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: | (811-05133) |
Exact name of registrant as specified in charter: | Putnam High Income Securities Fund |
Address of principal executive offices: | One Post Office Square, Boston, Massachusetts 02109 |
Name and address of agent for service: | Robert T. Burns, Vice President One Post Office Square Boston, Massachusetts 02109 |
Copy to: | Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036 |
Registrant's telephone number, including area code: | (617) 292-1000 |
Date of fiscal year end: | August 31, 2018 |
Date of reporting period: | September 1, 2017 — February 28, 2018 |
Item 1. Report to Stockholders: |
The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940: |
Putnam
High Income
Securities Fund
Semiannual report
2 | 28 | 18
Consider these risks before investing: Lower-rated bonds may offer higher yields in return for more risk. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about changes in monetary policy or interest rates), changes in government intervention, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. You can lose money by investing in the fund. The fund’s shares trade on a stock exchange at market prices, which may be lower than the fund’s net asset value.
Message from the Trustees
April 12, 2018
Dear Fellow Shareholder:
After an extended period of record advances and low volatility, the U.S. stock market encountered some challenges in early 2018. Following several turbulent days, the S&P 500 Index entered correction territory on February 8, 2018, closing more than 10% below its January 2018 peak. Global stock and bond markets have also struggled as concerns grow about rising inflation and interest rates.
While declines like this can be unsettling, seasoned investors recognize that they are natural and ultimately can restore balance in the financial markets. In this changing environment, Putnam’s experienced investment professionals continue to monitor risks and seek opportunities. They take a research-intensive approach to investing that includes risk management strategies designed to serve investors in all types of markets.
As always, we believe investors should maintain a well-diversified portfolio, think about long-term goals, and speak regularly with their financial advisors. In the following pages, you will find an overview of your fund’s performance for the reporting period as well as an outlook for the coming months.
Thank you for investing with Putnam.
Putnam High Income Securities Fund offers investors a portfolio of high-yield corporate bonds and convertible securities. As a closed-end fund, it shares some common characteristics with open-end mutual funds, but there are some key differences that investors should understand as they consider their portfolio.
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Looking at a closed-end fund’s performance
You will usually see that the NAV and the market price differ. The market price can be influenced by several factors that cause it to vary from the NAV, including fund distributions, changes in supply and demand for the fund’s shares, changing market conditions, and investor perceptions of the fund or its investment manager. A fund’s performance at market price typically differs from its results at NAV.
A hybrid portfolio for seeking returns
Though it carries commensurately greater risk, including the risk of corporate default and periodic illiquidity, the fund’s combination of security types can offer greater return potential than other types of bond funds. This is because of the higher-yielding nature of below-investment-grade corporate credit and because of the optionality embedded in convertibles, which allows shares to be exchanged for common stock.
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Data are historical. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and net asset value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart are at NAV. See below and pages 10–11 for additional performance information, including fund returns at market price. Index and Lipper results should be compared with fund performance at NAV.
* The fund’s blended benchmark is an unmanaged index administered by Putnam Management, 50% of which is the JPMorgan Developed High Yield Index and 50% of which is the ICE BofAML Speculative Grade U.S. Convertible Index. The ICE BofAML Speculative Grade U.S. Convertible Index and the JPMorgan Developed High Yield Index were introduced on 12/31/92 and 12/31/94, respectively, which post-date the inception of the fund.
† Returns for the six-month period are not annualized, but cumulative.
* The fund’s blended benchmark is an unmanaged index administered by Putnam Management, 50% of which is the JPMorgan Developed High Yield Index and 50% of which is the ICE BofAML Speculative Grade U.S. Convertible Index.
This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 2/28/18. See above and pages 10–11 for additional fund performance information. Index descriptions can be found on page 12.
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Robert L. Salvin
Portfolio Manager
Rob has an M.B.A. from the University of Chicago Booth School of Business and a B.S. from the University of Pennsylvania Wharton School. He joined Putnam in 2000 and has been in the investment industry since 1986.
Your fund is also managed by Anthony J. Daigle.
What contributed to the fund’s performance during the six-month reporting period ended February 28, 2018?
Conditions during the reporting period were generally favorable despite an increase in volatility in late January and February and concerns about valuations in corporate credit.
The convertibles portion of the portfolio, which represents a majority of assets, had positive absolute performance. Security selection within the consumer cyclicals and communication services sectors were the largest contributors on a relative basis. Specifically, an out-of-benchmark position in the consumer cyclical mobile payment company, Square, was one of the top relative performers at the issuer level. The underlying stock surged over the period in conjunction with the rest of the technology sector. An underweight position in DISH Network and an overweight position in Becton Dickinson also added to performance.
The high-yield portion of the portfolio also had positive absolute performance for the period. Overweight allocations to the financials; gaming, lodging and leisure; and utilities industries were the largest relative contributors to return. At the issuer level, positioning in Keane
High Income Securities Fund 5 |
Credit qualities are shown as a percentage of the fund’s net assets as of 2/28/18. A bond rated BBB or higher (A-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings and portfolio credit quality will vary over time.
Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.
*Equity instruments are a combination of common stocks and convertible preferred stocks.
Group was the largest relative contributor. The portfolio had reduced exposure to the holding, which benefited performance due to Keane Group’s mixed to weaker third-quarter earnings results. In December, the fund’s position in Keane rallied. The holding was sold from the portfolio before period-end in January to lock in profits. Additionally, an underweight position in Ally Financial benefited returns, as the company posted constructive fourth-quarter earnings.
What detracted most from the fund’s benchmark-relative performance?
Underweight exposure to technology convertibles, along with security selection and a slight overweight position in the capital goods sector, were among the top detractors from relative performance. At the issuer level, underweight positioning in semiconductor companies Micron Technology and ON Semiconductor were the largest relative detractors. The underlying stocks all climbed in value during the period.
Among the portfolio’s high-yield holdings, underweight positions in the energy, health-care, and services industries were the largest relative detractors. At the issuer level, a moderate overweight allocation to CHS/Community Health Systems was the top detractor following weaker-than-expected fourth-quarter earnings. An overweight position in Sprint Communications also detracted from high-yield returns, as merger talks with T-Mobile USA collapsed during the fourth quarter.
Were there any noteworthy shifts in the fund’s asset allocation during the reporting period? If so, why?
In response to a rise in new issuance of convertible bonds, we have selectively participated in a few deals, resulting in a moderately higher allocation to convertible securities. The surge in new issuance that we have seen in the past few months has focused on convertible cash bonds, unlike the wave of mandatory convertibles that dominated the new-issue market prior
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to the last year [mandatories automatically convert to stocks, causing them to trade essentially like stocks]. We believe there is relative value in the new-issue market, and so we have trimmed mandatories and replaced them when appropriate.
Additionally, higher Treasury yields and market expectations for three to four Federal Reserve rate hikes in 2018 led us to decrease exposure to convertible preferred stocks, which are more sensitive to interest-rate moves. As a result, the portfolio moved to a higher weighting in convertible bonds and notes.
What is your outlook for the coming months, and how has it influenced the fund’s positioning?
Investor confidence in the economy, coupled with solid underlying fundamentals, lead us to believe that the outlook for convertible securities remains constructive, although the sector has experienced some short-term volatility driven by inflation fears. The U.S. tax overhaul framework includes a reduction of the corporate tax rate, a lower repatriation tax rate, full expensing of capital expenditures, and the capping of interest deductibility. On balance, we believe these changes will be positive for convertible issuers. Additionally, the new tax law increases the relative attractiveness of convertible market funding versus corporate debt, particularly for more highly leveraged companies.
This table shows the fund’s top 10 individual holdings and the percentage of the fund’s net assets that each represented as of 2/28/18. Short-term investments and derivatives, if any, are excluded. Holdings may vary over time.
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Convertibles witnessed a healthy new-issue market in 2017 and started 2018 with one of the strongest months in ten years as 14 deals were priced that together were worth $6.4 billion in proceeds in January. Increased supply has expanded the universe of investment options in the U.S. convertibles market, creating attractive associated return opportunities, in our view. We expect this robust environment for new issues to continue in the face of rising interest rates, barring any short-term volatility. Ultimately, with central banks beginning the process of normalizing monetary policy and potential equity market unease, we believe convertible securities continue to be an attractive option for investors whose investment objectives may include current income and capital appreciation while also lowering portfolio volatility.
In this environment, we favor what we view to be higher-quality names, along with higher market capitalization issuers. Additionally, we have trimmed exposure to securities in which the underlying equity valuations have become stretched, in our view.
We also continue to have a generally constructive view of the high-yield asset class as the fundamental landscape of U.S. issuers has been positive, buoyed by generally favorable corporate earnings and economic data. Additionally, we believe that many high-yield issuers should benefit from the lower corporate tax rate. Overall default levels have significantly fallen over the past 12 months and are at levels last seen in 2014. From a valuation standpoint, although spreads are measurably tighter year-over-year, they continue to look fair, in our view, on the back of solid fundamentals and are still wide of their all-time tights. The risks that we see include commodity price volatility, policy mistakes from global central banks, and/or heightened geopolitical tension. Overall, our positioning has been consistent, and we will continue to try to capitalize on what we believe
This chart shows how the fund’s weightings have changed over the past six months. Allocations are shown as a percentage of the fund’s net assets. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Current period summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, the exclusion of as-of trades, if any, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.
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are relative value opportunities in the primary and secondary markets.
Thank you, Rob, for this update on the fund.
The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice.
Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.
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Your fund’s performance
This section shows your fund’s performance, price, and distribution information for periods ended February 28, 2018, the end of the first half of its current fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance information as of the most recent calendar quarter-end. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return, net asset value, and market price will fluctuate, and you may have a gain or a loss when you sell your shares.
Fund performance Total return for periods ended 2/28/18
Annual | |||||||||
average | |||||||||
Life of | |||||||||
fund (since | Annual | Annual | Annual | ||||||
7/9/87) | 10 years | average | 5 years | average | 3 years | average | 1 year | 6 months | |
NAV | 8.66% | 94.76% | 6.89% | 37.59% | 6.59% | 16.98% | 5.37% | 7.78% | 3.04% |
Market price | 8.44 | 106.82 | 7.54 | 39.66 | 6.91 | 22.87 | 7.11 | 6.91 | 3.52 |
Performance assumes reinvestment of distributions and does not account for taxes. Performance is shown net of expenses.
Comparative index returns For periods ended 2/28/18
Annual | |||||||||
average | |||||||||
Life of | |||||||||
fund (since | Annual | Annual | Annual | ||||||
7/9/87) | 10 years | average | 5 years | average | 3 years | average | 1 year | 6 months | |
Fund’s blended | |||||||||
benchmark | |||||||||
(50% JPMorgan | |||||||||
Developed High | |||||||||
Yield Index/50% ICE | —† | 123.76% | 8.39% | 41.97% | 7.26% | 19.27% | 6.05% | 7.54% | 3.05% |
BofAML Speculative | |||||||||
Grade U. S. | |||||||||
Convertible Index) | |||||||||
Lipper Convertible | |||||||||
Securities Funds | |||||||||
(closed-end) | 8.24% | 81.59 | 5.97 | 42.88 | 7.35 | 16.14 | 5.09 | 10.07 | 5.03 |
category average* |
Index and Lipper results should be compared with fund performance at net asset value.
* Over the 6-month, 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 2/28/18, there were 14, 13, 11, 11, 11, and 2 funds, respectively, in this Lipper category.
† The fund’s blended benchmark is an unmanaged index administered by Putnam Management, 50% of which is the JPMorgan Developed High Yield Index and 50% of which is the ICE BofAML Speculative Grade U.S. Convertible Index. The ICE BofAML Speculative Grade U.S. Convertible Index and the JPMorgan Developed High Yield Index were introduced on 12/31/92 and 12/31/94, respectively, which post-date the inception of the fund.
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Fund price and distribution information For the six-month period ended 2/28/18
Distributions | |||
Number | 6 | ||
Income | $0.1698 | ||
Capital gains | — | ||
Total | $0.1698 | ||
Share value | NAV | Market price | |
8/31/17 | $9.53 | $8.77 | |
2/28/18 | 9.65 | 8.91 | |
Current rate (end of period) | NAV | Market price | |
Current dividend rate* | 3.52% | 3.81% |
The classification of distributions, if any, is an estimate. Final distribution information will appear on your year-end tax forms.
* Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by NAV or market price at end of period.
Fund performance as of most recent calendar quarter Total return for periods ended 3/31/18
Annual | |||||||||
average | |||||||||
Life of | |||||||||
fund (since | Annual | Annual | Annual | ||||||
7/9/87) | 10 years | average | 5 years | average | 3 years | average | 1 year | 6 months | |
NAV | 8.63% | 98.42% | 7.09% | 35.23% | 6.22% | 18.08% | 5.70% | 7.39% | 1.65% |
Market price | 8.48 | 118.76 | 8.14 | 39.56 | 6.89 | 26.87 | 8.26 | 8.42 | 3.15 |
See the discussion following the fund performance table on page 10 for information about the calculation of fund performance.
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Terms and definitions
Important terms
Total return shows how the value of the fund’s shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund.
Net asset value (NAV) is the value of all your fund’s assets, minus any liabilities, divided by the number of outstanding shares.
Market price is the current trading price of one share of the fund. Market prices are set by transactions between buyers and sellers on exchanges such as the New York Stock Exchange.
Fixed-income terms
Current rate is the annual rate of return earned from dividends or interest of an investment. Current rate is expressed as a percentage of the price of a security, fund share, or principal investment.
Yield curve is a graph that plots the yields of bonds with equal credit quality against their differing maturity dates, ranging from shortest to longest. It is used as a benchmark for other debt, such as mortgage or bank lending rates.
Comparative indexes
Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.
The fund’s blended benchmark is an unmanaged index administered by Putnam Management, 50% of which is the JPMorgan Developed High Yield Index and 50% of which is the ICE BofAML Speculative Grade U.S. Convertible Index.
ICE BofAML (Intercontinental Exchange Bank of America Merrill Lynch) Speculative Grade U.S. Convertible Index is an unmanaged index of U.S. convertible securities.
ICE BofAML U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.
JPMorgan Developed High Yield Index is an unmanaged index of high-yield fixed-income securities issued in developed countries.
S&P 500 Index is an unmanaged index of common stock performance.
ICE Data Indices, LLC (“ICE BofAML”), used with permission. ICE BofAML permits use of the ICE BofAML indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofAML indices or any data included in, related to, or derived therefrom; assumes no liability in connection with the use of the foregoing; and does not sponsor, endorse, or recommend Putnam Investments, or any of its products or services.
Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.
Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.
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Other information for shareholders
Important notice regarding share repurchase program
In September 2017, the Trustees of your fund approved the renewal of a share repurchase program that had been in effect since 2005. This renewal allows your fund to repurchase, in the 12 months beginning October 10, 2017, up to 10% of the fund’s common shares outstanding as of October 9, 2017.
Important notice regarding delivery of shareholder documents
In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single copy of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581, and Putnam will begin sending individual copies within 30 days.
Proxy voting
Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2017, are available in the Individual Investors section of putnam.com, and on the SEC’s website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.
Fund portfolio holdings
The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Form N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s website or the operation of the Public Reference Room.
Trustee and employee fund ownership
Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of February 28, 2018, Putnam employees had approximately $528,000,000 and the Trustees had approximately $81,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.
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Summary of Putnam Closed-End Funds’ Amended and Restated Dividend Reinvestment Plans
Putnam High Income Securities Fund, Putnam Managed Municipal Income Trust, Putnam Master Intermediate Income Trust, Putnam Municipal Opportunities Trust and Putnam Premier Income Trust (each, a “Fund” and collectively, the “Funds”) each offer a dividend reinvestment plan (each, a “Plan” and collectively, the “Plans”). If you participate in a Plan, all income dividends and capital gain distributions are automatically reinvested in Fund shares by the Fund’s agent, Putnam Investor Services, Inc. (the “Agent”). If you are not participating in a Plan, every month you will receive all dividends and other distributions in cash, paid by check and mailed directly to you.
Upon a purchase (or, where applicable, upon registration of transfer on the shareholder records of a Fund) of shares of a Fund by a registered shareholder, each such shareholder will be deemed to have elected to participate in that Fund’s Plan. Each such shareholder will have all distributions by a Fund automatically reinvested in additional shares, unless such shareholder elects to terminate participation in a Plan by instructing the Agent to pay future distributions in cash. Shareholders who were not participants in a Plan as of January 31, 2010, will continue to receive distributions in cash but may enroll in a Plan at any time by contacting the Agent.
If you participate in a Fund’s Plan, the Agent will automatically reinvest subsequent distributions, and the Agent will send you a confirmation in the mail telling you how many additional shares were issued to your account.
To change your enrollment status or to request additional information about the Plans, you may contact the Agent either in writing, at P.O. Box 8383, Boston, MA 02266-8383, or by telephone at 1-800-225-1581 during normal East Coast business hours.
How you acquire additional shares through a Plan If the market price per share for your Fund’s shares (plus estimated brokerage commissions) is greater than or equal to their net asset value per share on the payment date for a distribution, you will be issued shares of the Fund at a value equal to the higher of the net asset value per share on that date or 95% of the market price per share on that date.
If the market price per share for your Fund’s shares (plus estimated brokerage commissions) is less than their net asset value per share on the payment date for a distribution, the Agent will buy Fund shares for participating accounts in the open market. The Agent will aggregate open-market purchases on behalf of all participants, and the average price (including brokerage commissions) of all shares purchased by the Agent will be the price per share allocable to each participant. The Agent will generally complete these open-market purchases within five business days following the payment date. If, before the Agent has completed open-market purchases, the market price per share (plus estimated brokerage commissions) rises to exceed the net asset value per share on the payment date, then the purchase price may exceed the net asset value per share, potentially resulting in the acquisition of fewer shares than if the distribution had been paid in newly issued shares.
How to withdraw from a Plan Participants may withdraw from a Fund’s Plan at any time by notifying the Agent, either in writing or by telephone. Such withdrawal will be effective immediately if notice is received by the Agent with sufficient time prior to any distribution record date; otherwise, such withdrawal will be effective with respect to any subsequent distribution following notice of withdrawal. There is no penalty for withdrawing from or not participating in a Plan.
Plan administration The Agent will credit all shares acquired for a participant under a Plan to the account in which the participant’s common shares are held. Each participant will
14 High Income Securities Fund |
be sent reasonably promptly a confirmation by the Agent of each acquisition made for his or her account.
About brokerage fees Each participant pays a proportionate share of any brokerage commissions incurred if the Agent purchases additional shares on the open market, in accordance with the Plans. There are no brokerage charges applied to shares issued directly by the Funds under the Plans.
About taxes and Plan amendments Reinvesting dividend and capital gain distributions in shares of the Funds does not relieve you of tax obligations, which are the same as if you had received cash distributions. The Agent supplies tax information to you and to the IRS annually. Each Fund reserves the right to amend or terminate its Plan upon 30 days’ written notice. However, the Agent may assign its rights, and delegate its duties, to a successor agent with the prior consent of a Fund and without prior notice to Plan participants.
If your shares are held in a broker or nominee name If your shares are held in the name of a broker or nominee offering a dividend reinvestment service, consult your broker or nominee to ensure that an appropriate election is made on your behalf. If the broker or nominee holding your shares does not provide a reinvestment service, you may need to register your shares in your own name in order to participate in a Plan.
In the case of record shareholders such as banks, brokers or nominees that hold shares for others who are the beneficial owners of such shares, the Agent will administer the Plan on the basis of the number of shares certified by the record shareholder as representing the total amount registered in such shareholder’s name and held for the account of beneficial owners who are to participate in the Plan.
High Income Securities Fund 15 |
Financial statements
These sections of the report, as well as the accompanying Notes, constitute the fund’s financial statements.
The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.
Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)
Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.
Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year.
Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.
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The fund’s portfolio 2/28/18 (Unaudited)
Principal | ||
CONVERTIBLE BONDS AND NOTES (42.2%)* | amount | Value |
Basic materials (0.7%) | ||
Cemex SAB de CV cv. unsec. sub. notes 3.72%, 3/15/20 (Mexico) | $455,000 | $468,616 |
Patrick Industries, Inc. 144A cv. sr. unsec. notes 1.00%, 2/1/23 | 421,000 | 416,398 |
885,014 | ||
Capital goods (2.4%) | ||
Aerojet Rocketdyne Holdings, Inc. cv. sr. unsec. sub. notes | ||
2.25%, 12/15/23 | 491,000 | 607,269 |
Dycom Industries, Inc. cv. sr. unsec. notes 0.75%, 9/15/21 | 535,000 | 683,784 |
Greenbrier Cos., Inc. (The) cv. sr. unsec. notes 2.875%, 2/1/24 | 470,000 | 544,157 |
Horizon Global Corp. cv. sr. unsec. unsub. notes 2.75%, 7/1/22 | 385,000 | 312,091 |
II-VI, Inc. 144A cv. sr. unsec. notes 0.25%, 9/1/22 | 453,000 | 485,789 |
Kaman Corp. 144A cv. sr. unsec. notes 3.25%, 5/1/24 | 324,000 | 365,126 |
2,998,216 | ||
Communication services (1.8%) | ||
DISH Network Corp. cv. sr. unsec. notes 3.375%, 8/15/26 | 2,295,000 | 2,308,919 |
Powerwave Technologies, Inc. cv. unsec. sub. notes 3.875%, | ||
10/1/27 (In default)† F | 1,160,000 | 116 |
2,309,035 | ||
Communications equipment (0.7%) | ||
Ciena Corp. cv. sr. unsec. notes 4.00%, 12/15/20 | 618,000 | 830,672 |
830,672 | ||
Components (0.3%) | ||
Finisar Corp. cv. sr. unsec. unsub. bonds 0.50%, 12/15/36 | 427,000 | 392,219 |
392,219 | ||
Computers (2.6%) | ||
Avid Technology, Inc. cv. sr. unsec. notes 2.00%, 6/15/20 | 274,000 | 233,256 |
Citrix Systems, Inc. cv. sr. unsec. notes 0.50%, 4/15/19 | 435,000 | 578,296 |
HubSpot, Inc. 144A cv. sr. unsec. notes 0.25%, 6/1/22 | 551,000 | 721,040 |
Nutanix, Inc. 144A cv. sr. unsec. notes zero %, 1/15/23 | 387,000 | 397,745 |
RealPage, Inc. 144A cv. sr. unsec. notes 1.50%, 11/15/22 | 587,000 | 801,089 |
Western Digital Corp. 144A cv. company guaranty sr. unsec. notes | ||
1.50%, 2/1/24 | 536,000 | 554,914 |
3,286,340 | ||
Consumer cyclicals (7.1%) | ||
Booking Holdings, Inc. cv. sr. unsec. unsub. notes 0.35%, 6/15/20 | 710,000 | 1,117,363 |
Caesars Entertainment Corp. cv. sr. unsec. notes 5.00%, 10/1/24 | 312,240 | 607,696 |
CalAtlantic Group, Inc. cv. company guaranty sr. unsec. unsub. | ||
notes 1.625%, 5/15/18 | 480,000 | 808,752 |
Euronet Worldwide, Inc. cv. sr. unsec. bonds 1.50%, 10/1/44 | 535,000 | 661,625 |
Liberty Interactive, LLC cv. sr. unsec. notes 3.50%, 1/15/31 | 890,000 | 520,205 |
Liberty Interactive, LLC 144A cv. sr. unsec. bonds 1.75%, 9/30/46 | 710,000 | 817,591 |
Liberty Media Corp. cv. sr. unsec. bonds 1.375%, 10/15/23 | 510,000 | 600,474 |
Liberty Media Corp. cv. sr. unsec. unsub. bonds 2.25%, 9/30/46 | 404,000 | 421,354 |
Macquarie Infrastructure Corp. cv. sr. unsec. unsub. notes | ||
2.00%, 10/1/23 | 812,000 | 730,521 |
Navistar International Corp. cv. sr. unsec. sub. bonds 4.75%, 4/15/19 | 444,000 | 460,172 |
Square, Inc. 144A cv. sr. unsec. notes 0.375%, 3/1/22 | 372,000 | 766,432 |
Tesla, Inc. cv. sr. unsec. sub. notes 1.25%, 3/1/21 | 1,150,000 | 1,308,169 |
8,820,354 |
High Income Securities Fund 17 |
Principal | ||
CONVERTIBLE BONDS AND NOTES (42.2%)* cont. | amount | Value |
Consumer staples (2.0%) | ||
IAC FinanceCo, Inc. 144A cv. company guaranty sr. unsec. notes | ||
0.875%, 10/1/22 | $615,000 | $713,636 |
Liberty Expedia Holdings, Inc. cv. sr. unsec. unsub. bonds | ||
1.00%, 6/30/47 | 617,000 | 594,220 |
Vector Group, Ltd. cv. sr. unsec. sub. notes 1.75%, 4/15/20 | 695,000 | 757,242 |
Wayfair, Inc. 144A cv. sr. unsec. sub. notes 0.375%, 9/1/22 | 447,000 | 452,393 |
2,517,491 | ||
Electronics (7.8%) | ||
Intel Corp. cv. jr. unsec. sub. notes 3.25%, 8/1/39 | 205,000 | 487,908 |
Microchip Technology, Inc. 144A cv. sr. unsec. sub. notes | ||
1.625%, 2/15/27 | 2,731,000 | 3,208,728 |
Micron Technology, Inc. cv. sr. unsec. bonds 3.00%, 11/15/43 | 890,000 | 1,503,428 |
Micron Technology, Inc. cv. sr. unsec. bonds Ser. E, 1.625%, 2/15/33 | 565,000 | 2,515,672 |
ON Semiconductor Corp. cv. company guaranty sr. unsec. unsub. | ||
notes 1.00%, 12/1/20 | 685,000 | 959,891 |
OSI Systems, Inc. 144A cv. sr. unsec. unsub. notes 1.25%, 9/1/22 | 551,000 | 492,112 |
TTM Technologies, Inc. cv. sr. unsec. notes 1.75%, 12/15/20 | 323,000 | 563,153 |
9,730,892 | ||
Energy (2.1%) | ||
Chesapeake Energy Corp. cv. company guaranty sr. unsec. notes | ||
5.50%, 9/15/26 | 1,175,000 | 1,009,431 |
Oasis Petroleum, Inc. cv. sr. unsec. notes 2.625%, 9/15/23 | 276,000 | 284,376 |
SEACOR Holdings, Inc. cv. sr. unsec. bonds 3.00%, 11/15/28 | 621,000 | 580,964 |
Whiting Petroleum Corp. cv. company guaranty sr. unsec. unsub. | ||
notes 1.25%, 4/1/20 | 770,000 | 724,762 |
2,599,533 | ||
Financials (2.7%) | ||
Blackstone Mortgage Trust, Inc. cv. sr. unsec. unsub. notes | ||
5.25%, 12/1/18 R | 536,000 | 599,380 |
Heritage Insurance Holdings, Inc. 144A cv. company guaranty sr. | ||
unsec. bonds 5.875%, 8/1/37 | 275,000 | 345,840 |
IH Merger Sub, LLC cv. company guaranty sr. unsec. notes | ||
3.50%, 1/15/22 R | 604,000 | 666,065 |
Starwood Property Trust, Inc. cv. sr. unsec. unsub. notes | ||
4.00%, 1/15/19 R | 821,000 | 867,694 |
TCP Capital Corp. cv. sr. unsec. bonds 5.25%, 12/15/19 | 827,000 | 852,352 |
3,331,331 | ||
Health care (4.7%) | ||
BioMarin Pharmaceutical, Inc. cv. sr. unsec. sub. notes | ||
1.50%, 10/15/20 | 245,000 | 270,725 |
BioMarin Pharmaceutical, Inc. cv. sr. unsec. sub. notes | ||
0.599%, 8/1/24 | 382,000 | 359,080 |
Brookdale Senior Living, Inc. cv. sr. unsec. unsub. notes | ||
2.75%, 6/15/18 | 655,000 | 650,088 |
China Medical Technologies, Inc. cv. sr. unsec. bonds Ser. CMT, | ||
4.00%, 8/15/18 (China) (In default)† F | 763,000 | 48,832 |
China Medical Technologies, Inc. 144A cv. sr. unsec. notes 6.25%, | ||
12/17/18 (China) (In default)† F | 445,000 | 24,920 |
Clovis Oncology, Inc. cv. sr. unsec. notes 2.50%, 9/15/21 | 415,000 | 509,154 |
Impax Laboratories, Inc. cv. sr. unsec. notes 2.00%, 6/15/22 | 365,000 | 357,502 |
18 High Income Securities Fund |
Principal | ||
CONVERTIBLE BONDS AND NOTES (42.2%)* cont. | amount | Value |
Health care cont. | ||
Insmed, Inc. cv. sr. unsec. sub. notes 1.75%, 1/15/25 | $358,000 | $329,897 |
Jazz Investments I, Ltd. cv. company guaranty sr. unsec. sub. | ||
bonds 1.875%, 8/15/21 (Ireland) | 951,000 | 973,991 |
Medicines Co. (The) cv. sr. unsec. notes 2.50%, 1/15/22 | 705,000 | 779,012 |
Neurocrine Biosciences, Inc. 144A cv. sr. unsec. notes | ||
2.25%, 5/15/24 | 410,000 | 543,614 |
Pacira Pharmaceuticals, Inc. (Delaware) 144A cv. sr. unsec. sub. | ||
notes 2.375%, 4/1/22 | 614,000 | 562,530 |
Teladoc, Inc. 144A cv. sr. unsec. notes 3.00%, 12/15/22 | 370,000 | 438,529 |
5,847,874 | ||
Semiconductor (2.7%) | ||
Cypress Semiconductor Corp. cv. sr. unsec. notes 4.50%, 1/15/22 | 395,000 | 567,305 |
Integrated Device Technology, Inc. cv. sr. unsec. unsub. notes | ||
0.875%, 11/15/22 | 465,000 | 523,497 |
Jazz US Holdings, Inc. cv. company guaranty sr. unsec. notes | ||
8.00%, 12/31/18 | 125,000 | 365,063 |
Novellus Systems, Inc. cv. company guaranty sr. unsec. notes | ||
2.625%, 5/15/41 | 228,000 | 1,307,046 |
Teradyne, Inc. cv. sr. unsec. notes 1.25%, 12/15/23 | 410,000 | 622,341 |
3,385,252 | ||
Software (1.9%) | ||
Everbridge, Inc. cv. sr. unsec. unsub. notes 1.50%, 11/1/22 | 495,000 | 570,604 |
Okta, Inc. 144A cv. sr. unsec. notes 0.25%, 2/15/23 | 480,000 | 501,252 |
Safeguard Scientifics, Inc. cv. sr. unsec. bonds 5.25%, 5/15/18 | 718,000 | 730,872 |
Workday, Inc. 144A cv. sr. unsec. notes 0.25%, 10/1/22 | 517,000 | 559,201 |
2,361,929 | ||
Technology services (1.8%) | ||
Carbonite, Inc. 144A cv. sr. unsec. unsub. notes 2.50%, 4/1/22 | 360,000 | 464,248 |
J2 Cloud Services, LLC cv. sr. unsec. notes 3.25%, 6/15/29 | 535,000 | 650,821 |
Proofpoint, Inc. cv. sr. unsec. unsub. notes 0.75%, 6/15/20 | 285,000 | 398,288 |
Twitter, Inc. cv. sr. unsec. unsub. bonds 1.00%, 9/15/21 | 760,000 | 720,936 |
2,234,293 | ||
Transportation (0.9%) | ||
Air Transport Services Group, Inc. 144A cv. sr. unsec. notes | ||
1.125%, 10/15/24 | 614,000 | 663,005 |
Scorpio Tankers, Inc. 144A cv. sr. unsec. sub. notes 2.375%, 7/1/19 | 462,000 | 419,268 |
1,082,273 | ||
Total convertible bonds and notes (cost $48,059,893) | $52,612,718 | |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* | amount | Value |
Basic materials (6.3%) | ||
A Schulman, Inc. company guaranty sr. unsec. unsub. notes | ||
6.875%, 6/1/23 | $50,000 | $53,000 |
AK Steel Corp. company guaranty sr. unsec. notes | ||
6.375%, 10/15/25 | 55,000 | 53,900 |
Allegheny Technologies, Inc. sr. unsec. unsub. notes | ||
7.875%, 8/15/23 | 65,000 | 70,688 |
Allegheny Technologies, Inc. sr. unsec. unsub. notes | ||
5.95%, 1/15/21 | 50,000 | 50,938 |
High Income Securities Fund 19 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Basic materials cont. | ||
American Woodmark Corp. 144A company guaranty sr. unsec. | ||
notes 4.875%, 3/15/26 | $125,000 | $124,688 |
ArcelorMittal SA sr. unsec. unsub. bonds 6.125%, 6/1/25 (France) | 100,000 | 110,125 |
ArcelorMittal SA sr. unsec. unsub. notes 7.25%, 10/15/39 (France) | 120,000 | 148,164 |
Beacon Escrow Corp. 144A sr. unsec. notes 4.875%, 11/1/25 | 120,000 | 117,036 |
Beacon Roofing Supply, Inc. company guaranty sr. unsec. unsub. | ||
notes 6.375%, 10/1/23 | 150,000 | 159,938 |
Big River Steel, LLC/BRS Finance Corp. 144A company guaranty sr. | ||
notes 7.25%, 9/1/25 | 145,000 | 153,338 |
Blue Cube Spinco, Inc. company guaranty sr. unsec. unsub. notes | ||
9.75%, 10/15/23 | 120,000 | 139,200 |
BMC East, LLC 144A company guaranty sr. notes 5.50%, 10/1/24 | 160,000 | 162,400 |
Boise Cascade Co. 144A company guaranty sr. unsec. notes | ||
5.625%, 9/1/24 | 210,000 | 216,300 |
Builders FirstSource, Inc. 144A company guaranty sr. unsub. notes | ||
5.625%, 9/1/24 | 175,000 | 178,063 |
BWAY Holding Co. 144A sr. notes 5.50%, 4/15/24 | 115,000 | 117,588 |
BWAY Holding Co. 144A sr. unsec. notes 7.25%, 4/15/25 | 280,000 | 289,100 |
Cemex Finance, LLC 144A company guaranty sr. notes 6.00%, | ||
4/1/24 (Mexico) | 400,000 | 418,000 |
CF Industries, Inc. company guaranty sr. unsec. bonds | ||
4.95%, 6/1/43 | 105,000 | 95,550 |
Chemours Co. (The) company guaranty sr. unsec. notes | ||
5.375%, 5/15/27 | 60,000 | 60,150 |
Chemours Co. (The) company guaranty sr. unsec. unsub. notes | ||
7.00%, 5/15/25 | 80,000 | 86,200 |
Chemours Co. (The) company guaranty sr. unsec. unsub. notes | ||
6.625%, 5/15/23 | 100,000 | 105,125 |
Compass Minerals International, Inc. 144A company guaranty sr. | ||
unsec. notes 4.875%, 7/15/24 | 180,000 | 176,400 |
Cornerstone Chemical Co. 144A company guaranty sr. notes | ||
6.75%, 8/15/24 | 140,000 | 141,925 |
CPG Merger Sub, LLC 144A company guaranty sr. unsec. notes | ||
8.00%, 10/1/21 | 60,000 | 61,800 |
Crown Americas, LLC/Crown Americas Capital Corp. VI 144A | ||
company guaranty sr. unsec. notes 4.75%, 2/1/26 | 55,000 | 54,175 |
First Quantum Minerals, Ltd. 144A company guaranty sr. unsec. | ||
notes 7.50%, 4/1/25 (Canada) | 295,000 | 303,850 |
Flex Acquisition Co., Inc. 144A sr. unsec. notes 6.875%, 1/15/25 | 125,000 | 126,563 |
Freeport-McMoRan, Inc. company guaranty sr. unsec. notes | ||
6.875%, 2/15/23 (Indonesia) | 110,000 | 118,525 |
Freeport-McMoRan, Inc. company guaranty sr. unsec. sub. notes | ||
6.75%, 2/1/22 (Indonesia) | 55,000 | 56,788 |
GCP Applied Technologies, Inc. 144A company guaranty sr. unsec. | ||
notes 9.50%, 2/1/23 | 195,000 | 213,769 |
HudBay Minerals, Inc. 144A company guaranty sr. unsec. notes | ||
7.625%, 1/15/25 (Canada) | 90,000 | 97,875 |
Ingevity Corp. 144A sr. unsec. notes 4.50%, 2/1/26 | 100,000 | 97,750 |
Joseph T Ryerson & Son, Inc. 144A sr. notes 11.00%, 5/15/22 | 50,000 | 55,668 |
Kraton Polymers, LLC/Kraton Polymers Capital Corp. 144A | ||
company guaranty sr. unsec. notes 10.50%, 4/15/23 | 115,000 | 128,513 |
20 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Basic materials cont. | ||
Kraton Polymers, LLC/Kraton Polymers Capital Corp. 144A | ||
company guaranty sr. unsec. notes 7.00%, 4/15/25 | $60,000 | $61,950 |
Louisiana-Pacific Corp. company guaranty sr. unsec. unsub. notes | ||
4.875%, 9/15/24 | 190,000 | 191,425 |
Mercer International, Inc. company guaranty sr. unsec. notes | ||
7.75%, 12/1/22 (Canada) | 34,000 | 35,955 |
Mercer International, Inc. sr. unsec. notes 6.50%, 2/1/24 (Canada) | 115,000 | 120,463 |
Mercer International, Inc. 144A sr. unsec. notes 5.50%, | ||
1/15/26 (Canada) | 90,000 | 89,550 |
New Gold, Inc. 144A company guaranty sr. unsec. unsub. notes | ||
6.25%, 11/15/22 (Canada) | 75,000 | 76,875 |
New Gold, Inc. 144A sr. unsec. notes 6.375%, 5/15/25 (Canada) | 30,000 | 31,050 |
Northwest Acquisitions ULC/Dominion Finco, Inc. 144A notes | ||
7.125%, 11/1/22 | 45,000 | 46,238 |
NOVA Chemicals Corp. 144A sr. unsec. bonds 5.25%, | ||
6/1/27 (Canada) | 116,000 | 113,390 |
NOVA Chemicals Corp. 144A sr. unsec. notes 4.875%, | ||
6/1/24 (Canada) | 64,000 | 63,200 |
Novelis Corp. 144A company guaranty sr. unsec. bonds | ||
5.875%, 9/30/26 | 190,000 | 191,425 |
Novelis Corp. 144A company guaranty sr. unsec. notes | ||
6.25%, 8/15/24 | 110,000 | 113,575 |
Olin Corp. sr. unsec. bonds 5.00%, 2/1/30 | 55,000 | 53,075 |
Pactiv, LLC sr. unsec. unsub. bonds 8.375%, 4/15/27 | 15,000 | 17,025 |
Park-Ohio Industries, Inc. company guaranty sr. unsec. notes | ||
6.625%, 4/15/27 | 145,000 | 151,525 |
Platform Specialty Products Corp. 144A company guaranty sr. | ||
unsec. notes 5.875%, 12/1/25 | 195,000 | 194,025 |
Platform Specialty Products Corp. 144A sr. unsec. notes | ||
6.50%, 2/1/22 | 65,000 | 66,706 |
Smurfit Kappa Treasury Funding, Ltd. company guaranty sr. unsec. | ||
unsub. notes 7.50%, 11/20/25 (Ireland) | 125,000 | 150,156 |
Steel Dynamics, Inc. company guaranty sr. unsec. notes | ||
5.00%, 12/15/26 | 35,000 | 35,700 |
Steel Dynamics, Inc. company guaranty sr. unsec. notes | ||
4.125%, 9/15/25 | 30,000 | 29,025 |
Steel Dynamics, Inc. company guaranty sr. unsec. unsub. notes | ||
5.50%, 10/1/24 | 80,000 | 82,800 |
Steel Dynamics, Inc. company guaranty sr. unsec. unsub. notes | ||
5.25%, 4/15/23 | 65,000 | 66,381 |
Teck Resources, Ltd. company guaranty sr. unsec. unsub. notes | ||
4.75%, 1/15/22 (Canada) | 45,000 | 45,675 |
Teck Resources, Ltd. company guaranty sr. unsec. unsub. notes | ||
3.75%, 2/1/23 (Canada) | 40,000 | 39,100 |
Teck Resources, Ltd. 144A company guaranty sr. unsec. notes | ||
8.50%, 6/1/24 (Canada) | 15,000 | 16,688 |
TMS International Corp. 144A sr. unsec. notes 7.25%, 8/15/25 | 125,000 | 130,313 |
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. | ||
144A sr. unsec. notes 5.375%, 9/1/25 (Luxembourg) | 70,000 | 70,788 |
Tronox Finance PLC 144A company guaranty sr. unsec. notes | ||
5.75%, 10/1/25 (United Kingdom) | 40,000 | 39,700 |
High Income Securities Fund 21 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Basic materials cont. | ||
U. S. Concrete, Inc. company guaranty sr. unsec. unsub. notes | ||
6.375%, 6/1/24 | $170,000 | $180,625 |
Univar USA, Inc. 144A company guaranty sr. unsec. notes | ||
6.75%, 7/15/23 | 80,000 | 83,100 |
USG Corp. 144A company guaranty sr. unsec. bonds | ||
4.875%, 6/1/27 | 120,000 | 118,200 |
USG Corp. 144A company guaranty sr. unsec. notes 5.50%, 3/1/25 | 75,000 | 78,000 |
Venator Finance SARL/Venator Materials Corp. 144A sr. unsec. | ||
notes 5.75%, 7/15/25 (Luxembourg) | 100,000 | 101,750 |
Weekley Homes, LLC/Weekley Finance Corp. sr. unsec. notes | ||
6.00%, 2/1/23 | 150,000 | 151,500 |
WR Grace & Co. - Conn. 144A company guaranty sr. unsec. notes | ||
5.625%, 10/1/24 | 70,000 | 73,500 |
Zekelman Industries, Inc. 144A company guaranty sr. notes | ||
9.875%, 6/15/23 | 140,000 | 154,000 |
7,807,545 | ||
Capital goods (3.1%) | ||
Advanced Disposal Services, Inc. 144A sr. unsec. notes | ||
5.625%, 11/15/24 | 200,000 | 204,000 |
Allison Transmission, Inc. 144A company guaranty sr. unsec. notes | ||
5.00%, 10/1/24 | 70,000 | 70,963 |
Allison Transmission, Inc. 144A company guaranty sr. unsec. notes | ||
4.75%, 10/1/27 | 50,000 | 49,000 |
American Axle & Manufacturing, Inc. company guaranty sr. unsec. | ||
notes 7.75%, 11/15/19 | 105,000 | 111,563 |
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. 144A | ||
company guaranty sr. unsec. notes 7.25%, 5/15/24 (Ireland) | 200,000 | 214,000 |
ATS Automation Tooling Systems, Inc. 144A sr. unsec. notes 6.50%, | ||
6/15/23 (Canada) | 95,000 | 99,513 |
Belden, Inc. 144A company guaranty sr. unsec. sub. notes | ||
5.25%, 7/15/24 | 220,000 | 222,750 |
Berry Global, Inc. company guaranty notes 5.50%, 5/15/22 | 55,000 | 56,513 |
Berry Global, Inc. company guaranty unsub. notes 5.125%, 7/15/23 | 35,000 | 35,744 |
Berry Global, Inc. 144A notes 4.50%, 2/15/26 | 40,000 | 38,900 |
Bombardier, Inc. 144A sr. unsec. notes 8.75%, 12/1/21 (Canada) | 180,000 | 197,325 |
Bombardier, Inc. 144A sr. unsec. notes 7.50%, 12/1/24 (Canada) | 95,000 | 98,681 |
Briggs & Stratton Corp. company guaranty sr. unsec. notes | ||
6.875%, 12/15/20 | 170,000 | 186,150 |
Crown Cork & Seal Co., Inc. company guaranty sr. unsec. bonds | ||
7.375%, 12/15/26 | 85,000 | 96,475 |
FXI Holdings, Inc. 144A sr. notes 7.875%, 11/1/24 | 110,000 | 108,488 |
Gates Global, LLC/Gates Global Co. 144A company guaranty sr. | ||
unsec. notes 6.00%, 7/15/22 | 186,000 | 189,255 |
GFL Environmental, Inc. 144A sr. unsec. notes 5.375%, | ||
3/1/23 (Canada) | 55,000 | 54,931 |
Great Lakes Dredge & Dock Corp. company guaranty sr. unsec. | ||
notes 8.00%, 5/15/22 | 165,000 | 171,600 |
Legrand France SA sr. unsec. unsub. notes 8.50%, 2/15/25 (France) | 90,000 | 113,570 |
Manitowoc Foodservice, Inc. sr. unsec. notes 9.50%, 2/15/24 | 200,000 | 222,000 |
MasTec, Inc. company guaranty sr. unsec. unsub. notes | ||
4.875%, 3/15/23 | 130,000 | 129,675 |
22 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Capital goods cont. | ||
Oshkosh Corp. company guaranty sr. unsec. sub. notes | ||
5.375%, 3/1/25 | $105,000 | $109,494 |
RBS Global, Inc./Rexnord, LLC 144A sr. unsec. notes | ||
4.875%, 12/15/25 | 85,000 | 83,725 |
Reynolds Group Issuer, Inc./Reynolds Group Issuer, LLC/Reynolds | ||
Group Issuer Lu 144A company guaranty sr. unsec. unsub. notes | ||
7.00%, 7/15/24 | 100,000 | 105,313 |
Tennant Co. company guaranty sr. unsec. unsub. notes | ||
5.625%, 5/1/25 | 80,000 | 82,040 |
Tenneco, Inc. company guaranty sr. unsec. unsub. notes | ||
5.375%, 12/15/24 | 120,000 | 123,600 |
Tenneco, Inc. company guaranty sr. unsec. unsub. notes | ||
5.00%, 7/15/26 | 50,000 | 49,125 |
TI Group Automotive Systems, LLC 144A sr. unsec. notes 8.75%, | ||
7/15/23 (United Kingdom) | 81,000 | 85,860 |
TransDigm, Inc. company guaranty sr. unsec. sub. notes | ||
6.50%, 5/15/25 | 90,000 | 92,250 |
TransDigm, Inc. company guaranty sr. unsec. sub. notes | ||
6.375%, 6/15/26 | 75,000 | 76,688 |
TransDigm, Inc. company guaranty sr. unsec. unsub. notes | ||
6.50%, 7/15/24 | 80,000 | 82,500 |
Trident Merger Sub, Inc. 144A sr. unsec. notes 6.625%, 11/1/25 | 95,000 | 94,050 |
Wabash National Corp. 144A company guaranty sr. unsec. notes | ||
5.50%, 10/1/25 | 50,000 | 49,500 |
Waste Pro USA, Inc. 144A sr. unsec. notes 5.50%, 2/15/26 | 75,000 | 75,375 |
Wrangler Buyer Corp. 144A sr. unsec. notes 6.00%, 10/1/25 | 140,000 | 141,750 |
3,922,366 | ||
Communication services (4.2%) | ||
Altice SA 144A company guaranty sr. unsec. notes 7.75%, | ||
5/15/22 (Luxembourg) | 400,000 | 373,500 |
Cablevision Systems Corp. sr. unsec. unsub. notes 8.00%, 4/15/20 | 35,000 | 37,195 |
CCO Holdings, LLC/CCO Holdings Capital Corp. 144A company | ||
guaranty sr. unsec. bonds 5.50%, 5/1/26 | 175,000 | 175,000 |
CCO Holdings, LLC/CCO Holdings Capital Corp. 144A company | ||
guaranty sr. unsec. notes 5.875%, 4/1/24 | 215,000 | 221,988 |
CCO Holdings, LLC/CCO Holdings Capital Corp. 144A sr. unsec. | ||
notes 5.75%, 2/15/26 | 90,000 | 91,125 |
CCO Holdings, LLC/CCO Holdings Capital Corp. 144A sr. unsec. | ||
unsub. notes 5.125%, 5/1/23 | 125,000 | 127,344 |
CenturyLink, Inc. sr. unsec. unsub. notes 6.75%, 12/1/23 | 5,000 | 4,925 |
CenturyLink, Inc. sr. unsec. unsub. notes 5.625%, 4/1/20 | 25,000 | 25,374 |
Cequel Communications Holdings I, LLC/Cequel Capital Corp. | ||
144A sr. unsec. unsub. notes 5.125%, 12/15/21 | 240,000 | 238,577 |
Cequel Communications Holdings I, LLC/Cequel Capital Corp. | ||
144A sr. unsec. unsub. notes 5.125%, 12/15/21 | 70,000 | 69,738 |
CommScope Technologies Finance, LLC 144A sr. unsec. notes | ||
6.00%, 6/15/25 | 235,000 | 242,708 |
CommScope Technologies, LLC 144A company guaranty sr. unsec. | ||
unsub. notes 5.00%, 3/15/27 | 80,000 | 78,050 |
CSC Holdings, LLC sr. unsec. unsub. bonds 5.25%, 6/1/24 | 245,000 | 235,813 |
CSC Holdings, LLC sr. unsec. unsub. notes 6.75%, 11/15/21 | 50,000 | 52,625 |
High Income Securities Fund 23 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Communication services cont. | ||
CSC Holdings, LLC 144A sr. unsec. unsub. notes 10.125%, 1/15/23 | $255,000 | $284,963 |
Digicel, Ltd. 144A company guaranty sr. unsec. notes 6.75%, | ||
3/1/23 (Jamaica) | 200,000 | 187,000 |
DISH DBS Corp. company guaranty sr. unsec. unsub. notes | ||
5.875%, 11/15/24 | 105,000 | 98,438 |
Frontier Communications Corp. sr. unsec. notes 11.00%, 9/15/25 | 35,000 | 27,431 |
Frontier Communications Corp. sr. unsec. notes 10.50%, 9/15/22 | 95,000 | 81,106 |
Intelsat Jackson Holdings SA company guaranty sr. unsec. notes | ||
7.50%, 4/1/21 (Bermuda) | 20,000 | 18,163 |
Intelsat Jackson Holdings SA 144A company guaranty sr. notes | ||
8.00%, 2/15/24 (Bermuda) | 4,000 | 4,200 |
Intelsat Jackson Holdings SA 144A sr. unsec. notes 9.75%, | ||
7/15/25 (Bermuda) | 250,000 | 236,875 |
Quebecor Media, Inc. sr. unsec. unsub. notes 5.75%, | ||
1/15/23 (Canada) | 25,000 | 25,875 |
SFR Group SA 144A company guaranty sr. notes 7.375%, | ||
5/1/26 (France) | 200,000 | 193,060 |
SFR Group SA 144A company guaranty sr. notes 6.00%, | ||
5/15/22 (France) | 200,000 | 194,750 |
Sprint Capital Corp. company guaranty sr. unsec. unsub. notes | ||
6.875%, 11/15/28 | 225,000 | 214,875 |
Sprint Communications, Inc. sr. unsec. notes 7.00%, 8/15/20 | 60,000 | 62,850 |
Sprint Communications, Inc. 144A company guaranty sr. unsec. | ||
notes 9.00%, 11/15/18 | 43,000 | 44,613 |
Sprint Corp. company guaranty sr. unsec. sub. notes | ||
7.875%, 9/15/23 | 330,000 | 341,550 |
Sprint Corp. company guaranty sr. unsec. sub. notes | ||
7.25%, 9/15/21 | 265,000 | 276,925 |
T-Mobile USA, Inc. company guaranty sr. unsec. notes | ||
6.625%, 4/1/23 | 140,000 | 144,900 |
T-Mobile USA, Inc. company guaranty sr. unsec. notes | ||
6.375%, 3/1/25 | 220,000 | 232,100 |
T-Mobile USA, Inc. company guaranty sr. unsec. notes | ||
5.375%, 4/15/27 | 55,000 | 56,238 |
T-Mobile USA, Inc. company guaranty sr. unsec. notes | ||
4.00%, 4/15/22 | 30,000 | 30,000 |
T-Mobile USA, Inc. company guaranty sr. unsec. unsub. bonds | ||
4.75%, 2/1/28 | 95,000 | 92,661 |
T-Mobile USA, Inc. company guaranty sr. unsec. unsub. notes | ||
6.50%, 1/15/26 | 55,000 | 58,988 |
T-Mobile USA, Inc. company guaranty sr. unsec. unsub. notes | ||
4.50%, 2/1/26 | 40,000 | 39,250 |
Videotron, Ltd. company guaranty sr. unsec. unsub. notes 5.00%, | ||
7/15/22 (Canada) | 195,000 | 200,850 |
Videotron, Ltd./Videotron Ltee. 144A sr. unsec. notes 5.125%, | ||
4/15/27 (Canada) | 90,000 | 90,799 |
Windstream Services, LLC company guaranty sr. unsec. notes | ||
6.375%, 8/1/23 | 110,000 | 64,350 |
5,276,772 |
24 High Income Securities Fund |
Principal | |||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value | |
Consumer cyclicals (8.0%) | |||
AMC Entertainment Holdings, Inc. company guaranty sr. unsec. | |||
notes 6.125%, 5/15/27 | $60,000 | $58,350 | |
AMC Entertainment Holdings, Inc. company guaranty sr. unsec. | |||
sub. notes 5.875%, 11/15/26 | 75,000 | 72,469 | |
AMC Entertainment Holdings, Inc. company guaranty sr. unsec. | |||
sub. notes 5.875%, 2/15/22 | 40,000 | 40,350 | |
AMC Entertainment Holdings, Inc. company guaranty sr. unsec. | |||
sub. notes 5.75%, 6/15/25 | 65,000 | 63,213 | |
American Builders & Contractors Supply Co., Inc. 144A sr. unsec. | |||
notes 5.75%, 12/15/23 | 105,000 | 109,463 | |
American Tire Distributors, Inc. 144A sr. unsec. sub. notes | |||
10.25%, 3/1/22 | 175,000 | 182,240 | |
Boyd Gaming Corp. company guaranty sr. unsec. sub. notes | |||
6.875%, 5/15/23 | 75,000 | 79,125 | |
Boyd Gaming Corp. company guaranty sr. unsec. unsub. notes | |||
6.375%, 4/1/26 | 35,000 | 36,794 | |
Brookfield Residential Properties, Inc. 144A company guaranty sr. | |||
unsec. notes 6.50%, 12/15/20 (Canada) | 100,000 | 101,820 | |
Brookfield Residential Properties, Inc./Brookfield Residential | |||
US Corp. 144A company guaranty sr. unsec. notes 6.125%, | |||
7/1/22 (Canada) | 85,000 | 87,656 | |
CBS Radio, Inc. 144A company guaranty sr. unsec. notes | |||
7.25%, 11/1/24 | 155,000 | 159,619 | |
Cinemark USA, Inc. company guaranty sr. unsec. notes | |||
5.125%, 12/15/22 | 40,000 | 40,600 | |
Cinemark USA, Inc. company guaranty sr. unsec. sub. notes | |||
4.875%, 6/1/23 | 65,000 | 64,594 | |
Clear Channel Worldwide Holdings, Inc. company guaranty sr. | |||
unsec. sub. notes 7.625%, 3/15/20 | 70,000 | 69,825 | |
Clear Channel Worldwide Holdings, Inc. company guaranty sr. | |||
unsec. unsub. notes 6.50%, 11/15/22 | 330,000 | 338,250 | |
Constellation Merger Sub, Inc. 144A sr. unsec. notes 8.50%, 9/15/25 | 260,000 | 254,638 | |
CRC Escrow Issuer, LLC/CRC Finco, Inc. 144A company guaranty sr. | |||
unsec. notes 5.25%, 10/15/25 | 145,000 | 141,738 | |
Diamond Resorts International, Inc. 144A sr. notes 7.75%, 9/1/23 | 210,000 | 226,538 | |
Diamond Resorts International, Inc. 144A sr. unsec. notes | |||
10.75%, 9/1/24 | 120,000 | 130,050 | |
Eldorado Resorts, Inc. company guaranty sr. unsec. unsub. notes | |||
7.00%, 8/1/23 | 45,000 | 47,588 | |
Gartner, Inc. 144A company guaranty sr. unsec. notes | |||
5.125%, 4/1/25 | 85,000 | 87,125 | |
GLP Capital LP/GLP Financing II, Inc. company guaranty sr. unsec. | |||
sub. notes 4.875%, 11/1/20 | 75,000 | 76,500 | |
GLP Capital LP/GLP Financing II, Inc. company guaranty sr. unsec. | |||
unsub. notes 5.375%, 4/15/26 | 50,000 | 51,625 | |
Gray Television, Inc. 144A company guaranty sr. unsec. notes | |||
5.875%, 7/15/26 | 80,000 | 79,300 | |
Great Canadian Gaming Corp. 144A company guaranty sr. unsec. | |||
notes 6.625%, 7/25/22 (Canada) | CAD | 170,000 | 136,522 |
GW Honos Security Corp. 144A company guaranty sr. unsec. notes | |||
8.75%, 5/15/25 (Canada) | $125,000 | 134,531 |
High Income Securities Fund 25 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Consumer cyclicals cont. | ||
Hanesbrands, Inc. 144A company guaranty sr. unsec. unsub. notes | ||
4.625%, 5/15/24 | $70,000 | $69,300 |
Hilton Worldwide Finance, LLC/Hilton Worldwide Finance Corp. | ||
company guaranty sr. unsec. notes 4.875%, 4/1/27 | 145,000 | 145,000 |
Howard Hughes Corp. (The) 144A sr. unsec. notes 5.375%, 3/15/25 | 215,000 | 212,044 |
iHeartCommunications, Inc. company guaranty sr. notes 9.00%, | ||
12/15/19 (In default)† | 130,000 | 102,700 |
IHS Markit, Ltd. 144A company guaranty notes 4.75%, 2/15/25 | ||
(United Kingdom) | 115,000 | 117,588 |
IHS Markit, Ltd. 144A company guaranty sr. unsec. notes 4.00%, | ||
3/1/26 (United Kingdom) | 25,000 | 24,250 |
Jack Ohio Finance, LLC/Jack Ohio Finance 1 Corp. 144A company | ||
guaranty notes 10.25%, 11/15/22 | 230,000 | 251,850 |
Jack Ohio Finance, LLC/Jack Ohio Finance 1 Corp. 144A company | ||
guaranty sr. notes 6.75%, 11/15/21 | 225,000 | 234,443 |
Jacobs Entertainment, Inc. 144A notes 7.875%, 2/1/24 | 65,000 | 69,469 |
Jeld-Wen, Inc. 144A company guaranty sr. unsec. notes | ||
4.875%, 12/15/27 | 55,000 | 53,350 |
Jeld-Wen, Inc. 144A company guaranty sr. unsec. notes | ||
4.625%, 12/15/25 | 65,000 | 63,538 |
Jo-Ann Stores Holdings, Inc. 144A sr. unsec. notes 9.75%, | ||
10/15/19‡‡ | 80,000 | 79,200 |
Lennar Corp. company guaranty sr. unsec. unsub. notes | ||
4.75%, 11/15/22 | 60,000 | 60,300 |
Lennar Corp. 144A company guaranty sr. unsec. sub. notes | ||
5.875%, 11/15/24 | 55,000 | 58,438 |
Lions Gate Entertainment Corp. 144A sr. unsec. unsub. notes | ||
5.875%, 11/1/24 | 110,000 | 114,400 |
Live Nation Entertainment, Inc. 144A company guaranty sr. unsec. | ||
notes 4.875%, 11/1/24 | 50,000 | 49,688 |
Masonite International Corp. 144A company guaranty sr. unsec. | ||
notes 5.625%, 3/15/23 | 110,000 | 113,713 |
Mattamy Group Corp. 144A sr. unsec. notes 6.875%, | ||
12/15/23 (Canada) | 50,000 | 52,438 |
Mattamy Group Corp. 144A sr. unsec. notes 6.50%, | ||
10/1/25 (Canada) | 75,000 | 78,469 |
Meredith Corp. 144A sr. unsec. notes 6.875%, 2/1/26 | 110,000 | 113,438 |
MGM Resorts International company guaranty sr. unsec. unsub. | ||
notes 8.625%, 2/1/19 | 70,000 | 73,500 |
MGM Resorts International company guaranty sr. unsec. unsub. | ||
notes 6.625%, 12/15/21 | 65,000 | 70,200 |
Navistar International Corp. 144A sr. unsec. notes 6.625%, 11/1/25 | 175,000 | 180,250 |
Neiman Marcus Group, LLC (The) company guaranty sr. notes | ||
7.125%, 6/1/28 | 125,000 | 87,813 |
Neiman Marcus Group, Ltd. 144A company guaranty sr. unsec. sub. | ||
notes 8.75% (9.50%), 10/15/21‡‡ | 73,325 | 41,429 |
Neiman Marcus Group, Ltd. 144A company guaranty sr. unsec. sub. | ||
notes 8.00%, 10/15/21 | 60,000 | 36,300 |
Nexstar Broadcasting, Inc. 144A company guaranty sr. unsec. | ||
notes 5.625%, 8/1/24 | 250,000 | 251,718 |
Nielsen Co. Luxembourg SARL (The) 144A company guaranty sr. | ||
unsec. notes 5.00%, 2/1/25 (Luxembourg) | 60,000 | 59,906 |
26 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Consumer cyclicals cont. | ||
Nielsen Finance, LLC/Nielsen Finance Co. 144A company guaranty | ||
sr. unsec. sub. notes 5.00%, 4/15/22 | $75,000 | $75,844 |
Outfront Media Capital, LLC/Outfront Media Capital Corp. | ||
company guaranty sr. unsec. sub. notes 5.875%, 3/15/25 | 90,000 | 91,350 |
Outfront Media Capital, LLC/Outfront Media Capital Corp. | ||
company guaranty sr. unsec. sub. notes 5.625%, 2/15/24 | 45,000 | 45,506 |
Penn National Gaming, Inc. 144A sr. unsec. notes 5.625%, 1/15/27 | 90,000 | 89,325 |
Penske Automotive Group, Inc. company guaranty sr. unsec. sub. | ||
notes 5.75%, 10/1/22 | 160,000 | 164,400 |
Penske Automotive Group, Inc. company guaranty sr. unsec. sub. | ||
notes 5.50%, 5/15/26 | 60,000 | 59,850 |
Penske Automotive Group, Inc. company guaranty sr. unsec. sub. | ||
notes 5.375%, 12/1/24 | 100,000 | 100,250 |
PetSmart, Inc. 144A sr. unsec. notes 7.125%, 3/15/23 | 40,000 | 25,496 |
PulteGroup, Inc. company guaranty sr. unsec. unsub. notes | ||
7.875%, 6/15/32 | 160,000 | 192,400 |
PulteGroup, Inc. company guaranty sr. unsec. unsub. notes | ||
5.50%, 3/1/26 | 90,000 | 91,463 |
Regal Entertainment Group sr. unsec. sub. notes 5.75%, 2/1/25 | 90,000 | 92,138 |
Regal Entertainment Group sr. unsec. sub. notes 5.75%, 6/15/23 | 70,000 | 72,100 |
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp. | ||
144A sr. notes 6.125%, 8/15/21 | 195,000 | 184,275 |
Sabre GLBL, Inc. 144A company guaranty sr. notes 5.375%, 4/15/23 | 135,000 | 136,013 |
Scientific Games International, Inc. company guaranty sr. unsec. | ||
notes 10.00%, 12/1/22 | 340,000 | 368,900 |
Sinclair Television Group, Inc. 144A company guaranty sr. unsec. | ||
sub. notes 5.625%, 8/1/24 | 225,000 | 228,375 |
Sirius XM Radio, Inc. 144A company guaranty sr. unsec. sub. notes | ||
6.00%, 7/15/24 | 125,000 | 130,625 |
Sirius XM Radio, Inc. 144A sr. unsec. bonds 5.00%, 8/1/27 | 110,000 | 106,975 |
Six Flags Entertainment Corp. 144A company guaranty sr. unsec. | ||
bonds 5.50%, 4/15/27 | 150,000 | 150,563 |
Six Flags Entertainment Corp. 144A company guaranty sr. unsec. | ||
unsub. notes 4.875%, 7/31/24 | 170,000 | 169,590 |
Spectrum Brands, Inc. company guaranty sr. unsec. notes | ||
5.75%, 7/15/25 | 65,000 | 66,950 |
Spectrum Brands, Inc. company guaranty sr. unsec. sub. notes | ||
6.625%, 11/15/22 | 5,000 | 5,163 |
Spectrum Brands, Inc. company guaranty sr. unsec. unsub. notes | ||
6.125%, 12/15/24 | 110,000 | 115,225 |
Standard Industries, Inc. 144A sr. unsec. notes 5.375%, 11/15/24 | 175,000 | 178,938 |
Standard Industries, Inc. 144A sr. unsec. notes 5.00%, 2/15/27 | 70,000 | 69,388 |
Standard Industries, Inc. 144A sr. unsec. notes 4.75%, 1/15/28 | 10,000 | 9,600 |
SugarHouse HSP Gaming Prop. Mezz LP/SugarHouse HSP | ||
Gaming Finance Corp. 144A company guaranty sr. unsub. notes | ||
5.875%, 5/15/25 | 85,000 | 79,900 |
Taylor Morrison Communities, Inc./Monarch Communities, Inc. | ||
144A company guaranty sr. unsec. sub. notes 5.625%, 3/1/24 | 45,000 | 45,788 |
Townsquare Media, Inc. 144A company guaranty sr. unsec. notes | ||
6.50%, 4/1/23 | 60,000 | 57,000 |
TRI Pointe Group, Inc./TRI Pointe Homes, Inc. company guaranty | ||
sr. unsec. unsub. notes 5.875%, 6/15/24 | 100,000 | 103,000 |
High Income Securities Fund 27 |
Principal | |||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value | |
Consumer cyclicals cont. | |||
Tribune Media Co. company guaranty sr. unsec. notes | |||
5.875%, 7/15/22 | $85,000 | $86,700 | |
Univision Communications, Inc. 144A company guaranty sr. sub. | |||
notes 5.125%, 2/15/25 | 110,000 | 101,613 | |
Werner FinCo LP/Werner FinCo, Inc. 144A company guaranty sr. | |||
unsec. notes 8.75%, 7/15/25 | 175,000 | 179,813 | |
WMG Acquisition Corp. 144A company guaranty sr. notes | |||
5.00%, 8/1/23 | 105,000 | 106,444 | |
WMG Acquisition Corp. 144A company guaranty sr. unsec. notes | |||
5.50%, 4/15/26 | 30,000 | 30,000 | |
Wolverine World Wide, Inc. 144A company guaranty sr. unsec. | |||
bonds 5.00%, 9/1/26 | 95,000 | 95,000 | |
Wyndham Worldwide Corp. sr. unsec. unsub. bonds 4.50%, 4/1/27 | 150,000 | 149,024 | |
Wynn Las Vegas, LLC/Wynn Las Vegas Capital Corp. 144A company | |||
guaranty sr. unsec. sub. notes 5.25%, 5/15/27 | 195,000 | 191,588 | |
9,981,827 | |||
Consumer staples (2.4%) | |||
1011778 BC ULC/New Red Finance, Inc. 144A company guaranty | |||
notes 5.00%, 10/15/25 (Canada) | 120,000 | 117,000 | |
1011778 BC ULC/New Red Finance, Inc. 144A company guaranty sr. | |||
notes 4.625%, 1/15/22 (Canada) | 45,000 | 45,281 | |
1011778 BC ULC/New Red Finance, Inc. 144A company guaranty sr. | |||
sub. notes 4.25%, 5/15/24 (Canada) | 85,000 | 81,175 | |
Ascend Learning, LLC 144A sr. unsec. notes 6.875%, 8/1/25 | 115,000 | 118,450 | |
BlueLine Rental Finance Corp./BlueLine Rental, LLC 144A | |||
company guaranty sub. notes 9.25%, 3/15/24 | 210,000 | 227,063 | |
Brand Energy & Infrastructure Services, Inc. 144A sr. unsec. notes | |||
8.50%, 7/15/25 | 220,000 | 227,150 | |
CEC Entertainment, Inc. company guaranty sr. unsec. sub. notes | |||
8.00%, 2/15/22 | 180,000 | 174,600 | |
Ceridian HCM Holding, Inc. 144A sr. unsec. notes 11.00%, 3/15/21 | 275,000 | 284,166 | |
Dean Foods Co. 144A company guaranty sr. unsec. notes | |||
6.50%, 3/15/23 | 90,000 | 87,975 | |
Diamond (BC) BV 144A sr. unsec. notes 5.625%, 8/15/25 | EUR | 100,000 | 118,785 |
Fresh Market, Inc. (The) 144A company guaranty sr. notes | |||
9.75%, 5/1/23 | $80,000 | 54,200 | |
Golden Nugget, Inc. 144A company guaranty sr. unsec. sub. notes | |||
8.75%, 10/1/25 | 165,000 | 173,663 | |
Golden Nugget, Inc. 144A sr. unsec. notes 6.75%, 10/15/24 | 230,000 | 235,750 | |
Itron, Inc. 144A company guaranty sr. unsec. notes 5.00%, 1/15/26 | 125,000 | 124,375 | |
KFC Holding Co./Pizza Hut Holdings, LLC/Taco Bell of America, LLC | |||
144A company guaranty sr. unsec. notes 5.25%, 6/1/26 | 90,000 | 91,125 | |
KFC Holding Co./Pizza Hut Holdings, LLC/Taco Bell of America, LLC | |||
144A company guaranty sr. unsec. notes 5.00%, 6/1/24 | 90,000 | 90,900 | |
KFC Holding Co./Pizza Hut Holdings, LLC/Taco Bell of America, LLC | |||
144A company guaranty sr. unsec. notes 4.75%, 6/1/27 | 60,000 | 58,650 | |
Lamb Weston Holdings, Inc. 144A company guaranty sr. unsec. | |||
unsub. notes 4.875%, 11/1/26 | 130,000 | 130,000 | |
Lamb Weston Holdings, Inc. 144A company guaranty sr. unsec. | |||
unsub. notes 4.625%, 11/1/24 | 25,000 | 25,125 | |
Match Group, Inc. 144A sr. unsec. bonds 5.00%, 12/15/27 | 100,000 | 100,775 |
28 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Consumer staples cont. | ||
Netflix, Inc. 144A sr. unsec. bonds 4.875%, 4/15/28 | $85,000 | $83,513 |
Revlon Consumer Products Corp. company guaranty sr. unsec. | ||
notes 6.25%, 8/1/24 | 215,000 | 147,813 |
Revlon Consumer Products Corp. company guaranty sr. unsec. | ||
sub. notes 5.75%, 2/15/21 | 100,000 | 80,750 |
Rite Aid Corp. 144A company guaranty sr. unsec. unsub. notes | ||
6.125%, 4/1/23 | 90,000 | 90,450 |
2,968,734 | ||
Energy (5.5%) | ||
Alta Mesa Holdings LP/Alta Mesa Finance Services Corp. company | ||
guaranty sr. unsec. notes 7.875%, 12/15/24 | 190,000 | 202,350 |
Antero Resources Corp. company guaranty sr. unsec. notes | ||
5.625%, 6/1/23 | 30,000 | 30,750 |
Antero Resources Corp. company guaranty sr. unsec. sub. notes | ||
5.375%, 11/1/21 | 90,000 | 92,025 |
Antero Resources Corp. company guaranty sr. unsec. sub. notes | ||
5.125%, 12/1/22 | 30,000 | 30,263 |
Ascent Resources Utica Holdings, LLC/ARU Finance Corp. 144A sr. | ||
unsec. notes 10.00%, 4/1/22 | 60,000 | 63,900 |
Baytex Energy Corp. 144A company guaranty sr. unsec. sub. notes | ||
5.125%, 6/1/21 (Canada) | 40,000 | 37,600 |
Calfrac Holdings LP 144A company guaranty sr. unsec. unsub. | ||
notes 7.50%, 12/1/20 | 85,000 | 84,601 |
California Resources Corp. 144A company guaranty notes | ||
8.00%, 12/15/22 | 55,000 | 43,588 |
Cenovus Energy, Inc. sr. unsec. bonds 6.75%, 11/15/39 (Canada) | 75,000 | 86,250 |
Cheniere Corpus Christi Holdings, LLC company guaranty sr. notes | ||
5.875%, 3/31/25 | 250,000 | 264,375 |
Cheniere Corpus Christi Holdings, LLC company guaranty sr. notes | ||
5.125%, 6/30/27 | 90,000 | 91,013 |
Chesapeake Energy Corp. company guaranty sr. unsec. notes | ||
5.75%, 3/15/23 | 75,000 | 68,625 |
Chesapeake Energy Corp. 144A company guaranty notes | ||
8.00%, 12/15/22 | 191,000 | 203,176 |
Chesapeake Energy Corp. 144A company guaranty sr. unsec. | ||
bonds 8.00%, 6/15/27 | 35,000 | 33,556 |
Chesapeake Energy Corp. 144A company guaranty sr. unsec. notes | ||
8.00%, 1/15/25 | 80,000 | 79,000 |
Continental Resources, Inc. company guaranty sr. unsec. bonds | ||
4.90%, 6/1/44 | 145,000 | 139,563 |
Continental Resources, Inc. company guaranty sr. unsec. notes | ||
3.80%, 6/1/24 | 100,000 | 97,125 |
Continental Resources, Inc. company guaranty sr. unsec. sub. | ||
notes 5.00%, 9/15/22 | 20,000 | 20,300 |
Continental Resources, Inc. company guaranty sr. unsec. unsub. | ||
notes 4.50%, 4/15/23 | 80,000 | 80,800 |
Covey Park Energy, LLC/Covey Park Finance Corp. 144A company | ||
guaranty sr. unsec. notes 7.50%, 5/15/25 | 145,000 | 147,175 |
CrownRock LP/CrownRock Finance, Inc. 144A sr. unsec. notes | ||
5.625%, 10/15/25 | 100,000 | 98,000 |
Denbury Resources, Inc. company guaranty sr. unsec. sub. notes | ||
6.375%, 8/15/21 | 65,000 | 53,950 |
High Income Securities Fund 29 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Energy cont. | ||
Denbury Resources, Inc. 144A company guaranty notes | ||
9.00%, 5/15/21 | $107,000 | $109,408 |
Diamondback Energy, Inc. company guaranty sr. unsec. unsub. | ||
notes 5.375%, 5/31/25 | 155,000 | 155,000 |
Diamondback Energy, Inc. company guaranty sr. unsec. unsub. | ||
notes 4.75%, 11/1/24 | 45,000 | 44,438 |
Endeavor Energy Resources LP/EER Finance, Inc. 144A sr. unsec. | ||
bonds 5.75%, 1/30/28 | 150,000 | 150,000 |
Endeavor Energy Resources LP/EER Finance, Inc. 144A sr. unsec. | ||
notes 5.50%, 1/30/26 | 45,000 | 44,550 |
Energy Transfer Partners LP jr. unsec. sub. FRB Ser. B, 6.625%, | ||
perpetual maturity | 240,000 | 231,000 |
Ensco PLC sr. unsec. notes 7.75%, 2/1/26 (United Kingdom) | 115,000 | 108,675 |
EP Energy, LLC/Everest Acquisition Finance, Inc. company | ||
guaranty sr. unsec. sub. notes 9.375%, 5/1/20 | 42,000 | 38,850 |
EP Energy, LLC/Everest Acquisition Finance, Inc. 144A company | ||
guaranty notes 9.375%, 5/1/24 | 98,000 | 72,275 |
EP Energy, LLC/Everest Acquisition Finance, Inc. 144A company | ||
guaranty notes 8.00%, 2/15/25 | 65,000 | 44,688 |
EP Energy, LLC/Everest Acquisition Finance, Inc. 144A company | ||
guaranty sr. notes 8.00%, 11/29/24 | 30,000 | 30,900 |
Extraction Oil & Gas, Inc. 144A sr. unsec. notes 5.625%, 2/1/26 | 120,000 | 117,600 |
Hess Infrastructure Partners LP/Hess Infrastructure Partners | ||
Finance Corp. 144A sr. unsec. notes 5.625%, 2/15/26 | 135,000 | 135,000 |
Holly Energy Partners LP/Holly Energy Finance Corp. 144A | ||
company guaranty sr. unsec. notes 6.00%, 8/1/24 | 155,000 | 158,875 |
Indigo Natural Resources, LLC 144A sr. unsec. notes | ||
6.875%, 2/15/26 | 150,000 | 146,658 |
Jonah Energy, LLC/Jonah Energy Finance Corp. 144A company | ||
guaranty sr. unsec. notes 7.25%, 10/15/25 | 75,000 | 71,250 |
MEG Energy Corp. 144A company guaranty sr. unsec. notes 7.00%, | ||
3/31/24 (Canada) | 15,000 | 12,788 |
MEG Energy Corp. 144A company guaranty sr. unsec. notes | ||
6.375%, 1/30/23 (Canada) | 35,000 | 30,013 |
MEG Energy Corp. 144A notes 6.50%, 1/15/25 (Canada) | 60,000 | 58,875 |
Murray Energy Corp. 144A notes 11.25%, 4/15/21 | 110,000 | 48,400 |
Nabors Industries, Inc. 144A company guaranty sr. unsec. notes | ||
5.75%, 2/1/25 | 130,000 | 124,069 |
Newfield Exploration Co. sr. unsec. unsub. notes 5.75%, 1/30/22 | 170,000 | 178,500 |
Newfield Exploration Co. sr. unsec. unsub. notes 5.375%, 1/1/26 | 55,000 | 56,788 |
Noble Holding International, Ltd. company guaranty sr. unsec. | ||
unsub. notes 7.75%, 1/15/24 | 110,000 | 100,513 |
Noble Holding International, Ltd. 144A company guaranty sr. | ||
unsec. notes 7.875%, 2/1/26 | 40,000 | 40,200 |
Oasis Petroleum, Inc. company guaranty sr. unsec. sub. notes | ||
6.875%, 1/15/23 | 10,000 | 10,225 |
Oasis Petroleum, Inc. company guaranty sr. unsec. unsub. notes | ||
6.875%, 3/15/22 | 145,000 | 148,534 |
QEP Resources, Inc. sr. unsec. notes 5.625%, 3/1/26 | 85,000 | 83,619 |
Range Resources Corp. company guaranty sr. unsec. sub. notes | ||
5.75%, 6/1/21 | 190,000 | 194,275 |
30 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Energy cont. | ||
Regency Energy Partners LP/Regency Energy Finance Corp. | ||
company guaranty sr. unsec. notes 5.00%, 10/1/22 | $55,000 | $57,431 |
Regency Energy Partners LP/Regency Energy Finance Corp. | ||
company guaranty sr. unsec. unsub. notes 4.50%, 11/1/23 | 80,000 | 81,337 |
Rose Rock Midstream LP/Rose Rock Finance Corp. company | ||
guaranty sr. unsec. sub. notes 5.625%, 11/15/23 | 50,000 | 48,375 |
SemGroup Corp. company guaranty sr. unsec. notes | ||
6.375%, 3/15/25 | 95,000 | 93,575 |
SESI, LLC company guaranty sr. unsec. unsub. notes | ||
7.125%, 12/15/21 | 40,000 | 40,800 |
SESI, LLC 144A company guaranty sr. unsec. notes 7.75%, 9/15/24 | 85,000 | 88,400 |
Seven Generations Energy, Ltd. 144A company guaranty sr. unsec. | ||
notes 5.375%, 9/30/25 (Canada) | 75,000 | 73,688 |
Seven Generations Energy, Ltd. 144A sr. unsec. bonds 6.75%, | ||
5/1/23 (Canada) | 35,000 | 36,488 |
Seventy Seven Energy, Inc. escrow sr. unsec. notes | ||
6.50%, 7/15/22F | 105,000 | 11 |
Seventy Seven Operating, LLC escrow company guaranty sr. | ||
unsec. unsub. notes 6.625%, 11/15/19 F | 115,000 | 12 |
SM Energy Co. sr. unsec. notes 6.50%, 11/15/21 | 85,000 | 86,275 |
SM Energy Co. sr. unsec. sub. notes 5.00%, 1/15/24 | 50,000 | 47,000 |
SM Energy Co. sr. unsec. unsub. notes 6.75%, 9/15/26 | 60,000 | 60,300 |
SM Energy Co. sr. unsec. unsub. notes 6.50%, 1/1/23 | 35,000 | 35,350 |
SM Energy Co. sr. unsec. unsub. notes 6.125%, 11/15/22 | 50,000 | 50,500 |
Stone Energy Corp. company guaranty notes 7.50%, 5/31/22 | 171,065 | 173,631 |
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. 144A | ||
company guaranty sr. unsec. bonds 5.50%, 1/15/28 | 80,000 | 80,200 |
Targa Resources Partners LP/Targa Resources Partners Finance | ||
Corp. company guaranty sr. unsec. notes 5.375%, 2/1/27 | 65,000 | 65,000 |
Targa Resources Partners LP/Targa Resources Partners Finance | ||
Corp. company guaranty sr. unsec. notes 5.125%, 2/1/25 | 30,000 | 29,925 |
Targa Resources Partners LP/Targa Resources Partners | ||
Finance Corp. 144A company guaranty sr. unsec. unsub. bonds | ||
5.00%, 1/15/28 | 200,000 | 194,250 |
Trinidad Drilling, Ltd. 144A company guaranty sr. unsec. notes | ||
6.625%, 2/15/25 (Canada) | 90,000 | 86,963 |
Vermilion Energy, Inc. 144A company guaranty sr. unsec. notes | ||
5.625%, 3/15/25 (Canada) | 60,000 | 59,850 |
Weatherford International, LLC 144A company guaranty sr. unsec. | ||
notes 9.875%, 3/1/25 | 45,000 | 44,325 |
Weatherford International, Ltd. company guaranty sr. unsec. sub. | ||
notes 9.875%, 2/15/24 | 120,000 | 118,800 |
Weatherford International, Ltd. company guaranty sr. unsec. | ||
unsub. notes 8.25%, 6/15/23 | 25,000 | 24,250 |
Whiting Petroleum Corp. 144A sr. unsec. notes 6.625%, 1/15/26 | 60,000 | 61,200 |
Williams Cos., Inc. (The) sr. unsec. unsub. notes 8.75%, 3/15/32 | 45,000 | 59,175 |
WPX Energy, Inc. sr. unsec. notes 8.25%, 8/1/23 | 30,000 | 33,975 |
WPX Energy, Inc. sr. unsec. notes 7.50%, 8/1/20 | 108,000 | 115,560 |
WPX Energy, Inc. sr. unsec. unsub. notes 6.00%, 1/15/22 | 115,000 | 119,313 |
6,859,910 |
High Income Securities Fund 31 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Financials (3.7%) | ||
Alliance Data Systems Corp. 144A company guaranty sr. unsec. | ||
notes 5.375%, 8/1/22 | $105,000 | $105,394 |
Alliant Holdings Intermediate, LLC 144A sr. unsec. notes | ||
8.25%, 8/1/23 | 120,000 | 124,800 |
Ally Financial, Inc. company guaranty sr. unsec. notes | ||
8.00%, 11/1/31 | 220,000 | 272,800 |
Ally Financial, Inc. company guaranty sr. unsec. unsub. notes | ||
8.00%, 3/15/20 | 60,000 | 65,100 |
Ally Financial, Inc. sub. unsec. notes 5.75%, 11/20/25 | 120,000 | 125,100 |
Ally Financial, Inc. unsec. sub. notes 8.00%, 12/31/18 | 65,000 | 67,681 |
American International Group, Inc. jr. unsec. sub. FRB | ||
8.175%, 5/15/58 | 100,000 | 135,000 |
Bank of America Corp. jr. unsec. sub. FRN Ser. AA, 6.10%, | ||
perpetual maturity | 55,000 | 58,713 |
Bank of America Corp. jr. unsec. sub. FRN Ser. Z, 6.50%, | ||
perpetual maturity | 50,000 | 54,823 |
CBRE Services, Inc. company guaranty sr. unsec. notes | ||
5.25%, 3/15/25 | 50,000 | 53,490 |
CBRE Services, Inc. company guaranty sr. unsec. unsub. notes | ||
5.00%, 3/15/23 | 75,000 | 76,924 |
CIT Group, Inc. sr. unsec. notes 3.875%, 2/19/19 | 45,000 | 45,225 |
CIT Group, Inc. sr. unsec. sub. notes 5.00%, 8/1/23 | 75,000 | 77,250 |
CIT Group, Inc. sr. unsec. unsub. notes 5.00%, 8/15/22 | 100,000 | 103,125 |
CIT Group, Inc. 144A sr. unsec. notes 5.50%, 2/15/19 | 62,000 | 63,473 |
CNG Holdings, Inc. 144A sr. notes 9.375%, 5/15/20 | 125,000 | 122,500 |
CNO Financial Group, Inc. sr. unsec. unsub. notes 5.25%, 5/30/25 | 155,000 | 157,325 |
Credit Acceptance Corp. company guaranty sr. unsec. notes | ||
7.375%, 3/15/23 | 50,000 | 52,250 |
Credit Acceptance Corp. company guaranty sr. unsec. notes | ||
6.125%, 2/15/21 | 55,000 | 55,275 |
Dresdner Funding Trust I 144A jr. unsec. sub. notes 8.151%, 6/30/31 | 110,000 | 144,045 |
ESH Hospitality, Inc. 144A company guaranty sr. unsec. notes | ||
5.25%, 5/1/25 R | 60,000 | 59,850 |
Freedom Mortgage Corp. 144A sr. unsec. notes 8.125%, 11/15/24 | 115,000 | 117,875 |
goeasy, Ltd. 144A company guaranty sr. unsec. notes 7.875%, | ||
11/1/22 (Canada) | 70,000 | 74,463 |
Hub Holdings, LLC/Hub Holdings Finance, Inc. 144A sr. unsec. sub. | ||
notes 8.125%, 7/15/19‡‡ | 70,000 | 70,088 |
HUB International, Ltd. 144A sr. unsec. notes 7.875%, 10/1/21 | 155,000 | 159,844 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. company | ||
guaranty sr. unsec. notes 6.75%, 2/1/24 | 65,000 | 66,300 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. company | ||
guaranty sr. unsec. notes 6.25%, 2/1/22 | 60,000 | 60,900 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. company | ||
guaranty sr. unsec. notes 6.00%, 8/1/20 | 65,000 | 66,268 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. company | ||
guaranty sr. unsec. notes 5.875%, 2/1/22 | 95,000 | 95,000 |
Intelsat Connect Finance SA 144A company guaranty sr. unsec. | ||
sub. notes 12.50%, 4/1/22 (Luxembourg) | 9,000 | 7,234 |
International Lease Finance Corp. sr. unsec. unsub. notes | ||
5.875%, 8/15/22 | 60,000 | 65,175 |
32 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Financials cont. | ||
iStar, Inc. sr. unsec. notes 6.00%, 4/1/22 R | $40,000 | $40,200 |
iStar, Inc. sr. unsec. unsub. notes 5.25%, 9/15/22 R | 40,000 | 39,300 |
Liberty Mutual Group, Inc. 144A company guaranty jr. unsec. sub. | ||
bonds 7.80%, 3/15/37 | 45,000 | 55,913 |
Lloyds Banking Group PLC jr. unsec. sub. FRB 7.50%, perpetual | ||
maturity (United Kingdom) | 249,000 | 272,966 |
LPL Holdings, Inc. 144A company guaranty sr. unsec. notes | ||
5.75%, 9/15/25 | 140,000 | 141,750 |
MGM Growth Properties Operating Partnership LP/MGP Finance | ||
Co-Issuer, Inc. company guaranty sr. unsec. notes 5.625%, 5/1/24 R | 45,000 | 46,553 |
MGM Growth Properties Operating Partnership LP/MGP Finance | ||
Co-Issuer, Inc. company guaranty sr. unsec. notes 4.50%, 1/15/28 R | 35,000 | 33,075 |
Nationstar Mortgage, LLC/Nationstar Capital Corp. company | ||
guaranty sr. unsec. unsub. notes 6.50%, 7/1/21 | 130,000 | 132,844 |
OneMain Financial Holdings, LLC 144A company guaranty sr. | ||
unsec. unsub. notes 7.25%, 12/15/21 | 65,000 | 67,275 |
Provident Funding Associates LP/PFG Finance Corp. 144A sr. | ||
unsec. notes 6.375%, 6/15/25 | 120,000 | 122,700 |
Royal Bank of Scotland Group PLC jr. unsec. sub. FRB 7.648%, | ||
perpetual maturity (United Kingdom) | 170,000 | 218,450 |
Springleaf Finance Corp. company guaranty sr. unsec. unsub. | ||
notes 8.25%, 12/15/20 | 40,000 | 43,600 |
Springleaf Finance Corp. company guaranty sr. unsec. unsub. | ||
notes 6.125%, 5/15/22 | 95,000 | 97,375 |
Starwood Property Trust, Inc. 144A sr. unsec. notes | ||
4.75%, 3/15/25 R | 105,000 | 101,588 |
Stearns Holdings, Inc. 144A company guaranty sr. notes | ||
9.375%, 8/15/20 | 90,000 | 92,250 |
TMX Finance, LLC/TitleMax Finance Corp. 144A company guaranty | ||
sr. notes 8.50%, 9/15/18 | 170,000 | 162,775 |
USIS Merger Sub, Inc. 144A sr. unsec. notes 6.875%, 5/1/25 | 95,000 | 96,188 |
4,568,092 | ||
Health care (3.1%) | ||
Air Medical Merger Sub Corp. 144A sr. unsec. notes 6.375%, 5/15/23 | 135,000 | 127,913 |
ASP AMC Merger Sub, Inc. 144A sr. unsec. notes 8.00%, 5/15/25 | 140,000 | 133,000 |
BioScrip, Inc. company guaranty sr. unsec. notes 8.875%, 2/15/21 | 55,000 | 51,288 |
Centene Corp. sr. unsec. unsub. notes 6.125%, 2/15/24 | 110,000 | 115,500 |
Centene Corp. sr. unsec. unsub. notes 4.75%, 1/15/25 | 25,000 | 24,859 |
Centene Corp. sr. unsec. unsub. notes 4.75%, 5/15/22 | 110,000 | 111,856 |
CHS/Community Health Systems, Inc. company guaranty sr. notes | ||
6.25%, 3/31/23 | 115,000 | 104,650 |
CHS/Community Health Systems, Inc. company guaranty sr. | ||
unsec. notes 6.875%, 2/1/22 | 275,000 | 179,438 |
CHS/Community Health Systems, Inc. company guaranty sr. | ||
unsec. unsub. notes 7.125%, 7/15/20 | 85,000 | 71,825 |
Concordia International Corp. 144A company guaranty sr. unsec. | ||
notes 7.00%, 4/15/23 (Canada) (In default)† | 175,000 | 15,313 |
Endo DAC/Endo Finance, LLC/Endo Finco, Inc. 144A company | ||
guaranty sr. unsec. unsub. notes 6.00%, 7/15/23 (Ireland) | 210,000 | 157,500 |
Endo Finance, LLC/Endo Finco, Inc. 144A company guaranty sr. | ||
unsec. unsub. notes 5.375%, 1/15/23 | 160,000 | 119,600 |
High Income Securities Fund 33 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Health care cont. | ||
HCA, Inc. company guaranty sr. bonds 5.25%, 6/15/26 | $100,000 | $102,500 |
HCA, Inc. company guaranty sr. notes 6.50%, 2/15/20 | 200,000 | 210,500 |
HCA, Inc. company guaranty sr. sub. bonds 5.50%, 6/15/47 | 185,000 | 182,688 |
HCA, Inc. company guaranty sr. sub. notes 3.75%, 3/15/19 | 65,000 | 65,325 |
HCA, Inc. company guaranty sr. unsec. unsub. notes | ||
7.50%, 2/15/22 | 30,000 | 33,300 |
Jaguar Holding Co. II/Pharmaceutical Product Development, LLC | ||
144A company guaranty sr. unsec. notes 6.375%, 8/1/23 | 135,000 | 135,675 |
Kinetic Concepts, Inc./KCI USA, Inc. 144A company guaranty sub. | ||
notes 12.50%, 11/1/21 | 80,000 | 90,200 |
Mallinckrodt International Finance SA/Mallinckrodt CB, | ||
LLC 144A company guaranty sr. unsec. unsub. notes 5.50%, | ||
4/15/25 (Luxembourg) | 125,000 | 100,625 |
Molina Healthcare, Inc. company guaranty sr. unsec. notes | ||
5.375%, 11/15/22 | 75,000 | 74,625 |
Molina Healthcare, Inc. 144A company guaranty sr. unsec. notes | ||
4.875%, 6/15/25 | 20,000 | 19,150 |
Ortho-Clinical Diagnostics, Inc./Ortho-Clinical Diagnostics | ||
SA 144A sr. unsec. notes 6.625%, 5/15/22 | 165,000 | 163,763 |
Service Corp. International sr. unsec. notes 5.375%, 1/15/22 | 110,000 | 112,406 |
Service Corp. International sr. unsec. notes 4.625%, 12/15/27 | 30,000 | 29,325 |
Service Corp. International sr. unsec. unsub. notes 5.375%, 5/15/24 | 255,000 | 262,943 |
Sotera Health Holdings, LLC 144A sr. unsec. notes 6.50%, 5/15/23 | 110,000 | 111,650 |
Tenet Healthcare Corp. company guaranty sr. sub. notes | ||
6.00%, 10/1/20 | 140,000 | 145,599 |
Tenet Healthcare Corp. sr. unsec. notes 8.125%, 4/1/22 | 60,000 | 63,300 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. notes 5.50%, 11/1/25 | 30,000 | 29,681 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 9.00%, 12/15/25 | 80,000 | 80,400 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 6.125%, 4/15/25 | 175,000 | 153,563 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 5.875%, 5/15/23 | 225,000 | 199,969 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 5.625%, 12/1/21 | 10,000 | 9,450 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 5.50%, 3/1/23 | 55,000 | 48,675 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsec. notes 5.375%, 3/15/20 | 35,000 | 34,913 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsub. notes 7.00%, 3/15/24 | 160,000 | 168,400 |
Valeant Pharmaceuticals International, Inc. 144A company | ||
guaranty sr. unsub. notes 6.50%, 3/15/22 | 35,000 | 36,400 |
WellCare Health Plans, Inc. sr. unsec. notes 5.25%, 4/1/25 | 50,000 | 50,606 |
3,928,373 | ||
Technology (2.4%) | ||
Avaya, Inc. 144A escrow notes 7.00%, 4/1/19 F | 300,000 | — |
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 144A | ||
company guaranty sr. unsec. notes 7.125%, 6/15/24 | 375,000 | 403,594 |
34 High Income Securities Fund |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Technology cont. | ||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 144A sr. notes | ||
5.45%, 6/15/23 | $130,000 | $136,953 |
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 144A sr. unsec. | ||
notes 5.875%, 6/15/21 | 20,000 | 20,450 |
First Data Corp. 144A company guaranty sr. unsec. unsub. notes | ||
7.00%, 12/1/23 | 120,000 | 126,150 |
First Data Corp. 144A notes 5.75%, 1/15/24 | 175,000 | 178,063 |
First Data Corp. 144A sr. notes 5.375%, 8/15/23 | 105,000 | 106,828 |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 144A sr. unsec. | ||
notes 8.625%, 11/15/24 | 265,000 | 275,974 |
Infor Software Parent, LLC/Infor Software Parent, Inc. 144A | ||
company guaranty sr. unsec. notes 7.125%, 5/1/21‡‡ | 225,000 | 228,938 |
Infor US, Inc. company guaranty sr. unsec. notes 6.50%, 5/15/22 | 155,000 | 158,488 |
Infor US, Inc. 144A company guaranty sr. notes 5.75%, 8/15/20 | 60,000 | 61,200 |
Iron Mountain, Inc. 144A company guaranty sr. unsec. bonds | ||
5.25%, 3/15/28 R | 45,000 | 42,876 |
Iron Mountain, Inc. 144A company guaranty sr. unsec. notes | ||
4.875%, 9/15/27 R | 150,000 | 141,375 |
Micron Technology, Inc. 144A sr. unsec. unsub. notes | ||
5.25%, 1/15/24 | 170,000 | 174,250 |
Plantronics, Inc. 144A company guaranty sr. unsec. notes | ||
5.50%, 5/31/23 | 170,000 | 170,425 |
Solera, LLC/Solera Finance, Inc. 144A sr. unsec. notes | ||
10.50%, 3/1/24 | 255,000 | 286,314 |
Tempo Acquisition, LLC/Tempo Acquisition Finance Corp. 144A sr. | ||
unsec. notes 6.75%, 6/1/25 | 135,000 | 136,013 |
TTM Technologies, Inc. 144A company guaranty sr. unsec. notes | ||
5.625%, 10/1/25 | 170,000 | 169,150 |
Western Digital Corp. company guaranty sr. unsec. notes | ||
4.75%, 2/15/26 | 125,000 | 125,938 |
2,942,979 | ||
Transportation (0.1%) | ||
Watco Cos., LLC/Watco Finance Corp. 144A company guaranty sr. | ||
unsec. notes 6.375%, 4/1/23 | 155,000 | 158,875 |
158,875 | ||
Utilities and power (1.5%) | ||
AES Corp./Virginia (The) sr. unsec. notes 5.50%, 4/15/25 | 270,000 | 276,750 |
AES Corp./Virginia (The) sr. unsec. notes 4.875%, 5/15/23 | 45,000 | 45,506 |
AES Corp./Virginia (The) sr. unsec. unsub. bonds 5.125%, 9/1/27 | 45,000 | 45,563 |
AES Corp./Virginia (The) sr. unsec. unsub. notes 7.375%, 7/1/21 | 145,000 | 159,138 |
Calpine Corp. sr. unsec. sub. notes 5.75%, 1/15/25 | 175,000 | 164,063 |
Calpine Corp. 144A company guaranty sr. notes 5.25%, 6/1/26 | 85,000 | 82,450 |
Calpine Corp. 144A company guaranty sr. sub. notes | ||
5.875%, 1/15/24 | 25,000 | 25,438 |
Colorado Interstate Gas Co., LLC company guaranty sr. unsec. | ||
notes 6.85%, 6/15/37 | 95,000 | 100,859 |
Dynegy, Inc. company guaranty sr. unsec. notes 7.375%, 11/1/22 | 130,000 | 136,988 |
Dynegy, Inc. company guaranty sr. unsec. unsub. notes | ||
7.625%, 11/1/24 | 180,000 | 193,500 |
Dynegy, Inc. 144A company guaranty sr. unsec. notes | ||
8.125%, 1/30/26 | 55,000 | 60,225 |
High Income Securities Fund 35 |
Principal | ||
CORPORATE BONDS AND NOTES (40.3%)* cont. | amount | Value |
Utilities and power cont. | ||
Energy Transfer Equity LP sr. sub. notes 5.875%, 1/15/24 | $135,000 | $143,100 |
Energy Transfer Equity LP sr. sub. notes 5.50%, 6/1/27 | 45,000 | 46,575 |
GenOn Americas Generation, LLC sr. unsec. notes 9.125%, 5/1/31 | ||
(In default)† | 100,000 | 53,000 |
GenOn Energy, Inc. sr. unsec. sub. notes 9.875%, 10/15/20 | ||
(In default) † | 95,000 | 79,088 |
NRG Energy, Inc. company guaranty sr. unsec. notes | ||
7.25%, 5/15/26 | 90,000 | 95,963 |
NRG Energy, Inc. company guaranty sr. unsec. notes | ||
6.625%, 1/15/27 | 120,000 | 123,900 |
NRG Energy, Inc. 144A company guaranty sr. unsec. bonds | ||
5.75%, 1/15/28 | 40,000 | 39,400 |
Texas Competitive Electric Holdings Co., LLC/TCEH Finance, Inc. | ||
escrow company guaranty sr. notes 11.50%, 10/1/20 | 60,000 | 450 |
1,871,956 | ||
Total corporate bonds and notes (cost $50,323,397) | $50,287,429 | |
CONVERTIBLE PREFERRED STOCKS (13.8%)* | Shares | Value |
Basic materials (—%) | ||
Smurfit-Stone Container Corp. escrow zero % cv. pfd.F | 65,720 | $657 |
657 | ||
Capital goods (1.0%) | ||
Belden, Inc. $6.75 cv. pfd. | 5,761 | 568,328 |
Rexnord Corp. Ser. A, $2.875 cv. pfd. | 11,537 | 723,361 |
1,291,689 | ||
Communication services (1.9%) | ||
Cincinnati Bell, Inc. Ser. B, $3.378 cum. cv. pfd. | 21,872 | 1,077,032 |
Crown Castle International Corp. Ser. A, 6.875% cv. pfd. | 1,119 | 1,237,853 |
2,314,885 | ||
Consumer cyclicals (0.5%) | ||
Stanley Black & Decker, Inc. $5.375 cv. pfd. | 5,519 | 647,514 |
647,514 | ||
Energy (0.6%) | ||
Hess Corp. $4.00 cv. pfd. | 13,160 | 720,642 |
Nine Point Energy 6.75% cv. pfd. | 24 | 26,484 |
747,126 | ||
Financials (5.2%) | ||
Alexandria Real Estate Equities, Inc. Ser. D, $1.75 cv. pfd.R | 14,245 | 512,505 |
AMG Capital Trust II $2.575 cv. pfd. | 14,140 | 884,809 |
Bank of America Corp. Ser. L, 7.25% cv. pfd. | 993 | 1,270,544 |
EPR Properties Ser. C, $1.438 cv. pfd.R | 37,670 | 945,517 |
iStar, Inc. Ser. J, $2.25 cv. pfd.R | 7,445 | 338,785 |
RLJ Lodging Trust Ser. A, $0.488 cv. pfd. | 37,550 | 975,925 |
Wells Fargo & Co. Ser. L, 7.50% cv. pfd. | 720 | 917,280 |
Welltower, Inc. Ser. I, $3.25 cv. pfd.R | 12,177 | 669,735 |
6,515,100 |
36 High Income Securities Fund |
CONVERTIBLE PREFERRED STOCKS (13.8%)* cont. | Shares | Value |
Health care (2.0%) | ||
Allergan PLC Ser. A, 5.50% cv. pfd. | 745 | $406,579 |
Anthem, Inc. $2.63 cv. pfd. | 12,115 | 699,875 |
Becton Dickinson and Co. Ser. A, $3.063 cv. pfd. | 23,115 | 1,355,838 |
2,462,292 | ||
Technology (1.1%) | ||
Mandatory Exchangeable Trust 144A $5.75 cv. pfd. | 4,456 | 929,566 |
NCR Corp. Ser. A, 5.50% (5.50%) cv. pfd.‡‡ | 308 | 405,026 |
1,334,592 | ||
Utilities and power (1.5%) | ||
DTE Energy Co. $3.25 cv. pfd. | 16,040 | 823,229 |
Dynegy, Inc. $7.00 cv. pfd. | 3,046 | 249,011 |
NextEra Energy, Inc. $3.06 cv. pfd. | 15,700 | 866,599 |
1,938,839 | ||
Total convertible preferred stocks (cost $15,931,368) | $17,252,694 | |
COMMON STOCKS (2.0%)* | Shares | Value |
ACC Claims Holdings, LLC Class A (Units) F | 199,505 | $1,197 |
Ally Financial, Inc. | 4,660 | 130,014 |
Avaya Holdings Corp.† | 6,601 | 138,555 |
Bank of America Corp. | 8,630 | 277,023 |
Berry Plastics Group, Inc.† | 1,830 | 99,552 |
Caesars Entertainment Corp.† | 944 | 11,989 |
Charter Communications, Inc. Class A† | 245 | 83,773 |
CIT Group, Inc. | 1,606 | 85,198 |
Crown Holdings, Inc.† | 1,030 | 51,335 |
Eldorado Resorts, Inc.† | 2,180 | 74,338 |
Gaming and Leisure Properties, Inc.R | 2,520 | 83,815 |
Halcon Resources Corp.† | 5,898 | 35,683 |
Live Nation Entertainment, Inc.† | 900 | 40,320 |
Milagro Oil & Gas, Inc. (Units)F | 39 | 3,159 |
Nine Point Energy | 1,015 | 13,966 |
salesforce. com, Inc.† | 8,200 | 953,250 |
SandRidge Energy, Inc.† | 2,270 | 31,916 |
Seven Generations Energy, Ltd. Class A (Canada)† | 2,990 | 34,952 |
Stone Energy Corp.† | 3,230 | 97,740 |
T-Mobile US, Inc.† | 4,484 | 271,775 |
Tervita Corp. Class A (Canada) | 127 | 866 |
Texas Competitive Electric Holdings Co., LLC/TCEH Finance, Inc. (Rights) | 1,028 | 822 |
Total common stocks (cost $2,207,073) | $2,521,238 |
Expiration | Strike | |||
WARRANTS (—%)* † | date | price | Warrants | Value |
Halcon Resources Corp. | 9/9/20 | $14.04 | 1,601 | $1,137 |
Total warrants (cost $—) | $1,137 |
High Income Securities Fund 37 |
SHORT-TERM INVESTMENTS (1.2%)* | Shares | Value |
Putnam Short Term Investment Fund 1.54% L | 1,483,938 | $1,483,938 |
Total short-term investments (cost $1,483,938) | $1,483,938 | |
TOTAL INVESTMENTS | ||
Total investments (cost $118,005,669) | $124,159,154 |
Key to holding’s currency abbreviations | |
CAD | Canadian Dollar |
EUR | Euro |
USD /$ | United States Dollar |
Key to holding’s abbreviations | |
DAC | Designated Activity Company |
FRB | Floating Rate Bonds: the rate shown is the current interest rate at the close of the reporting period. Rates may |
be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the | |
close of the reporting period. | |
FRN | Floating Rate Notes: the rate shown is the current interest rate or yield at the close of the reporting period. |
Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in | |
place at the close of the reporting period. |
Notes to the fund’s portfolio
Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from September 1, 2017 through February 28, 2018 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.
* Percentages indicated are based on net assets of $124,771,159.
† This security is non-income-producing.
‡‡ Income may be received in cash or additional securities at the discretion of the issuer. The rate shown in parenthesis is the rate paid in kind, if applicable.
F This security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities’ valuation inputs (Note 1).
L Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
R Real Estate Investment Trust.
At the close of the reporting period, the fund maintained liquid assets totaling $2,226 to cover certain derivative contracts.
Debt obligations are considered secured unless otherwise indicated.
144A after the name of an issuer represents securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The dates shown on debt obligations are the original maturity dates.
38 High Income Securities Fund |
FORWARD CURRENCY CONTRACTS at 2/28/18 (aggregate face value $309,594) (Unaudited) | ||||||
Unrealized | ||||||
Contract | Delivery | Aggregate | appreciation/ | |||
Counterparty | Currency | type* | date | Value | face value | (depreciation) |
Bank of America N.A. | ||||||
Euro | Sell | 3/21/18 | $124,006 | $121,745 | $(2,261) | |
Citibank, N.A. | ||||||
Canadian Dollar | Sell | 4/18/18 | 20,359 | 20,902 | 543 | |
State Street Bank and Trust Co. | ||||||
Canadian Dollar | Sell | 4/18/18 | 162,636 | 166,947 | 4,311 | |
Unrealized appreciation | 4,854 | |||||
Unrealized (depreciation) | (2,261) | |||||
Total | $2,593 |
* The exchange currency for all contracts listed is the United States Dollar.
High Income Securities Fund 39 |
ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:
Level 1: Valuations based on quoted prices for identical securities in active markets.
Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.
The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:
Valuation inputs | |||
Investments in securities: | Level 1 | Level 2 | Level 3 |
Common stocks * : | |||
Capital goods | $150,887 | $— | $— |
Communication services | 355,548 | — | 1,197 |
Consumer cyclicals | 126,647 | — | — |
Energy | 200,291 | 14,832 | 3,159 |
Financials | 576,050 | — | — |
Technology | 1,091,805 | — | — |
Utilities and power | — | 822 | — |
Total common stocks | 2,501,228 | 15,654 | 4,356 |
Convertible bonds and notes | — | 52,538,850 | 73,868 |
Convertible preferred stocks | 1,696,567 | 15,555,470 | 657 |
Corporate bonds and notes | — | 50,287,406 | 23 |
Warrants | 1,137 | — | — |
Short-term investments | 1,483,938 | — | — |
Totals by level | $5,682,870 | $118,397,380 | $78,904 |
Valuation inputs | |||
Other financial instruments: | Level 1 | Level 2 | Level 3 |
Forward currency contracts | $— | $2,593 | $— |
Totals by level | $— | $2,593 | $— |
* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.
During the reporting period, transfers within the fair value hierarchy, if any (other than certain transfers involving non-U.S. equity securities as described in Note 1), did not represent, in the aggregate, more than 1% of the fund’s net assets measured as of the end of the period. Transfers are accounted for using the end of period pricing valuation method.
At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.
The accompanying notes are an integral part of these financial statements.
40 High Income Securities Fund |
Statement of assets and liabilities 2/28/18 (Unaudited)
ASSETS | |
Investment in securities, at value (Note 1): | |
Unaffiliated issuers (identified cost $116,521,731) | $122,675,216 |
Affiliated issuers (identified cost $1,483,938 (Note 5) | 1,483,938 |
Cash | 397,181 |
Dividends, interest and other receivables | 1,195,024 |
Receivable for investments sold | 15,225 |
Unrealized appreciation on forward currency contracts (Note 1) | 4,854 |
Total assets | 125,771,438 |
LIABILITIES | |
Payable for investments purchased | 136,122 |
Payable for shares of the fund repurchased (Note 4) | 50,150 |
Payable for compensation of Manager (Note 2) | 209,596 |
Payable for custodian fees (Note 2) | 6,540 |
Payable for investor servicing fees (Note 2) | 10,459 |
Payable for Trustee compensation and expenses (Note 2) | 83,548 |
Payable for administrative services (Note 2) | 467 |
Distributions payable to shareholders | 365,341 |
Unrealized depreciation on forward currency contracts (Note 1) | 2,261 |
Payable for proxy fees | 57,633 |
Other accrued expenses | 78,162 |
Total liabilities | 1,000,279 |
Net assets | $124,771,159 |
REPRESENTED BY | |
Paid-in capital (Unlimited shares authorized) (Note 4) | $133,099,117 |
Undistributed net investment income (Note 1) | 135,821 |
Accumulated net realized loss on investments and foreign currency transactions (Note 1) | (14,619,832) |
Net unrealized appreciation of investments and assets and liabilities in foreign currencies | 6,156,053 |
Total — Representing net assets applicable to capital shares outstanding | $124,771,159 |
COMPUTATION OF NET ASSET VALUE | |
Net asset value per share | |
($124,771,159 divided by 12,930,356 shares) | $9.65 |
The accompanying notes are an integral part of these financial statements.
High Income Securities Fund 41 |
Statement of operations Six months ended 2/28/18 (Unaudited)
INVESTMENT INCOME | |
Interest (including interest income of $18,068 from investments in affiliated issuers) (Note 5) | $2,023,558 |
Dividends | 554,469 |
Total investment income | 2,578,027 |
EXPENSES | |
Compensation of Manager (Note 2) | 429,016 |
Investor servicing fees (Note 2) | 31,392 |
Custodian fees (Note 2) | 8,180 |
Administrative services (Note 2) | 2,197 |
Auditing and tax fees | 47,564 |
Proxy fees | 59,070 |
Other | 46,679 |
Total expenses | 624,098 |
Expense reduction (Note 2) | (755) |
Net expenses | 623,343 |
Net investment income | 1,954,684 |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on: | |
Securities from unaffiliated issuers (Notes 1 and 3) | 2,308,920 |
Forward currency contracts (Note 1) | (7,920) |
Foreign currency transactions (Note 1) | 257 |
Total net realized gain | 2,301,257 |
Change in net unrealized appreciation (depreciation) on: | |
Securities in unaffiliated issuers | (485,467) |
Assets and liabilities in foreign currencies | (34) |
Forward currency contracts | 11,436 |
Total change in net unrealized depreciation | (474,065) |
Net gain on investments | 1,827,192 |
Net increase in net assets resulting from operations | $3,781,876 |
The accompanying notes are an integral part of these financial statements.
42 High Income Securities Fund |
Statement of changes in net assets
INCREASE IN NET ASSETS | Six months ended 2/28/18* | Year ended 8/31/17 |
Operations | ||
Net investment income | $1,954,684 | $3,945,408 |
Net realized gain on investments | ||
and foreign currency transactions | 2,301,257 | 3,670,062 |
Net unrealized appreciation (depreciation) of investments | ||
and assets and liabilities in foreign currencies | (474,065) | 4,716,003 |
Net increase in net assets resulting from operations | 3,781,876 | 12,331,473 |
Distributions to shareholders (Note 1): | ||
From ordinary income | ||
Net investment income | (2,199,061) | (4,795,452) |
Decrease from capital shares repurchased (Note 4) | (419,079) | (2,458,581) |
Total increase in net assets | 1,163,736 | 5,077,440 |
NET ASSETS | ||
Beginning of period | 123,607,423 | 118,529,983 |
End of period (including undistributed net investment | ||
income of $135,821 and $380,198, respectively) | $124,771,159 | $123,607,423 |
NUMBER OF FUND SHARES | ||
Shares outstanding at beginning of period | 12,977,001 | 13,286,033 |
Shares repurchased (Note 4) | (46,645) | (309,032) |
Shares outstanding at end of period | 12,930,356 | 12,977,001 |
* Unaudited.
The accompanying notes are an integral part of these financial statements.
High Income Securities Fund 43 |
Financial highlights (For a common share outstanding throughout the period)
PER-SHARE OPERATING PERFORMANCE | ||||||
Six months | Year ended | |||||
ended** | ||||||
2/28/18 | 8/31/17 | 8/31/16 | 8/31/15 | 8/31/14 | 8/31/13 | |
Net asset value, beginning of period | $9.53 | $8.92 | $8.67 | $9.56 | $8.76 | $8.21 |
Investment operations: | ||||||
Net investment income (loss) a | .15 | .30 | .35 | .35 | .36 | .44 |
Net realized and unrealized | ||||||
gain (loss) on investments | .14 | .66 | .17 | (.95) | .82 | .56 |
Total from investment operations | .29 | .96 | .52 | (.60) | 1.18 | 1.00 |
Less distributions: | ||||||
From net investment income | (.17) | (.37) | (.37) | (.37) | (.43) | (.48) |
Total distributions | (.17) | (.37) | (.37) | (.37) | (.43) | (.48) |
Increase from shares repurchased | — d | .02 | .10 | .08 | .05 | .03 |
Net asset value, end of period | $9.65 | $9.53 | $8.92 | $8.67 | $9.56 | $8.76 |
Market price, end of period | $8.91 | $8.77 | $8.02 | $7.33 | $8.61 | $7.68 |
Total return at market price (%) b | 3.52 * | 14.19 | 14.96 | (10.87) | 17.94 | (1.44) |
RATIOS AND SUPPLEMENTAL DATA | ||||||
Net assets, end of period | ||||||
(in thousands) | $124,771 | $123,607 | $118,530 | $127,027 | $151,659 | $145,549 |
Ratio of expenses to average | ||||||
net assets (%) c | .50 *e | 1.22 e | .94 | .90 | .94 | .90 |
Ratio of net investment income | ||||||
(loss) to average net assets (%) | 1.56 * | 3.29 | 4.15 | 3.86 | 3.91 | 5.10 |
Portfolio turnover (%) | 17 * | 50 | 26 | 35 | 41 | 48 |
* Not annualized.
** Unaudited.
a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.
b Total return assumes dividend reinvestment.
c Includes amounts paid through expense offset and brokerage/service arrangements, if any (Note 2).
d Amount represents less than $0.01 per share.
e Includes 0.05% and 0.28% of increased proxy fees related to the 2018 and 2017 annual shareholder meetings, respectively.
The accompanying notes are an integral part of these financial statements.
44 High Income Securities Fund |
Notes to financial statements 2/28/18 (Unaudited)
Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from September 1, 2017 through February 28, 2018.
Putnam High Income Securities Fund (the fund) is a Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified closed-end management investment company. The goal of the fund is to provide high current income as a primary objective and capital appreciation as a secondary objective. The fund pursues its objective primarily by investing in both convertible bonds and convertible preferred stocks, which share many of the same characteristics as convertible bonds, but offer greater potential for capital appreciation. The fund also invests significantly in high-yielding non-convertible securities with the potential for capital appreciation.
The fund’s shares trade on a stock exchange at market prices, which may be lower than the fund’s net asset value.
In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.
The fund has entered into contractual arrangements with an investment adviser, administrator, transfer agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.
Under the fund’s Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.
Note 1: Significant accounting policies
The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.
Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.
Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.
Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected
High Income Securities Fund 45 |
by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.
Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.
To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.
Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.
Interest income, net of any applicable withholding taxes, is recorded on the accrual basis. Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.
All premiums/discounts are amortized/accreted on a yield-to-maturity basis.
The fund earned certain fees in connection with its senior loan purchasing activities. These fees are treated as market discount and are amortized into income in the Statement of operations.
Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from
46 High Income Securities Fund |
changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.
Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used for hedging currency exposures and to gain exposure to currencies.
The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. The fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities.
Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio.
Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, is presented in the fund’s portfolio.
Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.
Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.
At the close of the reporting period, the fund had a net liability position of $2,261 on open derivative contracts subject to the Master Agreements. There was no collateral posted by the fund at period end for these agreements.
Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.
Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any,
High Income Securities Fund 47 |
are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.
At August 31, 201 7, the fund had a capital loss carryover of $16,435,227 available to the extent allowed by the Code to offset future net capital gain, if any. For any carryover, the amount of the carryover and that carryover’s expiration date is:
Loss carryover | |||
Short-term | Long-term | Total | Expiration |
$— | $2,503,715 | $2,503,715 | * |
13,931,512 | N/A | 13,931,512 | August 31, 2018 |
* Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The aggregate identified cost on a tax basis is $118,482,688, resulting in gross unrealized appreciation and depreciation of $11,113,742 and $5,434,683, respectively, or net unrealized appreciation of $5,679,059.
Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.
Note 2: Management fee, administrative services and other transactions
The fund pays Putnam Management for management and investment advisory services quarterly based on the average net assets (including assets, but excluding liabilities, attributable to leverage for investment purposes) of the fund. The fee is based on the following annual rates:
of the first $500 million of average | of the next $5 billion of average | |||
0.700% | net assets, | 0.430% | net assets, | |
of the next $500 million of average | of the next $5 billion of average | |||
0.600% | net assets, | 0.420% | net assets, | |
of the next $500 million of average | of the next $5 billion of average | |||
0.550% | net assets, | 0.410% | net assets, | |
of the next $5 billion of average | of the next $5 billion of average | |||
0.500% | net assets, | 0.400% | net assets, | |
of the next $5 billion of average | of the next $5 billion of average | |||
0.475% | net assets, | 0.390% | net assets, | |
of the next $5 billion of average | of the next $8.5 billion of average net | |||
0.455% | net assets, | 0.380% | assets and | |
of the next $5 billion of average | 0.370% | of any excess thereafter. | ||
0.440% | net assets, |
For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.342% of the fund’s average net assets.
Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not
48 High Income Securities Fund |
manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.40% of the average net assets (including assets, but excluding liabilities, attributable to leverage for investment purposes) of the portion of the fund managed by PIL.
The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.
Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. was paid a monthly fee for investor servicing at an annual rate of 0.05% of the fund’s average daily net assets. The amounts incurred for investor servicing agent functions during the reporting period are included in Investor servicing fees in the Statement of operations.
The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $100 under the expense offset arrangements and by $655 under the brokerage/ service arrangements.
Each Independent Trustee of the fund receives an annual Trustee fee, of which $94, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.
The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.
Note 3: Purchases and sales of securities
During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:
Cost of purchases | Proceeds from sales | |
Investments in securities (Long-term) | $22,382,462 | $20,299,686 |
U. S. government securities (Long-term) | — | — |
Total | $22,382,462 | $20,299,686 |
The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.
Note 4: Shares repurchased
In September 2017, the Trustees approved the renewal of the repurchase program to allow the fund to repurchase up to 10% of its outstanding common shares over the 12-month period ending October 9, 2018 (based on shares outstanding as of October 9, 2017). Prior to this renewal, the Trustees had approved a repurchase program to allow the fund to repurchase up to 10% of its outstanding common shares over the 12-month period ending October 9, 2017 (based on shares outstanding as of October 7, 2016). Repurchases are made when
High Income Securities Fund 49 |
the fund’s shares are trading at less than net asset value and in accordance with procedures approved by the fund’s Trustees.
For the reporting period, the fund repurchased 46,645 common shares for an aggregate purchase price of $419,079, which reflects a weighted-average discount from net asset value per share of 7.71%. The weighted-average discount reflects the payment of commissions by the fund to execute repurchase trades.
For the previous fiscal year, the fund repurchased 309,032 common shares for an aggregate purchase price of $2,458,581, which reflected a weighted-average discount from net asset value per share of 10.58%. The weighted-average discount reflected the payment of commissions by the fund to execute repurchase trades.
At the close of the reporting period, Putnam Investments, LLC owned approximately 484 shares of the fund (less than 0.01% of the fund’s shares outstanding), valued at $4,671 based on net asset value.
Note 5: Affiliated transactions
Transactions during the reporting period with any company which is under common ownership or control were as follows:
Shares | |||||
outstanding | |||||
and fair | |||||
Fair value as | Purchase | Sale | Investment | value as | |
Name of affiliate | of 8/31/17 | cost | proceeds | income | of 2/28/18 |
Short-term investments | |||||
Putnam Short Term | |||||
Investment Fund** | $2,900,362 | $10,750,592 | $12,167,016 | $18,068 | $1,483,938 |
Total Short-term | |||||
investments | $2,900,362 | $10,750,592 | $12,167,016 | $18,068 | $1,483,938 |
** Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.
There were no realized or unrealized gains or losses during the period.
Note 6: Market, credit and other risks
In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations. The fund may invest in higher-yielding, lower-rated bonds that may have a higher rate of default.
Note 7: Senior loan commitments
Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations.
Note 8: Summary of derivative activity
The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:
Forward currency contracts (contract amount) | $320,000 |
Warrants (number of warrants) | 1,601 |
50 High Income Securities Fund |
The following is a summary of the fair value of derivative instruments as of the close of the reporting period:
Fair value of derivative instruments as of the close of the reporting period | ||||
ASSET DERIVATIVES | LIABILITY DERIVATIVES | |||
Derivatives not | ||||
accounted for as | Statement of | Statement of | ||
hedging instruments | assets and | assets and | ||
under ASC 815 | liabilities location | Fair value | liabilities location | Fair value |
Foreign exchange | ||||
contracts | Receivables | $4,854 | Payables | $2,261 |
Equity contracts | Investments | 1,137 | Payables | — |
Total | $5,991 | $2,261 |
The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):
Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments | ||
Derivatives not accounted for as | Forward currency | |
hedging instruments under ASC 815 | contracts | Total |
Foreign exchange contracts | $(7,920) | $(7,920) |
Total | $(7,920) | $(7,920) |
Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) | |||
on investments | |||
Derivatives not accounted for as hedging | Forward currency | ||
instruments under ASC 815 | Warrants | contracts | Total |
Foreign exchange contracts | $— | $11,436 | $11,436 |
Equity contracts | 336 | — | $336 |
Total | $336 | $11,436 | $11,772 |
High Income Securities Fund 51 |
Note 9: Offsetting of financial and derivative assets and liabilities
The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.
Bank of America N.A. |
Citibank, N.A. | State Street Bank and Trust Co. |
Total | |
Assets: | ||||
Forward currency contracts # | $— | $543 | $4,311 | $4,854 |
Total Assets | $— | $543 | $4,311 | $4,854 |
Liabilities: | ||||
Forward currency contracts # | $2,261 | $— | $— | $2,261 |
Total Liabilities | $2,261 | $— | $— | $2,261 |
Total Financial and Derivative | $(2,261) | $543 | $4,311 | $2,593 |
Net Assets | ||||
Total collateral received | $— | $— | $— | |
(pledged)†## | ||||
Net amount | $(2,261) | $543 | $4,311 | |
Controlled collateral received | ||||
(including TBA commitments)** | $— | $— | $— | $— |
Uncontrolled collateral received | $— | $— | $— | $— |
Collateral (pledged) (including | ||||
TBA commitments)** | $— | $— | $— | $— |
** Included with Investments in securities on the Statement of assets and liabilities.
† Additional collateral may be required from certain brokers based on individual agreements.
# Covered by master netting agreement (Note 1).
## Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.
52 High Income Securities Fund |
Fund information
Founded over 80 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.
Investment Manager | Trustees | Michael J. Higgins |
Putnam Investment | Jameson A. Baxter, Chair | Vice President, Treasurer, |
Management, LLC | Kenneth R. Leibler, Vice Chair | and Clerk |
One Post Office Square | Liaquat Ahamed | |
Boston, MA 02109 | Ravi Akhoury | Janet C. Smith |
Barbara M. Baumann | Vice President, | |
Investment Sub-Advisor | Katinka Domotorffy | Principal Financial Officer, |
Putnam Investments Limited | Catharine Bond Hill | Principal Accounting Officer, |
16 St James’s Street | Paul L. Joskow | and Assistant Treasurer |
London, England SW1A 1ER | Robert E. Patterson | |
George Putnam, III | Susan G. Malloy | |
Marketing Services | Robert L. Reynolds | Vice President and |
Putnam Retail Management | Manoj P. Singh | Assistant Treasurer |
One Post Office Square | ||
Boston, MA 02109 | Officers | Mark C. Trenchard |
Robert L. Reynolds | Vice President and | |
Custodian | President | BSA Compliance Officer |
State Street Bank | ||
and Trust Company | Jonathan S. Horwitz | Nancy E. Florek |
Executive Vice President, | Vice President, Director of | |
Legal Counsel | Principal Executive Officer, | Proxy Voting and Corporate |
Ropes & Gray LLP | and Compliance Liaison | Governance, Assistant Clerk, |
and Assistant Treasurer | ||
Robert T. Burns | ||
Vice President and | Denere P. Poulack | |
Chief Legal Officer | Assistant Vice President, Assistant | |
Clerk, and Assistant Treasurer | ||
James F. Clark | ||
Vice President and | ||
Chief Compliance Officer |
Call 1-800-225-1581 Monday through Friday between 8:00 a.m. and 8:00 p.m. Eastern Time, or visit putnam.com anytime for up-to-date information about the fund’s NAV.
Item 2. Code of Ethics: |
Not Applicable |
Item 3. Audit Committee Financial Expert: |
Not Applicable |
Item 4. Principal Accountant Fees and Services: |
Not Applicable |
Item 5. Audit Committee |
Not Applicable |
Item 6. Schedule of Investments: |
The registrant's schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above. |
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies: |
Not applicable |
Item 8. Portfolio Managers of Closed-End Management Investment Companies |
(a) Not applicable |
(b) During the period Eric Harthun was removed as manager of the fund. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers: |
Registrant Purchase of Equity Securities | |||||
Maximum | |||||
Total Number | Number (or | ||||
of Shares | Approximate | ||||
Purchased | Dollar Value) | ||||
as Part | of Shares | ||||
of Publicly | that May Yet Be | ||||
Total Number | Average | Announced | Purchased | ||
of Shares | Price Paid | Plans or | under the Plans | ||
Period | Purchased | per Share | Programs* | or Programs** | |
September 1 – September 30, 2017 | — | — | — | 1,095,421 | |
October 1 – October 9, 2017 | — | — | — | 1,095,421 | |
October 10 – October 31, 2017 | — | — | — | 1,297,700 | |
November 1 – November 30, 2017 | 41,035 | $8.99 | 41,035 | 1,256,665 | |
December 1 – December 31, 2017 | — | — | — | 1,256,665 | |
January 1 – January 31, 2018 | — | — | — | 1,256,665 | |
February 1 – February 28, 2018 | 5,610 | $8.94 | 5,610 | 1,251,055 |
* | In October 2005, the Board of Trustees of the Putnam Funds initiated the closed-end fund share repurchase program, which, as subsequently amended, authorized the fund to repurchase of up to 10% of its fund's outstanding common shares over the two-years ending October 5, 2007. The Trustees have subsequently renewed the program on an annual basis. The program renewed by the Board in September 2016, which was in effect between October 8, 2016 and October 7, 2017, allowed the fund to repurchase up to 1,320,176 of its shares. The program renewed by the Board in September 2017, which is in effect between October 10, 2017 and October 9, 2018, allows the fund to repurchase up to 1,297,700 of its shares. |
** | Information prior to October 9, 2017 is based on the total number of shares eligible for repurchase under the program, as amended through September 2016. Information from October 10, 2017 forward is based on the total number of shares eligible for repurchase under the program, as amended through September 2017. |
Item 10. Submission of Matters to a Vote of Security Holders: |
Not applicable |
Item 11. Controls and Procedures: |
(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. |
(b) Changes in internal control over financial reporting: Not applicable |
Item 12. Disclosures of Securities Lending Activities for Closed-End Investment Companies: |
Not Applicable |
Item 13. Exhibits: |
(a)(1) Not applicable |
(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. |
(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith. |
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. |
Putnam High Income Securities Fund |
By (Signature and Title): |
/s/ Janet C. Smith Janet C. Smith Principal Accounting Officer |
Date: April 26, 2018 |
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/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer |
Date: April 26, 2018 |
By (Signature and Title): |
/s/ Janet C. Smith Janet C. Smith Principal Financial Officer |
Date: April 26, 2018 |