485BPOS

STEWARD FUNDS

A LEADER IN VALUES-BASED INVESTING

 

Steward Covered Call Income Fund

Class A    SCJAX
Class C    SCJCX
Class R6    SCJKX
Institutional Class    SCJIX

Steward Equity Market Neutral Fund

Class A    SMNAX
Class C*    SMNCX
Class R6*    SMNRX
Institutional Class    SMNIX

Steward Global Equity Income Fund

Class A    SGIDX
Class C    SGIFX
Class R6    SGIGX
Institutional Class    SGISX

Steward International Enhanced Index Fund

Class A    SNTKX
Class C    SNTDX
Class R6    SNTFX
Institutional Class    SNTCX

Steward Large Cap Core Fund

Class A    SJCAX
Class C*    SJCCX
Class R6*    SJCRX
Institutional Class    SJCIX

Steward Large Cap Growth Fund

Class A    SJGAX
Class C*    SJGCX
Class R6*    SJGRX
Institutional Class    SJGIX

Steward Large Cap Value Fund

Class A    SJVAX
Class C*    SJVCX
Class R6*    SJVRX
Institutional Class    SJVIX

Steward Select Bond Fund

Class A    SEAKX
Class C    SEAAX
Class R6    SEABX
Institutional Class    SEACX

Steward Small Cap Growth Fund

Class A    SKGAX
Class C*    SKGCX
Class R6*    SKGRX
Institutional Class    SKGIX

Steward Values-Focused Large Cap Enhanced Index Fund

Class A    SEEKX
Class C    SEEBX
Class R6    SEEHX
Institutional Class    SEECX

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

Class A    TRDFX
Class C    SSMEX
Class R6    SSMOX
Institutional Class    SCECX

 

(The foregoing are all series and classes of Steward Funds, Inc.)

(*Class C shares and Class R6 shares of these Funds are not currently available for purchase.)

STATEMENT OF ADDITIONAL INFORMATION

August 28, 2023

This Statement of Additional Information is not a Prospectus but it contains information in addition to and more detailed than that set forth in the Prospectus for the Funds and should be read in conjunction with the Prospectus for the Funds dated August 28, 2023. The information in this Statement of Additional Information expands on the information contained in the Prospectus and any supplements thereto. A copy of the Funds’ Prospectus may be obtained without charge by contacting Crossmark Distributors, Inc. by phone at (888) 845-6910 or by writing to it at 15375 Memorial Dr., Suite 200, Houston, TX 77079.

The report of Independent Registered Public Accounting Firm and the financial statements and financial highlights of the Funds included in the Annual Report (“Annual Report”) for the fiscal year ended April 30, 2023 are incorporated herein by reference to the Annual Report. Copies of such Annual Report are available without

 

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charge upon request by writing to the Funds at 15375 Memorial Dr., Suite 200, Houston, TX 77079 or by calling toll free (888) 845-6910. The financial statements and financial highlights included in the Annual Report were audited by Cohen & Company, Ltd., an independent registered public accounting firm, and have been so included and incorporated by reference into this SAI in reliance upon the report of said firm, which report is given upon its authority as an expert in auditing and accounting.

 

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TABLE OF CONTENTS

 

     Page  

GENERAL INFORMATION

     4  

INVESTMENT STRATEGIES

     6  

PORTFOLIO HOLDINGS DISCLOSURE POLICIES

     17  

INVESTMENT RESTRICTIONS

     18  

DIRECTORS AND EXECUTIVE OFFICERS

     19  

PORTFOLIO TRANSACTIONS AND BROKERAGE

     56  

DETERMINATION OF NET ASSET VALUE

     61  

HOW TO BUY AND REDEEM SHARES

     62  

DIVIDENDS AND DISTRIBUTIONS

     63  

FEDERAL INCOME TAXES

     63  

OTHER INFORMATION

     69  

APPENDIX A

     70  

 

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GENERAL INFORMATION

Steward Values-Focused Small-Mid Cap Enhanced Index Fund began as a series of Capstone Series Fund, Inc. (“CSFI”), an open-end diversified management company registered under the Investment Company Act of 1940, as amended (“1940 Act”). CSFI was incorporated in New Jersey in 1952 and commenced business shortly thereafter. On February 28, 1967, it was merged into a Pennsylvania corporation and operated under the laws of that state until May 11, 1992 when it was reorganized as a Maryland corporation and its name changed from U.S. Trend Fund, Inc. to Capstone U.S. Trend Fund, Inc. Effective September 6, 1994, the name of CSFI was changed to Capstone Growth Fund, Inc. This change was approved by stockholders at a meeting held August 25, 1994. On January 22, 2002, the name of the corporate entity was changed to Capstone Series Fund, Inc., and the Fund was redesignated Capstone Growth Fund. On December 20, 2005, the name of the Fund was changed to Steward Small-Cap Equity Fund and it classified its shares into two classes. The original class was designated “Individual Class,” and the new class was designated “Institutional Class.” Effective March 31, 2008, the name of the Fund was changed to Steward Small-Mid Cap Enhanced Index Fund. Effective February 14, 2017, the Fund was reorganized and merged into a series of Steward Funds, Inc. (“SFI”) by action of the Board of Directors (the “Board”). Effective October 29, 2021, the name of the Fund was changed to Steward Values-Focused Small-Mid Cap Enhanced Index Fund.

Steward Global Equity Income Fund, Steward International Enhanced Index Fund, Steward Select Bond Fund and Steward Values-Focused Large Cap Enhanced Index Fund are series of SFI, an open-end diversified management company registered under the 1940 Act. SFI was originally incorporated in Delaware in 1968 and commenced business shortly thereafter as an open-end diversified management company under the 1940 Act. On February 18, 1992, shareholders approved a plan of reorganization pursuant to which the corporate entity became, on May 11, 1992, a Maryland series company, Capstone Fixed Income Series, Inc. The name of the corporate entity was changed to Capstone Christian Values Fund, Inc. on March 13, 2000. On June 3, 2004, the name was changed to Steward Funds, Inc., and names of each of the corporation’s series were also changed. Prior to August 28, 2004, Steward Select Bond Fund was known as Steward Select Fixed Income Fund. Prior to April 1, 2008, Steward Global Equity Income Fund, Steward Values-Focused Large Cap Enhanced Index Fund and Steward International Enhanced Index Fund were known as Capstone Government Income Fund, Steward Domestic All-Cap Equity Fund and Steward International Equity Fund, respectively, and from April 1, 2008 until October 29, 2021, Steward Values-Focused Large Cap Enhanced Index Fund was known as Steward Large Cap Enhanced Index Fund. Steward Covered Call Income Fund was added as an additional series of SFI by action of the Board effective September 15, 2017. Steward Equity Market Neutral Fund, Steward Large Cap Core Fund, Steward Large Cap Growth Fund, Steward Large Cap Value Fund and Steward Small Cap Growth Fund were added as additional series of SFI by action of the Board effective August 25, 2021.

Steward Covered Call Income Fund, Steward Equity Market Neutral Fund, Steward Global Equity Income Fund, Steward International Enhanced Index Fund, Steward Large Cap Core Fund, Steward Large Cap Growth Fund, Steward Large Cap Value Fund, Steward Select Bond Fund, Steward Small Cap Growth Fund, Steward Values-Focused Large Cap Enhanced Index Fund and Steward Values-Focused Small-Mid Cap Enhanced Index Fund (each a “Fund” and collectively, the “Funds”) each offer Class A, Class C, Class R6 and Institutional Class shares, although Class C shares and Class R6 shares of Steward Equity Market Neutral Fund, Steward Large Cap Core Fund, Steward Large Cap Growth Fund, Steward Large Cap Value Fund and Steward Small Cap Growth Fund are not currently available for purchase. The Individual Class shares of Steward Global Equity Income Fund, Steward International Enhanced Index Fund, Steward Select Bond Fund, Steward Values-Focused Large Cap Enhanced Index Fund and Steward Values-Focused Small-Mid Cap Enhanced Index Fund were redesignated as Class A shares effective September 15, 2017. Class C and Class K shares of each of Steward Covered Call Income Fund, Steward Global Equity Income Fund, Steward International Enhanced Index Fund, Steward Select Bond Fund, Steward Values-Focused Large Cap Enhanced Index Fund and Steward Values-Focused Small-Mid Cap Enhance Index Fund were authorized by action of the Board effective September 15, 2017 and Class K shares of each such Fund were redesignated as Class R6 shares effective August 28, 2018. All shares issued and outstanding are fully paid and non-assessable, transferable, have no pre-emptive rights (except

 

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as may be determined by the Board of Directors (the “Board”)) or conversion rights (except that Class C shares convert to Class A shares after eight years) and are redeemable as described in the Prospectus and this Statement of Additional Information (“SAI”). Each share has equal rights with each other share of the same class of a Fund as to voting, dividends, exchanges and liquidation. Shareholders are entitled to one vote for each share held and fractional votes for fractional shares held. Each class of shares may be subject to such sales loads or charges, expenses and fees, and account size requirements as the Board may establish or change from time to time and to the extent permitted under the 1940 Act.

Crossmark Global Investments, Inc. (“Crossmark”) serves as investment adviser to the Funds. Crossmark provides portfolio screening services to the Funds for use in the management of the Funds’ investment portfolios, as well as administration, compliance and claims preparation services to the Funds. The Northern Trust Company (“Northern Trust”) acts as fund accounting and sub-administration services provider for the Funds. In addition, Northern Trust acts as custodian and transfer agent for the Funds. Foreside Fund Officer Services, LLC (“Foreside”) provides principal financial officer services to the Funds. Crossmark Distributors, Inc. (“Crossmark Distributors”), an affiliate of Crossmark, is the Funds’ distributor. (See “Adviser,” “Administration, Fund Accounting and Sub-Administration Services, Compliance Services, Class Action and Fair Fund Services, Transfer Agency and Service, Master Services and Fund PFO/Treasurer Agreements” and “Distributor”).

 

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INVESTMENT STRATEGIES

Following is a discussion of the various types of securities and strategies that may be used by a Fund, to the extent not inconsistent with its investment objective and policies.

Temporary Defensive and Other Short-Term Positions

Although it is expected that each of the Funds will normally be invested consistent with its investment objective and policies, each of the Funds may invest in certain short-term, high-quality debt instruments for the following purposes: (a) to meet anticipated day-to-day operating expenses; (b) pending Crossmark’s ability to invest cash inflows; (c) to permit the relevant Fund to meet redemption requests; and (d) for temporary defensive purposes. The short-term instruments in which the Funds may invest include: (i) short-term obligations of the U.S. Government or its agencies, instrumentalities, authorities, or political subdivisions; (ii) other short-term debt securities; (iii) commercial paper, including master notes; (iv) bank obligations, including certificates of deposit, time deposits and bankers’ acceptances; (v) repurchase agreements; (vi) money market funds; and (vii) zero coupon bonds.

The Funds’ short-term investments will generally not have maturities of greater than one year.

Common Stock, Convertible Securities, and Other Equity Securities

Each Fund other than Steward Select Bond Fund may invest in common stocks, which represent an equity (ownership) interest in a company. This ownership interest generally gives a Fund the right to vote on issues affecting the company’s organization and operations. Common stocks do not contain a guarantee of value — their prices can fluctuate up or down and may be reduced to zero under certain circumstances.

These Funds may also buy other types of equity securities such as convertible securities (including “synthetic convertible securities”), preferred stock, and warrants or other securities that are exchangeable for shares of common stock. A convertible security is a security that may be converted at either a stated price or rate within a specified period of time into a specified number of shares of common stock. By investing in convertible securities, a Fund seeks the opportunity, through the conversion feature, to participate in the capital appreciation of the common stock into which the securities are convertible, while investing at a better price than may be available on the common stock or obtaining a higher fixed rate of return than is available on common stocks. The value of a convertible security is a function of its “investment value” (determined by its yield in comparison with the yields of other securities of comparable maturity and quality that do not have a conversion privilege) and its “conversion value” (the security’s worth, at market value, if converted into the underlying common stock). The credit standing of the issuer and other factors may also affect the investment value of a convertible security. The conversion value of a convertible security is determined by the market price of the underlying common stock. If the conversion value is low relative to the investment value, the price of the convertible security is governed principally by its investment value. To the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be increasingly influenced by its conversion value.

The market value of convertible debt securities tends to vary inversely with the level of interest rates. The value of the security declines as interest rates increase and increases as interest rates decline. Although under normal market conditions longer-term debt securities have greater yields than do shorter-term debt securities of similar quality, they are subject to greater price fluctuations. A convertible security may be subject to redemption at the option of the issuer at a price established in the instrument governing the convertible security. If a convertible security held by a Fund is called for redemption, the Fund must permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Rating requirements do not apply to convertible debt securities purchased by the Funds because the Funds purchase such securities for their equity characteristics.

 

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These Funds, as well as Steward Select Bond Fund, may invest in preferred stock. Unlike common stock, preferred stock offers a stated dividend rate payable from a corporation’s earnings. Such preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when interest rates decline. Dividends on some preferred stock may be “cumulative,” requiring all or a portion of prior unpaid dividends to be paid before dividends are paid on the issuer’s common stock. Preferred stock also generally has a preference over common stock on the distribution of a corporation’s assets in the event of liquidation of the corporation, and it may be “participating,” which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. The rights of preferred stocks on the distribution of a corporation’s assets in the event of liquidation are generally subordinate to the rights associated with a corporation’s debt securities.

A warrant gives the holder a right to purchase at any time during a specified period a predetermined number of shares of common stock at a fixed price. Unlike convertible debt securities or preferred stock, warrants do not pay a fixed dividend. Investments in warrants involve certain risks, including the possible lack of a liquid market for resale of the warrants, potential price fluctuations as a result of speculation or other factors, and failure of the price of the underlying security to reach or have reasonable prospects of reaching a level at which the warrant can be prudently exercised (in which event the warrant may expire without being exercised, resulting in a loss of a Fund’s entire investment therein).

“Synthetic” convertible securities are derivative positions composed of two or more different securities whose investment characteristics, taken together, resemble those of convertible securities. For example, a Fund may purchase a non-convertible debt security and a warrant or option, which enables the Fund to have a convertible-like position with respect to a company, group of companies or stock index. Synthetic convertible securities are typically offered by financial institutions and investment banks in private placement transactions. Upon conversion, the Fund generally receives an amount in cash equal to the difference between the conversion price and the then-current value of the underlying security. Unlike a true convertible security, a synthetic convertible comprises two or more separate securities, each with its own market value. Therefore, the market value of a synthetic convertible is the sum of the values of its fixed-income component and its convertible component. For this reason, the values of a synthetic convertible and a true convertible security may respond differently to market fluctuations. A Fund will invest in synthetic convertibles only with respect to companies whose corporate debt securities are rated “A” or higher by Moody’s or “A” or higher by S&P and will not invest more than 15% of its net assets in such synthetic securities and other illiquid securities.

Small- and mid-cap companies tend to be smaller, less established companies, and investment in equity securities of these companies may involve greater risk than is customarily associated with securities of larger, more established companies. Small- and mid-cap companies may experience relatively higher growth rates and higher failure rates than do larger companies. The trading volume of securities of small- and mid-cap companies is normally less than that of larger companies and, therefore, such volume may disproportionately affect the market price of such securities, tending to make them rise more in response to buying demand and fall more in response to selling pressure than is the case with larger companies.

While all investments involve risk, micro-cap stocks are among the riskiest. Many micro-cap companies are new and have no proven track record. Some of these companies have no assets, operations, or revenues. Others have products and services that are still in development or have yet to be tested in the market. Another risk that pertains to microcap stocks involves the low volumes of trades. Because many micro-cap stocks trade in low volumes, any size of trade can have a large percentage impact on the price of the stock.

Covered Call Options

Covered call options may be written on Steward Covered Call Income Fund’s equity securities. A call option gives the purchaser of the option the right to buy, and the writer, in this case, the Fund, the obligation to sell, the

 

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underlying security at a specified exercise price at any time prior and up to the expiration of the contract. When call options are written, the Fund will typically write options with exercise prices that are above the current market price of the security, thus providing room for growth. The purchaser pays a premium to the Fund for the option, so the premium is an extra source of income to the Fund. If the price of the underlying security rises, but does not rise to the level of the exercise price, the option would not typically be exercised, and the Fund would keep both the security at its appreciated value and the option premium. However, if the price of the underlying security rises above the exercise price of the option prior to expiration of the option and the option is exercised, the Fund will lose the value of the appreciation above the exercise price, although the loss in appreciation will be moderated by the amount of the option premium received by the Fund. If the price of the security drops below the price at the time the option was written, such loss in value will be diminished by the value of the premium.

The covered call strategy used by the Fund is designed to earn extra income for the Fund from premiums to moderate the impact of market declines and to reduce the volatility of the Fund’s portfolio. This strategy means that the Fund may be expected to underperform equity markets during periods of sharply rising equity prices; conversely, by using this strategy, the Fund would tend to outperform equity markets during periods of flat or declining equity prices due to the Fund’s receipt of premiums from selling the call options. Covered call options on a particular equity security may be sold on up to the full number of shares of that equity security held by the Fund. For securities on which options expire unexercised, the Fund can write more options, thus earning more premium income, until an option on the security is exercised. The Fund’s portfolio management considers several factors when writing (selling) options, including the overall equity market outlook, factors affecting the particular industry sector, individual security considerations, the timing of corporate events, and the levels of option premiums.

The Fund may terminate an option that it has written prior to the option’s expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written. The Fund will realize a profit or loss from such transaction if the cost of such transaction is less or more, respectively, than the premium received from the writing of the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by unrealized appreciation of the underlying security owned by the Fund.

Options written by the Fund will normally have expiration dates not more than one year from the date written. The exercise price of the options may be below (“in-the-money”), equal to (“at-the-money”) or above (“out-of-the-money”) the current market price of the underlying securities at the times the options are written. The Fund may engage in buy-and-write transactions in which the Fund simultaneously purchases a security and writes a call option thereon. Where a call option is written against a security subsequent to the purchase of that security, the resulting combined position is also referred to as buy-and-write. Buy-and-write transactions using in-the-money call options may be utilized when it is expected that the price of the underlying security will remain flat or decline moderately during the option period. In such a transaction, the Fund’s maximum gain will be the premium received from writing the option reduced by any excess of the price paid by the Fund for the underlying security over the exercise price. Buy-and-write transactions using at-the-money call options may be utilized when it is expected that the price of the underlying security will remain flat or advance moderately during the option period. In such a transaction, the Fund’s gain will be limited to the premiums received from writing the option. Buy-and-write transactions using out-of-the-money call options may be utilized when it is expected that the premiums received from writing the call option plus the appreciation in market price of the underlying security up to the exercise price will be greater than the appreciation in the price of the underlying security alone. In any of the foregoing situations, if the market price of the underlying security declines, the amount of such decline will be offset wholly or in part by the premium received, and the Fund may or may not realize a loss.

To the extent that a secondary market is available on the exchanges, the covered call option writer may liquidate the position prior to the assignment of an exercise notice by entering a closing purchase transaction for an option

 

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of the same series as the option previously written. The cost of such a closing purchase, plus transaction costs, may be greater than the premium received upon writing the original option, in which event the writer will have incurred a loss on the transaction.

With respect to writing covered call options, Steward Covered Call Income Fund complies with the requirements of Rule 18f-4 under the 1940 Act, which governs the use of derivatives within mutual fund portfolios. Pursuant to the requirements of Rule 18f-4, the Fund maintains a comprehensive derivatives risk management program and has appointed a derivatives risk manager to administer the program. Under the program, covered call options written by the Fund are subject to a value-at-risk based limit, which is designed to limit the extent to which the Fund may increase its market risk by leveraging its portfolio through derivatives.

Short Sales

When Steward Equity Market Neutral Fund takes a short position, it sells at the current market price a stock it does not own but has borrowed in anticipation that the market price of the stock will decline. To complete, or close out, the short sale transaction, the Fund buys the same stock in the market and returns it to the lender. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay the lender amounts equal to any dividends or interest, which accrue during the period of the loan. To borrow the security, the Fund may also be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale may be retained by the broker, to the extent necessary to meet the margin requirements, until the short position is closed out. The Fund makes money when the market price of the borrowed stock goes down and the Fund is able to replace it for less than it earned by selling it short. Alternatively if the price of the stock goes up after the short sale and before the short position is closed, the Fund will lose money because it will have to pay more to replace the borrowed stock than it received when it sold the stock short.

The Fund may not always be able to close out a short position at a particular time or at an acceptable price. A lender may request that the borrowed securities be returned to it on short notice, and the Fund may have to buy the borrowed securities at an unfavorable price. If this occurs at a time that other short sellers of the same security also want to close out their positions, a “short squeeze” can occur. A short squeeze occurs when demand is greater than supply for the stock sold short. A short squeeze makes it more likely that the Fund will have to close out its short sale at an unfavorable price. If that happens, the Fund will lose some or all of the potential profit from, or even incur a loss as a result of, the short sale.

With respect to short sales, Steward Equity Market Neutral Fund complies with the requirements of Rule 18f-4 under the 1940 Act, which governs the use of derivatives within mutual fund portfolios. Pursuant to the requirements of Rule 18f-4, the Fund maintains a comprehensive derivatives risk management program and has appointed a derivatives risk manager to administer the program. Under the program, short sales by the Fund are subject to a value-at-risk based limit, which is designed to limit the extent to which the Fund may increase its market risk by leveraging its portfolio through derivatives.

Foreign Securities

Steward Global Equity Income Fund and Steward International Enhanced Index Fund will invest substantial amounts in securities of non-U.S. issuers. Although Steward Covered Call Income Fund, Steward Equity Market Neutral Fund, Steward Large Cap Core Fund, Steward Large Cap Growth Fund, Steward Large Cap Value Fund, Steward Small Cap Growth Fund, Steward Values-Focused Large Cap Enhanced Index Fund, and Steward Values-Focused Small-Mid Cap Enhanced Index Fund expect to invest principally in securities of U.S. issuers, these Funds may also invest in some foreign securities. The Funds may invest in U.S. dollar-denominated securities that may be issued or guaranteed by non-U.S. entities. Certain of these investments may be made directly by the Funds; others may be indirect, through another investment company in which the Funds may invest. Investing in securities issued by foreign corporations involves considerations and possible risks not

 

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typically associated with investing in obligations issued by domestic corporations. Less information may be available about foreign companies than about domestic companies, and foreign companies generally are not subject to the same uniform accounting, auditing, and financial reporting standards or to other regulatory practices and requirements comparable to those applicable to domestic companies. The values of U.S. dollar-denominated foreign investments are affected by changes in application of foreign tax laws, including withholding taxes, changes in governmental administration or economic or monetary policy (in the United States or abroad) or changed circumstances in dealings between nations. These securities may involve higher brokerage commissions than securities of U.S. issuers, and they may be less liquid, more volatile and less subject to governmental supervision than in the United States. Investments in issuers in foreign countries could be affected by other factors not present in the United States, including nationalization, expropriation, confiscatory taxation, lack of uniform accounting and auditing standards and potential difficulties in enforcing contractual obligations and could be subject to extended settlement periods or restrictions affecting the prompt return of capital to the United States.

A Fund’s foreign investments may include emerging-market stock. The considerations outlined above when making investments in foreign securities also apply to investments in emerging markets. The risks associated with investing in foreign securities are often heightened for investments in developing or emerging markets. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems that can be expected to have less stability, than those of more developed countries. Moreover, the economies of individual emerging-market countries may differ favorably or unfavorably from the U.S. economy in such respects as the rate of growth in gross domestic product, the rate of inflation, capital reinvestments, resource self-sufficiency and balance of payments position. Many emerging-market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets of certain emerging-market countries.

Foreign government securities in which a Fund may invest may include obligations issued or backed by the national, state or provincial government or similar political subdivisions or central banks in foreign countries. Foreign government securities also include debt obligations of supranational entities, which include international organizations designated or backed by governmental entities to promote economic reconstruction or development, international banking institutions and related government agencies. These securities also include debt securities of “quasi-government agencies.”

A Fund may invest in equity securities of non-U.S. issuers, in the form of American Depositary Receipts (“ADRs”), American Depositary Shares (“ADSs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”) (together, “Depositary Receipts”), or other securities convertible into securities of eligible European or Far Eastern issuers. The securities for which these securities may be exchanged may not necessarily be U.S. dollar denominated. An ADR or ADS is typically issued by an American bank or trust company and evidences ownership of underlying securities issued by a foreign corporation. An EDR, which is sometimes referred to as a Continental Depositary Receipt (“CDR”), is issued in Europe, typically by a foreign bank or trust company and evidences ownership of either foreign or domestic securities. Generally, ADRs and ADSs in registered form are designed for use in U.S. securities markets and EDRs in bearer form are designed for use in European securities markets. GDRs allow companies in Europe, Asia, the United States and Latin America to offer shares in many markets around the world. GDRs are traded on major stock exchanges, particularly the London SEAQ International trading system. For purposes of the Funds’ investment policies, the Funds’ investments in ADRs, ADSs, EDRs and GDRs will be deemed to be investments in the equity securities of the foreign issuers into which they may be converted.

Depositary Receipt facilities may be established as either “sponsored” or “unsponsored.” While Depositary Receipts issued through these two types of facilities are in some respects similar, there are distinctions between them relating to the rights and obligations of Depositary Receipt holders and the practices of market participants. A depositary may establish an unsponsored facility without participation by (or even necessarily the

 

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acquiescence of) the issuer of the deposited securities, although typically the depositary requests a letter of non-objection from the issuer prior to establishing the facility. Holders of unsponsored Depositary Receipts generally bear all the costs of such facilities. The depositary usually charges fees upon the deposit and withdrawal of the deposited securities, the conversion of dividends into U.S. dollars, the disposition of noncash distributions, and the performance of other services. The depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited securities or to pass through voting rights to Depositary Receipt holders with respect to the deposited securities. Sponsored Depositary Receipt facilities are created in generally the same manner as unsponsored facilities, except that the issuer of the deposited securities enters into a deposit agreement with the depositary. The deposit agreement sets out the rights and responsibilities of the issuer, the depositary and the Depositary Receipt holders. With sponsored facilities, the issuer of the deposited securities generally will bear some of the costs relating to the facility (such as dividend payment fees of the depositary), although Depositary Receipt holders continue to bear certain other costs (such as deposit and withdrawal fees). Under the terms of most sponsored arrangements, depositaries agree to distribute notices of shareholder meetings and voting instructions, and to provide shareholder communications and other information to the Depositary Receipt holders at the request of the issuer of the deposited securities. The Funds may invest in sponsored and unsponsored Depositary Receipts. Although Depositary Receipts are denominated in U.S. dollars, the value of securities underlying a Depositary Receipt, and thus of the Depositary Receipt, may be affected by changes in the relative values of the currencies of the U.S. and the country of the issuer.

Market Disruptions and Geopolitical Events

Economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers in other countries or regions. The value of a Fund’s investments may be negatively affected by adverse changes in overall economic or market conditions, such as the level of economic activity and productivity, unemployment and labor force participation rates, inflation or deflation (and expectations for inflation or deflation), interest rates, demand and supply for particular products or resources including labor, and debt levels and credit ratings, among other factors. Such adverse conditions may contribute to an overall economic contraction across entire economies or markets, which may negatively impact the profitability of issuers operating in those economies or markets. In addition, geopolitical and other globally interconnected occurrences, including war, terrorism, economic or financial crises, uncertainty or contagion, trade disputes, government debt crises (including defaults or downgrades) or uncertainty about government debt payments, public health crises, natural disasters, climate change and related events or conditions have led, and in the future may lead, to disruptions in the U.S. and world economies and markets, which may increase financial market volatility and have significant adverse direct or indirect effects on a Fund and its investments. Adverse market conditions or disruptions could cause a Fund to lose money, experience significant redemptions, and encounter operational difficulties. Although multiple asset classes may be affected by adverse market conditions or a particular market disruption, the duration and effects may not be the same for all types of assets.

Russia’s military incursions in Ukraine have led to, and may lead to, additional sanctions being levied by the United States, European Union and other countries against Russia. Russia’s military incursions and the resulting sanctions could adversely affect global energy, commodities and financial markets and thus could affect the value of the Fund’s investments. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

Any partial or complete dissolution of the Economic and Monetary Union of the European Union, or any increased uncertainty as to its status, could have significant adverse effects on currency and financial markets, and on the value of a Fund and its investments. Securities and financial markets may be susceptible to market manipulation or other fraudulent trade practices, which could disrupt the orderly functioning of these markets or adversely affect the value of investments traded in these markets, including investments held by a Fund. For

 

11


Steward International Enhanced Index Fund and Steward Global Equity Income Fund, to the extent the Fund has focused its investments in the market of a particular region, adverse geopolitical and other events could have a disproportionate impact on the Fund.

Recent political activity in the U.S. has increased the risk that the U.S. could default on some or any of its obligations. While it is impossible to predict the consequences of such an unprecedented event, it is likely that a default by the U.S. would be highly disruptive to the U.S. and global securities markets and could significantly impair the value of a Fund’s investments. Similarly, political events within the U.S. at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S. economy, decrease the value of many Fund investments, and increase uncertainty in or impair the operation of the U.S. or other securities markets.

Other market disruption events include the pandemic spread of the novel coronavirus known as COVID-19, which at times has caused significant uncertainty, market volatility, decreased economic and other activity, increased government activity, including economic stimulus measures, and supply chain disruptions. While COVID-19 is no longer considered to be a public health emergency, a Fund and its investments may be adversely affected by its lingering effects well into the future.

Adverse market conditions or particular market disruptions, such as discussed above, may magnify the impact of each of the other risks described in this section and may increase volatility in one or more markets in which a Fund invests leading to the potential for greater losses for the Fund.

Government Obligations

Government obligations in which a Fund may invest include U.S. Treasury obligations and obligations of U.S. Government agencies and instrumentalities. Direct obligations of the U.S. Treasury in which a Fund may invest include U.S. Treasury bills, notes, and bonds. U.S. Treasury bills have, at the time of issuance, maturities of one year or less. U.S. Treasury notes have, at the time of issuance, maturities of one to ten years. U.S. Treasury bonds generally have, at the time of issuance, maturities of greater than ten years. Obligations of U.S. Government agencies and instrumentalities have various degrees of backing. Some obligations issued or guaranteed by agencies or instrumentalities of the U.S. Government, such as Government National Mortgage Association (“GNMA”) participation certificates, are, like U.S. Treasury obligations, backed by the full faith and credit of the U.S. Treasury. Other obligations, such as those of the Federal Home Loan Banks, are backed by the right of the issuer to borrow from the U.S. Treasury, subject to certain limits. Still other government obligations, such as obligations of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Tennessee Valley Authority, are backed only by the credit of the agency or instrumentality issuing the obligations, and, in certain instances, by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality. Some government obligations, such as obligations of the Federal Farm Credit Banks, are backed only by the credit of the agency or instrumentality issuing the obligation. No assurances can be given that the U.S. Government will provide financial support to agencies or instrumentalities whose securities are not backed by the full faith and credit of the U.S. Treasury, since it is not obligated to do so. Accordingly, such U.S. Government obligations may involve risk of loss of principal and interest. The Funds may invest in fixed-rate and floating- or variable-rate U.S. Government obligations. The Funds may purchase U.S. Government obligations on a forward commitment basis.

Forward Commitments, When-Issued Transactions, and Free Trade Transactions

A Fund may contract to purchase securities for a fixed price at a future date beyond customary settlement time (a “forward commitment” or “when-issued” transaction) so long as such transactions are consistent with the Fund’s ability to manage its investment portfolio and meet redemption requests. A Fund may dispose of a security purchased on a forward commitment or when-issued basis prior to settlement if it is appropriate to do so and if the Fund would realize short-term profits or losses, if any, upon such sale. Rule 18f-4 under the 1940 Act permits

 

12


a fund to invest in a security on a forward commitment or when-issued basis and the transaction will be deemed not to involve a senior security, provided that the fund intends to physically settle the transaction and the transaction will settle within 35 days of its trade date. Forward commitments and when-issued transactions involve a risk of loss if the value of the security to be purchased declines prior to the settlement date or the other party to the transaction fails to complete the transaction. A Fund may dispose of a commitment prior to settlement if Crossmark deems it appropriate to do so. In addition, a Fund may enter into transactions to sell its purchase commitments to third parties at current market values and simultaneously acquire other commitments to purchase similar securities at later dates. A Fund may realize short-term profits or losses upon the sale of such commitments.

Eurodollar and Yankee Dollar Investments

When appropriate to its investment objective and policies, a Fund may invest in Eurodollar and Yankee Dollar instruments. Eurodollar instruments are bonds of foreign corporate and government issuers that pay interest and principal in U.S. dollars generally held in banks outside the United States, primarily in Europe. Yankee Dollar instruments are U.S. dollar-denominated bonds typically issued in the United States by foreign governments and their agencies and foreign banks and corporations. (See also “Bank Obligations,” below.)

Bank Obligations

These obligations include negotiable certificates of deposit and bankers’ acceptances. A certificate of deposit is a short-term, interest-bearing negotiable certificate issued by a commercial bank against funds deposited in the bank. A bankers’ acceptance is a short-term draft drawn on a commercial bank by a borrower, usually in connection with an international commercial transaction. The borrower is liable for payment as is the bank, which unconditionally guarantees to pay the draft at its face amount on the maturity date. The Funds will limit their bank investments to dollar-denominated obligations rated A or better by Moody’s or S&P issued by U.S. or foreign banks that have more than $1 billion in total assets at the time of investment and, in the case of U.S. banks, (i) are members of the Federal Reserve System or are examined by the Comptroller of the Currency, or (ii) whose deposits are insured by the Federal Deposit Insurance Corporation. A Fund’s bank investments (either direct, or through another investment company in which it may invest) may include Eurodollar Certificates of Deposit (“ECDs”), Eurodollar Time Deposits (“ETDs”) and Yankee Certificates of Deposit (“Yankee CDs”). ECDs, ETDs, and Yankee CDs are subject to somewhat different risks from the obligations of domestic banks. ECDs are U.S. dollar-denominated certificates of deposit issued by foreign branches of U.S. and foreign banks; ETDs are U.S. dollar-denominated time deposits in a foreign branch of a U.S. bank or a foreign bank; and Yankee CDs are certificates of deposit issued by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the United States. Different risks may also exist for ECDs, ETDs, and Yankee CDs because the banks issuing these instruments, or their domestic or foreign branches, are not necessarily subject to the same regulatory requirements that apply to domestic banks, such as reserve requirements, loan limitations, examinations, accounting, auditing and recordkeeping, and the public availability of information.

Commercial Paper

Commercial paper includes short-term unsecured promissory notes issued by U.S. and foreign bank holding companies, corporations and financial institutions and similar taxable instruments issued by government agencies and instrumentalities. Asset-backed commercial paper is commercial paper issued by a bankruptcy remote special-purpose entity to fund the acquisition of financial assets (such as trade receivables, commercial loans, auto and equipment loans, leases or collateral debt obligations) that is repaid from the cash flows of those receivables on a specific date. All commercial paper purchased by the Funds must have a remaining maturity of no more than 270 days from the date of purchase by the Funds, and commercial paper purchased by a Fund must be rated at least A-1 or P-1 by a nationally recognized statistical rating organization (“NRSRO”) or deemed of comparable quality by Crossmark. A Fund may not invest more than 5% of its total assets in commercial paper of a single issuer.

 

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Repurchase Agreements

The Funds may invest in securities subject to repurchase agreements with U.S. banks or broker-dealers. A repurchase agreement is a transaction in which the seller of a security commits itself at the time of the sale to repurchase that same security from the buyer at a mutually agreed-upon time and price. The repurchase price exceeds the sale price, reflecting an agreed-upon interest rate effective for the period the buyer owns the security subject to repurchase. The agreed-upon rate is unrelated to the interest rate on that security. The agreement will be fully collateralized by the underlying securities and will be marked-to-market on a daily basis during the term of the repurchase agreement to ensure that the value of the collateral always equals or exceeds the repurchase price. A Fund will enter into repurchase agreements only with firms that present minimal credit risks as determined in accordance with guidelines adopted by the Funds’ Board. In the event of default by the seller under the repurchase agreement, a Fund that is a purchaser under such an agreement may have problems in exercising its rights to the underlying securities and may incur costs and experience time delays in connection with the disposition of such securities. A repurchase agreement is equivalent to a loan by a Fund.

Reverse Repurchase Agreements

A Fund may enter into reverse repurchase agreements to meet redemption requests where the liquidation of portfolio securities is deemed by the Fund’s investment adviser or money manager to be inconvenient or disadvantageous. A reverse repurchase agreement is a transaction in which a Fund transfers possession of a portfolio security to a bank or broker-dealer in return for a percentage of the portfolio security’s market value. The Fund retains record ownership of the security involved, including the right to receive interest and principal payments. At an agreed future date, the Fund repurchases the security by paying an agreed purchase price plus interest. A reverse repurchase agreement is equivalent to a borrowing by a Fund and is subject to the Funds’ derivatives risk management program pursuant to Rule 18f-4 under the 1940 Act.

Corporate Debt Securities

Corporate debt securities include bonds, debentures, notes and similar instruments issued by corporations and similar entities. A Fund’s investment in these instruments must comply with the Fund’s rating criteria.

Loans of Portfolio Securities

A Fund may lend its portfolio securities to brokers, dealers and financial institutions, provided: (1) the loan is secured continuously by collateral consisting of U.S. Government securities or cash or letters of credit maintained on a daily mark-to-market basis in an amount no less than the current market value of the securities loaned; (2) the Fund may at any time call the loan and obtain the return of the securities loaned within three business days; and (3) the Fund will receive any interest or dividends paid on the loaned securities. In connection with lending securities, a Fund may pay reasonable finders, administrative and custodial fees.

Cash collateral received by a Fund when it lends its portfolio securities is invested in high-quality, short-term debt instruments, short-term bank collective investment and money market mutual funds, and other investments meeting quality and maturity criteria established by the Funds. Income generated from the investment of the cash collateral is first used to pay the rebate interest cost to the borrower of the securities and then to pay for lending transaction costs. The remaining amount is divided between the Fund and the lending agent.

A Fund will retain most rights of beneficial ownership of the loaned securities, including the right to receive dividends, interest or other distributions on the loaned securities. Voting rights may pass with the loan, but a Fund will call a loan in order to vote proxies if a material issue affecting the investment is subject to a vote.

Loans of portfolio securities entail certain risks. A Fund may incur costs or possible losses in excess of the interest and fees received in connection with securities lending transactions. Some securities purchased with cash

 

14


collateral are subject to market fluctuations while a loan is outstanding. To the extent that the value of the cash collateral as invested is insufficient to return the full amount of the collateral plus rebate interest to the borrower upon termination of the loan, a Fund must immediately pay the amount of the shortfall to the borrower. Loans of securities also involve a risk that the borrower may fail to return the securities or may fail to provide additional collateral. If the borrower fails financially, a Fund may also lose its rights to the collateral.

The Funds did not engage in any securities lending activities during the most recent fiscal year.

Investment Companies

Each Fund is permitted to invest in shares of other open-end or closed-end investment companies, including exchange-traded funds (“ETFs”), to the extent consistent with its investment objective and policies and with limits imposed under applicable law and regulations. To the extent a Fund invests a portion of its assets in other investment companies, those assets will be subject to the expenses of any such investment company as well as to the expenses of the Fund itself. A Fund’s investments in a closed-end investment company, together with investments in such closed-end company by other funds having the same investment adviser as the Fund, would be limited to 10% of the outstanding voting shares of such closed-end company. The Funds may not purchase shares of any affiliated investment company except as permitted by an SEC rule or order.

ETFs in which a Fund may invest may be organized as open-end mutual funds or unit investment trusts. Typically, an ETF seeks to track the performance of an index, such as the S&P 500 or the NASDAQ 100, by holding in its portfolio either the same securities that comprise the index, or a representative sample of the index. Investing in an ETF will give a Fund exposure to the securities comprising the index on which the ETF is based, and the ETF investment will gain or lose value depending on the performance of the index. ETFs have expenses, including advisory and administrative fees, which are borne by ETF shareholders. As a result, an investor in a Fund is subject to a duplicate level of fees to the extent that such Fund invests in ETFs.

Unlike shares of typical mutual funds or unit investment trusts, shares of ETFs are bought and sold based on market values throughout each trading day, rather than at the closing net asset value price. Thus, ETF shares could trade at either a premium or a discount to net asset value. Trading prices of ETFs that track equity market indices tend to closely track the actual net asset value of the underlying portfolios because these portfolios are publicly disclosed on each trading day. Also, an approximation of actual net asset value is disseminated throughout the trading day. If available, the Funds may also invest in ETFs that are based on fixed-income indices or are actively managed. Because it is unlikely that actively managed ETFs would have the transparency of index-tracking ETFs, they would be more likely to trade at a discount or premium to their net asset values. If an ETF held by a Fund trades at a discount to net asset value, the Fund could lose money even if the securities in which the ETF invests increase in value.

Real Estate Investment Trusts

A Fund may invest in debt or equity securities issued by real estate investment trusts (“REITs”), including REITs invested principally in mortgages of churches, colleges, schools and other nonprofit organizations. A REIT is a corporation or a business trust that would otherwise be taxed as a corporation, which meets the definitional requirements of the Internal Revenue Code of 1986, as amended (the “Code”). The Code permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating corporate-level federal income tax and making the REIT a pass-through vehicle for federal income tax purposes. To meet the definitional requirements of the Code, a REIT must, among other things, invest substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to shareholders annually 90% or more of its otherwise taxable income. REITs are sometimes informally characterized as equity REITs, mortgage REITs and hybrid REITs. An equity REIT invests primarily in the fee simple ownership of land and buildings and derives its income primarily from rental income. An equity REIT may also realize capital gains (or

 

15


losses) by selling real estate properties in its portfolio that have appreciated (or depreciated) in value. A mortgage REIT invests primarily in mortgages on real estate, which may secure construction, development or long-term loans. A mortgage REIT generally derives its income primarily from interest payments on the credit it has extended. A hybrid REIT combines the characteristics of equity REITs and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate.

Investments in REITs and real estate securities may be subject to certain of the same risks associated with the direct ownership of real estate. These risks include: declines in the value of real estate generally; changes in neighborhood or property appeal; environmental cleanup costs; condemnation or casualty losses; risks related to general and local economic conditions, over-building and competition; increases in property taxes and operating expenses; lack of availability of mortgage funds; high or extended vacancy rates; and rent controls or variations in rental income. The values of securities issued by REITs are affected by tax and regulatory requirements and by perceptions of management skill. A Fund’s investment in REITs is also subject to heavy cash flow dependency, defaults of tenants, self-liquidation, the possibility of failing to qualify as a REIT under the Code, and failing to maintain exemption from the requirement to register under the 1940 Act. Rising interest rates may cause REIT investors to demand a higher annual return, which may cause a decline in the prices of REIT securities. Rising interest rates also generally increase the costs of obtaining financing, which could make it more difficult for a REIT to meet its obligations. During periods of declining interest rates, certain mortgage REITs may hold mortgages that the mortgagors may elect to prepay, and such prepayment may diminish the yield on securities issued by those REITs. In addition, mortgage REITs may be affected by the borrowers’ ability to repay its debt to the REIT when due. Equity REIT securities may be affected by the ability of tenants to pay rent. In addition, REITs may not be diversified. Also, by investing in REITs indirectly through the Fund, a shareholder will bear expenses of the REITs in addition to expenses of the Fund.

Illiquid Securities

A Fund may invest up to 15% of its net assets in illiquid securities. If a Fund’s holdings of illiquid securities exceed 15% of its net assets, it will take appropriate action to bring holdings down to 15% or less of its net assets in accordance with the Fund’s liquidity risk management program adopted pursuant to Rule 22e-4 under the 1940 Act (the “LRM Program”). The LRM Program administrator is responsible for determining the liquidity classification of Fund investments and monitoring compliance with the 15% limit on illiquid securities. Illiquid securities are investments that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, as determined pursuant to the provisions of the LRM Program, and may include investments that are not readily marketable, repurchase agreements maturing in more than seven days, time deposits with a notice or demand period of more than seven days, certain over-the-counter options, certain investment company securities, and certain restricted securities. There may be undesirable delays in selling illiquid securities at a price representing their fair value.

Investments by the Funds in securities of other investment companies may be subject to restrictions regarding redemption. In certain circumstances, to the extent a Fund owns securities of such a company in excess of 1% of that company’s total outstanding securities, such holdings by the Fund could be deemed to be illiquid and would be subject to the Fund’s 15% limit on illiquid investments.

The expenses of registering restricted securities that are illiquid may be negotiated at the time such securities are purchased by a Fund. When registration is required, a considerable period may elapse between a decision to sell the securities and the time the sale would be permitted. Thus, a Fund may not be able to obtain as favorable a price as that prevailing at the time of the decision to sell. A Fund also may acquire, through private placements, securities having contractual resale restrictions, which might lower the amount realizable upon the sale of such securities.

 

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The purchase price and subsequent valuation of illiquid securities normally reflect a discount, which may be significant, from the market price of comparable securities for which a liquid market exists. There can be no assurance that a Fund will be able to sell such a security at the price at which it is valued for purposes of determining the Fund’s net asset value.

PORTFOLIO HOLDINGS DISCLOSURE POLICIES

The policy of the Funds and their service providers is to protect the confidentiality of the Funds’ portfolio holdings and to prevent the selective disclosure of nonpublic information about those holdings. The Funds’ Board has adopted policies and procedures to implement this policy. These policies and procedures are designed to assure that any disclosure of nonpublic information about Fund portfolio holdings is in the best interests of Fund shareholders and to address any conflicts that may exist between the interests of Fund shareholders and those of Fund service providers and their affiliates. Portfolio holding information may be disclosed only in accordance with these policies and procedures, with such exceptions as may be approved by the Funds’ Chief Compliance Officer.

The Funds may publicly disclose monthly their month-end portfolio holdings on their website, www.stewardfunds.com. The information for each month-end would generally be posted around the end of the following month. A Fund may provide portfolio holdings information to organizations such as Standard & Poor’s Corporation no earlier than it is made publicly available as provided above. Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Portfolio holdings information included with Form N-PORT for the third month of each relevant fiscal quarter will be publicly available on the SEC’s website at www.sec.gov. Each Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for each Fund is available to investors within 60 days after the period to which it relates. Each Fund’s Forms N-PORT and Forms N-CSR are available on the SEC’s website listed above. Following or simultaneously with any such filing or other public disclosure, the Funds may make public a summary or list of completed purchases and sales, as of the date of the information contained in the relevant filing or public disclosure (“trade commentary”).

For legitimate business purposes — for example, in the event of a merger or retention of a new adviser or sub-adviser — disclosure of information about Fund portfolio holdings may occasionally be determined by a Fund’s Chief Compliance Officer, in consultation with the Fund’s legal counsel, to be appropriate, provided any such disclosure is subject to a confidentiality agreement that includes provisions to prevent trading on nonpublic information. Nothing in the Funds’ policies prevents disclosure of portfolio holdings information that may be required by applicable law or regulation.

A Fund or its authorized service provider may at any time distribute analytical data that does not identify any specific portfolio holding.

Crossmark’s trading desk may periodically distribute lists of investments held by its clients (including a Fund) to facilitate efficient trading of those investments and receipt of relevant research. Crossmark may also periodically distribute a list of issuers and securities that are covered by its research department as of a particular date, which may include securities held by a Fund or that are under consideration for a Fund. The list will not, however, indicate that a Fund owns or may own any security and will not identify Fund position sizes.

Whenever disclosure of portfolio holdings pursuant to a Funds’ policies and procedures would involve a conflict of interest between a Fund’s shareholders and Crossmark, the Funds’ distributor or any affiliated person of the Fund, Crossmark, or the distributor, such disclosure may not be made without the approval of a majority of the Fund’s independent directors upon a determination that the arrangement is in the best interest of the Fund’s

 

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shareholders. Neither a Fund nor Crossmark, the distributor or any affiliated person of a Fund, may enter into any arrangement to receive compensation or benefit of any kind for the disclosure of Fund portfolio holdings information.

The Funds’ Chief Compliance Officer is responsible for monitoring compliance with the Funds’ portfolio holdings disclosure policies and procedures and may request certifications from persons who have access to this information that their use of the information complies with the policies and with the terms of any applicable Confidentiality Agreement. The Chief Compliance Officer will report material violations to the Board, which will determine appropriate corrective action.

The Board may impose additional restrictions on dissemination of information about a Fund’s portfolio holdings. A Fund’s policies and procedures regarding disclosure of Fund portfolio holdings may be waived, or exceptions permitted, only with consent of the Fund’s Chief Compliance Officer upon a determination that such waiver is consistent with best interests of the Fund and its shareholders.

INVESTMENT RESTRICTIONS

The Funds are subject to investment restrictions designed to reflect their values-based screening policies. In addition, each Fund has adopted the following investment restrictions, which are fundamental policies of the Fund (except as otherwise noted) and may not be changed without approval by vote of a majority of the outstanding shares of that Fund. For this purpose, such a majority vote means the lesser of (1) 67% or more of the voting securities present at an annual or special meeting of shareholders, if holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy; or (2) more than 50% of the outstanding voting securities of the Fund.

Fundamental Investment Restrictions of the Funds

As a fundamental policy, each Fund has elected to be qualified as a diversified open-end series of SFI.

Additionally, the Funds may not:

 

1.

borrow money, except as permitted under or to the extent not prohibited by the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

 

2.

issue senior securities, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

 

3.

concentrate its investments in a particular industry, as that term is used in the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

 

4.

engage in the business of underwriting securities issued by others, except to the extent that a Fund may be deemed to be an underwriter in connection with the disposition of portfolio securities;

 

5.

purchase or sell real estate, which does not include securities of companies that deal in real estate or mortgages or investments secured by real estate or interests therein, except that each Fund reserves freedom of action to hold and to sell real estate acquired as a result of the Fund’s ownership of securities;

 

6.

purchase physical commodities or contracts relating to physical commodities; or

 

7.

make loans to other persons, except (i) loans of portfolio securities, and (ii) to the extent that entry into repurchase agreements and the purchase of debt instruments or interests in indebtedness in accordance with a Fund’s investment objective and policies may be deemed to be loans.

A Fund’s classification as a diversified series means, under currently applicable law, that at least 75% of the value of the Fund’s assets will be represented by cash and cash items (including receivables), U.S. Government

 

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securities, securities of other investment companies, and other securities with respect to which the Fund will make no investment that would (a) cause more than 5% of its assets to be invested in the securities of a single issuer or (b) cause it to own more than 10% of the voting securities of a single issuer.

With respect to the foregoing restrictions regarding senior securities, borrowing and concentrating investments, the 1940 Act and regulatory interpretations of relevant provisions of that Act establish the following general limits. Open-end registered investment companies are not permitted to issue any class of senior security or to sell any senior security of which they are the issuers. For this purpose, SFI’s issuance of separate series of shares (each Fund is a series of SFI) and the division of those series into separate classes (each of Class A, Class C, Class R6, and Institutional Class is such a separate class) are not considered to create senior securities. Although borrowings could be deemed to be senior securities, the 1940 Act permits a Fund to borrow for temporary purposes only in an amount not exceeding 5% of the value of its total assets at the time when the loan is made. (A borrowing shall be presumed to be for temporary purposes if it is repaid within 60 days and is not extended or renewed.) The 1940 Act also permits each Fund to borrow from a bank, provided that immediately after any such borrowing there is an asset coverage (including the proceeds of borrowings) of at least 300% for all borrowings by the Fund, and in the event such asset coverage falls below 300%, the Fund shall, within three days thereafter (not including Sundays and holidays) or such longer time as the SEC may prescribe, reduce the amount of its borrowings so that asset coverage for such borrowings shall be at least 300%. Thus, a Fund may pledge, mortgage, or hypothecate no more than one-third of its total assets to secure borrowings. A Fund will not purchase additional securities while outstanding borrowings exceed 5% of its total net assets.

With respect to concentration, the SEC staff takes the position that investment of 25% or more of a Fund’s assets in any one industry or group of industries represents concentration.

With respect to the foregoing restrictions on making loans, a Fund may lend its portfolio securities in an amount not to exceed 33 1/3% of its total assets. A Fund may invest without limit in repurchase agreements to the extent consistent with its investment objective, investment restrictions, and all 1940 Act requirements, including diversification requirements. Loans to affiliated investment companies are not presently permitted by the 1940 Act in the absence of an exemptive order from the SEC.

An investment restriction that involves a maximum percentage of securities or assets shall not be considered to be violated unless an excess over the percentage occurs as a result of an acquisition of securities, except that if asset coverage for borrowings falls below the required 300%, noted above, a Fund shall, within the time period noted above, reduce its borrowings so that such asset coverage will be at least 300%.

A Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund’s investment objective and principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. During these times, a Fund may invest up to 100% of its assets in cash or cash equivalents, shares of money market mutual funds, commercial paper, zero coupon bonds, repurchase agreements, and other securities Crossmark believes to be consistent with the Fund’s best interests. During a period in which a Fund takes a temporary defensive position, the Fund may not achieve its investment objective.

DIRECTORS AND EXECUTIVE OFFICERS

Leadership structure. The Funds’ Board of Directors (the “Board”) provides overall supervision of the affairs of the Funds. All directors were most recently elected by shareholders at a meeting held on July 29, 2019. Richard J. Rossi was appointed by the Board as Lead Independent Director at a meeting held on May 14, 2020. As Lead Independent Director, Mr. Rossi is responsible for (i) serving as Chair of all meetings/executive sessions of the independent directors, (ii) working with SFI’s investment adviser and legal counsel to determine the agenda for Board meetings, (iii) serving as the principal contact for and facilitating communication between the independent directors and SFI’s service providers and (iv) any other duties that the Nominating and Corporate

 

19


Governance Committee may delegate to the Lead Independent Director. Michael L. Kern, III, CFA, was appointed by the Board as Chairman of the Board at a meeting held on September 8, 2017. Mr. Kern is an “interested person” of the Funds, as defined in the 1940 Act, because of his position as President, CEO and Treasurer of Crossmark and its affiliates. As Chairman of the Board, Mr. Kern has responsibility for coordinating the work and leading meetings of the Board, for coordinating with the independent directors and for assuring that the concerns of the independent directors are considered by the full Board and brought to the attention of Fund management. Mr. Kyle Dana is also an “interested person,” because of his position with AGFinancial, the parent company of Crossmark Global Holdings, Inc., which through its subsidiary, Steward Financial Holdings, Inc., has effective voting control over SFI as of August 1, 2023. The other four directors are independent directors. During SFI’s fiscal year ended April 30, 2023, the Board met four (4) times.

Risk oversight. The Funds’ service providers, including their investment adviser, principal underwriter, administrator, fund accounting and sub-administration services provider, and transfer agent, provide day-to-day risk management of the Funds in their areas of responsibility. The Board oversees the performance of these service providers, including their management of risks. The Board meets quarterly and its Committees meet periodically (see “Board Committees,” below) to review information concerning the Funds’ operations and performance, the broader securities markets, and other information relevant to their oversight responsibilities that, among other things, helps them to identify and monitor general and particular risks to the Funds. The Board’s Committees focus on particular types of risks in their areas of responsibility. It should be noted that not all risks to the Funds can be identified or controlled. Moreover, certain risks are inherent in the Funds’ operations. See, for example, investment risks described in the Funds’ Prospectus.

Qualifications of directors. The Funds’ directors, in addition to meeting high standards of integrity and commitment, offer to the Funds a variety of experience relevant to oversight of the Funds, including, in the aggregate, responsible leadership experience in sales and marketing, accounting, business operations, strategic planning, investment, and service on boards of other entities. In selecting candidates for directors, the Nominating and Corporate Governance Committee has considered whether candidates meet high standards of personal and relevant professional experience and can bring diverse points of view to the Board. Independent directors must satisfy regulatory requirements and guidelines adopted by the Board relevant to their independence. Beyond these considerations, the Nominating and Corporate Governance Committee has not set specific minimum qualifications. The Board believes that each independent director’s background brings to the Board a combination of skills that permits him or her to objectively review, question and evaluate information provided to him or her by Fund management and to exercise effective business judgment in overseeing the Funds. The particular types of experience for the directors are described below.

Interested Directors

Michael L. Kern, III, CFA: Mr. Kern has been President, Chief Executive Officer and Treasurer of Crossmark Global Holdings, Inc. since May 2015 and has served as President, Chief Executive Officer and Treasurer of Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. since 2016. Previously, Mr. Kern spent 19 years with Stout Risius Ross, Inc., a financial advisory firm, where he, over the years, served as Managing Director in the Valuation & Financial Opinions Group, Head of the Investment Banking Group, Chief Financial Officer, Chief Operating Officer and, finally, President for his last six years at the firm. Mr. Kern holds a B.S. Degree in Finance and Business Economics from Wayne State University and is a Chartered Financial Analyst (CFA) with Series 7, 63 and 24 securities licenses. In 2006, he received Crain’s Detroit Business 40 Under 40 Award and is a member of the CFA Institute and Young Presidents’ Organization.

Kyle A. Dana, CRPC: Since 2000, Mr. Dana has worked with AGFinancial, and currently serves as Senior Vice President of Retirement Planning and Investment Solutions. Mr. Dana has dual degrees in Management and Marketing from Evangel University and professional licenses and designations, including Chartered Retirement Planning Counselor (CRPC®) and Series 63 license.

 

20


Independent Directors

Mark H. Barineau: Mr. Barineau currently serves as President and owner of Lionsmark Investment Group, a private real estate investment and management company he formed in 2016. Its primary business is the acquisition, development and management of multifamily assets and other active and passive real estate investments. Mr. Barineau also currently serves as co-founder and managing member of Starboard Star Venture Capital LLC, a venture capital fund formed in 2021 focused on investments in technology companies primarily in energy, construction, property and other industrial applications, as well as B2B startups in sports technology and other markets. Mr. Barineau’s professional career began in 1992 as a Project Controls Engineer with a subsidiary of Waste Management where he performed value engineering and cost controls related to environmental remediation and landfill construction. In 1996, his entrepreneurial spirit led him to the real estate industry, where he served various roles including President and an owner of Radney Management & Investments, Inc., which specialized in the acquisition, development and management of government subsidized low-income and conventional workforce multifamily housing across the United States. He sold his interests in this company in 2016. Raised in Houston, he is a graduate of The University of the South (Sewanee, TN) and Columbia University (New York, NY) and holds B.S. degrees in both Physics and Mechanical Engineering. He is a Certified Property Manager by the Institute of Real Estate Management, a member of Young Presidents’ Organization (former executive board member) and a member of several Houston area social clubs. Mr. Barineau strives to put his faith in practice with his time, talent and treasure. He has served as an Executive Vestry Member of St. Martin’s Episcopal Church (largest Episcopal church in the USA) and as a Trustee of Episcopal High School.

Adriana R. Posada: Ms. Posada retired from American Beacon Advisors, Inc. in 2016, where she had served since 1998 as Senior Portfolio Manager for several registered investment companies (“funds”) and had responsibility for managing a substantial portion of a large corporate pension plan’s assets. Her experience included equity, fixed income, alternative and derivative investments. She also identified, selected and oversaw sub-advisers for the funds and the pension plan. She reported regularly to the funds’ board of directors and to the pension plan’s representative regarding the performance of the sub-advisers. From 1993 to 1998, also at American Beacon Advisors, Inc., her responsibilities involved regulatory compliance and preparation and dissemination of certain numerical information regarding the funds and separate accounts. She also served as a Trustee of Irving Firemen’s Relief and Retirement Plan from 2009 to 2015. Ms. Posada holds a B.S. in mathematics from Universidad de Los Andes, Bogota, Colombia; an M.S. in mathematics from the University of Houston, Houston, Texas; and an M.A. in Actuarial Science from the University of Michigan, Ann Arbor, Michigan. She has passed exam parts 1, 2 and 3 of the Society of Actuaries.

Richard L. Peteka: Prior to his retirement in 2023, Mr. Peteka had been the Chief Financial Officer and Secretary of SLR Private Credit BDC II LLC since 2022, SLR HC BDC LLC since 2020, SCP Private Credit Income BDC LLC since 2018 and SLR Investment Corp. since May 2012, each of which is a publicly traded business development company managed by SLR Capital Partners LLC. Prior to joining SLR Capital Partners, he served from 2004 to 2012 as the Chief Financial Officer and Treasurer of Apollo Investment Corporation. Prior to 2004, Mr. Peteka was at Citigroup Asset Management, which he joined as a Director in 1999 and where he served as Chief Financial Officer and Treasurer of various open-end and closed-end investment companies. Mr. Peteka holds a B.S. degree in Finance from The College at Old Westbury and an MBA in International Finance from St. John’s University.

Richard J. Rossi: Mr. Rossi retired in 2017 from Eagle Asset Management, an investment advisory firm in St. Petersburg, Florida and a subsidiary of Raymond James, where he served as an officer for seventeen years. At the time of his retirement, he was President and Co-Chief Operating Officer of the firm as well as President of Eagle Mutual Funds and Eagle Fund Distributors. Mr. Rossi was instrumental in developing the firm’s overall strategic decisions and business plans, including developing its asset management acquisition strategy. He was responsible for all retail and institutional mutual fund and private account sales, client services, and administrative functions and oversaw a substantial increase in assets during his tenure as a result of the acquisition strategy. In addition to

 

21


his roles at Eagle Asset Management, Mr. Rossi previously served as Vice President, Institutional Equity Sales, of First Union Capital Markets as well as Managing Director and Chief Operating Officer of Mentor Investment Group. Mr. Rossi began his career in 1984 with Raymond James and has over 30 years of executive management and senior sales experience in the asset management and financial services industries. Mr. Rossi holds a B.A. from the University of Florida and an M.P.A. from the University of North Florida.

Directors and Executive Officers

The directors provide overall supervision of the affairs of the Funds. The Funds’ directors, the Funds’ executive officers, and their principal occupations for the past five years are listed below.

 

Name,
  Address, Age  

  

  Position(s)  

Held with
the Funds

  

  Term of  
Office1
and
  Length of  
Time
Served

  

Principal Occupation(s)
During the Past 5 Years

   Number of
Funds in
Fund
Complex
Overseen by
Director or
Nominee
  

Other
Directorships Held
by Director or
Nominee During
the Past 5 Years

Interested Directors

Michael L. Kern,

III, CFA2

c/o 15375

Memorial Drive,

Suite 200

Houston, TX

77079

Birth Year: 1973

   Chairman of
the Board;
Director
   Indefinite
Term Since 2017
   President, CEO and Treasurer, Crossmark Global Holdings, Inc. (May 2015 - Present); President, CEO and Treasurer, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2016 - Present); Secretary, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2016 - 2018)    11    GSV Fund Management Company (2020 - Present); Foundation Capital Resources (2015 - 2023)

Kyle A. Dana,

CRPC 3

c/o 15375

Memorial Drive,

Suite 200

Houston, TX
77079

Birth Year: 1978

   Director    Indefinite Term Since 2017    Senior Vice President, Retirement & Investment Solutions, AGFinancial4 (2000 - Present)    11    N/A

Independent Directors

Mark H. Barineau
c/o 15375
Memorial Drive,
Suite 200
Houston, TX
77079
Birth Year: 1968

   Director    Indefinite Term Since 2017    President, Lionsmark Investment Group5 (April 2016 - Present); Co-Founder and Managing Member, Starboard Star Venture Capital LLC (2021 - Present); President and Owner, Radney Management & Investments, Inc.6 (1996 - 2016)    11    N/A

 

22


Name,
  Address, Age  

  

  Position(s)  

Held with
the Funds

  

  Term of  
Office1
and
  Length of  
Time
Served

  

Principal Occupation(s)
During the Past 5 Years

   Number of
Funds in
Fund
Complex
Overseen by
Director or
Nominee
  

Other
Directorships Held
by Director or
Nominee During
the Past 5 Years

Richard L. Peteka

c/o 15375

Memorial Drive,

Suite 200

Houston, TX

77079

Birth Year: 1961

   Director    Indefinite Term Since 2017    Retired; Chief Financial Officer and Secretary, SLR Investment Corp. (May 2012 - April 2023), SCP Private Credit Income BDC LLC (2018 - April 2023), SLR HC BDC LLC (2020 - April 2023) and SLR Private Credit BDC II LLC (2022 - April 2023)7    11    N/A

Adriana R. Posada

c/o 15375

Memorial Drive,

Suite 200

Houston, TX

77079

Birth Year: 1954

   Director    Indefinite Term Since 2017    Retired; Sr. Portfolio Manager, American Beacon Advisors, Inc. (September 1998 - March 2016)    11    N/A

Richard J. Rossi

c/o 15375

Memorial Drive,

Suite 200

Houston, TX

77079

Birth Year: 1956

   Director;
Lead Independent Director as of May 14, 2020
   Indefinite Term Since 2019    Retired; President and Co-Chief Operating Officer, Eagle Asset Management, President, Eagle Mutual Funds and Eagle Fund Distributors (2000 - 2017)    11    N/A

1 

Each Director serves on the Board from the time of his or her election or appointment until the election of Directors next succeeding his or her election or appointment and until his or her successor is elected and qualified. Because the Funds do not hold regular annual meetings of shareholders to elect Directors, each Director serves for an indefinite period.

2 

Mr. Kern is an “interested person” of SFI, as defined in the 1940 Act, because of his position with the Funds’ investment adviser, administrator and distributor.

3 

Mr. Dana is an “interested person” of SFI, as defined in the 1940 Act, because of his position with AGFinancial, which is an affiliate of the Funds’ investment adviser, administrator and distributor.

4 

AGFinancial is an affiliate of the SFI’s investment adviser, administrator and distributor specializing in delivering financial products and services that align with faith and values.

5 

Lionsmark Investment Group is a private real estate investment and management company that Mr. Barineau formed in 2016. Its primary business is the acquisition, development and management of multifamily assets and other active and passive real estate investments.

6 

Radney Management & Investments, Inc. was established in 1982 and is an ACCREDITED MANAGEMENT ORGANIZATION® specializing in multifamily property management.

7 

SLR Investment Corp., SCP Private Credit Income BDC LLC, SLR HC BDC LLC and SLR Private Credit BDC II LLC are business development companies that invest primarily in senior secured loans of private middle-market companies to generate current income that is distributed to shareholders across economic cycles.

 

23


The Funds’ Officers are as follows:

 

Name,
  Address, Age  

  

Position(s)
Held with
Funds

  

Term of Office1
and
    Length of Time    
Served

  

Principal Occupation(s)
During Past 5 Years

  

Other
Directorships/
Trusteeships
Held
by Officer
During the
Past 5 Years

Executive Officers

           

Michael L. Kern, III, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1973

   President    Since 2016    President, CEO and Treasurer, Crossmark Global Holdings, Inc. (May 2015 - Present); President, CEO and Treasurer, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2016 - Present); Secretary, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2016 - 2018)    GSV Fund Management Company (2020 - Present); Foundation Capital Resources (2015 - 2023)

Robert C. Doll, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1954

   Executive Vice President    Since 2021    Chief Investment Officer, Crossmark Global Investments, Inc. (2021 - Present); Chief Equity Strategist and Senior Portfolio Manager, Nuveen (November 2012 - March 2021)    N/A

James Jacoby

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1968

   Executive Vice President, Derivatives Risk Manager and Liquidity Risk Management Program Administrator    Since 2022    Chief Operating Officer, Crossmark Global Investments, Inc. (2022 - Present); Global Head of Performance and Risk, Invesco, Ltd. (2007 - 2022)    N/A

 

24


Name,
  Address, Age  

  

Position(s)
Held with
Funds

  

Term of Office1
and
    Length of Time    
Served

  

Principal Occupation(s)
During Past 5 Years

  

Other
Directorships/
Trusteeships
Held
by Officer
During the
Past 5 Years

Brent Lium, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1969

   Executive Vice President    Since 2019    Managing Director – Head of Equity Investments, Crossmark Global Investments, Inc. (February 2021 - Present); Managing Director, Crossmark Global Investments, Inc. (2019 - February 2021); Portfolio Manager, Invesco Ltd. (2001 - 2019)    N/A

Rob Botard, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1970

   Executive Vice President    Since 2022    Managing Director – Portfolio Manager, Crossmark Global Investments, Inc. (April 2022 - Present); Portfolio Manager, Invesco Ltd. (April 2011 - April 2022)    N/A

Victoria Fernandez, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1973

   Executive Vice President    Since 2014    Chief Market Strategist, Crossmark Global Investments, Inc. (2018 - Present); Managing Director – Fixed Income Investments, Crossmark Global Investments, Inc. (2012 - 2018)    N/A

Paul Townsen

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1971

   Executive Vice President    Since 2017    Managing Director – Portfolio Manager (2017 - Present)    N/A

 

25


Name,
  Address, Age  

  

Position(s)
Held with
Funds

  

Term of Office1
and
    Length of Time    
Served

  

Principal Occupation(s)
During Past 5 Years

  

Other
Directorships/
Trusteeships
Held
by Officer
During the
Past 5 Years

Ryan Caylor, CFA

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1988

   Executive Vice President    Since 2020    Portfolio Manager, Crossmark Global Investments, Inc. (2020 - Present); Head of Research, Crossmark Global Investments, Inc. (2019 - Present); Senior Research Analyst, Crossmark Global Investments, Inc. (2016 - 2019)    N/A

Heather Lindsey

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1973

   Executive Vice President    Since 2022    Managing Director – Head of Distribution, Crossmark Global Investments, Inc. (August 2021 - Present); Senior Vice President – Head of Strategic Accounts, Invesco Ltd. (March 2018 - March 2020); Senior Director – Retirement & Insurance Platforms, Invesco Ltd. (April 2008 - February 2018)    N/A

Jim A. Coppedge

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1968

   Executive Vice President, Chief Compliance Officer, Secretary and Assistant Treasurer    Since 2017    General Counsel and Chief Compliance Officer, Crossmark Global Investments, Inc. (2017 - Present); General Counsel and Chief Compliance Officer, Crossmark Distributors, Inc. (December 2017 - Present); Secretary, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2018 - Present)    N/A

 

26


Name,
  Address, Age  

  

Position(s)
Held with
Funds

  

Term of Office1
and
    Length of Time    
Served

  

Principal Occupation(s)
During Past 5 Years

  

Other
Directorships/
Trusteeships
Held
by Officer
During the
Past 5 Years

Monique D. Labbe

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1973

   Treasurer    Since 2023    Fund Principal Financial Officer, Foreside Fund Officer Services, LLC (2014 - Present)    N/A

Brystal Eshenroder

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1989

   Assistant Secretary    Since 2023    Senior Compliance and Fund Administration Manager, Crossmark Global Investments, Inc. (2022 - Present); Regional Compliance Manager for Private Wealth Management, Goldman Sachs & Co. LLC (2021); Global Compliance Employee Services, Goldman Sachs & Co. LLC (2017 - 2021)    N/A

Patricia Mims

15375 Memorial Drive,

Suite 200

Houston, TX 77079

Birth Year: 1960

   Assistant Treasurer    Since 2021    Financial Operations Principal, Crossmark Distributors, Inc. (2018 - Present); Senior Compliance Officer, Crossmark Global Investments, Inc. (October 2018 - 2020); Assistant Secretary, Crossmark Global Investments, Inc. and Crossmark Distributors, Inc. (2018 - 2020); Senior Compliance Associate, Crossmark Global Investments, Inc. (April 2013 - October 2018)    N/A

 

1

SFI officers are elected by the Board annually and hold office until the next annual Board meeting at which officers are elected and until his or her successor is elected and qualified.

 

27


Board Committees

The Board has two committees, the Audit Committee and the Nominating and Corporate Governance Committee, which are comprised exclusively of independent directors and report to the Board. Following is a description of each of the committees:

Audit Committee – The Committee’s primary functions include serving as an independent and objective party to monitor SFI’s accounting policies and financial reporting, as well as the work of SFI’s independent registered public accounting firm (the “independent auditors”). The Committee assists the Board in its oversight of (1) the integrity of each Fund’s financial statements; (2) each Fund’s compliance with legal and regulatory requirements as related to accounting and financial reporting; (3) the independent auditors’ qualifications and independence; and (4) the performance of SFI’s independent auditors. The Committee also serves to provide an open avenue of communication among the independent auditors, SFI management and the Board. The Committee is composed entirely of independent directors. Current Committee members are: Richard L. Peteka, Chair; Adriana R. Posada; Mark H. Barineau; and Richard J. Rossi. The Committee met five (5) times during the fiscal year ended April 30, 2023.

Nominating and Corporate Governance Committee – The Committee’s primary functions are to select individuals who would qualify to serve as independent directors, nominate directors for membership on the Board and its committees, recommend committee chairs, review committee membership and oversee the administration of the SFI Board of Directors Governance Guidelines and Procedures. Shareholders may submit suggestions for independent director candidates by sending a resume of the candidate to the Secretary of SFI for the attention of the Chair of the Nominating and Corporate Governance Committee. SFI’s address is 15375 Memorial Dr., Suite 200, Houston, TX 77079. The Committee is composed entirely of independent directors. Current Committee members are: Adriana R. Posada, Chair; Richard L. Peteka; Mark H. Barineau; and Richard J. Rossi. The Committee met three (3) times during the fiscal year ended April 30, 2023.

The following table provides information about the ownership of securities in the Funds and in the total Fund Complex for the directors.

 

Directors

 

Fund

  Dollar Range of
Equity Securities
in each Fund1
    Aggregate Dollar Range
of Equity Securities in all
Funds Overseen by the
Director1
 

Interested Directors

     

Michael L. Kern, III, CFA

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   

$10,001 - $50,000

$0

Over $100,000

$10,001 - $50,000

$0

$0

$0

$10,001 - $50,000

$0

Over $100,000

Over $100,000

 

 

 

 

 

 

 

 

 

 

 

    Over $100,000  

 

28


Directors

 

Fund

  Dollar Range of
Equity Securities
in each Fund1
    Aggregate Dollar Range
of Equity Securities in all
Funds Overseen by the
Director1
 

Kyle A. Dana, CRPC

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   

$1 - $10,000

$1 - $10,000

Over $100,000

$50,001 - $100,000

$10,001 - $50,000

$10,001 - $50,000

$10,001 - $50,000

$0

$10,001 - $50,000

$10,001 - $50,000

$10,001 - $50,000

 

 

 

 

 

 

 

 

 

 

 

    Over $100,000  

Independent Directors

     

Mark H. Barineau

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   

$10,001 - $50,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

 

 

 

 

 

 

 

 

 

 

 

    $10,001 - $50,000  

Richard L. Peteka

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   

$0

$0

Over $100,000

$0

$0

$0

$0

$0

$0

$50,001 - $100,000

$0

 

 

 

 

 

 

 

 

 

 

 

    Over $100,000  

Adriana R. Posada

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   

$0

$0

$10,001 - $50,000

$0

$0

$0

$0

$0

$0

$0

$10,001 - $50,000

 

 

 

 

 

 

 

 

 

 

 

    $50,001 - $100,000  

 

29


Directors

 

Fund

  Dollar Range of
Equity Securities
in each Fund1
  Aggregate Dollar Range
of Equity Securities in all
Funds Overseen by the
Director1

Richard J. Rossi

 

Steward Covered Call Income Fund

Steward Equity Market Neutral Fund

Steward Global Equity Income Fund

Steward International Enhanced Index Fund

Steward Large Cap Core Fund

Steward Large Cap Growth Fund

Steward Large Cap Value Fund

Steward Select Bond Fund

Steward Small Cap Growth Fund

Steward Values-Focused Large Cap Enhanced Index Fund

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

  $10,001 - $50,000

$10,001 - $50,000

$10,001 - $50,000

$10,001 - $50,000

$0

$0

$0

$10,001 - $50,000

$0

$0

$10,001 - $50,000

  Over $100,000

1 

Valuation as of December 31, 2022.

As of December 31, 2022, neither the independent directors, nor any of their immediate family members, owned any securities issued by Crossmark or the Funds’ principal underwriter or any company controlling, controlled by or under common control with those entities.

Director and Officer Compensation

Each independent director is paid an annual retainer of $15,000. Additionally, each independent director is paid $14,500 per regular quarterly meeting attended and $2,000 per special telephonic meeting attended. The Lead Independent Director and the Chair of the Audit Committee are each paid $15,000 annually for their service. The Chair of the Nominating and Corporate Governance Committee is paid $3,500 annually for her service. All compensation received by the independent directors is allocated among the Funds based on average net assets. The officers, other than the Funds’ Chief Compliance Officer and Treasurer, and interested directors do not currently receive compensation from the Funds for serving in such capacities. The Funds reimburse Crossmark for a portion of the compensation paid to the Funds’ Chief Compliance Officer. The portion of the Chief Compliance Officer’s compensation reimbursed by each Fund is not significant relative to the expenses of the respective Fund. Effective January 1, 2023, Foreside provides principal financial officer services to the Funds by making available a senior financial professional who serves as Treasurer of the Funds. Foreside receives a fee from the Funds for the services provided, which is paid monthly in arrears, and is also reimbursed by the Funds for certain out-of-pocket expenses. The Funds do not directly compensate the Treasurer. Additional information on the Funds’ arrangement with Foreside is discussed below under “Administration, Fund Accounting and Sub-Administration Services, Compliance Services, Class Action and Fair Fund Services, Transfer Agency and Service, Master Services and Fund PFO/Treasurer Agreements.”

Except as noted above, the directors and officers are reimbursed for expenses incurred in attending meetings of the Board.

 

30


The following table represents the compensation received by the independent directors from the Funds during the fiscal year ended April 30, 2023.

 

Name of Person, Position

   Aggregate
Compensation
from Steward
Funds
     Pension or
Retirement
Benefits
Accrued as
Part of
Fund
Expenses
     Estimated
Annual
Benefits
upon
Retirement
     Total
Compensation
from Fund
Complex Paid
to Directors
 

Mark H. Barineau, Director

   $ 75,000      $ 0      $ 0      $ 75,000  

Richard L. Peteka, Director

   $ 90,000      $ 0      $ 0      $ 90,000  

Adriana R. Posada, Director

   $ 78,500      $ 0      $ 0      $ 78,500  

Richard J. Rossi, Director

   $ 90,000      $ 0      $ 0      $ 90,000  

Control Persons and Principal Holders of Securities

As of August 1, 2023, Assemblies of God Financial Services Group, d.b.a. AGFinancial, a Missouri nonprofit corporation, 3900 S. Overland Ave., Springfield, MO 65807, and the parent company of Crossmark Global Holdings, Inc., through its subsidiary, Steward Financial Holdings, Inc., has effective voting control over SFI and each of the Funds. AGFinancial serves as the sponsor of the Ministers Benefit Plan (the “Plan”), a 403(b) retirement plan, which owns more than 25% of the voting securities of each Fund. As sponsor of the Plan, AGFinancial has voting control over the Plan’s shares. Therefore, AGFinancial has effective voting control over sufficient shares of SFI and each of the noted Funds to determine the outcome of votes presented to shareholders.

The following table sets forth information concerning each person who, to the knowledge of the Funds, owned beneficially or of record more than five percent or more of the indicated class of each Fund’s shares as of August 1, 2023. Except for Crossmark Global Investments, Inc., all shareholders in the table below are record holders.

As of August 1, 2023, the directors and officers of the Funds, in the aggregate, owned less than one percent of any class of a Fund’s shares.

 

Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Covered Call Income Fund – Class A

     
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 383,548.98        33.47
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 370,119.54        32.30
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 64,911.21        5.66

Steward Covered Call Income Fund – Institutional Class

     
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd.
Jersey City, NJ 07310
   $ 17,138,104.76        26.80

 

31


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 
Matrix Trust Company Cust FBO
PAS AGS Steward DVRSFD Equity Port
PO Box 52129
Phoenix, AZ 85072
   $ 11,401,282.69        17.83
Matrix Trust Company Cust FBO
PAS AGS Steward AGGSV Growth Port
PO Box 52129
Phoenix, AZ 85072
   $ 6,308,837.14        9.87
Nabank Co
PO Box 2180
Tulsa, OK 74101
   $ 5,722,852.64        8.95

Matrix Trust Company Cust FBO
PAS AGS Steward Growth Port
PO Box 52129
Phoenix, AZ 85072 

   $ 4,304,672.73        6.73
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 3,585,835.28        5.61

Steward Covered Call Income Fund – Class C

     
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 279,704.14        20.10
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 230,262.71        16.55
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd.
Jersey City, NJ 07310
   $ 110,593.96        7.95

Steward Covered Call Income Fund – Class R6

     
Pershing LLC
PO Box 2052
Jersey City, NJ 07303-9998
   $ 12,671.48        92.40
Crossmark Global Investments, Inc.
15375 Memorial Dr., Suite 200
Houston, TX 77079
   $ 1,041.64        7.60

Steward Equity Market Neutral Fund – Class A

     

TD Ameritrade Inc for the Exclusive Benefit of our Clients
PO Box 2226
Omaha, NE 68103-2226

   $ 4,813,073.50        74.20

Stifel Nicolaus Company Inc.
501 North Broadway
St. Louis, MO 63102

   $ 875,339.66        13.49

 

32


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Equity Market Neutral Fund – Institutional Class

     
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd.
Jersey City, NJ 07310
   $ 22,390,588.53        30.17
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 10,025,816.51        13.51
Matrix Trust Company Cust FBO
PAS AGS Steward DVRSFD Equity Port
PO Box 52129
Phoenix, AZ 85072
   $ 8,593,976.02        11.58
TD Ameritrade Inc for the Exclusive Benefit of our Clients
PO Box 2226
Omaha, NE 68103-2226
   $ 5,414,882.20        7.30
Matrix Trust Company Cust FBO
PAS AGS Steward AGGSV Growth Port
PO Box 52129
Phoenix, AZ 85072
   $ 4,460,095.91        6.01
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 4,103,693.67        5.53

Steward Global Equity Income Fund – Class A

     
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 4,221,411.88        22.74
TD Ameritrade Inc for the Exclusive Benefit of our Clients
PO Box 2226
Omaha, NE 68103-2226
   $ 2,653,579.94        14.30

Steward Global Equity Income Fund – Institutional Class

     
National Financial Services LLC
499 Washington Blvd.
Jersey City, NJ 07310
   $ 109,745,122.45        30.78
Matrix Trust Company Cust FBO
PAS AGS Steward DVRSFD Equity Port
PO Box 52129
Phoenix, AZ 85072
   $ 37,651,648.28        10.56
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 34,202,808.40        9.59
TD Ameritrade Inc
FBO Our Clients
P O Box 2226
Omaha, NE 68103-2226
   $ 23,469,569.22        6.58

 

33


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Global Equity Income Fund – Class C

     
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 619,564.32        56.21
RJ Trust CO NH Custodian FBO Vanvick IRA
PO Box 385
Cashiers, NC 28717-0385
   $ 127,653.36        11.58
RJ Trust CO NH – Custodian FBO Mast IRA
2425 May Ln
Grand Prairie, TX 75050-2924
   $ 88,105.19        7.99

Steward Global Equity Income Fund – Class R6

     
Voya Institutional Trust Company
1 Orange Way
Windsor, CT 06095
   $ 177,765.85        49.67
Mid Atlantic Trust Company FBO
MATC Omnibus Div Reinvest LTCG – RE
1251 Waterfront Place Suite 525
Pittsburgh, PA 15222
   $ 123,722.29        34.57

Steward International Enhanced Index Fund – Class A

     
TD Ameritrade for the Exclusive Benefit of our Clients
PO Box 2226
Omaha, NE 68103-2226
   $ 188,598.18        5.33

Steward International Enhanced Index Fund – Institutional Class

     
National Financial Services LLC
499 Washington Blvd.
Jersey City, NJ 07310
   $ 101,374,938.26        45.99
Matrix Trust Company Cust FBO
PAS AGS Steward DVRSFD Equity Port
PO Box 52129
Phoenix, AZ 85072
   $ 49,931,291.99        22.65
Matrix Trust Company Cust FBO
PAS AGS Steward AGGSV GRWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 18,837,401.05        8.55

Steward International Enhanced Index Fund – Class C

     
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 3,884.77        79.75
Crossmark Global Investments, Inc.
15375 Memorial Dr., Suite 200
Houston, TX 77079
   $ 986.65        20.25

 

34


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward International Enhanced Index Fund – Class R6

     
Mid Atlantic Trust Company FBO
MATC Omnibus Div Reinvest LTCG – RE 1
251 Waterfront Place Suite
525 Pittsburgh, PA 15222
   $ 471,498.53        79.49
Matrix Trust Company Matt Saxe Chevrolet
Buick Inc 401
717 17th Street, Suite 1300
Denver, CO 80202
   $ 52,487.23        8.85
Matrix Trust Company Matt Saxe Chevrolet
Buick Inc 401
717 17th Street, Suite 1300
Denver, CO 80202
   $ 38,594.59        6.51

Steward Large Cap Core Fund – Class A

     
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 53,664.72        9.36

Steward Large Cap Core Fund – Institutional Class

     

National Financial Service for the Exc Ben of our Customers
499 Washington Blvd
Jersey City, NJ 07310

   $ 27,717,739.00        33.22
Matrix Trust Company Trustee FBO PAS AGS Steward DVRSFD EQTY Port
PO Box 52129
Phoenix, AZ 85072
   $ 24,415,289.12        29.26
Matrix Trust Company Trustee FBO PAS AGS Steward AGGSV GRWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 10,184,382.12        12.21
Matrix Trust Company Trustee FBO PAS AGS Steward GROWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 5,120,803.01        6.14

Steward Large Cap Growth Fund – Class A

     
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 53,262.72        14.36

Steward Large Cap Growth Fund – Institutional Class

     
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd
Jersey City, NJ 07310
   $ 28,664,453.60        32.35

 

35


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 
Matrix Trust Company Trustee FBO PAS AGS Steward DVRSFD EQTY Port
PO Box 52129
Phoenix, AZ 85072
   $ 19,957,874.65        22.53
TD Ameritrade Inc For The Exclusive Benefit Of Our Clients
PO Box 2226
Omaha, NE 68103-2226
   $ 10,089,109.38        11.39
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 8,016,126.77        9.05
Matrix Trust Company Trustee FBO PAS AGS Steward AGGSV GRWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 7,577,014.73        8.55

Steward Large Cap Value Fund – Class A

     
National Financial Services LLC 499
Washington Blvd
Jersey City, NJ 07310
   $ 53,778.16        7.97

Steward Large Cap Value Fund – Institutional Class

     
Matrix Trust Company Trustee FBO PAS AGS Steward DVRSFD EQTY Port
PO Box 52129
Phoenix, AZ 85072
   $ 25,532,792.00        35.80
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd
Jersey City, NJ 07310
   $ 17,286,481.32        24.24
Matrix Trust Company Trustee FBO PAS AGS Steward AGGSV GRWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 9,632,037.03        13.50
Matrix Trust Company Trustee FBO PAS AGS Steward GROWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 5,111,685.39        7.17

Steward Select Bond Fund – Class A

     
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd
Jersey City, NJ 07310
   $ 133,636.76        5.00

Steward Select Bond Fund – Institutional Class

     
National Financial Services LLC 499 Washington Blvd.
Jersey City,
NJ 07310
   $ 46,849,939.41        30.07

 

36


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 
Matrix Trust Company Cust FBO PAS AGS Steward Growth Port
PO Box 52129
Phoenix, AZ 85072
   $ 23,330,991.50        14.97
Matrix Trust Company Cust FBO PAS AGS Steward Mod Growth Port
PO Box 52129
Phoenix, AZ 85072
   $ 15,888,942.01        10.20
Matrix Trust Company Cust FBO PAS AGS Steward AGGSV Growth Port
PO Box 52129
Phoenix, AZ 85072
   $ 14,583,780.69        9.36
Matrix Trust Company Cust FBO PAS AGS Steward Conservative Port
PO Box 52129
Phoenix, AZ 85072
   $ 10,437,519.20        6.70

Steward Select Bond Fund – Class C

     
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 138,874.24        99.99

Steward Select Bond Fund – Class R6

     
Crossmark Global Investments, Inc.
15375 Memorial Dr., Suite 200
Houston, TX 77079
   $ 911.88        100.00

Steward Small Cap Growth Fund – Class A

     
National Financial Services LLC
499 Washington Blvd.
Jersey City, NJ 07310
   $ 13,435.40        7.39

Steward Small Cap Growth Fund – Institutional Class

     

Matrix Trust Company Trustee FBO PAS AGS Steward DVRSFD EQTY Port
PO Box 52129

Phoenix, AZ 85072

   $ 11,580,562.46        44.28

Matrix Trust Company Trustee FBO PAS AGS Steward AGGSV GRWTH Port
PO Box 52129
Phoenix, AZ 85072

   $ 4,805,719.92        18.38
National Financial Service for the Exc Ben of our Customers
499 Washington Blvd
Jersey City, NJ 07310
   $ 3,756,663.02        14.37
Matrix Trust Company Trustee FBO PAS AGS Steward GROWTH Port
PO Box 52129
Phoenix, AZ 85072
   $ 2,186,039.37        8.36

 

37


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Values-Focused Large Cap Enhanced Index Fund – Class A

     
TD Ameritrade Inc For The Exclusive Benefit Of Our Clients
PO Box 2226
Omaha, NE 68103-2226
   $ 1,705,013.86        15.98
Charles Schwab & Co Inc Special Custody A/C FBO Customers
211 Main Street
San Francisco, CA 94105
   $ 860,696.95        8.07
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 856,677.75        8.03
Morgan Stanley Smith Barney LLC For The Exclusive Benefit Of Its Cust
1 New York Plaza, 39th Floor
New York, NY
   $ 825,009.38        7.73

National Financial Service for the Exc Ben of our Customers

499 Washington Blvd
Jersey City, NJ 07310

   $ 594,559.18        5.57

Steward Values-Focused Large Cap Enhanced Index Fund – Institutional Class

     
National Financial Services LLC
499 Washington Blvd.
Jersey City, NJ 07310
   $ 71,958,484.36        33.04
Matrix Trust Company Cust FBO
Ministers Bene Assn Select Retirement
PO Box 52129
Phoenix, AZ 85072
   $ 55,266,557.95        25.38
Matrix Trust Company Cust FBO
PAS AGS Steward DVRSFD Equity Port
PO Box 52129
Phoenix, AZ 85072
   $ 23,223,676.18        10.66
Castle Medical Center
640 Ulukahiki St.
Kailua, HI 96734
   $ 12,878,389.72        5.91

Steward Values-Focused Large Cap Enhanced Index Fund – Class C

     
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 6,343.84        65.61
LPL Financial FBO Customer Accounts
4707 Executive Drive
San Diego, CA 92121-3091
   $ 3,310.16        34.23

 

38


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Values-Focused Large Cap Enhanced Index Fund – Class R6

     
Mid Atlantic Trust Company FBO Matc Omnibus
Div Reinvest LTCG – RE
1251 Waterfront Place, Suite 525
Pittsburgh, PA 15222
   $ 253,545.37        39.30
Voya Institutional Trust Company
1 Orange Way
Windsor, CT 06095
   $ 181,777.99        28.17
Matrix Trust Company Cust FBO Grace To Go 403B
717 17TH Street, Suite 1300
Denver, CO 80202
   $ 103,817.28        16.09
Lincoln Retirement Services Company FBO Archdiocese of Hartford 403B PL
PO Box 7876
Fort Wayne, IN 46801-7876
   $ 42,435.68        6.58

Steward Values-Focused Small-Mid Cap Enhanced Index Fund – Class A

     
TD Ameritrade Clearing, Inc.
PO Box 2226
Omaha, NE 68103-2226 
   $ 4,036,760.37        9.15
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 3,931,332.22        8.91

Steward Values-Focused Small-Mid Cap Enhanced Index Fund – Institutional Class

     
National Financial Services LLC
499 Washington Blvd.
Jersey City, NJ 07310
   $ 49,961,185.68        36.41
Matrix Trust Company Cust FBO PAS AGS Steward DVRSFD Equity Port
PO BOX 52129
Phoenix, AZ 85072
   $ 12,841,427.18        9.36
Matrix Trust Company Cust FBO Ministers Bene Assn Select Retirement
PO BOX 52129
Phoenix, AZ 85072
   $ 10,571,219.95        7.70
Charles Schwab & Co. Inc.
211 Main St
San Francisco, CA 94105
   $ 7,268,999.33        5.30

 

39


Fund/Class and Shareholder Name and Address

   Amount of
Ownership
     Percent of the
Class
 

Steward Values-Focused Small-Mid Cap Enhanced Index Fund – Class C

     
American Enterprise Investment Svc
707 2nd Ave South
Minneapolis, MN 55402-2405
   $ 11,713.88        92.53

Crossmark Global Investments, Inc.
15375 Memorial Dr., Suite 200

Houston, TX 77079

   $ 945.62        7.47

Steward Values-Focused Small-Mid Cap Enhanced Index Fund – Class R6

     
Voya Institutional Trust Company
1 Orange Way
Windsor, CT 06095
   $ 262,783.61        81.53
Mid Atlantic Trust Company FBO
MATC Omnibus Div Reinvest LTCG – RE
1251 Waterfront Place Suite 525
Pittsburgh, PA 15222
   $ 42,033.97        13.04

Adviser

Crossmark Global Investments, Inc. (“Crossmark”), located at 15375 Memorial Dr., Suite 200, Houston, TX 77079, was formed in 1982 as a wholly-owned subsidiary of Crossmark Global Holdings, Inc. The controlling shareholder of Crossmark is Steward Financial Holdings, Inc., a holding company that is a wholly-owned, for-profit, subsidiary of AGFinancial. AGFinancial was organized by the Assemblies of God Church in 1998. Crossmark provides investment management services to pension and profit-sharing accounts, corporations, and individuals, and serves as investment adviser to the Funds. Crossmark managed $5.9 billion in assets as of June 30, 2023.

Crossmark acts as investment adviser and provides investment advisory and values-based screening services to each Fund pursuant to an investment advisory agreement (the “Advisory Agreement”) dated August 1, 2019, as amended November 15, 2021. Crossmark receives fees for its services under the Advisory Agreement monthly, in arrears, from the Funds at the annual fee rates set forth in the table below, which are applied to the average daily net assets of the applicable Fund.

Crossmark has full discretion to manage the assets of each Fund in accordance with its investment objective and policies and the terms of SFI’s Articles of Amendment and Restatement, as amended. Crossmark is authorized, with the consent of the directors, to engage sub-advisers for the Funds, although it does not currently do so. Crossmark has sole authority to select broker-dealers to execute transactions for the Funds, subject to the reserved authority of the directors to designate particular broker-dealers for this purpose. Crossmark will vote proxies on portfolio securities on behalf of the Funds, subject to any guidelines that may be established by the directors from time to time. (See Appendix A for current guidelines.)

 

Steward Covered Call Income Fund

 

Steward Global Equity Income Fund

0.625% of the first $1 billion

 

0.625% of the first $1 billion

0.5625% of assets over $1 billion

 

0.5625% of assets over $1 billion

Steward Equity Market Neutral Fund

 

Steward International Enhanced Index Fund

1.00% of the first $1 billion

 

0.365% of the first $1 billion

0.90% of the next $1 billion

 

0.3285% of assets over $1 billion

0.80% of assets over $2 billion

 

 

40


Steward Large Cap Core Fund

  Steward Small Cap Growth Fund

0.50% of the first $1 billion

 

0.75% of the first $1 billion

0.45% of the next $1 billion

 

0.70% of the next $1 billion

0.40% of assets over $2 billion

 

0.65% of assets over $2 billion

Steward Large Cap Growth Fund

  Steward Values-Focused Large Cap Enhanced Index Fund

0.50% of the first $1 billion

 

0.215% of the first $1 billion

0.45% of the next $1 billion

 

0.1935% of assets over $1 billion

0.40% of assets over $2 billion

 
Steward Large Cap Value Fund   Steward Values-Focused Small-Mid Cap Enhanced Index Fund

0.50% of the first $1 billion

 

0.215% of the first $1 billion

0.45% of the next $1 billion

 

0.1935% of assets over $1 billion

0.40% of assets over $2 billion

 
Steward Select Bond Fund  

0.315% of the first $1 billion

 

0.2835% of assets over $1 billion

 

The Advisory Agreement, after an initial term of up to two years, remains in effect thereafter from year to year as to a Fund, provided the renewal of the agreement as to the Fund is specifically approved (a) by the Fund’s Board or by vote of a majority of the Fund’s outstanding voting securities, and (b) by the affirmative vote of a majority of the directors who are not parties to the agreement or “interested persons,” as defined in the 1940 Act, of any such party, by votes cast at a meeting called for such purpose. The Advisory Agreement may be terminated as to a Fund (a) at any time without penalty by the Fund upon the vote of a majority of the directors or, by vote of the majority of the Fund’s outstanding voting securities, upon 60 days’ written notice to Crossmark or (b) by Crossmark at any time without penalty, upon 90 days’ written notice to the Fund. The Advisory Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act).

Total dollar amounts paid by each Fund to Crossmark for its services under the Advisory Agreement for the last three fiscal years or periods, as applicable, are as follows:

 

Fund

   Advisory Fee  

Steward Covered Call Income Fund

  

Year Ended April 30, 2023

   $ 247,172  

Year Ended April 30, 2022

   $ 175,917  

Year Ended April 30, 2021

   $ 196,710  

Steward Equity Market Neutral Fund*

  

Year Ended April 30, 2023

   $ 595,498  

Period Ended April 30, 2022

   $ 108,807  

Steward Global Equity Income Fund

  

Year Ended April 30, 2023

   $ 1,930,165  

Year Ended April 30, 2022

   $ 2,094,332  

Year Ended April 30, 2021

   $ 1,899,059  

Steward International Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 736,199  

Year Ended April 30, 2022

   $ 722,985  

Year Ended April 30, 2021

   $ 570,499  

 

41


Fund

   Advisory Fee  

Steward Large Cap Core Fund*

  

Year Ended April 30, 2023

   $ 360,811  

Period Ended April 30, 2022

   $ 149,715  

Steward Large Cap Growth Fund*

  

Year Ended April 30, 2023

   $ 292,233  

Period Ended April 30, 2022

   $ 97,054  

Steward Large Cap Value Fund*

  

Year Ended April 30, 2023

   $ 300,516  

Period Ended April 30, 2022

   $ 128,636  

Steward Select Bond Fund

  

Year Ended April 30, 2023

   $ 458,490  

Year Ended April 30, 2022

   $ 564,732  

Year Ended April 30, 2021

   $ 522,051  

Steward Small Cap Growth Fund*

  

Year Ended April 30, 2023

   $ 184,652  

Period Ended April 30, 2022

   $ 108,253  

Steward Values-Focused Large Cap Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 449,019  

Year Ended April 30, 2022

   $ 730,678  

Year Ended April 30, 2021

   $ 910,030  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 370,915  

Year Ended April 30, 2022

   $ 522,203  

Year Ended April 30, 2021

   $ 499,758  

 

*

Commenced operations on November 15, 2021.

For the following Funds, Crossmark has contractually agreed through August 31, 2024 to waive fees and reimburse expenses to the extent that total annual Fund operating expenses (excluding brokerage costs, interest, taxes, dividend expense on short positions, litigation and indemnification expenses, acquired fund fees and expenses and extraordinary expenses (as determined under generally accepted accounting principles)) exceed the respective rates for Class A, Class C, Class R6 and Institutional Class shares set forth in the table below.

 

     Class A     Class C     Class R6     Institutional
Class
 

Fund

        

Steward Covered Call Income Fund

     1.25     2.00     1.00     1.00

Steward Equity Market Neutral Fund

     2.25     3.00     2.00     2.00

Steward Large Cap Core Fund

     1.00     1.75     0.75     0.75

Steward Large Cap Growth Fund

     1.00     1.75     0.75     0.75

Steward Large Cap Value Fund

     1.00     1.75     0.75     0.75

Steward Small Cap Growth Fund

     1.25     2.00     1.00     1.00

If it becomes unnecessary for Crossmark to waive fees or make reimbursements, Crossmark may recapture any of its prior waivers or reimbursements for a period not to exceed three years from the date on which the waiver or reimbursement was made to the extent that such a recapture does not cause the total annual Fund

 

42


operating expenses (excluding brokerage costs, interest, taxes, dividend expense on short positions, litigation and indemnification expenses, acquired fund fees and expenses and extraordinary expenses (as determined under generally accepted accounting principles)) to exceed the applicable expense limitation in effect at time of recoupment or in effect at the time of the waiver or reimbursement, whichever is lower. The agreement to waive fees and reimburse expenses may be terminated by the Board at any time and will terminate automatically upon termination of the Advisory Agreement. From time to time, Crossmark may voluntarily waive fees or reimburse expenses of the Fund. These voluntary waivers or reimbursements may be terminated at any time at the option of Crossmark.

Total dollar amounts waived or reimbursed by Crossmark, as well as any recoupments by Crossmark of amounts previously waived or reimbursed, under the agreement with respect to each applicable Fund for the last three fiscal years or periods, as applicable, are as follows:

 

Fund

   Amount
Waived or
Reimbursed*
 

Steward Covered Call Income Fund

  

Year Ended April 30, 2023

   $ 201,684  

Year Ended April 30, 2022

   $ 173,717  

Year Ended April 30, 2021

   $ 206,272 ** 

Steward Equity Market Neutral Fund***

  

Year Ended April 30, 2023

   $ 0  

Period Ended April 30, 2022

   $ 0  

Steward Large Cap Core Fund***

  

Year Ended April 30, 2023

   $ 172,245  

Period Ended April 30, 2022

   $ 43,800  

Steward Large Cap Growth Fund***

  

Year Ended April 30, 2023

   $ 171,362  

Period Ended April 30, 2022

   $ 46,983  

Steward Large Cap Value Fund***

  

Year Ended April 30, 2023

   $ 168,673  

Period Ended April 30, 2022

   $ 41,105  

Steward Small Cap Growth Fund***

  

Year Ended April 30, 2023

   $ 141,135  

Period Ended April 30, 2022

   $ 44,894  

 

*

During the noted fiscal periods, there were no recoupments by Crossmark of amounts previously waived or reimbursed.

**

During the fiscal year ended April 30, 2021, Crossmark voluntarily reimbursed expenses for Steward Covered Call Income Fund in the amount of $108,278.

***

Commenced operations on November 15, 2021.

Pursuant to the Advisory Agreement, Crossmark pays the compensation and expenses of all of its directors, officers and employees who serve as officers and executive employees of the Funds (including the Funds’ share of payroll taxes), except expenses of travel to attend meetings of the Funds’ Board or committees or advisers to the Board. Crossmark also agrees to make available, without expense to the Funds, the services of its directors, officers and employees who serve as officers of the Funds. However, the Funds reimburse Crossmark for a portion of the compensation paid to the Funds’ Chief Compliance Officer.

 

43


The Advisory Agreement provides that Crossmark shall not be liable for any error of judgment or of law, or for any loss suffered by a Fund in connection with the matters to which the agreement relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of Crossmark in the performance of its obligations and duties, or by reason of its reckless disregard of its obligations and duties under the Advisory Agreement.

Portfolio Managers

The portfolio managers for the Funds and the dollar range of their ownership of shares in each Fund as of April 30, 2023, are indicated in the following table:

 

Fund

   Portfolio Managers    Dollar Range of Equity
Securities in
Fund Beneficially Owned

Steward Covered Call Income Fund

   Paul Townsen

Ryan Caylor

   Over $100,000

$10,001 - $50,000

Steward Equity Market Neutral Fund

   Robert Doll

Ryan Caylor

   Over $100,000

$50,001 - $100,000

Steward Global Equity Income Fund

   Rob Botard

Brent Lium

   Over $100,000

$10,001 - $50,000

Steward International Enhanced Index Fund

   Brent Lium

Rob Botard

   $10,001 - $50,000

None

Steward Large Cap Core Fund

   Robert Doll

Ryan Caylor

   Over $100,000

$10,001 - $50,000

Steward Large Cap Growth Fund

   Robert Doll

Ryan Caylor

   Over $100,000

$10,001 - $50,000

Steward Large Cap Value Fund

   Robert Doll

Ryan Caylor

   Over $100,000

$10,001 - $50,000

Steward Select Bond Fund

   Victoria
Fernandez
   Over $100,000

Steward Small Cap Growth Fund

   Brent Lium    Over $100,000

Steward Values-Focused Large Cap Enhanced Index Fund

   Brent Lium

Rob Botard

   $10,001 - $50,000

None

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   Brent Lium

Rob Botard

   $10,001 - $50,000

None

The numbers of registered investment company accounts and private accounts, and assets in each category, managed by each portfolio manager for the Funds as of April 30, 2023, are indicated in the following table. None of these portfolio managers manages any pooled investment vehicles other than registered investment companies.

 

Portfolio Manager

   Number
of
Registered
Investment
Companies
     Assets under
Management
     Number
of
Private
Accounts
     Assets under
Management
     Total Assets  

Robert Doll

     4      $ 293,884,302        962      $ 517,673,494      $ 811,557,796  

Victoria Fernandez

     1      $ 155,115,277        2,183      $ 925,452,969      $ 1,080,568,246  

Brent Lium

     5      $ 971,410,022        82      $ 1,296,117,423      $ 2,267,527,445  

Ryan Caylor

     8      $ 942,372,471        27      $ 85,438,445      $ 1,027,810,916  

Paul Townsen

     1      $ 55,643,649        815      $ 406,998,339      $ 462,641,987  

Rob Botard

     1      $ 353,588,295        645      $ 948,021,522      $ 1,301,609,817  

 

44


None of the accounts managed by these portfolio managers has a performance-based investment advisory fee. Due to the nature of these Funds’ investments, no material conflicts of interest arise by virtue of the fact that these portfolio managers manage other accounts and more than one Fund. The compensation of each of these portfolio managers is derived approximately 50-70% from base salary and 30-50% from incentive compensation. The portfolio managers participate in normal corporate benefits, including group life and health insurance, 401(k) plan with a corporate matching contribution calculated in the same manner as for all other participating employees, and vacation.

Administration, Fund Accounting and Sub-Administration Services, Compliance Services, Class Action and Fair Fund Services, Transfer Agency and Service, Master Services and Fund PFO/Treasurer Agreements

Crossmark acts as administrator and provides administration and compliance services to each Fund pursuant to an administration agreement (the “Administration Agreement”), as amended and restated May 24, 2023. Crossmark receives fees for its services under the Administration Agreement monthly, in arrears, from the Funds at the annual fee rates set forth in the table below, which are applied to the average daily net assets of the applicable Fund.

 

Administration
Agreement All Funds

0.0750% of the first $1 billion

0.0675% of assets over $1 billion

Pursuant to a Class Action and Fair Fund Services Agreement with SFI, on behalf of all Funds and any future series of SFI, Crossmark assists in preparing claims on behalf of the Funds in class action lawsuits and prepares claims by the Funds for SEC Fair Funds. Crossmark receives fees for these services totaling 6% of amounts received by such Funds from Fair Funds.

The Funds reimburse Crossmark for a portion of the compensation paid to the Funds’ Chief Compliance Officer. Total dollar amounts paid by each Fund to Crossmark for administration and compliance and class action and Fair Fund services for the last three fiscal years or periods, as applicable, are set forth in the table below.

 

Fund

   Administration
Services
Fee
     Class
Action/Fair
Fund Services
Fee*
 

Steward Covered Call Income Fund

     

Year Ended April 30, 2023

   $ 29,661      $ 0  

Year Ended April 30, 2022

   $ 21,110      $ 0  

Year Ended April 30, 2021

   $ 23,605      $ 0  

Steward Equity Market Neutral Fund**

     

Year Ended April 30, 2023

   $ 44,662      $ 0  

Period Ended April 30, 2022

   $ 8,161      $ 0  

Steward Global Equity Income Fund

     

Year Ended April 30, 2023

   $ 231,620      $ 0  

Year Ended April 30, 2022

   $ 251,320      $ 0  

Year Ended April 30, 2021

   $ 227,889      $ 0  

Steward International Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 151,273      $ 0  

Year Ended April 30, 2022

   $ 148,559      $ 0  

Year Ended April 30, 2021

   $ 117,227      $ 0  

 

45


Fund

   Administration
Services
Fee
     Class
Action/Fair
Fund Services
Fee*
 

Steward Large Cap Core Fund**

     

Year Ended April 30, 2023

   $ 54,122      $ 0  

Period Ended April 30, 2022

   $ 22,457      $ 0  

Steward Large Cap Growth Fund**

     

Year Ended April 30, 2023

   $ 43,835      $ 0  

Period Ended April 30, 2022

   $ 14,558      $ 0  

Steward Large Cap Value Fund**

     

Year Ended April 30, 2023

   $ 45,078      $ 0  

Period Ended April 30, 2022

   $ 19,295      $ 0  

Steward Select Bond Fund

     

Year Ended April 30, 2023

   $ 109,165      $ 0  

Year Ended April 30, 2022

   $ 134,461      $ 0  

Year Ended April 30, 2021

   $ 124,298      $ 0  

Steward Small Cap Growth Fund**

     

Year Ended April 30, 2023

   $ 18,465      $ 0  

Period Ended April 30, 2022

   $ 10,825      $ 0  

Steward Values-Focused Large Cap Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 156,635      $ 0  

Year Ended April 30, 2022

   $ 254,889      $ 0  

Year Ended April 30, 2021

   $ 317,456      $ 0  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 129,389      $ 0  

Year Ended April 30, 2022

   $ 182,164      $ 0  

Year Ended April 30, 2021

   $ 174,336      $ 0  

 

*

Crossmark waived all fees (if any) received under the agreement during the fiscal years ended April 30, 2023, April 30, 2022 and April 30, 2021.

**

Commenced operations on November 15, 2021.

Pursuant to a Transfer Agency and Service Agreement with SFI dated March 1, 2019, Northern Trust, 333 South Wabash Avenue, Chicago, IL 60604, provides transfer agency services to each Fund. Pursuant to a Fund Administration and Accounting Agreement with SFI dated March 1, 2019, Northern Trust provides fund accounting and sub-administration services to each Fund. The Funds paid the following fees to Northern Trust for transfer agency services and accounting services for the periods indicated.

 

Fund

   Transfer
Agent
Fees
     Accounting
Fees
 

Steward Covered Call Income Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 55,000  

Year Ended April 30, 2022

   $ 30,000      $ 55,038  

Year Ended April 30, 2021

   $ 31,875      $ 54,962  

Steward Equity Market Neutral Fund*

     

Year Ended April 30, 2023

   $ 7,500      $ 55,000  

Period Ended April 30, 2022

   $ 3,438      $ 25,208  

 

46


Fund

   Transfer
Agent
Fees
     Accounting
Fees
 

Steward Global Equity Income Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 153,794  

Year Ended April 30, 2022

   $ 30,000      $ 142,242  

Year Ended April 30, 2021

   $ 31,875      $ 169,199  

Steward International Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 101,332  

Year Ended April 30, 2022

   $ 30,000      $ 97,342  

Year Ended April 30, 2021

   $ 31,875      $ 76,081  

Steward Large Cap Core Fund*

     

Year Ended April 30, 2023

   $ 7,500      $ 55,000  

Period Ended April 30, 2022

   $ 3,438      $ 25,208  

Steward Large Cap Growth Fund*

     

Year Ended April 30, 2023

   $ 7,500      $ 55,000  

Period Ended April 30, 2022

   $ 3,438      $ 25,208  

Steward Large Cap Value Fund*

     

Year Ended April 30, 2023

   $ 7,500      $ 55,000  

Period Ended April 30, 2022

   $ 3,438      $ 25,208  

Steward Select Bond Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 70,251  

Year Ended April 30, 2022

   $ 30,000      $ 92,365  

Year Ended April 30, 2021

   $ 31,875      $ 81,840  

Steward Small Cap Growth Fund*

     

Year Ended April 30, 2023

   $ 7,500      $ 55,000  

Period Ended April 30, 2022

   $ 3,438      $ 25,208  

Steward Values-Focused Large Cap Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 102,200  

Year Ended April 30, 2022

   $ 30,000      $ 147,450  

Year Ended April 30, 2021

   $ 31,875      $ 222,840  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 30,000      $ 84,623  

Year Ended April 30, 2022

   $ 30,000      $ 119,601  

Year Ended April 30, 2021

   $ 31,875      $ 112,559  

 

*

Commenced operations on November 15, 2021.

Pursuant to a Fund PFO/Treasurer Agreement with SFI dated January 1, 2023, Foreside Fund Officer Services, LLC (previously defined as “Foreside”), a wholly owned subsidiary of Foreside Financial Group, LLC (d/b/a ACA Group), 3 Canal Plaza, Suite 100, Portland, Maine 04101, provides principal financial officer services to the Funds by making available a senior financial professional who serves as Treasurer of the Funds. Foreside receives a fee from the Funds for the services provided, which is paid monthly in arrears. Foreside is also reimbursed by the Funds for certain out-of-pocket expenses. The Funds paid the following fees to Foreside for principal financial officer services for the periods indicated.

 

47


Fund

   Principal
Financial
Officer
Fees
 

Steward Covered Call Income Fund*

  

Period Ended April 30, 2023

   $ 2,167  

Steward Equity Market Neutral Fund*

  

Period Ended April 30, 2023

   $ 2,659  

Steward Global Equity Income Fund*

  

Period Ended April 30, 2023

   $ 6,577  

Steward International Enhanced Index Fund*

  

Period Ended April 30, 2023

   $ 4,640  

Steward Large Cap Core Fund*

  

Period Ended April 30, 2023

   $ 2,614  

Steward Large Cap Growth Fund*

  

Period Ended April 30, 2023

   $ 2,519  

Steward Large Cap Value Fund*

  

Period Ended April 30, 2023

   $ 2,389  

Steward Select Bond Fund*

  

Period Ended April 30, 2023

   $ 3,693  

Steward Small Cap Growth Fund*

  

Period Ended April 30, 2023

   $ 1,832  

Steward Values-Focused Large Cap Enhanced Index Fund*

  

Period Ended April 30, 2023

   $ 4,577  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund*

  

Period Ended April 30, 2023

   $ 4,075  

 

*

From January 1, 2023 to April 30, 2023.

Expenses

Each Fund and class pays all of its expenses and its allocated share of the expenses of SFI that are not borne by Crossmark or other service providers, including, but not limited to, expenses such as (i) advisory, administration, and class action/Fair Fund fees, (ii) fees under the Funds’ Service and Distribution Plan and Sub-Accounting Services Plan (see “Distributor,” below), (iii) fees for state filings and for legal, auditing, fund accounting and sub-administration, transfer agent, dividend disbursing, and custodian services, (iv) the expenses of registration, issue, repurchase, or redemption of shares, (v) interest, taxes, and brokerage commissions, (vi) membership dues in the Investment Company Institute, (vii) the cost of reports and notices to shareholders, (viii) fees to Fund directors and fees for officers or employees who are not affiliated with Crossmark, if any, and (ix) travel expenses (or an appropriate portion thereof) of Fund directors and officers who are directors, officers, or employees of Crossmark to the extent that such expenses relate to attendance at meetings of the Funds’ Board or any committees thereof or advisers thereto.

The expenses allocable to each Fund and each class of shares are accrued daily and are deducted from total income before dividends are paid. Fund expenses, including a Fund’s share of expenses of SFI, are generally allocated between Funds and classes based on their respective net asset values. Class A and Class C expenses

 

48


incurred pursuant to the Service and Distribution Plan (see “Distributor,” below) are borne by Class A and Class C directly, in accordance with the terms of that Plan. Expenses of Class A, Class C, and Institutional Class incurred pursuant to the Sub-Accounting Services Plan are borne by each class in accordance with the terms of that Plan, and the directors may determine that other expenses are specific to a particular class and should be allocated to that class.

Distributor

Crossmark Distributors, located at 15375 Memorial Dr., Suite 200, Houston, Texas 77079, acts as the principal underwriter of the Funds’ shares pursuant to a written agreement. Crossmark Distributors has the exclusive right (except for distributions of shares directly by the Funds) to distribute shares of the Funds in a continuous offering through affiliated and unaffiliated dealers. Crossmark Distributors’ obligation is an agency or “best efforts” arrangement under which Crossmark Distributors is required to take and pay for only such Fund shares as may be sold to the public. Crossmark Distributors is not obligated to sell any stated number of shares. Except to the extent otherwise provided by the applicable Service and Distribution Plan (see below), Crossmark Distributors bears the cost of printing (but not typesetting) prospectuses used in connection with this offering and the cost and expense of supplemental sales literature, promotion, and advertising.

Michael L. Kern, III, CFA is President and a director of the Funds and is also President, CEO and Treasurer and a director of Crossmark and Crossmark Distributors, and their parent company, Crossmark Global Holdings, Inc. Jim A. Coppedge is Executive Vice President, Chief Compliance Officer, Secretary and Assistant Treasurer of the Funds and is also General Counsel, Chief Compliance Officer and Secretary of Crossmark and Crossmark Distributors.

The Distribution Agreement, after an initial two-year term, is renewable from year to year if approved in each case (a) by the Board of SFI, or by a vote of a majority of the Fund’s outstanding voting securities and (b) by the affirmative vote of a majority of directors who are not parties to the Distribution Agreement or “interested persons,” as defined in the 1940 Act, of any party, by vote cast at a meeting called for such purpose. The Distribution Agreement provides that it will terminate if assigned, and that it may be terminated without penalty by either party on 60 days’ written notice.

SFI has adopted a Service and Distribution Plan (the “Plan”) pursuant to Rule 12b-1 of the 1940 Act for each Fund’s Class A and Class C shares, which permits each Fund, out of assets attributable to its Class A and Class C shares, to compensate Crossmark Distributors for its services in connection with the distribution of Class A and Class C shares and for the provision of certain services to Class A and Class C shareholders. These services include, but are not limited to, the payment of compensation to securities dealers (which may include Crossmark Distributors itself) and other financial institutions and organizations (collectively, “Service Organizations”) to obtain various distribution-related and/or administrative services for the Funds. These services also include, among other things, processing new shareholder account applications, preparing and electronically transmitting to the Funds’ Transfer Agent information regarding all transactions by customers and serving as the primary source of information to customers in answering questions concerning the Funds and their transactions with the Funds. Crossmark Distributors is also authorized to engage in advertising, the preparation and distribution of sales literature, and other promotional activities on behalf of the Funds. In addition, the Plan authorizes Class A and Class C shares of each Fund to bear the cost of preparing, printing and distributing Fund prospectuses and statements of additional information to prospective Class A and Class C investors and of implementing and operating the Plan. Institutional Class and Class R6 shares are not subject to the Plan.

Under the Plan, payments are made to Crossmark Distributors at an annual rate of 0.25% of the average net assets of Class A shares of each Fund and 1.00% of the average net assets of Class C shares of each Fund. Subject to these limits, Crossmark Distributors may reallow amounts up to 0.25% of Class A net assets and up to 1.00% of Class C net assets to Service Organizations (which may include Crossmark Distributors itself), such reallowances to be at an annual rate of 0.25% based on the average net asset value of Class A shares and 1.00%

 

49


based on the average net asset value of Class C shares of that Fund held by shareholders for whom the Service Organization provides services. Any remaining amounts not so allocated will be retained by Crossmark Distributors. In the first year of a selling agreement with a Service Organization with respect to a Fund’s Class A or Class C shares, Crossmark Distributors compensates the Service Organization for the entire year in advance and collects the fees under the Plan from the applicable class of the Fund on a monthly basis. Thereafter, Crossmark Distributors pays such Service Organizations on a monthly basis.

Rule 12b-1 requires that the Plan and related agreements have been approved by a vote of the Board of SFI and by a vote of the directors who are not “interested persons” of SFI, as defined under the 1940 Act, and have no direct or indirect interest in the operation of the Plan or any agreements related to the Plan (the “Plan Directors”). The Plan will continue in effect for successive one-year periods provided that such continuance is specifically approved at least annually by a majority of the directors, including a majority of the Plan Directors. In determining whether to adopt or continue the Plan, the directors must request and evaluate information they believe is reasonably necessary to make an informed determination of whether the Plan and related agreements should be implemented, and must conclude, in the exercise of reasonable business judgment and in light of their fiduciary duties, that there is a reasonable likelihood that the Plan and related agreements will benefit each applicable Fund, each class and their shareholders. Any change in the Plan that would materially increase the distribution expenses to be paid by a class requires approval by shareholders of the affected class, but otherwise, the Plan may be amended by the directors, including a majority of the Plan Directors.

As required by Rule 12b-1, the directors will review quarterly reports prepared by Crossmark Distributors on the amounts expended and the purposes for the expenditures. The Plan and related agreements may be terminated with respect to one or more Funds or classes at any time by a vote of the Plan Directors or by vote of a majority of the outstanding voting securities of each such Fund or class. As required by Rule 12b-1, selection and nomination of disinterested directors for SFI is committed to the discretion of the directors who are not “interested persons” of SFI, as defined under the 1940 Act.

The amounts paid to Crossmark Distributors and reallowed by Crossmark Distributors to other Service Organizations by the Class A shares and Class C shares of each Fund during its past fiscal year ended April 30, 2023 were as follows:

 

Fund

   Total
12b-1
Fees Paid
     Amount
Retained
by
Crossmark
Distributors
     Amount Paid
to Other
Service
Organizations
 

Class A

        

Steward Covered Call Income Fund

   $ 1,248      $ 284      $ 964  

Steward Equity Market Neutral Fund

   $ 3,091      $ 1,074      $ 2,017  

Steward Global Equity Income Fund

   $ 45,960      $ 13,026      $ 32,934  

Steward International Enhanced Index Fund

   $ 11,896      $ 1,066      $ 10,830  

Steward Large Cap Core Fund

   $ 1,122      $ 715      $ 407  

Steward Large Cap Growth Fund

   $ 677      $ 360      $ 317  

Steward Large Cap Value Fund

   $ 1,284      $ 814      $ 470  

Steward Select Bond Fund

   $ 7,326      $ 4,163      $ 3,163  

Steward Small Cap Growth Fund

   $ 434      $ 247      $ 187  

Steward Values-Focused Large Cap Enhanced Index Fund

   $ 25,714      $ 5,781      $ 19,933  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   $ 111,898      $ 70,036      $ 41,862  

 

50


Fund

   Total
12b-1
Fees Paid
     Amount
Retained
by
Crossmark
Distributors
     Amount Paid
to Other
Service
Organizations
 

Class C

        

Steward Covered Call Income Fund

   $ 6,139      $ 0      $ 6,139  

Steward Global Equity Income Fund

   $ 8,529      $ 0      $ 8,529  

Steward International Enhanced Index Fund

   $ 4      $ 0      $ 4  

Steward Select Bond Fund

   $ 337      $ 0      $ 337  

Steward Values-Focused Large Cap Enhanced Index Fund

   $ 191      $ 0      $ 191  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

   $ 4      $ 0      $ 4  

Since the 12b-1 fees are not directly linked to expenses, the amount of 12b-1 fees paid by the Class A and Class C shares of a Fund during any year may be more or less than actual expenses incurred pursuant to the Plan. For this reason, this type of fee arrangement is characterized by the staff of the SEC as being of the “compensation” variety (in contrast to “reimbursement” arrangements by which a distributor’s payments are directly linked to its expenses).

The allocation of the total 12b-1 fees paid to Crossmark Distributors by the Class A shares and Class C shares of each Fund during its past fiscal year ended April 30, 2023 was as follows:

 

Fund

  Advertising     Printing
and
Mailing
    Compensation
to Crossmark
Distributors
    Compensation
to Other
Service
Organizations
    Compensation
to Sales
Personnel
    Interest,
Carrying,
or Other
Financing
Charges
 

Class A

           

Steward Covered Call Income Fund

  $ —       $ —       $ 284     $ 964     $ —       $ —    

Steward Equity Market Neutral Fund

  $ —       $ —       $ 1,074     $ 2,017     $ —       $ —    

Steward Global Equity Income Fund

  $ —       $ —       $ 13,026     $ 32,934     $ —       $ —    

Steward International Enhanced Index Fund

  $ —       $ —       $ 1,066     $ 10,830     $ —       $ —    

Steward Large Cap Core Fund

  $ —       $ —       $ 715     $ 407     $ —       $ —    

Steward Large Cap Growth Fund

  $ —       $ —       $ 360     $ 317     $ —       $ —    

Steward Large Cap Value Fund

  $ —       $ —       $ 814     $ 470     $ —       $ —    

Steward Select Bond Fund

  $ —       $ —       $ 4,163     $ 3,163     $ —       $ —    

Steward Small Cap Growth Fund

  $ —       $ —       $ 247     $ 187     $ —       $ —    

Steward Values-Focused Large Cap Enhanced Index Fund

  $ —       $ —       $ 5,781     $ 19,933     $ —       $ —    

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

  $ —       $ —       $ 70,036     $ 41,862     $ —       $ —    

Class C

           

Steward Covered Call Income Fund

  $ —       $ —       $ —       $ 6,139     $ —       $ —    

Steward Global Equity Income Fund

  $ —       $ —       $ —       $ 8,529     $ —       $ —    

Steward International Enhanced Index Fund

  $ —       $ —       $ —       $ 4     $ —       $ —    

Steward Select Bond Fund

  $ —       $ —       $ —       $ 337     $ —       $ —    

Steward Values-Focused Large Cap Enhanced Index Fund

  $ —       $ —       $ —       $ 191     $ —       $ —    

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

  $ —       $ —       $ —       $ 4     $ —       $ —    

 

51


Each Fund has also adopted a Sub-Accounting Services Plan with respect to its Class A, Class C and Institutional Class shares. The Sub-Accounting Services Plan provides that each Fund, out of the assets attributable to the applicable share class, shall reimburse Crossmark Distributors for payments by Crossmark Distributors to certain third-party providers that assist in the servicing of certain group accounts in which Fund shareholders of the applicable share class participate. For asset-based fee arrangements between Crossmark Distributors and third-party providers, the amounts payable to Crossmark Distributors may not exceed, on an annual basis, 0.20% of the average daily net assets of the applicable share class. For per-account arrangements between Crossmark Distributors and third-party providers, the amounts payable to Crossmark Distributors may not exceed, on an annual basis, $20 per account. These fees are in addition to any fees payable under the Service and Distribution Plan. Class R6 shares are not subject to the Sub-Accounting Services Plan.

The amounts paid pursuant to the Sub-Accounting Services Plan for the periods indicated are:

 

Fund – Class A

   Total Sub-
Accounting
Services
Fees Paid
     Amount
Retained by
Crossmark
Distributors
     Amount
Paid to
Third-Party
Providers
 

Steward Covered Call Income Fund

 

Year Ended April 30, 2023

   $ 709      $ 0      $ 709  

Year Ended April 30, 2022

   $ 41      $ 0      $ 41  

Year Ended April 30, 2021

   $ 25      $ 0      $ 25  

Steward Equity Market Neutral Fund*

 

Year Ended April 30, 2023

   $ 644      $ 0      $ 644  

Period Ended April 30, 2022

   $ 19      $ 0      $ 19  

Steward Global Equity Income Fund

 

Year Ended April 30, 2023

   $ 18,138      $ 0      $ 18,138  

Year Ended April 30, 2022

   $ 32,566      $ 0      $ 32,566  

Year Ended April 30, 2021

   $ 62,344      $ 0      $ 62,344  

Steward International Enhanced Index Fund

 

Year Ended April 30, 2023

   $ 5,935      $ 0      $ 5,935  

Year Ended April 30, 2022

   $ 6,446      $ 0      $ 6,446  

Year Ended April 30, 2021

   $ 13,651      $ 0      $ 13,651  

Steward Large Cap Core Fund*

 

Year Ended April 30, 2023

   $ 571      $ 0      $ 571  

Period Ended April 30, 2022

   $ 10      $ 0      $ 10  

Steward Large Cap Growth Fund*

 

Year Ended April 30, 2023

   $ 335      $ 0      $ 335  

Period Ended April 30, 2022

   $ 11      $ 0      $ 11  

Steward Large Cap Value Fund*

 

Year Ended April 30, 2023

   $ 616      $ 0      $ 616  

Period Ended April 30, 2022

   $ 9      $ 0      $ 9  

Steward Select Bond Fund

 

Year Ended April 30, 2023

   $ 2,073      $ 0      $ 2,073  

Year Ended April 30, 2022

   $ 3,106      $ 0      $ 3,106  

Year Ended April 30, 2021

   $ 5,339      $ 0      $ 5,339  

Steward Small Cap Growth Fund*

 

Year Ended April 30, 2023

   $ 203      $ 0      $ 203  

Period Ended April 30, 2022

   $ 21      $ 0      $ 21  

 

52


Fund – Class A

   Total Sub-
Accounting
Services
Fees Paid
     Amount
Retained by
Crossmark
Distributors
     Amount
Paid to
Third-Party
Providers
 

Steward Values-Focused Large Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 7,876      $ 0      $ 7,876  

Year Ended April 30, 2022

   $ 21,523      $ 0      $ 21,523  

Year Ended April 30, 2021

   $ 33,078      $ 0      $ 33,078  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 17,568      $ 0      $ 17,568  

Year Ended April 30, 2022

   $ 25,567      $ 0      $ 25,567  

Year Ended April 30, 2021

   $ 30,137      $ 0      $ 30,137  

 

Fund – Class C

   Total Sub-
Accounting
Services
Fees Paid
     Amount
Retained by
Crossmark
Distributors
     Amount
Paid to
Third-Party
Providers
 

Steward Covered Call Income Fund

 

Year Ended April 30, 2023

   $ 755      $ 0      $ 755  

Year Ended April 30, 2022

   $ 339      $ 0      $ 339  

Year Ended April 30, 2021

   $ 362      $ 0      $ 362  

Steward Global Equity Income Fund

 

Year Ended April 30, 2023

   $ 1,032      $ 0      $ 1,032  

Year Ended April 30, 2022

   $ 1,418      $ 0      $ 1,418  

Year Ended April 30, 2021

   $ 4,360      $ 0      $ 4,360  

Steward International Enhanced Index Fund

 

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Year Ended April 30, 2022

   $ 0      $ 0      $ 0  

Year Ended April 30, 2021

   $ 0      $ 0      $ 0  

Steward Select Bond Fund

 

Year Ended April 30, 2023

   $ 30      $ 0      $ 30  

Year Ended April 30, 2022

   $ 9      $ 0      $ 9  

Year Ended April 30, 2021

   $ 0      $ 0      $ 0  

Steward Values-Focused Large Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 28      $ 0      $ 28  

Year Ended April 30, 2022

   $ 2      $ 0      $ 2  

Year Ended April 30, 2021

   $ 0      $ 0      $ 0  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 9      $ 0      $ 9  

Year Ended April 30, 2022

   $ 0      $ 0      $ 0  

Year Ended April 30, 2021

   $ 0      $ 0      $ 0  

 

53


Fund – Institutional Class

   Total Sub-
Accounting
Services
Fees Paid
     Amount
Retained by
Crossmark
Distributors
     Amount
Paid to
Third-Party
Providers
 

Steward Covered Call Income Fund

 

Year Ended April 30, 2023

   $ 40,564      $ 0      $ 40,564  

Year Ended April 30, 2022

   $ 26,046      $ 0      $ 26,046  

Year Ended April 30, 2021

   $ 36,593      $ 0      $ 36,593  

Steward Equity Market Neutral Fund*

        

Year Ended April 30, 2023

   $ 82,348      $ 0      $ 82,348  

Period Ended April 30, 2022

   $ 13,524      $ 0      $ 13,524  

Steward Global Equity Income Fund

 

Year Ended April 30, 2023

   $ 314,551      $ 0      $ 314,551  

Year Ended April 30, 2022

   $ 318,508      $ 0      $ 318,508  

Year Ended April 30, 2021

   $ 265,445      $ 0      $ 265,445  

Steward International Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 226,200      $ 0      $ 226,200  

Year Ended April 30, 2022

   $ 195,905      $ 0      $ 195,905  

Year Ended April 30, 2021

   $ 163,566      $ 0      $ 163,566  

Steward Large Cap Core Fund*

        

Year Ended April 30, 2023

   $ 90,248      $ 0      $ 90,248  

Period Ended April 30, 2022

   $ 17,199      $ 0      $ 17,199  

Steward Large Cap Growth Fund*

        

Year Ended April 30, 2023

   $ 72,278      $ 0      $ 72,278  

Period Ended April 30, 2022

   $ 14,914      $ 0      $ 14,914  

Steward Large Cap Value Fund*

        

Year Ended April 30, 2023

   $ 77,989      $ 0      $ 77,989  

Period Ended April 30, 2022

   $ 12,857      $ 0      $ 12,857  

Steward Select Bond Fund

        

Year Ended April 30, 2023

   $ 149,920      $ 0      $ 149,920  

Year Ended April 30, 2022

   $ 176,666      $ 0      $ 176,666  

Year Ended April 30, 2021

   $ 183,232      $ 0      $ 183,232  

Steward Small Cap Growth Fund*

        

Year Ended April 30, 2023

   $ 32,375      $ 0      $ 32,375  

Period Ended April 30, 2022

   $ 7,539      $ 0      $ 7,539  

Steward Values-Focused Large Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 189,308      $ 0      $ 189,308  

Year Ended April 30, 2022

   $ 328,799      $ 0      $ 328,799  

Year Ended April 30, 2021

   $ 361,932      $ 0      $ 361,932  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

        

Year Ended April 30, 2023

   $ 135,839      $ 0      $ 135,839  

Year Ended April 30, 2022

   $ 187,421      $ 0      $ 187,421  

Year Ended April 30, 2021

   $ 177,613      $ 0      $ 177,613  

 

*

Commenced operations on November 15, 2021.

Class A shares are subject to a front-end sales charge that varies with the amount you invest (see “Sales Charges” in the Prospectus). The front-end sales charge is paid to the Funds’ distributor, Crossmark Distributors. The

 

54


authorized dealer commission as a percentage of the offering price is the full amount of the applicable front-end sales charge. Purchases of Class A shares pursuant to the Large Order NAV Purchase Privilege may be subject to a CDSC of 1.00% if redeemed within 12 months of the original purchase date (see “Class A NAV Sales” in the Prospectus). The following table shows any front-end sales charges paid to Crossmark Distributors, and amounts retained by Crossmark Distributors, on Class A shares and any CDSCs paid to Crossmark Distributors for the noted fiscal periods. Any front-end sales charges not retained by Crossmark Distributors were paid out to unaffiliated dealers.

 

Fund – Class A Shares

   Front-End Sales
Charges
     Front-End Sales
Charges Retained
     CDSCs  

Steward Covered Call Income Fund*

        

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Equity Market Neutral Fund**

        

Year Ended April 30, 2023

   $ 17,012      $ 988      $ 0  

Period Ended April 30, 2022

   $ 18,439      $ 989      $ 0  

Steward Global Equity Income Fund*

        

Year Ended April 30, 2023

   $ 5,646      $ 299      $ 0  

Period Ended April 30, 2022

   $ 836      $ 41      $ 0  

Steward International Enhanced Index Fund*

        

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Large Cap Core Fund**

        

Year Ended April 30, 2023

   $ 101      $ 14      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Large Cap Growth Fund**

        

Year Ended April 30, 2023

   $ 4      $ 0      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Large Cap Value Fund**

        

Year Ended April 30, 2023

   $ 3,235      $ 188      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Select Bond Fund*

        

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Small Cap Growth Fund**

        

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Period Ended April 30, 2022

   $ 0      $ 0      $ 0  

Steward Values-Focused Large Cap Enhanced Index Fund*

        

Year Ended April 30, 2023

   $ 662      $ 41      $ 0  

Period Ended April 30, 2022

   $ 145      $ 8      $ 0  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund*

        

Year Ended April 30, 2023

   $ 0      $ 0      $ 0  

Period Ended April 30, 2022

   $ 106      $ 6      $ 0  

 

*

The front-end sales charge and CDSC on Class A shares were implemented on October 29, 2021.

**

Commenced operations on November 15, 2021.

 

55


Class C shares are subject to a CDSC of 1.00% if you redeem your shares within twelve months of purchase (see “Sales Charges” in the Prospectus). When you redeem Class C shares that are subject to the CDSC, the CDSC is based on the original purchase cost or current NAV of the shares sold, whichever is less. Reinvested dividends and share appreciation are not subject to the CDSC. In processing orders to redeem shares, shares not subject to the CDSC are redeemed first. The CDSC is not imposed when you exchange your Class C shares for Class C shares of a different Fund, but you may be subject to the CDSC if you redeem your exchanged shares prior to twelve months from the date you originally purchased shares. The CDSC is paid to the Funds’ distributor, Crossmark Distributors. The following table shows any CDSCs paid to Crossmark Distributors on Class C shares for the noted fiscal periods:

 

Fund

   Class C Shares  

Steward Covered Call Income Fund

  

Year Ended April 30, 2023

   $ 772  

Year Ended April 30, 2022

   $ 0  

Year Ended April 30, 2021

   $ 0  

Steward Global Equity Income Fund

  

Year Ended April 30, 2023

   $ 698  

Year Ended April 30, 2022

   $ 366  

Year Ended April 30, 2021

   $ 0  

Steward International Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 0  

Year Ended April 30, 2022

   $ 0  

Year Ended April 30, 2021

   $ 0  

Steward Select Bond Fund

  

Year Ended April 30, 2023

   $ 7  

Year Ended April 30, 2022

   $ 0  

Year Ended April 30, 2021

   $ 0  

Steward Values-Focused Large Cap Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 5  

Year Ended April 30, 2022

   $ 0  

Year Ended April 30, 2021

   $ 0  

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

  

Year Ended April 30, 2023

   $ 0  

Year Ended April 30, 2022

   $ 0  

Year Ended April 30, 2021

   $ 0  

PORTFOLIO TRANSACTIONS AND BROKERAGE

Crossmark is responsible for the placement of portfolio business and the negotiation of the commissions paid on the Funds’ securities transactions. It is the policy of Crossmark to seek the best security price or “best execution” available with respect to each transaction. In over-the-counter transactions, orders are placed directly with a principal market maker unless it is believed that a better price and execution can be obtained by using a broker. Crossmark seeks the best security price at the most favorable commission rate. In selecting dealers and in negotiating commissions, Crossmark considers the firm’s reliability, the quality of its execution services on a continuing basis and its financial condition. When more than one firm is believed to meet these criteria, preference may be given to firms that also provide research services to the Funds or Crossmark. In addition, Crossmark may cause a Fund to pay a broker that provides brokerage and research services a commission in

 

56


excess of the amount another broker might have charged for effecting a securities transaction, subject to certain guidelines promulgated by the SEC from time to time. Such higher commission may be paid if Crossmark determines in good faith that the amount paid is reasonable in relation to the services received in terms of the particular transaction or Crossmark’s overall responsibilities to the particular Fund and to Crossmark’s other clients. Such brokerage and research services must provide lawful and appropriate assistance to Crossmark in the performance of its investment decision-making responsibilities and may include advice, both directly and in writing, as to the value of the securities, the advisability of investing in, purchasing or selling securities, and the availability of securities, or purchasers or sellers of securities, as well as furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts.

Crossmark makes investment decisions and places portfolio transactions for other advisory accounts including other investment companies. Brokerage and research services furnished by firms through which a Fund effects securities transactions may be used by Crossmark in servicing all of its accounts. Therefore, not all of such services may be used by Crossmark in connection with that Fund. Crossmark has arrangements to receive such services only with respect to accounts for which it exercises brokerage discretion. Many of Crossmark’s clients have not granted Crossmark brokerage discretion and, therefore, any services received as a result of paying commissions in excess of the amount another broker might have charged are subsidized by accounts that have granted Crossmark such discretion. Other services received, although not by a specific arrangement, may also be used by Crossmark in providing service to other accounts, including one or more Funds. In the opinion of Crossmark, the benefits from brokerage and research services to each of the accounts (including the Funds) managed by Crossmark cannot be measured separately. Crossmark seeks to allocate portfolio transactions equitably whenever concurrent decisions are made to purchase or sell securities by a Fund and another advisory account. In some cases, this procedure could have an adverse effect on the price or the amount of securities available to a Fund. In making such allocations among a Fund and other advisory accounts, the main factors considered by Crossmark are the respective investment objectives, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment, the size of investment commitments generally held, and opinions of the persons responsible for recommending the investment.

The Funds paid the following commissions during their three most recent fiscal years or periods, as applicable:

 

Fund

   Commissions
Paid(a)
     Approximate
Percent Paid
to Brokers
Who
Furnished
Research
Services
 

Steward Covered Call Income Fund

     

Year Ended April 30, 2023(b)

   $ 147,290        100

Year Ended April 30, 2022

   $ 75,212        100

Year Ended April 30, 2021

   $ 99,214        100

Steward Equity Market Neutral Fund(c)

     

Year Ended April 30, 2023(b)

   $ 180,641        100

Period Ended April 30, 2022

   $ 41,022        100

Steward Global Equity Income Fund

     

Year Ended April 30, 2023

   $ 537,137        100

Year Ended April 30, 2022

   $ 624,927        100

Year Ended April 30, 2021

   $ 667,945        100

Steward International Enhanced Index Fund

     

Year Ended April 30, 2023

   $ 73,406        100

Year Ended April 30, 2022(d)

   $ 95,242        100

Year Ended April 30, 2021

   $ 46,651        100

 

57


Fund

   Commissions
Paid(a)
     Approximate
Percent Paid
to Brokers
Who
Furnished
Research
Services
 

Steward Large Cap Core Fund(c)

     

Year Ended April 30, 2023

   $ 52,967        100

Period Ended April 30, 2022

   $ 47,160        100

Steward Large Cap Growth Fund(c)

     

Year Ended April 30, 2023

   $ 33,530        100

Period Ended April 30, 2022

   $ 25,685        100

Steward Large Cap Value Fund(c)

     

Year Ended April 30, 2023

   $ 72,888        100

Period Ended April 30, 2022

   $ 63,775        100

Steward Select Bond Fund

     

Year Ended April 30, 2023

   $ 20,000        100

Year Ended April 30, 2022(e)

   $ 12,500        100

Year Ended April 30, 2021

   $ 103,125        100

Steward Small Cap Growth Fund(c)

     

Year Ended April 30, 2023

   $ 18,046        100

Period Ended April 30, 2022

   $ 46,133        100

Steward Values-Focused Large Cap Enhanced Index Fund

     

Year Ended April 30, 2023(f)

   $ 12,926        100

Year Ended April 30, 2022

   $ 107,065        100

Year Ended April 30, 2021

   $ 166,431        100

Steward Values-Focused Small-Mid Cap Enhanced Index Fund

     

Year Ended April 30, 2023(f)

   $ 57,713        100

Year Ended April 30, 2022(g)

   $ 150,395        100

Year Ended April 30, 2021

   $ 236,899        100

 

(a) 

No commissions were paid to affiliated brokers.

(b) 

Brokerage commissions paid by the Fund materially increased in fiscal year 2023 due to an increase in the Fund’s assets.

(c) 

Commenced operations on November 15, 2021.

(d) 

Brokerage commissions paid by the Fund materially increased in fiscal year 2022 due to an increase in the Fund’s assets.

(e) 

Brokerage commissions paid by the Fund materially decreased in fiscal year 2022 due to a decrease in the Fund’s assets.

(f)

Brokerage commissions paid by the Fund materially decreased in fiscal year 2023 due to changes in the Fund’s investment process.

(g) 

Brokerage commissions paid by the Fund materially decreased in fiscal year 2022 due to a decrease in the Fund’s assets.

 

58


For the most recent fiscal year, each Fund allocated the following amount of transactions, and related commissions, to broker-dealer firms that have been deemed by Crossmark to provide research services. The provision of research services was not necessarily a factor in the placement of business with such firms.

 

Fund

  Capital
Institutional
Services
    Cowen &
Company
    Interactive
Brokers
    Northern
Trust
Securities,
Inc.
    Virtu
Financial,
Inc
    Sanders Morris
Harris
 

Steward Covered Call Income Fund

           

Commissions

    N/A     $ 133,082       N/A       N/A     $ 12,465     $ 1,742  

Transactions

    N/A     $ 12,965,838       N/A       N/A     $ 47,806,725     $ 19,549,706  

Steward Equity Market Neutral Fund

           

Commissions

    N/A       N/A     $ 52     $ 180,589       N/A       N/A  

Transactions

    N/A       N/A     $ 330,534     $ 212,721,008       N/A       N/A  

Steward Global Equity Income Fund

           

Commissions

    N/A       N/A       N/A     $ 142,986     $ 394,150       N/A  

Transactions

    N/A       N/A       N/A     $ 92,631,848     $ 299,204,345       N/A  

Steward International Enhanced Index Fund

           

Commissions

    N/A       N/A       N/A     $ 32,430     $ 40,976       N/A  

Transactions

    N/A       N/A       N/A     $ 36,164,236     $ 42,785,072       N/A  

Steward Large Cap Core Fund

           

Commissions

    N/A       N/A       N/A     $ 38,652     $ 14,315       N/A  

Transactions

    N/A       N/A       N/A     $ 91,373,692     $ 31,389,149       N/A  

Steward Large Cap Growth Fund

           

Commissions

    N/A       N/A       N/A     $ 23,247     $ 10,283       N/A  

Transactions

    N/A       N/A       N/A     $ 69,215,334     $ 26,133,455       N/A  

Steward Large Cap Value Fund

           

Commissions

    N/A       N/A       N/A     $ 50,691     $ 22,197       N/A  

Transactions

    N/A       N/A       N/A     $ 97,388,180     $ 37,192,480       N/A  

Steward Select Bond Fund

           

Commissions

  $ 20,000       N/A       N/A       N/A       N/A       N/A  

Transactions

  $ 9,456,560       N/A       N/A       N/A       N/A       N/A  

Steward Small Cap Growth Fund

           

Commissions

    N/A       N/A       N/A     $ 5,631     $ 12,416       N/A  

Transactions

    N/A       N/A       N/A     $ 5,729,745     $ 11,386,166       N/A  

Steward Values-Focused Large Cap Enhanced Index Fund

           

Commissions

    N/A       N/A       N/A     $ 6,384     $ 6,542       N/A  

Transactions

    N/A       N/A       N/A     $ 17,166,208     $ 23,737,619       N/A  

 

59


Fund

  Capital
Institutional
Services
    Cowen &
Company
    Interactive
Brokers
    Northern
Trust
Securities,
Inc.
    Virtu
Financial,
Inc
    Sanders Morris
Harris
 

Steward Values-Focused Small-Mid Cap Enhanced Index Fund