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 811-4173 | |
John Hancock Investors Trust | |
(Exact name of registrant as specified in charter) | |
601 Congress Street, Boston, Massachusetts 02210 | |
(Address of principal executive offices) (Zip code) | |
Salvatore Schiavone | |
Treasurer | |
601 Congress Street | |
Boston, Massachusetts 02210 | |
(Name and address of agent for service) | |
Registrant's telephone number, including area code: 617-663-4497 | |
Date of fiscal year end: | October 31 |
Date of reporting period: | April 30, 2014 |
ITEM 1. REPORTS TO STOCKHOLDERS.
Portfolio summary
Portfolio Composition1 | ||||
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Corporate Bonds | 76.3% | Foreign Government Obligations | 0.7% | |
|
| |||
U.S. Government & Agency | Convertible Bonds | 0.6% | ||
Obligations | 13.1% |
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Asset Backed Securities | 0.4% | ||
Collateralized Mortgage Obligations | 4.0% |
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Preferred Securities | 0.4% | ||
Capital Preferred Securities | 1.0% |
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Short-Term Investments | 3.5% | ||
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Quality Composition1,2 | ||||
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U.S. Government | 3.7% | BB | 21.6% | |
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| |||
U.S. Government Agency | 9.4% | B | 31.5% | |
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| |||
AAA | 1.1% | CCC & Below | 10.8% | |
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| |||
AA | 1.3% | Preferred Securities | 0.4% | |
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| |||
A | 4.3% | Not Rated | 0.3% | |
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| |||
BBB | 12.1% | Short-Term Investments | 3.5% | |
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|
1 As a percentage of total investments on 4-30-14.
2 Ratings are from Moody’s Investors Service, Inc. If not available, we have used Standard & Poor’s Ratings Services. In the absence of ratings from these agencies, we have used Fitch Ratings, Inc. “Not Rated” securities are those with no ratings available from these agencies. All ratings are as of 4-30-14 and do not reflect subsequent downgrades or upgrades, if any.
6 | Investors Trust | Semiannual report |
Fund’s investments
As of 4-30-14 (unaudited)
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Corporate Bonds 112.8% (76.3% of Total Investments) | $198,077,411 | ||||
| |||||
(Cost $191,607,726) | |||||
Consumer Discretionary 17.2% | 30,292,680 | ||||
Auto Components 1.7% | |||||
| |||||
Allison Transmission, Inc. (S)(Z) | 7.125 | 05-15-19 | 550,000 | 594,000 | |
| |||||
American Axle & Manufacturing, Inc. (Z) | 6.250 | 03-15-21 | 1,000,000 | 1,057,500 | |
| |||||
The Goodyear Tire & Rubber Company (Z) | 7.000 | 05-15-22 | 1,200,000 | 1,323,000 | |
Automobiles 0.8% | |||||
| |||||
Chrysler Group LLC (Z) | 8.250 | 06-15-21 | 1,240,000 | 1,393,450 | |
Hotels, Restaurants & Leisure 2.0% | |||||
| |||||
GLP Capital LP (S)(Z) | 4.875 | 11-01-20 | 1,285,000 | 1,326,763 | |
| |||||
Grupo Posadas SAB de CV (S)(Z) | 7.875 | 11-30-17 | 600,000 | 607,500 | |
| |||||
Mohegan Tribal Gaming Authority (S) | 11.000 | 09-15-18 | 1,000,000 | 1,002,487 | |
| |||||
PF Chang’s China Bistro, Inc. (S) | 10.250 | 06-30-20 | 400,000 | 416,000 | |
| |||||
Waterford Gaming LLC (S) | 8.625 | 09-15-14 | 505,754 | 113,578 | |
Household Durables 1.4% | |||||
| |||||
Corporacion GEO SAB de CV (H)(S) | 9.250 | 06-30-20 | 1,000,000 | 127,500 | |
| |||||
Modular Space Corp. (S) | 10.250 | 01-31-19 | 895,000 | 933,038 | |
| |||||
Standard Pacific Corp. (Z) | 8.375 | 05-15-18 | 140,000 | 165,200 | |
| |||||
William Lyon Homes, Inc. (S) | 5.750 | 04-15-19 | 1,300,000 | 1,326,000 | |
Internet & Catalog Retail 0.6% | |||||
| |||||
QVC, Inc. (Z) | 5.950 | 03-15-43 | 1,000,000 | 1,033,716 | |
Leisure Products 0.3% | |||||
| |||||
Easton-Bell Sports, Inc. (Z) | 9.750 | 12-01-16 | 465,000 | 488,841 | |
Media 8.6% | |||||
| |||||
21st Century Fox America, Inc. (Z) | 7.750 | 01-20-24 | 980,000 | 1,234,091 | |
| |||||
AMC Entertainment, Inc. (S) | 5.875 | 02-15-22 | 960,000 | 981,600 | |
| |||||
CBS Outdoor Americas Capital LLC (S) | 5.250 | 02-15-22 | 900,000 | 922,500 | |
| |||||
CBS Outdoor Americas Capital LLC (S) | 5.625 | 02-15-24 | 900,000 | 924,750 | |
| |||||
Cinemark USA, Inc. (Z) | 7.375 | 06-15-21 | 365,000 | 405,150 | |
| |||||
Clear Channel Communications, Inc. | 11.250 | 03-01-21 | 3,000,000 | 3,378,750 | |
| |||||
Clear Channel Communications, Inc., PIK | 14.000 | 02-01-21 | 2,020,000 | 2,070,500 | |
| |||||
DIRECTV Holdings LLC (Z) | 5.875 | 10-01-19 | 355,000 | 408,169 | |
| |||||
Lee Enterprises, Inc. (S) | 9.500 | 03-15-22 | 170,000 | 176,375 | |
| |||||
Myriad International Holdings BV (S)(Z) | 6.000 | 07-18-20 | 440,000 | 480,700 | |
| |||||
Numericable Group SA (S) | 6.250 | 05-15-24 | 210,000 | 214,988 | |
| |||||
Sinclair Television Group, Inc. | 6.375 | 11-01-21 | 830,000 | 863,200 |
See notes to financial statements | Semiannual report | Investors Trust | 7 |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Media (continued) | |||||
| |||||
Sirius XM Canada Holdings, Inc. (S) | 5.625 | 04-23-21 | CAD 380,000 | $350,355 | |
| |||||
Time Warner Cable, Inc. (Z) | 8.250 | 04-01-19 | 375,000 | 474,866 | |
| |||||
Videotron, Ltd. | 6.375 | 12-15-15 | 300,000 | 300,750 | |
| |||||
WMG Acquisition Corp. (S) | 6.000 | 01-15-21 | 1,000,000 | 1,047,500 | |
| |||||
WMG Acquisition Corp. (S) | 6.750 | 04-15-22 | 820,000 | 826,150 | |
Multiline Retail 0.2% | |||||
| |||||
Macy’s Retail Holdings, Inc. (Z) | 7.875 | 08-15-36 | 375,000 | 414,462 | |
Specialty Retail 1.5% | |||||
| |||||
Automotores Gildemeister SA (S)(Z) | 8.250 | 05-24-21 | 720,000 | 489,600 | |
| |||||
Hillman Group, Inc. | 10.875 | 06-01-18 | 290,000 | 307,763 | |
| |||||
Outerwall, Inc. | 6.000 | 03-15-19 | 500,000 | 518,750 | |
| |||||
Toys R Us Property Company II LLC (Z) | 8.500 | 12-01-17 | 225,000 | 230,063 | |
| |||||
Toys R Us, Inc. (Z) | 10.375 | 08-15-17 | 1,360,000 | 1,111,800 | |
Textiles, Apparel & Luxury Goods 0.1% | |||||
| |||||
Hot Topic, Inc. (S)(Z) | 9.250 | 06-15-21 | 230,000 | 251,275 | |
Consumer Staples 5.3% | 9,386,886 | ||||
Beverages 2.2% | |||||
| |||||
Ajecorp BV (S)(Z) | 6.500 | 05-14-22 | 1,000,000 | 940,000 | |
| |||||
Corporacion Lindley SA (S)(Z) | 4.625 | 04-12-23 | 1,000,000 | 963,500 | |
| |||||
Crestview DS Merger Sub II, Inc. (S) | 10.000 | 09-01-21 | 1,005,000 | 1,115,550 | |
| |||||
SABMiller Holdings, Inc. (S)(Z) | 3.750 | 01-15-22 | 750,000 | 774,125 | |
Food & Staples Retailing 0.7% | |||||
| |||||
ARAMARK Corp. | 5.750 | 03-15-20 | 170,000 | 178,288 | |
| |||||
Office Depot de Mexico SA de CV (S) | 6.875 | 09-20-20 | 610,000 | 638,213 | |
| |||||
Tops Holding Corp. | 8.875 | 12-15-17 | 400,000 | 436,000 | |
Food Products 0.6% | |||||
| |||||
Marfrig Holding Europe BV (S)(Z) | 8.375 | 05-09-18 | 600,000 | 603,000 | |
| |||||
Marfrig Holding Europe BV (S) | 9.875 | 07-24-17 | 305,000 | 320,250 | |
| |||||
TreeHouse Foods, Inc. | 4.875 | 03-15-22 | 205,000 | 207,563 | |
Household Products 0.2% | |||||
| |||||
Reynolds Group Issuer, Inc. (Z) | 8.500 | 05-15-18 | 390,000 | 407,550 | |
Tobacco 1.6% | |||||
| |||||
Lorillard Tobacco Company (Z) | 6.875 | 05-01-20 | 720,000 | 850,097 | |
| |||||
Vector Group, Ltd. (Z) | 7.750 | 02-15-21 | 1,200,000 | 1,284,000 | |
| |||||
Vector Group, Ltd. (S) | 7.750 | 02-15-21 | 625,000 | 668,750 | |
Energy 18.1% | 31,710,859 | ||||
Energy Equipment & Services 6.0% | |||||
| |||||
Astoria Depositor Corp. (S) | 8.144 | 05-01-21 | 510,000 | 535,500 | |
| |||||
EDC Finance, Ltd. (S)(Z) | 4.875 | 04-17-20 | 1,000,000 | 885,000 | |
| |||||
Forbes Energy Services, Ltd. (Z) | 9.000 | 06-15-19 | 295,000 | 301,638 | |
| |||||
Hercules Offshore, Inc. (S)(Z) | 7.500 | 10-01-21 | 550,000 | 554,125 | |
| |||||
Inkia Energy, Ltd. (S)(Z) | 8.375 | 04-04-21 | 1,400,000 | 1,538,250 | |
| |||||
Key Energy Services, Inc. (Z) | 6.750 | 03-01-21 | 1,500,000 | 1,582,500 | |
| |||||
Nostrum Oil & Gas Finance BV (S) | 6.375 | 02-14-19 | 1,000,000 | 1,000,000 | |
| |||||
Offshore Group Investment, Ltd. (Z) | 7.125 | 04-01-23 | 2,000,000 | 1,970,000 | |
| |||||
Permian Holdings, Inc. (S)(Z) | 10.500 | 01-15-18 | 800,000 | 808,000 |
8 | Investors Trust | Semiannual report | See notes to financial statements |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Energy Equipment & Services (continued) | |||||
| |||||
Pioneer Energy Services Corp. (S) | 6.125 | 03-15-22 | 205,000 | $210,125 | |
| |||||
RKI Exploration & Production LLC (S) | 8.500 | 08-01-21 | 565,000 | 613,025 | |
| |||||
TMK OAO (S)(Z) | 6.750 | 04-03-20 | 600,000 | 513,000 | |
Oil, Gas & Consumable Fuels 12.1% | |||||
| |||||
Arch Coal, Inc. (S) | 8.000 | 01-15-19 | 1,540,000 | 1,536,150 | |
| |||||
Athlon Holdings LP (S) | 6.000 | 05-01-22 | 500,000 | 506,250 | |
| |||||
Carrizo Oil & Gas, Inc. (Z) | 7.500 | 09-15-20 | 1,200,000 | 1,314,000 | |
| |||||
Clayton Williams Energy Inc. | 7.750 | 04-01-19 | 1,070,000 | 1,139,550 | |
| |||||
Cloud Peak Energy Resources LLC | 6.375 | 03-15-24 | 935,000 | 972,400 | |
| |||||
CNOOC Finance 2012, Ltd. (S)(Z) | 5.000 | 05-02-42 | 1,000,000 | 1,021,339 | |
| |||||
EV Energy Partners LP (Z) | 8.000 | 04-15-19 | 405,000 | 423,225 | |
| |||||
FTS International, Inc. (S) | 6.250 | 05-01-22 | 440,000 | 445,500 | |
| |||||
Georgian Oil and Gas Corp. (S)(Z) | 6.875 | 05-16-17 | 1,500,000 | 1,560,000 | |
| |||||
Indo Energy Finance II BV (S) | 6.375 | 01-24-23 | 300,000 | 232,875 | |
| |||||
Linn Energy LLC (Z) | 8.625 | 04-15-20 | 910,000 | 981,663 | |
| |||||
Lukoil International Finance BV (S)(Z) | 4.563 | 04-24-23 | 1,000,000 | 875,000 | |
| |||||
Pacific Rubiales Energy Corp. (S) | 5.125 | 03-28-23 | 705,000 | 681,206 | |
| |||||
Pan American Energy LLC (S)(Z) | 7.875 | 05-07-21 | 1,100,000 | 1,105,500 | |
| |||||
Petrobras International Finance Company (Z) | 5.375 | 01-27-21 | 500,000 | 511,903 | |
| |||||
Plains All American Pipeline LP (Z) | 6.500 | 05-01-18 | 1,000,000 | 1,173,214 | |
| |||||
Plains Exploration & Production Company (Z) | 6.875 | 02-15-23 | 750,000 | 840,000 | |
| |||||
Rice Energy, Inc. (S) | 6.250 | 05-01-22 | 420,000 | 420,525 | |
| |||||
Samson Investment Company (S)(Z) | 10.750 | 02-15-20 | 1,885,000 | 1,988,675 | |
| |||||
Tullow Oil PLC (S)(Z) | 6.000 | 11-01-20 | 1,750,000 | 1,785,000 | |
| |||||
Tullow Oil PLC (S) | 6.250 | 04-15-22 | 500,000 | 505,000 | |
| |||||
Valero Energy Corp. (Z) | 4.500 | 02-01-15 | 205,000 | 211,110 | |
| |||||
Valero Energy Corp. (Z) | 6.125 | 02-01-20 | 205,000 | 240,611 | |
| |||||
W&T Offshore, Inc. (Z) | 8.500 | 06-15-19 | 675,000 | 729,000 | |
Financials 21.0% | 36,864,045 | ||||
Banks 5.0% | |||||
| |||||
Alfa Bank OJSC (S)(Z) | 7.750 | 04-28-21 | 300,000 | 294,000 | |
| |||||
Banco Bradesco SA (S)(Z) | 5.750 | 03-01-22 | 500,000 | 521,875 | |
| |||||
Banco Regional SAECA (S) | 8.125 | 01-24-19 | 400,000 | 428,500 | |
| |||||
Barclays Bank PLC (S)(Z) | 10.179 | 06-12-21 | 195,000 | 264,767 | |
| |||||
BBVA Bancomer SA (S)(Z) | 6.500 | 03-10-21 | 1,000,000 | 1,100,000 | |
| |||||
Credit Agricole SA (7.875% to 1-23-24, then 5 | |||||
year U.S. Swap Rate + 4.898%) (Q)(S) | 7.875 | 01-23-24 | 500,000 | 537,950 | |
| |||||
GTB Finance B.V. (S)(Z) | 7.500 | 05-19-16 | 285,000 | 298,238 | |
| |||||
National City Bank of Indiana (Z) | 4.250 | 07-01-18 | 2,000,000 | 2,150,112 | |
| |||||
Sberbank of Russia (S)(Z) | 6.125 | 02-07-22 | 1,000,000 | 970,000 | |
| |||||
State Bank of India (S)(Z) | 4.500 | 07-27-15 | 500,000 | 516,591 | |
| |||||
VTB Bank OJSC (9.500% to 12-6-22, then 10 | |||||
Year U.S. Treasury + 8.067%) (Q)(S) | 9.500 | 12-06-22 | 1,000,000 | 960,000 | |
| |||||
Wells Fargo & Company (5.900% to 6-15-24, | |||||
then 3 month LIBOR + 3.110%) (Q) | 5.900 | 06-15-24 | 760,000 | 777,038 | |
Capital Markets 3.9% | |||||
| |||||
E*TRADE Financial Corp. (Z) | 6.375 | 11-15-19 | 1,000,000 | 1,086,250 | |
| |||||
Morgan Stanley (Z) | 3.800 | 04-29-16 | 1,000,000 | 1,052,333 |
See notes to financial statements | Semiannual report | Investors Trust | 9 |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Capital Markets (continued) | |||||
| |||||
Morgan Stanley (5.450% to 7-15-19, then | |||||
3 month LIBOR + 3.610%) (Q) | 5.450 | 07-15-19 | 500,000 | $504,375 | |
| |||||
Morgan Stanley (Z) | 5.750 | 01-25-21 | 1,000,000 | 1,147,014 | |
| |||||
The Goldman Sachs Group, Inc. (Z) | 5.250 | 07-27-21 | 990,000 | 1,098,861 | |
| |||||
The Goldman Sachs Group, Inc. (Z) | 6.250 | 09-01-17 | 1,000,000 | 1,142,728 | |
| |||||
Walter Investment Management Corp. (S)(Z) | 7.875 | 12-15-21 | 875,000 | 868,438 | |
Consumer Finance 3.1% | |||||
| |||||
American Express Credit Corp. (Z) | 5.125 | 08-25-14 | 1,000,000 | 1,014,582 | |
| |||||
Credit Acceptance Corp. (S) | 6.125 | 02-15-21 | 1,005,000 | 1,045,200 | |
| |||||
Credito Real SAB de CV (S)(Z) | 7.500 | 03-13-19 | 935,000 | 984,088 | |
| |||||
First Cash Financial Services, Inc. (S) | 6.750 | 04-01-21 | 755,000 | 781,425 | |
| |||||
SLM Corp. (Z) | 8.450 | 06-15-18 | 485,000 | 571,694 | |
| |||||
Springleaf Finance Corp. | 6.000 | 06-01-20 | 500,000 | 506,250 | |
| |||||
Springleaf Finance Corp. | 8.250 | 10-01-23 | 500,000 | 557,500 | |
Diversified Financial Services 4.4% | |||||
| |||||
Cementos Progreso Trust (S)(Z) | 7.125 | 11-06-23 | 1,195,000 | 1,269,688 | |
| |||||
CorpGroup Banking SA (S) | 6.750 | 03-15-23 | 1,000,000 | 982,222 | |
| |||||
Corporacion Andina de Fomento (Z) | 3.750 | 01-15-16 | 690,000 | 721,029 | |
| |||||
Gruposura Finance (S)(Z) | 5.700 | 05-18-21 | 440,000 | 464,750 | |
| |||||
Intercorp Retail Trust (S)(Z) | 8.875 | 11-14-18 | 305,000 | 328,638 | |
| |||||
JPMorgan Chase & Company (Z) | 3.450 | 03-01-16 | 2,000,000 | 2,093,278 | |
| |||||
Leucadia National Corp. (Z) | 5.500 | 10-18-23 | 1,350,000 | 1,419,721 | |
| |||||
Nationstar Mortgage LLC (Z) | 10.875 | 04-01-15 | 375,000 | 377,344 | |
Diversified Telecommunication Services 0.2% | |||||
| |||||
Crown Castle International Corp. | 4.875 | 04-15-22 | 400,000 | 406,000 | |
Insurance 1.8% | |||||
| |||||
CNA Financial Corp. (Z) | 7.350 | 11-15-19 | 655,000 | 806,868 | |
| |||||
Lincoln National Corp. (7.000% to 5-17-16, | |||||
then 3 month LIBOR + 2.358%) (Z) | 7.000 | 05-17-66 | 370,000 | 383,949 | |
| |||||
MetLife, Inc. (Z) | 6.817 | 08-15-18 | 1,000,000 | 1,194,518 | |
| |||||
Symetra Financial Corp. (8.300% to 10-15-17, | |||||
then 3 month LIBOR + 4.177%) (S) | 8.300 | 10-15-37 | 520,000 | 546,000 | |
| |||||
Willis North America, Inc. (Z) | 7.000 | 09-29-19 | 215,000 | 252,258 | |
Investment Companies 0.7% | |||||
| |||||
IPIC GMTN, Ltd. (S)(Z) | 5.500 | 03-01-22 | 1,000,000 | 1,127,500 | |
Real Estate Investment Trusts 0.9% | |||||
| |||||
DuPont Fabros Technology LP | 5.875 | 09-15-21 | 835,000 | 870,488 | |
| |||||
Health Care REIT, Inc. (Z) | 6.125 | 04-15-20 | 345,000 | 401,580 | |
| |||||
Plum Creek Timberlands LP (Z) | 5.875 | 11-15-15 | 345,000 | 367,905 | |
Real Estate Management & Development 1.0% | |||||
| |||||
Country Garden Holdings Company, Ltd. (S) | 7.500 | 01-10-23 | 200,000 | 183,000 | |
| |||||
Country Garden Holdings Company, Ltd. (S)(Z) | 11.125 | 02-23-18 | 1,000,000 | 1,082,500 | |
| |||||
General Shopping Investments, Ltd. | |||||
(12.000% to 3-20-17, then 5 Year USGG | |||||
+ 11.052%) (Q)(S) | 12.000 | 03-20-17 | 500,000 | 405,000 |
10 | Investors Trust | Semiannual report | See notes to financial statements |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Health Care 5.8% | $10,110,115 | ||||
Health Care Providers & Services 3.5% | |||||
| |||||
AmerisourceBergen Corp. (Z) | 3.500 | 11-15-21 | 1,000,000 | 1,036,924 | |
| |||||
BioScrip, Inc. (S) | 8.875 | 02-15-21 | 1,000,000 | 1,040,000 | |
| |||||
Community Health Systems, Inc. (S) | 5.125 | 08-01-21 | 200,000 | 204,000 | |
| |||||
Community Health Systems, Inc. (S) | 6.875 | 02-01-22 | 600,000 | 621,750 | |
| |||||
Envision Healthcare Corp. | 8.125 | 06-01-19 | 65,000 | 69,063 | |
| |||||
HCA, Inc. (Z) | 7.500 | 02-15-22 | 130,000 | 148,265 | |
| |||||
Select Medical Corp. (S) | 6.375 | 06-01-21 | 800,000 | 824,000 | |
| |||||
Select Medical Corp. | 6.375 | 06-01-21 | 1,175,000 | 1,210,250 | |
| |||||
Tenet Healthcare Corp. (S) | 6.000 | 10-01-20 | 305,000 | 320,250 | |
| |||||
Tenet Healthcare Corp. | 8.125 | 04-01-22 | 585,000 | 649,350 | |
Pharmaceuticals 2.3% | |||||
| |||||
Endo Health Solutions, Inc. | 7.250 | 01-15-22 | 1,345,000 | 1,469,413 | |
| |||||
Grifols Worldwide Operations, Ltd. (S) | 5.250 | 04-01-22 | 1,610,000 | 1,634,150 | |
| |||||
Salix Pharmaceuticals, Ltd. (S) | 6.000 | 01-15-21 | 600,000 | 643,500 | |
| |||||
Valeant Pharmaceuticals International, Inc. (S) | 5.625 | 12-01-21 | 230,000 | 239,200 | |
Industrials 12.8% | 22,506,563 | ||||
Aerospace & Defense 1.2% | |||||
| |||||
B/E Aerospace, Inc. (Z) | 5.250 | 04-01-22 | 1,000,000 | 1,035,000 | |
| |||||
Ducommun, Inc. (Z) | 9.750 | 07-15-18 | 160,000 | 178,400 | |
| |||||
Kratos Defense & Security Solutions, Inc. (Z) | 10.000 | 06-01-17 | 400,000 | 421,000 | |
| |||||
TransDigm, Inc. (Z) | 7.750 | 12-15-18 | 495,000 | 527,175 | |
Airlines 4.6% | |||||
| |||||
Air Canada (S) | 7.750 | 04-15-21 | 425,000 | 432,969 | |
| |||||
Air Canada 2013-1 Class C | |||||
Pass Through Trust (S)(Z) | 6.625 | 05-15-18 | 1,000,000 | 1,025,080 | |
| |||||
American Airlines 2011-1 Class B | |||||
Pass Through Trust (S)(Z) | 7.000 | 01-31-18 | 1,094,647 | 1,187,692 | |
| |||||
American Airlines 2013-2 Class B | |||||
Pass Through Trust (S) | 5.600 | 07-15-20 | 711,344 | 745,133 | |
| |||||
Continental Airlines 1999-1 | |||||
Class A Pass Through Trust (Z) | 6.545 | 02-02-19 | 168,045 | 187,790 | |
| |||||
Continental Airlines 2000-2 | |||||
Class B Pass Through Trust (Z) | 8.307 | 04-02-18 | 73,201 | 79,057 | |
| |||||
Delta Air Lines 2007-1 | |||||
Class A Pass Through Trust (Z) | 6.821 | 08-10-22 | 605,062 | 712,460 | |
| |||||
TAM Capital 3, Inc. (S)(Z) | 8.375 | 06-03-21 | 505,000 | 543,506 | |
| |||||
TAM Capital, Inc. (Z) | 7.375 | 04-25-17 | 860,000 | 910,525 | |
| |||||
UAL 2009-1 Pass Through Trust (Z) | 10.400 | 11-01-16 | 164,203 | 186,994 | |
| |||||
UAL 2009-2A Pass Through Trust (Z) | 9.750 | 01-15-17 | 429,697 | 494,152 | |
| |||||
VRG Linhas Aereas SA (S)(Z) | 10.750 | 02-12-23 | 1,500,000 | 1,481,250 | |
Building Products 0.6% | |||||
| |||||
Associated Materials LLC | 9.125 | 11-01-17 | 1,000,000 | 1,050,000 | |
Commercial Services & Supplies 0.8% | |||||
| |||||
Garda World Security Corp. (S) | 7.250 | 11-15-21 | 220,000 | 231,825 | |
| |||||
Iron Mountain, Inc. | 5.750 | 08-15-24 | 750,000 | 740,625 | |
| |||||
Iron Mountain, Inc. (Z) | 8.375 | 08-15-21 | 417,000 | 439,935 |
See notes to financial statements | Semiannual report | Investors Trust | 11 |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Construction & Engineering 0.8% | |||||
| |||||
Aeropuertos Argentina 2000 SA (S) | 10.750 | 12-01-20 | 1,305,000 | $1,306,631 | |
Electrical Equipment 0.7% | |||||
| |||||
Artesyn Escrow, Inc. (S)(Z) | 9.750 | 10-15-20 | 1,355,000 | 1,260,150 | |
Industrial Conglomerates 0.5% | |||||
| |||||
Hutchison Whampoa International 09/16, | |||||
Ltd. (S)(Z) | 4.625 | 09-11-15 | 385,000 | 404,173 | |
| |||||
Tenedora Nemak SA de CV (S) | 5.500 | 02-28-23 | 500,000 | 506,250 | |
Machinery 0.1% | |||||
| |||||
Victor Technologies Group, Inc. (Z) | 9.000 | 12-15-17 | 236,000 | 252,378 | |
Marine 1.7% | |||||
| |||||
Global Ship Lease, Inc. (S) | 10.000 | 04-01-19 | 350,000 | 365,750 | |
| |||||
Navios Maritime Acquisition Corp. (S)(Z) | 8.125 | 11-15-21 | 830,000 | 865,275 | |
| |||||
Navios Maritime Holdings, Inc. (S) | 7.375 | 01-15-22 | 870,000 | 878,700 | |
| |||||
Navios South American Logistics, Inc. (S) | 7.250 | 05-01-22 | 805,000 | 807,013 | |
Trading Companies & Distributors 0.4% | |||||
| |||||
Aircastle, Ltd. | 5.125 | 03-15-21 | 770,000 | 773,850 | |
Transportation Infrastructure 1.4% | |||||
| |||||
CHC Helicopter SA (Z) | 9.250 | 10-15-20 | 1,548,000 | 1,664,100 | |
| |||||
Florida East Coast Holdings Corp. (S) | 6.750 | 05-01-19 | 790,000 | 811,725 | |
Information Technology 2.6% | 4,573,300 | ||||
Communications Equipment 0.5% | |||||
| |||||
Alcatel-Lucent USA, Inc. (S) | 6.750 | 11-15-20 | 400,000 | 420,000 | |
| |||||
Avaya, Inc. (S) | 10.500 | 03-01-21 | 520,000 | 473,200 | |
Electronic Equipment, Instruments & Components 0.8% | |||||
| |||||
CDW LLC (Z) | 8.000 | 12-15-18 | 325,000 | 348,969 | |
| |||||
Viasystems, Inc. (S) | 7.875 | 05-01-19 | 1,000,000 | 1,065,000 | |
Internet Software & Services 0.5% | |||||
| |||||
Ancestry.com, Inc., PIK (S) | 9.625 | 10-15-18 | 220,000 | 230,450 | |
| |||||
IAC/interActiveCorp (Z) | 4.875 | 11-30-18 | 615,000 | 642,675 | |
IT Services 0.4% | |||||
| |||||
Brightstar Corp. (S)(Z) | 9.500 | 12-01-16 | 700,000 | 759,500 | |
Technology Hardware, Storage & Peripherals 0.4% | |||||
| |||||
Seagate HDD Cayman (Z) | 7.000 | 11-01-21 | 565,000 | 633,506 | |
Materials 9.4% | 16,516,733 | ||||
Chemicals 0.2% | |||||
| |||||
Rentech Nitrogen Partners LP (S)(Z) | 6.500 | 04-15-21 | 430,000 | 423,550 | |
Construction Materials 1.9% | |||||
| |||||
Cemex Finance LLC (S) | 6.000 | 04-01-24 | 700,000 | 700,875 | |
| |||||
Cemex SAB de CV (S) | 9.000 | 01-11-18 | 215,000 | 232,200 | |
| |||||
China Shanshui Cement Group, Ltd. (S)(Z) | 8.500 | 05-25-16 | 350,000 | 362,250 | |
| |||||
Magnesita Finance, Ltd. (Q)(S) | 8.625 | 04-05-17 | 1,000,000 | 963,750 | |
| |||||
U.S. Concrete, Inc. (S) | 8.500 | 12-01-18 | 875,000 | 947,188 | |
| |||||
Vulcan Materials Company (Z) | 7.500 | 06-15-21 | 120,000 | 141,300 |
12 | Investors Trust | Semiannual report | See notes to financial statements |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Containers & Packaging 1.2% | |||||
| |||||
AEP Industries, Inc. | 8.250 | 04-15-19 | 355,000 | $377,631 | |
| |||||
Cascades, Inc. (Z) | 7.875 | 01-15-20 | 240,000 | 256,200 | |
| |||||
Graphic Packaging International, Inc. (Z) | 7.875 | 10-01-18 | 236,000 | 250,750 | |
| |||||
Pretium Packaging LLC | 11.500 | 04-01-16 | 160,000 | 171,000 | |
| |||||
Tekni-Plex, Inc. (S)(Z) | 9.750 | 06-01-19 | 199,000 | 225,368 | |
| |||||
Wise Metals Group LLC (S) | 8.750 | 12-15-18 | 800,000 | 848,000 | |
Metals & Mining 5.7% | |||||
| |||||
AngloGold Ashanti Holdings PLC (Z) | 5.125 | 08-01-22 | 1,000,000 | 968,701 | |
| |||||
APERAM (S)(Z) | 7.750 | 04-01-18 | 300,000 | 317,250 | |
| |||||
AuRico Gold, Inc. (S) | 7.750 | 04-01-20 | 260,000 | 254,150 | |
| |||||
BlueScope Steel, Ltd. (S)(Z) | 7.125 | 05-01-18 | 500,000 | 537,500 | |
| |||||
Cia Minera Ares SAC (S)(Z) | 7.750 | 01-23-21 | 995,000 | 1,041,019 | |
| |||||
CSN Islands XI Corp. (S)(Z) | 6.875 | 09-21-19 | 250,000 | 263,125 | |
| |||||
Essar Steel Algoma, Inc. (S)(Z) | 9.375 | 03-15-15 | 500,000 | 497,500 | |
| |||||
Evraz Group SA (S)(Z) | 6.500 | 04-22-20 | 1,000,000 | 815,000 | |
| |||||
Ferrexpo Finance PLC (S) | 7.875 | 04-07-16 | 600,000 | 537,000 | |
| |||||
MMC Norilsk Nickel OJSC (S)(Z) | 5.550 | 10-28-20 | 850,000 | 820,250 | |
| |||||
Rain CII Carbon LLC (S)(Z) | 8.000 | 12-01-18 | 945,000 | 989,888 | |
| |||||
Rio Tinto Finance USA, Ltd. (Z) | 7.125 | 07-15-28 | 710,000 | 909,688 | |
| |||||
Severstal OAO (S) | 4.450 | 03-19-18 | 1,000,000 | 942,500 | |
| |||||
SunCoke Energy, Inc. (Z) | 7.625 | 08-01-19 | 105,000 | 112,350 | |
| |||||
Thompson Creek Metals Company, Inc. (Z) | 7.375 | 06-01-18 | 1,000,000 | 942,500 | |
Paper & Forest Products 0.4% | |||||
| |||||
Sappi Papier Holding GmbH (S)(Z) | 7.750 | 07-15-17 | 600,000 | 668,250 | |
Telecommunication Services 15.5% | 27,209,781 | ||||
Diversified Telecommunication Services 7.7% | |||||
| |||||
CCU Escrow Corp. (S) | 10.000 | 01-15-18 | 1,000,000 | 977,500 | |
| |||||
Cincinnati Bell, Inc. (Z) | 8.375 | 10-15-20 | 625,000 | 687,500 | |
| |||||
Frontier Communications Corp. (Z) | 7.125 | 03-15-19 | 530,000 | 592,275 | |
| |||||
Frontier Communications Corp. | 7.625 | 04-15-24 | 125,000 | 129,688 | |
| |||||
Frontier Communications Corp. (Z) | 8.750 | 04-15-22 | 435,000 | 495,900 | |
| |||||
GTP Acquisition Partners I LLC (S)(Z) | 7.628 | 06-15-16 | 620,000 | 660,335 | |
| |||||
Intelsat Luxembourg SA | 8.125 | 06-01-23 | 1,250,000 | 1,312,500 | |
| |||||
Satelites Mexicanos SA de CV (Z) | 9.500 | 05-15-17 | 1,404,000 | 1,474,200 | |
| |||||
T-Mobile USA, Inc. | 6.125 | 01-15-22 | 250,000 | 262,813 | |
| |||||
T-Mobile USA, Inc. (Z) | 6.250 | 04-01-21 | 1,400,000 | 1,491,000 | |
| |||||
T-Mobile USA, Inc. (Z) | 6.464 | 04-28-19 | 495,000 | 524,700 | |
| |||||
T-Mobile USA, Inc. | 6.625 | 04-01-23 | 245,000 | 262,150 | |
| |||||
T-Mobile USA, Inc. | 6.731 | 04-28-22 | 205,000 | 221,144 | |
| |||||
T-Mobile USA, Inc. (Z) | 6.836 | 04-28-23 | 855,000 | 920,194 | |
| |||||
Telecom Italia Capital SA | 7.175 | 06-18-19 | 550,000 | 638,000 | |
| |||||
Wind Acquisition Finance SA (S) | 7.250 | 02-15-18 | 1,750,000 | 1,841,875 | |
| |||||
Wind Acquisition Finance SA (S) | 7.375 | 04-23-21 | 1,000,000 | 1,027,500 | |
Wireless Telecommunication Services 7.8% | |||||
| |||||
Bharti Airtel International Netherlands BV (S) | 5.125 | 03-11-23 | 600,000 | 586,800 | |
| |||||
Colombia Telecomunicaciones SA ESP (S)(Z) | 5.375 | 09-27-22 | 1,000,000 | 990,000 | |
| |||||
Crown Castle Towers LLC (S)(Z) | 4.883 | 08-15-20 | 750,000 | 831,447 |
See notes to financial statements | Semiannual report | Investors Trust | 13 |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Wireless Telecommunication Services (continued) | |||||
| |||||
Digicel Group, Ltd. (S) | 7.125 | 04-01-22 | 1,200,000 | $1,206,000 | |
| |||||
Digicel Group, Ltd. (S)(Z) | 8.250 | 09-30-20 | 1,365,000 | 1,453,725 | |
| |||||
Digicel, Ltd. (S) | 6.000 | 04-15-21 | 500,000 | 506,250 | |
| |||||
SBA Tower Trust (S)(Z) | 2.933 | 12-15-17 | 380,000 | 385,672 | |
| |||||
SBA Tower Trust (S)(Z) | 5.101 | 04-17-17 | 580,000 | 620,863 | |
| |||||
Sprint Communications, Inc. (S)(Z) | 9.000 | 11-15-18 | 1,000,000 | 1,218,750 | |
| |||||
Sprint Communications, Inc. (Z) | 11.500 | 11-15-21 | 2,150,000 | 2,881,000 | |
| |||||
Telefonica Celular del Paraguay SA (S) | 6.750 | 12-13-22 | 1,000,000 | 1,050,000 | |
| |||||
VimpelCom Holdings BV (S)(Z) | 7.504 | 03-01-22 | 2,000,000 | 1,960,000 | |
Utilities 5.1% | 8,906,449 | ||||
Electric Utilities 2.5% | |||||
| |||||
Abengoa Transmision Sur SA (S) | 6.875 | 04-30-43 | 1,000,000 | 1,041,250 | |
| |||||
Beaver Valley II Funding Corp. (Z) | 9.000 | 06-01-17 | 126,000 | 132,743 | |
| |||||
BVPS II Funding Corp. (Z) | 8.890 | 06-01-17 | 306,000 | 319,404 | |
| |||||
CE Generation LLC (Z) | 7.416 | 12-15-18 | 371,800 | 369,941 | |
| |||||
Exelon Corp. (Z) | 4.900 | 06-15-15 | 1,015,000 | 1,059,842 | |
| |||||
FPL Energy National Wind LLC (S) | 5.608 | 03-10-24 | 73,820 | 72,441 | |
| |||||
Israel Electric Corp., Ltd. (S)(Z) | 6.700 | 02-10-17 | 1,000,000 | 1,088,750 | |
| |||||
PNPP II Funding Corp. (Z) | 9.120 | 05-30-16 | 123,000 | 127,320 | |
| |||||
W3A Funding Corp. (Z) | 8.090 | 01-02-17 | 224,168 | 223,958 | |
Independent Power and Renewable Electricity Producers 2.6% | |||||
| |||||
Calpine Corp. (S)(Z) | 5.875 | 01-15-24 | 680,000 | 697,850 | |
| |||||
Dynegy, Inc. | 5.875 | 06-01-23 | 1,530,000 | 1,476,450 | |
| |||||
NRG Energy, Inc. | 6.625 | 03-15-23 | 500,000 | 522,500 | |
| |||||
NRG Energy, Inc. (Z) | 7.875 | 05-15-21 | 1,600,000 | 1,774,000 | |
Convertible Bonds 0.9% (0.6% of Total Investments) | $1,670,313 | ||||
| |||||
(Cost $1,395,625) | |||||
Materials 0.3% | 511,563 | ||||
Containers & Packaging 0.3% | |||||
| |||||
Owens-Brockway Glass Container, Inc. (S)(Z) | 3.000 | 06-01-15 | 500,000 | 511,563 | |
Telecommunication Services 0.6% | 1,158,750 | ||||
Wireless Telecommunication Services 0.6% | |||||
| |||||
Clearwire Communications LLC (S)(Z) | 8.250 | 12-01-40 | 1,000,000 | 1,158,750 | |
Term Loans (M) 0.0% (0.0% of Total Investments) | $0 | ||||
| |||||
(Cost $248,529) | |||||
Industrials 0.0% | 0 | ||||
Airlines 0.0% | |||||
| |||||
Global Aviation Holdings, Inc. (H) | 0.000 | 07-31-17 | 51,038 | 0 | |
| |||||
Global Aviation Holdings, Inc. (H) | 0.000 | 02-13-18 | 514,063 | 0 |
14 | Investors Trust | Semiannual report | See notes to financial statements |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Capital Preferred Securities (a) 1.5% (1.0% of Total Investments) | $2,583,570 | ||||
| |||||
(Cost $2,467,247) | |||||
Financials 1.5% | 2,583,570 | ||||
Banks 0.6% | |||||
| |||||
HSBC Finance Capital Trust IX (5.911% | |||||
to 11-30-2015, then 3 month LIBOR | |||||
+ 1.926%) (Z) | 5.911 | 11-30-35 | 700,000 | 726,250 | |
| |||||
Mellon Capital IV (P)(Q)(Z) | 4.000 | 06-09-14 | 400,000 | 343,500 | |
Capital Markets 0.9% | |||||
| |||||
The Goldman Sachs Capital II (P)(Q) | 4.000 | 06-09-14 | 983,000 | 756,910 | |
| |||||
The Goldman Sachs Capital III (P)(Q)(Z) | 4.000 | 06-09-14 | 983,000 | 756,910 | |
U.S. Government & Agency Obligations 19.4% | |||||
(13.1% of Total Investments) | $34,166,099 | ||||
| |||||
(Cost $34,207,513) | |||||
U.S. Government 5.5% | 9,724,845 | ||||
| |||||
U.S. Treasury Notes | |||||
Note (Z) | 0.625 | 09-30-17 | 800,000 | 787,562 | |
Note (Z) | 1.375 | 01-31-20 | 5,000,000 | 4,848,440 | |
Note (Z) | 1.750 | 05-15-22 | 1,120,000 | 1,064,000 | |
Note (Z) | 2.750 | 02-15-24 | 3,000,000 | 3,024,843 | |
U.S. Government Agency 13.9% | 24,441,254 | ||||
| |||||
Federal Home Loan Mortgage Corp. | |||||
30 Yr Pass Thru | 5.000 | 03-01-41 | 2,621,513 | 2,895,053 | |
30 Yr Pass Thru | 6.500 | 03-01-38 | 128,740 | 143,859 | |
| |||||
Federal National Mortgage Association | |||||
15 Yr Pass Thru | 4.000 | 12-01-24 | 1,751,679 | 1,871,898 | |
30 Yr Pass Thru | 3.000 | 10-29-27 | 670,000 | 619,205 | |
30 Yr Pass Thru | 4.000 | 12-01-40 | 5,071,973 | 5,332,585 | |
30 Yr Pass Thru | 4.000 | 09-01-41 | 3,678,919 | 3,858,754 | |
30 Yr Pass Thru | 4.000 | 10-01-41 | 1,863,180 | 1,956,004 | |
30 Yr Pass Thru | 4.000 | 01-01-42 | 944,279 | 991,324 | |
30 Yr Pass Thru | 4.500 | 10-01-40 | 2,680,318 | 2,898,546 | |
30 Yr Pass Thru | 5.000 | 02-01-41 | 383,026 | 424,246 | |
30 Yr Pass Thru | 5.000 | 04-01-41 | 644,234 | 714,671 | |
30 Yr Pass Thru | 5.500 | 06-01-38 | 834,615 | 925,085 | |
30 Yr Pass Thru | 5.500 | 08-01-40 | 225,874 | 250,005 | |
30 Yr Pass Thru | 6.500 | 07-01-36 | 267,344 | 298,653 | |
30 Yr Pass Thru | 6.500 | 10-01-37 | 158,286 | 176,879 | |
30 Yr Pass Thru | 6.500 | 01-01-39 | 970,292 | 1,084,487 | |
Foreign Government Obligations 1.0% (0.7% of Total Investments) | $1,777,580 | ||||
| |||||
(Cost $1,758,465) | |||||
Argentina 0.3% | 568,608 | ||||
Provincia de Neuquen (S) | 7.875 | 04-26-21 | 578,000 | 568,608 | |
Dominican Republic 0.6% | 995,000 | ||||
Government of Dominican Republic (S)(Z) | 5.875 | 04-18-24 | 1,000,000 | 995,000 | |
South Korea 0.1% | 213,972 | ||||
Korea Development Bank (Z) | 4.375 | 08-10-15 | 205,000 | 213,972 |
See notes to financial statements | Semiannual report | Investors Trust | 15 |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Collateralized Mortgage Obligations 5.8% (4.0% of Total Investments) $10,261,018 | |||||
| |||||
(Cost $9,753,664) | |||||
Commercial & Residential 4.0% | 7,049,500 | ||||
American Home Mortgage Assets Trust | |||||
Series 2006-6, Class XP IO | 2.040 | 12-25-46 | 4,934,504 | 348,124 | |
| |||||
Bear Stearns Adjustable Rate Mortgage Trust | |||||
Series 2005-2, Class A1 (P) | 2.580 | 03-25-35 | 420,721 | 427,031 | |
| |||||
Bear Stearns Asset Backed Securities Trust | |||||
Series 2004-AC5, Class A1 | 5.750 | 10-25-34 | 347,193 | 356,446 | |
| |||||
Commercial Mortgage Pass | |||||
Through Certificates | |||||
Series 2012-LC4, Class C (P) | 5.823 | 12-10-44 | 290,000 | 322,064 | |
| |||||
Deutsche Mortgage Securities, Inc. Mortgage | |||||
Loan Trust | |||||
Series 2004-4, Class 2AR1 (P) | 0.696 | 06-25-34 | 500,123 | 466,150 | |
| |||||
Extended Stay America Trust | |||||
Series 2013-ESFL, Class DFL (P) (S) | 3.291 | 12-05-31 | 475,000 | 471,138 | |
| |||||
GSR Mortgage Loan Trust | |||||
Series 2006-4F, Class 6A1 | 6.500 | 05-25-36 | 2,058,534 | 1,623,290 | |
| |||||
HarborView Mortgage Loan Trust | |||||
Series 2005-8, Class 1X IO | 2.089 | 09-19-35 | 2,919,262 | 163,590 | |
Series 2007-3, Class ES IO (S) | 0.350 | 05-19-47 | 5,977,757 | 63,514 | |
Series 2007-4, Class ES IO | 0.350 | 07-19-47 | 6,423,438 | 64,234 | |
Series 2007-6, Class ES IO (S) | 0.342 | 08-19-37 | 5,014,054 | 53,274 | |
| |||||
Hilton USA Trust | |||||
Series 2013-HLF, Class EFL (P) (S) | 3.903 | 11-05-30 | 840,000 | 840,115 | |
| |||||
IndyMac Index Mortgage Loan Trust | |||||
Series 2005-AR18, Class 1X IO | 2.048 | 10-25-36 | 7,741,186 | 621,868 | |
Series 2005-AR18, Class 2X IO | 1.692 | 10-25-36 | 6,981,951 | 249,744 | |
| |||||
JPMorgan Chase Commercial Mortgage | |||||
Securities Corp. | |||||
Series 2013-INMZ, Class M (S) | 6.130 | 09-15-18 | 750,000 | 759,684 | |
| |||||
VFC 2013-1 LLC | |||||
Series 2013-1, Class A (S) | 3.130 | 03-20-26 | 216,757 | 219,234 | |
U.S. Government Agency 1.8% | 3,211,518 | ||||
| |||||
Federal Home Loan Mortgage Corp. | |||||
Series 290, Class IO | 3.500 | 11-15-32 | 3,219,804 | 642,781 | |
Series 3830, Class NI IO | 4.500 | 01-15-36 | 2,862,593 | 290,685 | |
Series K017, Class X1 IO | 1.590 | 12-25-21 | 2,677,515 | 230,237 | |
Series K709, Class X1 IO | 1.673 | 03-25-19 | 3,242,585 | 209,909 | |
Series K710, Class X1 IO | 1.912 | 05-25-19 | 2,467,112 | 188,416 | |
| |||||
Federal National Mortgage Association | |||||
Series 2012-118, Class IB IO | 3.500 | 11-25-42 | 1,343,869 | 285,271 | |
Series 2012-67, Class KG | 3.500 | 02-25-41 | 349,271 | 358,364 | |
Series 402, Class 3 IO | 4.000 | 11-25-39 | 445,435 | 93,027 | |
Series 402, Class 4 IO | 4.000 | 10-25-39 | 692,875 | 136,644 | |
Series 407, Class 15 IO | 5.000 | 01-25-40 | 734,312 | 140,051 | |
Series 407, Class 21 IO | 5.000 | 01-25-39 | 370,959 | 59,924 | |
Series 407, Class 7 IO | 5.000 | 03-25-41 | 628,171 | 130,623 | |
Series 407, Class 8 IO | 5.000 | 03-25-41 | 164,482 | 29,322 | |
Series 407, Class C6 IO | 5.500 | 01-25-40 | 1,170,899 | 241,942 | |
| |||||
Government National Mortgage Association | |||||
Series 2012-114, Class IO | 1.033 | 01-16-53 | 1,941,459 | 174,322 |
16 | Investors Trust | Semiannual report | See notes to financial statements |
Maturity | |||||
Rate (%) | date | Par value^ | Value | ||
Asset Backed Securities 0.6% (0.4% of Total Investments) | $980,664 | ||||
| |||||
(Cost $947,884) | |||||
ContiMortgage Home Equity Loan Trust | |||||
Series 1995-2, Class A5 | 8.100 | 08-15-25 | 27,531 | 26,926 | |
| |||||
Sonic Capital LLC | |||||
Series 2011-1A, Class A2 (S) | 5.438 | 05-20-41 | 411,102 | 439,692 | |
| |||||
Westgate Resorts LLC | |||||
Series 2012-2A, Class B (S) | 4.500 | 01-20-25 | 506,135 | 514,046 | |
Shares | Value | ||||
Common Stocks 0.0% (0.0% of Total Investments) | $0 | ||||
| |||||
(Cost $593,666) | |||||
Consumer Discretionary 0.0% | 0 | ||||
Media 0.0% | |||||
| |||||
Vertis Holdings, Inc. (I) | 34,014 | 0 | |||
Industrials 0.0% | 0 | ||||
Airlines 0.0% | |||||
| |||||
Global Aviation Holdings, Inc., Class A (I) | 82,159 | 0 | |||
Preferred Securities (b) 0.5% (0.4% of Total Investments) | $969,212 | ||||
| |||||
(Cost $917,875) | |||||
Financials 0.4% | 805,974 | ||||
Banks 0.4% | |||||
| |||||
FNB Corp., 7.250% (Z) | 30,175 | 805,974 | |||
Telecommunication Services 0.1% | 163,238 | ||||
Diversified Telecommunication Services 0.1% | |||||
| |||||
Crown Castle International Corp., 4.500% | 1,635 | 163,238 | |||
Par value | Value | ||||
Short-Term Investments 5.2% (3.5% of Total Investments) | $9,053,000 | ||||
| |||||
(Cost $9,053,000) | |||||
Repurchase Agreement 5.2% | 9,053,000 | ||||
Repurchase Agreement with State Street Corp. dated 4-30-14 at | |||||
0.000% to be repurchased at $9,053,000, on 5-1-14, collateralized | |||||
by $9,305,000 U.S. Treasury Notes, 1.375% due 12-31-18 (valued | |||||
at $9,235,213, including interest) | $9,053,000 | 9,053,000 | |||
Total investments (Cost $252,951,194)† 147.7% | $259,538,867 | ||||
| |||||
Other assets and liabilities, net (47.7%) | ($83,874,814) | ||||
| |||||
Total net assets 100.0% | $175,664,053 | ||||
|
The percentage shown for each investment category is the total value of that category as a percentage of the net assets applicable of the fund.
^ All par values are denominated in U.S. dollars unless otherwise indicated.
See notes to financial statements | Semiannual report | Investors Trust | 17 |
Notes to Schedule of Investments
CAD Canadian Dollar
IO Interest-Only Security — (Interest Tranche of Stripped Mortgage Pool). Rate shown is the annualized yield at the end of the period.
LIBOR London Interbank Offered Rate
PIK Paid-in-kind
REIT Real Estate Investment Trust
USGG U.S. Generic Government Yield Index
(a) Includes hybrid securities with characteristics of both equity and debt that trade with, and pay, interest income.
(b) Includes preferred stocks and hybrid securities with characteristics of both equity and debt that pay dividends on a periodic basis.
(H) Non-income producing — Issuer is in default.
(I) Non-income producing security.
(M) Term loans are variable rate obligations. The coupon rate shown represents the rate at period end.
(P) Variable rate obligation. The coupon rate shown represents the rate at period end.
(Q) Perpetual bonds have no stated maturity date. Date shown as maturity date is next call date.
(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $112,257,573 or 63.9% of the fund’s net assets as of 4-30-14.
(Z) All or a portion of this security is segregated as collateral pursuant to the Credit Facility Agreement. Total collateral value at 4-30-14 was $150,658,063.
† At 4-30-14, the aggregate cost of investment securities for federal income tax purposes was $253,678,147. Net unrealized appreciation aggregated $5,860,720, of which $11,664,602 related to appreciated investment securities and $5,803,882 related to depreciated investment securities.
The fund had the following country concentration as a percentage of total investments on 4-30-14:
United States | 70.3% | |
Cayman Islands | 3.5% | |
Luxembourg | 3.2% | |
Netherlands | 2.8% | |
Ireland | 2.3% | |
Canada | 1.9% | |
Peru | 1.8% | |
United Kingdom | 1.8% | |
Mexico | 1.8% | |
Argentina | 1.1% | |
Other countries | 9.5% | |
|
||
Total | 100.0% |
18 | Investors Trust | Semiannual report | See notes to financial statements |
F I N A N CI A L S T A T E M E N T S
Financial statements
Statement of assets and liabilities 4-30-14 (unaudited)
This Statement of assets and liabilities is the fund’s balance sheet. It shows the value of what the fund owns, is due and owes. You’ll also find the net asset value for each common share.
Assets | |
| |
Investments, at value (Cost $252,951,194) | $259,538,867 |
Cash | 365,977 |
Cash segregated at custodian for swap contracts | 280,000 |
Receivable for investments sold | 1,607,209 |
Dividends and interest receivable | 3,812,410 |
Other receivables and prepaid expenses | 173,970 |
Total assets | 265,778,433 |
Liabilities | |
| |
Credit facility agreement payable | 85,900,000 |
Foreign currency overdraft, at value (cost $346,257) | 346,700 |
Payable for investments purchased | 1,425,236 |
Payable for delayed delivery securities purchased | 1,701,172 |
Swap contracts, at value | 616,774 |
Interest payable | 45,631 |
Payable to affiliates | |
Accounting and legal services fees | 7,443 |
Other liabilities and accrued expenses | 71,424 |
Total liabilities | 90,114,380 |
Net assets | $175,664,053 |
Net assets consist of | |
| |
Paid-in capital | $177,907,714 |
Undistributed net investment income | 1,309,305 |
Accumulated net realized gain (loss) on investments, foreign currency | |
transactions and swap agreements | (9,523,425) |
Net unrealized appreciation (depreciation) on investments, translation of | |
assets and liabilities in foreign currencies and swap agreements | 5,970,459 |
Net assets | $175,664,053 |
Net asset value per share | |
| |
Based on 8,776,995 shares of beneficial interest outstanding — unlimited | |
number of shares authorized with no par value | $20.01 |
See notes to financial statements | Semiannual report | Investors Trust | 19 |
F I N A N C I A L S T A T E M E N T S
Statement of operations For the six-month period ended 4-30-14
(unaudited)
This Statement of operations summarizes the fund’s investment income earned and expenses incurred in operating the fund. It also shows net gains (losses) for the period stated.
Investment income | |
| |
Interest | $8,138,407 |
Dividends | 35,818 |
Total investment income | 8,174,225 |
Expenses | |
| |
Investment management fees | 678,772 |
Accounting and legal services fees | 23,168 |
Transfer agent fees | 39,825 |
Trustees’ fees | 20,507 |
Printing and postage | 32,359 |
Professional fees | 67,940 |
Custodian fees | 12,871 |
Stock exchange listing fees | 7,893 |
Interest expense | 279,141 |
Other | 23,768 |
Total expenses | 1,186,244 |
Net investment income | 6,987,981 |
Realized and unrealized gain (loss) | |
| |
Net realized gain (loss) on | |
Investments | 2,023,475 |
Swap contracts | (222,823) |
Foreign currency transactions | (3,675) |
1,796,977 | |
Change in net unrealized appreciation (depreciation) of | |
Investments | 445,695 |
Swap contracts | 194,454 |
Translation of assets and liabilities in foreign currencies | (436) |
639,713 | |
Net realized and unrealized gain | 2,436,690 |
Increase in net assets from operations | $9,424,671 |
20 | Investors Trust | Semiannual report | See notes to financial statements |
F I N A N C I A L S T A T E M E N T S
Statements of changes in net assets
These Statements of changes in net assets show how the value of the fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of fund share transactions.
Six months | ||
ended | Year | |
4-30-14 | ended | |
(Unaudited) | 10-31-13 | |
Increase (decrease) in net assets | ||
| ||
From operations | ||
Net investment income | $6,987,981 | $14,005,643 |
Net realized gain | 1,796,977 | 1,357,599 |
Change in net unrealized appreciation (depreciation) | 639,713 | (6,564,239) |
Increase in net assets resulting from operations | 9,424,671 | 8,799,003 |
Distributions to shareholders | ||
From net investment income | (7,171,254) | (14,900,053) |
From fund share transactions | ||
Issued in shelf offering | 293,478 | 1,722,799 |
Issued pursuant to Dividend Reinvestment Plan | 237,128 | 855,166 |
Total from fund share transactions | 530,606 | 2,577,965 |
Total increase (decrease) | 2,784,023 | (3,523,085) |
Net assets | ||
| ||
Beginning of period | 172,880,030 | 176,403,115 |
End of period | $175,664,053 | $172,880,030 |
Undistributed net investment income | $1,309,305 | $1,492,578 |
Share activity | ||
| ||
Shares outstanding | ||
Beginning of period | 8,750,917 | 8,631,305 |
Issued in shelf offering | 14,126 | 78,325 |
Issued pursuant to Dividend Reinvestment Plan | 11,952 | 41,287 |
End of period | 8,776,995 | 8,750,917 |
See notes to financial statements | Semiannual report | Investors Trust | 21 |
F I N A N C I A L S T A T E M E N T S
Statement of cash flows
This Statement of cash flows shows cash flow from operating and financing activities for the period stated.
For the | |
six-month | |
period ended | |
4-30-14 | |
(unaudited) | |
Cash flows from operating activities | |
| |
Net increase in net assets from operations | $9,424,671 |
Adjustments to reconcile net increase in net assets from operations to net | |
cash provided by operating activities: | |
Long-term investments purchased | (93,759,413) |
Long-term investments sold | 98,623,192 |
Increase in short-term investments | (9,053,000) |
Net amortization of premium (discount) | 787,907 |
Income paid-in-kind | (128,095) |
Increase in dividends and interest receivable | (76,123) |
Decrease in payable for investments purchased | (1,012,809) |
Increase in payable for delayed delivery securities purchased | 293,237 |
Decrease in receivable for investments sold | 3,292,141 |
Decrease in receivable for delayed delivery securities sold | 1,001,341 |
Decrease in cash segregated at custodian for swap contracts | 270,000 |
Increase in other receivables and prepaid assets | (3,813) |
Decrease in unrealized depreciation of swap contracts | (194,454) |
Decrease in payable to affiliates | (11,161) |
Decrease in interest payable | (2,574) |
Decrease in due to custodian | (305,782) |
Increase foreign currency overdraft | 346,700 |
Decrease in other liabilities and accrued expenses | (16,170) |
Net change in unrealized (appreciation) depreciation on investments | (445,695) |
Net realized gain on investments | (2,023,475) |
Net cash provided by operating activities | $7,006,625 |
| |
Cash flows from financing activities | |
Fund shares issued in shelf offering | $293,478 |
Cash distributions to common shareholders net of reinvestments | ($6,934,126) |
Net cash used in financing activities | ($6,640,648) |
Net increase in cash | $365,977 |
Cash at beginning of period | $— |
Cash at end of period | $365,977 |
Supplemental disclosure of cash flow information | |
| |
Cash paid for interest | $281,715 |
Noncash financing activities not included herein consist of | $237,128 |
reinvestment of distributions |
22 | Investors Trust | Semiannual report | See notes to financial statements |
Financial highlights
The Financial highlights show how the fund’s net asset value for a share has changed during the period.
COMMON SHARES Period ended | 4-30-141 | 10-31-13 | 10-31-12 | 10-31-11 | 10-31-10 | 10-31-09 |
Per share operating performance | ||||||
| ||||||
Net asset value, beginning of period | $19.76 | $20.44 | $19.19 | $20.11 | $18.03 | $14.51 |
Net investment income2 | 0.80 | 1.61 | 1.88 | 1.93 | 2.15 | 1.70 |
Net realized and unrealized gain (loss) | ||||||
on investments | 0.27 | (0.59) | 1.30 | (0.88) | 2.00 | 3.51 |
Total from investment operations | 1.07 | 1.02 | 3.18 | 1.05 | 4.15 | 5.21 |
Less distributions to | ||||||
common shareholders | ||||||
From net investment income | (0.82) | (1.71) | (1.94) | (1.97) | (2.07) | (1.69) |
Anti-dilutive impact of shelf offering | 0.003 | 0.01 | 0.01 | — | — | — |
Net asset value, end of period | $20.01 | $19.76 | $20.44 | $19.19 | $20.11 | $18.03 |
Per share market value, end of period | $20.24 | $19.30 | $22.24 | $21.82 | $21.13 | $17.73 |
Total return at net asset value (%)4 | 5.625 | 5.09 | 16.14 | 4.90 | 23.81 | 39.26 |
Total return at market value (%)4 | 9.385 | (5.66) | 11.13 | 13.52 | 32.29 | 47.62 |
Ratios and supplemental data | ||||||
| ||||||
Net assets applicable to common shares, | ||||||
end of period (in millions) | $176 | $173 | $176 | $164 | $171 | $152 |
Ratios (as a percentage of | ||||||
average net assets): | ||||||
Expenses6 | 1.387 | 1.41 | 1.57 | 1.62 | 1.93 | 2.43 |
Net investment income | 8.147 | 8.00 | 9.65 | 9.63 | 11.33 | 11.34 |
Portfolio turnover (%) | 37 | 61 | 56 | 45 | 71 | 72 |
Senior securities | ||||||
| ||||||
Total debt outstanding end of period | ||||||
(in millions) | $86 | $86 | $86 | $88 | $80 | $67 |
Asset coverage per $1,000 of debt8 | $3,045 | $3,013 | $3,054 | $2,871 | $3,136 | $3,268 |
1 Six months ended 4-30-14. Unaudited.
2 Based on the average daily shares outstanding.
3 Less than $0.005.
4 Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that dividend and capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the fund’s shares traded during the period.
5 Not annualized.
6 Expenses excluding interest were 1.06%, 1.07%, 1.07%, 1.04%, 1.12% and 1.43% for the periods ended 4-30-14, 10-31-13, 10-31-12, 10-31-11, 10-31-10 and 10-31-09, respectively.
7 Annualized.
8 Asset coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at period end (Note 7). As debt outstanding changes, level of invested assets may change accordingly. Asset coverage ratio provides a measure of leverage.
See notes to financial statements | Semiannual report | Investors Trust | 23 |
Notes to financial statements
(unaudited)
Note 1 — Organization
John Hancock Investors Trust (the fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).
In 2012, the fund filed a registration statement with the Securities and Exchange Commission, registering an additional 1,000,000 common shares through an equity shelf offering program. Under this program, the fund, subject to market conditions, may raise additional equity capital from time to time by offering new common shares at a price equal to or above the fund’s net asset value per common share.
Note 2 — Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:
Security valuation. Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are valued at the last sale price or official closing price on the exchange where the security was acquired or most likely will be sold. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Debt obligations are valued based on the evaluated prices provided by an independent pricing vendor or from broker-dealers. Independent pricing vendors utilize matrix pricing which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices. Swaps are valued using evaluated prices obtained from an independent pricing vendor. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor. Securities that trade only in the over-the-counter (OTC) market are valued using bid prices. Certain short-term securities with maturities of 60 days or less at the time of purchase are valued at amortized cost. Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund’s Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed.
The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are
24 | Investors Trust | Semiannual report |
not readily available or reliable, including the fund’s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the values by input classification of the fund’s investments as of April 30, 2014, by major security category or type:
LEVEL 3 | ||||
LEVEL 2 | SIGNIFICANT | |||
TOTAL MARKET | LEVEL 1 | SIGNIFICANT | UNOBSERVABLE | |
VALUE AT 4-30-14 | QUOTED PRICE | OBSERVABLE INPUTS | INPUTS | |
| ||||
Corporate Bonds | $198,077,411 | — | $197,963,833 | $113,578 |
Convertible Bonds | 1,670,313 | — | 1,670,313 | — |
Capital Preferred Securities | 2,583,570 | — | 2,583,570 | — |
U.S. Government & | ||||
Agency Obligations | 34,166,099 | — | 34,166,099 | — |
Foreign Government | ||||
Obligations | 1,777,580 | — | 1,777,580 | — |
Collateralized Mortgage | ||||
Obligations | 10,261,018 | — | 10,079,996 | 181,022 |
Asset Backed Securities | 980,664 | — | 980,664 | — |
Preferred Securities | 969,212 | $163,238 | 805,974 | — |
Short-Term Investments | 9,053,000 | — | 9,053,000 | — |
| ||||
Total Investments in | ||||
Securities | $259,538,867 | $163,238 | $259,081,029 | $294,600 |
Other Financial Instruments | ||||
Interest Rate Swaps | ($616,774) | — | ($616,774) | — |
Repurchase agreements. The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund’s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest.
Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, the MRA does not result in an offset of the reported amounts of assets and liabilities in the Statement of assets and liabilities. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions. Collateral received by the fund for repurchase agreements is disclosed in the Fund’s investments as part of the caption related to the repurchase agreement.
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may
Semiannual report | Investors Trust | 25 |
not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain if amounts are estimable. Foreign taxes are provided for based on the fund’s understanding of the tax rules and rates that exist in the foreign markets in which it invests. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Foreign currency translation. Assets, including investments and liabilities denominated in foreign currencies, are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is reflected as a component of the realized and unrealized gains (losses) on investments.
Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors. Foreign investments are also subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency.
Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.
Stripped securities. Stripped securities are financial instruments structured to separate principal and interest cash flows so that one class receives principal payments from the underlying assets (PO or principal only), while the other class receives the interest cash flows (IO or interest only). Both PO and IO investments represent an interest in the cash flows of an underlying stripped security. If the underlying assets experience greater than anticipated prepayments of principal, the fund may fail to fully recover its initial investment in an IO security. The market value of these securities can be extremely volatile in response to changes in interest rates or prepayments on the underlying securities. In addition, these securities present additional credit risk such that the fund may not receive all or part of its principal or interest payments because the borrower or issuer has defaulted on its obligation.
Overdrafts. Pursuant to the custodian agreement, the fund’s custodian may, in its discretion, advance funds to the fund to make properly authorized payments. When such payments result in an overdraft, the fund is obligated to repay the custodian for any overdraft, including any costs or expenses associated with the overdraft. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject
26 | Investors Trust | Semiannual report |
to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
Under the Regulated Investment Company Modernization Act of 2010, the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable 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.
For federal income tax purposes, as of October 31, 2013, the fund has a capital loss carryforward of $10,859,805 available to offset future net realized capital gains. The following table details the capital loss carryforward available:
CAPITAL LOSS CARRYFORWARD EXPIRING AT OCTOBER 31 | NO EXPIRATION DATE | |||||
2014 | 2015 | 2016 | 2017 | 2019 | SHORT-TERM | LONG-TERM |
| ||||||
$2,605,424 | $1,304,634 | $912,660 | $2,675,603 | $2,044,097 | $975,640 | $341,747 |
As of October 31, 2013, the fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.
Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends quarterly and capital gain distributions, if any, annually.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to defaulted bonds, expiration of capital loss carryforwards, derivative transactions and amortization and accretion on debt securities.
Statement of cash flows. Information on financial transactions that have been settled through the receipt and disbursement of cash is presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the amount included in the fund’s Statement of assets and liabilities and represents the cash on hand at the fund’s custodian and does not include any short-term investments or cash segregated at the custodian for swap contracts.
Note 3 — Derivative instruments
The fund may invest in derivatives in order to meet its investment objective. Derivatives include a variety of different instruments that may be traded in the OTC market, on a regulated exchange or through a clearing facility. The risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Semiannual report | Investors Trust | 27 |
Certain swaps are typically traded through the OTC market and may be regulated by the Commodity Futures Trading Commission (the CFTC). Derivative counterparty risk is managed through an ongoing evaluation of the creditworthiness of all potential counterparties and, if applicable, designated clearing organizations. The fund attempts to reduce its exposure to counterparty risk for derivatives traded in the OTC market, whenever possible, by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement with each of its OTC counterparties. The ISDA gives each party to the agreement the right to terminate all transactions traded under the agreement if there is certain deterioration in the credit quality or contractual default of the other party, as defined in the ISDA. Upon an event of default or a termination of the ISDA, the non-defaulting party has the right to close out all transactions and to net amounts owed.
As defined by the ISDA, the fund may have collateral agreements with certain counterparties to mitigate counterparty risk on OTC derivatives. Subject to established minimum levels, collateral for OTC transactions is generally determined based on the net aggregate unrealized gain or loss on contracts with a particular counterparty. Collateral pledged to the fund is held in a segregated account by a third-party agent or held by the custodian bank for the benefit of the fund and can be in the form of cash or debt securities issued by the U.S. government or related agencies; collateral posted by the fund for OTC transactions is held in a segregated account at the fund’s custodian and is noted in the accompanying Fund’s investments, or if cash is posted, on the Statement of assets and liabilities. The fund’s maximum risk of loss due to counterparty risk is equal to the asset value of outstanding contracts offset by collateral received.
Interest rate swaps. Interest rate swaps represent an agreement between the fund and a counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The fund settles accrued net interest receivable or payable under the swap contracts at specified, future intervals. Swap agreements are privately negotiated in the OTC market or may be executed on a registered commodities exchange (centrally cleared swaps). Swaps are marked-to-market daily and the change in value is recorded as unrealized appreciation/depreciation of swap contracts. A termination payment by the counterparty or the fund is recorded as realized gain or loss, as well as the net periodic payments received or paid by the fund. The value of the swap will typically impose collateral posting obligations on the party that is considered out-of-the-money on the swap.
Entering into swap agreements involves, to varying degrees, elements of credit, market and documentation risk that may amount to values that are in excess of the amounts recognized on the Statement of assets and liabilities. Such risks involve the possibility that there will be no liquid market for the swap, or that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree or contest the terms of the swap. Market risks may also accompany the swap, including interest rate risk. The fund may also suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.
During the six months ended April 30, 2014, the fund used interest rate swaps to manage against anticipated interest rate changes. The following table summarizes the interest rate swap contracts held as of April 30, 2014.
USD NOTIONAL | PAYMENTS MADE BY | PAYMENTS RECEIVED | ||||
COUNTERPARTY | AMOUNT | FUND | BY FUND | MATURITY DATE | MARKET VALUE | |
| ||||||
Morgan Stanley | $22,000,000 | Fixed 1.442500% | 3 Month LIBOR (a) | Aug 2016 | ($457,419) | |
Capital Services | ||||||
Morgan Stanley | $22,000,000 | Fixed 1.093750% | 3 Month LIBOR (a) | May 2017 | (159,355) | |
Capital Services | ||||||
TOTAL | $44,000,000 | ($616,774) |
(a) At 4-30-14, the 3-month LIBOR rate was 0.22335%.
28 | Investors Trust | Semiannual report |
No interest rate swap positions were entered into or closed during the six months ended April 30, 2014.
Fair value of derivative instruments by risk category
The table below summarizes the fair value of derivatives held by the fund at April 30, 2014 by risk category:
FINANCIAL | ASSET | LIABILITY | ||
STATEMENT OF ASSETS AND | INSTRUMENTS | DERIVATIVES | DERIVATIVES | |
RISK | LIABILITIES LOCATION | LOCATION | FAIR VALUE | FAIR VALUE |
| ||||
Interest rate | Swap contracts, | Interest rate | — | ($616,774) |
contracts | at value | swaps |
Effect of derivative instruments on the Statement of operations
The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30, 2014:
STATEMENT OF OPERATIONS | SWAP | |
RISK | LOCATION | CONTRACTS |
| ||
Interest rate contracts | Net realized gain (loss) | ($222,823) |
The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30, 2014:
STATEMENT OF OPERATIONS | SWAP | |
RISK | LOCATION | CONTRACTS |
| ||
Interest rate contracts | Change in unrealized | $194,454 |
appreciation (depreciation) |
Note 4 — Guarantees and indemnifications
Under the fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into contracts with service providers that contain general indemnification clauses. The fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 5 — Fees and transactions with affiliates
John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Advisor, serves as distributor for the common shares offered through the equity shelf offering. The Advisor and the Distributor are indirect, wholly owned subsidiaries of Manulife Financial Corporation (MFC).
Management fee. The fund has an investment advisory agreement with the Advisor under which the fund pays a daily management fee to the Advisor equivalent, on an annual basis, to the sum of (a) 0.650% of the first $150,000,000 of the fund’s average daily managed assets (net assets plus borrowings under the Credit Facility Agreement) (see Note 7); (b) 0.375% of the next $50,000,000 of the fund’s average daily managed assets; (c) 0.350% of the next $100,000,000 of the fund’s average daily managed assets; and (d) 0.300% of the fund’s average daily managed assets in excess of $300,000,000. The Advisor has a subadvisory agreement with John Hancock Asset Management
Semiannual report | Investors Trust | 29 |
a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Advisor. The fund is not responsible for payment of the subadvisory fees.
The investment management fees incurred for six months ended April 30, 2014, were equivalent to a net annual effective rate of 0.53% of the fund’s average daily managed assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred for the six months ended April 30, 2014 amounted to an annual rate of 0.02% of the fund’s average daily managed assets.
Trustee expenses. The fund compensates each Trustee who is not an employee of the Advisor or its affiliates. Each independent Trustee receives from the fund and the other John Hancock closed-end funds an annual retainer. In addition, Trustee out-of-pocket expenses are allocated to each fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Distributor. The fund will compensate the Distributor with respect to sales of the common shares offered through the equity shelf offering at a commission rate of 1% of the gross proceeds of the sale of common shares, a portion of which is allocated to the selling dealers. During the six months ended April 30, 2014, compensation to the Distributor was $2,992. The Distributor has an agreement with a sub-placement agent in the sale of common shares. The fund is not responsible for payment of commissions to the sub placement agent.
Note 6 — Leverage risk
The fund utilizes a Credit Facility Agreement (CFA) to increase its assets available for investment. When the fund leverages its assets, common shareholders bear the fees associated with the CFA and have the potential to benefit or be disadvantaged from the use of leverage. The Advisor’s fee is also increased in dollar terms from the use of leverage. Consequently, the fund and the Advisor may have differing interests in determining whether to leverage the fund’s assets. Leverage creates risks that that may adversely affect the return for the holders of common shares, including:
• the likelihood of greater volatility of net asset value and market price of common shares;
• fluctuations in the interest rate paid for the use of the credit facility;
• increased operating costs, which may reduce the fund’s total return;
• the potential for a decline in the value of an investment acquired through leverage, while the fund’s obligations under such leverage remains fixed; and
• the fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements.
To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the fund’s return will be greater than if leverage had not been used, conversely, returns would be lower if the cost of the leverage exceeds the income or capital appreciation derived.
In addition to the risks created by the fund’s use of leverage, the fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the CFA is terminated. Were this to happen, the fund would be required to de-leverage, selling securities at a potentially inopportune time and incurring tax consequences. Further, the fund’s ability to generate income from the use of leverage would be adversely affected.
30 | Investors Trust | Semiannual report |
Note 7 — Credit Facility Agreement
The fund has entered into a CFA with Credit Suisse Securities (USA) LLC (CSSU), pursuant to which the fund borrows money to increase its assets available for investment. In accordance with the 1940 Act, the fund’s borrowings under the CFA will not exceed 33 1/3% of the fund’s managed assets (net assets plus borrowings) at the time of any borrowing.
The fund pledges a portion of its assets as collateral to secure borrowings under the CFA. Such pledged assets are held in a special custody account with the fund’s custodian. The amount of assets required to be pledged by the fund is determined in accordance with the CFA. The fund retains the benefits of ownership of assets pledged to secure borrowings under the CFA. Interest charged is at the rate of three month LIBOR (London Interbank Offered Rate) plus 0.41% and is payable monthly. As of April 30, 2014, the fund had borrowings of $85,900,000, at an interest rate of 0.63%, which is reflected in the Credit facility agreement payable on the Statement of assets and liabilities. During the six months ended April 30, 2014, the average borrowings under the CFA and the effective average interest rate were $85,900,000 and 0.66%, respectively.
The fund may terminate the CFA with CSSU at any time. If certain asset coverage and collateral requirements or other covenants are not met, the CFA could be deemed in default and result in termination. Absent a default or facility termination event, CSSU is required to provide the fund with 270 calendar days’ notice prior to terminating or amending the CFA.
Note 8 — Fund share transactions
Transactions in common shares for the six months ended April 30, 2014 and the year ended October 31, 2013 are presented on the Statement of changes in net assets. Proceeds received in connection with the shelf offering are net of commissions and offering costs. Total offering costs of $194,556 have been prepaid by the fund. These costs are deducted from proceeds as shares are issued. To date, $21,618 has been deducted from proceeds of shares issued and the remaining $172,938 is included in Other receivables and prepaid expenses on the Statement of assets and liabilities.
Note 9 — Purchase and sale of securities
Purchases and sales of securities, other than short-term securities and U.S. Treasury obligations, amounted to $87,744,413 and $82,793,909, respectively, for the six months ended April 30, 2014. Purchases and sales of U.S. Treasury obligations aggregated $6,015,000 and $15,829,283, respectively, for the six months ended April 30, 2014.
Semiannual report | Investors Trust | 31 |
Additional information
Unaudited
Investment objective and policy
The fund is a diversified, closed-end, management investment company, common shares of which were initially offered to the public in January 1971. The fund’s primary investment objective is to generate income for distribution to its shareholders, with capital appreciation as a secondary objective. The preponderance of the fund’s assets are invested in a diversified portfolio of debt securities issued by U.S. and non-U.S. corporations and governments, some of which may carry equity features. Up to 50% of the value of the fund’s assets may be invested in restricted securities acquired through private placements. The fund may also invest in repurchase agreements.
Effective March 20, 2013, the Board of Trustees approved a revision to the fund’s investment policy regarding the amount of the fund’s securities that is rated investment grade to provide that the fund will invest at least 30% of its net assets (plus borrowings for investment purposes) in debt securities that are rated, at the time of acquisition, investment grade (i.e., at least “Baa” by Moody’s Investors Service, Inc. (Moody’s) or “BBB” by Standard & Poor’s Ratings Services (S&P)), or in unrated securities determined by the fund’s investment advisor or subadvisor to be of comparable credit quality, securities issued or guaranteed by the U.S. government, or its agencies and instrumentalities and cash and cash equivalents. Under the prior investment policy, the fund was required to invest at least 30% of its total assets in such securities. The new investment policy also provides that the fund may invest up to 70% of its net assets (plus borrowings for investment purposes) in debt securities that are rated, at the time of acquisition, below investment grade (junk bonds) (i.e., rated “Ba” or lower by Moody’s or “BB” or lower by S&P), or in unrated securities determined by the fund’s advisor or subadvisor to be of comparable quality.
Dividends and distributions
During the six months ended April 30, 2014, dividends from net investment income totaling $0.8194 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:
PAYMENT DATE | INCOME DISTRIBUTIONS | |||
|
||||
December 31, 2013 | $0.4468 | |||
March 31, 2014 | 0.3726 | |||
Total | $0.8194 |
Shareholder communication and assistance
If you have any questions concerning the fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the fund to the transfer agent at:
Computershare
P.O. Box 30170
College Station, TX 77842-3170
Telephone: 800-852-0218
If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.
32 | Investors Trust | Semiannual report |
Shareholder meeting
The fund held its Annual Meeting of Shareholders on February 18, 2014. The following proposal was considered by the shareholders:
Proposal: Election of twelve (12) Trustees to serve until their respective successors have been duly elected and qualified. Each Trustee was re-elected by the fund’s shareholders and the votes cast with respect to each Trustee are set forth below.
VOTES FOR | VOTES WITHHELD | |
| ||
Independent Trustees | ||
Charles L. Bardelis | 6,396,462.667 | 156,123.494 |
Peter S. Burgess | 6,407,212.060 | 145,374.101 |
William H. Cunningham | 6,407,345.933 | 145,240.228 |
Grace K. Fey | 6,408,027.601 | 144,558.560 |
Theron S. Hoffman | 6,395,958.777 | 156,627.384 |
Deborah C. Jackson | 6,397,266.835 | 155,319.326 |
Hassell H. McClellan | 6,402,251.096 | 150,335.065 |
James M. Oates | 6,393,319.763 | 159,266.398 |
Steven R. Pruchansky | 6,386,058.605 | 166,527.556 |
Gregory A. Russo | 6,402,802.892 | 149,783.269 |
Non-Independent Trustees | ||
Craig Bromley | 6,404,420.974 | 148,165.187 |
Warren A. Thomson | 6,389,881.508 | 162,704.653 |
Semiannual report | Investors Trust | 33 |
More information
Trustees | Officers | Investment advisor |
James M. Oates, | Andrew G. Arnott | John Hancock Advisers, LLC |
Chairperson | President | |
Steven R. Pruchansky, | John J. Danello# | Subadvisor |
Vice Chairperson | Senior Vice President, Secretary | John Hancock Asset Management |
Charles L. Bardelis* | and Chief Legal Officer | a division of Manulife Asset |
Craig Bromley† | Francis V. Knox, Jr. | Management (US) LLC |
Peter S. Burgess* | Chief Compliance Officer | |
William H. Cunningham | Charles A. Rizzo | Custodian |
Grace K. Fey | Chief Financial Officer | State Street Bank and |
Theron S. Hoffman* | Salvatore Schiavone | Trust Company |
Deborah C. Jackson | Treasurer | |
Hassell H. McClellan | Transfer agent | |
Gregory A. Russo | Computershare Shareowner | |
Warren A. Thomson† | Services, LLC | |
*Member of the | Legal counsel | |
Audit Committee | K&L Gates LLP | |
†Non-Independent Trustee | ||
#Effective 5-29-14 | Stock symbol | |
Listed New York Stock | ||
Exchange: JHI |
For shareholder assistance refer to page 32
You can also contact us: | ||
800-852-0218 | Regular mail: | |
jhinvestments.com | Computershare | |
P.O. Box 30170 | ||
College Station, TX 77842-3170 |
The fund’s proxy voting policies and procedures, as well as the fund’s proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
The fund’s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund’s Form N-Q is available on our website and the SEC’s website, sec.gov, and can be reviewed and copied (for a fee) at the SEC’s Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC’s Public Reference Room.
We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-852-0218.
The report is certified under the Sarbanes-Oxley Act, which requires closed-end funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in all material respects.
34 | Investors Trust | Semiannual report |
800-852-0218
800-231-5469 TDD
800-843-0090 EASI-Line
jhinvestments.com
PRESORTED | |
STANDARD | |
U.S. POSTAGE | |
PAID | |
MIS |
P5SA 4/14 | |
MF184402 | 6/14 |
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) Not applicable.
(b) Not applicable.
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.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has adopted procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached “John Hancock Funds – Nominating, Governance and Administration Committee Charter.”
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Nominating, Governance and Administration Committee Charter.”
(c)(2) Contact person at the registrant.
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.
John Hancock Investors Trust | |
By: | /s/ Andrew Arnott |
------------------------------ | |
Andrew Arnott | |
President | |
Date: | June 5, 2014 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew Arnott |
------------------------------ | |
Andrew Arnott | |
President | |
Date: | June 5, 2014 |
By: | /s/ Charles A. Rizzo |
--------------------------------- | |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | June 5, 2014 |