Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

June 30, 2021

(Unaudited)

 

SHARES   CONVERTIBLE PREFERRED (Restricted)(a)(b) - 1.0% of Net Assets   VALUE 
    Biotechnology – 0.9%    
 294,259   Oculis SA, Series B2, 6.00% (c)  $3,130,916 
 79,934   Oculis SA, Series C, 6.00% (c)   850,498 
 2,538,462   Rainier Therapeutics, Inc. Series A, 6.00%   254 
 1,470,588   Rainier Therapeutics, Inc. Series B, 6.00%   241,470 
 3,596,396   Rallybio Holdings, LLC Series B   5,000,069 
         9,223,207 
     Health Care Equipment & Supplies – 0.1%     
 183,549   IO Light Holdings, Inc. Series A2   634,144 
     TOTAL CONVERTIBLE PREFERRED
(Cost $11,716,042)
   9,857,351 

 

PRINCIPAL
AMOUNT
   NON-CONVERTIBLE NOTES - 15.4% of Net Assets    
    Biotechnology – 3.4%    
$3,245,000   AbbVie, Inc., 3.20% due 05/14/26   3,520,359 
 5,303,000   AbbVie, Inc., 4.25% due 11/14/28   6,145,931 
 10,000,000   Amgen, Inc., 3.63% due 05/15/22   10,180,720 
 2,200,000   Amgen, Inc., 3.20% due 11/02/27   2,403,444 
 840,000   Biogen, Inc., 3.63% due 09/15/22   872,645 
 10,000,000   Gilead Sciences, Inc., 2.95% due 03/01/27   10,781,033 
         33,904,132 
     Health Care Equipment & Supplies  – 1.8%     
 2,100,000   Abbott Laboratories, 3.40% due 11/30/23   2,241,995 
 2,413,000   Becton, Dickinson and Co., 3.70% due 06/06/27   2,682,609 
 1,558,000   Medtronic, plc., 3.50% due 03/15/25   1,711,066 
 3,500,000   Stryker Corp., 3.65% due 03/07/28   3,933,583 
 6,000,000   Zimmer Biomet Holdings, Inc., 4.25% due 08/15/35   6,625,003 
         17,194,256 
     Health Care Providers & Services – 5.7%     
 10,500,000   Anthem, Inc., 3.50% due 08/15/24   11,310,402 
 2,975,000   Anthem, Inc., 4.10% due 03/01/28   3,402,774 
 2,325,000   Anthem, Inc., 4.65% due 08/15/44   2,912,102 
 2,100,000   Cigna Corp., 3.50% due 06/15/24   2,251,725 
 1,504,000   Cigna Corp., 4.38% due 10/15/28   1,750,656 
 8,250,000   Cigna Corp., 6.13% due 11/15/41   11,800,222 
 286,000   CVS Health Corp., 3.70% due 03/09/23   301,168 
 2,031,000   CVS Health Corp., 4.30% due 03/25/28   2,335,238 
 2,100,000   CVS Health Corp., 4.78% due 03/25/38   2,579,586 
 3,700,000   CVS Health Corp., 5.05% due 03/25/48   4,807,317 
 2,750,000   Tenet Healthcare Corp., 4.63% due 07/15/24   2,790,425 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

June 30, 2021

(Unaudited, continued)

 

PRINCIPAL
AMOUNT
   Health Care Providers & Services – continued  VALUE 
$2,100,000   UnitedHealth Group, Inc., 2.88% due 12/15/21  $2,125,926 
 1,460,000   UnitedHealth Group, Inc., 3.85% due 06/15/28   1,679,477 
 4,970,000   UnitedHealth Group, Inc., 3.88% due 12/15/28   5,718,075 
         55,765,093 
     Healthcare Services – 0.2%     
 2,100,000   Laboratory Corporation of America Holdings, 3.60% due 02/01/25   2,272,315 
     Life Sciences Tools & Services – 0.2%     
 2,100,000   Thermo Fisher Scientific, Inc., 3.20% due 08/15/27   2,294,307 
     Pharmaceuticals – 4.1%     
 4,750,000   AstraZeneca plc, 6.45% due 09/15/37 (c)    7,133,543 
 7,500,000   Bristol-Myers Squibb Co., 3.20% due 06/15/26   8,235,461 
 2,100,000   Bristol-Myers Squibb Co., 3.40% due 07/26/29   2,352,131 
 2,200,000   Johnson & Johnson, 2.90% due 01/15/28   2,405,812 
 4,200,000   Merck & Co., Inc., 2.80% due 05/18/23   4,396,316 
 2,100,000   Merck & Co., Inc., 2.75% due 02/10/25   2,237,919 
 4,000,000   Merck & Co., Inc., 3.40% due 03/07/29   4,486,720 
 8,100,000   Pfizer, Inc., 3.45% due 03/15/29   9,119,516 
         40,367,418 
     TOTAL NON-CONVERTIBLE NOTES
(Cost $138,070,278)
   151,797,521 
           
 SHARES   COMMON STOCKS - 100.7% of Net Assets     
     Biotechnology – 14.0%     
 366,775   AbbVie, Inc.   41,313,536 
 35,125   Alexion Pharmaceuticals, Inc. (b)   6,452,814 
 72,998   Amgen, Inc.   17,793,263 
 123,052   Atreca, Inc. (b)(d)   1,048,403 
 24,992   Biogen, Inc. (b)(e)   8,653,980 
 42,972   Exact Sciences Corp. (b)   5,341,849 
 84,894   Exelixis, Inc. (b)   1,546,769 
 364,646   Galera Therapeutics, Inc. (b)   3,584,470 
 194,532   Gilead Sciences, Inc.   13,395,474 
 43,738   I-Mab ADR (b)   3,671,805 
 31,649   Incyte Corp. (b)   2,662,630 
 25,000   Intercept Pharmaceuticals, Inc. (b)   499,250 
 77,000   Iovance Biotherapeutics, Inc. (b)   2,003,540 
 34,093   Nektar Therapeutics (b)   585,036 
 18,174   Regeneron Pharmaceuticals, Inc. (b)(e)   10,150,906 
 21,700   REGENXBIO, Inc. (b)   843,045 
 32,000   Sarepta Therapeutics, Inc. (b)   2,487,680 
 35,235   United Therapeutics Corp. (b)(e)   6,321,511 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

June 30, 2021

(Unaudited, continued)

 

SHARES   Biotechnology – continued  VALUE 
 50,981   Vertex Pharmaceuticals, Inc. (b)(e)  $10,279,299 
         138,635,260 
     Health Care Equipment & Supplies  – 19.1%     
 403,272   Abbott Laboratories (e)   46,751,323 
 38,207   Becton, Dickinson and Co.   9,291,560 
 191,308   DENTSPLY Sirona, Inc. (e)   12,102,144 
 33,012   DexCom, Inc. (b)(e)   14,096,124 
 159,758   Edwards Lifesciences Corp. (b)(e)   16,546,136 
 17,402   Hologic, Inc. (b)   1,161,061 
 14,106   IDEXX Laboratories, Inc. (b)   8,908,644 
 310,692   Medtronic plc (e)   38,566,198 
 16,669   STERIS plc   3,438,815 
 85,667   Stryker Corp. (e)   22,250,290 
 1,600   Teleflex, Inc.   642,864 
 95,597   Zimmer Biomet Holdings, Inc. (e)   15,373,910 
         189,129,069 
     Health Care Providers & Services – 22.7%     
 20,815   1Life Healthcare, Inc. (b)   688,144 
 36,405   Addus HomeCare Corp. (b)   3,175,972 
 29,364   Amedisys, Inc. (b)(e)   7,192,125 
 65,596   Anthem, Inc. (e)   25,044,553 
 33,523   Charles River Laboratories International, Inc. (b)(e)   12,400,828 
 121,708   Cigna Corp. (e)   28,853,316 
 92,835   Community Health Systems, Inc. (b)   1,433,372 
 117,271   CVS Health Corp.   9,785,092 
 19,912   Five Star Senior Living, Inc. (b)   114,693 
 60,963   HCA Healthcare, Inc. (e)   12,603,491 
 35,549   Humana, Inc. (e)   15,738,253 
 35,509   Molina Healthcare, Inc. (b)(e)   8,985,908 
 117,522   Owens & Minor, Inc.   4,974,706 
 132,254   R1 RCM, Inc. (b)   2,941,329 
 209,254   UnitedHealth Group, Inc. (e)   83,793,672 
 41,066   Universal Health Services, Inc.   6,013,294 
         223,738,748 
     Healthcare Services – 1.6%     
 67,290   Centene Corp. (b)   4,907,460 
 39,765   Laboratory Corporation of America Holdings (b)(e)   10,969,175 
         15,876,635 
     Life Sciences Tools & Services – 8.3%     
 39,625   Agilent Technologies, Inc.   5,856,971 
 7,600   Bio-Techne Corp.   3,421,976 
 26,088   Illumina, Inc. (b)(e)   12,345,103 
 6,650   Mettler-Toledo International, Inc. (b)   9,212,511 
 18,335   PerkinElmer, Inc.   2,831,107 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

June 30, 2021

(Unaudited, continued)

 

SHARES   Life Sciences Tools & Services – continued  VALUE 
 25,068   PRA Health Sciences, Inc. (b)  $4,141,484 
 70,218   Thermo Fisher Scientific, Inc. (e)   35,422,874 
 26,201   Waters Corp. (b)(e)   9,055,328 
         82,287,354 
     Medical Devices and Diagnostics – 6.5%     
 6,886   Align Technology, Inc. (b)   4,207,346 
 143,612   Boston Scientific Corp. (b)   6,140,849 
 102,691   Danaher Corp. (e)   27,558,157 
 13,277   Intuitive Surgical, Inc. (b)   12,210,060 
 57,887   ResMed, Inc.   14,270,303 
         64,386,715 
     Pharmaceuticals – 22.2%     
 410,575   Assertio Holdings, Inc. (b)(d)   640,497 
 83,400   AstraZeneca plc ADR (e)   4,995,660 
 368,537   Bristol-Myers Squibb Co.   24,625,642 
 80,025   Catalent, Inc. (b)   8,652,303 
 153,553   Eli Lilly & Co. (e)   35,243,484 
 180,231   Horizon Therapeutics plc (b)(e)   16,876,831 
 26,187   IQVIA Holdings, Inc. (b)   6,345,634 
 361,548   Johnson & Johnson   59,561,417 
 77,674   McKesson Corp.   14,854,376 
 356,818   Merck & Co., Inc.   27,749,736 
 35,681   Organon & Co. (b)   1,079,707 
 28,292   Perrigo Co. plc   1,297,188 
 266,910   Pfizer, Inc.   10,452,196 
 225,704   Teva Pharmaceutical Industries Ltd. ADR (b)   2,234,470 
 25,361   Zoetis, Inc.   4,726,276 
         219,335,417 
     Real Estate Investment Trusts – 6.3%     
 293,879   Diversified Healthcare Trust    1,228,414 
 31,668   Global Medical REIT, Inc.   467,420 
 11,370   Healthcare Realty Trust, Inc.   343,374 
 13,749   Healthcare Trust of America, Inc.   367,098 
 66,791   Healthpeak Properties, Inc.   2,223,472 
 135,390   LTC Properties, Inc.   5,197,622 
 266,557   Medical Properties Trust, Inc.   5,357,796 
 5,596   National Health Investors, Inc.   375,212 
 160,373   New Senior Investment Group, Inc.   1,408,075 
 235,358   Omega Healthcare Investors, Inc.   8,541,142 
 326,992   Physicians Realty Trust   6,039,542 
 419,879   Sabra Health Care REIT, Inc.   7,641,798 
 3,075   Universal Health Realty Income Trust   189,266 
 156,416   Ventas, Inc.   8,931,354 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

SCHEDULE OF INVESTMENTS

June 30, 2021

(Unaudited, continued)

 

SHARES   Real Estate Investment Trusts – continued  VALUE 
 161,599   Welltower, Inc.  $13,428,877 
         61,740,462 
     TOTAL COMMON STOCKS
(Cost $803,482,836)
   995,129,660 
     EXCHANGE TRADED FUND (d)(e)- 1.2% of Net Assets     
 92,081   Health Care Select Sector SPDR Fund   11,597,602 
     TOTAL EXCHANGE TRADED FUND
(Cost $10,950,861)
   11,597,602 

 

  PRINCIPAL
AMOUNT
   SHORT-TERM INVESTMENT - 5.4% of Net Assets     
$ 42,897,000   Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $42,897,000, 0.00%, dated 06/30/21, due 07/01/21 (collateralized by U.S. Treasury Note 1.25%, due 6/30/28, market value $43,755,030)   42,897,000 

 

  SHARES         
  10,577,615   State Street Institutional U.S. Government Money Market Fund, Institutional Class, 0.03% (f)   10,577,615 
      TOTAL SHORT-TERM INVESTMENT
(Cost $53,474,615)
   53,474,615 

 

NUMBER OF
CONTRACTS
(100 SHARES
EACH)/
NOTIONAL
AMOUNT ($)
  OPTION CONTRACTS WRITTEN - (0.1)% of Net Assets  VALUE 
   Call Option Contracts Written - (0.1)%     
401/(4,531,300)  Abbott Laboratories Jul21 113 Call   (134,335)
28/(700,000)  Amedisys, Inc. Jul21 250 Call   (12,040)
97/(3,734,500)  Anthem, Inc. Jun21 385 Call   (36,860)
834/(5,004,000)  AstraZeneca plc Jul21 60 Call   (66,720)
35/(1,312,500)  Biogen, Inc. Jul21 375 Call   (8,925)
132/(5,016,000)  Charles River Laboratories International, Inc. Jul21 380 Call   (36,960)
120/(2,850,000)  Cigna Corp. Jul21 237.5 Call   (46,200)
55/(1,540,000)  Danaher Corp. Jul21 280 Call   (4,675)
94/(611,000)  DENTSPLY Sirona, Inc. Jun21 67.5 Call   (5,170)
32/(1,408,000)  DexCom, Inc. Jul21 440 Call   (15,520)
158/(1,738,000)  Edwards Lifesciences Corp. Jul21 110 Call   (3,950)
152/(3,382,000)  Eli Lilly & Co. Jul21 222.5 Call   (137,560)
60/(1,260,000)  HCA Healthcare, Inc. Jun21 220 Call   (17,280)
137/(1,726,200)  Health Care Select Sector SPDR Fund Jul21 126 Call   (17,947)
176/(1,760,000)  Horizon Therapeutics plc Jul21 100 Call   (14,080)
35/(1,575,000)  Humana, Inc. Jul21 450 Call   (14,525)
37/(1,776,000)  Illumina, Inc. Jul21 480 Call   (27,010)
39/(1,053,000)  Laboratory Corporation of America Holdings Jul21 270 Call   (35,100)
309/(3,924,300)  Medtronic plc Jul21 127 Call   (17,304)

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

 

Tekla Healthcare Opportunities Fund 

SCHEDULE OF INVESTMENTS 

June 30, 2021

(Unaudited, continued)

 

  NUMBER OF
CONTRACTS
(100 SHARES
EACH)/
NOTIONAL
AMOUNT ($)
  Call Option Contracts Written - continued   VALUE  
  34/(884,000)   Molina Healthcare, Inc. Jul21 260 Call   $ (14,280 )
  11/(588,500)   Regeneron Pharmaceuticals, Inc. Jul21 535 Call     (30,580 )
  83/(2,241,000)   Stryker Corp. Jul21 270 Call     (4,150 )
  25/(1,250,000)   Thermo Fisher Scientific, Inc. Jul21 500 Call     (27,325 )
  34/(629,000)   United Therapeutics Corp. Jul21 185 Call     (7,140 )
  208/(8,320,000)   UnitedHealth Group, Inc. Jul21 400 Call     (175,760 )
  50/(950,000)   Vertex Pharmaceuticals, Inc. Jul21 190 Call     (63,600 )
  38/(1,330,000)   Waters Corp. Jul21 350 Call     (13,870 )
  93/(1,581,000)   Zimmer Biomet Holdings, Inc. Jul21 170 Call     (2,976 )
      TOTAL CALL OPTION CONTRACTS WRITTEN 
(Premiums received $(709,018))
    (991,842 )
      TOTAL INVESTMENTS - 123.6%
(Cost $1,016,985,614)
    1,220,864,907  
      OTHER LIABILITIES IN EXCESS OF ASSETS - (23.6)%     (232,886,255 )
      NET ASSETS - 100%   $ 987,978,652  

  

(a) Security fair valued using significant unobservable inputs. See Investment Valuation and Fair Value Measurements.
(b) Non-income producing security.
(c) Foreign security.
(d) All or a portion of this security is on loan as of June 30, 2021.
(e) A portion of security is pledged as collateral for call options written.
(f) This security represents the investment of cash collateral received for securities lending and is a registered investment company advised by State Street Global Advisors. The rate shown is the annualized seven-day yield as of June 30, 2021.
ADR American Depository Receipt

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

(Unaudited)

 

Investment Valuation

 

Shares of publicly traded companies listed on national securities exchanges or trading in the over-the-counter market are typically valued at the last sale price, as of the close of trading, generally 4 p.m., Eastern Time. The Board of Trustees of the Fund (the Trustees) has established and approved fair valuation policies and procedures with respect to securities for which quoted prices may not be available or which do not reflect fair value. Convertible, corporate and government bonds are valued using a third-party pricing service. Convertible bonds are valued using this pricing service only on days when there is no sale reported. Puts and calls generally are valued at the close of regular trading on the securities or commodities exchange on which they are primarily traded. Options on securities generally are valued at their last bid price in the case of exchange traded options or, in the case of OTC-traded options, the average of the last bid price as obtained from two or more dealers unless there is only one dealer, in which case that dealer’s price is used. Forward foreign currency contracts are valued on the basis of the value of the underlying currencies at the prevailing currency exchange rate. Restricted securities of companies that are publicly traded are typically valued based on the closing market quote on the valuation date adjusted for the impact of the restriction as determined in good faith by Tekla Capital Management LLC (the Adviser) also using fair valuation policies and procedures approved by the Trustees described below. Non-exchange traded warrants of publicly traded companies are generally valued using the Black-Scholes model, which incorporates both observable and unobservable inputs. Short-term investments with a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.

 

Convertible preferred shares, warrants or convertible note interests in private companies and other restricted securities, as well as shares of publicly traded companies for which market quotations are not readily available, such as stocks for which trading has been halted or for which there are no current day sales, or which do not reflect fair value, are typically valued in good faith, based upon the recommendations made by the Adviser pursuant to fair valuation policies and procedures approved by the Trustees.

 

The Adviser has a Valuation Sub-Committee comprised of senior management which reports to the Valuation Committee of the Board at least quarterly. Each fair value determination is based on a consideration of relevant factors, including both observable and unobservable inputs. Observable and unobservable inputs the Adviser considers may include (i) the existence of any contractual restrictions on the disposition of securities; (ii) information obtained from the company, which may include an analysis of the company’s financial statements, products, intended markets or technologies; (iii) the price of the same or similar security negotiated at arm’s length in an issuer’s completed subsequent round of financing; (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies; or (v) a probability and time value adjusted analysis of contractual terms. Where available and appropriate, multiple valuation methodologies are applied to confirm fair value. Significant unobservable inputs identified by the Adviser are often used in the fair value determination. A significant change in any of these inputs may result in a significant change in the fair value measurement. Due to the uncertainty inherent in the valuation process, such estimates of fair value may differ significantly from the values that would have been used had a ready market for the investments existed, and differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations used at the date of this schedule of investments.

 

Federal Income Tax Cost

 

At June 30, 2021, the cost of securities for Federal income tax purposes was $1,018,280,209. The net unrealized gain on securities held by the Fund was $202,584,698, including gross unrealized gain of $240,072,404 and gross unrealized loss of $37,487,706.

 

Securities lending

 

The Fund may lend its securities to approved borrowers to earn additional income. The Fund receives cash collateral from the borrower in an amount not less than the market value of the loaned securities. The Fund will invest its cash collateral in State Street Institutional U.S. Government Money Market Fund (SAHXX), which is registered with the Securities and Exchange Commission (SEC) as an investment company. SAHXX invests substantially all of its assets in the State Street U.S. Government Money Market Portfolio. The Fund will receive the benefit of any gains and bear any losses generated by SAHXX with respect to the cash collateral.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

(Unaudited continued)

 

The Fund has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the Fund for the lent securities. The lending agent uses the collateral received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of SAHXX.

 

Although the risk of loss on securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the Fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to return the securities on a timely basis. The Fund receives compensation for lending its securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the Fund is net of fees retained by the securities lending agent. Net income received from SAHXX is a component of securities lending income as recorded by the Fund.

 

As of June 30, 2021, the Fund loaned securities valued at $10,306,358 and received $10,577,615 of cash collateral.

 

Fair Value Measurements

 

The Fund uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels. Level 1 includes quoted prices in active markets for identical investments. Level 2 includes prices determined using other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). The independent pricing vendor may value bank loans and debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, and/or other methodologies designed to identify the market value for such securities and such securities are considered Level 2 in the fair value hierarchy. Level 3 includes prices determined using significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). These inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

For the period ended June 30, 2021, there were no transfers between levels.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

(Unaudited continued)

 

The following is a summary of the levels used as of June 30, 2021 to value the Fund’s net assets.

 

Assets at Value  Level 1   Level 2   Level 3   Total 
Convertible Preferred                    
Biotechnology  $-   $-   $9,223,207   $9,223,207 
Health Care Equipment & Supplies   -    -    634,144    634,144 
Non-convertible Notes                    
Biotechnology   -    33,904,132    -    33,904,132 
Health Care Equipment & Supplies   -    17,194,256    -    17,194,256 
Health Care Providers & Services   -    55,765,093    -    55,765,093 
Healthcare Services   -    2,272,315    -    2,272,315 
Life Sciences Tools & Services   -    2,294,307    -    2,294,307 
Pharmaceuticals   -    40,367,418    -    40,367,418 
Common Stocks                    
Biotechnology   138,635,260    -    -    138,635,260 
Health Care Equipment & Supplies   189,129,069    -    -    189,129,069 
Health Care Providers & Services   223,738,748    -    -    223,738,748 
Healthcare Services   15,876,635    -    -    15,876,635 
Life Sciences Tools & Services   82,287,354    -    -    82,287,354 
Medical Devices and Diagnostics   64,386,715    -    -    64,386,715 
Pharmaceuticals   219,335,417    -    -    219,335,417 
Real Estate Investment Trusts   61,740,462    -    -    61,740,462 
Exchange Traded Fund   11,597,602    -    -    11,597,602 
Short-term Investment   10,577,615    42,897,000    -    53,474,615 
Other Assets   -    -    182,222    182,222 
Total  $1,017,304,877   $194,694,521   $10,039,573   $1,222,038,971 
Other Financial Instruments                    
Liabilities                    
Option Contracts Written  $(991,842)  $-   $-   $(991,842)
Total  $(991,842)  $-   $-   $(991,842)

 

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

 

Investments in Securities  Balance as of
September 30,
2020
   Net realized
gain (loss) and
change in
unrealized
appreciation
(depreciation)
   Cost of
purchases
and
conversions
   Proceeds
from
sales and
conversions
   Net
transfers
into
(out of)
Level 3
   Balance as
of June 30,
2021
 
Convertible Preferred and Warrants                              
Biotechnology  $11,757,099   $18,096,039   $3,329,150   $(23,959,081)  $-   $9,223,207 
Health Care Equipment & Supplies   629,223    4,921    -         -    634,144 
Convertible Notes                              
Biotechnology   649,617    (430,334)   -    (219,283)   -    - 
Common Stock and Warrants                              
Biotechnology   18,426    (10,237)   -    (8,189)   -    - 
Other Assets   -    -    182,222    -         182,222 
Total  $13,054,365   $17,660,389   $3,511,372   $(24,186,553)  $-   $10,039,573 

 

Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2021  $899,914 

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

(Unaudited continued)

 

The following is a quantitative disclosure about significant unobservable inputs used in the determination of the fair value of Level 3 assets.

 

   Fair Value at
June 30, 2021
   Valuation
Technique
  Unobservable
Input
  Range
(Weighted Average)
 
Convertible Preferred  $14,665   Probability adjusted
value
  Probability of events
Timing of events
   50.00% (50.00%)
 
0.25 (0.25) years
 
    9,223,207   Market approach,  (a)   N/A 
    619,479   Recent transaction  (b)   N/A 
Other Assets   182,222   Probability adjusted
value
  Probability of events
Timing of events
   

20.00% (20.00%)

0.25 (0.25) years

 
   $10,039,573            

 

(a)There is no quantitative information to provide as this method of measure is investment specific.

(b)The valuation technique used as a basis to approximate fair value of these investments is based on subsequent financing rounds.

 

Private Companies and Other Restricted Securities

 

The Fund may invest in private companies and other restricted securities if these securities would currently comprise 10% or less of Managed Assets. The value of these securities represented 1% of the Fund’s Managed Assets at June 30, 2021.

 

The following table details the acquisition date, cost, carrying value per unit, and value of the Fund’s private companies and other restricted securities at June 30, 2021. The Fund on its own does not have the right to demand that such securities be registered.

 

 

 

 

Tekla Healthcare Opportunities Fund

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

(Unaudited continued)

 

Security (#)  Acquisition
Date
   Cost   Carrying Value
per Unit
   Value 
IO Light Holdings, Inc. Series A2 Cvt. Pfd  04/30/20   $628,047   $3.45   $634,144 
Oculis SA                    
Series B2, Cvt. Pfd  01/16/19     2,477,246    10.64    3,130,916 
Series C, Cvt. Pfd  4/21/21     850,498    10.64    850,498 
Rainier Therapeutics, Inc.                    
Series A, Cvt. Pfd  01/19/16, 10/24/16     1,651,433    0.00††   254 
Series B, Cvt. Pfd  03/03/17     1,100,200    0.16    241,470 
Rallybio Holdings, LLC                    
Series B Cvt. Pfd  03/27/20     5,008,618    1.39    5,000,069 
        $11,716,042        $9,857,351 

  

(#) See Schedule of Investments and corresponding footnotes for more information on each issuer.
Interest received as part of a corporate action for a previously owned security.
†† Carrying value per unit is greater than $0.00 but less than $0.01