan B
5.50% due 3/5/2021(1)

     11,970,000           12,067,316   

Connolly Corp.
1st Lien Term Loan
5.00% due 5/14/2021(1)

     25,000,000           25,268,750   

2nd Lien Term Loan
8.00% due 5/14/2022(1)

     5,000,000           5,070,850   

Convatec, Inc.
Term Loan
4.00% due 12/22/2016(1)

     12,005,395           12,000,353   

DaVita HealthCare Partners, Inc.
Term Loan B
3.50% due 6/24/2021(1)

     9,250,000           9,287,832   

Immucor, Inc.
Refi Term Loan B2
5.00% due 8/17/2018(1)

     22,716,969           22,795,115   

INC Research, Inc.
Refi Term Loan B
4.25% due 7/12/2018(1)

     6,420,366           6,404,316   

Kindred Healthcare, Inc.
New Term Loan
4.00% due 4/9/2021(1)

     30,000,000           30,012,600   

MedSolutions Holdings, Inc.
Term Loan B
6.50% due 7/8/2019(1)

     20,900,000           20,913,167   

Onex Carestream Finance LP
1st Lien Term Loan
5.00% due 6/7/2019(1)

     17,064,105           17,072,637   

2nd Lien Term Loan
9.50% due 12/7/2019(1)

     14,589,646           14,881,439   
                    

 

90   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Healthcare (continued)         

Pharmaceutical Product Development LLC
New Term Loan B
4.00% due 12/5/2018(1)

   $ 985,000         $ 986,999   

Select Medical Corp.
Series E Term Loan B
3.75% due 6/1/2018(1)

     11,000,000           10,986,140   

Sheridan Holdings, Inc.
1st Lien Term Loan 2013
4.50% due 6/29/2018(1)

     20,343,672           20,328,414   

2nd Lien Term Loan 2013
8.25% due 12/20/2021(1)

     5,000,000           5,106,250   

Surgical Care Affiliates, Inc.
Class C Incremental Term Loan
4.00% due 6/29/2018(1)

     16,925,256           16,854,678   

United Surgical Partners International, Inc.
Extended Term Loan
4.25% due 4/19/2017(1)

     9,196,627           9,196,627   

Incremental Term Loan
4.75% due 4/3/2019(1)

     8,324,761           8,366,385   
        

 

 

  
                 247,599,868   
Independent Energy – 1.6%         

Chief Exploration & Development LLC
2nd Lien Term Loan
7.50% due 5/12/2021(1)

     7,000,000           7,140,000   

Fieldwood Energy LLC
1st Lien Term Loan
3.875% due 9/28/2018(1)

     6,947,520           6,967,806   

2nd Lien Term Loan
8.375% due 9/30/2020(1)

     15,470,443           15,942,292   

Samson Investment Co.
New 2nd Lien Term Loan
5.00% due 9/25/2018(1)

     13,000,000           12,977,250   
        

 

 

  
                 43,027,348   
Industrial - Other – 3.3%         

Brock Holdings III, Inc.
New Term Loan B
6.00% due 3/16/2017(1)

     10,040,181           10,052,731   

New 2nd Lien Term Loan
10.00% due 3/16/2018(1)

     2,500,000           2,521,875   

Gates Global, Inc.
Term Loan B
4.25% due 6/5/2021(1)

     26,000,000           25,906,660   

Rexnord LLC
1st Lien Term Loan B
4.00% due 8/21/2020(1)

     29,775,000           29,730,338   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   91

Table of Contents

SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Industrial - Other (continued)         

Road Infrastructure Investment LLC
New 1st Lien Term Loan
4.25% due 3/31/2021(1)

   $ 14,962,500         $ 14,943,797   

New 2nd Lien Term Loan
7.75% due 9/21/2021(1)

     2,500,000           2,483,325   
        

 

 

  
                 85,638,726   
Insurance - Life – 0.6%         

CNO Financial Group, Inc.
Term Loan B2
3.75% due 9/20/2018(1)

     16,177,772           16,170,977   
        

 

 

  
                 16,170,977   
Insurance: Property - Casualty – 2.7%         

Alliant Holdings I, Inc.
New Term Loan B
4.25% due 12/20/2019(1)

     16,554,091           16,541,675   

Asurion LLC
New Term Loan B1
5.00% due 5/24/2019(1)

     21,314,070           21,434,069   

New 2nd Lien Term Loan
8.50% due 3/3/2021(1)

     9,000,000           9,328,500   

USI, Inc.
Term Loan B
4.25% due 12/27/2019(1)

     22,693,587           22,707,884   
        

 

 

  
                 70,012,128   
Leisure – 1.0%         

WMG Acquisition Corp.
New Term Loan
3.75% due 7/1/2020(1)

     27,293,750           26,833,304   
        

 

 

  
                 26,833,304   
Lodging – 0.9%         

Hilton Worldwide Finance LLC
USD Term Loan B2
3.50% due 10/26/2020(1)

     24,210,526           24,160,168   
        

 

 

  
                 24,160,168   
Media - Entertainment – 8.4%         

Cumulus Media Holdings, Inc.
2013 Term Loan
4.25% due 12/23/2020(1)

     20,425,673           20,476,738   

Deluxe Entertainment Services Group, Inc.
Term Loan 2014
6.50% due 2/28/2020(1)

     21,862,500           21,780,516   

EMI Music Publishing Ltd.
Term Loan B
3.75% due 6/29/2018(1)

     14,124,161           14,095,912   
                    

 

92   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Media - Entertainment (continued)         

Getty Images, Inc.
Term Loan B
4.75% due 10/18/2019(1)

   $ 20,192,500         $ 19,497,070   

IMG Worldwide Holdings LLC
1st Lien Term Loan
5.25% due 5/6/2021(1)

     25,000,000           25,150,000   

2nd Lien Term Loan
8.25% due 5/1/2022(1)

     6,000,000           6,097,500   

Media General, Inc.
Delayed Draw Term Loan B
4.25% due 7/31/2020(1)

     27,830,508           27,934,595   

Telesat Canada
USD Term Loan B2
3.50% due 3/28/2019(1)

     18,116,885           18,065,976   

Tribune Co.
2013 Term Loan
4.00% due 12/27/2020(1)

     34,825,000           34,879,327   

Univision Communications, Inc.
Term Loan C4
4.00% due 3/1/2020(1)

     33,382,514           33,337,113   
        

 

 

  
                 221,314,747   
Metals And Mining – 1.1%         

FMG Resources (August 2006) Pty. Ltd.
New Term Loan B
3.75% due 6/30/2019(1)

     29,479,475           29,490,678   
        

 

 

  
                 29,490,678   
Midstream – 0.1%         

EMG Utica LLC
Term Loan
4.75% due 3/27/2020(1)

     2,500,000           2,503,125   
        

 

 

  
                 2,503,125   
Oil Field Services – 5.0%         

Caelus Energy Alaska O3 LLC
2nd Lien Term Loan
8.75% due 4/2/2021(1)

     14,500,000           14,258,285   

Drillships Financing Holding, Inc.
Term Loan B1
6.00% due 3/31/2021(1)

     29,775,000           30,240,383   

Floatel international Ltd.
USD Term Loan B
6.00% due 5/2/2020(1)

     27,800,000           27,956,514   

Seadrill Partners Finco LLC
Term Loan B
4.00% due 2/21/2021(1)

     35,835,000           35,586,663   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   93

Table of Contents

SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Oil Field Services (continued)         

Stallion Oilfield Services Ltd.
Term Loan B
8.00% due 6/19/2018(1)

   $ 11,121,497         $ 11,274,418   

Teine Energy Ltd.
2nd Lien Term Loan
7.50% due 5/9/2019(1)

     10,862,500           10,971,125   
        

 

 

  
                 130,287,388   
Packaging – 1.8%         

Berry Plastics Holding Corp.
Term Loan D
3.50% due 2/8/2020(1)

     25,422,667           25,197,677   

Reynolds Group Holdings, Inc.
New Dollar Term Loan
4.00% due 12/1/2018(1)

     23,170,894           23,189,431   
        

 

 

  
                 48,387,108   
Pharmaceuticals – 3.4%         

Envision Acquisition Co. LLC
1st Lien Term Loan
5.75% due 11/4/2020(1)

     19,850,000           19,998,875   

2nd Lien Term Loan
9.75% due 11/4/2021(1)

     2,500,000           2,525,000   

JLL/Delta Dutch Newco B.V.
USD Term Loan
4.25% due 3/11/2021(1)

     24,000,000           23,790,000   

Millennium Laboratories, Inc.
Term Loan B
5.25% due 4/16/2021(1)

     30,000,000           30,275,100   

Quintiles Transnational Corp.
Term Loan B3
3.75% due 6/8/2018(1)

     13,000,000           12,987,000   
        

 

 

  
                 89,575,975   
Refining – 0.3%         

Citgo Petroleum Corp.
Term Loan B
8.00% due 6/24/2015(1)

     1,142,857           1,150,000   

Term Loan C
9.00% due 6/23/2017(1)

     6,729,631           6,813,751   
        

 

 

  
                 7,963,751   
Retailers – 4.5%         

99 Cents Only Stores
New Term Loan
4.50% due 1/11/2019(1)

     12,642,134           12,699,023   

Bass Pro Group LLC
New Term Loan
3.75% due 11/20/2019(1)

     15,784,735           15,789,628   
                    

 

94   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Retailers (continued)         

BJ’s Wholesale Club, Inc.
New 1st Lien Term Loan
4.50% due 9/26/2019(1)

   $ 22,213,702         $ 22,225,253   

New 2nd Lien Term Loan
8.50% due 3/26/2020(1)

     15,000,000           15,346,950   

Hudson’s Bay Co.
1st Lien Term Loan
4.75% due 11/4/2020(1)

     23,125,000           23,405,738   

The Neiman Marcus Group, Inc.
2020 Term Loan
4.25% due 10/25/2020(1)

     29,850,187           29,769,890   
        

 

 

  
                 119,236,482   
Technology – 8.8%         

Avago Technologies Cayman Ltd.
USD Term Loan B
3.75% due 5/6/2021(1)

     27,000,000           27,074,790   

Avaya, Inc.
Term Loan B6
6.50% due 3/30/2018(1)

     18,671,184           18,673,798   

CDW LLC
New Term Loan
3.25% due 4/29/2020(1)

     25,789,918           25,499,781   

First Data Corp.
2018 Term Loan
4.154% due 9/24/2018(1)

     22,435,000           22,450,929   

Extended 2021 Term Loan
4.154% due 3/24/2021(1)

     10,000,000           10,012,500   

Interactive Data Corp.
2014 Term Loan
4.75% due 5/2/2021(1)

     11,000,000           11,089,430   

ION Trading Technologies S.a.r.l.
New 2nd Lien Term Loan
7.25% due 5/15/2022(1)

     26,000,000           26,086,580   

Renaissance Learning, Inc.
New 1st Lien Term Loan
4.50% due 4/9/2021(1)

     14,463,750           14,445,670   

New 2nd Lien Term Loan
8.00% due 4/1/2022(1)

     12,000,000           11,940,000   

STG-Fairway Acquisitions, Inc.
Term Loan B
6.25% due 2/28/2019(1)

     14,328,749           14,275,017   

SumTotal Systems LLC
1st Lien Term Loan
6.25% due 11/16/2018(1)

     10,224,233           9,968,627   

TransUnion LLC
New USD Term Loan
4.00% due 4/9/2021(1)

     26,932,500           26,922,804   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   95

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SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Technology (continued)         

Vantiv LLC
2014 Term Loan B
3.75% due 5/12/2021(1)

   $ 12,700,000         $ 12,763,500   
        

 

 

  
          
                 231,203,426   
Wireless – 1.1%         

Crown Castle Operating Co.
Term Loan B2
3.00% due 1/31/2021(1)

     5,491,552           5,488,862   

LTS Buyer LLC
1st Lien Term Loan
4.00% due 4/13/2020(1)

     23,191,740           23,113,120   
        

 

 

  
                 28,601,982   
Wirelines – 1.2%         

Integra Telecom, Inc.
Term Loan B
5.25% due 2/22/2019(1)

     9,875,000           9,926,844   

Level 3 Financing, Inc.
New 2019 Term Loan
4.00% due 8/1/2019(1)

     21,000,000           21,017,430   
        

 

 

  
                 30,944,274   
Total Senior Secured Loans
(Cost $2,203,697,430)		                2,212,741,278   
      
      Principal
Amount		        Value  
Corporate Bonds – 11.6%         
Airlines – 0.2%         

Air Canada
Sr. Sec. Nt.
6.75% due 10/1/2019(2)

     4,000,000           4,350,000   
        

 

 

  
                 4,350,000   
Cable Satellite – 0.4%         

CCO Holdings LLC
7.25% due 10/30/2017

     10,000,000           10,550,000   
        

 

 

  
                 10,550,000   
Chemicals – 0.3%         

Axalta Coating Systems U.S. Holdings, Inc. 7.375% due 5/1/2021(2)

     6,422,000           6,999,980   
        

 

 

  
                 6,999,980   
Consumer Cyclical Services – 0.4%         

Monitronics International, Inc.
9.125% due 4/1/2020(3)

     11,000,000           11,742,500   
        

 

 

  
                 11,742,500   

 

96   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
Consumer Products – 0.5%         

Party City Holdings, Inc.
8.875% due 8/1/2020

   $ 6,250,000         $ 6,921,875   

PC Nextco Holdings LLC
Sr. Nt.
8.75% due 8/15/2019(2)(4)

     5,400,000           5,514,750   
        

 

 

  
                 12,436,625   
Food And Beverage – 0.2%         

Big Heart Pet Brands
7.625% due 2/15/2019

     4,154,000           4,328,883   
        

 

 

  
                 4,328,883   
Gaming – 0.8%         

Golden Nugget Escrow, Inc.
Sr. Nt.
8.50% due 12/1/2021(2)(3)

     10,000,000           10,500,000   

Pinnacle Entertainment, Inc.
7.75% due 4/1/2022

     10,000,000           10,875,000   
        

 

 

  
                 21,375,000   
Healthcare – 1.4%         

Amsurg Corp.
5.625% due 11/30/2020

     6,250,000           6,312,500   

ConvaTec Finance International S.A.
Sr. Nt.
8.25% due 1/15/2019(2)(3)(4)

     6,800,000           6,953,000   

ConvaTec Healthcare E S.A.
10.50% due 12/15/2018(2)

     11,600,000           12,557,000   

Universal Hospital Services, Inc.
Sec. Nt.
7.625% due 8/15/2020

     10,750,000           11,260,625   
        

 

 

  
                 37,083,125   
Independent Energy – 3.4%         

Alta Mesa Holdings LP
9.625% due 10/15/2018

     10,330,000           10,846,500   

Clayton Williams Energy, Inc.
7.75% due 4/1/2019(3)

     14,000,000           14,840,000   

Energy XXI Gulf Coast, Inc.
7.50% due 12/15/2021

     6,250,000           6,687,500   

Linn Energy LLC
6.50% due 5/15/2019

     5,000,000           5,275,000   

Midstates Petroleum Co., Inc.
10.75% due 10/1/2020

     5,000,000           5,675,000   

Northern Oil and Gas, Inc.
8.00% due 6/1/2020

     8,250,000           8,806,875   

Penn Virginia Corp.
8.50% due 5/1/2020(3)

     15,000,000           16,762,500   
                    

 

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SCHEDULE OF INVESTMENTS — RS FLOATING RATE FUND

 

June 30, 2014 (unaudited)   Principal
Amount		        Value  
Independent Energy (continued)         

Samson Investment Co.
10.75% due 2/15/2020(2)

   $ 9,000,000         $ 9,483,750   

SandRidge Energy, Inc.
8.125% due 10/15/2022

     11,000,000           12,113,750   
        

 

 

  
                 90,490,875   
Industrial - Other – 0.5%         

Safway Group Holding LLC
Sec. Nt.
7.00% due 5/15/2018(2)

     11,600,000           12,296,000   
        

 

 

  
                 12,296,000   
Insurance: Property - Casualty – 0.2%         

A-S Co-Issuer Subsidiary, Inc.
Sr. Nt.
7.875% due 12/15/2020(2)

     5,000,000           5,281,250   
        

 

 

  
                 5,281,250   
Pharmaceuticals – 0.6%         

JLL/Delta Dutch Newco B.V.
Sr. Nt.
7.50% due 2/1/2022(2)

     14,330,000           14,831,550   
        

 

 

  
                 14,831,550   
Retailers – 0.5%         

99 Cents Only Stores
11.00% due 12/15/2019

     5,625,000           6,229,688   

Neiman Marcus Group Ltd. LLC
8.75% due 10/15/2021(2)(4)

     6,000,000           6,540,000   
        

 

 

  
                 12,769,688   
Technology – 1.2%         

Alcatel-Lucent U.S.A., Inc.
4.625% due 7/1/2017(2)

     7,500,000           7,743,750   

Avaya, Inc.
Sec. Nt.
10.50% due 3/1/2021(2)

     14,457,000           13,336,583   

Igloo Holdings Corp.
Sr. Nt.
8.25% due 12/15/2017(2)(4)

     8,000,000           8,160,000   

Interactive Data Corp.
5.875% due 4/15/2019(2)

     3,000,000           3,045,000   
        

 

 

  
                 32,285,333   
Transportation Services – 0.5%         

Avis Budget Car Rental LLC
2.977% due 12/1/2017(1)

     6,000,000           6,120,000   

Navios Maritime Holdings, Inc.
8.125% due 2/15/2019

     8,000,000           8,410,000   
        

 

 

  
                 14,530,000   

 

98   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)   Principal
Amount		        Value  
Wireless – 0.5%         

Digicel Group Ltd.
Sr. Nt.
8.25% due 9/30/2020(2)

   $ 12,470,000         $ 13,592,300   
        

 

 

  
                 13,592,300   
Total Corporate Bonds
(Cost $291,971,065)		                304,943,109   
      
      Principal
Amount		        Value  
Repurchase Agreements – 4.8%         
   

State Street Bank and Trust Co.
Repurchase Agreement, 0.00%,
dated 6/30/2014, maturity value of $127,364,000, due 7/1/2014(5)

     127,364,000           127,364,000   
Total Repurchase Agreements
(Cost $127,364,000)		                127,364,000   
Total Investments – 100.5%
(Cost $2,623,032,495)		                2,645,048,387   
Other Liabilities, Net – (0.5)%                (13,953,529 ) 
Total Net Assets – 100.0%              $ 2,631,094,858   

 

(1) 

Variable rate security. The rate shown is the rate in effect at June 30, 2014.

(2) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $141,184,913, representing 5.4% of net assets. These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.

(3) 

Securities are segregated to cover anticipated or existing derivative positions or to be announced securities (TBA).

(4) 

Payment-in-kind security, for which interest payments may be made in additional principal ranging from 0% to 100% of the full stated interest rate. As of June 30, 2014, interest payments had been made in cash.

(5) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Note

     0.75%           3/31/2018         $ 129,914,025   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   99

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The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Senior Secured Loans

   $     —       $ 2,212,741,278       $     —         $ 2,212,741,278   

Corporate Bonds

     —         304,943,109         —           304,943,109   

Repurchase Agreements

     —         127,364,000         —           127,364,000   
Total   $ —       $ 2,645,048,387       $ —         $ 2,645,048,387   

 

100   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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SCHEDULE OF INVESTMENTS — RS STRATEGIC INCOME FUND

 

June 30, 2014 (unaudited)         Principal
Amount		      Value  
Asset-Backed Securities – 2.5%          

Avis Budget Rental Car Funding AESOP LLC
2014-1A A
2.46% due 7/20/2020(1)(2)

      $ 500,000       $ 503,584   

Domino’s Pizza Master Issuer LLC
2012-1A A2
5.216% due 1/25/2042(1)

        763,338         820,299   

GE Capital Credit Card Master Note Trust
2012-6 A
1.36% due 8/17/2020(2)

        500,000         497,801   

Miramax LLC
2011-1A A
6.25% due 10/20/2021(1)(2)

          316,058         324,967   

Total Asset-Backed Securities

(Cost $2,078,672)

                   2,146,651   
       
            Principal
Amount		      Value  
Collateralized Mortgage Obligations – 11.1%          

Banc of America Funding Corp.
2004-2 1CB1
5.75% due 9/20/2034

        206,353         222,597   

Banc of America Mortgage Securities Trust
2003-J 2A2
2.846% due 11/25/2033(3)

        266,868         268,233   

Bear Stearns ALT-A Trust
2003-3 2A
2.599% due 10/25/2033(3)

        427,495         432,793   

2004-4 A1
0.752% due 6/25/2034(3)

        471,040         452,777   

Chase Mortgage Finance Corp.
2005-S1 1A10
5.50% due 5/25/2035

        35,836         36,787   

2007-A1 2A1
2.498% due 2/25/2037(2)(3)

        165,350         166,195   

2007-A1 9A1
2.573% due 2/25/2037(3)

        152,128         152,012   

Countrywide Home Loans Mortgage Pass-Through Trust
2003-11 A31
5.50% due 5/25/2033(2)

        99,621         102,612   

Countrywide Home Loans Trust
2004-5 2A9
5.25% due 5/25/2034

        378,799         398,152   

CS First Boston Mortgage Securities Corp.
2003-8 2A1
5.00% due 4/25/2018(2)

        56,255         56,797   
                       

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   101

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Collateralized Mortgage Obligations (continued)        

2004-AR5 6A1
2.561% due 6/25/2034(3)

      $ 433,673       $ 436,250   

GSR Mortgage Loan Trust
2004-15F 5A1
5.50% due 1/25/2020

        131,624         135,233   

Impac CMB Trust
2004-7 1A1
0.892% due 11/25/2034(3)

        423,770         407,848   

JPMorgan Mortgage Trust
2004-S2 1A3
4.75% due 11/25/2019(2)

        95,991         96,679   

2005-A1 3A1
2.971% due 2/25/2035(2)(3)

        229,627         231,116   

2005-A1 6T1
2.952% due 2/25/2035(2)(3)

        130,491         129,652   

Master Adjustable Rate Mortgages Trust
2004-13 2A1
2.642% due 4/21/2034(2)(3)

        221,563         224,195   

Master Asset Securitization Trust
2003-5 2A1
5.00% due 6/25/2018

        71,682         74,270   

Merrill Lynch Mortgage Investors Trust
2005-A2 A2
2.47% due 2/25/2035(3)

        444,682         445,773   

Morgan Stanley Mortgage Loan
Trust 2004-1 1A9
4.50% due 11/25/2018(2)

        44,736         45,394   

Prime Mortgage Trust
2004-2 A2
4.75% due 11/25/2019(2)

        77,913         80,833   

RAAC Trust
2005-SP1 1A5
5.00% due 9/25/2034

        222,163         228,256   

Residential Funding Mortgage Securities I, Inc.
2005-S3 A1
4.75% due 3/25/2020

        68,538         69,712   

Structured Adjustable Rate Mortgage Loan Trust
2004-5 3A1
2.415% due 5/25/2034(2)(3)

        405,849         409,287   

Structured Asset Securities Corp.
2004-20 7A1
5.25% due 11/25/2034

        202,599         205,424   

2004-21XS 2A6A
4.74% due 12/25/2034(3)

        40,495         41,420   

Thornburg Mortgage Securities Trust
2004-4 3A
2.018% due 12/25/2044(2)(3)

        406,034         407,789   
                       

 

102   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Collateralized Mortgage Obligations (continued)        

Wells Fargo Mortgage Backed Securities Trust
2003-17 1A14
5.25% due 1/25/2034(2)

      $ 145,778       $ 154,902   

2004-EE 2A1
2.612% due 12/25/2034(2)(3)

        356,748         364,433   

2004-O A1
4.857% due 8/25/2034(2)(3)

        255,222         260,403   

2004-R 2A1
2.615% due 9/25/2034(2)(3)

        310,759         319,613   

2004-W A9
2.616% due 11/25/2034(3)

        289,492         298,355   

2004-Y 3A1
2.616% due 11/25/2034(3)

        433,119         438,747   

2005-2 2A1
4.75% due 4/25/2020

        119,831         124,089   

2005-6 A4
5.50% due 8/25/2035

        171,509         177,842   

2005-AR10 2A6
2.614% due 6/25/2035(2)(3)

        239,093         242,045   

2005-AR12 2A5
2.618% due 6/25/2035(3)

        259,785         262,746   

2005-AR3 2A1
2.614% due 3/25/2035(3)

        391,661         396,326   

2005-AR4 2A2
2.613% due 4/25/2035(3)

        421,157         428,177   

2006-1 A3
5.00% due 3/25/2021

          153,612         157,116   
Total Collateralized Mortgage Obligations
(Cost $9,454,255)		                   9,582,880   
       
            Principal
Amount		      Value  
Senior Secured Loans – 10.6%          
Automotive – 0.8%          

Navistar International Corp.
Term Loan B
5.75% due 8/17/2017(3)

        697,500         710,578   
         

 

 

  
                    710,578   
Consumer Products – 1.1%          

Party City Holdings, Inc.
Term Loan
4.00% due 7/27/2019(3)

        982,587         975,984   
         

 

 

  
                    975,984   

 

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Electric – 1.1%          

Calpine Corp.
Term Loan B3
4.00% due 10/9/2019(3)

      $ 982,500       $ 984,544   
         

 

 

  
                    984,544   
Food And Beverage – 1.5%          

Big Heart Pet Brands New
Term Loan
3.50% due 3/8/2020(3)

        798,089         790,858   

H.J. Heinz Co.
Term Loan B2
3.50% due 6/5/2020(3)

        495,000         498,485   
         

 

 

  
                    1,289,343   
Healthcare – 3.5%          

Immucor, Inc. Refi
Term Loan B2
5.00% due 8/17/2018(3)

        972,725         976,071   

Kindred Healthcare, Inc.
New Term Loan
4.00% due 4/9/2021(3)

        1,000,000         1,000,420   

Select Medical Corp.
Series E Term Loan B
3.75% due 6/1/2018(3)

        500,000         499,370   

Sheridan Holdings, Inc.
1st Lien Term Loan 2013
4.50% due 6/29/2018(3)

        492,504         492,135   
         

 

 

  
                    2,967,996   
Oil Field Services – 1.2%          

Drillships Financing Holding, Inc.
Term Loan B1
6.00% due 3/31/2021(3)

        992,500         1,008,013   
         

 

 

  
                    1,008,013   
Refining – 0.3%          

Citgo Petroleum Corp.
Term Loan B
8.00% due 6/24/2015(3)

        228,572         230,000   
         

 

 

  
                    230,000   
Retailers – 1.1%          

Bass Pro Group LLC
New Term Loan
3.75% due 11/20/2019(3)

        967,139         967,439   
         

 

 

  
                    967,439   
Total Senior Secured Loans
(Cost $9,077,554)		                   9,133,897   

 

104   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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RS STRATEGIC INCOME FUND

 

June 30, 2014 (unaudited)         Principal
Amount		      Value  
Commercial Mortgage-Backed Securities – 10.1%        

Bear Stearns Commercial Mortgage Securities Trust
2006-T24 AM
5.568% due 10/12/2041(3)

      $ 475,000       $ 516,127   

2007-PW16 AM
5.898% due 6/11/2040(3)

        450,000         499,372   

Citigroup Commercial Mortgage Trust
2006-C5 A4
5.431% due 10/15/2049(2)

        605,000         656,230   

2006-C5 AM
5.462% due 10/15/2049(2)

        420,000         456,306   

2014-388G B
1.205% due 6/15/2033(1)(3)

        425,000         426,069   

CS Commercial Mortgage Trust
2006-C3 A3
5.982% due 6/15/2038(2)(3)

        481,602         517,201   

Fairway Outdoor Funding LLC
2012-1A A2
4.212% due 10/15/2042(1)(2)

        477,108         483,941   

GS Mortgage Securities Trust
2006-GG8 AM
5.591% due 11/10/2039

        424,000         459,594   

2012-ALOH A
3.551% due 4/10/2034(1)(2)

        500,000         517,990   

JPMorgan Chase Commercial Mortgage Securities Corp.
2006-LDP7 AM
6.057% due 4/15/2045(2)(3)

        500,000         544,640   

JPMorgan Chase Commercial Mortgage Securities Trust
2007-LD12 AM
6.218% due 2/15/2051(3)

        450,000         504,830   

LB UBS Commercial Mortgage Trust
2006-C1 AM
5.217% due 2/15/2031(2)(3)

        600,000         636,379   

2006-C6 AM
5.413% due 9/15/2039(2)

        450,000         489,461   

Morgan Stanley Bank of America Merrill Lynch Trust
2013-C11 A2
3.085% due 8/15/2046

        400,000         417,435   

Morgan Stanley Capital I Trust
2006-HQ9 AM
5.773% due 7/12/2044(2)(3)

        500,000         544,481   

SBA Tower Trust
2.933% due 12/15/2017(1)(2)

        500,000         509,552   
                       

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   105

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Commercial Mortgage-Backed Securities (continued)        

Wachovia Bank Commercial Mortgage Trust
2006-C29 A4
5.308% due 11/15/2048(2)

        $ 492,259       $ 533,490   
Total Commercial Mortgage-Backed Securities
(Cost $8,735,726)		               8,713,098   
       
            Principal
Amount		      Value  
Corporate Bonds – 58.3%          
Automotive – 1.2%          

Ford Motor Credit Co. LLC
Sr. Nt.
3.875% due 1/15/2015(2)

        500,000         508,957   

General Motors Financial Co., Inc.
3.25% due 5/15/2018

        500,000         507,500   
         

 

 

  
                    1,016,457   
Banking – 10.9%          

Bank of America Corp.
Sr. Nt.
5.875% due 1/5/2021(2)

        1,000,000         1,169,958   

BBVA Bancomer S.A./Grand Cayman
Jr. Sub. Nt.
6.008% due 5/17/2022(1)(3)

        1,000,000         1,055,000   

Citigroup, Inc.
Sr. Nt.
4.50% due 1/14/2022(2)

        750,000         815,251   

First Horizon National Corp.
Sr. Nt.
5.375% due 12/15/2015(2)

        500,000         528,931   

HSBC Holdings PLC
Sr. Nt.
5.10% due 4/5/2021(2)

        1,000,000         1,136,279   

Intesa Sanpaolo S.p.A.
5.017% due 6/26/2024(1)

        1,000,000         1,011,815   

Lloyds Bank PLC
6.375% due 1/21/2021(2)

        750,000         905,638   

Morgan Stanley
Sr. Nt.
5.50% due 7/28/2021(2)

        950,000         1,091,386   

Royal Bank of Scotland Group PLC
Sub. Nt.
6.125% due 12/15/2022

        500,000         546,867   

The Goldman Sachs Group, Inc.
Sr. Nt.
5.75% due 1/24/2022(2)

        500,000         578,592   
                       

 

106   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)   Foreign
Currency(5) 		     Principal
Amount		      Value  
Banking (continued)          

5.95% due 1/18/2018(2)

      $ 500,000       $ 568,025   
         

 

 

  
                        9,407,742   
Building Materials – 1.6%          

Cemex S.A.B. de C.V.
Sr. Sec. Nt.
6.50% due 12/10/2019(1)

        300,000         321,375   

HeidelbergCement Finance Luxembourg SA
3.25% due 10/21/2020(2)

     EUR         400,000         576,363   

Odebrecht Finance Ltd.
5.25% due 6/27/2029(1)

      $ 500,000         497,750   
         

 

 

  
                        1,395,488   
Cable Satellite – 2.7%          

Cablevision Systems Corp.
Sr. Nt.
5.875% due 9/15/2022

        300,000         305,625   

Cequel Communications Holdings I LLC
Sr. Nt.
6.375% due 9/15/2020(1)

        300,000         318,750   

Comcast Corp.
6.50% due 11/15/2035(2)

        500,000         647,754   

CSC Holdings LLC
Sr. Nt.
6.75% due 11/15/2021

        500,000         550,000   

DIRECTV Holdings LLC
3.80% due 3/15/2022(2)

        250,000         258,154   

Hughes Satellite Systems Corp.
Sr. Sec. Nt.
6.50% due 6/15/2019

        250,000         278,750   
         

 

 

  
                        2,359,033   
Chemicals – 0.7%          

FMC Corp.
Sr. Nt.
5.20% due 12/15/2019(2)

        250,000         278,808   

LyondellBasell Industries N.V.
Sr. Nt.
5.00% due 4/15/2019(2)

        300,000         338,393   
         

 

 

  
                        617,201   
Construction Machinery – 0.8%          

Ashtead Capital, Inc.
Sec. Nt.
6.50% due 7/15/2022(1)

        300,000         327,750   

United Rentals North America, Inc.
7.625% due 4/15/2022

        300,000         336,750   
         

 

 

  
                        664,500   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   107

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Electric – 0.4%          

AES Corp.
Sr. Nt.
7.375% due 7/1/2021

      $ 300,000       $ 351,000   
         

 

 

  
                    351,000   
Energy - Integrated – 0.3%          

Suncor Energy, Inc.
Sr. Nt.
6.10% due 6/1/2018(2)

        250,000         290,141   
         

 

 

  
                    290,141   
Finance Companies – 1.9%          

AerCap Ireland Capital Ltd.
3.75% due 5/15/2019(1)

        300,000         302,250   

Aircastle Ltd.
Sr. Nt.
6.25% due 12/1/2019

        500,000         547,500   

CIT Group, Inc.
Sr. Nt.
5.25% due 3/15/2018

        280,000         300,650   

HSBC Finance Capital Trust IX
5.911% due 11/30/2035(2)(3)

        500,000         521,250   
         

 

 

  
                    1,671,650   
Food And Beverage – 1.2%          

Constellation Brands, Inc.
4.25% due 5/1/2023

        500,000         501,875   

Mead Johnson Nutrition Co.
Sr. Nt.
4.60% due 6/1/2044

        500,000         504,015   
         

 

 

  
                    1,005,890   
Gaming – 0.4%          

MGM Resorts International
6.625% due 12/15/2021

        300,000         333,750   
         

 

 

  
                    333,750   
Government Related – 4.3%          

Petrobras International Finance Co.
5.875% due 3/1/2018(2)

        1,000,000         1,089,649   

Petroleos Mexicanos
5.75% due 3/1/2018

        1,000,000         1,127,500   

Sinopec Group Overseas Development 2014 Ltd.
1.75% due 4/10/2017(1)

        1,500,000         1,500,684   
         

 

 

  
                    3,717,833   

 

108   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Home Construction – 0.6%          

Taylor Morrison Communities, Inc.
7.75% due 4/15/2020(1)

      $ 216,000       $ 235,980   

Weekley Homes LLC
Sr. Nt.
6.00% due 2/1/2023

        250,000         250,000   
         

 

 

  
                    485,980   
Independent Energy – 3.1%          

Alta Mesa Holdings LP
9.625% due 10/15/2018

        250,000         262,500   

Anadarko Petroleum Corp.
Sr. Nt.
6.95% due 6/15/2019(2)

        250,000         305,962   

Bonanza Creek Energy, Inc.
6.75% due 4/15/2021

        300,000         321,000   

Clayton Williams Energy, Inc.
7.75% due 4/1/2019

        250,000         265,000   

Energy XXI Gulf Coast, Inc.
6.875% due 3/15/2024(1)

        500,000         510,000   

EV Energy Partners LP
8.00% due 4/15/2019

        130,000         136,500   

Harvest Operations Corp.
6.875% due 10/1/2017

        300,000         325,500   

RKI Exploration & Production LLC
8.50% due 8/1/2021(1)

        500,000         542,500   
         

 

 

  
                    2,668,962   
Industrial - Other – 0.6%          

Safway Group Holding LLC
Sec. Nt.
7.00% due 5/15/2018(1)

        500,000         530,000   
         

 

 

  
                    530,000   
Insurance - Life – 0.7%          

MetLife, Inc.
Sr. Nt.
4.75% due 2/8/2021(2)

        500,000         558,795   
         

 

 

  
                    558,795   
Insurance: Property - Casualty – 1.1%          

ACE INA Holdings, Inc.
5.70% due 2/15/2017(2)

        300,000         334,986   

CNA Financial Corp.
Sr. Nt.
7.35% due 11/15/2019(2)

        500,000         616,764   
         

 

 

  
                    951,750   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   109

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Leisure – 0.3%          

WMG Acquisition Corp.
Sr. Sec. Nt.
6.00% due 1/15/2021(1)

      $ 270,000       $ 278,775   
         

 

 

  
                    278,775   
Media - Entertainment – 2.7%          

21st Century Fox America, Inc.
5.65% due 8/15/2020(2)

        250,000         291,187   

Discovery Communications LLC
5.625% due 8/15/2019(2)

        250,000         286,285   

Netflix, Inc.
Sr. Nt.
5.75% due 3/1/2024(1)

        350,000         365,750   

Telesat LLC
6.00% due 5/15/2017(1)

        300,000         309,375   

Time Warner, Inc.
4.00% due 1/15/2022(2)

        500,000         527,235   

Univision Communications, Inc.
Sr. Sec. Nt.
7.875% due 11/1/2020(1)

        500,000         550,000   
         

 

 

  
                    2,329,832   
Metals And Mining – 3.0%          

Anglo American Capital PLC
2.625% due 9/27/2017(1)(2)

        1,000,000         1,025,300   

FMG Resources August 2006 Pty. Ltd.
8.25% due 11/1/2019(1)

        250,000         272,187   

Samarco Mineracao S.A.
Sr. Nt.
5.75% due 10/24/2023(1)

        250,000         262,425   

Southern Copper Corp.
Sr. Nt.
7.50% due 7/27/2035

        400,000         465,650   

Vale Overseas Ltd.
6.875% due 11/21/2036

        500,000         553,520   
         

 

 

  
                    2,579,082   
Midstream – 5.9%          

Crestwood Midstream Partners LP
6.00% due 12/15/2020

        400,000         420,000   

Energy Transfer Partners LP

          

Sr. Nt.

          

3.60% due 2/1/2023(2)

        250,000         247,700   

6.70% due 7/1/2018(2)

        1,000,000         1,170,888   

Magellan Midstream Partners LP
Sr. Nt.
4.25% due 2/1/2021(2)

        250,000         272,325   
                       

 

110   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Midstream (continued)          

MarkWest Energy Partners LP
6.50% due 8/15/2021

      $ 163,000       $ 176,040   

Niska Gas Storage Canada ULC
6.50% due 4/1/2019(1)

        300,000         288,000   

NiSource Finance Corp.

          

5.25% due 9/15/2017

        750,000         836,002   

5.65% due 2/1/2045(2)

        750,000         844,443   

Regency Energy Partners LP
6.50% due 7/15/2021

        250,000         272,500   

Tesoro Logistics LP
6.125% due 10/15/2021

        500,000         533,750   
         

 

 

  
                    5,061,648   
Oil Field Services – 1.2%          

Offshore Group Investment Ltd.
Sr. Sec. Nt.
7.125% due 4/1/2023

        250,000         253,750   

Transocean, Inc.
2.50% due 10/15/2017

        800,000         816,954   
         

 

 

  
                    1,070,704   
Paper – 0.6%          

Fibria Overseas Finance Ltd.
5.25% due 5/12/2024

        250,000         248,750   

Georgia-Pacific LLC
5.40% due 11/1/2020(1)(2)

        235,000         271,248   
         

 

 

  
                    519,998   
Refining – 0.7%          

Calumet Specialty Products Partners LP
6.50% due 4/15/2021(1)

        300,000         306,000   

Phillips 66
4.30% due 4/1/2022(2)

        250,000         270,576   
         

 

 

  
                    576,576   
REITs – 0.8%          

Sabra Health Care LP
5.50% due 2/1/2021

        80,000         84,000   

WCI Finance LLC
5.70% due 10/1/2016(1)(2)

        500,000         563,504   
         

 

 

  
                    647,504   
Sovereign – 2.5%          

Republic of Costa Rica
Sr. Nt.
7.00% due 4/4/2044(1)

        500,000         520,000   

Republic of Indonesia
Sr. Nt.
5.875% due 3/13/2020(1)

        500,000         555,000   
                       

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   111

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
Sovereign (continued)          

Republic of Panama
Sr. Nt.
5.20% due 1/30/2020

      $ 1,000,000       $ 1,116,000   
         

 

 

  
                    2,191,000   
Technology – 0.7%          

First Data Corp.
12.625% due 1/15/2021

        500,000         615,625   
         

 

 

  
                    615,625   
Wireless – 3.4%          

America Movil S.A.B. de C.V.
5.625% due 11/15/2017(2)

        500,000         564,760   

American Tower Corp.
Sr. Nt.
4.50% due 1/15/2018

        500,000         544,796   

Bharti Airtel International Netherlands BV
5.35% due 5/20/2024(1)

        1,000,000         1,037,550   

Sprint Communications, Inc.
9.00% due 11/15/2018(1)

        400,000         485,000   

T-Mobile U.S.A., Inc.
6.25% due 4/1/2021

        250,000         265,625   
         

 

 

  
                    2,897,731   
Wirelines – 4.0%          

AT&T, Inc.
Sr. Nt.
6.30% due 1/15/2038

        1,000,000         1,210,177   

Telecom Italia Capital S.A.
4.95% due 9/30/2014(2)

        500,000         504,000   

Turk Telekomunikasyon AS
Sr. Nt.
3.75% due 6/19/2019(1)

        500,000         494,200   

Verizon Communications, Inc.

          

Sr. Nt.

          

6.10% due 4/15/2018(2)

        500,000         578,141   

6.55% due 9/15/2043(2)

        500,000         629,220   
         

 

 

  
                    3,415,738   
Total Corporate Bonds
(Cost $48,185,078)		                   50,210,385   
       
            Principal
Amount		      Value  
Mortgage Pass-Through Securities – 0.2%          

FNMA
3.50% due 7/1/2043(2)

        188,675         194,521   
                       
Total Mortgage Pass-Through Securities
(Cost $193,802)		                   194,521   

 

112   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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June 30, 2014 (unaudited)         Principal
Amount		      Value  
U.S. Government Securities – 2.3%          

U.S. Treasury Notes
0.875% due 12/31/2016(2)

      $ 2,000,000       $ 2,010,468   
                       
Total U.S. Government Securities
(Cost $2,002,029)		                   2,010,468   
       
            Principal
Amount		      Value  
Repurchase Agreements – 2.5%          
   

State Street Bank and Trust Co.
Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $2,165,000, due 7/1/2014(4)

          2,165,000         2,165,000   
Total Repurchase Agreements
(Cost $2,165,000)		                   2,165,000   
Total Investments – 97.6%
(Cost $81,892,116)		                   84,156,900   
Other Assets, Net – 2.4%                   2,029,827   
Total Net Assets – 100.0%                 $ 86,186,727   

 

(1) 

Securities that may be resold in transactions, exempt from registration under Rule 144A of the Securities Act of 1933, normally to certain qualified buyers. At June 30, 2014, the aggregate market value of these securities amounted to $18,324,570, representing 21.3% of net assets. These securities have been deemed liquid by the investment adviser pursuant to the Fund’s liquidity procedures approved by the Board of Trustees.

(2) 

Securities are segregated to cover anticipated or existing derivative positions or to be announced securities (TBA).

At June 30, 2014, the Fund had entered into the following forward currency exchange contracts:

 

Expiration
Date		   Counterparty   Currency
to be
Received		     Amount of
Currency
to be
Received		     Currency
to be
Delivered		     Amount of
Currency
to be
Delivered		     Unrealized
Depreciation		  
   

9/17/2014

   Barclays Bank PLC     USD        555,850        EUR        400,000      $ (3,126 ) 

Legend:

EUR – Euro

USD – U.S. Dollar

 

(3)

Variable rate securities, which may include step-up bonds or adjustable rate mortgages. The rate shown is the rate in effect at June 30, 2014.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   113

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(4) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  

U.S. Treasury Note

     1.375%           6/30/2018         $ 2,209,134   

 

(5) 

See currency legend on previous page.

The table below presents futures contracts as of June 30, 2014:

 

Description   Counterparty   Number of
Contracts		     Expiration     Face Value
(000s)		     Unrealized
Depreciation		  

Sold Futures Contracts

  

U.S. Ultra Bond

   Goldman
Sachs & Co.		     7        9/19/2014      $ 1,050      $ (21,022 ) 

At June 30, 2014, the Fund had entered into the following open option contracts:

 

Number of

Contracts

   Written Call Options   Expiration
Date		     Premiums
Received		     Current
Value		     Unrealized
Appreciation/
(Depreciation)		  

85

   10 YR U.S. Treasury Note, strike @ $125.5     August 2014      $ 36,030      $ (54,453 )    $ (18,423 ) 

25

   30 YR U.S. Treasury Note, strike @ $137     August 2014        19,443        (39,453 )      (20,010 ) 

25

   30 YR U.S. Treasury Note, strike @ $139     August 2014        19,443        (18,750 )      693   
Total               $ 74,916      $ (112,656 )    $ (37,740 ) 
         
Number of
Contracts		   Written Put Options   Expiration
Date		     Premiums
Received		     Current
Value		     Unrealized
Appreciation		  

40

   30 YR U.S. Treasury Note, strike @ $129     August 2014      $ 18,609      $ (1,875 )    $ 16,734   

35

   30 YR U.S. Treasury Note, strike @ $133     August 2014        20,658        (9,844 )      10,814   
Total               $ 39,267      $ (11,719 )    $ 27,548   

 

114   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS STRATEGIC INCOME FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  

Asset-Backed Securities

   $     —       $ 2,146,651       $     —         $ 2,146,651   

Collateralized Mortgage Obligations

     —         9,582,880         —           9,582,880   

Senior Secured Loans

     —         9,133,897         —           9,133,897   

Commercial Mortgage-Backed Securities

     —         8,713,098         —           8,713,098   

Corporate Bonds

     —         50,210,385         —           50,210,385   

Mortgage Pass-Through Securities

     —         194,521         —           194,521   

U.S. Government Securities

     —         2,010,468         —           2,010,468   

Repurchase Agreements

     —         2,165,000         —           2,165,000   
Other Financial Instruments:                

Forward Currency Contracts

     —         (3,126 )       —           (3,126 ) 

Financial Futures Contracts

     (21,022 )       —         —           (21,022 ) 

Written Call Options

     (112,656 )       —         —           (112,656 ) 

Written Put Options

     (11,719 )       —         —           (11,719 ) 
Total   $ (145,397 )     $ 84,153,774       $ —         $ 84,008,377   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   115

Table of Contents

FINANCIAL INFORMATION

 

Statements of Assets and Liabilities

As of June 30, 2014 (unaudited)

   RS Investment
Quality Bond		     RS Low
Duration Bond		  

Assets

    

Investments, at value

   $ 121,546,760      $ 1,154,315,385   

Cash

     20,030        1,354,999   

Cash deposits with brokers

     231,000        144,000   

Foreign currency, at value

     —        —   

Receivable for investments sold

     —        8,009,300   

Dividends/interest receivable

     895,650        5,352,269   

Receivable for fund shares subscribed

     118,011        3,610,487   

Receivable for variation margin

     17,657        8,750   

Prepaid expenses

     33,936        81,265   
   

 

 

    

 

 

  

Total Assets

     122,863,044        1,172,876,455   
   

 

 

    

 

 

  

Liabilities

    

Payable for investments purchased

     1,939,613        19,483,762   

Payable for fund shares redeemed

     192,398        4,497,110   

Payable to adviser

     33,526        429,005   

Written options, at value

     27,187        —   

Distributions payable

     11,954        328,455   

Payable to distributor

     4,392        48,410   

Accrued trustees’ fees

     2,280        22,657   

Unrealized depreciation for open forward currency contracts

     —        —   

Accrued expenses/other liabilities

     82,541        376,241   
   

 

 

    

 

 

  

Total Liabilities

     2,293,891        25,185,640   
   

 

 

    

 

 

  

Total Net Assets

   $ 120,569,153      $ 1,147,690,815   
   

 

 

    

 

 

  

Net Assets Consist of:

    

Paid-in capital

   $ 114,410,171      $ 1,164,318,665   

Distributions in excess of net investment income

     —        (3,551 ) 

Accumulated undistributed net investment income

     32,832        —   

Accumulated net realized gain/(loss) from investments, futures contracts, swap contracts, written options and foreign currency transactions

     804,168        (17,623,290 ) 

Net unrealized appreciation on investments, futures contracts, written options and translation of assets and liabilities in foreign currencies

     5,321,982        998,991   
   

 

 

    

 

 

  

Total Net Assets

   $ 120,569,153      $ 1,147,690,815   
   

 

 

    

 

 

  

Investments, at Cost

   $ 116,258,835      $ 1,153,254,156   
   

 

 

    

 

 

  

Foreign Currency, at Cost

   $ —      $ —   
   

 

 

    

 

 

  

Premiums Received for Written Options

  $ 30,656      $ —   
   

 

 

    

 

 

  

Pricing of Shares

    

Net Assets:

    

Class A

   $ 69,144,385      $ 510,843,057   

Class C

     10,263,100        221,918,414   

Class K

     7,035,902        5,482,385   

Class Y

     34,125,766        409,446,959   

Shares of Beneficial Interest Outstanding with No Par Value:

    

Class A

     6,705,906        50,372,199   

Class C

     995,514        21,881,129   

Class K

     681,449        540,516   

Class Y

     3,308,000        40,366,439   

Net Asset Value Per Share:

    

Class A

   $ 10.31      $ 10.14   

Class C

     10.31        10.14   

Class K

     10.32        10.14   

Class Y

     10.32        10.14   

Sales Charge Class A (Load)

     3.75 %      2.25 % 

Maximum Offering Price Per Class A Share

   $ 10.71      $ 10.37   

 

116   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

RS High Yield     RS
Tax-Exempt		     RS High Income
Municipal Bond		     RS Floating
Rate		     RS Strategic
Income		  
         
$ 118,177,940      $ 251,131,395      $ 105,602,589      $ 2,645,048,387      $ 84,156,900   
  56,110        2,645,425        4,065,343        3,262,211        —   
  —        —        —        —        427,000   
  —        —        —        —        8,779   
  6,146,424        —        —        73,909,491        —   
  1,617,539        3,185,189        1,449,093        11,628,481        797,876   
  212,022        371,387        692,102        6,085,952        1,667,452   
  —        —        —        —        3,738   
  40,970        31,550        17,605        93,649        21,490   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  126,251,005        257,364,946        111,826,732        2,740,028,171        87,083,235   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
  10,243,004        —        —        90,689,975        505,280   
  819,648        2,350,444        235,877        13,915,144        59,688   
  40,823        80,047        29,458        1,249,026        29,869   
  —        —        —        —        124,375   
  246,026        137,092        59,067        2,038,608        108,953   
  8,311        12,806        6,401        130,312        4,523   
  1,821        5,125        2,231        46,662        1,424   
 
 		     
—		  
  		     —        —        —        3,126   
  56,707        119,907        66,588        863,586        59,270   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  11,416,340        2,705,421        399,622        108,933,313        896,508   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 114,834,665      $ 254,659,525      $ 111,427,110      $ 2,631,094,858      $ 86,186,727   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
$ 109,780,820      $ 238,461,599      $ 109,924,345      $ 2,624,908,986      $ 83,434,102   
  (1 )      —        —        —        (32,732 ) 
  —        18,778        10,271        235,290        —   
 
 
 		     
    
2,567,769		  
 
  		     (3,915,954 )      (7,797,509 )      (16,065,310 )      554,833   
 
 
 		     
    
2,486,077		  
 
  		     20,095,102        9,290,003        22,015,892        2,230,524   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 114,834,665      $ 254,659,525      $ 111,427,110      $ 2,631,094,858      $ 86,186,727   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 115,691,863      $ 231,036,293      $ 96,312,586      $ 2,623,032,495      $ 81,892,116   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ —      $ —      $ —      $ —      $ 8,699   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ —      $ —      $ —      $ —      $ 114,183   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
         
$ 50,785,763      $ 140,609,109      $ 44,969,323      $ 810,739,867      $ 54,685,519   
  32,347,118        57,992,132        35,654,163        744,970,073        16,817,003   
  23,926,727        —        —        2,563,782        3,869,381   
  7,775,057        56,058,284        30,803,624        1,072,821,136        10,814,824   
         
  6,773,313        13,132,183        4,252,676        78,336,658        5,209,331   
  4,306,296        5,417,420        3,372,169        71,946,685        1,594,766   
  3,181,216        —        —        247,733        366,710   
  1,042,043        5,238,477        2,912,730        103,625,952        1,035,782   
         
$ 7.50      $ 10.71      $ 10.57      $ 10.35      $ 10.50   
  7.51        10.70        10.57        10.35        10.55   
  7.52        —        —        10.35        10.55   
  7.46        10.70        10.58        10.35        10.44   
  3.75 %      3.75 %      3.75 %      2.25 %      3.75 % 
$ 7.79      $ 11.13      $ 10.98      $ 10.59      $ 10.91   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   117

Table of Contents

FINANCIAL INFORMATION

 

Statements of Operations

For the Six-Month Period Ended June 30, 2014 (unaudited)

    RS Investment
Quality Bond		    

RS Low

Duration Bond

  
Investment Income     

Interest

    $ 2,491,436      $ 16,640,888   

Dividends

      —        —   
    

 

 

    

 

 

  

Total Investment Income

      2,491,436        16,640,888   
    

 

 

    

 

 

  
 
Expenses     

Investment advisory fees

      308,657        2,714,974   

Distribution fees

      166,630        1,891,736   

Transfer agent fees

      92,143        706,333   

Custodian fees

      40,134        87,503   

Professional fees

      21,022        75,417   

Registration fees

      16,167        23,270   

Shareholder reports

      12,632        100,080   

Administrative service fees

      7,544        75,364   

Trustees’ fees

      3,809        37,835   

Insurance expense

      2,326        10,744   

Other expenses

      2,244        16,378   
    

 

 

    

 

 

  

Total Expenses

      673,308        5,739,634   
 

Less: Fee waiver by adviser

      (116,716 )      —   
    

 

 

    

 

 

  

Total Expenses, Net

      556,592        5,739,634   
    

 

 

    

 

 

  

Net Investment Income

      1,934,844        10,901,254   
    

 

 

    

 

 

  
 

Realized Gain/(Loss) and Change in Unrealized Appreciation/Depreciation on Investments, Futures Contracts, Swap Contracts, Written Options and Foreign Currency Transactions

     

Net realized gain/(loss) from investments

      673,052        (4,227,544 ) 

Net realized gain/(loss) from futures contracts

      105,835        (276,633 ) 

Net realized loss from swap contracts

      (5,808 )      —   

Net realized gain from written options

      4,769        —   

Net realized loss from foreign currency transactions

      —        —   

Net change in unrealized appreciation/depreciation on investments

      2,776,856        7,583,022   

Net change in unrealized appreciation/depreciation on futures contracts

      181,023        (1,503,039 ) 

Net change in unrealized appreciation/depreciation on written options

     762        —   

Net change in unrealized appreciation/depreciation on translation of assets and liabilities in foreign currencies

      —        —   
    

 

 

    

 

 

  

Net Gain on Investments, Futures Contracts, Swap Contracts, Written Options and Foreign Currency Transactions

      3,736,489        1,575,806   
    

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $ 5,671,333      $ 12,477,060   
    

 

 

    

 

 

  
                  

 

118   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS High Yield     RS Tax-Exempt     RS High Income
Municipal Bond		     RS Floating
Rate		     RS Strategic
Income		  
         
$ 3,499,349      $ 5,187,544      $ 2,842,441      $ 69,215,851      $ 1,639,926   
  7,969        —        —        —        —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  3,507,318        5,187,544        2,842,441        69,215,851        1,639,926   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
         
  326,444        669,923        273,363        8,927,768        247,582   
  297,041        488,382        231,629        4,933,974        158,926   
  66,532        171,840        78,100        1,490,886        44,870   
  26,626        26,873        12,645        136,288        30,147   
  19,743        27,559        20,163        191,898        19,289   
  17,843        13,386        9,095        16,729        11,384   
  9,037        22,152        10,529        189,519        7,814   
  6,421        16,498        6,807        165,383        4,830   
  3,204        8,285        3,427        82,830        2,437   
  2,093        4,525        545        21,700        1,064   
  1,737        5,159        3,203        192,434        1,991   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  776,721        1,454,582        649,506        16,349,409        530,334   
 
  (92,465 )      (171,939 )      (134,666 )      (931,543 )      (105,858 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  684,256        1,282,643        514,840        15,417,866        424,476   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  2,823,062        3,904,901        2,327,601        53,797,985        1,215,450   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
         
  4,650,468        2,220,431        370,304        6,918,483        561,020   
  (28,198 )      —        —        —        (95,060 ) 
  —        —        —        —        (11,717 ) 
  —        —        —        —        50,214   
  —        —        —        —        (1,215 ) 
 
 		     
(1,806,814)		  
  		     8,415,116        5,752,096        (4,495,336 )      848,413   
 
 		     
(55,890)		  
  		     —        —        —        90,747   
 
 		     
—		  
  		     —        —        —        (69,931 ) 
 
 		     
—		  
  		     —        —        —        (309 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
 
 		     
    
2,759,566		  
 
  		     10,635,547        6,122,400        2,423,147        1,372,162   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 5,582,628      $ 14,540,448      $ 8,450,001      $ 56,221,132      $ 2,587,612   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                     

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   119

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

   

RS Investment Quality Bond

       
 
     

For the

Six Months
Ended

6/30/14

    

For the

Year Ended
12/31/13

      
     

 

    

 

      
Operations       

Net investment income

    $ 1,934,844      $ 4,684,976     

Net realized gain/(loss) from investments, futures contracts, swap contracts and written options

      777,848        385,724     

Net change in unrealized appreciation/depreciation on investments, futures contracts and written options

      2,958,641        (8,617,864 )   
    

 

 

    

 

 

    

Net Increase/(Decrease) in Net Assets Resulting from Operations

      5,671,333        (3,547,164 )   
    

 

 

    

 

 

    
Distributions to Shareholders       

Net investment income

       

Class A

      (1,133,738 )      (2,824,108 )   

Class C

      (129,630 )      (390,828 )   

Class K

      (97,965 )      (196,041 )   

Class Y

      (574,699 )      (1,273,999 )   

Net realized gain on investments

       

Class A

      —        (332,048 )   

Class C

      —        (59,879 )   

Class K

      —        (29,667 )   

Class Y

      —        (145,811 )   
    

 

 

    

 

 

    

Total Distributions

      (1,936,032 )      (5,252,381 )   
    

 

 

    

 

 

    
Capital Share Transactions       

Proceeds from sales of shares

      7,829,511        24,362,473     

Reinvestment of distributions

      1,853,092        4,934,563     

Cost of shares redeemed

      (26,899,374 )      (110,994,178 )   
    

 

 

    

 

 

    

Net Decrease in Net Assets Resulting from Capital Share Transactions

      (17,216,771 )      (81,697,142 )   
    

 

 

    

 

 

    

Net Increase/(Decrease) in Net Assets

      (13,481,470 )      (90,496,687 )   
    

 

 

    

 

 

    
 
Net Assets       

Beginning of period

      134,050,623        224,547,310     
    

 

 

    

 

 

    

End of period

    $ 120,569,153      $ 134,050,623     
    

 

 

    

 

 

    

Distributions in Excess of Net Investment Income Included in Net Assets

    $ —      $ —     
    

 

 

    

 

 

    

Accumulated Undistributed Net Investment Income Included in Net Assets

    $ 32,832      $ 34,020     
    

 

 

    

 

 

    
Other Information:       

Shares

       

Sold

      767,610        2,362,860     

Reinvested

      181,265        484,130     

Redeemed

      (2,646,218 )      (10,842,560 )   
    

 

 

    

 

 

    

Net Decrease

      (1,697,343 )      (7,995,570 )   
    

 

 

    

 

 

    
                      

 

120   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

RS Low Duration Bond

     RS High Yield     RS Tax-Exempt  
 

For the

Six Months
Ended

6/30/14

    

For the

Year Ended
12/31/13

    

For the

Six Months
Ended

6/30/14

    

For the

Year Ended
12/31/13

    

For the

Six Months
Ended

6/30/14

    

For the

Year Ended
12/31/13

  

 

    

 

    

 

  
           
$ 10,901,254      $ 27,219,913      $ 2,823,062      $ 6,824,682      $ 3,904,901      $ 11,304,551   

 

(4,504,177

) 

     (13,068,984 )      4,622,270        3,349,464        2,220,431        (6,136,385 ) 

 

6,079,983

  

     (18,574,200 )      (1,862,704 )      (2,212,824 )      8,415,116        (27,340,584 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

12,477,060

  

     (4,423,271 )      5,582,628        7,961,322        14,540,448        (22,172,418 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
           
  (5,017,411 )      (12,609,796 )      (1,215,849 )      (3,115,247 )      (2,254,984 )      (6,609,911 ) 
  (1,325,054 )      (3,129,208 )      (786,004 )      (1,920,004 )      (693,441 )      (1,920,654 ) 
  (40,018 )      (90,507 )      (596,909 )      (1,204,530 )      —        —   
  (4,515,896 )      (11,390,023 )      (224,300 )      (759,894 )      (956,476 )      (2,774,072 ) 
           
  —        (118,647 )      —        —        —        (59,390 ) 
  —        (53,009 )      —        —        —        (23,815 ) 
  —        (1,043 )      —        —        —        —   
  —        (98,848 )      —        —        —        (23,765 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  (10,898,379 )      (27,491,081 )      (2,823,062 )      (6,999,675 )      (3,904,901 )      (11,411,607 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
  210,946,691        918,921,776        16,463,140        56,339,294        24,048,141        89,071,968   
  8,888,546        22,148,909        1,526,210        4,611,072        3,056,779        8,872,698   
  (399,889,011 )      (1,377,311,394 )      (18,476,337 )      (82,538,038 )      (63,049,970 )      (277,554,762 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(180,053,774

) 

     (436,240,709 )      (486,987 )      (21,587,672 )      (35,945,050 )      (179,610,096 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  (178,475,093 )      (468,155,061 )      2,272,579        (20,626,025 )      (25,309,503 )      (213,194,121 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
           
  1,326,165,908        1,794,320,969        112,562,086        133,188,111        279,969,028        493,163,149   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 1,147,690,815      $ 1,326,165,908      $ 114,834,665      $ 112,562,086      $ 254,659,525      $ 279,969,028   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

$

(3,551

) 

   $ (6,426 )    $ (1 )    $ (1 )    $ —      $ —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

$

—

  

   $ —      $ —      $ —      $ 18,778      $ 18,778   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           
           
  20,790,989        89,693,913        2,213,012        7,717,120        2,287,625        8,237,613   
  876,200        2,169,626        205,699        633,544        288,470        830,523   
  (39,419,302 )      (134,808,715 )      (2,502,299 )      (11,338,353 )      (5,974,950 )      (26,212,459 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  (17,752,113 )      (42,945,176 )      (83,588 )      (2,987,689 )      (3,398,855 )      (17,144,323 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   121

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

    RS High Income Municipal Bond  
 
     

For the

Six Months

Ended

6/30/14

    

For the

Year Ended
12/31/13

  
     

 

  
Operations     

Net investment income

    $ 2,327,601      $ 8,076,676   

Net realized gain/(loss) from investments, futures contracts, swap contracts, written options and foreign currency transactions

      370,304        (7,022,336 ) 

Net change in unrealized appreciation/depreciation on investments, futures contracts, written options and translation of assets and liabilities in foreign currencies

      5,752,096        (14,952,856 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

      8,450,001        (13,898,516 ) 
    

 

 

    

 

 

  
Distributions to Shareholders     

Net investment income

     

Class A

      (1,001,818 )      (3,896,630 ) 

Class C

      (635,671 )      (1,757,327 ) 

Class K

      —        —   

Class Y

      (677,091 )      (2,426,719 ) 

Net realized gain on investments

     

Class A

      —        —   

Class C

      —        —   

Class K

      —        —   

Class Y

      —        —   
    

 

 

    

 

 

  

Total Distributions

      (2,314,580 )      (8,080,676 ) 
    

 

 

    

 

 

  
Capital Share Transactions     

Proceeds from sales of shares

      21,323,797        67,477,002   

Reinvestment of distributions

      1,971,717        6,835,230   

Cost of shares redeemed

      (35,941,360 )      (214,565,062 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

      (12,645,846 )      (140,252,830 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets

      (6,510,425 )      (162,232,022 ) 
    

 

 

    

 

 

  
 
Net Assets     

Beginning of period

      117,937,535        280,169,557   
    

 

 

    

 

 

  

End of period

    $ 111,427,110      $ 117,937,535   
    

 

 

    

 

 

  

Distributions in Excess of Net Investment Income Included in Net Assets

    $ —      $ (2,750 ) 
    

 

 

    

 

 

  

Accumulated Undistributed Net Investment Income Included in Net Assets

    $ 10,271      $ —   
    

 

 

    

 

 

  
Other Information:     

Shares

     

Sold

      2,064,906        6,222,069   

Reinvested

      190,549        642,355   

Redeemed

      (3,512,673 )      (20,103,907 ) 
    

 

 

    

 

 

  

Net Increase/(Decrease)

      (1,257,218 )      (13,239,483 ) 
    

 

 

    

 

 

  
                  

 

122   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

    
RS Floating Rate		     RS Strategic Income  
 

For the

Six Months

Ended

6/30/14

    

For the

Year Ended
12/31/13

    

For the

Six Months

Ended

6/30/14

    

For the

Year Ended
12/31/13

  

 

    

 

  
       
$ 53,797,985      $ 105,212,437      $ 1,215,450      $ 3,194,608   
 
 
 		     
    
6,918,483		  
 
  		     11,165,721        503,242        353,630   
 
 
 		     
    
(4,495,336)		  
 
  		     4,504,240        868,920        (3,250,276 ) 

 

 

    

 

 

    

 

 

    

 

 

  
 
 		     
56,221,132		  
  		     120,882,398        2,587,612        297,962   

 

 

    

 

 

    

 

 

    

 

 

  
       
       
  (16,993,105 )      (34,787,955 )      (835,956 )      (2,429,996 ) 
  (12,534,449 )      (25,507,532 )      (178,376 )      (334,949 ) 
  (47,970 )      (164,617 )      (50,281 )      (101,165 ) 
  (23,943,105 )      (44,792,353 )      (140,706 )      (493,849 ) 
       
  —        —        (34,759 )      (18,620 ) 
  —        —        (10,449 )      (4,283 ) 
  —        —        (2,418 )      (1,315 ) 
  —        —        (5,866 )      (2,997 ) 

 

 

    

 

 

    

 

 

    

 

 

  
  (53,518,629 )      (105,252,457 )      (1,258,811 )      (3,387,174 ) 

 

 

    

 

 

    

 

 

    

 

 

  
       
  458,004,010        2,014,741,715        15,098,108        32,342,276   
  40,314,033        79,404,482        694,803        3,274,818   
  (713,517,895 )      (1,209,449,428 )      (9,458,306 )      (63,711,121 ) 

 

 

    

 

 

    

 

 

    

 

 

  
 
 		         
(215,199,852)		  
  		     884,696,769        6,334,605        (28,094,027 ) 

 

 

    

 

 

    

 

 

    

 

 

  
  (212,497,349 )      900,326,710        7,663,406        (31,183,239 ) 

 

 

    

 

 

    

 

 

    

 

 

  
 
       
  2,843,592,207        1,943,265,497        78,523,321        109,706,560   

 

 

    

 

 

    

 

 

    

 

 

  
$ 2,631,094,858      $ 2,843,592,207      $ 86,186,727      $ 78,523,321   

 

 

    

 

 

    

 

 

    

 

 

  

$

—

  

   $ (44,066 )    $ (32,732 )    $ (42,863 ) 

 

 

    

 

 

    

 

 

    

 

 

  
    
$		  
235,290		  
  		   $ —      $ —      $ —   

 

 

    

 

 

    

 

 

    

 

 

  
       
       
  44,244,057        195,273,740        1,445,927        3,072,550   
  3,896,552        7,704,050        66,504        314,001   
  (68,954,660 )      (117,276,207 )      (905,765 )      (6,096,868 ) 

 

 

    

 

 

    

 

 

    

 

 

  
  (20,814,051 )      85,701,583        606,666        (2,710,317 ) 

 

 

    

 

 

    

 

 

    

 

 

  
                             

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   123

Table of Contents

FINANCIAL INFORMATION

 

The Financial Highlights table is intended to help you understand each Fund’s financial performance for the past six reporting periods. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in each Fund (assuming reinvestment of all distributions).

 

Financial Highlights

Six-Months-Ended Numbers are unaudited

  
    

Net Asset

Value,

Beginning
of Period

    

Net

Investment
Income

    

    
    
Net Realized

and

Unrealized
Gain/(Loss)

    

Total

Operations

     Distributions
From Net
Investment
Income		    

Distributions
From Net

Realized

Capital Gains

  
RS Investment Quality Bond Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.01      $ 0.16      $ 0.30      $ 0.46      $ (0.16 )    $ —   

Year Ended 12/31/13

     10.50        0.28        (0.45 )      (0.17 )      (0.28 )      (0.04 ) 

Year Ended 12/31/12

     10.34        0.28        0.32        0.60        (0.28 )      (0.16 ) 

Year Ended 12/31/11

     10.12        0.35        0.33        0.68        (0.35 )      (0.11 ) 

Year Ended 12/31/10

     9.89        0.38        0.36        0.74        (0.38 )      (0.13 ) 

Year Ended 12/31/09

     9.34        0.41        0.55        0.96        (0.41 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.01      $ 0.12      $ 0.30      $ 0.42      $ (0.12 )    $ —   

Year Ended 12/31/13

     10.50        0.20        (0.45 )      (0.25 )      (0.20 )      (0.04 ) 

Year Ended 12/31/12

     10.34        0.20        0.32        0.52        (0.20 )      (0.16 ) 

Year Ended 12/31/11

     10.11        0.28        0.34        0.62        (0.28 )      (0.11 ) 

Year Ended 12/31/10

     9.89        0.30        0.35        0.65        (0.30 )      (0.13 ) 

Year Ended 12/31/09

     9.34        0.34        0.55        0.89        (0.34 )      —   
 

Class K

            

Six Months Ended 6/30/141

   $ 10.02      $ 0.14      $ 0.30      $ 0.44      $ (0.14 )    $ —   

Year Ended 12/31/13

     10.51        0.24        (0.45 )      (0.21 )      (0.24 )      (0.04 ) 

Year Ended 12/31/12

     10.36        0.23        0.31        0.54        (0.23 )      (0.16 ) 

Year Ended 12/31/11

     10.13        0.31        0.34        0.65        (0.31 )      (0.11 ) 

Year Ended 12/31/10

     9.90        0.34        0.36        0.70        (0.34 )      (0.13 ) 

Year Ended 12/31/09

     9.35        0.37        0.55        0.92        (0.37 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.02      $ 0.17      $ 0.30      $ 0.47      $ (0.17 )    $ —   

Year Ended 12/31/13

     10.50        0.30        (0.44 )      (0.14 )      (0.30 )      (0.04 ) 

Year Ended 12/31/12

     10.35        0.30        0.31        0.61        (0.30 )      (0.16 ) 

Year Ended 12/31/11

     10.12        0.37        0.34        0.71        (0.37 )      (0.11 ) 

Year Ended 12/31/10

     9.89        0.40        0.36        0.76        (0.40 )      (0.13 ) 

Period From 5/13/094
to 12/31/091

     9.47        0.27        0.42        0.69        (0.27 )      —   

See notes to Financial Highlights on pages 136–137.

 

124   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            
Total
Distributions		    

Net Asset

Value, End

of Period

     Total Return2    

Net Assets,

End of Period

(000s)

     Net Ratio of
Expenses to
Average Net
Assets3		    

Gross

Ratio of

Expenses
to Average
Net Assets

    

Net Ratio

of Net

Investment
Income to
Average Net
Assets3

    

Gross

Ratio of Net
Investment
Income to
Average Net
Assets

    

Portfolio

Turnover

Rate

  
                 
                 
$ (0.16)      $ 10.31        4.62%      $ 69,144        0.87%        1.07%        3.17%        2.97%        24%   
  (0.32)        10.01        (1.64)%        80,139        0.85%        1.01%        2.70%        2.54%        201%   
  (0.44)        10.50        5.85%        129,706        0.85%        0.99%        2.62%        2.48%        154%   
  (0.46)        10.34        6.87%        115,632        0.85%        0.98%        3.46%        3.33%        113%   
  (0.51)        10.12        7.55%        135,370        0.85%        1.04%        3.69%        3.50%        129%   
  (0.41)        9.89        10.50%        127,155        0.85%        1.05%        4.24%        4.04%        169%   
 
                 
$ (0.12)      $ 10.31        4.21%      $ 10,263        1.66%        1.91%        2.39%        2.14%        24%   
  (0.24)        10.01        (2.37)%        12,057        1.60%        1.81%        1.92%        1.71%        201%   
  (0.36)        10.50        5.06%        27,040        1.60%        1.79%        1.83%        1.64%        154%   
  (0.39)        10.34        6.17%        15,482        1.60%        1.84%        2.60%        2.36%        113%   
  (0.43)        10.11        6.64%        7,270        1.60%        1.80%        2.97%        2.77%        129%   
  (0.34)        9.89        9.68%        11,701        1.60%        1.81%        3.49%        3.28%        169%   
 
                 
$ (0.14)      $ 10.32        4.41%      $ 7,036        1.27%        1.47%        2.76%        2.56%        24%   
  (0.28)        10.02        (2.02)%        7,287        1.25%        1.41%        2.32%        2.16%        201%   
  (0.39)        10.51        5.33%        9,291        1.25%        1.44%        2.23%        2.04%        154%   
  (0.42)        10.36        6.55%        10,471        1.25%        1.50%        3.04%        2.79%        113%   
  (0.47)        10.13        7.12%        10,104        1.25%        1.50%        3.34%        3.09%        129%   
  (0.37)        9.90        10.05%        13,096        1.25%        1.55%        3.86%        3.56%        169%   
 
                 
$ (0.17)      $ 10.32        4.72%      $ 34,126        0.66%        0.79%        3.37%        3.24%        24%   
  (0.34)        10.02        (1.35)%        34,568        0.66%        0.72%        2.89%        2.83%        201%   
  (0.46)        10.50        5.95%        58,511        0.66%        0.74%        2.80%        2.72%        154%   
  (0.48)        10.35        7.18%        51,026        0.66%        0.68%        3.39%        3.37%        113%   
  (0.53)        10.12        7.75%        1,849        0.66%        0.76%        3.85%        3.75%        129%   

 

(0.27)

  

     9.89        7.32%        1,093        0.66%        0.84%        4.28%        4.10%        169%   

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   125

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                       
    

Net Asset

Value,

Beginning
of Period

    

Net

Investment
Income

    

    
    
Net Realized

and
Unrealized
Gain/(Loss)

    

Total

Operations

     Distributions
From Net
Investment
Income		    

Distributions
From Net

Realized

Capital Gains

  
RS Low Duration Bond Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.13      $ 0.09      $ 0.01      $ 0.10      $ (0.09 )    $ —   

Year Ended 12/31/13

     10.32        0.18        (0.19 )      (0.01 )      (0.18 )      — 5 

Year Ended 12/31/12

     10.21        0.20        0.11        0.31        (0.20 )      — 5 

Year Ended 12/31/11

     10.28        0.24        (0.06 )      0.18        (0.24 )      (0.01 ) 

Year Ended 12/31/10

     10.17        0.28        0.14        0.42        (0.28 )      (0.03 ) 

Year Ended 12/31/09

     9.88        0.28        0.29        0.57        (0.28 )      — 5 
 

Class C

            

Six Months Ended 6/30/141

   $ 10.13      $ 0.06      $ 0.01      $ 0.07      $ (0.06 )    $ —   

Year Ended 12/31/13

     10.32        0.10        (0.19 )      (0.09 )      (0.10 )      — 5 

Year Ended 12/31/12

     10.21        0.12        0.11        0.23        (0.12 )      — 5 

Year Ended 12/31/11

     10.28        0.16        (0.06 )      0.10        (0.16 )      (0.01 ) 

Year Ended 12/31/10

     10.17        0.21        0.14        0.35        (0.21 )      (0.03 ) 

Year Ended 12/31/09

     9.88        0.21        0.29        0.50        (0.21 )      — 5 
 

Class K

            

Six Months Ended 6/30/141

   $ 10.13      $ 0.07      $ 0.01      $ 0.08      $ (0.07 )    $ —   

Year Ended 12/31/13

     10.32        0.14        (0.19 )      (0.05 )      (0.14 )      — 5 

Year Ended 12/31/12

     10.21        0.15        0.11        0.26        (0.15 )      — 5 

Year Ended 12/31/11

     10.28        0.20        (0.06 )      0.14        (0.20 )      (0.01 ) 

Year Ended 12/31/10

     10.17        0.24        0.14        0.38        (0.24 )      (0.03 ) 

Year Ended 12/31/09

     9.88        0.24        0.29        0.53        (0.24 )      — 5 
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.13      $ 0.11      $ 0.01      $ 0.12      $ (0.11 )    $ —   

Year Ended 12/31/13

     10.32        0.20        (0.19 )      0.01        (0.20 )      — 5 

Year Ended 12/31/12

     10.21        0.22        0.11        0.33        (0.22 )      — 5 

Year Ended 12/31/11

     10.28        0.26        (0.06 )      0.20        (0.26 )      (0.01 ) 

Year Ended 12/31/10

     10.17        0.30        0.14        0.44        (0.30 )      (0.03 ) 

Period From 5/13/094
to 12/31/091

     9.98        0.20        0.19        0.39        (0.20 )      — 5 

See notes to Financial Highlights on pages 136–137.

 

126   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2    

Net Assets,

End of Period
(000s)

     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average
Net Assets3		     Gross
Ratio of Net
Investment
Income to
Average Net
Assets		    

Portfolio

Turnover

Rate

  
                 
                 
$ (0.09)      $ 10.14        1.03%      $ 510,843        0.89%        0.89%        1.87%        1.87%        19%   
  (0.18)        10.13        (0.07)%        580,942        0.83%        0.84%        1.76%        1.75%        74%   
  (0.20)        10.32        3.06%        818,462        0.80%        0.84%        1.88%        1.84%        64%   
  (0.25)        10.21        1.68%        665,196        0.80%        0.86%        2.26%        2.20%        76%   
  (0.31)        10.28        4.15%        408,167        0.80%        0.93%        2.68%        2.55%        121%   
  (0.28)        10.17        5.89%        162,209        0.80%        0.97%        2.84%        2.67%        393%   
 
                 
$ (0.06)      $ 10.14        0.64%      $ 221,919        1.66%        1.66%        1.10%        1.10%        19%   
  (0.10)        10.13        (0.85)%        268,237        1.61%        1.63%        0.98%        0.96%        74%   
  (0.12)        10.32        2.29%        334,753        1.55%        1.62%        1.12%        1.05%        64%   
  (0.17)        10.21        0.93%        236,987        1.55%        1.61%        1.52%        1.46%        76%   
  (0.24)        10.28        3.38%        144,393        1.55%        1.67%        1.92%        1.80%        121%   
  (0.21)        10.17        5.10%        44,681        1.55%        1.71%        2.09%        1.93%        393%   
 
                 
$ (0.07)      $ 10.14        0.81%      $ 5,482        1.33%        1.33%        1.43%        1.43%        19%   
  (0.14)        10.13        (0.50)%        5,894        1.26%        1.30%        1.34%        1.30%        74%   
  (0.15)        10.32        2.65%        7,238        1.20%        1.33%        1.46%        1.33%        64%   
  (0.21)        10.21        1.28%        5,551        1.20%        1.36%        1.88%        1.72%        76%   
  (0.27)        10.28        3.75%        4,139        1.20%        1.41%        2.32%        2.11%        121%   
  (0.24)        10.17        5.47%        3,746        1.20%        1.42%        2.42%        2.20%        393%   
 
                 
$ (0.11)      $ 10.14        1.16%      $ 409,447        0.62%        0.62%        2.13%        2.13%        19%   
  (0.20)        10.13        0.15%        471,093        0.61%        0.61%        1.98%        1.98%        74%   
  (0.22)        10.32        3.27%        633,868        0.61%        0.61%        2.03%        2.03%        64%   
  (0.27)        10.21        1.89%        312,680        0.60%        0.60%        2.43%        2.43%        76%   
  (0.33)        10.28        4.36%        104,784        0.62%        0.62%        2.83%        2.83%        121%   
 
  (0.20)        10.17        3.91%        7,347        0.63%        0.73%        3.07%        2.97%        393%   

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   127

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                       
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income

     Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		    

Distributions
From Net
Investment
Income

     Distributions
From Net
Realized
Capital Gains		  
RS High Yield Fund            

Class A

            

Six Months Ended 6/30/141

   $ 7.31      $ 0.20      $ 0.19      $ 0.39      $ (0.20 )    $     —   

Year Ended 12/31/13

     7.25        0.43        0.07        0.50        (0.44 )      —   

Year Ended 12/31/12

     6.75        0.45        0.50        0.95        (0.45 )      —   

Year Ended 12/31/11

     6.93        0.49        (0.18 )      0.31        (0.49 )      —   

Year Ended 12/31/10

     6.59        0.52        0.34        0.86        (0.52 )      —   

Year Ended 12/31/09

     5.16        0.50        1.43        1.93        (0.50 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 7.32      $ 0.17      $ 0.19      $ 0.36      $ (0.17 )    $ —   

Year Ended 12/31/13

     7.25        0.36        0.07        0.43        (0.36 )      —   

Year Ended 12/31/12

     6.74        0.39        0.51        0.90        (0.39 )      —   

Year Ended 12/31/11

     6.93        0.44        (0.19 )      0.25        (0.44 )      —   

Year Ended 12/31/10

     6.58        0.47        0.35        0.82        (0.47 )      —   

Year Ended 12/31/09

     5.16        0.45        1.42        1.87        (0.45 )      —   
 

Class K

            

Six Months Ended 6/30/141

   $ 7.33      $ 0.19      $ 0.19      $ 0.38      $ (0.19 )    $ —   

Year Ended 12/31/13

     7.25        0.39        0.08        0.47        (0.39 )      —   

Year Ended 12/31/12

     6.75        0.42        0.50        0.92        (0.42 )      —   

Year Ended 12/31/11

     6.93        0.46        (0.18 )      0.28        (0.46 )      —   

Year Ended 12/31/10

     6.59        0.49        0.34        0.83        (0.49 )      —   

Year Ended 12/31/09

     5.16        0.48        1.43        1.91        (0.48 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 7.27      $ 0.21      $ 0.19      $ 0.40      $ (0.21 )    $ —   

Year Ended 12/31/13

     7.24        0.43        0.07        0.50        (0.47 )      —   

Year Ended 12/31/12

     6.74        0.46        0.50        0.96        (0.46 )      —   

Year Ended 12/31/11

     6.92        0.50        (0.18 )      0.32        (0.50 )      —   

Year Ended 12/31/10

     6.58        0.53        0.34        0.87        (0.53 )      —   

Period From 5/13/094
to 12/31/091

     5.74        0.33        0.84        1.17        (0.33 )      —   

See notes to Financial Highlights on pages 136–137.

 

128   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses
to Average
Net Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ (0.20)      $ 7.50        5.42%      $ 50,786        0.97%        1.14%        5.46%        5.29%        131%   
  (0.44)        7.31        7.05%        42,329        0.95%        1.11%        5.72%        5.56%        96%   
  (0.45)        7.25        14.43%        64,916        0.92%        1.12%        6.36%        6.16%        103%   
  (0.49)        6.75        4.56%        68,517        0.85%        1.11%        7.10%        6.84%        101%   
  (0.52)        6.93        13.54%        72,025        0.85%        1.14%        7.67%        7.38%        108%   
  (0.50)        6.59        38.92%        76,328        0.85%        1.14%        8.39%        8.10%        66%   
 
                 
$ (0.17)      $ 7.51        5.03%      $ 32,347        1.70%        1.89%        4.75%        4.56%        131%   
  (0.36)        7.32        6.10%        37,733        1.70%        1.87%        4.97%        4.80%        96%   
  (0.39)        7.25        13.75%        34,998        1.67%        1.88%        5.60%        5.39%        103%   
  (0.44)        6.74        3.62%        27,882        1.60%        1.88%        6.34%        6.06%        101%   
  (0.47)        6.93        12.88%        25,102        1.60%        1.92%        6.92%        6.60%        108%   
  (0.45)        6.58        37.69%        15,088        1.60%        1.93%        7.67%        7.34%        66%   
 
                 
$ (0.19)      $ 7.52        5.21%      $ 23,927        1.35%        1.50%        5.10%        4.95%        131%   
  (0.39)        7.33        6.62%        23,036        1.35%        1.49%        5.32%        5.18%        96%   
  (0.42)        7.25        13.98%        22,003        1.32%        1.52%        5.96%        5.76%        103%   
  (0.46)        6.75        4.15%        18,961        1.25%        1.54%        6.71%        6.42%        101%   
  (0.49)        6.93        13.09%        18,710        1.25%        1.58%        7.29%        6.96%        108%   
  (0.48)        6.59        38.36%        16,522        1.25%        1.60%        8.04%        7.69%        66%   
 
                 
$ (0.21)      $ 7.46        5.54%      $ 7,775        0.76%        0.89%        5.72%        5.59%        131%   
  (0.47)        7.27        7.14%        9,464        0.76%        0.85%        5.88%        5.79%        96%   
  (0.46)        7.24        14.66%        11,271        0.73%        0.91%        6.52%        6.34%        103%   
  (0.50)        6.74        4.75%        7,418        0.66%        0.88%        7.30%        7.08%        101%   
  (0.53)        6.92        13.77%        4,678        0.66%        0.88%        7.89%        7.67%        108%   
 
  (0.33)        6.58        20.76%        1,207        0.66%        0.97%        8.25%        7.94%        66%   

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   129

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income

         
    
Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Tax-Exempt Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.30      $ 0.16      $ 0.41      $ 0.57      $ (0.16 )    $     —   

Year Ended 12/31/13

     11.13        0.31        (0.83 )      (0.52 )      (0.31 )      —5   

Year Ended 12/31/12

     10.69        0.32        0.44        0.76        (0.32 )      —   

Year Ended 12/31/11

     9.95        0.34        0.74        1.08        (0.34 )      —   

Year Ended 12/31/10

     10.19        0.37        (0.24 )      0.13        (0.37 )      —   

Year Ended 12/31/09

     9.48        0.37        0.71        1.08        (0.37 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.30      $ 0.12      $ 0.40      $ 0.52      $ (0.12 )    $ —   

Year Ended 12/31/13

     11.12        0.23        (0.82 )      (0.59 )      (0.23 )      —5   

Year Ended 12/31/12

     10.69        0.23        0.43        0.66        (0.23 )      —   

Year Ended 12/31/11

     9.95        0.26        0.74        1.00        (0.26 )      —   

Year Ended 12/31/10

     10.18        0.29        (0.23 )      0.06        (0.29 )      —   

Year Ended 12/31/09

     9.47        0.29        0.71        1.00        (0.29 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.29      $ 0.17      $ 0.41      $ 0.58      $ (0.17 )    $ —   

Year Ended 12/31/13

     11.12        0.33        (0.83 )      (0.50 )      (0.33 )      —5   

Year Ended 12/31/12

     10.68        0.34        0.44        0.78        (0.34 )      —   

Year Ended 12/31/11

     9.95        0.36        0.73        1.09        (0.36 )      —   

Year Ended 12/31/10

     10.18        0.39        (0.23 )      0.16        (0.39 )      —   

Period From 5/13/094
to 12/31/091

     9.94        0.25        0.24        0.49        (0.25 )      —   

 

  

See notes to Financial Highlights on pages 136–137.

 

130   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ (0.16)      $ 10.71        5.57%      $ 140,610        0.80%        0.97%        3.07%        2.90%        8%   
  (0.31)        10.30        (4.67)%        152,992        0.80%        0.93%        2.92%        2.79%        26%   
  (0.32)        11.13        7.19%        275,881        0.80%        0.91%        2.91%        2.80%        15%   
  (0.34)        10.69        11.11%        258,848        0.80%        0.90%        3.33%        3.23%        17%   
  (0.37)        9.95        1.21%        161,531        0.82%        0.96%        3.58%        3.44%        22%   
  (0.37)        10.19        11.52%        181,692        0.85%        0.94%        3.66%        3.57%        44%   
 
                 
$ (0.12)      $ 10.70        5.06%      $ 57,992        1.60%        1.73%        2.27%        2.14%        8%   
  (0.23)        10.30        (5.35)%        64,061        1.60%        1.69%        2.12%        2.03%        26%   
  (0.23)        11.12        6.24%        107,073        1.60%        1.69%        2.10%        2.01%        15%   
  (0.26)        10.69        10.22%        79,106        1.60%        1.67%        2.55%        2.48%        17%   
  (0.29)        9.95        0.52%        62,692        1.60%        1.72%        2.78%        2.66%        22%   
  (0.29)        10.18        10.69%        43,668        1.60%        1.71%        2.90%        2.79%        44%   
 
                 
$ (0.17)      $ 10.70        5.63%      $ 56,058        0.69%        0.71%        3.18%        3.16%        8%   
  (0.33)        10.29        (4.57)%        62,916        0.69%        0.69%        3.03%        3.03%        26%   
  (0.34)        11.12        7.34%        110,209        0.67%        0.67%        3.03%        3.03%        15%   
  (0.36)        10.68        11.14%        75,837        0.68%        0.68%        3.42%        3.42%        17%   
  (0.39)        9.95        1.47%        41,376        0.67%        0.67%        3.71%        3.71%        22%   
 
  (0.25)        10.18        4.95%        2,356        0.69%        0.77%        3.80%        3.72%        44%   
                                                                     

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   131

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income

    

    
    
Net Realized
and

Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS High Income Municipal Bond Fund             

Class A

            

Six Months Ended 6/30/141

   $ 10.00      $ 0.23      $ 0.57      $ 0.80      $ (0.23 )    $ —   

Year Ended 12/31/13

     11.19        0.45        (1.19 )      (0.74 )      (0.45 )      —   

Year Ended 12/31/12

     10.55        0.44        0.64        1.08        (0.44 )      —   

Year Ended 12/31/11

     9.95        0.52        0.60        1.12        (0.52 )      —   

Year Ended 12/31/10

     10.07        0.59        (0.11 )      0.48        (0.59 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.04        0.07        0.11        (0.04 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.00      $ 0.19      $ 0.57      $ 0.76      $ (0.19 )    $ —   

Year Ended 12/31/13

     11.19        0.37        (1.19 )      (0.82 )      (0.37 )      —   

Year Ended 12/31/12

     10.55        0.35        0.64        0.99        (0.35 )      —   

Year Ended 12/31/11

     9.95        0.46        0.60        1.06        (0.46 )      —   

Year Ended 12/31/10

     10.07        0.57        (0.11 )      0.46        (0.57 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.04        0.07        0.11        (0.04 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.00      $ 0.24      $ 0.58      $ 0.82      $ (0.24 )    $ —   

Year Ended 12/31/13

     11.19        0.47        (1.19 )      (0.72 )      (0.47 )      —   

Year Ended 12/31/12

     10.55        0.46        0.64        1.10        (0.46 )      —   

Year Ended 12/31/11

     9.95        0.54        0.60        1.14        (0.54 )      —   

Year Ended 12/31/10

     10.07        0.59        (0.11 )      0.48        (0.59 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.04        0.07        0.11        (0.04 )      —   

See notes to Financial Highlights on pages 136–137.

 

132   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ (0.23)      $ 10.57        8.02%      $ 44,969        0.77%        1.02%        4.44%        4.19%        8%   
  (0.45)        10.00        (6.74)%        54,603        0.73%        0.95%        4.17%        3.95%        19%   
  (0.44)        11.19        10.32%        137,734        0.68%        0.92%        3.89%        3.65%        17%   
  (0.52)        10.55        11.68%        99,686        0.51%        0.96%        5.11%        4.66%        20%   
  (0.60)        9.95        4.74%        72,924        0.12%        1.20%        5.64%        4.56%        41%   

 

(0.04)

  

     10.07        1.10%        31,346        —% 7      1.25%        3.85%        2.60%        —% 8 
 
                 
$ (0.19)      $ 10.57        7.61%      $ 35,654        1.53%        1.78%        3.67%        3.42%        8%   
  (0.37)        10.00        (7.47)%        36,049        1.52%        1.73%        3.40%        3.19%        19%   
  (0.35)        11.19        9.46%        68,925        1.48%        1.72%        3.08%        2.84%        17%   
  (0.46)        10.55        10.94%        34,428        1.21%        1.74%        4.41%        3.88%        20%   
  (0.58)        9.95        4.55%        20,104        0.34%        1.94%        5.36%        3.76%        41%   

 

(0.04)

  

     10.07        1.10%        2,022        —% 7      2.14%        3.85%        1.71%        —% 8 
 
                 
$ (0.24)      $ 10.58        8.26%      $ 30,804        0.51%        0.74%        4.67%        4.44%        8%   
  (0.47)        10.00        (6.54)%        27,286        0.50%        0.71%        4.39%        4.18%        19%   
  (0.46)        11.19        10.59%        73,511        0.44%        0.68%        4.11%        3.88%        17%   
  (0.54)        10.55        11.89%        36,526        0.30%        0.67%        5.25%        4.88%        20%   
  (0.60)        9.95        4.76%        10,731        0.10%        0.87%        5.66%        4.89%        41%   

 

(0.04)

  

     10.07        1.10%        2,022        —% 7      2.14%        3.85%        1.71%        —% 8 
               
               

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   133

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income

    

Net Realized
and
Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Floating Rate Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.34      $ 0.21      $ 0.01      $ 0.22      $ (0.21 )    $ —   

Year Ended 12/31/13

     10.27        0.44        0.07        0.51        (0.44 )      —   

Year Ended 12/31/12

     9.85        0.54        0.42        0.96        (0.54 )      —   

Year Ended 12/31/11

     10.30        0.54        (0.44 )      0.10        (0.54 )      (0.01 ) 

Year Ended 12/31/10

     10.03        0.52        0.30        0.82        (0.52 )      (0.03 ) 

Period From 12/7/096 to 12/31/091

     10.00        0.01        0.03        0.04        (0.01 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.34      $ 0.17      $ 0.01      $ 0.18      $ (0.17 )    $ —   

Year Ended 12/31/13

     10.27        0.36        0.07        0.43        (0.36 )      —   

Year Ended 12/31/12

     9.86        0.46        0.41        0.87        (0.46 )      —   

Year Ended 12/31/11

     10.31        0.48        (0.44 )      0.04        (0.48 )      (0.01 ) 

Year Ended 12/31/10

     10.04        0.51        0.30        0.81        (0.51 )      (0.03 ) 

Period From 12/7/096
to 12/31/091

     10.00        0.01        0.04        0.05        (0.01 )      —   
 

Class K

            

Six Months Ended 6/30/141

   $ 10.34      $ 0.18      $ 0.01      $ 0.19      $ (0.18 )    $ —   

Year Ended 12/31/13

     10.26        0.40        0.08        0.48        (0.40 )      —   

Year Ended 12/31/12

     9.85        0.49        0.41        0.90        (0.49 )      —   

Year Ended 12/31/11

     10.31        0.50        (0.45 )      0.05        (0.50 )      (0.01 ) 

Year Ended 12/31/10

     10.04        0.52        0.30        0.82        (0.52 )      (0.03 ) 

Period From 12/7/096 to 12/31/091

     10.00        0.01        0.04        0.05        (0.01 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.34      $ 0.22      $ 0.01      $ 0.23      $ (0.22 )    $ —   

Year Ended 12/31/13

     10.27        0.47        0.07        0.54        (0.47 )      —   

Year Ended 12/31/12

     9.86        0.56        0.41        0.97        (0.56 )      —   

Year Ended 12/31/11

     10.30        0.56        (0.43 )      0.13        (0.56 )      (0.01 ) 

Year Ended 12/31/10

     10.04        0.52        0.29        0.81        (0.52 )      (0.03 ) 

Period From 12/7/096
to 12/31/091

     10.00        0.01        0.04        0.05        (0.01 )      —   

See notes to Financial Highlights on pages 136–137.

 

134   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average
Net Assets3		     Gross
Ratio of Net
Investment
Income/
(Loss) to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ (0.21)      $ 10.35        2.12%      $ 810,740        0.99%        1.07%        4.05%        3.97%        23%   
  (0.44)        10.34        5.10%        854,291        0.94%        1.06%        4.29%        4.17%        30%   
  (0.54)        10.27        9.96%        771,638        0.79%        1.05%        5.27%        5.01%        52%   
  (0.55)        9.85        1.02%        458,208        0.50%        1.07%        5.33%        4.76%        87%   
  (0.55)        10.30        8.37%        373,238        0.07%        1.24%        5.22%        4.05%        64%   

 

(0.01)

  

     10.03        0.38%        44,195        —%7        1.65%        1.26%        (0.39)%        —%8   
 
                 
$ (0.17)      $ 10.35        1.71%      $ 744,970        1.79%        1.85%        3.25%        3.19%        23%   
  (0.36)        10.34        4.27%        800,072        1.73%        1.85%        3.48%        3.36%        30%   
  (0.46)        10.27        8.98%        599,026        1.58%        1.84%        4.50%        4.24%        52%   
  (0.49)        9.86        0.38%        407,389        1.20%        1.82%        4.72%        4.10%        87%   
  (0.54)        10.31        8.25%        159,695        0.24%        2.02%        5.12%        3.34%        64%   

 

(0.01)

  

     10.04        0.48%        2,009        —%7        3.09%        1.20%        (1.89)%        —%8   
 
                 
$ (0.18)      $ 10.35        1.85%      $ 2,564        1.54%        1.59%        3.50%        3.45%        23%   
  (0.40)        10.34        4.72%        2,773        1.38%        1.50%        3.85%        3.73%        30%   
  (0.49)        10.26        9.31%        4,285        1.26%        1.52%        4.82%        4.56%        52%   
  (0.51)        9.85        0.52%        3,627        0.90%        1.57%        4.96%        4.29%        87%   
  (0.55)        10.31        8.33%        2,918        0.08%        1.62%        5.13%        3.59%        64%   

 

(0.01)

  

     10.04        0.48%        2,009        —%7        3.09%        1.20%        (1.89)%        —%8   
 
                 
$ (0.22)      $ 10.35        2.23%      $ 1,072,821        0.77%        0.83%        4.27%        4.21%        23%   
  (0.47)        10.34        5.34%        1,186,456        0.72%        0.83%        4.47%        4.36%        30%   
  (0.56)        10.27        10.08%        568,316        0.60%        0.86%        5.46%        5.20%        52%   
  (0.57)        9.86        1.30%        283,393        0.31%        0.82%        5.54%        5.03%        87%   
  (0.55)        10.30        8.28%        120,289        0.08%        1.00%        5.30%        4.38%        64%   

 

(0.01)

  

     10.04        0.48%        2,015        —%7        3.09%        1.20%        (1.89)%        —%8   

See notes to Financial Highlights on pages 136–137.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   135

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income

    
    
Net Realized
and
Unrealized
Gain/(Loss)		     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Strategic Income Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.33      $ 0.16      $ 0.18      $ 0.34      $ (0.16 )    $ (0.01 ) 

Year Ended 12/31/13

     10.64        0.35        (0.28 )      0.07        (0.38 )      —5   

Year Ended 12/31/12

     10.29        0.40        0.48        0.88        (0.40 )      (0.13 ) 

Year Ended 12/31/11

     10.30        0.49        0.08        0.57        (0.52 )      (0.06 ) 

Year Ended 12/31/10

     9.96        0.53        0.35        0.88        (0.53 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.03        (0.04 )      (0.01 )      (0.03 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.38      $ 0.12      $ 0.18      $ 0.30      $ (0.12 )    $ (0.01 ) 

Year Ended 12/31/13

     10.66        0.27        (0.28 )      (0.01 )      (0.27 )      —5   

Year Ended 12/31/12

     10.31        0.30        0.49        0.79        (0.31 )      (0.13 ) 

Year Ended 12/31/11

     10.30        0.41        0.09        0.50        (0.43 )      (0.06 ) 

Year Ended 12/31/10

     9.96        0.53        0.34        0.87        (0.52 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.03        (0.04 )      (0.01 )      (0.03 )      —   

Class K

            

Six Months Ended 6/30/141

   $ 10.38      $ 0.14      $ 0.18      $ 0.32      $ (0.14 )    $ (0.01 ) 

Year Ended 12/31/13

     10.67        0.30        (0.28 )      0.02        (0.31 )      —5   

Year Ended 12/31/12

     10.32        0.34        0.49        0.83        (0.35 )      (0.13 ) 

Year Ended 12/31/11

     10.30        0.45        0.08        0.53        (0.45 )      (0.06 ) 

Year Ended 12/31/10

     9.96        0.53        0.35        0.88        (0.53 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.03        (0.04 )      (0.01 )      (0.03 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.27      $ 0.18      $ 0.17      $ 0.35      $ (0.17 )    $ (0.01 ) 

Year Ended 12/31/13

     10.62        0.38        (0.29 )      0.09        (0.44 )      —5   

Year Ended 12/31/12

     10.27        0.42        0.48        0.90        (0.42 )      (0.13 ) 

Year Ended 12/31/11

     10.30        0.51        0.07        0.58        (0.55 )      (0.06 ) 

Year Ended 12/31/10

     9.96        0.54        0.34        0.88        (0.53 )      (0.01 ) 

Period From 11/23/096
to 12/31/091

     10.00        0.03        (0.04 )      (0.01 )      (0.03 )      —   

 

Distributions reflect actual per–share amounts distributed for the period.

 

1 

Ratios for periods of less than one year have been annualized, except for total return and portfolio turnover rate.

 

2 

Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total return.

 

3 

Net Ratio of Expenses to Average Net Assets and Net Ratio of Net Investment Income to Average Net Assets include the effect of fee waivers and expense limitations, and exclude the effect of custody credits, if applicable.

 

136   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                  
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return2     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets3		     Gross
Ratio of
Expenses
to Average
Net Assets		     Net Ratio
of Net
Investment
Income to
Average Net
Assets3		     Gross
Ratio of Net
Investment
Income to
Average Net
Assets		    

Portfolio
Turnover

Rate

  
                 
                 
$ (0.17)      $ 10.50        3.27%      $ 54,686        0.88%        1.14%        3.09%        2.83%        54%   
  (0.38)        10.33        0.71%        53,615        0.81%        1.18%        3.40%        3.03%        133%   
  (0.53)        10.64        8.67%        84,372        0.72%        1.16%        3.74%        3.30%        157%   
  (0.58)        10.29        5.66%        66,131        0.50%        1.18%        4.73%        4.05%        79%   
  (0.54)        10.30        8.93%        52,362        0.12%        1.41%        5.14%        3.85%        51%   
  (0.03)       
 		     
9.96		  
  		     (0.14)%        43,942        —%7        1.14%        2.47%        1.33%        2%   
 
                 
$ (0.13)      $ 10.55        2.86%      $ 16,817        1.67%        1.93%        2.30%        2.04%        54%   
  (0.27)        10.38        (0.03)%        12,691        1.64%        1.99%        2.58%        2.23%        133%   
  (0.44)        10.66        7.78%        13,106        1.54%        1.97%        2.91%        2.48%        157%   
  (0.49)        10.31        4.94%        9,193        1.20%        2.01%        4.02%        3.21%        79%   
  (0.53)        10.30        8.89%        4,873        0.12%        2.19%        5.14%        3.07%        51%   
  (0.03)       
 		     
9.96		  
  		     (0.14)%        1,997        —%7        2.06%        2.47%        0.41%        2%   
                 
$ (0.15)      $ 10.55        3.04%      $ 3,869        1.28%        1.56%        2.70%        2.42%        54%   
  (0.31)        10.38        0.27%        3,806        1.25%        1.59%        2.97%        2.63%        133%   
  (0.48)        10.67        8.17%        3,085        1.16%        1.60%        3.32%        2.88%        157%   
  (0.51)        10.32        5.31%        2,595        0.83%        1.65%        4.41%        3.59%        79%   
  (0.54)        10.30        8.93%        2,298        0.12%        1.78%        5.15%        3.49%        51%   
  (0.03)       
 		     
9.96		  
  		     (0.14)%        1,997        —%7        2.06%        2.47%        0.41%        2%   
 
                 
$ (0.18)      $ 10.44        3.38%      $ 10,815        0.66%        0.90%        3.31%        3.07%        54%   
  (0.44)        10.27        0.88%        8,411        0.57%        0.91%        3.62%        3.28%        133%   
  (0.55)        10.62        8.93%        9,143        0.50%        0.90%        3.91%        3.51%        157%   
  (0.61)        10.27        5.82%        4,776        0.29%        0.93%        4.99%        4.35%        79%   
  (0.54)        10.30        8.95%        6,972        0.10%        1.07%        5.14%        4.17%        51%   
  (0.03)       
 		     
9.96		  
  		     (0.14)%        1,997        —%7        2.06%        2.47%        0.41%        2%   
4

Inception date.

 

5 

Rounds to $0.00 per share.

 

6 

Inception date. Shares were not offered to public prior to December 31, 2009.

 

7 

Expenses for the period ended December 31, 2009, were reimbursed by Guardian Investor Services LLC (See Note 2a).

 

8 

For the period ended December 31, 2009, no long-term securities were sold.

 

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Notes to Financial Statements

June 30, 2014 (unaudited)

RS Investment Trust (the “Trust”), a Massachusetts business trust organized on May 11, 1987, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. These financial statements relate to seven series offered by the Trust: RS Investment Quality Bond Fund, RS Low Duration Bond Fund, RS High Yield Fund, RS Tax-Exempt Fund, RS High Income Municipal Bond Fund, RS Floating Rate Fund and RS Strategic Income Fund (each a “Fund,” collectively the “Funds”). All of the Funds are diversified funds. The financial statements for the other remaining series of the Trust are presented in separate reports.

RS Investment Quality Bond Fund, RS Low Duration Bond Fund, RS High Yield Fund, RS Floating Rate Fund and RS Strategic Income Fund offer Class A, C, K and Y shares. RS Tax-Exempt Fund and RS High Income Municipal Bond Fund offer Class A, C and Y shares. The various classes differ principally in their respective sales charges, transfer agent expenses, and other expenses. In general, all classes of shares have identical rights to earnings, assets and voting privileges, except for certain differences, including class-specific expenses and voting rights with respect to matters affecting fewer than all classes or in which the interests of one class differ from the interests of any other class.

The Trust has an unlimited number of authorized shares of beneficial interest with no par value. Shares are bought and sold at closing net asset value (“NAV”) less any applicable sales charge.

Note 1 Significant Accounting Policies

The following policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

a. Investment Valuations The Funds are responsible for the valuation of portfolio securities. The valuations of debt securities, including bank loans, with more than 60 days to maturity for which quoted bid prices are readily available and considered by management to be representative of the bid side of the market are valued at the bid price by independent pricing services (each, a “Service”). Debt securities with more than 60 days to maturity for which quoted bid prices are not readily available and considered by management to be representative of market value are valued by a Service at estimated market value based on methods which may include consideration of yields or prices of government securities of comparable coupon, maturity and type; indications as to values from dealers; and general market conditions.

Other marketable securities are valued at the last reported sale price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the

 

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mean between the closing bid and ask prices. Securities traded on the NASDAQ Stock Market, LLC (“NASDAQ”) are generally valued at the NASDAQ official closing price, which may not be the last sale price. If the NASDAQ official closing price is not available for a security, that security is generally valued using the last reported sale price, or, if no sales are reported, at the mean between the closing bid and ask prices. Short-term investments that will mature in 60 days or less are valued at amortized cost, which approximates market value. Repurchase agreements are carried at cost, which approximates market value (see Note 5e). Foreign securities are valued in the currencies of the markets in which they trade and then converted to U.S. dollars using the prevailing exchange rates, and forward foreign currency contracts are valued at the mean between the bid and ask prices at the close of the New York Stock Exchange (“NYSE”).

Securities for which market quotations are not readily available or for which market quotations may be considered unreliable or for which a Service does not provide a valuation are valued at their fair values as determined in accordance with guidelines and procedures adopted by the Trust’s Board of Trustees.

Securities whose values have been materially affected by events occurring before the Funds’ valuation time but after the close of the securities’ principal exchange or market may be fair valued in accordance with guidelines and procedures adopted by the Board of Trustees.

In accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 820 (“ASC Topic 820”), fair value is defined as the price that the Funds would receive upon selling an investment in an “arm’s length” transaction to a willing buyer in the principal or most advantageous market for the investment. ASC Topic 820 established a hierarchy for classification of fair value measurements for disclosure purposes. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy of inputs is summarized in the three broad levels listed below.

 

Ÿ  

Level 1 — unadjusted quoted prices in active markets for identical investments

 

Ÿ  

Level 2 — inputs other than unadjusted quoted prices that are observable either directly or indirectly (including adjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)

 

Ÿ  

Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A security’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Trust. The Trust considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, and

 

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provided by independent sources that are actively involved in the relevant market. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an investment’s assigned level within the hierarchy.

The FASB requires reporting entities to make disclosures about purchases, sales, issuances and settlements of Level 3 securities on a gross basis. For the six months ended June 30, 2014, the Funds had no securities classified as Level 3.

The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the reporting period. For the six months ended June 30, 2014, there were no transfers between Level 1, Level 2 and Level 3.

In determining a security’s placement within the hierarchy, the Trust separates the Funds’ investment portfolios into two categories: investments and derivatives (e.g., futures).

Investments Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include certain U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, loans, state, municipal and provincial obligations, certain foreign equity securities and commercial paper and other short-term securities valued at amortized cost in accordance with Rule 2a-7 under the 1940 Act.

Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently or not at all. Level 3 investments include, among others, private placement securities. When observable prices are not available for these securities, the Trust uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the Trust in estimating the value of Level 3 investments include, for example, the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations, and other transactions across the capital structure. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Trust in the absence of market information. Assumptions used by the Trust due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Derivatives Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. Certain derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within Level 2.

 

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b. Taxes The Funds intend to continue complying with the requirements of the Internal Revenue Code to qualify as regulated investment companies and to distribute substantially all net investment income and realized net capital gains, if any, to shareholders. Therefore, the Funds do not expect to be subject to income tax, and no provision for such tax has been made.

From time to time, however, a Fund may choose to pay an excise tax if the cost of making the required distribution exceeds the amount of the excise tax.

As of June 30, 2014, the Trust has reviewed the tax positions for open periods, as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements. The Trust is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statement of Operations. For the six months ended June 30, 2014, the Funds did not incur any such interest or penalties. The Funds are not subject to examination by U.S. federal tax authorities for tax years before 2010 and by state authorities for tax years before 2009.

c. Securities Transactions Securities transactions are accounted for on the date securities are purchased or sold (trade date). Realized gains or losses on securities transactions are determined on the basis of specific identification.

d. Foreign Currency Translation The accounting records of the Funds are maintained in U.S. dollars. Investment securities and all other assets and liabilities of the Funds denominated in a foreign currency are generally translated into U.S. dollars at the exchange rates quoted at the close of the NYSE on each business day. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates in effect on the dates of the respective transactions. The Funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

e. Forward Foreign Currency Contracts The Funds may enter into forward foreign currency contracts. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward exchange rate. Risks may arise from the potential inability of a Fund’s counterparty to meet the terms of a contract and from unanticipated movements in the value of a currency relative to another currency. Fluctuations in the values of forward foreign currency contracts are recorded for book purposes as unrealized gains or losses from translation of other assets and liabilities denominated in foreign currencies by the Funds. When a forward contract is closed, a Fund will record a realized gain or loss equal to the increase or decrease in the value of such forward contract between the time it was opened and the time it was closed. Such amounts are recorded as net realized gains or losses on foreign currency related transactions.

 

 

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f. Futures Contracts The Funds may enter into financial futures contracts. In entering into such contracts, the Funds are required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the face value of the contract. Subsequent payments are received or made by the Funds each day, depending on the daily fluctuations in the values of the contracts, and are recorded for financial statement purposes as variation margin received or paid by the Funds. Daily changes in variation margin are recognized as unrealized gains or losses by the Funds. The Funds may not achieve the anticipated benefits of the financial futures contracts and may realize a loss.

g. Credit Derivatives The Funds may enter into credit derivatives, including credit default swaps on individual obligations or credit indices. The Funds may use these investments (i) as alternatives to direct long or short investment in a particular security or securities, (ii) to adjust a Fund’s asset allocation or risk exposure, or (iii) for hedging purposes. The use by a Fund of credit default swaps may have the effect of creating a short position in a security. Credit derivatives can create investment leverage and may create additional investment risks that may subject a Fund to greater volatility than investments in more traditional securities, as described in the Statement of Additional Information.

The Funds may enter into credit default swap agreements either as a buyer or seller. The Funds may buy a credit default swap to attempt to mitigate the risk of default or credit quality deterioration in one or more individual holdings or in a segment of the fixed income securities market. The Funds may sell a credit default swap in an attempt to gain exposure to an underlying issuer’s credit quality characteristics without investing directly in that issuer.

For swaps entered with an individual counterpary, the Funds bear the risk of loss of the uncollateralized amount expected to be received under a credit default swap agreement in the event of the default or bankruptcy of the counterparty. The Funds will enter into swap agreements only with counterparties that meet certain standards of creditworthiness. Credit default swap agreements are generally valued at a price at which the counterparty to such agreement would terminate the agreement. The Funds may also enter into cleared swaps.

In entering into swap contracts, the Funds are required to deposit with the broker, either in cash or securities, an amount equal to a percentage of the notional value of the contract. Subsequent payments are received or made by the Funds each day, depending on the daily fluctuations in the values of the contracts, and are recorded for financial statement purposes as variation margin received or paid by the Funds. Daily changes in variation margin are recognized as unrealized gains or losses by the Funds. The Funds may not achieve the anticipated benefits of the swap contracts and may realize a loss.

For the six months ended June 30, 2014, the following Funds entered into credit default swaps primarily for the strategy listed below:

 

Fund    Strategy  

RS Investment Quality Bond Fund

      Asset allocation and risk exposure management   

RS Strategic Income Fund

      Asset allocation and risk exposure management   

There were no credit default swaps held as of June 30, 2014.

 

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h. Options Transactions The Funds can write (sell) put and call options on securities and indexes to earn premiums, for hedging purposes, risk management purposes or otherwise as part of their investment strategies. In writing options, the Funds are required to deposit with the broker, either in cash or securities, an amount equal to a percentage of the value of the options. When an option is written, the premium received is recorded as an asset with an equal liability that is subsequently marked to market to reflect the market value of the written option. These liabilities, if any, are reflected as written options, at value, in the Funds’ Statements of Assets and Liabilities. Premiums received from writing options which expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchased transactions, as a realized loss. If a written call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss. If a written put option is exercised, the premium reduces the cost basis of the security. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of a written option could result in the Funds purchasing or selling a security at a price different from its current market value.

i. Investment Income Dividend income is generally recorded on the ex-dividend date. Interest income, which includes amortization/accretion of premium/discount, is accrued and recorded daily.

In calculating net asset value per share for each class, investment income, realized and unrealized gains and losses, and expenses other than class-specific expenses are allocated daily to each class of shares based upon the proportion of net assets attributable to each class at the beginning of the day.

j. Expenses Many expenses of the Trust can be directly attributed to a specific Fund. Expenses that cannot be directly attributed to a specific Fund are generally apportioned among all the series in the Trust, based on relative net assets.

k. Distributions to Shareholders Distributions of net investment income are declared and accrued daily and each Fund intends to distribute substantially all net investment income, as determined on a federal tax basis if any, monthly. Distributions of net realized capital gains, if any, are declared and paid at least once a year. Distributions to shareholders are recorded on the ex-dividend date.

l. Capital Accounts Due to the timing of dividend distributions and the differences in accounting for income and realized gains/(losses) for financial statement purposes versus federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains/(losses) were recorded by the Funds.

Note 2 Transactions with Affiliates

a. Advisory Fee and Expense Limitation Under the terms of the advisory agreement, which is reviewed and approved annually by the Board of Trustees, each Fund pays an investment advisory fee to RS Investment Management Co. LLC (“RS Investments”). Guardian Investor Services LLC (“GIS”), a subsidiary of The Guardian Life Insurance

 

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Company of America, holds a majority interest in RS Investments. RS Investments receives an investment advisory fee based on the average daily net assets of the Funds, at the following annual rates:

 

Fund   

Investment Advisory

Fee Percentage

  

RS Investment Quality Bond Fund

      0.50%   

RS Low Duration Bond Fund

      0.45%   

RS High Yield Fund

      0.60%   

RS Tax-Exempt Fund

      0.50%   

RS High Income Municipal Bond Fund

      0.50%   

RS Floating Rate Fund

      0.65%   

RS Strategic Income Fund

      0.60%   

RS Investments has entered into a Sub-Advisory Services Agreement with GIS. GIS is responsible for providing day-to-day investment advisory services to the Funds, subject to the oversight of the Board of Trustees of the Trust and RS Investments. Sub-investment advisory fees are paid by RS Investments to GIS and do not represent separate or additional expense to the Funds.

Expense limitations have been imposed pursuant to a written agreement between RS Investments and the Trust in effect from May 1, 2014, through April 30, 2015, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) to the following rates:

 

Fund    Expense Limitation  
      Class A      Class C      Class K      Class Y  

RS Investment Quality Bond Fund

      0.90%         1.77%         1.30%         0.66%   

RS High Yield Fund

      1.00%         1.70%         1.35%         0.76%   

RS Tax-Exempt Fund

      0.80%         1.60%         N/A         0.69%   

RS High Income Municipal Bond Fund

      0.80%         1.57%         N/A         0.57%   

RS Floating Rate Fund

      1.00%         1.80%         1.56%         0.78%   

RS Strategic Income Fund

      0.95%         1.74%         1.34%         0.74%   

The expense limitations in effect for RS Investment Quality Bond Fund, RS High Yield Fund and RS Tax-Exempt Fund from January 1, 2014, through April 30, 2014, were at the following rates:

 

Fund    Expense Limitation  
      Class A      Class C      Class K      Class Y  

RS Investment Quality Bond Fund

      0.85%         1.60%         1.25%         0.66%   

RS High Yield Fund

      0.95%         1.70%         1.35%         0.76%   

RS Tax-Exempt Fund

      0.80%         1.60%         N/A         0.69%   

 

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Expense limitations were imposed pursuant to a written agreement between RS Investments and the Trust in effect from January 1, 2014, through April 30, 2014, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) for Class A shares to the rates shown in the table below and to limit the total annual fund operating expenses of each of the other classes of the Fund so that each of those classes benefits from a level of fee waiver and/or expense reimbursement (as expressed in basis points) that is the same as the level of fee waiver and/or expense reimbursement for Class A shares during the period.

 

Fund   

Expense

Limitation

  

RS High Income Municipal Bond Fund, Class A

      0.75%   

RS Floating Rate Fund, Class A

      0.98%   

RS Strategic Income Fund, Class A

      0.85%   

To satisfy the expense limitations, certain affiliates of RS Investments, including GIS, may waive fees that would otherwise be paid by the Funds or may reimburse expenses incurred by the Funds.

RS Investments and GIS do not intend to recoup any reimbursed expenses or waived advisory fees from a prior year under expense limitations then in effect for a Fund.

b. Compensation of Trustees and Officers Trustees and officers of the Trust who are interested persons, as defined in the 1940 Act, of RS Investments receive no compensation from the Funds for acting as such. Trustees of the Trust who are not interested persons of RS Investments receive compensation and reimbursement of expenses from the Trust.

c. Distribution Fees RS Funds Distributor LLC (“RSFD”), a wholly owned subsidiary of RS Investments, serves as the principal underwriter for shares of the Funds. The Funds have entered into an agreement with RSFD for distribution services with respect to their shares and have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, whose continuance is reviewed annually by the Trust’s Board of Trustees. Under the plan, RSFD is compensated for services in such capacity, including its expenses in connection with the promotion and distribution of shares of each Fund. Prior to June 1, 2014, GIS served as the principal underwriter for shares of the Funds. For the six months ended June 30, 2014, RSFD and GIS received distribution fees as follows:

 

Fund           Annual Rate       

Distribution Fees

Received by
RSFD

       

Distribution Fees

Received by
GIS

  

RS Investment Quality Bond Fund

   Class A        0.25%           $14,133           $75,210   
  Class C        1.00%           8,556           45,730   
    Class K        0.65%           3,733           19,268   
    Class Y        0.00%           —           —   

 

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Fund           Annual Rate       

Distribution Fees

Received by
RSFD

       

Distribution Fees

Received by
GIS

  

RS Low Duration Bond Fund

   Class A        0.25%           $106,515           $565,117   
  Class C        1.00%           183,895           1,017,991   
    Class K        0.65%           2,927           15,291   
    Class Y        0.00%           —           —   

RS High Yield Fund

   Class A        0.25%           $10,146           $45,487   
    Class C        1.00%           26,533           138,866   
    Class K        0.65%           12,758           63,251   
    Class Y        0.00%           —           —   

RS Tax-Exempt Fund

   Class A        0.25%           $29,510           $154,062   
    Class C        1.00%           48,437           256,373   
    Class Y        0.00%           —           —   

RS High Income Municipal Bond Fund

   Class A        0.25%           $9,238           $47,312   
    Class C        1.00%           29,125           145,954   
    Class Y        0.00%           —           —   

RS Floating Rate Fund

   Class A        0.25%           $167,816           $885,175   
    Class C        1.00%           618,846           3,253,275   
    Class K        0.65%           1,396           7,466   
    Class Y        0.00%           —           —   

RS Strategic Income Fund

   Class A        0.25%           $11,351           $56,665   
    Class C        1.00%           13,753           64,806   
    Class K        0.65%           2,062           10,289   
    Class Y        0.00%           —           —   

RS Investments may perform certain services and incur certain expenses with respect to the promotion of the Funds’ shares and the servicing of shareholder accounts, which expenses are allocable to RSFD. RS Investments compensates RSFD for its services in connection with the promotion of Fund shares and reimburses RSFD for its expenses, including payments made by RSFD to third parties in respect of the promotion of Fund shares in excess of amounts received by RSFD under the distribution plan. In addition to payments under the distribution plan, the Funds reimburse RSFD for payments RSFD makes to financial intermediaries that provide certain administrative, recordkeeping, and account maintenance services. The amount of the reimbursement is calculated in a manner reviewed by the Board of Trustees periodically. Such amounts are included in the Statement of Operations under the caption “Transfer agent fees.”

Park Avenue Securities LLC (“PAS”), a wholly owned subsidiary of The Guardian Insurance & Annuity Company, Inc. (“GIAC”) and an affiliate of GIS, distributes the Funds’ shares as a retail broker-dealer. For the six months ended June 30, 2014, PAS informed the Trust it received $885,200 directly or indirectly from RSFD and GIS as continuing compensation for its services relating to its distribution of shares of all series in the Trust.

 

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For the six months ended June 30, 2014, aggregate front-end sales charges for the sale of Class A shares paid to RSFD and GIS were as follows:

 

Fund   

Sales
Charges

Received
by RSFD

   

Sales
Charges

Received
by GIS

  

RS Investment Quality Bond Fund

    $241    $ 1,895   

RS Low Duration Bond Fund

    1,132      8,028   

RS High Yield Fund

    391      3,582   

RS Tax-Exempt Fund

    192      1,297   

RS High Income Municipal Bond Fund

    1,357      3,021   

RS Floating Rate Fund

    2,892      22,212   

RS Strategic Income Fund

    253      2,388   

RSFD is entitled to retain any contingent deferred sales load (“CDSL”) imposed on certain share redemptions. Prior to June 1, 2014, GIS was entitled to retain any CDSL. For the six months ended June 30, 2014, RSFD and GIS received CDSL charges as follows:

 

Fund   

CDSL
Received

by RSFD

   

CDSL
Received

by GIS

  

RS Investment Quality Bond Fund

    $    —    $ 7,768   

RS Low Duration Bond Fund

    —      89,016   

RS High Yield Fund

    —      1,664   

RS Tax-Exempt Fund

    —      2,425   

RS High Income Municipal Bond Fund

    —      1,673   

RS Floating Rate Fund

    —      142,905   

RS Strategic Income Fund

    —      3,367   

Note 3 Federal Income Taxes

a. Distributions to Shareholders The tax character of distributions paid to shareholders during the year ended December 31, 2013, which is the most recently completed tax year, was as follows:

 

Fund    Tax-Exempt      Ordinary Income     

Long-Term

Capital Gains

  

RS Investment Quality Bond Fund

    $ —       $ 4,737,557       $ 514,824   

RS Low Duration Bond Fund

      —         27,491,081         —   

RS High Yield Fund

      —         6,999,675         —   

RS Tax-Exempt Fund

      11,295,671         9,044         106,892   

RS High Income Municipal Bond Fund

      7,940,395         140,281         —   

RS Floating Rate Fund

      —         105,252,457         —   

RS Strategic Income Fund

      —         3,359,959         27,215   

 

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Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences, and differing characterizations of distributions made by the Funds.

Permanent book and tax basis differences will result in reclassifications to paid-in capital, undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions. Undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions may include temporary book and tax differences, which will reverse in a subsequent period.

As of December 31, 2013, the Funds made the following reclassifications of permanent book and tax basis differences:

 

Fund   

Paid-in

Capital

      Undistributed
Net Investment
Income/(Loss)		      Accumulated
Net Realized
Gain/(Loss)		  

RS Investment Quality Bond Fund

    $ —       $ (488 )     $ 488   

RS Low Duration Bond Fund

      —         (4,239 )       4,239   

RS High Yield Fund

      (287 )       287         —   

RS Tax-Exempt Fund

      —         (78 )       78   

RS Floating Rate Fund

      (44,057 )       44,057         —   

RS Strategic Income Fund

      —         218,233         (218,233 ) 

See the chart below for the tax basis of distributable earnings as of December 31, 2013.

 

Fund    Tax-Exempt      Undistributed
Ordinary Income		     

Undistributed
Long-Term

Capital Gains

  

RS Investment Quality Bond Fund

    $ —       $ 34,021       $ —   

RS Low Duration Bond Fund

      —         360,886         —   

RS Tax-Exempt Fund

      18,778         —         —   

RS High Income Municipal Bond Fund

      40,979         —         —   

RS Strategic Income Fund

      —         2,119         53,054   

During any particular year, net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Funds if not distributed and, therefore, are normally distributed to shareholders annually.

During the year ended December 31, 2013, the Funds utilized capital loss carryovers as follows:

 

Fund    Amount  

RS High Yield Fund

    $ 3,405,354   

RS Floating Rate Fund

      6,458,587   

 

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See the chart below for capital loss carryovers available to the Funds at December 31, 2013.

 

                        Expiring                           
Fund    2017      No Expiration*      Total  

RS Low Duration Bond Fund

    $ —       $ 11,678,008       $ 11,678,008   

RS High Yield Fund

      1,998,611         —         1,998,611   

RS Tax-Exempt Fund

      —         6,136,385         6,136,385   

RS High Income Municipal Bond Fund

      —         8,167,814         8,167,814   

RS Floating Rate Fund

      —         22,701,910         22,701,910   

 

* For tax years beginning 2011, revisions to capital loss carryforward rules allow for capital losses to be carried forward to one or more subsequent taxable years without expiration.

In determining their taxable income, current tax law permits the Funds to elect to treat all or a portion of any net capital or currency loss realized after October 31 as occurring on the first day of the following fiscal year. For the year ended December 31, 2013, the Funds elected to defer net capital and currency losses as follows:

 

Fund    Deferred Net
Capital Losses		  

RS Investment Quality Bond Fund

    $ 121,411   

b. Tax Basis of Investments The cost of investments for federal income tax purposes at June 30, 2014, for each Fund is listed in the chart below. The net unrealized appreciation/(depreciation) on investments, which consists of gross unrealized appreciation and depreciation, is also disclosed in the chart below:

 

Fund  

Cost of

Investments

    

Net Unrealized
Appreciation on

Investments

    

Gross

Unrealized

Appreciation

    

Gross

Unrealized
Depreciation

  

RS Investment Quality Bond Fund

   $ 116,258,835      $ 5,287,925      $ 5,741,729      $ (453,804 ) 

RS Low Duration Bond Fund

     1,153,292,978        1,022,407        9,672,920        (8,650,513 ) 

RS High Yield Fund

     115,691,863        2,486,077        2,644,007        (157,930 ) 

RS Tax-Exempt Fund

     231,036,293        20,095,102        20,241,654        (146,552 ) 

RS High Income Municipal Bond Fund

     96,312,586        9,290,003        9,461,922        (171,919 ) 

RS Floating Rate Fund

     2,623,284,212        21,764,175        26,274,974        (4,510,799 ) 

RS Strategic Income Fund

     81,892,116        2,264,784        2,413,351        (148,567 ) 

 

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Note 4 Capital Shares

a. Transactions The Funds have authorized an unlimited number of shares of beneficial interest with no par value. Transactions, including conversions and exchanges, in capital shares for the Funds were as follows:

 

RS Investment Quality Bond Fund  
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares        Amount  
Class A             

Shares sold

     309,827       $ 3,158,769         1,233,443       $ 12,735,486   

Shares reinvested

     106,708         1,090,662         294,533         3,001,653   

Shares redeemed

     (1,715,631 )       (17,431,591 )       (5,876,497 )       (60,293,010 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (1,299,096 )     $ (13,182,160 )       (4,348,521 )     $ (44,555,871 ) 
                                    
Class C             

Shares sold

     62,382       $ 636,099         192,135       $ 1,995,044   

Shares reinvested

     11,106         113,417         36,421         371,020   

Shares redeemed

     (282,586 )       (2,870,961 )       (1,600,058 )       (16,260,195 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (209,098 )     $ (2,121,445 )       (1,371,502 )     $ (13,894,131 ) 
                                    
Class K             

Shares sold

     50,956       $ 519,479         178,911       $ 1,837,289   

Shares reinvested

     9,310         95,294         21,661         220,707   

Shares redeemed

     (105,814 )       (1,077,574 )       (357,416 )       (3,634,571 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (45,548 )     $ (462,801 )       (156,844 )     $ (1,576,575 ) 
                                    
Class Y             

Shares sold

     344,445       $ 3,515,164         758,371       $ 7,794,654   

Shares reinvested

     54,141         553,719         131,515         1,341,183   

Shares redeemed

     (542,187 )       (5,519,248 )       (3,008,589 )       (30,806,402 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (143,601 )     $ (1,450,365 )       (2,118,703 )     $ (21,670,565 ) 
                                    

 

RS Low Duration Bond Fund

  
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class A             

Shares sold

     9,691,306       $ 98,308,959         41,729,846       $ 427,500,024   

Shares reinvested

     448,694         4,551,434         1,135,614         11,593,533   

Shares redeemed

     (17,119,830 )       (173,650,824 )       (64,822,796 )       (662,674,610 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (6,979,830 )     $ (70,790,431 )       (21,957,336 )     $ (223,581,053 ) 
                                    
Class C             

Shares sold

     1,630,389       $ 16,544,644         8,854,785       $ 90,716,647   

Shares reinvested

     108,023         1,095,796         253,891         2,591,697   

Shares redeemed

     (6,336,714 )       (64,285,443 )       (15,066,107 )       (153,599,587 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (4,598,302 )     $ (46,645,003 )       (5,957,431 )     $ (60,291,243 ) 
                                    

 

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RS Low Duration Bond Fund — continued

  
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class K             

Shares sold

     69,063       $ 700,781         249,912       $ 2,556,201   

Shares reinvested

     3,918         39,748         8,918         91,039   

Shares redeemed

     (114,253 )       (1,159,266 )       (378,319 )       (3,862,821 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (41,272 )     $ (418,737 )       (119,489 )     $ (1,215,581 ) 
                                    
Class Y             

Shares sold

     9,400,231       $ 95,392,307         38,859,370       $ 398,148,904   

Shares reinvested

     315,565         3,201,568         771,203         7,872,640   

Shares redeemed

     (15,848,505 )       (160,793,478 )       (54,541,493 )       (557,174,376 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (6,132,709 )     $ (62,199,603 )       (14,910,920 )     $ (151,152,832 ) 
                                    

 

RS High Yield Fund  
   
     For the Six Months Ended 6/30/14     For the Year Ended 12/31/13  
     Shares     Amount     Shares        Amount  
Class A          

Shares sold

     1,790,414      $ 13,329,122        1,657,807      $ 12,175,247   

Shares reinvested

     117,005        868,485        285,676        2,079,200   

Shares redeemed

     (925,023 )      (6,875,729 )      (5,106,553 )      (37,263,035 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase/(decrease)

     982,396      $ 7,321,878        (3,163,070 )    $ (23,008,588 ) 
                                 
Class C          

Shares sold

     196,120      $ 1,456,214        3,863,248      $ 28,099,757   

Shares reinvested

     44,199        328,496        120,946        880,069   

Shares redeemed

     (1,086,750 )      (7,997,829 )      (3,661,492 )      (26,558,188 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase/(decrease)

     (846,431 )    $ (6,213,119 )      322,702      $ 2,421,638   
                                 
Class K          

Shares sold

     87,817      $ 651,560        183,777      $ 1,344,051   

Shares reinvested

     27,335        202,564        165,043        1,201,312   

Shares redeemed

     (75,685 )      (563,101 )      (240,537 )      (1,752,797 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase

     39,467      $ 291,023        108,283      $ 792,566   
                                 
Class Y          

Shares sold

     138,661      $ 1,026,244        2,012,288      $ 14,720,239   

Shares reinvested

     17,160        126,665        61,879        450,491   

Shares redeemed

     (414,841 )      (3,039,678 )      (2,329,771 )      (16,964,018 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net decrease

     (259,020 )    $ (1,886,769 )      (255,604 )    $ (1,793,288 ) 
                                 

 

 

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Transactions in Capital Shares (continued)

 

 

RS Tax-Exempt Fund  
   
     For the Six Months Ended 6/30/14     For the Year Ended 12/31/13  
     Shares      Amount     Shares      Amount  
Class A            

Shares sold

     1,282,886       $ 13,456,485        4,437,117       $ 48,094,281   

Shares reinvested

     191,562         2,030,443        546,488         5,837,951   

Shares redeemed

     (3,196,231 )       (33,669,179 )      (14,924,845 )       (158,376,883 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net decrease

     (1,721,783 )     $ (18,182,251 )      (9,941,240 )     $ (104,444,651 ) 
                                   
Class C            

Shares sold

     132,522       $ 1,400,207        656,203       $ 7,171,435   

Shares reinvested

     50,232         532,112        134,147         1,431,979   

Shares redeemed

     (986,418 )       (10,409,918 )      (4,194,648 )       (44,120,678 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net decrease

     (803,664 )     $ (8,477,599 )      (3,404,298 )     $ (35,517,264 ) 
                                   
Class Y            

Shares sold

     872,217       $ 9,191,449        3,144,293       $ 33,806,252   

Shares reinvested

     46,676         494,224        149,888         1,602,768   

Shares redeemed

     (1,792,301 )       (18,970,873 )      (7,092,966 )       (75,057,201 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net decrease

     (873,408 )     $ (9,285,200 )      (3,798,785 )     $ (39,648,181 ) 
                                   

 

RS High Income Municipal Bond Fund  
   
     For the Six Months Ended 6/30/14     For the Year Ended 12/31/13  
     Shares      Amount     Shares      Amount  
Class A            

Shares sold

     682,631       $ 7,061,207        2,378,384       $ 25,900,354   

Shares reinvested

     85,549         884,952        322,452         3,434,532   

Shares redeemed

     (1,976,077 )       (20,136,135 )      (9,547,616 )       (102,538,613 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net decrease

     (1,207,897 )     $ (12,189,976 )      (6,846,780 )     $ (73,203,727 ) 
                                   
Class C            

Shares sold

     277,061       $ 2,882,077        710,678       $ 7,709,208   

Shares reinvested

     52,708         545,452        138,308         1,464,680   

Shares redeemed

     (563,394 )       (5,796,122 )      (3,402,722 )       (36,197,845 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net decrease

     (233,625 )     $ (2,368,593 )      (2,553,736 )     $ (27,023,957 ) 
                                   
Class Y            

Shares sold

     1,105,214       $ 11,380,513        3,133,007       $ 33,867,440   

Shares reinvested

     52,292         541,313        181,595         1,936,018   

Shares redeemed

     (973,202 )       (10,009,103 )      (7,153,569 )       (75,828,604 ) 
   

 

 

     

 

 

    

 

 

     

 

 

  

Net increase/(decrease)

     184,304       $ 1,912,723        (3,838,967 )     $ (40,025,146 ) 
                                   

 

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RS Floating Rate Fund                
   
     For the Six Months Ended 6/30/14     For the Year Ended 12/31/13  
     Shares     Amount     Shares        Amount  
Class A          

Shares sold

     16,462,828      $ 170,398,669        59,545,691      $ 614,039,458   

Shares reinvested

     1,471,853        15,225,951        3,028,826        31,215,340   

Shares redeemed

     (22,228,020 )      (229,903,704 )      (55,114,664 )      (568,996,206 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase/(decrease)

     (4,293,339 )    $ (44,279,084 )      7,459,853      $ 76,258,592   
                                 
Class C          

Shares sold

     6,084,088      $ 62,992,270        30,540,503      $ 315,078,548   

Shares reinvested

     900,586        9,320,975        1,805,753        18,614,471   

Shares redeemed

     (12,386,571 )      (128,196,908 )      (13,328,652 )      (137,348,556 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase/(decrease)

     (5,401,897 )    $ (55,883,663 )      19,017,604      $ 196,344,463   
                                 
Class K          

Shares sold

     67,570      $ 699,286        162,862      $ 1,676,535   

Shares reinvested

     4,465        46,191        15,262        157,189   

Shares redeemed

     (92,564 )      (957,652 )      (327,350 )      (3,358,203 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net decrease

     (20,529 )    $ (212,175 )      (149,226 )    $ (1,524,479 ) 
                                 
Class Y          

Shares sold

     21,629,571      $ 223,913,785        105,024,684      $ 1,083,947,174   

Shares reinvested

     1,519,648        15,720,916        2,854,209        29,417,482   

Shares redeemed

     (34,247,505 )      (354,459,631 )      (48,505,541 )      (499,746,463 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net increase/(decrease)

     (11,098,286 )    $ (114,824,930 )      59,373,352      $ 613,618,193   
                                 

 

RS Strategic Income Fund          
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares         Amount  
Class A               

Shares sold

     393,830       $ 4,111,721           1,234,944       $ 12,986,519   

Shares reinvested

     38,250         399,323           226,642         2,364,945   

Shares redeemed

     (413,865 )       (4,327,213 )         (4,201,351 )       (43,935,443 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     18,215       $ 183,831           (2,739,765 )     $ (28,583,979 ) 
                                      
Class C               

Shares sold

     609,264       $ 6,376,262           455,257       $ 4,758,091   

Shares reinvested

     15,374         161,399           30,438         318,165   

Shares redeemed

     (253,075 )       (2,650,583 )         (491,503 )       (5,126,737 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     371,563       $ 3,887,078           (5,808 )     $ (50,481 ) 
                                      
Class K               

Shares sold

     4,040       $ 42,397           75,304       $ 784,511   

Shares reinvested

     2,280         23,919           9,803         102,463   

Shares redeemed

     (6,315 )       (66,034 )         (7,589 )       (79,114 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     5       $ 282           77,518       $ 807,860   
                                      

 

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Transactions in Capital Shares (continued)

 

RS Strategic Income Fund — continued          
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares         Amount  
Class Y               

Shares sold

     438,793       $ 4,567,728           1,307,045       $ 13,813,155   

Shares reinvested

     10,600         110,162           47,118         489,245   

Shares redeemed

     (232,510 )       (2,414,476 )         (1,396,425 )       (14,569,827 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     216,883       $ 2,263,414           (42,262 )     $ (267,427 ) 
                                      

b. Shareholder Concentration As of June 30, 2014, the number of shareholders and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders) who owned of record 5% or more of the net assets of a Fund is summarized in the following table:

 

Fund    Number of
Shareholders		      Percentage
of Net
Assets		  

RS Investment Quality Bond Fund

      4         54.23%   

RS Low Duration Bond Fund

      7         74.62%   

RS High Yield Fund

      3         53.58%   

RS Tax-Exempt Fund

      6         74.33%   

RS High Income Municipal Bond Fund

      7         76.48%   

RS Floating Rate Fund

      4         69.37%   

RS Strategic Income Fund

      3         67.68%   

Note 5 Investments

a. Investment Purchases and Sales The cost of investments and U.S. government agency obligations purchased and the proceeds from U.S. government agency obligations and other investments sold (excluding short-term investments) for the six months ended June 30, 2014, were as follows:

 

     Cost of Investments
Purchased		     Proceeds from
Investments Sold		  
Fund  

Other

Investments

     U.S.
Government
and Agency
Obligations		    

Other

Investments

     U.S.
Government
and Agency
Obligations		  

RS Investment Quality Bond Fund

   $ 6,594,453      $ 23,210,643      $ 26,330,211      $ 19,597,253   

RS Low Duration Bond Fund

     130,877,360        101,391,172        260,687,423        75,934,283   

RS High Yield Fund

     144,589,240        —        139,290,063        —   

RS Tax-Exempt Fund

     20,040,260        —        55,666,938        —   

 

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     Cost of Investments
Purchased		     Proceeds from
Investments Sold		  
Fund  

Other

Investments

     U.S.
Government
and Agency
Obligations		    

Other

Investments

     U.S.
Government
and Agency
Obligations		  

RS High Income Municipal Bond Fund

   $ 8,628,155      $ —      $ 26,143,857      $ —   

RS Floating Rate Fund

     721,440,614        —        625,313,715        —   

RS Strategic Income Fund

     31,412,465        20,897,931        20,309,947        22,188,696   

b. Derivative Instruments The following is a summary of the fair valuation of Funds’ derivative instruments at June 30, 2014.

 

Fund  

Derivative

Instrument Type

  

Statement of Assets

and Liabilities Location

   Value  

RS Investment Quality Bond Fund

   Financial Futures Contracts   Net unrealized appreciation on futures contracts*   $ 30,588   
    Written Call Option Contracts   Written options, at
value		     (26,250 ) 
    Written Put Option Contracts   Written options, at
value		     (937 ) 

RS Low Duration Bond Fund

   Financial Futures Contracts   Net unrealized depreciation on futures contracts*     (62,238 ) 

RS Strategic Income Fund

   Forward Foreign Currency Contracts to Sell   Net unrealized depreciation for open forward currency contracts     (3,126 ) 
    Financial Futures Contracts   Net unrealized depreciation on futures contracts*     (21,022 ) 
    Written Call Option Contracts   Written options, at
value		     (112,656 ) 
    Written Put Option Contracts   Written options, at
value		     (11,719 ) 

 

* The cumulative appreciation/(depreciation) of financial futures contracts is reported in the notes to the Schedule of Investments. Only the daily change in variation margin as of the reporting date is presented in the Statement of Assets and Liabilities. See Note 1f for additional information on futures contracts.

See Note 1e for additional information on forward foreign currency contracts.

 

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The following is a summary of the effect of the Funds’ foreign currency and other hedging activities on the Statement of Operations for the six months ended June 30, 2014.

 

Fund  

Derivative

Instrument Type

  

Location of Gain/(Loss)
on Derivatives

Recognized in Income

   Amount  

RS Investment Quality Bond Fund

   Financial Futures Contracts   Net realized gain from futures contracts   $ 105,835   
      Net change in unrealized appreciation/(depreciation) on futures contracts     181,023   
    Swap Contracts   Net realized loss from swaps contracts     (5,808 ) 
      Net change in unrealized appreciation/(depreciation) on swap contracts     —   
    Option Contracts   Net realized gain from written options     4,769   
        Net change in unrealized appreciation/(depreciation) on written options     762   

RS Low Duration Bond Fund

   Financial Futures Contracts   Net realized loss from futures contracts     (276,633 ) 
        Net change in unrealized appreciation/(depreciation) on futures contracts     (1,503,039 ) 

RS High Yield Fund

   Financial Futures Contracts   Net realized loss from futures contracts     (28,198 ) 
        Net change in unrealized appreciation/(depreciation) on futures contracts     (55,890 ) 

RS Strategic Income Fund

   Forward Foreign Currency Contracts   Net realized loss from foreign currency transactions     (36,286 ) 
      Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities in foreign currencies     (122 ) 
    Financial Futures Contracts   Net realized loss from futures contracts     (95,060 ) 
        Net change in unrealized appreciation/(depreciation) on futures contracts     90,747   

 

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Fund  

Derivative

Instrument Type

  

Location of Gain/(Loss)
on Derivatives

Recognized in Income

   Amount  

RS Strategic Income Fund

   Swap Contracts   Net realized loss from swap contracts   $ (11,717 ) 
      Net change in unrealized appreciation/(depreciation) on swap contracts     —   
    Option Contracts   Net realized gain from investments and written options     50,214   
        Net change in unrealized appreciation/(depreciation) on written options     (69,931 ) 

Transactions in written options for the six months ended June 30, 2014:

 

     RS Investment
Quality Bond Fund		     RS Strategic
Income Fund		  
     Contracts     Premiums     Contracts     Premiums  

Options outstanding, December 31, 2013

     30      $ 18,176        120      $ 113,177   

Written options

     120        46,843        585        304,081   

Options terminated in closing transactions

     (40 )      (16,187 )      (435 )      (266,723 ) 

Options exercised

     —        —        —        —   

Options expired

     (30 )      (18,176 )      (60 )      (36,352 ) 

Options outstanding, June 30, 2014

     80        30,656        210        114,183   

See the chart below for the average monthly value in forward foreign currency contracts, average daily face value in futures contracts, average daily notional value in swaps contracts and average daily face value in purchase and written option contacts during the six months ended June 30, 2014:

 

Fund   Forward
Foreign Currency
Contracts		     Short
Futures
Contracts		     Long Futures
Contracts		     Swap
Contracts		     Written
Option
Contracts		  

RS Investment Quality Bond Fund

   $ —      $ (234,807 )    $ 10,738,122      $ 126,740      $ 26,602   

RS Low Duration Bond Fund

     —        (25,653,039 )      25,370,166        —        —   

RS High Yield Fund

     —        (3,639,227 )      —        —        —   

RS Strategic Income Fund

     388,009        (1,354,696 )      2,217,127        253,481        166,298   

RS Strategic Income Fund used foreign currency forward contracts to hedge currency risk associated with the Fund’s foreign currency-denominated investments and to manage foreign currency exposure. RS Strategic Income Fund and RS Investment Quality Bond Fund used exchange-traded futures and options on Treasury futures to manage interest rate exposure and for income. RS Low Duration Bond Fund and RS

 

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High Yield Fund used exchange-traded futures to manage interest rate exposure. RS Investment Quality Bond Fund and RS Strategic Income Fund used swap contracts for asset allocation and to manage risk exposure.

The Funds have entered into ISDA Master Agreements (“ISDA Agreements”) with various counterparties, which govern derivatives transactions (the “Transactions”). The ISDA Agreements are each single contracts with a counterparty that permit multiple Transactions governed by that contract to be net settled upon the designation by the non-defaulting party of an early termination date (the “Early Termination Date”) under such contract upon the occurrence of certain events of default or termination events. Upon the designation of such Early Termination Date, all Transactions governed by the applicable agreement are terminated and a net settlement amount is calculated. In addition, the Fund receives and posts cash and securities collateral under the ISDA Agreements, subject to the terms of the related credit support agreement. Such credit support agreement grants the non-defaulting party designating the Early Termination Date the right to liquidate the collateral that has been posted to it and apply the proceeds to the calculation of the net settlement amount.

The following table presents RS Strategic Income Fund’s derivative liabilities by counterparty net of amounts available for offset and net of the related collateral pledged by the Fund as of June 30, 2014. The Fund did not hold any derivative assets as of June 30, 2014.

 

Counterparty    Gross Liabilities
in SAL		      Financial
Instrument		      Collateral
Pledged		      Net Amount
(not less than 0)		  

Barclays Bank PLC

    $ 3,126       $     —       $     —       $ 3,126   

c. Foreign Securities Foreign securities investments involve special risks and considerations not typically associated with U.S. investments. These risks include, but are not limited to, currency risk; adverse political, regulatory, social, and economic developments; and less reliable information about issuers. Moreover, securities of some foreign companies may be less liquid and their prices more volatile than those of comparable U.S. companies.

d. Industry or Sector Concentration In their normal course of business, some of the Funds may invest a significant portion of their assets in companies within a limited number of industries or sectors. As a result, these Funds may be subject to a greater risk of loss than that of a fund invested in a wider spectrum of industries or sectors because the stocks of many or all of the companies in the industry, group of industries, sector, or sectors may decline in value due to developments adversely affecting the industry, group of industries, sector, or sectors.

e. Repurchase Agreements The collateral for repurchase agreements is either cash or fully negotiable U.S. government securities (including U.S. government agency securities). Repurchase agreements are fully collateralized (including the interest accrued thereon) and such collateral is marked to market daily while the agreements remain in force. If the value of the collateral falls below the repurchase price plus accrued interest, the Fund will typically require the seller to deposit additional collateral

 

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by the next business day. If the request for additional collateral is not met, or the seller defaults, the Fund maintains the right to sell the collateral (although it may be prevented or delayed from doing so in certain circumstances) and may be required to claim any resulting loss against the seller.

f. Loans Floating rate loans in which the Funds invest are primarily “senior” loans. Senior floating rate loans typically hold a senior position in the capital structure of the borrower, are typically secured by specific collateral, and have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debtholders and stockholders of the borrower. While these protections may reduce risk, these investments still present significant credit risk. A significant portion of the Funds’ floating rate investments may be issued in connection with highly leveraged transactions such as leveraged buyouts, leveraged recapitalization loans, and other types of acquisition financing. Obligations in these types of transactions are subject to greater credit risk (including default and bankruptcy) than many other investments and may be, or become, illiquid. See Note 5(l) regarding below investment grade securities.

The Funds may purchase second lien loans (secured loans with a claim on collateral subordinate to a senior lender’s claim on such collateral), fixed rate loans, unsecured loans, and other debt obligations.

Transactions in loans may settle on a delayed basis, and the Funds may not receive the proceeds from the sale of a loan for a substantial period of time after sale.

g. Unfunded Loan Commitments The Fund enters into certain agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these loan commitments at the borrowers’ discretion. Funded portions of credit agreements are presented in the Schedule of Investments. There were no unfunded commitments as of June 30, 2014.

Unfunded loan commitments and funded portions of credit agreements are marked to market daily and any unrealized appreciation or depreciation is included in the Statement of Assets and Liabilities and the Statement of Operations.

h. Municipal Obligations The values of municipal obligations can fluctuate and may be affected by adverse tax, legislative, or political changes, and by financial developments affecting municipal issuers. Payment of municipal obligations may depend on a relatively limited source of revenue, resulting in greater credit risk. Future changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations.

i. Securities Purchased on a When-Issued or Delayed-Delivery Basis The Funds may purchase securities on a when-issued or delayed-delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally enter into these transactions with the intention of holding the securities, they may sell the securities before the settlement date. Assets will be segregated when a Fund agrees to purchase on a when-issued or delayed-delivery basis. These transactions may create investment leverage.

 

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j. Payment-In-Kind Securities Certain Funds may invest in payment-in-kind securities. Payment-in-kind securities give the issuer the option at each interest payment date to pay all or a portion of their interest or dividends in the form of additional securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds.

k. Restricted and Illiquid Securities A restricted security cannot be resold to the general public without prior registration under the Securities Act of 1933 (except pursuant to an applicable exemption). The values of these securities may be highly volatile. If the security is subsequently registered and resold, the issuer would typically bear the expense of all registrations at no cost to a Fund. Restricted and illiquid securities are valued according to the guidelines and procedures adopted by the Trust’s Board of Trustees and are noted, if any, in the Funds’ Schedule of Investments.

l. Below Investment Grade Securities Certain Funds may invest in below investment grade securities (i.e., lower-quality, “junk” debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about the issuer, or the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.

m. Mortgage- and Asset-Backed Securities The values of some mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose a Fund to a lower rate of return upon reinvestment of principal. The values of mortgage- and asset-backed securities depend in part on the credit quality and adequacy of the underlying assets or collateral and may fluctuate in response to the market’s perception of these factors as well as current and future repayment rates. Some mortgage-backed securities are backed by the full faith and credit of the U.S. government (e.g., mortgage-backed securities issued by the Government National Mortgage Association, commonly known as “Ginnie Mae”), while other mortgage-backed securities (e.g., mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, commonly known as “Fannie Mae” and “Freddie Mac”) are backed only by the credit of the government entity issuing them. In addition, some mortgage-backed securities are issued by private entities and, as such, are not guaranteed by the U.S. government or any agency or instrumentality of the U.S. government.

Note 6 Temporary Borrowings

The Funds, with other funds managed by RS Investments, share in a $400 million committed revolving credit facility from State Street Bank and Trust Company for temporary borrowing purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is calculated based on market rates at the time of borrowing. $300 million of the line of credit is

 

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reserved for use in the first instance by RS Floating Rate Fund with RS Floating Rate Fund paying the related commitment fees for that amount.

For the six months ended June 30, 2014, the Funds which borrowed under the facility were as follows:

 

Fund    Amount Outstanding
at 6/30/14		      Average
Borrowing*		      Days
Borrowings
Outstanding		      Average
Interest Rate*		  

RS Investment Quality Bond Fund

    $     —       $ 4,580,387         1         1.34%   

RS Tax-Exempt Fund

      —         917,718         18         1.34%   

RS High Income Municipal Bond Fund

      —         1,280,353         7         1.34%   

 

* For the six months ended June 30, 2014, based on the number of days borrowings were outstanding.

Note 7 Review for Subsequent Events

Management has evaluated subsequent events through the issuance of the Funds’ financial statements and determined that no material events have occurred that require disclosure.

Note 8 Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote.

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

Meeting of Shareholders

A special meeting of the shareholders of RS Investment Trust (the “Trust”) was held on May 23, 2014. At the meeting, the shareholders of the Trust elected Judson Bergman, Dennis M. Bushe, Margherita L. DiManni, Kenneth R. Fitzsimmons, Anne M. Goggin, Lawrence E. Harris, Christopher C. Melvin, Jr., Gloria S. Nelund, and Matthew H. Scanlan as trustees of the Trust.

Proposal to Elect Trustees

 

Nominee   Votes For     Votes Against/
Withheld		     Abstentions  

Judson Bergman

     550,801,232.965        9,280,122.985        0.000   

Dennis M. Bushe

     550,597,774.166        9,483,581.784        0.000   

Margherita L. DiManni

     550,787,370.938        9,293,985.012        0.000   

Kenneth R. Fitzsimmons

     550,425,719.024        9,655,636.926        0.000   

Anne M. Goggin

     550,954,630.766        9,126,725.184        0.000   

Lawrence E. Harris

     550,636,278.980        9,445,076.970        0.000   

Christopher C. Melvin, Jr.

     550,776,574.483        9,304,781.467        0.000   

Gloria S. Nelund

     550,067,457.888        9,013,898.888        0.000   

Matthew H. Scanlan

     550,564,139.160        9,517,216.790        0.000   

Portfolio Holdings and Proxy Voting Procedures

The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. This information is also available, without charge, upon request, by calling toll-free 800-766-3863.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) without charge, upon request, by calling toll-free 800-766-3863; (ii) on RS Investments’ website at http://www.rsinvestments.com; and (iii) on the Securities and Exchange Commission’s website at http://www.sec.gov.

The Statement of Additional Information includes information about the Trust’s Trustees and Officers and is available, without charge, upon request by calling toll-free 800-766-3863.

This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless accompanied or preceded by that Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

 

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LOGO

 

One Bush Street, Suite 900

San Francisco, CA 94104

 

  

PRSRT STD

U.S. POSTAGE

PAID

RS INVESTMENTS

 

 

WWW.RSINVESTMENTS.COM // 800.766.3863   

LOGO

 

EB 015098 (06/14)

Table of Contents

LOGO

 

RS INTERNATIONAL FUNDS

Class A, C, K, and Y Shares

RS INTERNATIONAL FUND

RS GLOBAL FUND

RS EMERGING MARKETS FUND

RS EMERGING MARKETS SMALL CAP FUND

RS CHINA FUND

 

NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

 

LOGO

Table of Contents

TABLE OF CONTENTS

 

RS Investments Overview  
CEO’s Letter     1   
RS International Funds  
Important Information Concerning Fund Performance     3   

RS International Fund

     4   

RS Global Fund

     6   

RS Emerging Markets Fund

     8   

RS Emerging Markets Small Cap Fund

     10   
RS China Fund     12   
Understanding Your Fund’s Expenses     15   
Financial Information  
Schedules of Investments     18   
Statements of Assets and Liabilities     44   
Statements of Operations     46   
Statements of Changes in Net Assets     48   
Financial Highlights     52   
Notes to Financial Statements     62   
Supplemental Information     78   
 

RS Investments

 

Value | Growth | International | Natural Resources | Fixed Income

RS Funds provide clients with access to distinct and experienced investment teams — each pursuing investment opportunities consistent with its particular style. The dedicated research team approach assures that our clients benefit from process consistency, investment excellence, and choice across disciplines.

 

Value   RS Technology Fund   Natural Resources
RS Partners Fund*   RS Small Cap Equity Fund*   RS Global Natural Resources Fund*
RS Value Fund    
RS Large Cap Alpha Fund   International   Fixed Income
RS Investors Fund  

RS International Fund

   RS Investment Quality Bond Fund
 

RS Global Fund

   RS Low Duration Bond Fund
Growth  

RS Emerging Markets Fund

   RS High Yield Fund
RS Small Cap Growth Fund  

RS Emerging Markets Small Cap Fund

   RS Tax-Exempt Fund
RS Select Growth Fund   RS China Fund   RS High Income Municipal Bond Fund
RS Mid Cap Growth Fund     RS Floating Rate Fund
RS Growth Fund     RS Strategic Income Fund

 

* Closed to most new investments. Please see prospectus for more information.

Table of Contents

CEO’S LETTER

 

LOGO  

Matthew H. Scanlan

CEO, RS Investments

Dear RS Funds Shareholder,

Despite clear evidence of economic recovery, investors are still reeling from 2008. Though caution remains a high priority, investors are finally beginning to overcome inertia and to realize the need to act with more conviction in this low-return environment.

Thus, the hunt for alpha (a measure of performance on a risk-adjusted basis) continues. We’ve noticed that the concept of high-conviction investing is gaining interest among investors, many of whom are exploring new approaches to produce alpha for their equity portfolios.

I spent most of my career in a quantitative investment environment, so I’ve had to do some serious soul searching over the last two years, asking myself: “Why am I leading a fundamental active investment firm?” I recently co-authored a white paper with my colleague Larry Siegel, Director of Research at the CFA Institute Research Foundation, which explores this concept and provides some answers.

Decades of experience have taught us that portfolios must be broadly diversified to meet long-term investment goals. But that doesn’t mean all managers must be diversified. In “No Fear of Commitment: The Role of High-Conviction Active Management,” we study the role of concentrated managers within a diversified portfolio and how investors should evaluate them.

We started with a philosophical review of active management. There’s a behavioral finance concept called “bounded rationality” that tells us that most managers should specialize, focusing their efforts on segments of the market where they are most confident in their ability to apply insights and earn significant alpha. Why? Because in the end, you can’t be an expert on everything, but you can know a great deal about a few things. Specialization — and conviction — matter!

In our white paper, which will appear in the fall issue of the Journal of Investing, we also took a look at implementation to find out which characteristics matter most with high-conviction managers and how those influence portfolio construction techniques. One key takeaway is that investors can blend the best of index and active exposures to create an optimal portfolio. That includes high-conviction managers, in those cases where the investor has confidence that the manager will exceed expectations.

We appreciate the confidence you’ve placed in us. In the pages that follow, you’ll find an update on the RS Funds. It includes important information about your investment with our firm.

Please visit www.rsinvestments.com for additional insights and the latest commentary from our investment teams.

Sincerely,

Matthew H. Scanlan

Chief Executive Officer

 

 

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CEO’S LETTER

 

 

As with all mutual funds, the value of an investment in a Fund could decline, so you could lose money.

RS Funds are sold by prospectus only. You should carefully consider the investment objectives, risks, charges, and expenses of the RS Funds before making an investment decision. The prospectus contains this and other important information. Please read it carefully before investing or sending money. To obtain a copy, please call 800.766.3863 or visit www.rsinvestments.com.

RS Funds are distributed by RS Funds Distributor LLC, member: FINRA, SIPC.

©2014 RS Investment Management Co. LLC

 

2   www.rsinvestments.com   THIS PAGE NOT PART OF YOUR FUND REPORT

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IMPORTANT INFORMATION CONCERNING FUND PERFORMANCE

 

Important Information Concerning Fund Performance

 

Except as otherwise specifically stated, all information, including portfolio security positions, is as of June 30, 2014. Any mention of specific securities should not be considered a recommendation to buy or sell those securities. A Fund may buy, sell, or hold any security identified herein, on the basis of factors described herein or on the basis of other factors or other considerations. Fund holdings will change.

Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double-digit returns are highly unusual and cannot be sustained. Class A performance quoted “with maximum sales charge” reflects the current maximum sales charge of 4.75%. Please read a Fund’s prospectus carefully for more information on sales charges as they do not apply in all cases, and if applied, are reduced for larger purchases. Certain share classes are subject to contingent deferred sales charges which are typically paid at time of sale. The Class C share performance quoted “with sales charge” takes into account the applicable contingent deferred sales charge of 1% for periods of 1 year or less. There are no sales charges for Class K and Class Y shares. Any sales charges are in addition to the Fund’s fees and expenses as detailed in the Financial Highlights section of this report. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures include the effect of expense limitations in effect during the periods shown, if applicable; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month-end performance and other information, which may be lower or higher than that cited, is available by contacting RS Investments at 800.766.3863 and is periodically updated on our website: www.rsinvestments.com.

 

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RS INTERNATIONAL FUND

 

RS International Fund

Characteristics (unaudited)

 

Total Net Assets: $41,827,723   

 

     
Sector Allocation1            
 
LOGO     
   
Top Ten Holdings1            
   
Holding   Country   % of Total
Net Assets		  
Roche Holding AG   Switzerland     3.54%   
British American Tobacco PLC   United Kingdom     2.81%   
Novartis AG, ADR   Switzerland     2.37%   
Bayer AG (Reg S)   Germany     2.26%   
Wolters Kluwer NV   Netherlands     2.20%   
Royal Dutch Shell PLC, Class A   United Kingdom     1.89%   
BHP Billiton Ltd.   Australia     1.79%   
Daimler AG (Reg S)   Germany     1.67%   
Aviva PLC   United Kingdom     1.64%   
Smith & Nephew PLC   United Kingdom     1.62%   

Total

         21.79%   

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Cash includes short-term investments and net other assets and liabilities.
2 The MSCI EAFE Index (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses.

 

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RS INTERNATIONAL FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year     Since
Inception		  
Class A Shares (2/16/93)              
without sales charge     2.42%        20.93%        4.89%        11.52%        7.08%        6.29%   
with maximum sales charge     -2.45%        15.17%        3.21%        10.45%        6.56%        6.05%   
Class C Shares (8/7/00)              
without sales charge     1.88%        19.46%        3.91%        10.58%        6.17%        1.68%   
with sales charge     0.88%        18.46%        3.91%        10.58%        6.17%        1.68%   
Class K Shares (5/15/01)     2.14%        20.12%        4.39%        11.04%        6.70%        4.10%   
Class Y Shares (3/10/09)     2.52%        22.33%        5.33%        11.46%        —        18.17%   
MSCI EAFE Index (Gross)2     5.14%        24.09%        8.59%        12.27%        7.42%        7.33% * 

 

* Since Class A shares inception. Since inception performance for the index is measured from 1/31/93, the month end prior to the Fund’s commencement of operations.

As of July 1, 2013, the Fund is managed by a new investment team led by U-Wen Kok.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS International Fund and in the MSCI EAFE Index (Gross). The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75%. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (3/10/09) would have the following values as of June 30, 2014: $18,193 (Class C), $19,120 (Class K) and $24,246 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian International Growth Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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RS GLOBAL FUND

 

RS Global Fund

Characteristics (unaudited)

 

Total Net Assets: $39,822,615   

 

     
Sector Allocation1            
 
LOGO     
   
Top Ten Holdings1            
   
Holding   Country   % of Total
Net Assets		  
Apple, Inc.   United States     2.25%   
Johnson & Johnson   United States     2.08%   
Wells Fargo & Co.   United States     1.96%   
The TJX Cos., Inc.   United States     1.90%   
Fifth Third Bancorp   United States     1.79%   
Eli Lilly & Co.   United States     1.78%   
Microsoft Corp.   United States     1.77%   
Colgate-Palmolive Co.   United States     1.76%   
Cathay Financial Holding Co. Ltd.   Taiwan     1.74%   
EOG Resources, Inc.   United States     1.68%   

Total

         18.71%   

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Cash includes short-term investments and net other assets and liabilities.
2 The MSCI All Country World Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses.

 

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RS GLOBAL FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year    

Since

Inception

  
Class A Shares (5/16/11)          
without sales charge     5.41%        25.14%        12.20%        11.58%   
with maximum sales charge     0.41%        19.15%        10.38%        9.85%   
Class C Shares (5/16/11)          
without sales charge     5.03%        24.23%        11.40%        10.79%   
with sales charge     4.03%        23.23%        11.40%        10.79%   
Class K Shares (5/16/11)     5.26%        24.74%        11.83%        11.23%   
Class Y Shares (5/16/11)     5.57%        25.58%        12.60%        12.00%   
MSCI All Country World Index (Gross)2     6.50%        23.58%        10.85%        10.44%   

Performance quoted represents past performance and does not guarantee or predict future results.

As of July 1, 2013, the Fund is managed by a new investment team led by U-Wen Kok.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 5/16/11 in Class A shares of RS Global Fund and in the MSCI All Country World Index (Gross). The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75%. Hypothetical $10,000 investments made on 5/16/11 in Class C shares, Class K shares and Class Y shares would have the following values as of June 30, 2014: $13,771 (Class C), $13,944 (Class K) and $14,249 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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RS EMERGING MARKETS FUND

 

RS Emerging Markets Fund

Characteristics (unaudited)

 

Total Net Assets: $432,467,100   

 

 
Sector Allocation1  
 
LOGO     
   
Top Ten Holdings1            
   
Holding   Country   % of Total
Net Assets		  
Samsung Electronics Co. Ltd.   South Korea     3.45%   
Taiwan Semiconductor Manufacturing Co. Ltd.   Taiwan     3.43%   
Hyundai Motor Co.   South Korea     2.11%   
China Construction Bank Corp., H shares   People’s Republic of China     2.11%   
Tencent Holdings Ltd.   People’s Republic of China     1.86%   
Bank of China Ltd., H shares   People’s Republic of China     1.61%   
Sasol Ltd.   South Africa     1.57%   
China Petroleum & Chemical Corp., H shares   People’s Republic of China     1.47%   
PetroChina Co. Ltd., H shares   People’s Republic of China     1.43%   
SK Telecom Co. Ltd., ADR   South Korea     1.34%   

Total

         20.38%   

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Cash includes short-term investments and net other assets and liabilities.
2 The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity performance of emerging markets. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses.

 

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RS EMERGING MARKETS FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     5 Year     10 Year    

Since

Inception

  
Class A Shares (5/1/97)              
without sales charge     3.88%        16.09%        -2.86%        7.18%        11.86%        8.09%   
with maximum sales charge     -1.03%        10.60%        -4.43%        6.15%        11.32%        7.78%   
Class C Shares (8/7/00)              
without sales charge     3.50%        15.19%        -3.62%        6.36%        10.99%        8.75%   
with sales charge     2.50%        14.19%        -3.62%        6.36%        10.99%        8.75%   
Class K Shares (5/15/01)     3.74%        15.84%        -3.16%        6.81%        11.48%        11.60%   
Class Y Shares (3/10/09)     4.08%        16.74%        -2.59%        7.51%        —        16.90%   
MSCI Emerging Markets Index (Gross)2     6.32%        14.68%        -0.06%        9.58%        12.30%        6.97% * 

 

* Since Class A shares inception. Since inception performance for the index is measured from 4/30/97, the month end prior to the Fund’s commencement of operations.

As of March 1, 2013, the Fund is managed by a new investment team led by Michael Reynal.

 

 
Results of a Hypothetical $10,000 Investment
 
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made 10 years ago in Class A shares of RS Emerging Markets Fund and the MSCI Emerging Markets Index (Gross). The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75%. Hypothetical $10,000 investments made 10 years ago in Class C shares and Class K shares and upon the inception of Class Y shares (3/10/09) would have the following values as of June 30, 2014: $28,358 (Class C), $29,647 (Class K) and $22,901 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results. The Fund is the successor to The Guardian Emerging Markets Fund; performance shown includes performance of the predecessor fund for periods prior to October 9, 2006.

 

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RS EMERGING MARKETS SMALL CAP FUND

 

RS Emerging Markets Small Cap Fund

Characteristics (unaudited)

 

Total Net Assets: $29,097,306   

 

 
Sector Allocation1  
 
LOGO     
   
Top Ten Holdings1            
   
Holding   Country   % of Total
Net Assets		  
TCL Communication Technology Holdings Ltd.   People’s Republic of China     1.87%   
Namchow Chemical Industrial Co. Ltd.   Taiwan     1.86%   
LG Innotek Co. Ltd.   South Korea     1.77%   
Advantech Co. Ltd.   Taiwan     1.76%   
China Animal Healthcare Ltd.   Hong Kong     1.75%   
Grand Korea Leisure Co. Ltd.   South Korea     1.66%   
Largan Precision Co. Ltd.   Taiwan     1.65%   
Ser Educacional S.A.   Brazil     1.53%   
Samkee Automotive Co. Ltd.   South Korea     1.44%   
Sinmag Equipment Corp.   Taiwan     1.39%   

Total

         16.68%   

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Cash includes short-term investments and net other assets and liabilities.
2 The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization index that is designed to measure equity performance of small-capitalization companies in emerging markets countries. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses.

 

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RS EMERGING MARKETS SMALL CAP FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
    

Since

Inception*

  
Class A Shares (1/31/14)    
without sales charge     10.00%   
with maximum sales charge     4.76%   
Class C Shares (1/31/14)    
without sales charge     9.60%   
with sales charge     8.60%   
Class Y Shares (1/31/14)     10.20%   
MSCI Emerging Markets Small Cap Index (Gross)2     12.12%   

Performance quoted represents past performance and does not guarantee or predict future results.

 

* Since inception returns are not annualized and represent cumulative total returns.

 

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RS CHINA FUND

 

RS China Fund

Characteristics (unaudited)

 

Total Net Assets: $28,374,934   

 

     
Sector Allocation1            
LOGO     
   
Top Ten Holdings1            
   
Holding   Country   % of Total
Net Assets		  
Tencent Holdings Ltd.   People’s Republic of China     9.63%   
China Construction Bank Corp., H shares   People’s Republic of China     8.41%   
Bank of China Ltd., H shares   People’s Republic of China     5.52%   
PetroChina Co. Ltd., H shares   People’s Republic of China     4.56%   
China Petroleum & Chemical Corp., H shares   People’s Republic of China     4.28%   
China Mobile Ltd.   People’s Republic of China     4.11%   
CNOOC Ltd.   People’s Republic of China     2.94%   
Industrial & Commercial Bank of China Ltd., H shares   People’s Republic of China     2.94%   
Ping An Insurance (Group) Co. of China Ltd., H shares   People’s Republic of China     2.86%   
China Unicom Hong Kong Ltd.   People’s Republic of China     2.31%   

Total

         47.56%   

 

1 Portfolio holdings are subject to change and should not be considered a recommendation to buy or sell individual securities. Cash includes short-term investments and net other assets and liabilities.
2 The MSCI China Index is a free float-adjusted market-capitalization-weighted index of Chinese equities that includes China-affiliated corporations and H shares listed on the Hong Kong Exchange, and B shares listed on the Shanghai and Shenzhen exchanges. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses. Effective May 1, 2013, RS Greater China Fund was renamed “RS China Fund” and, in connection with this change, the Fund’s index was changed from the MSCI Golden Dragon Index to the MSCI China Index, which is a more appropriate comparative, broad-based market index for the Fund.
3 The MSCI Golden Dragon Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the China region. The MSCI Golden Dragon Index consists of the following country indices: China, Hong Kong and Taiwan. “(Gross)” index results assume the reinvestment of dividends paid on the stocks constituting the index without any deduction of withholding taxes. Unlike the Fund, the index does not incur fees or expenses.

 

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RS CHINA FUND

 

Performance Update (unaudited)

 

 
Average Annual Total Returns  
     Year-to-Date     1 Year     3 Year     Since
Inception		  
Class A Shares (5/16/11)          
without sales charge     -1.26%        19.00%        2.31%        1.53%   
with maximum sales charge     -5.91%        13.38%        0.66%        -0.05%   
Class C Shares (5/16/11)          
without sales charge     -1.65%        18.10%        1.51%        0.73%   
with sales charge     -2.63%        17.10%        1.51%        0.73%   
Class K Shares (5/16/11)     -1.55%        18.57%        1.87%        1.10%   
Class Y Shares (5/16/11)     -1.16%        19.43%        2.63%        1.86%   
MSCI China (Gross)2     -0.50%        15.94%        0.99%        0.86%   
MSCI Golden Dragon Index (Gross)3     4.14%        17.77%        4.01%        3.39%   

Performance quoted represents past performance and does not guarantee or predict future results.

As of March 1, 2013, the Fund is managed by a new investment team led by Michael Reynal.

 

 
Results of a Hypothetical $10,000 Investment
LOGO

The chart above shows the performance of a hypothetical $10,000 investment made on 5/16/11 in Class A shares of RS China Fund, the MSCI China Index (Gross), and the MSCI Golden Dragon Index (Gross). The starting point of $9,525 for Class A shares reflects the current maximum sales charge of 4.75%. Hypothetical $10,000 investments made on 5/16/11 in Class C shares, Class K shares and Class Y shares would have the following values as of June 30, 2014: $10,230 (Class C), $10,349 (Class K) and $10,593 (Class Y). While Class C shares and Class K shares have a higher starting value than Class A shares because they do not impose a sales charge on purchase, they have higher annual expenses and, therefore, day-to-day performance is lower than that of Class A shares. The chart and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Performance quoted represents past performance and does not guarantee or predict future results.

 

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This Page Intentionally Left Blank

 

 

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including as applicable, sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including investment advisory fees, distribution (12b-1) fees, and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2014, to June 30, 2014, unless otherwise indicated. The following tables show the Funds’ expenses in two ways:

Expenses based on actual return

This section of the table provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled “Expenses Paid During Period” for your Fund to estimate the expenses you paid on your account during this period. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the table below. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Expenses based on hypothetical 5% return for comparison purposes

This section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds with the costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A maintenance fee of $12.00 that is charged once a year may apply for IRAs. This fee is not included in the table below. If it were, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or exchange fees. Therefore the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

 

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UNDERSTANDING YOUR FUND’S EXPENSES (UNAUDITED)

 

Based on Actual
Return		   Beginning
Account Value
1/1/14		     Ending
Account Value
6/30/14		     Expenses Paid
During Period*
1/1/14-6/30/14		     Expense Ratio
During Period
1/1/14-6/30/14		  

RS International Fund

   Class A     $1,000.00        $1,024.20        $7.03        1.40%   
  Class C     $1,000.00        $1,018.80        $12.56        2.51%   
  Class K     $1,000.00        $1,021.40        $9.82        1.96%   
    Class Y     $1,000.00        $1,025.20        $5.77        1.15%   

RS Global Fund

   Class A     $1,000.00        $1,054.10        $7.13        1.40%   
  Class C     $1,000.00        $1,050.30        $10.98        2.16%   
  Class K     $1,000.00        $1,052.60        $9.16        1.80%   
    Class Y     $1,000.00        $1,055.70        $5.50        1.08%   

RS Emerging Markets Fund

   Class A     $1,000.00        $1,038.80        $8.34        1.65%   
  Class C     $1,000.00        $1,035.00        $12.36        2.45%   
  Class K     $1,000.00        $1,037.40        $9.90        1.96%   
    Class Y     $1,000.00        $1,040.80        $6.78        1.34%   

RS Emerging Markets Small Cap Fund(a)

   Class A     $1,000.00        $1,100.00        $8.41        1.95%   
  Class C     $1,000.00        $1,096.00        $11.71        2.72%   
    Class Y     $1,000.00        $1,102.00        $6.48        1.50%   

RS China Fund

   Class A     $1,000.00        $987.40        $8.62        1.75%   
  Class C     $1,000.00        $983.50        $12.30        2.50%   
  Class K     $1,000.00        $984.50        $10.52        2.14%   
    Class Y     $1,000.00        $988.40        $7.00        1.42%   
Based on Hypothetical Return
(5% Return Before Expenses)		                       

RS International Fund

   Class A     $1,000.00        $1,017.85        $7.00        1.40%   
  Class C     $1,000.00        $1,012.35        $12.52        2.51%   
  Class K     $1,000.00        $1,015.08        $9.79        1.96%   
    Class Y     $1,000.00        $1,019.09        $5.76        1.15%   

RS Global Fund

   Class A     $1,000.00        $1,017.85        $7.00        1.40%   
  Class C     $1,000.00        $1,014.08        $10.79        2.16%   
  Class K     $1,000.00        $1,015.87        $9.00        1.80%   
    Class Y     $1,000.00        $1,019.44        $5.41        1.08%   

RS Emerging Markets Fund

   Class A     $1,000.00        $1,016.61        $8.25        1.65%   
  Class C     $1,000.00        $1,012.65        $12.23        2.45%   
  Class K     $1,000.00        $1,015.08        $9.79        1.96%   
    Class Y     $1,000.00        $1,018.15        $6.71        1.34%   

RS Emerging Markets Small Cap Fund(a)

   Class A     $1,000.00        $1,012.53        $8.06        1.95%   
  Class C     $1,000.00        $1,009.37        $11.23        2.72%   
    Class Y     $1,000.00        $1,014.38        $6.21        1.50%   

RS China Fund

   Class A     $1,000.00        $1,016.12        $8.75        1.75%   
  Class C     $1,000.00        $1,012.39        $12.48        2.50%   
  Class K     $1,000.00        $1,014.19        $10.68        2.14%   
    Class Y     $1,000.00        $1,017.75        $7.10        1.42%   
* Expenses are equal to the Fund’s annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
(a) 

Commencement of operations was February 1, 2014. Expenses are equal to the Fund’s annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by 150/365 (to reflect the one-half year period).

 

16   www.rsinvestments.com  

Table of Contents

Financial Information

Six-Month Period Ended June 30, 2014

Table of Contents

SCHEDULE OF INVESTMENTS — RS INTERNATIONAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 96.1%         
Australia – 7.3%         

Australia & New Zealand Banking Group Ltd.

     11,754         $ 369,598   

BHP Billiton Ltd.

     22,013           750,745   

Commonwealth Bank of Australia

     6,996           533,571   

CSL Ltd.

     5,973           374,943   

Macquarie Group Ltd.

     6,368           358,224   

Westpac Banking Corp.

     11,161           356,997   

Woodside Petroleum Ltd.

     8,376           324,749   
        

 

 

  
                 3,068,827   
Denmark – 2.6%         

Coloplast A/S, Class B

     5,317           481,109   

Pandora A/S

     4,368           335,217   

Royal UNIBREW A/S(1)

     1,662           261,342   
        

 

 

  
                 1,077,668   
France – 7.7%         

AXA S.A.

     13,144           314,054   

Cap Gemini S.A.

     4,761           339,763   

GDF Suez

     19,161           527,915   

Natixis

     45,967           295,012   

Orange S.A.

     27,120           429,101   

Total S.A.

     9,018           652,449   

Vinci S.A.

     8,896           665,054   
        

 

 

  
                 3,223,348   
Germany – 11.3%         

Allianz SE (Reg S)

     3,819           637,444   

BASF SE

     4,776           555,561   

Bayer AG (Reg S)

     6,697           944,767   

Daimler AG (Reg S)

     7,460           696,873   

Deutsche Post AG (Reg S)

     13,827           499,084   

Drillisch AG

     10,377           412,280   

HeidelbergCement AG

     5,451           464,469   

Infineon Technologies AG

     21,114           263,569   

Siemens AG (Reg S)

     2,029           267,897   
        

 

 

  
                 4,741,944   
Hong Kong – 2.6%         

Cheung Kong Holdings Ltd.

     20,000           354,575   

Hutchison Whampoa Ltd.

     37,000           505,555   

Power Assets Holdings Ltd.

     20,500           179,833   

Sands China Ltd.

     7,200           54,529   
        

 

 

  
                 1,094,492   

 

18   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INTERNATIONAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Italy – 1.9%         

Enel S.p.A.

     64,022         $ 372,393   

Intesa Sanpaolo S.p.A.

     73,632           227,179   

MARR S.p.A.

     10,757           200,879   
        

 

 

  
                 800,451   
Japan – 17.2%         

Alps Electric Co. Ltd.

     31,600           406,066   

Astellas Pharma, Inc.

     32,600           428,708   

Brother Industries Ltd.

     16,300           282,602   

Central Japan Railway Co.

     4,000           570,992   

Chubu Electric Power Co., Inc.(1)

     16,000           198,711   

Daito Trust Construction Co. Ltd.

     2,800           329,249   

Fujitsu Ltd.

     48,000           359,656   

Honda Motor Co. Ltd.

     3,800           132,600   

Mitsubishi Electric Corp.

     28,000           345,877   

Mitsubishi UFJ Financial Group, Inc.

     66,100           405,769   

Mitsui Fudosan Co. Ltd.

     5,000           168,746   

Mizuho Financial Group, Inc.

     237,841           488,883   

NH Foods Ltd.

     16,000           312,387   

Nippon Telegraph & Telephone Corp.

     9,000           560,950   

Obic Co. Ltd.

     15,400           507,893   

Rohto Pharmaceutical Co. Ltd.

     16,180           251,677   

SoftBank Corp.

     3,000           223,569   

Sumitomo Corp.

     26,600           358,918   

Sumitomo Mitsui Financial Group, Inc.

     4,905           205,799   

Toyota Motor Corp.

     8,400           502,930   

Tsuruha Holdings, Inc.

     2,588           142,815   
        

 

 

  
                 7,184,797   
Netherlands – 4.8%         

Heineken NV

     9,366           672,283   

ING Groep NV, CVA(1)

     28,494           399,841   

Wolters Kluwer NV

     31,028           919,094   
        

 

 

  
                 1,991,218   
New Zealand – 0.9%         

Fisher & Paykel Healthcare Corp. Ltd.

     36,896           153,445   

SKY Network Television Ltd.

     39,938           240,189   
        

 

 

  
                 393,634   
Norway – 2.3%         

DNB ASA

     27,911           509,970   

Statoil ASA

     14,791           454,658   
        

 

 

  
                 964,628   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   19

Table of Contents

SCHEDULE OF INVESTMENTS — RS INTERNATIONAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
South Korea – 0.5%         

Samsung Electronics Co. Ltd.

     150         $ 195,892   
        

 

 

  
                 195,892   
Spain – 1.6%         

Amadeus IT Holding S.A., Class A

     6,365           262,386   

Banco Bilbao Vizcaya Argentaria S.A.

     13,019           165,933   

Ferrovial S.A.

     11,801           262,937   
        

 

 

  
                 691,256   
Sweden – 4.6%         

Intrum Justitia AB

     19,653           586,190   

NCC AB, Class B

     11,271           387,938   

Skandinaviska Enskilda Banken AB, Class A

     43,377           578,985   

Swedbank AB, Class A

     14,002           370,872   
        

 

 

  
                 1,923,985   
Switzerland – 10.0%         

Actelion Ltd. (Reg S)(1)

     2,055           260,101   

Helvetia Holding AG (Reg S)

     278           127,635   

Nestle S.A. (Reg S)

     5,338           413,625   

Novartis AG (Reg S)

     2,742           248,311   

Novartis AG, ADR

     10,952           991,485   

Roche Holding AG

     4,966           1,479,653   

Swiss Life Holding AG (Reg S)(1)

     810           192,004   

Swisscom AG (Reg S)

     649           376,989   

UBS AG (Reg S)(1)

     5,173           94,844   
        

 

 

  
                 4,184,647   
United Kingdom – 20.8%         

AstraZeneca PLC

     1,727           128,485   

Aviva PLC

     78,621           685,951   

BP PLC, ADR

     6,730           355,008   

British American Tobacco PLC

     19,769           1,176,300   

British Land Co. PLC

     20,234           243,124   

British Sky Broadcasting Group PLC

     3,435           53,124   

Britvic PLC

     11,283           140,467   

BT Group PLC

     70,863           465,645   

Diageo PLC

     16,588           528,312   

GlaxoSmithKline PLC

     19,323           514,478   

Glencore PLC(1)

     13,864           77,260   

HSBC Holdings PLC

     28,753           291,701   

Lloyds Banking Group PLC(1)

     64,895           82,486   

National Grid PLC

     20,561           296,013   

Next PLC

     4,537           502,260   

Reed Elsevier PLC

     31,862           512,019   
                    

 

20   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS INTERNATIONAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
United Kingdom (continued)         

Rio Tinto PLC

     7,398         $ 399,449   

Royal Dutch Shell PLC, Class A

     19,155           791,537   

Royal Dutch Shell PLC, Class B

     14,171           615,873   

Smith & Nephew PLC

     38,368           679,036   

Vodafone Group PLC

     42,456           141,900   
        

 

 

  
                 8,680,428   
Total Common Stocks
(Cost $38,131,077)		                40,217,215   
      
      Shares        Value  
Exchange-Traded Funds – 1.0%         
United States – 1.0%         

iShares MSCI EAFE ETF

     5,983           409,058   
        

 

 

  
                 409,058   
Total Exchange-Traded Funds
(Cost $404,742)		                409,058   
      
      Principal
Amount		        Value  
Repurchase Agreements – 1.9%         
   

State Street Bank and Trust Co. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $789,000, due 7/1/2014(2)

   $ 789,000           789,000   
Total Repurchase Agreements
(Cost $789,000)		                789,000   
Total Investments – 99.0%
(Cost $39,324,819)		                41,415,273   
Other Assets, Net – 1.0%                412,450   
Total Net Assets – 100.0%              $ 41,827,723   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  
   

U.S. Treasury Note

     1.50%           8/31/2018         $ 808,000   

Legend:

ADR – American Depositary Receipt.

CVA – Certificaten Van Aandelen (Certificate of Shares).

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   21

Table of Contents

SCHEDULE OF INVESTMENTS — RS INTERNATIONAL FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks:

                                     

Argentina

   $ —       $ 3,068,827 *     $     —         $ 3,068,827   

Denmark

     —         1,077,668 *       —           1,077,668   

France

     —         3,223,348 *       —           3,223,348   

Germany

     —         4,741,944 *       —           4,741,944   

Hong Kong

     —         1,094,492 *       —           1,094,492   

Italy

     —         800,451 *       —           800,451   

Japan

     —         7,184,797 *       —           7,184,797   

Netherlands

     —         1,991,218 *       —           1,991,218   

New Zealand

     153,445         240,189 *       —           393,634   

Norway

     —         964,628 *       —           964,628   

South Korea

     —         195,892 *       —           195,892   

Spain

     —         691,256 *       —           691,256   

Sweden

     —         1,923,985 *       —           1,923,985   

Switzerland

     991,485         3,193,162 *       —           4,184,647   

United Kingdom

     355,008         8,325,420 *       —           8,680,428   
   

Exchange-Traded Funds

     409,058         —         —           409,058   
   

Repurchase Agreements

     —         789,000         —           789,000   
   
Total   $ 1,908,996       $ 39,506,277       $ —         $ 41,415,273   

 

* Consists of certain foreign securities whose values were determined by a pricing service using pricing models. These investments in securities were classified as Level 2 rather than Level 1.

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

 

(unaudited)   Investment in Securities  
   

Balance as of 12/31/2013

   $ 641,850   
   

Change in unrealized appreciation/depreciation

     (42,574 ) 
   

Net realized gain

     45,351   
   

Purchases

     —   
   

Sales

     (644,627 ) 
   

Transfers into/out of Level 3

     —   
   
Balance as of 6/30/2014   $ —   

 

22   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 97.7%         
Australia – 3.9%         

Australia & New Zealand Banking Group Ltd.

     8,355         $ 262,719   

BHP Billiton Ltd.

     7,915           269,938   

CSL Ltd.

     4,272           268,166   

Macquarie Group Ltd.

     6,683           375,944   

Transurban Group

     22,276           155,229   

Woodside Petroleum Ltd.

     5,225           202,580   
        

 

 

  
                 1,534,576   
Canada – 3.1%         

Canadian Tire Corp. Ltd., Class A

     6,520           625,512   

Magna International, Inc.

     1,830           196,986   

Whitecap Resources, Inc.

     27,855           429,944   
        

 

 

  
                 1,252,442   
Denmark – 0.4%         

Pandora A/S

     2,137           164,001   
        

 

 

  
                 164,001   
Finland – 1.8%         

Orion Oyj, Class B

     10,771           401,465   

Sampo Oyj, Class A

     5,870           296,743   
        

 

 

  
                 698,208   
France – 3.0%         

AXA S.A.

     7,747           185,101   

Cap Gemini S.A.

     4,321           308,363   

GDF Suez

     5,234           144,205   

Natixis

     29,248           187,711   

Total S.A.

     5,358           387,649   
        

 

 

  
                 1,213,029   
Germany – 4.8%         

Allianz SE (Reg S)

     1,163           194,121   

BASF SE

     3,003           349,320   

Daimler AG (Reg S)

     4,889           456,704   

Drillisch AG

     10,237           406,718   

Hannover Rueck SE

     1,503           135,347   

HeidelbergCement AG

     4,316           367,757   
        

 

 

  
                 1,909,967   
Hong Kong – 1.7%         

Cheung Kong Holdings Ltd.

     10,000           177,287   

CNOOC Ltd.

     175,957           317,221   

Hutchison Whampoa Ltd.

     13,000           177,627   
        

 

 

  
                 672,135   
India – 0.4%         

ICICI Bank Ltd.

     6,197           145,918   
        

 

 

  
                 145,918   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   23

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Japan – 7.4%         

Alps Electric Co. Ltd.

     26,100         $ 335,390   

As One Corp.

     6,479           201,073   

Astellas Pharma, Inc.

     30,400           399,777   

Central Japan Railway Co.

     2,500           356,870   

Honda Motor Co. Ltd.

     1,500           52,342   

Nishio Rent All Co. Ltd.

     4,406           187,182   

Obic Co. Ltd.

     10,500           346,290   

Resona Holdings, Inc.

     65,896           383,998   

SoftBank Corp.

     1,400           104,332   

Sumitomo Mitsui Financial Group, Inc.

     4,599           192,960   

Tokyo Gas Co. Ltd.

     12,000           70,096   

Toyota Motor Corp.

     2,700           161,656   

Tsuruha Holdings, Inc.

     2,500           137,959   
        

 

 

  
                 2,929,925   
Mexico – 1.7%         

Gruma S.A.B. de C.V., Class B(1)

     31,597           378,161   

Promotora y Operadora de Infraestructura S.A.B. de C.V.(1)

     23,300           310,864   
        

 

 

  
                 689,025   
New Zealand – 0.7%         

Fisher & Paykel Healthcare Corp. Ltd.

     44,439           184,816   

SKY Network Television Ltd.

     15,285           91,924   
        

 

 

  
                 276,740   
Norway – 0.8%         

Statoil ASA

     10,564           324,725   
        

 

 

  
                 324,725   
People’s Republic of China – 0.1%         

Tencent Holdings Ltd.

     3,500           53,381   
        

 

 

  
                 53,381   
Singapore – 1.1%         

Avago Technologies Ltd.

     5,980           430,979   
        

 

 

  
                 430,979   
South Africa – 0.9%         

Omnia Holdings Ltd.

     17,112           371,330   
        

 

 

  
                 371,330   
South Korea – 0.9%         

Samsung Electronics Co. Ltd.

     277           361,748   
        

 

 

  
                 361,748   
Spain – 1.4%         

Amadeus IT Holding S.A., Class A

     4,925           203,024   

Banco Bilbao Vizcaya Argentaria S.A.

     3,037           38,708   
                    

 

24   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS GLOBAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Spain (continued)         

Gas Natural SDG S.A.

     4,261         $ 134,619   

Zeltia S.A.(1)

     41,739           168,414   
        

 

 

  
                 544,765   
Sweden – 1.6%         

Nolato AB, Class B

     11,344           257,905   

Swedbank AB, Class A

     13,890           367,906   
        

 

 

  
                 625,811   
Switzerland – 5.7%         

Actelion Ltd. (Reg S)(1)

     1,161           146,947   

Nestle S.A. (Reg S)

     2,336           181,009   

Novartis AG (Reg S)

     3,642           329,814   

Novartis AG, ADR

     5,800           525,074   

Roche Holding AG

     2,057           612,897   

Swisscom AG (Reg S)

     820           476,319   
        

 

 

  
                 2,272,060   
Taiwan – 1.7%         

Cathay Financial Holding Co. Ltd.

     442,726           691,519   
        

 

 

  
                 691,519   
Thailand – 0.3%         

BEC World PCL (Reg F)

     81,500           122,377   
        

 

 

  
                 122,377   
United Kingdom – 7.9%         

AstraZeneca PLC

     1,141           84,888   

British American Tobacco PLC

     9,860           586,692   

British Land Co. PLC

     19,433           233,499   

British Sky Broadcasting Group PLC

     5,241           81,054   

Britvic PLC

     10,831           134,840   

BT Group PLC

     33,903           222,779   

GlaxoSmithKline PLC

     13,570           361,304   

HSBC Holdings PLC

     11,186           113,483   

Lloyds Banking Group PLC(1)

     265,265           337,171   

Northgate PLC

     21,531           193,327   

Rio Tinto PLC

     3,317           179,099   

Severn Trent PLC

     6,952           229,817   

Vodafone Group PLC

     26,946           90,061   

Whitbread PLC

     3,918           295,576   
        

 

 

  
                 3,143,590   
United States – 46.4%         

Ameriprise Financial, Inc.

     4,639           556,680   

Amgen, Inc.

     3,840           454,541   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   25

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
United States (continued)         

Apple, Inc.

     9,646         $ 896,403   

Biogen Idec, Inc.(1)

     928           292,608   

Cantel Medical Corp.

     6,306           230,926   

Celgene Corp.(1)

     4,114           353,310   

Cisco Systems, Inc.

     12,333           306,475   

Colgate-Palmolive Co.

     10,300           702,254   

DIRECTV(1)

     6,769           575,433   

Dollar Tree, Inc.(1)

     6,742           367,169   

Domino’s Pizza, Inc.

     7,610           556,215   

Electronic Arts, Inc.(1)

     5,025           180,247   

Eli Lilly & Co.

     11,392           708,241   

EOG Resources, Inc.

     5,710           667,270   

Facebook, Inc., Class A(1)

     6,100           410,469   

Fifth Third Bancorp

     33,431           713,752   

Gilead Sciences, Inc.(1)

     3,534           293,004   

Google, Inc., Class C(1)

     841           483,810   

Hess Corp.

     6,037           596,999   

Johnson & Johnson

     7,928           829,427   

JPMorgan Chase & Co.

     5,153           296,916   

LinkedIn Corp., Class A(1)

     1,277           218,967   

Marathon Oil Corp.

     7,911           315,807   

Microsoft Corp.

     16,904           704,897   

Murphy Oil Corp.

     5,305           352,676   

Phillips 66

     4,209           338,530   

Prudential Financial, Inc.

     6,928           614,998   

Public Service Enterprise Group, Inc.

     10,800           440,532   

Quaker Chemical Corp.

     2,901           222,768   

QUALCOMM, Inc.

     5,914           468,389   

Ross Stores, Inc.

     7,244           479,046   

Sanderson Farms, Inc.

     4,300           417,960   

Texas Instruments, Inc.

     8,500           406,215   

The TJX Cos., Inc.

     14,200           754,730   

Universal Corp.

     2,254           124,759   

Walgreen Co.

     7,300           541,149   

Wells Fargo & Co.

     14,864           781,252   

Westlake Chemical Corp.

     6,770           567,055   

Yahoo!, Inc.(1)

     7,020           246,612   
        

 

 

  
                 18,468,491   
Total Common Stocks
(Cost $33,886,335)		                38,896,742   

 

26   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS GLOBAL FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Preferred Stocks – 0.2%         
Brazil – 0.2%         

Companhia Energetica de Minas Gerais

     11,955         $ 87,329   
        

 

 

  
                 87,329   
Total Preferred Stocks
(Cost $79,638)		                87,329   
      
      Principal
Amount		        Value  
Repurchase Agreements – 2.3%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $921,000, due 7/1/2014(2)

   $ 921,000           921,000   
Total Repurchase Agreements
(Cost $921,000)		                921,000   
Total Investments – 100.2%
(Cost $34,886,973)		                39,905,071   
Other Liabilities, Net – (0.2)%                (82,456 ) 
Total Net Assets – 100.0%              $ 39,822,615   

 

(1)

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  
   

U.S. Treasury Bond

     3.75%           11/15/2043         $ 940,688   

Legend:

ADR – American Depositary Receipt.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   27

Table of Contents

SCHEDULE OF INVESTMENTS — RS GLOBAL FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                       Valuation Inputs                              
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks:

                                     

Australia

   $ —       $ 1,534,576 *     $     —         $ 1,534,576   

Canada

     1,252,442         —         —           1,252,442   

Denmark

     —         164,001 *       —           164,001   

Finland

     —         698,208 *       —           698,208   

France

     —         1,213,029 *       —           1,213,029   

Germany

     —         1,909,967 *       —           1,909,967   

Hong Kong

     —         672,135 *       —           672,135   

India

     —         145,918 *       —           145,918   

Japan

     —         2,929,925 *       —           2,929,925   

Mexico

     689,025         —         —           689,025   

New Zealand

     184,816         91,924 *       —           276,740   

Norway

     —         324,725 *       —           324,725   

People’s Republic of China

     —         53,381 *       —           53,381   

Singapore

     430,979         —         —           430,979   

South Africa

     —         371,330 *       —           371,330   

South Korea

     —         361,748 *       —           361,748   

Spain

     —         544,765 *       —           544,765   

Sweden

     —         625,811 *       —           625,811   

Switzerland

     525,074         1,746,986 *       —           2,272,060   

Taiwan

     —         691,519 *       —           691,519   

Thailand

     —         122,377 *       —           122,377   

United Kingdom

     —         3,143,590 *       —           3,143,590   

United States

     18,468,491         —         —           18,468,491   
   

Preferred Stocks

     87,329         —         —           87,329   
   

Repurchase Agreements

     —         921,000         —           921,000   
   
Total   $ 21,638,156       $ 18,266,915       $ —         $ 39,905,071   

 

* Consists of certain foreign securities whose values were determined by a pricing service using pricing models. These investments in securities were classified as Level 2 rather than Level 1.

 

28   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 95.0%         
Argentina – 0.4%         

YPF S.A., ADR

     51,416         $ 1,680,275   
        

 

 

  
                 1,680,275   
Brazil – 6.2%         

Ambev S.A., ADR

     589,149           4,147,609   

BB Seguridade Participacoes S.A.

     340,600           5,000,708   

Duratex S.A.

     354,870           1,448,711   

Estacio Participacoes S.A.

     165,800           2,194,908   

Even Construtora e Incorporadora S.A.

     379,700           1,125,610   

Petroleo Brasileiro S.A., ADR

     295,089           4,317,152   

Sao Martinho S.A.

     159,308           2,884,055   

Ser Educacional S.A.

     257,400           2,974,167   

Ultrapar Participacoes S.A., ADR

     106,454           2,512,315   
        

 

 

  
                 26,605,235   
Chile – 1.0%         

Banco de Chile

     12,780,442           1,699,314   

Enersis S.A., ADR

     151,598           2,554,426   
        

 

 

  
                 4,253,740   
Colombia – 0.5%         

Cemex Latam Holdings S.A.(1)

     238,270           2,335,109   
        

 

 

  
                 2,335,109   
Greece – 1.2%         

Hellenic Telecommunications Organization S.A.(1)

     142,702           2,107,662   

Piraeus Bank S.A.(1)

     1,359,862           3,011,848   
        

 

 

  
                 5,119,510   
Hong Kong – 1.9%         

China Pioneer Pharma Holdings Ltd.

     5,996,000           3,612,680   

Sands China Ltd.

     336,000           2,544,686   

Sound Global Ltd.(1)

     2,194,000           2,054,519   
        

 

 

  
                 8,211,885   
India – 7.8%         

Bank of Baroda

     219,613           3,203,286   

Bharat Petroleum Corp. Ltd.

     175,577           1,751,668   

CESC Ltd.

     133,651           1,570,134   

Container Corp. of India Ltd.

     99,692           1,981,176   

HCL Technologies Ltd.

     168,085           4,202,350   

HDFC Bank Ltd., ADR

     55,480           2,597,574   

ICICI Bank Ltd., ADR

     110,575           5,517,693   

Lupin Ltd.

     258,316           4,509,921   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   29

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS FUND

 

June 30, 2014 (unaudited)   Shares        Value  
India (continued)         

NMDC Ltd.

     287,857         $ 869,523   

Raymond Ltd.

     324,973           2,184,603   

Tata Motors Ltd., ADR

     140,206           5,476,446   
        

 

 

  
                 33,864,374   
Indonesia – 2.4%         

PT Adaro Energy Tbk

     17,151,224           1,703,166   

PT Bank Rakyat Indonesia (Persero) Tbk

     5,674,300           4,944,078   

PT Telekomunikasi Indonesia (Persero) Tbk

     17,831,900           3,709,081   
        

 

 

  
                 10,356,325   
Malaysia – 1.8%         

Muhibbah Engineering (M) Bhd

     2,051,700           1,909,362   

Telekom Malaysia Bhd

     1,210,300           2,393,296   

Tenaga Nasional Bhd

     930,181           3,533,775   
        

 

 

  
                 7,836,433   
Mexico – 4.9%         

America Movil S.A.B. de C.V., ADR, Series L

     100,947           2,094,650   

Arca Continental S.A.B. de C.V.

     521,800           3,532,964   

Banregio Grupo Financiero S.A.B. de C.V.

     217,200           1,288,116   

Cemex S.A.B. de C.V.(1)

     2,129,854           2,818,792   

Gruma S.A.B. de C.V., Class B(1)

     226,255           2,707,875   

Grupo Financiero Inbursa S.A.B. de C.V.

     1,194,800           3,561,330   

Grupo Mexico S.A.B. de C.V., Series B

     883,206           2,947,083   

Promotora y Operadora de Infraestructura S.A.B. de C.V.(1)

     174,500           2,328,146   
        

 

 

  
                 21,278,956   
People’s Republic of China – 17.0%         

Bank of China Ltd., H shares

     15,555,000           6,964,188   

China Communications Construction Co. Ltd., H shares

     3,831,000           2,577,475   

China Construction Bank Corp., H shares

     12,080,857           9,136,161   

China Mobile Ltd.

     399,840           3,883,541   

China Petroleum & Chemical Corp., H shares

     6,685,805           6,365,081   

China Resources Cement Holdings Ltd.

     2,416,000           1,514,740   

China Shenhua Energy Co. Ltd., H shares

     740,000           2,137,699   

China Singyes Solar Technologies Holdings Ltd.(1)

     856,000           1,455,336   

China Unicom Hong Kong Ltd.

     1,518,000           2,338,170   

Huadian Power International Corp. Ltd., H shares

     4,164,000           2,526,810   

New China Life Insurance Co. Ltd., H shares

     1,418,200           4,684,679   

PetroChina Co. Ltd., H shares

     4,928,000           6,192,976   

Ping An Insurance (Group) Co. of China Ltd., H shares

     477,500           3,693,735   

Qihoo 360 Technology Co. Ltd., ADR(1)

     21,633           1,991,101   
                    

 

30   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS EMERGING MARKETS FUND

 

June 30, 2014 (unaudited)   Shares        Value  
People’s Republic of China (continued)         

Shenzhen International Holdings Ltd.

     2,972,500         $ 3,654,570   

TCL Communication Technology Holdings Ltd.

     2,500,000           3,025,841   

Tencent Holdings Ltd.

     528,015           8,053,098   

Want Want China Holdings Ltd.

     2,235,187           3,217,728   
        

 

 

  
                 73,412,929   
Peru – 1.5%         

Credicorp Ltd.

     27,346           4,251,482   

Southern Copper Corp.

     66,859           2,030,508   
        

 

 

  
                 6,281,990   
Philippines – 1.8%         

BDO Unibank, Inc.

     1,461,900           3,130,223   

Emperador, Inc.(1)

     7,913,800           2,142,614   

Universal Robina Corp.

     742,960           2,625,928   
        

 

 

  
                 7,898,765   
Poland – 0.6%         

Bank Zachodni WBK S.A.

     21,187           2,575,513   
        

 

 

  
                 2,575,513   
Russia – 6.5%         

Etalon Group Ltd., GDR (Reg S)

     288,455           1,280,163   

Gazprom OAO, ADR

     471,901           4,112,617   

Lukoil OAO, ADR

     77,189           4,617,446   

Magnitogorsk Iron & Steel Works OJSC, GDR (Reg S)(1)

     111,981           293,390   

MMC Norilsk Nickel OJSC, ADR

     159,129           3,152,346   

QIWI PLC, ADR

     30,514           1,230,630   

Rosneft OAO, GDR (Reg S)

     173,505           1,269,189   

Sberbank of Russia, ADR

     366,096           3,702,514   

Sistema JSFC, GDR (Reg S)

     140,929           4,340,613   

X5 Retail Group N.V., GDR (Reg S)(1)

     194,936           4,208,668   
        

 

 

  
                 28,207,576   
South Africa – 5.1%         

Barclays Africa Group Ltd.

     194,685           2,956,435   

Coronation Fund Managers Ltd.

     137,871           1,238,506   

MMI Holdings Ltd.

     1,109,238           2,737,872   

Naspers Ltd., N shares

     41,061           4,834,639   

Sasol Ltd.

     113,979           6,770,798   

Steinhoff International Holdings Ltd.

     606,664           3,382,104   
        

 

 

  
                 21,920,354   
South Korea – 17.4%         

BS Financial Group, Inc.

     183,670           2,705,470   

Hanssem Co. Ltd.

     21,393           1,644,406   

Hyundai Motor Co.

     40,334           9,144,554   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   31

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS FUND

 

June 30, 2014 (unaudited)   Shares        Value  
South Korea (continued)         

KB Financial Group, Inc.

     142,770         $ 4,961,525   

KCC Corp.

     8,561           5,219,689   

Korea Electric Power Corp.

     131,710           4,848,720   

LG Chem Ltd.

     10,155           2,969,805   

LG Innotek Co. Ltd.(1)

     25,580           3,664,905   

Lumens Co. Ltd.(1)

     100,793           876,670   

Meritz Fire & Marine Insurance Co. Ltd.

     225,830           2,755,950   

Paradise Co. Ltd.

     57,106           2,111,272   

POSCO, ADR

     24,067           1,791,547   

Samkee Automotive Co. Ltd.

     207,160           1,966,955   

Samsung C&T Corp.

     55,344           4,082,345   

Samsung Electronics Co. Ltd.

     11,439           14,938,746   

SK Hynix, Inc.(1)

     117,794           5,656,216   

SK Telecom Co. Ltd., ADR

     223,054           5,786,021   
        

 

 

  
                 75,124,796   
Taiwan – 12.7%         

AcBel Polytech, Inc.

     1,759,000           2,632,787   

Catcher Technology Co. Ltd.

     305,000           2,846,356   

CTBC Financial Holding Co. Ltd.

     4,033,000           2,688,645   

E-Lead Electronic Co. Ltd.

     668,000           1,717,385   

Fubon Financial Holding Co. Ltd.

     3,963,000           5,724,710   

Hon Hai Precision Industry Co. Ltd.

     522,000           1,750,039   

Largan Precision Co. Ltd.

     64,000           5,105,806   

MediaTek, Inc.

     276,000           4,668,619   

Merry Electronics Co. Ltd.

     454,000           2,425,217   

Namchow Chemical Industrial Co. Ltd.

     981,000           2,261,872   

Novatek Microelectronics Corp.

     787,000           3,870,653   

President Chain Store Corp.

     285,000           2,284,017   

Taiwan Cement Corp.

     1,385,000           2,098,048   

Taiwan Semiconductor Manufacturing Co. Ltd.

     3,501,998           14,818,856   
        

 

 

  
                 54,893,010   
Thailand – 1.6%         

GFPT PCL (Reg F)

     7,188,800           2,836,760   

Krung Thai Bank PCL (Reg F)

     2,368,477           1,525,111   

PTT Global Chemical PCL (Reg F)

     391,628           814,688   

The Siam Cement PCL (Reg F)

     121,500           1,707,447   
        

 

 

  
                 6,884,006   
Turkey – 2.3%         

Celebi Hava Servisi A.S.

     147,500           1,594,889   

Migros Ticaret A.S.(1)

     440,989           4,217,059   

Turkiye Vakiflar Bankasi T.A.O., Class D

     1,854,285           4,353,034   
        

 

 

  
                 10,164,982   

 

32   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS EMERGING MARKETS FUND

 

June 30, 2014 (unaudited)   Shares        Value  
United Arab Emirates – 0.4%         

Aldar Properties PJSC

     1,973,176         $ 1,666,697   
        

 

 

  
                 1,666,697   
Total Common Stocks
(Cost $348,494,506)		                410,572,460   
      
      Shares        Value  
Preferred Stocks – 3.6%         
Brazil – 3.6%         

Banco Bradesco S.A.

     373,169           5,413,019   

Cia Brasileira de Distribuicao Grupo Pao de Acucar, ADR

     33,175           1,536,998   

Comp. Lorenz S.A.(1)(2)(3)

     4,700,000           —   

Itau Unibanco Holding S.A.

     259,556           3,755,603   

Vale S.A.

     419,608           5,004,151   
        

 

 

  
                 15,709,771   
Total Preferred Stocks
(Cost $15,573,702)		                15,709,771   
      
      Rights        Value  
Rights – 0.0%         
South Korea – 0.0%         

BS Financial Group, Inc.(1)(2)

     35,605           82,833   
        

 

 

  
                 82,833   
Total Rights
(Cost $0)		                82,833   
      
      Principal
Amount		        Value  
Repurchase Agreements – 1.2%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $5,251,000, due 7/1/2014(4)

   $ 5,251,000           5,251,000   
Total Repurchase Agreements
(Cost $5,251,000)		                5,251,000   
Total Investments – 99.8%
(Cost $369,319,208)		                431,616,064   
Other Assets, Net – 0.2%                851,036   
Total Net Assets – 100.0%              $ 432,467,100   

 

(1) 

Non-income-producing security.

(2) 

Fair valued security. See 1a in Notes to Financial Statements.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   33

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SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS FUND

 

(3) 

The table below presents securities deemed illiquid by the investment adviser.

 

Security   Shares     Cost     Value     Acquisition
Date		     % of
Fund’s
Net
Assets		  
   

Comp. Lorenz S.A.

     4,700,000      $ 179,645      $     —        6/27/1997        0.00%   

 

(4) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  
   

U.S. Treasury Bond

     2.75%           11/15/2042         $ 5,356,575   

Legend:

ADR – American Depositary Receipt.

GDR – Global Depositary Receipt.

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                        Valuation Inputs                               
Investments in Securities
(unaudited)		   Level 1      Level 2     Level 3        Total  
   

Common Stocks:

                                    

Argentina

   $ 1,680,275       $ —      $     —         $ 1,680,275   

Brazil

     26,605,235         —        —           26,605,235   

Chile

     4,253,740         —        —           4,253,740   

Colombia

     2,335,109         —        —           2,335,109   

Greece

     —         5,119,510 *      —           5,119,510   

Hong Kong

     —         8,211,885 *      —           8,211,885   

India

     13,591,713         20,272,661 *      —           33,864,374   

Indonesia

     —         10,356,325 *      —           10,356,325   

Malaysia

     —         7,836,433 *      —           7,836,433   

Mexico

     21,278,956         —        —           21,278,956   

People’s Republic of China

     1,991,101         71,421,828 *      —           73,412,929   

Peru

     6,281,990         —        —           6,281,990   

Philippines

     —         7,898,765 *      —           7,898,765   

Poland

     —         2,575,513 *      —           2,575,513   

Russia

     25,025,695         3,181,881 *      —           28,207,576   

South Africa

     —         21,920,354 *      —           21,920,354   

South Korea

     7,577,568         67,547,228 *      —           75,124,796   

Taiwan

     —         54,893,010 *      —           54,893,010   

Thailand

     —         6,884,006 *      —           6,884,006   

Turkey

     —         10,164,982 *      —           10,164,982   

United Arab Emirates

     —         1,666,697 *      —           1,666,697   
   

Preferred Stocks

     15,709,771         —        —           15,709,771   
   

Rights

     —         82,833        —           82,833   
   

Repurchase Agreements

     —         5,251,000        —           5,251,000   
   
Total   $ 126,331,153       $ 305,284,911      $ —         $ 431,616,064   

 

* Consists of certain foreign securities whose values were determined by a pricing service using pricing models. These investments in securities were classified as Level 2 rather than Level 1.

 

34   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS SMALL CAP FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 96.2%         
Argentina – 0.6%         

Ternium S.A., ADR

     6,122         $ 170,988   
        

 

 

  
                 170,988   
Brazil – 4.3%         

Duratex S.A.

     60,830           248,331   

Even Construtora e Incorporadora S.A.

     77,700           230,339   

Kroton Educacional S.A.

     12,100           339,315   

Ser Educacional S.A.

     38,500           444,854   
        

 

 

  
                 1,262,839   
Colombia – 0.5%         

Gran Tierra Energy, Inc.(1)

     16,349           132,754   
        

 

 

  
                 132,754   
Georgia – 0.7%         

TBC Bank JSC, GDR (Reg S)(1)

     15,200           215,080   
        

 

 

  
                 215,080   
Greece – 1.0%         

Piraeus Bank S.A.(1)

     133,382           295,417   
        

 

 

  
                 295,417   
Hong Kong – 3.9%         

China Animal Healthcare Ltd.

     731,000           509,439   

China Pioneer Pharma Holdings Ltd.

     657,000           395,852   

Sound Global Ltd.(1)

     243,000           227,552   
        

 

 

  
                 1,132,843   
India – 6.0%         

Bank of Baroda

     18,102           264,037   

CESC Ltd.

     21,987           258,304   

Container Corp. of India Ltd.

     13,027           258,885   

Raymond Ltd.

     47,631           320,195   

TVS Motor Co. Ltd.

     131,914           354,514   

Yes Bank Ltd.

     30,873           278,382   
        

 

 

  
                 1,734,317   
Indonesia – 2.1%         

PT Adaro Energy Tbk

     1,048,900           104,159   

PT Astra Agro Lestari Tbk

     106,600           253,581   

PT Salim Ivomas Pratama Tbk

     2,823,200           240,410   
        

 

 

  
                 598,150   
Malaysia – 2.5%         

AMMB Holdings Bhd

     62,600           138,835   

Genting Plantations Bhd

     89,200           322,242   

Muhibbah Engineering (M) Bhd

     299,000           278,257   
        

 

 

  
                 739,334   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   35

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS SMALL CAP FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Mexico – 4.2%         

Arca Continental S.A.B. de C.V.

     42,800         $ 289,787   

Banregio Grupo Financiero S.A.B. de C.V.

     47,100           279,329   

Gruma S.A.B. de C.V., Class B(1)

     16,300           195,082   

Megacable Holdings S.A.B. de C.V.

     56,900           240,609   

Promotora y Operadora de Infraestructura S.A.B. de C.V.(1)

     17,300           230,813   
        

 

 

  
                 1,235,620   
People’s Republic of China – 12.2%         

China Lilang Ltd.

     296,000           188,693   

China Shipping Development Co. Ltd., H shares(1)

     364,000           212,760   

China Singyes Solar Technologies Holdings Ltd.(1)

     55,000           93,509   

Dongyue Group Ltd.

     466,000           194,258   

ENN Energy Holdings Ltd.

     52,000           373,397   

Huadian Power International Corp. Ltd., H shares

     490,000           297,343   

Jiangxi Copper Co. Ltd., H Shares

     142,000           225,198   

Kaisa Group Holdings Ltd.

     683,000           202,656   

Lonking Holdings Ltd.

     1,481,000           254,317   

New China Life Insurance Co. Ltd., H shares

     90,000           297,293   

Shenzhen International Holdings Ltd.

     110,750           136,163   

Shenzhou International Group Holdings Ltd.

     72,000           246,562   

TCL Communication Technology Holdings Ltd.

     449,000           543,441   

Tianjin Port Development Holdings Ltd.

     1,750,000           275,422   
        

 

 

  
                 3,541,012   
Peru – 1.4%         

Ferreycorp S.A.A.

     443,772           301,292   

Intercorp Financial Services, Inc.

     3,405           111,446   
        

 

 

  
                 412,738   
Philippines – 2.9%         

Alliance Global Group, Inc.

     367,900           245,129   

BDO Unibank, Inc.

     157,750           337,774   

Universal Robina Corp.

     69,970           247,303   
        

 

 

  
                 830,206   
Russia – 1.9%         

Magnitogorsk Iron & Steel Works OJSC, GDR (Reg S)(1)

     7,259           19,018   

Phosagro OAO, GDR (Reg S)

     19,042           238,406   

X5 Retail Group N.V., GDR (Reg S)(1)

     13,503           291,530   
        

 

 

  
                 548,954   
South Africa – 6.1%         

Coronation Fund Managers Ltd.

     15,057           135,258   

Investec Ltd.

     18,114           166,146   

Mediclinic International Ltd.

     30,394           233,503   
                    

 

36   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS EMERGING MARKETS SMALL CAP FUND

 

June 30, 2014 (unaudited)   Shares        Value  
South Africa (continued)         

MMI Holdings Ltd.

     162,842         $ 401,934   

Mondi Ltd.

     15,235           278,155   

Omnia Holdings Ltd.

     13,468           292,255   

Super Group Ltd.(1)

     92,899           266,052   
        

 

 

  
                 1,773,303   
South Korea – 14.9%         

Grand Korea Leisure Co. Ltd.

     11,780           484,294   

GS Home Shopping, Inc.

     1,219           290,587   

Hancom, Inc.

     16,225           394,436   

Hansol Paper Co.

     26,020           301,973   

Hanssem Co. Ltd.

     1,590           122,218   

KCC Corp.

     542           330,460   

KEPCO Plant Service & Engineering Co. Ltd.

     3,943           269,613   

LG Hausys Ltd.

     1,488           284,818   

LG Innotek Co. Ltd.(1)

     3,591           514,491   

Lumens Co. Ltd.(1)

     20,366           177,138   

Mando Corp.

     1,333           167,296   

Medy-Tox, Inc.

     2,105           285,953   

Meritz Fire & Marine Insurance Co. Ltd.

     23,340           284,833   

Samkee Automotive Co. Ltd.

     44,143           419,132   
        

 

 

  
                 4,327,242   
Taiwan – 24.1%         

AcBel Polytech, Inc.

     173,000           258,938   

Advantech Co. Ltd.

     60,000           512,430   

ASPEED Technology, Inc.

     41,000           367,601   

E-Lead Electronic Co. Ltd.

     108,000           277,661   

E.Sun Financial Holding Co. Ltd.

     315,000           202,066   

Gigabyte Technology Co. Ltd.

     210,000           336,459   

Grand Pacific Petrochemical Corp.

     362,000           226,764   

Huaku Development Co. Ltd.

     76,000           181,947   

King Slide Works Co. Ltd.

     26,000           371,611   

King’s Town Bank

     282,000           272,011   

Largan Precision Co. Ltd.

     6,000           478,669   

Merry Electronics Co. Ltd.

     63,000           336,539   

MPI Corp.

     100,000           395,754   

Namchow Chemical Industrial Co. Ltd.

     235,000           541,835   

Novatek Microelectronics Corp.

     81,000           398,377   

Posiflex Technology, Inc.

     58,000           365,422   

Primax Electronics Ltd.

     238,000           368,932   

Promise Technology, Inc.

     265,000           394,533   

Sinmag Equipment Corp.

     72,000           405,321   
                    

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   37

Table of Contents

SCHEDULE OF INVESTMENTS — RS EMERGING MARKETS SMALL CAP FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Taiwan (continued)         

YC INOX Co. Ltd.

     339,000         $ 329,145   
        

 

 

  
                 7,022,015   
Thailand – 1.6%         

GFPT PCL (Reg F)

     870,100           343,349   

Siamgas & Petrochemicals PCL (Reg F)

     239,600           126,241   
        

 

 

  
                 469,590   
Turkey – 4.9%         

Brisa Bridgestone Sabanci Sanayi ve Ticaret A.S.

     61,524           195,230   

Celebi Hava Servisi A.S.

     24,674           266,795   

Eregli Demir ve Celik Fabrikalari T.A.S.

     74,885           134,113   

Migros Ticaret A.S.(1)

     35,003           334,724   

Turk Traktor ve Ziraat Makineleri A.S.

     7,054           229,739   

Turkiye Sinai Kalkinma Bankasi A.S.

     339,959           277,615   
        

 

 

  
                 1,438,216   
United Arab Emirates – 0.4%         

Drake & Scull International(1)

     324,252           119,077   
        

 

 

  
                 119,077   
Total Common Stocks
(Cost $25,358,054)		                27,999,695   
      
      Shares        Value  
Preferred Stocks – 0.5%         
Brazil – 0.5%         

Banco ABC Brasil S.A.

     23,800           146,495   
        

 

 

  
                 146,495   
Total Preferred Stocks
(Cost $141,505)		                146,495   
Total Investments – 96.7%
(Cost $25,499,559)		                28,146,190   
Other Assets, Net – 3.3%                951,116   
Total Net Assets – 100.0%              $ 29,097,306   

 

(1) 

Non-income-producing security.

Legend:

ADR – American Depositary Receipt.

GDR – Global Depositary Receipt.

 

38   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS EMERGING MARKETS SMALL CAP FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                      Valuation Inputs                             
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks:

                                     

Argentina

   $ 170,988       $ —       $ —         $ 170,988   

Brazil

     1,262,839         —         —           1,262,839   

Colombia

     132,754         —         —           132,754   

Georgia

     215,080         —         —           215,080   

Greece

     —         295,417 *       —           295,417   

Hong Kong

     —         1,132,843 *       —           1,132,843   

India

     —         1,734,317 *       —           1,734,317   

Indonesia

     —         598,150 *       —           598,150   

Malaysia

     322,242         417,092 *       —           739,334   

Mexico

     1,235,620         —         —           1,235,620   

People’s Republic of China

     —         3,541,012 *       —           3,541,012   

Peru

     412,738         —         —           412,738   

Philippines

     —         830,206 *       —           830,206   

Russia

     548,954         —         —           548,954   

South Africa

     —         1,773,303 *       —           1,773,303   

South Korea

     —         4,327,242 *       —           4,327,242   

Taiwan

     —         7,022,015 *       —           7,022,015   

Thailand

     —         469,590 *       —           469,590   

Turkey

     —         1,438,216 *       —           1,438,216   

United Arab Emirates

     —         119,077 *       —           119,077   
   

Preferred Stocks

     146,495         —         —           146,495   
   
Total   $ 4,447,710       $ 23,698,480       $ —         $ 28,146,190   

 

* Consists of certain foreign securities whose values were determined by a pricing service using pricing models. These investments in securities were classified as Level 2 rather than Level 1.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   39

Table of Contents

SCHEDULE OF INVESTMENTS — RS CHINA FUND

 

June 30, 2014 (unaudited)   Shares        Value  
Common Stocks – 96.5%         
Hong Kong – 8.5%         

China Animal Healthcare Ltd.

     411,000         $ 286,429   

China Pioneer Pharma Holdings Ltd.

     483,000           291,015   

China Vanke Co. Ltd., H shares(1)

     223,623           392,979   

Huadian Fuxin Energy Corp. Ltd., H shares

     522,000           272,853   

Man Wah Holdings Ltd.

     89,200           142,466   

Sands China Ltd.

     38,400           290,821   

SITC International Holdings Co. Ltd.

     544,000           221,863   

Sound Global Ltd.(1)

     302,000           282,801   

Xinyi Solar Holdings Ltd.

     934,000           239,981   
        

 

 

  
                 2,421,208   
People’s Republic of China – 84.5%         

Anhui Conch Cement Co. Ltd., H shares

     56,636           195,363   

Bank of China Ltd., H shares

     3,500,000           1,566,998   

China CITIC Bank Corp. Ltd., H shares

     841,000           509,928   

China Construction Bank Corp., H shares

     3,155,000           2,385,972   

China Life Insurance Co. Ltd., H shares

     204,000           533,729   

China Lilang Ltd.

     338,000           215,467   

China Merchants Bank Co. Ltd., H shares

     269,000           531,007   

China Mobile Ltd.

     120,000           1,165,529   

China Oilfield Services Ltd., H shares

     142,000           341,135   

China Overseas Land & Investment Ltd.

     86,000           208,597   

China Pacific Insurance (Group) Co. Ltd., H shares

     66,600           235,462   

China Petroleum & Chemical Corp., H shares

     1,275,200           1,214,027   

China Resources Cement Holdings Ltd.

     328,000           205,644   

China Shenhua Energy Co. Ltd., H shares

     97,000           280,212   

China Singyes Solar Technologies Holdings Ltd.(1)

     169,000           287,327   

China Taiping Insurance Holdings Co. Ltd.(1)

     181,600           324,751   

China Telecom Corp. Ltd., H shares

     890,000           436,472   

China Unicom Hong Kong Ltd.

     426,000           656,166   

Chongqing Changan Automobile Co. Ltd., B shares

     185,200           365,602   

CNOOC Ltd.

     463,000           834,711   

ENN Energy Holdings Ltd.

     58,000           416,481   

Guangdong Investment Ltd.

     320,000           368,328   

Haier Electronics Group Co. Ltd.

     114,000           298,684   

Huadian Power International Corp. Ltd., H shares

     746,000           452,690   

Industrial & Commercial Bank of China Ltd., H shares

     1,320,000           834,682   

Jiangxi Copper Co. Ltd., H Shares

     112,000           177,621   

Jumei International Holding Ltd., ADR(1)

     11,441           311,195   

New China Life Insurance Co. Ltd., H shares

     172,700           570,472   

PAX Global Technology Ltd.(1)

     276,000           179,452   
                    

 

40   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

RS CHINA FUND

 

June 30, 2014 (unaudited)   Shares        Value  
People’s Republic of China (continued)         

PetroChina Co. Ltd., H shares

     1,030,000         $ 1,294,392   

Ping An Insurance (Group) Co. of China Ltd., H shares

     105,000           812,235   

Qihoo 360 Technology Co. Ltd., ADR(1)

     2,685           247,127   

Shenzhen Expressway Co. Ltd., H shares

     542,000           288,875   

Shenzhen International Holdings Ltd.

     226,000           277,858   

Shimao Property Holdings Ltd.

     148,000           272,665   

Sihuan Pharmaceutical Holdings Group Ltd.

     684,000           416,565   

Sinotrans Ltd., H shares

     440,000           284,408   

TCL Communication Technology Holdings Ltd.

     280,000           338,894   

Tencent Holdings Ltd.

     179,155           2,732,409   

Want Want China Holdings Ltd.

     413,000           594,546   

YY, Inc., ADR(1)

     4,120           311,060   
        

 

 

  
                 23,974,738   
Taiwan – 3.5%         

AcBel Polytech, Inc.

     262,000           392,149   

E-Lead Electronic Co. Ltd.

     109,000           280,232   

Namchow Chemical Industrial Co. Ltd.

     144,000           332,018   
        

 

 

  
                 1,004,399   
Total Common Stocks
(Cost $24,605,149)		                27,400,345   
      
      Principal
Amount		        Value  
Repurchase Agreements – 0.4%         
   

Fixed Income Clearing Corp. Repurchase Agreement, 0.00%, dated 6/30/2014, maturity value of $102,000, due 7/1/2014(2)

   $ 102,000           102,000   
Total Repurchase Agreements
(Cost $102,000)		                102,000   
Total Investments – 96.9%
(Cost $24,707,149)		                27,502,345   
Other Assets, Net – 3.1%                872,589   
Total Net Assets – 100.0%              $ 28,374,934   

 

(1) 

Non-income-producing security.

(2) 

The table below presents collateral for repurchase agreements.

 

Security   Coupon        Maturity Date        Value  
   

U.S. Treasury Bond

     3.75%           11/15/2043         $ 108,125   

Legend:

ADR – American Depositary Receipt.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   41

Table of Contents

SCHEDULE OF INVESTMENTS — RS CHINA FUND

 

The following is a summary of the inputs used as of June 30, 2014, in valuing the Fund’s investments. For more information on valuation inputs, please refer to Note 1a of the accompanying Notes to Financial Statements.

 

                       Valuation Inputs                              
Investments in Securities
(unaudited)		   Level 1      Level 2      Level 3        Total  
   

Common Stocks:

                                     

Hong Kong

   $ 392,979       $ 2,028,229 *     $     —         $ 2,421,208   

People’s Republic of China

     1,234,984         22,739,754 *       —           23,974,738   

Taiwan

     —         1,004,399 *       —           1,004,399   
   

Repurchase Agreements

     —         102,000         —           102,000   
   
Total   $ 1,627,963       $ 25,874,382       $ —         $ 27,502,345   

 

* Consists of certain foreign securities whose values were determined by a pricing service using pricing models. These investments in securities were classified as Level 2 rather than Level 1.

 

42   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

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This Page Intentionally Left Blank

 

 

 

 

  www.rsinvestments.com   43

Table of Contents

FINANCIAL INFORMATION

 

 

Statements of Assets and Liabilities

As of June 30, 2014 (unaudited)

    RS International  
Assets   

Investments, at value

    $ 41,415,273   

Cash

      786   

Foreign currency, at value

      8,563   

Foreign tax reclaims receivable

      384,947   

Dividends receivable

      72,471   

Receivable for fund shares subscribed

      18,878   

Receivable for investments sold

      —   

Prepaid expenses

      32,724   
    

 

 

  

Total Assets

      41,933,642   
    

 

 

  
Liabilities   

Payable for fund shares redeemed

      34,162   

Payable to adviser

      14,092   

Payable to distributor

      1,725   

Accrued trustees’ fees

      831   

Payable for investments purchased

      9   

Accrued foreign capital gains tax

      —   

Accrued expenses/other liabilities

      55,100   
    

 

 

  

Total Liabilities

      105,919   
    

 

 

  

Total Net Assets

    $ 41,827,723   
    

 

 

  
Net Assets Consist of:   

Paid-in capital

    $ 33,044,798   

Accumulated undistributed net investment income

      561,145   

Accumulated net realized gain/(loss) from investments, foreign currency transactions and foreign capital gains tax

      6,114,722   

Net unrealized appreciation on investments, foreign capital gains tax and translation of assets and liabilities in foreign currencies

      2,107,058   
    

 

 

  

Total Net Assets

    $ 41,827,723   
    

 

 

  

Investments, at Cost

    $ 39,324,819   
    

 

 

  

Foreign Currency, at Cost

    $ 8,564   
    

 

 

  
Pricing of Shares   

Net Assets:

   

Class A

    $ 29,680,778   

Class C

      2,457,208   

Class K

      4,205,550   

Class Y

      5,484,187   

Shares of Beneficial Interest Outstanding with No Par Value:

   

Class A

      2,188,706   

Class C

      227,202   

Class K

      326,040   

Class Y

      408,863   

Net Asset Value Per Share:

   

Class A

    $ 13.56   

Class C

      10.82   

Class K

      12.90   

Class Y

      13.41   

Sales Charge Class A (Load)

      4.75 % 

Maximum Offering Price Per Class A Share

    $ 14.24   

 

44   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS Global          RS Emerging
Markets		     RS Emerging
Markets Small Cap		     RS China  
         
$ 39,905,071        $ 431,616,064      $ 28,146,190      $ 27,502,345   
  913          18,037        535,667        865   
  13,176          50,149        50,892        78,240   
  32,448          6,137        215        —   
  89,451          1,514,975        72,494        338,102   
  —          406,440        479,851        258,736   
  —          1,424,216        —        214,293   
  36,882          50,646        39,153        36,394   

 

 

      

 

 

    

 

 

    

 

 

  
  40,077,941          435,086,664        29,324,462        28,428,975   

 

 

      

 

 

    

 

 

    

 

 

  
         
  —          1,032,832        —        2,422   
  18,617          335,455        20,976        14,101   
  1,894          12,767        572        1,276   
  605          8,054        439        482   
  195,950          784,135        144,981        6   
  1,529          122,604        40,806        —   
  36,731          323,717        19,382        35,754   

 

 

      

 

 

    

 

 

    

 

 

  
  255,326          2,619,564        227,156        54,041   

 

 

      

 

 

    

 

 

    

 

 

  
$ 39,822,615        $ 432,467,100      $ 29,097,306      $ 28,374,934   

 

 

      

 

 

    

 

 

    

 

 

  
         
$ 32,655,268        $ 368,182,287      $ 26,521,154      $ 27,968,924   
  245,013          1,027,285        53,586        240,962   

 

1,904,734

  

       1,084,497        (82,928 )      (2,630,883 ) 

 

5,017,600

  

       62,173,031        2,605,494        2,795,931   

 

 

      

 

 

    

 

 

    

 

 

  
$ 39,822,615        $ 432,467,100      $ 29,097,306      $ 28,374,934   

 

 

      

 

 

    

 

 

    

 

 

  
$ 34,886,973        $ 369,319,208      $ 25,499,559      $ 24,707,149   

 

 

      

 

 

    

 

 

    

 

 

  
$ 13,182        $ 50,144      $ 50,815      $ 77,659   

 

 

      

 

 

    

 

 

    

 

 

  
         
         
$ 13,388,944        $ 191,886,413      $ 6,428,639      $ 10,574,388   
  6,889,167          27,551,295        2,740,903        4,110,311   
  5,588,524          27,289,618        —        4,139,932   
  13,955,980          185,739,774        19,927,764        9,550,303   
         
  1,089,893          9,549,340        584,513        1,038,954   
  568,434          1,725,215        250,000        405,799   
  458,222          1,426,572        —        407,421   
  1,132,568          9,209,623        1,808,559        936,402   
         
$ 12.28        $ 20.09      $ 11.00      $ 10.18   
  12.12          15.97        10.96        10.13   
  12.20          19.13        —        10.16   
  12.32          20.17        11.02        10.20   
  4.75 %        4.75 %      4.75 %      4.75 % 
$ 12.89          $ 21.09      $ 11.55      $ 10.69   

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   45

Table of Contents

FINANCIAL INFORMATION

 

Statements of Operations

For the Six-Month Period Ended June 30, 2014 (unaudited)

    RS International  
Investment Income   

Dividends

    $ 992,184   

Interest

      377   

Withholding taxes on foreign dividends

      (89,578 ) 
    

 

 

  

Total Investment Income

      902,983   
    

 

 

  
 
Expenses   

Investment advisory fees

      170,073   

Distribution fees

      63,780   

Transfer agent fees

      51,718   

Custodian fees

      43,488   

Professional fees

      24,955   

Registration fees

      16,946   

Shareholder reports

      10,986   

Administrative service fees

      2,676   

Trustees’ fees

      1,358   

Insurance expense

      634   

Other expenses

      6,466   
    

 

 

  

Total Expenses

      393,080   
 

Less: Fee waiver by adviser

      (76,975 ) 
    

 

 

  

Total Expenses, Net

      316,105   
    

 

 

  

Net Investment Income

      586,878   
    

 

 

  
 

Realized Gain/(Loss) and Change in Unrealized Appreciation/Depreciation on Investments, Foreign Currency Transactions and Foreign Capital Gains Tax

   

Net realized gain/(loss) from investments

      3,169,369   

Net realized loss from foreign currency transactions

      (60,782 ) 

Foreign capital gains taxes paid

      —   

Net change in unrealized appreciation/depreciation on investments

      (2,737,523 ) 

Net change in unrealized appreciation/depreciation on translation of assets and liabilities in foreign currencies

      791   

Net change in accrued foreign capital gains tax

      —   
    

 

 

  
 

Net Gain/(Loss) on Investments, Foreign Currency Transactions and Foreign Capital Gains Tax

      371,855   
    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

    $ 958,733   
    

 

 

  
          

 

1 

Commenced operations on February 1, 2014.

 

46   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

RS Global          RS Emerging
Markets		     RS Emerging
Markets Small Cap1		     RS China  
         
$ 603,121        $ 5,250,423      $ 256,858      $ 536,803   
  —          85        —        —   
  (47,922 )        (526,477 )      (15,657 )      (43,495 ) 

 

 

      

 

 

    

 

 

    

 

 

  
  555,199          4,724,031        241,201        493,308   

 

 

      

 

 

    

 

 

    

 

 

  
 
         
  149,478          2,180,171        137,052        150,113   
  64,092          475,182        16,378        45,544   
  13,211          447,769        9,198        17,238   
  30,131          250,108        22,629        29,963   
  24,851          44,776        12,040        21,301   
  17,732          19,264        20,374        17,435   
  3,896          74,394        3,036        3,353   
  2,162          26,757        1,028        1,745   
  1,092          13,492        688        846   
  474          27,391        105        429   
  3,876          12,630        3,657        1,391   

 

 

      

 

 

    

 

 

    

 

 

  
  310,995          3,571,934        226,185        289,358   
 
  (36,411 )        (107,626 )      (38,570 )      (42,919 ) 

 

 

      

 

 

    

 

 

    

 

 

  
  274,584          3,464,308        187,615        246,439   

 

 

      

 

 

    

 

 

    

 

 

  
  280,615          1,259,723        53,586        246,869   

 

 

      

 

 

    

 

 

    

 

 

  
 
         
  1,753,772          3,708,399        24,312        (138,750 ) 
  (26,120 )        (572,984 )      (105,044 )      (2,944 ) 
  —          (937 )      (2,196 )      —   
  19,972          10,910,521        2,646,631        (520,462 ) 

 

(107

) 

       (250 )      (331 )      769   
  (1,529 )        (83,800 )      (40,806 )      —   

 

 

      

 

 

    

 

 

    

 

 

  
 
  1,745,988          13,960,949        2,522,566        (661,387 ) 

 

 

      

 

 

    

 

 

    

 

 

  
$ 2,026,603        $ 15,220,672      $ 2,576,152      $ (414,518 ) 

 

 

      

 

 

    

 

 

    

 

 

  
                                 

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   47

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

   RS International  
 
     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  
    

 

  
Operations    

Net investment income

   $ 586,878      $ 7,016,071   

Net realized gain/(loss) from investments, foreign currency transactions, foreign capital gains tax and contribution by adviser

     3,108,587        124,398,366   

Net change in unrealized appreciation/depreciation on investments, foreign capital gains tax and translation of assets and liabilities in foreign currencies

     (2,736,732 )      (79,798,432 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

     958,733        51,616,005   
   

 

 

    

 

 

  
Distributions to Shareholders    

Net investment income

    

Class A

     —        (1,606,717 ) 

Class C

     —        (119,589 ) 

Class K

     —        (217,071 ) 

Class Y

     —        (4,597,377 ) 

Net realized gain on investments

    

Class A

     —        (10,914,490 ) 

Class C

     —        (935,827 ) 

Class K

     —        (1,567,154 ) 

Class Y

     —        (39,048,198 ) 
   

 

 

    

 

 

  

Total Distributions

     —        (59,006,423 ) 
   

 

 

    

 

 

  
Capital Share Transactions    

Proceeds from sales of shares

     2,428,971        34,593,375   

Reinvestment of distributions

     —        50,057,099   

Cost of shares redeemed

     (7,144,041 )      (940,028,503 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Capital Share Transactions

     (4,715,070 )      (855,378,029 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets

     (3,756,337 )      (862,768,447 ) 
   

 

 

    

 

 

  
 
Net Assets    

Beginning of period

     45,584,060        908,352,507   
   

 

 

    

 

 

  

End of period

   $ 41,827,723      $ 45,584,060   
   

 

 

    

 

 

  

Distributions in Excess of Net Investment Income Included in Net Assets

   $ —      $ (25,733 ) 
   

 

 

    

 

 

  

Accumulated Undistributed Net Investment Income Included in Net Assets

   $ 561,145      $ —   
   

 

 

    

 

 

  
Other Information:    

Shares

    

Sold

     190,676        1,935,725   

Reinvested

     —        3,853,076   

Redeemed

     (549,386 )      (52,638,706 ) 
   

 

 

    

 

 

  

Net Increase/(Decrease)

     (358,710 )      (46,849,905 ) 
   

 

 

    

 

 

  
                 

 

1 

Commenced operations on February 1, 2014.

 

48   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

RS Global     RS Emerging Markets     RS Emerging
Markets Small Cap		  
 
For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		     For the
Period Ended
6/30/141		  

 

    

 

    

 

  
         
$ 280,615      $ 145,073      $ 1,259,723      $ 2,688,726      $ 53,586   
 
 
 		     
    
1,727,652		  
 
  		     5,646,541        3,134,478        191,316,852        (82,928 ) 
 
 
 		     
    
18,336		  
 
  		     2,471,755        10,826,471        (239,672,159 )      2,605,494   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
  2,026,603        8,263,369        15,220,672        (45,666,581 )      2,576,152   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
         
  —        (124,648 )      —        (114,451 )      —   
  —        (24,087 )      —        —        —   
  —        (34,502 )      —        —        —   
  —        (172,024 )      —        (943,945 )      —   
         
  —        (1,341,893 )      —        (44,119,341 )      —   
  —        (643,598 )      —        (7,311,381 )      —   
  —        (571,730 )      —        (4,981,615 )      —   
  —        (1,420,303 )      —        (33,761,473 )      —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  —        (4,332,785 )      —        (91,232,206 )      —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
  1,018,741        4,124,334        49,055,096        171,411,078        26,953,264   
  —        4,319,856        —        85,900,078        —   
  (433,283 )      (4,728,988 )      (109,278,982 )      (1,041,750,739 )      (432,110 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
  585,458        3,715,202        (60,223,886 )      (784,439,583 )      26,521,154   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  2,612,061        7,645,786        (45,003,214 )      (921,338,370 )      29,097,306   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
         
  37,210,554        29,564,768        477,470,314        1,398,808,684        —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
$ 39,822,615      $ 37,210,554      $ 432,467,100      $ 477,470,314      $ 29,097,306   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
$ —      $ (35,602 )    $ —      $ (232,438 )    $ —   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
$ 245,013      $ —      $ 1,027,285      $ —      $ 53,586   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
         
         
  87,386        362,999        2,635,036        8,402,244        2,684,572   
  —        381,669        —        4,535,316        —   
  (37,351 )      (430,175 )      (5,871,858 )      (46,810,905 )      (41,500 ) 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  50,035        314,493        (3,236,822 )      (33,873,345 )      2,643,072   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                     

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   49

Table of Contents

FINANCIAL INFORMATION

 

Statements of Changes in Net Assets

Six-Months-Ended Numbers are unaudited

   RS China  
   
     For the
Six Months
Ended
6/30/14		     For the
Year Ended
12/31/13		  
    

 

  
Operations      

Net investment income

   $ 246,869      $ 278,569   

Net realized loss from investments and foreign currency transactions

     (141,694 )      (633,501 ) 

Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities in foreign currencies

     (519,693 )      3,949,462   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Resulting from Operations

     (414,518 )      3,594,530   
   

 

 

    

 

 

  
Distributions to Shareholders      

Net investment income

      

Class A

     —        (143,570 ) 

Class C

     —        (25,191 ) 

Class K

     —        (38,911 ) 

Class Y

     —        (148,945 ) 
   

 

 

    

 

 

  

Total Distributions

     —        (356,617 ) 
   

 

 

    

 

 

  
Capital Share Transactions      

Proceeds from sales of shares

     1,352,170        6,361,949   

Reinvestment of distributions

     —        356,561   

Cost of shares redeemed

     (1,264,050 )      (5,020,521 ) 
   

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Capital Share Transactions

     88,120        1,697,989   
   

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets

     (326,398 )      4,935,902   
   

 

 

    

 

 

  
   
Net Assets      

Beginning of period

     28,701,332        23,765,430   
   

 

 

    

 

 

  

End of period

   $ 28,374,934      $ 28,701,332   
   

 

 

    

 

 

  

Distributions in Excess of Net Investment Income Included in Net Assets

   $ —      $ (5,907 ) 
   

 

 

    

 

 

  

Accumulated Undistributed Net Investment Income Included in Net Assets

   $ 240,962      $ —   
   

 

 

    

 

 

  
Other Information:      

Shares

      

Sold

     138,172        620,346   

Reinvested

     —        34,967   

Redeemed

     (132,148 )      (497,098 ) 
   

 

 

    

 

 

  

Net Increase

     6,024        158,215   
   

 

 

    

 

 

  
                 

 

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This Page Intentionally Left Blank

 

 

 

 

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Table of Contents

FINANCIAL INFORMATION

 

The Financial Highlights table is intended to help you understand each Fund’s financial performance for the past six reporting periods (or, if shorter, the period since inception of each Fund’s share classes). Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in each Fund (assuming reinvestment of all distributions).

 

Financial Highlights

Six-Months-Ended Numbers are unaudited

         
    

Net
Asset

Value,
Beginning

of Period

     Net
Investment
Income/
(Loss)		    

Net Realized

and

Unrealized
Gain/(Loss)

     Total
Operations		    

Distributions
From Net

Investment
Income

     Distributions
From Net
Realized
Capital Gains		     Total
Distributions		  
RS International Fund     

Class A

              

Six Months Ended 6/30/141

   $ 13.24      $ 0.19 2    $ 0.13      $ 0.32      $ —      $ —      $ —   

Year Ended 12/31/13

     18.08        0.23 2      1.91        2.14        (0.87 )      (6.11 )      (6.98 ) 

Year Ended 12/31/12

     15.44        0.12 2      2.60        2.72        (0.08 )      —        (0.08 ) 

Year Ended 12/31/11

     17.79        0.14 2      (2.61 )      (2.47 )      — 3      —        — 3 

Year Ended 12/31/10

     15.73        0.07 2      2.32        2.39        (0.37 )      —        (0.37 ) 

Year Ended 12/31/09

     11.59        0.09 2      3.85        3.94        —        —        —   

Class C

              

Six Months Ended 6/30/141

   $ 10.62      $ 0.09 2    $ 0.11      $ 0.20      $ —      $ —      $ —   

Year Ended 12/31/13

     15.85        0.04 2      1.59        1.63        (0.75 )      (6.11 )      (6.86 ) 

Year Ended 12/31/12

     13.61        (0.02 )2      2.29        2.27        (0.03 )      —        (0.03 ) 

Year Ended 12/31/11

     15.79        0.04 2      (2.34 )      (2.30 )      — 3      —        — 3 

Year Ended 12/31/10

     14.03        (0.05 )2      2.06        2.01        (0.29 )      —        (0.29 ) 

Year Ended 12/31/09

     10.41        — 2,3      3.42        3.42        —        —        —   

Class K

              

Six Months Ended 6/30/141

   $ 12.63      $ 0.15 2    $ 0.12      $ 0.27      $ —      $ —      $ —   

Year Ended 12/31/13

     17.58        0.14 2      1.83        1.97        (0.81 )      (6.11 )      (6.92 ) 

Year Ended 12/31/12

     15.03        0.06 2      2.52        2.58        (0.03 )      —        (0.03 ) 

Year Ended 12/31/11

     17.39        0.10 2      (2.58 )      (2.48 )      — 3      —        — 3 

Year Ended 12/31/10

     15.41        — 2,3      2.26        2.26        (0.32 )      —        (0.32 ) 

Year Ended 12/31/09

     11.37        0.06 2      3.78        3.84        —        —        —   

Class Y

              

Six Months Ended 6/30/141

   $ 13.08      $ 0.20 2    $ 0.13      $ 0.33      $ —      $ —      $ —   

Year Ended 12/31/13

     18.04        0.37 2      1.86        2.23        (1.08 )      (6.11 )      (7.19 ) 

Year Ended 12/31/12

     15.42        0.16 2      2.61        2.77        (0.15 )      —        (0.15 ) 

Year Ended 12/31/11

     17.76        0.06 2      (2.47 )      (2.41 )      (0.05 )      —        (0.05 ) 

Year Ended 12/31/10

     15.84        (0.04 )2      2.36        2.32        (0.44 )      —        (0.44 ) 

Period From 3/10/097 to 12/31/091

     9.20        (0.26 )2      6.70        6.44        —        —        —   

See notes to Financial Highlights on pages 60–61.

 

52   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

 

                                                            

Increase

From
Regulatory
Settlements

    

Net Asset
Value, End

of Period

     Total
Return4		     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets5		    

Gross

Ratio of
Expenses
to Average

Net Assets

    

Net Ratio

of Net
Investment
Income/

(Loss) to
Average Net
Assets5

    

Gross

Ratio of Net
Investment
Income/

(Loss) to
Average Net
Assets

    

Portfolio

Turnover

Rate

  
                 
                 
$ —      $ 13.56        2.42%      $ 29,681        1.40%        1.75%        2.85%        2.50%        116%   
  —        13.24        15.55%        31,483        1.40%        1.61%        1.46%        1.25%        41% 9 
  —        18.08        17.65%        34,005        1.34%        1.34%        0.73%        0.73%        21%   
  0.12        15.44        (13.19)% 6      29,807        1.40%        1.42%        0.82%        0.80%        15%   
  0.04        17.79        15.50% 6      32,556        1.54%        1.60%        0.45%        0.39%        23%   
  0.20        15.73        35.72% 6      28,303        1.73%        1.75%        0.71%        0.69%        99%   
                 
$ —      $ 10.82        1.88%      $ 2,457        2.51%        2.66%        1.79%        1.64%        116%   
  —        10.62        14.24%        2,390        2.55%        2.55%        0.29%        0.29%        41% 9 
  —        15.85        16.69%        2,370        2.20%        2.20%        (0.12)%        (0.12)%        21%   
  0.12        13.61        (13.78)% 6      1,600        2.14%        2.14%        0.26%        0.26%        15%   
  0.04        15.79        14.61% 6      10,124        2.30%        2.30%        (0.32)%        (0.32)%        23%   
  0.20        14.03        34.77% 6      8,040        2.43%        2.43%        (0.02)%        (0.02)%        99%   
                 
$ —      $ 12.90        2.14%      $ 4,206        1.96%        2.14%        2.34%        2.16%        116%   
  —        12.63        14.93%        4,479        1.96%        1.99%        0.91%        0.88%        41% 9 
  —        17.58        17.18%        4,247        1.74%        1.74%        0.38%        0.38%        21%   
  0.12        15.03        (13.55)% 6      4,132        1.78%        1.78%        0.59%        0.59%        15%   
  0.04        17.39        14.95% 6      17,234        1.95%        1.95%        0.03%        0.03%        23%   
  0.20        15.41        35.53% 6      14,790        1.96%        2.12%        0.45%        0.29%        99%   
                 
$ —      $ 13.41        2.52%      $ 5,484        1.15%        1.79%        3.02%        2.38%        116%   
  —        13.08        16.29%        7,232        1.01%        1.01%        1.96%        1.96%        41% 9 
  —        18.04        18.00%        867,731        1.02%        1.02%        0.94%        0.94%        21%   
  0.12        15.42        (12.90)% 6      454,722        1.04%        1.04%        0.38%        0.38%        15%   
  0.04        17.76        14.93% 6      22,179        1.16%        1.16%        (0.22)%        (0.22)%        23%   

 

0.20

  

     15.84        72.17% 6      76        3.69% 8      3.69% 8      (2.21)% 8      (2.21)% 8      99%   

See notes to Financial Highlights on pages 60–61.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   53

Table of Contents

FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                
     Net Asset
Value,
Beginning
of Period		    

Net

Investment
Income/(Loss)

         
    
    
Net  Realized
and
Unrealized
Gain/(Loss)		    

Total

Operations

     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		  
RS Global Fund            

Class A

            

Six Months Ended 6/30/141

   $ 11.65      $ 0.09 2    $ 0.54      $ 0.63      $ —      $ —   

Year Ended 12/31/13

     10.26        0.06 2      2.87        2.93        (0.13 )      (1.41 ) 

Year Ended 12/31/12

     8.79        0.12 2      1.44        1.56        (0.09 )      —   

Period From 5/16/117
to 12/31/111

     10.00        0.02 2      (1.23 )      (1.21 )      —        —   
 

Class C

            

Six Months Ended 6/30/141

   $ 11.54      $ 0.05 2    $ 0.53      $ 0.58      $ —      $ —   

Year Ended 12/31/13

     10.19        (0.03 )2      2.84        2.81        (0.05 )      (1.41 ) 

Year Ended 12/31/12

     8.74        0.06 2      1.44        1.50        (0.05 )      —   

Period From 5/16/117
to 12/31/111

     10.00        (0.03 )2      (1.23 )      (1.26 )      —        —   
 

Class K

            

Six Months Ended 6/30/141

   $ 11.59      $ 0.07 2    $ 0.54      $ 0.61      $ —      $ —   

Year Ended 12/31/13

     10.22        0.01 2      2.86        2.87        (0.09 )      (1.41 ) 

Year Ended 12/31/12

     8.76        0.10 2      1.45        1.55        (0.09 )      —   

Period From 5/16/117
to 12/31/111

     10.00        (0.01 )2      (1.23 )      (1.24 )      —        —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 11.67      $ 0.11 2    $ 0.54      $ 0.65      $ —      $ —   

Year Ended 12/31/13

     10.27        0.10 2      2.88        2.98        (0.17 )      (1.41 ) 

Year Ended 12/31/12

     8.81        0.15 2      1.46        1.61        (0.15 )      —   

Period From 5/16/117
to 12/31/111

     10.00        0.03 2      (1.22 )      (1.19 )      —        —   

See notes to Financial Highlights on pages 60–61.

 

54   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL INFORMATION

 

                                                            
Total
Distributions		     Net Asset
Value, End
of Period		     Total Return4     Net Assets,
End of Period
(000s)		    

Net Ratio of
Expenses to

Average Net
Assets5

     Gross
Ratio of
Expenses
to Average
Net Assets		    

Net Ratio
of Net

Investment

Income/

(Loss) to

Average Net

Assets5

    

Gross

Ratio of Net
Investment

Income/

(Loss) to

Average Net

Assets

    

Portfolio

Turnover

Rate

  
                 
                 
$ —      $ 12.28        5.41%      $ 13,389        1.40%        1.58%        1.57%        1.39%        83%   
  (1.54 )      11.65        29.02%        12,539        1.40%        1.67%        0.50%        0.23%        137% 9 
  (0.09 )      10.26        17.81%        9,557        1.40%        1.95%        1.22%        0.67%        28%   
 
 		     
—		  
  		     8.79        (12.10)%        11,211        1.40%        1.78%        0.27%        (0.11)%        9%   
 
                 
$ —      $ 12.12        5.03%      $ 6,889        2.16%        2.36%        0.83%        0.63%        83%   
  (1.46 )      11.54        28.04%        5,997        2.15%        2.42%        (0.26)%        (0.53)%        137% 9 
  (0.05 )      10.19        17.18%        4,171        1.94%        2.49%        0.60%        0.05%        28%   
 
 		     
—		  
  		     8.74        (12.60)%        3,508        2.31%        2.69%        (0.60)%        (0.98)%        9%   
 
                 
$ —      $ 12.20        5.26%      $ 5,589        1.80%        2.00%        1.17%        0.97%        83%   
  (1.50 )      11.59        28.47%        5,311        1.79%        2.06%        0.10%        (0.17)%        137% 9 
  (0.09 )      10.22        17.70%        4,126        1.52%        2.07%        1.02%        0.47%        28%   
 
 		     
—		  
  		     8.76        (12.40)%        3,505        1.90%        2.28%        (0.19)%        (0.57)%        9%   
 
                 
$ —      $ 12.32        5.57%      $ 13,956        1.08%        1.28%        1.88%        1.68%        83%   
  (1.58 )      11.67        29.50%        13,364        1.05%        1.32%        0.85%        0.58%        137% 9 
  (0.15 )      10.27        18.30%        11,711        0.89%        1.44%        1.59%        1.04%        28%   
 
 		     
—		  
  		     8.81        (11.90)%        7,514        1.10%        1.48%        0.61%        0.23%        9%   

See notes to Financial Highlights on pages 60–61.

 

The accompanying notes are an integral part of these financial statements.   www.rsinvestments.com   55

Table of Contents

FINANCIAL HIGHLIGHTS

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

                       
    

    
    
Net
Asset

Value,
Beginning

of Period

    

Net

Investment
Income/
(Loss)

    

Net Realized

and
Unrealized
Gain/(Loss)

     Total
Operations		     Distributions
From Net
Investment
Income		     Distributions
From Net
Realized
Capital Gains		     Total
Distributions		  
RS Emerging Markets Fund              

Class A

              

Six Months Ended 6/30/141

   $ 19.34      $ 0.05 2    $ 0.70      $ 0.75      $ —      $ —      $ —   

Year Ended 12/31/13

     23.88        0.09 2      (1.37 )      (1.28 )      (0.01 )      (3.39 )      (3.40 ) 

Year Ended 12/31/12

     21.13        0.07 2      2.73        2.80        (0.05 )      —        (0.05 ) 

Year Ended 12/31/11

     26.74        0.07 2      (5.68 )      (5.61 )      —        —        —   

Year Ended 12/31/10

     23.12        (0.01 )2      4.18        4.17        (0.55 )      —        (0.55 ) 

Year Ended 12/31/09

     12.14        (0.02 )2      11.29        11.27        (0.29 )      —        (0.29 ) 
 

Class C

              

Six Months Ended 6/30/141

   $ 15.43      $ (0.02 )2    $ 0.56      $ 0.54      $ —      $ —      $ —   

Year Ended 12/31/13

     19.90        (0.03 )2      (1.16 )      (1.19 )      —        (3.39 )      (3.39 ) 

Year Ended 12/31/12

     17.72        (0.08 )2      2.26        2.18        —        —        —   

Year Ended 12/31/11

     22.59        (0.10 )2      (4.77 )      (4.87 )      —        —        —   

Year Ended 12/31/10

     19.63        (0.15 )2      3.52        3.37        (0.41 )      —        (0.41 ) 

Year Ended 12/31/09

     10.35        (0.13 )2      9.60        9.47        (0.19 )      —        (0.19 ) 
 

Class K

              

Six Months Ended 6/30/141

   $ 18.44      $ 0.02 2    $ 0.67      $ 0.69      $ —      $ —      $ —   

Year Ended 12/31/13

     22.97        0.07 2      (1.34 )      (1.27 )      —        (3.39 )      (3.39 ) 

Year Ended 12/31/12

     20.36        0.01 2      2.60        2.61        —        —        —   

Year Ended 12/31/11

     25.86        (0.02 )2      (5.48 )      (5.50 )      —        —        —   

Year Ended 12/31/10

     22.41        (0.09 )2      4.04        3.95        (0.50 )      —        (0.50 ) 

Year Ended 12/31/09

     11.71        (0.07 )2      10.86        10.79        (0.09 )      —        (0.09 ) 
 

Class Y

              

Six Months Ended 6/30/141

   $ 19.38      $ 0.08 2    $ 0.71      $ 0.79      $ —      $ —      $ —   

Year Ended 12/31/13

     23.92        0.10 2      (1.30 )      (1.20 )      (0.09 )      (3.39 )      (3.48 ) 

Year Ended 12/31/12

     21.18        0.15 2      2.70        2.85        (0.11 )      —        (0.11 ) 

Year Ended 12/31/11

     26.75        0.12 2      (5.69 )      (5.57 )      —        —        —   

Year Ended 12/31/10

     23.13        0.11 2      4.16        4.27        (0.65 )      —        (0.65 ) 

Period From 3/10/097 to 12/31/091

     10.88        — 2,3      12.60        12.60        (0.35 )      —        (0.35 ) 

See notes to Financial Highlights on pages 60–61.

 

56   www.rsinvestments.com   The accompanying notes are an integral part of these financial statements.

Table of Contents

FINANCIAL HIGHLIGHTS

 

                                                            
Increase
From
Contribution
by Adviser		    

Net Asset
Value, End

of Period

     Total Return4     Net Assets,
End of Period
(000s)		     Net Ratio of
Expenses to
Average Net
Assets5		    

Gross

Ratio of
Expenses

to Average

Net Assets

    

Net Ratio

of Net
Investment
Income/

(Loss) to
Average Net
Assets5

    

Gross

Ratio of Net
Investment
Income/

(Loss) to
Average Net
Assets

    

Portfolio
Turnover

Rate

  
                 
                 

$

—

  

   $ 20.09        3.88%      $ 191,866        1.65%        1.74%        0.49%        0.40%        72%   
  0.14        19.34        (4.74)% 10      225,463        1.65%        1.65%        0.42%        0.42%        224% 11 
  —        23.88        13.26%        533,677        1.53%        1.53%        0.30%        0.30%        49%   
  —        21.13        (20.98)%        919,103        1.49%        1.49%        0.27%        0.27%        44%   
  —        26.74        18.15%        1,393,971        1.56%        1.56%        (0.03)%        (0.03)%        41%   
  —        23.12        92.96%        1,174,248        1.61%        1.61%        (0.10)%        (0.10)%        61%   
 
                 

$

—

  

   $ 15.97        3.50%      $ 27,551        2.45%        2.52%        (0.29)%        (0.36)%        72%   
  0.11        15.43        (5.46)% 10      31,349        2.43%        2.43%        (0.21)%        (0.21)%        224% 11 
  —        19.90        12.30%        52,280        2.32%        2.32%        (0.42)%        (0.42)%        49%   
  —        17.72        (21.56)%        62,237        2.26%        2.26%        (0.50)%        (0.50)%        44%   
  —        22.59        17.26%        104,109        2.31%        2.31%        (0.75)%        (0.75)%        41%   
  —        19.63        91.61%        80,180        2.34%        2.34%        (0.86)%        (0.86)%        61%   
 
                 

$

—

  

   $ 19.13        3.74%      $ 27,290        1.96%        1.97%        0.23%        0.22%        72%   
  0.13        18.44        (4.95)% 10      28,038        1.90%        1.90%        0.37%        0.37%        224% 11 
  —        22.97        12.82%        36,130        1.88%        1.88%        0.03%        0.03%        49%   
  —        20.36        (21.27)%        36,423        1.87%        1.87%        (0.09)%        (0.09)%        44%   
  —        25.86        17.71%        46,882        1.92%        1.92%        (0.38)%        (0.38)%        41%   
  —        22.41        92.21%        24,569        1.95%        1.95%        (0.40)%        (0.40)%        61%   
 
                 

$

—

  

   $ 20.17        4.08%      $ 185,740        1.34%        1.34%        0.85%        0.85%        72%   
  0.14        19.38        (4.32)% 10      192,620        1.31%        1.31%        0.46%        0.46%        224% 11 
  —        23.92        13.47%        776,722        1.31%        1.31%        0.64%        0.64%        49%   
  —        21.18        (20.82)%        554,099        1.32%        1.32%        0.49%        0.49%        44%   
  —        26.75        18.57%        633,433        1.19%        1.19%        0.47%        0.47%        41%   

 

—

  

     23.13        115.89%        53,546        1.22%        1.22%        0.02%        0.02%        61%   

See notes to Financial Highlights on pages 60–61.

 

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FINANCIAL INFORMATION

 

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
    

Net Asset

Value,

Beginning

of Period

    

Net

Investment
Income/
(Loss)

    

Net Realized

and

Unrealized

Gain

    

Total

Operations

    

Distributions
From Net

Investment
Income

    

Distributions
From Net
Realized

Capital Gains

  
RS Emerging Markets Small Cap Fund            

Class A

            

Period From 1/31/147
to 6/30/141

   $ 10.00      $ 0.01 2    $ 0.99      $ 1.00      $     —      $     —   
 

Class C

            

Period From 1/31/147
to 6/30/141

   $ 10.00      $ (0.02 )2    $ 0.98      $ 0.96      $ —      $ —   
 

Class Y

            

Period From 1/31/147
to 6/30/141

   $ 10.00      $ 0.03 2    $ 0.99      $ 1.02      $ —      $ —   

See notes to Financial Highlights on pages 60–61.

 

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`                                                          
Total
Distributions		    

Net Asset

Value, End

of Period

     Total Return4    

Net Assets,

End of Period

(000s)

    

Net Ratio of

Expenses to

Average Net
Assets5

    

Gross

Ratio of

Expenses
to Average
Net Assets

    

Net Ratio

of Net

Investment

Income/

(Loss) to

Average Net

Assets5

    

Gross

Ratio of Net
Investment

Income/
(Loss) to

Average Net

Assets

    

Portfolio

Turnover

Rate

  
                 
                 
 
$     —      $ 11.00        10.00%      $ 6,428        1.95%        2.30%        0.27%        (0.08)%        69%   
 
                 
 
$ —      $ 10.96        9.60%      $ 2,741        2.72%        3.07%        (0.54)%        (0.89)%        69%   
 
                 

$

—

  

   $ 11.02        10.20%      $ 19,928        1.50%        1.85%        0.70%        0.35%        69%   

See notes to Financial Highlights on pages 60–61.

 

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FINANCIAL INFORMATION

 

Financial Highlights (continued)

Six-Months-Ended Numbers are unaudited

  
    

Net Asset

Value,

Beginning

of Period

    

Net

Investment
Income/(Loss)

    

    
    
    
Net Realized

and

Unrealized

Gain/(Loss)

    

Total

Operations

    

Distributions
From Net

Investment
Income

    

Distributions
From Net
Realized

Capital Gains

  
RS China Fund            

Class A

            

Six Months Ended 6/30/141

   $ 10.31      $ 0.09 2    $ (0.22 )    $ (0.13 )    $ —      $     —   

Year Ended 12/31/13

     9.06        0.11 2      1.28        1.39        (0.14 )      —   

Year Ended 12/31/12

     7.51        0.07 2      1.55        1.62        (0.07 )      —   

Period From 5/16/117
to 12/31/111

     10.00        0.06 2      (2.49 )      (2.43 )      (0.06 )      —   
 

Class C

            

Six Months Ended 6/30/141

   $ 10.30      $ 0.06 2    $ (0.23 )    $ (0.17 )    $ —      $ —   

Year Ended 12/31/13

     9.05        0.04 2      1.27        1.31        (0.06 )      —   

Year Ended 12/31/12

     7.50        0.02 2      1.56        1.58        (0.03 )      —   

Period From 5/16/117
to 12/31/111

     10.00        — 2,3      (2.50 )      (2.50 )      —        —   
 

Class K

            

Six Months Ended 6/30/141

   $ 10.32      $ 0.07 2    $ (0.23 )    $ (0.16 )    $ —      $ —   

Year Ended 12/31/13

     9.06        0.07 2      1.29        1.36        (0.10 )      —   

Year Ended 12/31/12

     7.51        0.04 2      1.56        1.60        (0.05 )      —   

Period From 5/16/117
to 12/31/111

     10.00        0.03 2      (2.50 )      (2.47 )      (0.02 )      —   
 

Class Y

            

Six Months Ended 6/30/141

   $ 10.32      $ 0.11 2    $ (0.23 )    $ (0.12 )    $ —      $ —   

Year Ended 12/31/13

     9.06        0.15 2      1.28        1.43        (0.17 )      —   

Year Ended 12/31/12

     7.51        0.09 2      1.56        1.65        (0.10 )      —   

Period From 5/16/117
to 12/31/111

     10.00        0.08 2      (2.50 )      (2.42 )      (0.07 )      —   

Distributions reflect actual per-share amounts distributed for the period.

 

1 

Ratios for periods less than one year have been annualized, except for total return and portfolio turnover rate.

 

2 

Calculated based on the average shares outstanding during the period.

 

3 

Rounds to $0.00 per share.

 

4 

Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total return.

 

5 

Net Ratio of Expenses to Average Net Assets and Net Ratio of Net Investment Income/(Loss) to Average Net Assets include the effect of fee waivers and expense limitations and exclude the effect of custody credits, if applicable.

 

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Total
Distributions		    

Net Asset

Value, End

of Period

     Total Return4    

Net Assets,

End of Period

(000s)

    

Net Ratio of

Expenses to

Average Net
Assets5

    

Gross

Ratio of

Expenses

to Average

Net Assets

    

Net Ratio

of Net

Investment

Income/

(Loss) to

Average Net

Assets5

    

Gross

Ratio of Net
Investment

Income/

(Loss) to

Average Net

Assets

    

Portfolio

Turnover

Rate

  
                 
                 
$ —      $ 10.18        (1.26)%      $ 10,575        1.75%        2.11%        1.76%        1.40%        76%   
  (0.14 )      10.31        15.33%        10,919        1.75%        2.05%        1.12%        0.82%        200% 11 
  (0.07 )      9.06        21.65%        8,500        1.75%        2.06%        0.81%        0.50%        23%   
 
 		     
(0.06		  
) 		     7.51        (24.32)%        6,784        1.75%        2.27%        1.20%        0.68%        9%   
 
                 
$ —      $ 10.13        (1.65)%      $ 4,110        2.50%        2.79%        1.15%        0.86%        76%   
  (0.06 )      10.30        14.51%        4,192        2.52%        2.82%        0.41%        0.11%        200% 11 
  (0.03 )      9.05        21.12%        3,661        2.26%        2.57%        0.29%        (0.02)%        23%   
 
 		     
—		  
  		     7.50        (25.00)%        3,017        2.98%        3.50%        (0.01)%        (0.53)%        9%   
 
                 
$ —      $ 10.16        (1.55)%      $ 4,140        2.14%        2.42%        1.51%        1.23%        76%   
  (0.10 )      10.32        14.98%        4,204        2.16%        2.46%        0.78%        0.48%        200% 11 
  (0.05 )      9.06        21.33%        3,657        2.04%        2.35%        0.51%        0.20%        23%   
 
 		     
(0.02		  
) 		     7.51        (24.66)%        3,014        2.35%        2.87%        0.63%        0.11%        9%   
 
                 
$ —      $ 10.20        (1.16)%      $ 9,550        1.42%        1.70%        2.29%        2.01%        76%   
  (0.17 )      10.32        15.77%        9,386        1.43%        1.73%        1.54%        1.24%        200% 11 
  (0.10 )      9.06        22.03%        7,947        1.43%        1.74%        1.12%        0.81%        23%   

 

(0.07

) 

     7.51        (24.13)%        6,485        1.41%        1.93%        1.56%        1.04%        9%   
6 

Without the effect of the income from regulatory settlements, the total returns would have been for 2011 (13.49)%, (14.07)%, (13.86)%, and (13.16)%; for 2010 15.17%, 14.32%, 14.68%, and 14.93%; for 2009, 33.91%, 32.95%, 33.69%, and 69.89% for Class A, Class C, Class K and Class Y, respectively. The total return impact from regulatory settlements is calculated based on average shares outstanding for the period.

 

7 

Inception date.

 

8 

Ratios have been annualized using the period from May 23, 2009, through December 31, 2009, to reflect the initial date when significant capital shares were sold.

 

9 

The portfolio turnover rate was significantly higher than in prior periods due to trading in the Fund by the Fund’s new portfolio management team, effective as of July 1, 2013.

 

10 

Without the effect of the contribution by adviser, the total returns would have been (5.50)%, (6.22)%, (5.64)%, and (5.05)% for Class A, Class C, Class K and Class Y, respectively. The total return impact from contribution by adviser is calculated based on average shares outstanding for the period.

 

11 

The portfolio turnover rate was significantly higher than in prior periods due to trading in the Fund by the Fund’s new portfolio management team, effective as of March 1, 2013.

 

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Table of Contents

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Notes to Financial Statements

June 30, 2014 (unaudited)

RS Investment Trust (the “Trust”), a Massachusetts business trust organized on May 11, 1987, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. These financial statements relate to five series offered by the Trust: RS International Fund, RS Global Fund, RS Emerging Markets Fund, RS Emerging Markets Small Cap Fund and RS China Fund (each a “Fund,” collectively the “Funds”). RS Emerging Markets Small Cap Fund commenced operations on February 1, 2014. All of the Funds are diversified funds. The financial statements for the other remaining series of the Trust are presented in separate reports.

RS International Fund, RS Global Fund, RS Emerging Markets Fund, and RS China Fund offer Class A, C, K and Y shares. RS Emerging Markets Small Cap Fund offers Class A, C and Y shares. The various classes differ principally in their respective sales charges, transfer agent expenses, and other expenses. In general, all classes of shares have identical rights to earnings, assets and voting privileges, except for certain differences, including class-specific expenses and voting rights with respect to matters affecting fewer than all classes or in which the interests of one class differ from the interests of any other class.

The Trust has an unlimited number of authorized shares of beneficial interest with no par value. Shares are bought and sold at closing net asset value (“NAV”) less any applicable sales charge.

Note 1 Significant Accounting Policies

The following policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

a. Investment Valuations Marketable securities are valued at the last reported sale price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the mean between the closing bid and ask prices. Securities traded on the NASDAQ Stock Market, LLC (“NASDAQ”) are generally valued at the NASDAQ official closing price, which may not be the last sale price. If the NASDAQ official closing price is not available for a security, that security is generally valued using the last reported sale price, or, if no sales are reported, at the mean between the closing bid and ask prices. Short-term investments that will mature in 60 days or less are valued at amortized cost, which approximates market value. Repurchase agreements are carried at cost, which approximates market value (see Note 5d). Foreign securities are valued in the currencies of the markets in which they trade and then converted to U.S. dollars using the prevailing exchange rates and forward foreign currency contracts are valued at the mean between the bid and ask prices at the close of the New York Stock Exchange (“NYSE”).

Securities for which market quotations are not readily available or for which market quotations may be considered unreliable are valued at their fair values as determined in accordance with guidelines and procedures adopted by the Trust’s Board of Trustees.

 

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Securities whose values have been materially affected by events occurring before the Funds’ valuation time but after the close of the securities’ principal exchange or market may be fair valued in accordance with guidelines and procedures adopted by the Board of Trustees. In addition, the values of a Fund’s investments in foreign securities are generally determined by a pricing service using pricing models designed to estimate likely changes in the values of those securities.

In accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 820 (“ASC Topic 820”), fair value is defined as the price that the Funds would receive upon selling an investment in an “arm’s length” transaction to a willing buyer in the principal or most advantageous market for the investment. ASC Topic 820 established a hierarchy for classification of fair value measurements for disclosure purposes. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy of inputs is summarized in the three broad levels listed below.

 

Ÿ  

Level 1 — unadjusted quoted prices in active markets for identical investments

 

Ÿ  

Level 2 — inputs other than unadjusted quoted prices that are observable either directly or indirectly (including adjusted quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)

 

Ÿ  

Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A security’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Trust. The Trust considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, and provided by independent sources that are actively involved in the relevant market. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an investment’s assigned level within the hierarchy.

The FASB requires reporting entities to make disclosures about purchases, sales, issuances and settlements of Level 3 securities on a gross basis. For the six months ended June 30, 2014, RS International Fund held one security classified as Level 3.

The Funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 at the end of the reporting period. Transfers between Levels 1 and 2 related to certain exchange-traded foreign securities whose prices may have been affected by events occurring after the close of trading on the exchange and, as a result, whose values were determined by a pricing service using pricing models in accordance with methods approved by the Funds’ Board of Trustees.

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Transfers into and out of each level of the fair value hierarchy for the six months ended June 30, 2014, were as follows:

 

     Transfers
into
Level 1		     Transfers
(out) of
Level 1		     Transfers
into
Level 2		     Transfers
(out) of
Level 2		     Transfers
into
Level 3		     Transfers
(out) of
Level 3		  

RS International Fund

              

Common Stocks

   $ 153,445      $ (619,566 )    $ 619,566      $ (153,445 )    $     —      $     —   

RS Global Fund

              

Common Stocks

     184,816        (747,274 )      747,274        (184,816 )      —        —   

Preferred Stocks

     87,329        —        —        (87,329 )      —        —   

RS Emerging Markets Fund

              

Preferred Stocks

     14,172,773        —        —        (14,172,773 )      —        —   

In determining a security’s placement within the hierarchy, the Trust separates the Funds’ investment portfolios into two categories: investments and derivatives (e.g., futures).

Investments Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include certain U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, state, municipal and provincial obligations, and certain foreign equity securities, including securities whose prices may have been affected by events occurring after the close of trading on their principal exchange or market and, as a result, whose values are determined by a pricing service as described above, or securities whose values are otherwise determined using fair valuation methods approved by the Funds’ Board of Trustees.

Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently or not at all. Level 3 investments include, among others, private placement securities. When observable prices are not available for these securities, the Trust uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the Trust in estimating the value of Level 3 investments include, for example, the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations, and other transactions across the capital structure. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Trust in the absence of market information. Assumptions used by the Trust due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Derivatives Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. Certain

 

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derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within Level 2.

b. Taxes The Funds intend to continue complying with the requirements of the Internal Revenue Code to qualify as regulated investment companies and to distribute substantially all net investment income and realized net capital gains, if any, to shareholders. Therefore, the Funds do not expect to be subject to income tax, and no provision for such tax has been made.

From time to time, however, a Fund may choose to pay an excise tax if the cost of making the required distribution exceeds the amount of the excise tax.

As of June 30, 2014, the Trust has reviewed the tax positions for open periods, as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements. The Trust is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statement of Operations. For the six months ended June 30, 2014, the Funds did not incur any such interest or penalties. RS International Fund and RS Emerging Markets Fund are not subject to examination by U.S. federal tax authorities for tax years before 2010 and by state authorities for tax years before 2009. RS Global Fund, RS Emerging Markets Small Cap Fund and RS China Fund are subject to U.S. federal and state authority examination since inception.

c. Securities Transactions Securities transactions are accounted for on the date securities are purchased or sold (trade date). Realized gains or losses on securities transactions are determined on the basis of specific identification.

d. Foreign Currency Translation The accounting records of the Funds are maintained in U.S. dollars. Investment securities and all other assets and liabilities of the Funds denominated in a foreign currency are generally translated into U.S. dollars at the exchange rates quoted at the close of the NYSE on each business day. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rates in effect on the dates of the respective transactions. The Funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

e. Forward Foreign Currency Contracts The Funds may enter into forward foreign currency contracts. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward exchange rate. Risks may arise from the potential inability of a Fund’s counterparty to meet the terms of a contract and from unanticipated movements in the value of a currency relative to another currency. Fluctuations in the values of forward foreign currency contracts are recorded for book purposes as unrealized gains or losses from translation of other assets and liabilities denominated in foreign currencies by the Funds. When a forward contract is closed, a Fund will record a realized gain or loss equal to the increase or decrease in

 

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the value of such forward contract between the time it was opened and the time it was closed. Such amounts are recorded as net realized gains or losses on foreign currency related transactions.

f. Foreign Capital Gains Tax Gains realized by the Funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The Funds record a liability based on unrealized gains to provide for non-U.S. taxes likely to be payable upon the sale of such securities.

g. Investment Income Dividend income is generally recorded on the ex-dividend date. Interest income, which includes amortization/accretion of premium/discount, is accrued and recorded daily.

In calculating net asset value per share for each class, investment income, realized and unrealized gains and losses, and expenses other than class-specific expenses are allocated daily to each class of shares based upon the proportion of net assets attributable to each class at the beginning of the day.

h. Expenses Many expenses of the Trust can be directly attributed to a specific Fund. Expenses that cannot be directly attributed to a specific Fund are generally apportioned among all the series in the Trust, based on relative net assets.

i. Distributions to Shareholders Each Fund intends to declare and distribute substantially all net investment income, if any, at least once a year. Distributions of net realized capital gains, if any, are declared and paid at least once a year. Distributions to shareholders are recorded on the ex-dividend date.

j. Capital Accounts Due to the timing of dividend distributions and the differences in accounting for income and realized gains/(losses) for financial statement purposes versus federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains/(losses) were recorded by the Funds.

Note 2 Transactions with Affiliates

a. Advisory Fee and Expense Limitation Under the terms of the advisory agreement, which is reviewed and approved annually by the Board of Trustees, each Fund pays an investment advisory fee to RS Investment Management Co. LLC (“RS Investments”). Guardian Investor Services LLC (“GIS”), a subsidiary of The Guardian Life Insurance Company of America (“Guardian Life”), holds a majority interest in RS Investments. RS Investments receives an investment advisory fee based on the average daily net assets of the Funds, at the following annual rates:

 

Fund   

Investment Advisory

Fee Percentage

  

RS International Fund

      0.80%   

RS Global Fund

      0.80%   

RS Emerging Markets Fund

      1.00%   

RS Emerging Markets Small Cap Fund

      1.25%   

RS China Fund

      1.10%   

 

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Expense limitations have been imposed pursuant to a written agreement between RS Investments and the Trust in effect through April 30, 2015, to limit the following Funds’ total annual fund operating expenses (excluding expenses indirectly incurred by the Funds through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) to the following rates:

 

Fund   

Expense Limitation

  
      Class A      Class C      Class K      Class Y  

RS International Fund

      1.40%         2.65%         1.96%         1.15%   

RS Global Fund(1)

      1.40%         2.17%         1.81%         1.09%   

RS Emerging Markets Fund

      1.65%         2.45%         1.96%         1.32% (2) 

RS China Fund(3)

      1.75%         2.50%         2.14%         1.42%   
(1) 

The expense limitation in effect from January 1, 2014, through April 30, 2014, was 1.40% for Class A shares, and the fee waiver for each of the other classes of the Fund was equal to the level of fee waiver for Class A shares.

(2) 

The expense limitation was in effect beginning May 1, 2014.

(3) 

The expense limitation in effect from January 1, 2014, through April 30, 2014, was 1.75% for Class A shares, and the fee waiver for each of the other classes of the Fund was equal to the level of fee waiver for Class A shares.

Expense limitations have been imposed pursuant to a written agreement between RS Investments and the Trust in effect through April 30, 2015, to limit the following Fund’s total annual fund operating expenses (excluding expenses indirectly incurred by the Fund through investments in pooled investment vehicles, interest, taxes, investment-related expenses [e.g., brokerage commissions], and extraordinary expenses) for Class Y shares to the rates shown in the table below and to limit the total annual fund operating expenses of each of the other classes of the Fund so that each of those classes benefits from a level of fee waiver and/or expense reimbursement (as expressed in basis points) that is the same as the level of fee waiver and/or expense reimbursement for Class Y shares during the period.

 

Fund    Expense
Limitation		  

RS Emerging Markets Small Cap Fund, Class Y

      1.50%   

To satisfy the expense limitations, certain affiliates of RS Investments, including GIS, may waive expenses that would otherwise be charged to the Funds or may reimburse expenses incurred by the Funds.

RS Investments and GIS do not intend to recoup any reimbursed expenses or waived advisory fees from a prior year under expense limitations then in effect for a Fund.

b. Compensation of Trustees and Officers Trustees and officers of the Trust who are interested persons, as defined in the 1940 Act, of RS Investments receive no compensation from the Funds for acting as such. Trustees of the Trust who are not interested persons of RS Investments receive compensation and reimbursement of expenses from the Trust.

 

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c. Distribution Fees RS Funds Distributor LLC (“RSFD”), a wholly owned subsidiary of RS Investments, serves as the principal underwriter for shares of the Funds. The Funds have entered into an agreement with RSFD for distribution services with respect to their shares and have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, whose continuance is reviewed annually by the Trust’s Board of Trustees. Under the plan, RSFD is compensated for services in such capacity, including its expenses in connection with the promotion and distribution of shares of each Fund. Prior to June 1, 2014, GIS served as the principal underwriter for shares of the Funds. For the six months ended June 30, 2014, RSFD and GIS received distribution fees as follows:

 

Fund

           Annual Rate      Distribution Fees
Received by RSFD		     

Distribution Fees

Received by GIS

  

RS International Fund

   Class A        0.25%         $6,134         $31,385   
    Class C        1.00%         2,025         10,112   
    Class K        0.65%         2,240         11,884   
    Class Y        0.00%         —         —   

RS Global Fund

   Class A        0.25%         $2,731         $12,953   
    Class C        1.00%         5,582         25,600   
    Class K        0.65%         2,962         14,264   
    Class Y        0.00%         —         —   

RS Emerging Markets Fund

   Class A        0.25%         $39,516         $210,146   
  Class C        1.00%         22,667         116,688   
    Class K        0.65%         14,654         71,511   
    Class Y        0.00%         —         —   

RS Emerging Markets Small Cap Fund

   Class A        0.25%         $1,198         $4,442   
  Class C        1.00%         2,208         8,530   
    Class Y        0.00%         —         —   

RS China Fund

   Class A        0.25%         $2,090         $10,926   
    Class C        1.00%         3,321         16,358   
    Class K        0.65%         2,174         10,675   
    Class Y        0.00%         —         —   

RS Investments may perform certain services and incur certain expenses with respect to the promotion of the Funds’ shares and the servicing of shareholder accounts, which expenses are allocable to RSFD. RS Investments compensates RSFD for its services in connection with the promotion of Fund shares and reimburses RSFD for its expenses, including payments made by RSFD to third parties in respect of the promotion of Fund shares in excess of amounts received by RSFD under the distribution plan. In addition to payments under the distribution plan, the Funds reimburse RSFD for payments RSFD makes to financial intermediaries that provide certain administrative, recordkeeping, and account maintenance services. The amount of the reimbursement is calculated in a manner reviewed by the Board of Trustees periodically. Such amounts are included in the Statement of Operations under the caption “Transfer agent fees.”

Park Avenue Securities LLC (“PAS”), a wholly owned subsidiary of GIAC and an affiliate of GIS, distributes the Funds’ shares as a retail broker-dealer. For the six

 

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months ended June 30, 2014, PAS informed the Trust it received $885,200 directly or indirectly from RSFD and GIS as continuing compensation for its services relating to its distribution of shares of all series in the Trust.

For the six months ended June 30, 2014, aggregate front-end sales charges for the sale of Class A shares paid to RSFD and GIS were as follows:

 

Fund    Sales Charges
Received by RSFD		      Sales Charges
Received by GIS		  

RS International Fund

    $ 105       $ 2,054   

RS Global Fund

      58         261   

RS Emerging Markets Fund

      839         7,674   

RS Emerging Markets Small Cap Fund

      3         —   

RS China Fund

      2         129   

RSFD is entitled to retain any contingent deferred sales load (“CDSL”) imposed on certain share redemptions. Prior to June 1, 2014, GIS was entitled to retain any CDSL. For the six months ended June 30, 2014, RSFD and GIS received CDSL charges as follows:

 

Fund    CDSL Received
by RSFD		      CDSL Received
by GIS		  

RS International Fund

    $     —       $ 2   

RS Global Fund

      —         248   

RS Emerging Markets Fund

      —         1,815   

RS Emerging Markets Small Cap Fund

      —         —   

RS China Fund

      —         —   

Note 3 Federal Income Taxes

a. Distributions to Shareholders The tax character of distributions paid to shareholders during the year ended December 31, 2013, which is the most recently completed tax year, was as follows:

 

Fund    Ordinary Income      Long-Term
Capital Gains		  

RS International Fund

    $ 39,260,797       $ 19,745,626   

RS Global Fund

      1,216,050         3,116,735   

RS Emerging Markets Fund

      1,058,396         90,173,810   

RS China Fund

      356,617         —   

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences, and differing characterizations of distributions made by the Funds.

 

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Permanent book and tax basis differences will result in reclassifications to paid-in capital, undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions. Undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions may include temporary book and tax differences, which will reverse in a subsequent period.

As of December 31, 2013, the Funds made the following reclassifications of permanent book and tax basis differences:

 

Fund   

Paid-in

Capital

      Undistributed
Net Investment
Income/(Loss)		      Accumulated
Net Realized
Gain/(Loss)		  

RS International Fund

    $ 65,959,821       $ (336,984 )     $ (65,622,837 ) 

RS Global Fund

      (133 )       174,753         (174,620 ) 

RS Emerging Markets Fund

      13,702,235         15,068,632         (28,770,867 ) 

RS China Fund

      —         72,141         (72,141 ) 

The tax basis of distributable earnings as of December 31, 2013, was as follows:

 

Fund   

Undistributed

Ordinary Income

     

Undistributed

Long-Term
Capital Gains

  

RS International Fund

    $ 3,058,831       $ —   

RS Global Fund

      188,989         24,418   

RS China Fund

      8,222         —   

During any particular year, net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Funds if not distributed and, therefore, are normally distributed to shareholders annually.

During the year ended December 31, 2013, the Funds utilized capital loss carryovers as follows:

 

Fund

    Amount  

RS International Fund

    $ 1,519,411   

RS Global Fund

      972,488   

RS Emerging Markets Fund

      61,870,826   

See the chart below for capital loss carryovers available to the Funds at December 31, 2013.

 

Fund    No
Expiration*		      Total  

RS China Fund

    $ 2,233,187       $ 2,233,187   
* For tax years beginning 2011, revisions to capital loss carryforward rules allow for capital losses to be carried forward to one or more subsequent taxable years without expiration.

 

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In determining their taxable income, current tax law permits the Funds to elect to treat all or a portion of any net capital or currency loss realized after October 31 as occurring on the first day of the following fiscal year. For the year ended December 31, 2013, the Funds elected to defer net capital and currency losses as follows:

 

Fund    Deferred Net
Capital Losses		  

RS International Fund

    $ 24,271   

RS Emerging Markets Fund

      54,014   

RS China Fund

      30,472   

b. Tax Basis of Investments The cost of investments (excluding foreign currency related transactions) for federal income tax purposes at June 30, 2014, for each Fund is listed in the chart below. The net unrealized appreciation/(depreciation) on investments, which consists of gross unrealized appreciation and depreciation, is also disclosed in the chart below:

 

Fund   Cost of
Investments		     Net Unrealized
Appreciation
on Investments		     Gross Unrealized
Appreciation		     Gross Unrealized
Depreciation		  

RS International Fund

   $ 39,492,916      $ 1,922,357      $ 2,411,752      $ (489,395 ) 

RS Global Fund

     34,995,750        4,909,321        5,074,121        (164,800 ) 

RS Emerging Markets Fund

     372,019,022        59,597,042        67,228,681        (7,631,639 ) 

RS Emerging Markets Small Cap Fund

     25,499,599        2,646,631        3,229,991        (583,360 ) 

RS China Fund

     25,028,706        2,473,639        3,107,220        (633,581 ) 

Note 4 Capital Shares

a. Transactions The Funds have authorized an unlimited number of shares of beneficial interest with no par value. Transactions, including conversions and exchanges, in capital shares for the Funds were as follows:

Transactions in Capital Shares

 

RS International Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     100,321       $ 1,324,379           301,254       $ 5,112,563   

Shares reinvested

     —         —           953,343         12,417,598   

Shares redeemed

     (288,755 )       (3,818,812 )         (758,491 )       (12,168,859 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (188,434 )     $ (2,494,433 )         496,106       $ 5,361,302   
                                      

 

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Transactions in Capital Shares (continued)

 

RS International Fund — continued  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class C               

Shares sold

     23,451       $ 249,876           69,094       $ 842,764   

Shares reinvested

     —         —           96,364         1,026,727   

Shares redeemed

     (21,274 )       (226,528 )         (89,975 )       (1,078,857 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     2,177       $ 23,348           75,483       $ 790,634   
                                      
Class K               

Shares sold

     42,772       $ 537,423           62,741       $ 975,613   

Shares reinvested

     —         —           142,888         1,784,231   

Shares redeemed

     (71,284 )       (901,855 )         (92,683 )       (1,323,936 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (28,512 )     $ (364,432 )         112,946       $ 1,435,908   
                                      
Class Y               

Shares sold

     24,132       $ 317,293           1,502,636       $ 27,662,435   

Shares reinvested

     —         —           2,660,481         34,828,543   

Shares redeemed

     (168,073 )       (2,196,846 )         (51,697,557 )       (925,456,851 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net decrease

     (143,941 )     $ (1,879,553 )         (47,534,440 )     $ (862,965,873 ) 
                                      

 

RS Global Fund  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class A               

Shares sold

     29,017       $     342,039           144,202       $       1,623,914   

Shares reinvested

     —         —           129,070         1,463,663   

Shares redeemed

     (15,169 )       (176,217 )         (128,507 )       (1,404,786 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     13,848       $ 165,822           144,765       $ 1,682,791   
                                      
Class C               

Shares sold

     56,815       $ 658,756           55,810       $ 663,996   

Shares reinvested

     —         —           58,660         658,753   

Shares redeemed

     (8,050 )       (91,528 )         (4,207 )       (47,101 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     48,765       $       567,228           110,263       $ 1,275,648   
                                      
Class K               

Shares sold

     —       $ —           1,086       $ 11,724   

Shares reinvested

     —         —           53,744         606,232   

Shares redeemed

     —         —           (433 )       (5,308 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

     —       $ —           54,397       $ 612,648   
                                      

 

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RS Global Fund — continued  
   
     For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
     Shares      Amount        Shares      Amount  
Class Y               

Shares sold

     1,554       $ 17,946           161,901       $      1,824,700   

Shares reinvested

     —         —           140,195         1,591,208   

Shares redeemed

     (14,132 )       (165,538 )         (297,028 )       (3,271,793 ) 
   

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

     (12,578 )     $ (147,592 )         5,068       $ 144,115   
                                      

 

RS Emerging Markets Fund  
   
     For the Six Months Ended 6/30/14      For the Year Ended 12/31/13  
     Shares      Amount      Shares      Amount  
Class A             

Shares sold

     1,089,461       $ 20,552,818         3,186,932       $ 65,367,035   

Shares reinvested

     —         —         2,237,259         43,220,435   

Shares redeemed

     (3,197,449 )       (60,665,404 )       (16,119,631 )       (350,143,496 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (2,107,988 )     $ (40,112,586 )       (10,695,440 )     $ (241,556,026 ) 
                                    
Class C             

Shares sold

     151,192       $ 2,275,525         263,442       $ 4,152,226   

Shares reinvested

     —         —         408,574         6,324,450   

Shares redeemed

     (457,360 )       (6,879,471 )       (1,267,547 )       (21,060,005 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (306,168 )     $ (4,603,946 )       (595,531 )     $ (10,583,329 ) 
                                    
Class K             

Shares sold

     181,016       $ 3,250,704         353,365       $ 6,758,193   

Shares reinvested

     —         —         261,666         4,824,924   

Shares redeemed

     (274,905 )       (4,916,238 )       (667,317 )       (12,723,521 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (93,889 )     $ (1,665,534 )       (52,286 )     $ (1,140,404 ) 
                                    
Class Y             

Shares sold

     1,213,367       $ 22,976,049         4,598,505       $ 95,133,624   

Shares reinvested

     —         —         1,627,817         31,530,269   

Shares redeemed

     (1,942,144 )       (36,817,869 )       (28,756,410 )       (657,823,717 ) 
   

 

 

     

 

 

     

 

 

     

 

 

  

Net decrease

     (728,777 )     $ (13,841,820 )       (22,530,088 )     $ (531,159,824 ) 
                                    

 

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Transactions in Capital Shares (continued)

 

 

RS Emerging Markets Small Cap Fund               
   
     For the Period Ended 6/30/14  
     Shares      Amount  
Class A*       

Shares sold

     623,212       $ 6,308,376   

Shares redeemed

     (38,699 )       (401,830 ) 
   

 

 

     

 

 

  

Net increase

     584,513       $ 5,906,546   
                  
Class C*       

Shares sold

     250,000       $ 2,500,000   
   

 

 

     

 

 

  

Net increase

     250,000       $ 2,500,000   
                  
Class Y*       

Shares sold

     1,811,360       $ 18,144,888   

Shares redeemed

     (2,801 )       (30,280 ) 
   

 

 

     

 

 

  

Net increase

     1,808,559       $    18,114,608   
                  
* Inception date was January 31, 2014.

 

RS China Fund                                  
   
      For the Six Months Ended 6/30/14        For the Year Ended 12/31/13  
      Shares      Amount        Shares      Amount  
Class A                

Shares sold

      109,153       $    1,072,894           184,323       $      1,823,372   

Shares reinvested

      —         —           14,080         143,570   

Shares redeemed

      (128,766 )       (1,230,721 )         (78,402 )       (733,437 ) 
    

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

      (19,613 )     $ (157,827 )         120,001       $ 1,233,505   
                                       
Class C                

Shares sold

      —       $ —           6,575       $ 60,901   

Shares reinvested

      —         —           2,468         25,191   

Shares redeemed

      (1,055 )       (10,007 )         (6,784 )       (59,292 ) 
    

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

      (1,055 )     $ (10,007 )         2,259       $ 26,800   
                                       
Class K                

Shares sold

      38       $ 369           71       $ 700   

Shares reinvested

      —         —           3,813         38,911   

Shares redeemed

      (110 )       (1,075 )         —         —   
    

 

 

     

 

 

       

 

 

     

 

 

  

Net increase/(decrease)

      (72 )     $ (706 )         3,884       $ 39,611   
                                       
Class Y                

Shares sold

      28,981       $ 278,907           429,377       $ 4,476,976   

Shares reinvested

      —         —           14,606         148,889   

Shares redeemed

      (2,217 )       (22,247 )         (411,912 )       (4,227,792 ) 
    

 

 

     

 

 

       

 

 

     

 

 

  

Net increase

      26,764       $ 256,660           32,071       $ 398,073   
                                       

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

b. Shareholder Concentration As of June 30, 2014, the number of shareholders and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders) who owned of record 5% or more of the net assets of a Fund is summarized in the following table:

 

Fund    Number of
Shareholders		      Percentage of
Net Assets		  

RS International Fund

      2         20.61%   

RS Global Fund

      2         88.31%   

RS Emerging Markets Fund

      4         48.04%   

RS Emerging Markets Small Cap Fund

      1         94.60%   

RS China Fund

      1         92.15%   

Note 5 Investments

a. Investment Purchases and Sales The cost of investments purchased and the proceeds from investments sold (excluding short-term investments) for the six months ended June 30, 2014, were as follows:

 

Fund    Cost of Investments
Purchased		      Proceeds from Investments
Sold		  

RS International Fund

    $ 48,471,782       $ 52,820,919   

RS Global Fund

      31,505,082         30,987,199   

RS Emerging Markets Fund

      314,002,627         380,271,403   

RS Emerging Markets Small Cap Fund

      40,656,774         15,182,304   

RS China Fund

      20,674,067         20,742,317   

b. Foreign Securities Foreign securities investments involve special risks and considerations not typically associated with U.S. investments. These risks include, but are not limited to, currency risk; adverse political, regulatory, social, and economic developments; and less reliable information about issuers. Moreover, securities of some foreign companies may be less liquid and their prices more volatile than those of comparable U.S. companies.

c. Industry, Sector or Regional Concentration In their normal course of business, the Funds may invest a significant portion of their assets in companies within a limited number of industries or sectors. As a result, the Funds may be subject to a greater risk of loss than that of a fund invested in a wider spectrum of industries or sectors because the stocks of many or all of the companies in the industry, group of industries, sector, or sectors may decline in value due to developments adversely affecting the industry, group of industries, sector, or sectors.

Investing in a regionally concentrated mutual fund involves greater risk than investing in a more diversified fund due to lack of exposure to a broader geographical area. The political and economic conditions and changes in regulatory, tax or economic policy in a concentrated region could significantly affect the market in that region and in surrounding areas.

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher and there may be delays in settlement procedures.

d. Repurchase Agreements The collateral for repurchase agreements is either cash or fully negotiable U.S. government securities (including U.S. government agency securities). Repurchase agreements are fully collateralized (including the interest accrued thereon) and such collateral is marked to market daily while the agreements remain in force. If the value of the collateral falls below the repurchase price plus accrued interest, the Fund will typically require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults, the Fund maintains the right to sell the collateral (although it may be prevented or delayed from doing so in certain circumstances) and may be required to claim any resulting loss against the seller.

Note 6 Temporary Borrowings

The Funds, with other funds managed by RS Investments, share in a $400 million committed revolving credit facility from State Street Bank and Trust Company for temporary borrowing purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is calculated based on market rates at the time of borrowing.

For the six months ended June 30, 2014, the Funds which borrowed under the facility were as follows:

 

Fund   Amount Outstanding
at 6/30/14		     Average
Borrowing*		     Days
Borrowings
Outstanding		     Average
Interest Rate*		  

RS International Fund

   $     —      $ 377,546        21        1.34%   

RS Global Fund

     —        13,804        1        1.34%   

RS Emerging Markets Fund

     —        2,905,924        55        1.34%   

RS Emerging Markets Small Cap Fund

     —        135,574        14        1.34%   

RS China Fund

     —        253,827        17        1.34%   
* For the six months ended June 30, 2014, based on the number of days borrowings were outstanding.

Note 7 Review for Subsequent Events

Management has evaluated subsequent events through the issuance of the Funds’ financial statements and determined that no material events have occurred that require disclosure.

Note 8 Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their

 

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

vendors and others that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote.

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

Supplemental Information (unaudited)

Approval of the Investment Advisory Agreement for RS Emerging Markets Small Cap Fund

The Board of Trustees of RS Investment Trust (the “Trust”), including all the Independent Trustees, met in person on December 4, 2013 to consider the approval of the investment advisory agreement (the “Advisory Agreement”) for RS Emerging Markets Small Cap Fund (the “Fund”), a new series of the Trust, for the two-year period commencing on its date of execution. Before the Board meeting on December 4, 2013, the Trustees had met on November 6, 2013 with representatives of RS Investment Management Co. LLC (“RS Investments”), the proposed investment adviser of the Fund, to discuss in detail the proposed new Fund. The Trustees considered and reviewed the information they received from RS Investments and determined not to request further information from RS Investments at that time in connection with their consideration of the approval of the Advisory Agreement.

In their consideration of the Advisory Agreement, the Trustees considered both the information provided specifically for that purpose at their meeting and information they receive and consider throughout the year, both in connection with the general oversight of the Funds and in connection with the annual advisory contract renewal process for all of the Funds.

The Trustees were assisted in their review by the Independent Trustees’ counsel, who reviewed all of the information presented to the Trustees.

The Trustees considered the nature, extent, and quality of the services expected to be provided by RS Investments. In this regard, the Trustees took into account the experience of the Fund’s proposed portfolio management team and of RS Investments’ senior management, and the time and attention to be devoted by each to the Fund. The Trustees considered RS Investments’ significant responsibilities in monitoring the services to be provided by the Fund’s service providers, such as the custodian, transfer agent, fund accountant and others.

The Trustees reviewed the proposed advisory fee and expense ratio for the Fund. They compared that information to comparable information for a peer group of small-cap emerging markets funds (the “Custom Peer Group”). The Custom Peer Group was developed by RS Investments from Morningstar’s universe of emerging markets funds, by eliminating from the universe all funds that were identified by Morningstar as large-cap funds. The data developed by RS Investments showed that the Fund’s proposed advisory fee and its anticipated total expense ratio, taking into consideration RS Investments’ proposed expense cap, were both close to the median of the funds in the Custom Peer Group.

The representatives of RS Investments reported to the Trustees that RS Investments does not currently provide advisory services in strategies that are similar to the Fund’s strategies.

The Trustees discussed with RS Investments the firm’s anticipated profitability with respect to the Fund, whether economies of scale would likely be realized as the Fund

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

grows, and whether a reduction in the advisory fees paid by the Fund by means of breakpoints would be appropriate. Representatives of RS Investments noted that because RS Investments will incur significant expenses in connection with the start-up of the Fund, it does not expect to realize any profit from the advisory or other fees RS Investments and its affiliates expect to receive from the Fund for a number of years. The Trustees noted that profitability and possible economies of scale should be assessed after a reasonable period of operation and determined not to recommend advisory fee breakpoints for the Fund at this time.

The Trustees considered the research and other similar services RS Investments receives from many of the broker-dealers with which it intends to place the Fund’s (as well as other RS Investments clients’) portfolio transactions and from third parties with which these broker-dealers have arrangements. The Trustees concluded that any benefit to RS Investments of these “soft dollar” relationships did not appear likely to be unreasonable.

After reviewing and considering all of the information described above, the Trustees voted unanimously to approve the Advisory Agreement, including the advisory fee proposed in connection with that approval, for the two-year period commencing on its date of execution.

Meeting of Shareholders

A special meeting of the shareholders of RS Investment Trust (the “Trust”) was held on May 23, 2014. At the meeting, the shareholders of the Trust elected Judson Bergman, Dennis M. Bushe, Margherita L. DiManni, Kenneth R. Fitzsimmons, Anne M. Goggin, Lawrence E. Harris, Christopher C. Melvin, Jr., Gloria S. Nelund, and Matthew H. Scanlan as trustees of the Trust.

Proposal to Elect Trustees

 

Nominee   Votes For     Votes Against/
Withheld		     Abstentions  

Judson Bergman

     550,801,232.965        9,280,122.985        0.000   

Dennis M. Bushe

     550,597,774.166        9,483,581.784        0.000   

Margherita L. DiManni

     550,787,370.938        9,293,985.012        0.000   

Kenneth R. Fitzsimmons

     550,425,719.024        9,655,636.926        0.000   

Anne M. Goggin

     550,954,630.766        9,126,725.184        0.000   

Lawrence E. Harris

     550,636,278.980        9,445,076.970        0.000   

Christopher C. Melvin, Jr.

     550,776,574.483        9,304,781.467        0.000   

Gloria S. Nelund

     550,067,457.888        9,013,898.888        0.000   

Matthew H. Scanlan

     550,564,139.160        9,517,216.790        0.000   

 

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SUPPLEMENTAL INFORMATION (UNAUDITED)

 

Portfolio Holdings and Proxy Voting Procedures

The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. This information is also available, without charge, upon request, by calling toll-free 800-766-3863.

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (i) without charge, upon request, by calling toll-free 800-766-3863; (ii) on RS Investments’ website at www.rsinvestments.com; and (iii) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

The Statement of Additional Information includes information about the Trust’s Trustees and Officers and is available, without charge, upon request by calling toll-free 800-766-3863.

This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless accompanied or preceded by that Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

 

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LOGO

One Bush Street, Suite 900

San Francisco, CA 94104

 

  

PRSRT STD

U.S. POSTAGE

PAID

RS INVESTMENTS

 

 

WWW.RSINVESTMENTS.COM // 800.766.3863   

LOGO

 

EB 015099 (06/14)

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Item 2. Code of Ethics.

Not required.

 

Item 3. Audit Committee Financial Expert.

Not required.

 

Item 4. Principal Accountant Fees and Services.

Not required.

 

Item 5. Audit Committee of Listed registrants.

Not applicable to the registrant.

 

Item 6. Investments.

 

  (a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

 

  (b) None.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the registrant.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the registrant.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the registrant.

 

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A) or this Item.

 

Item 11. Controls and Procedures.

 

  (a) The registrant’s principal executive and principal financial officers have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this Form N-CSR, to provide reasonable assurance that the information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

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  (b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Exhibits.
(a)(1)   Not applicable.
(a)(2)   Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3)   Not applicable.
(b)   Certification pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto.

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SIGNATURES

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

 

(Registrant)   RS Investment Trust
By (Signature and Title)*  

/s/ Matthew H. Scanlan

  Matthew H. Scanlan, President                
  (Principal Executive Officer)

Date: September 5, 2014

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

 

By (Signature and Title)*  

/s/ Matthew H. Scanlan

  Matthew H. Scanlan, President                
  (Principal Executive Officer)

Date: September 5, 2014

 

By (Signature and Title)*  

/s/ Shelly Chu

  Shelly Chu, Treasurer                              
  (Principal Financial Officer)

Date: September 5, 2014