3Q2016. Popular Family of Funds

Transcription

1 3Q016 Popular Family of Funds

2 POPULAR FAMILY OF FUNDS 1 QUARTERLY UPDATE THIRD QUARTER 016 CONTENTS: Popular Core Equity Fund 3 Popular Total Return Fund 5 Popular Income Plus Fund 7 Popular High Grade Fixed-Income Fund 9

3 15%.

4 POPULAR CORE EQUITY FUND FUND FACTS Category Large-Cap Equity Open-End Daily NAV 3 Fund Overview 4 5 The Popular Core Equity Fund is Date 05/6/005 Class A Class C Ticker Symbol Po PCREQ Po PCREC %.9% Sales Charges 6 Class A Class C Maximum Sales Charge (Load) imposed on Purchases sales 5.00% 0.30% redemptions None 1.00% Who Should Invest Puerto Rico residents seeking long-term growth of capital growth and value companies concentrated in the large-cap sector Who Should Not Invest Investors who are not Puerto Rico residents Advantages Exempt from estate taxes 15% Management Popular Asset Management 3

5 POPULAR CORE EQUITY FUND QUARTERLY REPORT 07/01/16-09/30/16 T 4 T US large- The Popular Core E Puerto Rico in 005. Except as otherwise noted, September 30, 016. NAV Movement Combined 7 05/6/005-09/30/016 Class A & C Shares May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Holdings 5 Top Holdings as % of P Apple 3.4% Verizon.6% Google.4% Microsoft 1.9% Exxon Mobil 1.9% Johnson & Johnson 1.9% Berkshire Hathaway 1.7% Comcast 1.6% General Electric 1.6% Wells Fargo 1.5% Top Ten 0.5% Sectors 5 D P Technology 18.3% Financial Services 16.6% Health Care 16.0% Consumer Discretionary 14.5% Producer Durables 10.6% Energy 9.8% Consumer Staples 5.7% Utilities 5.6% Materials & Processing.9% Returns 8 Fund performance as of 09/30/016 3-Month 1-Year Class A Shares (POPCREQ) 3.41% 10.7% Class C Shares (POPCREC) 3.0% 9.93% 3-Year Annualized 5-Year Annualized 10-Year Annualized 8.58% 14.% 5.37% 7.81% 13.41% 4.57% Sales Charges 6 Class A Class C Maximum Sales Charge (Load) imposed on Purchases Sales Maximum Deferred Sales Charge (Load) on Redemptions 5.00% 0.30% None 1.00% Number of Wtd. Avg. Market Cap. Beta Dividend Yield Price to Turnover 15 $140,90.00 MM 1.11% Max. Sales Charge % Class A 1.57% Class C.9% Sector Returns 5,8 Sector Name 3-Month Return 1-Month Return Best / Worst Contributor for the Quarter Technology 1.9%.8% Apple 19% Cognizant Technology 17% Financial Services 4.6% 7.4% Bank of America 18% Wells Fargo 6% Health Care 0.9% 10.7% Biogen 9% Bristol Myers Squibb 7%.9% 9.6% Amazon.com 17% The Walt Disney Co. 4% Producer Durables 4.1% 19.7% Convergys % Triumph Group 1% Energy.3% 19.0% Valero Energy 5% Exxon Mobil 6% Consumer Staples -.6% 15.8% Procter & Gamble 7% Kroger 19% U -5.9% 17.4% Southern 3% Verizon 6% Materials & Processing 3.7%.% Westlake Chemical 5% USG 4% Source: Bloomberg, THE BLOOMBERG, Bloomberg L.P., and BLOOMBERG FINANCIAL MARKETS are trademarks, trade names and service marks of Bloomberg L.P., a Delaware limited partnership. THE INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISK, FEES, EXPENSES AND CHARGES CAREFULLY BEFORE INVESTING. THIS INFORMATION IS CONTAINED IN THE FUND PROSPECTUS WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING. A COPY OF THE PROSPECTUS CAN BE OBTAINED FROM YOUR FINANCIAL ADVISOR OR AT THE PERFORMANCE DATA CALCULATION DOES NOT INCLUDE SALES LOAD. IF THE SALES LOAD WERE REFLECTED, IT WOULD REDUCE THE PERFORMANCE QUOTED. AN INVESTMENT IN THE FUND IS NOT INSURED BY THE FDIC, HAS NO BANK GUARANTEE AND MAY LOSE VALUE. PAST PERFORMANCE DOES NOT GUARANTEE SIMILAR FUTURE RESULTS. FUND PERFORMANCE MAY CHANGE OVER TIME, AND CURRENTLY, MAY BE HIGHER OR LOWER THAN STATED. SHARES OF THE FUND MAY ONLY BE PURCHASED BY INDIVIDUALS WHO HAVE THEIR PRINCIPAL RESIDENCE IN PUERTO RICO OR ENTITIES WHOSE PRINCIPAL OFFICE AND PLACE OF BUSINESS ARE LOCATED IN PUERTO RICO. PLEASE REFER TO THE BACK OF THE BROCHURE, SPECIFICALLY TO THE LEGAL NOTES SECTION, FOR IMPORTANT DISCLOSURES REGARDING AN INVESTMENT IN ANY OF THE FUNDS. 4

6 POPULAR TOTAL RETURN FUND FUND FACTS Category Large-Cap Equity Open-End Daily NAV 3 Fund Overview 4 The fund incorporated in Puerto Rico in Date 03/7/001 Class A Class C Ticker Symbol Po PTRFA Po PTRFC % 1.85% Sales Charges 6 Class A Class C Maximum Sales Charge (Load) imposed on purchases 5.00% None Who Should Invest Puerto Rico residents seeking long-term growth of capital None 1.00% Who Should Not Invest Investors who are not Puerto Rico residents Advantages Exempt from estate taxes 15% Management Popular Asset Management 5

7 POPULAR TOTAL RETURN FUND QUARTERLY REPORT 07/01/16-09/30/16 open-end fund incorporated in Puerto Rico in 001. E 4 5 The Popular Total Return Fund is a nondiversified June 30, 016. NAV Movement 9 03/7/001-09/30/016 As of 09/30/ Mar-01 Jun-01 Sep-01 Dec-01 Mar-0 Jun-0 Sep-0 Dec-0 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-1 Jun-1 Sep-1 Dec-1 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 U.S. Large-Cap Stocks 54% U.S. Mid-Cap Stocks 3% U.S. Small-Cap Stocks 4% Developed Markets 14% Emerging Markets 4% Fixed Income 1% Cash & Equivalents 9% Returns 8 Fund performance as of 09/30/016 Class A Shares (POPTRFA) 3-Month 1-Year 3-Year Annualized 5-Year Annualized 10-Year Annualized 3.58% 10.51% 6.18% 10.47% 4.61% 6 Max. Sales Charge % Class A 1.10% E 6 Class C 1.85% Sales Charges 6 Class A Class C Class C Shares (POPTRFC) 3.37% 9.71% 5.37% 9.63% 3.70% Maximum Sales Charge (Load) imposed on purchases Sales 5.00% None Maximum Deferred Sales Charge None 1.00% Asset Class Returns 5,8 Asset Class Index US Large-Cap Stocks S&P 500 US Mid-Cap Stocks S&P 400 US Small-Cap Stocks Russell Month Return 1-Month Return 3.85% 15.43% 4.14% 15.33% 9.05% 15.47% Best / Worst Contributor for the Quarter Apple 19% Bristol Myers Squibb 7% Microsoft 13% Exxon Mobil 6% Amazon.com 17% General Electric 5% Idexx Labs Mettler Toledo Int'l 1% 15% Carter Hldgs Treehouse Foods 18% 15% Dominos Pizza 16% Mid-Amer Apt Cmntys 11% Sarepta Therapeutics 9% Ampio Pharmaceuticals 78% Tobira Therapeutics 18% CytRx 74% Clayton Williams Energy 199% Tokai Pharmaceuticals 7% Developed Markets Emerging Markets Fixed Income MSCI EAFE 6.43% 6.5% Austria 17% Denmark 6% MSCI Emerging Markets Barclays Aggregate 9.03% 16.78% 0.46% 5.19% Egypt 1% Turkey 5% Corporate 1.41% US Treasury -0.8% Source: Bloomberg, THE BLOOMBERG, Bloomberg L.P., and BLOOMBERG FINANCIAL MARKETS are trademarks, trade names and service marks of Bloomberg L.P., a Delaware limited partnership. THE INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISK, FEES, EXPENSES AND CHARGES CAREFULLY BEFORE INVESTING. THIS INFORMATION IS CONTAINED IN THE FUND PROSPECTUS WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING. A COPY OF THE PROSPECTUS CAN BE OBTAINED FROM YOUR FINANCIAL ADVISOR OR AT THE PERFORMANCE DATA CALCULATION DOES NOT INCLUDE SALES LOAD. IF THE SALES LOAD WERE REFLECTED, IT WOULD REDUCE THE PERFORMANCE QUOTED. AN INVESTMENT IN THE FUND IS NOT INSURED BY THE FDIC, HAS NO BANK GUARANTEE AND MAY LOSE VALUE. PAST PERFORMANCE DOES NOT GUARANTEE SIMILAR FUTURE RESULTS. FUND PERFORMANCE MAY CHANGE OVER TIME, AND CURRENTLY, MAY BE HIGHER OR LOWER THAN STATED. SHARES OF THE FUND MAY ONLY BE PURCHASED BY INDIVIDUALS WHO HAVE THEIR PRINCIPAL RESIDENCE IN PUERTO RICO OR ENTITIES WHOSE PRINCIPAL OFFICE AND PLACE OF BUSINESS ARE LOCATED IN PUERTO RICO. PLEASE REFER TO THE BACK OF THE BROCHURE, SPECIFICALLY TO THE LEGAL NOTES SECTION, FOR IMPORTANT DISCLOSURES REGARDING AN INVESTMENT IN ANY OF THE FUNDS. 6

8 POPULAR INCOME PLUS FUND FUND FACTS Category Open-End Daily NAV 3 Fund Overview 4 of the Fund is to provide Puerto Rico residents with a high level of current income 10 that is consistent with the tax advantages provided by Puerto Rico Investment Companies., providing liquidity to its investors through daily subscriptions 3 and redemptions. into credit default swaps ( CDSs ) in order to obtain exposure to the U.S. corporate debt market % The Fund may issue up to 50% of its total assets in debt. This strategy, also known as leverage, may present 1 Date 07/03/007 Class A Class C Who Should Invest Puerto Rico residents seeking a monthly dividend 10 Puerto Rico residents who want exposure to the main components of the bond market including the corporate bond sector Who Should Not Invest Investors who are not Puerto Rico residents Advantages The Fund provides tax exempt and taxable income (taxable income is taxed at a rate of 15%) Exempt from estate taxes Management Ticker Symbol Po PIPFA Po PIPFC Popular Asset Management % 1.91% Sales Charges 6 Class A Class C Maximum Sales Charge (Load) imposed on purchases 4.00% None None 1.00% 7

9 POPULAR INCOME PLUS FUND QUARTERLY REPORT 07/01/16-09/30/16 Objective and Characteristics 10 T Puerto Rico residents with a high level of current income that is consistent with the tax advantages provided by Puerto Rico Investment Companies. The Fund is nondiversified and open-ended, providing liquidity to its investors through daily subscriptions and redemptions. 3 No less than 95% of the Fund s assets at the time of purchase are rated investment grade. The Fund will enter in credit default swaps ( CDSs ) 11 in order to obtain exposure to the U.S. corporate debt market. The Fund invests in a combination of taxable and tax-exempt instruments. The tax rate applicable on the taxable income portion is 10%. The Fund may issue up to 50% of its total assets in debt. The strategy, also known as leverage, may involve 1 certain additional risks. As of 09/30/016 5 Exposure to U.S. Corporate Credit Sector Exposure to the U.S. corporate credit market is primarily attained by participating in the Markit CDX.NA.IG Index. The index is composed of 15, equally-weighted, investment grade entities domiciled in North America. A new CDS index series is created every six months. 11 U.S. Agencies 1.% U.S. Corporates.0% P.R. MBS (GN S, FN s) 54.5% P.R. Munis - Other 0.7% P.R. Munis - Insured 1.6% As of 09/30/016 the index composition was: Consumer 34% Energy 15% Financial 17% Industrial 19% Technology, Media & Telecommunications 14% Dividend Yield 10 As of 09/30/016 Over $10.00 / Share A Shares C Shares Current (end of Qtr.) 4.05% 3.85% Last 3 mos. 4.38% 4.1% Avg. since inception 6.31% 5.51% Total Return 8 As of 09/30/016 A Shares C Shares Last 3 mos. 0.00% -0.14% Last 1 mos..83%.3% Since inception (Annualized) -0.39% -1.16% Portfolio Characteristics Portfolio Duration Only.94 Portfolio Duration with Leverage 5.56 Portfolio Duration with Leverage.65 and Hedges Average Asset Quality AA Average Life 6.71 Market Value of Credit Default Swaps 0.19% Expense R 10 Class A 1.09% Class C 1.91% NAV A Shares C Shares September 30, 016 U.S. $4.47 U.S. $4.61 Qtr. High / Low U.S. $4.45 / U.S. $4.64 U.S. $4.58 / U.S. $4.77 June 30, 016 U.S. $4.61 U.S. $4.74 July 3, 007 Total Assets U.S. $166,081,594 Net Assets U.S. $86,09,484 Assets Leverage Ratio: 47.4% THE INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISK, FEES, EXPENSES AND CHARGES CAREFULLY BEFORE INVESTING. THIS INFORMATION IS CONTAINED IN THE FUND PROSPECTUS WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING. A COPY OF THE PROSPECTUS CAN BE OBTAINED FROM YOUR FINANCIAL ADVISOR OR AT THE PERFORMANCE DATA CALCULATION DOES NOT INCLUDE SALES LOAD. IF THE SALES LOAD WERE REFLECTED, IT WOULD REDUCE THE PERFORMANCE QUOTED. AN INVESTMENT IN THE FUND IS NOT INSURED BY THE FDIC, HAS NO BANK GUARANTEE AND MAY LOSE VALUE. PAST PERFORMANCE DOES NOT GUARANTEE SIMILAR FUTURE RESULTS. FUND PERFORMANCE MAY CHANGE OVER TIME, AND CURRENTLY, MAY BE HIGHER OR LOWER THAN STATED. SHARES OF THE FUND MAY ONLY BE PURCHASED BY INDIVIDUALS WHO HAVE THEIR PRINCIPAL RESIDENCE IN PUERTO RICO OR ENTITIES WHOSE PRINCIPAL OFFICE AND PLACE OF BUSINESS ARE LOCATED IN PUERTO RICO. PLEASE REFER TO THE BACK OF THE BROCHURE, SPECIFICALLY TO THE LEGAL NOTES SECTION, FOR IMPORTANT DISCLOSURES REGARDING AN INVESTMENT IN ANY OF THE FUNDS. 8

10 14 pen-end Daily NAV 3 15% June 30, 016. D 1.00% 15%

11 POPULAR HIGH GRADE FIXED-INCOME FUND 14 QUARTERLY REPORT 07/01/16-09/30/16 Objective and Characteristics The main objective 4 10 of the Fund is to provide Puerto Rico resident-investors with a high level of current monthly income, consistent with the preservation of 3 capital. T No less AAA or have similar quality. T instruments. T 10% The Fund may issue up to 50% of its total assets in debt. The strategy, also known 1 Except as otherwise noted, the information provided is as of September 30, As of 09/30/016 As of 09/30/016 Dividend Yield 10 U.S. Agencies 8.3% P.R. Munis - Insured 7.9% P.R. MBS (GN s, FN s) 48.5% P.R. Munis - Other 8.9% U.S. Munis 4.% U.S. Corporates.% Over $10.00/Share as of 09/30/016 Growth of a $10,000 Investment 13 $16,000 $15,000 $14,000 $13,000 $1,000 $11,000 $10,000 Total Return 8 As of 09/30/016 Sep-0 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-1 Sep-1 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Current (end of Qtr.) 4.05% Last 3 mos. 4.05% Last 1 mos. 4.05% A since inception 5.45% Last 3 mos..89% Last 1 mos. 9.97% Since inception (Annualized) 3.31% Portfolio Characteristics Portfolio Duration Only 3.3 Portfolio Duration with Leverage 5.61 Portfolio Duration with Leverage and Hedges.35 Average Asset Quality AA Average Life 6.03 Expense R % Max. Sales Charge % NAV September 30, 016 U.S. $6.40 Qtr. High / Low U.S. $6.31 / $6.4 June 30, 016 U.S. $6.3 September 4, 00 Total Assets U.S. $8,747,96 Net Assets U.S. $134,471,78 Assets Leverage R 40.6% THE INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISK, FEES, EXPENSES AND CHARGES CAREFULLY BEFORE INVESTING. THIS INFORMATION IS CONTAINED IN THE FUND PROSPECTUS WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING. A COPY OF THE PROSPECTUS CAN BE OBTAINED FROM YOUR FINANCIAL ADVISOR OR AT THE PERFORMANCE DATA CALCULATION DOES NOT INCLUDE SALES LOAD. IF THE SALES LOAD WERE REFLECTED, IT WOULD REDUCE THE PERFORMANCE QUOTED. AN INVESTMENT IN THE FUND IS NOT INSURED BY THE FDIC, HAS NO BANK GUARANTEE AND MAY LOSE VALUE. PAST PERFORMANCE DOES NOT GUARANTEE SIMILAR FUTURE RESULTS. FUND PERFORMANCE MAY CHANGE OVER TIME, AND CURRENTLY, MAY BE HIGHER OR LOWER THAN STATED. SHARES OF THE FUND MAY ONLY BE PURCHASED BY INDIVIDUALS WHO HAVE THEIR PRINCIPAL RESIDENCE IN PUERTO RICO OR ENTITIES WHOSE PRINCIPAL OFFICE AND PLACE OF BUSINESS ARE LOCATED IN PUERTO RICO. PLEASE REFER TO THE BACK OF THE BROCHURE, SPECIFICALLY TO THE LEGAL NOTES SECTION, FOR IMPORTANT DISCLOSURES REGARDING AN INVESTMENT IN ANY OF THE FUNDS. 10

12 POPULAR FAMILY OF FUNDS LEGAL NOTES 1. Funds entails certain fees, charges and expenses. contained in the f.... An and Popular, Inc. The brokerage products and services are offered by Popular Securities, a registered broker/ dealer and member of FINRA and SIPC. Popular Securities is a subsidiary of Popular, Inc. and an affiliate of Banco Popular de Puerto Rico. Popular, Inc. and Banco Popular de Puerto Rico are not registered broker-dealers No market presently exists for the shares of the Fund and no secondary market is expected to develop. However, the Fund has adopted a policy whereby, shares may be redeemed on any is suitable for long-term investors Certain fees, charges and expenses may apply to an investment in the fund. There is no guarantee that actual expenses will be the same as those included and that various fees payable to the 7. The graph represents the overall NAV movement for all Fund Classes and does not necessarily correspond to the NAV movement of each individual Fund Class during the periods depicted in As of 09/30/016, the NAV for Class A and C shares was U.S. $18.50, and $17.7, respectively The graph represents the overall NAV movement for all Fund Classes and does not necessarily correspond to the NAV movement of each individual Fund Class during the periods depicted in As of 09/30/016, the NAV for Class A and C shares was U.S. $17.34, and $17.19, respectively. 10. any such future dividend will be the same. 11. The Fund intends to enter into CDSs. These are a type of swap contract. Use of these instruments may involve certain costs and risks such as, but not limited to; liquidity risk, interest rate risk, CDSs, please see the Fund Prospectus. 1. special risks. For more details regarding the risks associated with leverage, please see the Fund Prospectus On December 13, 013, the Fund's shareholders approved a change in the Fund's investment objective, which allows for the investment of up to 80% of the Fund's total assets in NonPuerto Rico Assets. On May 1, 014, the Office of the Commissioner of Financial Institutions approved and issued an amended and restated ruling to the Fund in order to implement the change in the Fund's investment policy. Accordingly, the Fund will no longer invest 67% of its assets in certain Puerto Rico securities and 33% of its assets in certain obligations considered Non-Puerto Rico Assets. As a result, shareholders and prospective investors should consider the information set forth in the Prospectus before investing in the Fund, particularly the information regarding the Fund's new investment strategy.

13 POPULAR FAMILY OF FUNDS LEGAL NOTES Disclosures 016 O 1

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