Item
1. Report to Stockholders.
ANNUAL
REPORT
Year
Ended
June
30,
2007
Message
from Portfolio 21’s founders
Dear
Friends,
Since
the
inception of Portfolio 21 in 1999, we have struggled with the term
“sustainability”. Our definition was provided by one of our advisors,
Mathis Wackernagel (co-founder of the Global Footprint Network) as well as
by
other progressive economists. We define sustainability as
“
securing people’s quality of life within the means of
nature
.” Talk about inconvenient truths! The truth is
that sustainability places limits on us. Since our natural systems
are finite, we cannot live within the means of nature if we insist upon
relentless physical growth. We are currently using natural resources
and services at a rate that is equivalent to a 25% overdraft or
deficit. That is, we are dipping into our natural capital faster than
it can renew itself. Since we currently have no way to borrow natural
capital from another planet, galaxy or universe, it seems obvious that the
only
way to live within the means of nature is to use less.
A
popular
notion is that we can have growth without using more natural
capital. Some refer to this as sustainable development—the idea that
we are a knowledge economy and that we can “dematerialize” while still improving
the quality of life. This is indeed an attractive scenario, and there
are many, many examples of governments, companies, and individuals that have
made progress in this area. But, when we look at the big picture, the
trend is still inconvenient. Modern industrial economies, no matter
how high-tech, are carbon-based economies, and their predominant activity is
burning material. The atmosphere is now the biggest dumping ground for the
processed output flows of industrial economies. And the atmosphere is
full.
Unfortunately,
the concept of cutting back is unattractive to most people. Not only
is it interpreted as an infringement on personal freedom, but it highlights
the
fact that humans are not all-powerful. We cannot manufacture or
invent natural capital. Cutting back is not attractive to US
politicians, either. And those who understand the financial system
know that it depends upon growth to fund the interest payments on all the debt
we have accumulated. Introducing the concept (and reality!) of
biocapacity limits into an economic system that has prided itself on its ability
to generate seemingly unlimited growth is indeed awkward. Rather than
embracing biocapacity limits as an
exhilarating
challenge and opportunity for renewal, the economic establishment engages in
financial one upsmanship. It is not uncommon for people who raise the
issues of biocapacity limits to be labeled naïve and negative rather than
realistic and honest. This refusal to accept limitations has
contributed to the willingness of the press, the financial community, and
government to avoid the hard task of defining sustainability in a meaningful
way. The reality of sustainability is just not compatible with our
global growth mentality.
At
Portfolio 21, when we use the term sustainability in conjunction with investing
in the global economy via publicly traded stocks, we are careful to include
two
big caveats: 1) we are referring to environmental sustainability, and
2) we are skeptical that any publicly traded corporation is
sustainable. In the aggregate, the global economic system seeks lower
costs and higher profit margins. To the extent that it can realize
better margins through environmental measures, it will do so because there
is a
compelling financial case. It is much less likely that the global economic
system, in the aggregate, can or will deal with social
inequities. Thus, in the global economy, we believe we can identify
companies that are incorporating environmental sustainability into their
business strategies, giving themselves a competitive advantage in an economy
that is going to be running headlong into all kinds of limits soon, if not
already. However, we do not claim that we are investing in
sustainable companies because we do not believe that is what we are
doing. We are managing ecological risk in investment portfolios by
applying rigorous environmental sustainability criteria to
companies.
We
believe we owe it to you, our shareholders, to be honest. To speak
the truth as we know it. We cannot in good conscience pretend that we
are engaged in sustainable investing. To the extent that you and we
choose to invest in the global economy, we believe our investment strategy
is
well positioned to provide competitive returns and that the companies in
Portfolio 21 are better equipped to deal with the inconvenient truth—and
limitations—of sustainability than those that are choosing to believe in a more
convenient fantasy of unlimited biocapacity.
Sincerely,
|
|
|
Leslie
Christian
|
Carsten
Henningsen
|
|
Co-founder
|
Co-founder
|
Management’s
Discussion of Fund Performance:
Portfolio
21 achieved an above market return relative to the MSCI World Equity Index
during the past six months. Longer-term performance remained above
benchmark.
|
|
|
|
|
|
Since
|
|
|
6
|
|
3
|
5
|
Inception
|
|
|
month
|
1
|
Years
|
Years
|
(9/30/99)
|
|
(as
of 6/30/07)
|
return
|
Year
|
(avg
Annual)
|
(avg
Annual)
|
(avg
Annual)
|
|
Portfolio
21-
|
|
|
|
|
|
|
Retail
Class
|
11.37%
|
28.18%
|
17.64%
|
14.70%
|
7.98%
|
|
MSCI
World
|
9.48%
|
24.19%
|
17.30%
|
14.55%
|
5.66%
|
Gross
Expense Ratio: 1.63%
Performance
data quoted represents past performance and does not guarantee future results.
The investment return and principal value of an investment will fluctuate so
that an investor’s shares, when redeemed, may be worth more or less than their
original cost. Current performance of the fund may be lower or higher
than the performance quoted. Performance data current to the most recent month
end may be obtained by calling 1-877-351-4115. The Fund imposes a 2% redemption
fee on shares held for less than 60 days. Performance data quoted
does not reflect the redemption fee. If reflected, total return would
be reduced.
Global
economic growth has benefited investors in all corners of the
world. We have seen a much stronger correlation among the world’s
equity markets over the past year than we have experienced over past decades
due
to the increased globalization of commerce and capital. In fact, over
the past six months major U.S., European and Japanese market indices have risen
in tandem to the tune of around 6%, in local currency
returns. Returns calculated in U.S. dollar terms paint a different
picture. Central banks in Europe have been driving up interest rates,
and as a result the value of the euro and the sterling, while lack of action
at
the Bank of Japan has pressured the yen versus the U.S.
dollar. Portfolio 21 has benefited from these events, as the fund is
more heavily weighted in European currency denominated assets. These
foreign currency developments could continue to work in the fund’s favor if
current economic trends persist and the U.S. continues to run enormous trade
and
budget deficits.
The
International Energy Agency is forecasting energy related demand to outstrip
supply into the foreseeable future, resulting in a tighter market than
previously anticipated. What sectors have benefited this
year? Commodity based companies outperformed during the past six
months as demand and price pressure for metals, chemicals, crops and energy
have
remained strong. The materials and energy sectors within the MSCI
World Equity Index were by far the highest returning sectors. The
fund’s investment criteria exclude representation in some of these sub-sectors,
which has impacted short-term performance. Consider a more important
question: What sectors are most likely to prosper in the
future? We believe the answer resides in solutions to
looming
ecological dilemmas, such as biocapacity constraints and climate
change. A number of technology and industrial based companies are
developing innovative ways to reduce and conserve energy use and
emissions. Some are even designing and marketing products with these
concerns in mind. Many of these companies are profitable today and
are likely to outperform in the future. Portfolio 21 is heavily
invested here and our shareholders stand to potentially benefit should this
continue over the long term.
Beyond
currencies and sectors, individual stock performance had a considerable impact
on fund performance year-to-date:
Nokia
is the world’s leading producer and marketer of mobile phones. The
company has retained and even gained top market share over the past
decade. Nokia has been able to sustain consistent profitability,
whereas most competitors have not. The company also happens to be one
of Portfolio 21’s largest positions and a top performing stock during the first
half of 2006. Shares of Nokia have returned better than 40% over the
past six months. Nokia incorporates lifecycle thinking into its
operations to ensure minimal environmental impact, beginning with the extraction
of raw materials and ending with recycling, waste treatment, and the
reintroduction of recovered materials into the economic system.
Siemens
manufactures a wide-range of industrial products. The company builds
locomotives, traffic control systems, and automotive electronics and engineers
electrical power plants. Siemens has been embroiled in a bribery
scandal that has ultimately led to the resignation of the Chairman and Chief
Executive. The company is working on rebuilding its reputation and
trust amongst government officials and the public. On the other hand,
the previous CEO restructured the company to be the more efficient and
profitable enterprise it has proven to be over the past six
months. Investors have applauded and driven the stock up more than
40% in the first half of this year. Siemens offers a variety of
products and services contributing to environmental solutions, such as high
efficiency lighting; alternative energy systems based on biomass, wind and
hydrogen fuel cells; and mass transit equipment such as light rail
trains. While Siemens has significant work to do, it has awareness of
ecological issues and focused strategies to address them.
Teijin
,
headquartered in Japan, is one of the largest producers of polyester fiber
in
the world. The company had a rough third quarter as weak performance
in the plastics and films segments, combined with higher raw material prices,
hurt the bottom line. On the bright side, Teijin moved to strengthen
its presence in the fast growing carbon fiber market and announced plans to
make
it a core business. While lowering production costs and raising
productivity remain key tasks, the trend toward lighter vehicle bodies is
stimulating a need for carbon fibers for use in vehicle hoods and parts, notably
driveshafts and other drive parts. Carbon fibers are also used as reinforcement
materials in the fuel tanks of hydrogen-powered cars and natural gas-powered
trucks, both of which are
attracting
increasing attention as viable environment-friendly alternatives to conventional
vehicles.
Staples
latest quarterly performance was a bit sub par, but the company remains a core
long-term holding. It continues to dominate the office products
sector while increasing market share, margins and earnings. Part of
the reason for the company’s supremacy is its industry-leading environmental
performance. Staples is participating in the Paper Working Group,
which is developing an impressive tool for the environmental evaluation of
paper
products and aims to make environmentally preferable paper products more
accessible and affordable. The company offers recycling programs for
a variety of products it retails and is a Plug into eCycling partner to increase
electronics recycling. Staples also recognizes its global warming
impact and is running internal initiatives to reduce energy use and support
renewable power, as well as participating in several external
groups.
The
information above represents the opinions of Progressive Investment Management
Corporation, is subject to change, and any forecasts made cannot be
guaranteed.
The
Fund’s environmental policy could cause it to make or avoid investments that
could result in the portfolio underperforming similar funds that do not have
an
environmental policy.
Portfolio
21 invests in foreign securities, which are subject to the risks of currency
fluctuations, political and economic instability and differences in accounting
standards.
Fund
holdings and sector allocations are subject to change and are not
recommendations to buy or sell any security. Please see the following annual
report for the fund’s holdings as of June 30, 2007.
The
MSCI
World Equity Index is a free float-adjusted market capitalization index that
is
designed to measure global developed market equity performance. You
cannot invest directly in an index.
Investment
performance reflects fee waivers in effect. In the absence of such waivers,
total return would be reduced. Must be preceded or accompanied by a current
prospectus. Please refer to the prospectus for important information
about the Fund including investment objectives, risks, charges and
expenses.
The
Fund
is distributed by Quasar Distributors, LLC (8/07)
|
PORTFOLIO
HOLDINGS BY
COUNTRY
at
June 30, 2007 (Unaudited)
|
|
|
|
Portfolio
Holdings
|
|
|
Percent
of Net Assets
|
|
|
|
|
|
|
|
|
|
|
Australia
|
|
$
|
3,310,166
|
|
|
|
1.38
|
%
|
|
|
Austria
|
|
|
2,045,428
|
|
|
|
0.85
|
%
|
|
|
Belgium
|
|
|
2,498,926
|
|
|
|
1.04
|
%
|
|
|
Canada
|
|
|
1,223,961
|
|
|
|
0.51
|
%
|
|
|
China
|
|
|
437,640
|
|
|
|
0.18
|
%
|
|
|
Denmark
|
|
|
12,323,202
|
|
|
|
5.14
|
%
|
|
|
Finland
|
|
|
7,567,781
|
|
|
|
3.15
|
%
|
|
|
France
|
|
|
5,015,176
|
|
|
|
2.09
|
%
|
|
|
Germany
|
|
|
20,155,040
|
|
|
|
8.40
|
%
|
|
|
Hong
Kong
|
|
|
888,509
|
|
|
|
0.37
|
%
|
|
|
Italy
|
|
|
2,768,797
|
|
|
|
1.15
|
%
|
|
|
Japan
|
|
|
24,983,758
|
|
|
|
10.41
|
%
|
|
|
Netherlands
|
|
|
1,819,760
|
|
|
|
0.76
|
%
|
|
|
NewZealand
|
|
|
259,245
|
|
|
|
0.11
|
%
|
|
|
Norway
|
|
|
3,010,366
|
|
|
|
1.25
|
%
|
|
|
Singapore
|
|
|
206,650
|
|
|
|
0.09
|
%
|
|
|
Spain
|
|
|
3,371,079
|
|
|
|
1.41
|
%
|
|
|
Sweden
|
|
|
29,730,523
|
|
|
|
12.39
|
%
|
|
|
Switzerland
|
|
|
15,082,860
|
|
|
|
6.29
|
%
|
|
|
United
Kingdom
|
|
|
29,239,688
|
|
|
|
12.19
|
%
|
|
|
United
States
|
|
|
78,122,354
|
|
|
|
32.56
|
%
|
|
|
Liabilities
in Excess
|
|
|
|
|
|
|
|
|
|
|
of
Other Assets
|
|
|
(4,129,521
|
)
|
|
|
(1.72
|
)%
|
|
|
Total
|
|
$
|
239,931,388
|
|
|
|
100.00
|
%
|
|
|
EXPENSE
EXAMPLE
for
the Six
Months Ended June 30, 2007
(Unaudited)
|
As
a
shareholder of the Portfolio 21 Fund (the “Fund”), you incur two types of costs:
(1) transaction costs; and (2) ongoing costs, including investment advisory
fees, distribution fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing
in
the Fund and to compare these costs with the ongoing costs of investing in
other
mutual funds. The example is based on an investment of $1,000
invested at the beginning of the period and held for the entire period (1/1/07
–6/30/07).
Actual
Expenses
The
first line of the table below
provides information about actual account values based on actual returns and
actual expenses. Although the Fund charges no sales load or other
transaction fees, you will be assessed fees for outgoing wire transfers,
returned checks and stop payment orders at prevailing rates charged by U.S.
Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request
a redemption be made by wire transfer, currently, the Fund’s transfer agent
charges a $15.00 fee. You will be charged a redemption fee equal to 2.00%
of
|
EXPENSE
EXAMPLE
(Unaudited)
,
Continued
|
the
net
amount of the redemption if you redeem your shares less than 60 calendar days
after you purchase them. Individual Retirement Accounts (“IRA”) will be charged
a $15.00 annual maintenance fee. Currently, the advisor is paying the
IRA annual maintenance fee. To the extent the Fund invests in shares of other
investment companies as part of its investment strategy, you will indirectly
bear your proportionate share of any fees and expenses charged by the underlying
funds in which the Fund invests in addition to the expenses of the
Fund. Actual expenses of the underlying funds may
vary. These expenses are not included in the example
below. The example below includes, but is not limited to, investment
advisory, shareholder servicing, fund accounting, custody and transfer agent
fees. However, the example below does not include portfolio trading
commissions and related expenses, and other extraordinary expenses as determined
under generally accepted accounting principles. You may use the
information in this line, together with the amount you invested, to estimate
the
expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled “Expenses Paid During Period” to estimate the expenses you paid on your
account during this period.
Hypothetical
Example for Comparison Purposes
The
second line of the table below provides information about hypothetical account
values based on a hypothetical return 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 Fund and other
funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other
funds. Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any transactional costs,
such as sales charges (loads), redemption fees or exchange
fees. Therefore, the second line of the table is useful in comparing
ongoing costs only and will not help you determine the relative total costs
of
owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.
|
EXPENSE
EXAMPLE
(Unaudited)
,
Continued
|
|
|
|
Beginning
|
|
|
Ending
|
|
|
Expenses
Paid
|
|
|
|
|
Account
Value
|
|
|
Account
Value
|
|
|
During
the Period
|
|
|
|
|
1/1/07
|
|
|
6/30/07
|
|
|
1/1/07
– 6/30/07*
|
|
|
Retail
Class Actual
|
|
$
|
1,000
|
|
|
$
|
1,114
|
|
|
$
|
7.86
|
|
|
Hypothetical
(5% annual
|
|
|
|
|
|
|
|
|
|
|
|
|
|
return
before expenses)
|
|
$
|
1,000
|
|
|
$
|
1,017
|
|
|
$
|
7.50
|
|
|
|
|
Beginning
|
|
|
Ending
|
|
|
Expenses
Paid
|
|
|
|
|
Account
Value
|
|
|
Account
Value
|
|
|
During
the Period
|
|
|
|
|
3/30/07
|
|
|
6/30/07
|
|
|
3/30/07
–6/30/07**
|
|
|
Institutional
Class ^ Actual
|
|
$
|
1,000
|
|
|
$
|
1,062
|
|
|
$
|
3.15
|
|
|
Hypothetical
(5% annual
|
|
|
|
|
|
|
|
|
|
|
|
|
|
return
before expenses)
|
|
$
|
1,000
|
|
|
$
|
1,010
|
|
|
$
|
3.07
|
|
|
*
|
Expenses
are equal to the Fund’s annualized expense ratio for the most recent
six-month period of 1.50% (reflecting fee waivers in effect) multiplied
by
the average account value over the period multiplied by 181/365 (to
reflect the one-half year period).
|
|
^
|
Class
I shares have been offered since March 30, 2007.
|
|
**
|
Expenses
are equal to the Fund’s annualized expense ratio for the March 30, 2007
through June 30, 2007 period of 1.20% (reflecting fee waivers in
effect)
multiplied by the average account value over the period multiplied
by
93/365 (to reflect the three month
period).
|
Portfolio
21 – Retail Class
Value
of
$10,000 vs MSCI World Index and S&P 500 Index
|
Average
Annual Total Return
|
|
Period
Ended June 30, 2007
|
|
1
Year
|
|
|
28.18
|
%
|
|
5
Year
|
|
|
14.70
|
%
|
|
Since
Inception (9/30/99)
|
|
|
7.98
|
%
|
This
chart illustrates the performance of a hypothetical $10,000 investment made
on
September 30, 1999 (the “Fund’s inception”), and is not intended to imply any
future performance. The returns shown do not reflect the deduction of taxes
that
a shareholder would pay on fund distributions or the redemption of fund shares.
The returns reflect fee waivers in effect. In the absence of such
waivers, total return would be reduced. The chart assumes reinvestment of
capital gains and dividends, but does not reflect redemption of
fees.
As
of
June 30, 2007, the S&P 500 Index returned 20.59%, 10.71% and 3.74% for the
one-year, five-year and since inception periods, respectively.
As
of
June 30, 2007, the MSCI World Index returned 24.19%, 14.55% and 5.66% for the
one-year, five-year and since inception periods, respectively.
Performance
data quoted represents past performance and does not guarantee future
results. The investment return and principal value of an investment
will fluctuate so that an investor’s shares, when redeemed, may be worth more of
less than their original cost. Current performance of the fund may be
lower or higher than the performance quoted. Performance data current
to the most recent month end may be obtained by calling
1-877-351-4115.
The
Fund imposes a 2% redemption fee on shares held for less than 60
days.
The
MSCI
World Index measures performance for a diverse range of developed country global
stock markets, including U.S., Canada, Europe, Australia, New Zealand and the
Far East. The index reflects the reinvestment of distributions, if
any, but does not reflect fees, brokerage commissions, or other costs of
investing. The S&P 500 Index is a broad based index of 500 stocks, which is
widely recognized as representative of the equity market in general. The index
is unmanaged and returns include reinvested dividends. One cannot invest
directly in an index.
Portfolio
21 – Institutional Class
Value
of
$10,000 vs MSCI World Index and S&P 500 Index
|
Average
Annual Total Return
|
|
Period
Ended June 30, 2007
|
|
Since
Inception (3/30/07)
|
|
|
6.18
|
%
|
This
chart illustrates the performance of a hypothetical $10,000 investment made
on
March 30, 2007 (the “inception”), and is not intended to imply any future
performance. The returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
The returns reflect fee waivers in effect. In the absence of such
waivers, total return would be reduced. The chart assumes reinvestment of
capital gains and dividends, but does not reflect redemption of
fees.
As
of
June 30, 2007, the S&P 500 Index returned 6.28% for the inception
period.
As
of
June 30, 2007, the MSCI World Index returned 6.71% for the inception
period.
Performance
data quoted represents past performance and does not guarantee future
results. The investment return and principal value of an investment
will fluctuate so that an investor’s shares, when redeemed, may be worth more of
less than their original cost. Current performance of the fund may be
lower or higher than the performance quoted. Performance data current
to the most recent month end may be obtained by calling
1-877-351-4115.
The
Fund imposes a 2% redemption fee on shares held for less than 60
days.
The
MSCI
World Index measures performance for a diverse range of developed country global
stock markets, including U.S., Canada, Europe, Australia, New Zealand and the
Far East. The index reflects the reinvestment of distributions, if
any, but does not reflect fees, brokerage commissions, or other costs of
investing. The S&P 500 Index is a broad based index of 500 stocks, which is
widely recognized as representative of the equity market in general. The index
is unmanaged and returns include reinvested dividends. One cannot invest
directly in an index.
|
SCHEDULE
OF INVESTMENTS
at
June 30,
2007
|
|
Shares
|
|
|
|
Value
|
|
|
COMMON
STOCKS: 90.4%
|
|
|
|
|
|
|
|
|
|
Automobiles
& Components: 0.7%
|
|
|
|
|
|
11,625
|
|
Ballard
Power
|
|
|
|
|
|
|
|
Systems,
Inc.
|
|
|
|
|
|
|
|
(Canada)
(a)
|
|
$
|
62,426
|
|
|
|
16,500
|
|
Fuel
Systems
|
|
|
|
|
|
|
|
|
Solutions,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
273,570
|
|
|
|
10,000
|
|
Johnson
|
|
|
|
|
|
|
|
|
Controls,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
1,157,700
|
|
|
|
55,825
|
|
Quantum
|
|
|
|
|
|
|
|
|
Fuel
Systems
|
|
|
|
|
|
|
|
|
Technologies
|
|
|
|
|
|
|
|
|
Worldwide,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
87,087
|
|
|
|
|
|
|
|
|
1,580,783
|
|
|
Banks:
6.1%
|
|
|
|
|
|
|
70,000
|
|
Dexia
-
|
|
|
|
|
|
|
|
|
Brussels
Exchange
|
|
|
|
|
|
|
|
|
(Belgium)
|
|
|
2,186,529
|
|
|
|
10,000
|
|
Dexia
-
|
|
|
|
|
|
|
|
|
Paris
Exchange
|
|
|
|
|
|
|
|
|
(Belgium)
|
|
|
312,397
|
|
|
|
60,000
|
|
ForeningsSparbanken
|
|
|
|
|
|
|
|
|
AB
(Sweden)
|
|
|
2,167,529
|
|
|
|
285,000
|
|
HSBC
Holdings PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
5,218,490
|
|
|
|
310,000
|
|
UniCredito
Italiano
|
|
|
|
|
|
|
|
|
SpA
(Italy)
|
|
|
2,768,798
|
|
|
|
96,000
|
|
Westpac
Banking
|
|
|
|
|
|
|
|
|
Corp.
(Australia)
|
|
|
2,084,618
|
|
|
|
|
|
|
|
|
14,738,361
|
|
|
Capital
Goods: 13.0%
|
|
|
|
|
|
|
5,500
|
|
Acciona
SA (Spain)
|
|
|
1,496,264
|
|
|
|
240,000
|
|
Atlas
Copco AB -
|
|
|
|
|
|
|
|
|
Class
A (Sweden)
|
|
|
3,997,502
|
|
|
|
3,000
|
|
Energy
Conversion
|
|
|
|
|
|
|
|
|
Devices,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
92,460
|
|
|
|
121,800
|
|
JM
AB (Sweden)
|
|
|
3,684,997
|
|
|
|
45,000
|
|
Kurita
Water
|
|
|
|
|
|
|
|
|
Industries
Ltd
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
1,412,823
|
|
|
|
150,000
|
|
Mitsubishi
Electric
|
|
|
|
|
|
|
|
|
Corp.
(Japan)
|
|
|
1,389,522
|
|
|
|
10,600
|
|
Plug
Power, Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
33,284
|
|
|
|
18,000
|
|
Schneider
Electric
|
|
|
|
|
|
|
|
|
SA
(France)
|
|
|
2,521,949
|
|
|
|
34,000
|
|
Siemens
AG -
|
|
|
|
|
|
|
|
|
Registered
Shares
|
|
|
|
|
|
|
|
|
(Germany)
|
|
|
4,868,857
|
|
|
|
87,000
|
|
Skanska
AB -
|
|
|
|
|
|
|
|
|
Class
B (Sweden)
|
|
|
1,862,980
|
|
|
|
213,300
|
|
SKF
AB -
|
|
|
|
|
|
|
|
|
Class
B (Sweden)
|
|
|
4,462,887
|
|
|
|
12,000
|
|
Suntech
Power
|
|
|
|
|
|
|
|
|
Holdings
Co., Ltd. -
|
|
|
|
|
|
|
|
|
ADR
(China) (a)
|
|
|
437,640
|
|
|
|
26,000
|
|
Trex
Co., Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
510,380
|
|
|
|
41,900
|
|
Vestas
Wind Systems
|
|
|
|
|
|
|
|
|
A/S
(Denmark) (a)
|
|
|
2,749,571
|
|
|
|
40,750
|
|
Volvo
AB - ADR
|
|
|
|
|
|
|
|
|
(Sweden)
|
|
|
810,518
|
|
|
|
37,500
|
|
Volvo
AB - Class B
|
|
|
|
|
|
|
|
|
(Sweden)
|
|
|
745,593
|
|
|
|
|
|
|
|
|
31,077,227
|
|
|
Commercial
Services & Supplies: 1.3%
|
|
|
|
|
|
|
150,000
|
|
Biffa
PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
812,953
|
|
|
|
43,800
|
|
Herman
Miller, Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
1,384,080
|
|
|
|
100,000
|
|
Tomra
Systems ASA
|
|
|
|
|
|
|
|
|
(Norway)
|
|
|
872,713
|
|
|
|
|
|
|
|
|
3,069,746
|
|
|
Consumer
Durables & Apparel: 7.5%
|
|
|
|
|
|
|
100,000
|
|
Barratt
|
|
|
|
|
|
|
|
|
Developments
Plc
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,982,223
|
|
|
|
102,000
|
|
Electrolux
AB -
|
|
|
|
|
|
|
|
|
Class
B (Sweden)
|
|
|
2,415,038
|
|
The
accompanying notes are an integral part of these financial
statements.
|
SCHEDULE
OF INVESTMENTS
at
June 30,
2007, Continued
|
|
Shares
|
|
|
|
Value
|
|
|
Consumer
Durables & Apparel (Continued)
|
|
|
|
|
|
54,000
|
|
Husqvarna
AB -
|
|
|
|
|
|
|
|
Class
A (Sweden)
|
|
$
|
762,406
|
|
|
|
180,000
|
|
Husqvarna
AB -
|
|
|
|
|
|
|
|
|
Class
B (Sweden)
|
|
|
2,548,054
|
|
|
|
30,000
|
|
Interface,
Inc. - Class
|
|
|
|
|
|
|
|
|
A
(United States)
|
|
|
565,800
|
|
|
|
43,000
|
|
Koninklijke
Philips
|
|
|
|
|
|
|
|
|
Electronics
NV -
|
|
|
|
|
|
|
|
|
ADR
(Netherlands)
|
|
|
1,819,760
|
|
|
|
35,000
|
|
Matsushita
Electric
|
|
|
|
|
|
|
|
|
Industrial
Co. Ltd.
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
693,601
|
|
|
|
36,000
|
|
Nike,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
2,098,440
|
|
|
|
105,000
|
|
Sharp
Corp. (Japan)
|
|
|
1,990,537
|
|
|
|
35,200
|
|
Shimano,
Inc.
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
1,207,184
|
|
|
|
35,000
|
|
Sony
Corp. - ADR
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
1,797,950
|
|
|
|
|
|
|
|
|
17,880,993
|
|
|
Diversified
Financials: 3.3%
|
|
|
|
|
|
|
2,600
|
|
Deutsche
Bank AG
|
|
|
|
|
|
|
|
|
(Germany)
|
|
|
376,324
|
|
|
|
26,000
|
|
Deutsche
Bank AG -
|
|
|
|
|
|
|
|
|
GDR
(Germany)
|
|
|
3,762,919
|
|
|
|
64,000
|
|
UBS
AG - GDR
|
|
|
|
|
|
|
|
|
(Switzerland)
|
|
|
3,840,640
|
|
|
|
|
|
|
|
|
7,979,883
|
|
|
Food
& Staples Retailing: 2.4%
|
|
|
|
|
|
|
120,000
|
|
Alliance
Boots PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
2,744,689
|
|
|
|
50,000
|
|
United
Natural
|
|
|
|
|
|
|
|
|
Foods,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
1,329,000
|
|
|
|
40,000
|
|
Whole
Foods
|
|
|
|
|
|
|
|
|
Market,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
1,532,000
|
|
|
|
10,187
|
|
Wild
Oats
|
|
|
|
|
|
|
|
|
Markets,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
170,734
|
|
|
|
|
|
|
|
|
5,776,423
|
|
|
Health
Care Equipment & Services: 2.2%
|
|
|
|
|
|
|
75,000
|
|
Baxter
|
|
|
|
|
|
|
|
|
International,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
4,225,500
|
|
|
|
30,000
|
|
Olympus
Corp.
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
1,170,432
|
|
|
|
|
|
|
|
|
5,395,932
|
|
|
Household
& Personal Products: 0.6%
|
|
|
|
|
|
|
60,000
|
|
Kao
Corp. (Japan)
|
|
|
1,553,484
|
|
|
|
|
|
|
|
|
Insurance:
4.8%
|
|
|
|
|
|
|
135,000
|
|
Aviva
PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
2,004,038
|
|
|
|
375,000
|
|
Friends
|
|
|
|
|
|
|
|
|
Provident
PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,342,353
|
|
|
|
9,000
|
|
Muenchener
|
|
|
|
|
|
|
|
|
Rueckversicherungs
|
|
|
|
|
|
|
|
|
AG
(Germany)
|
|
|
1,650,520
|
|
|
|
125,000
|
|
Sompo
Japan
|
|
|
|
|
|
|
|
|
Insurance,
Inc.
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
1,528,840
|
|
|
|
138,000
|
|
Storebrand
ASA
|
|
|
|
|
|
|
|
|
(Norway)
|
|
|
2,137,652
|
|
|
|
32,000
|
|
Swiss
Reinsurance
|
|
|
|
|
|
|
|
|
(Switzerland)
|
|
|
2,918,404
|
|
|
|
|
|
|
|
|
11,581,807
|
|
|
Materials:
9.8%
|
|
|
|
|
|
|
19,000
|
|
Air
Liquide (France)
|
|
|
2,493,227
|
|
|
|
24,900
|
|
Air
Products &
|
|
|
|
|
|
|
|
|
Chemicals,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
2,001,213
|
|
|
|
16,000
|
|
Linde
AG
|
|
|
|
|
|
|
|
|
(Germany)
|
|
|
1,925,026
|
|
|
|
34,000
|
|
Novozymes
A/S -
|
|
|
|
|
|
|
|
|
Class
B (Denmark)
|
|
|
3,940,667
|
|
|
|
50,000
|
|
Praxair,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
3,599,500
|
|
|
|
43,000
|
|
Schnitzer
Steel
|
|
|
|
|
|
|
|
|
Industries,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
2,061,420
|
|
|
|
107,000
|
|
Stora
Enso OYJ -
|
|
|
|
|
|
|
|
|
R
Shares (Finland)
|
|
|
2,013,244
|
|
The
accompanying notes are an integral part of these financial
statements.
|
SCHEDULE
OF INVESTMENTS
at
June 30,
2007, Continued
|
|
Shares
|
|
|
|
Value
|
|
|
Materials
(Continued)
|
|
|
|
|
|
161,790
|
|
Svenska
Cellulosa
|
|
|
|
|
|
|
|
AB
- Class B
|
|
|
|
|
|
|
|
(Sweden)
|
|
$
|
2,705,606
|
|
|
|
500,000
|
|
Teijin
Ltd. (Japan)
|
|
|
2,734,731
|
|
|
|
|
|
|
|
|
23,474,634
|
|
|
Media:
1.1%
|
|
|
|
|
|
|
100,000
|
|
British
Sky
|
|
|
|
|
|
|
|
|
Broadcasting
|
|
|
|
|
|
|
|
|
Group
Plc
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,282,116
|
|
|
|
60,000
|
|
EMI
Group PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
321,460
|
|
|
|
80,000
|
|
Reed
Elsevier PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,033,915
|
|
|
|
|
|
|
|
|
2,637,491
|
|
|
Pharmaceuticals
& Biotechnology: 5.7%
|
|
|
|
|
|
|
110,200
|
|
Bristol-Myers
|
|
|
|
|
|
|
|
|
Squibb
Co.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
3,477,912
|
|
|
|
80,000
|
|
Novartis
AG
|
|
|
|
|
|
|
|
|
(Switzerland)
|
|
|
4,491,247
|
|
|
|
13,800
|
|
Novo-Nordisk
A/S -
|
|
|
|
|
|
|
|
|
ADR
(Denmark)
|
|
|
1,499,508
|
|
|
|
38,000
|
|
Novo-Nordisk
A/S -
|
|
|
|
|
|
|
|
|
Class
B (Denmark)
|
|
|
4,133,456
|
|
|
|
|
|
|
|
|
13,602,123
|
|
|
Real
Estate: 1.6%
|
|
|
|
|
|
|
75,000
|
|
British
Land
|
|
|
|
|
|
|
|
|
Co.
PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
2,006,948
|
|
|
|
39,870
|
|
Potlatch
Corp.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
1,716,403
|
|
|
|
|
|
|
|
|
3,723,351
|
|
|
Retailing:
4.6%
|
|
|
|
|
|
|
32,000
|
|
Hennes
& Mauritz
|
|
|
|
|
|
|
|
|
AB
- Class B
|
|
|
|
|
|
|
|
|
(Sweden)
|
|
|
1,892,033
|
|
|
|
700,000
|
|
Kingfisher
PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
3,170,630
|
|
|
|
100,000
|
|
Marks
& Spencer
|
|
|
|
|
|
|
|
|
Group
Plc
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,255,912
|
|
|
|
195,000
|
|
Staples,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
4,627,350
|
|
|
|
|
|
|
|
|
10,945,925
|
|
|
Semiconductors
& Semiconductor Equipment: 3.5%
|
|
|
|
|
|
|
31,000
|
|
Advanced
Micro
|
|
|
|
|
|
|
|
|
Devices,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
443,300
|
|
|
|
105,000
|
|
Applied
|
|
|
|
|
|
|
|
|
Materials,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
2,086,350
|
|
|
|
135,000
|
|
Intel
Corp.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
3,207,600
|
|
|
|
124,000
|
|
STMicroelectronics
|
|
|
|
|
|
|
|
|
NV
- ADR
|
|
|
|
|
|
|
|
|
(Switzerland)
|
|
|
2,379,560
|
|
|
|
7,223
|
|
Verigy
Ltd
|
|
|
|
|
|
|
|
|
(Singapore)
(a)
|
|
|
206,650
|
|
|
|
|
|
|
|
|
8,323,460
|
|
|
Software
& Services: 0.8%
|
|
|
|
|
|
|
49,000
|
|
Adobe
Systems, Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
1,967,350
|
|
|
|
|
|
|
|
|
Technology
Hardware & Equipment: 12.1%
|
|
|
|
|
|
|
105,210
|
|
Agilent
|
|
|
|
|
|
|
|
|
Technologies,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
4,044,272
|
|
|
|
74,350
|
|
Canon,
Inc. (Japan)
|
|
|
4,360,109
|
|
|
|
92,000
|
|
Dell,
Inc.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
2,626,600
|
|
|
|
42,000
|
|
Ericsson
Telephone
|
|
|
|
|
|
|
|
|
Co.
- ADR
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
1,675,380
|
|
|
|
62,300
|
|
Hewlett-Packard
Co.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
2,779,826
|
|
|
|
46,000
|
|
International
Business
|
|
|
|
|
|
|
|
|
Machines
Corp.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
4,841,500
|
|
|
|
100,000
|
|
NEC
Corp. (Japan)
|
|
|
514,811
|
|
The
accompanying notes are an integral part of these financial
statements.
|
SCHEDULE
OF INVESTMENTS
at
June 30,
2007, Continued
|
|
Shares/
|
|
|
|
|
|
|
Principal
Amount
|
|
|
|
Value
|
|
|
Technology
Hardware & Equipment (Continued)
|
|
|
|
|
|
197,600
|
|
Nokia
OYJ - ADR
|
|
|
|
|
|
|
|
(Finland)
|
|
$
|
5,554,536
|
|
|
|
2,350
|
|
Nortel
Networks
|
|
|
|
|
|
|
|
|
Corp.
(Canada) (a)
|
|
|
56,518
|
|
|
|
30,000
|
|
Ricoh
Co., Ltd.
|
|
|
|
|
|
|
|
|
(Japan)
|
|
|
694,091
|
|
|
|
7,000
|
|
Sunpower
Corp. -
|
|
|
|
|
|
|
|
|
Class
A (United
|
|
|
|
|
|
|
|
|
States)
(a)
|
|
|
441,350
|
|
|
|
78,900
|
|
Xerox
Corp.
|
|
|
|
|
|
|
|
|
(United
States) (a)
|
|
|
1,458,072
|
|
|
|
|
|
|
|
|
29,047,065
|
|
|
Telecommunication
Services: 1.9%
|
|
|
|
|
|
|
300,000
|
|
BT
Group PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,996,664
|
|
|
|
3,300
|
|
Swisscom
AG
|
|
|
|
|
|
|
|
|
(Switzerland)
|
|
|
1,128,207
|
|
|
|
9,525
|
|
Swisscom
AG -
|
|
|
|
|
|
|
|
|
ADR
(Switzerland)
|
|
|
324,802
|
|
|
|
315,000
|
|
Telstra
Corp., Ltd.
|
|
|
|
|
|
|
|
|
(Australia)
|
|
|
1,225,548
|
|
|
|
|
|
|
|
|
4,675,221
|
|
|
Transportation:
3.8%
|
|
|
|
|
|
|
16,000
|
|
Canadian
Pacific
|
|
|
|
|
|
|
|
|
Railway
Ltd
|
|
|
|
|
|
|
|
|
(Canada)
(a)
|
|
|
1,105,017
|
|
|
|
87,386
|
|
Deutsche
Post AG
|
|
|
|
|
|
|
|
|
(Germany)
|
|
|
2,828,775
|
|
|
|
370
|
|
East
Japan Railway
|
|
|
|
|
|
|
|
|
Co.
(Japan)
|
|
|
2,850,928
|
|
|
|
80,000
|
|
Mitsui
OSK Lines
|
|
|
|
|
|
|
|
|
Ltd.
(Japan)
|
|
|
1,084,714
|
|
|
|
375,000
|
|
MTR
Corp.
|
|
|
|
|
|
|
|
|
(Hong
Kong)
|
|
|
888,509
|
|
|
|
23,000
|
|
National
|
|
|
|
|
|
|
|
|
Express
Group
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
489,615
|
|
|
|
|
|
|
|
|
9,247,558
|
|
|
Utilities:
3.6%
|
|
|
|
|
|
|
70,000
|
|
National
Grid PLC
|
|
|
|
|
|
|
|
|
(United
Kingdom)
|
|
|
1,036,920
|
|
|
|
40,000
|
|
Oest
Elektrizitats
|
|
|
|
|
|
|
|
|
(Austria)
|
|
|
2,045,428
|
|
|
|
24,000
|
|
Ormat
|
|
|
|
|
|
|
|
|
Technologies,
Inc.
|
|
|
|
|
|
|
|
|
(United
States)
|
|
|
904,320
|
|
|
|
40,000
|
|
Red
Electrica
|
|
|
|
|
|
|
|
|
De
Espana (Spain)
|
|
|
1,874,815
|
|
|
|
92,000
|
|
Severn
Trent
|
|
|
|
|
|
|
|
|
PLC
(United
|
|
|
|
|
|
|
|
|
Kingdom)
|
|
|
2,540,764
|
|
|
|
40,049
|
|
Trustpower
Ltd
|
|
|
|
|
|
|
|
|
(New
Zealand)
|
|
|
259,245
|
|
|
|
|
|
|
|
|
8,661,492
|
|
|
TOTAL
COMMON STOCKS
|
|
|
|
|
|
(Cost
$158,669,213)
|
|
|
216,940,309
|
|
|
|
|
|
|
|
|
PREFERRED
STOCKS: 2.0%
|
|
|
|
|
|
|
|
|
|
|
|
Household
& Personal Products: 2.0%
|
|
|
|
|
|
|
90,000
|
|
Henkel
KGaA
|
|
|
4,742,619
|
|
|
TOTAL
PREFERRED STOCKS
|
|
|
|
|
|
(Cost
$2,809,414)
|
|
|
4,742,619
|
|
|
|
|
|
|
|
|
SHORT-TERM
INVESTMENTS: 9.3%
|
|
|
|
|
|
|
|
|
|
|
|
Certificates
of Deposit: 1.0%
|
|
|
|
|
|
|
|
|
New
Resource Bank
|
|
|
|
|
|
$
|
100,000
|
|
4.150%,
12/21/2007
|
|
|
100,000
|
|
|
|
300,000
|
|
4.500%,
02/21/2008
|
|
|
300,000
|
|
|
|
300,000
|
|
4.400%,
04/24/2008
|
|
|
300,000
|
|
|
|
|
|
Permaculture
|
|
|
|
|
|
|
24,285
|
|
1.000%,
03/27/2008
|
|
|
24,285
|
|
|
|
|
|
Self-Help
|
|
|
|
|
|
|
|
|
Credit
Union
|
|
|
|
|
|
|
100,000
|
|
4.960%,
08/20/2007
|
|
|
100,000
|
|
|
|
|
|
Shorebank
|
|
|
|
|
|
|
285,000
|
|
4.580%,
08/17/2007
|
|
|
285,000
|
|
|
|
200,000
|
|
4.350%,
10/18/2007
|
|
|
200,000
|
|
|
|
95,000
|
|
4.470%,
11/08/2007
|
|
|
95,000
|
|
|
|
100,000
|
|
4.530%,
11/30/2007
|
|
|
100,000
|
|
|
|
200,000
|
|
4.450%,
02/14/2008
|
|
|
200,000
|
|
|
|
100,000
|
|
4.450%,
02/28/2008
|
|
|
100,000
|
|
|
|
300,000
|
|
4.380%,
03/27/2008
|
|
|
300,000
|
|
|
|
200,000
|
|
4.530%,
04/24/2008
|
|
|
200,000
|
|
The
accompanying notes are an integral part of these financial
statements.
|
SCHEDULE
OF INVESTMENTS
at
June 30,
2007, Continued
|
|
Shares/
|
|
|
|
|
|
|
Principal
Amount
|
|
|
|
Value
|
|
|
Certificates
of Deposit (Continued)
|
|
|
|
|
$
|
95,000
|
|
3.941%,
07/20/2008
|
|
$
|
95,000
|
|
|
|
|
|
Wainwright
|
|
|
|
|
|
|
100,000
|
|
4.360%,
01/18/2008
|
|
|
100,000
|
|
|
|
|
|
|
|
|
2,499,285
|
|
|
Money
Market: 8.3%
|
|
|
|
|
|
|
19,878,696
|
|
Fidelity
Money
|
|
|
|
|
|
|
|
|
Market
Portfolio
|
|
|
19,878,696
|
|
|
TOTAL
SHORT-TERM INVESTMENTS
|
|
|
|
|
|
(Cost
$22,377,981)
|
|
|
22,377,981
|
|
|
|
|
|
|
|
|
TOTAL
INVESTMENTS IN SECURITIES: 101.7%
|
|
|
|
|
|
(Cost
$183,856,608)
|
|
|
244,060,909
|
|
|
|
|
|
|
|
|
Liabilities
in Excess
|
|
|
|
|
|
of
Other Assets: (1.7)%
|
|
|
(4,129,521
|
)
|
|
|
|
|
|
|
|
TOTAL
NET ASSETS: 100.0%
|
|
$
|
239,931,388
|
|
ADR
American Depository Receipt
GDR
Global Depository Receipt
(a)
Non-income producing security.
|
|
|
Percent
of
|
|
Country
|
|
Net
Assets
|
|
Australia
|
|
|
1.38
|
%
|
|
Austria
|
|
|
0.85
|
%
|
|
Belgium
|
|
|
1.04
|
%
|
|
Canada
|
|
|
0.51
|
%
|
|
China
|
|
|
0.18
|
%
|
|
Denmark
|
|
|
5.14
|
%
|
|
Finland
|
|
|
3.15
|
%
|
|
France
|
|
|
2.09
|
%
|
|
Germany
|
|
|
8.40
|
%
|
|
Hong
Kong
|
|
|
0.37
|
%
|
|
Italy
|
|
|
1.15
|
%
|
|
Japan
|
|
|
10.41
|
%
|
|
Netherlands
|
|
|
0.76
|
%
|
|
NewZealand
|
|
|
0.11
|
%
|
|
Norway
|
|
|
1.25
|
%
|
|
Singapore
|
|
|
0.09
|
%
|
|
Spain
|
|
|
1.41
|
%
|
|
Sweden
|
|
|
12.39
|
%
|
|
Switzerland
|
|
|
6.29
|
%
|
|
United
Kingdom
|
|
|
12.19
|
%
|
|
United
States
|
|
|
32.56
|
%
|
|
Liabilities
in Excess
|
|
|
|
|
|
of
Other Assets
|
|
|
(1.72
|
)%
|
|
|
|
|
100.00
|
%
|
The
accompanying notes are an integral part of these financial
statements.
|
STATEMENT
OF ASSETS AND
LIABILITIES
at
June 30,
2007
|
|
ASSETS
|
|
|
|
|
Investments
in securities, at value (cost $183,856,608) (Note 2)
|
|
$
|
244,060,909
|
|
|
Cash
|
|
|
2,921
|
|
|
Receivables:
|
|
|
|
|
|
Dividends
and interest
|
|
|
448,646
|
|
|
Fund
shares sold
|
|
|
938,319
|
|
|
Prepaid
expenses
|
|
|
32,602
|
|
|
Total
assets
|
|
|
245,483,397
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Payables:
|
|
|
|
|
|
Investment
securities purchased
|
|
|
5,007,827
|
|
|
Fund
shares redeemed
|
|
|
169,989
|
|
|
Investment
advisory fees (net)
|
|
|
175,512
|
|
|
Administration
fees
|
|
|
18,770
|
|
|
Custody
fees
|
|
|
15,772
|
|
|
Fund
accounting fees
|
|
|
10,435
|
|
|
Transfer
agent fees
|
|
|
12,511
|
|
|
Distribution
fees
|
|
|
112,254
|
|
|
Chief
compliance officer fees
|
|
|
834
|
|
|
Other
accrued expenses
|
|
|
28,105
|
|
|
Total
liabilities
|
|
|
5,552,009
|
|
|
NET
ASSETS
|
|
$
|
239,931,388
|
|
|
|
|
|
|
|
|
COMPONENTS
OF NET ASSETS
|
|
|
|
|
|
Paid-in
capital
|
|
$
|
177,809,174
|
|
|
Undistributed
net investment income
|
|
|
1,824,782
|
|
|
Accumulated
net realized gain on investments
|
|
|
|
|
|
and
foreign currency transactions
|
|
|
88,103
|
|
|
Net
unrealized appreciation on investments
|
|
|
60,204,301
|
|
|
Net
unrealized appreciation of foreign currency, and
|
|
|
|
|
|
translation
of other assets and liabilities in foreign currency
|
|
|
5,028
|
|
|
Net
assets
|
|
$
|
239,931,388
|
|
|
|
|
|
|
|
|
Retail
Class
|
|
|
|
|
|
Net
assets
|
|
$
|
172,222,327
|
|
|
Shares
issued and outstanding
|
|
|
|
|
|
(Unlimited
number of shares authorized without par value)
|
|
|
4,712,840
|
|
|
Net
asset value, offering price, and redemption price per
share
|
|
$
|
36.54
|
|
|
|
|
|
|
|
|
Institutional
Class:
|
|
|
|
|
|
Net
assets
|
|
$
|
67,709,061
|
|
|
Shares
issued and outstanding
|
|
|
|
|
|
(Unlimited
number of shares authorized without par value)
|
|
|
1,851,473
|
|
|
Net
asset value, offering price, and redemption price per
share
|
|
$
|
36.57
|
|
The
accompanying notes are an integral part of these financial
statements.
|
STATEMENT
OF OPERATIONS
For
the year
ended June 30, 2007
|
|
INVESTMENT
INCOME
|
|
|
|
|
Dividends
(net of foreign withholding tax of $574,968)
|
|
$
|
3,743,184
|
|
|
Interest
|
|
|
782,295
|
|
|
Total
investment income
|
|
|
4,525,479
|
|
|
|
|
|
|
|
|
EXPENSES
(Note 3)
|
|
|
|
|
|
Investment
advisory fees
|
|
|
1,689,416
|
|
|
Distribution
fees
|
|
|
399,550
|
|
|
Administration
fees
|
|
|
221,988
|
|
|
Fund
accounting fees
|
|
|
83,687
|
|
|
Custody
fees
|
|
|
73,310
|
|
|
Transfer
agent fees
|
|
|
44,359
|
|
|
Registration
fees
|
|
|
34,031
|
|
|
Reports
to shareholders
|
|
|
27,546
|
|
|
Miscellaneous
expense
|
|
|
25,706
|
|
|
Audit
fees
|
|
|
23,187
|
|
|
Trustee
fees
|
|
|
12,923
|
|
|
Legal
fees
|
|
|
12,277
|
|
|
Chief
compliance officer fees
|
|
|
5,000
|
|
|
Insurance
expense
|
|
|
2,612
|
|
|
Total
expenses
|
|
|
2,655,592
|
|
|
Less: fees
waived
|
|
|
(120,444
|
)
|
|
Net
expenses
|
|
|
2,535,148
|
|
|
Net
investment income
|
|
|
1,990,331
|
|
|
|
|
|
|
|
|
REALIZED
AND UNREALIZED GAIN ON INVESTMENTS
|
|
|
|
|
|
AND
FOREIGN CURRENCY TRANSACTIONS
|
|
|
|
|
|
Net
realized gain on investments and
|
|
|
|
|
|
foreign
currency transactions
|
|
|
48,443
|
|
|
Change
in net unrealized appreciation on investments
|
|
|
39,849,712
|
|
|
Change
in net unrealized appreciation of foreign
|
|
|
|
|
|
currency,
and translation of other assets and
|
|
|
|
|
|
liabilities
in foreign currency
|
|
|
3,378
|
|
|
Net
realized and unrealized gain on investments
|
|
|
|
|
|
and
foreign currency transactions
|
|
|
39,901,533
|
|
|
Net
increase in net assets
|
|
|
|
|
|
resulting
from operations
|
|
$
|
41,891,864
|
|
The
accompanying notes are an integral part of these financial
statements.
(This
Page Intentionally Left Blank.)
|
STATEMENTS
OF CHANGES IN NET
ASSETS
|
|
|
|
Year
Ended
|
|
|
Period
Ended
|
|
|
Year
Ended
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
August
31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
INCREASE
(DECREASE) IN
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS FROM:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
$
|
1,990,331
|
|
|
$
|
1,506,651
|
|
|
$
|
637,807
|
|
|
Net
realized gain on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
foreign currency transactions
|
|
|
48,443
|
|
|
|
1,784,506
|
|
|
|
59,209
|
|
|
Change
in net unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
appreciation
on investments
|
|
|
39,849,712
|
|
|
|
10,336,133
|
|
|
|
9,610,992
|
|
|
Change
in net unrealized appreciation of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign
currency, and translation of other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets
and liabilities in foreign currency
|
|
|
3,378
|
|
|
|
—
|
|
|
|
—
|
|
|
Net
increase in net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
resulting
from operations
|
|
|
41,891,864
|
|
|
|
13,627,290
|
|
|
|
10,308,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS
TO SHAREHOLDERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From
net investment income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
Class
|
|
|
(1,548,567
|
)
|
|
|
(561,957
|
)
|
|
|
(265,510
|
)
|
|
Institutional
Class
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
From
net realized gain:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
Class
|
|
|
(1,444,815
|
)
|
|
|
(212,750
|
)
|
|
|
—
|
|
|
Institutional
Class
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
distributions to shareholders
|
|
|
(2,993,382
|
)
|
|
|
(774,707
|
)
|
|
|
(265,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
SHARE TRANSACTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase in net assets derived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from
net change in outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares
- Retail Class (a) (b)
|
|
|
14,975,721
|
|
|
|
18,591,167
|
|
|
|
26,836,993
|
|
|
Net
increase in net assets derived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from
net change in outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares
- Institutional Class (c)
|
|
|
66,225,856
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
increase in net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from
capital share transactions
|
|
|
81,201,577
|
|
|
|
18,591,167
|
|
|
|
26,836,993
|
|
|
Total
increase in net assets
|
|
|
120,100,059
|
|
|
|
31,443,750
|
|
|
|
36,879,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
of period
|
|
|
119,831,329
|
|
|
|
88,387,579
|
|
|
|
51,508,088
|
|
|
End
of period
|
|
$
|
239,931,388
|
|
|
$
|
119,831,329
|
|
|
$
|
88,387,579
|
|
|
Undistributed
net investment income
|
|
$
|
1,824,782
|
|
|
$
|
1,441,139
|
|
|
$
|
500,260
|
|
The
accompanying notes are an integral part of these financial
statements.
|
STATEMENTS
OF CHANGES IN
NET ASSETS
,
Continued
|
(a) Summary
of capital share transactions for Retail shares is as follows:
|
|
|
Year
Ended
|
|
|
Period
Ended
|
|
|
Year
Ended
|
|
|
|
|
June
30, 2007
|
|
|
June
30, 2006
|
|
|
August
31, 2005
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
sold
|
|
|
2,827,936
|
|
|
$
|
93,763,181
|
|
|
|
1,129,424
|
|
|
$
|
31,752,443
|
|
|
|
1,388,264
|
|
|
$
|
34,221,777
|
|
|
Shares
issued in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinvestment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
distributions
|
|
|
87,541
|
|
|
|
2,862,594
|
|
|
|
27,332
|
|
|
|
731,133
|
|
|
|
10,084
|
|
|
|
252,894
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
redeemed
(b)
|
|
|
(2,327,433
|
)
|
|
|
(81,650,054
|
)
|
|
|
(499,132
|
)
|
|
|
(13,892,409
|
)
|
|
|
(311,287
|
)
|
|
|
(7,637,678
|
)
|
|
Net
increase
|
|
|
588,044
|
|
|
$
|
14,975,721
|
|
|
|
657,624
|
|
|
$
|
18,591,167
|
|
|
|
1,087,061
|
|
|
$
|
26,836,993
|
|
(b) Net
of redemption fees of $3,013, $6,226 and $5,074 respectively.
(c) Summary
of capital share transactions for Institutional shares is as
follows:
|
|
|
Period
Ended
|
|
|
Period
Ended
|
|
|
Year
Ended
|
|
|
|
|
June
30, 2007 (d)
|
|
|
June
30, 2006
|
|
|
August
31, 2005
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
sold
|
|
|
1,861,715
|
|
|
$
|
66,598,502
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
Shares
issued in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinvestment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
redeemed
|
|
|
(10,242
|
)
|
|
|
(372,646
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net
increase
|
|
|
1,851,473
|
|
|
$
|
66,225,856
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
(d) Institutional
shares have been offered since March 30, 2007.
The
accompanying notes are an integral part of these financial
statements.
|
FINANCIAL
HIGHLIGHTS
For
a
capital share outstanding throughout each period
|
Retail
Class
|
|
|
Year
|
|
|
Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Year
Ended August 31,
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
Net
asset value,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
beginning
of period/year
|
|
$
|
29.05
|
|
|
$
|
25.49
|
|
|
$
|
21.64
|
|
|
$
|
19.47
|
|
|
$
|
16.67
|
|
|
$
|
19.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENT
OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss)
|
|
|
0.32
|
|
|
|
0.37
|
|
|
|
0.18
|
|
|
|
0.08
|
|
|
|
0.02
|
|
|
|
(0.05
|
)
|
|
Net
realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain
(loss) on investments
|
|
|
7.79
|
|
|
|
3.41
|
|
|
|
3.77
|
|
|
|
2.13
|
|
|
|
2.79
|
|
|
|
(2.67
|
)
|
|
Total
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment
operations
|
|
|
8.11
|
|
|
|
3.78
|
|
|
|
3.95
|
|
|
|
2.21
|
|
|
|
2.81
|
|
|
|
(2.72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS
DISTRIBUTIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From
net investment income
|
|
|
(0.32
|
)
|
|
|
(0.16
|
)
|
|
|
(0.10
|
)
|
|
|
(0.04
|
)
|
|
|
—
|
|
|
|
—
|
|
|
From
net realized gain
|
|
|
(0.30
|
)
|
|
|
(0.06
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
(0.13
|
)
|
|
Total
distributions
|
|
|
(0.62
|
)
|
|
|
(0.22
|
)
|
|
|
(0.10
|
)
|
|
|
(0.04
|
)
|
|
|
(0.02
|
)
|
|
|
(0.13
|
)
|
|
Paid-in
capital from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
redemption
fees (Note 2)
|
|
|
—
|
*
|
|
|
—
|
*
|
|
|
—
|
*
|
|
|
—
|
*
|
|
|
0.01
|
|
|
|
—
|
|
|
Net
asset value,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
end
of period/year
|
|
$
|
36.54
|
|
|
$
|
29.05
|
|
|
$
|
25.49
|
|
|
$
|
21.64
|
|
|
$
|
19.47
|
|
|
$
|
16.67
|
|
|
Total
return
|
|
|
28.18
|
%
|
|
14.88
|
%^
|
|
|
18.27
|
%
|
|
|
11.36
|
%
|
|
|
16.90
|
%
|
|
|
(14.04
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIOS/SUPPLEMENTAL
DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
period/year (millions)
|
|
$
|
172.2
|
|
|
$
|
119.8
|
|
|
$
|
88.4
|
|
|
$
|
51.5
|
|
|
$
|
22.5
|
|
|
$
|
15.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIO
OF EXPENSES TO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
NET ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before
fees waived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
expenses absorbed
|
|
|
1.57
|
%
|
|
|
1.63
|
%
+
|
|
|
1.69
|
%
|
|
|
1.90
|
%
|
|
|
2.17
|
%
|
|
|
2.42
|
%
|
|
After
fees waived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
expenses absorbed
|
|
|
1.50
|
%
|
|
|
1.50
|
%
+
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
1.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIO
OF NET INVESTMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) TO AVERAGE NET ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before
fees waived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
expenses absorbed
|
|
|
0.99
|
%
|
|
|
1.60
|
%
+
|
|
|
0.71
|
%
|
|
|
0.02
|
%
|
|
|
(0.52
|
)%
|
|
|
(1.27
|
)%
|
|
After
fees waived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
expenses absorbed
|
|
|
1.06
|
%
|
|
|
1.73
|
%
+
|
|
|
0.90
|
%
|
|
|
0.42
|
%
|
|
|
0.15
|
%
|
|
|
(0.35
|
)%
|
|
Portfolio
turnover rate
|
|
|
0
|
%
|
|
4
|
%^
|
|
|
1
|
%
|
|
|
4
|
%
|
|
|
10
|
%
|
|
|
8
|
%
|
|
*
|
Less
than $.01 per share.
|
|
^
|
Not
annualized
|
|
+
|
Annualized
|
The
accompanying notes are an integral part of these financial
statements.
|
FINANCIAL
HIGHLIGHTS
For
a
capital share outstanding throughout each
period
|
Institutional
Class
|
|
|
Period
Ended
|
|
|
|
|
June
30, 2007*
|
|
|
Net
asset value, beginning of period
|
|
$
|
34.44
|
|
|
|
|
|
|
|
|
INCOME
FROM
|
|
|
|
|
|
INVESTMENT
OPERATIONS:
|
|
|
|
|
|
Net
investment income
|
|
|
0.16
|
|
|
Net
realized and unrealized
|
|
|
|
|
|
gain
on investments
|
|
|
1.97
|
|
|
Total
from investment operations
|
|
|
2.13
|
|
|
|
|
|
|
|
|
LESS
DISTRIBUTIONS:
|
|
|
|
|
|
From
net investment income
|
|
|
—
|
|
|
From
net realized gain
|
|
|
—
|
|
|
Total
distributions
|
|
|
—
|
|
|
Paid-in
capital from redemption fees (Note 2)
|
|
|
—
|
|
|
Net
asset value, end of period
|
|
$
|
36.57
|
|
|
Total
return
|
|
6.18
|
%^
|
|
|
|
|
|
|
|
RATIOs/SUPPLEMENTAL
DATA:
|
|
|
|
|
|
Net
assets, end of period (millions)
|
|
$
|
67.7
|
|
|
|
|
|
|
|
|
RATIO
OF EXPENSES TO AVERAGE NET ASSETS:
|
|
|
|
|
|
Before
fees waived and expenses absorbed
|
|
|
1.23
|
%
+
|
|
After
fees waived and expenses absorbed
|
|
|
1.20
|
%
+
|
|
|
|
|
|
|
|
RATIO
OF NET INVESTMENT INCOME
|
|
|
|
|
|
TO
AVERAGE NET ASSETS:
|
|
|
|
|
|
Before
fees waived and expenses absorbed
|
|
|
2.28
|
%
+
|
|
After
fees waived and expenses absorbed
|
|
|
2.31
|
%
+
|
|
Portfolio
turnover rate
|
|
0
|
%^
|
|
*
|
Institutional
shares have been offered since March 30, 2007.
|
|
^
|
Not
annualized
|
|
+
|
Annualized
|
The
accompanying notes are an integral part of these financial
statements.
|
NOTES
TO FINANCIAL
STATEMENTS
June
30,
2007
|
Portfolio
21 (the “Fund”) is a diversified series of shares of beneficial interest of
Professionally Managed Portfolios (the “Trust”), which is registered under the
Investment Company Act of 1940, as amended (the “1940 Act”) as an open-end
investment management company. The Fund commenced operations on
September 30, 1999.
The
Fund offers Retail and
Institutional shares. Institutional shares are offered primarily for
direct investment by investors such as pension and profit-sharing plans,
employee benefit trusts, endowments, foundations and
corporations. Each class of shares has equal rights as to earnings
and assets except that each class bears different distribution
expenses. Each class of shares has exclusive voting rights with
respect to matters that affect just that class. Income, expenses
(other than expenses attributable to a specific class), and realized and
unrealized gains or losses on investments are allocated to each class of shares
based on its relative net assets.
The
investment objective of the Fund
is to seek long-term growth of capital. The Fund seeks to achieve its
objective by investing primarily in common stocks of domestic and foreign
companies of any size market capitalization that satisfy certain
environmental sustainability criteria.
On
June 20, 2006 the Trust’s board of
trustees approved a change in the Fund’s fiscal year-end from August 31 to June
30, effective with the ten-month period ending June 30, 2006.
|
NOTE
2 – SIGNIFICANT ACCOUNTING
POLICIES
|
The
following is a summary of significant accounting policies consistently followed
by the Fund. These policies are in conformity with accounting
principles generally accepted in the United States of America.
|
A.
|
Security
Valuation.
All equity securities that are traded on a
national securities exchange, except those listed on the NASDAQ Global
Market
®
(“NASDAQ”), and Small CapSM exchanges are valued at the last reported sale
price on the exchange on which the security is principally
traded. Securities traded on NASDAQ will be valued at the
NASDAQ Official Closing Price (“NOCP”). If, on a particular
day, an exchange-traded or NASDAQ security does not trade, then the
mean
between the most recent quoted bid and asked prices will be used.
All
equity securities that are not traded on a listed exchange are valued
at
the last sale price in the over-the-counter market. If a
non-exchange traded security does not trade on a particular day,
then the
mean between
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
|
|
the
last quoted closing bid and asked price will be
used. Securities for which quotations are not readily available
are valued at their respective fair values as determined in good
faith by
the Board of Trustees. When a security is “fair valued,”
consideration is given to the facts and circumstances relevant to
the
particular situation, including a review of various factors set forth
in
the pricing procedures adopted by the Fund’s Board of
Trustees. Fair value pricing is an inherently subjective
process, and no single standard exists for determining fair
value. Different funds could reasonably arrive at different
values for the same security. The use of fair value pricing by
a fund may cause the net asset value of its shares to differ significantly
from the net asset value that would be calculated without regard
to such
considerations. As of June 30, 2007, the Fund did not hold fair valued
securities as described above.
|
|
|
Short-term
securities that have maturities of less than 60 days are valued at
amortized cost, which when combined with accrued interest, approximates
market value.
|
|
|
The
Fund may invest substantially in securities traded on foreign exchanges
(see “
Foreign Currency
” below). Investments that are
primarily traded on foreign exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges,
or if there were no transactions on such day, at the mean between
the bid
and asked prices. The Trust has selected FT InteractiveData (“FTID”) to
provide fair value pricing data with respect to certain security
holdings
held by certain Funds. The use of this third-party pricing service
is
designed to capture events occurring after a foreign exchange closes
that
may affect the value of certain holdings of certain Fund’s securities
traded on those foreign exchanges.
|
|
B.
|
Foreign
Currency.
Investment securities and other assets and
liabilities denominated in foreign currencies are translated into
U.S.
dollar amounts at the date of valuation. Purchases and sales of investment
securities and income and expense items denominated in foreign currencies
are translated into U.S. dollar amounts on the respective dates of
such
transactions.
|
|
|
The
Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities
held.
Such fluctuations are included with the net realized and unrealized
gain
or loss from investments.
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
|
|
The
Fund reports net realized foreign exchange gains or losses that arise
from
sales of foreign currencies, currency gains or losses realized between
the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding
taxes
recorded on the Fund’s books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange
gains and losses arise from changes in the fair values of assets
and
liabilities, other than investments in securities at fiscal period
end,
resulting from changes in exchange
rates.
|
|
C.
|
Federal
Income Taxes.
The Fund has elected to be taxed as “regulated
investment company” and intends to distribute substantially all taxable
income to its shareholders and otherwise comply with the provisions
of the
Internal Revenue Code applicable to regulated investment
companies. Therefore, no provision for federal income taxes or
excise taxes has been made.
|
|
|
In
order to avoid imposition of the excise tax applicable to regulated
investment companies, the Fund intends to declare each year as dividends
in each calendar year at least 98% of its net investment income (earned
during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed
amounts, if any, from prior years.
|
|
|
Under
current tax laws, losses after October 31 may be deferred and treated
as
occurring on the first business day of the following fiscal
year. The Fund had Post-October currency losses of
$50,893.
|
|
D.
|
Security
Transactions and Investment Income.
Investment securities
transactions are accounted for on the trade date. Gains and
losses realized on sales of securities are determined on a first
in, first
out basis. Discounts/premiums on debt securities purchased are
accreted/amortized over the life of the respective securities using
the
effective interest method. Dividend income is recorded on the
ex-dividend date. Interest income is recorded on an accrual
basis. Other non-cash dividends are recognized as investment income
at the
fair value of the property received. Withholding taxes on foreign
dividends have been provided for in accordance with the Fund’s
understanding of the country’s tax rules and
rates.
|
|
E.
|
Distributions
to Shareholders.
Distributions to shareholders from net
investment income and net realized gains on securities for the Fund
normally, which are determined in accordance with income tax
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
|
|
regulations,
are declared and paid on an annual basis. Distributions are
recorded on the ex-dividend date.
|
|
F.
|
Use
of Estimates.
The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the
date of
the financial statements and the reported amount of revenue and expenses
during the reporting period. Actual results could differ from
those estimates.
|
|
G.
|
Share
Valuation.
The net asset value (“NAV”) per share of the Fund is
calculated by dividing the sum of the value of the securities held
by the
Fund, plus cash or other assets, minus all liabilities (including
estimated accrued expenses) by the total number of shares outstanding
for
the Fund, rounded to the nearest cent. The Fund’s shares will
not be priced on the days on which the NYSE is closed for
trading. The offering and redemption price per share for the
Fund is equal to the Fund’s net asset value per share. The Fund
charges a 2.00% redemption fee on shares held less than 60
days. This fee is deducted from the redemption proceeds
otherwise payable to the shareholder. The Fund retains the fee
charged as paid-in-capital and such fees become part of the Fund’s daily
NAV calculation.
|
|
H.
|
Reclassification
of Capital Accounts.
Accounting principles generally
accepted in the United States of America require that certain components
of the net assets relating to permanent differences be reclassified
between financial and tax reporting. These
reclassifications have no effect on the net assets or net assets
per value
per share. For the year ended June 30, 2007, the Fund decreased
accumulated net investment income by $58,121 and increased accumulated
capital gains by $58,121 due to certain permanent book and tax
differences. Net assets were not affected by the
change.
|
|
I.
|
Guarantees
and Indemnifications.
In the normal course of business, the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund’s maximum exposure under
these arrangements is unknown as this would involve future claims
that may
be made against the Fund that have not yet occurred. However,
based on experience, the Fund expects the risk of loss to be
remote.
|
|
J.
|
New
Accounting Pronouncement.
On July 13, 2006, the Financial
Accounting Standards Board (“FASB”) released FASB Interpretation
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
|
|
No.
48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48
provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN
48
requires the evaluation of tax positions taken or expected to be
taken in
the course of preparing the Fund’s tax returns to determine whether the
tax positions are “more-likely-than-not” of being sustained by the
applicable tax authority. Tax positions not deemed to meet the more
likely-than-not threshold would be recorded as a tax benefit or expense
in
the current year. Adoption of FIN 48 is required as of the date of
the
last NAV calculation in the first required financial statement reporting
period for fiscal years beginning after December 15, 2006 and is
to be
applied to all open tax years as of the effective date. On
December 22, 2006, the SEC granted a six-month delay in the required
implementation of FIN 48 for mutual funds. At this time, management
is
evaluating the implications of FIN 48 and its impact in the financial
statements has not yet been
determined.
|
|
|
In
September 2006, FASB issued FASB Statement No. 157, “Fair Value
Measurement” (“SFAS 157”), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about
fair
value measurements. SFAS 157 is effective for fiscal years
beginning after November 15, 2007, and interim periods within those
fiscal
years. The Fund believes adoption of SFAS 157 will have no
material impact on its financial
statements.
|
|
NOTE
3 – COMMITMENTS AND OTHER RELATED PARTY
TRANSACTIONS
|
Progressive
Investment Management Corporation (the “Advisor”) provides the Fund with
investment management services under an Investment Advisory Agreement (the
“Agreement”). Under the Agreement, the Advisor furnishes all
investment advice, office space, certain administrative services, and provides
most of the personnel needed by the Fund. For the period July 1, 2006 to March
29, 2007, the Advisor was entitled to a monthly fee at the annual rate of 1.00%
based upon the average daily net assets of the Fund. Effective March
30, 2007, the Advisor is entitled to a monthly fee at the annual rate of 0.95%
based upon the average daily net assets of the Fund. As compensation
for its services, for the year ended June 30, 2007, the Fund incurred $1,689,416
in advisory fees.
The
Advisor has contractually agreed
to limit the Fund’s annual ratio of expenses to 1.50% for the Retail Class and
1.20% for the Institutional Class of the Fund’s average daily net
assets. The contract’s term is indefinite and may
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
be
terminated only by the Board of Trustees. For the year ended June 30,
2007 the Advisor waived $120,444 in fees for the Fund.
The
Advisor is permitted to seek
reimbursement from the Fund, subject to limitations for fees waived and/or
Fund
expenses it pays over the following three years after payment. At June 30,
2007,
the remaining cumulative unreimbursed amount paid and/or waived by the Advisor
on behalf of the Fund that may be reimbursed was $521,822. The
Advisor may recapture a portion of the above amount no later than the dates
as
stated below:
|
Year
of Expiration
|
Amount
|
|
August
31, 2007
|
$148,411
|
|
August
31, 2008
|
$135,899
|
|
June
30, 2009
|
$117,068
|
|
June
30, 2010
|
$120,444
|
The
Fund must pay its current ordinary operating expenses before the Advisor is
entitled to any reimbursement. Any such reimbursement is also
contingent upon Board of Trustees review and approval prior to the time the
reimbursement is initiated.
U.S.
Bancorp Fund Services, LLC (the
“USBFS”), an indirect wholly-owned subsidiary of U.S. Bancorp, serves as the
Fund’s Administrator (the “Administrator”) and, in that capacity, performs
various administrative and accounting services for the Fund. USBFS
also serves as the Fund’s fund accountant, transfer agent, dividend disbursing
agent and registrar. The Administrator prepares various federal and
state regulatory filings, reports and returns for the Fund; prepares reports
and
materials to be supplied to the trustees; monitors the activities of the Fund’s
custodian, transfer agent and accountants; coordinates the preparation and
payment of Fund expenses and reviews the Fund’s expense accruals. For
its services, the Administrator received a monthly fee at the following annual
rate:
|
Under
$15 million
|
$30,000
|
|
$15
to $50 million
|
0.20%
of average daily net assets
|
|
$50
to $100 million
|
0.15%
of average daily net assets
|
|
$100
to $150 million
|
0.10%
of average daily net assets
|
|
Over
$150 million
|
0.05%
of average daily net assets
|
Effective
April 1, 2007, the
Administrator receives a monthly fee at the following annual rates:
|
First
$50 million
|
0.15%
of average daily net assets
|
|
Next
$50 million
|
0.12%
of average daily net assets
|
|
Next$50
million
|
0.10%
of average daily net assets
|
|
Over
$150 million
|
0.05%
of average daily net assets
|
|
$30,000
minimum
|
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
For
the year ended June 30, 2007 the
Fund incurred $221,988 in administration fees. The officers of the Trust are
employees of the Administrator. The Chief Compliance Officer is also an employee
of the Administrator. For the year ended June 30, 2007, the Fund was allocated
$5,000 of the Trust’s Chief Compliance Officer fee.
Quasar
Distributors, LLC (the
“Distributor”) acts as the Fund’s principal underwriter in a continuous public
offering of the Fund’s shares. U.S. Bank, N.A.serves as custodian
(the “Custodian”) to the Fund. Both the Distributor and Custodian are affiliates
of the Administrator.
The
Fund has adopted a Distribution
Plan (the “Plan”) in accordance with Rule 12b-1 under the 1940 Act with respect
to Retail shares. The Plan provides that the Fund may pay a fee to
the Advisor, as Distribution Coordinator, at an annual rate of up to 0.25%
of
the average daily net assets of Retail shares. No distribution fees
are paid by Institutional shares. The fee is paid to the Distribution
Coordinator as compensation for distribution-related activities, not
reimbursement for specific expenses incurred. For the year ended June
30, 2007, the Fund incurred $399,550 in distribution fees.
The
Fund has entered into Sub-Transfer
Agent Arrangements (the “Arrangements”) with respect to Retail Class
shares. Under the Arrangements, the Fund will pay Sub-Transfer
Agents, at an annual rate of up to 0.05% of the average daily net assets of
Retail shares. All Arrangements must be approved by the Board of
Trustees. For the year ended June 30, 2007, the Fund incurred $2,994
in Sub-Transfer Agent fees.
|
NOTE
4 – PURCHASES AND SALES OF
SECURITIES
|
For the year ended June 30, 2007, the cost of purchases and the proceeds from
the sale of securities, excluding short-term investments, were $71,583,024
and
$0 respectively.
There
were no purchases or sales of
long-term U.S. Government securities for the year ended June 30,
2007.
|
NOTE
5 – DISTRIBUTIONS TO
SHAREHOLDERS
|
The tax character of distributions paid during the year ended June 30, 2007
and
the period ended June 30, 2006 was as follows:
|
|
|
2007
|
|
|
2006
|
|
|
Distributions
paid from:
|
|
|
|
|
|
|
|
Ordinary
income
|
|
$
|
1,548,567
|
|
|
$
|
561,957
|
|
|
Long-term
capital gain
|
|
|
1,444,815
|
|
|
|
212,750
|
|
|
|
|
$
|
2,993,382
|
|
|
$
|
774,707
|
|
|
NOTES
TO FINANCIAL
STATEMENTS
June
30, 2007,
Continued
|
The
Fund designated as long-term
capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3),
the
amount necessary to reduce the earnings and profits of the Fund related to
net
capital gain to zero for the tax year ended June 30, 2007.
As
of June 30, 2007, the components of
accumulated earnings/(losses) on a tax basis were as follows:
|
Cost
of investments (a)
|
|
$
|
183,856,608
|
|
|
Gross
unrealized appreciation
|
|
|
64,940,100
|
|
|
Gross
unrealized depreciation
|
|
|
(4,735,799
|
)
|
|
Net
unrealized appreciation
|
|
|
60,204,301
|
|
|
Undistributed
ordinary income
|
|
|
1,876,229
|
|
|
Undistributed
long-term capital gain
|
|
|
87,549
|
|
|
Total
distributable earnings
|
|
|
1,963,778
|
|
|
Net
unrealized appreciation on
|
|
|
|
|
|
foreign
currency transactions
|
|
|
5,028
|
|
|
Post-October
currency loss
|
|
|
(50,893
|
)
|
|
Total
accumulated gains
|
|
$
|
62,122,214
|
|
|
(a)
|
At
June 30, 2007 , the basis of investments for federal income purposes
was
the same as their cost for financial reporting
purposes.
|
|
REPORT
OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING
FIRM
|
To
the Shareholders of
Portfolio
21 and
The
Board of Trustees of
Professionally
Managed Portfolios
We
have
audited the accompanying statement of assets and liabilities, including the
schedule of investments, of Portfolio 21, a series of Professionally Managed
Portfolios, as of June 30, 2007 and the related statement of operations for
the
year then ended, the statements of changes in net assets and the financial
highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund’s
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of material
misstatement. The Trust is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Trust’s
internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 2007, by correspondence with
the
custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well
as evaluating the overall financial statement presentation. We believe that
our
audits provide a reasonable basis for our opinion.
In
our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of Portfolio
21
as of June 30, 2007, the results of its operations for the year then ended,
the
changes in its net assets and the financial highlights for the periods indicated
thereon, in conformity with accounting principles generally accepted in the
United States of America.
TAIT,
WELLER &
BAKER LLP
Philadelphia,
Pennsylvania
August
27, 2007
|
TRUSTEES
AND EXECUTIVE
OFFICERS
(Unaudited)
|
The
overall management of the business
and affairs of the Trust is vested with its Board of Trustees (the
“Board”). The Board approves all significant agreements between the
Trust and persons or companies furnishing services to it, including the
agreements with the Advisor, the Administrator, Custodian and Transfer
Agent. The day-to-day operations of the Trust are delegated to its
officers, subject to the Fund’s investment objectives, strategies, and policies
and to general supervision by the Board.
The
current Trustees and executive
officers of the Trust, their dates of birth and positions with the Trust, term
of office with the Trust and length of time served, their principal occupations
for the past five years and other directorships held are set forth in the table
below. Unless noted otherwise, each person has held the position
listed for a minimum of five years.
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
of
Portfolios
|
|
|
|
|
|
|
|
Term
of
|
|
Principal
|
|
in
Fund
|
|
|
|
|
|
Position
|
|
Office
and
|
|
Occupation
|
|
Complex
(2)
|
|
Other
|
|
Name,
Address
|
|
with
the
|
|
Length
of
|
|
During
Past
|
|
Overseen
by
|
|
Directorships
|
|
and
Age
|
|
Trust
(1)
|
|
Time
Served
|
|
Five
Years
|
|
Trustees
|
|
Held
|
|
|
|
Independent
Trustees of the Trust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dorothy
A. Berry
|
|
Chairman
|
|
Indefinite
|
|
President,
Talon Industries,
|
|
1
|
|
Allegiant
|
|
(born
1943)
|
|
and
|
|
Term;
|
|
Inc.
(administrative,
|
|
|
|
Funds.
|
|
2020
E. Financial Way
|
|
Trustee
|
|
Since
|
|
management
and business
|
|
|
|
|
|
Suite
100
|
|
|
|
May
1991.
|
|
consulting);
formerly,
|
|
|
|
|
|
Glendora,
CA 91741
|
|
|
|
|
|
Chief
Operating Officer,
|
|
|
|
|
|
|
|
|
|
|
|
Integrated
Asset
|
|
|
|
|
|
|
|
|
|
|
|
Management
(investment
|
|
|
|
|
|
|
|
|
|
|
|
advisor
and manager) and
|
|
|
|
|
|
|
|
|
|
|
|
formerly,
President, Value
|
|
|
|
|
|
|
|
|
|
|
|
Line,
Inc. (investment
|
|
|
|
|
|
|
|
|
|
|
|
advisory
and financial
|
|
|
|
|
|
|
|
|
|
|
|
publishing
firm).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wallace
L. Cook
|
|
Trustee
|
|
Indefinite
|
|
Investment
Consultant;
|
|
1
|
|
The
Dana
|
|
(born
1939)
|
|
|
|
Term;
|
|
formerly,
Chief Executive
|
|
|
|
Foundation;
|
|
2020
E. Financial Way
|
|
|
|
Since
|
|
Officer,
Rockefeller Trust
|
|
|
|
The
|
|
Suite
100
|
|
|
|
May
1991.
|
|
Co.,
prior thereto Senior
|
|
|
|
University
|
|
Glendora,
CA 91741
|
|
|
|
|
|
Vice
President; formerly,
|
|
|
|
of
Virginia
|
|
|
|
|
|
|
|
Senior
Vice President,
|
|
|
|
Law
School
|
|
|
|
|
|
|
|
Norton
Simon, Inc.
|
|
|
|
Foundation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl
A. Froebel
|
|
Trustee
|
|
Indefinite
|
|
Owner,
Golf Adventures,
|
|
1
|
|
None.
|
|
(born
1938)
|
|
|
|
Term;
|
|
LLC,
(Vacation Services),
|
|
|
|
|
|
2020
E. Financial Way
|
|
|
|
Since
|
|
formerly,
President and
|
|
|
|
|
|
Suite
100
|
|
|
|
May
1991.
|
|
Founder,
National Investor
|
|
|
|
|
|
Glendora,
CA 91741
|
|
|
|
|
|
Data
Services, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
(investment
related
|
|
|
|
|
|
|
|
|
|
|
|
computer
software).
|
|
|
|
|
|
TRUSTEES
AND EXECUTIVE
OFFICERS
(Unaudited), Continued
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
of
Portfolios
|
|
|
|
|
|
|
|
Term
of
|
|
Principal
|
|
in
Fund
|
|
|
|
|
|
Position
|
|
Office
and
|
|
Occupation
|
|
Complex
(2)
|
|
Other
|
|
Name,
Address
|
|
with
the
|
|
Length
of
|
|
During
Past
|
|
Overseen
by
|
|
Directorships
|
|
and
Age
|
|
Trust
(1)
|
|
Time
Served
|
|
Five
Years
|
|
Trustees
|
|
Held
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
J. Paggioli
|
|
Trustee
|
|
Indefinite
|
|
Consultant
since July
|
|
1
|
|
Trustee,
|
|
(born
1950)
|
|
|
|
Term;
|
|
2001;
formerly, Executive
|
|
|
|
Managers
|
|
2020
E. Financial Way
|
|
|
|
Since
|
|
Vice
President, Investment
|
|
|
|
Funds;
|
|
Suite
100
|
|
|
|
May
1991.
|
|
Company
Administration,
|
|
|
|
Trustee,
|
|
Glendora,
CA 91741
|
|
|
|
|
|
LLC
(“ICA”) (mutual fund
|
|
|
|
Managers
|
|
|
|
|
|
|
|
administrator).
|
|
|
|
AMG
Funds.
|
|
|
|
Officers
of the Trust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
M. Slotky
|
|
President
|
|
Indefinite
|
|
Vice
President, U.S.
|
|
1
|
|
Not
|
|
(born
1947)
|
|
|
|
Term;
Since
|
|
Bancorp
Fund Services,
|
|
|
|
Applicable.
|
|
2020
E. Financial Way
|
|
|
|
August
2002.
|
|
LLC
since July 2001;
|
|
|
|
|
|
Suite
100
|
|
Chief
|
|
Indefinite
|
|
formerly,
Senior Vice
|
|
|
|
|
|
Glendora,
CA 91741
|
|
Compliance
|
|
Term;
Since
|
|
President,
ICA (May
|
|
|
|
|
|
|
|
Officer
|
|
September
|
|
1997-July
2001).
|
|
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
|
|
|
|
|
Anti-
|
|
Indefinite
|
|
|
|
|
|
|
|
|
|
Money
|
|
Term;
Since
|
|
|
|
|
|
|
|
|
|
Laundering
|
|
December
|
|
|
|
|
|
|
|
|
|
Officer
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
W. Falkeis
|
|
Treasurer
|
|
Indefinite
|
|
Chief
Financial Officer,
|
|
1
|
|
Not
|
|
(born
1973)
|
|
|
|
Term;
|
|
U.S.
Bancorp Fund Services,
|
|
|
|
Applicable.
|
|
615
East Michigan St.
|
|
|
|
Since
|
|
LLC,
since April 2006; Vice
|
|
|
|
|
|
Milwaukee,
WI 53202
|
|
|
|
August
2002.
|
|
President,
U.S. Bancorp
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Services, LLC since
|
|
|
|
|
|
|
|
|
|
|
|
1997;
formerly, Chief
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Officer, Quasar
|
|
|
|
|
|
|
|
|
|
|
|
Distributors,
LLC
|
|
|
|
|
|
|
|
|
|
|
|
(2000-2003).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angela
L. Pingel
|
|
Secretary
|
|
Indefinite
|
|
Counsel,
U.S. Bancorp
|
|
1
|
|
Not
|
|
(born
1971)
|
|
|
|
Term;
|
|
Fund
Services LLC since
|
|
|
|
Applicable.
|
|
615
East Michigan St.
|
|
|
|
Since
|
|
2004;
formerly, Associate,
|
|
|
|
|
|
Milwaukee,
WI 53202
|
|
|
|
December
|
|
Krukowski
& Costello,
|
|
|
|
|
|
|
|
|
|
2005.
|
|
S.C.,
(2002-2004); formerly,
|
|
|
|
|
|
|
|
|
|
|
|
Vice
President – Investment
|
|
|
|
|
|
|
|
|
|
|
|
Operations,
Heartland
|
|
|
|
|
|
|
|
|
|
|
|
Advisors,
Inc. (1994-2002).
|
|
|
|
|
|
(1)
|
The
Trustees of the Trust are not “interested persons” of the Trust as defined
under the 1940 Act (“Independent Trustee”).
|
|
(2)
|
The
Trust is comprised of numerous series managed by unaffiliated investment
advisors. The term “Fund Complex” applies only to the
Fund. The Fund does not hold itself out as related to any other
series within the Trust for purposes of investment and investor services,
nor does it share the same investment advisor with any other
series.
|
|
FEDERAL
TAX INFORMATION
(Unaudited)
|
Portfolio
21 designates 100% of the
ordinary distributions paid during the period ended June 30, 2007 as qualified
dividend income under the Jobs Growth and Tax Reconciliation Act of
2003.
For
the period ended June 30, 2007,
32% of the ordinary distributions paid by Portfolio 21 qualify for the dividend
receivable deduction available to corporate shareholders.
Additional
information applicable to
foreign shareholders only: Portfolio 21 designates 9% of the ordinary
income distributions paid during the period ended June 30, 2007 as interest
related dividends under Internal Revenue Code Section 871
(K)(1)(c).
For
the year ended June 30, 2007,
Portfolio 21 earned foreign source income and paid foreign taxes which they
intend to pass through to their shareholders pursuant to Section 853 of the
Internal Revenue Code as follows:
|
|
|
Gross
|
Taxes
|
|
|
Gross
|
Taxes
|
|
|
|
Dividend
|
Withheld
|
|
|
Dividend
|
Withheld
|
|
|
Country
|
Per
Share
|
Per
Share
|
|
Country
|
Per
Share
|
Per
Share
|
|
|
Austria
|
0.0061
|
0.0009
|
|
Italy
|
0.0123
|
0.0033
|
|
|
Belgium
|
0.0133
|
0.0020
|
|
Japan
|
0.0286
|
0.0020
|
|
|
Canada
|
0.0003
|
0.0000
|
|
Netherlands
|
0.0109
|
0.0016
|
|
|
Denmark
|
0.0126
|
0.0022
|
|
Norway
|
0.0074
|
0.0011
|
|
|
Finland
|
0.0272
|
0.0042
|
|
Spain
|
0.0032
|
0.0006
|
|
|
France
|
0.0176
|
0.0026
|
|
Switzerland
|
0.0411
|
0.0097
|
|
|
Germany
|
0.0559
|
0.0085
|
|
Sweden
|
0.1546
|
0.0486
|
|
INFORMATION
ABOUT THE
PORTFOLIO HOLDINGS
(Unaudited)
|
Portfolio
21 files its complete
schedule of portfolio holdings for its first and third quarters with the SEC
on
Form N-Q. The Fund’s Form N-Q is available without charge, upon request, by
calling (866) 209-1962. Furthermore, you can obtain the Form N-Q on
the SEC’s website at
www.sec.gov
.
|
INFORMATION
ABOUT PROXY
VOTING
(Unaudited)
|
Information
regarding how Portfolio 21
votes proxies relating to portfolio securities is available without charge,
upon
request, by calling toll-free at (866) 209-1962 or by accessing the SEC’s
website at
www.sec.gov
. Information regarding how the Fund voted proxies
relating to portfolio securities during the most recent 12-month period ending
June 30 is available by calling (866) 209-1962 or by accessing the SEC’s website
at
www.sec.gov
.
|
INFORMATION
ABOUT
HOUSEHOLDING
|
To
reduce expenses, we may mail only
one copy of the Fund’s prospectus and each annual and semi-annual report to
those addresses shared by two or more accounts. If you wish to receive
individual copies of these documents, please call us at (866) 209-1962 (or
contact your financial institution). We will begin sending you individual copies
thirty days after receiving your request.
Advisor
PROGRESSIVE
INVESTMENT MANAGEMENT CORPORATION
721
NW
9th Avenue
Portland,
Oregon 97209
(877)
351-4115 EXT. 21
Distributor
QUASAR
DISTRIBUTORS, LLC
615
East
Michigan Street
Milwaukee,
Wisconsin 53202
Custodian
U.S.
BANK, N.A.
Custody
Operations
1555
N.
RiverCenter Drive, Suite 302
Milwaukee,
Wisconsin 53212
Transfer
Agent
U.S.
BANCORP FUND SERVICES, LLC
615
East
Michigan Street
Milwaukee,
Wisconsin 53202
Independent
Registered Public Accounting Firm
TAIT,
WELLER & BAKER LLP
1818
Market Street, Suite 2400
Philadelphia,
Pennsylvania 19103
Legal
Counsel
PAUL,
HASTINGS, JANOFSKY & WALKER, LLP
55
Second
Street, 24th Floor
San
Francisco, California 94105
Portfolio
21 – Retail Class
Symbol
–
PORTX
CUSIP
–
742935588
Portfolio
21 – Institutional Class
Symbol
–
PORIX
CUSIP
–
742935356