Form N-CSRS CONESTOGA FUNDS For: Mar 31
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E-mailUNITED 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 | 811-21120 |
| Conestoga Funds |
| (Exact name of registrant as specified in charter) |
| 550 E. Swedesford Road, Suite 120 Wayne, PA | 19087 |
| (Address of principal executive offices) | (Zip code) |
| Conestoga Capital Advisors 550 E. Swedesford Road, Suite 120 Wayne, PA 19087 |
| (Name and address of agent for service) |
| With Copy To: |
| Josh Deringer, Esq. |
| Faegre Drinker Biddle & Reath LLP |
| One Logan Square, Suite 2000 |
| Philadelphia, PA 19103 |
| Registrant's telephone number, including area code: | (800) 320-7790 |
| Date of fiscal year end: | September 30 | |
| Date of reporting period: | March 31, 2026 |
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. | Reports to Stockholders. |
| (a) |
| (b) | Not applicable |
| Item 2. | Code of Ethics. |
Not required
| Item 3. | Audit Committee Financial Expert. |
Not required
| Item 4. | Principal Accountant Fees and Services. |
Not required
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable
| Item 6. | Investments. |
(a) The Registrant(s) schedule(s) of investments is included in the Financial Statements under Item 7 of this form.
(b) Not applicable
| Item 7. | Financial Statements and Financial Highlights for Open-End Management Investment Companies |
(a)
Conestoga Funds
SMALL CAP FUND
SMID CAP FUND
DISCOVERY FUND
M a n a g e d B y
SEMI-ANNUAL
FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
March
31, 2026
(Unaudited)
Table of Contents
|
Schedule of Investments |
1 |
|
Statements of Assets and Liabilities |
10 |
|
Statements of Operations |
11 |
|
Statements of Changes in Net Assets |
12 |
|
Financial Highlights |
15 |
|
Notes to Financial Statements |
21 |
|
Additional Information |
36 |
|
CONESTOGA
SMALL CAP FUND March 31, 2026 (Unaudited) | ||||||||
|
COMMON STOCKS — 100.7% |
Shares |
Value |
||||||
|
Basic Materials — 8.9% |
||||||||
|
Metal Fabricating — 4.6% |
||||||||
|
RBC Bearings, Inc. (a) |
190,810 | $ | 103,632,727 | |||||
|
Specialty Chemicals — 4.3% |
||||||||
|
Balchem Corporation |
564,125 | 95,607,905 | ||||||
|
Consumer Discretionary — 6.8% |
||||||||
|
Education Services — 3.5% |
||||||||
|
Bright Horizons Family Solutions, Inc. (a) |
584,940 | 48,041,122 | ||||||
|
Universal Technical Institute, Inc. (a) |
837,775 | 30,243,678 | ||||||
| 78,284,800 | ||||||||
|
Home Improvement Retailers — 3.3% |
||||||||
|
SiteOne Landscape Supply, Inc. (a) |
547,790 | 72,916,327 | ||||||
|
Consumer Staples — 1.1% |
||||||||
|
Nondurable Household Products — 1.1% |
||||||||
|
WD-40 Company |
124,076 | 25,304,060 | ||||||
|
Health Care — 16.6% |
||||||||
|
Biotechnology — 2.3% |
||||||||
|
Vericel Corporation (a) |
1,555,620 | 50,044,295 | ||||||
|
Medical Equipment — 11.6% |
||||||||
|
Artivion, Inc. (a) |
727,620 | 26,645,444 | ||||||
|
LeMaitre Vascular, Inc. |
952,776 | 104,014,556 | ||||||
|
Merit Medical Systems, Inc. (a) |
1,029,730 | 70,979,289 | ||||||
|
Repligen Corporation (a) |
489,135 | 57,629,886 | ||||||
| 259,269,175 | ||||||||
|
Medical Supplies — 2.7% |
||||||||
|
Stevanato Group S.p.A. (b) |
4,381,616 | 60,247,220 | ||||||
|
Industrials — 38.7% |
||||||||
|
Building Materials: Other — 2.0% |
||||||||
|
Simpson Manufacturing Company, Inc. |
254,255 | 43,635,243 | ||||||
|
Building: Climate Control — 3.0% |
||||||||
|
AAON, Inc. |
621,422 | 51,422,671 | ||||||
|
Legence Corporation - Class A (a) |
281,635 | 15,901,112 | ||||||
| 67,323,783 | ||||||||
1
|
CONESTOGA
SMALL CAP FUND | ||||||||
|
COMMON STOCKS — 100.7% (Continued) |
Shares |
Value |
||||||
|
Industrials — 38.7% (Continued) |
||||||||
|
Commercial Vehicles and Parts — 2.7% |
||||||||
|
Federal Signal Corporation |
550,450 | $ | 59,525,663 | |||||
|
Construction — 3.5% |
||||||||
|
Construction Partners, Inc. - Class A (a) |
695,150 | 77,245,068 | ||||||
|
Defense — 3.7% |
||||||||
|
Karman Holdings, Inc. (a) |
244,025 | 19,534,201 | ||||||
|
Mercury Systems, Inc. (a) |
873,283 | 63,671,064 | ||||||
| 83,205,265 | ||||||||
|
Diversified Industrials — 7.3% |
||||||||
|
CSW Industrials, Inc. |
261,325 | 68,096,068 | ||||||
|
ESCO Technologies, Inc. |
339,875 | 95,630,629 | ||||||
| 163,726,697 | ||||||||
|
Electronic Equipment: Control & Filter — 5.0% |
||||||||
|
Crane NXT Company |
239,140 | 9,706,693 | ||||||
|
Helios Technologies, Inc. |
865,324 | 55,995,116 | ||||||
|
MSA Safety, Inc. |
282,850 | 46,373,257 | ||||||
| 112,075,066 | ||||||||
|
Electronic Equipment: Gauges & Meters — 2.6% |
||||||||
|
Badger Meter, Inc. |
83,700 | 12,751,695 | ||||||
|
Mirion Technologies, Inc. (a) |
1,250,155 | 23,240,381 | ||||||
|
Transcat, Inc. (a) |
313,764 | 23,045,966 | ||||||
| 59,038,042 | ||||||||
|
Electronic Equipment: Other — 2.5% |
||||||||
|
SPX Technologies, Inc. (a) |
281,470 | 56,277,112 | ||||||
|
Engineering & Contracting Services — 2.4% |
||||||||
|
Exponent, Inc. |
823,800 | 53,752,950 | ||||||
|
Machinery: Industrial — 2.0% |
||||||||
|
Enpro, Inc. |
52,810 | 13,236,826 | ||||||
|
Kadant, Inc. |
105,350 | 30,799,073 | ||||||
| 44,035,899 | ||||||||
|
Professional Business Support Services — 2.0% |
||||||||
|
UL Solutions, Inc. - Class A |
514,920 | 44,133,793 | ||||||
|
Real Estate — 3.9% |
||||||||
|
Real Estate Services — 3.9% |
||||||||
|
FirstService Corporation |
634,345 | 88,135,894 | ||||||
2
|
CONESTOGA
SMALL CAP FUND | ||||||||
|
COMMON STOCKS — 100.7% (Continued) |
Shares |
Value |
||||||
|
Technology — 16.1% |
||||||||
|
Computer Services — 1.0% |
||||||||
|
Workiva, Inc. (a) |
381,969 | $ | 22,776,812 | |||||
|
Production Technology Equipment — 5.5% |
||||||||
|
Azenta, Inc. (a) |
1,848,072 | 39,049,761 | ||||||
|
Novanta, Inc. (a) |
709,590 | 83,809,675 | ||||||
| 122,859,436 | ||||||||
|
Software — 9.6% |
||||||||
|
Agilysys, Inc. (a) |
448,031 | 31,872,925 | ||||||
|
BlackLine, Inc. (a) |
1,122,615 | 41,536,755 | ||||||
|
CCC Intelligent Solutions Holdings, Inc. (a) |
2,424,365 | 14,546,190 | ||||||
|
Descartes Systems Group, Inc. (The) (a) |
938,531 | 67,161,279 | ||||||
|
nCino, Inc. (a) |
1,381,450 | 20,694,121 | ||||||
|
Q2 Holdings, Inc. (a) |
787,861 | 37,265,825 | ||||||
| 213,077,095 | ||||||||
|
Telecommunications — 4.1% |
||||||||
|
Telecommunications Equipment — 4.1% |
||||||||
|
Digi International, Inc. (a)(b) |
1,908,774 | 92,002,907 | ||||||
|
Utilities — 4.5% |
||||||||
|
Waste & Disposal Services — 4.5% |
||||||||
|
Casella Waste Systems, Inc. - Class A (a) |
1,262,295 | 100,150,485 | ||||||
|
Total Common Stocks (Cost $1,433,894,655) |
$ | 2,248,283,719 | ||||||
|
|
||||||||
|
MONEY MARKET FUNDS — 0.2% |
|
|
||||||
|
Morgan Stanley Institutional Liquidity Fund - Advisory Class, 3.32% (c) (Cost $4,566,843) |
4,566,843 | $ | 4,566,843 | |||||
|
Total Investments at Value — 100.9% (Cost $1,438,461,498) |
$ | 2,252,850,562 | ||||||
|
Liabilities in Excess of Other Assets — (0.9%) |
(20,865,033 | ) | ||||||
|
Net Assets — 100.0% |
$ | 2,231,985,529 | ||||||
|
(a) |
Non-income producing security. |
|
(b) |
The Fund owned 5% or more of the company’s outstanding voting shares thereby making the company an affiliate of the Fund as that term is defined in the Investment Company Act of 1940 (Note 5). |
|
(c) |
The rate shown is the 7-day effective yield as of March 31, 2026. |
|
Schedule of Investments uses the Russell ICB Industry and Sector classification. | |
|
See accompanying notes to financial statements. | |
3
|
CONESTOGA
SMID CAP FUND | ||||||||
|
COMMON STOCKS — 99.1% |
Shares |
Value |
||||||
|
Basic Materials — 9.1% |
||||||||
|
Metal Fabricating — 5.0% |
||||||||
|
RBC Bearings, Inc. (a) |
45,630 | $ | 24,782,566 | |||||
|
Specialty Chemicals — 4.1% |
||||||||
|
Balchem Corporation |
122,520 | 20,764,689 | ||||||
|
Consumer Discretionary — 12.7% |
||||||||
|
Consumer Services: Miscellaneous — 4.2% |
||||||||
|
Rollins, Inc. |
394,145 | 21,051,284 | ||||||
|
Education Services — 2.3% |
||||||||
|
Bright Horizons Family Solutions, Inc. (a) |
136,935 | 11,246,472 | ||||||
|
Home Improvement Retailers — 2.4% |
||||||||
|
SiteOne Landscape Supply, Inc. (a) |
88,000 | 11,713,680 | ||||||
|
Recreational Products — 2.1% |
||||||||
|
Pool Corporation |
52,000 | 10,521,160 | ||||||
|
Recreational Vehicles & Boats — 1.7% |
||||||||
|
LCI Industries |
70,000 | 8,608,600 | ||||||
|
Financials — 0.6% |
||||||||
|
Financial Data Providers — 0.6% |
||||||||
|
Clearwater Analytics Holdings, Inc. - Class A (a) |
121,170 | 2,865,670 | ||||||
|
Health Care — 11.0% |
||||||||
|
Medical Equipment — 5.5% |
||||||||
|
Merit Medical Systems, Inc. (a) |
195,453 | 13,472,575 | ||||||
|
Repligen Corporation (a) |
115,820 | 13,645,912 | ||||||
| 27,118,487 | ||||||||
|
Medical Supplies — 5.5% |
||||||||
|
Bio-Techne Corporation |
156,960 | 8,202,730 | ||||||
|
Stevanato Group S.p.A. |
604,112 | 8,306,540 | ||||||
|
West Pharmaceutical Services, Inc. |
43,980 | 11,023,147 | ||||||
| 27,532,417 | ||||||||
|
Industrials — 38.9% |
||||||||
|
Aerospace — 2.5% |
||||||||
|
HEICO Corporation - Class A |
58,000 | 12,243,220 | ||||||
4
|
CONESTOGA
SMID CAP FUND | ||||||||
|
COMMON STOCKS — 99.1% (Continued) |
Shares |
Value |
||||||
|
Industrials — 38.9% (Continued) |
||||||||
|
Building Materials: Other — 2.3% |
||||||||
|
Simpson Manufacturing Company, Inc. |
67,255 | $ | 11,542,303 | |||||
|
Building: Climate Control — 4.6% |
||||||||
|
AAON, Inc. |
95,000 | 7,861,250 | ||||||
|
Watsco, Inc. |
41,265 | 15,011,794 | ||||||
| 22,873,044 | ||||||||
|
Construction — 3.7% |
||||||||
|
Construction Partners, Inc. - Class A (a) |
164,215 | 18,247,571 | ||||||
|
Defense — 3.7% |
||||||||
|
Karman Holdings, Inc. (a) |
50,700 | 4,058,535 | ||||||
|
Mercury Systems, Inc. (a) |
199,155 | 14,520,391 | ||||||
| 18,578,926 | ||||||||
|
Diversified Industrials — 3.1% |
||||||||
|
CSW Industrials, Inc. |
58,930 | 15,355,980 | ||||||
|
Electronic Equipment: Control & Filter — 2.4% |
||||||||
|
MSA Safety, Inc. |
72,690 | 11,917,526 | ||||||
|
Electronic Equipment: Other — 3.1% |
||||||||
|
SPX Technologies, Inc. (a) |
76,560 | 15,307,406 | ||||||
|
Engineering & Contracting Services — 2.7% |
||||||||
|
Exponent, Inc. |
205,065 | 13,380,491 | ||||||
|
Machinery: Industrial — 3.8% |
||||||||
|
EVI Industries, Inc. |
269,787 | 5,552,217 | ||||||
|
JBT Marel Corporation |
63,945 | 8,176,647 | ||||||
|
Kadant, Inc. |
18,660 | 5,455,251 | ||||||
| 19,184,115 | ||||||||
|
Machinery: Specialty — 3.0% |
||||||||
|
Graco, Inc. |
177,690 | 15,041,459 | ||||||
|
Professional Business Support Services — 1.4% |
||||||||
|
UL Solutions, Inc. - Class A |
81,940 | 7,023,077 | ||||||
|
Transaction Processing Services — 2.6% |
||||||||
|
Jack Henry & Associates, Inc. |
83,355 | 13,173,424 | ||||||
5
|
CONESTOGA
SMID CAP FUND | ||||||||
|
COMMON STOCKS — 99.1% (Continued) |
Shares |
Value |
||||||
|
Real Estate — 4.0% |
||||||||
|
Real Estate Services — 4.0% |
||||||||
|
FirstService Corporation |
144,385 | $ | 20,060,852 | |||||
|
Technology — 18.2% |
||||||||
|
Computer Services — 1.7% |
||||||||
|
CACI International, Inc. - Class A (a) |
9,385 | 5,104,220 | ||||||
|
Workiva, Inc. (a) |
58,455 | 3,485,671 | ||||||
| 8,589,891 | ||||||||
|
Production Technology Equipment — 3.0% |
||||||||
|
Novanta, Inc. (a) |
128,770 | 15,209,025 | ||||||
|
Software — 13.5% |
||||||||
|
CCC Intelligent Solutions Holdings, Inc. (a) |
531,465 | 3,188,790 | ||||||
|
Descartes Systems Group, Inc. (The) (a) |
220,100 | 15,750,356 | ||||||
|
Guidewire Software, Inc. (a) |
93,000 | 13,909,080 | ||||||
|
nCino, Inc. (a) |
244,810 | 3,667,254 | ||||||
|
Procore Technologies, Inc. (a) |
139,235 | 7,936,395 | ||||||
|
Q2 Holdings, Inc. (a) |
198,250 | 9,377,225 | ||||||
|
Tyler Technologies, Inc. (a) |
38,510 | 13,185,054 | ||||||
| 67,014,154 | ||||||||
|
Utilities — 4.6% |
||||||||
|
Waste & Disposal Services — 4.6% |
||||||||
|
Casella Waste Systems, Inc. - Class A (a) |
285,955 | 22,687,670 | ||||||
|
Total Common Stocks (Cost $420,054,239) |
$ | 493,635,159 | ||||||
|
|
||||||||
|
MONEY MARKET FUNDS — 0.9% |
|
|
||||||
|
Morgan Stanley Institutional Liquidity Fund - Advisory Class, 3.32% (b) (Cost $4,585,217) |
4,585,217 | $ | 4,585,217 | |||||
|
Total Investments at Value — 100.0% (Cost $424,639,456) |
$ | 498,220,376 | ||||||
|
Liabilities in Excess of Other Assets — (0.0%) (c) |
(245,311 | ) | ||||||
|
Net Assets — 100.0% |
$ | 497,975,065 | ||||||
|
(a) |
Non-income producing security. |
|
(b) |
The rate shown is the 7-day effective yield as of March 31, 2026. |
|
(c) |
Percentage rounds to less than 0.1%. |
|
Schedule of Investments uses the Russell ICB Industry and Sector classification. | |
|
See accompanying notes to financial statements. | |
6
|
CONESTOGA
DISCOVERY FUND | ||||||||
|
COMMON STOCKS — 98.0% |
Shares |
Value |
||||||
|
Consumer Discretionary — 6.5% |
||||||||
|
Education Services — 3.9% |
||||||||
|
Universal Technical Institute, Inc. (a) |
5,375 | $ | 194,037 | |||||
|
Specialty Retailers — 2.6% |
||||||||
|
Oddity Tech Ltd. - Class A (a) |
9,410 | 125,906 | ||||||
|
Consumer Staples — 8.5% |
||||||||
|
Food Products — 5.7% |
||||||||
|
Mama’s Creations, Inc. (a) |
18,280 | 280,415 | ||||||
|
Soft Drinks — 2.8% |
||||||||
|
Vita Coco Company, Inc. (The) (a) |
2,920 | 139,897 | ||||||
|
Financials — 5.0% |
||||||||
|
Property & Casualty Insurance — 5.0% |
||||||||
|
Palomar Holdings, Inc. (a) |
2,061 | 246,290 | ||||||
|
Health Care — 26.9% |
||||||||
|
Biotechnology — 11.9% |
||||||||
|
Alpha Teknova, Inc. (a) |
31,806 | 91,919 | ||||||
|
Twist Bioscience Corporation (a) |
5,675 | 269,676 | ||||||
|
Vericel Corporation (a) |
7,004 | 225,319 | ||||||
| 586,914 | ||||||||
|
Health Care Facilities — 2.3% |
||||||||
|
U.S. Physical Therapy, Inc. |
1,534 | 114,989 | ||||||
|
Medical Equipment — 12.7% |
||||||||
|
Artivion, Inc. (a) |
4,300 | 157,466 | ||||||
|
BioLife Solutions, Inc. (a) |
8,909 | 169,984 | ||||||
|
iRadimed Corporation |
2,085 | 200,702 | ||||||
|
OrthoPediatrics Corporation (a) |
6,221 | 98,727 | ||||||
| 626,879 | ||||||||
|
Industrials — 35.3% |
||||||||
|
Construction — 3.2% |
||||||||
|
Construction Partners, Inc. - Class A (a) |
1,423 | 158,124 | ||||||
|
Electrical Components — 4.2% |
||||||||
|
Electrovaya, Inc. (a) |
26,270 | 205,432 | ||||||
7
|
CONESTOGA
DISCOVERY FUND | ||||||||
|
COMMON STOCKS — 98.0% (Continued) |
Shares |
Value |
||||||
|
Industrials — 35.3% (Continued) |
||||||||
|
Electronic Equipment: Control & Filter — 2.7% |
||||||||
|
Energy Recovery, Inc. (a) |
13,345 | $ | 134,384 | |||||
|
Electronic Equipment: Gauges & Meters — 4.4% |
||||||||
|
Transcat, Inc. (a) |
2,995 | 219,983 | ||||||
|
Engineering & Contracting Services — 7.2% |
||||||||
|
Bowman Consulting Group Ltd. (a) |
6,385 | 181,589 | ||||||
|
Willdan Group, Inc. (a) |
2,276 | 174,251 | ||||||
| 355,840 | ||||||||
|
Industrial Suppliers — 6.7% |
||||||||
|
CryoPort, Inc. (a) |
15,949 | 132,058 | ||||||
|
Hillman Solutions Corporation (a) |
23,630 | 196,601 | ||||||
| 328,659 | ||||||||
|
Machinery: Industrial — 3.3% |
||||||||
|
Graham Corporation (a) |
2,070 | 163,364 | ||||||
|
Professional Business Support Services — 3.6% |
||||||||
|
Montrose Environmental Group, Inc. (a) |
8,065 | 176,543 | ||||||
|
Technology — 11.7% |
||||||||
|
Computer Services — 2.8% |
||||||||
|
Climb Global Solutions, Inc. |
6,970 | 138,145 | ||||||
|
Software — 8.9% |
||||||||
|
N-able, Inc. (a) |
25,210 | 117,731 | ||||||
|
Planet Labs PBC - Class A (a) |
1,807 | 50,506 | ||||||
|
Q2 Holdings, Inc. (a) |
2,960 | 140,008 | ||||||
|
TECSYS, Inc. |
6,675 | 131,230 | ||||||
| 439,475 | ||||||||
|
Telecommunications — 4.1% |
||||||||
|
Telecommunications Equipment — 4.1% |
||||||||
|
Digi International, Inc. (a) |
4,170 | 200,994 | ||||||
|
Total Common Stocks (Cost $4,273,467) |
$ | 4,836,270 | ||||||
8
|
CONESTOGA
DISCOVERY FUND | ||||||||
|
MONEY MARKET FUNDS — 1.6% |
Shares |
Value |
||||||
|
Morgan Stanley Institutional Liquidity Fund - Advisory Class, 3.32% (b) (Cost $79,104) |
79,104 | $ | 79,104 | |||||
|
Total Investments at Value — 99.6% (Cost $4,352,571) |
$ | 4,915,374 | ||||||
|
Other Assets in Excess of Liabilities — 0.4% |
19,071 | |||||||
|
Net Assets — 100.0% |
$ | 4,934,445 | ||||||
|
(a) |
Non-income producing security. |
|
(b) |
The rate shown is the 7-day effective yield as of March 31, 2026. |
|
Schedule of Investments uses the Russell ICB Industry and Sector classification. | |
|
See accompanying notes to financial statements. | |
9
|
CONESTOGA
FUNDS March 31, 2026 (Unaudited) | ||||||||||||
|
|
Conestoga
|
Conestoga
|
Conestoga
|
|||||||||
|
ASSETS |
||||||||||||
|
Investments in unaffiliated securities, at cost |
$ | 1,293,643,405 | $ | 424,639,456 | $ | 4,352,571 | ||||||
|
Investments in affiliated securities, at cost |
144,818,093 | — | — | |||||||||
|
Total investments, at cost |
$ | 1,438,461,498 | $ | 424,639,456 | $ | 4,352,571 | ||||||
|
Investments in unaffiliated securities, at value (Note 2) |
$ | 2,100,600,435 | $ | 498,220,376 | $ | 4,915,374 | ||||||
|
Investments in affiliated securities, at value (Notes 2 & 5) |
152,250,127 | — | — | |||||||||
|
Total investments, at value |
2,252,850,562 | 498,220,376 | 4,915,374 | |||||||||
|
Receivable for capital shares sold |
1,890,293 | 98,457 | — | |||||||||
|
Receivable due from Adviser (Note 4) |
— | — | 37,351 | |||||||||
|
Dividends and interest receivable |
216,900 | 77,433 | 1,279 | |||||||||
|
Other assets |
57,573 | 33,425 | 21,073 | |||||||||
|
Total assets |
2,255,015,328 | 498,429,691 | 4,975,077 | |||||||||
|
LIABILITIES |
||||||||||||
|
Payable for capital shares redeemed |
17,764,373 | 88,377 | — | |||||||||
|
Payable for investment securities purchased |
3,441,371 | — | — | |||||||||
|
Payable to Adviser (Note 4) |
1,630,839 | 262,944 | — | |||||||||
|
Accrued distribution and shareholder servicing fees (Note 4) |
52,859 | 3,011 | 14,318 | |||||||||
|
Accrued Trustees’ fees (Note 4) |
64,469 | 64,469 | 1,263 | |||||||||
|
Payable to administrator (Note 4) |
34,266 | 11,272 | 6,608 | |||||||||
|
Accrued legal fees |
8,000 | 8,000 | 8,000 | |||||||||
|
Accrued audit fees |
8,238 | 8,238 | 8,238 | |||||||||
|
Other accrued expenses |
25,384 | 8,315 | 2,205 | |||||||||
|
Total liabilities |
23,029,799 | 454,626 | 40,632 | |||||||||
|
CONTINGENCIES AND COMMITMENTS (NOTES 4 & 8) |
$ | — | $ | — | $ | — | ||||||
|
NET ASSETS |
$ | 2,231,985,529 | $ | 497,975,065 | $ | 4,934,445 | ||||||
|
NET ASSETS CONSIST OF: |
||||||||||||
|
Paid-in capital |
$ | 1,109,277,273 | $ | 427,126,421 | $ | 4,228,444 | ||||||
|
Accumulated earnings |
1,122,708,256 | 70,848,644 | 706,001 | |||||||||
|
NET ASSETS |
$ | 2,231,985,529 | $ | 497,975,065 | $ | 4,934,445 | ||||||
|
NET ASSET VALUE PER SHARE: |
||||||||||||
|
INSTITUTIONAL CLASS |
||||||||||||
|
Net assets applicable to Institutional Class |
$ | 1,906,546,701 | $ | 473,186,840 | $ | 2,811,934 | ||||||
|
Institutional Class shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) |
30,048,242 | 21,720,129 | 327,455 | |||||||||
|
Net asset value, offering price and redemption price per share (Note 2) |
$ | 63.45 | $ | 21.79 | $ | 8.59 | ||||||
|
INVESTORS CLASS |
||||||||||||
|
Net assets applicable to Investors Class |
$ | 325,438,828 | $ | 24,788,225 | $ | 2,122,511 | ||||||
|
Investors Class shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) |
5,273,868 | 1,171,603 | 249,752 | |||||||||
|
Net asset value, offering price and redemption price per share (Note 2) |
$ | 61.71 | $ | 21.16 | $ | 8.50 | ||||||
|
See accompanying notes to financial statements. |
10
|
CONESTOGA
FUNDS For the Six Months Ended March 31, 2026 (Unaudited) | ||||||||||||
|
|
Conestoga
|
Conestoga
|
Conestoga
|
|||||||||
|
INVESTMENT INCOME |
||||||||||||
|
Dividend income from unaffiliated investments |
$ | 5,323,201 | $ | 1,646,400 | $ | 7,038 | ||||||
|
Dividend income from affiliated investments (Note 5) |
— | — | — | |||||||||
|
Foreign withholding taxes on dividends |
(52,479 | ) | (11,828 | ) | (128 | ) | ||||||
|
Total investment income |
5,270,722 | 1,634,572 | 6,910 | |||||||||
|
EXPENSES |
||||||||||||
|
Management fees (Note 4) |
13,565,975 | 2,456,542 | 26,474 | |||||||||
|
Shareholder servicing fees (Note 4) |
||||||||||||
|
Institutional Class |
775,343 | 137,018 | 1,504 | |||||||||
|
Investors Class |
107,536 | 7,488 | 572 | |||||||||
|
Distribution fees - Investors Class (Note 4) |
537,665 | 37,440 | 2,857 | |||||||||
|
Trustees’ fees and expenses (Note 4) |
134,557 | 134,557 | 5,315 | |||||||||
|
Fund accounting fees (Note 4) |
118,277 | 57,280 | 28,377 | |||||||||
|
Legal fees |
67,408 | 67,408 | 67,408 | |||||||||
|
Transfer agent fees (Note 4) |
||||||||||||
|
Institutional Class |
42,646 | 4,923 | 4,076 | |||||||||
|
Investors Class |
57,507 | 4,334 | 4,193 | |||||||||
|
Custody and bank service fees |
80,113 | 22,311 | 2,518 | |||||||||
|
Registration and filing fees |
41,712 | 25,120 | 23,127 | |||||||||
|
Borrowing expenses (Note 10) |
25,430 | 1,678 | 15 | |||||||||
|
Audit and tax services fees |
6,413 | 7,913 | 7,913 | |||||||||
|
Postage and supplies |
6,886 | 9,911 | 5,243 | |||||||||
|
Insurance expense |
16,381 | 3,362 | 30 | |||||||||
|
Administration fees (Note 4) |
5,475 | 5,475 | 5,475 | |||||||||
|
Shareholder reporting expenses |
6,499 | 3,746 | 3,674 | |||||||||
|
Other expenses |
80,092 | 23,230 | 13,463 | |||||||||
|
Total expenses |
15,675,915 | 3,009,736 | 202,234 | |||||||||
|
Fee reductions and expense reimbursements by the Adviser (Note 4) |
(1,680,073 | ) | (515,444 | ) | (166,286 | ) | ||||||
|
Net expenses |
13,995,842 | 2,494,292 | 35,948 | |||||||||
|
NET INVESTMENT LOSS |
(8,725,120 | ) | (859,720 | ) | (29,038 | ) | ||||||
|
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
||||||||||||
|
Net realized gains from unaffiliated investments |
352,074,219 | 1,614,693 | 423,050 | |||||||||
|
Net realized losses from affiliated investments (Note 5) |
(12,109,410 | ) | — | — | ||||||||
|
Net change in unrealized appreciation (depreciation) on unaffiliated investments |
(521,579,429 | ) | (76,864,129 | ) | (877,461 | ) | ||||||
|
Net change in unrealized appreciation (depreciation) on affiliated investments (Note 5) |
(14,423,604 | ) | — | — | ||||||||
|
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS |
(196,038,224 | ) | (75,249,436 | ) | (454,411 | ) | ||||||
|
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | (204,763,344 | ) | $ | (76,109,156 | ) | $ | (483,449 | ) | |||
|
See accompanying notes to financial statements. |
11
|
CONESTOGA
SMALL CAP FUND | ||||||||
|
|
Six
Months |
Year
Ended |
||||||
|
FROM OPERATIONS |
||||||||
|
Net investment loss |
$ | (8,725,120 | ) | $ | (25,351,380 | ) | ||
|
Net realized gains from investments |
339,964,809 | 163,361,511 | ||||||
|
Net change in unrealized appreciation (depreciation) on investments |
(536,003,033 | ) | (447,616,224 | ) | ||||
|
Net change in net assets resulting from operations |
(204,763,344 | ) | (309,606,093 | ) | ||||
|
DISTRIBUTIONS TO SHAREHOLDERS (Note 2) |
||||||||
|
Institutional Class |
(137,178,915 | ) | — | |||||
|
Investors Class |
(24,373,149 | ) | — | |||||
|
Change in net assets from distributions to shareholders |
(161,552,064 | ) | — | |||||
|
CAPITAL SHARE TRANSACTIONS (Note 6) |
||||||||
|
Institutional Class |
||||||||
|
Proceeds from shares sold |
235,659,760 | 593,921,486 | ||||||
|
Reinvestment of distributions to shareholders |
106,116,096 | — | ||||||
|
Payments for shares redeemed |
(1,073,614,259 | ) | (902,011,103 | ) | ||||
|
Net change in Institutional Class net assets from capital share transactions |
(731,838,403 | ) | (308,089,617 | ) | ||||
|
Investors Class |
||||||||
|
Proceeds from shares sold |
24,887,879 | 66,801,087 | ||||||
|
Reinvestment of distributions to shareholders |
21,935,501 | — | ||||||
|
Payments for shares redeemed |
(166,606,925 | ) | (305,256,348 | ) | ||||
|
Net change in Investors Class net assets from capital share transactions |
(119,783,545 | ) | (238,455,261 | ) | ||||
|
TOTAL CHANGE IN NET ASSETS |
(1,217,937,356 | ) | (856,150,971 | ) | ||||
|
|
||||||||
|
NET ASSETS |
||||||||
|
Beginning of period |
3,449,922,885 | 4,306,073,856 | ||||||
|
End of period |
$ | 2,231,985,529 | $ | 3,449,922,885 | ||||
|
See accompanying notes to financial statements. |
12
|
CONESTOGA
SMID CAP FUND | ||||||||
|
|
Six
Months |
Year
Ended |
||||||
|
FROM OPERATIONS |
||||||||
|
Net investment loss |
$ | (859,720 | ) | $ | (2,704,782 | ) | ||
|
Net realized gains from investments |
1,614,693 | 30,119,778 | ||||||
|
Net change in unrealized appreciation (depreciation) on investments |
(76,864,129 | ) | (53,528,389 | ) | ||||
|
Net change in net assets resulting from operations |
(76,109,156 | ) | (26,113,393 | ) | ||||
|
DISTRIBUTIONS TO SHAREHOLDERS (Note 2) |
||||||||
|
Institutional Class |
(11,506,642 | ) | — | |||||
|
Investors Class |
(664,009 | ) | — | |||||
|
Change in net assets from distributions to shareholders |
(12,170,651 | ) | — | |||||
|
CAPITAL SHARE TRANSACTIONS (Note 6) |
||||||||
|
Institutional Class |
||||||||
|
Proceeds from shares sold |
39,158,767 | 65,600,475 | ||||||
|
Reinvestment of distributions to shareholders |
10,039,658 | — | ||||||
|
Payments for shares redeemed |
(83,456,551 | ) | (161,305,673 | ) | ||||
|
Net change in Institutional Class net assets from capital share transactions |
(34,258,126 | ) | (95,705,198 | ) | ||||
|
Investors Class |
||||||||
|
Proceeds from shares sold |
1,147,780 | 2,438,447 | ||||||
|
Reinvestment of distributions to shareholders |
589,684 | — | ||||||
|
Payments for shares redeemed |
(5,684,438 | ) | (10,229,846 | ) | ||||
|
Net change in Investors Class net assets from capital share transactions |
(3,946,974 | ) | (7,791,399 | ) | ||||
|
TOTAL CHANGE IN NET ASSETS |
(126,484,907 | ) | (129,609,990 | ) | ||||
|
NET ASSETS |
||||||||
|
Beginning of period |
624,459,972 | 754,069,962 | ||||||
|
End of period |
$ | 497,975,065 | $ | 624,459,972 | ||||
|
See accompanying notes to financial statements. |
13
|
CONESTOGA
DISCOVERY FUND | ||||||||
|
|
Six
Months |
Year
Ended |
||||||
|
FROM OPERATIONS |
||||||||
|
Net investment loss |
$ | (29,038 | ) | $ | (53,973 | ) | ||
|
Net realized gains from investments |
423,050 | 227,247 | ||||||
|
Net change in unrealized appreciation (depreciation) on investments |
(877,461 | ) | 1,084,694 | |||||
|
Net change in net assets resulting from operations |
(483,449 | ) | 1,257,968 | |||||
|
DISTRIBUTIONS TO SHAREHOLDERS (Note 2) |
||||||||
|
Institutional Class |
(29,018 | ) | — | |||||
|
Investors Class |
(23,167 | ) | — | |||||
|
Change in net assets from distributions to shareholders |
(52,185 | ) | — | |||||
|
CAPITAL SHARE TRANSACTIONS (Note 6) |
||||||||
|
Institutional Class |
||||||||
|
Proceeds from shares sold |
349,343 | 94,622 | ||||||
|
Reinvestment of distributions to shareholders |
28,685 | — | ||||||
|
Payments for shares redeemed |
(239,117 | ) | (34,514 | ) | ||||
|
Net change in Institutional Class net assets from capital share transactions |
138,911 | 60,108 | ||||||
|
Investors Class |
||||||||
|
Proceeds from shares sold |
189,670 | 161,501 | ||||||
|
Reinvestment of distributions to shareholders |
23,167 | — | ||||||
|
Payments for shares redeemed |
(213,646 | ) | (444,035 | ) | ||||
|
Net change in Investors Class net assets from capital share transactions |
(809 | ) | (282,534 | ) | ||||
|
TOTAL CHANGE IN NET ASSETS |
(397,532 | ) | 1,035,542 | |||||
|
NET ASSETS |
||||||||
|
Beginning of period |
5,331,977 | 4,296,435 | ||||||
|
End of period |
$ | 4,934,445 | $ | 5,331,977 | ||||
|
See accompanying notes to financial statements. |
14
|
CONESTOGA
SMALL CAP FUND | ||||||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Year |
Year |
||||||||||||||||||
|
Net asset value at beginning of period |
$ | 72.31 | $ | 78.28 | $ | 66.27 | $ | 59.06 | $ | 87.18 | $ | 63.19 | ||||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||||||
|
Net investment loss (a) |
(0.19 | ) | (0.47 | ) | (0.33 | ) | (0.29 | ) | (0.45 | ) | (0.56 | ) | ||||||||||||
|
Net realized and unrealized gains (losses) on investments |
(5.02 | ) | (5.50 | ) | 12.95 | 9.93 | (23.17 | ) | 24.55 | |||||||||||||||
|
Total from investment operations |
(5.21 | ) | (5.97 | ) | 12.62 | 9.64 | (23.62 | ) | 23.99 | |||||||||||||||
|
Less distributions from net realized gains |
(3.65 | ) | — | (0.61 | ) | (2.43 | ) | (4.50 | ) | — | ||||||||||||||
|
Net asset value at end of period |
$ | 63.45 | $ | 72.31 | $ | 78.28 | $ | 66.27 | $ | 59.06 | $ | 87.18 | ||||||||||||
|
Total return (b) |
(7.56 | %)(c) | (7.63 | %) | 19.19 | % | 16.54 | % | (28.62 | %) | 37.96 | % | ||||||||||||
|
Net assets at end of period (000,000’s) |
$ | 1,907 | $ | 2,954 | $ | 3,527 | $ | 2,796 | $ | 2,359 | $ | 3,386 | ||||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||||||
|
Ratio of total expenses to average net assets |
1.00 | %(d) | 0.99 | % | 0.99 | % | 0.98 | % | 0.98 | % | 0.98 | % | ||||||||||||
|
Ratio of net expenses to average net assets (e) |
0.90 | %(d) | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | ||||||||||||
|
Ratio of net investment loss to average net assets (e) |
(0.55 | %)(d) | (0.61 | %) | (0.47 | %) | (0.44 | %) | (0.62 | %) | (0.69 | %) | ||||||||||||
|
Portfolio turnover rate |
14 | %(c) | 17 | % | 16 | % | 13 | % | 24 | % | 19 | % | ||||||||||||
|
(a) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(b) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(c) |
Not annualized. |
|
(d) |
Annualized. |
|
(e) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
15
|
CONESTOGA
SMALL CAP FUND | ||||||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Year |
Year |
||||||||||||||||||
|
Net asset value at beginning of period |
$ | 70.50 | $ | 76.46 | $ | 64.88 | $ | 57.97 | $ | 85.83 | $ | 62.33 | ||||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||||||
|
Net investment loss (a) |
(0.25 | ) | (0.61 | ) | (0.47 | ) | (0.41 | ) | (0.59 | ) | (0.70 | ) | ||||||||||||
|
Net realized and unrealized gains (losses) on investments |
(4.89 | ) | (5.35 | ) | 12.66 | 9.75 | (22.77 | ) | 24.20 | |||||||||||||||
|
Total from investment operations |
(5.14 | ) | (5.96 | ) | 12.19 | 9.34 | (23.36 | ) | 23.50 | |||||||||||||||
|
Less distributions from net realized gains |
(3.65 | ) | — | (0.61 | ) | (2.43 | ) | (4.50 | ) | — | ||||||||||||||
|
Net asset value at end of period |
$ | 61.71 | $ | 70.50 | $ | 76.46 | $ | 64.88 | $ | 57.97 | $ | 85.83 | ||||||||||||
|
Total return (b) |
(7.66 | %)(c) | (7.80 | %) | 18.94 | % | 16.33 | % | (28.78 | %) | 37.70 | % | ||||||||||||
|
Net assets at end of period (000,000’s) |
$ | 325 | $ | 496 | $ | 779 | $ | 703 | $ | 642 | $ | 968 | ||||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||||||
|
Ratio of total expenses to average net assets |
1.27 | %(d) | 1.26 | % | 1.26 | % | 1.26 | % | 1.26 | % | 1.25 | % | ||||||||||||
|
Ratio of net expenses to average net assets (e) |
1.10 | %(d) | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | ||||||||||||
|
Ratio of net investment loss to average net assets (e) |
(0.75 | %)(d) | (0.82 | %) | (0.67 | %) | (0.64 | %) | (0.82 | %) | (0.89 | %) | ||||||||||||
|
Portfolio turnover rate |
14 | %(c) | 17 | % | 16 | % | 13 | % | 24 | % | 19 | % | ||||||||||||
|
(a) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(b) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(c) |
Not annualized. |
|
(d) |
Annualized. |
|
(e) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
16
|
CONESTOGA
SMID CAP FUND | ||||||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Year |
Year |
||||||||||||||||||
|
Net asset value at beginning of period |
$ | 25.52 | $ | 26.49 | $ | 20.98 | $ | 17.96 | $ | 26.13 | $ | 19.29 | ||||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||||||
|
Net investment loss (a) |
(0.03 | ) | (0.10 | ) | (0.06 | ) | (0.06 | ) | (0.09 | ) | (0.11 | ) | ||||||||||||
|
Net realized and unrealized gains (losses) on investments |
(3.19 | ) | (0.87 | ) | 5.57 | 3.08 | (8.08 | ) | 6.95 | |||||||||||||||
|
Total from investment operations |
(3.22 | ) | (0.97 | ) | 5.51 | 3.02 | (8.17 | ) | 6.84 | |||||||||||||||
|
Less distributions from net realized gains |
(0.51 | ) | — | — | — | — | — | |||||||||||||||||
|
Net asset value at end of period |
$ | 21.79 | $ | 25.52 | $ | 26.49 | $ | 20.98 | $ | 17.96 | $ | 26.13 | ||||||||||||
|
Total return (b) |
(12.82 | %)(c) | (3.66 | %) | 26.26 | % | 16.82 | % | (31.27 | %) | 35.46 | % | ||||||||||||
|
Net assets at end of period (000’s) |
$ | 473,187 | $ | 591,190 | $ | 711,283 | $ | 340,636 | $ | 272,623 | $ | 357,479 | ||||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||||||
|
Ratio of total expenses to average net assets |
1.02 | %(d) | 0.99 | % | 1.02 | % | 1.07 | % | 1.07 | % | 1.10 | % | ||||||||||||
|
Ratio of net expenses to average net assets (e) |
0.85 | %(d) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||||
|
Ratio of net investment loss to average net assets (e) |
(0.28 | %)(d) | (0.38 | %) | (0.27 | %) | (0.29 | %) | (0.41 | %) | (0.47 | %) | ||||||||||||
|
Portfolio turnover rate |
10 | %(c) | 11 | % | 10 | % | 9 | % | 15 | % | 17 | % | ||||||||||||
|
(a) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(b) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(c) |
Not annualized. |
|
(d) |
Annualized. |
|
(e) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
17
|
CONESTOGA
SMID CAP FUND | ||||||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Year |
Year |
||||||||||||||||||
|
Net asset value at beginning of period |
$ | 24.83 | $ | 25.84 | $ | 20.52 | $ | 17.60 | $ | 25.68 | $ | 19.01 | ||||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||||||
|
Net investment loss (a) |
(0.06 | ) | (0.16 | ) | (0.12 | ) | (0.11 | ) | (0.15 | ) | (0.17 | ) | ||||||||||||
|
Net realized and unrealized gains (losses) on investments |
(3.10 | ) | (0.85 | ) | 5.44 | 3.03 | (7.93 | ) | 6.84 | |||||||||||||||
|
Total from investment operations |
(3.16 | ) | (1.01 | ) | 5.32 | 2.92 | (8.08 | ) | 6.67 | |||||||||||||||
|
Less distributions from net realized gains |
(0.51 | ) | — | — | — | — | — | |||||||||||||||||
|
Net asset value at end of period |
$ | 21.16 | $ | 24.83 | $ | 25.84 | $ | 20.52 | $ | 17.60 | $ | 25.68 | ||||||||||||
|
Total return (b) |
(12.93 | %)(c) | (3.91 | %) | 25.93 | % | 16.59 | % | (31.46 | %) | 35.09 | % | ||||||||||||
|
Net assets at end of period (000’s) |
$ | 24,788 | $ | 33,270 | $ | 42,787 | $ | 42,937 | $ | 44,183 | $ | 64,189 | ||||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||||||
|
Ratio of total expenses to average net assets |
1.36 | %(d) | 1.31 | % | 1.34 | % | 1.38 | % | 1.36 | % | 1.36 | % | ||||||||||||
|
Ratio of net expenses to average net assets (e) |
1.10 | %(d) | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | ||||||||||||
|
Ratio of net investment loss to average net assets (e) |
(0.54 | %)(d) | (0.63 | %) | (0.51 | %) | (0.54 | %) | (0.66 | %) | (0.71 | %) | ||||||||||||
|
Portfolio turnover rate |
10 | %(c) | 11 | % | 10 | % | 9 | % | 15 | % | 17 | % | ||||||||||||
|
(a) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(b) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(c) |
Not annualized. |
|
(d) |
Annualized. |
|
(e) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
18
|
CONESTOGA
DISCOVERY FUND | ||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Period
|
|||||||||||||||
|
Net asset value at beginning of period |
$ | 9.54 | $ | 7.33 | $ | 6.35 | $ | 7.07 | $ | 10.00 | ||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||
|
Net investment loss (b) |
(0.05 | ) | (0.09 | ) | (0.06 | ) | (0.06 | ) | (0.06 | ) | ||||||||||
|
Net realized and unrealized gains (losses) on investments |
(0.80 | ) | 2.30 | 1.04 | (0.66 | ) | (2.87 | ) | ||||||||||||
|
Total from investment operations |
(0.85 | ) | 2.21 | 0.98 | (0.72 | ) | (2.93 | ) | ||||||||||||
|
Less distributions from net realized gains |
(0.10 | ) | — | — | — | — | ||||||||||||||
|
Net asset value at end of period |
$ | 8.59 | $ | 9.54 | $ | 7.33 | $ | 6.35 | $ | 7.07 | ||||||||||
|
Total return (c) |
(9.01 | %)(d) | 30.15 | % | 15.43 | % | (10.18 | %) | (29.30 | %)(d) | ||||||||||
|
Net assets at end of period (000’s) |
$ | 2,812 | $ | 2,970 | $ | 2,222 | $ | 1,864 | $ | 2,075 | ||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||
|
Ratio of total expenses to average net assets |
7.43 | %(e) | 7.08 | % | 8.13 | % | 11.38 | % | 9.08 | %(e) | ||||||||||
|
Ratio of net expenses to average net assets (f) |
1.25 | %(e) | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | %(e) | ||||||||||
|
Ratio of net investment loss to average net assets (f) |
(0.99 | %)(e) | (1.05 | %) | (0.87 | %) | (0.88 | %) | (0.90 | %)(e) | ||||||||||
|
Portfolio turnover rate |
31 | %(d) | 31 | % | 32 | % | 23 | % | 27 | %(d) | ||||||||||
|
(a) |
Represents the period from the commencement of operations as a series of Conestoga Funds (December 20, 2021) through September 30, 2022. |
|
(b) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(c) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(d) |
Not annualized. |
|
(e) |
Annualized. |
|
(f) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
19
|
CONESTOGA
DISCOVERY FUND | ||||||||||||||||||||
|
Per Share Data for a Share Outstanding Throughout Each Period: | ||||||||||||||||||||
|
|
Six
Months |
Year |
Year |
Year |
Period
|
|||||||||||||||
|
Net asset value at beginning of period |
$ | 9.46 | $ | 7.28 | $ | 6.32 | $ | 7.05 | $ | 10.00 | ||||||||||
|
Income (loss) from investment operations: |
||||||||||||||||||||
|
Net investment loss (b) |
(0.06 | ) | (0.11 | ) | (0.08 | ) | (0.08 | ) | (0.07 | ) | ||||||||||
|
Net realized and unrealized gains (losses) on investments |
(0.80 | ) | 2.29 | 1.04 | (0.65 | ) | (2.88 | ) | ||||||||||||
|
Total from investment operations |
(0.86 | ) | 2.18 | 0.96 | (0.73 | ) | (2.95 | ) | ||||||||||||
|
Less distributions from net realized gains |
(0.10 | ) | — | — | — | — | ||||||||||||||
|
Net asset value at end of period |
$ | 8.50 | $ | 9.46 | $ | 7.28 | $ | 6.32 | $ | 7.05 | ||||||||||
|
Total return (c) |
(9.19 | %)(d) | 29.95 | % | 15.19 | % | (10.35 | %) | (29.50 | %)(d) | ||||||||||
|
Net assets at end of period (000’s) |
$ | 2,123 | $ | 2,362 | $ | 2,075 | $ | 140 | $ | 184 | ||||||||||
|
Ratios/supplementary data: |
||||||||||||||||||||
|
Ratio of total expenses to average net assets |
7.92 | %(e) | 7.72 | % | 7.76 | % | 23.00 | % | 13.66 | %(e) | ||||||||||
|
Ratio of net expenses to average net assets (f) |
1.50 | %(e) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | %(e) | ||||||||||
|
Ratio of net investment loss to average net assets (f) |
(1.24 | %)(e) | (1.30 | %) | (1.15 | %) | (1.13 | %) | (1.14 | %)(e) | ||||||||||
|
Portfolio turnover rate |
31 | %(d) | 31 | % | 32 | % | 23 | % | 27 | %(d) | ||||||||||
|
(a) |
Represents the period from the commencement of operations as a series of Conestoga Funds (December 20, 2021) through September 30, 2022. |
|
(b) |
Per share net investment loss has been determined on the basis of average number of shares outstanding during the period. |
|
(c) |
Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Adviser had not reduced management fees and/or reimbursed expenses (Note 4). |
|
(d) |
Not annualized. |
|
(e) |
Annualized. |
|
(f) |
Ratio was determined after management fee reductions and/or expense reimbursements (Note 4). |
|
See accompanying notes to financial statements. | |
20
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 2026 (Unaudited)
1. Organization
Conestoga Funds (the “Trust”) was organized as a Delaware statutory trust on February 5, 2002. The Trust consists of three series, the Conestoga Small Cap Fund (the “Small Cap Fund”), the Conestoga SMid Cap Fund (the “SMid Cap Fund”), and the Conestoga Discovery Fund (the “Discovery Fund”) (individually, a “Fund” and collectively, the “Funds”). The Trust is registered as an open-end diversified management investment company of the series type under the Investment Company Act of 1940, as amended (the “1940 Act”). Each Fund’s investment objective is to achieve long-term growth of capital. Each Fund currently offers two classes of shares, Institutional Class and Investors Class. The Discovery Fund commenced operations on December 20, 2021.
Each Fund’s two classes of shares represent interests in the same portfolio of investments, and have the same rights, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes, with the share classes differing primarily in the expenses to which they are subject and investment minimums. Institutional Class shares are sold without any sales loads or distribution fees but are subject to a shareholder servicing fee of up to 0.10% of the average daily net assets allocable to Institutional Class shares and require a $250,000 initial investment. Investors Class shares are sold without any sales loads but are subject to a distribution fee of up to 0.25% and a shareholder servicing fee of up to 0.25% of the average daily net assets allocable to Investors Class shares and require a $2,500 initial investment. The Board of Trustees of the Trust (the “Board” and the members thereof, “Trustees”) has determined to limit the shareholder servicing fees paid by Investors Class shares of each Fund to 0.05% of the average daily net assets allocable to Investors Class shares until at least September 30, 2026.
2. Significant Accounting Policies
The following is a summary of the Funds’ significant accounting policies. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The Funds follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, “Financial Services – Investment Companies.”
Segment reporting – The management team of Conestoga Capital Advisors, LLC (the “Adviser”), compromised of the Managing Partners as well as the Funds’ Treasurer, acts as each Fund’s chief operating decision maker (“CODM”). The CODM has determined that each Fund has a single operating segment as the CODM monitors the operating results of each Fund as a whole and each Fund’s long-term strategic asset allocation is pre-determined in accordance with the terms of its prospectus, based on a defined investment strategy which is executed by the Adviser. The CODM allocates resources and assesses
21
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
performance based on the operating results of each Fund, which is consistent with the results presented in each Fund’s Schedule of Investments, Statements of Changes in Net Assets and Financial Highlights.
Accounting Pronouncement – In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which amends quantitative and qualitative income tax disclosure requirements in order to increase disclosure consistency, bifurcate income tax information by jurisdiction and remove information that is no longer beneficial. Fund Management concluded that there is no material impact on the Funds’ financial statements.
Securities valuation – Each Fund values its portfolio securities at market value as of the close of regular trading on the New York Stock Exchange, Inc. (the “NYSE”) (normally 4:00 p.m. Eastern Time) on each business day the NYSE is open for business. The Funds value their listed securities on the basis of the security’s last sale price on the security’s primary exchange, if available, otherwise at the exchange’s most recently quoted bid price. NASDAQ-listed securities are valued at the NASDAQ Official Closing Price. Investments representing shares of other open-end investment companies, including money market funds, are valued at their net asset value (“NAV”) as reported by such companies. When using a quoted price and when the market is considered active, the security will be classified as Level 1 within the fair value hierarchy (see below). In the event that market quotations are not readily available or are considered unreliable due to market or other events, the Funds value their securities and other assets at fair value, as determined in good faith by the Adviser as the Funds’ valuation designee (in such capacity, the “Valuation Designee”), in accordance with procedures established by and under the general supervision of the Board pursuant to Rule 2a-5 under the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of Section 2(a)(41) of the 1940 Act, which requires a fund to fair value a security when market quotations are not readily available. The Funds adopted Pricing and Valuation Guidelines conforming to Rule 2a-5, effective September 8, 2022, and designated the Adviser as Valuation Designee for each of the Funds. Under these procedures, securities held by the Funds may be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used. Unavailable or unreliable market quotes may be due to the following factors: a substantial bid-ask spread; infrequent sales resulting in stale prices; insufficient trading volume; small trade sizes; a temporary lapse in any reliable pricing source; and actions of the securities or futures markets, such as the suspension or limitation of trading. As a result, the prices of securities used to calculate each Fund’s NAV may differ from quoted or published prices for the same securities.
GAAP establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements.
22
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:
|
● |
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities |
|
● |
Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the assets 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 risks, yield curves, default rates and similar data |
|
● |
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing a Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and based on the best information available |
The inputs or methods used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. 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.
The following is a summary of the Funds’ investments based on the inputs used to value the investments as of March 31, 2026:
|
Conestoga Small Cap Fund |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
|
Common Stocks |
$ | 2,248,283,719 | $ | — | $ | — | $ | 2,248,283,719 | ||||||||
|
Money Market Funds |
4,566,843 | — | — | 4,566,843 | ||||||||||||
|
Total |
$ | 2,252,850,562 | $ | — | $ | — | $ | 2,252,850,562 | ||||||||
|
Conestoga SMid Cap Fund |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
|
Common Stocks |
$ | 493,635,159 | $ | — | $ | — | $ | 493,635,159 | ||||||||
|
Money Market Funds |
4,585,217 | — | — | 4,585,217 | ||||||||||||
|
Total |
$ | 498,220,376 | $ | — | $ | — | $ | 498,220,376 | ||||||||
|
Conestoga Discovery Fund |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
|
Common Stocks |
$ | 4,836,270 | $ | — | $ | — | $ | 4,836,270 | ||||||||
|
Money Market Funds |
79,104 | — | — | 79,104 | ||||||||||||
|
Total |
$ | 4,915,374 | $ | — | $ | — | $ | 4,915,374 | ||||||||
23
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
Refer to each Fund’s Schedule of Investments for a listing of the common stocks by industry and sector type. The Funds did not hold any derivative instruments or any assets or liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of or during the six months ended March 31, 2026.
Share valuation – The NAV per share of each class of each Fund is calculated daily by dividing the total value of the assets attributable to that class, less liabilities attributable to that class, by the number of shares outstanding of that class. The offering price and redemption price per share of each class of each Fund is equal to the NAV per share of such class.
Cash – Each Fund’s cash may be held in a bank account with balances which may exceed the Federal Deposit Insurance Corporation limit of $250,000. As of March 31, 2026, none of the Funds had a cash balance held in a deposit sweep account.
Investment income – Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the security received. Withholding taxes on foreign dividends have been recorded in accordance with the Funds’ understanding of the applicable country’s rules and tax rates.
Investment transactions – Investment transactions are accounted for on the trade date. Realized gains and losses on investments sold are determined on a specific identification basis.
Common expenses – Common expenses of the Trust are allocated between the Funds based on the relative net assets of each Fund or the nature of the services performed and the relative applicability to each Fund.
Distributions to shareholders – Each Fund distributes to its shareholders any net investment income dividends and net realized capital gains distributions at least once each year. The amount of such dividends and distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. Dividends and distributions to shareholders are recorded on the ex-dividend date. The tax character of distributions paid to shareholders during the six months ended March 31, 2026 and year-ended September 30, 2025 were as follows:
|
Conestoga Small Cap Fund |
Ordinary |
Long-Term
|
Total |
|||||||||
|
March 31, 2026 |
$ | — | $ | 161,552,064 | $ | 161,552,064 | ||||||
|
September 30, 2025 |
$ | — | $ | — | $ | — | ||||||
24
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
|
Conestoga SMid Cap Fund |
Ordinary |
Long-Term
|
Total |
|||||||||
|
March 31, 2026 |
$ | — | $ | 12,170,651 | $ | 12,170,651 | ||||||
|
September 30, 2025 |
$ | — | $ | — | $ | — | ||||||
|
Conestoga Discovery Fund |
Ordinary |
Long-Term
|
Total |
|||||||||
|
March 31, 2026 |
$ | — | $ | 52,185 | $ | 52,185 | ||||||
|
September 30, 2025 |
$ | — | $ | — | $ | — | ||||||
Allocation between classes – Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation are allocated daily to each class of a Fund based upon its proportionate share of total net assets of that Fund. Class-specific expenses are charged directly to the class incurring the expense. Common expenses that are not attributable to a specific class are allocated daily to each class of shares of a Fund based upon its proportionate share of total net assets.
Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of change in net assets from operations during the reporting period. Actual results could differ from those estimates.
Federal income tax – Each Fund has qualified and intends to continue to qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”). Qualification generally will relieve each Fund of liability for federal income taxes to the extent each Fund distributes substantially all of its taxable net investment income and net realized capital gains are distributed in accordance with the Code.
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also each Fund’s intention to declare as dividends in each calendar year at least 98% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts from prior years.
25
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
The following information is computed on a tax basis for each item as of March 31, 2026:
|
|
Small Cap Fund |
SMid Cap Fund |
Discovery Fund |
|||||||||
|
Tax cost of investments |
$ | 1,456,002,509 | $ | 425,969,903 | $ | 4,380,023 | ||||||
|
Gross unrealized appreciation |
$ | 960,680,652 | $ | 124,567,292 | $ | 1,221,420 | ||||||
|
Gross unrealized depreciation |
(163,832,599 | ) | (52,316,819 | ) | (686,069 | ) | ||||||
|
Net unrealized appreciation |
796,848,053 | 72,250,473 | 535,351 | |||||||||
|
Accumulated ordinary loss |
(27,124,407 | ) | (2,831,790 | ) | (69,906 | ) | ||||||
|
Other gains |
352,984,610 | 1,429,961 | 380,427 | |||||||||
|
Capital loss carryforwards |
— | — | (139,871 | ) | ||||||||
|
Accumulated earnings |
$ | 1,122,708,256 | $ | 70,848,644 | $ | 706,001 | ||||||
The difference between the federal income tax cost of investments and the financial statement cost of portfolio investments for the Funds are due to certain timing differences in the recognition of capital gains or losses under income tax regulations and GAAP. These “book/tax” differences are temporary in nature and are primarily due to the tax deferral of losses on wash sales.
For the year ended September 30, 2025, the Funds had the following capital loss carryforwards (“CLCFs”) for federal income tax purposes:
|
|
Small Cap Fund |
SMid Cap Fund |
Discovery Fund |
|||||||||
|
Short-term capital loss carryforwards |
$ | — | $ | — | $ | — | ||||||
|
Long-term capital loss carryforwards |
— | — | 139,871 | |||||||||
|
Total |
$ | — | $ | — | $ | 139,871 | ||||||
These CLCFs, which do not expire, are available to offset net realized capital gains in the current and future years, thereby reducing future taxable gain distributions.
The Funds recognize the tax benefits or expenses of uncertain tax positions only when the position is “more likely than not” of being sustained assuming examination by tax authorities. Management has reviewed each Fund’s tax positions for the current and all open tax years (generally, three years) and has concluded that no provision for unrecognized tax benefits or expenses is required in these financial statements. The Funds identify their major tax jurisdiction as U.S. Federal.
The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expenses on the Statements of Operations. During the six months ended March 31, 2026, the Funds did not incur any interest and penalties.
26
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Investment Transactions
During the six months ended March 31, 2026, the cost of purchases and proceeds from sales of investment securities, other than short-term investments, were as follows:
|
|
Small Cap Fund |
SMid Cap Fund |
Discovery Fund |
|||||||||
|
Purchases of investment securities |
$ | 399,218,198 | $ | 55,997,041 | $ | 1,782,625 | ||||||
|
Proceeds from sales of investment securities |
$ | 1,251,730,499 | $ | 93,106,156 | $ | 1,608,708 | ||||||
4. Transactions with Related Parties
INVESTMENT ADVISORY AGREEMENT
The Small Cap Fund has entered into an Investment Advisory Agreement with the Adviser to provide supervision and assistance in overall management services to the Small Cap Fund. For these services, the Small Cap Fund pays the Adviser a management fee, calculated daily and paid monthly, equal to an annual rate of 0.90% of its average daily net assets. The Adviser has contractually agreed to limit the Small Cap Fund’s net annual operating expenses (excluding taxes, extraordinary expenses, reorganization expenses, brokerage commissions, interest, other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of such Fund’s business) to 1.10% (for the Investors Class) and 0.90% (for the Institutional Class) of average daily net assets until at least January 31, 2027. During the six months ended March 31, 2026, the Adviser reduced its management fees of $13,565,975 from the Small Cap Fund by $551,051 and reimbursed other operating expenses of $1,129,022 under this arrangement. In addition, if at any point during the 24 months following the date that the Adviser reduced its management fees and/or made expense reimbursements, it becomes unnecessary for the Adviser to reduce its management fees or make expense reimbursements, the Adviser may recapture any of its prior management fee reductions or expense reimbursements to the extent such recapture does not cause the Fund’s total annual operating expenses to exceed the applicable expense limitation that was in effect at the time of the management fee reduction or expense reimbursement. As of March 31, 2026, the Adviser may seek recovery of management fee reductions and expense reimbursements no later than the dates as stated below:
|
|
September
30, |
September
30, |
March
31, |
Total |
||||||||||||
|
Small Cap Fund |
$ | 2,081,996 | $ | 3,938,837 | $ | 1,680,073 | $ | 7,700,906 | ||||||||
During the six months ended March 31, 2026, the Adviser did not recover any previous management fee reductions or expense reimbursements from the Small Cap Fund.
27
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
The SMid Cap Fund has entered into an Investment Advisory Agreement with the Adviser to provide supervision and assistance in overall management services to the SMid Cap Fund. For these services, the SMid Cap Fund pays the Adviser a management fee, calculated daily and paid monthly, equal to an annual rate of 0.85% of its average daily net assets. The Adviser has contractually agreed to limit the SMid Cap Fund’s net annual operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of such Fund’s business) to 1.10% (for the Investors Class) and 0.85% (for the Institutional Class) of average daily net assets until at least January 31, 2027. During the six months ended March 31, 2026, the Adviser reduced its management fees of $2,456,542 from the SMid Cap Fund by $340,090 and reimbursed other operating expenses of $175,354 under this arrangement. In addition, if at any point during the 24 months following the date that the Adviser reduced its management fees and/or made expense reimbursements, it becomes unnecessary for the Adviser to reduce its management fees or make expense reimbursements, the Adviser may recapture any of its prior management fee reductions or expense reimbursements to the extent such recapture does not cause the Fund’s total annual operating expenses to exceed the current expense limitation or the applicable expense limitation that was in effect at the time of the management fee reduction or expense reimbursement. As of March 31, 2026, the Adviser may seek recovery of management fee reductions and expense reimbursements no later than the dates as stated below:
|
|
September
30, |
September
30, |
March
31, |
Total |
||||||||||||
|
SMid Cap Fund |
$ | 461,767 | $ | 1,014,052 | $ | 515,444 | $ | 1,991,263 | ||||||||
During the six months ended March 31, 2026, the Adviser did not recover any previous management fee reductions or expense reimbursements from the SMid Cap Fund.
The Discovery Fund has entered into an Investment Advisory Agreement with the Adviser to provide supervision and assistance in overall management services to the Discovery Fund. For these services, the Discovery Fund pays the Adviser a management fee, calculated daily and paid monthly, equal to an annual rate of 1.00% of its average daily net assets. The Adviser has contractually agreed to limit the Discovery Fund’s net annual operating expenses (excluding interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of such Fund’s business) to 1.50% (for the Investors Class) and 1.25% (for the Institutional Class) of average daily net assets until at least January 31, 2027. During the six months ended March 31, 2026, the Adviser did not collect any of its management fees of $26,474 from the Discovery Fund and reimbursed other operating expenses of $139,812 under this arrangement. In addition, if at any point during the 24 months following the date that the Adviser reduced its management fees
28
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
and/or made expense reimbursements, it becomes unnecessary for the Adviser to reduce its management fees or make expense reimbursements, the Adviser may recapture any of its prior management fee reductions or expense reimbursements to the extent such recapture does not cause the Fund’s total annual operating expenses to exceed the current expense limitation or the applicable expense limitation that was in effect at the time of the management fee reduction or expense reimbursement. As of March 31, 2026, the Adviser may seek recovery of management fee reductions and expense reimbursements no later than the date as stated below:
|
|
September
30, |
September
30, |
March
31, |
Total |
||||||||||||
|
Discovery Fund |
$ | 110,057 | $ | 277,218 | $ | 166,286 | $ | 553,561 | ||||||||
During the six months ended March 31, 2026, the Adviser did not recover any previous management fee reductions or expense reimbursements from the Discovery Fund.
DISTRIBUTION AND SHAREHOLDER SERVICING PLANS
The Trust, on behalf of each Fund, has adopted a distribution plan (the “Distribution Plan”), pursuant to Rule 12b-1 under the 1940 Act, which permits each Fund to pay certain expenses associated with the distribution of Investors Class shares, including, but not limited to, advertising, printing of prospectuses and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, and payments to dealers and shareholder servicing agents who enter into agreements with the Funds. The Distribution Plan provides that each Fund may reimburse the Distributor (hereinafter defined) for distribution expenses in an amount not exceeding, on an annual basis, 0.25% of the average daily net assets allocable to Investors Class shares. During the six months ended March 31, 2026, Investors Class shares of the Small Cap Fund, SMid Cap Fund and Discovery Fund incurred fees of $537,665, $37,440, and $2,857, respectively, under the Distribution Plan.
The Trust, on behalf of each Fund, has adopted a Shareholder Servicing Plan under which each Fund may enter into agreements with various shareholder servicing agents, including financial institutions and securities brokers. Each Fund may pay shareholder servicing fees in an amount not exceeding, on an annual basis, 0.10% of the average daily net assets allocable to the Institutional Class shares and 0.25% of the average daily net assets allocable to the Investors Class shares. The Board has approved a limitation on the shareholder servicing fees of 0.05% of the average daily net assets attributable
29
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
to Investors Class shares that will continue through at least September 30, 2026. During the six months ended March 31, 2026, the Funds incurred the following fees under the Shareholder Servicing Plan:
|
|
Small Cap Fund |
SMid Cap Fund |
Discovery Fund |
|||||||||
|
Institutional Class shares |
$ | 775,343 | $ | 137,018 | $ | 1,504 | ||||||
|
Investors Class shares |
$ | 107,536 | $ | 7,488 | $ | 572 | ||||||
OTHER SERVICE PROVIDERS
Ultimus Fund Solutions, LLC (“Ultimus”) provides fund accounting, transfer agency and certain administration services to the Funds. Each Fund pays Ultimus fees in accordance with the agreements for such services. In addition, each Fund pays out-of-pocket expenses including, but not limited to, postage, supplies and costs related to the pricing of its portfolio securities.
Under the terms of a Distribution Agreement with the Trust, Ultimus Fund Distributors, LLC (the “Distributor”) serves as the principal underwriter to each Fund. The Distributor is a wholly-owned subsidiary of Ultimus.
Certain officers of the Trust are also officers of Ultimus and/or the Distributor. An employee of Ultimus serves as the Trust’s Anti-Money Laundering Officer.
TRUSTEE COMPENSATION
Trustees affiliated with the Adviser are not compensated by the Trust for their services. Effective January 1, 2026, each Trustee who is not an “interested person” of the Trust as defined in Section 2(a)(19) under the 1940 Act (“Independent Trustee”) receives a quarterly retainer of $16,750, $6,000 per quarterly and special in-person meeting, and $2,500 per special telephonic meeting. The Lead Independent Trustee receives an additional annual retainer of $45,500, and the Chair of the Audit Committee receives an additional annual retainer of $36,400, for their respective leadership roles. From January 1, 2025 through December 31, 2025, each Independent Trustee received a quarterly retainer of $17,750, $5,000 per quarterly and special in-person meeting, and $2,500 per special telephonic meeting. The Lead Independent Trustee received an additional annual retainer of $36,400, and the Chair of the Audit Committee received an additional annual retainer of $30,340, for their respective leadership roles. Each Fund pays its proportionate share of such fees.
PRINCIPAL HOLDERS OF FUND SHARES
A beneficial owner of 25% or more of a Fund’s outstanding shares may be considered a controlling person. That shareholder’s vote could have a more significant effect on matters presented at a shareholders’ meeting. As of March 31, 2026, no individual shareholders owned of record 25% or more of the outstanding shares of the Funds.
30
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Affiliated Issuers
A company is considered an affiliate of a Fund under the 1940 Act if the Fund’s holdings in that company represent 5% or more of the outstanding voting shares of the company. The industry and percentage of net assets for these holdings can be found on the Small Cap Fund’s Schedule of Investments. Further information on these holdings for the six months ended March 31, 2026 appears below:
|
|
Digi
|
Mesa
|
||||||
|
Percentage of Outstanding Voting Shares Owned |
5.08 | % | 0.00 | % | ||||
|
Shares at Beginning of Period |
2,399,554 | 279,510 | ||||||
|
Shares Purchased During the Period |
257,645 | — | ||||||
|
Shares Sold During the Period |
(748,425 | ) | (279,510 | ) | ||||
|
Shares at End of Period |
1,908,774 | — | ||||||
|
Market Value at Beginning of Period |
$ | 87,487,739 | $ | 18,729,965 | ||||
|
Cost of Purchases During the Period |
11,980,944 | — | ||||||
|
Cost of Sales During the Period |
(28,896,634 | ) | (24,995,226 | ) | ||||
|
Change in Unrealized Appreciation (Depreciation) |
21,430,858 | 6,265,261 | ||||||
|
Market Value at End of Period |
$ | 92,002,907 | $ | — | ||||
|
Net Realized Gains (Losses) During the Period |
$ | 5,178,785 | $ | (4,972,997 | ) | |||
|
Dividend Income Earned During the Period |
$ | — | $ | — | ||||
|
|
Stevanato
Group |
Transcat, Inc.* |
||||||
|
Percentage of Outstanding Voting Shares Owned |
8.81 | % | 3.36 | % | ||||
|
Shares at Beginning of Period |
4,718,031 | 656,099 | ||||||
|
Shares Purchased During the Period |
554,635 | — | ||||||
|
Shares Sold During the Period |
(891,050 | ) | (342,335 | ) | ||||
|
Shares at End of Period |
4,381,616 | 313,764 | ||||||
|
Market Value at Beginning of Period |
$ | 121,489,298 | $ | 48,026,447 | ||||
|
Cost of Purchases During the Period |
8,991,666 | — | ||||||
|
Cost of Sales During the Period |
(25,387,312 | ) | (27,707,190 | ) | ||||
|
Change in Unrealized Appreciation (Depreciation) |
(44,846,432 | ) | 2,726,709 | |||||
|
Market Value at End of Period |
$ | 60,247,220 | $ | 23,045,966 | ||||
|
Net Realized Losses During the Period |
$ | (9,968,621 | ) | $ | (2,346,577 | ) | ||
|
Dividend Income Earned During the Period |
$ | — | $ | — | ||||
31
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
|
|
|
|
Total |
|||||||||
|
Market Value at Beginning of Period |
$ | 275,733,449 | ||||||||||
|
Cost of Purchases During the Period |
20,972,610 | |||||||||||
|
Cost of Sales During the Period |
(106,986,362 | ) | ||||||||||
|
Change in Unrealized Appreciation (Depreciation) |
(14,423,604 | ) | ||||||||||
|
Market Value at End of Period (with Transcat, Inc.) |
$ | 175,296,093 | ||||||||||
|
Market Value at End of Period (without Transcat, Inc.) |
$ | 152,250,127 | ||||||||||
|
Net Realized Losses During the Period |
$ | (12,109,410 | ) | |||||||||
|
Dividend Income Earned During the Period |
$ | — | ||||||||||
|
* |
At March 31, 2026, the company was no longer qualified as an affiliate, although it was an affiliate company during the Small Cap Fund’s six month period. |
|
** |
As of March 31, 2026, the company was no longer held by the Small Cap Fund. |
6. Capital Share Activity
The following table summarizes the capital share activity in Institutional Class shares of the Small Cap Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
3,393,006 | $ | 235,659,760 | 7,772,736 | $ | 593,921,486 | ||||||||||
|
Reinvested |
1,553,449 | 106,116,096 | — | — | ||||||||||||
|
Redeemed |
(15,744,883 | ) | (1,073,614,259 | ) | (11,985,467 | ) | (902,011,103 | ) | ||||||||
|
Total |
(10,798,428 | ) | $ | (731,838,403 | ) | (4,212,731 | ) | $ | (308,089,617 | ) | ||||||
The following table summarizes the capital share activity in Investors Class shares of the Small Cap Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
367,517 | $ | 24,887,879 | 906,470 | $ | 66,801,087 | ||||||||||
|
Reinvested |
330,006 | 21,935,501 | — | — | ||||||||||||
|
Redeemed |
(2,462,484 | ) | (166,606,925 | ) | (4,055,914 | ) | (305,256,348 | ) | ||||||||
|
Total |
(1,764,961 | ) | $ | (119,783,545 | ) | (3,149,444 | ) | $ | (238,455,261 | ) | ||||||
32
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
The following table summarizes the capital share activity in Institutional Class shares of the SMid Cap Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
1,612,127 | $ | 39,158,767 | 2,526,167 | $ | 65,600,475 | ||||||||||
|
Reinvested |
411,968 | 10,039,658 | — | — | ||||||||||||
|
Redeemed |
(3,466,445 | ) | (83,456,551 | ) | (6,214,846 | ) | (161,305,673 | ) | ||||||||
|
Total |
(1,442,350 | ) | $ | (34,258,126 | ) | (3,688,679 | ) | $ | (95,705,198 | ) | ||||||
The following table summarizes the capital share activity in Investors Class shares of the SMid Cap Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
47,922 | $ | 1,147,780 | 95,394 | $ | 2,438,447 | ||||||||||
|
Reinvested |
24,892 | 589,684 | — | — | ||||||||||||
|
Redeemed |
(240,933 | ) | (5,684,438 | ) | (411,657 | ) | (10,229,846 | ) | ||||||||
|
Total |
(168,119 | ) | $ | (3,946,974 | ) | (316,263 | ) | $ | (7,791,399 | ) | ||||||
The following table summarizes the capital share activity in Institutional Class shares of the Discovery Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
38,141 | $ | 349,343 | 12,010 | $ | 94,622 | ||||||||||
|
Reinvested |
3,177 | 28,685 | — | — | ||||||||||||
|
Redeemed |
(25,032 | ) | (239,117 | ) | (4,098 | ) | (34,514 | ) | ||||||||
|
Total |
16,286 | $ | 138,911 | 7,912 | $ | 60,108 | ||||||||||
33
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
The following table summarizes the capital share activity in Investors Class shares of the Discovery Fund:
|
|
For
the Six Months Ended |
For
the Year Ended |
||||||||||||||
|
|
Shares |
Value |
Shares |
Value |
||||||||||||
|
Issued |
20,716 | $ | 189,670 | 18,339 | $ | 161,501 | ||||||||||
|
Reinvested |
2,591 | 23,167 | — | — | ||||||||||||
|
Redeemed |
(23,358 | ) | (213,646 | ) | (53,636 | ) | (444,035 | ) | ||||||||
|
Total |
(51 | ) | $ | (809 | ) | (35,297 | ) | $ | (282,534 | ) | ||||||
7. Industry Risk
If a Fund has significant investments in the securities of issuers within a particular industry, any development affecting that industry will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that industry. In addition, this may increase the risk of loss in the Fund and increase the volatility of the Fund’s NAV per share. Occasionally, market conditions, regulatory changes or other developments may negatively impact a particular industry. Under the Russell ICB Industry and Sector classification, equity companies are categorized within 11 industries and 45 sectors and 171 subsectors. As of March 31, 2026, the Funds had a significant value of their net assets invested in stocks within the Russell ICB industries as follows:
|
Fund |
Russell ICB Industry |
% Net Assets |
|
Small Cap Fund |
Industrials |
38.7% |
|
SMid Cap Fund |
Industrials |
38.9% |
|
Discovery Fund |
Industrials |
35.3% |
|
Health Care |
26.9% |
The Funds consider companies to be “in the same industry” for purposes of industry concentration if the companies are categorized in the same Russell ICB subsector. None of the Funds concentrated their investments by investing more than 25% of their net assets in a single Russell ICB subsector.
8. Contingencies and Commitments
The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and that provide general indemnifications. The Funds’ maximum exposure
34
CONESTOGA
FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
9. Recent Market Risk
Certain local, regional or global events such as war, acts of terrorism, the spread of infectious illnesses and/or other public health issues, financial institution instability, trade disruption or other events may have a significant impact on a security or a Fund. These types of events and others like them may have adverse impacts on 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. Some of the impacts noted in recent times include, but are not limited to, embargos, political actions, tariffs, supply chain disruptions, bank failures, restrictions to investment and/or monetary movement, including the forced selling of securities or the inability to participate in impacted markets. The duration of these events could adversely affect a Fund’s performance, the performance of the securities in which a Fund invests and may lead to losses on an investment. The ultimate impact of these events on the financial performance of a Fund’s investments is not reasonably estimable at this time. Management is actively monitoring these events.
10. Borrowing Costs
From time to time, the Funds may have an overdrawn cash balance at the custodian due to redemptions or market movements. When this occurs, the Funds will incur borrowing costs charged by UMB Bank, NA (the “Custodian”). Accordingly, during the six months ended March 31, 2026, the Small Cap Fund, SMid Cap Fund and Discovery Fund incurred $25,430, $1,678 and $15 of borrowing costs charged by the Custodian, respectively.
11. Subsequent Events
The Funds are required to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed as of the date of the Statements of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Funds are required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has evaluated subsequent events through the issuance of these financial statements and has noted no such events.
35
CONESTOGA
FUNDS
Additional Information (Unaudited)
Changes in and/or Disagreements with Accountants
There were no changes in or disagreements with accountants during the period covered by this report.
Proxy Disclosures
Not applicable.
Remuneration Paid to Directors, Officers and Others
Refer to the financial statements included herein.
Statement Regarding Basis for Approval of Investment Advisory Agreement
At an in-person meeting held on November 19, 2025, the Board of Trustees (the “Board”) of the Conestoga Funds (the “Trust”) considered the annual renewals of the advisory agreements with Conestoga Capital Advisors, LLC (“CCA” or the “Adviser”) on behalf of the Conestoga Small Cap Fund (the “Small Cap Fund”), the Conestoga SMid Cap Fund (the “SMid Cap Fund”), the Conestoga Mid Cap Fund (the “Mid Cap Fund”) and the Conestoga Discovery Fund (the “Discovery Fund,” together with the Small Cap Fund, the SMid Cap Fund and the Mid Cap Fund, the “Funds,” and each, a “Fund”), respectively (the “Investment Advisory Agreements”), between each Fund and the Adviser.
In evaluating the Investment Advisory Agreements, generally the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the Trust (the “Independent Trustees”) relied upon their knowledge of CCA, CCA’s services and the Funds, resulting from the Independent Trustees’ meetings and interactions with management historically and throughout the previous year. The Independent Trustees also relied upon written materials and oral presentations regarding the Investment Advisory Agreements, which the Independent Trustees had received as requested in preparation for their consideration of the Investment Advisory Agreements and initially discussed with CCA and the full Board earlier in the meeting. Among other materials, the Independent Trustees considered the report created by FUSE Research Network, LLC (“FUSE”), an independent, third-party service provider, which provided comparisons of the Funds’ fees and performance against a peer universe and peer group of similar mutual funds.
The Independent Trustees reviewed and considered the nature, extent and quality of the investment advisory services provided by CCA under the Investment Advisory Agreements, including portfolio management, investment research, equity securities trading and monitoring for best execution, and adviser resources dedicated to the Funds. The Independent Trustees also reviewed and considered the nature, extent and quality of the non-advisory and administrative services provided to the Funds by the Adviser, including accounting, clerical, bookkeeping, business management and planning, and the provision of supplies, office space and utilities. In addition, the Independent Trustees considered CCA’s regulatory and compliance policies, procedures, and systems. The Independent Trustees evaluated the Adviser’s capabilities in providing (or overseeing) the administrative, legal and compliance services needed to support the management
36
CONESTOGA
FUNDS
Additional Information (Unaudited) (Continued)
of the Funds, and the information that regularly had been provided by the Trust’s Chief Compliance Officer to the Trustees at prior Board meetings. The Independent Trustees also considered CCA’s willingness to add personnel as the Funds have grown to ensure that appropriate staffing levels were maintained.
Based on their consideration and review of the foregoing information, the Independent Trustees determined that the Funds benefited from the nature, extent, and quality of these services, as well as CCA’s ability to continue to provide these services based on the Adviser’s experience, operations, and resources and concluded that they supported the continuation of the Investment Advisory Agreements.
The Independent Trustees placed an emphasis on the investment performance of each of the Funds. The Independent Trustees considered whether the Funds operated within their investment objectives and styles and considered each Fund’s record of compliance with its investment restrictions. While consideration was given to performance reports and discussions throughout the year, particular attention in assessing performance was given to information furnished in connection with the contract renewals. The Independent Trustees also took into consideration CCA’s explanations for each Fund’s performance, as well as the Adviser’s expectations for the acceptable performance of each Fund over longer-term periods. In addition, the Independent Trustees reviewed a Morningstar Risk Analysis for each of the Funds and considered CCA’s discussion of Fund performance on a risk-adjusted basis.
The Independent Trustees reviewed information comparing the Small Cap Fund’s total returns for various periods ended September 30, 2025 (annualized for periods greater than one year) to the performance of: (1) the Russell 2000 Growth Index, (2) five other comparable small cap mutual funds provided by CCA (the “Small Cap Peer Group”), and (3) other mutual funds included in the FUSE peer group that consisted of the Small Cap Fund and thirteen other small growth funds with similar pricing characteristics (the “FUSE Peer Group”) and the FUSE peer universe that consisted of the FUSE Peer Group and all other small growth funds with similar pricing features, excluding outliers (the “FUSE Peer Universe”).
The Independent Trustees noted that the Small Cap Fund (Investors Share Class) outperformed the Russell 2000 Growth Index for the 10-year period and underperformed the Index for the quarter, one-year, three-year and five-year periods and slightly underperformed for the since inception period. The Independent Trustees also considered the Fund’s performance against the Small Cap Peer Group, noting that the Fund (Investors Share Class) ranked fifth on a year-to-date and three-year annual return basis and fourth on a five-year annual return basis. The Independent Trustees reviewed the Small Cap Fund’s performance against the FUSE Peer Group, noting that the Small Cap Fund (Investors Class Shares) had underperformed the FUSE Peer Group median for the three-month, one-year, three-year, five-year, ten-year and since inception periods ended September 30, 2025. The Independent Trustees also reviewed the Small Cap Fund’s
37
CONESTOGA
FUNDS
Additional Information (Unaudited) (Continued)
performance against the FUSE Peer Universe, noting that the Small Cap Fund (Investors Class Shares) had outperformed the FUSE Peer Universe median for the ten-year period ended September 30, 2025, but had underperformed for the three-month, one-year, three-year, five-year and since inception periods.
The Independent Trustees reviewed information comparing the SMid Cap Fund’s total returns for various periods ended September 30, 2025 (annualized for periods greater than one year) to the performance of: (1) the Russell 2500 Growth Index, (2) five other comparable smid cap mutual funds provided by CCA (the “SMid Cap Peer Group”), and (3) other mutual funds included in the FUSE peer group that consisted of the SMid Cap Fund and fourteen other smid growth funds with similar pricing characteristics (the “FUSE Peer Group”) and the FUSE peer universe that consisted of the FUSE Peer Group and all other mid-cap growth funds with similar pricing features, excluding outliers (the “FUSE Peer Universe”).
The Independent Trustees noted that the SMid Cap Fund (Investors Share Class) underperformed the Russell 2500 Growth Index for the quarter, year-to-date, one-year, three-year, five-year and since inception periods. The Independent Trustees also considered the Fund’s performance against the SMid Cap Peer Group, noting that the Fund (Investors Share Class) ranked fourth on a year-to-date and one-year annual return basis and third on a three-year annual return basis. The Independent Trustees reviewed the SMid Cap Fund’s performance against the FUSE Peer Group, noting that the SMid Cap Fund (Investors Class Shares) had outperformed the Peer Group median for the three-year, five-year, ten-year, and since inception periods ended September 30, 2025, but had underperformed for the three-month and one-year periods. The Independent Trustees also reviewed the SMid Cap Fund’s performance against the FUSE Peer Universe, noting that the SMid Cap Fund (Investors Class Shares) had outperformed the Peer Universe median for the ten-year period ended September 30, 2025, and underperformed for the three-moth, one-year, three-year, five-year and since inception periods.
With respect to the Mid Cap Fund, the Independent Trustees considered the limited performance history of the Fund. The Independent Trustees reviewed information comparing the Mid Cap Fund’s total returns for various periods ended September 30, 2025 (annualized for periods greater than one year) to the performance of: (1) the Russell Mid Cap Growth Index, (2) five other comparable mid cap mutual funds provided by CCA (the “Mid Cap Peer Group”), and (3) other mutual funds included in the FUSE peer group that consisted of the Mid Cap Fund and twelve other mid-cap growth funds with similar pricing characteristics (the “FUSE Peer Group”) and the FUSE peer universe that consisted of the FUSE Peer Group and all other mid-cap growth funds with similar pricing features, excluding outliers (the “FUSE Peer Universe”).
The Independent Trustees noted that the Mid Cap Fund (Investors Share Class) had underperformed the Russell Mid Cap Growth Index for the three-month, year-to-date, one-year and since inception periods ended September 30, 2025. The Independent
38
CONESTOGA
FUNDS
Additional Information (Unaudited) (Continued)
Trustees also considered the Fund’s performance against the Mid Cap Peer Group, noting that the Fund (Investors Share Class) ranked fifth on a year-to-date basis and sixth on a one-year annual return basis. The Independent Trustees reviewed the Mid Cap Fund’s performance against the FUSE Peer Group, noting that the Mid Cap Fund (Investors Class Shares) had underperformed the FUSE Peer Group median for the three-month, one-year, three-year and since inception periods ended September 30, 2025. The Independent Trustees also reviewed the Mid Cap Fund’s performance against the FUSE Peer Universe, noting that the Mid Cap Fund (Investors Class Shares) had underperformed the FUSE Peer Universe median for the three-month, one-year, three-year and since inception periods ended September 30, 2025.
The Independent Trustees reviewed information comparing the Discovery Fund’s total returns for various periods ended September 30, 2025 (annualized for periods great than one year) to the performance of: (1) the Russell Micro Cap Growth Index, (2) five other comparable micro cap mutual funds provided by CCA (the “Micro Cap Peer Group”), and (3) other mutual funds included in the FUSE peer group that consisted of the Discovery Fund and nine other micro cap growth funds with similar pricing characteristics (the “FUSE Peer Group”) and the FUSE peer universe that consisted of the FUSE Peer Group and all other small growth funds with similar pricing features, excluding outliers (the “FUSE Peer Universe”).
The Independent Trustees noted that the Discovery Fund (Investors Share Class) had underperformed the Russell Micro Cap Growth Index for the three-month, year-to-date, one-year, and three-year periods ended September 30, 2025, but had outperformed the Index for the since inception period. The Independent Trustees also considered the Discovery Fund’s against the Micro Cap Peer Group, noting that the Discovery Fund (Investors Share Class) ranked second on a year-to-date basis and first on a one-year annual return basis. The Independent Trustee reviewed the Discovery Fund’s performance against the FUSE Peer Group, noting that the Discovery Fund (Investors Class Shares) had outperformed the FUSE Peer Group median for the one-year period, but had underperformed for the three-month, three-year and since inception periods ended September 30, 2025. The Independent Trustees also reviewed the Discovery Fund’s performance against the FUSE Peer Universe, noting that the Discovery Fund (Investors Class Shares) had outperformed the FUSE Peer Universe median for the three-month and one-year periods, but had underperformed for the three-year and since inception periods ended September 30, 2025.
Based on the foregoing, the Independent Trustees concluded that CCA’s performance in managing each of the Funds indicated that the Adviser’s continued management will benefit the Funds and their shareholders.
The Independent Trustees considered the Funds’ expense levels, including the effect of the Funds’ expense limitation arrangements with CCA, which apply on a Fund-by-Fund basis and require CCA to assume the operating expenses of the Funds (with exceptions)
39
CONESTOGA
FUNDS
Additional Information (Unaudited) (Continued)
above a certain limit. The Independent Trustees considered the Adviser’s undertaking to continue such expense limitations until at least January 31, 2027, at current levels. The Independent Trustees compared the net expense ratios and net management fees of the Small Cap Fund, SMid Cap Fund, Mid Cap Fund, and Discovery Fund to the net expense ratios and net management fees of each Fund’s respective FUSE Peer Group and FUSE Peer Universe. The Independent Trustees noted that the net management fee and net expense ratio for each Class of each Fund was in the 40th percentile or better of the FUSE Peer Group, except for: (1) the net advisory fee of the Small Cap Fund (Institutional Class Shares), which was four basis points higher than the median of the FUSE Peer Group and in the 64th percentile; and (2) the net expense ratio of the Discovery Fund (Investors Class Shares), which was in the 67th percentile of the FUSE Peer Group.
Overall, the Independent Trustees concluded that the management fees paid by the Small Cap Fund, SMid Cap Fund, Mid Cap Fund, and the Discovery Fund were reasonable in comparison to the management fees of the respective peer groups. The Independent Trustees also concluded that the management fees paid by the Funds to CCA were reasonable in comparison to the management fees charged by the Adviser to its other advisory clients, particularly when considering the nature of the services provided to Fund shareholders versus CCA’s other clients. While intending to continuously monitor the fee structures of the Funds, the Independent Trustees found their expense structures to be acceptable in view of the nature and structure of Fund operations, CCA’s contractual agreements to limit Fund operating expenses, and, with respect to the Mid Cap Fund and the Discovery Fund, the size of the Funds.
The Independent Trustees reviewed the costs of the services provided by CCA and discussed the profitability of the Small Cap Fund, SMid Cap Fund, Mid Cap Fund, and Discovery Fund advisory relationships to the Adviser. The Independent Trustees considered “fall-out benefits” that could be derived by CCA from its relationship with the Funds. The Independent Trustees also considered CCA’s use of “soft dollar” arrangements. Under such arrangements, it was noted, brokerage commissions paid by the Funds and/or other accounts managed by CCA would be used to pay for research that a securities broker obtains from third parties. The Independent Trustees considered CCA’s representation that the Funds’ fee structures reflect economies of scale and considered the asset size of the Mid Cap Fund and the Discovery Fund and potential economies of scale in the future. The Independent Trustees also considered the entrepreneurial risk undertaken by CCA in managing and operating the Trust and the Funds and they considered the Adviser’s commitment to the continued successful operation of the Funds.
After further discussion and consultation with Independent Trustee counsel, the Independent Trustees agreed that they have been provided with sufficient information with which to approve the Investment Advisory Agreements for another year with respect to each of the Funds.
40
CONESTOGA
FUNDS
Additional Information (Unaudited) (Continued)
Following further consideration of the foregoing factors and such other matters as were deemed relevant, with no single factor being determinative and each Trustee not necessarily attributing the same weight to each factor, the Independent Trustees concluded that the management fee rates of the Funds continued to be supported by the services provided by CCA to the Funds, as well as the costs that were incurred and benefits that were gained by the Adviser in providing such services. As a result, the Independent Trustees concluded that it was in the best interests of the Funds’ shareholders to approve the continuation of the Investment Advisory Agreements and the Independent Trustees determined to approve the Investment Advisory Agreements.
41
|
Interested Trustees
Robert
M. Mitchell, Chairman and
Independent Trustees
Nicholas
J. Kovich, Lead Independent Trustee
Investment Adviser
Conestoga
Capital Advisors, LLC
Dividend
Paying Agent,
Ultimus
Fund Solutions, LLC
Custodian
UMB
Bank, NA
Distributor
Ultimus
Fund Distributors, LLC |
Independent Registered Public Accounting Firm
Cohen
& Company, Ltd.
Legal Counsel
Faegre
Drinker Biddle & Reath LLP
Conestoga Funds’ Officers
Robert
M. Mitchell, Chairman and |
This report is provided for the general information of the shareholders of the Conestoga Small Cap, SMid Cap and Discovery Funds. This report is not intended for distribution to prospective investors in the Funds, unless preceded or accompanied by an effective prospectus.
(b) Included in (a)
| Item 8. | Changes in and Disagreements with Accountants for Open-End Management Investment Companies |
Not applicable
| Item 9. | Proxy Disclosures for Open-End Management Investment Companies. |
Not applicable
| Item 10. | Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. |
Included under Item 7
| Item 11. | Statement Regarding Basis for Approval of Investment Advisory Contract. |
Included under Item 7
| Item 12. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable
| Item 13. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable
| Item 14. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable
| Item 15. | Submission of Matters to a Vote of Security Holders. |
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
| Item 16. | Controls and Procedures. |
(a) Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| Item 17. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable
| Item 18. | Recovery of Erroneously Awarded Compensation. |
(a) Not applicable
(b) Not applicable
| Item 19. | Exhibits. |
File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(a)(1) Code of Ethics: Not applicable.
(a)(2) Not applicable.
(a)(4) Not applicable.
(a)(5) Not applicable.
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30.a-2(b)): Attached hereto.
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
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) | Conestoga Funds | |||
| By (Signature and Title)* | /s/ Robert M. Mitchell | |||
| Robert M. Mitchell, Chief Executive Officer | ||||
| Date | June 4, 2026 | |||
| 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/ Robert M. Mitchell | |||
| Robert M. Mitchell, Chief Executive Officer | ||||
| Date | June 4, 2026 | |||
| By (Signature and Title)* | /s/ Joseph F. Monahan | |||
| Joseph F. Monahan, Treasurer and Chief Financial Officer | ||||
| Date | June 4, 2026 | |||
| * | Print the name and title of each signing officer under his or her signature. |
ATTACHMENTS / EXHIBITS
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