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 811-21719

 

INVESTMENT MANAGERS SERIES TRUST
(Exact name of registrant as specified in charter)

 

235 W. Galena Street

Milwaukee, WI 53212
(Address of principal executive offices) (Zip code)

 

Constance Dye Shannon

UMB Fund Services, Inc.

235 W. Galena Street

Milwaukee, WI 53212
(Name and address of agent for service)

 

(414) 299-2295

Registrant's telephone number, including area code

 

Date of fiscal year end: November 30

 

Date of reporting period: May 31, 2020

 

 

Item 1. Report to Stockholders.

 

The registrant’s semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), is as follows:

 

 

 

RIVERBRIDGE GROWTH FUND
Investor Class (RIVRX) 

Institutional Class (RIVBX)

 

RIVERBRIDGE ECO LEADERS® FUND 

Investor Class (ECOLX) 

Institutional Class (RIVEX)

 

SEMI-ANNUAL REPORT 

MAY 31, 2020

 

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds, if you hold your shares directly with the Funds, or from your financial intermediary, such as a broker-dealer or bank, if you hold your shares through a financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold your shares directly with the Funds, you may elect to receive shareholder reports and other communications from the Funds electronically by contacting the Funds at (888) 447-4470 or, if you hold your shares through a financial intermediary, contacting your financial intermediary.

 

You may elect to receive all future reports in paper free of charge. If you hold your shares directly with the Funds, you can inform the Funds that you wish to continue receiving paper copies of your shareholder reports at (888) 447-4470 or, if you hold your shares through a financial intermediary, contacting your financial intermediary. Your election to receive reports in paper will apply to all of the Investment Managers Series Trust’s Funds you hold directly or through your financial intermediary, as applicable.

 

 

 

RIVERBRIDGE FUNDS 

Each a series of Investment Managers Series Trust

 

Table of Contents

 

Schedule of Investments 1
Statements of Assets and Liabilities 7
Statements of Operations 8
Statements of Changes in Net Assets 9
Financial Highlights 11
Notes to Financial Statements 15
Expense Examples 23

 

This report and the financial statements contained herein are provided for the general information of the shareholders of the Riverbridge Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.

 

www.riverbridge.com

 

 

Riverbridge Growth Fund
SCHEDULE OF INVESTMENTS
As of May 31, 2020 (Unaudited)

 

 

Number
of Shares 		        Value  
        COMMON STOCKS — 98.4%        
        COMMUNICATION SERVICES — 3.4%        
  1,211     Alphabet, Inc. - Class A*   $ 1,735,993  
  1,211     Alphabet, Inc. - Class C*     1,730,422  
  5,353     Netflix, Inc.*     2,246,815  
              5,713,230  
        CONSUMER DISCRETIONARY — 10.5%        
  2,306     Amazon.com, Inc.*     5,632,105  
  20,573     Five Below, Inc.*     2,152,964  
  74,879     Gentex Corp.     1,979,801  
  42,163     Grand Canyon Education, Inc.*     4,114,687  
  48,239     Starbucks Corp.     3,762,160  
              17,641,717  
        HEALTH CARE — 21.5%        
  17,760     Amedisys, Inc.*     3,410,808  
  7,756     Chemed Corp.     3,711,324  
  22,596     Danaher Corp.     3,764,720  
  9,339     IDEXX Laboratories, Inc.*     2,884,630  
  18,717     Neogen Corp.*     1,333,025  
  44,742     Roche Holding A.G. - ADR1     1,939,566  
  27,685     Teladoc Health, Inc.*     4,818,851  
  11,322     UnitedHealth Group, Inc.     3,451,512  
  23,250     Veeva Systems, Inc. - Class A*     5,088,727  
  25,263     West Pharmaceutical Services, Inc.     5,457,818  
              35,860,981  
        INDUSTRIALS — 22.5%        
  25,829     A.O. Smith Corp.     1,226,877  
  9,603     CoStar Group, Inc.*     6,307,250  
  108,328     Fastenal Co.     4,469,613  
  75,016     Healthcare Services Group, Inc.     1,794,383  
  43,277     HEICO Corp.     4,360,590  
  49,148     IHS Markit Ltd.1     3,413,820  
  28,916     Proto Labs, Inc.*     3,653,537  
  90,891     Ritchie Bros Auctioneers, Inc.1     3,932,854  
  90,041     Rollins, Inc.     3,763,714  
  26,650     Verisk Analytics, Inc. - Class A     4,601,922  
              37,524,560  
        INFORMATION TECHNOLOGY — 35.6%        
  33,810     2U, Inc.*     1,233,051  
  31,613     Analog Devices, Inc.     3,570,688  
  13,950     ANSYS, Inc.*     3,947,850  
  42,788     Blackline, Inc.*     3,179,148  
  40,180     Fiserv, Inc.*     4,290,019  

1 

 

Riverbridge Growth Fund

SCHEDULE OF INVESTMENTS - Continued
As of May 31, 2020 (Unaudited)

 

 

Number

of Shares

        Value  
        COMMON STOCKS (Continued)        
      INFORMATION TECHNOLOGY (Continued)        
  34,006     Globant S.A.*,1   $ 4,767,981  
  20,437     Guidewire Software, Inc.*     2,096,427  
  44,605     Microsoft Corp.     8,173,866  
  60,187     National Instruments Corp.     2,330,441  
  7,356     NVIDIA Corp.     2,611,527  
  16,695     Paycom Software, Inc.*     4,962,255  
  69,624     Pluralsight, Inc. - Class A*     1,450,268  
  26,064     salesforce.com, Inc.*     4,555,726  
  7,962     ServiceNow, Inc.*     3,088,699  
  17,018     Tyler Technologies, Inc.*     6,387,026  
  14,888     Visa, Inc. - Class A     2,906,733  
              59,551,705  
      MATERIALS — 4.9%        
  23,084     Ecolab, Inc.     4,907,197  
  10,453     International Flavors & Fragrances, Inc.     1,392,235  
  8,997     Linde PLC1     1,820,453  
              8,119,885  
        TOTAL COMMON STOCKS        
      (Cost $99,873,685)     164,412,078  
        SHORT-TERM INVESTMENTS — 1.3%        
  2,233,826     Fidelity Institutional Treasury Fund, 0.11%2     2,233,826  
        TOTAL SHORT-TERM INVESTMENTS        
      (Cost $2,233,826)     2,233,826  
                 
      TOTAL INVESTMENTS — 99.7%        
      (Cost $102,107,511)     166,645,904  
      Other Assets Less Liabilities — 0.3%     436,191  
      NET ASSETS — 100.0%   $ 167,082,095  

 

ADR American Depository Receipt
PLC Public Limited Company

 

* Non-income producing security.

1 Foreign security denominated in U.S. Dollars.

2 The rate is the annualized seven-day yield at period end.

 

See accompanying Notes to Financial Statements.

2 

 

Riverbridge Growth Fund
SUMMARY OF INVESTMENTS
As of May 31, 2020 (Unaudited)

 

 

Security Type/Sector

Percent of Total

Net Assets

Common Stocks  
Information Technology 35.6%
Industrials 22.5%
Health Care 21.5%
Consumer Discretionary 10.5%
Materials 4.9%
Communication Services 3.4%
Total Common Stocks 98.4%
Short-Term Investments 1.3%
Total Investments 99.7%
Other assets less liabilities 0.3%
Total Net Assets 100.0%

 

See accompanying Notes to Financial Statements.

3 

 

Riverbridge Eco Leaders Fund
SCHEDULE OF INVESTMENTS
As of May 31, 2020 (Unaudited)

 

 

Number

of Shares

      Value
        COMMON STOCKS — 97.1%        
        COMMUNICATION SERVICES — 3.1%        
  125     Alphabet, Inc. - Class A*   $ 179,190  
  316     Netflix, Inc.*     132,635  
              311,825  
        CONSUMER DISCRETIONARY — 10.5%        
  130     Amazon.com, Inc.*     317,508  
  1,041     Five Below, Inc.*     108,941  
  4,581     Gentex Corp.     121,122  
  2,763     Grand Canyon Education, Inc.*     269,641  
  3,142     Starbucks Corp.     245,044  
              1,062,256  
        HEALTH CARE — 21.0%        
  1,063     Amedisys, Inc.*     204,149  
  462     Chemed Corp.     221,072  
  1,351     Danaher Corp.     225,090  
  559     IDEXX Laboratories, Inc.*     172,664  
  1,237     Neogen Corp.*     88,099  
  2,990     Roche Holding A.G. - ADR1     129,617  
  1,642     Teladoc Health, Inc.*     285,807  
  678     UnitedHealth Group, Inc.     206,688  
  1,398     Veeva Systems, Inc. - Class A*     305,980  
  1,334     West Pharmaceutical Services, Inc.     288,197  
              2,127,363  
        INDUSTRIALS — 22.8%        
  1,539     A.O. Smith Corp.     73,103  
  598     CoStar Group, Inc.*     392,767  
  6,201     Fastenal Co.     255,853  
  3,449     Healthcare Services Group, Inc.     82,500  
  2,754     HEICO Corp.     277,493  
  3,330     IHS Markit Ltd.1     231,302  
  2,021     Proto Labs, Inc.*     255,353  
  5,694     Ritchie Bros Auctioneers, Inc.1     246,379  
  5,331     Rollins, Inc.     222,836  
  1,600     Verisk Analytics, Inc. - Class A     276,288  
              2,313,874  
        INFORMATION TECHNOLOGY — 35.0%        
  1,763     2U, Inc.*     64,297  
  1,891     Analog Devices, Inc.     213,588  
  927     ANSYS, Inc.*     262,341  
  2,613     Blackline, Inc.*     194,146  
  2,176     Fiserv, Inc.*     232,331  
  2,029     Globant S.A.*,1     284,486  

4 

 

Riverbridge Eco Leaders Fund

SCHEDULE OF INVESTMENTS - Continued
As of May 31, 2020 (Unaudited)

 

 

Number

of Shares

        Value  
        COMMON STOCKS (Continued)        
        INFORMATION TECHNOLOGY (Continued)        
  1,193     Guidewire Software, Inc.*   $ 122,378  
  2,621     Microsoft Corp.     480,298  
  3,679     National Instruments Corp.     142,451  
  435     NVIDIA Corp.     154,434  
  999     Paycom Software, Inc.*     296,933  
  4,116     Pluralsight, Inc. - Class A*     85,736  
  1,611     salesforce.com, Inc.*     281,587  
  460     ServiceNow, Inc.*     178,448  
  1,019     Tyler Technologies, Inc.*     382,441  
  894     Visa, Inc. - Class A     174,544  
              3,550,439  
        MATERIALS — 4.7%        
  1,381     Ecolab, Inc.     293,573  
  623     International Flavors & Fragrances, Inc.     82,977  
  526     Linde PLC1     106,431  
              482,981  
      TOTAL COMMON STOCKS        
      (Cost $7,529,251)     9,848,738  
      SHORT-TERM INVESTMENTS — 2.2%        
  220,990     Fidelity Institutional Treasury Fund, 0.11%2     220,990  
      TOTAL SHORT-TERM INVESTMENTS        
      (Cost $220,990)     220,990  
                 
      TOTAL INVESTMENTS — 99.3%        
      (Cost $7,750,241)     10,069,728  
      Other Assets Less Liabilities — 0.7%     70,602  
      NET ASSETS — 100.0%   $ 10,140,330  

 

ADR American Depository Receipt
PLC Public Limited Company

 

* Non-income producing security.

1 Foreign security denominated in U.S. Dollars.

2 The rate is the annualized seven-day yield at period end.

 

See accompanying Notes to Financial Statements.

5 

 

Riverbridge Eco Leaders Fund
SUMMARY OF INVESTMENTS
As of May 31, 2020 (Unaudited)

 

 

Security Type/Sector

Percent of Total

Net Assets

Common Stocks  
Information Technology 35.0%
Industrials 22.8%
Health Care 21.0%
Consumer Discretionary 10.5%
Materials 4.7%
Communication Services 3.1%
Total Common Stocks 97.1%
Short-Term Investments 2.2%
Total Investments 99.3%
Other assets less liabilities 0.7%
Total Net Assets 100.0%

 

See accompanying Notes to Financial Statements.

6 

 

Riverbridge Funds

STATEMENTS OF ASSETS AND LIABILITIES

As of May 31, 2020 (Unaudited)

 

 

    Growth Fund     Eco Leaders Fund  
Assets:            
Investments, at value (cost $102,107,511 and 7,750,241, respectively)   $ 166,645,904     $ 10,069,728  
Cash     9,572       530  
Receivables:                
Fund shares sold     482,833       79,845  
Dividends and interest     101,830       5,891  
Due from Advisor     -       11,635  
Prepaid expenses     18,683       14,225  
Total Assets     167,258,822       10,181,854  
                 
Liabilities:                
Payables:                
Fund shares redeemed     26,649       -  
Advisory fees     81,797       -  
Shareholder servicing fees (Note 8)     8,559       31  
Distribution fees (Note 7)     1,480       1,393  
Fund administration fees     28,844       15,404  
Transfer agent fees and expenses     6,396       6,390  
Custody fees     2,937       2,937  
Auditing fees     9,576       9,576  
Trustees' deferred compensation (Note 3)     3,755       3,512  
Chief Compliance Officer fees     1,961       2,020  
Trustees' fees and expenses     870       79  
Legal fees     115       168  
Accrued other expenses     3,788       14  
Total Liabilities     176,727       41,524  
                 
Net Assets   $ 167,082,095     $ 10,140,330  
                 
Components of Net Assets:                
Paid-in capital (par value of $0.01 per share with an unlimited number of shares)   $ 101,045,495     $ 7,729,657  
Total distributable earnings     66,036,600       2,410,673  
Net Assets   $ 167,082,095     $ 10,140,330  
                 
Investor Class:                
Net assets applicable to shares outstanding   $ 8,188,603     $ 7,451,510  
Shares of beneficial interest issued and outstanding     330,996       444,383  
Net asset value, offering and redemption price per share   $ 24.74     $ 16.77  
                 
Institutional Class:                
Net assets applicable to shares outstanding   $ 158,893,492     $ 2,688,820  
Shares of beneficial interest issued and outstanding     6,304,543       158,086  
Net asset value, offering and redemption price per share   $ 25.20     $ 17.01  

 

See accompanying Notes to Financial Statements.

7 

 

Riverbridge Funds

STATEMENTS OF OPERATIONS

For the Six Months Ended May 31, 2020 (Unaudited)

 

 

    Growth Fund     Eco Leaders Fund  
Investment income:                
Dividends (net of foreign withholdings taxes of $12,501 and $703, respectively)   $ 486,353     $ 25,701  
Interest     13,552       801  
Total investment income     499,905       26,502  
                 
Expenses:                
Advisory fees     515,914       32,821  
Shareholder servicing fees (Note 8)     56,265       3,179  
Distribution fees (Note 7)     8,040       6,709  
Fund administration fees     80,126       40,837  
Transfer agent fees and expenses     16,479       12,878  
Custody fees     14,260       8,535  
Registration fees     17,500       16,998  
Legal fees     10,800       3,817  
Auditing fees     9,575       9,576  
Shareholder reporting fees     8,965       1,845  
Trustees' fees and expenses     5,350       4,244  
Chief Compliance Officer fees     4,601       4,574  
Miscellaneous     4,000       2,281  
Insurance fees     1,608       1,395  
                 
Total expenses     753,483       149,689  
Advisory fees waived     (85,199 )     (32,821 )
Other expenses absorbed     —       (75,169 )
Net expenses     668,284       41,699  
Net investment loss     (168,379 )     (15,197 )
                 
Realized and Unrealized Gain:                
Net realized gain on investments     2,221,433       177,061  
Net change in unrealized appreciation/depreciation on investments     15,413,295       938,544  
Net realized and unrealized gain     17,634,728       1,115,605  
                 
Net increase in Net Assets from Operations   $ 17,466,349     $ 1,100,408  

 

See accompanying Notes to Financial Statements.

8 

 

Riverbridge Growth Fund

STATEMENTS OF CHANGES IN NET ASSETS

 

  

   

For the

Six Months Ended

May 31, 2020

(Unaudited)

   

For the

Year Ended

November 30, 2019

 
Increase (Decrease) in Net Assets from:                
Operations:                
Net investment loss   $ (168,379 )   $ (245,096 )
Net realized gain on investments     2,221,433       1,580,807  
Net change in unrealized appreciation/depreciation on investments     15,413,295       15,932,438  
Net increase from payments by affiliates (Note 3)     -       45,082  
Net increase in net assets resulting from operations     17,466,349       17,313,231  
                 
Distributions to Shareholders:                
Distributions:                
Investor Class     (98,549 )     (430,023 )
Institutional Class     (1,698,487 )     (5,899,424 )
Total distributions to shareholders     (1,797,036 )     (6,329,447 )
                 
Capital Transactions:                
Net proceeds from shares sold:                
Investor Class     3,810,346       2,535,738  
Institutional Class     49,834,864       32,744,349  
Reinvestment of distributions:                
Investor Class     94,075       419,438  
Institutional Class     1,607,652       5,537,863  
Cost of shares redeemed:                
Investor Class1      (3,493,003 )     (2,732,456 )
Institutional Class2      (31,427,923 )     (16,501,803 )
Net increase in net assets from capital transactions     20,426,011       22,003,129  
                 
Total increase in net assets     36,095,324       32,986,913  
                 
Net Assets:                
Beginning of period     130,986,771       97,999,858  
End of period   $ 167,082,095     $ 130,986,771  
Capital Share Transactions:                
Shares sold:                
Investor Class     172,377       123,514  
Institutional Class     2,201,258       1,586,619  
Shares reinvested:                
Investor Class     4,266       24,952  
Institutional Class     71,642       324,231  
Shares redeemed:                
Investor Class     (164,520 )     (137,653 )
Institutional Class     (1,461,321 )     (813,726 )
Net increase in capital share transactions     823,702       1,107,937  

 

1  Net of redemption fee proceeds of $823 and $7,470, respectively.
2  Net of redemption fee proceeds of $18,326 and $351, respectively.

 

See accompanying Notes to Financial Statements.

9 

 

Riverbridge Eco Leaders Fund

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   

For the

Six Months Ended

May 31, 2020

(Unaudited)

   

For the

Year Ended

November 30, 2019

 
Increase (Decrease) in Net Assets from:                
Operations:                
Net investment loss   $ (15,197 )   $ (26,623 )
Net realized gain on investments     177,061       212,998  
Net change in unrealized appreciation/depreciation on investments     938,544       848,816  
Net increase in net assets resulting from operations     1,100,408       1,035,191  
                 
Distributions to Shareholders:                
Distributions:                
Investor Class     (167,623 )     (370,001 )
Institutional Class     (67,177 )     (115,620 )
Total distributions to shareholders     (234,800 )     (485,621 )
                 
Capital Transactions:                
Net proceeds from shares sold:                
Investor Class     3,191,566       2,801,129  
Institutional Class     900,907       1,236,390  
Reinvestment of distributions:                
Investor Class     167,092       368,312  
Institutional Class     50,851       108,627  
Cost of shares redeemed:                
Investor Class1      (1,150,573 )     (2,181,983 )
Institutional Class2      (921,304 )     (177,551 )
Net increase in net assets from capital transactions     2,238,539       2,154,924  
                 
Total increase in net assets     3,104,147       2,704,494  
                 
Net Assets:                
Beginning of period     7,036,183       4,331,689  
End of period   $ 10,140,330     $ 7,036,183  
Capital Share Transactions:                
Shares sold:                
Investor Class     208,504       206,992  
Institutional Class     58,701       88,025  
Shares reinvested:                
Investor Class     11,199       32,167  
Institutional Class     3,363       9,380  
Shares redeemed:                
Investor Class     (77,613 )     (158,801 )
Institutional Class     (58,671 )     (12,146 )
Net increase in capital share transactions     145,483       165,617  

  

1  Net of redemption fee proceeds of $2,225 and $1,833, respectively.
2  Net of redemption fee proceeds of $0 and $168, respectively.

 

See accompanying Notes to Financial Statements.

10 

 

Riverbridge Growth Fund

FINANCIAL HIGHLIGHTS

Investor Class

 

Per share operating performance.

For a capital share outstanding throughout each period.

  

   

For the

Six Months Ended

May 31, 2020

    For the Year Ended November 30,  
    (Unaudited)     2019     2018     2017     2016     2015  
Net asset value, beginning of period   $ 22.18     $ 20.55     $ 17.77     $ 14.86     $ 14.63     $ 13.97  
Income from Investment Operations:                                                
Net investment loss1      (0.05 )     (0.09 )     (0.08 )     (0.06 )     (0.04 )     (0.05 )
Net realized and unrealized gain     2.92       3.05       2.88       3.46       0.57       1.02  
Net increase from payments by affiliates (Note 3)     -       0.01       -       -       -       -  
Total from investment operations     2.87       2.97       2.80       3.40       0.53       0.97  
                                                 
Less Distributions:                                                
From net realized gain     (0.31 )     (1.36 )     (0.02 )     (0.49 )     (0.31 )     (0.31 )
Total distributions     (0.31 )     (1.36 )     (0.02 )     (0.49 )     (0.31 )     (0.31 )
                                                 
Redemption Fee Proceeds1      - 2      0.02       - 2      - 2      0.01       - 2 
                                                 
Net asset value, end of period   $ 24.74     $ 22.18     $ 20.55     $ 17.77     $ 14.86     $ 14.63  
                                                 
Total return3      13.13 %4      16.65 %5      15.74 %     23.59 %     3.78 %     7.14 %
                                                 
Ratios and Supplemental Data:                                                
Net assets, end of period (in thousands)   $ 8,189     $ 7,072     $ 6,332     $ 3,910     $ 3,462     $ 4,902  
                                                 
Ratio of expenses to average net assets:                                                
Before fees waived and expenses absorbed     1.33 %6      1.34 %     1.43 %     1.48 %     1.53 %     1.67 %
After fees waived and expenses absorbed     1.21 %6      1.21 %7      1.25 %     1.25 %     1.25 %     1.25 %
Ratio of net investment loss to average net assets:                                                
Before fees waived and expenses absorbed     (0.61 )%6      (0.59 )%     (0.61 )%     (0.60 )%     (0.56 )%     (0.79 )%
After fees waived and expenses absorbed     (0.49 )%6      (0.46 )%     (0.43 )%     (0.37 )%     (0.28 )%     (0.37 )%
                                                 
Portfolio turnover rate     14 %4      15 %     25 %     13 %     21 %     25 %

  

1  Based on average shares outstanding during the period.
2  Amount represents less than $0.01 per share.
3  Total returns would have been lower had expenses not been waived or absorbed by the Advisor. Returns shown include 12b-1 fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
4  Not annualized.
5  Payments by affiliates had impact of 0.05% to the total return.
6  Annualized.
7  Effective December 1, 2018, the annual operating expense limit is changed to 1.21%.

 

See accompanying Notes to Financial Statements.

11 

 

Riverbridge Growth Fund

FINANCIAL HIGHLIGHTS

Institutional Class

 

Per share operating performance.

For a capital share outstanding throughout each period.

 

   

For the

Six Months Ended

May 31, 2020

    For the Year Ended November 30,  
    (Unaudited)     2019     2018     2017     2016     2015  
Net asset value, beginning of period   $ 22.56     $ 20.85     $ 17.98     $ 15.00     $ 14.73     $ 14.04  
Income from Investment Operations:                                                
Net investment loss1      (0.03 )     (0.04 )     (0.03 )     (0.02 )     - 2     (0.02 )
Net realized and unrealized gain     2.98       3.10       2.92       3.49       0.58       1.02  
Net increase from payments by affiliates (Note 3)     -       0.01       -       -       -       -  
Total from investment operations     2.95       3.07       2.89       3.47       0.58       1.00  
                                                 
Less Distributions:                                                
From net realized gain     (0.31 )     (1.36 )     (0.02 )     (0.49 )     (0.31 )     (0.31 )
Total distributions     (0.31 )     (1.36 )     (0.02 )     (0.49 )     (0.31 )     (0.31 )
                                                 
Redemption Fee Proceeds1      - 2      - 2      - 2      - 2      -       - 2 
                                                 
Net asset value, end of period   $ 25.20     $ 22.56     $ 20.85     $ 17.98     $ 15.00     $ 14.73  
                                                 
Total return3      13.27 %4      16.80 %5      16.06 %     23.84 %     4.03 %     7.32 %
                                                 
Ratios and Supplemental Data:                                                
Net assets, end of period (in thousands)   $ 158,893     $ 123,915     $ 91,668     $ 81,107     $ 57,698     $ 47,697  
                                                 
Ratio of expenses to average net assets:                                                
Before fees waived and expenses absorbed     1.08 %6      1.09 %     1.18 %     1.23 %     1.28 %     1.42 %
After fees waived and expenses absorbed     0.96 %6      0.96 %7      1.00 %     1.00 %     1.00 %     1.00 %
Ratio of net investment loss to average net assets:                                                
Before fees waived and expenses absorbed     (0.35 )%6      (0.34 )%     (0.36 )%     (0.35 )%     (0.31 )%     (0.54 )%
After fees waived and expenses absorbed     (0.23 )%6      (0.21 )%     (0.18 )%     (0.12 )%     (0.03 )%     (0.12 )%
                                                 
Portfolio turnover rate     14 %4      15 %     25 %     13 %     21 %     25 %

   

1  Based on average shares outstanding during the period.
2  Amount represents less than $0.01 per share.
3  Total returns would have been lower had expenses not been waived or absorbed by the Advisor. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
4  Not annualized.
5  Payments by affiliates had impact of 0.05% to the total return.
6  Annualized.
7  Effective December 1, 2018, the annual operating expense limit is changed to 0.96%.

 

See accompanying Notes to Financial Statements.

12 

 

Riverbridge Eco Leaders Fund

FINANCIAL HIGHLIGHTS  

Investor Class

 

Per share operating performance.

For a capital share outstanding throughout each period.

 

   

For the

Six Months Ended

May 31, 2020

    For the Year Ended November 30,    

For the Period

December 31,

2014* 

through

November 30,

 
    (Unaudited)     2019     2018     2017     2016     2015  
Net asset value, beginning of period   $ 15.33     $ 14.83     $ 13.02     $ 10.81     $ 10.42     $ 10.00  
Income from Investment Operations:                                                
Net investment loss     (0.04 )     (0.07 )     (0.07 )     (0.08 )     (0.06 )     (0.07 )
Net realized and unrealized gain     2.01       2.28       1.88       2.40       0.64       0.49  
Total from investment operations     1.97       2.21       1.81       2.32       0.58       0.42  
                                                 
Less Distributions:                                                
From net realized gain     (0.54 )     (1.72 )     -       (0.11 )     (0.19 )     -  
Total distributions     (0.54 )     (1.72 )     -       (0.11 )     (0.19 )     -  
                                                 
Redemption Fee Proceeds1      0.01       0.01       - 2      - 2      -       - 2 
                                                 
Net asset value, end of period   $ 16.77     $ 15.33     $ 14.83     $ 13.02     $ 10.81     $ 10.42  
                                                 
Total return3      13.34 %4      18.86 %     13.90 %     21.73 %     5.69 %     4.20 %4 
                                                 
Ratios and Supplemental Data:                                                
Net assets, end of period (in thousands)   $ 7,452     $ 4,634     $ 3,292     $ 619     $ 284     $ 214  
                                                 
Ratio of expenses to average net assets:                                                
Before fees waived and expenses absorbed     4.17 %5      4.73 %     7.90 %     11.24 %     12.84 %     17.82 %5 
After fees waived and expenses absorbed     1.21 %5      1.21 %6      1.20 %7      1.40 %     1.40 %     1.40 %5 
Ratio of net investment loss to average net assets:                                                
Before fees waived and expenses absorbed     (3.44 )%5      (4.04 )%     (7.19 )%     (10.53 )%     (12.04 )%     (17.13 )%5 
After fees waived and expenses absorbed     (0.48 )%5      (0.52 )%     (0.49 )%     (0.69 )%     (0.60 )%     (0.71 )%5 
                                                 
Portfolio turnover rate     20 %4      36 %     67 %     13 %     24 %     12 %4 

 

* Commencement of operations.
1  Based on average shares outstanding during the period.
2  Amount represents less than $0.01 per share.
3  Total returns would have been lower had expenses not been waived or absorbed by the Advisor. Returns shown include 12b-1 fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
4  Not annualized.
5  Annualized.
6  Effective December 1, 2018, the annual operating expense limit is changed to 1.21%.
7  Effective December 1, 2017 through December 1, 2018 the Advisor voluntarily agreed to limit its annual operating expenses to 1.20%.

 

See accompanying Notes to Financial Statements.

13 

 

Riverbridge Eco Leaders Fund

FINANCIAL HIGHLIGHTS

Institutional Class

 

Per share operating performance.

For a capital share outstanding throughout each period.

 

   

For the

Six Months Ended

May 31, 2020

    For the Year Ended November 30,    

For the Period

December 31,

2014*  

through  

November 30,

 
    (Unaudited)     2019     2018     2017     2016     2015  
Net asset value, beginning of period   $ 15.53     $ 14.97     $ 13.12     $ 10.86     $ 10.45     $ 10.00  
Income from Investment Operations:                                                
Net investment loss     (0.02 )     (0.04 )     (0.03 )     (0.05 )     (0.03 )     (0.04 )
Net realized and unrealized gain     2.04       2.32       1.88       2.42       0.63       0.49  
Total from investment operations     2.02       2.28       1.85       2.37       0.60       0.45  
                                                 
Less Distributions:                                                
From net realized gain     (0.54 )     (1.72 )     -       (0.11 )     (0.19 )     -  
Total distributions     (0.54 )     (1.72 )     -       (0.11 )     (0.19 )     -  
                                                 
Redemption Fee Proceeds1      -       - 2      -       -       -       -  
                                                 
Net asset value, end of period   $ 17.01     $ 15.53     $ 14.97     $ 13.12     $ 10.86     $ 10.45  
                                                 
Total return3      13.43 %4      19.11 %     14.10 %     22.09 %     5.87 %     4.50 %4
                                                 
Ratios and Supplemental Data:                                                
Net assets, end of period (in thousands)   $ 2,689     $ 2,402     $ 1,040     $ 2,086     $ 1,599     $ 1,410  
                                                 
Ratio of expenses to average net assets:                                                
Before fees waived and expenses absorbed     3.92 %5      4.48 %     7.65 %     10.99 %     12.59 %     17.57 %5 
After fees waived and expenses absorbed     0.96 %5      0.96 %6      0.95 %7      1.15 %     1.15 %     1.15 %5 
Ratio of net investment loss to average net assets:                                                
Before fees waived and expenses absorbed     (3.19 )%5      (3.79 )%     (6.93 )%     (10.28 )%     (11.79 )%     (16.88 )%5 
After fees waived and expenses absorbed     (0.23 )%5      (0.27 )%     (0.23 )%     (0.44 )%     (0.35 )%     (0.46 )%5 
                                                 
Portfolio turnover rate     20 %4      36 %     67 %     13 %     24 %     12 %4 

  

* Commencement of operations.
1  Based on average shares outstanding during the period.
2  Amount represents less than $0.01 per share.
3  Total returns would have been lower had expenses not been waived or absorbed by the Advisor. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
4  Not annualized.
5  Annualized.
6  Effective December 1, 2018, the annual operating expense limit is changed to 0.96%.
7  Effective December 1, 2017 through December 1, 2018 the Advisor voluntarily agreed to limit its annual operating expenses to 0.95%.

 

See accompanying Notes to Financial Statements.

14 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS

May 31, 2020 (Unaudited)

 

 

Note 1 – Organization

Riverbridge Growth Fund (the ‘‘Growth Fund’’), and Riverbridge Eco Leaders Fund (the “Eco Leaders Fund”) are organized as a diversified series of Investment Managers Series Trust, a Delaware statutory trust (the “Trust”) which is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

The Growth Fund seeks to achieve long-term capital appreciation. The Fund commenced investment operations on December 31, 2012, with two classes of shares, Investor Class and Institutional Class.

 

The Eco Leaders Fund seeks to achieve long-term capital appreciation. The Fund commenced investment operations on December 31, 2014, with two classes of shares, Investor Class and Institutional Class.

 

The shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights as to voting, redemptions, dividends and liquidation, subject to the approval of the Trustees.  Income, expenses (other than expenses attributable to a specific class) and realized and unrealized gains and losses on investments are allocated to each class of shares in proportion to their relative net assets.  Shareholders of a class that bears distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan.

 

Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services—Investment Companies”.

 

Note 2 – Accounting Policies

The following is a summary of the significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

 

(a) Valuation of Investments

Each Fund values equity securities at the last reported sale price on the principal exchange or in the principal over the counter (“OTC”) market in which such securities are traded, as of the close of regular trading on the NYSE on the day the securities are being valued or, if the last-quoted sales price is not readily available, the securities will be valued at the last bid or the mean between the last available bid and ask price. Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Debt securities are valued by utilizing a price supplied by independent pricing service providers. The independent pricing service providers may use various valuation methodologies including matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. These models generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings and general market conditions. If a price is not readily available for a portfolio security, the security will be valued at fair value (the amount which the Fund might reasonably expect to receive for the security upon its current sale) as determined in good faith by the Fund’s advisor, subject to review and approval by the Valuation Committee, pursuant to procedures adopted by the Board of Trustees. The actions of the Valuation Committee are subsequently reviewed by the Board at its next regularly scheduled board meeting. The Valuation Committee meets as needed. The Valuation Committee is comprised of all the Trustees, but action may be taken by any one of the Trustees. 

15 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

(b) Investment Transactions, Investment Income and Expenses

Investment transactions are accounted for on trade date. Realized gains and losses on investments are determined on the identified cost basis. Dividend income is recorded net of applicable withholding taxes on the ex-dividend date and interest income is recorded on an accrual basis. Withholding taxes on foreign dividends, if applicable, are paid (a portion of which may be reclaimable) or provided for in accordance with the applicable country’s tax rules and rates and are disclosed in the Statements of Operations.  Withholding tax reclaims are filed in certain countries to recover a portion of the amounts previously withheld. The Funds record a reclaim receivable based on a number of factors, including a jurisdiction’s legal obligation to pay reclaims as well as payment history and market convention. Discounts on debt securities are accreted or amortized to interest income over the lives of the respective securities using the effective interest method.  Premiums for callable debt securities are amortized to the earliest call date, if the call price was less than the purchase price. If the call price was not at par and the security was not called, the security is amortized to the next call price and date. Income and expenses of the Funds are allocated on a pro rata basis to each class of shares, except for distribution and service fees which are unique to each class of shares. Expenses incurred by the Trust with respect to more than one Fund are allocated in proportion to the net assets of each Fund except where allocation of direct expenses to each Fund or an alternative allocation method can be more appropriately made.

 

(c) Federal Income Taxes

The Funds intend to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of their net investment income and any net realized gains to their shareholders. Therefore, no provision is made for federal income or excise taxes. Due to the timing of dividend distributions and the differences in accounting for income and realized gains and losses for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains and losses are recorded by the Funds.

 

Accounting for Uncertainty in Income Taxes (the “Income Tax Statement”) requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.

 

The Income Tax Statement requires management of the Funds to analyze tax positions taken in the prior three open tax years, if any, and tax positions expected to be taken in the Funds’ current tax year, as defined by the IRS statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the open years ended November 30, 2016-2019, and as of and during the six months ended May 31, 2020, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which they are reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

(d) Distributions to Shareholders

The Funds will make distributions of net investment income and capital gains, if any, at least annually. Distributions to shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.

 

The character of distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense and gain (loss) items for financial statement and tax purposes. Where appropriate, reclassifications between net asset accounts are made for such differences that are permanent in nature.

16 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

(e) Illiquid Securities

Pursuant to Rule 22e-4 under the 1940 Act, the Funds have adopted a Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Funds limit their illiquid investments that are assets to no more than 15% of net assets. An illiquid investment is any security which may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. If the Advisor at any time determines that the value of illiquid securities held by a Fund exceeds 15% of its net asset value, the Advisor will take such steps as it considers appropriate to reduce them as soon as reasonably practicable in accordance with the Funds’ written LRMP.

 

Note 3 – Investment Advisory and Other Agreements

The Trust, on behalf of the Funds, entered into an Investment Advisory Agreement (the “Agreement”) with Riverbridge Partners, LLC (the “Advisor”). Under the terms of the Agreement, the Growth Fund and the Eco Leaders Fund pay a monthly investment advisory fee to the Advisor at the annual rate of 0.75% and 0.90%, respectively, of each Fund’s average daily net assets. The Advisor has contractually agreed to waive its fees and/or pay for operating expenses of each Fund to ensure that the total annual fund operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with Form N-1A), expenses incurred with any merger or reorganization, and extraordinary expenses such as litigation expenses) do not exceed 1.21% and 0.96% of the average daily net assets of each Fund’s Investor Class shares and Institutional Class shares, respectively. This agreement is in effect until March 31, 2021 with respect to Growth Fund and until March 31, 2030 with respect to Eco Leaders Fund. The agreement may be terminated before the applicable date for each Fund by the Board of Trustees.

 

For the six months ended May 31, 2020, the Advisor waived its advisory fees and absorbed other expenses totaling $85,199 and $107,990 for the Growth Fund and Eco Leaders Fund, respectively. The Advisor may recover from the Funds fees and/or expenses previously waived and/or absorbed, if the Funds’ expense ratios, including the recovered expenses, fall below the expense limit at which they were waived. Each Fund’s advisor is permitted to seek reimbursement from the Fund, subject to certain limitations, of fees waived or payments made to the Fund for a period ending three full fiscal years after the date of the waiver or payment. This reimbursement may be requested from the Fund if the reimbursement will not cause the Fund’s annual expense ratio to exceed the lesser of (a) the expense limitation amount in effect at the time such fees were waived or payments made, or (b) the expense limitation amount in effect at the time of the reimbursement. At May 31, 2020, the amount of these potentially recoverable expenses was $565,115 and $745,551 for the Growth Fund and Eco Leaders Fund, respectively. The Advisor may recapture all or a portion of this amount no later than November 30, of the years stated below:

 

    Growth Fund   Eco Leaders Fund
2020   $ 164,870     $ 216,226  
2021     172,781       210,416  
2022     142,265       210,919  
2023     85,199       107,990  
Total   $ 565,115     $ 745,551  

 

UMB Fund Services, Inc. (“UMBFS”), serves as the Funds’ fund accountant, transfer agent and co-administrator; and Mutual Fund Administration, LLC (“MFAC”) serves as the Funds’ other co-administrator. UMB Bank, n.a., an affiliate of UMBFS, serves as the Funds’ custodian. The Funds’ allocated fees incurred for fund accounting, fund administration, transfer agency and custody services for the six months ended May 31, 2020 are reported on the Statements of Operations.

17 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

For the year ended November 30, 2019, UMBFS reimbursed the Growth Fund $45,082 for losses from an accounting error. This amount is reported on the Fund’s Statements of Changes under the caption “Net increase from payments by affiliates.” This reimbursement had an impact of 0.05% to the Fund’s total return.

 

IMST Distributors, LLC serves as the Funds’ distributor (the “Distributor”). The Distributor does not receive compensation from the Funds for its distribution services; the Advisor pays the Distributor a fee for its distribution-related services.

 

Certain trustees and officers of the Trust are employees of UMBFS or MFAC. The Funds do not compensate trustees and officers affiliated with the Funds’ co-administrators.  For the six months ended May 31, 2020, the Funds’ allocated fees incurred to Trustees who are not affiliated with the Funds’ co-administrators are reported on the Statements of Operations.

 

The Funds’ Board of Trustees has adopted a Deferred Compensation Plan (the “Plan”) for the Independent Trustees that enables Trustees to elect to receive payment in cash or the option to select various fund(s) in the Trust in which their deferred accounts shall be deemed to be invested.  If a trustee elects to defer payment, the Plan provides for the creation of a deferred payment account.  The Funds’ liability for these amounts is adjusted for market value changes in the invested fund(s) and remains a liability to the Funds until distributed in accordance with the Plan.  The Trustees Deferred compensation liability under the Plan constitutes a general unsecured obligation of each Fund and is disclosed in the Statements of Assets and Liabilities.  Contributions made under the plan and the change in unrealized appreciation/depreciation and income are included in the Trustees’ fees and expenses in the Statements of Operations.

 

Dziura Compliance Consulting, LLC provides Chief Compliance Officer (“CCO”) services to the Trust. The Funds’ allocated fees incurred for CCO services for the six months ended May 31, 2020, are reported on the Statements of Operations.

 

Note 4 – Federal Income Taxes

At May 31, 2020, gross unrealized appreciation and depreciation of investments owned by the Funds, based on cost for federal income tax purposes were as follows:

 

    Growth Fund   Eco Leaders Fund
Cost of investments   $ 102,510,194     $ 7,796,586  
                 
Gross unrealized appreciation   $ 66,640,669     $ 2,465,873  
Gross unrealized depreciation     (2,504,959 )     (192,731 )
                 
Net unrealized appreciation on investments   $ 64,135,710     $ 2,273,142  

 

The difference between cost amounts for financial statement and federal income tax purposes is due primarily to timing differences in recognizing certain gains and losses in security transactions.

 

18 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

As of November 30, 2019, the components of accumulated earnings/deficit on a tax basis were as follows:

 

    Growth Fund   Eco Leaders Fund
Undistributed ordinary income   $ -     $ -  
Undistributed long-term capital gains     1,840,239       234,795  
Tax accumulated earnings     1,840,239       234,795  
                 
Accumulated capital and other losses     (192,123 )     (21,311 )
Unrealized deferred compensation     (3,244 )     (3,017 )
Net unrealized appreciation on investments     48,722,415       1,334,598  
Total accumulated earnings   $ 50,367,287     $ 1,545,065  

 

As of November 30, 2019, the Funds had qualified late-year ordinary losses, which are deferred until fiscal year 2020 for tax purposes. Net late-year losses incurred after December 31, and within the taxable year are deemed to arise on the first day of the Fund's next taxable year.

 

    Late-Year Ordinary Losses
Growth Fund   $ 192,123  
Eco Leaders Fund     21,311  

 

The tax character of the distributions paid during the fiscal years ended November 30, 2019 and November 30, 2018, were as follows:

 

    Growth Fund   Eco Leaders Fund
Distributions paid from:   2019   2018   2019   2018
    Ordinary Income   $ -     $ -     $ -     $ -  
    Net long-term capital gains     6,329,447       72,272       485,621       -  
Total distributions paid   $ 6,329,447     $ 72,272     $ 485,621     $ -  

 

Note 5 – Redemption Fee

The Funds may impose a redemption fee of 1.00% of the total redemption amount on all shares redeemed within 90 days of purchase. For the six months ended May 31, 2020 and the year ended November 30, 2019, redemption fees were as follows:

 

    Six Months Ended May 31, 2020   Year Ended November 30, 2019
Growth Fund   $ 19,149     $ 7,821  
Eco Leaders Fund     2,225       2,001  

19 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

Note 6 – Investment Transactions

For the six months ended May 31, 2020, for the Growth Fund and the Eco Leaders Fund, purchases and sales of investments, excluding short-term investments, were as follows:

 

    Purchases   Sales
Growth Fund   $ 37,662,285     $ 19,760,340  
Eco Leaders Fund     3,258,641       1,470,691  

 

Note 7 – Distribution Plan 

The Trust, on behalf of each Fund, has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act, which allows each Fund to pay distribution fees for the sale and distribution of its Investor Class shares.  The Plan provides for the payment of distribution fees at the annual rate of up to 0.25% of average daily net assets attributable to the Investor Class shares, payable to IMST Distributors, LLC. The Institutional Class does not pay any distribution fees.

 

For the six months ended May 31, 2020, for the Growth Fund and Eco Leaders Fund, distribution fees incurred by each Fund’s Investor Class shares are disclosed on the Statements of Operations.

 

Note 8 – Shareholder Servicing Plan

The Trust, on behalf of each Fund, has adopted a Shareholder Servicing Plan to pay a fee at an annual rate of up to 0.10% of each Fund’s average daily net assets of shares serviced by shareholder servicing agents who provide administrative and support services to their customers.

 

For the six months ended May 31, 2020, for the Growth Fund and Eco Leaders Fund, shareholder servicing fees incurred are disclosed on the Statements of Operations.

 

Note 9 – Indemnifications

In the normal course of business, each Fund enters into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, each Fund expects the risk of loss to be remote.

 

Note 10 – Fair Value Measurements and Disclosure

Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or a liability, when a transaction is not orderly, and how that information must be incorporated into a fair value measurement.

 

Under Fair Value Measurements and Disclosures, various inputs are used in determining the value of the Funds’ investments. These inputs are summarized into three broad Levels as described below:

 

  • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.
     
  • Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

20 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

  • Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

The inputs used to measure fair value may fall into different Levels of the fair value hierarchy. In such cases, for disclosure purposes, the Level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest Level input that is significant to the fair value measurement in its entirety.

 

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used, as of May 31, 2020, in valuing the Funds’ assets carried at fair value:

 

Growth Fund   Level 1   Level 2**   Level 3**   Total
Investments                
Common Stocks*   $ 164,412,078     $ -     $ -     $ 164,412,078  
Short-Term Investments     2,233,826       -       -       2,233,826  
Total Investments   $ 166,645,904     $ -     $ -     $ 166,645,904  

 

Eco Leaders Fund   Level 1   Level 2**   Level 3**   Total
Investments                
Common Stocks*   $ 9,848,738     $ -     $ -     $ 9,848,738  
Short-Term Investments     220,990       -       -       220,990  
Total Investments   $ 10,069,728     $ -     $ -     $ 10,069,728  

 

* All common stocks held in the Funds are Level 1 securities. For a detailed break-out of common stocks by major industry classification, please refer to the Schedules of Investments.

** The Funds did not hold any Level 2 or 3 securities at period end.

 

Note 11 – Events Subsequent to the Fiscal Periods End

The Funds have adopted financial reporting rules regarding subsequent events which require an entity to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet. Management has evaluated the Funds’ related events and transactions that occurred through the date of issuance of the Funds’ financial statements.

21 

 

Riverbridge Funds

NOTES TO FINANCIAL STATEMENTS - Continued

May 31, 2020 (Unaudited)

 

 

In early 2020, an outbreak of a novel strain of coronavirus (COVID-19) emerged globally. This coronavirus has resulted in closing international borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general public concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries, the financial health of individual companies and the market in general in significant and unforeseen ways. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Funds, including political, social and economic risks. Any such impact could adversely affect the Funds’ performance, the performance of the securities in which the Funds invest and may lead to losses on your investment in the Funds. The ultimate impact of COVID-19 on the financial performance of the Funds’ investments are not reasonably estimable at this time.

 

There were no other events or transactions that occurred during this period that materially impacted the amounts or disclosures in the Funds’ financial statements.

22 

 

Riverbridge Funds

EXPENSE EXAMPLES

For the Six Months Ended May 31, 2020 (Unaudited)

 

 

Expense Examples

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees (Investor Class only), and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from December 1, 2019 to May 31, 2020.

 

Actual Expenses

The information in the rows titled “Actual Performance” of the table below provides actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate row for your share class, under the column titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

The information in the rows titled “Hypothetical (5% annual return before expenses)” of the table below provides hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (load) or contingent deferred sales charges. Therefore, the information in the row titled “Hypothetical (5% annual return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 


Riverbridge Growth Fund 		Beginning Account Value Ending Account Value Expenses Paid During Period
Investor Class 12/1/19 5/31/20 12/1/19 – 5/31/20*
Actual Performance $1,000.00 $1,131.30 $6.44
Hypothetical (5% annual return before expenses) 1,000.00 1,018.95 6.10
       
Institutional Class 12/1/19 5/31/20 12/1/19 – 5/31/20*
Actual Performance $1,000.00 $1,132.70 $5.11
Hypothetical (5% annual return before expenses) 1,000.00 1,020.21 4.84

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.21% and 0.96% Investor Class and Institutional Class, respectively, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the six month period). The expense ratios reflect an expense waiver. Assumes all dividends and distributions were reinvested.

23 

 

Riverbridge Funds

EXPENSE EXAMPLES – Continued

For the Six Months Ended May 31, 2020 (Unaudited)

 

 


Riverbridge Eco Leaders Fund 		Beginning Account Value Ending Account Value Expenses Paid During Period
Investor Class 12/1/19 5/31/20 12/1/19 – 5/31/20*
Actual Performance $1,000.00 $1,133.40 $6.44
Hypothetical (5% annual return before expenses) 1,000.00 1,018.96 6.10
       
Institutional Class 12/1/19 5/31/20 12/1/19 – 5/31/20*
Actual Performance $1,000.00 $1,134.30 $5.11
Hypothetical (5% annual return before expenses) 1,000.00 1,020.21 4.84

 

* Expenses are equal to the Fund’s annualized expense ratio of 1.21% and 0.96% Investor Class and Institutional Class, respectively, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the six month period). The expense ratios reflect an expense waiver. Assumes all dividends and distributions were reinvested.

24 

 

RIVERBRIDGE FUNDS
Each a series of Investment Managers Series Trust

 

Investment Advisor
Riverbridge Partners, LLC
1200 IDS Center

80 South Eighth Street

Minneapolis, Minnesota 55402

 

Custodian
UMB Bank, n.a.
928 Grand Boulevard, 5th Floor
Kansas City, Missouri 64106

 

Fund Co-Administrator
Mutual Fund Administration, LLC
2220 East Route 66, Suite 226
Glendora, California 91740

 

Fund Co-Administrator, Transfer Agent and Fund Accountant
UMB Fund Services, Inc.
235 West Galena Street
Milwaukee, Wisconsin 53212

 

Distributor

IMST Distributors, LLC

Three Canal Plaza, Suite 100

Portland, Maine 04101

www.foreside.com

 

 

FUND INFORMATION

 

 

  TICKER CUSIP
Riverbridge Growth Fund – Investor Class RIVRX 46141P 305
Riverbridge Growth Fund – Institutional Class RIVBX 46141P 404
Riverbridge Eco Leaders® Fund – Investor Class ECOLX 46141P 602
Riverbridge Eco Leaders® Fund – Institutional Class RIVEX 46141P 701

 

Privacy Principles of the Riverbridge Funds for Shareholders

The Funds are committed to maintaining the privacy of their shareholders and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information the Funds collect, how we protect that information and why, in certain cases, we may share information with select other parties.

 

Generally, the Funds do not receive any non-public personal information relating to their shareholders, although certain non-public personal information of their shareholders may become available to the Funds. The Funds do not disclose any non-public personal information about their shareholders or a former shareholder to anyone, except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third party administrator).

 

 

This report is sent to shareholders of the Riverbridge Funds for their information. It is not a Prospectus, circular or representation intended for use in the purchase or sale of shares of the Funds or of any securities mentioned in this report.

 

Proxy Voting Policies and Procedures

A description of the Funds’ proxy voting policies and procedures related to portfolio securities are available without charge, upon request, by calling the Funds at (888) 447-4470 or on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

 

Proxy Voting Record

Information regarding how the Funds voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also available, without charge and upon request by calling (888) 447-4470 or by accessing the Funds’ Form N-PX on the SEC’s website at www.sec.gov.

 

Fund Portfolio Holdings

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the Funds’ Form N-PORT on the SEC’s website at www.sec.gov.

 

Prior to their use of Form N-PORT, the Funds filed their complete schedule of portfolio holdings with the SEC on Form N-Q, which is available online at www.sec.gov.

 

Householding Mailings

The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (888) 447-4470.

  

Riverbridge Funds

P.O. Box 2175

Milwaukee, WI 53201

Toll Free: (888) 447-4470

 

 

Item 2. Code of Ethics.

 

Not applicable for semi-annual reports.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable for semi-annual reports.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable for semi-annual reports.

 

Item 5. Audit Committee of Listed Registrants.

 

(a) Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

 

(b) Not applicable.

 

Item 6. Investments.

 

(a) Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

 

(b) Not Applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable to open-end investment companies.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable to open-end investment companies.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable to open-end investment companies.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

 

 

Item 11. Controls and Procedures.

 

(a) The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

 

(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

Not applicable for open-end investment companies.

 

Item 13. Exhibits.

 

(a) (1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable

 

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

 

(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.

 

(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.

 

(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) Investment Managers Series Trust  
     
By (Signature and Title) /s/ Maureen Quill  
  Maureen Quill, President/Chief Executive Officer  
     
Date 8/07/20  

  

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title) /s/ Maureen Quill  
  Maureen Quill, President/Chief Executive Officer  
     
Date 8/07/20  
     
By (Signature and Title) /s/ Rita Dam  
  Rita Dam, Treasurer/Chief Financial Officer  
     
Date 8/07/20  

 

EX.99.CERT

 

CERTIFICATIONS

 

I, Maureen Quill, certify that:

 

1. I have reviewed this report on Form N-CSR of the Riverbridge Funds, each a series of Investment Managers Series Trust (the “Trust”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: 8/07/20   /s/ Maureen Quill  
      Maureen Quill  
      President/Chief Executive Officer  

 

 

CERTIFICATIONS

  

I, Rita Dam, certify that:

 

1. I have reviewed this report on Form N-CSR of the Riverbridge Funds, each a series of Investment Managers Series Trust (the “Trust”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

  

Date: 8/07/20   /s/ Rita Dam  
      Rita Dam  
      Treasurer/Chief Financial Officer  

 

EX.99.906CERT

 

Certification of CEO and CFO Pursuant to

 

18 U.S.C. Section 1350,

 

as Adopted Pursuant to

 

Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the report on Form N-CSR of the Riverbridge Funds, each a series of Investment Managers Series Trust (the “Trust”), for the six months ended May 31, 2020 (the “Report”), Maureen Quill, as President/Chief Executive Officer of the Trust, and Rita Dam, as Treasurer/Chief Financial Officer of the Trust, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his or her knowledge:

 

  (1) the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

 

  (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date 8/07/20  
     
/s/ Maureen Quill  
Maureen Quill  
President/Chief Executive Officer  
   
/s/ Rita Dam  
Rita Dam  
Treasurer/Chief Financial Officer  

 

This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by Investment Managers Series Trust for purposes of Section 18 of the Exchange Act of 1934.