Close

Form N-30B-2 LIBERTY ALL STAR GROWTH For: Sep 30

December 6, 2022 10:56 AM EST

News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.

 

 

 

LIBERTY ALL-STAR® GROWTH FUND
Periods Ended September 30, 2022 (Unaudited)

 

 

Fund Statistics
Net Asset Value (NAV)   $5.04
Market Price   $4.95
Discount   -1.8%

 

  Quarter Year-to-Date
Distributions* $0.11 $0.40
Market Price Trading Range $4.92 to $6.90 $4.92 to $9.09
Premium/(Discount) Range 13.5% to -2.5% 13.5% to -2.5%

 

Performance
Shares Valued at NAV with Dividends Reinvested -4.22% -34.78%
Shares Valued at Market Price with Dividends Reinvested -13.52% -41.28%
Dow Jones Industrial Average -6.17% -19.72%
Lipper Multi-Cap Growth Mutual Fund Average -2.38% -34.49%
NASDAQ Composite Index -3.91% -32.00%
Russell Growth Benchmark -1.55% -30.42%
S&P 500® Index -4.88% -23.87%

 

*Sources of distributions to shareholders may include ordinary dividends, long-term capital gains and return of capital. The final determination of the source of all distributions in 2022 for tax reporting purposes will be made after year end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during its fiscal year and may be subject to changes based on tax regulations. Based on current estimates no portion of the distributions consist of a return of capital. Pursuant to Section 852 of the Internal Revenue Code, the taxability of these distributions will be reported on Form 1099-DIV for 2022.

 

Performance returns for the Fund are total returns, which include dividends. Returns are net of management fees and other Fund expenses.

 

The returns shown for the Lipper Multi-Cap Growth Mutual Fund Average are based on open-end mutual funds’ total returns, which include dividends, and are net of fund expenses. Returns for the unmanaged Dow Jones Industrial Average, NASDAQ Composite Index, the Russell Growth Benchmark and the S&P 500® Index are total returns, including dividends. A description of the Lipper benchmark and the market indices can be found on page 18.

 

Past performance cannot predict future results. Performance will fluctuate with market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.

 

Closed-end funds raise money in an initial public offering and shares are listed and traded on an exchange. Open-end mutual funds continuously issue and redeem shares at net asset value. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value.

 

 

Liberty All-Star® Growth Fund President’s Letter

 

(Unaudited)

 

Fellow Shareholders: October 2022

 

Persistent inflation and the Federal Reserve’s efforts to combat it combined to send stocks broadly lower in the third quarter. The July – September period was a continuation of pressures that have plagued equities since the beginning of the year—dragging returns into negative territory for three straight quarters—and, of chief concern to investors, raising the prospects of a recession in 2023.

 

For the quarter, the S&P 500® Index returned -4.88 percent; the Dow Jones Industrial Average (DJIA) returned -6.17 percent; and the NASDAQ Composite Index returned -3.91 percent. Through nine months, all three indices stood at lows for the year: the S&P 500®, down 23.87 percent; the DJIA, down 19.72 percent; and the NASDAQ Composite, down 32.00 percent. This was the first time since the global financial crisis more than a decade ago that stocks declined for three straight quarters.

 

Stocks did manage to stage a summer rally that saw the S&P 500® claw back 17 percent of its losses over the mid-June to mid-August period. In July, the S&P 500® had its best month since November 2020 and the NASDAQ Composite had its best since April of that year; better than expected corporate earnings spurred much of the rally. Ultimately, however, investor sentiment was eroded by hawkish comments from Fed Chair Jerome Powell, which culminated in another 0.75 percent hike in the fed funds rate on September 21. The decision lifted the target rate to a range of 3.0 to 3.25 percent from near zero at the start of the year, with expectations of a fourth straight 0.75 percent increase looming in November. Somewhat overlooked in the headline-grabbing interest rate increases was the Fed’s shift to a policy of quantitative tightening (QT), in which it has said it will drain $95 billion a month from its own balance sheet and thereby reduce liquidity throughout the economy.

 

Although additional headwinds were not needed, the situation in Ukraine remained a concern, with territorial gains by Ukrainian forces offset by Russia’s annexation of four regions in the eastern and southern parts of the country. In addition, Britain’s new prime minister, Liz Truss, in office for only a few weeks, faced a crisis of confidence owing to what was generally labeled an ill-conceived tax cut that sent the British pound sharply lower and government bond yields soaring.

 

In contrast to conditions on Wall Street, there were some bright spots on Main Street USA—inflation running at 8 to 9 percent annual rates notwithstanding. Job growth was the highlight, as the U.S. added an average of 405,000 jobs a month in June, July and August, thus extending to 20 the number of consecutive months of job growth. Consumer sentiment and new home starts saw reversals, however, as inflation and higher interest rates took their toll. In the latter part of September, the price of West Texas Intermediate Crude fell to under $80/barrel for the first time since February, but natural gas prices spiked earlier in the quarter and as the quarter closed the OPEC+ cartel was weighing cuts in oil production.

 

Through nine months of the year, value style stocks continued to outperform growth stocks, as represented by the Russell 3000® indices. Over the period, the Russell 3000® Value Index returned -17.97 percent versus -30.57 percent for the corresponding growth index. In the third quarter, however, it was the Russell 3000® Growth Index that outperformed on a relative basis, returning -3.37 percent versus -5.56 percent for its value counterpart.

 

This pattern held true throughout the capitalization spectrum as represented by the Liberty All-Star Growth Fund. For example, through nine months the large-cap Russell 1000® Growth Index returned -30.66 percent compared to the -17.75 percent return for the Value index. In the third quarter, the Russell 1000® Growth led its value counterpart on a relative basis, however, returning -3.60 percent versus -5.62 percent. In the third quarter, the Russell Midcap® Growth Index almost reached break even, returning -0.65 percent, while its value counterpart returned -4.93 percent.

 

 
Third Quarter Report (Unaudited) | September 30, 2022 1

 

 

Liberty All-Star® Growth Fund President’s Letter

 

(Unaudited)

 

Meanwhile, the small-cap Russell 2000® Growth Index was positive in the third quarter, with a return of 0.24 percent, while the corresponding value index returned -4.61 percent.

 

Liberty All-Star® Growth Fund

Liberty All-Star Growth Fund lagged in the third quarter with a -4.22 percent return with shares valued at net asset value (NAV) with dividends reinvested and -13.52 percent when shares are valued at market price with dividends reinvested. (Fund returns are net of expenses.) Both measures of Fund returns trailed the -2.38 percent return of the Fund’s primary benchmark, the Lipper Multi-Cap Growth Mutual Fund Average. Both were also behind the -1.55 percent return of the Fund’s Russell Growth Benchmark. On a relative basis the Fund’s NAV return with dividends reinvested topped those of the S&P 500® and the DJIA but lagged the return of the NASDAQ Composite.

 

Through nine months this year, the Fund posted an NAV return of -34.78 percent and a market price return of -41.28 percent. On a relative basis, the NAV return was essentially equal with the -34.49 percent return of the Lipper Multi-Cap Growth Average but lagged the Russell Growth Benchmark return of -30.42 percent.

 

In the third quarter the Fund’s market price return suffered as a result of a sharp contraction that saw the price of a share go from a 13.5 percent premium to the underlying NAV to a -2.5 percent discount—an extraordinary reversal of 16.0 percentage points, which can happen during significant market distortions.

 

In accordance with the Fund’s distribution policy, the Fund paid a distribution of $0.11 to shareholders during the third quarter, bringing the total distributed to shareholders since 1997, when the distribution policy commenced, to $16.40 per share. The Fund’s distribution policy is a major component of the Fund's total return, and we continue to emphasize that shareholders should include these distributions when determining the total return on their investment in the Fund.

 

We are disappointed with the Fund’s quarterly and year-to-date results but point out that owing to good performance in previous periods long-term Fund returns compare favorably with key benchmarks. We renew our commitment to hard work and thoughtful decision making on behalf of investors and continue to have confidence in the underlying strength of the Fund’s philosophy, structure and processes.

 

Sincerely,

 

 

William R. Parmentier, Jr.

President and Chief Executive Officer
Liberty All-Star® Growth Fund, Inc.

 

 

The views expressed in the President’s letter reflect the views of the President as of October 2022 and may not reflect his views on the date this report is first published or anytime thereafter. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the Fund disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent

 

 

2 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Table of Distributions & Rights Offerings

 

(Unaudited)

 

    Rights Offerings
Year Per Share Distributions Month Completed Shares Needed to Purchase One Additional Share Subscription Price
1997 $1.24      
1998 1.35 July 10 $12.41
1999 1.23      
2000 1.34      
2001 0.92 September 8 6.64
2002 0.67      
2003 0.58 September 81 5.72
2004 0.63      
2005 0.58      
2006 0.59      
2007 0.61      
2008 0.47      
20092 0.24      
2010 0.25      
2011 0.27      
2012 0.27      
2013 0.31      
2014 0.33      
20153 0.77      
2016 0.36      
2017 0.42      
2018 0.46 November 3 4.81
2019 0.46      
2020 0.63 March 5 4.34
2021 1.02 June 51 8.21
2022        
1st Quarter 0.15      
2nd Quarter 0.14      
3rd Quarter 0.11      
Total $16.40      

 

1The number of shares offered was increased by an additional 25 percent to cover a portion of the over-subscription requests.

2Effective with the second quarter distribution, the annual distribution rate was changed from 10 percent to 6 percent.

3Effective with the second quarter distribution, the annual distribution rate was changed from 6 percent to 8 percent.

 

DISTRIBUTION POLICY

 

 

The current policy is to pay distributions on its shares totaling approximately 8 percent of its net asset value per year, payable in four quarterly installments of 2 percent of the Fund’s net asset value at the close of the New York Stock Exchange on the Friday prior to each quarterly declaration date. Sources of distributions to shareholders may include ordinary dividends, long-term capital gains and return of capital. The final determination of the source of all distributions in 2022 for tax reporting purposes will be made after year end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholder 1099-DIV forms after the end of the year. If the Fund’s ordinary dividends and long-term capital gains for any year exceed the amount distributed under the distribution policy, the Fund may, in its discretion, retain and not distribute capital gains and pay income tax thereon to the extent of such excess.

 

 
Third Quarter Report (Unaudited) | September 30, 2022 3

 

 

Liberty All-Star® Growth Fund Top 20 Holdings & Economic Sectors

 

September 30, 2022 (Unaudited)

 

Top 20 Holdings* Percent of Net Assets
SPS Commerce, Inc. 2.96%
Amazon.com, Inc. 2.25
Microsoft Corp. 1.87
Casella Waste Systems, Inc. 1.83
FirstService Corp. 1.82
Visa, Inc. 1.73
UnitedHealth Group, Inc. 1.64
Montrose Environmental Group, Inc. 1.59
MSCI, Inc. 1.56
Globant SA 1.51
Danaher Corp. 1.46
Workday, Inc. 1.43
Regeneron Pharmaceuticals, Inc. 1.38
Salesforce, Inc. 1.35
Intuit, Inc. 1.32
Yum! Brands, Inc. 1.27
Thermo Fisher Scientific, Inc. 1.26
Autodesk, Inc. 1.24
Alphabet, Inc. 1.24
S&P Global, Inc. 1.22
  31.93%

 

Economic Sectors* Percent of Net Assets
Information Technology 28.32%
Health Care 21.90
Consumer Discretionary 13.06
Industrials 12.01
Financials 9.03
Communication Services 3.86
Real Estate 3.74
Materials 3.08
Consumer Staples 1.62
Energy 1.34
Other Net Assets 2.04
  100.00%

 

*Because the Fund is actively managed, there can be no guarantee that the Fund will continue to hold securities of the indicated issuers and sectors in the future.

 

 

4 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Stock Changes in the Quarter

 

(Unaudited)

 

The following are the largest ($2 million or more) stock changes - both purchases and sales - that were made in the Fund’s portfolio during the third quarter of 2022.

 

  Shares
Security Name Purchases (Sales) Held as of 9/30/22
Purchases    

Deckers Outdoor Corp.

10,000 10,000
Starbucks Corp. 29,491 29,491
Ulta Beauty, Inc. 7,000 7,000

 

Sales    

Novanta, Inc.

(13,750) 13,905
Walt Disney Co. (22,299) 0

 

 
Third Quarter Report (Unaudited) | September 30, 2022 5

 

 

  Investment Managers/
Liberty All-Star® Growth Fund Portfolio Characteristics

 

(Unaudited)

 

THE FUND’S THREE GROWTH INVESTMENT MANAGERS AND THE MARKET CAPITALIZATION ON WHICH EACH FOCUSES:

 

 

 

ALPS Advisors, Inc., the investment advisor to the Fund, has the ultimate authority (subject to oversight by the Board of Directors) to oversee the investment managers and recommend their hiring, termination and replacement.

 

MANAGERS’ DIFFERING INVESTMENT STRATEGIES ARE REFLECTED IN PORTFOLIO CHARACTERISTICS

 

 

The portfolio characteristics table below is a regular feature of the Fund’s shareholder reports. It serves as a useful tool for understanding the value of the Fund’s multi-managed portfolio. The characteristics are different for each of the Fund’s three investment managers. These differences are a reflection of the fact that each has a different capitalization focus and investment strategy. The shaded column highlights the characteristics of the Fund as a whole, while the first three columns show portfolio characteristics for the Russell Smallcap, Midcap and Largecap Growth indices. See page 18 for a description of these indices.

 

PORTFOLIO CHARACTERISTICS As of September 30, 2022 (Unaudited)

 

 

   

Market Capitalization
Spectrum

 
  Russell Growth Small   Large  
  Smallcap Midcap Largecap Total
  Index Index Index Weatherbie Congress Sustainable Fund
Number of Holdings 1,121 407 518 50 40 28 117*
Percent of Holdings in Top 10 6% 12% 46% 48% 31% 47% 19%

Weighted Average Market Capitalization (billions)

$3.0 $22.1 $709.8 $3.0 $14.5 $321.0 $116.8
Average Five-Year Earnings Per Share Growth 18% 20% 24% 29% 28% 23% 26%
Average Five-Year Sales Per Share Growth 9% 13% 16% 11% 13% 14% 12%
Price/Earnings Ratio** 16x 23x 23x 30x 21x 27x 25x

 

*Certain holdings are held by more than one manager.
**Excludes negative earnings.

 

 

6 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

   SHARES   VALUE 
COMMON STOCKS (97.96%)          
COMMUNICATION SERVICES (3.86%)          
Entertainment (1.77%)          
Netflix, Inc.(a)   12,283   $2,891,909 
Take-Two Interactive Software, Inc.(a)   20,000    2,180,000 
         5,071,909 

Interactive Media & Services (1.88%)

          
Alphabet, Inc., Class C(a)   36,860    3,544,089 
Match Group, Inc.(a)   38,237    1,825,817 
         5,369,906 

Media (0.21%)

          
TechTarget, Inc.(a)   10,148    600,762 
           
CONSUMER DISCRETIONARY (13.06%)          

Distributors (0.78%)

          
Pool Corp.   7,000   2,227,470 
           

Diversified Consumer Services (1.07%)

          
Chegg, Inc.(a)   145,153    3,058,374 
           

Hotels, Restaurants & Leisure (3.17%)

          
Planet Fitness, Inc., Class A(a)   36,922    2,128,922 
Starbucks Corp.   29,491    2,484,912 
Wingstop, Inc.   6,483    813,098 
Yum! Brands, Inc.   34,233    3,640,337 
         9,067,269 

Internet & Direct Marketing Retail (2.50%)

          
Amazon.com, Inc.(a)   56,950    6,435,350 
Xometry, Inc., Class A(a)   12,533    711,749 
         7,147,099 

Leisure Products (0.09%)

          
Latham Group, Inc.(a)   73,068    262,314 
           

Multiline Retail (0.37%)

          
Ollie's Bargain Outlet Holdings, Inc.(a)   20,244    1,044,590 
           

Specialty Retail (3.79%)

          
Asbury Automotive Group, Inc.(a)   18,000    2,719,800 
Floor & Decor Holdings, Inc., Class A(a)   30,500    2,142,930 
MYT Netherlands Parent BV(a)(b)(c)   70,771    815,282 
National Vision Holdings, Inc.(a)   138    4,506 
Ulta Beauty, Inc.(a)   7,000    2,808,330 

 

See Notes to Schedule of Investments. 

 
Third Quarter Report (Unaudited) | September 30, 2022 7

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

   SHARES   VALUE 
COMMON STOCKS (continued)          
Specialty Retail (continued)          
Williams-Sonoma, Inc.   20,000   $2,357,000 
         10,847,848 
Textiles, Apparel & Luxury Goods (1.29%)          
Canada Goose Holdings, Inc.(a)(c)   36,645    558,470 
Deckers Outdoor Corp.(a)   10,000    3,126,100 
         3,684,570 
CONSUMER STAPLES (1.62%)          
Food Products (0.87%)          
McCormick & Co., Inc.   35,000    2,494,450 
           
Household Products (0.75%)          
Church & Dwight Co., Inc.   30,000    2,143,200 
           
ENERGY (1.34%)          
Energy Equipment & Services (1.34%)          
Core Laboratories NV   170,322    2,295,940 
Dril-Quip, Inc.(a)   78,830    1,538,762 
         3,834,702 
FINANCIALS (9.03%)          
Banks (1.58%)          
First Republic Bank   18,000    2,349,900 
Seacoast Banking Corp. of Florida   71,772    2,169,667 
         4,519,567 
Capital Markets (5.88%)          
Hamilton Lane, Inc., Class A   47,857    2,852,756 
MSCI, Inc.   10,555    4,451,993 
Raymond James Financial, Inc.   30,000    2,964,600 
S&P Global, Inc.   11,474    3,503,586 
StepStone Group, Inc., Class A   124,476    3,050,907 
         16,823,842 
Consumer Finance (0.92%)          
American Express Co.   17,090    2,305,612 
LendingTree, Inc.(a)   5,568    132,852 
Upstart Holdings, Inc.(a)(c)   9,101    189,210 
         2,627,674 
Insurance (0.06%)          
Goosehead Insurance, Inc., Class A(a)   4,470    159,311 

 

See Notes to Schedule of Investments.

 

8 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

 

 

SHARES

  

VALUE 

 
COMMON STOCKS (continued)        
Thrifts & Mortgage Finance (0.59%)          
Axos Financial, Inc.(a)   49,333   $1,688,669 
           
HEALTH CARE (21.90%)          
Biotechnology (4.21%)          
ACADIA Pharmaceuticals, Inc.(a)   61,536    1,006,729 
Horizon Pharma Plc(a)   37,500    2,320,875 
Natera, Inc.(a)   20,848    913,559 
Neurocrine Biosciences, Inc.(a)   30,000    3,186,300 
Regeneron Pharmaceuticals, Inc.(a)   5,750    3,961,003 
Ultragenyx Pharmaceutical, Inc.(a)   15,908    658,750 
         12,047,216 
Health Care Equipment & Supplies (7.03%)          
Abbott Laboratories   19,807    1,916,525 
Cooper Cos., Inc.   8,500    2,243,150 
Glaukos Corp.(a)   59,356    3,160,113 
Inogen, Inc.(a)   42,692    1,036,562 
Inspire Medical Systems, Inc.(a)   6,323    1,121,511 
Intuitive Surgical, Inc.(a)   15,312    2,870,081 
Nevro Corp.(a)   46,036    2,145,278 
ResMed, Inc.   15,000    3,274,500 
STERIS PLC   14,000    2,327,920 
         20,095,640 
Health Care Providers & Services (3.17%)          
Agiliti, Inc.(a)   95,857    1,371,714 
PetIQ, Inc.(a)   37,494    258,708 
Progyny, Inc.(a)   47,449    1,758,460 
UnitedHealth Group, Inc.   9,303    4,698,387 
US Physical Therapy, Inc.   12,951    984,535 
         9,071,804 
Health Care Technology (0.61%)          
Definitive Healthcare Corp.(a)   111,773    1,736,953 
           
Life Sciences Tools & Services (6.68%)          
Azenta, Inc.   41,000    1,757,260 
Charles River Laboratories International, Inc.(a)   10,500    2,066,400 
Danaher Corp.   16,193    4,182,490 
IQVIA Holdings, Inc.(a)   14,993    2,715,832 
Mettler-Toledo International, Inc.(a)   2,500    2,710,300 
Thermo Fisher Scientific, Inc.   7,093    3,597,499 
West Pharmaceutical Services, Inc.   8,500    2,091,680 
         19,121,461 

 

See Notes to Schedule of Investments. 

 
Third Quarter Report (Unaudited) | September 30, 2022 9

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

   SHARES   VALUE 
COMMON STOCKS (continued)          
Pharmaceuticals (0.20%)          
Aerie Pharmaceuticals, Inc.(a)   38,209   $578,102 
           
INDUSTRIALS (12.01%)          
Aerospace & Defense (0.19%)          
Kratos Defense & Security Solutions, Inc.(a)   54,730    556,057 
           
Building Products (0.90%)          
Masco Corp.   55,000    2,567,950 
           
Commercial Services & Supplies (4.45%)          
Casella Waste Systems, Inc., Class A(a)   68,625    5,242,264 
Copart, Inc.(a)   27,500    2,926,000 
Montrose Environmental Group, Inc.(a)   135,039    4,544,062 
         12,712,326 
Construction & Engineering (1.09%)          
Ameresco, Inc., Class A(a)   46,835    3,113,591 
           
Electrical Equipment (0.53%)          
Generac Holdings, Inc.(a)   8,500    1,514,190 
           
Machinery (0.98%)          
IDEX Corp.   14,000    2,797,900 
           
Professional Services (1.05%)          
Booz Allen Hamilton Holding Corp.   32,500    3,001,375 
           
Road & Rail (0.86%)          
Saia, Inc.(a)   13,000    2,470,000 
           
Trading Companies & Distributors (1.96%)          
SiteOne Landscape Supply, Inc.(a)   31,286    3,258,124 
Transcat, Inc.(a)   31,145    2,357,365 
         5,615,489 
INFORMATION TECHNOLOGY (28.32%)          
Communications Equipment (0.71%)          
Ciena Corp.(a)   50,000    2,021,500 
           
Electronic Equipment, Instruments & Components (4.02%)          
Keysight Technologies, Inc.(a)   20,000    3,147,200 
Novanta, Inc.(a)   13,905    1,608,113 

 

See Notes to Schedule of Investments.

 

10 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

   SHARES   VALUE 
COMMON STOCKS (continued)
Electronic Equipment, Instruments & Components (continued)
Teledyne Technologies, Inc.(a)   6,500   $2,193,555 
Trimble, Inc.(a)   50,000    2,713,500 
Zebra Technologies Corp., Class A(a)   7,000    1,834,070 
         11,496,438 
IT Services (6.01%)          
Akamai Technologies, Inc.(a)   32,000    2,570,240 
CI&T, Inc., Class A(a)   138,629    1,301,726 
FleetCor Technologies, Inc.(a)   14,129    2,489,106 
Globant SA(a)   23,120    4,325,290 
Grid Dynamics Holdings, Inc.(a)   83,568    1,565,229 
Visa, Inc., Class A   27,799    4,938,492 
         17,190,083 
Semiconductors & Semiconductor Equipment (3.76%)          
Diodes, Inc.(a)   35,000    2,271,850 
Entegris, Inc.   28,500    2,366,070 
Impinj, Inc.(a)   27,916    2,234,117 
Monolithic Power Systems, Inc.   6,000    2,180,400 
Skyworks Solutions, Inc.   20,000    1,705,400 
         10,757,837 
Software (13.82%)          
Adobe, Inc.(a)   6,986    1,922,547 
Autodesk, Inc.(a)   19,028    3,554,431 
Ebix, Inc.(c)   18,925    359,007 
Everbridge, Inc.(a)   998    30,818 
Intuit, Inc.   9,766    3,782,567 
Microsoft Corp.   22,909    5,335,506 
Paycom Software, Inc.(a)   8,000    2,639,920 
Qualys, Inc.(a)   19,000    2,648,410 
Rapid7, Inc.(a)   17,492    750,407 
Salesforce, Inc.(a)   26,782    3,852,323 
SEMrush Holdings, Inc., Class A(a)(c)   9,983    111,910 
SPS Commerce, Inc.(a)   68,140    8,465,032 
Vertex, Inc., Class A(a)   143,808    1,965,855 
Workday, Inc., Class A(a)   26,935    4,100,046 
         39,518,779 
MATERIALS (3.08%)          
Chemicals (2.03%)          
Ecolab, Inc.   23,049    3,328,737 
Sherwin-Williams Co.   12,167    2,491,193 
         5,819,930 

 

See Notes to Schedule of Investments. 

 
Third Quarter Report (Unaudited) | September 30, 2022 11

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

   SHARES   VALUE 
COMMON STOCKS (continued)          
Containers & Packaging (1.05%)          
Ball Corp.   61,930   $2,992,457 
           
REAL ESTATE (3.74%)          
Equity Real Estate Investment Trusts (REITs) (1.92%)          
Equinix, Inc.   5,022    2,856,715 
Sun Communities, Inc.   19,500    2,638,935 
         5,495,650 
Real Estate Management & Development (1.82%)          
FirstService Corp.   43,818    5,214,780 
           
TOTAL COMMON STOCKS          
(COST OF $261,851,395)        280,181,034 
           
SHORT TERM INVESTMENTS (2.81%)          
MONEY MARKET FUND (2.09%)          
State Street Institutional US Government Money          
Market Fund, 2.92%(d)          
(COST OF $5,970,007)   5,970,007    5,970,007 
           
INVESTMENTS PURCHASED WITH COLLATERAL FROM          
SECURITIES LOANED (0.72%)          
State Street Navigator Securities Lending Government          
Money Market Portfolio, 3.07%          
(COST OF $2,070,167)   2,070,167    2,070,167 
           
TOTAL SHORT TERM INVESTMENTS          
(COST OF $8,040,174)        8,040,174 
           
TOTAL INVESTMENTS (100.77%)          
(COST OF $269,891,569)        288,221,208 
           
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.77%)        (2,209,416)
           
NET ASSETS (100.00%)       $286,011,792 
           
NET ASSET VALUE PER SHARE          
(56,719,883 SHARES OUTSTANDING)       $5.04 

 

See Notes to Schedule of Investments.

 

12 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Schedule of Investments

 

September 30, 2022 (Unaudited)

 

(a)Non-income producing security.
(b)American Depositary Receipt.
(c)Security, or a portion of the security position, is currently on loan. The total market value of securities on loan is $2,013,288.
(d)Rate reflects seven-day effective yield on September 30, 2022.

 

See Notes to Schedule of Investments. 

 
Third Quarter Report (Unaudited) | September 30, 2022 13

 

 

Liberty All-Star® Growth Fund Notes to Schedule of Investments

 

September 30, 2022 (Unaudited)

 

Security Valuation

Equity securities are valued at the last sale price at the close of the principal exchange on which they trade, except for securities listed on the NASDAQ Stock Market LLC (“NASDAQ”), which are valued at the NASDAQ official closing price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

 

Cash collateral from securities lending activity is reinvested in the State Street Navigator Securities Lending Government Money Market Portfolio (“State Street Navigator”), a registered investment company under the Investment Company Act of 1940 (the “1940 Act”), which operates as a money market fund in compliance with Rule 2a-7 under the 1940 Act. Shares of registered investment companies are valued daily at that investment company’s net asset value per share.

 

The Fund’s investments are valued at market value or, in the absence of market value with respect to any portfolio securities, at fair value according to procedures adopted by the Fund's Board of Directors (the "Board"). Effective September 8, 2022, the Board approved changes to the Fund’s valuation policy to comply with Rule 2a-5 and designated ALPS Advisors, Inc. (the “Advisor”) as the Fund’s Valuation Designee (as defined in the rule). The Valuation Designee will be responsible for determining fair value in good faith for all Fund investments, subject to oversight by the Board. When market quotations are not readily available, or in management’s judgment they do not accurately reflect fair value of a security, or an event occurs after the market close but before the Fund is priced that materially affects the value of a security, the security will be valued by the Advisor's Valuation Committee, using fair valuation procedures established by the Valuation Designee. Examples of potentially significant events that could materially impact a Fund’s net asset value include, but are not limited to: single issuer events such as corporate actions, reorganizations, mergers, spin-offs, liquidations, acquisitions and buyouts; corporate announcements on earnings or product offerings; regulatory news; and litigation and multiple issuer events such as governmental actions; natural disasters or armed conflicts that affect a country or a region; or significant market fluctuations. Potential significant events are monitored by the Advisor, Sub-Advisers and/or the Valuation Committee through independent reviews of market indicators, general news sources and communications from the Fund’s custodian. As of September 30, 2022, the Fund held no securities that were fair valued.

 

Security Transactions

Security transactions are recorded on trade date. Cost is determined and gains/(losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

 

Income Recognition

Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date.

 

The Fund estimates components of distributions from real estate investment trusts (“REITs”). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Once the REIT reports annually the tax character of its distributions, the Fund revises its estimates. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

 

 

14 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Notes to Schedule of Investments

 

September 30, 2022 (Unaudited)

 

Lending of Portfolio Securities

The Fund may lend its portfolio securities only to borrowers that are approved by the Fund’s securities lending agent, State Street Bank & Trust Co. (“SSB”). The Fund will limit such lending to not more than 20% of the value of its total assets. The borrower pledges and maintains with the Fund collateral consisting of cash (U.S. Dollar only), securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, or by irrevocable bank letters of credit issued by a person other than the borrower or an affiliate of the borrower. The initial collateral received by the Fund is required to have a value of no less than 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of no less than 105% of the market value for all other securities. The collateral is maintained thereafter, at a market value equal to no less than 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

 

Any cash collateral received is reinvested in State Street Navigator. Non-cash collateral, in the form of securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, is not disclosed in the Fund’s Schedule of Investments as it is held by the lending agent on behalf of the Fund, and the Fund does not have the ability to re-hypothecate these securities.

 

The following is a summary of the Fund’s securities lending positions and related cash and non-cash collateral received as of September 30, 2022:

 

Market Value of Securities on Loan Cash Collateral Received Non-Cash Collateral Received Total Collateral Received
$2,013,288 $2,070,167 $14,291 $2,084,458

 

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by SSB. SSB’s indemnity allows for full replacement of securities lent wherein SSB will purchase the unreturned loaned securities on the open market by applying the proceeds of the collateral, or to the extent such proceeds are insufficient or the collateral is unavailable, SSB will purchase the unreturned loan securities at SSB’s expense. However, the Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

 

Fair Value Measurements

The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

 

 

Third Quarter Report (Unaudited) | September 30, 2022 15

 

 

Liberty All-Star® Growth Fund Notes to Schedule of Investments

 

September 30, 2022 (Unaudited)

 

Valuation techniques used to value the Fund’s investments by major category are as follows:

 

Equity securities that are valued based on unadjusted quoted prices in active markets are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the mean of the most recent quoted bid and ask prices on such day and are generally categorized as Level 2 in the hierarchy. Investments in shares of registered investment companies are valued at their closing NAV each business day and are categorized as Level 1 in the hierarchy.

 

Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.

 

These inputs are categorized in the following hierarchy under applicable financial accounting standards:

 

Level 1 –  Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
   
Level 2 –  Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
   
Level 3 –  Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

  

The following is a summary of the inputs used to value the Fund’s investments as of September 30, 2022:

 

   Valuation Inputs     
Investments in Securities at Value  Level 1   Level 2   Level 3   Total 
Common Stocks*  $280,181,034   $   $   $280,181,034 
Short Term Investments   8,040,174            8,040,174 
Total  $288,221,208   $   $   $288,221,208 

 

*See Schedule of Investments for industry classifications.

 

The Fund did not have any securities which used significant unobservable inputs (Level 3) in determining fair value during the period.

 

Indemnification

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 against the Fund. Also, under the Fund’s organizational documents and by contract, the Directors and Officers of the Fund are indemnified against certain liabilities that may arise out of their duties to the Fund. However, based on experience, the Fund expects the risk of loss due to these warranties and indemnities to be minimal.

 

 

16 www.all-starfunds.com

 

 

Liberty All-Star® Growth Fund Notes to Schedule of Investments

 

September 30, 2022 (Unaudited)

 

Maryland Statutes

By resolution of the Board of Directors, the Fund has opted into the Maryland Control Share Acquisition Act and the Maryland Business Combination Act. In general, the Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation acquired in a control share acquisition may not be voted except to the extent approved by shareholders at a meeting by a vote of two-thirds of the votes entitled to be cast on the matter (excluding shares owned by the acquirer and by officers or directors who are employees of the corporation). “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within certain statutorily defined ranges (one-tenth but less than one-third, one-third but less than a majority, and more than a majority of the voting power). In general, the Maryland Business Combination Act prohibits an interested shareholder (a shareholder that holds 10% or more of the voting power of the outstanding stock of the corporation) of a Maryland corporation from engaging in a business combination (generally defined to include a merger, consolidation, share exchange, sale of a substantial amount of assets, a transfer of the corporation’s securities and similar transactions to or with the interested shareholder or an entity affiliated with the interested shareholder) with the corporation for a period of five years after the most recent date on which the interested shareholder became an interested shareholder. At the time of adoption, March 19, 2009, the Board and the Fund were not aware of any shareholder that held control shares or that was an interested shareholder under the statutes.

 

 

Third Quarter Report (Unaudited) | September 30, 2022 17

 

 

  Description of Lipper Benchmark
Liberty All-Star® Growth Fund and Market Indices
 

(Unaudited)

 

Dow Jones Industrial Average

A price-weighted measure of 30 U.S. blue-chip companies.

 

Lipper Multi-Cap Growth Mutual Fund Average

The average of funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-Cap growth funds typically have above-average characteristics compared to the S&P SuperComposite 1500® Index.

 

NASDAQ Composite Index

Measures all NASDAQ domestic and international based common type stocks listed on the NASDAQ Stock Market.

 

Russell 3000® Growth Index

Measures the performance of those Russell 3000® companies with lower book-to-price ratios and higher growth values. The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.

 

Russell 3000® Value Index

Measures the performance of those Russell 3000® companies with higher book-to-price ratios and lower growth values.

 

Russell Top 200® Growth Index

Measures the performance of those Russell Top 200® companies with lower book-to-price-ratios and higher growth values. The Russell Top 200® Index measures the performance of the 200 largest companies in the Russell 3000® Index.

 

Russell 1000® Growth Index (Largecap)

Measures the performance of those Russell 1000® companies with lower book-to-price-ratios and higher growth values. The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000® Index.

 

Russell 1000® Value Index (Largecap)

Measures the performance of those Russell 1000® companies with higher book-to-price-ratios and lower growth values.

 

Russell Midcap® Growth Index

Measures the performance of those Russell Midcap® companies with lower book-to-price-ratios and higher growth values. The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000® Index.

 

Russell Midcap® Value Index

Measures the performance of those Russell Midcap® companies with higher book-to-price-ratios and lower growth values.

 

Russell 2000® Growth Index (Smallcap)

Measures the performance of those Russell 2000® companies with lower book-to-price-ratios and higher growth values. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index.

 

 

18 www.all-starfunds.com

 

 

  Description of Lipper Benchmark
Liberty All-Star® Growth Fund and Market Indices
 

(Unaudited)

 

Russell 2000® Value Index (Smallcap)

Measures the performance of those Russell 2000® companies with higher book-to-price-ratios and lower growth values.

 

Russell Growth Benchmark

The average of the Russell Top 200®, Midcap® and 2000® Growth Indices.

 

S&P 500® Index

A large cap U.S. equities index that includes 500 leading companies and represents approximately 80% of the total domestic U.S. equity market capitalization.

 

An investor cannot invest directly in an index.

 

 
Third Quarter Report (Unaudited) | September 30, 2022 19

 

 

 

 



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings