08/16/2024 | Press release | Distributed by Public on 08/16/2024 08:12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07044
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.
(Exact Name of Registrant as Specified in Charter)
c/o BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, New York 10286
(Address of Principal Executive Offices) (Zip Code)
Deirdre Cunnane, Esq.
240 Greenwich Street
New York, New York 10286
(Name and Address of Agent for Service)
Registrant's Telephone Number, including Area Code: (212) 922-6400
Date of fiscal year end: 12/31
Date of reporting period: 6/30/2024
FORM N-CSR
Item 1. Reports to Stockholders.
BNY Mellon Sustainable U.S. Equity Portfolio, Inc. |
SEMI-ANNUAL JUNE 30, 2024 |
Initial Shares
This semi-annual shareholder report contains important information about BNY Mellon Sustainable U.S. Equity Portfolio, Inc. (the "Fund") for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at im.bnymellon.com/us/en/intermediary/products/variable-products.html#funds-table-tabs1. You can also request this information by calling 1-800-373-9387 (inside the U.S. only) or by sending an e-mail request to [email protected].
What were the Fund's costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class |
Costs of a $10,000 investment |
Costs paid as a percentage of a $10,000 investment |
Initial Shares |
$36 |
0.67%* |
* |
Annualized |
KEY FUND STATISTICS (AS OF 6/30/24)
Fund Size (Millions) |
Number of Holdings |
Portfolio Turnover |
$363 |
44 |
12.76% |
Portfolio Holdings (as of 6/30/24)
Top Ten Holdings (Based on Net Assets)*
* Excludes money market funds or other short-term securities held for the investment of cash and cash collateral for securities loaned, if any.
Not FDIC Insured. Not Bank-Guaranteed. May Lose Value |
Sector Allocation (Based on Net Assets)
For additional information about the Fund, including its prospectus, financial information, portfolio holdings and proxy voting information, please visit im.bnymellon.com/us/en/intermediary/products/variable-products.html#funds-table-tabs1.
Printed on recycled paper. |
© 2024 BNY Mellon Securities Corporation, Distributor, |
BNY Mellon Sustainable U.S. Equity Portfolio, Inc. |
SEMI-ANNUAL JUNE 30, 2024 |
Service Shares
This semi-annual shareholder report contains important information about BNY Mellon Sustainable U.S. Equity Portfolio, Inc. (the "Fund") for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at im.bnymellon.com/us/en/intermediary/products/variable-products.html#funds-table-tabs1. You can also request this information by calling 1-800-373-9387 (inside the U.S. only) or by sending an e-mail request to [email protected].
What were the Fund's costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class |
Costs of a $10,000 investment |
Costs paid as a percentage of a $10,000 investment |
Service Shares |
$50 |
0.92%* |
* |
Annualized |
KEY FUND STATISTICS (AS OF 6/30/24)
Fund Size (Millions) |
Number of Holdings |
Portfolio Turnover |
$363 |
44 |
12.76% |
Portfolio Holdings (as of 6/30/24)
Top Ten Holdings (Based on Net Assets)*
* Excludes money market funds or other short-term securities held for the investment of cash and cash collateral for securities loaned, if any.
Not FDIC Insured. Not Bank-Guaranteed. May Lose Value |
Sector Allocation (Based on Net Assets)
For additional information about the Fund, including its prospectus, financial information, portfolio holdings and proxy voting information, please visit im.bnymellon.com/us/en/intermediary/products/variable-products.html#funds-table-tabs1.
Printed on recycled paper. |
© 2024 BNY Mellon Securities Corporation, Distributor, |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Not applicable.
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.
SEMI-ANNUAL FINANCIALS AND OTHER INFORMATION June 30, 2024 |
Initial Shares Service Shares |
|
IMPORTANT NOTICE - CHANGES TO ANNUAL AND SEMI-ANNUAL REPORTS The Securities and Exchange Commission (the "SEC") has adopted rule and form amendments which have resulted in changes to the design and delivery of annual and semi-annual fund reports ("Reports"). Reports are now streamlined to highlight key information. Certain information previously included in Reports, including financial statements, no longer appear in the Reports but will be available online within the Semi-Annual and Annual Financials and Other Information, delivered free of charge to shareholders upon request, and filed with the SEC. |
Save time. Save paper. View your next shareholder report online as soon as it's available. Log into www.im.bnymellon.com and sign up for eCommunications. It's simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
T H E F U N D
Please note the Semi-Annual Financials and Other Information only contains Items 7-11 required in
Form N-CSR. All other required items will be filed with the SEC.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies |
3 |
Statement of Investments |
3 |
Statement of Assets and Liabilities |
5 |
Statement of Operations |
6 |
Statement of Changes in Net Assets |
7 |
Financial Highlights |
8 |
Notes to Financial Statements |
10 |
Item 8. Changes in and Disagreements with Accountants for |
15 |
Item 9. Proxy Disclosures for Open-End Management Investment Companies |
16 |
Item 10. Remuneration Paid to Directors, Officers, and Others of |
17 |
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract |
18 |
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.
Statement of Investments
June 30, 2024 (Unaudited)
Description |
Shares |
Value ($) |
|||||
Common Stocks - 99.0% |
|||||||
Banks - 4.7% |
|||||||
First Horizon Corp. |
249,053 |
3,927,566 |
|||||
JPMorgan Chase & Co. |
64,787 |
13,103,819 |
|||||
17,031,385 |
|||||||
Capital Goods - 9.1% |
|||||||
AECOM |
54,333 |
4,788,911 |
|||||
Hubbell, Inc. |
15,166 |
5,542,870 |
|||||
Ingersoll Rand, Inc. |
95,861 |
8,708,013 |
|||||
Johnson Controls International PLC |
96,311 |
6,401,792 |
|||||
Trane Technologies PLC |
22,786 |
7,494,999 |
|||||
32,936,585 |
|||||||
Commercial & Professional Services - 3.1% |
|||||||
Veralto Corp. |
48,899 |
4,668,388 |
|||||
Waste Management, Inc. |
30,206 |
6,444,148 |
|||||
11,112,536 |
|||||||
Consumer Discretionary Distribution & Retail - 4.8% |
|||||||
Amazon.com, Inc. |
90,487 |
a |
17,486,613 |
||||
Consumer Durables & Apparel - .9% |
|||||||
Lululemon Athletica, Inc. |
10,964 |
a |
3,274,947 |
||||
Consumer Staples Distribution & Retail - 3.0% |
|||||||
Costco Wholesale Corp. |
12,805 |
10,884,122 |
|||||
Financial Services - 4.3% |
|||||||
Mastercard, Inc., Cl. A |
19,712 |
8,696,146 |
|||||
The Goldman Sachs Group, Inc. |
15,502 |
7,011,865 |
|||||
15,708,011 |
|||||||
Food, Beverage & Tobacco - 2.8% |
|||||||
Darling Ingredients, Inc. |
73,831 |
a |
2,713,289 |
||||
PepsiCo, Inc. |
45,959 |
7,580,018 |
|||||
10,293,307 |
|||||||
Health Care Equipment & Services - 6.8% |
|||||||
Boston Scientific Corp. |
110,883 |
a |
8,539,100 |
||||
DexCom, Inc. |
41,189 |
a |
4,670,009 |
||||
Edwards Lifesciences Corp. |
64,474 |
a |
5,955,463 |
||||
UnitedHealth Group, Inc. |
10,763 |
5,481,165 |
|||||
24,645,737 |
|||||||
Insurance - 3.9% |
|||||||
RenaissanceRe Holdings Ltd. |
27,371 |
6,117,692 |
|||||
The Progressive Corp. |
38,690 |
8,036,300 |
|||||
14,153,992 |
|||||||
Materials - 2.3% |
|||||||
CF Industries Holdings, Inc. |
45,252 |
3,354,078 |
|||||
Ecolab, Inc. |
21,130 |
5,028,940 |
|||||
8,383,018 |
|||||||
Media & Entertainment - 4.3% |
|||||||
Alphabet, Inc., Cl. A |
85,844 |
15,636,485 |
|||||
Pharmaceuticals, Biotechnology & Life Sciences - 8.2% |
|||||||
AbbVie, Inc. |
41,773 |
7,164,904 |
|||||
Danaher Corp. |
29,790 |
7,443,031 |
3
Statement of Investments (Unaudited) (continued)
Description |
Shares |
Value ($) |
|||||
Common Stocks - 99.0% (continued) |
|||||||
Pharmaceuticals, Biotechnology & Life Sciences - 8.2% (continued) |
|||||||
Eli Lilly & Co. |
10,690 |
9,678,512 |
|||||
Zoetis, Inc. |
30,779 |
5,335,847 |
|||||
29,622,294 |
|||||||
Semiconductors & Semiconductor Equipment - 12.8% |
|||||||
Applied Materials, Inc. |
23,819 |
5,621,046 |
|||||
Micron Technology, Inc. |
47,847 |
6,293,316 |
|||||
NVIDIA Corp. |
253,060 |
31,263,032 |
|||||
Texas Instruments, Inc. |
17,436 |
3,391,825 |
|||||
46,569,219 |
|||||||
Software & Services - 17.2% |
|||||||
Accenture PLC, Cl. A |
24,506 |
7,435,365 |
|||||
Akamai Technologies, Inc. |
42,600 |
a |
3,837,408 |
||||
Intuit, Inc. |
14,402 |
9,465,138 |
|||||
Microsoft Corp. |
68,499 |
30,615,628 |
|||||
PTC, Inc. |
22,286 |
a |
4,048,698 |
||||
Roper Technologies, Inc. |
12,576 |
7,088,588 |
|||||
62,490,825 |
|||||||
Technology Hardware & Equipment - 7.6% |
|||||||
Apple, Inc. |
112,146 |
23,620,191 |
|||||
TE Connectivity Ltd. |
25,644 |
3,857,627 |
|||||
27,477,818 |
|||||||
Utilities - 3.2% |
|||||||
Constellation Energy Corp. |
29,129 |
5,833,665 |
|||||
NextEra Energy, Inc. |
81,551 |
5,774,626 |
|||||
11,608,291 |
|||||||
Total Common Stocks (cost $204,781,829) |
359,315,185 |
||||||
1-Day |
|||||||
Investment Companies - 1.1% |
|||||||
Registered Investment Companies - 1.1% |
|||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares |
5.42 |
4,103,753 |
b |
4,103,753 |
|||
Total Investments (cost $208,885,582) |
100.1% |
363,418,938 |
|||||
Liabilities, Less Cash and Receivables |
(.1%) |
(324,899) |
|||||
Net Assets |
100.0% |
363,094,039 |
a Non-income producing security.
b Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company's prospectus.
Affiliated Issuers |
||||||
Description |
Value ($) |
Purchases ($)† |
Sales ($) |
Value ($) |
Dividends/ |
|
Registered Investment Companies - 1.1% |
||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares - 1.1% |
2,468,260 |
16,485,376 |
(14,849,883) |
4,103,753 |
86,354 |
† Includes reinvested dividends/distributions.
See notes to financial statements.
4
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2024 (Unaudited)
Cost |
Value |
|||||
Assets ($): |
||||||
Investments in securities-See Statement of Investments |
||||||
Unaffiliated issuers |
204,781,829 |
359,315,185 |
||||
Affiliated issuers |
4,103,753 |
4,103,753 |
||||
Dividends receivable |
107,487 |
|||||
Receivable for shares of Common Stock subscribed |
18,105 |
|||||
Prepaid expenses |
9,650 |
|||||
363,554,180 |
||||||
Liabilities ($): |
||||||
Due to BNY Mellon Investment Adviser, Inc. and affiliates-Note 3(c) |
196,027 |
|||||
Payable for shares of Common Stock redeemed |
201,601 |
|||||
Directors' fees and expenses payable |
1,951 |
|||||
Other accrued expenses |
60,562 |
|||||
460,141 |
||||||
Net Assets ($) |
363,094,039 |
|||||
Composition of Net Assets ($): |
||||||
Paid-in capital |
193,180,936 |
|||||
Total distributable earnings (loss) |
169,913,103 |
|||||
Net Assets ($) |
363,094,039 |
Net Asset Value Per Share |
Initial Shares |
Service Shares |
|
Net Assets ($) |
306,246,157 |
56,847,882 |
|
Shares Outstanding |
5,815,272 |
1,101,531 |
|
Net Asset Value Per Share ($) |
52.66 |
51.61 |
|
See notes to financial statements. |
5
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2024 (Unaudited)
Investment Income ($): |
||||||
Income: |
||||||
Cash dividends: |
||||||
Unaffiliated issuers |
1,616,807 |
|||||
Affiliated issuers |
86,354 |
|||||
Interest |
12 |
|||||
Total Income |
1,703,173 |
|||||
Expenses: |
||||||
Management fee-Note 3(a) |
1,015,842 |
|||||
Distribution fees-Note 3(b) |
62,662 |
|||||
Professional fees |
56,003 |
|||||
Prospectus and shareholders' reports |
14,043 |
|||||
Chief Compliance Officer fees-Note 3(c) |
12,712 |
|||||
Directors' fees and expenses-Note 3(d) |
8,048 |
|||||
Shareholder servicing costs-Note 3(c) |
4,940 |
|||||
Loan commitment fees-Note 2 |
3,665 |
|||||
Custodian fees-Note 3(c) |
3,379 |
|||||
Miscellaneous |
10,204 |
|||||
Total Expenses |
1,191,498 |
|||||
Less-reduction in fees due to earnings credits-Note 3(c) |
(561) |
|||||
Net Expenses |
1,190,937 |
|||||
Net Investment Income |
512,236 |
|||||
Realized and Unrealized Gain (Loss) on Investments-Note 4 ($): |
||||||
Net realized gain (loss) on investments |
14,911,387 |
|||||
Net change in unrealized appreciation (depreciation) on investments |
41,787,053 |
|||||
Net Realized and Unrealized Gain (Loss) on Investments |
56,698,440 |
|||||
Net Increase in Net Assets Resulting from Operations |
57,210,676 |
|||||
See notes to financial statements. |
6
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended |
Year Ended |
||||||||
Operations ($): |
|||||||||
Net investment income |
512,236 |
1,801,522 |
|||||||
Net realized gain (loss) on investments |
14,911,387 |
2,306,850 |
|||||||
Net change in unrealized appreciation |
41,787,053 |
57,292,529 |
|||||||
Net Increase (Decrease) in Net Assets |
57,210,676 |
61,400,901 |
|||||||
Distributions ($): |
|||||||||
Distributions to shareholders: |
|||||||||
Initial Shares |
(3,516,845) |
(31,308,747) |
|||||||
Service Shares |
(533,192) |
(3,961,014) |
|||||||
Total Distributions |
(4,050,037) |
(35,269,761) |
|||||||
Capital Stock Transactions ($): |
|||||||||
Net proceeds from shares sold: |
|||||||||
Initial Shares |
4,542,211 |
8,439,068 |
|||||||
Service Shares |
5,982,304 |
12,642,067 |
|||||||
Distributions reinvested: |
|||||||||
Initial Shares |
3,516,845 |
31,308,747 |
|||||||
Service Shares |
533,192 |
3,961,014 |
|||||||
Cost of shares redeemed: |
|||||||||
Initial Shares |
(18,189,885) |
(25,601,862) |
|||||||
Service Shares |
(2,071,625) |
(2,907,088) |
|||||||
Increase (Decrease) in Net Assets |
(5,686,958) |
27,841,946 |
|||||||
Total Increase (Decrease) in Net Assets |
47,473,681 |
53,973,086 |
|||||||
Net Assets ($): |
|||||||||
Beginning of Period |
315,620,358 |
261,647,272 |
|||||||
End of Period |
363,094,039 |
315,620,358 |
|||||||
Capital Share Transactions (Shares): |
|||||||||
Initial Shares |
|||||||||
Shares sold |
91,336 |
203,133 |
|||||||
Shares issued for distributions reinvested |
70,478 |
823,048 |
|||||||
Shares redeemed |
(372,550) |
(616,351) |
|||||||
Net Increase (Decrease) in Shares Outstanding |
(210,736) |
409,830 |
|||||||
Service Shares |
|||||||||
Shares sold |
122,905 |
310,486 |
|||||||
Shares issued for distributions reinvested |
10,897 |
106,080 |
|||||||
Shares redeemed |
(42,804) |
(71,178) |
|||||||
Net Increase (Decrease) in Shares Outstanding |
90,998 |
345,388 |
|||||||
See notes to financial statements. |
7
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. The fund's total returns do not reflect expenses associated with variable annuity or insurance contracts.
Six Months Ended |
|||||||
June 30, 2024 |
Year Ended December 31, |
||||||
Initial Shares |
(Unaudited) |
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per Share Data ($): |
|||||||
Net asset value, beginning of period |
44.99 |
41.73 |
58.08 |
47.24 |
39.30 |
30.73 |
|
Investment Operations: |
|||||||
Net investment incomea |
.08 |
.27 |
.33 |
.24 |
.39 |
.40 |
|
Net realized and unrealized gain |
8.19 |
8.65 |
(12.99) |
12.17 |
8.47 |
9.85 |
|
Total from Investment Operations |
8.27 |
8.92 |
(12.66) |
12.41 |
8.86 |
10.25 |
|
Distributions: |
|||||||
Dividends from |
(.27) |
(.33) |
(.25) |
(.40) |
(.44) |
(.52) |
|
Dividends from net realized |
(.33) |
(5.33) |
(3.44) |
(1.17) |
(.48) |
(1.16) |
|
Total Distributions |
(.60) |
(5.66) |
(3.69) |
(1.57) |
(.92) |
(1.68) |
|
Net asset value, end of period |
52.66 |
44.99 |
41.73 |
58.08 |
47.24 |
39.30 |
|
Total Return (%) |
18.48b |
23.82 |
(22.87) |
27.00 |
24.14 |
34.36 |
|
Ratios/Supplemental Data (%): |
|||||||
Ratio of total expenses |
.67c |
.67 |
.68 |
.67 |
.68 |
.68 |
|
Ratio of net expenses |
.67c |
.67 |
.68 |
.67 |
.68 |
.68 |
|
Ratio of net investment income |
.34c |
.66 |
.71 |
.46 |
.97 |
1.14 |
|
Portfolio Turnover Rate |
12.76b |
35.09 |
28.92 |
13.23 |
24.81 |
25.43 |
|
Net Assets, end of period ($ x 1,000) |
306,246 |
271,082 |
234,377 |
328,328 |
277,555 |
237,287 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
8
Six Months Ended |
|||||||
June 30, 2024 |
Year Ended December 31, |
||||||
Service Shares |
(Unaudited) |
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per Share Data ($): |
|||||||
Net asset value, beginning of period |
44.07 |
41.00 |
57.15 |
46.54 |
38.71 |
30.30 |
|
Investment Operations: |
|||||||
Net investment incomea |
.02 |
.17 |
.21 |
.10 |
.29 |
.31 |
|
Net realized and unrealized gain |
8.04 |
8.47 |
(12.78) |
11.99 |
8.38 |
9.71 |
|
Total from Investment Operations |
8.06 |
8.64 |
(12.57) |
12.09 |
8.67 |
10.02 |
|
Distributions: |
|||||||
Dividends from |
(.19) |
(.24) |
(.14) |
(.31) |
(.36) |
(.45) |
|
Dividends from net realized |
(.33) |
(5.33) |
(3.44) |
(1.17) |
(.48) |
(1.16) |
|
Total Distributions |
(.52) |
(5.57) |
(3.58) |
(1.48) |
(.84) |
(1.61) |
|
Net asset value, end of period |
51.61 |
44.07 |
41.00 |
57.15 |
46.54 |
38.71 |
|
Total Return (%) |
18.34b |
23.50 |
(23.06) |
26.68 |
23.86 |
34.01 |
|
Ratios/Supplemental Data (%): |
|||||||
Ratio of total expenses |
.92c |
.92 |
.93 |
.92 |
.93 |
.93 |
|
Ratio of net expenses |
.92c |
.92 |
.93 |
.92 |
.93 |
.93 |
|
Ratio of net investment income |
.09c |
.41 |
.46 |
.20 |
.72 |
.88 |
|
Portfolio Turnover Rate |
12.76b |
35.09 |
28.92 |
13.23 |
24.81 |
25.43 |
|
Net Assets, end of period ($ x 1,000) |
56,848 |
44,539 |
27,271 |
30,211 |
18,139 |
12,964 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1-Significant Accounting Policies:
BNY Mellon Sustainable U.S. Equity Portfolio, Inc. (the "fund"), which is registered under the Investment Company Act of 1940, as amended (the "Act"), is a diversified open-end management investment company. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund's investment objective is to seek long-term capital appreciation. BNY Mellon Investment Adviser, Inc. (the "Adviser"), a wholly-owned subsidiary of The Bank of New York Mellon Corporation ("BNY"), serves as the fund's investment adviser. Newton Investment Management Limited (the "Sub-Adviser" or "NIM"), an indirect wholly-owned subsidiary of BNY and an affiliate of the Adviser, serves as the sub-adviser. NIM has entered into a sub-sub-investment advisory agreement with its affiliate, Newton Investment Management North America, LLC ("NIMNA"), which enables NIMNA to provide certain advisory services to the Sub-Adviser for the benefit of the fund, including, but not limited to, portfolio management services. NIMNA is subject to the supervision of NIM and the Adviser. NIMNA is also an affiliate of the Adviser. NIMNA's principal office is located at BNY Mellon Center, 201 Washington Street, Boston, MA 02108. NIMNA is an indirect subsidiary of BNY.
BNY Mellon Securities Corporation (the "Distributor"), a wholly-owned subsidiary of the Adviser, is the distributor of the fund's shares, which are sold without a sales charge. The fund is authorized to issue 150 million shares of $.001 par value Common Stock in each of the following classes of shares: Initial and Service. Initial shares are subject to a Shareholder Services Plan fee and Service shares are subject to a Distribution Plan fee. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, Shareholder Services Plan and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative U.S. generally accepted accounting principles ("GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund's financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund's maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation:The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund's investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1-unadjusted quoted prices in active markets for identical investments.
Level 2-other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3-significant unobservable inputs (including the fund's own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund's investments are as follows:
10
The fund's Board of Directors (the "Board") has designated the Adviser as the fund's valuation designee to make all fair value determinations with respect to the fund's portfolio investments, subject to the Board's oversight and pursuant to Rule 2a-5 under the Act.
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depositary Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2024 in valuing the fund's investments:
Level 1-Unadjusted Quoted Prices |
Level 2- Other Significant Observable Inputs |
Level 3-Significant Unobservable Inputs |
Total |
|||
Assets ($) |
||||||
Investments in Securities:† |
||||||
Equity Securities - Common Stocks |
359,315,185 |
- |
- |
359,315,185 |
||
Investment Companies |
4,103,753 |
- |
- |
4,103,753 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Securities transactions and investment income:Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(c) Affiliated issuers:Investments in other investment companies advised by the Adviser are considered "affiliated" under the Act.
(d) Market Risk:The value of the securities in which the fund invests may be affected by political, regulatory, economic and social developments, and developments that impact specific economic sectors, industries or segments of the market. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed-income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or
11
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies world-wide.
Sustainable Investment Approach Risk:The fund's sustainable investment approach may cause it to make different investments than funds that invest principally in equity securities of U.S. companies that do not incorporate sustainable investment criteria when selecting investments. Under certain economic conditions, this could cause the fund to underperform funds that do not incorporate similar criteria. For example, the incorporation of sustainable investment criteria may result in the fund forgoing opportunities to buy certain securities when it might otherwise be advantageous to do so or selling securities when it might otherwise be disadvantageous for the fund to do so. The incorporation of sustainable investment criteria may also affect the fund's exposure to certain sectors and/or types of investments, and may adversely impact the fund's performance depending on whether such sectors or investments are in or out of favor in the market. NIM's security selection process incorporates ESG data provided by third parties, which may be limited for certain companies and/or only take into account one or a few ESG related components. In addition, ESG data may include quantitative and/or qualitative measures, and consideration of this data may be subjective. Different methodologies may be used by the various data sources that provide ESG data. ESG data from third parties used by NIM as part of its sustainable investment process often lacks standardization, consistency and transparency, and for certain companies such data may not be available, complete or accurate. NIM's evaluation of ESG factors relevant to a particular company may be adversely affected in such instances. As a result, the fund's investments may differ from, and potentially underperform, funds that incorporate ESG data from other sources or utilize other methodologies.
(e) Dividends and distributions to shareholders:Dividends and distributions are recorded on the ex-dividend date. Dividends from net investment income and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(f) Federal income taxes:It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2024, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2024, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2023 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2023 was as follows: ordinary income $2,004,758 and long-term capital gains $33,265,003. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2-Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $738 million unsecured credit facility led by Citibank, N.A. (the "Citibank Credit Facility") and a $300 million unsecured credit facility provided by BNY (the "BNY Credit Facility"), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a "Facility"). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $618 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $120 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNY Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2024, the fund did not borrow under the Facilities.
12
NOTE 3-Management Fee, Sub-Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to the management agreement with the Adviser, the management fee is computed at an annual rate of .60% of the value of the fund's average daily net assets and is payable monthly. The Adviser has contractually agreed, from January 1, 2024 through May 1, 2025, to waive receipt of its fees and/or assume the direct expenses of the fund so that the direct expenses of neither class of fund shares (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .70% of the value of the fund's average daily net assets. On or after May 1, 2025, the Adviser may terminate this expense limitation agreement at any time. During the period ended June 30, 2024, there was no expense reimbursement pursuant to the undertaking.
Pursuant to a sub-investment advisory agreement between the Adviser and the Sub-Adviser, the Sub-Adviser serves as the fund's sub-adviser responsible for the day-to-day management of the fund's portfolio. The Adviser pays the Sub-Adviser a monthly fee at an annual percentage of the value of the fund's average daily net assets. The Adviser has obtained an exemptive order from the SEC (the "Order"), upon which the fund may rely, to use a manager of managers approach that permits the Adviser, subject to certain conditions and approval by the Board, to enter into and materially amend sub-investment advisory agreements with one or more sub-advisers who are either unaffiliated with the Adviser or are wholly-owned subsidiaries (as defined under the Act) of the Adviser's ultimate parent company, BNY, without obtaining shareholder approval. The Order also allows the fund to disclose the sub-advisory fee paid by the Adviser to any unaffiliated sub-adviser in the aggregate with other unaffiliated sub-advisers in documents filed with the SEC and provided to shareholders. In addition, pursuant to the Order, it is not necessary to disclose the sub-advisory fee payable by the Adviser separately to a sub-adviser that is a wholly-owned subsidiary of BNY in documents filed with the SEC and provided to shareholders; such fees are to be aggregated with fees payable to the Adviser. The Adviser has ultimate responsibility (subject to oversight by the Board) to supervise any sub-adviser and recommend the hiring, termination, and replacement of any sub-adviser to the Board.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares' shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares' average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2024, Service shares were charged $62,662 pursuant to the Distribution Plan.
(c)Under the Shareholder Services Plan, Initial shares reimburse the Distributor at an amount not to exceed an annual rate of .25% of the value of its average daily net assets for certain allocated expenses with respect to servicing and/or maintaining Initial shares' shareholder accounts. During the period ended June 30, 2024,Initial shares were charged $3,709 pursuant to the Shareholder Services Plan.
The fund has an arrangement with BNY Mellon Transfer, Inc., (the "Transfer Agent"), a subsidiary of BNY and an affiliate of the Adviser, whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset Transfer Agent fees. For financial reporting purposes, the fund includes transfer agent net earnings credits, if any, as an expense offset in the Statement of Operations.
The fund has an arrangement with The Bank of New York Mellon (the "Custodian"), a subsidiary of BNY and an affiliate of the Adviser, whereby the fund will receive interest income or be charged overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates the Transfer Agent, under a transfer agency agreement, for providing transfer agency and cash management services for the fund. The majority of Transfer Agent fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2024, the fund was charged $959 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $561.
The fund compensates the Custodian, under a custody agreement, for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2024, the fund was charged $3,379 pursuant to the custody agreement.
13
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended June 30, 2024, the fund was charged $12,712 for services performed by the fund's Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of "Due to BNY Mellon Investment Adviser, Inc. and affiliates" in the Statement of Assets and Liabilities consist of: Management fee of $177,272, Distribution Plan fees of $11,407, Custodian fees of $3,396, Chief Compliance Officer fees of $3,595 and Transfer Agent fees of $357.
(d)Each board member of the fund also serves as a board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and meeting attendance fees are allocated to each fund based on net assets.
NOTE 4-Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities during the period ended June 30, 2024, amounted to $37,088,182 and $47,679,325, respectively.
At June 30, 2024, accumulated net unrealized appreciation on investments was $154,533,356, consisting of $161,146,111 gross unrealized appreciation and $6,612,755 gross unrealized depreciation.
At June 30, 2024, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
14
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment
Companies. (Unaudited)
N/A
15
Item 9. Proxy Disclosures for Open-End Management Investment Companies. (Unaudited)
N/A
16
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. (Unaudited)
Each board member also serves as a board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets. Directors fees paid by the fund are within Item 7. Statement of Operations as Directors' fees and expenses.
17
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. (Unaudited)
N/A
18
© 2024 BNY Mellon Securities Corporation Code-0111NCSRSA0624 |
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 13. Portfolio Managers for Closed-End Management Investment Companies.
Not applicable.
Item 14. Purchases of Equity Securities By Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 15.
Item 16. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: August 6, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: August 6, 2024
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: August 7, 2024
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)