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Form N-CSRS NORTH COUNTRY FUNDS For: May 31

August 9, 2022 1:24 PM EDT

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united states
securities and exchange commission
washington, d.c. 20549

form n-csr

certified shareholder report of registered management
investment companies

Investment Company Act file number 811-10123

 

The North Country Funds

(Exact name of Registrant as specified in charter)

 

250 Glen Street, Glens Falls, NY 12801       

(Address of principal executive offices) (Zip code)

 

Richard Malinowski

c/o Ultimus Fund Solutions, LLC, 80 Arkay Drive, Hauppauge, NY 11788

(Name and address of agent for service)

 

Registrant's telephone number, including area code: 631-470-2619

 

Date of fiscal year end: 11/30

 

Date of reporting period: 5/31/22

 

Item 1. Reports to Stockholders.

 

  The North Country Funds
   
  Large Cap Equity Fund
   
  (NORTH COUNTRY FUNDS LOGO)
   
   
   
   
   
  Semi-Annual Report
  May 31, 2022
Investment Adviser  
North Country Investment Advisers, Inc.  
250 Glen Street  
Glens Falls, NY 12801  
   

Administrator and
Fund Accountant
Ultimus Fund Solutions, LLC
225 Pictoria Drive, Suite 450
Cincinnati, Ohio 45246

 

 

Investor Information: (888) 350-2990

 

This report and the financial statements contained herein are submitted for the general information of shareholders and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale or solicitation of an offer to buy shares of the North Country Funds. Such offering is made only by prospectus, which includes details as to offering price and other material information.

 

 

North Country Large Cap Equity Fund
Portfolio Summary (Unaudited)
May 31, 2022

 

Industries % of Net Assets   Industries % of Net Assets
Common Stock 98.9%   Household Products 1.7%
Software 12.6%   Home Construction 1.7%
Technology Hardware 7.3%   Asset Management 1.6%
Medical Equipment & Devices 6.9%   Entertainment Content 1.6%
Biotech & Pharma 6.8%   Beverages 1.6%
Internet Media & Services 5.5%   Diversified Industrials 1.4%
Technology Services 5.2%   Electric Utilities 1.3%
Banking 4.1%   Wholesale - Consumer Staples 1.1%
Retail - Discretionary 3.9%   Apparel & Textile Products 1.0%
E-Commerce Discretionary 3.7%   Specialty Finance 0.6%
Retail - Consumer Staples 3.5%   Machinery 0.6%
Institutional Financial Services 3.3%   Telecommunications 0.6%
Semiconductors 3.1%   Self-Storage REIT 0.5%
Chemicals 2.9%   Infrastructure REIT 0.4%
Oil & Gas Producers 2.7%   Construction Materials 0.4%
Health Care Facilities & Services 2.6%   Office REIT 0.2%
Transportation & Logistics 2.5%   Money Market Funds 1.1%
Insurance 2.2%   Other assets in excess of liabilities 0.0%
Commercial Support Services 2.0%   Total Net Assets 100.0%
Leisure Facilities & Services 1.8%      
         
Top Ten Holdings % of Net Assets   Top Ten Holdings % of Net Assets
Apple, Inc. 6.3%   Adobe, Inc. 3.1%
Microsoft Corporation 6.2%   Home Depot, Inc. (The) 2.7%
Visa, Inc. 5.2%   Thermo Fisher Scientific, Inc. 2.6%
Amazon.com, Inc. 3.7%   UnitedHealth Group, Inc. 2.6%
Alphabet, Inc. 3.3%   Johnson & Johnson 2.4%

 

1

 

NORTH COUNTRY LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS (Unaudited)
May 31, 2022

 

Shares      Fair Value 
     COMMON STOCKS — 98.9%     
     APPAREL & TEXTILE PRODUCTS - 1.0%     
 12,000   NIKE, Inc., Class B  $1,426,200 
           
     ASSET MANAGEMENT - 1.6%     
 3,350   BlackRock, Inc.   2,241,418 
           
     BANKING - 4.1%     
 69,500   Bank of America Corporation   2,585,400 
 21,700   JPMorgan Chase & Company   2,869,391 
         5,454,791 
     BEVERAGES - 1.6%     
 13,200   PepsiCo, Inc.   2,214,300 
           
     BIOTECH & PHARMA - 6.8%     
 11,900   Amgen, Inc.   3,055,206 
 18,500   Johnson & Johnson   3,321,305 
 54,500   Pfizer, Inc.   2,890,680 
         9,267,191 
     CHEMICALS - 2.9%     
 2,700   Air Products and Chemicals, Inc.   664,632 
 3,900   Ecolab, Inc.   639,249 
 8,500   LyondellBasell Industries N.V., Class A   971,125 
 6,250   Sherwin-Williams Company   1,675,250 
         3,950,256 
     COMMERCIAL SUPPORT SERVICES - 2.0%     
 17,550   Waste Management, Inc.   2,781,851 
           
     CONSTRUCTION MATERIALS - 0.4%     
 3,000   Vulcan Materials Company   494,610 
           
     DIVERSIFIED INDUSTRIALS - 1.4%     
 10,000   Honeywell International, Inc.   1,936,200 
           

The accompanying notes are an integral part of the financial statements

2

 

NORTH COUNTRY LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
May 31, 2022

 

Shares      Fair Value 
     COMMON STOCKS — 98.9% (Continued)     
     E-COMMERCE DISCRETIONARY - 3.7%     
 2,100   Amazon.com, Inc.(a)  $5,048,799 
           
     ELECTRIC UTILITIES - 1.3%     
 8,000   Dominion Energy, Inc.   673,760 
 5,500   NextEra Energy, Inc.   416,295 
 9,150   Southern Company (The)   692,289 
         1,782,344 
     ENTERTAINMENT CONTENT - 1.6%     
 17,500   Activision Blizzard, Inc.   1,362,900 
 7,950   Walt Disney Company (The)(a)   877,998 
         2,240,898 
     HEALTH CARE FACILITIES & SERVICES - 2.6%     
 7,000   UnitedHealth Group, Inc.   3,477,460 
           
     HOME CONSTRUCTION - 1.7%     
 39,900   Masco Corporation   2,261,931 
           
     HOUSEHOLD PRODUCTS - 1.7%     
 15,400   Procter & Gamble Company (The)   2,277,352 
           
     INFRASTRUCTURE REIT - 0.4%     
 2,350   American Tower Corporation   601,906 
           
     INSTITUTIONAL FINANCIAL SERVICES - 3.3%     
 2,600   Goldman Sachs Group, Inc. (The)   849,810 
 26,350   Intercontinental Exchange, Inc.   2,697,977 
 11,300   Morgan Stanley   973,382 
         4,521,169 
     INSURANCE - 2.2%     
 9,550   Berkshire Hathaway, Inc., Class B(a)   3,017,609 
           
     INTERNET MEDIA & SERVICES - 5.5%     
 1,950   Alphabet, Inc., Class A(a)   4,436,718 
 7,500   Meta Platforms, Inc., Class A(a)   1,452,300 
           

The accompanying notes are an integral part of the financial statements

3

 

NORTH COUNTRY LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
May 31, 2022

 

Shares      Fair Value 
     COMMON STOCKS — 98.9% (Continued)     
     INTERNET MEDIA & SERVICES - 5.5% (Continued)     
 4,000   Netflix, Inc.(a)  $789,760 
 20,000   Twitter, Inc.(a)   792,000 
         7,470,778 
     LEISURE FACILITIES & SERVICES - 1.8%     
 5,100   Domino’s Pizza, Inc.   1,852,167 
 2,600   McDonald’s Corporation   655,746 
         2,507,913 
     MACHINERY - 0.6%     
 4,000   Caterpillar, Inc.   863,400 
           
     MEDICAL EQUIPMENT & DEVICES - 6.9%     
 20,000   Abbott Laboratories   2,349,200 
 5,000   Danaher Corporation   1,319,100 
 9,000   Stryker Corporation   2,110,500 
 6,325   Thermo Fisher Scientific, Inc.   3,589,880 
         9,368,680 
     OFFICE REIT - 0.2%     
 2,000   Alexandria Real Estate Equities, Inc.   331,900 
           
     OIL & GAS PRODUCERS - 2.7%     
 8,400   Chevron Corporation   1,467,144 
 10,100   Exxon Mobil Corporation   969,600 
 34,400   Williams Companies, Inc. (The)   1,274,864 
         3,711,608 
     RETAIL - CONSUMER STAPLES - 3.5%     
 3,175   Costco Wholesale Corporation   1,480,249 
 8,400   Dollar Tree, Inc.(a)   1,346,772 
 15,500   Walmart, Inc.   1,993,765 
         4,820,786 
     RETAIL - DISCRETIONARY - 3.9%     
 12,200   Home Depot, Inc. (The)   3,693,550 
 23,050   TJX Companies, Inc. (The)   1,465,288 
         5,158,838 
           

The accompanying notes are an integral part of the financial statements

4

 

NORTH COUNTRY LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
May 31, 2022

 

Shares      Fair Value 
     COMMON STOCKS — 98.9% (Continued)     
     SELF-STORAGE REIT - 0.5%     
 1,900   Public Storage  $628,216 
           
     SEMICONDUCTORS - 3.1%     
 24,100   Intel Corporation   1,070,522 
 6,500   NVIDIA CorporationMoney   1,213,680 
 13,750   QUALCOMM, Inc.   1,969,275 
         4,253,477 
     SOFTWARE - 12.6%     
 10,000   Adobe, Inc.(a)   4,164,800 
 31,000   Microsoft Corporation   8,427,970 
 19,000   Oracle Corporation   1,366,480 
 19,400   Salesforce, Inc.(a)   3,108,656 
         17,067,906 
     SPECIALTY FINANCE - 0.6%     
 6,800   Capital One Financial Corporation   869,448 
           
     TECHNOLOGY HARDWARE - 7.3%     
 57,500   Apple, Inc.   8,558,300 
 30,750   Cisco Systems, Inc.   1,385,287 
         9,943,587 
     TECHNOLOGY SERVICES - 5.2%     
 33,125   Visa, Inc., Class A   7,028,131 
           
     TELECOMMUNICATIONS - 0.6%     
 15,000   Verizon Communications, Inc.   769,350 
           
     TRANSPORTATION & LOGISTICS - 2.5%     
 5,300   Union Pacific Corporation   1,164,834 
 11,400   United Parcel Service, Inc., Class B   2,077,650 
         3,242,484 
     WHOLESALE - CONSUMER STAPLES - 1.1%     
 17,500   Sysco Corporation   1,473,150 
           

The accompanying notes are an integral part of the financial statements

5

 

NORTH COUNTRY LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
May 31, 2022

 

Shares      Fair Value 
         
     TOTAL COMMON STOCKS (Cost $55,004,564)  $134,505,937 
           
     SHORT-TERM INVESTMENTS — 1.1%     
     MONEY MARKET FUNDS - 1.1%     
 1,546,088   BlackRock Liquidity Funds Treasury Trust Fund, Institutional Class, 0.56% (Cost $1,546,088)(b)   1,546,088 
           
     TOTAL INVESTMENTS - 100.0% (Cost $56,550,652)  $136,052,025 
     OTHER ASSETS IN EXCESS OF LIABILITIES- 0.0%   67,078 
     NET ASSETS - 100.0%  $136,119,103 
           
ETF - Exchange-Traded Fund
   
NV - Naamioze Vennootschap
   
REIT - Real Estate Investment Trust

 

(a)Non-income producing security.

 

(b)Rate disclosed is the seven day effective yield as of May 31, 2022.

 

The accompanying notes are an integral part of the financial statements

6

 

THE NORTH COUNTRY FUNDS
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
May 31, 2022

 

   Large Cap 
   Equity Fund 
ASSETS:     
Investments in securities, at fair value
(Cost $56,550,652)
  $136,052,025 
Dividends and interest receivable   198,805 
Receivable for fund shares sold   338 
Prepaid expenses and other assets   9,674 
Total Assets   136,260,842 
      
LIABILITIES:     
Accrued advisory fees   86,076 
Payable to related parties   12,245 
Payable for fund shares redeemed   11,299 
Accrued audit fees   9,600 
Accrued administrative fees   8,278 
Accrued legal fees   6,950 
Accrued expenses and other liabilities   7,291 
Total Liabilities   141,739 
Net Assets  $136,119,103 
      
NET ASSETS CONSIST OF:     
Paid in capital  $47,093,487 
Accumulated earnings   89,025,616 
Net Assets  $136,119,103 
      
Shares outstanding (unlimited number of shares authorized; no par value)   6,558,561 
      
Net asset value, offering and redemption price per share ($136,119,103/6,558,561)  $20.75 
      

The accompanying notes are an integral part of these financial statements

7

 

THE NORTH COUNTRY FUNDS
STATEMENT OF OPERATIONS (Unaudited)
For the Six Months Ended May 31, 2022

 

   Large Cap 
   Equity Fund 
INVESTMENT INCOME:     
Dividends  $1,035,628 
Interest   1,879 
Total investment income   1,037,507 
      
EXPENSES:     
Investment advisory fees   571,530 
Administration and fund accounting fees   97,790 
Legal fees   20,932 
Transfer agency fees   18,763 
Trustees’ fees   9,173 
Audit fees   8,826 
Printing expense   8,078 
Chief Compliance Officer fees   7,979 
Registration and filing fees   6,634 
Custody fees   6,184 
Insurance expense   3,734 
Total expenses   759,623 
      
Net investment income   277,884 
      
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:     
Net realized gain from investment transactions   9,223,487 
Net change in unrealized depreciation of investments   (29,935,870)
Net realized and unrealized loss on investments   (20,712,383)
      
Net decrease in net assets resulting from operations  $(20,434,499)
      

The accompanying notes are an integral part of these financial statements

8

 

  THE NORTH COUNTRY FUNDS  
LARGE CAP EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS

 

   For the     
   Six Months Ended   For the Year 
   May 31, 2022   Ended 
   (Unaudited)   November 30, 2021 
         
FROM OPERATIONS:          
Net investment income  $277,884   $513,762 
Net realized gain from investment transactions   9,223,487    13,246,537 
Net change in unrealized appreciation (deprecation)   (29,935,870)   19,569,412 
Net increase (decrease) in net assets resulting from operations   (20,434,499)   33,329,711 
           
DISTRIBUTIONS TO SHAREHOLDERS:          
Total distributions to shareholders   (13,679,110)   (15,652,516)
           
CAPITAL SHARE TRANSACTIONS (Note 4)   (392,897)   1,605,134 
           
Net increase (decrease) in net assets   (34,506,506)   19,282,329 
           
NET ASSETS:          
Beginning of period   170,625,609    151,343,280 
           
End of period  $136,119,103   $170,625,609 

 

The accompanying notes are an integral part of these financial statements

9

 

THE NORTH COUNTRY FUNDS
LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS

 

(For a fund share outstanding throughout each period)

 

   For the Six                     
   Months Ended                     
   May 31, 2022   For the Year Ended November 30, 
   (Unaudited)   2021   2020   2019   2018   2017 
                         
Net asset value, beginning of period  $25.86   $23.48   $20.32   $18.99   $18.87   $15.54 
                               
INCOME FROM INVESTMENT OPERATIONS:                              
Net investment income (1)   0.04    0.07    0.08    0.08    0.05    0.07 
Net realized and unrealized gain (loss) on investments   (3.07)   4.74    4.44    2.55    1.28    3.59 
Total from investment operations   (3.03)   4.81    4.52    2.63    1.33    3.66 
                               
LESS DISTRIBUTIONS:                              
Dividends from net investment income   (0.07)   (0.10)   (0.08)   (0.05)   (0.07)   (0.07)
Distribution from net realized gains from security transactions   (2.01)   (2.33)   (1.28)   (1.25)   (1.14)   (0.26)
Total distributions   (2.08)   (2.43)   (1.36)   (1.30)   (1.21)   (0.33)
                               
Net asset value, end of period  $20.75   $25.86   $23.48   $20.32   $18.99   $18.87 
                               
Total return (2)   (12.93)% (4)   22.73%   23.90%   15.25%   7.52%   23.96%
                               
RATIOS/SUPPLEMENTAL DATA:                              
Net assets, end of period (in 000’s)  $136,119   $170,626   $151,343   $136,366   $127,978   $127,703 
Ratios to average net assets:                              
Expenses   1.00% (3)   0.99%   1.02%   1.04%   1.03%   1.03%
Net investment income   0.37% (3)   0.31%   0.40%   0.41%   0.29%   0.39%
Portfolio turnover rate   4% (4)   7%   5%   15%   22%   12%

 

 

(1)Net investment income per share is based on average shares outstanding during the year or period.

 

(2)Total returns are historical and assume changes in share price and reinvestment of dividends and capital gain distributions, if any. Total return does not reflect the deductions of taxes that a shareholder would pay on distributions or on the redemption of shares.

 

(3)Annualized for periods of less than one year.

 

(4)Not annualized.

 

The accompanying notes are an integral part of these financial statements

10

 

  THE NORTH COUNTRY FUND  
NOTES TO FINANCIAL STATEMENTS (Unaudited)
May 31, 2022

 

NOTE 1. ORGANIZATION

 

The North Country Funds (the “Trust”) was organized as a Massachusetts business trust on June 1, 2000, and registered under the Investment Company Act of 1940 as an open-end, diversified, management investment company on September 11, 2000. The Trust currently offers one series: the North Country Large Cap Equity Fund (the “Fund”). The Fund’s principal investment objective is to provide investors with long-term capital appreciation. The Fund commenced operations on March 1, 2001.

 

The Fund was initially organized on March 26, 1984 under New York law as a Collective Investment Trust sponsored by Glens Falls National Bank & Trust Company. Prior to its conversion to a regulated investment company (mutual fund), investor participation was limited to qualified employee benefit plans.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The following is a summary of the significant accounting policies followed by the Trust in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with these generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from these estimates. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services - Investment Companies.

 

Security Valuation – Securities which are traded on a national securities exchange are valued at the last quoted sale price. NASDAQ traded securities are valued using the NASDAQ official closing price (“NOCP”). Investments for which no sales are reported are valued at the mean between the current bid and ask prices on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy described below. When an equity security is valued by the independent pricing service using factors other than market quotations or the market is considered inactive, they will be categorized in level 2.

 

Any securities or other assets for which market quotations are not readily available, or securities for which the last bid price does not accurately reflect the current value, are valued at fair value as determined by the Trust’s Fair Value Committee (the “Committee”) in accordance with the Trust’s Portfolio Securities Valuation Procedures (the “Procedures”). Pursuant to the Procedures, the Committee will consider, among others, the following factors to determine a security’s fair value: (i) the nature and pricing history (if any) of the security; (ii) whether any dealer quotations for the security are available; and (iii) possible valuation methodologies that could be used to determine the fair value of the security. In the absence of readily available market quotations, or other observable inputs, securities valued at fair value pursuant to the Procedures would be categorized as level 3.

 

Money market funds are valued at their net asset value of $1.00 per share and are categorized as level 1. Securities with maturities of 60 days or less may be valued at amortized cost, which approximates fair value and would be

 

11

 

  THE NORTH COUNTRY FUNDS  
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
May 31, 2022

 

categorized as level 2. The ability of issuers of debt securities held by the Fund to meet its obligations may be affected by economic or political developments in a specific country or region.

 

The Fund utilizes various methods to measure the fair value of most of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:

 

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access.

 

Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

 

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

 

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

 

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

 

The following is a summary of inputs used as of May 31, 2022, in valuing the Fund’s assets carried at fair value.

 

North Country Large Cap Equity Fund:                
                 
Assets  Level 1   Level 2   Level 3*   Total 
Common Stock **  $134,505,937   $   $   $134,505,937 
Money Market Fund   1,546,088            1,546,088 
Total  $136,052,025   $   $   $136,052,025 

 

*The Fund did not hold any Level 3 investments during the period.

 

**See Schedule of Investments for industry classifications.

 

Federal Income Taxes – The Fund makes no provision for federal income or excise tax. The Fund intends to qualify each year as regulated investment companies (“RICs”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of its taxable income. The Fund also intends to distribute sufficient net investment income and net capital gains, if any,

 

12

 

  THE NORTH COUNTRY FUNDS  
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
May 31, 2022

 

so that it will not be subject to excise tax on undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Fund could incur a tax expense.

 

Management has analyzed the Fund’s tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years November 30, 2019 to November 30, 2021 or expected to be taken in the Fund’s November 30, 2022 year-end tax returns. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. The Fund identifies their major tax jurisdictions as U.S. Federal and New York State.

 

Dividends and Distributions – The Fund will pay dividends from net investment income, if any, on an annual basis. The Fund will declare and pay distributions from net realized capital gains, if any, annually. Income and capital gain distributions to shareholders are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

 

Security Transactions – Securities transactions are recorded no later than the first business day after the trade date, except for reporting purposes when trade date is used. Realized gains and losses on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities using the effective yield method. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.

 

Indemnification – The Trust indemnifies its officers and trustees for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss due to these warranties and indemnities to be remote.

 

Cash and cash equivalents – Cash and cash equivalents are held with a financial institution. The assets of the Fund may be placed in deposit accounts at U.S. banks and such deposits generally exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The FDIC insures deposit accounts up to $250,000 for each accountholder. The counterparty is generally a single bank rather than a group of financial institutions; thus there may be a greater counterparty credit risk. The Fund places deposits only with those counterparties which are believed to be creditworthy and there has been no history of loss.

 

NOTE 3. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES

 

The Trust has entered into an investment advisory agreement (the “Advisory Agreement”) with North Country Investment Advisers, Inc. (the “Adviser”). Pursuant to the Advisory Agreement, the Adviser is responsible for formulating the Trust’s investment programs, making day-to-day investment decisions and engaging in portfolio transactions, subject to the authority of the Board of Trustees. Under the terms of the agreement, the Fund pays a fee, calculated daily and paid monthly, at an annual rate of 0.75% of the average daily net assets of the Fund. For the six months ended May 31, 2022, the Adviser received advisory fees of $571,530.

 

13

 

  THE NORTH COUNTRY FUNDS  
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
May 31, 2022

 

The Trust has entered into an Underwriting Agreement with Northern Lights Distributors, LLC (“the Distributor”) to serve as the principal underwriter for the Fund and distributor for the Fund’s shares.

 

In addition, certain affiliates of the Distributor provide services to the Fund as follows:

 

Ultimus Fund Solutions, LLC (“UFS”) – UFS, an affiliate of the Distributor, provides administration, fund accounting, and transfer agent services to the Trust. Pursuant to separate servicing agreements with UFS, the Fund pays UFS customary fees for providing administration, fund accounting, and transfer agency services to the Fund. Certain officers of the Trust are also officers of UFS, and are not paid any fees directly by the Fund for serving in such capacities.

 

Northern Lights Compliance Services, LLC (“NLCS”) – NLCS, an affiliate of UFS and the Distributor, provides a Chief Compliance Officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under the terms of such agreement, NLCS receives customary fees from the Fund.

 

BluGiant, LLC (“BluGiant”), an affiliate of UFS and the Distributor, provides EDGAR conversion and filing services as well as print management services for the Fund on an ad-hoc basis. For the provision of these services, BluGiant receives customary fees from the Fund.

 

Certain officers and/or trustees of the Adviser are also officers/trustees of the Trust.

 

NOTE 4. CAPITAL SHARE TRANSACTIONS

 

At May 31, 2022, there were an unlimited number of shares authorized with no par value. Paid in capital for the Fund amounted to $47,093,487.

 

Transactions in capital shares were as follows:

 

   For the Six Months   For the Year 
   Ended   Ended 
   May 31, 2022   November 30, 2021 
   Shares   Amount   Shares   Amount 
Shares sold   214,005   $4,793,615    388,578   $9,092,502 
Shares issued for reinvestment of dividends   521,834    12,764,060    701,718    14,897,468 
Shares redeemed   (774,169)   (17,950,572)   (940,379)   (22,384,836)
Net increase (decrease)   (38,330)  $(392,897)   149,917   $1,605,134 

 

NOTE 5. INVESTMENTS

 

The cost of purchases and proceeds from the sales of securities, other than short-term investments, for the six months May 31, 2022, amounted to $6,091,787 and $17,997,408, respectively.

 

14

 

  THE NORTH COUNTRY FUNDS  
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
May 31, 2022

 

NOTE 6. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION – TAX BASIS

 

The identified cost of investments in securities owned by the Fund for federal income tax purposes, and its gross unrealized appreciation and depreciation at May 31, 2022, were as follows:

 

    Gross   Gross   Net Unrealized 
Tax   Unrealized   Unrealized   Appreciation 
Cost   Appreciation   Depreciation   (Depreciation) 
$56,525,595   $80,246,500   $(720,070)  $79,526,430 

 

NOTE 7. TAX INFORMATION

 

The tax character of distributions paid during the fiscal year ended November 30, 2021 and fiscal year ended November 30, 2020 was as follows:

 

For the year ended November 30, 2021: 
Ordinary   Long-Term   Return of     
Income   Capital Gains   Capital   Total 
$611,331   $15,041,185   $   $15,652,516 
                  
For the year ended November 30, 2020: 
Ordinary   Long-Term   Return of     
Income   Capital Gains   Capital   Total 
$522,754   $8,621,269   $   $9,144,023 

 

As of November 30, 2021, the components of distributable earnings/ (deficit) on a tax basis were as follows:

 

Undistributed   Undistributed   Post October Loss   Capital Loss   Other   Unrealized   Total 
Ordinary   Long-Term   and   Carry   Book/Tax   Appreciation   Accumulated 
Income   Capital Gains   Late Year Loss   Forwards   Differences   (Depreciation)   Earnings/(Deficits) 
$594,682   $13,083,591   $   $   $   $109,460,952   $123,139,225 

 

NOTE 8. CONTROL OWNERSHIP

 

The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Fund creates presumption of control of the Fund, under Section 2(a) 9 of the Act. As of May 31, 2022, SEI Private Trust Company, an account holding shares for the benefit of others in nominee name, held approximately 86% of the voting securities of the Fund.

 

NOTE 9. SUBSEQUENT EVENTS

 

Subsequent events after the date of the Statements of Assets and Liabilities have been evaluated through the date the financial statements were issued. Management has concluded that there is no impact requiring additional adjustment or disclosure in the financial statements.

 

15

 

  THE NORTH COUNTRY FUNDS  
DISCLOSURE OF FUND EXPENSES (Unaudited)

 

As a shareholder of a Fund in The North Country Funds, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Please note, the expenses shown in the tables are meant to highlight ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges (CDSCs) on redemptions.

 

This example is based on an investment of $1,000 invested at December 1, 2021 and held until May 31, 2022.

 

Actual Expenses: The “Actual” section of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during the period.

 

Hypothetical Examples for Comparison Purposes: The “Hypothetical” section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs which may be applicable to your account. Therefore, the “Hypothetical” example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if transactional costs were included, your costs would have been higher.

 

   Beginning  Ending  Expense  Expenses Paid During
   Account Value  Account Value  Ratio  the Period*
   (12/1/21)  (5/31/22)  (Annualized)  (12/1/21-5/31/22)
Large Cap Equity Fund            
Actual  $1,000.00  $870.70  1.00%  $4.66
Hypothetical            
(5% return before expenses)  $1,000.00  $1,019.95  1.00%  $5.04

 

*Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 182 days divided by 365 days.

 

16

 

Rev July 2011

 

FACTS WHAT DO THE NORTH COUNTRY FUNDS DO WITH YOUR PERSONAL INFORMATION?

 

Why? Financial companies choose how they share your personal information.  Federal law gives consumers the right to limit some but not all sharing.  Federal law also requires us to tell you how we collect, share, and protect your personal information.  Please read this notice carefully to understand what we do.

 

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

 

●         Social Security number and wire transfer instructions

 

         account transactions and transaction history

 

         investment experience and purchase history

 

When you are no longer our customer, we continue to share your information as described in this notice.

 

How? All financial companies need to share customers’ personal information to run their everyday business.  In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons The North Country Funds (“The Funds”) choose to share; and whether you can limit this sharing.

 

Reasons we can share your personal information   Do The Funds share?   Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus   Yes   No
For our marketing purposes — to offer our products and services to you   Yes   No
For joint marketing with other financial companies   Yes   No
For our affiliates’ everyday business purposes — information about your transactions and experiences   Yes   No
For our affiliates’ everyday business purposes — information about your creditworthiness   No   We don’t share
For our affiliates to market to you   No   We don’t share
For nonaffiliates to market to you   No   We don’t share

 

Questions?   Call 1-888-350-2990

17

 

Who we are

Who is providing this notice?

The North Country Funds

What we do

How do The Funds protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you.

How do The Funds collect my personal information?

We collect your personal information, for example, when you

 

●     open an account or deposit money

 

●     direct us to buy securities or direct us to sell your securities

 

●     seek advice about your investments

 

We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

 

●     sharing for affiliates’ everyday business purposes — information about your creditworthiness

 

●     affiliates from using your information to market to you

 

●     sharing for non-affiliates to market to you

 

●     State laws and individual companies may give you additional rights to limit sharing.

 

Definitions
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

●     Our affiliates include financial companies such as Glens Falls National Bank and Trust Company and North Country Investment Advisers.

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

 

●     The Funds do not share with nonaffiliates so they can market you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

●     The Funds do not jointly market.

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

How to Obtain Proxy Voting Information

 

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ending June 30, as well as a description of the policies and procedures that the Fund use to determine how to vote proxies is available without charge, upon request, by calling toll-free 1-888-350-2990 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

 

How to Obtain 1st and 3rd Fiscal Quarter Portfolio Holdings

 

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit on Form N-PORT, within sixty days of the end of the period. Form N-PORT is available on the SEC’s website at http://www.sec.gov. The information on Form N-PORT is available without charge, upon request, by calling 1-888-350-2990.

 

 

NC-SAR22

 

 

(a)       Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).

 

(b)       Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

 

Item 2. Code of Ethics.

 

Not applicable.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable.

 

Item 5. Audit Committee of Listed Registrants. Not applicable to open-end investment companies.

 

Item 6. Schedule of Investments. Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to open-end investment companies.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to open-end investment companies.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchases . Not applicable to open-end investment companies.

 

Item 10. Submission of Matters to a Vote of Security Holders. None

 

Item 11. Controls and Procedures.

 

(a)       Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

(b)       There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 12. Disclosure of securities lending activities for closed-end management investment companies.

 

Not applicable to open-end investment companies.

 

Item 13. Exhibits.

 

(a)(1) Code of Ethics filed herewith.

 

(a)(2) Certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.

 

(a)(3) Not applicable for open-end investment companies.

 

(b)       Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.

 

SIGNATURES

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

 

(Registrant) The North Country Funds

 

By (Signature and Title)

/s/ James Colantino

James Colantino, Principal Executive Officer

 

Date 8/5/22

 

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/ James Colantino

James Colantino, Principal Executive Officer

Date 8/5/22

 

 

 

By (Signature and Title)

/s/ Rich Gleason

Rich Gleason, Principal Financial Officer

 

Date 8/5/22

 

 

CERTIFICATIONS

 

I, James Colantino, certify that:

 

1.       I have reviewed this report on Form N-CSR of The North Country Funds;

 

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

 

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

 

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

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

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

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

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

 

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

 

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

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

 

 

Date: 8/5/22                                                                          /s/ James Colantino

James Colantino, Principal Executive Officer

 

 

 

 

 

 

 

 

I, Rich Gleason, certify that:

 

1.       I have reviewed this report on Form N-CSR of The North Country Funds;

 

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

 

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

 

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

 

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

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

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

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

 

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

 

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

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

 

 

Date: 8/5/22                                                                          /s/ Rich Gleason

Rich Gleason, Principal Financial Officer

 

certification

James Colantino, President, and Rich Gleason, Treasurer of The North Country Funds (the “Registrant”), each certify to the best of his or her knowledge that:

1.       The Registrant’s periodic report on Form N-CSR for the period ended May 31, 2022 (the “Form N-CSR”) fully complies with the requirements of Sections 15(d) of the Securities Exchange Act of 1934, as amended; and

2.       The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Principal Executive Officer                             Principal Financial Officer

The North Country Funds                               The North Country Funds

 

 

/s/ James Colantino                                    /s/ Rich Gleason

James Colantino                                            Rich Gleason

Date: 8/5/22                                                Date: 8/5/22

 

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to The North Country Funds. and will be retained by The North Country Funds and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.

 

This certification is being furnished to the Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR filed with the Commission.

 

 

 

 

 

 

 

 

 

 

 

 



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