Form N-CSRS ALPINE EQUITY TRUST

Certified semi-annual shareholder report of registered management investment companies

What is Form N-CSRS?
  • Accession No.: 0000930413-17-002467 Act: 40 File No.: 811-05684 Film No.: 17954732
  • CIK: 0000842436
  • Submitted: 2017-07-07
  • Period of Report: 2017-04-30

N-CSRS HTML

c88529_ncsrs.htm

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: 811-05684

 

 

Alpine Equity Trust

 

(Exact name of registrant as specified in charter)

 

2500 Westchester Avenue, Suite 215

Purchase, New York 10577

 

(Address of principal executive offices)(Zip code)

 

(Name and Address of Agent for
Service)

 

Copy to:

 

Samuel A. Lieber

Alpine Woods Capital Investors, LLC

2500 Westchester Avenue, Suite 215

Purchase, New York 10577

 

Rose DiMartino

Attorney at Law

Willkie Farr & Gallagher

787 7th Avenue, 40th Floor

New York, New York 10019

 

Registrant’s telephone number, including area code: (914) 251-0880

 

Date of fiscal year end: October 31

 

Date of reporting period: November 1, 2016 - April 30, 2017

 

Item 1: Shareholder Report

 

 

Table of Contents

 

Alpine’s Investment Outlook   1  
       
Equity Manager Reports      
       
Alpine International Real Estate Equity Fund   7  
Alpine Realty Income & Growth Fund   15  
Alpine Emerging Markets Real Estate Fund   21  
Alpine Global Infrastructure Fund   30  
Alpine Global Realty Growth & Income Fund   37  
       
Schedules of Portfolio Investments   46  
       
Statements of Assets and Liabilities   56  
       
Statements of Operations   58  
       
Statements of Changes in Net Assets   60  
       
Financial Highlights   65  
       
Notes to Financial Statements   74  
       
Information about your Funds’ Expenses   93  
       
Additional Information   96  
       

 

Additional Alpine Funds are offered in the Alpine Series Trust and Alpine Income Trust. These Funds include:

 

Alpine Dynamic Dividend Fund Alpine Small Cap Fund
   
Alpine Rising Dividend Fund Alpine Ultra Short Municipal Income Fund
   
Alpine Financial Services Fund Alpine High Yield Managed Duration Municipal Fund

 

Alpine’s Series and Income Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing in funds of the Alpine Series Trust and Alpine Income Trust. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 1-888-785-5578, or visiting www.alpinefunds.com. Read it carefully before investing.

 

Mutual fund investing involves risk. Principal loss is possible.

 

Alpine’s Investment Outlook

 

Dear Shareholders:

 

We are pleased to present the semi-annual reports for the Alpine Mutual Funds. The past six months have seen a significant market impact from the election of Donald J. Trump as President. During the ten weeks following the election, the combined agenda of the President and the Republican Congress gave market participants hope that the economy would receive significant fiscal stimulus with a focus on improving corporate earnings. However, at this juncture, roughly six months past the election, no notable legislation has been passed and the prospect of additional economic stimulus seems questionable.

 

Nevertheless, capital markets continued to trade at strong levels. The overall economic trajectory continues on its slow but steady course of improvement. In fact, corporate profits of many companies have been improving over the past year, following the aftermath of the commodity cycle collapse in 2015. It’s worth noting that over the long term, jobless claims have declined from their nadir of 665,000 new claimants for unemployment per month in March of 2009 to 232,000 in April 2017. This is the lowest number since March of 1973, and well below the 50 year average of 358,000 jobs lost. While business layoffs have declined, stronger hiring patterns represented by job openings across all industries are essential. Job openings have been holding at an average annualized level of 5,655,000 since the beginning of 2016, which is the highest level since December of 2000 when the Bureau of Labor Statistics survey commenced. Notably, the economy has added 16 million jobs since the cycle low point at the end of 2009, growing 1.67% per year to 146 million non-farm jobs. This is even faster than the prior economic expansion from late 2003 through 2007 when the U.S. added 1.43% new jobs per year. However, if we go back almost 17 years to the end of the DotCom bubble in 2000 when non-farm payrolls registered 133 million jobs, the economy has only grown employment by 0.59% per year over. That is a far cry from the previous extended period from 1982, when interest rates started coming down, through December of 2000 as the economy added over 43 million jobs. For that period, non-farm jobs grew at approximately 2.25% per year over an 18 year stretch (Source: Bloomberg). Thus, it is understandable why many Americans believe, that our

economy has stagnated, and are hoping for the return to growth reminiscent of their younger days.

 

Even, the often mentioned underemployment level, which also includes part-time and marginally employed people, has only recently fallen below the 10% level down to 8.6% from the high of 17.1% in early 2010. Notably, this current level is about the same as the average from the decade between 1997 and 2007 before the economic and financial collapse in 2008. Although auto sales have come off historically strong levels, new home sales continue its steady recovery. For all these reasons, we believe the United States is poised to generate continued overall strength in its economy despite the ongoing headwinds from globalization and excess productive capacity abroad. Nonetheless, we have yet to overcome those factors which have contributed to a delayed capital expenditures (capex) cycle outside of regions and industries dominated by technological hubs or major trans shipments such as ports for goods and commodities. Thus, Alpine believes that the prospect for a return to wage growth is improving, which may become meaningful over the next year or so. This could lead to higher prices and perhaps rising interest rates.

 

Early in the year, Alpine presented a podcast in which several portfolio managers raised the question “Trump Change or Chump Change?” in assessing the direction of the market. We think that the President’s rhetoric focused many investors on the prospect of rising interest rates and corporate capex in response to a strengthening economy. However, his administration’s agenda for tax reductions, regulatory reform and infrastructure spending (which we believed could have been a significant catalyst for growth) has since floundered. The administration’s ineffectiveness in working with an aligned Congress and the inability to staff many government appointments during the first few months of the Trump Presidency has put into question whether much, if anything, will be accomplished before the prospect of mid-term elections absorbs the House of Representatives. For now, we expect minimal change unless somehow Republicans and Democrats can find common ground on long term economic programs such as infrastructure regeneration. Thus, the United States appears to be back in a state of


 

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governmental gridlock, much like the prior eight years, where low rates dominated the financial markets and business cycles. The Federal Reserve (Fed) will likely continue to seek opportunities to normalize interest rates, boosting 25 basis points at a time as the economy and markets permit, over the next 12-18 months. However, the Fed’s so called “dot plot” graph, projecting future interest rates, may shift lower and slower yet again.

 

Even with moderating prospects, the United States is still leading the world economically, albeit at a slow pace. That said, we see some positive fundamental changes in Japan after nearly two decades of stagnation, and China remains a major industrial force even though it is growing more slowly and must work through its internal financial restructurings over the next number of years. While Europe still appears to be some three or four years behind the United States in terms of job growth and strengthening its banking systems, Germany is leading the Eurozone forward.

 

It is notable that President Trump’s international policies, specifically, rejecting the Trans-Pacific Partnership and not confirming Article 5 of the North Atlantic Treaty Organization (NATO) – to defend members under attack – may weaken the economic and international prominence of our country. Unless new policy initiatives or alignments could be established, China and Germany, and possibly Japan and even Russia may fill leadership, trade and economic voids that we abandon.

 

We believe that the equity markets and bond markets should gradually move towards higher interest rates, albeit, the risk of an inflationary shock to both seems much more remote now than it has anytime over the last few years. Nevertheless, we expect the markets to climb the ‘wall of worry’ between the risk of slowing down a little too much or speeding up a little too much. This could enable a significantly longer economic cycle than we have experienced in quite a while. So, the current seven year expansion could last easily for another two to three years and, possibly, longer. This suggests that investors using fixed-income and equity income strategies might still be able to achieve reasonable total returns even if interest rates rise at a modest annual pace. Meanwhile, equity investors will likely still seek growth in companies that are able to expand market share or apply innovative technology to traditional industries. For example, we highlight autonomous cars, drones, power generation, as well as new fields of endeavor, such as “Big Data” and the ever evolving field of bio-pharma research. Ultimately, those companies or entrepreneurs who can affect fundamental change to transform the way we work, play, learn, feed, entertain and protect ourselves, will likely continue to see great opportunities. Our job at Alpine is to find those companies which can capitalize on such

growth, as well as invest in underappreciated businesses which can excel in more traditional or mundane segments of the economy which may offer ongoing value and growth opportunities for investors.

 

Even though we have enjoyed solid performance by many of our Funds over the past fiscal period, we will continue to explore new ways to add value and attempt to reward your support for our endeavors. We appreciate your interest and look forward to reporting to you at the end of the next fiscal period. Meanwhile, feel free to visit our website for periodic updates on our thinking.

 

Sincerely,

 

 

Samuel A. Lieber
President

 

Past performance is not a guarantee of future results. The specific market, sector or investment conditions that contribute to a Fund’s performance may not be replicated in future periods.

 

Mutual fund investing involves risk. Principal loss is possible. Please refer to individual letters for risks specific to that Fund.

 

This letter and the letters that follow represent the opinions of the Funds’ management and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of results, or investment advice.


 

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Disclosures and Definitions

 

Definitions and Disclosures

 

The specific market, sector or investment conditions that contributed to a Fund’s performance may not be replicated in future periods.

 

Please refer to the Schedule of Portfolio Investments for Fund holdings information. Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security.

 

Diversification does not assure a profit or protect against loss in a declining market.

 

Favorable tax treatment of Fund distributions may be adversely affected, changed or repealed by future changes in tax laws. Alpine may not be able to anticipate the level of dividends that companies will pay in any given timeframe.

 

The Funds’ monthly distributions may consist of net investment income, net realized capital gains and/or a return of capital. If a distribution includes anything other than net investment income, the Funds will provide a notice of the best estimate of its distribution sources when distributed, which will be posted on the Funds’ website; www.alpinefunds.com, or can be obtained by calling 1-800-617-7616. We estimate that the Alpine Equity Trust did not pay any distributions during the fiscal semi-annual period ended April 30, 2017 through a return of capital. A return of capital distribution does not necessarily reflect the Funds’ performance and should not be confused with “yield” or “income.” Final determination of the federal income tax characteristics of distributions paid during the calendar year will be provided on U.S. Form 1099-DIV, which will be mailed to shareholders. Please consult your tax advisor for further information.

 

Neither the Fund nor any of its representatives may give tax advice. Investors should consult their tax advisor for information concerning their particular situation.

 

All investments involve risk. Principal loss is possible. A small portion of the S&P 500 yield may include return of capital; the 10-year Treasury yield does not include return of capital; Corporate Bonds and High Yield Bonds generally do not have return of capital; a portion of the dividend paid by REITs and REIT preferred stock may be deemed a return of capital for tax purposes in the event the company pays a dividend greater than its taxable income. A stock may trade with more or less liquidity than a bond depending on the number of shares and bonds outstanding, the size of the company, and the demand for the securities. The REIT and REIT preferred stock market are smaller than the broader equity and bond markets and often trade with less liquidity than these markets depending upon the size of the individual issue and the demand of the securities. Treasury notes are

guaranteed by the U.S. government and thus they are considered to be safer than other asset classes. Tax features of a Treasury Note, Corporate Bond, Stock, High Yield Bond, REITs and REIT preferred stock may vary based on an individual’s circumstances. Consult a tax professional for additional information.

 

Earnings Growth & EPS Growth are not measures of the Funds’ future performance.

 

Must be preceded or accompanied by a prospectus.

 

Quasar Distributors, LLC, distributor.

 

Basis Point is a value equaling one one-hundredth of a percent (1/100 of 1%).

 

Capitalization rate (or “cap rate”) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.

 

Cash Flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

 

Consumer Price Index is an index of the variation in prices paid by typical consumers for retail goods and other items.

 

Diktat an order or decree imposed by someone in power without popular consent.

 

Dividend Payout Ratio is the fraction of net income a company pays to its stockholders in dividends.

 

Dividend Yield is the yield a company pays out to its shareholders in the form of dividends. It is calculated by taking the amount of dividends paid per share over a specific period of time and dividing by the stock’s price.

 

Free cash flow (FCF) is a measure of financial performance calculated as operating cash flow minus capital expenditures. FCF represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value.

 

FTSE EPRA/NAREIT Developed Europe Index is a subset of the FTSE EPRA/NAREIT® Developed Index and is an unmanaged index designed to track the performance of publicly traded real estate companies, defined as the ownership, trading and development of income-producing real estate, in developed markets worldwide.

 

FTSE EPRA/NAREIT Emerging Index is a total return index, designed to track the performance of listed real estate companies and REITS in emerging markets.


 

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Disclosures and Definitions (Continued)

 

FTSE EPRA/NAREIT Global Real Estate Index is a total return index that is designed to represent general trends in eligible real estate equities worldwide.

 

Source: FTSE the funds or securities referred to herein are not sponsored, endorsed, or promoted by the index providers, and the index providers bear no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship the index providers have with the licensee and any related funds.

 

Ibovespa Index is a total return index weighted by traded volume and is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange.

 

Japan Manufacturing Purchasing Managers’ Index (PMI) is a measure of the activity level of purchasing managers in the manufacturing sector in Japan.

 

Lipper Real Estate Funds Average is an average of funds that invest at least 80% of their portfolio in equity securities of domestic and foreign companies engaged in the real estate industry.

 

Markit Eurozone Manufacturing PMI measures the performance of the manufacturing sector and is derived from a survey of 600 industrial companies.

 

MSCI Daily TR Net EAFE Index USD is a free float adjusted market cap weighted index designed to measure developed market equity performance, excluding the U.S. and Canada.

 

MSCI Emerging Markets Index is a total return, free-float adjusted market capitalization weighted index that is designed to measure the equity market performance in the global emerging markets.

 

MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. The MSCI Europe Index consists of the following 15 developed market country indexes: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom*.

 

MSCI REIT (RMS) Index is a total return index comprising the most actively traded equity REITs that are of reasonable size.

 

MSCI World Index is a free float-adjusted market cap weighted index that is designed to measure the equity market performance of developed markets.

 

Source: MSCI makes no express or implied warranties or representations and shall have no liability whatsoever

with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

 

Return on Equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.

 

Russian MICEX Index is cap-weighted composite index calculated based on prices of the 50 most liquid Russian stocks of the largest and dynamically developing Russian issuers presented on the Moscow Exchange. MICEX Index was launched on September 22, 1997 at base value 100. The MICEX Index is calculated in real time and denominated by Moscow Exchange in Russian rubles.

 

S&P 500® Index is a total return, float-adjusted market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. Total return indexes include reinvestments of all dividends.

 

S&P Developed Ex-US Property Index is a total return index that defines and measures the investable universe of publicly traded property companies domiciled in developed countries outside of the U.S. The companies included are engaged in real estate related activities, such as property ownership, management, development, rental and investment. Total return indexes include reinvestments of all dividends.

 

S&P 500® Financials Index comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.

 

S&P Global Infrastructure Index is a total return index that is designed to track 75 companies from around the world chosen to represent the listed infrastructure industry while maintaining liquidity and tradability. To create diversified exposure, the index includes three distinct infrastructure clusters: energy, transportation, and utilities. Net Total Return (NTR) indexes include reinvestments of all dividends minus taxes.

 

S&P 500® Telecommunication Services Index comprises those companies included in the S&P 500® that are classified as members of the GICS telecommunications services sector.


 

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Disclosures and Definitions (Continued)

 

The S&P 500® Index, the S&P Developed ex. U.S. Property Index, and the S&P Global Infrastructure Index (the “Indices”) are products of S&P Dow Jones Indices LLC and have been licensed for use by Alpine Woods Capital Investors, LLC. Copyright © 2015 by S&P Dow Jones Indices LLC. All rights reserved. Redistribution or reproductions in whole or in part are prohibited without written the permission of S&P Dow Jones Indices LLC. S&P Dow Jones Indices LLC, its affiliates, and third party licensors make no representation or warranty, express or implied, with respect to the Index and none of such parties shall have any liability for any errors, omissions, or interruptions in the Index or the data included therein.

 

Shanghai Stock Exchange Composite Index is an index comprised of all stocks that are traded on the Shanghai Stock Exchange.

 

Tier 1 Cities – represent the most developed areas of China with the most affluent and sophisticated consumers. They are also considered to be the center of main economic activity.

 

Tier 2 Cities – represent less developed areas of China than Tier 1 cities.

 

Yield is the income return on an investment

 

Yield Curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.


 

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Equity Manager Reports

 

 

  Alpine International Real Estate Equity Fund
   
  Alpine Realty Income & Growth Fund
   
  Alpine Emerging Markets Real Estate Fund
   
  Alpine Global Infrastructure Fund
   
  Alpine Global Realty Growth & Income Fund


 

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Alpine International Real Estate Equity Fund

 

Comparative Annualized Returns as of 4/30/17 (Unaudited)
   6 Months(1)  1 Year  3 Years  5 Years  10 Years  Since Inception(2)
Alpine International Real Estate Equity Fund — Institutional Class   9.31%    3.91%    -0.98%    1.70%    -4.99%    4.66% 
Alpine International Real Estate Equity Fund — Class A (Without Load)   9.21%    3.68%    -1.22%    1.44%    N/A    4.49% 
Alpine International Real Estate Equity Fund — Class A (With Load)   3.18%    -2.00%    -3.07%    0.29%    N/A    3.40% 
FTSE EPRA/NAREIT Global Ex-U.S. Index(3)   5.85%    3.69%    2.96%    6.12%    N/A    N/A 
MSCI EAFE Index   11.47%    11.29%    0.86%    6.78%    0.87%    4.47% 
Lipper International Real Estate Funds Average(4)   5.79%    2.74%    2.23%    5.86%    -1.23%    4.66% 
Lipper International Real Estate Funds Ranking(4)   N/A(5)    11/52    43/45    39/42    23/23    1/1 
Gross Expense Ratio (Institutional Class): 1.39%(6)                              
Net Expense Ratio (Institutional Class): 1.39%(6)                              
Gross Expense Ratio (Class A): 1.64%(6)                              
Net Expense Ratio (Class A): 1.64%(6)                              

 

 
  (1) Not annualized.
  (2) Institutional Class shares commenced on February 1, 1989 and Class A shares commenced on December 30, 2011. Returns for indices are since February 1, 1989.
  (3) Index commenced on October 31, 2008.
  (4) The since inception data represents the period beginning February 2, 1989 (Institutional Class only).
  (5) FINRA does not recognize rankings for less than one year.
  (6) As disclosed in the prospectus dated February 28, 2017.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end may be lower or higher than the performance quoted and may be obtained by calling 1-888-785-5578. Performance data shown does not reflect the 1.00% redemption fee imposed on shares held for fewer than 60 days. If it did, total returns would be reduced. Returns for the Class A shares with sales charge reflect a maximum sales charge of 5.50%. Performance for the Class A shares without sales charges does not reflect this load.

 

FTSE EPRA/NAREIT Global ex-U.S. Index is a total return index that is designed to represent general trends in eligible real estate equities outside the United States. MSCI EAFE Index is a total return, free-float adjusted market capitalization weighted index that measures the performance of stocks from Europe, Asia, and the Far East. This is one of the most widely used measures of international stock performance. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. The Lipper International Real Estate Funds Average is an average of funds that invest at least 80% of their portfolio in equity securities of domestic and foreign companies engaged in the real estate industry. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. Lipper rankings for the periods shown are based on fund total returns with dividends and distributions reinvested and do not reflect sales charges. The FTSE EPRA/NAREIT Global ex-U.S. Index, the MSCI EAFE Index and the Lipper International Real Estate Funds Average are unmanaged and do not reflect direct fees associated with a mutual fund, such as investment adviser fees; however, the Lipper International Real Estate Funds Average reflects fees charged by the underlying funds. The performance for the Alpine International Real Estate Equity Fund reflects the deduction of fees for these value added services. Investors cannot directly invest in an index.

 

Expense Ratios reflect the ratios reported in the Fund’s most recent prospectus. The Alpine International Real Estate Equity Fund has a contractual expense waiver that continues through February 28, 2018. Where a Fund’s gross and net expense ratios are the same for the period reported, the contractual expense reimbursement level was not reached as of the end of that period. To the extent the Fund’s expenses were reduced by waivers, the Fund’s total returns were increased. In these cases, in the absence of the expense waivers, the Fund’s total returns would have been lower.

 

To the extent that the Fund’s historical performance resulted from gains derived from participation in Initial Public Offerings (“IPOs”) and/or Secondary Offerings, there is no guarantee that these results can be replicated in future periods or that the Fund will be able to participate to the same degree in IPO/Secondary Offerings in the future.

 

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Alpine International Real Estate Equity Fund (Continued)

 

 

Portfolio Distributions* (Unaudited)

 

 

Top 10 Holdings* (unaudited)
1.  IWG PLC   4.71%
2.  Dalata Hotel Group PLC   3.83%
3.  The Phoenix Mills, Ltd.   3.08%
4.  South Asian Real Estate PLC   2.98%
5.  Hulic Co., Ltd.   2.78%
6.  Accor SA   2.68%
7.  DLF, Ltd.   2.57%
8.  TerraForm Power, Inc.-Class A   2.53%
9.  Kenedix, Inc.   2.38%
10.  Hispania Activos Inmobiliarios Socimi SA   2.30%
 

* Portfolio Distributions percentages are based on total investments. Top 10 Holdings do not include short-term investments and percentages are based on total net assets. Portfolio holdings and sector distributions are as of 04/30/17 and are subject to change. Portfolio holdings are not recommendations to buy or sell any securities.


 

 

 

Value of a $1,000,000 Investment (Unaudited)

 

 

 

This chart represents a comparison of a hypothetical $1,000,000 investment in the Fund versus a similar investment in the Fund’s benchmark. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment performance reflects the waiver and recovery of certain fees, if applicable. Without the waiver and recovery of fees, the Fund’s total return would have differed.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.

 

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Alpine International Real Estate Equity Fund (Continued)

 

Commentary

 

Dear Shareholders:

 

We present the semi-annual results for the Alpine International Real Estate Equity Fund. For the six month period ended April 30, 2017, the closing NAV was $21.24 per share, representing a total return of 9.31%. The Fund’s benchmark index, the FTSE EPRA/NAREIT Global Ex-U.S. Index returned 5.85% over the same period. In the context of broader equity markets, the MSCI EAFE Index produced a total return of 11.47%. All references in this letter to the Fund’s performance relate to the performance of the Fund’s Institutional Class.

 

Performance Drivers

 

The Semi-Annual period kicked off a week before Trump’s unexpected election victory and ended as the clock was winding down on his first one hundred days in office. Over those six months, global real estate equity returns underperformed the broader market by a wide margin but exhibited a degree of resilience in the face of a series of geopolitical shocks, mounting macroeconomic uncertainties and the imminent threat of Federal Reserve (Fed) action. The Trump election immediately ignited expectations for an expansionary fiscal policy which set off a backing up of global yields as the reflationary impulse drove a reflexive sell off of bond proxies including real estate investment trusts (REITs). The dramatic sell off of the so-called interest rate sensitive sectors proved to be short lived and offered a good opportunity for active managers to accumulate oversold stocks. There were further headwinds on the horizon as the Fed hiked rates in December and March, but shares continued to grind out positive returns. Underpinning performance during the period was the reflation trade, particularly in emerging Asia, driven by resurging cyclical momentum in China. This was offset modestly toward the end of the period as increasing political noise and legislative defeats tempered market sentiment for a near-term payoff from the Trump trade.

 

In Japan, the developers and Japan REITs (JREITs) lagged the market as uncertainty over Bank of Japan (BoJ) policy, an appreciating yen and fading tailwinds on the reflation trade weighed on the shares. The FTSE EPRA/NAREIT Developed Europe Index saw strong absolute returns but underperformed on a relative basis primarily due to the strength of financials across many of the broader indices, the lack of visibility on Brexit negotiations and concerns over election outcomes, most importantly in France. Once again there was notable dispersion at the country level with Sweden and the U.K. outperforming versus relative weakness in France and Germany. In the U.K., the real estate securities posted an impressive rally toward the end of the period, easily eclipsing the more-than respectable performance of the broad index. Coming up on the one-year anniversary of the historic Brexit vote, there are still

few signs of stress in the London commercial market. In fact recent transactions such as the sale of Facebook’s headquarters (Rathbone Square) and the sale of the Cheesegrater (the Leadenhall building) have been supportive of valuations and have prompted a spate of special dividend payments from the proceeds. Yields appear to have stabilized and occupier demand has underpinned resilient top line rental values, however incentives are increasing while lease durations and break year options are coming in. Nonetheless Brexit risks remain front and center and share volatility could swing based on sentiment toward the negotiations and any news of financial sector tenants shifting personnel out of London. The Australian REIT (AREIT) market was resilient yet underperformed the broader market as it too was a casualty of the threat of the back up in interest rates. Finally, emerging market (EM) real estate saw strong overall results despite expectations for further rate hikes from the Fed, fears over protectionist trade policies from the Trump administration and geopolitical tensions ramping up in North Korea, Brazil, Turkey and the Middle East. At the country level, India and Brazil saw strong relative performance while Turkey and Indonesia were laggards.

 

Portfolio Overview

 

At six month period end on April 30, 2017, the top 10 positions accounted for 29.84% of the portfolio versus 31.59% six months ago as three companies fell out of the top 10: China Resources Land, Ichigo in Japan and JM in Sweden and were replaced by Accor the French hotel company, DLF in India and Hispania in Spain. Other notable adjustments to the portfolio included establishing positions in Patrizia in Germany and Purplebricks in the U.K. as well as Shinoken, Open House and Takara Leben in Japan. Other modest adjustments to the portfolio included increasing its position in the US, exiting its exposure to South African REITs, while reducing exposure to China. The Fund’s top three overweight positions remained in India, the U.S. and Ireland and it maintained its top underweight positions in China/Hong Kong, Australia and Canada.

 

The Fund’s country allocations adjusted during the period as our assessment of the macroeconomic conditions, stock valuations, investment opportunities and risks continued to evolve. During the period under review the Fund’s largest allocation was to Japan. While the economic data out of Japan has not met expectations, we continue to be encouraged by the recovery in real estate fundamentals, the potential tailwind from policy initiatives and continued strength in transactions in the physical property market. The portfolio remains overweight India and we are very constructive on the long term prospects for the overall economy as well as its real estate sector.


 

9

 

Alpine International Real Estate Equity Fund (Continued)

 

Passage of a real estate reform bill in March of this year requiring developers to hold 70% of pre-sales cashflow in an escrow account until project completion should inject a higher degree of confidence into the overall market while creating substantial barriers to entry for undercapitalized developers. Although a weak British pound has prompted yet another wave of investor appetite for London assets, the positions in the U.K. were significantly reduced due to the late-cyclicality of the London office market as well as the negative implications of Brexit. The position in China/Hong Kong was decreased. Caution with respect to the credit markets, Moody’s recent downgrade of China’s credit rating and the sustainability of the strength in the physical property market as concerns over growing intervention, particularly in Tier I markets, by the government led us to be more defensive in our China allocation. The position in Brazil was modestly reduced based on valuation and increasing political risks. While we believe that the country remains attractive on a longer term view, the raised execution risk on reforms could ratchet up the risk premium on asset prices and weigh on the growth and inflation outlook. The Fund maintained significant underweights to the Australian, Canadian and South African markets due to the macroeconomic outlook, specifically commodity pricing, as well as instability in the currencies. Finally, the Fund hedged its currency exposure to the yen, euro and pound.

 

The top five contributors to the Fund’s performance over the period under discussion were IWG, Purplebricks, Global Logistic Properties (GLP), Dalata Hotel Group and JM.

 

  IWG (formerly Regus) is one of the pioneers and global leaders in flexible workspace solutions. The shares are recovering after a challenging 2016 which saw a slower pace of network expansion and margin pressure on the mature portfolio. Early operating evidence suggests that these trends are reversing and the shares are beginning to reflect this recovery as well as the company’s attractive organic growth prospects.
     
  Purplebricks is a U.K.-based online residential real estate broker offering a hybrid model in which vendors pay a small fixed fee rather than the percentage-based charges of traditional brokers. The shares outperformed based on the company exceeding market share expectations in the U.K. and Australia markets. The shares were furthered buoyed by the announcement of an expansion into the U.S. market.
     
  GLP is a Singapore-based owner, developer and manager of logistics assets in China, Japan, Brazil and the U.S. The company is in the midst of evaluating at least three potential buyout bids from Blackstone, Warburg Pincus and a management-led consortium, which has narrowed the discount to NAV significantly.
  Dalata Hotel Group is a Irish hotel company with primary exposure to Ireland and the U.K. A recovery in RevPAR trends and good visibility on its development pipeline are expected to drive robust top line growth.
     
  JM is a leading Swedish developer focusing on residential projects in Stockholm. The company has benefitted from the ongoing strength in the Stockholm market and a supportive macroeconomic backdrop have led to an acceleration of housing starts and expected margin expansion. Strong operating cash flow leaves its balance sheet in a net cash position and helped to support its share buyback and dividend program.

 

The top five negative contributors to the Fund’s performance for the period ended April 30 were Ichigo, South Asian Real Estate, Invincible Investment, Dewan Housing and Fibra Uno.

 

  Ichigo is an asset manager in Japan. Share performance was weak as management conservatively guided for its first profit decline in six years due to temporary delays in asset sales to its Japan REITs (JREITs) and infrastructure fund. Its underlying asset management business appears to be able to continue to grow and Ichigo potentially can support its shares through buybacks and cash dividends.
     
  South Asian Real Estate (SARE)* is a residential developer in India.
     
  Invincible Investment is a JREIT focused primarily in hotel and residential assets. The shares have underperformed due to weakening sentiment for hotel operating metrics and caution over the outlook for increased supply. The company issued equity in the period to acquire more residential assets. A high relative dividend yield and the potential for share buybacks could, in our view, help to narrow the NAV discount over the medium term.
     
  Dewan Housing, a pan-Indian housing finance company, is one of the largest players in the lower-middle income affordable segments. The company is positioned to benefit from the Modi government’s focus on affordable housing but we sold off early on in the period due to the demonetization program in India which temporarily sapped liquidity away from lower income buyers.
     
  Fibra Uno is the largest Mexican Fibra (REIT equivalent) holding a diversified portfolio of assets across Mexico. Management has put together a high quality portfolio with solid operating metrics and a robust acquisition/development pipeline which has the shares trading at a premium to its NAV. However,


 

 

 

* The Fund purchased South Asian Real Estate PLC (“SARE”) through a private placement in 2007. There is no public market for the holding. As of April 30, 2017, the holding was valued based upon an equal weighting of an income approach and a market approach.

 

10

 

Alpine International Real Estate Equity Fund (Continued)

 

  going forward, investors remain cautious as to management’s ability to source accretive deals and drive value creation on share-based acquisitions. Additionally the company’s distribution growth and funds from operation (FFO) yield have lagged peers recently.

 

Outlook

 

As we look beyond the largely symbolic 100-day assessment period of the new Trump administration markets appear to be consolidating gains from the global reflation trade which began as rates bottomed in the summer of 2016 but caught a “massive and huge” tailwind from the Trump election and renewed cyclical momentum in China. Risk appetite appears to have crested for the moment in the face of mixed messages for growth prospects from the hard versus soft economic indicators, and perhaps most significantly an ongoing reevaluation of the ability of the U.S. to enact fiscal stimulus, tax reform, infrastructure and deregulation in a timely manner. So which economies could be best positioned to drive the next leg of the global reflation trade? Where does the Fed’s dot plot go from here? What risk could higher bond yields pose to the global economy? These are just a few of the questions that remain top of mind for all investors as we continue to climb a wall of worry comprised of political and policy uncertainties, the constantly evolving trends for growth and inflation, as well as a diverse array of potential geopolitical threats.

 

Broadly speaking, we see cause for guarded optimism as the global growth environment appears more balanced than it has in recent memory. A pro-growth agenda, reflationary policies and a measured tightening of interest rates have generally been supportive for real estate returns on an historical basis, however, political uncertainties and a maturing cycle amplify downside risks. In the U.S. REIT market, we expect a widening differentiation of operating data but an overall healthy (but peaking) same-store rental outlook supporting net operating income (NOI) growth in 2017. There are developing signs of cyclical momentum in European markets and the risk premia associated with political outcomes appear to be narrowing. Japan has clearly underperformed but we believe that it’s only a matter of time before equities returns reflect strong underlying fundamentals and robust transaction levels in the physical market. To this point, first quarter 2017 transaction volumes in Japan rose by 51% year over year (YoY) with acquisitions by overseas investors rising 3.7 times from first quarter 2016 levels according to CBRE. Emerging markets lagged the reflation trade in Q4 2016 but have since recovered from low valuations and have been supported by an improving earnings profile. A growing U.S. economy has historically been a positive for developing markets absent trade protectionism and a sharp overshoot in rates and/or currencies.

While we believe global monetary policy will remain extremely accommodative there seems to be greater scope for divergence among central banks since quantitative easing (QE) regimes were initiated in response to the financial crisis. The Fed increased rates at both its December and March meetings and markets are currently pricing in one to two increases for the remainder of 2017. However, until there is greater visibility on the new administration’s fiscal agenda it is difficult to say with any conviction where U.S. rates might settle. Adding further uncertainty into the equation are Fed Chair Yellen’s comments regarding shrinking the central bank’s $4.5 trillion balance sheet. The challenge is not exclusively a question of magnitude and pace of the drawdown, but how the Treasury aims to cope with a funding gap as the Fed unwinds $2.5 trillion in government securities. If not handled well, the read through to bond yields and mortgage rates could heighten volatility. The BoJ is expected to stay the course in its battle against deflation and to augment its current approach with further fiscal initiatives. While its commitment to the official Japanese Government Bond (JGB) buying target of JPY80 trillion (approximately $72 billion USD) per annum could be weakening we still believe Kuroda, the Governor of the Bank of Japan, when he says that only an extended overshoot of his 2% consumer price index (CPI) target would trigger policy tightening. We are nowhere near that level. So this leaves all eyes on the tone and tenor of the European Central Bank (ECB) as Mario Draghi, President of the European Central Bank, finds himself occupying the middle ground between the Fed’s tightening impulse and the BoJ’s policy stance. Current market talk is rife with uneasiness regarding the ECB reducing its monthly asset purchases into 2018 and what this policy shift could ultimately mean for bond yields, especially in Spain and Italy.

 

In China, the government’s intervention revitalized cyclical momentum in its economy, providing much of the heavy lifting for the global reflation trade. Indeed, nominal gross domestic product (GDP) growth in China accelerated from 9.6% YoY in fourth quarter 2016 to 11.8% YoY in first quarter 2017. While uncertainties remain regarding the sustainability of the recovery absent unprecedented liquidity from the People’s Bank of China (PBOC) we remain firmly of the view that slowdowns in China are based on policy shifts not sharp decelerations in demand. The U.S. government stepped back its threat of labeling China a currency manipulator and with tensions rising in North Korea it’s imperative that relations between the U.S. and China are guided by political pragmatism. Periodic volatility in the growth outlook for China could reverberate through global markets and remains one of the dominant drivers of macro instability, particularly with respect to EMs. In the run up to the critical National Congress in fourth quarter 2017 (held every five years) the current Chinese government will want to do everything in its power to


 

11

 

Alpine International Real Estate Equity Fund (Continued)

 

ensure political and economic status quo which should help it to consolidate its power and provide leverage to shape the Politburo Standing Committee. As such, we remain cautiously optimistic that China can avoid any so-called “hard landing” in its economy through a mix of political reforms as well as monetary and fiscal measures.

 

It remains our expectation that there will likely be wide dispersion and volatility of returns by sector and geography, making this an attractive environment for active management. We have outlined frequently in our discussions with shareholders that at this point in the cycle the drivers for real estate have clearly shifted away from cap rate compression toward growth prospects. A strong fiscal impulse and reflationary backdrop could provide a tailwind for this view and reinforce our long-held preference for companies with attractive valuations, good visibility of cash flow and a history of growing dividends. As such we maintain our bias for markets and asset types with favorable supply/demand dynamics supporting rising net absorption trends as well as heightened rental tension. Another noteworthy investment theme for global real estate could likely come from mergers & acquisitions (M&A) – as divergent valuations, cheap financing and the market’s emphasis on growth could drive consolidation.

 

In our view, the geopolitical landscape collectively represents one of the most significant pressures to our outlook as equity markets have become increasingly more phlegmatic about political risks over time. The nuclear aspirations of North Korea and the war in Syria could pose existential threats to nearby regions. The Temer government coalition in Brazil is hanging by a thread after the most recent scandal placing the reform agenda and the viability of Temer’s administration very much in question. The constitutional referendum in Turkey and the purge of cabinet members in South Africa

reinforce autocratic ideals inconsistent with shareholder risk tolerance. In the U.K. and Europe uncertainty over the direction of Brexit could add to volatility in asset markets. Although the Netherlands and France have avoided electoral pitfalls, Germany and Italy might still present further challenges for the Eurozone outlook. The list is big and continues growing.

 

And finally perhaps the biggest wild card in the outlook is that after 100 days of the new administration there are more questions than answers surrounding the potential for a sea change in the US. Foremost among them being to what extent does the current administration’s inability to drive legislation undermine its domestic agenda? Where could investors ultimately calibrate their expectations for the President’s ability to overcome the ideological divisions within his own administration, then cobble together consensus in the Republican Party and finally reach out to enough Democrats to enact meaningful legislation? For the time being the economic agenda appears to be languishing and there seems to be a narrowing path for the new administration to enact any meaningful legislation in advance of the August recess.

 

Differentiation – whether in markets, asset types or growth models – should remain a dominant theme in portfolio construction. Alpine’s Real Estate team carefully evaluates the risk/reward proposition of each position in the portfolio and monitors volatility carefully. The managers remain extremely selective in our approach to the markets and deploying capital.

 

We thank our shareholders for their continued support.

 

Sincerely,

 

Samuel A. Lieber
Portfolio Manager


 

This letter represents the opinions of the Fund’s management and is subject to change, is not guaranteed and should not be considered a recommendation to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of future results, or investment advice. Views expressed may vary from those of the firm as a whole.

 

Earnings growth is not representative of the fund’s future performance.

 

Past performance is no guarantee of future results.

 

Diversification does not assure a profit nor protect against loss in a declining market.

 

 

 

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to risks, including the following in alphabetical order:

 

Concentration Risk – The Fund’s strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

 

12

 

Alpine International Real Estate Equity Fund (Continued)

 

Currency Risk – The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. Currency conversion costs and currency fluctuations could erase investment gains or add to investment losses. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation.

 

Cybersecurity Risk – Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or its service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.

 

Equity Securities Risk – The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry). Holders of common stock generally are subject to more risks than holders of preferred stock or debt securities because the right to repayment of common stockholders’ claims is subordinated to that of preferred stock and debt securities upon the bankruptcy of the issuer.

 

Foreign and Emerging Market Securities Risk – The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value of these securities. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund. The risks of foreign investments are heightened when investing in issuers in emerging market countries. Emerging market countries tend to have economic, political and legal systems that are less fully developed and are less stable than those of more developed countries. Less developed markets are more likely to experience problems with the clearing and settling of trades and the holding of securities by banks, agents and depositories are less developed than those in the United States. They are often particularly sensitive to market movements because their market prices tend to reflect speculative expectations. Low trading volumes may result in a lack of liquidity and in extreme price volatility.

 

Foreign Currency Transactions Risk – Foreign securities are often denominated in foreign currencies. As a result, the value of the Fund’s shares is affected by changes in exchange rates. The Fund may enter into foreign currency transactions to try to manage this risk. The Fund’s ability to use foreign currency transactions successfully depends on a number of factors, including the foreign currency transactions being available at prices that are not too costly, the availability of liquid markets and the ability of the Adviser to accurately predict the direction of changes in currency exchange rates.

 

Growth Stock Risk – Growth stocks typically are very sensitive to market movements because their market prices tend to reflect future expectations. When it appears those expectations will not be met, the prices of growth stocks typically fall. Growth stocks as a group may be out of favor and underperform the overall equity market while the market concentrates on undervalued stocks.

 

Initial Public Offerings and Secondary Offerings Risk – The Fund may invest a portion of its assets in shares of IPOs or secondary offerings of an issuer. IPOs and secondary offerings may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs and secondary offerings on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs and secondary offerings may not be consistently available to the Fund for investing. IPO and secondary offering shares frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO and secondary offering shares for a very short period of time. This may increase the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO and secondary offering shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

 

13

 

Alpine International Real Estate Equity Fund (Continued)

 

Interest Rate Risk – Interest rates may rise resulting in a decrease in the value of securities held by the Fund, or may fall resulting in an increase in the value of such securities. Securities having longer maturities generally involve a greater risk of fluctuations in the value resulting from changes in interest rates.

 

Leverage Risk – The Fund may use leverage to purchase securities. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. The Fund may also have to sell assets at inopportune times to satisfy its obligations. The use of leverage is considered to be a speculative investment practice and may result in the loss of a substantial amount, and possibly all, of the Fund’s assets.

 

Liquidity Risk – Some assets held by the Fund may be impossible or difficult to sell, particularly during times of market turmoil. These illiquid assets may also be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss.

 

Management Risk – The Adviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, may be incorrect. The Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment objectives and strategies.

 

Market Risk – The price of a security held by the Fund may fall due to changing market, economic or political conditions.

 

Micro Capitalization Company Risk – Stock prices of micro capitalization companies are significantly more volatile, and more vulnerable to adverse business and economic developments than those of larger companies. Micro capitalization companies often have narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies, including small or medium capitalization companies.

 

Operational Risk – Your ability to transact with the Fund or the valuation of your investment may be negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.

 

Real Estate Investment Trusts (“REITs”) Risk – REITs’ share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to qualify for favorable tax treatment. REITs may be leveraged, which increases risk. Certain REITs charge management fees, which may result in layering the management fee paid by the fund.

 

Real Estate Securities Risk – Risks associated with investment in securities of companies in the real estate industry include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.

 

Small and Medium Capitalization Company Risk – Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger companies.

 

Undervalued Stock Risk – The Fund may pursue strategies that may include investing in securities, which, in the opinion of the Adviser, are undervalued. The identification of investment opportunities in undervalued securities is a difficult task and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

 

Please refer to pages 3-5 for other important disclosures and definitions.

 

14

 
Alpine Realty Income & Growth Fund

 

Comparative Annualized Returns as of 4/30/17 (Unaudited)      
   6 Months(1)  1 Year  3 Years  5 Years  10 Years  Since Inception(2)
Alpine Realty Income & Growth Fund — Institutional Class  5.96%  7.56%  9.74%  9.67%  3.77%  11.07%  
Alpine Realty Income & Growth Fund — Class A (Without Load)  5.82%  7.28%  9.45%  9.39%  N/A  11.58%  
Alpine Realty Income & Growth Fund — Class A (With Load)  -0.02%  1.37%  7.41%  8.16%  N/A  10.40%  
MSCI US REIT Index  4.09%  5.88%  8.92%  9.23%  4.73%  10.75%  
S&P 500® Index  13.32%  17.92%  10.47%  13.68%  7.15%  5.68%  
Lipper Real Estate Funds Average(3)  3.73%  5.66%  7.99%  8.32%  4.08%  10.11%  
Lipper Real Estate Funds Ranking(3)  N/A(4)  41/265  16/232  15/203  83/134  7/46  
Gross Expense Ratio (Institutional Class): 1.36%(5)                  
Net Expense Ratio (Institutional Class): 1.06%(5)                  
Gross Expense Ratio (Class A): 1.61%(5)                  
Net Expense Ratio (Class A): 1.31%(5)                  

 

 
  (1) Not annualized.
  (2) Institutional Class shares commenced on December 29, 1998 and Class A shares commenced on December 30, 2011. Returns for indices are since December 29, 1998.
  (3) The since inception data represents the period beginning December 31, 1998 (Institutional Class only).
  (4) FINRA does not recognize rankings for less than one year.
  (5) As disclosed in the prospectus supplement dated April 10, 2017 to the propectus dated February 28, 2017.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end may be lower or higher than the performance quoted and may be obtained by calling 1-888-785-5578. Performance data shown does not reflect the 1.00% redemption fee imposed on shares held for fewer than 60 days. If it did, total returns would be reduced. Returns for the Class A shares with sales charge reflect a maximum sales charge of 5.50%. Performance for the Class A shares without sales charges does not reflect this load.

 

MSCI US REIT Index is a gross, total return, free float-adjusted market capitalization index that is comprised of equity REITs. The index is based on MSCI USA Investable Market Index (IMI) its parent index which captures large, mid and small caps securities. With 144 constituents, it represents about 99% of the US REIT universe and securities are classified in the REIT sector according to the Global Industry Classification Standard (GICS®). It however excludes Mortgage REIT and selected Specialized REITs. This index reinvests as much as possible of a company’s dividend distributions. The reinvested amount is equal to the total dividend amount distributed to persons residing in the country of the dividend-paying company. Gross total return indexes do not, however, include any tax credits. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. S&P 500® Index is a total return, float-adjusted market capitalization weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. Total return indexes include reinvestments of all dividends. Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. The Lipper Real Estate Funds Average is an average of funds that invest at least 80% of their portfolio in equity securities of domestic and foreign companies engaged in the real estate industry. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. Lipper rankings for the periods shown are based on fund total returns with dividends and distributions reinvested and do not reflect sales charges. The MSCI US REIT Index, the S&P 500® Index and the Lipper Real Estate Funds Average are unmanaged and do not reflect direct fees associated with a mutual fund, such as investment adviser fees; however, the Lipper Real Estate Funds Average reflects fees charged by the underlying funds. The performance for the Alpine Realty Income & Growth Fund reflects the deduction of fees for these value-added services. Investors cannot directly invest in an index.

 

Expense Ratios reflect the ratios reported in the Fund’s most recent prospectus. The Alpine Realty Income & Growth Fund has a contractual expense waiver that continues through February 28, 2019. Where a Fund’s gross and net expense ratios are the same for the period reported, the contractual expense reimbursement level was not reached as of the end of that period. To the extent the Fund’s expenses were reduced by waivers, the Fund’s total returns were increased. In these cases, in the absence of the expense waivers, the Fund’s total returns would have been lower.

 

To the extent that the Fund’s historical performance resulted from gains derived from participation in Initial Public Offerings (“IPOs”) and/or Secondary Offerings, there is no guarantee that these results can be replicated in future periods or that the Fund will be able to participate to the same degree in IPO/Secondary Offerings in the future.

 

15

 

Alpine Realty Income & Growth Fund (Continued)

 

 

Portfolio Distributions* (Unaudited)

 

 

Top 10 Holdings* (unaudited)  
1.   Simon Property Group, Inc. 7.35 %
2.   Boston Properties, Inc. 5.66 %
3.   Digital Realty Trust, Inc. 5.18 %
4.   Essex Property Trust, Inc. 5.11 %
5.   Alexandria Real Estate Equities, Inc. 4.77 %
6.   Public Storage 4.51 %
7.   AvalonBay Communities, Inc. 4.39 %
8.   Prologis, Inc. 4.39 %
9.   Vornado Realty Trust 4.00 %
10.   Equity Residential 3.98 %
 
* Portfolio Distributions percentages are based on total investments. Top 10 Holdings do not include short-term investments and percentages are based on total net assets. Portfolio holdings and sector distributions are as of 04/30/17 and are subject to change. Portfolio holdings are not recommendations to buy or sell any securities.


 

 

 

Value of a $1,000,000 Investment (Unaudited)

 

 

 

This chart represents a comparison of a hypothetical $1,000,000 investment in the Fund versus a similar investment in the Fund’s benchmarks. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment performance reflects the waiver and recovery of certain fees, if applicable. Without the waiver and recovery of fees, the Fund’s total return would have differed.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.

 

16

 

Alpine Realty Income & Growth Fund (Continued)

 

Commentary

 

Dear Shareholders:

 

We welcome the opportunity to report the results of the Alpine Realty Income & Growth Fund for the fiscal semi-annual period ended April 30, 2017. During this period, the Fund produced a total return of 5.96% which compares to the 3.73% return of the Lipper Real Estate Funds average, 4.09% return of the MSCI US REIT Index (the RMS Index) and the 13.32% return of the S&P 500® Index 500 Index (the S&P). All references in this letter to the Fund’s performance relate to the performance of the Fund’s Institutional Class.

 

At April 30, 2017, the Fund’s net asset value per share had increased to $22.56 from $22.11 six months prior. During this timeframe, the Fund paid two quarterly distributions of $0.1875 per share totaling $0.375 per share for the fiscal period and one long term capital gain distribution of $0.47. Since its inception at $10.00 per share on December 29, 1998 through April 30, 2017, the Fund has delivered an annualized total return to shareholders of 11.07% including cumulative distributions of $18.85. The performance chart on page 15 presents the Fund’s returns for the current period, one-year, three-year, five-year, ten-year, and since inception periods.

 

Following the November 2016 U.S. presidential election, investor optimism regarding the potential for favorable business conditions and reduced taxes from the new Trump administration’s policy objectives led to increased confidence in corporate earnings and to some degree less interest in the dividend paying equities of real estate investment trusts (REITs). This confidence manifested itself in a new all-time high for the S&P on March 1, 2017 including heightened expectations for inflationary growth that resulted in the yield on the Ten Year US Treasury obligation rising to 2.63% on March 13, its highest level since July 2014. In this context, the average returns of REIT equities as represented by the RMS Index lagged the overall performance of broader indices. Despite the positive 4.09% return in the period, the RMS Index closed the latest fiscal semi-annual period nearly 7.5% below its all-time high achieved on August 1, 2016 while broader indices reached new highs.

 

Within the real estate category, the best performing sectors over the six months included the data center and lodging REITs, perceived to have the highest earnings growth and return potential in the near term from strong secular trends and renewed economic optimism, respectively, and the two private prison REITs. The prison REITs’ stock prices more than doubled after the election

in large part due to renewed confidence that these prison operators would continue to be used by government agencies, an outcome that had been somewhat in doubt under a prospective Clinton administration. The subsectors lagging overall REIT averages included the net lease and the retail shopping center and regional mall landlords. While valuations in the net lease group were pressured by rising interest rates, the stocks of retail landlords suffered most particularly from fear that brick-and-mortar retailing may be in a permanent secular decline.

 

For the Fund, the top contributors to its performance during the latest six month period ended April 30, 2017 included three companies within the data center subsector and two apartment REITs. Data center REITs, including three of the Fund’s holdings – Digital Realty Trust, Coresite Realty Corporation, and Equinix – continued to benefit from strong demand from network service, cloud, and information technology providers, demonstrated by very healthy leasing trends and by the returns on invested capital these entities achieved in their new facilities developments and expansion efforts. As a group, the returns of all of the data center REITs in the RMS Index exceeded 20% in the latest six month period. Also producing above average returns were the apartment REITs whose performances previously during calendar year 2016 lagged overall REIT averages primarily on concerns of decelerating fundamentals that were resulting from a wave of new supply additions impacting landlord pricing power in many markets. Two of the Fund’s largest overweight positions in this subsector, Essex Property Trust and AvalonBay Communities, however, reported better than anticipated results in their west coast markets where the impacts of new supply had been most feared and had their stock valuations rewarded by investors. Relative to the overall return of the RMS Index, some of the greatest positive attribution was produced by our overweight positions in the aforementioned data center REITs, Digital Realty and Coresite Realty, as well as another data center holding, DuPont Fabros Technology; the above described investment in Essex Property Trust; and the Fund’s non-ownership of Brixmor Property Group, a shopping center owner whose stock declined significantly during the period on concerns of slowing retail sales and store bankruptcies.

 

Holdings that underperformed REIT average returns and detracted the most from Fund performance were retail shopping center and regional mall landlords. As noted above, these two subsectors were among the weakest


 

17

 

Alpine Realty Income & Growth Fund (Continued)

 

performing property groups during the period. Announcements of proposed store closures by major department stores such as Macy’s and Sears, bankruptcy declarations by many retailers particularly in the apparel category, signs of flat to weakening retail store sales trends, and the continued success of internet-based shopping, the most noteworthy example being Amazon, all reinforced investor fears about the viability of brick-and-mortar retailing. The facts are fairly clear. The U.S. is hugely over-retailed in terms of shopping space per capita and needs both a significant reduction of the weakest retailer venues and smarter strategies by the retailers themselves. For the Fund, the most negative contributions to overall results were delivered by Simon Property Group, Macerich Company, GGP, Inc., and Taubman Centers, all regional mall entities, and Kimco Realty, one of the sector’s largest shopping center landlords. Relative to the overall returns of the RMS Index, the securities that created the most impactful negative attribution to performance included the aforementioned regional mall REITs, Simon, Macerich, and Taubman, as well as the Fund’s non-ownership of the two private prison owners, CoreCivic and The Geo Group, which significantly outperformed overall REIT averages.

 

Both the overall equities market and the real estate sector are now over eight years into a recovery that began in March of 2009. Valuations are near all-time highs in broad indices such as the S&P while real estate operating fundamentals, in terms of occupancies, rental rates, and valuations, have in many sectors reached or exceeded pre-financial crisis levels. As a result, within numerous geographic markets and property types, including apartments, hotels, senior living, and self-storage, new supply additions have increased to take advantage of the positive fundamentals and,

consequently, have put temporary pressure on landlord pricing power. Though such new development remains below historic levels generally, we nevertheless believe that for the health of real estate property markets and for valuations and prices of equities in both the REIT indices and the overall stock market, the domestic economy needs to reaccelerate in terms of job creation, business confidence, and capital spending. The early investor confidence in future earnings growth from improved business conditions and reduced taxes under the new Trump administration has seemingly stalled somewhat and, in our opinion, will likely not reignite until some of the proposed policy objectives are enacted and demonstrated in reaccelerating economic growth.

 

The Fund’s portfolio remains structured to capture the pockets of stronger near term economic potential through overweight investments in those areas that can benefit from above average employment, demographic shifts, and innovation. While we still find the technology driven economies of the west coast and the Boston/Cambridge metropolitan area on the east coast as most attractive, some of the Fund’s largest overweight positions also continue to be in the data center, life science, and cell tower areas where demand drivers stay steady despite vacillations in overall Gross Domestic Product growth. Additionally, we anticipate that we will continue to employ low levels of leverage both in the execution of the Fund’s strategy and to manage unexpected Fund flows. We look forward to providing an update on real estate trends and Fund performance at the end of the fiscal year in October 2017.

 

Sincerely,

 

Robert W. Gadsden
Portfolio Manager


 

This letter represents the opinions of the Fund’s management and is subject to change, is not guaranteed and should not be considered a recommendation to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of future results, or investment advice. Views expressed may vary from those of the firm as a whole.

 

Earnings growth is not representative of the fund’s future performance.

 

Past performance is no guarantee of future results.

 

 

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to risks, including the following, which are provided in alphabetical order:

 

Concentration Risk – The Fund’s strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

 

18

 

Alpine Realty Income & Growth Fund (Continued)

 

Credit Risk – Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

 

Cybersecurity Risk – Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or its service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.

 

Dividend Strategy Risk – There is no guarantee that the issuers of the stocks held by the fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The fund’s emphasis on dividend-paying stocks could cause the fund to underperform similar funds that invest without consideration of a company’s track record of paying dividends or ability to pay dividends in the future. Dividend-paying stocks may not participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. The Fund may hold securities for short periods of time related to the dividend payment periods and may experience loss during these periods.

 

Equity Securities Risk – The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry).

 

Fixed Income Securities Risk – Fixed income securities are subject to issuer risk, interest rate risk and market risk.

 

Growth Stock Risk – Growth stocks typically are very sensitive to market movements because their market prices tend to reflect future expectations. When it appears those expectations will not be met, the prices of growth stocks typically fall. Growth stocks as a group may be out of favor and underperform the overall equity market while the market concentrates on undervalued stocks.

 

Initial Public Offerings and Secondary Offerings Risk – The Fund may invest a portion of its assets in shares of IPOs or secondary offerings of an issuer. IPOs and secondary offerings may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs and secondary offerings on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs and secondary offerings may not be consistently available to the Fund for investing. IPO and secondary offering shares frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO and secondary offering shares for a very short period of time. This may increase the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO and secondary offering shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

 

Interest Rate Risk – Interest rates may rise resulting in a decrease in the value of securities held by the Fund, or may fall resulting in an increase in the value of such securities. Securities having longer maturities generally involve a greater risk of fluctuations in the value resulting from changes in interest rates.

 

Leverage Risk – The Fund may use leverage to purchase securities. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.

 

Liquidity Risk – Some assets held by the Fund may be difficult to sell, particularly during times of market turmoil. These illiquid assets may be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss.

 

Management Risk – The Adviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, may be incorrect. The Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment objectives and strategies.

 

Market Risk – The price of a security held by the Fund may fall due to changing market, economic or political conditions.

 

19

 

Alpine Realty Income & Growth Fund (Continued)

 

Non-Diversified Fund Risk – Performance of a non-diversified fund may be more volatile than a diversified fund because a non-diversified fund may invest a greater percentage of its total assets in the securities of a single issuer.

 

Preferred Stock Risk – Preferred stock represents an interest in a company that generally entitles the holder to receive, in preference to the holders of common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Preferred stocks may pay fixed or adjustable rates of return. Preferred stock has investment characteristics of both fixed income and equity securities. However, the value of these securities tends to vary more with fluctuations in the underlying common stock and less with fluctuations in interest rates and tends to exhibit greater volatility.

 

Real Estate Investment Trusts (“REITs”) Risk – REITs’ share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to qualify for favorable tax treatment.

 

Real Estate Securities Risk – Risks associated with investment in securities of companies in the real estate industry include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.

 

Small and Medium Capitalization Company Risk – Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger companies.

 

Undervalued Stock Risk – The Fund may pursue strategies that may include investing in securities, which, in the opinion of the Adviser, are undervalued. The identification of investment opportunities in undervalued securities is a difficult task and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

 

Please refer to pages 3-5 for other important disclosures and definitions.

 

20

 
Alpine Emerging Markets Real Estate Fund

 

Comparative Annualized Returns as of 4/30/17 (Unaudited)
  6 Months(1) 1 Year 3 Years 5 Years Since Inception(2)
Alpine Emerging Markets Real Estate Fund — Institutional Class 5.89% 9.18% 0.59% 0.97% 8.59%
Alpine Emerging Markets Real Estate Fund — Class A (Without Load) 5.78% 8.99% 0.35% 0.74% 4.28%  
Alpine Emerging Markets Real Estate Fund — Class A (With Load) -0.05% 3.02% -1.53% -0.39% 3.18%  
FTSE EPRA/NAREIT Emerging Index 9.31% 14.47% 4.61% 3.74% 11.42%  
S&P Developed Ex-U.S. Property Index 5.45% 2.68% 3.92% 8.14% 11.02%  
MSCI Emerging Markets Index 8.88% 19.13% 1.79% 1.49% 9.09%  
Lipper International Real Estate Funds Average(3) 5.79% 2.74% 2.23% 5.86% 9.05%  
Lipper International Real Estate Funds Ranking(3) N/A(4) 5/52 40/45 41/42 20/34
Gross Expense Ratio (Institutional Class): 3.33%(5)            
Net Expense Ratio (Institutional Class): 1.35%(5)            
Gross Expense Ratio (Class A): 3.58%(5)            
Net Expense Ratio (Class A): 1.60%(5)            

 

 
  (1) Not annualized.
  (2) Institutional Class shares commenced on November 3, 2008 and Class A shares commenced on December 30, 2011. Returns for indices are since November 3, 2008.
  (3) The since inception data represents the period beginning November 6, 2008 (Institutional Class only).
  (4) FINRA does not recognize rankings for less than one year.
  (5) As disclosed in the prospectus dated February 28, 2017.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end may be lower or higher than the performance quoted and may be obtained by calling 1-888-785-5578. Performance data shown does not reflect the 1.00% redemption fee imposed on shares held for fewer than 60 days. If it did, total returns would be reduced. Returns for the Class A shares with sales charge reflect a maximum sales charge of 5.50%. Performance for the Class A shares without sales charges does not reflect this load.

 

FTSE EPRA/NAREIT Emerging Index is a total return index, designed to track the performance of listed real estate companies and REITS in emerging markets. S&P Developed Ex-U.S. Property Index is a total return index that defines and measures the investable universe of publicly traded property companies domiciled in developed countries outside of the U.S. The companies included are engaged in real estate related activities, such as property ownership, management, development, rental and investment. Total return indexes include reinvestments of all dividends. MSCI Emerging Markets Index is a total return, free-float adjusted market capitalization weighted index that is designed to measure the equity market performance in the global emerging markets. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. The Lipper Global Real Estate Funds Average is an average of funds that invest at least 25% of their equity portfolio in shares of companies engaged in the real estate industry that are strictly outside of the U.S. or whose securities are principally traded outside of the U.S. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. Lipper rankings for the periods shown are based on fund total returns with dividends and distributions reinvested and do not reflect sales charges. The FTSE EPRA/NAREIT Emerging Index, the S&P Developed Ex-U.S. Property Index, the MSCI Emerging Markets Index and the Lipper Global Real Estate Funds Average are unmanaged and do not reflect direct fees associated with a mutual fund, such as investment adviser fees; however, the Lipper Global Real Estate Funds Average reflects fees charged by the underlying funds. The performance for the Alpine Emerging Markets Real Estate Fund reflects the deduction of fees for these value added services. Investors cannot directly invest in an index.

 

Expense Ratios reflect the ratios reported in the Fund’s most recent prospectus. The Alpine Emerging Markets Real Estate Fund has a contractual expense waiver that continues through February 28, 2018. Where a Fund’s gross and net expense ratios are the same for the period reported, the contractual expense reimbursement level was not reached as of the end of that period. To the extent the Fund’s expenses were reduced by waivers, the Fund’s total returns were increased. In these cases, in the absence of the expense waivers, the Fund’s total returns would have been lower.

 

To the extent that the Fund’s historical performance resulted from gains derived from participation in Initial Public Offerings (“IPOs”) and/or Secondary Offerings, there is no guarantee that these results can be replicated in future periods or that the Fund will be able to participate to the same degree in IPO/Secondary Offerings in the future.

 

21

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

 

Portfolio Distributions* (Unaudited)

 

Top 10 Holdings* (unaudited)
1.   China Resources Land, Ltd. 5.72 %
2.   China Overseas Land & Investment, Ltd. 4.41 %
3.   Longfor Properties Co., Ltd. 3.07 %
4.   Central Pattana PCL 2.63 %
5.   Ayala Land, Inc. 2.51 %
6.   CIFI Holdings Group Co., Ltd. 2.48 %
7.   BR Malls Participacoes SA 2.45 %
8.   Housing Development & Infrastructure, Ltd.- Macquarie Bank, Ltd. 2.35 %
9.   China Vanke Co., Ltd.-Class H 2.12 %
10.   Global Logistic Properties, Ltd. 2.09 %
 
* Portfolio Distributions percentages are based on total investments. Top 10 Holdings do not include short-term investments and percentages are based on total net assets. Portfolio holdings and sector distributions are as of 04/30/17 and are subject to change. Portfolio holdings are not recommendations to buy or sell any securities.


 

 

 

Value of a $1,000,000 Investment (Unaudited)

 

 

 

This chart represents a comparison of a hypothetical $1,000,000 investment in the Fund versus a similar investment in the Fund’s benchmarks. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment performance reflects the waiver and recovery of certain fees, if applicable. Without the waiver and recovery of fees, the Fund’s total return would have differed.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.

 

22

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

Commentary

 

Dear Shareholders:

 

We present below the annual results for the Alpine Emerging Markets Real Estate Fund. For the period ended April 30, 2017, the closing NAV was $15.11 per share, representing a total return of 5.89%. The Fund’s benchmark index, the FTSE EPRA/NAREIT Emerging Index returned 9.31%. Over that same time frame the MSCI Emerging Markets Index finished with a total return of 8.88% and the S&P Developed (Ex-U.S.) Property Index returned 5.45%. All references in this letter to the Fund’s performance relate to the performance of the Fund’s Institutional Class.

 

Performance Drivers

 

Over the past six months emerging market (EM) real estate equity posted respectable absolute returns and outperformed global real estate by a wide margin but nevertheless underperformed the MSCI World Index as caution over Federal Reserve (Fed) rate policy and the potentially negative consequences of “Trumponomics” on EMs, via the global trade, foreign exchange (FX) and credit channels, offset a somewhat unexpected recovery of cyclical momentum in China. The equities came under pressure directly after the surprise election result as investors likely had a sense of déjà vu of the May 2013 taper tantrum. EM currencies, especially the Mexican peso, were hit hard. Yields blew out as bond traders priced in a new reality of higher rates, inflation premia and deficits. While the velocity of the knee jerk reaction resembled the taper tantrum, the “Trump tantrum” analogue proved to be otherwise misplaced. Indeed, by the end of the period under review the dollar had effectively done a round trip and core rates had stabilized (albeit at higher levels). Through the end of the calendar year EMs generally traded sideways as the U.S. dollar (USD) strengthened and yield curves steepened sharply. As the new year began early evidence of cyclical strength in China drove the first leg of strong performance across the developing economies as surging exports/world trade and resilient commodity prices appeared to do much of the heavy lifting for the global reflation trade – much more so than Trump’s fiscal diktats. Robust net fund flows into EMs began to reflect a new-found optimism for an asset class that has remained under the radar of most market participants. The rally gained renewed momentum after the Fed’s March rate hike as improvements in EM’s sequential data were suggesting that levels of economic growth in developing markets could hit their highest levels since

2014. For the time being, investors are coming around to the reflation, relative value to developed markets, and growth differential narratives which historically benefit EM assets. The next leg of the recovery could be driven by a shift into cyclical at the expense of defensive EM assets.

 

Portfolio Analysis

 

The underperformance of the Fund during the period was driven primarily by exposure to Indonesia, Mexico and the Philippines. The net cash buffer of the Fund presented a further drag on performance. The allocations to Hong Kong/China, Brazil and Singapore represented positive contributions to performance on an absolute return basis. At period’s end on April 30, 2017, the top 10 positions accounted for 29.83% of the portfolio versus 30.95% for the prior period due to a reduction in the China exposure and a material shift in the composition of the top 10. The top allocations shifted as five companies: Emaar, Fibra Uno, Redefine, KWG and Oberoi were reduced in favor of Central Pattana, CIFI Holdings, HDIL, China Vanke and Global Logistic Properties.

 

The Fund’s country allocations adjusted during the period as our assessment of the macro conditions, stock valuations, investment opportunities and risks continued to evolve. During the period under review the Fund’s largest allocation was to HK/China but was reduced toward the end of the period as the strong share performance was not reflecting the tightening credit environment and weakening sales in Tier 1 and 2 markets. Doubts over the sustainability of the economic recovery and concerns over further policy intervention, particularly in Tier I markets, have led us to be more defensive in our China allocation. The portfolio remains overweight India and we are very constructive on the long term prospects for the overall economy as well as its real estate sector. Passage of a real estate reform bill in March of this year requiring developers to hold 70% of pre-sales cashflow in an escrow account until project completion should inject a higher degree of confidence into the overall market while creating substantial barriers to entry for undercapitalized developers. However the recent demonetization policy, while a necessary move for the long term could likely dampen demand for land and real estate in the near term. The position in Brazil was increased primarily due to the establishment of a position in Tenda, which was spun off from Gafisa during the period. The weighting to Egypt was increased once the devaluation of the pound took place in November 2017. The Fund maintained significant underweights to the


 

23

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

Malaysian and South African markets due to the macroeconomic outlook, specifically commodity pricing, as well as instability in the currencies. Finally the Fund hedged its currency exposure to the euro, pound and Hong Kong dollar.

 

The top five contributors to the Fund’s absolute performance for the period under discussion based on contribution to total return were primarily property developers in China as well as global logistics player: Longfor Properties, Global Logistic Properties, China Resources Land, CIFI Holdings and KWG Property.

 

Longfor Properties is a Chinese developer based in Beijing. The overall Chinese property market experienced very strong returns in the new year based largely on evidence of a cyclical recovery in China and continued strong sales despite a ramp up in policy measures. Outperformance has been driven by its strong cash flow from and counter-cyclical land purchases, which has underpinned stability of margin at an attractive level. The company is known for its fiscal discipline and remains one of the very few privately-owned developers to have an investment grade credit rating from S&P, Moody’s and Fitch. Robust growth in contracted sales support a high visibility of earnings growth.
   
Global Logistic Properties (GLP) is a Singapore-based owner, developer and manager of logistics assets in China, Japan, Brazil and the US. The company is in the midst of evaluating at least three potential buyout bids from Blackstone, Warburg Pincus and a management-led consortium, which has narrowed the discount to NAV significantly.
   
China Resources Land is one of the largest developers and operators of real estate in China and benefitted from the rally in the broader market as well as a sharp recovery in retail sales in its malls (+30% through April 2017) which led to rental income growth of 11% year over year (YoY). Further support came from management increasing the dividend payout ratio from 28% to 30%.
   
CIFI Holdings is a mid-sized Chinese developer focusing on tier 1 and 2 cities. The shares rallied with the overall market but its strong sell through rate (47% through April 2017) led to expectations of a raise in guidance while its higher margins and return on equity (RoE) relative to peers further underpinned its outperformance.
   
KWG Property is a Pearl River Delta based Chinese property owner and developer focusing on tier one markets. The shares rallied along with the overall
  market but it was the market’s belief in management’s 26% increase in sales guidance and the payment of a special dividend which drove the outperformance.

 

The top five negative contributors to the Fund’s absolute performance for the period ended April 30, 2017 based on contribution to total return were Fibra Uno, Bumi Serpong, China Vanke, Lippo Cikarang and Pakwon Jati.

 

Fibra Uno is the largest Mexican Fibra (REIT equivalent) holding a diversified portfolio of assets across Mexico. Management has put together a high quality portfolio with solid operating metrics and a robust acquisition/development pipeline which has the shares trading at a premium to its NAV. However going forward investors remain cautious as to management’s ability to source accretive deals and drive value creation on share-based acquisitions. Additionally the company’s distribution growth and funds from operations (FFO) yield have lagged peers recently.
   
Bumi Serpong is an Indonesian township developer. The residential market overall is still experiencing weak demand, which was reflected in the company’s muted launch schedule and marketing sales performance to date. Indonesian shares in general were under short term pressure from the overhang from the Jakarta gubernatorial elections in February and April.
   
China Vanke is one of the largest developers in China. Weakness in the shares has been primarily driven by uncertainty surrounding the ownership and management structure of the company as a number of life insurance companies and some other Chinese developers have taken meaningful stakes in the company. Uncertainty over the ownership prompted a downgrade from S&P. Shenzhen Metro Group, one of the company’s largest shareholders, has recently consolidated its position through the purchase of Evergrande’s holdings which should help to resolve concerns over the splintered ownership structure.
   
Lippo Cikarang is a residential and industrial land developer in Indonesia. Indonesian shares in general were under short term pressure from the overhang from the Jakarta gubernatorial elections in February and April. However, LPCK has underperformed the sector due to disappointing sales and potential oversupply in select sub-markets. We remain constructive on the company as it is trading at a significant discount to replacement cost.


 

24

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

Pakwon Jati,is a mixed-use developer and landlord in Indonesia targeting residential and malls. Indonesian shares in general were under short term pressure from the overhang from the Jakarta gubernatorial elections in February and April but the company underperformed due to expectations for lagging earnings growth in 2017 due to slower than expected revenue recognition and a one-off penalty paid for the early redemption of a bond.

 

Outlook

 

As we look beyond the largely symbolic 100-day assessment period of the new Trump administration markets appear to be consolidating gains from the global reflation trade which began as rates bottomed in the summer of 2016 but caught a “massive and huge” tailwind from the Trump election and renewed cyclical momentum in China. Risk appetite appears to have crested for the moment in the face of mixed messages for growth prospects from the hard versus soft economic indicators, and perhaps most significantly an ongoing reevaluation of the ability of the U.S. to enact fiscal stimulus, tax reform, infrastructure and deregulation in a timely manner. So which economies could be best positioned to drive the next leg of the global reflation trade? Where does the Fed’s dot plot go from here? What risk could higher bond yields pose to the global economy? These are just a few of the questions that remain top of mind for all investors as we continue to climb a wall of worry comprised of political and policy uncertainties, the slope and velocity of growth and inflation, and the lurking threats of myriad geopolitical crises.

 

Broadly speaking, we see cause for guarded optimism as the global growth environment appears more balanced than it has in recent memory. A pro-growth agenda, reflationary policies and a measured tightening of interest rates have generally been supportive for real estate returns on an historical basis, however, political uncertainties and a maturing cycle amplify downside risks. Emerging markets lagged the reflation trade in fourth quarter 2016 but have since recovered from low valuations and have been supported by an improving earnings profile. A growing U.S. economy has historically been a positive for developing markets absent trade protectionism and a sharp overshoot in rates and/or currencies. But China remains the lynchpin for a sustainable re-rating across EM assets.

 

In China, the government’s intervention revitalized cyclical momentum in its economy, providing much of the heavy lifting for the global reflation trade. Indeed, nominal gross domestic product (GDP) growth in China accelerated from 9.6% YoY in Q4 2016 to 11.8% YoY in

Q1 2017. While uncertainties remain regarding the sustainability of the recovery absent unprecedented liquidity from the People’s Bank of China (PBOC) we remain firmly of the view that slowdowns in China are based on policy shifts not sharp decelerations in demand. The U.S. government stepped back its threat of labeling China a currency manipulator and with tensions rising in North Korea it’s imperative that relations between the U.S. and China are guided by political pragmatism. Periodic volatility in the growth outlook for China could reverberate through global markets and remains one of the dominant drivers of macro instability, particularly with respect to EMs. In the run up to the critical National Congress in fourth quarter 2017 (held every five years) the current Chinese government will want to do everything in its power to ensure political and economic status quo which should help it to consolidate its power and provide leverage to shape the Politburo Standing Committee. As such, we remain cautiously optimistic that China can avoid any so-called “hard landing” in its economy through a mix of political reforms as well as monetary and fiscal measures

 

Another key variable in the EM equation is the direction of global rates. While we believe global monetary policy will remain extremely accommodative there seems to be greater scope for divergence among central banks since quantitative easing (QE) regimes were initiated in response to the financial crisis. The Fed increased rates at both its December and March meeting and markets are currently pricing in one to two increases for the remainder of 2017. However, until there is greater visibility on the new administration’s fiscal agenda it is difficult to say with any conviction where U.S. rates might settle. Adding further uncertainty into the equation are Fed Chair Yellen’s comments regarding shrinking the central bank’s $4.5 trillion balance sheet. The challenge is not exclusively a question of magnitude and pace of the drawdown, but how the Treasury aims to cope with a funding gap as the Fed unwinds $2.5 trillion in government securities. If not handled well, the read through to bond yields and mortgage rates could heighten volatility. The Bank of Japan (BoJ) is expected to stay the course in its battle against deflation and to augment its current approach with further fiscal initiatives. While its commitment to the official JGB buying target of JPY80 trillion (approximately $72 billion USD) per annum could be weakening we still believe Kuroda, the Governor of the Bank of Japan, when he says that only an extended overshoot of his 2% consumer price index (CPI) target would trigger policy tightening. We are nowhere near that level. So this leaves all eyes on the tone and tenor of the European Central Bank (ECB) as Mario Draghi, President of the ECB, finds himself


 

25

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

occupying the middle ground between the Fed’s tightening impulse and the BoJ’s policy stance. Current market talk is rife with uneasiness regarding the ECB reducing its monthly asset purchases into 2018 and what this policy shift could ultimately mean for bond yields, especially in Spain and Italy.

 

On balance we generally remain sanguine about the rate cycle for now for two main reasons: we believe that global rates should remain accommodative for the medium term based on the trajectory of expected inflation and the relatively tight trading range for the U.S.D. Secondly, we do not interpret moderate rate increases as harmful to a recovery but as a symptom of growth. Quantitative easing regimes, in place since the financial crisis, suggest a deficit in the growth outlook. The continuation of these policies almost a decade later should be the real concern for EMs, not measured moves by central banks to normalize the cost of capital.

 

In our view, the geopolitical landscape collectively represents one of the most significant pressures to our outlook as equity markets have become increasingly more phlegmatic about political risks over time. The nuclear aspirations of North Korea and the war in Syria could pose existential threats to nearby regions. The Temer government coalition in Brazil is hanging by a thread after the most recent scandal placing the reform agenda and the viability of Temer’s administration very much in question. The constitutional referendum in Turkey and the purge of cabinet members in South Africa reinforce autocratic ideals inconsistent with shareholder risk tolerance. In the U.K. and Europe uncertainty over the direction of Brexit could add to volatility in asset markets. Although the Netherlands and France have avoided electoral pitfalls, Germany and Italy might still present further challenges for the Eurozone outlook. The wall of worry could remain high.

 

And finally perhaps the biggest wild card in the outlook is that after 100 days of the new administration there are more questions than answers surrounding the potential for a sea change in the U.S. Foremost among them being to what extent does the current administration’s inability to drive legislation undermine its domestic agenda? Where could investors ultimately calibrate their expectations for the President’s ability to overcome the

ideological divisions within his own administration, then cobble together consensus in the Republican Party and finally reach out to enough Democrats to enact meaningful legislation? For the time being the economic agenda appears to be languishing and there seems to be a narrowing path for the new administration to enact any meaningful legislation in advance of the August recess.

 

In the current environment, differentiation – whether in markets, asset types or growth models – should remain a dominant theme in Alpine’s portfolio construction methodology. Accordingly, important indicators for our assessment of EM opportunities include: evidence of an inflection in earnings, supply/demand dynamics in asset markets, volatility of commodity prices, potential trade tensions, the relative vulnerability to credit dislocations, and the success of implementation of structural reforms. Over the medium-term, many EM economies could underpin the ongoing recovery in global growth. As the developing countries strive to become deeper and more integrated, it is Alpine’s view that over time the emerging equity markets could increase substantially in absolute terms as more companies come public and eventually even surpass developed markets in terms of market capitalization. At the same time we expect growth differentials between EMs and developed markets to stabilize gradually, which could support a structural reallocation to EM equities. Dispersion of EM real estate equity returns across geographies and asset types could remain elevated, which is consistent with Alpine’s long-term view that the current macroeconomic climate could provide attractive opportunities for active management and stock selection. Ultimately, we could expect the drivers reinforcing the broader EM narrative in general and real estate equities specifically such as urbanization trends, demographics and the growth of the aspirational middle class to support a sustainable upward trend in demand over the long term.

 

We thank our shareholders for their support and look forward to opportunities to come.

 

Sincerely,

 

Joel E.D. Wells
Samuel A. Lieber
Portfolio Managers


 

26

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

Diversification does not assure a profit nor protect against loss in a declining market.

 

Earnings growth is not representative of the fund’s future performance.

 

This letter represents the opinions of the Fund’s management and is subject to change, is not guaranteed and should not be considered a recommendation to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of future results, or investment advice. Views expressed may vary from those of the firm as a whole.

 

Past performance is no guarantee of future results.

 

 

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to risks including the following in alphabetical order:

 

Concentration Risk – The Fund’s strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

 

Currency Risk – The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. Currency conversion costs and currency fluctuations could erase investment gains or add to investment losses. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation.

 

Cybersecurity Risk – Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or its service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.

 

Equity Securities Risk – The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry). Holders of common stock generally are subject to more risks than holders of preferred stock or debt securities because the right to repayment of common stockholders’ claims is subordinated to that of preferred stock and debt securities upon the bankruptcy of the issuer.

 

Foreign and Emerging Market Securities Risk – The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value of these securities. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund. The risks of foreign investments are heightened when investing in issuers in emerging market countries. Emerging market countries tend to have economic, political and legal systems that are less fully developed and are less stable than those of more developed countries. Less developed markets are more likely to experience problems with the clearing and settling of trades and the holding of securities by banks, agents and depositories are less developed than those in the United States. They are often particularly sensitive to market movements because their market prices tend to reflect speculative expectations. Low trading volumes may result in a lack of liquidity and in extreme price volatility. Additionally, the Fund is subject to the risks specific to investing in China. China is an emerging market and demonstrates significantly higher volatility form time to time in comparison to developed markets.

 

27

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

Foreign Currency Transactions Risk – Foreign securities are often denominated in foreign currencies. As a result, the value of the Fund’s shares is affected by changes in exchange rates. The Fund may enter into foreign currency transactions to try to manage this risk. The Fund’s ability to use foreign currency transactions successfully depends on a number of factors, including the foreign currency transactions being available at prices that are not too costly, the availability of liquid markets and the ability of the Adviser to accurately predict the direction of changes in currency exchange rates.

 

Growth Stock Risk – Growth stocks typically are very sensitive to market movements because their market prices tend to reflect future expectations. When it appears those expectations will not be met, the prices of growth stocks typically fall. Growth stocks as a group may be out of favor and underperform the overall equity market while the market concentrates on undervalued stocks.

 

Initial Public Offerings and Secondary Offerings Risk – The Fund may invest a portion of its assets in shares of IPOs or secondary offerings of an issuer. IPOs and secondary offerings may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs and secondary offerings on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs and secondary offerings may not be consistently available to the Fund for investing. IPO and secondary offering shares frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO and secondary offering shares for a very short period of time. This may increase the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO and secondary offering shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

 

Interest Rate Risk – Interest rates may rise resulting in a decrease in the value of securities held by the Fund, or may fall resulting in an increase in the value of such securities. Securities having longer maturities generally involve a greater risk of fluctuations in the value resulting from changes in interest rates.

 

Liquidity Risk – Some assets held by the Fund may be impossible or difficult to sell, particularly during times of market turmoil. These illiquid assets may also be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss.

 

Management Risk – The Adviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, may be incorrect. The Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment objectives and strategies.

 

Market Risk – The price of a security held by the Fund may fall due to changing market, economic or political conditions.

 

Operational Risk – Your ability to transact with the Fund or the valuation of your investment may be negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.

 

Micro Capitalization Company Risk – Stock prices of micro capitalization companies are significantly more volatile, and more vulnerable to adverse business and economic developments than those of larger companies. Micro capitalization companies often have narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies, including small or medium capitalization companies.

 

Real Estate Investment Trusts (“REITs”) Risk – REITs’ share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to qualify for favorable tax treatment. REITs may be leveraged, which increases risk. Certain REITs charge management fees, which may result in layering the management fee paid by the fund.

 

Real Estate Securities Risk – Risks associated with investment in securities of companies in the real estate industry include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations

 

28

 

Alpine Emerging Markets Real Estate Fund (Continued)

 

in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.

 

Small and Medium Capitalization Company Risk – Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger companies.

 

Undervalued Stock Risk – The Fund may pursue strategies that may include investing in securities, which, in the opinion of the Adviser, are undervalued. The identification of investment opportunities in undervalued securities is a difficult task and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

 

Please refer to pages 3-5 for other important disclosures and definitions.

 

29

 
Alpine Global Infrastructure Fund

 

Comparative Annualized Returns as of 4/30/17 (Unaudited)
  6 Months(1) 1 Year 3 Years 5 Years Since Inception(2)
Alpine Global Infrastructure Fund — Institutional Class 11.98% 13.43% 3.84% 9.17% 13.70%
Alpine Global Infrastructure Fund — Class A (Without Load) 11.86% 13.16% 3.58% 8.90% 10.85%
Alpine Global Infrastructure Fund — Class A (With Load) 5.72% 6.94% 1.65% 7.67% 9.68%
S&P Global Infrastructure Index 8.35% 11.01% 4.25% 8.23% 9.26%
MSCI All Country World Index 11.76% 15.14% 5.29% 8.96% 10.37%
Lipper Global Infrastructure Funds Average(3) 7.83% 10.13% 3.68% 8.31% 10.49%
Lipper Global Infrastructure Funds Ranking(3) N/A(4) 8/89 32/67 18/49 1/22
Gross Expense Ratio (Institutional Class): 1.29%(5)          
Net Expense Ratio (Institutional Class): 1.21%(5)          
Gross Expense Ratio (Class A): 1.54%(5)          
Net Expense Ratio (Class A): 1.46%(5)          

 

 

  (1) Not annualized.
  (2) Institutional Class shares commenced on November 3, 2008 and Class A shares commenced on December 30, 2011. Returns for indices are since November 3, 2008.
  (3) The since inception data represents the period beginning November 6, 2008 (Institutional Class only).
  (4) FINRA does not recognize rankings for less than one year.
  (5) As disclosed in the prospectus dated February 28, 2017.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end may be lower or higher than the performance quoted and may be obtained by calling 1-888-785-5578. Performance data shown does not reflect the 1.00% redemption fee imposed on shares held for fewer than 60 days. If it did, total returns would be reduced. Returns for the Class A shares with sales charge reflect a maximum sales charge of 5.50%. Performance for the Class A shares without sales charges does not reflect this load.

 

S&P Global Infrastructure Index is a total return index that is designed to track 75 companies from around the world chosen to represent the listed infrastructure industry while maintaining liquidity and tradability. To create diversified exposure, the index includes three distinct infrastructure clusters: energy, transportation, and utilities. Net Total Return (NTR) indexes include reinvestments of all dividends minus taxes. MSCI All Country World Index is a total return, free-float adjusted market capitalization weighted index that captures large and mid-cap representation across 24 Developed and 21 Emerging Markets countries. With 2,483 constituents, the index covers approximately 85% of the global investable equity opportunity set. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. The Lipper Global Infrastructure Funds Average is an average of funds that limit their investments to a specific industry (e.g., transportation, retailing, or paper, etc.) or ones that have not been classified into an existing investment classification. To create diversified exposure across the global listed infrastructure market, the index has balanced weights across three distinct infrastructure clusters: utilities, transportation, and energy. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. Rankings for the periods shown are based on Fund total returns with dividends and distributions reinvested and do not reflect sales charges. The S&P Global Infrastructure Index, MSCI All Country World Index and the Lipper Global Infrastructure Funds Average are unmanaged and do not reflect direct fees associated with a mutual fund, such as investment adviser fees; however, the Lipper Global Infrastructure Funds Average reflects fees charged by the underlying funds. The performance for the Alpine Global Infrastructure Fund reflects the deduction of fees for these value-added services. Lipper rankings for the periods shown are based on fund total returns with dividends and distributions reinvested and do not reflect sales charges. Investors cannot directly invest in an index.

 

Expense Ratios reflect the ratios reported in the Fund’s most recent prospectus. The Alpine Global Infrastructure Fund has a contractual expense waiver that continues through February 28, 2018. Where a Fund’s gross and net expense ratios are the same for the period reported, the contractual expense reimbursement level was not reached as of the end of that period. To the extent the Fund’s expenses were reduced by waivers, the Fund’s total returns were increased. In these cases, in the absence of the expense waivers, the Fund’s total returns would have been lower.

 

The Fund’s past performance benefited significantly from Initial Public Offerings (“IPOs”) and Secondary Offerings of certain issuers. There is no assurance that the Fund can replicate this performance in the future. Additionally, there is no guarantee that the Fund will be able to participate to the same degree in IPO/Secondary Offerings in the future.

 

30

 

Alpine Global Infrastructure Fund (Continued)

 

Portfolio Distributions* (Unaudited)

 

Top 10 Holdings* (unaudited)
1.   Cosan Logistica SA 3.13%
2.   Ferrovial SA 2.66%
3.   Cellnex Telecom SAU 2.54%
4.   Veolia Environnement SA 2.45%
5.   T-Mobile U.S., Inc. 2.42%
6.   American Tower Corp. 2.27%
7.   Canadian Pacific Railway, Ltd. 2.24%
8.   Crown Castle International Corp. 2.22%
9.   Enbridge, Inc. 2.20%
10.   East Japan Railway Co. 2.15%
 
* Portfolio Distributions percentages are based on total investments. Top 10 Holdings do not include short-term investments and percentages are based on total net assets. Portfolio holdings and sector distributions are as of 04/30/17 and are subject to change. Portfolio holdings are not recommendations to buy or sell any securities.


 

 

Value of a $1,000,000 Investment (Unaudited)

 

 

This chart represents a comparison of a hypothetical $1,000,000 investment in the Fund versus a similar investment in the Fund’s benchmarks. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment performance reflects the waiver and recovery of certain fees, if applicable. Without the waiver and recovery of fees, the Fund’s total return would have differed.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.

 

31

 

Alpine Global Infrastructure Fund (Continued)

 

Commentary

 

Dear Shareholders:

 

For the six month period ended April 30, 2017, the Alpine Global Infrastructure Fund generated a total return of 11.98% versus the S&P Global Infrastructure Index (the “benchmark”) which had a total return of 8.35%. All references in this letter to the Fund’s performance relate to the performance of the Fund’s Institutional Class.

 

Economic Analysis

 

Stock markets across the world continued their relentless rally in the six month period ended April 30, 2017, fueled by a synchronized global recovery in corporate earnings and tailwinds from continued accommodative monetary policy across most major regions. A significant portion of this performance was realized in the weeks following the U.S. presidential election. The so-called “Trump trade” was evident in the strong performance of financial stocks, with the S&P 500® Financials Index returning 20.30% in the six month period. Industrials stocks also benefited from Trump’s pledge to spend $1 trillion on infrastructure during his campaign. The consequent rise in interest rates, illustrated by the U.S. 10 year Treasury Rate’s spike from 1.83% to 2.28% during the period, cooled investor interest for “bond proxies,” with the S&P 500® Telecommunication Services Index returning just 4.02% in the period.

 

Over in Europe the euphoria was palpable, with the MSCI Europe Index outpacing the S&P 500 Index, gaining 15.00% in U.S. Dollars, versus the latter’s 13.32%, as the Markit Eurozone Manufacturing Purchasing Managers Index (PMI) reported an 8th consecutive monthly increase, ending at 56.7 in April 2017. Investors grew sanguine over the prospect that pro-business candidate Emmanuel Macron would prevail in the May 2017 French presidential election.

 

Emerging markets (EM) were more of a mixed bag, on the other hand. The Ibovespa Brasil Sao Paulo Stock Exchange Index was up just 0.68% in U.S. Dollars, consolidating its impressive gains from the previous year. The Shanghai Stock Exchange Composite Index posted a -0.02% return in U.S. dollars as the People’s Bank of China (PBOC) began to shift away from easy monetary policy to rein in asset prices and inflation. All was not gloomy in EM markets, however; for instance, the Russian MICEX Index returned 13.81% in U.S. Dollars, fueled by hopes that relations between Russia and the United States would improve.

Portfolio Analysis

 

On a relative basis, the Fund outperformed in the “Other” sector. The “Other” sector consists of companies that we own that are not classified in one of our five infrastructure sectors. These companies include social infrastructure such as private correctional facilities (see below for the reasons these stocks outperformed). The transportation sector was the worst performing sector in the Fund. We were underweight in this sector and the companies that we own within this sector slightly underperformed the S&P Global Infrastructure Index.

 

We believe that the urbanization of emerging market countries will be an important driver of infrastructure development and spending. During the period, the Fund’s exposure to emerging markets continues to be overweight as compared to the benchmark.

 

The top five stocks contributing to the Fund’s absolute performance for the 6-month period ended April 30, 2017, based on contribution to total return were Cosan Logistica, GEO Group, CoreCivic, T-Mobile and NRG Energy:

 

  Cosan Logistica is a holding company whose sole asset is shares of Rumo, a railway concession operator in Brazil, hence share performance correlates strongly with Rumo. The shares rallied as the company executed on its strategy of improved operating performance and gained market share at the port of Santos. The stock currently trades at a significant discount to its net asset value.
     
  GEO Group and CoreCivic are U.S. private corrections facility operators. Both stocks underperformed ahead of the U.S. Presidential election in November as investors feared a new administration would deemphasize, or phase out, private corrections facilities. The stocks rebounded post-election as the incoming administration was not expected to take a hard stance on the issue.
     
  T-Mobile is a U.S. wireless communications company. The company continued to build operating momentum capturing the largest net share of recent market growth. Market speculation over industry consolidation also increased as the broadcast spectrum auction ended.
     
  NRG Energy is an independent power producer in the United States. NRG outperformed after two activist investors took stakes in the company and


 

32

 

Alpine Global Infrastructure Fund (Continued)

 

    gained seats on the board of directors. Investors increased expectations for potential asset sales and operating cost savings.

 

The bottom five stocks contributing to the Fund’s absolute performance for the 6-month period ended April 30, 2017, based on contribution to total return were Grana y Montero, NOS, Veolia Environment, Companhia de Sandeamento Basico do Estado de Sao Paulo and Promotora y Operadora de Infraestructura:

 

  Grana y Montero (Grana) is a Peruvian construction company. Grana and Odebrecht, a Brazilian construction company, were partners in several projects. Odebrecht is accused of bribing government officials to win projects. The press speculated that the management of Grana was aware of these bribes. Subsequent to April 30, 2017, we have completely liquidated our position in the company.
     
  NOS is a telecommunications company in Portugal. Despite good key performance indicators and improving market fundamentals, the company disappointed investors with higher than expected near-term capital expenditure. Investors had expected higher free cash flow and faster dividend growth.
     
  Veolia Environment is a global waste and water utility company. Political uncertainty and weak economic activity in France were the primary drags on the company’s business. This culminated in the reduction of long-term sales guidance which drove the stock’s underperformance. We viewed the weakness in the shares as overdone and added to our holdings during the period.
     
  Companhia de Sandeamento Basico do Estado de Sao Paulo (SABESP) is a water utility company in Brazil. The shares underperformed on weak third quarter operating results in 2016, in addition to concerns over the company’s U.S. Dollar-denominated debt exposure and its ongoing regulatory review. Subsequent to April 30, 2017, we have completely liquidated our position in the company.
     
  Promotora y Operadora de Infraestructura (Pinfra) is a road concession company in Mexico. Following the U.S. election last November, the shares declined as investors feared a withdrawal from the North American Free Trade Agreement (NAFTA) would weaken the Mexican economy. We believe Pinfra continues to be well positioned with its solid balance sheet to capture new opportunities.

Summary and Outlook

 

As we look towards the balance of 2017, we see reasons for cautious optimism. One by one we are seeing purchasing managers’ indices (PMI) across most major regions inflect positively. Some of the more notable improvements have been seen in France, where the PMI has improved from 48.0 in April 2016 to 55.1 in April 2017, in Japan where the PMI has surged from 47.7 to 52.7, and in Brazil where the PMI has moved from 41.6 to 50.1. While these indicators may prove to be overheated, based more on optimism over future prospects than on current macroeconomic conditions, we believe the positive tone in the global stock market is well supported by fundamentals.

 

That said, there are still plenty of reasons for caution; despite Republican control of both houses of Congress, President Trump has so far been unable to succeed on his, and the party’s longtime promise to repeal Obamacare, leading some to question the ability of this administration to push forward federal tax reform and infrastructure stimulus. The U.S. stock market’s strong move since the election is arguably at least partly driven by expectations that these stimuli will be implemented successfully.

 

In Europe, with multiple hotly contested elections, uncertainty is still fairly high, but we like the combination of an improving macroeconomic backdrop and an arguably discounted valuation relative to the U.S. market. We have continued to hedge a portion of our Euro currency exposure during the period to partially help offset the Euro’s impact on the value of the Fund’s Euro-denominated holdings.

 

The Asia-Pacific region is more of a mixed bag. In China, interest rates are now rising, as evidenced by the rising 3-month interbank interest rates (SHIBOR), suggesting a tightening credit environment. Due to the uncertainty of the Chinese Renminbi, we have hedged our exposure to the Hong Kong Dollar to help protect the Fund against a devaluation of the currency. The Japanese economy remains one of the weaker parts of the region, with demographic headwinds and stubbornly low inflation and wage growth leaving the outlook there a bit more muted. However there are some green shoots, particularly the recent strengthening of the Japan Manufacturing Purchasing Managers’ Index (PMI).

 

The elections in the United States put a renewed focus on infrastructure. President Trump mentioned infrastructure as a top priority in his acceptance speech, and he appears to believe that the country needs to rebuild its infrastructure and use the rebuilding as part of a fiscal stimulus for the economy. At this time it is unclear the total dollar amount of the infrastructure spending or


 

33

 

Alpine Global Infrastructure Fund (Continued)

 

how it will be funded. But in President Trump’s proposal, he made it clear that he wants the private sector to be involved in the spending on infrastructure through public-private-partnerships, incentivizing private investment through tax credits.

 

Infrastructure was not only a focus on a national level, but also at the city and state level, as several infrastructure spending initiatives were included on local ballots. In Los Angeles, voters agreed to a half-cent sales tax increase to fund $120 billion in transportation infrastructure over the next forty years. In Seattle, voters passed a $54 billion proposal to expand public transportation across the region. Overall, at least 30 local or state ballot measures on public transportation have passed.

 

In its 2017 report card on the condition of the United Sates’ infrastructure, the American Society of Civil Engineers (ASCE) gave a D+ rating as an overall grade. The rails were the only sector that received a grade above a C+. The majority of the rail freight infrastructure is privately owned. The aviation sector received a grade

of a D. The report stated “it is expected that 24 out of the top 30 major airports may soon experience Thanksgiving-peak traffic volume at least one day every week.” The ASCE quantified the infrastructure funding gap of over $2 trillion from 2016 to 2025.

 

We believe the Fund should be well positioned to take advantage of any increase in global infrastructure spending. We continue to believe that the combination of urbanization, rising standards of living and population growth can propel infrastructure spending for decades to come. We will continue to adapt our investment approach as economic conditions change and look forward to discussing the portfolio and the prospects for the Fund in future communications. We appreciate your trust and investment in the Fund.

 

Sincerely,

 

Joshua E. Duitz
Portfolio Manager


 

This letter represents the opinions of the Fund’s management and is subject to change, is not guaranteed and should not be considered a recommendation to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of future results, or investment advice. Views expressed may vary from those of the firm as a whole.

 

Earnings growth is not representative of the fund’s future performance.

 

Past performance is no guarantee of future results.

 

 

 

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to risks including the following in alphabetical order:

 

Concentration Risk – The Fund’s strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

 

Currency Risk – The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. Currency conversion costs and currency fluctuations could erase investment gains or add to investment losses. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation.

 

Cybersecurity Risk – Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or its service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.

 

Dividend Strategy Risk – There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The Fund’s emphasis on dividend-paying stocks could cause the Fund to underperform similar funds that invest without consideration of a company’s track record of paying dividends or ability to pay dividends in the future. Dividend-paying stocks may not

 

34

 

Alpine Global Infrastructure Fund (Continued)

 

participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. The Fund may hold securities for short periods of time related to the dividend payment periods and may experience loss during these periods.

 

Equity Securities Risk – The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry). Holders of common stock generally are subject to more risks than holders of preferred stock or debt securities because the right to repayment of common stockholders’ claims is subordinated to that of preferred stock and debt securities upon the bankruptcy of the issuer.

 

Foreign and Emerging Market Securities Risk – The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value of these securities. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund. The risks of foreign investments are heightened when investing in issuers in emerging market countries. Emerging market countries tend to have economic, political and legal systems that are less fully developed and are less stable than those of more developed countries. Less developed markets are more likely to experience problems with the clearing and settling of trades and the holding of securities by banks, agents and depositories are less developed than those in the United States. They are often particularly sensitive to market movements because their market prices tend to reflect speculative expectations. Low trading volumes may result in a lack of liquidity and in extreme price volatility.

 

Foreign Currency Transactions Risk – Foreign securities are often denominated in foreign currencies. As a result, the value of the Fund’s shares is affected by changes in exchange rates. The Fund may enter into foreign currency transactions to try to manage this risk. The Fund’s ability to use foreign currency transactions successfully depends on a number of factors, including the foreign currency transactions being available at prices that are not too costly, the availability of liquid markets and the ability of the Adviser to accurately predict the direction of changes in currency exchange rates.

 

Growth Stock Risk – Growth stocks typically are very sensitive to market movements because their market prices tend to reflect future expectations. When it appears those expectations will not be met, the prices of growth stocks typically fall. Growth stocks as a group may be out of favor and underperform the overall equity market while the market concentrates on undervalued stocks.

 

Infrastructure-Related Investment Risk – Because the Fund concentrates its investments in infrastructure-related entities, the Fund has greater exposure to the potential adverse economic, regulatory, political and other changes affecting such entities. Infrastructure-related entities are subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, costs associated with environmental and other regulations, the effects of economic slowdown and surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Additionally, infrastructure-related entities may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, service interruption due to environmental, operational or other mishaps and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.

 

Initial Public Offerings and Secondary Offerings Risk – The Fund may invest a portion of its assets in shares of IPOs or secondary offerings of an issuer. IPOs and secondary offerings may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs and secondary offerings on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs and secondary offerings may not be consistently available to the Fund for investing. IPO and secondary offering shares frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO and secondary offering shares for a very short period of time. This may increase

 

35

 

Alpine Global Infrastructure Fund (Continued)

 

the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO and secondary offering shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

 

Liquidity Risk – Some assets held by the Fund may be impossible or difficult to sell, particularly during times of market turmoil. These illiquid assets may also be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss.

 

Management Risk – The Adviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, may be incorrect. The Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment objectives and strategies.

 

Market Risk – The price of a security held by the Fund may fall due to changing market, economic or political conditions.

 

Operational Risk – Your ability to transact with the Fund or the valuation of your investment may be negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.

 

Portfolio Turnover Risk – High portfolio turnover necessarily results in greater transaction costs which may reduce Fund performance.

 

Small and Medium Capitalization Company Risk – Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger companies.

 

Undervalued Stock Risk – The Fund may pursue strategies that may include investing in securities, which, in the opinion of the Adviser, are undervalued. The identification of investment opportunities in undervalued securities is a difficult task and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

 

Please refer to pages 3-5 for other important disclosures and definitions.

 

36

 
Alpine Global Realty Growth & Income Fund

 

Comparative Annualized Returns as of 4/30/17 (Unaudited)
  6 Months(1) 1 Year Since Inception
(11/3/2015)(1)(2)
Global Realty Growth & Income Fund — Institutional Class 4.64% 0.38% 1.25%
FTSE EPRA/NAREIT Global Index 4.28% 4.10% 5.09%
Lipper Global Real Estate Funds Average 3.57% 2.57% 1.09%
Lipper Global Real Estate Funds Ranking N/A(3) 139/181 168/173
Gross Expense Ratio (Institutional Class): 2.42%(4)      
Net Expense Ratio (Institutional Class): 1.35%(4)      

 

 

  (1) Not annualized.
  (2) Institutional Class shares commenced on November 3, 2015.
  (3) FINRA does not recognize rankings for less than one year.
  (4) As disclosed in the prospectus dated February 28, 2017.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end may be lower or higher than the performance quoted and may be obtained by calling 1-888-785-5578. Performance data shown does not reflect the 1.00% redemption fee imposed on shares held for fewer than 60 days. If it did, total returns would be reduced.

 

FTSE EPRA/NAREIT Global Index is a total return index that is designed to represent general trends in eligible real estate equities worldwide. The funds or securities referred to herein are not sponsored, endorsed, or promoted by the index providers, and the index providers bear no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship the index providers have with the licensee and any related funds. Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. The Lipper Global Real Estate Funds Average is an average of funds that invest at least 25% of their equity portfolio in shares of companies engaged in the real estate industry that are strictly outside of the U.S. or whose securities are principally traded outside of the U.S. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. Rankings for the periods shown are based on Fund total returns with dividends and distributions reinvested and do not reflect sales charges. The FTSE EPRA/NAREIT Global Index and the Lipper Global Real Estate Funds Average are unmanaged and do not reflect direct fees associated with a mutual fund, such as investment adviser fees; however, the Lipper Global Real Estate Funds Average reflects fees charged by the underlying funds. The performance for the Alpine Global Realty Growth & Income Fund reflects the deduction of fees for these value added services. Investors cannot directly invest in an index.

 

Expense Ratios reflect the ratios reported in the Fund’s most recent prospectus. The Alpine Global Realty Growth & Income Fund has a contractual expense waiver that continues through February 28, 2018. Where a Fund’s gross and net expense ratios are the same for the period reported, the contractual expense reimbursement level was not reached as of the end of that period. To the extent the Fund’s expenses were reduced by waivers, the Fund’s total returns were increased. In these cases, in the absence of the expense waivers, the Fund’s total returns would have been lower.

 

To the extent that the Fund’s historical performance resulted from gains derived from participation in Initial Public Offerings (“IPOs”) and/or Secondary Offerings, there is no guarantee that these results can be replicated in future periods or that the Fund will be able to participate to the same degree in IPO/Secondary Offerings in the future.

 

37

 

Alpine Global Realty Growth & Income Fund (Continued)

 

 

Portfolio Distributions* (Unaudited)

 

 

Top 10 Holdings* (unaudited)
1.   Simon Property Group, Inc. 3.89%
2.   Prologis, Inc. 3.20%
3.   Boston Properties, Inc. 2.24%
4.   Mitsui Fudosan Co., Ltd. 1.94%
5.   Unibail-Rodamco SE 1.93%
6.   ADO Properties SA 1.80%
7.   SL Green Realty Corp. 1.65%
8.   Public Storage 1.64%
9.   AvalonBay Communities, Inc. 1.64%
10.   Starwood Property Trust, Inc. 1.56%
 

* Portfolio Distributions percentages are based on total investments. Top 10 Holdings do not include short-term investments and percentages are based on total net assets. Portfolio holdings and sector distributions are as of 04/30/17 and are subject to change. Portfolio holdings are not recommendations to buy or sell any securities.


 

 

 

Value of a $1,000,000 Investment (Unaudited)

 

 

This chart represents a comparison of a hypothetical $1,000,000 investment in the Fund versus a similar investment in the Fund’s benchmark. The graph and the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment performance reflects the waiver and recovery of certain fees, if applicable. Without the waiver and recovery of fees, the Fund’s total return would have differed.

 

Performance data quoted represents past performance and is not predictive of future results. Investment return and principal value of the Fund fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.

 

38

 

Alpine Global Realty Growth & Income Fund (Continued)

 

Commentary

 

Dear Shareholders:

 

We present the Semi-Annual report for the Alpine Global Realty Growth & Income Fund (ARIGX) for the six month period ended April 30, 2017. The net asset value per share was $9.76, which, in combination with its quarterly distributions, produced a total return of 4.64% compared with the total return of the Fund’s primary benchmark, the FTSE EPRA/NAREIT Global Index of 4.28% over the six month period.

 

Performance Drivers

 

The Semi-Annual period kicked off a week before Trump’s unexpected election victory and ended as the clock was winding down on his first one hundred days in office. Over those six months, global real estate equity returns underperformed the broader market by a wide margin but exhibited a degree of resilience in the face of a series of geopolitical shocks, mounting macroeconomic uncertainties and the imminent threat of Federal Reserve (Fed) action. The Trump election immediately ignited expectations for an expansionary fiscal policy which set off a backing up of global yields as the reflationary impulse drove a reflexive sell off of bond proxies including real estate investment trusts (REITs). The dramatic sell off of the so-called interest rate sensitive sectors proved to be short lived and offered a good opportunity for active managers to accumulate oversold stocks. There were further headwinds on the horizon as the Fed hiked rates in December and March, but shares continued to grind out positive returns. Underpinning performance during the period was the reflation trade, particularly in emerging Asia, driven by resurging cyclical momentum in China. This was offset modestly toward the end of the period as increasing political noise and legislative defeats tempered market sentiment for a near-term payoff from the Trump trade.

 

At the country level, the U.S. REIT sector as a whole significantly lagged the broad market as expectations for a steepening yield curve continued to present a headwind for the group as the 10-year Treasury yield shifted from 1.83% to 2.28% on a sequential basis. However there was notable dispersion of returns as sectors exhibiting pricing power, such as data centers, outperformed those sectors experiencing concerns over backfilling vacant space, leasing spreads and pressure on cap rates, such as malls and strip centers. Retail store closings dominated headlines, which added further pressure to the mall and shopping center stocks. In Japan, the developers and Japan REITs (JREITs) lagged the

market as uncertainty over Bank of Japan (BoJ) policy, an appreciating yen and fading tailwinds on the reflation trade weighed on the shares. The FTSE EPRA/NAREIT Developed Europe Index saw strong absolute returns but underperformed on a relative basis primarily due to the strength of financials across many of the broader indices, the lack of visibility on Brexit negotiations and concerns over election outcomes, most importantly in France. Once again there was notable dispersion at the country level with Sweden and the U.K. outperforming versus relative weakness in France and Germany. In the U.K., the real estate securities posted an impressive rally toward the end of the period, easily eclipsing the more-than respectable performance of the broad index. Coming up on the one-year anniversary of the historic Brexit vote, there are still few signs of stress in the London commercial market. In fact recent transactions such as the sale of Facebook’s headquarters (Rathbone Square) and the sale of the Cheesegrater (the Leadenhall building) have been supportive of valuations and have prompted a spate of special dividend payments from the proceeds. Yields appear to have stabilized and occupier demand has underpinned resilient top line rental values, however incentives are increasing while lease durations and break year options are coming in. Nonetheless Brexit risks remain front and center and share volatility could swing based on sentiment toward the negotiations and any news of financial sector tenants shifting personnel out of London. The Australian REIT (AREIT) market was resilient yet underperformed the broader market as it too was a casualty of the threat of the back up in interest rates. Finally, emerging market (EM) real estate saw strong overall results despite expectations for further rate hikes from the Fed, fears over protectionist trade policies from the Trump administration and geopolitical tensions ramping up in North Korea, Brazil, Turkey and the Middle East.

 

Portfolio Overview

 

In aggregate the top ten holdings represented 21.26% of the portfolio as of the period ended April 30, 2017, versus 24.8% as of the fiscal year ended October 31, 2016. In the U.S. the multifamily REIT Essex and the mall REIT General Growth dropped out of the top ten, as well as the Japanese asset manager Ichigo and property developer Mitsubishi Estate. They were replaced by U.S. REIT names Public Storage, AvalonBay, Starwood Property Trust and SL Green. During the period, the Fund initiated positions primarily in Europe and the U.K. with the addition of Aroundtown Property, Patrizia and WCM in Germany as


 

39

 

Alpine Global Realty Growth & Income Fund (Continued)

 

well as St. Modwen and Purplebricks in the U.K. Other European additions include Axiare in Spain and Kaufman et Broad in France. The Fund was overweight in developed markets versus emerging markets (EM), but did establish a position in Brazil. The Fund’s largest absolute exposure by a wide margin was to the U.S., followed by the allocations to Japan and Australia. Notable overweight country exposures in the Fund included Spain, Ireland and Mexico, while carried underweight positions included Canada, Hong Kong and South Africa. The Fund maintained a modest cash balance and hedged its exposure to the euro, pound and Hong Kong dollar during the period.

 

Top Contributors

 

The top five contributors to the Fund’s absolute returns over the period under discussion were CoreSite Realty, Global Logistic Properties (GLP), DuPont Fabros, NorthStar Realty Europe and Hispania.

 

  CoreSite Realty is an owner, operator and developer of data centers in the US. Fundamentals across the group continue to show strong secular trends. The company’s recent results exceeded expectations and management raised its funds from operations (FFO)/share guidance at the midpoint to reflect strong leasing volumes and rents, as well as lower rental churn.

 

  GLP, is a Singapore-based owner, developer and manager of logistics assets in China, Japan, Brazil and the US. The company is in the midst of evaluating at least three potential buyout bids from Blackstone, Warburg Pincus and a management-led consortium, which has narrowed the discount to NAV significantly.

 

  DuPont Fabros is a U.S.-based REIT specializing in developing, owning and operating wholesale data centers. Fundamentals for the group overall are robust. While guidance was reduced at the midpoint due to an expected equity raise the company offered strong top line and FFO growth mixed with a robust pace of leasing and a strong development pipeline.

 

  NorthStar Realty Europe is a NYSE-listed REIT focused on office and retail assets across Europe and the U.K. Early signs of recovery across Europe and a muted impact of Brexit on capital values underpinned share performance during the period. Rental growth outpaced inflation and an attractive dividend provided further support.

 

  Hispania Activos Immobiliarios, is a Spanish SOCIMI (REIT equivalent) investing in hotels, offices and

 

    residential. After a strategic review management announced an ambitious asset disposal program followed by cash distributions ultimately resulting in a pure hotel platform by 2020. These initiatives, along with further investments in its hotel assets, have realized significant shareholder value and led to a narrowing of its NAV discount.

 

The top five negative contributors to the Fund’s performance during the period were primarily affected by its Japan exposure and the weighting to U.S. retail REITS including: Ichigo, Simon Property Group, Invincible Investment, Kimco and General Growth.

 

  Ichigo is an asset manager in Japan. Share performance was weak as management conservatively guided for its first profit decline in six years due to temporary delays in asset sales to its Japan REIT (JREITs) and infrastructure fund. Its underlying asset management business appears to be able to continue to grow and Ichigo potentially can support through buybacks and cash dividends.

 

  Simon Property Group, a U.S. REIT, is one of the largest owners and operators of malls and premium outlets globally. On the ground metrics, such as sales per square foot, base minimum rents and leasing spreads, remain in respectable territory, however a challenging retail environment, viz, increasing level of highly visible retail bankruptcies and conventional wisdom promoting the narrative of the death of brick and mortar retail, has indiscriminately brought the entire sector down.

 

  Invincible Investment is a JREIT focused primarily in hotel and residential assets. The shares have underperformed due to weakening sentiment for hotel operating metrics and caution over the outlook for increased supply. The company issued equity in the period to acquire more residential assets. A high relative dividend yield and the potential for share buybacks could help to narrow the NAV discount over the medium term.

 

  Kimco, is a U.S. REIT which develops, owns and operates shopping centers. Operating fundamentals in the portfolio remain stable, management is progressing on balance sheet initiatives and their efforts to streamline the business, however a challenging retail environment, viz, increasing level of highly visible retail bankruptcies and conventional wisdom promoting the narrative of the death of brick and mortar retail, has weighed on the sector.

 

  General Growth, a U.S. REIT, is the second largest mall operator in the US. It too fell prey to the sell off


 

40

 

Alpine Global Realty Growth & Income Fund (Continued)

 

  across retail REITs as the disconnect between public and private market values widened. On a recent earnings call management discussed exploring strategic alternatives to narrow its NAV discount, including an outright sale of the company. Brookfield Asset Management is the company’s largest shareholder at 29%.

 

Outlook

 

As we look beyond the largely symbolic 100-day assessment period of the new Trump administration markets appear to be consolidating gains from the global reflation trade which began as rates bottomed in the summer of 2016 but caught a “massive and huge” tailwind from the Trump election and renewed cyclical momentum in China. Risk appetite appears to have crested for the moment in the face of mixed messages for growth prospects from the hard versus soft economic indicators, and perhaps most significantly an ongoing reevaluation of the ability of the U.S. to enact fiscal stimulus, tax reform, infrastructure and deregulation in a timely manner. So which economies could be best positioned to drive the next leg of the global reflation trade? Where does the Fed’s dot plot go from here? What risk could higher bond yields pose to the global economy? These are just a few of the questions that remain top of mind for all investors as we continue to climb a wall of worry comprised of political and policy uncertainties, the constantly evolving trends for growth and inflation, as well as a diverse array of potential geopolitical threats.

 

Broadly speaking, we see cause for guarded optimism as the global growth environment appears more balanced than it has in recent memory. A pro-growth agenda, reflationary policies and a measured tightening of interest rates have generally been supportive for real estate returns on an historical basis, however, political uncertainties and a maturing cycle amplify downside risks. In the U.S. REIT market, we expect a widening differentiation of operating data but an overall healthy (but peaking) same-store rental outlook supporting net operating income (NOI) growth in 2017. There are developing signs of cyclical momentum in European markets and the risk premia associated with political outcomes appear to be narrowing. Japan has clearly underperformed but we believe that it’s only a matter of time before equities returns reflect strong underlying fundamentals and robust transaction levels in the physical market. To this point, first quarter 2017 transaction volumes in Japan rose by 51% year over year (YoY) with acquisitions by overseas investors rising 3.7 times from first quarter 2016 levels according to CBRE.

Emerging markets lagged the reflation trade in Q4 2016 but have since recovered from low valuations and have been supported by an improving earnings profile. A growing U.S. economy has historically been a positive for developing markets absent trade protectionism and a sharp overshoot in rates and/or currencies.

 

While we believe global monetary policy will remain extremely accommodative there seems to be greater scope for divergence among central banks since quantitative easing (QE) regimes were initiated in response to the financial crisis. The Fed increased rates at both its December and March meetings and markets are currently pricing in one to two increases for the remainder of 2017. However, until there is greater visibility on the new administration’s fiscal agenda it is difficult to say with any conviction where U.S. rates might settle. Adding further uncertainty into the equation are Fed Chair Yellen’s comments regarding shrinking the central bank’s $4.5 trillion balance sheet. The challenge is not exclusively a question of magnitude and pace of the drawdown, but how the Treasury aims to cope with a funding gap as the Fed unwinds $2.5 trillion in government securities. If not handled well, the read through to bond yields and mortgage rates could heighten volatility. The BoJ is expected to stay the course in its battle against deflation and to augment its current approach with further fiscal initiatives. While its commitment to the official Japanese Government Bond (JGB) buying target of JPY80 trillion (approximately $72 billion USD) per annum could be weakening we still believe Kuroda, the Governor of the Bank of Japan, when he says that only an extended overshoot of his 2% consumer price index (CPI) target would trigger policy tightening. We are nowhere near that level. So this leaves all eyes on the tone and tenor of the European Central Bank (ECB) as Mario Draghi, President of the European Central Bank, finds himself occupying the middle ground between the Fed’s tightening impulse and the BoJ’s policy stance. Current market talk is rife with uneasiness regarding the ECB reducing its monthly asset purchases into 2018 and what this policy shift could ultimately mean for bond yields, especially in Spain and Italy.

 

In China, the government’s intervention revitalized cyclical momentum in its economy, providing much of the heavy lifting for the global reflation trade. Indeed, nominal gross domestic product (GDP) growth in China accelerated from 9.6% YoY in fourth quarter 2016 to 11.8% YoY in first quarter 2017. While uncertainties remain regarding the sustainability of the recovery absent unprecedented liquidity from the People’s Bank of China (PBOC) we remain firmly of the view that slowdowns in China are based on policy shifts not sharp


 

41

 

Alpine Global Realty Growth & Income Fund (Continued)

 

decelerations in demand. The U.S. government stepped back its threat of labeling China a currency manipulator and with tensions rising in North Korea it’s imperative that relations between the U.S. and China are guided by political pragmatism. Periodic volatility in the growth outlook for China could reverberate through global markets and remains one of the dominant drivers of macro instability, particularly with respect to EMs. In the run up to the critical National Congress in fourth quarter 2017 (held every five years) the current Chinese government will want to do everything in its power to ensure political and economic status quo which should help it to consolidate its power and provide leverage to shape the Politburo Standing Committee. As such, we remain cautiously optimistic that China can avoid any so-called “hard landing” in its economy through a mix of political reforms as well as monetary and fiscal measures.

 

It remains our expectation that there will likely be wide dispersion and volatility of returns by sector and geography, making this an attractive environment for active management. We have outlined frequently in our discussions with shareholders that at this point in the cycle the drivers for real estate have clearly shifted away from cap rate compression toward growth prospects. A strong fiscal impulse and reflationary backdrop could provide a tailwind for this view and reinforce our long-held preference for companies with attractive valuations, good visibility of cash flow and a history of growing dividends. As such we maintain our bias for markets and asset types with favorable supply/demand dynamics supporting rising net absorption trends as well as heightened rental tension. Another noteworthy investment theme for global real estate could likely come from mergers & acquisitions (M&A) – as divergent valuations, cheap financing and the market’s emphasis on growth could drive consolidation.

 

In our view, the geopolitical landscape collectively represents one of the most significant pressures to our outlook as equity markets have become increasingly more phlegmatic about political risks over time. The nuclear aspirations of North Korea and the war in Syria could pose existential threats to nearby regions. The Temer government coalition in Brazil is hanging by a

thread after the most recent scandal placing the reform agenda and the viability of Temer’s administration very much in question. The constitutional referendum in Turkey and the purge of cabinet members in South Africa reinforce autocratic ideals inconsistent with shareholder risk tolerance. In the U.K. and Europe uncertainty over the direction of Brexit could add to volatility in asset markets. Although the Netherlands and France have avoided electoral pitfalls, Germany and Italy might still present further challenges for the Eurozone outlook. The list is big and continues growing.

 

And finally perhaps the biggest wild card in the outlook is that after 100 days of the new administration there are more questions than answers surrounding the potential for a sea change in the US. Foremost among them being to what extent does the current administration’s inability to drive legislation undermine its domestic agenda? Where could investors ultimately calibrate their expectations for the President’s ability to overcome the ideological divisions within his own administration, then cobble together consensus in the Republican Party and finally reach out to enough Democrats to enact meaningful legislation? For the time being the economic agenda appears to be languishing and there seems to be a narrowing path for the new administration to enact any meaningful legislation in advance of the August recess.

 

In this fluid environment, differentiation remains a guiding investment principle and underscores the importance of allocating capital to those companies which embody best in class management teams, strong operating platforms with diverse value creation opportunities, balance sheet discipline and the ability to drive dividend growth over time. Alpine believes it is essential to maintain a diversified portfolio in terms of geography, asset mix and income distribution potential.

 

Thank you for your interest and support.

 

Sincerely,

 

Joel E.D. Wells
Bruce Ebnother
Portfolio Managers


 

42

 

Alpine Global Realty Growth & Income Fund (Continued)

 

This letter represents the opinions of the Fund’s management and is subject to change, is not guaranteed and should not be considered a recommendation to buy or sell any security. The information provided is not intended to be, and is not, a forecast of future events, a guarantee of future results, or investment advice. Views expressed may vary from those of the firm as a whole.

 

Earnings growth is not representative of the fund’s future performance.

 

Past performance is no guarantee of future results.

 

Diversification does not assure a profit nor protect against loss in a declining market.

 

 

 

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to risks, including the following in alphabetical order:

 

Concentration Risk – The Fund’s strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

 

Credit Risk – Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

 

Currency Risk – The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. Currency conversion costs and currency fluctuations could erase investment gains or add to investment losses. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation.

 

Cybersecurity Risk – Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or its service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.

 

Dividend Strategy Risk – There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The Fund’s emphasis on dividend-paying stocks could cause the Fund to underperform similar funds that invest without consideration of a company’s track record of paying dividends or ability to pay dividends in the future. Dividend-paying stocks may not participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. The Fund may hold securities for short periods of time related to the dividend payment periods and may experience loss during these periods.

 

Equity Securities Risk – The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry). Holders of common stock generally are subject to more risks than holders of preferred stock or debt securities because the right to repayment of common stockholders’ claims is subordinated to that of preferred stock and debt securities upon the bankruptcy of the issuer.

 

Fixed Income Securities Risk – Fixed income securities are subject to issuer risk, interest rate risk and market risk.

 

Foreign and Emerging Market Securities Risk – The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or

 

43

 

Alpine Global Realty Growth & Income Fund (Continued)

 

financial instability. Lack of information may also affect the value of these securities. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund. The risks of foreign investments are heightened when investing in issuers in emerging market countries. Emerging market countries tend to have economic, political and legal systems that are less fully developed and are less stable than those of more developed countries. Less developed markets are more likely to experience problems with the clearing and settling of trades and the holding of securities by banks, agents and depositories are less developed than those in the United States. They are often particularly sensitive to market movements because their market prices tend to reflect speculative expectations. Low trading volumes may result in a lack of liquidity and in extreme price volatility.

 

Foreign Currency Transactions Risk – Foreign securities are often denominated in foreign currencies. As a result, the value of the Fund’s shares is affected by changes in exchange rates. The Fund may enter into foreign currency transactions to try to manage this risk. The Fund’s ability to use foreign currency transactions successfully depends on a number of factors, including the foreign currency transactions being available at prices that are not too costly, the availability of liquid markets and the ability of the Adviser to accurately predict the direction of changes in currency exchange rates.

 

Growth Stock Risk – Growth stocks typically are very sensitive to market movements because their market prices tend to reflect future expectations. When it appears those expectations will not be met, the prices of growth stocks typically fall. Growth stocks as a group may be out of favor and underperform the overall equity market while the market concentrates on undervalued stocks.

 

Initial Public Offerings and Secondary Offerings Risk – The Fund may invest a portion of its assets in shares of IPOs or secondary offerings of an issuer. IPOs and secondary offerings may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs and secondary offerings on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs and secondary offerings may not be consistently available to the Fund for investing. IPO and secondary offering shares frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO and secondary offering shares for a very short period of time. This may increase the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO and secondary offering shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

 

Interest Rate Risk – Interest rates may rise resulting in a decrease in the value of securities held by the Fund, or may fall resulting in an increase in the value of such securities. Securities having longer maturities generally involve a greater risk of fluctuations in the value resulting from changes in interest rates.

 

Leverage Risk – The Fund may use leverage to purchase securities. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. The Fund may also have to sell assets at inopportune times to satisfy its obligations. The use of leverage is considered to be a speculative investment practice and may result in the loss of a substantial amount, and possibly all, of the Fund’s assets.

 

Liquidity Risk – Some assets held by the Fund may be impossible or difficult to sell, particularly during times of market turmoil. These illiquid assets may also be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss.

 

Management Risk – The Adviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, may be incorrect. The Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment objectives and strategies.

 

Market Risk – The price of a security held by the Fund may fall due to changing market, economic or political conditions.

 

Non-Diversified Fund Risk – Performance of a non-diversified fund may be more volatile than a diversified fund because a non-diversified fund may invest a greater percentage of its total assets in the securities of a single issuer.

 

Operational Risk – Your ability to transact with the Fund or the valuation of your investment may be negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed

 

44

 

Alpine Global Realty Growth & Income Fund (Continued)

 

internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.

 

Preferred Stock Risk – Preferred stock represents an interest in a company that generally entitles the holder to receive, in preference to the holders of common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Preferred stocks may pay fixed or adjustable rates of return. Preferred stock has investment characteristics of both fixed income and equity securities. However, the value of these securities tends to vary more with fluctuations in the underlying common stock and less with fluctuations in interest rates and tends to exhibit greater volatility.

 

Real Estate Investment Trusts (“REITs”) Risk – REITs’ share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to qualify for favorable tax treatment. REITs may be leveraged, which increases risk. Certain REITs charge management fees, which may result in layering the management fee paid by the fund.

 

Real Estate Securities Risk – Risks associated with investment in securities of companies in the real estate industry include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.

 

Small and Medium Capitalization Company Risk – Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger companies.

 

Undervalued Stock Risk – The Fund may pursue strategies that may include investing in securities, which, in the opinion of the Adviser, are undervalued. The identification of investment opportunities in undervalued securities is a difficult task and there is no assurance that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer opportunities for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses.

 

Valuation Risk – The sales price the Fund could receive for any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology. Investors who purchase or redeem Fund shares on days when the Fund is holding fair-valued securities may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the Fund had not fair-valued the security or had used a different valuation methodology. The Fund’s ability to value its investments may be impacted by technological issues and/or errors by pricing services or other third party service providers.

 

Please refer to pages 3-5 for other important disclosures and definitions.

 

45

 

Alpine International Real Estate Equity Fund

 

Schedule of Portfolio Investments

April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—92.2%    
Asia—39.5%    
China—3.3%    
 305,000   China Overseas Land & Investment, Ltd.  $886,178 
 428,261   China Resources Land, Ltd.   1,189,254 
 342,000   Guangzhou R&F Properties Co., Ltd.—Class H   575,983 
 625,000   Longfor Properties Co., Ltd.   1,083,135 
         3,734,550 
India—13.1%    
 2,099,872   DB Realty, Ltd. (a)   1,537,447 
 1,000,000   DLF, Ltd.   2,886,678 
 2,290,373   Hirco PLC (a)(b)(c)   0 
 500,000   Housing Development & Infrastructure, Ltd. (a)   704,570 
 136,778   Kolte-Patil Developers, Ltd.   396,323 
 374,877   Prestige Estates Projects, Ltd.   1,373,811 
 178,276   Sobha, Ltd.   1,028,142 
 2,000,000   South Asian Real Estate PLC (a)(b)(c)(d)   3,341,614 
 540,000   The Phoenix Mills, Ltd.   3,458,837 
         14,727,422 
Japan—16.9%    
 30,000   Aeon Mall Co., Ltd.   509,442 
 330,691   Hulic Co., Ltd.   3,114,829 
 1,200   Ichigo Hotel REIT Investment Corp.   1,170,128 
 800,000   Ichigo, Inc.   2,325,185 
 2,738   Invincible Investment Corp.   1,048,779 
 2,000   Japan Hotel REIT Investment Corp.   1,361,740 
 578,312   Kenedix, Inc.   2,666,538 
 86,725   Mitsui Fudosan Co., Ltd.   1,905,655 
 32,000   Open House Co., Ltd.   784,822 
 42,728   Resorttrust, Inc.   735,163 
 85,000   Seibu Holdings, Inc.   1,483,830 
 60,000   Shinoken Group Co., Ltd.   1,118,995 
 150,000   Takara Leben Co., Ltd.   705,091 
         18,930,197 
Philippines—1.5%    
 1,237,077   Ayala Land, Inc.   873,988 
 10,500,000   Megaworld Corp.   853,197 
 1   SM Prime Holdings, Inc.   1 
         1,727,186 
Singapore—2.7%    
 2,429,000   Banyan Tree Holdings, Ltd. (a)   930,119 
 1,001,420   Global Logistic Properties, Ltd.   2,064,266 
         2,994,385 
Thailand—0.4%    
 253,746   Central Pattana PCL   440,149 
United Arab Emirates—1.6%    
 900,000   Emaar Properties PJSC   1,759,325 
     Total Asia (Cost $71,152,199)   44,313,214 
Shares   Security
Description
  Value 
           
Europe—34.7%    
France—5.2%    
 66,000   Accor SA  $3,008,395 
 20,526   Klepierre   805,817 
 37,901   Nexity SA   2,060,768 
         5,874,980 
Germany—4.5%    
 41,500   ADO Properties SA (e)   1,518,919 
 193,773   Aroundtown Property Holdings PLC   1,006,837 
 50,000   Dream Global Real Estate Investment Trust   362,624 
 47,030   PATRIZIA Immobilien AG (a)   927,771 
 58,548   TLG Immobilien AG   1,184,645 
         5,000,796 
Ireland—6.7%    
 757,791   Cairn Homes PLC (a)   1,291,847 
 798,000   Dalata Hotel Group PLC (a)   4,294,150 
 518,484   Green REIT PLC   770,931 
 866,666   Hibernia REIT PLC   1,203,675 
         7,560,603 
Italy—0.4%    
 55,737   COIMA RES SpA (e)   439,268 
Netherlands—2.3%     
 35,000   InterXion Holding NV (a)   1,458,100 
 110,000   NSI NV   464,434 
 15,000   Wereldhave NV   690,834 
         2,613,368 
Poland—0.4%    
 100,000   Atrium European Real Estate, Ltd.   421,559 
 3,265,000   Nanette Real Estate Group NV (a)(b)(c)   0 
         421,559 
Spain—5.8%    
 10,851   Axiare Patrimonio SOCIMI SA   180,137 
 170,744   Hispania Activos Inmobiliarios Socimi SA   2,577,841 
 131,029   Lar Espana Real Estate Socimi SA   1,084,747 
 100,000   Melia Hotels International SA   1,484,715 
 100,000   Merlin Properties Socimi SA   1,183,524 
         6,510,964 
Sweden—1.6%    
 50,877   JM AB   1,791,003 
United Kingdom—7.8%    
 100,000   Countryside Properties PLC (e)   349,445 
 1,254,024   IWG PLC   5,277,061 
 252,084   LondonMetric Property PLC   549,824 
 431,140   Purplebricks Group PLC (a)   1,648,712 
 200,000   St Modwen Properties PLC   946,791 
         8,771,833 
     Total Europe (Cost $33,205,495)   38,984,374 


 

The accompanying notes are an integral part of these financial statements.

 

46

 

Alpine International Real Estate Equity Fund

 

Schedule of Portfolio Investments—Continued

April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—(continued)    
North & South America—18.0%    
Brazil—4.2%    
 220,535   Cyrela Commercial Properties SA Empreendimentos e Participacoes  $774,709 
 336,829   Direcional Engenharia SA   647,330 
 912,132   General Shopping Brasil SA (a)   1,692,619 
 155,394   Sao Carlos Empreendimentos e Participacoes SA   1,590,634 
         4,705,292 
Mexico—4.6%  
 500,000   Concentradora Fibra Hotelera Mexicana SA de CV   410,087 
 766,024   Corp. Inmobiliaria Vesta SAB de CV   1,077,506 
 1,000,979   Fibra Uno Administracion SA de CV   1,744,578 
 1,000,000   Grupo GICSA SA de CV (a)   643,816 
 1,257,643   Hoteles City Express SAB de CV (a)   1,293,368 
         5,169,355 
Shares   Security
Description
  Value 
           
United States—9.2%    
 10,000   CyrusOne, Inc.  $546,400 
 40,000   DR Horton, Inc.   1,315,600 
 6,000   Equinix, Inc.   2,506,200 
 35,000   LGI Homes, Inc. (a)   1,114,050 
 75,000   NorthStar Realty Europe Corp.   872,250 
 225,000   TerraForm Power, Inc.—Class A (a)   2,832,750 
 50,000   William Lyon Homes—Class A (a)   1,100,000 
         10,287,250 
     Total North & South America (Cost $27,675,325)   20,161,897 
     Total Common Stocks (Cost $132,033,019)   103,459,485 
          
Principal
Amount
         
           
Short-Term Investments—7.7%    
$8,613,000   State Street Eurodollar Time Deposit, 0.09%   8,613,000 
     Total Short-Term Investments (Cost $8,613,000)   8,613,000 
Total Investments (Cost $140,646,019) (f)—99.9%  112,072,485 
Other Assets in Excess of Liabilities—0.1%  84,081 
TOTAL NET ASSETS 100.0% $112,156,566 


 

 

 

Percentages are stated as a percent of net assets.

 

(a)Non-income producing security.

 

(b)Illiquid security.

 

(c)Security fair valued in accordance with procedures approved by the Board of Trustees. These securities comprised 3.0% of the Fund’s net assets.

 

(d)Private placement.

 

(e)Restricted under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. Liquid securities restricted under Rule 144A comprised 2.1% of the Fund’s net assets.

 

(f)See Note 8 for the cost of investments for federal tax purposes.

 

AB—Aktiebolag is the Swedish equivalent of a corporation.

 

AG—Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders.

 

NV—Naamloze Vennootschap is the Dutch term for a public limited liability corporation.

 

PCL—Public Company Limited

 

PJSC—Public Joint Stock Company

 

PLC—Public Limited Company

 

REIT—Real Estate Investment Trust

 

SA—Generally designates corporations in various countries, mostly those employing the civil law.

 

SA de CV—Sociedad Anonima de Capital Variable is the Spanish equivalent to Variable Capital Company.

 

SAB de CV—Sociedad Anonima Bursátil de Capital Variable is the Spanish equivalent to Variable Capital Company.

 

The accompanying notes are an integral part of these financial statements.

 

47

 

Alpine Realty Income & Growth Fund

 

Schedule of Portfolio Investments

April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Real Estate Investment Trusts—103.5%    
Apartments—16.4%    
 15,000   American Campus Communities, Inc.  $710,850 
 25,625   AvalonBay Communities, Inc. (a)   4,864,650 
 14,500   Camden Property Trust   1,193,785 
 68,360   Equity Residential (a)   4,414,689 
 23,165   Essex Property Trust, Inc. (a)   5,663,147 
 36,900   UDR, Inc.   1,377,846 
         18,224,967 
Diversified—5.2%    
 26,114   American Assets Trust, Inc. (a)   1,118,463 
 10,000   Forest City Realty Trust, Inc.—Class A   226,000 
 46,117   Vornado Realty Trust (a)   4,438,300 
         5,782,763 
Health Care—6.7%    
 16,887   HCP, Inc.   529,408 
 25,413   Omega Healthcare Investors, Inc.   838,629 
 27,344   Sabra Health Care REIT, Inc.   743,483 
 55,712   Ventas, Inc. (a)   3,566,125 
 24,803   Welltower, Inc.   1,771,926 
         7,449,571 
Lodging—3.1%    
 30,000   Ashford Hospitality Prime, Inc.   317,700 
 29,696   Chatham Lodging Trust   574,915 
 72,100   Host Hotels & Resorts, Inc.   1,294,195 
 29,214   Park Hotels & Resorts, Inc.   749,923 
 15,300   Pebblebrook Hotel Trust   455,328 
         3,392,061 
Manufactured Homes—2.1%    
 28,900   Equity LifeStyle Properties, Inc.   2,338,299 
Mortgage & Finance—1.0%    
 50,000   Starwood Property Trust, Inc.   1,134,500 
Net Lease—0.6%    
 9,012   EPR Properties   655,262 
Office-Industrial Buildings—43.9%    
 47,028   Alexandria Real Estate Equities, Inc. (a)   5,291,120 
 49,611   Boston Properties, Inc.   6,280,753 
 36,171   CoreSite Realty Corp.   3,539,332 
 37,087   Cousins Properties, Inc.   314,869 
 29,169   CyrusOne, Inc.   1,593,794 
 50,000   Digital Realty Trust, Inc.   5,742,000 
 57,509   Douglas Emmett, Inc.   2,166,364 
 26,196   Duke Realty Corp.   726,415 
 38,852   DuPont Fabros Technology, Inc.   2,002,821 
 45,455   Empire State Realty Trust, Inc.—Class A   945,464 
 8,000   Equinix, Inc.   3,341,600 
 15,714   Hudson Pacific Properties, Inc.   539,933 
 38,773   Kilroy Realty Corp. (a)   2,734,660 
 18,708   Liberty Property Trust   758,984 
Shares   Security
Description
  Value 
           
Office-Industrial Buildings—(continued)    
 15,000   Mack-Cali Realty Corp.  $405,750 
 71,882   New York REIT, Inc.   685,754 
 35,608   Paramount Group, Inc.   583,971 
 89,400   Prologis, Inc.   4,864,254 
 35,000   SL Green Realty Corp. (a)   3,672,550 
 32,537   STAG Industrial, Inc.   857,675 
 51,058   Terreno Realty Corp.   1,576,671 
         48,624,734 
REIT - Infrastructure—2.0%    
 17,500   American Tower Corp.   2,203,950 
Retail Centers—16.1%    
 42,191   CBL & Associates Properties, Inc.   390,267 
 25,075   DDR Corp.   271,061 
 12,100   Federal Realty Investment Trust (a)   1,583,769 
 76,000   GGP, Inc.   1,642,360 
 50,000   Kimco Realty Corp.   1,014,500 
 10,000   Regency Centers Corp.   631,800 
 49,295   Simon Property Group, Inc. (a)   8,146,492 
 19,106   Taubman Centers, Inc. (a)   1,195,080 
 30,928   The Macerich Co. (a)   1,930,835 
 23,058   Urban Edge Properties   587,979 
 15,130   Weingarten Realty Investors   495,810 
         17,889,953 
Single Family Home—0.4%    
 19,230   Invitation Homes, Inc. (b)   414,406 
Storage—6.0%    
 17,500   Extra Space Storage, Inc.   1,321,775 
 12,000   National Storage Affiliates Trust   294,000 
 23,865   Public Storage (a)   4,996,854 
         6,612,629 
     Total Real Estate Investment Trusts (Cost $55,276,288)   114,723,095 
Common Stocks—0.6%    
Lodging—0.6%    
 7,200   Marriott International, Inc.—Class A   679,824 
     Total Common Stocks (Cost $382,278)   679,824 
Preferred Stocks—1.3%    
Diversified—0.5%    
 22,167   Colony NorthStar, Inc.—Series B, 8.250%   567,254 
Retail Centers—0.8%    
 37,843   CBL & Associates Properties, Inc.—Series D, 7.375%   883,634 
     Total Preferred Stocks (Cost $1,166,419)   1,450,888 
Total Investments (Cost $56,824,985) (c)—105.4%  116,853,807 
Liabilities in Excess of Other Assets—(5.4)%  (5,951,666)
TOTAL NET ASSETS 100.0% $110,902,141 


 

 

 

Percentages are stated as a percent of net assets.

 

(a) All or a portion of the security has been designated as collateral for the line of credit.

 

(b) Non-income producing security.

 

(c) See Note 8 for the cost of investments for federal tax purposes.

 

REIT—Real Estate Investment Trust

 

The accompanying notes are an integral part of these financial statements.

 

48

 

Alpine Emerging Markets Real Estate Fund

 

Schedule of Portfolio Investments

April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—87.5%    
Asia—60.2%     
China—34.0%    
 25,000   CapitaLand Retail China Trust  $28,451 
 72,000   China Jinmao Holdings Group, Ltd.   23,326 
 110,000   China Overseas Grand Oceans Group, Ltd. (a)   56,426 
 60,000   China Overseas Land & Investment, Ltd.   174,330 
 81,357   China Resources Land, Ltd.   225,923 
 30,000   China State Construction International Holdings, Ltd.   54,459 
 33,000   China Vanke Co., Ltd.—Class H   83,748 
 271,000   CIFI Holdings Group Co., Ltd.   97,901 
 70,000   Fantasia Holdings Group Co., Ltd.   10,979 
 20,000   Greentown China Holdings, Ltd. (a)   19,233 
 35,000   Guangzhou R&F Properties Co., Ltd.—Class H   58,946 
 270,000   Joy City Property, Ltd.   42,348 
 100,000   KWG Property Holding, Ltd.   75,594 
 43,000   Logan Property Holdings Co., Ltd.   24,656 
 70,000   Longfor Properties Co., Ltd.   121,311 
 69,000   Shanghai Jin Jiang International Hotels Group Co., Ltd.—Class H   20,137 
 140,000   Shenzhen Investment, Ltd.   63,535 
 30,000   Shimao Property Holdings, Ltd.   48,211 
 35,000   Sino-Ocean Group Holding, Ltd.   17,099 
 50,000   SOHO China, Ltd.   27,255 
 15,000   Sunac China Holdings, Ltd.   19,554 
 72,000   Times Property Holdings, Ltd.   50,078 
         1,343,500 
India—1.0%    
 50,000   Ascendas India Trust   41,155 
Indonesia—6.0%    
 15,000   First Real Estate Investment Trust   14,494 
 50,000   Lippo Malls Indonesia Retail Trust   15,209 
 400,000   PT Bekasi Fajar Industrial Estate TBK   8,883 
 400,159   PT Bumi Serpong Damai TBK   53,739 
 527,222   PT Ciputra Development TBK   50,630 
 400,714   PT Pakuwon Jati TBK   18,790 
 2,200,000   PT Puradelta Lestari TBK   39,613 
 250,000   PT Summarecon Agung TBK   25,508 
 200,000   PT Surya Semesta Internusa TBK   10,953 
         237,819 
Malaysia—0.8%    
 82,000   Eco World Development Group BHD (a)   28,712 
 6,500   Eco World International BHD (a)   1,767 
         30,479 
Philippines—7.3%    
 140,307   Ayala Land, Inc.   99,126 
 20,000   DoubleDragon Properties Corp. (a)   20,815 
 264,000   Filinvest Land, Inc.   9,141 
 550,000   Megaworld Corp.   44,691 
 85,000   Robinsons Land Corp.   43,635 
 120,000   SM Prime Holdings, Inc.   71,570 
         288,978 
Shares   Security
Description
  Value 
         
Singapore—2.1%   
 40,000   Global Logistic Properties, Ltd.  $82,454 
Thailand—6.2%    
 120,000   Ananda Development PCL   17,138 
 120,000   AP Thailand PCL   27,580 
 150,000   BTS Group Holdings PCL—NVDR   36,860 
 60,000   Central Pattana PCL   104,076 
 50,000   Land & Houses PCL   14,889 
 30,000   Land and Houses PCL—NVDR   8,933 
 250,000   The Erawan Group PCL   34,837 
         244,313 
United Arab Emirates—2.4%    
 58,000   Aldar Properties PJSC   33,793 
 45,000   Emaar Malls PJSC   31,486 
 15,000   Emaar Properties PJSC   29,322 
         94,601 
Vietnam—0.4%    
 71,600   Amata VN PCL   14,904 
     Total Asia (Cost $2,169,666)   2,378,203 
Europe—3.5%    
Austria—1.1%    
 2,000   CA Immobilien Anlagen AG   43,823 
Poland—1.0%    
 9,000   Atrium European Real Estate, Ltd.   37,940 
Russia—0.5%    
 5,000   Etalon Group, Ltd.—GDR   19,250 
Spain—0.7%    
 2,000   Melia Hotels International SA   29,694 
Turkey—0.2%    
 21,500   Is Gayrimenkul Yatirim Ortakligi AS   8,414 
     Total Europe (Cost $124,529)   139,121 
Middle East/Africa—6.1%    
Egypt—2.7%    
 36,000   Medinet Nasr Housing   41,166 
 150,000   Palm Hills Developments SAE   24,432 
 15,000   Six of October Development & Investment (a)   11,210 
 70,000   Talaat Moustafa Group   31,180 
         107,988 
Morocco—0.3%    
 700   Residences Dar Saada   12,454 
South Africa—3.1%    
 35,000   Delta Property Fund, Ltd.   22,969 
 2,250   Hyprop Investments, Ltd.   20,783 
 30,000   Redefine Properties, Ltd.   24,694 
 2,000   Resilient REIT, Ltd.   17,438 
 40,000   SA Corporate Real Estate Fund Nominees Pty, Ltd.   16,462 
 12,400   Vukile Property Fund, Ltd.   17,630 
         119,976 
     Total Middle East/Africa (Cost $233,659)   240,418 


 

The accompanying notes are an integral part of these financial statements.

 

49

 

Alpine Emerging Markets Real Estate Fund

 

Schedule of Portfolio Investments—Continued

April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—(continued)    
North & South America—17.7%    
Argentina—1.6%    
 2,000   IRSA Inversiones y Representaciones SA—ADR (a)  $50,440 
 3,100   TGLT SA—GDR (a)(b)   13,775 
         64,215 
Brazil—11.6%    
 2,759   Aliansce Shopping Centers SA   13,099 
 1,000   BB Progressivo II FII   42,816 
 21,913   BR Malls Participacoes SA (a)   96,998 
 4,000   BR Properties SA (a)   11,896 
 17,285   Construtora Tenda SA   65,185 
 30   CSHG Brasil Shopping Investimento Imobiliario   20,198 
 3,000   Cyrela Brazil Realty SA Empreendimentos e Participacoes   12,476 
 7,000   Direcional Engenharia SA   13,453 
 5,612   Ez Tec Empreendimentos e Participacoes SA   35,928 
 3,466   Gafisa SA   19,863 
 2,538   General Shopping Brasil SA (a)   4,710 
 2,000   Iguatemi Empresa de Shopping Centers SA   20,901 
 300   Kinea Renda Imobiliaria FII   13,848 
 11,000   MRV Engenharia e Participacoes SA   55,242 
 1,482   Multiplan Empreendimentos Imobiliarios SA   31,610 
         458,223 
Chile—1.4%    
 20,627   Parque Arauco SA   53,811 
Mexico—3.1%    
 26,244   Corp. Inmobiliaria Vesta SAB de CV   36,915 
 25,000   Fibra Uno Administracion SA de CV   43,572 
 15,000   Grupo GICSA SA de CV (a)   9,657 
 20,000   TF Administradora Industrial S de RL de CV   33,827 
         123,971 
     Total North & South America (Cost $648,879)   700,220 
     Total Common Stocks (Cost $3,176,733)   3,457,962 
Shares    Security
Description
  Value 
           
Preferred Stocks—0.7%    
Europe—0.7%    
Russia—0.7%    
 15,000   Raven Russia, Ltd., 12.000%  $28,049 
     Total Europe (Cost $25,834)   28,049 
     Total Preferred Stocks (Cost $25,834)   28,049 
Equity-Linked Structured Notes—7.3%    
Asia—7.3%    
India—7.3%    
 9,478   Dewan Housing Finance Corp.—Macquarie Bank, Ltd.   63,059 
 15,000   DLF, Ltd.—Macquarie Bank, Ltd.   43,300 
 66,000   Housing Development & Infrastructure, Ltd.—Macquarie Bank, Ltd. (a)   93,003 
 3,000   Oberoi Realty, Ltd.—Macquarie Bank, Ltd.   18,512 
 7,310   Phoenix Mills, Ltd.—Macquarie Bank, Ltd.   46,823 
 6,000   Prestige Estates Projects, Ltd.—Macquarie Bank, Ltd.   21,988 
         286,685 
     Total Asia (Cost $203,501)   286,685 
     Total Equity-Linked Structured Notes (Cost $203,501)   286,685 
Rights—0.0% (c)    
Asia—0.0% (c)    
Malaysia—0.0% (c)    
 2,600   Eco World International BHD Expiration: April 04, 2022 (a)   192 
     Total Asia (Cost $0)   192 
     Total Rights (Cost $0)   192 
           
Principal
Amount
         
           
Short-Term Investments—3.0%    
$118,000   State Street Eurodollar Time Deposit, 0.09%   118,000 
     Total Short-Term Investments (Cost $118,000)   118,000 
Total Investments (Cost $3,524,068) (d)—98.5%  3,890,888 
Other Assets in Excess of Liabilities—1.5%  61,086 
TOTAL NET ASSETS 100.0% $3,951,974 


 

The accompanying notes are an integral part of these financial statements.

 

50

 

Alpine Emerging Markets Real Estate Fund

 

Schedule of Portfolio Investments—Continued

April 30, 2017 (Unaudited)

 

 

 

 

Percentages are stated as a percent of net assets.

 

(a)Non-income producing security.

 

(b)Restricted under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. Liquid securities restricted under Rule 144A comprised 0.3% of the Fund’s net assets.

 

(c)Amount is less than 0.05%.

 

(d)See Note 8 for the cost of investments for federal tax purposes.

 

ADR—American Depositary Receipt

 

AG—Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders.

 

GDR—Global Depositary Receipt

 

NVDR—Non-Voting Depositary Receipts

 

PCL—Public Company Limited

 

PJSC—Public Joint Stock Company

 

SA—Generally designates corporations in various countries, mostly those employing the civil law.

 

SA de CV—Sociedad Anonima de Capital Variable is the Spanish equivalent to Variable Capital Company.

 

SAB de CV—Sociedad Anonima Bursátil de Capital Variable is the Spanish equivalent to Variable Capital Company.

 

SAE—Societe Anonyme Egyptienne.

 

The accompanying notes are an integral part of these financial statements.

 

51

 

Alpine Global Infrastructure Fund

 

Schedule of Portfolio Investments
April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—99.4%     
Asia—15.6%     
China—9.1%     
 1,992,000   Beijing Enterprises Water Group, Ltd.  $1,526,329 
 721,000   China Everbright International, Ltd.   975,132 
 587,000   China Merchants Port Holdings, Co., Ltd.   1,679,116 
 1,353,500   China Railway Construction Corp., Ltd.—Class H   1,893,214 
 540,771   China State Construction International Holdings, Ltd.   981,659 
 112,500   China Unicom Hong Kong, Ltd.—ADR   1,460,250 
 1,571,000   COSCO SHIPPING Ports, Ltd.   1,720,792 
 1,774,200   CRRC Corp., Ltd.—Class H   1,731,238 
 1,334,100   Zhejiang Expressway Co., Ltd.—Class H   1,660,260 
         13,627,990 
Indonesia—2.7%     
 5,336,670   PT Jasa Marga Persero TBK   1,857,765 
 2,500,000   PT Sarana Menara Nusantara TBK (a)   727,736 
 3,250,000   PT Tower Bersama Infrastructure TBK   1,426,401 
         4,011,902 
Japan—2.1%     
 36,100   East Japan Railway Co.   3,223,498 
Philippines—1.7%     
 1,392,700   International Container Terminal Services, Inc.   2,480,743 
     Total Asia (Cost $23,159,976)   23,344,133 
Europe—32.1%     
Finland—0.6%     
 78,000   DNA OYJ   960,109 
France—9.0%     
 23,100   Aeroports de Paris   3,081,188 
 22,666   Bouygues SA   952,913 
 45,500   SFR Group SA (a)   1,489,868 
 127,700   Suez   2,098,377 
 193,400   Veolia Environnement SA   3,674,095 
 26,300   Vinci SA   2,237,454 
         13,533,895 
Germany—1.3%     
 25,300   Fraport AG Frankfurt Airport Services Worldwide   1,989,780 
Italy—5.2%     
 114,100   Atlantia SpA   2,893,450 
 92,400   Buzzi Unicem SpA   2,375,370 
 521,000   Enel SpA   2,476,680 
         7,745,500 
Netherlands—1.9%     
 405,400   Koninklijke KPN NV   1,172,453 
 35,900   Koninklijke Vopak NV   1,619,765 
         2,792,218 
Portugal—1.6%     
 428,500   NOS SGPS SA   2,454,250 
Shares   Security
Description
  Value 
         
Spain—8.3%     
 160,000   Abertis Infraestructuras SA  $2,814,751 
 88,600   Atlantica Yield PLC (b)   1,846,424 
 215,100   Cellnex Telecom SAU (c)   3,801,653 
 209,552   EDP Renovaveis SA   1,596,713 
 240,000   Saeta Yield SA   2,371,188 
         12,430,729 
United Kingdom—4.2%     
 77,500   BT Group PLC—SP ADR (b)   1,543,025 
 187,100   Ferrovial SA   3,981,389 
 11,700   National Grid PLC—SP ADR   758,979 
         6,283,393 
     Total Europe (Cost $45,672,823)   48,189,874 
North & South America—51.7%     
Brazil—6.8%     
 539,618   CCR SA   3,009,165 
 105,000   Cia de Saneamento Basico do Estado de Sao Paulo—ADR (b)   966,000 
 2,259,298   Cosan Logistica SA (a)   4,697,899 
 222,630   Energisa SA   1,595,700 
         10,268,764 
Canada—5.2%     
 21,900   Canadian Pacific Railway, Ltd. (b)   3,356,175 
 79,500   Enbridge, Inc.   3,295,198 
 12,500   Waste Connections, Inc.   1,150,250 
         7,801,623 
Mexico—2.2%     
 175,000   Infraestructura Energetica Nova SAB de CV   815,912 
 235,000   Promotora y Operadora de Infraestructura SAB de CV   2,498,644 
         3,314,556 
Peru—0.2%     
 70,000   Grana y Montero SA—SP ADR (b)   235,900 
United States—37.3%     
 19,500   American Electric Power Co., Inc. (b)   1,322,685 
 27,000   American Tower Corp. (b)   3,400,380 
 41,900   CMS Energy Corp. (b)   1,902,260 
 59,100   Comcast Corp.—Class A (b)   2,316,129 
 35,500   CoreCivic, Inc.   1,222,975 
 35,200   Crown Castle International Corp. (b)   3,329,920 
 26,500   DISH Network Corp.—Class A (a)(b)   1,707,660 
 19,800   DTE Energy Co. (b)   2,070,882 
 62,700   FirstEnergy Corp.   1,877,238 
 41,200   Genesee & Wyoming, Inc.—Class A (a)(b)   2,791,712 
 69,000   Great Plains Energy, Inc.   2,041,710 
 14,000   Kansas City Southern (b)   1,260,980 
 100,000   Kinder Morgan, Inc.   2,063,000 
 34,500   MasTec, Inc. (a)(b)   1,523,175 
 22,500   NextEra Energy, Inc. (b)   3,005,100 
 25,700   Norfolk Southern Corp.   3,019,493 
 60,000   NRG Energy, Inc. (b)   1,014,000 
 97,800   NRG Yield, Inc.—Class A (b)   1,695,852 


 

The accompanying notes are an integral part of these financial statements.

 

52

 

Alpine Global Infrastructure Fund

 

Schedule of Portfolio Investments—Continued
April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
         
Common Stocks—(continued)     
North & South America—continued     
United States—continued     
 82,800   Pattern Energy Group, Inc. (b)  $1,823,256 
 39,900   SemGroup Corp.—Class A (b)   1,328,670 
 16,800   Sempra Energy   1,898,736 
 54,000   T-Mobile U.S., Inc. (a)(b)   3,632,580 
 46,050   The Geo Group, Inc. (b)   1,534,386 
 96,700   The Williams Cos., Inc.   2,961,921 
 230,000   TravelCenters of America LLC (a)(b)   1,403,000 
 19,500   Union Pacific Corp. (b)   2,183,220 
 12,600   Vulcan Materials Co.   1,523,088 
         55,854,008 
     Total North & South America (Cost $68,266,316)   77,474,851 
     Total Common Stocks (Cost $137,099,115)   149,008,858 
Shares    Security
Description
  Value 
             
Equity—Linked Structured Notes—0.6%     
Europe—0.6%     
Finland—0.6%     
  61,128    Fortum OYJ—Morgan Stanley BV  $889,598 
       Total Equity-Linked Structured Notes (Cost $954,764)   889,598 
Total Investments (Cost $138,053,879) (d)—100.0%   149,898,456 
Liabilities in Excess of Other Assets—0.0%(e)   (20,199)
TOTAL NET ASSETS 100.0%  $149,878,257 


 

 

Percentages are stated as a percent of net assets.

(a) Non-income producing security.
(b) All or a portion of the security has been designated as collateral for the line of credit.
(c) Restricted under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. Liquid securities restricted under Rule 144A comprised 2.5% of the Fund’s net assets.
(d) See Note 8 for the cost of investments for federal tax purposes.
(e) Amount is less than 0.05%.

ADR—American Depositary Receipt

AG—Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders.

NV—Naamloze Vennootschap is the Dutch term for a public limited liability corporation.

PLC—Public Limited Company

SA—Generally designates corporations in various countries, mostly those employing the civil law.

SAB de CV—Sociedad Anonima Bursátil de Capital Variable is the Spanish equivalent to Variable Capital Company.

SAU—Sociedad Anonima Unipersonal

SP ADR—Sponsored American Depositary Receipt

SpA—Societa’ Per Azioni is an Italian shared company.

 

The accompanying notes are an integral part of these financial statements.

 

53

 

Alpine Global Realty Growth & Income Fund

 

Schedule of Portfolio Investments
April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—95.7%     
Asia—18.1%     
China—2.2%     
 9,000   China Overseas Land & Investment, Ltd.  $26,150 
 9,000   China Resources Land, Ltd.   24,992 
 10,000   China Vanke Co., Ltd.—Class H   25,378 
 100,000   Joy City Property, Ltd.   15,685 
 10,000   Longfor Properties Co., Ltd.   17,330 
         109,535 
Hong Kong—2.3%     
 8,000   Cheung Kong Property Holdings, Ltd.   57,390 
 4,000   Sun Hung Kai Properties, Ltd.   60,013 
         117,403 
India—0.6%     
 40,000   Ascendas India Trust   32,924 
Japan—10.1%     
 170   Daito Trust Construction Co., Ltd.   25,010 
 5,000   Hulic Co., Ltd.   47,096 
 30   Ichigo Hotel REIT Investment Corp.   29,253 
 18,000   Ichigo, Inc.   52,317 
 70   Invincible Investment Corp.   26,813 
 70   Japan Hotel REIT Investment Corp.   47,661 
 4,000   Kenedix, Inc.   18,444 
 3,000   Mitsubishi Estate Co., Ltd.   57,322 
 4,500   Mitsui Fudosan Co., Ltd.   98,881 
 3,000   Seibu Holdings, Inc.   52,370 
 1,500   Sekisui House, Ltd.   24,887 
 1,300   Sumitomo Realty & Development Co., Ltd.   35,055 
         515,109 
Singapore—2.9%     
 31,000   Ascendas Real Estate Investment Trust   56,801 
 60,000   Frasers Logistics & Industrial Trust   43,374 
 23,000   Global Logistic Properties, Ltd.   47,411 
         147,586 
        Total Asia (Cost $946,484)   922,557 
Australia—6.2%     
 37,000   Gateway Lifestyle (Stapled Unit)   59,013 
 11,000   Goodman Group   66,800 
 25,000   Ingenia Communities Group   51,293 
 32,000   Mirvac Group   54,393 
 15,000   Stockland   54,475 
 14,000   Viva Energy REIT   25,265 
 1,000   Westfield Corp.   6,799 
         318,038 
     Total Australia (Cost $293,117)   318,038 
Europe—25.8%     
France—3.8%     
 588   Kaufman & Broad SA   23,058 
 1,800   Klepierre   70,665 
 400   Unibail-Rodamco SE   98,233 
         191,956 
Shares   Security
Description
  Value 
         
Germany—8.4%     
 2,500   ADO Properties SA (a)  $91,501 
 10,813   Aroundtown Property Holdings PLC   56,184 
 1,500   Deutsche Wohnen AG   51,290 
 3,850   Dream Global Real Estate     
     Investment Trust   27,922 
 2,500   PATRIZIA Immobilien AG (b)   49,318 
 2,600   TLG Immobilien AG   52,608 
 1,700   Vonovia SE   61,545 
 11,000   WCM Beteiligungs & Grundbesitz—AG (b)   38,391 
         428,759 
Ireland—2.7%     
 15,000   Cairn Homes PLC (b)   25,571 
 12,000   Dalata Hotel Group PLC (b)   64,574 
 33,000   Hibernia REIT PLC   45,832 
         135,977 
Italy—0.6%     
 4,000   COIMA RES SpA (a)   31,524 
Netherlands—0.9%     
 1,000   Wereldhave NV   46,056 
Norway—1.1%     
 3,500   Entra ASA (a)   40,153 
 15,000   Norwegian Property ASA   17,645 
         57,798 
Poland—0.3%     
 4,000   Atrium European Real Estate, Ltd.   16,862 
Spain—3.7%     
 2,030   Axiare Patrimonio SOCIMI SA   33,700 
 4,230   Hispania Activos Inmobiliarios Socimi SA   63,863 
 2,520   Lar Espana Real Estate Socimi SA   20,862 
 6,000   Merlin Properties Socimi SA   71,012 
         189,437 
Sweden—0.6%     
 3,000   Hemfosa Fastigheter AB   27,808 
United Kingdom—3.7%     
 2,000   Great Portland Estates PLC   17,926 
 21,000   LondonMetric Property PLC   45,803 
 9,421   Purplebricks Group PLC (b)   36,027 
 10,000   St Modwen Properties PLC   47,339 
 5,000   The UNITE Group PLC   41,900 
         188,995 
     Total Europe (Cost $1,239,134)   1,315,172 
North & South America—45.6%     
Brazil—3.1%     
 500   BB Progressivo II FII   21,408 
 6,000   BR Malls Participacoes SA (b)   26,559 
 3,000   Construtora Tenda SA (b)   11,314 
 15,000   Direcional Engenharia SA   28,827 
 7,000   Ez Tec Empreendimentos e Participacoes SA   44,813 
 2,000   Gafisa SA   11,462 
 15,000   Helbor Empreendimentos SA   11,956 
         156,339 


 

The accompanying notes are an integral part of these financial statements.

 

54

 

Alpine Global Realty Growth & Income Fund

 

Schedule of Portfolio Investments—Continued
April 30, 2017 (Unaudited)

 

Shares   Security
Description
  Value 
           
Common Stocks—(continued)     
North & South America—continued     
Mexico—1.4%     
 25,000   Corp. Inmobiliaria Vesta SAB de CV  $35,166 
 20,000   Fibra Uno Administracion SA de CV   34,857 
         70,023 
United States—41.1%     
 440   AvalonBay Communities, Inc.   83,530 
 900   Boston Properties, Inc.   113,940 
 400   Camden Property Trust   32,932 
 2,032   Colony NorthStar, Inc.—Class A   26,558 
 800   CoreSite Realty Corp.   78,280 
 500   CyrusOne, Inc.   27,320 
 500   Digital Realty Trust, Inc.   57,420 
 1,100   DuPont Fabros Technology, Inc.   56,705 
 150   Equinix, Inc.   62,655 
 1,100   Equity Residential   71,038 
 310   Essex Property Trust, Inc.   75,786 
 2,250   Forest City Realty Trust, Inc.—Class A   50,850 
 1,600   Gaming and Leisure Properties, Inc.   55,680 
 2,000   GGP, Inc.   43,220 
 1,500   Host Hotels & Resorts, Inc.   26,925 
 1,700   Hudson Pacific Properties, Inc.   58,412 
 1,000   Kilroy Realty Corp.   70,530 
 1,380   Kimco Realty Corp.   28,000 
 700   Kite Realty Group Trust   14,252 
 500   Lennar Corp.—Class A   25,250 
 2,100   MGM Resorts International   64,491 
 4,500   New York REIT, Inc.   42,930 
Shares   Security
Description
  Value 
           
United States—continued      
 2,000   Pebblebrook Hotel Trust  $59,520 
 3,000   Prologis, Inc.   163,230 
 400   Public Storage   83,752 
 1,100   QTS Realty Trust, Inc.—Class A   58,784 
 1,200   Simon Property Group, Inc.   198,312 
 800   SL Green Realty Corp.   83,944 
 3,500   Starwood Property Trust, Inc.   79,415 
 100   Taubman Centers, Inc.   6,255 
 500   The Howard Hughes Corp. (b)   61,555 
 600   The Macerich Co.   37,458 
 1,600   Urban Edge Properties   40,800 
 575   Vornado Realty Trust   55,338 
         2,095,067 
     Total North & South America (Cost $2,282,809)   2,321,429 
     Total Common Stocks (Cost $4,761,544)   4,877,196 
           
Principal
Amount
         
           
Short-Term Investments—5.3%     
$271,000   State Street Eurodollar Time Deposit, 0.09%   271,000 
     Total Short-Term Investments (Cost $271,000)   271,000 
Total Investments (Cost $5,032,544) (c)—101.0%   5,148,196 
Liabilities in Excess of Other Assets—(1.0)%   (53,392)
TOTAL NET ASSETS 100.0%  $5,094,804 


 

 

Percentages are stated as a percent of net assets.

(a) Restricted under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. Liquid securities restricted under Rule 144A comprised 3.2% of the Fund’s net assets.
(b) Non—income producing security.
(c) See Note 8 for the cost of investments for federal tax purposes.

AG—Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders.

ASA—Allmennaksjeselskap is the Norwegian term for a public limited company.

PLC—Public Limited Company

REIT—Real Estate Investment Trust

SA—Generally designates corporations in various countries, mostly those employing the civil law.

SA de CV—Sociedad Anonima de Capital Variable is the Spanish equivalent to Variable Capital Company.

SAB de CV—Sociedad Anonima Bursátil de Capital Variable is the Spanish equivalent to Variable Capital Company.

SE—SE Regulation. A European Company which can operate on a Europe-wide basis and be governed by Community law directly applicable in all Member States.

 

The accompanying notes are an integral part of these financial statements.

 

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Alpine Mutual Funds

 

 

Statements of Assets and Liabilities
April 30, 2017 (Unaudited)

 

   International   Realty   Emerging 
   Real Estate   Income &   Markets Real 
   Equity Fund   Growth Fund   Estate Fund 
ASSETS:               
Investments, at value(1)  $112,072,485   $116,853,807   $3,890,888 
Foreign currencies, at value(2)   34,920        421 
Cash   354    53    254 
Receivable from investment securities sold   375,611    900,467    85,174 
Dividends and interest receivable   263,672    37,576    30,944 
Receivable from capital shares issued   1,347    2,973    27 
Tax reclaim receivable   27,103    2,322     
Unrealized appreciation on forward currency contracts           1,402 
Due from Adviser       23,017    6,217 
Prepaid expenses and other assets   34,975    1,889    911 
Total assets   112,810,467    117,822,104    4,016,238 
LIABILITIES:               
Payable for investment securities purchased           37,977 
Unrealized depreciation on forward currency contracts   324,053        909 
Payable for capital shares redeemed   49,171    348     
Payable for line of credit (Note 2)       6,645,935     
Accrued expenses and other liabilities:               
Investment advisory fees (Note 6)   90,675    92,458    3,241 
Distribution fees (Note 5)   1,718    21,486    1,953 
Trustee fees (Note 6)   2,700    2,731    98 
Other   185,584    157,005    20,086 
Total liabilities   653,901    6,919,963    64,264 
Net Assets  $112,156,566   $110,902,141   $3,951,974 
NET ASSETS REPRESENTED BY:               
Paid-in-capital  $870,676,049   $53,249,997   $5,140,016 
Undistributed (distributions in excess of) net investment income   (394,905)   (305,035)   18,249 
Accumulated net realized loss from investments and foreign currency transactions   (729,225,103)   (2,071,431)   (1,573,470)
Net unrealized appreciation/(depreciation) on:               
Investments   (28,573,534)   60,028,822    366,820 
Foreign currency translations   (325,941)   (212)   359 
Net Assets  $112,156,566   $110,902,141   $3,951,974 
Net asset value               
Institutional Class               
Net assets  $112,019,936   $107,605,379   $3,727,248 
Shares outstanding   5,272,080    4,770,373    246,296 
Net asset value, offering price and redemption price per share*  $21.25   $22.56   $15.13 
Class A               
Net assets  $136,630   $3,296,762   $224,726 
Shares outstanding   6,470    146,370    14,845 
Net asset value per share  $21.12   $22.52   $15.14 
Maximum offering price per share (net asset value plus sales charge of 5.50% of offering price)  $22.35   $23.83   $16.02 
*   If applicable, redemption price per share may be reduced by a redemption fee               
(1) Total cost of investments  $140,646,019   $56,824,985   $3,524,068 
(2) Cost of foreign currencies  $34,947   $   $434 

 

The accompanying notes are an integral part of these financial statements.

 

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Alpine Mutual Funds

 

 

Statements of Assets and Liabilities—Continued
April 30, 2017 (Unaudited)

 

       Global 
   Global   Realty 
   Infrastructure   Growth & 
   Fund   Income Fund 
ASSETS:            
Investments, at value(1)  $149,898,456     $5,148,196 
Foreign currencies, at value(2)   32,794      3,819 
Cash   27      957 
Receivable from investment securities sold   1,315,914      33,299 
Dividends and interest receivable   741,758      19,865 
Receivable from capital shares issued   155,916       
Tax reclaim receivable   23,261      2,372 
Unrealized appreciation on forward currency contracts   12,218      487 
Due from Adviser   16,820      4,625 
Prepaid expenses and other assets   3,094      880 
Total assets   152,200,258      5,214,500 
LIABILITIES:            
Payable for investment securities purchased   1,034,258      83,724 
Unrealized depreciation on forward currency contracts   146,253      12,139 
Payable for capital shares redeemed   5,450       
Payable for line of credit (Note 2)   828,186       
Accrued expenses and other liabilities:            
Investment advisory fees (Note 6)   124,995      4,167 
Distribution fees (Note 5)   20,106       
Trustee fees (Note 6)   3,596      111 
Other   159,157      19,555 
Total liabilities   2,322,001      119,696 
Net Assets  $149,878,257     $5,094,804 
NET ASSETS REPRESENTED BY:            
Paid-in-capital  $151,091,009     $5,212,406 
Distributions in excess of net investment income   (364,539)     (46,563)
Accumulated net realized loss from investments and foreign currency transactions   (12,580,066)     (174,970)
Net unrealized appreciation/(depreciation) on:            
Investments   11,844,577      115,652 
Foreign currency translations   (112,724)     (11,721)
Net Assets  $149,878,257     $5,094,804 
             
Net asset value            
Institutional Class            
Net assets  $132,464,760     $5,094,804 
Shares outstanding   6,868,916      521,872 
Net asset value, offering price and redemption price per share*  $19.28     $9.76 
Class A            
Net assets  $17,413,497     $ 
Shares outstanding   904,398       
Net asset value per share  $19.25     $ 
Maximum offering price per share (net asset value plus sales charge of 5.50% of offering price)  $20.37     $ 
*   If applicable, redemption price per share may be reduced by a redemption fee.            
(1) Total cost of investments  $138,053,879     $5,032,544 
(2) Cost of foreign currencies  $32,794     $3,829 

 

The accompanying notes are an integral part of these financial statements.

 

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Alpine Mutual Funds

 

 

Statements of Operations
For the six months ended April 30, 2017 (Unaudited)

 

   International  Realty  Emerging
   Real Estate  Income &  Markets Real
   Equity Fund  Growth Fund  Estate Fund
INVESTMENT INCOME:                     
Dividend income    $915,271     $2,269,579     $61,911 
Less: Foreign taxes withheld     (67,450)           (3,217)
Interest and other income(a)     22,238      4,851      5,786 
Total investment income     870,059      2,274,430      64,480 
EXPENSES:                     
Investment advisory fee (Note 6)     520,334      551,565      18,542 
Transfer agent fees     78,045      74,792      2,786 
Accounting and custody fees     32,405      5,987      9,613 
Audit and tax fees     18,947      17,590      13,961 
Registration and filing fees     17,338      16,973      16,898 
Printing and mailing fees     19,160      15,430      875 
Interest (Note 2)           48,214      23 
Administration fee (Note 6)     11,564      12,844      414 
Legal fees     3,085      7,331      868 
Distribution fees - Class A (Note 5)     155      3,956      296 
Trustee fees     5,368      5,624      197 
Compliance fees     2,216      2,305      59 
Other fees     4,928      4,710      106 
Total expenses     713,545      767,321      64,638 
Less: Fee waivers and/or expense reimbursements (Note 6)     (21,483)     (45,067)     (39,288)
Net expenses     692,062      722,254      25,350 
Net investment income     177,997      1,552,176      39,130 
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:                     
Net realized gain/(loss) from:                     
Investments     (7,736,918)     1,192,036      (86,543)
Foreign currency transactions     2,720,967            (39,726)
Net realized gain/(loss) from investments and foreign currency     (5,015,951)     1,192,036      (126,269)
Change in net unrealized appreciation/(depreciation) on:                     
Investments     16,414,081      3,658,377      301,414 
Foreign currency translations     (2,034,627)     (146)     (1,147)
Change in net unrealized appreciation on investments and foreign currency     14,379,454      3,658,231      300,267 
Net gain on investments and foreign currency     9,363,503      4,850,267      173,998 
Increase in net assets from operations    $9,541,500     $6,402,443     $213,128 
(a) Other income represents a non-recurring refund for overbilling of prior years’ custodian out-of-pocket fees.

 

The accompanying notes are an integral part of these financial statements.

 

58

 

Alpine Mutual Funds

 

 

Statements of Operations—Continued
For the six months ended April 30, 2017 (Unaudited)

 

       Global 
   Global   Realty 
   Infrastructure   Growth & 
   Fund   Income Fund 
INVESTMENT INCOME:              
Dividend income    $2,868,789     $97,095 
Less: Foreign taxes withheld     (112,497)     (5,148)
Interest and other income     11,122      24 
Total investment income     2,767,414      91,971 
EXPENSES:              
Investment advisory fee (Note 6)     751,302      24,477 
Transfer agent fees     86,298      441 
Accounting and custody fees     37,838      224 
Audit and tax fees     20,754      14,329 
Registration and filing fees     17,472      10,043 
Printing and mailing fees     25,176      903 
Interest (Note 2)     6,818       
Administration fee (Note 6)     16,768      544 
Legal fees     14,365      1,641 
Distribution fees - Class A (Note 5)     19,965       
Trustee fees     7,464      240 
Compliance fees     3,167      101 
Other fees     7,653      7,081 
Total expenses     1,015,040      60,024 
Less: Fee waivers and/or expense reimbursements (Note 6)     (86,695)     (26,980)
Net expenses     928,345      33,044 
Net investment income     1,839,069      58,927 
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:              
Net realized gain/(loss) from:              
Investments     2,518,276      (75,302)
Foreign currency transactions     1,311,291      56,952 
Net realized gain/(loss) from investments and foreign currency     3,829,567      (18,350)
Change in net unrealized appreciation/(depreciation) on:              
Investments     12,627,715      222,937 
Foreign currency translations     (869,408)     (33,976)
Change in net unrealized appreciation on investments and foreign currency     11,758,307      188,961 
Net gain on investments and foreign currency     15,587,874      170,611 
Increase in net assets from operations    $17,426,943     $229,538 

 

The accompanying notes are an integral part of these financial statements.

 

59

 

Alpine Mutual Funds