Form N-CSRS Investment Managers Seri For: Apr 30

 

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 811-22894

 

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

 

235 W. Galena Street 

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

 

Constance Dye Shannon

UMB Fund Services, Inc.

235 W. Galena Street 

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

  

(414) 299-2295

Registrant's telephone number, including area code

 

Date of fiscal year end: October 31

 

Date of reporting period: April 30, 2020

Item 1. Report to Stockholders.

 

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

 

 

 

All Terrain Opportunity Fund

(Institutional Class: TERIX)

 

SEMI-ANNUAL REPORT 

APRIL 30, 2020

 

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund, if you hold your shares directly with the Fund, or from your financial intermediary, such as a broker-dealer or bank, if you hold your shares through a financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.   If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold your shares directly with the Fund, you may elect to receive shareholder reports and other communications from the Fund electronically by contacting the Fund at (844) 441-4440 or, if you hold your shares through a financial intermediary, contacting your financial intermediary.   You may elect to receive all future reports in paper free of charge. If you hold your shares directly with the Fund, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports at (844) 441-4440 or, if you hold your shares through a financial intermediary, contacting your financial intermediary. Your election to receive reports in paper will apply to all of the Investment Managers Series Trust II’s Funds you hold directly or through your financial intermediary, as applicable.

All Terrain Opportunity Fund

A series of Investment Managers Series Trust II 

 

Table of Contents

 

Schedule of Investments	1
Statement of Assets and Liabilities	4
Statement of Operations	5
Statements of Changes in Net Assets	6
Financial Highlights	7
Notes to Financial Statements	9
Supplemental Information	17
Expense Example	19

 

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

 

www.allterrainfunds.com

All Terrain Opportunity Fund

SCHEDULE OF INVESTMENTS 

As of April 30, 2020 (Unaudited)

 

Number of Shares						Value
				COMMON STOCKS — 3.8%
				CONSUMER DISCRETIONARY — 0.8%
	100			Amazon.com, Inc.*		$	247,400
				FINANCIALS — 2.0%
	5,000			Mid-America Apartment Communities, Inc. - REIT			559,600
				INDUSTRIALS — 1.0%
	2,000			Honeywell International, Inc.			283,800
				TOTAL COMMON STOCKS
				(Cost $1,091,379)			1,090,800
				EXCHANGE-TRADED FUNDS — 26.9%
				COMMODITY FUNDS — 5.8%
	1,000			ZKB Gold ETF - Class AA USD*1			1,630,800
				EQUITY FUNDS — 21.1%
	8,000			Consumer Discretionary Select Sector SPDR Fund			932,800
	15,000			Consumer Staples Select Sector SPDR Fund			873,900
	7,000			Energy Select Sector SPDR Fund			266,000
	8,100			Health Care Select Sector SPDR Fund			807,813
	6,000			Invesco QQQ Trust Series 1			1,313,460
	3,000			SPDR S&P 500 ETF Trust			871,440
	10,000			Technology Select Sector SPDR Fund			914,100
							5,979,513
				TOTAL EXCHANGE-TRADED FUNDS
				(Cost $7,420,159)			7,610,313
				MUTUAL FUNDS — 7.1%
				EQUITY FUNDS — 0.0%
	266			MFS International Intrinsic Value Fund - Class I			11,794
				FIXED INCOME FUNDS — 7.1%
	218,579			Diamond Hill Short Duration Total Return Fund - Class Y			2,000,000
				TOTAL MUTUAL FUNDS
				(Cost $2,012,665)			2,011,794
				SHORT-TERM INVESTMENTS — 63.7%
	18,023,264			Fidelity Investments Money Market Funds - Treasury Portfolio - Class I, 0.165%2			18,023,264
				TOTAL SHORT-TERM INVESTMENTS
				(Cost $18,023,264)			18,023,264
				TOTAL INVESTMENTS — 101.5%
				(Cost $28,547,467)			28,736,171
				Liabilities in Excess of Other Assets — (1.5)%			(424,489	)
				TOTAL NET ASSETS — 100.0%		$	28,311,682

All Terrain Opportunity Fund

SCHEDULE OF INVESTMENTS - Continued 

As of April 30, 2020 (Unaudited)

 

ETF –	Exchange-Traded Fund
REIT –	Real Estate Investment Trusts

 

*	Non-income producing security.
1	Foreign security denominated in U.S. Dollars.
2	The rate is the annualized seven-day yield at period end.

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund

SUMMARY OF INVESTMENTS

As of April 30, 2020 (Unaudited)

 

Security Type/Sector	Percent of Total Net Assets
Common Stocks
Financials	2.0%
Industrials	1.0%
Consumer Discretionary	0.8%
Total Common Stocks	3.8%
Exchange-Traded Funds
Equity Funds	21.1%
Commodity Funds	5.8%
Total Exchange-Traded Funds	26.9%
Mutual Funds
Fixed Income Funds	7.1%
Equity Funds	0.0%
Total Mutual Funds	7.1%
Short-Term Investments	63.7%
Total Investments	101.5%
Liabilities in Excess of Other Assets	(1.5)%
Total Net Assets	100.0%

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund

STATEMENT OF ASSETS AND LIABILITIES 

As of April 30, 2020 (Unaudited)

 

Assets:
Investments, at value (cost $28,547,467)	$	28,736,171
Receivables:
Investment securities sold		2,903,179
Dividends and interest		37,011
Prepaid expenses		13,692
Total Assets		31,690,053
Liabilities:
Payables:
Investment securities purchased		3,322,024
Advisory fees		14,067
Shareholder servicing fees (Note 7)		754
Fund administration and accounting fees		9,045
Transfer agent fees and expenses		1,661
Custody fees		1,970
Trustees' deferred compensation (Note 3)		13,039
Auditing fees		7,460
Chief Compliance Officer fees		3,203
Legal fees		2,179
Trustees' fees and expenses		1,697
Shareholder reporting fees		252
Accrued other expenses		1,020
Total Liabilities		3,378,371
Net Assets	$	28,311,682
Components of Net Assets:
Paid-in capital (par value of $0.01 per share with an unlimited number of shares authorized)	$	28,753,521
Total accumulated deficit		(441,839	)
Net Assets	$	28,311,682
Shares of beneficial interest issued and outstanding		1,164,029
Net asset value per share	$	24.32

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund

STATEMENT OF OPERATIONS

For the Six Months Ended April 30, 2020 (Unaudited)

 

Investment Income:
Dividends	$	356,624
Interest		32,421
Total investment income		389,045
Expenses:
Advisory fees		183,539
Shareholder servicing fees (Note 7)		12,447
Fund administration and accounting fees		34,686
Transfer agent fees and expenses		7,917
Custody fees		5,968
Trustees' fees and expenses		15,443
Registration fees		10,443
Legal fees		8,204
Auditing fees		7,460
Chief Compliance Officer fees		7,160
Shareholder reporting fees		5,222
Miscellaneous		2,983
Insurance fees		1,512
Total expenses		302,984
Advisory fees waived		(82,656	)
Voluntary advisory fees waived		(23,818	)
Fees paid indirectly (Note 3)		(10,569	)
Net expenses		185,941
Net investment income		203,104
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(321,064	)
Purchased options contracts		8,058
Net realized loss		(313,006	)
Capital gain distributions from regulated investment companies		661
Net change in unrealized appreciation/depreciation on:
Investments		60,340
Net realized and unrealized loss		(252,005	)
Net Decrease in Net Assets from Operations	$	(48,901	)

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund 

STATEMENTS OF CHANGES IN NET ASSETS

 

		For the Six Months Ended April 30, 2020 (Unaudited)				For the Year Ended October 31, 2019
Increase (Decrease) in Net Assets from:
Operations:
Net investment income		$	203,104			$	530,844
Net realized gain (loss) on investments and purchased options contracts			(313,006	)			328,386
Capital gain distributions from regulated investment companies			661				4,972
Net change in unrealized appreciation/depreciation investments and purchased options contracts			60,340				102,363
Net increase (decrease) in net assets resulting from operations			(48,901	)			966,565
Distributions to Shareholders:
Total distributions to shareholders			(799,170	)			(1,900,833	)
Capital Transactions:
Net proceeds from shares sold			3,886,689				1,194,085
Reinvestment of distributions			799,169				1,900,834
Cost of shares redeemed1			(3,826,376	)			(5,345,357	)
Net increase (decrease) in net assets from capital transactions			859,482				(2,250,438	)
Total increase (decrease) in net assets			11,411				(3,184,706	)
Net Assets:
Beginning of period			28,300,271				31,484,977
End of period		$	28,311,682			$	28,300,271
Capital Share Transactions:
Shares sold			162,310				47,271
Shares reinvested			32,116				76,645
Shares redeemed			(151,408	)			(212,236	)
Net increase (decrease) in capital share transactions			43,018				(88,320	)

 

1	Net of redemption fee proceeds of $0 and $50, respectively.

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund

FINANCIAL HIGHLIGHTS

Institutional Class

Per share operating performance.

For a capital share outstanding throughout each period.

 

		For the Six Months Ended April 30, 2020				For the Year Ended October 31,																For the Period November 3, 2014*  through October 31,
		(Unaudited)				2019				2018				2017				2016				2015
Net asset value, beginning of period		$	25.25			$	26.04			$	25.57			$	24.23			$	24.39			$	25.00
Income from Investment Operations:
Net investment income1,2			0.19				0.44				0.37				0.60				0.60				0.29
Net realized and unrealized gain (loss)			(0.33	)			0.35				0.47				1.33				(0.18	)			(0.52	)
Total from investment operations			(0.14	)			0.79				0.84				1.93				0.42				(0.23	)
Less Distributions:
From net investment income			(0.19	)			(0.45	)			(0.37	)			(0.59	)			(0.58	)			(0.38	)
From net realized gain			(0.60	)			(1.13	)			-				-				-				-
Total distributions			(0.79	)			(1.58	)			(0.37	)			(0.59	)			(0.58	)			(0.38	)
Redemption fee proceeds1			-				-	3			-				-	3			-				-
Net asset value, end of period		$	24.32			$	25.25			$	26.04			$	25.57			$	24.23			$	24.39
Total return4			(0.63	)%5			3.28	%			3.23	%			8.05	%			1.74	%			(0.93	)%5
Ratios and Supplemental Data:
Net assets, end of period (in thousands)		$	28,312			$	28,300			$	31,485			$	33,470			$	33,429			$	8,146
Ratio of expenses to average net assets (including interest expense):
Before fees waived and expenses absorbed6			2.31	%7			2.15	%			2.20	%			2.34	%			2.69	%			2.83	%7
After fees waived and expenses absorbed6,8			1.42	%7			1.52	%			1.39	%			1.49	%9			1.78	%			1.95	%7
Ratio of net investment income to average net assets (including interest expense):
Before fees waived and expenses absorbed2			0.66	%7			1.12	%			0.62	%			1.54	%			1.56	%			0.30	%7
After fees waived and expenses absorbed2			1.55	%7			1.75	%			1.43	%			2.39	%			2.47	%			1.18	%7
Portfolio turnover rate			574	%5			799	%			550	%			280	%			206	%			283	%5

 

*

Commencement of operations.

1	Based on average shares outstanding for the period.
2	Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. The ratio does not include net investment income of the investment companies in which the Fund invests.

All Terrain Opportunity Fund

FINANCIAL HIGHLIGHTS - Continued

Institutional Class

 

3	Amount represents less than $0.01 per share.
4	Total returns would have been lower had expenses not been waived or absorbed by the Advisor. Prior to September 16, 2016, returns shown include Rule 12b-1 fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Prior to September 16, 2016, returns shown do not include payment of sales load of 5.75% of offering price which is reduced on sales of $25,000 or more. If the sales charge was included, total returns would be lower.
5	Not annualized.
6	Does not include expenses of the investment companies in which the Fund invests.
7	Annualized.
8	Prior to September 16, 2016, the Advisor had contractually agreed to limit the operating expenses of Class A to 1.95%. Effective September 16, 2016, the Advisor has contractually agreed to limit the operating expenses to 1.70% of the Institutional Class which was re-designated from Class A on that date. Effective May 1, 2017, the Advisor has contractually agreed to limit the operating expenses to 1.60% of the Institutional Class.
9	If interest expense on cash due to broker had been excluded, the expense ratio would have been lowered by 0.01% for the year ended October 31, 2017.

 

See accompanying Notes to Financial Statements.

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS

April 30, 2020 (Unaudited)

 

Note 1 – Organization

The All Terrain Opportunity Fund (the ‘‘Fund’’) is organized as a diversified series of Investment Managers Series Trust II, a Delaware statutory trust (the “Trust”) which is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund seeks to provide capital appreciation with positive returns in all market conditions. The Fund commenced investment operations on November 3, 2014, with three classes of shares: Class A, Class C and Class I. Class I shares were liquidated on December 4, 2015. Class C shares were re-designated to Class I shares on August 29, 2016, and were subsequently liquidated on September 30, 2016. Class A shares were re-designated to Institutional Class on September 16, 2016.

 

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

 

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.”

 

Note 2 – Accounting Policies

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

 

(a) Valuation of Investments 

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

 

(b) Short Sales 

Short sales are transactions under which the Fund sells a security it does not own in anticipation of a decline in the value of that security. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund then is obligated to replace the security borrowed by purchasing the security at market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. When a security is sold short a decrease in the value of the security will be recognized as a gain and an increase in the value of the security will be recognized as a loss, which is potentially limitless. Until the security is replaced, the Fund is required to pay the lender amounts equal to dividend or interest that accrue during the period of the loan which is recorded as an expense. To borrow the security, the Fund also may be required to pay a premium or an interest fee, which are recorded as interest expense. Cash or securities are segregated for the broker to meet the necessary margin requirements. The Fund is subject to the risk that it may not always be able to close out a short position at a particular time or at an acceptable price.

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued 

April 30, 2020 (Unaudited)

 

(c) Options 

The Fund may write or purchase options contracts primarily to generate gains from option premiums or to reduce overall portfolio risk. When the Fund writes or purchases an option, an amount equal to the premium received or paid by the Fund is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Fund on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether the Fund has realized a gain or a loss on investment transactions. The Fund, as a writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.

 

(d) Exchange Traded Funds (“ETFs”)

ETFs typically trade on securities exchanges and their shares may, at times, trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, may involve duplication of advisory fees and certain other expenses. As a result, Fund shareholders indirectly bear their proportionate share of these acquired expenses. Therefore, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in securities.

 

Each ETF in which the Fund invests is subject to specific risks, depending on the nature of the ETF. Each ETF is subject to the risks associated with direct ownership of the securities comprising the index on which the ETF is based. These risks could include liquidity risk, sector risk as well as risks associated with fixed-income securities.

 

(e) Investment Transactions, Investment Income and Expenses

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

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited) 

 

(f) Federal Income Taxes 

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

 

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

 

The Income Tax Statement requires management of the Fund to analyze tax positions taken in the prior three open tax years, if any, any tax positions expected to be taken in the Fund’s current tax year, as defined by the IRS statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the years ended October 31, 2017-2019, and the six months ended April 30, 2020, the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

(g) Distributions to Shareholders

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

 

The character of distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense and gain (loss) items for financial statement and tax purposes.

 

(h) Illiquid Securities 

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

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited)

 

(i) Short-Term Investments

The Fund invests a significant amount (63.7% of its net assets as of April 30, 2020) in the Fidelity Investments Money Market Funds – Treasury Portfolio – Class I (“FISXX”). FISXX invests exclusively in a portfolio of short-term U.S. Treasury securities, as well as repurchase agreements collateralized fully by U.S. Treasury securities. The Fund may also hold cash.

 

FISXX files complete Semi-Annual and Annual Reports with the U.S. Securities and Exchange Commission for semi-annual and annual periods of each fiscal year on Form N-CSR. The Forms N-CSR are available on the website of the U.S. Securities and Exchange Commission at www.sec.gov, and may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The net expense ratio per the March 31, 2020 Annual report of the Fidelity Investments Money Market Funds – Treasury Portfolio – Class I was 0.18%.

 

Note 3 – Investment Advisory and Other Agreements

The Trust, on behalf of the Fund, entered into an Investment Advisory Agreement (the “Agreement”) with Castle Financial & Retirement Planning Associates, Inc. (“Castle Financial”), and Foothill Capital Management, LLC (“Foothill Capital”), who serve as co-investment advisors and construct the Fund’s portfolio (collectively referred to as the “Advisors”). Under the terms of the Agreement, the Fund pays a monthly investment advisory fee to Castle Financial and Foothill Capital and at the following annual rates based on the Fund’s average daily net assets: 

 

	Advisory Fees
Castle Financial	0.56%
Foothill Capital	0.84%
Total	1.40%

 

Prior to December 14, 2018, Bauer Capital Management LLC (“Bauer”) served as a co-investment advisor for the Fund.

 

The Advisors have contractually agreed to waive their fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with SEC Form N-1A), expenses incurred in connection with any merger or reorganization, and extraordinary expenses such as litigation expenses) do not exceed 1.60% of the average daily net assets of Institutional Class shares of the Fund. This agreement is in effect until February 28, 2021 and may be terminated before that date only by the Trust’s Board of Trustees. Any reduction in advisory fees or payment of the Fund’s expenses made by Castle Financial or Foothill Capital is not subject to reimbursement by the Fund.

 

For the six months ended April 30, 2020, the Advisors waived advisory fees and absorbed other expenses totaling $106,474. The advisors will not seek recoupment of any advisory fee waived or other expenses absorbed.

 

		Advisory Fees Accrued				Advisory Fees Waived and/or Other Expenses Absorbed
Castle Financial*		$	110,124			$	73,410
Foothill Capital			73,415				33,064
Total		$	183,539			$	106,474

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited)

 

*

Castle Financial has agreed to voluntarily waive a portion of its advisory fee after expenses reimbursed. The voluntarily advisory fee waived is reported on the Statement of Operations.

 

UMB Fund Services, Inc. (“UMBFS”) serves as the Fund’s fund accountant, transfer agent and co-administrator; and Mutual Fund Administration, LLC (“MFAC”) serves as the Fund’s other co-administrator. UMB Bank, n.a., an affiliate of UMBFS, serves as the Fund’s custodian. The Fund’s allocated fees incurred for fund accounting, fund administration, transfer agency and custody services for the six months ended April 30, 2020, are reported on the Statement of Operations.

 

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

 

Certain trustees and officers of the Trust are employees of UMBFS or MFAC. The Fund does not compensate trustees and officers affiliated with the Fund’s co-administrators. For the six months ended April 30, 2020, the Fund’s allocated fees incurred to Trustees who are not affiliated with the Fund’s co-administrators are reported on the Statement of Operations. A portion of the fees were paid by the Trust’s Co-Administrators. Such amount is shown as a reduction of expenses, “Fees paid indirectly”, on the Statement of Operations.

 

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

 

Dziura Compliance Consulting, LLC provides Chief Compliance Officer (“CCO”) services to the Trust. The Fund’s allocated fees incurred for CCO services for the six months ended April 30, 2020, are reported on the Statement of Operations.

 

Note 4 – Federal Income Taxes 

At April 30, 2020, gross unrealized appreciation and depreciation of investments owned by the Fund, based on cost for federal income tax purposes were as follows:

 

Cost of investments		$	28,892,759
Gross unrealized appreciation		$	167,753
Gross unrealized depreciation			(324,341	)
Net unrealized depreciation on investments		$	(156,588	)

 

The difference between cost amounts for financial statement and federal income tax purposes are due primarily to wash sale loss deferrals.

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited)

 

As of October 31, 2019, the components of accumulated earnings (deficit) on a tax basis were as follows:

 

Undistributed ordinary income		$	635,335
Undistributed long-term gains			-
Tax accumulated earnings			635,335
Accumulated capital and other losses			-
Unrealized deferred compensation			(12,174	)
Unrealized depreciation on investments			(216,928	)
Total accumulated earnings		$	406,223

 

The tax character of the distributions paid during the fiscal years ended October 31, 2019 and October 31, 2018 were as follows:

 

Distributions paid from:		2019				2018
Ordinary income		$	1,382,850			$	462,223
Net long-term capital gains			517,983				-
Total taxable distributions			1,900,833				462,223
Total distributions paid		$	1,900,833			$	462,223

 

Note 5 – Redemption Fee

The Fund may impose a redemption fee of 1.00% of the total redemption amount on all shares redeemed within 60 days of purchase. For the six months ended April 30, 2020 and for the year ended October 31, 2019, the Fund received $0 and $50, respectively.

 

Note 6 - Investment Transactions

For the six months ended April 30, 2020, purchases and sales of investments, excluding short-term investments and options, were $106,912,791 and $113,568,282, respectively. A high portfolio turnover rate may incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The portfolio turnover rate is reported in the Financial Highlights.

 

Note 7 – Shareholder Servicing Plan

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

 

For the six months ended April 30, 2020, shareholder servicing fees incurred are disclosed on the Statement of Operations.

 

Note 8 – Indemnifications

In the normal course of business, the Fund enters into contracts that contain a variety of representations which provide general indemnifications. 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, the Fund expects the risk of loss to be remote.

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited) 

 

Note 9 – Fair Value Measurements and Disclosure

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

 

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

 

●

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the 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 inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used, as of April 30, 2020, in valuing the Fund’s assets carried at fair value:

 

		Level 1				Level 2*				Level 3*				Total
Investments
Common Stocks1		$	1,090,800			$	-			$	-			$	1,090,800
Exchange-Traded Funds1			7,610,313				-				-				7,610,313
Mutual Funds1			2,011,794				-				-				2,011,794
Short-Term Investments			18,023,264				-				-				18,023,264
Total Investments		$	28,736,171			$	-			$	-			$	28,736,171

 

*

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

All Terrain Opportunity Fund

NOTES TO FINANCIAL STATEMENTS – Continued

April 30, 2020 (Unaudited) 

 

1

Common stocks, exchange-traded funds and mutual funds held in the Fund are Level 1 securities. For a detailed break-out of common stocks by sectors, and exchange-traded funds or mutual funds by asset classification, please refer to the Schedule of Investments.

 

Note 10 – Derivatives and Hedging Disclosures 

Derivatives and Hedging requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effects on the Fund’s financial position, performance and cash flows. The Fund invested in options contracts during the six months ended April 30, 2020.

 

The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2020 are as follows:

 

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments		Purchased Options Contracts				Written Options Contracts
Equity contracts		$	8,058			$	-
Total		$	8,058			$	-

 

There was no change in unrealized appreciation/depreciation of derivative instruments.

 

Note 11 – Events Subsequent to the Fiscal Period End

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

 

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

 

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

All Terrain Opportunity Fund

SUPPLEMENTAL INFORMATION (Unaudited)

 

Board Consideration of Investment Advisory Agreement

At an in-person meeting held on April 22, 2020, the Board of Trustees (the “Board”) of Investment Managers Series Trust II (the “Trust”), including the trustees who are not “interested persons” of the Trust (the “Independent Trustees”) as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), reviewed and unanimously approved the renewal of the investment co-advisory agreement (each an “Advisory Agreement”) between the Trust and each of Castle Financial & Retirement Planning Associates, Inc. (the “Castle”) and Foothill Capital Management, LLC (“FCM” and together with Castle, the “Investment Advisors”) with respect to the All Terrain Opportunity Fund series of the Trust (the “Fund”) for an additional one-year term from when it otherwise would expire. In approving renewal of each Advisory Agreement, the Board, including the Independent Trustees, determined that such renewal was in the best interests of the Fund and its shareholders.

 

Background

In advance of the meeting, the Board received information about the Fund and each Advisory Agreement from the Investment Advisors and from Mutual Fund Administration, LLC and UMB Fund Services, Inc., the Trust’s co-administrators, certain portions of which are discussed below. The materials, among other things, included information about each Investment Advisor’s organization and financial condition; information regarding the background, experience, and compensation structure of relevant personnel providing services to the Fund; information about each Investment Advisor’s compliance policies and procedures, disaster recovery and contingency planning, and policies with respect to portfolio execution and trading; information regarding the profitability of each Investment Advisor’s overall relationship with the Fund; reports comparing the performance of the Fund with returns of the HFRX Global Hedge Fund Index and a group of comparable funds (the “Peer Group”) selected by Broadridge Financial Solutions, Inc. (“Broadridge”) from Morningstar, Inc.’s Multialternative fund universe (the “Fund Universe”) for the one-, three-, and five-year periods ended January 31, 2020; and reports comparing the investment advisory fee and total expenses of the Fund with those of the Peer Group and Fund Universe. The Board also received a memorandum from legal counsel to the Trust and the Independent Trustees discussing the legal standards under the 1940 Act and other applicable law for their consideration of the proposed renewal of each Advisory Agreement. In addition, the Board considered information reviewed by the Board during the year at other Board and Board committee meetings. No representatives of the Investment Advisors were present during the Board’s consideration of the Advisory Agreements, and the Independent Trustees were represented by their legal counsel with respect to the matters considered.

 

In renewing each Advisory Agreement, the Board and the Independent Trustees considered a variety of factors, including those discussed below. In their deliberations, the Board and the Independent Trustees did not identify any particular factor that was controlling, and each Trustee may have attributed different weights to the various factors.

 

Nature, Extent and Quality of Services

With respect to the performance results of the Fund, the meeting materials indicated that the Fund’s annualized total returns for the three- and five-year periods were higher than the HFRX Global Hedge Fund Index returns and the Peer Group and Fund Universe median returns. The Fund’s total return for the one-year period was below the Fund Universe and Peer Group median returns and the HFRX Index return by 0.50%, 1.11%, and 2.16%, respectively. The Trustees considered the Investment Advisors’ explanation that the Fund’s underperformance over the one-year period was due to its conservative portfolio and lack of equity exposure.

 

The Board also considered the overall quality of services provided by each Investment Advisor to the Fund. In doing so, the Board considered each Investment Advisor’s specific responsibilities in day-to-day management and oversight of the Fund, as well as the qualifications, experience, and responsibilities of the personnel involved in the activities of the Fund. The Board also considered the overall quality of the organization and operations of each Investment Advisor, as well as its compliance structure. The Board and the Independent Trustees concluded that based on the various factors they had reviewed, the nature, overall quality, and extent of the management and oversight services provided by each Investment Advisor to the Fund were satisfactory.

All Terrain Opportunity Fund

SUPPLEMENTAL INFORMATION (Unaudited) - Continued

 

Advisory Fee and Expense Ratio

With respect to the advisory fee paid by the Fund, the meeting materials indicated that the annual investment advisory fee (gross of fee waivers) was higher than the Peer Group and Fund Universe medians by 0.18% and 0.325%, respectively. The Trustees noted, however, that Castle had waived a significant portion of its advisory fee and FCM had waived a portion of its advisory fee for the year ended January 31, 2020. The Trustees also considered the Investment Advisors’ assertions that the Fund’s advisory fee is appropriate in light of the extensive time and work that the Investment Advisors put into managing the Fund’s investment strategy; and that the strategy is unique in that it incorporates a significant number of factors, a significant amount of research, and a proprietary risk model developed by the Investment Advisors. The Trustees also considered information regarding the allocation of the Fund’s advisory fee between the Investment Advisors. The Trustees also noted that neither Investment Advisor manages assets for any other clients using the same investment strategies as those used by the Fund, and therefore they did not have a good basis for comparing the Fund’s advisory fee with those of other similar client accounts of the Investment Advisors.

 

The meeting materials indicated that the annual total expenses paid by the Fund (net of fee waivers) for the Fund’s most recent fiscal year were slightly above the Peer Group median by 0.02%, and above the Fund Universe median by 0.31%. The Trustees considered that the annual total expenses of the Fund were likely above those of the Peer Group and Fund Universe as a result of the Fund’s higher investment advisory fee. The Trustees also noted that the average net assets of the Fund were lower than the average net assets of corresponding classes of funds in the Peer Group, and significantly lower than the average net assets of corresponding classes of the funds in the Fund Universe, and that certain of those other funds also had significant assets in other classes.

 

The Board and the Independent Trustees concluded that based on the factors they had reviewed, the compensation payable to each Investment Advisor under its respective Advisory Agreement was fair and reasonable in light of the nature and quality of the services each Investment Advisor provides to the Fund.

 

Profitability and Economies of Scale

The Board next considered information prepared by each Investment Advisor relating to its costs and profits with respect to the Fund for the year ended January 31, 2020. The Board noted that FCM waived a portion of its advisory fee and had not realized a profit with respect to the Fund. The Board also observed that Castle waived a significant portion of its advisory fee with respect to the Fund, and determined that Castle’s profit level was reasonable.

 

The Board also considered the benefits received by each Investment Advisor as a result of its relationship with the Fund, other than the receipt of its investment advisory fee, including any research received from broker-dealers providing execution services to the Fund, the beneficial effects from the review by the Trust’s Chief Compliance Officer of each Investment Advisor’s compliance program, and the intangible benefits of each Investment Advisor’s association with the Fund generally and any favorable publicity arising in connection with the Fund’s performance. The Trustees also noted that although there were no advisory fee breakpoints, the asset level of the Fund was not currently likely to lead to significant economies of scale, and that any such economies would be considered in the future as the assets of the Fund grow.

 

Conclusion

Based on these and other factors, the Board and the Independent Trustees concluded that renewal of each Advisory Agreement was in the best interests of the Fund and its shareholders and, accordingly, approved the renewal of each Advisory Agreement.

All Terrain Opportunity Fund

EXPENSE EXAMPLE

For the Six Months Ended April 30, 2020 (Unaudited) 

 

Expense Examples

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

 

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from November 1, 2019 to April 30, 2020.

 

Actual Expenses 

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

 

Hypothetical Example for Comparison Purposes 

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

 

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

 

		Beginning Account Value	Ending Account Value	Expenses Paid During Period*
		11/1/19	4/30/20	11/1/19 - 4/30/20
Institutional Class	Actual Performance	$1,000	$993.70	$7.03
	Hypothetical (5% annual return before expenses)	1,000	1,017.81	7.12

  

*

Expenses are equal to the Fund’s annualized expense ratios of 1.42%, multiplied by the average account values over the period, multiplied by 182/366 (to reflect the six month period). The expense ratios reflect an expense waiver. Assumes all dividends and distributions were reinvested.

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All Terrain Opportunity Fund

A series of Investment Managers Series Trust II

 

Investment Co-Advisor

Castle Financial & Retirement Planning Associates, Inc.

740 River Road, Suite 208 & 209
Fair Haven, New Jersey 07704

 

Investment Co-Advisor

Foothill Capital Management, LLC

740 River Road, Suite 208
Fair Haven, New Jersey 07704

 

Custodian

UMB Bank, n.a.

928 Grand Boulevard, 5^th Floor

Kansas City, Missouri 64106

 

Fund Co-Administrator

Mutual Fund Administration, LLC

2220 East Route 66, Suite 226

Glendora, California 91740

 

Fund Co-Administrator, Transfer Agent and Fund Accountant

UMB Fund Services, Inc.

235 West Galena Street

Milwaukee, Wisconsin 53212

 

Distributor

IMST Distributors, LLC

Three Canal Plaza, Suite 100

Portland, Maine 04101

www.foreside.com

FUND INFORMATION

 

	TICKER	CUSIP
All Terrain Opportunity  Fund – Institutional Class	TERIX	46141T 406

 

Privacy Principles of the All Terrain Opportunity Fund for Shareholders 

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

 

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

 

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

 

Proxy Voting Policies and Procedures

A description of the Fund’s proxy voting policies and procedures related to portfolio securities is available without charge, upon request, by calling the Fund at (844) 441-4440 or on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

 

Proxy Voting Record

Information regarding how the Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also available, without charge and upon request by calling the Fund at (844) 441-4440 or by accessing the Fund’s Form N-PX on the SEC’s website at www.sec.gov.

 

Fund Portfolio Holdings

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

 

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

 

Householding

The Fund will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Fund at (844) 441-4440.

 

All Terrain Opportunity Fund

P.O. Box 2175

Milwaukee, WI 53201

Toll Free: (844) 441-4440

Item 2. Code of Ethics.

 

Not applicable for semi-annual reports.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable for semi-annual reports.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable for semi-annual reports.

 

Item 5. Audit Committee of Listed Registrants.

 

(a)

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

(b)

Not applicable.

 

Item 6. Investments.

 

(a)

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

(b)

Not applicable.

 

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

 

Not applicable to open-end investment companies.

 

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

 

Not applicable to open-end investment companies.

 

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

 

Not applicable to open-end investment companies.

 

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

 

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

Item 11. Controls and Procedures.

 

(a)

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

 

(b)

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

 

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

 

Not applicable to open-end investment companies.

 

Item 13. Exhibits.

 

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

 

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

 

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

 

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

 

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

SIGNATURES

 

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

 

(Registrant)	Investment Managers Series Trust II
By (Signature and Title)	/s/ Terrance Gallagher
	Terrance Gallagher, President/Chief Executive Officer
Date	7/9/2020

  

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/ Terrance Gallagher
	Terrance Gallagher, President/Chief Executive Officer
Date	7/9/2020
By (Signature and Title)	/s/ Rita Dam
	Rita Dam, Treasurer/Chief Financial Officer
Date	7/9/2020

 

EX.99.CERT

 

CERTIFICATIONS

 

I, Terrance Gallagher, certify that:

 

1.	I have reviewed this report on Form N-CSR of All Terrain Opportunity Fund, a series of Investment Managers Series Trust II (the “Trust”);

 

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

 

3.

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

 

4.

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

 

(a)

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

 

(b)

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

 

(c)

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

 

(d)

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

 

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

 

(a)

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

 

(b)

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

 

Date:	7/9/2020		/s/ Terrance Gallagher
			Terrance Gallagher President/Chief Executive Officer

CERTIFICATIONS

 

I, Rita Dam, certify that:

 

1.	I have reviewed this report on Form N-CSR of All Terrain Opportunity Fund, a series of Investment Managers Series Trust II (the “Trust”);

 

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

 

3.

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

 

4.

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

 

(a)

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

 

(b)

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

 

(c)

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

 

(d)

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

 

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

 

(a)

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

 

(b)

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

 

Date:	7/9/2020		/s/ Rita Dam
			Rita Dam Treasurer/Chief Financial Officer

 

EX.99.906CERT

 

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the report on Form N-CSR of All Terrain Opportunity Fund, a series of Investment Managers Series Trust II (the “Trust”); for the six months ended April 30, 2020 (the “Report”), Terrance Gallagher, as President/Chief Executive Officer of the Trust, and Rita Dam, as Treasurer/Chief Financial Officer of the Trust, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his or her knowledge:

 

(1)

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

 

(2)

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

 

Date	7/9/2020
/s/ Terrance Gallagher
Terrance Gallagher
President/Chief Executive Officer
/s/ Rita Dam
Rita Dam
Treasurer/Chief Financial Officer

  

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

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