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: 811-21583
Clough Global Dividend and Income Fund
(exact name of Registrant as specified in charter)
1290 Broadway, Suite 1000, Denver, Colorado 80203
(Address of principal executive offices) (Zip code)
Sareena Khwaja-Dixon, Secretary
Clough Global Dividend and Income Fund
1290 Broadway, Suite 1000
Denver, Colorado 80203
(Name and address of agent for service)
Registrant’s telephone number, including area code: 877-256-8445
Date of fiscal year end: October 31
Date of reporting period: November 1, 2019 – April 30, 2020
Item 1. | Reports to Stockholders. |
Section 19(b) Disclosure
April 30, 2020 (Unaudited)
Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund (each a “Fund” and collectively, the “Funds”), acting pursuant to a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Fund’s Board of Trustees (the “Board”), have adopted a plan, consistent with each Fund’s investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the “Plan”). In accordance with the Plan, until July 2019, each Fund paid monthly distributions in an annualized amount of not less than 10% of the respective Fund’s average monthly net asset value (“NAV”). From August 2019 to July 2021, each Fund will pay monthly distributions in an amount not less than the average distribution rate of a peer group of closed-end funds selected by the Board.
Under the Plan, each Fund will distribute all available investment income to its shareholders, consistent with each Fund’s primary investment objectives and as required by the Internal Revenue Code of 1986, as amended (the “Code”). If sufficient investment income is not available on a monthly basis, each Fund will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases to enable each Fund to comply with the distribution requirements imposed by the Code.
Shareholders should not draw any conclusions about each Fund’s investment performance from the amount of these distributions or from the terms of the Plan. Each Fund’s total return performance on net asset value is presented in its financial highlights table.
Until July 2021, each Board may amend, suspend or terminate each Fund’s Plan without prior notice if the Board determines in good faith that continuation would constitute a breach of fiduciary duty or would violate the Investment Company Act of 1940. The suspension or termination of the Plan could have the effect of creating a trading discount (if a Fund’s stock is trading at or above net asset value) or widening an existing trading discount. Each Fund is subject to risks that could have an adverse impact on its ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, increased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to the Notes to Financial Statements in the Annual Report to Shareholders for a more complete description of its risks.
Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current fiscal period. Section 19(a) notices for each Fund, as applicable, are available on the Clough Global Closed-End Funds website www.cloughglobal.com.
Clough Global Funds | Table of Contents |
Shareholder Letter & Portfolio Allocation | |
Clough Global Dividend and Income Fund | 2 |
Clough Global Equity Fund | 6 |
Clough Global Opportunities Fund | 10 |
Statement of Investments | |
Clough Global Dividend and Income Fund | 14 |
Clough Global Equity Fund | 18 |
Clough Global Opportunities Fund | 22 |
Statements of Assets and Liabilities | 27 |
Statements of Operations | 28 |
Statements of Changes in Net Assets | 29 |
Statements of Cash Flows | 32 |
Financial Highlights | |
Clough Global Dividend and Income Fund | 34 |
Clough Global Equity Fund | 35 |
Clough Global Opportunities Fund | 36 |
Notes to Financial Statements | 37 |
Dividend Reinvestment Plan | 55 |
Additional Information | |
Fund Proxy Voting Policies & Procedures | 56 |
Portfolio Holdings | 56 |
Notice | 56 |
Section 19(A) Notices | 56 |
Investment Advisory Agreement Approval | 57 |
Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website at www.cloughglobal.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
Beginning on January 1, 2019, you may, notwithstanding the availability of shareholder reports online, elect to receive all future shareholder reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with a Fund, you can call 1-866-226-8017, from 8am to 5pm CT, to let the Fund know you wish to continue receiving paper copies of your shareholder reports.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-866-226-8017.
Clough Global Dividend and Income Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
To Our Investors,
First, we at Clough Capital Partners L.P. extend our best wishes to all our relationships in this extraordinary time, and hope this update finds you safe and healthy. Our investment team, along with our in-house trading, legal, finance, IT, distribution, and compliance colleagues are up and running seamlessly thanks to the important investments we have made in our infrastructure during our 20-year history.
The Clough Global Dividend and Income Fund (“GLV” or the “Fund”) was down -15.39% on net asset value (“NAV”) and -17.57% on market price for the first six months of the Fund’s fiscal year. The Fund’s benchmark, the 50% Bloomberg Barclays US Aggregate Bond Index/50% MSCI World Index, was down -0.78% for the same period.
The fiscal first half performance (November 1, 2019 – April 30, 2020) for the Fund bore the brunt of a full-blown panic over the coronavirus (COVID-19) attack and subsequent economic shutdown. The stock market decline in March reflected the most intensive scramble for cash ever. Forced deleveraging occurred in hedge funds, mortgage real estate investment trusts (“REITs”) and other traditional users of leverage. The speed and extent of the decline was exceeded only twice in the last 100 years, during the Great Depression and the Global Financial Crisis in 2007-2008. By the end of April, the Federal Reserve (the “Fed”) and U.S. Department of Treasury were responding with the strongest reflationary effort since WWII.
These new programs are likely, in our view, to put enough cash in the economy to turn or at least stem the tide for both the economy and financial markets. The blizzard of announcements from the Treasury and the Fed include cash payments to individuals, small business loans, and various related grants. This infusion of liquidity potentially amounts to 35 to 40% of gross domestic product (“GDP”), an impressive sum. Now authorized to buy paper in unlimited amounts, from banks and non-banks alike, the central bank is trying to make sure there are no cash shortages anywhere in the economy. We think this is likely to support the financial markets while the COVID-19 infection rate levels off. Liquidity being injected into capital markets will go somewhere, and it will still be there when the COVID-19 crisis passes. In the meantime, many stocks are down significantly and valuations for equities are currently much more attractive.
The Fund is using the current market dislocations to make significant investments in technology, healthcare, the emerging mortgage cycle, and attractive income from COVID-19-free sectors in the corporate bond market. We still believe more than ever in a lower for longer interest rate environment. In addition to long duration U.S. Treasuries, the Fund also expressed a low rate view by holding Eurodollar futures (Eurodollars are U.S. bank deposits held abroad and their values rise as the rates on bank deposit decline, which of course is happening). This type of approach is likely to be an effective tool, in our view, if deposit rates go negative.
Technology still has strong tailwinds. For one, we think cloud spending won’t slow. The months of being trapped and tethered to our homes will show us that telecommuting works. Broadband use for work, entertainment, and shopping is surging during the pandemic lockdown and we think that will speed up the 6 GHz mid-band spectrum that is so useful for the rollout of 5G. In any event, demand for 5G services will likely explode. The growth in the uses of artificial intelligence and machine learning will also likely spur a far more rapid buildout of 5G capability.
In March, the focus on healthcare quickly switched from the presidential race to COVID-19 with its unprecedented demand shock. The pandemic has delayed non-essential medical procedures, slowed clinical trials, and interrupted new drug and medical device launches. But it has also created opportunities by accelerating the shift toward virtual care and telemedicine, innovative pharmaceutical and biotech development, and new vaccines and treatments for this treacherous disease. The solution to the economic shutdown will be found in science and biology. While the government stimulus is important to reviving the economy, isolating and launching a treatment that slows replication of COVID-19 in the human body so that our immune system can catch up and fight the virus is the real solution to getting back to normal.
We believe the pending mortgage cycle could be very significant as interest rates have collapsed from the economic slowdown. With the 10-year Treasury well below 1%, the management of First American Financial Corp, one of the largest title insurers, recently estimated that there is $8 trillion dollars of mortgages in the U.S. that are eligible for refinancing and only $1 to $2 trillion in capacity to originate and process these potential transactions. Our investments in this area will focus on pure plays that we believe are likely to directly benefit from the mortgage cycle in origination, title insurance, as well as best in class homebuilders.
We have been of the view for some time now that sustainable yield will be in short supply. The pandemic and the economic fallout will only exacerbate this shortage. With the recent sell-off in corporate debt, we believe investment grade corporate bonds in non COVID-19 sectors, like software and pharmaceuticals, can offer equity-like returns with much lower volatility. Some high-quality REITs in the medical office building sector as well as higher quality agency mortgage REITs and business development companies (“BDCs”) with the liquidity and balance sheet to ride out the economic downturn can offer 5% to 10% dividend yields at significant discounts to book value.
Top 5 Contributors for the Fund’s first fiscal half of the year:
Microsoft Corp (MSFT): the pandemic is accelerating the transition to cloud-hosted software. Microsoft Azure and Office 365 both continue to grow rapidly through this period despite the economic weakness. The advantage of cloud-based software is that the software can be hosted, launched, and used remotely at home, away from the office.
2 | www.cloughglobal.com |
Clough Global Dividend and Income Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
Apple Inc (AAPL): we are looking forward to Apple’s 5G offering next year. Longer term, its strong balance sheet and share buyback program coupled with rapid growth in services make it, in our view, an attractive risk reward opportunity for the Fund.
Ford Motor (F): the Fund was short Ford Motor Co during the period. A heavy debt load and margin pressure from new model launches were weighing on performance prior to the onset of the pandemic. COVID-19 quickly priced a recession level valuation into the stock. The Fund has since covered the position.
Booking Holdings Inc (BKNG) and Sabre Corp (SABR): the Fund established short positions in both BKNG and SABR during the onset of the virus in January. Both companies help facilitate online travel reservations. The mounting travel restrictions from COVID-19 quickly reduced their sales and their stocks fell in value. The Fund has since covered both positions.
Top 5 Detractors for the Fund’s first fiscal half of the year:
Citigroup Inc (C): the U.S. money center banks were sold off by investors over 50% in a matter of weeks. We believe the move lower to this degree was overdone. While there will certainly be losses on the balance sheet, Citigroup does not have significant exposure to the hardest hit areas of the economy like energy, restaurants, and travel and leisure. Unlike 2008, Citigroup, as well as JPMorgan Chase & Co and Bank of America Corp, are operating with much lower leverage and greater liquidity and will be much better situated to recover from the collapse in economic activity. The Fund continues to hold the position.
PennyMac Mortgage Investment Trust (PMT) is an agency mortgage REIT that suffered a significant hit to book value during the first half of the year and was forced to reduce its dividend. Funding costs increased while the pricing of the mortgages it holds fell violently. We believe that the management team at PMT is a good operator of the REIT, but we believe there are other sectors that can recover quicker from the March lows and have exited the position.
Golub Capital BDC Inc (GBDC) is a BDC with a long and successful track record in managing credit to middle market companies. Given the rapid decline in the economy and the stress it put on many of its portfolio companies, Golub reduced its dividend and launched a rights offering to shore up its balance sheet and have dry powder to take advantage of distressed valuations in the market. The rights offering was a short term hit to pricing. However, we believe GBDC offers significant potential going forward in a recovery. The Fund participated in the rights offering and currently maintains its position in GBDC.
Ladder Capital Corp (LADR) is a commercial mortgage REIT. Ladder’s portfolio came under tremendous pressure during March. Investors, worried over questions of rent forbearance and future demand for apartments, hotels, and office space, quickly sold vehicles with commercial exposure like LADR. Similar to PMT, we believe LADR’s management is very sound. However, we believe the recovery could take some time for LADR and have exited the position.
Community Healthcare Trust Inc (CHCT) is a best-in-class medical office building REIT. It leases office space to outpatient facilities that perform essential services like chemotherapy and dialysis. Approximately 97% of their occupants paid rent in March and April. Management continues to make accretive acquisitions and made a modest increase to the dividend. The stock has rallied from its lows in March and we currently maintain the position.
The hedge book served the Fund well during the first half of the year. With valuations over-sold across many sectors, the Fund has covered many of its short positions while maintaining long term positions in sectors like European banks. We believe long duration U.S. Treasuries and the previously mentioned Eurodollar futures are, for the time being, more likely sources of potential protection for the Fund’s long equity book.
As always, please don’t hesitate to reach out to us with any questions. Be safe and we hope to see many of you in person as soon as possible.
Charles I Clough, Jr.
Robert M. Zdunczyk
Semi-Annual Report | April 30, 2020 | 3 |
Clough Global Dividend and Income Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Global Dividend and Income Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not continuously issue shares for sale as open-end mutual funds do. The market price of a closed-end Fund is based on the market’s value.
The information in this letter represents the opinions of the individual portfolio managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. Past performance is no guarantee of future results.
MSCI World Index: a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 23 developed markets countries. Both indices referenced herein reflect the reinvestment of dividends. Effective July 31, 2010, the MSCI World Index returns prior to January 1, 2002 were revised to reflect the total returns, with dividends reinvested, reported by MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).
Bloomberg Barclays US Aggregate Bond Index: an index that measures the performance of the U.S. investment grade bond market. The Barclays Aggregate Bond index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States, including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year.
The net asset value (NAV) of a closed-end fund is the market price of the underlying investments (i.e., stocks and bonds) in the fund’s portfolio, minus liabilities, divided by the total number of fund shares outstanding. However, the fund also has a market price; the value of which it trades on an exchange. This market price can be more or less than its NAV.
It is not possible to invest directly in an Index.
RISKS
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain an annual report or semiannual report which contains this and other information visit www.cloughglobal.com or call 1-877-256-8445. Read them carefully before investing.
A Fund’s distribution policy will, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio.
Distributions may be paid from sources of income other than ordinary income, such as net realized short-term capital gains, net realized long-term capital gains and return of capital. Based on current estimates, we anticipate the most recent distribution has been paid from short-term and long-term capital gains. The actual amounts and sources of the amounts for tax reporting purposes will depend upon a Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.
A Fund’s investments in securities of foreign issuers are subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, social, political and economic instability, differences in securities regulation and trading, expropriation or nationalization of assets, and foreign taxation issues.
A Fund’s investments in preferred stocks and bonds of below investment grade quality (commonly referred to as “high yield” or “junk bonds”), if any, are predominately speculative because of the credit risk of their issuers.
An investment by a Fund in REITs will subject it to various risks. The first, real estate industry risk, is the risk that the REIT share prices will decline because of adverse developments affecting the real estate industry and real property values. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country or of different regions, and the strength of specific industries that rent properties. The second, investment style risk, is the risk that returns from REITs—which typically are small or medium capitalization stocks—will trail returns from the overall stock market. The third, interest rate risk, is the risk that changes in interest rates may hurt real estate values or make REIT shares less attractive than other income-producing investments. Credit risk is the risk that an issuer of a preferred or debt security will become unable to meet its obligation to make dividend, interest and principal payments.
Interest rate risk is the risk that preferred stocks paying fixed dividend rates and fixed-rate debt securities will decline in value because of changes in market interest rates. When interest rates rise the value of such securities generally will fall. Derivative transactions (such as futures contracts and options thereon, options, swaps, and short sales) subject a Fund to increased risk of principal loss due to imperfect correlation or unexpected price or interest rate movements. Compared to investment companies that focus only on large companies, the Fund’s share price may be more volatile because it also invests in small and medium capitalization companies.
Past performance is no guarantee of future results.
4 | www.cloughglobal.com |
Clough Global Dividend and Income Fund | Portfolio Allocation | |
April 30, 2020 (Unaudited) |
Top 10 Equity Holdings(a)(d) | % of Total Portfolio |
1. Apple, Inc. | 3.70% |
2. Microsoft Corp. | 3.51% |
3. Community Healthcare Trust, Inc. | 3.40% |
4. PennyMac Financial Services, Inc. | 3.37% |
5. JPMorgan Chase & Co. | 3.30% |
6. Bank of America Corp. | 2.89% |
7. Citigroup, Inc. | 2.87% |
8. AIA Group, Ltd. | 1.97% |
9. Mastercard, Inc. | 1.90% |
10. Microchip Technology, Inc. | 1.63% |
Global Securities Holdings(a) | % of Total Portfolio |
United States | 64.46% |
U.S. Multinationals(b) | 17.40% |
China | 10.85% |
European Economic Community | 2.84% |
Hong Kong | 2.63% |
Taiwan | 1.31% |
India | 1.08% |
South Korea | 0.59% |
United Kingdom | 0.37% |
Other | -1.54% |
TOTAL INVESTMENTS | 100.00% |
Asset Allocation(a) | % of Total Portfolio |
Common Stock - US | 22.12% |
Common Stock - Foreign | 26.90% |
Exchange Traded Funds | -0.65% |
Total Return Swap Contracts | 3.32% |
Total Equities | 51.69% |
Government L/T | 30.40% |
Corporate Debt | 11.51% |
Preferred Stock | 1.00% |
Asset-Backed Securities | 0.06% |
Total Fixed Income | 42.97% |
Future | 2.84% |
Short-Term Investments | 1.28% |
Other (Cash) | 0.95% |
Purchased Options | 0.25% |
Warrant | 0.02% |
TOTAL INVESTMENTS | 100.00% |
Long | Short | Gross | Net | |
Exposure | Exposure | Exposure | Exposure | |
Country Allocation(c) | % TNA | %TNA | %TNA | %TNA |
United States | 110.8% | -6.7% | 117.5% | 104.1% |
U.S. Multinationals(b) | 32.8% | -5.9% | 38.7% | 26.9% |
China | 16.8% | 0.0% | 16.8% | 16.8% |
Taiwan | 2.0% | 0.0% | 2.0% | 2.0% |
India | 1.7% | 0.0% | 1.7% | 1.7% |
South Korea | 0.9% | 0.0% | 0.9% | 0.9% |
United Kingdom | 0.6% | 0.0% | 0.6% | 0.6% |
Other | 4.5% | -2.8% | 7.3% | 1.7% |
TOTAL INVESTMENTS | 170.1% | -15.4% | 185.5% | 154.7% |
(a) | Percentages calculated based on total portfolio, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(b) | U.S. Multinationals – has more than 50% of revenues derived outside the U.S. |
(c) | Percentages calculated based on net assets, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(d) | Only long equity and equity-related positions are listed. |
Semi-Annual Report | April 30, 2020 | 5 |
Clough Global Equity Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
To Our Investors,
First, we at Clough Capital Partners L.P. extend our best wishes to all our relationships in this extraordinary time, and hope this update finds you safe and healthy. Our investment team, along with our in-house trading, legal, finance, IT, distribution, and compliance colleagues are up and running seamlessly thanks to the important investments we have made in our infrastructure during our 20-year history.
For the first six months of the fiscal year ending April 30, 2020, the Clough Global Equity Fund (“GLQ” or the “Fund”) was down -8.49% on net asset value (“NAV”) and -12.58% on market price. The Fund’s benchmark, the MSCI World Index, was down -7.03% for the same period.
The fiscal first half performance (November 1, 2019 – April 30, 2020) for the Fund bore the brunt of a full-blown panic over the coronavirus (COVID-19) attack and subsequent economic shutdown. The stock market decline in March reflected the most intensive scramble for cash ever. Forced deleveraging occurred in hedge funds, mortgage real estate investment trusts (“REITs”) and other traditional users of leverage. The speed and extent of the decline was exceeded only twice in the last 100 years, during the Great Depression and the Global Financial Crisis in 2007-2008. By the end of April, the Federal Reserve (the “Fed”) and U.S. Department of Treasury were responding with the strongest reflationary effort since WWII.
These new programs are likely, in our view, to put enough cash in the economy to turn or at least stem the tide for both the economy and financial markets. The blizzard of announcements from the Treasury and the Fed include cash payments to individuals, small business loans, and various related grants. This infusion of liquidity potentially amounts to 35 to 40% of gross domestic product (“GDP”), an impressive sum. Now authorized to buy paper in unlimited amounts, from banks and non-banks alike, the central bank is trying to make sure there are no cash shortages anywhere in the economy. We think this is likely to support the financial markets while the COVID-19 infection rate levels off. Liquidity being injected into capital markets will go somewhere, and it will still be there when the COVID-19 crisis passes. In the meantime, many stocks are down significantly and valuations for equities are currently much more attractive.
The Fund is using the current market dislocations to make significant investments in technology, healthcare and the emerging mortgage cycle. We still believe more than ever in a lower for longer interest rate environment. In addition to long duration U.S. Treasuries, the Fund also expressed a low rate view by holding Eurodollar futures (Eurodollars are U.S. bank deposits held abroad and their values rise as the rates on bank deposit decline, which of course is happening). This type of approach islikely to be an effective tool, in our view, if deposit rates go negative.
Technology still has strong tailwinds. For one, we think cloud spending won’t slow. The months of being trapped and tethered to our homes will show us that telecommuting works. Broadband use for work, entertainment, and shopping is surging during the pandemic lockdown and we think that will speed up the 6 GHz mid-band spectrum that is so useful for the rollout of 5G. In any event, demand for 5G services will likely explode. The growth in the uses of artificial intelligence and machine learning will also likely spur a far more rapid buildout of 5G capability.
In March, the focus on healthcare quickly switched from the presidential race to COVID-19 with its unprecedented demand shock. The pandemic has delayed non-essential medical procedures, slowed clinical trials, and interrupted new drug and medical device launches. But it has also created opportunities by accelerating the shift toward virtual care and telemedicine, innovative pharmaceutical and biotech development, and new vaccines and treatments for this treacherous disease. The solution to the economic shutdown will be found in science and biology. While the government stimulus is important to reviving the economy, isolating and launching a treatment that slows replication of COVID-19 in the human body so that our immune system can catch up and fight the virus is the real solution to getting back to normal.
We believe the pending mortgage cycle could be very significant as interest rates have collapsed from the economic slowdown. With the 10-year Treasury well below 1%, the management of First American Financial Corp, one of the largest title insurers, recently estimated that there is $8 trillion dollars of mortgages in the U.S. that are eligible for refinancing and only $1 to $2 trillion in capacity to originate and process these potential transactions. Our investments in this area will focus on pure plays that we believe are likely to directly benefit from the mortgage cycle in origination, title insurance, as well as best in class homebuilders.
We have been of the view for some time now that sustainable yield will be in short supply. The pandemic and the economic fallout will only exacerbate this shortage. In addition to high quality names in technology and health care with attractive free cash flow yields, the Fund will continue to invest in well run, high dividend paying stocks. Best in class REITs in the medical office building sector as well as higher quality agency mortgage REITs and business development companies (“BDCs”) with the liquidity and balance sheet to ride out the economic downturn can offer 5% to 10% dividend yields at significant discounts to book value.
Top 5 Contributors for the Fund’s first fiscal half of the year:
Teladoc Health Inc (TDOC) is the leading telemedicine company in the U.S. The stock gained as the COVID-19 pandemic accelerated the shift from in-office medicine to telemedicine. In April, TDOC raised its 2020 revenue guidance on increased demand for telemedicine. We believe this shift away from in-office visits will continue after the pandemic has passed. The Fund continues to hold the position.
6 | www.cloughglobal.com |
Clough Global Equity Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
Amazon.com Inc (AMZN): for years, Amazon has tried to get prime users to buy groceries online with limited success. The pandemic has changed that with e-commerce penetration spiking even in categories like groceries that had been considered difficult. We believe the crisis will continue to improve the trajectory of e-commerce adoption.
Zai Lab Ltd (ZLAB), a China-based biotechnology company with a broad range of in-licensed products, gained during the first half of the year. The company announced strong results for its oncology product launch, reiterated its expected 2020 milestones (implying minimal disruption from COVID-19), and completed a successful capital raise in January. The Fund continues to hold the position
Microsoft Corp (MSFT): the pandemic is accelerating the transition to cloud-hosted software. Microsoft Azure and Office 365 both continue to grow rapidly through this period despite the economic weakness. The advantage of cloud-based software is that the software can be hosted, launched, and used remotely at home, away from the office.
Regeneron Pharmaceuticals Inc (REGN), a large diversified biotechnology company, gained after providing results that exceeded expectations for its two key products, Dupixent and Eylea. The company also announced positive data in the oncology pipeline and is developing an antibody cocktail that could potentially serve as a treatment for COVID-19. The Fund continues to hold the position.
Top 5 Detractors for the Fund’s first fiscal half of the year:
Citigroup Inc (C): the U.S. money center banks were sold off by investors over 50% in a matter of weeks. We believe the move lower to this degree was overdone. While there will certainly be losses on the balance sheet, Citigroup does not have significant exposure to the hardest hit areas of the economy like energy, restaurants, and travel and leisure. Unlike 2008, Citigroup, as well as JPMorgan Chase & Co and Bank of America Corp, are operating with much lower leverage and greater liquidity and will be much better situated to recover from the collapse in economic activity. The Fund continues to hold the position.
Two Harbors Investment Corp (TWO) and PennyMac Mortgage Investment Trust (PMT) are agency mortgage REITs that suffered significant hits to book value during the first half of the year and were forced to reduce their dividends. Funding costs increased for both while the pricing of the mortgages they held fell violently. We believe that the management teams at TWO and PMT are good operators of their REITs, but we believe there are other sectors that can recover quicker from the March lows and have exited the positions.
Ladder Capital Corp (LADR) is a commercial mortgage REIT. Ladder’s portfolio came under tremendous pressure during March. Investors, worried over questions of rent forbearance and future demand for apartments, hotels, and office space, quickly sold vehicles with commercial exposure like LADR. Similar to PMT, we believe LADR’s management is very sound. However, we believe the recovery could take some time for LADR and have exited the position.
Golub Capital BDC Inc (GBDC) is a BDC with a long and successful track record in managing credit to middle market companies. Given the rapid demise in the economy and the stress it would put on many of its portfolio companies, Golub reduced its dividend and launched a rights offering to shore up its balance sheet and have dry powder to take advantage of distressed valuations in the market. The rights offering was a short term hit to pricing. However, we believe GBDC offers significant potential going forward in a recovery. The Fund participated in the rights offering and currently maintains its position in GBDC.
The hedge book served the Fund well during the first half of the year. With valuations over-sold across many sectors, the Fund has covered many of its short positions while maintaining long term positions in sectors like European banks. We believe long duration U.S. Treasuries and the previously mentioned Eurodollar futures are, for the time being, more likely sources of potential protection for the Fund’s long equity book.
As always, please don’t hesitate to reach out to us with any questions. Be safe and we hope to see many of you in person as soon as possible.
Charles I Clough, Jr.
Robert M. Zdunczyk
Semi-Annual Report | April 30, 2020 | 7 |
Clough Global Equity Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Global Equity Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not continuously issue shares for sale as open-end mutual funds do. The market price of a closed-end Fund is based on the market’s value.
The information in this letter represents the opinions of the individual portfolio managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. Past performance is no guarantee of future results.
MSCI World Index: a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 23 developed markets countries. Both indices referenced herein reflect the reinvestment of dividends. Effective July 31, 2010, the MSCI World Index returns prior to January 1, 2002 were revised to reflect the total returns, with dividends reinvested, reported by MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).
The net asset value (NAV) of a closed-end fund is the market price of the underlying investments (i.e., stocks and bonds) in the fund’s portfolio, minus liabilities, divided by the total number of fund shares outstanding. However, the fund also has a market price; the value of which it trades on an exchange. This market price can be more or less than its NAV.
It is not possible to invest directly in an Index.
RISKS
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain an annual report or semiannual report which contains this and other information visit www.cloughglobal.com or call 1-877-256-8445. Read them carefully before investing.
A Fund’s distribution policy will, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio.
Distributions may be paid from sources of income other than ordinary income, such as net realized short-term capital gains, net realized long-term capital gains and return of capital. Based on current estimates, we anticipate the most recent distribution has been paid from short-term and long-term capital gains. The actual amounts and sources of the amounts for tax reporting purposes will depend upon a Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.
A Fund’s investments in securities of foreign issuers are subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, social, political and economic instability, differences in securities regulation and trading, expropriation or nationalization of assets, and foreign taxation issues.
A Fund’s investments in preferred stocks and bonds of below investment grade quality (commonly referred to as “high yield” or “junk bonds”), if any, are predominately speculative because of the credit risk of their issuers.
An investment by a Fund in REITs will subject it to various risks. The first, real estate industry risk, is the risk that the REIT share prices will decline because of adverse developments affecting the real estate industry and real property values. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country or of different regions, and the strength of specific industries that rent properties. The second, investment style risk, is the risk that returns from REITs—which typically are small or medium capitalization stocks—will trail returns from the overall stock market. The third, interest rate risk, is the risk that changes in interest rates may hurt real estate values or make REIT shares less attractive than other income-producing investments. Credit risk is the risk that an issuer of a preferred or debt security will become unable to meet its obligation to make dividend, interest and principal payments.
Interest rate risk is the risk that preferred stocks paying fixed dividend rates and fixed-rate debt securities will decline in value because of changes in market interest rates. When interest rates rise the value of such securities generally will fall. Derivative transactions (such as futures contracts and options thereon, options, swaps, and short sales) subject a Fund to increased risk of principal loss due to imperfect correlation or unexpected price or interest rate movements. Compared to investment companies that focus only on large companies, the Fund’s share price may be more volatile because it also invests in small and medium capitalization companies.
Past performance is no guarantee of future results.
8 | www.cloughglobal.com |
Clough Global Equity Fund | Portfolio Allocation |
April 30, 2020 (Unaudited) |
Top 10 Equity Holdings(a)(d) | % of Total Portfolio |
1. PennyMac Financial Services, Inc. | 3.42% |
2. Micron Technology, Inc. | 3.36% |
3. Alibaba Group Holding, Ltd. | 2.84% |
4. Amazon.com, Inc. | 2.83% |
5. Citigroup, Inc. | 2.68% |
6. Microsoft Corp. | 2.61% |
7. Bank of America Corp. | 2.60% |
8. JPMorgan Chase & Co. | 2.15% |
9. Regeneron Pharmaceuticals, Inc. | 1.89% |
10. Microchip Technology, Inc. | 1.71% |
Global Securities Holdings(a) | % of Total Portfolio |
United States | 64.63% |
China | 17.64% |
U.S. Multinationals(b) | 7.62% |
European Economic Community | 2.88% |
Hong Kong | 1.98% |
Switzerland | 1.69% |
Taiwan | 1.35% |
India | 1.07% |
United Kingdom | 0.96% |
Canada | 0.76% |
Other | -0.58% |
TOTAL INVESTMENTS | 100.00% |
Asset Allocation(a) | % of Total Portfolio |
Common Stock - US | 42.95% |
Common Stock - Foreign | 35.55% |
Exchange Traded Funds | -8.18% |
Total Return Swap Contracts | 4.03% |
Total Equities | 74.35% |
Government L/T | 18.05% |
Preferred Stock | 0.08% |
Total Fixed Income | 18.13% |
Other (Cash) | 3.90% |
Future | 2.88% |
Purchased Options | 0.44% |
Short-Term Investments | 0.29% |
Warrant | 0.02% |
TOTAL INVESTMENTS | 100.00% |
Long | Short | Gross | Net | |
Exposure | Exposure | Exposure | Exposure | |
Country Allocation(c) | % TNA | %TNA | %TNA | %TNA |
United States | 106.4% | -6.5% | 112.9% | 99.9% |
China | 26.1% | 0.0% | 26.1% | 26.1% |
U.S. Multinationals(b) | 28.2% | -16.9% | 45.1% | 11.3% |
Hong Kong | 2.9% | 0.0% | 2.9% | 2.9% |
Switzerland | 2.5% | 0.0% | 2.5% | 2.5% |
Taiwan | 2.0% | 0.0% | 2.0% | 2.0% |
India | 1.6% | 0.0% | 1.6% | 1.6% |
United Kingdom | 1.4% | 0.0% | 1.4% | 1.4% |
Canada | 1.1% | 0.0% | 1.1% | 1.1% |
Other | 1.9% | -2.8% | 4.7% | -0.9% |
TOTAL INVESTMENTS | 174.1% | -26.2% | 200.3% | 147.9% |
(a) | Percentages calculated based on total portfolio, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(b) | U.S. Multinationals – has more than 50% of revenues derived outside the U.S. |
(c) | Percentages calculated based on net assets, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(d) | Only long equity and equity-related positions are listed. |
Semi-Annual Report | April 30, 2020 | 9 |
Clough Global Opportunities Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
To Our Investors,
First, we at Clough Capital Partners L.P. extend our best wishes to all our relationships in this extraordinary time, and hope this update finds you safe and healthy. Our investment team, along with our in-house trading, legal, finance, IT, distribution, and compliance colleagues are up and running seamlessly thanks to the important investments we have made in our infrastructure during our 20-year history.
The Clough Global Opportunities Fund (“GLO” or the “Fund”) was down -7.78% on net asset value (“NAV”) and -8.38% on market price for the first six months of the Fund’s current fiscal year. The Fund’s benchmark, the 75% MSCI World Index/25% Bloomberg Barclays US Aggregate Index, was down 3.83% for the same period.
The fiscal first half performance (November 1, 2019 – April 30, 2020) for the Fund bore the brunt of a full-blown panic over the coronavirus (COVID-19) attack and subsequent economic shutdown. The stock market decline in March reflected the most intensive scramble for cash ever. Forced deleveraging occurred in hedge funds, mortgage real estate investment trusts (“REITs”) and other traditional users of leverage. The speed and extent of the decline was exceeded only twice in the last 100 years, during the Great Depression and the Global Financial Crisis in 2007-2008. By the end of April, the Federal Reserve (the “Fed”) and U.S. Department of Treasury were responding with the strongest reflationary effort since WWII.
These new programs are likely, in our view, to put enough cash in the economy to turn or at least stem the tide for both the economy and financial markets. The blizzard of announcements from the Treasury and the Fed include cash payments to individuals, small business loans, and various related grants. This infusion of liquidity potentially amounts to 35 to 40% of U.S. gross domestic product (“GDP”), an impressive sum. Now authorized to buy paper in unlimited amounts, from banks and non-banks alike, the central bank is trying to make sure there are no cash shortages anywhere in the economy. We think this is likely to support the financial markets while the COVID-19 infection rate levels off. Liquidity being injected into capital markets will go somewhere, and it will still be there when the COVID-19 crisis passes. In the meantime, many stocks are down significantly and valuations for equities are currently much more attractive.
The Fund is using the current market dislocations to make significant investments in technology, healthcare, the emerging mortgage cycle, and attractive income from COVID-19-free sectors in the corporate bond market. We still believe more than ever in a lower for longer interest rate environment. In addition to long duration U.S. Treasuries, the Fund also expressed a low rate view by holding Eurodollar futures (Eurodollars are U.S. bank deposits held abroad and their values rise as the rates on bank deposit decline, which of course is happening). This type of approach is likely to be an effective tool, in our view, if deposit rates go negative.
Technology still has strong tailwinds. For one, we think cloud spending won’t slow. The months of being trapped and tethered to our homes will show us that telecommuting works. Broadband use for work, entertainment, and shopping is surging during the pandemic lockdown and we think that will speed up the 6 GHz mid-band spectrum that is so useful for the rollout of 5G. In any event, demand for 5G services will likely explode. The growth in the uses of artificial intelligence and machine learning will also likely spur a far more rapid buildout of 5G capability.
In March, the focus on healthcare quickly switched from the presidential race to COVID-19 with its unprecedented demand shock. The pandemic has delayed non-essential medical procedures, slowed clinical trials, and interrupted new drug and medical device launches. But it has also created opportunities by accelerating the shift toward virtual care and telemedicine, innovative pharmaceutical and biotech development, and new vaccines and treatments for this treacherous disease. The solution to the economic shutdown will be found in science and biology. While the government stimulus is important to reviving the economy, isolating and launching a treatment that slows replication of COVID-19 in the human body so that our immune system can catch up and fight the virus is the real solution to getting back to normal.
We believe the pending mortgage cycle could be very significant as interest rates have collapsed from the economic slowdown. With the 10-year Treasury well below 1%, the management of First American Financial Corp, one of the largest title insurers, recently estimated that there is $8 trillion dollars of mortgages in the U.S. that are eligible for refinancing and only $1 to $2 trillion in capacity to originate and process these potential transactions. Our investments in this area will focus on pure plays that we believe are likely to directly benefit from the mortgage cycle in origination, title insurance, as well as best in class homebuilders.
We have been of the view for some time now that sustainable yield will be in short supply. The pandemic and the economic fallout will only exacerbate this shortage. With the recent sell-off in corporate debt, we believe investment grade corporate bonds in non COVID-19 sectors, like software and pharmaceuticals, can offer equity-like returns with much lower volatility. Some high-quality REITs in the medical office building sector as well as higher quality agency mortgage REITs and business development companies (“BDCs”) with the liquidity and balance sheet to ride out the economic downturn can offer 5% to 10% dividend yields at significant discounts to book value.
Top 5 Contributors [for the Fund’s first fiscal half of the year]:
Teladoc Health Inc (TDOC) is the leading telemedicine company in the U.S. The stock gained as the COVID-19 pandemic accelerated the shift from in-office medicine to telemedicine. In April, TDOC raised its 2020 revenue guidance as a result of increased demand for telemedicine. We believe this shift away from in-office visits will continue after the pandemic has passed. TDOC remains a core holding in the Fund.
10 | www.cloughglobal.com |
Clough Global Opportunities Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
Zai Lab Ltd (ZLAB), a China-based biotechnology company with a broad range of in-licensed products, gained during the first half of the year. The company announced strong results for its oncology product launch, reiterated its expected 2020 milestones (implying minimal disruption from COVID-19), and completed a successful capital raise in January. The Fund continues to hold the position.
Microsoft Corp (MSFT): the pandemic is accelerating the transition to cloud-hosted software. Microsoft Azure and Office 365 both continue to grow rapidly through this period despite the economic weakness. The advantage of cloud-based software is that the software can be hosted, launched, and used remotely at home, away from the office.
Netflix Inc (NFLX) is a core position in the Fund as we believe the global transition to video streaming is still in an early stage. The pandemic drove usage in the first quarter, as management reported a significant beat to new subscriber additions in their Q1 2020 earnings report. We continue to like the stock given its unrivaled content distribution and management team.
Regeneron Pharmaceuticals Inc (REGN), a large diversified biotechnology company, gained after providing results that exceeded expectations for its two key products, Dupixent and Eylea. The company also announced positive data in its oncology pipeline and is developing an antibody cocktail that could potentially serve as a treatment for COVID-19. The Fund continues to hold the position.
Top 5 Detractors [for the Fund’s first fiscal half of the year]:
Citigroup Inc (C): the U.S. money center banks were sold off by investors over 50% in a matter of weeks. We believe the move lower to this degree was overdone. While there will certainly be losses on the balance sheet, Citigroup does not have significant exposure to the hardest hit areas of the economy like energy, restaurants, and travel and leisure. Unlike 2008, Citigroup, as well as JPMorgan Chase & Co and Bank of America Corp, are operating with much lower leverage and greater liquidity and will be much better situated to recover from the collapse in economic activity. The Fund continues to hold the position.
Two Harbors Investment Corp (TWO) and PennyMac Mortgage Investment Trust (PMT) are agency mortgage REITs that suffered significant hits to book value during the first half of the year and were forced to reduce their dividends. Funding costs increased for both while the pricing of the mortgages they hold fell violently. We believe that the management teams at TWO and PMT are good operators of their REITs, but we feel there are other sectors that can recover quicker from the March lows and have exited the positions.
Ladder Capital Corp (LADR), is a commercial mortgage REIT. Ladder’s portfolio came under tremendous pressure during March. Investors, worried over questions of rent forbearance and future demand for apartments, hotels, and office space, quickly sold vehicles with commercial exposure like LADR. Similar to PMT, we believe LADR management is very sound. However, we believe the recovery could take some time for LADR and have exited the position.
Ares Capital Corp (ARCC) is a leading BDC with a strong history of managing credit to middle market companies. ARCC’s book value decreased as the sudden economic collapse put strain on its portfolio companies. Like most BDCs, Ares cut its dividend to shore up its balance sheet. We are strong believers in the ARCC management team and have followed them closely for the last fifteen years. At this time, we feel the recovery in price will be a slow grind and thus have temporarily exited the position until a more attractive entry point hopefully presents itself.
The hedge book served the Fund well during the first half of the year. With valuations over-sold across many sectors, the Fund has covered many of its short positions while maintaining long term positions in sectors like European banks. We believe long duration U.S. Treasuries and the previously mentioned Eurodollar futures are, for the time being, more likely sources of potential protection for the Fund’s long equity book.
As always, please don’t hesitate to reach out to us with any questions. Be safe and we hope to see many of you in person as soon as possible.
Charles I Clough, Jr.
Robert M. Zdunczyk
Semi-Annual Report | April 30, 2020 | 11 |
Clough Global Opportunities Fund | Shareholder Letter |
April 30, 2020 (Unaudited) |
This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Opportunities Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not continuously issue shares for sale as open-end mutual funds do. The market price of a closed-end Fund is based on the market’s value.
The information in this letter represents the opinions of the individual portfolio managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. Past performance is no guarantee of future results.
MSCI World Index: a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 23 developed markets countries. Both indices referenced herein reflect the reinvestment of dividends. Effective July 31, 2010, the MSCI World Index returns prior to January 1, 2002 were revised to reflect the total returns, with dividends reinvested, reported by MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).
Bloomberg Barclays US Aggregate Bond Index: an index that measures the performance of the U.S. investment grade bond market. The Barclays Aggregate Bond index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States, including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year.
The net asset value (NAV) of a closed-end fund is the market price of the underlying investments (i.e., stocks and bonds) in the fund’s portfolio, minus liabilities, divided by the total number of fund shares outstanding. However, the fund also has a market price; the value of which it trades on an exchange. This market price can be more or less than its NAV.
It is not possible to invest directly in an Index.
RISKS
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain an annual report or semiannual report which contains this and other information visit www.cloughglobal.com or call 1-877-256-8445. Read them carefully before investing.
A Fund’s distribution policy will, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio.
Distributions may be paid from sources of income other than ordinary income, such as net realized short-term capital gains, net realized long-term capital gains and return of capital. Based on current estimates, we anticipate the most recent distribution has been paid from short-term and long-term capital gains. The actual amounts and sources of the amounts for tax reporting purposes will depend upon a Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.
A Fund’s investments in securities of foreign issuers are subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, social, political and economic instability, differences in securities regulation and trading, expropriation or nationalization of assets, and foreign taxation issues.
A Fund’s investments in preferred stocks and bonds of below investment grade quality (commonly referred to as “high yield” or “junk bonds”), if any, are predominately speculative because of the credit risk of their issuers.
An investment by a Fund in REITs will subject it to various risks. The first, real estate industry risk, is the risk that the REIT share prices will decline because of adverse developments affecting the real estate industry and real property values. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country or of different regions, and the strength of specific industries that rent properties. The second, investment style risk, is the risk that returns from REITs—which typically are small or medium capitalization stocks—will trail returns from the overall stock market. The third, interest rate risk, is the risk that changes in interest rates may hurt real estate values or make REIT shares less attractive than other income-producing investments. Credit risk is the risk that an issuer of a preferred or debt security will become unable to meet its obligation to make dividend, interest and principal payments.
Interest rate risk is the risk that preferred stocks paying fixed dividend rates and fixed-rate debt securities will decline in value because of changes in market interest rates. When interest rates rise the value of such securities generally will fall. Derivative transactions (such as futures contracts and options thereon, options, swaps, and short sales) subject a Fund to increased risk of principal loss due to imperfect correlation or unexpected price or interest rate movements. Compared to investment companies that focus only on large companies, the Fund’s share price may be more volatile because it also invests in small and medium capitalization companies.
Past performance is no guarantee of future results.
12 | www.cloughglobal.com |
Clough Global Opportunities Fund | Portfolio Allocation |
April 30, 2020 (Unaudited) |
Top 10 Equity Holdings(a)(d) | % of Total Portfolio |
1. PennyMac Financial Services, Inc. | 3.39% |
2. Micron Technology, Inc. | 3.32% |
3. Alibaba Group Holding, Ltd. | 2.87% |
4. Bank of America Corp. | 2.55% |
5. Citigroup, Inc. | 2.51% |
6. Microsoft Corp. | 2.45% |
7. JPMorgan Chase & Co. | 2.25% |
8. Amazon.com, Inc. | 2.10% |
9. Regeneron Pharmaceuticals, Inc. | 1.90% |
10. Microchip Technology, Inc. | 1.73% |
Global Securities Holdings(a) | % of Total Portfolio |
United States | 65.27% |
China | 18.37% |
U.S. Multinationals(b) | 6.66% |
European Economic Community | 2.89% |
Hong Kong | 2.00% |
Taiwan | 1.37% |
Switzerland | 1.35% |
India | 1.10% |
United Kingdom | 0.91% |
Canada | 0.77% |
Other | -0.67% |
TOTAL INVESTMENTS | 100.00% |
Asset Allocation(a) | % of Total Portfolio |
Common Stock - US | 40.82% |
Common Stock - Foreign | 33.38% |
Exchange Traded Funds | -8.28% |
Total Return Swap Contracts | 4.07% |
Total Equities | 70.00% |
Government L/T | 17.31% |
Corporate Debt | 4.98% |
Preferred Stock | 0.51% |
Total Fixed Income | 22.81% |
Future | 2.89% |
Other (Cash) | 2.32% |
Short-Term Investments | 1.53% |
Purchased Options | 0.45% |
Warrant | 0.01% |
TOTAL INVESTMENTS | 100.00% |
Long | Short | Gross | Net | |
Exposure | Exposure | Exposure | Exposure | |
Country Allocation(c) | % TNA | %TNA | %TNA | %TNA |
United States | 107.1% | -6.4% | 113.5% | 100.7% |
China | 27.1% | 0.0% | 27.1% | 27.1% |
U.S. Multinationals(b) | 26.8% | -17.0% | 43.8% | 9.8% |
Hong Kong | 3.0% | 0.0% | 3.0% | 3.0% |
Taiwan | 2.0% | 0.0% | 2.0% | 2.0% |
Switzerland | 2.0% | 0.0% | 2.0% | 2.0% |
India | 1.6% | 0.0% | 1.6% | 1.6% |
United Kingdom | 1.3% | 0.0% | 1.3% | 1.3% |
Canada | 1.1% | 0.0% | 1.1% | 1.1% |
Other | 1.9% | -2.9% | 4.8% | -1.0% |
TOTAL INVESTMENTS | 173.9% | -26.3% | 200.2% | 147.6% |
(a) | Percentages calculated based on total portfolio, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(b) | U.S. Multinationals – has more than 50% of revenues derived outside the U.S. |
(c) | Percentages calculated based on net assets, including securities sold short, cash balances, market value of futures, and notional value of return swaps. |
(d) | Only long equity and equity-related positions are listed. |
Semi-Annual Report | April 30, 2020 | 13 |
Clough Global Dividend and Income Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Shares | Value | |||||||
COMMON STOCKS 90.10% | ||||||||
Communication Services 2.11% | ||||||||
Tencent Holdings, Ltd. | 32,000 | $ | 1,721,251 | |||||
Consumer Discretionary 6.42% | ||||||||
DR Horton, Inc.(a) | 27,200 | 1,284,384 | ||||||
Lennar Corp. - Class A(a) | 25,400 | 1,271,778 | ||||||
Li Ning Co., Ltd. | 255,000 | 804,224 | ||||||
Melco Resorts & Entertainment, Ltd. - ADR(a) | 52,500 | 830,550 | ||||||
Sands China, Ltd. | 197,600 | 813,085 | ||||||
Service Corp. International(a)(b) | 6,600 | 242,484 | ||||||
5,246,505 | ||||||||
Consumer Staples 1.71% | ||||||||
Sun Art Retail Group, Ltd. | 836,000 | 1,393,244 | ||||||
Energy 0.58% | ||||||||
Scorpio Tankers, Inc. | 21,800 | 477,202 | ||||||
Financials 33.07% | ||||||||
AGNC Investment Corp.(a) | 117,100 | 1,454,382 | ||||||
AIA Group, Ltd. | 268,200 | 2,489,131 | ||||||
Bank of America Corp.(a)(b) | 151,691 | 3,648,168 | ||||||
Barings BDC, Inc.(a) | 202,900 | 1,371,604 | ||||||
Citigroup, Inc.(a)(b) | 74,730 | 3,628,889 | ||||||
First American Financial Corp. | 24,900 | 1,148,388 | ||||||
Golub Capital BDC, Inc.(a) | 92,400 | 948,024 | ||||||
HDFC Bank, Ltd. | 102,178 | 1,363,099 | ||||||
JPMorgan Chase & Co.(a) | 43,500 | 4,165,560 | ||||||
PennyMac Financial Services, Inc.(a) | 141,100 | 4,256,987 | ||||||
Ping An Insurance Group Co. of China, Ltd. - Class H | 73,200 | 752,537 | ||||||
Solar Capital, Ltd.(a) | 34,600 | 521,076 | ||||||
TPG Specialty Lending, Inc.(a) | 77,100 | 1,269,066 | ||||||
27,016,911 | ||||||||
Health Care 7.55% | ||||||||
Amgen, Inc.(a) | 7,564 | 1,809,460 | ||||||
Eli Lilly & Co.(a)(b) | 7,413 | 1,146,346 | ||||||
Gilead Sciences, Inc.(a)(b) | 9,700 | 814,800 | ||||||
Thermo Fisher Scientific, Inc.(a)(b) | 3,251 | 1,088,045 | ||||||
Zimmer Biomet Holdings, Inc.(a)(b) | 3,970 | 475,209 | ||||||
Zoetis, Inc.(a)(b) | 6,410 | 828,877 | ||||||
6,162,737 | ||||||||
Information Technology 28.82% | ||||||||
Apple, Inc.(a)(b) | 15,900 | 4,671,420 | ||||||
Infineon Technologies AG | 20,162 | 374,504 | ||||||
Intel Corp.(a) | 25,600 | 1,535,488 | ||||||
Lam Research Corp.(a)(b) | 4,310 | 1,100,257 | ||||||
Mastercard, Inc. - Class A(a) | 8,749 | 2,405,713 | ||||||
MediaTek, Inc. | 64,000 | 893,178 | ||||||
Microchip Technology, Inc.(a) | 23,500 | 2,061,655 |
Shares | Value | |||||||
Information Technology (continued) | ||||||||
Microsoft Corp.(a)(b) | 24,734 | $ | 4,432,580 | |||||
NVIDIA Corp.(a) | 5,760 | 1,683,533 | ||||||
Samsung Electronics Co., Ltd. | 18,265 | 749,518 | ||||||
Silergy Corp. | 19,940 | 801,315 | ||||||
Taiwan Semiconductor | ||||||||
Manufacturing Co., Ltd. - Sponsored ADR | 14,400 | 765,072 | ||||||
Teradyne, Inc. | 11,500 | 719,210 | ||||||
Visa, Inc. - Class A(a)(b) | 7,559 | 1,350,944 | ||||||
23,544,387 | ||||||||
Real Estate 9.84% | ||||||||
Community Healthcare Trust, Inc.(a) | 115,500 | 4,296,600 | ||||||
KWG Group Holdings, Ltd. | 594,500 | 875,742 | ||||||
Longfor Properties Co., Ltd. | 149,000 | 754,370 | ||||||
Physicians Realty Trust(a) | 59,600 | 919,032 | ||||||
SBA Communications Corp.(a) | 4,120 | 1,194,470 | ||||||
8,040,214 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $72,364,703) | 73,602,451 | |||||||
PREFERRED STOCKS 1.55% | ||||||||
Gabelli Equity Trust, Inc. | ||||||||
Series K, Perpetual Maturity 5.000%(a)(b)(c) | 27,100 | 682,378 | ||||||
Trinity Capital, Inc., 01/16/2025 7.000%(a)(d) | 22,400 | 585,200 | ||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost $1,237,500) | 1,267,578 | |||||||
RIGHTS 0.04% | ||||||||
Golub Capital BDC, Inc., Strike Price $1.32, Expires 5/7/2020(a) | 47,375 | 30,486 | ||||||
TOTAL RIGHTS | ||||||||
(Cost $0) | 30,486 | |||||||
Underlying Security/Expiration Date/Exercise Price/Notional Amount | Contracts | Value | ||||||
PURCHASED OPTIONS 0.38% | ||||||||
Put Options Purchased 0.38% | ||||||||
S&P 500® Index | ||||||||
07/17/20, $2,700, $9,319,776 | 32 | 313,120 | ||||||
Total Put Options Purchased | ||||||||
(Cost $311,592) | 313,120 |
14 | www.cloughglobal.com |
Clough Global Dividend and Income Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Principal | ||||||||
Description/Maturity Date/Rate | Amount | Value | ||||||
CORPORATE BONDS 17.80% | ||||||||
Agile Group Holdings, Ltd. | ||||||||
11/23/2020, 9.500%(e) | $ | 250,000 | $ | 254,109 | ||||
Amgen, Inc. | ||||||||
02/21/2030, 2.450%(a)(b) | 400,000 | 413,884 | ||||||
AstraZeneca PLC | ||||||||
01/17/2029, 4.000%(a)(b) | 400,000 | 470,811 | ||||||
BankUnited, Inc. | ||||||||
11/17/2025, 4.875%(a)(b) | 750,000 | 800,130 | ||||||
Boston Scientific Corp. | ||||||||
03/01/2029, 4.000%(a)(b) | 400,000 | 449,230 | ||||||
Broadcom, Inc. | ||||||||
04/15/2030, 5.000%(d) | 300,000 | 336,595 | ||||||
Carvana Co. | ||||||||
10/01/2023, 8.875%(d) | 500,000 | 491,875 | ||||||
Centene Corp. | ||||||||
01/15/2025, 4.750% | 250,000 | 257,137 | ||||||
01/15/2025, 4.750%(d) | 160,000 | 164,568 | ||||||
Eli Lilly and Co. | ||||||||
03/15/2029, 3.375%(a)(b) | 400,000 | 456,405 | ||||||
Fifth Third Bancorp | ||||||||
Series J, Perpetual Maturity, 3M US L + 3.129%(a)(b)(c)(f) | 700,000 | 585,564 | ||||||
Goldman Sachs Capital II | ||||||||
Perpetual Maturity, 3M US L + 0.768%(a)(b)(c)(f) | 828,000 | 669,247 | ||||||
Healthcare Realty Trust, Inc. | ||||||||
01/15/2028, 3.625% | 400,000 | 400,383 | ||||||
Home Depot, Inc. | ||||||||
09/15/2056, 3.500%(a)(b) | 500,000 | 565,512 | ||||||
JPMorgan Chase & Co. | ||||||||
Series II, Perpetual Maturity, 1D US SOFR + 2.745%(c)(f) | 200,000 | 174,125 | ||||||
Marriott International, Inc. | ||||||||
03/01/2021, 2.875% | 300,000 | 294,204 | ||||||
Massachusetts Mutual Life Insurance Co. | ||||||||
04/15/2050, 3.375%(d) | 300,000 | 308,247 | ||||||
Mellon Capital IV | ||||||||
Series 1, Perpetual Maturity, 3M US L + 0.565%(a)(b)(c)(f) | 585,000 | 527,521 | ||||||
Micron Technology, Inc. | ||||||||
02/06/2029, 5.327%(a) | 1,000,000 | 1,147,015 | ||||||
MidAmerican Energy Co. | ||||||||
09/15/2043, 4.800%(a) | 500,000 | 665,677 | ||||||
NortonLifeLock, Inc. | ||||||||
04/15/2025, 5.000%(d) | 600,000 | 606,750 | ||||||
PulteGroup, Inc. | ||||||||
03/01/2026, 5.500% | 300,000 | 320,865 | ||||||
Seagate HDD Cayman | ||||||||
06/01/2027, 4.875% | 200,000 | 208,883 | ||||||
Sunac China Holdings, Ltd. | ||||||||
04/19/2023, 8.350%(e) | 750,000 | 748,255 | ||||||
Times China Holdings, Ltd. | ||||||||
06/04/2021, 7.850%(e) | 500,000 | 507,583 |
Principal | ||||||||
Description/Maturity Date/Rate | Amount | Value | ||||||
CORPORATE BONDS (continued) | ||||||||
Toll Brothers Finance Corp. | ||||||||
11/01/2029, 3.800% | $ | 250,000 | $ | 235,325 | ||||
TPG Specialty Lending, Inc. | ||||||||
11/01/2024, 3.875%(a)(b) | 1,500,000 | 1,380,524 | ||||||
USB Capital IX | ||||||||
Perpetual Maturity, 3M US L + 1.020%(a)(b)(c)(f) | 770,000 | 625,044 | ||||||
Wisconsin Public Service Corp. | ||||||||
11/01/2044, 4.752% | 365,000 | 477,252 | ||||||
TOTAL CORPORATE BONDS | ||||||||
(Cost $14,946,930) | 14,542,720 | |||||||
ASSET-BACKED SECURITIES 0.09% | ||||||||
United States Small Business Administration | ||||||||
Series 2008-20L, Class 1, 12/01/2028, 6.220%(a)(b) | 66,025 | 73,785 | ||||||
TOTAL ASSET-BACKED SECURITIES | ||||||||
(Cost $66,024) | 73,785 | |||||||
GOVERNMENT & AGENCY OBLIGATIONS 47.05% | ||||||||
U.S. Treasury Bonds | ||||||||
02/15/2029, 5.250%(a) | 1,710,000 | 2,394,200 | ||||||
11/15/2049, 2.375% | 2,300,000 | 2,910,758 | ||||||
U.S. Treasury Notes | ||||||||
08/15/2020, 1.500%(a) | 1,000,000 | 1,004,092 | ||||||
09/30/2020, 1.375%(a) | 2,000,000 | 2,010,547 | ||||||
11/15/2020, 1.750%(a) | 5,000,000 | 5,044,043 | ||||||
12/31/2020, 2.500%(a) | 3,000,000 | 3,047,285 | ||||||
01/31/2021, 2.500% | 1,500,000 | 1,526,485 | ||||||
02/28/2022, 1.125%(a) | 8,138,000 | 8,276,441 | ||||||
02/28/2023, 2.625%(a) | 1,900,000 | 2,027,656 | ||||||
02/28/2025, 1.125% | 3,200,000 | 3,320,000 | ||||||
02/28/2027, 1.125% | 6,600,000 | 6,867,094 | ||||||
TOTAL GOVERNMENT & AGENCY OBLIGATIONS | ||||||||
(Cost $38,243,236) | 38,428,601 |
Shares | Value | |||||||
SHORT-TERM INVESTMENTS 1.98% | ||||||||
Money Market Funds 1.98% | ||||||||
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (0.116% 7-day yield) | 1,616,859 | 1,616,859 | ||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost $1,616,859) | 1,616,859 |
Semi-Annual Report | April 30, 2020 | 15 |
Clough Global Dividend and Income Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Value | ||||
Total Investments - 158.99% | ||||
(Cost $128,786,844) | $ | 129,875,600 | ||
Liabilities in Excess of Other Assets - (58.99%)(g) | (48,189,018 | ) | ||
NET ASSETS - 100.00% | $ | 81,686,582 |
Investment Abbreviations:
1D FEDEF - Federal Funds Effective Rate (Daily)
LIBOR - London Interbank Offered Rate
SOFR - Secured Overnight Financing Rate
FEDEF Rates:
1D FEDEF - 1 Day FEDEF as of April 30, 2020 was 0.05%
Libor Rates:
3M US L - 3 Month LIBOR as of April 30, 2020 was 0.56%
1D SOFR as of April 30, 2020 was 0.04%
(a) | Pledged security; a portion or all of the security is pledged as collateral for securities sold short, total return swap contracts, or borrowings. As of April 30, 2020, the aggregate value of those securities was $84,734,519, representing 103.73% of net assets. (See Note 1 and Note 6) |
(b) | Loaned security; a portion or all of the security is on loan as of April 30, 2020. |
(c) | This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. |
(d) | Security is exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of April 30, 2020, these securities had an aggregate value of $2,493,235 or 3.05% of net assets. |
(e) | Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. As of April 30, 2020, the aggregate value of those securities was $1,509,947, representing 1.85% of net assets. |
(f) | Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at April 30, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above. |
(g) | Includes cash which is being held as collateral for total return swap contracts and securities sold short. |
(h) | Non-income producing security. |
For Fund compliance purposes, the Fund’s sector classifications refer to any one of the sector sub-classifications used by one or more widely recognized market indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sector sub-classifications for reporting ease. Sectors are shown as a percent of net assets. These sector classifications are unaudited.
16 | www.cloughglobal.com |
Clough Global Dividend and Income Fund | Statement of Investments | |
April 30, 2020 (Unaudited) |
FUTURES CONTRACTS
Unrealized | ||||||||||||||||
Expiration | Notional | Appreciation/ | ||||||||||||||
Description | Counterparty | Position | Contracts | Date | Value | (Depreciation) | ||||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 682 | December 2020 | $ | 169,962,925 | $ | 79,086 | ||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 1,930 | June 2021 | 481,269,625 | 3,516,413 | ||||||||||
$ | 651,232,550 | $ | 3,595,499 |
TOTAL RETURN SWAP CONTRACTS
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Appreciation | |||||||||||||
Morgan Stanley | Banco Santander SA | $ | (171,225 | ) | 1D FEDEF - 50 bps | 1D FEDEF | 05/20/2020 | $ | (95,356 | ) | $ | 75,869 | ||||||||
Morgan Stanley | Kweichow Moutai Co., Ltd. | 1,895,084 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 1,983,237 | 88,153 | |||||||||||||
Morgan Stanley | Sany Heavy Industry Co., Ltd. | 1,493,642 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 1,536,980 | 43,338 | |||||||||||||
$ | 3,217,501 | $ | 3,424,861 | $ | 207,360 | |||||||||||||||
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Depreciation | |||||||||||||
Morgan Stanley | Wuliangye Yibin Co., Ltd. | $ | 774,443 | 1D FEDEF - 255 bps | 1D FEDEF | 05/04/2022 | $ | 768,172 | $ | (6,271 | ) | |||||||||
TOTAL | $ | 3,991,944 | $ | 4,193,033 | $ | 201,089 |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 17 |
Clough Global Equity Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Shares | Value | |||||||
COMMON STOCKS 130.14% | ||||||||
Communication Services 7.07% | ||||||||
Facebook, Inc. - Class A(a)(b) | 9,700 | $ | 1,985,687 | |||||
GCI Liberty, Inc. - Class A(a)(b) | 8,800 | 535,304 | ||||||
Netflix, Inc.(a)(b) | 5,319 | 2,233,182 | ||||||
Tencent Holdings, Ltd. | 55,400 | 2,979,916 | ||||||
T-Mobile US, Inc.(a)(b)(c) | 30,920 | 2,714,776 | ||||||
10,448,865 | ||||||||
Consumer Discretionary 21.61% | ||||||||
Alibaba Group Holding, Ltd. - Sponsored ADR(a)(b) | 10,370 | 2,101,688 | ||||||
Alibaba Group Holding, Ltd.(a) | 161,150 | 4,095,008 | ||||||
Amazon.com, Inc.(a)(b)(c) | 2,500 | 6,185,000 | ||||||
Carnival Corp. | 81,400 | 1,294,260 | ||||||
Carvana Co.(a)(b) | 27,870 | 2,232,666 | ||||||
DR Horton, Inc.(b) | 49,100 | 2,318,502 | ||||||
JD.com, Inc. - ADR(a)(b) | 86,600 | 3,732,460 | ||||||
Lennar Corp. - Class A(b) | 45,600 | 2,283,192 | ||||||
Li Ning Co., Ltd. | 271,500 | 856,262 | ||||||
Meituan Dianping - Class B(a) | 191,300 | 2,561,360 | ||||||
Melco Resorts & Entertainment, Ltd. - ADR(b) | 93,600 | 1,480,752 | ||||||
Royal Caribbean Cruises Ltd.(b) | 27,600 | 1,290,852 | ||||||
Sands China, Ltd. | 360,800 | 1,484,620 | ||||||
31,916,622 | ||||||||
Consumer Staples 1.62% | ||||||||
Sun Art Retail Group, Ltd. | 1,436,500 | 2,394,012 | ||||||
Energy 0.56% | ||||||||
Scorpio Tankers, Inc.(b) | 37,700 | 825,253 | ||||||
Financials 26.75% | ||||||||
AGNC Investment Corp.(b) | 224,100 | 2,783,322 | ||||||
AIA Group, Ltd. | 306,400 | 2,843,661 | ||||||
Bank of America Corp.(b)(c) | 236,205 | 5,680,730 | ||||||
Citigroup, Inc.(b)(c) | 120,419 | 5,847,547 | ||||||
First American Financial Corp.(b) | 45,700 | 2,107,684 | ||||||
Golub Capital BDC, Inc.(b) | 150,109 | 1,540,118 | ||||||
HDFC Bank, Ltd. | 175,164 | 2,336,764 | ||||||
JPMorgan Chase & Co.(b)(c) | 49,150 | 4,706,604 | ||||||
PennyMac Financial Services, Inc.(b) | 247,600 | 7,470,092 | ||||||
Ping An Insurance Group Co. of China, Ltd. - Class H | 128,800 | 1,324,135 | ||||||
Solar Capital, Ltd.(b) | 39,400 | 593,364 | ||||||
TPG Specialty Lending, Inc.(b) | 137,800 | 2,268,188 | ||||||
39,502,209 | ||||||||
Health Care 22.78% | ||||||||
1Life Healthcare, Inc.(a)(b) | 35,000 | 863,450 | ||||||
Alphamab Oncology(a)(d) | 6,922 | 15,179 | ||||||
Amgen, Inc.(b) | 8,214 | 1,964,953 |
Shares | Value | |||||||
Health Care (continued) | ||||||||
Amphivena Therapeutics, Inc. - Series C(a)(d)(e)(f)(g) | 334,425 | $ | 1,199,997 | |||||
Apellis Pharmaceuticals, Inc.(a)(b)(c) | 77,397 | 2,652,395 | ||||||
Arcellx, Inc.(a)(d)(e)(f)(g) | 234,345 | 365,813 | ||||||
Centrexion Therapeutics(a)(d)(e)(f)(g) | 66,719 | 723,701 | ||||||
Centrexion Therapeutics Corp.(a)(e)(f)(g) | 4,336 | 47,032 | ||||||
CRISPR Therapeutics AG(a)(b) | 51,180 | 2,518,056 | ||||||
Galapagos NV - Sponsored ADR(a)(b)(c) | 3,366 | 742,035 | ||||||
Gilead Sciences, Inc.(b)(c) | 17,000 | 1,428,000 | ||||||
Gossamer Bio, Inc.(a)(b) | 87,821 | 1,143,429 | ||||||
GW Pharmaceuticals PLC - ADR(a)(b)(c) | 20,998 | 2,102,740 | ||||||
Idorsia, Ltd.(a)(d) | 40,561 | 1,173,233 | ||||||
Mirati Therapeutics, Inc.(a)(b)(c) | 22,400 | 1,904,896 | ||||||
Regeneron Pharmaceuticals, Inc.(a)(b)(c) | 7,835 | 4,120,270 | ||||||
SmileDirectClub, Inc.(a)(b) | 168,900 | 1,303,908 | ||||||
Teladoc Health, Inc.(a)(b)(c) | 12,204 | 2,008,656 | ||||||
Thermo Fisher Scientific, Inc.(b)(c) | 5,634 | 1,885,587 | ||||||
Veracyte, Inc.(a)(b)(c) | 34,310 | 925,341 | ||||||
Vertex Pharmaceuticals, Inc.(a)(b)(c) | 5,610 | 1,409,232 | ||||||
Zai Lab, Ltd. - ADR(a)(b)(c) | 38,390 | 2,407,821 | ||||||
Zoetis, Inc.(b) | 5,710 | 738,360 | ||||||
33,644,084 | ||||||||
Industrials 0.94% | ||||||||
Uber Technologies, Inc.(a) | 45,700 | 1,383,339 | ||||||
Information Technology 43.37% | ||||||||
Adobe, Inc.(a)(b) | 6,370 | 2,252,687 | ||||||
Apple, Inc.(b)(c) | 10,840 | 3,184,792 | ||||||
Cadence Design Systems, Inc.(a)(b) | 16,930 | 1,373,531 | ||||||
Crowdstrike Holdings, Inc. - Class A(a)(b) | 21,200 | 1,434,392 | ||||||
GDS Holdings, Ltd. - ADR(a)(b)(c) | 31,330 | 1,795,836 | ||||||
Infineon Technologies AG | 38,595 | 716,892 | ||||||
Intel Corp.(b)(c) | 46,200 | 2,771,076 | ||||||
Lam Research Corp.(b)(c) | 7,775 | 1,984,802 | ||||||
Mastercard, Inc. - Class A(b) | 5,905 | 1,623,698 | ||||||
MediaTek, Inc. | 113,000 | 1,577,018 | ||||||
Microchip Technology, Inc.(b) | 42,600 | 3,737,298 | ||||||
Micron Technology, Inc.(a)(b)(c) | 153,473 | 7,349,822 | ||||||
Microsoft Corp.(b)(c) | 31,862 | 5,709,989 | ||||||
NVIDIA Corp.(b)(c) | 10,190 | 2,978,333 | ||||||
Okta, Inc.(a)(b)(c) | 10,400 | 1,573,520 | ||||||
PayPal Holdings, Inc.(a)(b)(c) | 24,530 | 3,017,190 | ||||||
Qorvo, Inc.(a)(b) | 14,900 | 1,460,647 | ||||||
RingCentral, Inc. - Class A(a)(b)(c) | 7,100 | 1,622,563 | ||||||
salesforce.com, Inc.(a)(b)(c) | 16,799 | 2,720,598 | ||||||
Samsung Electronics Co., Ltd. | 32,646 | 1,339,653 | ||||||
ServiceNow, Inc.(a)(b)(c) | 7,285 | 2,560,969 | ||||||
Shopify, Inc. - Class A(a) | 2,615 | 1,653,438 |
18 | www.cloughglobal.com |
Clough Global Equity Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Shares | Value | |||||||
Information Technology (continued) | ||||||||
Silergy Corp. | 35,130 | $ | 1,411,745 | |||||
Taiwan Semiconductor | ||||||||
Manufacturing Co., Ltd. - Sponsored ADR(b) | 25,800 | 1,370,754 | ||||||
Teradyne, Inc. | 22,100 | 1,382,134 | ||||||
Visa, Inc. - Class A(b)(c) | 9,670 | 1,728,222 | ||||||
Workday, Inc. - Class A(a)(b) | 14,550 | 2,239,245 | ||||||
Zoom Video Communications, Inc. - Class A(a)(b)(c) | 11,000 | 1,486,870 | ||||||
64,057,714 | ||||||||
Real Estate 5.44% | ||||||||
Community Healthcare Trust, Inc.(b) | 52,700 | 1,960,440 | ||||||
KWG Group Holdings, Ltd. | 732,500 | 1,079,026 | ||||||
Longfor Properties Co., Ltd. | 265,000 | 1,341,664 | ||||||
Physicians Realty Trust(b) | 101,400 | 1,563,588 | ||||||
SBA Communications Corp.(b) | 7,220 | 2,093,223 | ||||||
8,037,941 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $183,703,659) | 192,210,039 | |||||||
PREFERRED STOCKS 0.12% | ||||||||
Gabelli Equity Trust, Inc. | ||||||||
Series K, Perpetual Maturity 5.000%(b)(h) | 7,130 | 179,534 | ||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost $178,250) | 179,534 | |||||||
RIGHTS 0.03% | ||||||||
Golub Capital BDC, Inc., Strike Price $1.32, Expires 5/7/2020(b) | 69,152 | 44,499 | ||||||
TOTAL RIGHTS | ||||||||
(Cost $0) | 44,499 | |||||||
Underlying Security/Expiration Date/ | ||||||||
Exercise Price/Notional Amount | Contracts | Value | ||||||
PURCHASED OPTIONS 0.65% | ||||||||
Put Options Purchased 0.65% | ||||||||
S&P 500® Index | ||||||||
07/17/20, $2,700, $17,765,823 | 61 | 596,885 | ||||||
SPDR® S&P® Biotech ETF | ||||||||
06/19/20, $85, $12,327,480 | 1,320 | 366,300 | ||||||
Total Put Options Purchased | ||||||||
(Cost $1,139,222) | 963,185 |
Principal | ||||||||
Description/Maturity Date/Rate | Amount | Value | ||||||
GOVERNMENT & AGENCY OBLIGATIONS 26.70% | ||||||||
U.S. Treasury Bonds | ||||||||
02/15/2029, 5.250%(b) | $ | 2,560,000 | $ | 3,584,300 | ||||
11/15/2049, 2.375% | 3,100,000 | 3,923,195 | ||||||
U.S. Treasury Notes | ||||||||
05/31/2020, 1.500%(b) | 3,000,000 | 3,003,466 | ||||||
11/15/2020, 1.750%(b) | 4,000,000 | 4,035,234 | ||||||
12/31/2020, 2.500%(b) | 3,000,000 | 3,047,285 | ||||||
01/31/2021, 2.500%(b) | 1,500,000 | 1,526,485 | ||||||
02/28/2022, 1.125%(b) | 6,000,000 | 6,102,070 | ||||||
02/28/2023, 2.625%(b) | 6,500,000 | 6,936,719 | ||||||
02/28/2025, 1.125%(b) | 3,000,000 | 3,112,500 | ||||||
02/28/2027, 1.125%(b) | 4,000,000 | 4,161,875 | ||||||
TOTAL GOVERNMENT & AGENCY OBLIGATIONS | ||||||||
(Cost $39,133,278) | 39,433,129 | |||||||
Shares | Value | |||||||
SHORT-TERM INVESTMENTS 0.43% | ||||||||
Money Market Funds 0.43% | ||||||||
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (0.116% 7-day yield) | 638,559 | 638,559 | ||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost $638,559) | 638,559 | |||||||
Total Investments - 158.07% | ||||||||
(Cost $224,792,968) | 233,468,945 | |||||||
Liabilities in Excess of Other Assets - (58.07%)(i) | (85,772,218 | ) | ||||||
NET ASSETS - 100.00% | $ | 147,696,727 | ||||||
SCHEDULE OF SECURITIES SOLD | ||||||||
SHORT (a) | Shares | Value | ||||||
COMMON STOCKS (14.00%) | ||||||||
Consumer Discretionary (0.52%) | ||||||||
Booking Holdings, Inc. | (516 | ) | (763,974 | ) | ||||
Financials (2.64%) | ||||||||
Deutsche Bank AG | (356,200 | ) | (2,639,442 | ) | ||||
Mediobanca Banca di Credito Finanziario SpA | (67,513 | ) | (391,230 | ) | ||||
Societe Generale S.A. | (14,196 | ) | (221,839 | ) | ||||
UniCredit SpA | (84,636 | ) | (651,931 | ) | ||||
(3,904,442 | ) | |||||||
Health Care (6.13%) | ||||||||
Alexion Pharmaceuticals, Inc. | (26,100 | ) | (2,804,967 | ) | ||||
Bruker Corp. | (19,520 | ) | (767,527 | ) |
Semi-Annual Report | April 30, 2020 | 19 |
Clough Global Equity Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
(a) | Non-income producing security. |
(b) | Pledged security; a portion or all of the security is pledged as collateral for securities sold short, total return swap contracts, or borrowings. As of April 30, 2020, the aggregate value of those securities was $175,686,820, representing 118.95% of net assets. (See Note 1 and Note 6) |
(c) | Loaned security; a portion or all of the security is on loan as of April 30, 2020. |
(d) | All or a portion of the security is exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of April 30, 2020, these securities had an aggregate value of $2,641,350 or 1.79% of net assets. |
(e) | Private Placement; these securities may only be resold in transactions exempt from registration under the Securities Act of 1933. As of April 30, 2020, these securities had an aggregate value of $2,336,543 or 1.58% of net assets. |
(f) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. (See Note 1) |
(g) | Fair valued security; valued by management in accordance with procedures approved by the Board. As of April 30, 2020, these securities had an aggregate value of $2,336,543 or 1.58% of total net assets. |
(h) | This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. |
(i) | Includes cash which is being held as collateral for total return swap contracts and securities sold short. |
For Fund compliance purposes, the Fund’s sector classifications refer to any one of the sector sub-classifications used by one or more widely recognized market indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sector sub-classifications for reporting ease. Sectors are shown as a percent of net assets. These sector classifications are unaudited.
20 | www.cloughglobal.com |
Clough Global Equity Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
FUTURES CONTRACTS
Unrealized | ||||||||||||||||
Expiration | Notional | Appreciation/ | ||||||||||||||
Description | Counterparty | Position | Contracts | Date | Value | (Depreciation) | ||||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 1,145 | December 2020 | $ | 285,348,313 | $ | 132,777 | ||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 3,290 | June 2021 | 820,402,626 | 6,150,647 | ||||||||||
$ | 1,105,750,939 | $ | 6,283,424 |
TOTAL RETURN SWAP CONTRACTS
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Appreciation | |||||||||||||
Morgan Stanley | Banco Santander SA | $ | (292,822 | ) | 1D FEDEF -50 bps | 1D FEDEF | 05/20/2020 | $ | (163,074 | ) | $ | 129,748 | ||||||||
Morgan Stanley | Kweichow Moutai Co., Ltd. | 3,351,498 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 3,508,804 | 157,306 | |||||||||||||
Morgan Stanley | Sany Heavy Industry Co., Ltd. | 2,641,046 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 2,717,580 | 76,534 | |||||||||||||
$ | 5,699,722 | $ | 6,063,310 | $ | 363,588 | |||||||||||||||
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Depreciation | |||||||||||||
Morgan Stanley | Wuliangye Yibin Co., Ltd. | $ | 1,420,783 | 1D FEDEF - 255 bps | 1D FEDEF | 05/04/2022 | $ | 1,409,277 | $ | (11,506 | ) | |||||||||
Morgan Stanley | Zoomlion Heavy Industry Science | 1,342,610 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 1,337,791 | (4,819 | ) | ||||||||||||
$ | 2,763,393 | $ | 2,747,068 | $ | (16,325 | ) | ||||||||||||||
TOTAL | $ | 8,463,115 | $ | 8,810,378 | $ | 347,263 |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 21 |
Clough Global Opportunities Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Shares | Value | |||||||
COMMON STOCKS 123.58% | ||||||||
Communication Services 7.60% | ||||||||
Facebook, Inc. - Class A(a)(b)(c) | 19,700 | $ | 4,032,787 | |||||
GCI Liberty, Inc. - Class A(a)(b)(c) | 44,272 | 2,693,066 | ||||||
Netflix, Inc.(a)(b) | 10,694 | 4,489,876 | ||||||
Tencent Holdings, Ltd. | 111,500 | 5,997,484 | ||||||
T-Mobile US, Inc.(a)(b)(c) | 59,390 | 5,214,442 | ||||||
22,427,655 | ||||||||
Consumer Discretionary 19.43% | ||||||||
Alibaba Group Holding, Ltd. - Sponsored ADR(a)(b) | 21,100 | 4,276,337 | ||||||
Alibaba Group Holding, Ltd.(a) | 324,820 | 8,254,052 | ||||||
Amazon.com, Inc.(a)(b)(c) | 3,700 | 9,153,800 | ||||||
Carnival Corp. | 164,200 | 2,610,780 | ||||||
Carvana Co.(a)(b) | 56,260 | 4,506,989 | ||||||
DR Horton, Inc.(b) | 78,200 | 3,692,604 | ||||||
JD.com, Inc. - ADR(a)(b) | 168,400 | 7,258,040 | ||||||
Lennar Corp. - Class A(b) | 72,200 | 3,615,054 | ||||||
Li Ning Co., Ltd. | 552,000 | 1,740,909 | ||||||
Meituan Dianping - Class B(a) | 384,800 | 5,152,176 | ||||||
Melco Resorts & Entertainment, Ltd. - ADR(b) | 188,900 | 2,988,398 | ||||||
Royal Caribbean Cruises Ltd.(b) | 55,600 | 2,600,412 | ||||||
Sands China, Ltd. | 364,000 | 1,497,788 | ||||||
57,347,339 | ||||||||
Consumer Staples 1.64% | ||||||||
Sun Art Retail Group, Ltd. | 2,904,500 | 4,840,521 | ||||||
Energy 0.57% | ||||||||
Scorpio Tankers, Inc.(b) | 76,200 | 1,668,018 | ||||||
Financials 25.65% | ||||||||
AGNC Investment Corp.(b) | 450,200 | 5,591,484 | ||||||
AIA Group, Ltd. | 619,400 | 5,748,575 | ||||||
Bank of America Corp.(b)(c) | 461,910 | 11,108,936 | ||||||
Barings BDC, Inc.(b) | 242,000 | 1,635,920 | ||||||
Citigroup, Inc.(b)(c) | 225,127 | 10,932,167 | ||||||
First American Financial Corp.(b) | 92,100 | 4,247,652 | ||||||
Golub Capital BDC, Inc.(b) | 105,757 | 1,085,067 | ||||||
HDFC Bank, Ltd. | 360,606 | 4,810,641 | ||||||
JPMorgan Chase & Co.(b)(c) | 102,300 | 9,796,248 | ||||||
PennyMac Financial Services, Inc.(b) | 490,137 | 14,787,433 | ||||||
Ping An Insurance Group Co. of China, Ltd. - Class H | 263,800 | 2,712,010 | ||||||
Solar Capital, Ltd.(b) | 68,985 | 1,038,914 | ||||||
TPG Specialty Lending, Inc.(b) | 133,927 | 2,204,439 | ||||||
75,699,486 | ||||||||
Health Care 22.00% | ||||||||
1Life Healthcare, Inc.(a)(b) | 70,200 | 1,731,834 | ||||||
Alphamab Oncology(a)(d) | 14,036 | 30,779 |
Shares | Value | |||||||
Health Care (continued) | ||||||||
Amgen, Inc.(b)(c) | 16,475 | $ | 3,941,149 | |||||
Amphivena Therapeutics, Inc. - Series C(a)(d)(e)(f)(g) | 780,326 | 2,799,997 | ||||||
Apellis Pharmaceuticals, Inc.(a)(b)(c) | 156,301 | 5,356,435 | ||||||
Arcellx, Inc.(a)(d)(e)(f)(g) | 538,792 | 841,054 | ||||||
Centrexion Therapeutics(a)(d)(e)(f)(g) | 217,952 | 2,364,125 | ||||||
Centrexion Therapeutics Corp.(a)(e)(f)(g) | 14,166 | 153,659 | ||||||
CRISPR Therapeutics AG(a)(b) | 119,338 | 5,871,430 | ||||||
Galapagos NV - Sponsored ADR(a)(b)(c) | 6,819 | 1,503,248 | ||||||
Gilead Sciences, Inc.(b)(c) | 33,900 | 2,847,600 | ||||||
Gossamer Bio, Inc.(a)(b) | 180,188 | 2,346,048 | ||||||
GW Pharmaceuticals PLC - ADR(a)(b)(c) | 39,434 | 3,948,921 | ||||||
Mirati Therapeutics, Inc.(a)(b)(c) | 45,300 | 3,852,312 | ||||||
Regeneron Pharmaceuticals, Inc.(a)(b)(c) | 15,740 | 8,277,351 | ||||||
SmileDirectClub, Inc.(a)(b) | 338,300 | 2,611,676 | ||||||
Teladoc Health, Inc.(a)(b)(c) | 24,823 | 4,085,618 | ||||||
Thermo Fisher Scientific, Inc.(b)(c) | 11,332 | 3,792,594 | ||||||
Vertex Pharmaceuticals, Inc.(a)(b) | 11,368 | 2,855,642 | ||||||
Zai Lab, Ltd. - ADR(a)(b)(c) | 77,420 | 4,855,782 | ||||||
Zoetis, Inc.(b)(c) | 6,670 | 862,498 | ||||||
64,929,752 | ||||||||
Industrials 0.94% | ||||||||
Uber Technologies, Inc.(a) | 91,900 | 2,781,813 | ||||||
Information Technology 40.46% | ||||||||
Adobe, Inc.(a)(b) | 12,820 | 4,533,665 | ||||||
Apple, Inc.(b)(c) | 21,910 | 6,437,158 | ||||||
Cadence Design Systems, Inc.(a)(b) | 34,110 | 2,767,344 | ||||||
Crowdstrike Holdings, Inc. - Class A(a)(b) | 42,800 | 2,895,848 | ||||||
GDS Holdings, Ltd. - ADR(a)(b)(c) | 63,290 | 3,627,783 | ||||||
Infineon Technologies AG | 77,543 | 1,440,340 | ||||||
Intel Corp.(b) | 72,900 | 4,372,542 | ||||||
Lam Research Corp.(b)(c) | 10,860 | 2,772,341 | ||||||
Mastercard, Inc. - Class A(b) | 8,697 | 2,391,414 | ||||||
MediaTek, Inc. | 229,000 | 3,195,904 | ||||||
Microchip Technology, Inc.(b) | 85,800 | 7,527,234 | ||||||
Micron Technology, Inc.(a)(b)(c) | 301,973 | 14,461,487 | ||||||
Microsoft Corp.(b)(c) | 59,564 | 10,674,464 | ||||||
NVIDIA Corp.(b) | 20,430 | 5,971,280 | ||||||
Okta, Inc.(a)(b)(c) | 21,310 | 3,224,203 | ||||||
PayPal Holdings, Inc.(a)(b)(c) | 49,350 | 6,070,050 | ||||||
Qorvo, Inc.(a)(b) | 29,910 | 2,932,077 | ||||||
RingCentral, Inc. - Class A(a)(b)(c) | 14,200 | 3,245,126 | ||||||
salesforce.com, Inc.(a)(b)(c) | 33,471 | 5,420,629 | ||||||
Samsung Electronics Co., Ltd. | 65,907 | 2,704,543 | ||||||
ServiceNow, Inc.(a)(b)(c) | 14,726 | 5,176,778 | ||||||
Shopify, Inc. - Class A(a) | 5,280 | 3,338,491 | ||||||
Silergy Corp. | 58,000 | 2,330,806 |
22 | www.cloughglobal.com |
Clough Global Opportunities Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Shares | Value | |||||||
Information Technology (continued) | ||||||||
Taiwan Semiconductor | ||||||||
Manufacturing Co., Ltd. - Sponsored ADR(b) | 52,000 | $ | 2,762,760 | |||||
Teradyne, Inc. | 44,300 | 2,770,522 | ||||||
Visa, Inc. - Class A(b)(c) | 7,514 | 1,342,902 | ||||||
Workday, Inc. - Class A(a)(b) | 14,520 | 2,234,628 | ||||||
Zoom Video Communications, Inc. - Class A(a)(b)(c) | 20,600 | 2,784,502 | ||||||
119,406,821 | ||||||||
Real Estate 5.29% | ||||||||
Community Healthcare Trust, Inc.(b) | 89,311 | 3,322,369 | ||||||
KWG Group Holdings, Ltd. | 1,473,000 | 2,169,837 | ||||||
Longfor Properties Co., Ltd. | 534,500 | 2,706,111 | ||||||
Physicians Realty Trust(b) | 207,400 | 3,198,108 | ||||||
SBA Communications Corp.(b) | 14,470 | 4,195,142 | ||||||
15,591,567 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $348,009,680) | 364,692,972 | |||||||
PREFERRED STOCKS 0.76% | ||||||||
Gabelli Equity Trust, Inc. | ||||||||
Series K, Perpetual Maturity 5.000%(b)(h) | 12,683 | 319,358 | ||||||
Trinity Capital, Inc., 01/16/2025 7.000%(b)(d) | 73,600 | 1,922,800 | ||||||
TOTAL PREFERRED STOCKS | ||||||||
(Cost $2,157,075) | 2,242,158 | |||||||
RIGHTS 0.02% | ||||||||
Golub Capital BDC, Inc., Strike Price $1.32, Expires 5/7/2020(b) | 66,139 | 42,560 | ||||||
TOTAL RIGHTS | ||||||||
(Cost $0) | 42,560 |
Underlying Security/Expiration Date/ | ||||||||
Exercise Price/Notional Amount | Contracts | Value | ||||||
PURCHASED OPTIONS 0.66% | ||||||||
Put Options Purchased 0.66% | ||||||||
S&P 500® Index 07/17/20, $2,700, $35,822,889 | 123 | 1,203,555 | ||||||
SPDR® S&P® Biotech ETF 06/19/20, $85, $24,841,740 | 2,660 | 738,150 | ||||||
Total Put Options Purchased | ||||||||
(Cost $2,296,443) | 1,941,705 |
Principal | ||||||||
Description/Maturity Date/Rate | Amount | Value | ||||||
CORPORATE BONDS 7.36% | ||||||||
Agile Group Holdings, Ltd. | ||||||||
11/23/2020, 9.500%(i) | $ | 750,000 | $ | 762,329 | ||||
Amgen, Inc. | ||||||||
02/21/2030, 2.450%(b) | 1,000,000 | 1,034,710 | ||||||
Centene Corp. | ||||||||
01/15/2025, 4.750%(b) | 750,000 | 771,413 | ||||||
Fifth Third Bancorp | ||||||||
Series J, Perpetual Maturity, 3M US L + 3.129%(b)(h)(j) | 1,500,000 | 1,254,780 | ||||||
Goldman Sachs Capital II | ||||||||
Perpetual Maturity, 3M US L + 0.768%(b)(h)(j) | 2,356,000 | 1,904,284 | ||||||
Healthcare Realty Trust, Inc. | ||||||||
01/15/2028, 3.625%(b) | 1,540,000 | 1,541,473 | ||||||
Home Depot, Inc. | ||||||||
09/15/2056, 3.500%(b) | 1,200,000 | 1,357,229 | ||||||
Marriott International, Inc. | ||||||||
03/01/2021, 2.875%(b) | 1,000,000 | 980,679 | ||||||
Massachusetts Mutual Life Insurance Co. | ||||||||
04/15/2050, 3.375%(d) | 850,000 | 873,367 | ||||||
NortonLifeLock, Inc. | ||||||||
04/15/2025, 5.000%(b)(d) | 1,200,000 | 1,213,500 | ||||||
PulteGroup, Inc. | ||||||||
03/01/2026, 5.500% | 500,000 | 534,775 | ||||||
Seagate HDD Cayman | ||||||||
06/01/2027, 4.875% | 1,250,000 | 1,305,518 | ||||||
Sunac China Holdings, Ltd. | ||||||||
04/19/2023, 8.350%(i) | 2,250,000 | 2,244,765 | ||||||
Times China Holdings, Ltd. | ||||||||
06/04/2021, 7.850%(i) | 1,500,000 | 1,522,749 | ||||||
TPG Specialty Lending, Inc. | ||||||||
11/01/2024, 3.875%(b)(c) | 2,500,000 | 2,300,874 | ||||||
USB Capital IX | ||||||||
Perpetual Maturity, 3M US L + 1.020%(b)(c)(h)(j) | 2,614,000 | 2,121,901 | ||||||
TOTAL CORPORATE BONDS | ||||||||
(Cost $22,918,012) | 21,724,346 | |||||||
GOVERNMENT & AGENCY OBLIGATIONS 25.56% | ||||||||
U.S. Treasury Bonds | ||||||||
02/15/2029, 5.250%(b) | 4,280,000 | 5,992,502 | ||||||
11/15/2049, 2.375% | 7,125,000 | 9,017,021 | ||||||
U.S. Treasury Notes | ||||||||
10/31/2020, 1.750%(b) | 4,000,000 | 4,032,266 | ||||||
12/31/2020, 2.500%(b) | 5,000,000 | 5,078,809 | ||||||
01/31/2021, 2.500%(b) | 2,000,000 | 2,035,312 | ||||||
02/28/2022, 1.125%(b) | 16,984,000 | 17,272,927 | ||||||
02/28/2023, 2.625%(b) | 15,000,000 | 16,007,812 | ||||||
02/28/2025, 1.125%(b) | 8,000,000 | 8,300,000 |
Semi-Annual Report | April 30, 2020 | 23 |
Clough Global Opportunities Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
Principal | ||||||||
Description/Maturity Date/Rate | Amount | Value | ||||||
GOVERNMENT & AGENCY OBLIGATIONS (continued) | ||||||||
02/28/2027, 1.125%(b) | $ | 7,400,000 | $ | 7,699,469 | ||||
TOTAL GOVERNMENT & AGENCY OBLIGATIONS | ||||||||
(Cost $74,911,648) | 75,436,118 |
Shares | Value | |||||||
SHORT-TERM INVESTMENTS 2.25% | ||||||||
Money Market Funds 2.25% | ||||||||
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (0.116% 7-day yield) | 6,652,627 | 6,652,627 | ||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost $6,652,627) | 6,652,627 | |||||||
Total Investments - 160.19% | ||||||||
(Cost $456,945,485) | 472,732,486 | |||||||
Liabilities in Excess of Other Assets - (60.19%)(k) | (177,627,195 | ) | ||||||
NET ASSETS - 100.00% | $ | 295,105,291 | ||||||
SCHEDULE OF SECURITIES SOLD SHORT (a) | Shares | Value | ||||||
COMMON STOCKS (13.98%) | ||||||||
Consumer Discretionary (0.52%) | ||||||||
Booking Holdings, Inc. | (1,041 | ) | (1,541,273 | ) | ||||
Financials (2.80%) | ||||||||
Deutsche Bank AG | (721,443 | ) | (5,345,893 | ) | ||||
Mediobanca Banca di Credito Finanziario SpA | (157,505 | ) | (912,722 | ) | ||||
Societe Generale S.A. | (30,516 | ) | (476,870 | ) | ||||
UniCredit SpA | (197,432 | ) | (1,520,771 | ) | ||||
(8,256,256 | ) | |||||||
Health Care (6.18%) | ||||||||
Alexion Pharmaceuticals, Inc. | (52,500 | ) | (5,642,175 | ) | ||||
Bruker Corp. | (39,410 | ) | (1,549,601 | ) | ||||
Charles River Laboratories International, Inc. | (23,940 | ) | (3,463,400 | ) | ||||
IQVIA Holdings, Inc. | (26,820 | ) | (3,824,264 | ) | ||||
PRA Health Sciences, Inc. | (39,010 | ) | (3,764,465 | ) | ||||
(18,243,905 | ) | |||||||
Information Technology (4.48%) | ||||||||
Cognizant Technology Solutions Corp. - Class A | (18,091 | ) | (1,049,640 | ) | ||||
Corning, Inc. | (60,300 | ) | (1,327,203 | ) | ||||
International Business Machines Corp. | (49,470 | ) | (6,211,453 | ) |
SCHEDULE OF SECURITIES SOLD SHORT (a) (continued) | Shares | Value | ||||||
Information Technology (continued) | ||||||||
ON Semiconductor Corp. | (78,200 | ) | $ | (1,254,719 | ) | |||
Paycom Software, Inc. | (4,250 | ) | (1,109,335 | ) | ||||
Paylocity Holding Corp. | (10,200 | ) | (1,168,206 | ) | ||||
Qualys, Inc. | (10,400 | ) | (1,096,576 | ) | ||||
(13,217,132 | ) | |||||||
TOTAL COMMON STOCKS | ||||||||
(Proceeds $39,110,571) | (41,258,566 | ) | ||||||
EXCHANGE TRADED FUNDS (12.23%) | ||||||||
SPDR® S&P 500® ETF Trust | (114,330 | ) | (33,210,578 | ) | ||||
SPDR® S&P® Regional Banking ETF | (75,300 | ) | (2,871,189 | ) | ||||
TOTAL EXCHANGE TRADED FUNDS | ||||||||
(Proceeds $31,437,005) | (36,081,767 | ) | ||||||
TOTAL SECURITIES SOLD SHORT | ||||||||
(Proceeds $70,547,576) | $ | (77,340,333 | ) |
Investment Abbreviations:
1D FEDEF - Federal Funds Effective Rate (Daily)
LIBOR - London Interbank Offered Rate
FEDEF Rates:
1D FEDEF - 1 Day FEDEF as of April 30, 2020 was 0.05%
Libor Rates:
3M US L - 3 Month LIBOR as of April 30, 2020 was 0.56%
(a) | Non-income producing security. |
(b) | Pledged security; a portion or all of the security is pledged as collateral for securities sold short, total return swap contracts, or borrowings. As of April 30, 2020, the aggregate value of those securities was $348,426,042, representing 118.07% of net assets. (See Note 1 and Note 6) |
(c) | Loaned security; a portion or all of the security is on loan as of April 30, 2020. |
(d) | Security is exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of April 30, 2020, these securities had an aggregate value of $10,045,622 or 3.40% of net assets. |
(e) | Private Placement; these securities may only be resold in transactions exempt from registration under the Securities Act of 1933. As of April 30, 2020, these securities had an aggregate value of $6,158,835 or 2.09% of net assets. |
(f) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. (See Note 1) |
(g) | Fair valued security; valued by management in accordance with procedures approved by the Board. As of April 30, 2020, these securities had an aggregate value of $6,158,835 or 2.09% of total net assets. |
24 | www.cloughglobal.com |
Clough Global Opportunities Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
(h) | This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. |
(i) | Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. As of April 30, 2020, the aggregate value of those securities was $4,529,843, representing 1.53% of net assets. |
(j) | Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at April 30, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above. |
(k) | Includes cash which is being held as collateral for total return swap contracts and securities sold short. |
For Fund compliance purposes, the Fund’s sector classifications refer to any one of the sector sub-classifications used by one or more widely recognized market indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sector sub-classifications for reporting ease. Sectors are shown as a percent of net assets. These sector classifications are unaudited.
Semi-Annual Report | April 30, 2020 | 25 |
Clough Global Opportunities Fund | Statement of Investments |
April 30, 2020 (Unaudited) |
FUTURES CONTRACTS
Unrealized | ||||||||||||||||
Expiration | Notional | Appreciation/ | ||||||||||||||
Description | Counterparty | Position | Contracts | Date | Value | (Depreciation) | ||||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 2,316 | December 2020 | $ | 577,176,150 | $ | 268,570 | ||||||||
EURODOLLAR 90 DAY | Morgan Stanley | Long | 6,611 | June 2021 | 1,648,535,488 | 12,317,832 | ||||||||||
$ | 2,225,711,638 | $ | 12,586,402 |
TOTAL RETURN SWAP CONTRACTS
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Appreciation | |||||||||||||
Morgan Stanley | Banco Santander SA | $ | (595,195 | ) | 1D FEDEF - 50 bps | 1D FEDEF | 05/20/2020 | $ | (331,467 | ) | $ | 263,728 | ||||||||
Morgan Stanley | Kweichow Moutai Co., Ltd. | 6,714,847 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 7,068,938 | 354,091 | |||||||||||||
Morgan Stanley | Sany Heavy Industry Co., Ltd. | 5,330,776 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 5,485,268 | 154,492 | |||||||||||||
$ | 11,450,428 | $ | 12,222,739 | $ | 772,311 | |||||||||||||||
Reference | Notional | Floating Rate | Floating | Termination | Net Unrealized | |||||||||||||||
Counter Party | Entity/Obligation | Amount | Paid by the Fund | Rate Index | Date | Value | Depreciation | |||||||||||||
Morgan Stanley | Wuliangye Yibin Co., Ltd. | $ | 2,857,093 | 1D FEDEF - 255 bps | 1D FEDEF | 05/04/2022 | $ | 2,833,956 | $ | (23,137 | ) | |||||||||
Morgan Stanley | Zoomlion Heavy Industry Science | 2,709,341 | 1D FEDEF - 250 bps | 1D FEDEF | 05/29/2020 | 2,699,616 | (9,725 | ) | ||||||||||||
$ | 5,566,434 | $ | 5,533,572 | $ | (32,862 | ) | ||||||||||||||
TOTAL | $ | 17,016,862 | $ | 17,756,311 | $ | 739,449 |
See Notes to the Financial Statements.
26 | www.cloughglobal.com |
Clough Global Funds | Statements of Assets and Liabilities |
April 30, 2020 (Unaudited) |
Clough Global Dividend and Income Fund | Clough Global Equity Fund | Clough Global Opportunities Fund | ||||||||||
ASSETS: | ||||||||||||
Investments, at value (Cost - see below)* | $ | 129,875,600 | $ | 233,468,945 | $ | 472,732,486 | ||||||
Cash | 2,713,044 | 6,505,122 | 13,080,107 | |||||||||
Deposit with broker for futures contracts | 1,765,931 | 3,320,976 | 6,348,894 | |||||||||
Deposit with broker for securities sold short | 9,122,378 | 37,194,477 | 75,006,374 | |||||||||
Deposit with broker for total return swap contracts | 1,733,037 | 3,617,136 | 7,291,742 | |||||||||
Deposit with broker for written options | 310,560 | 958,516 | 1,932,291 | |||||||||
Unrealized appreciation on total return swap contracts | 207,360 | 363,588 | 772,311 | |||||||||
Dividends receivable | 20,346 | 31,187 | 66,046 | |||||||||
Interest receivable | 291,525 | 171,780 | 447,745 | |||||||||
Receivable for investments sold | 7,065,029 | 7,416,952 | 14,605,961 | |||||||||
Other assets | 1,336 | 1,340 | 1,336 | |||||||||
Deferred offering costs | – | – | 103,247 | |||||||||
Total Assets | 153,106,146 | 293,050,019 | 592,388,540 | |||||||||
LIABILITIES: | ||||||||||||
Loan payable | 50,500,000 | 87,500,000 | 178,000,000 | |||||||||
Interest due on loan payable | 78,393 | 135,830 | 276,317 | |||||||||
Variation margin payable | 32,650 | 55,438 | 111,588 | |||||||||
Securities sold short, at value (Proceeds $11,609,147, $35,030,878 and $70,547,576) | 12,458,546 | 38,555,467 | 77,340,333 | |||||||||
Payable for investments purchased | 8,141,194 | 18,677,731 | 40,779,390 | |||||||||
Unrealized depreciation on total return swap contracts | 6,271 | 16,325 | 32,862 | |||||||||
Payable for total return swap contracts payments | 25,284 | 45,319 | 94,888 | |||||||||
Interest payable - margin account | 13,112 | 25,001 | 50,792 | |||||||||
Accrued investment advisory fee | 87,540 | 201,193 | 451,649 | |||||||||
Accrued administration fee | 36,543 | 72,437 | 145,430 | |||||||||
Other payables and accrued expenses | 40,031 | 68,551 | – | |||||||||
Total Liabilities | 71,419,564 | 145,353,292 | 297,283,249 | |||||||||
Net Assets | $ | 81,686,582 | $ | 147,696,727 | $ | 295,105,291 | ||||||
Cost of Investments | $ | 128,786,844 | $ | 224,792,968 | $ | 456,945,485 | ||||||
COMPOSITION OF NET ASSETS: | ||||||||||||
Paid-in capital | $ | 96,238,198 | $ | 157,240,832 | $ | 328,168,648 | ||||||
Distributable earnings | (14,551,616 | ) | (9,544,105 | ) | (33,063,357 | ) | ||||||
Net Assets | $ | 81,686,582 | $ | 147,696,727 | $ | 295,105,291 | ||||||
Shares of common stock outstanding of no par value, unlimited shares authorized | 8,407,724 | 13,230,829 | 32,224,412 | |||||||||
Net asset value per share | $ | 9.72 | $ | 11.16 | $ | 9.16 | ||||||
* Securities Loaned, at value | $ | 23,297,017 | $ | 63,482,052 | $ | 133,777,296 |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 27 |
Clough Global Funds | Statements of Operations |
For the six months ended April 30, 2020 (Unaudited) |
Clough Global Dividend and Income Fund | Clough Global Equity Fund | Clough Global Opportunities Fund | ||||||||||
INVESTMENT INCOME: | ||||||||||||
Dividends (net of foreign withholding taxes of $10,814, $18,202 and $36,935) | $ | 1,574,610 | $ | 2,296,339 | $ | 4,329,414 | ||||||
Interest on investment securities | 549,638 | 184,770 | 935,176 | |||||||||
Interest income - margin account | 59,815 | 98,609 | 215,904 | |||||||||
Hypothecated securities income (See Note 6) | 9,655 | 90,242 | 132,321 | |||||||||
Total Income | 2,193,718 | 2,669,960 | 5,612,815 | |||||||||
EXPENSES: | ||||||||||||
Investment advisory fee | 599,210 | 1,337,581 | 2,998,425 | |||||||||
Administration fee | 249,650 | 481,401 | 965,717 | |||||||||
Interest on loan | 580,021 | 1,002,894 | 2,068,686 | |||||||||
Trustees fee | 66,222 | 66,222 | 66,222 | |||||||||
Dividend expense - short sales | 128,273 | 221,943 | 484,359 | |||||||||
Other expenses | 2,704 | 4,168 | 4,843 | |||||||||
Total Expenses | 1,626,080 | 3,114,209 | 6,588,252 | |||||||||
Net Investment Income/(Loss) | 567,638 | (444,249 | ) | (975,437 | ) | |||||||
NET REALIZED GAIN/(LOSS) ON: | ||||||||||||
Investment securities | (14,996,724 | ) | (13,871,075 | ) | (21,923,608 | ) | ||||||
Futures contracts | 837,785 | 1,442,418 | 2,909,345 | |||||||||
Securities sold short | (1,186,200 | ) | (2,339,762 | ) | (4,187,579 | ) | ||||||
Written options | 1,341,047 | (4,143,118 | ) | (8,310,820 | ) | |||||||
Total return swap contracts | 450,587 | 1,662,334 | 3,368,589 | |||||||||
Foreign currency transactions | (66,548 | ) | (140,907 | ) | (250,660 | ) | ||||||
Net realized loss | (13,620,053 | ) | (17,390,110 | ) | (28,394,733 | ) | ||||||
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON: | ||||||||||||
Investment securities | (6,346,184 | ) | (1,027,888 | ) | (6,936,415 | ) | ||||||
Futures contracts | 3,595,499 | 6,283,424 | 12,586,402 | |||||||||
Securities sold short | (184,754 | ) | (2,329,549 | ) | (4,171,584 | ) | ||||||
Written options | (24,595 | ) | (40,992 | ) | (84,034 | ) | ||||||
Total return swap contracts | 102,527 | (36,589 | ) | (82,426 | ) | |||||||
Translation of assets and liabilities denominated in foreign currencies | (315 | ) | (542 | ) | (885 | ) | ||||||
Deferred capital gains tax | 19,802 | 33,041 | 58,892 | |||||||||
Net change in unrealized appreciation/(depreciation) | (2,838,020 | ) | 2,880,905 | 1,369,950 | ||||||||
Net Realized and Unrealized Loss | (16,458,073 | ) | (14,509,205 | ) | (27,024,783 | ) | ||||||
Net Decrease in Net Assets Attributable to Common Shares from Operations | $ | (15,890,435 | ) | $ | (14,953,454 | ) | $ | (28,000,220 | ) |
See Notes to the Financial Statements.
28 |
www.cloughglobal.com |
Clough Global Dividend and Income Fund | Statements of Changes in Net Assets |
For the | ||||||||
Six Months Ended | For the | |||||||
April 30, 2020 | Year Ended | |||||||
(Unaudited) | October 31, 2019 | |||||||
COMMON SHAREHOLDERS OPERATIONS: | ||||||||
Net investment income | $ | 567,638 | $ | 1,152,057 | ||||
Net realized gain/(loss) | (13,620,053 | ) | 3,580,635 | |||||
Net change in unrealized appreciation/(depreciation) | (2,838,020 | ) | 4,558,700 | |||||
Net Increase/(Decrease) in Net Assets From Operations | (15,890,435 | ) | 9,291,392 | |||||
DISTRIBUTIONS TO COMMON SHAREHOLDERS: | ||||||||
From distributable earnings | (5,078,265 | ) | (4,288,182 | ) | ||||
Tax return of capital | – | (4,638,158 | ) | |||||
Net Decrease in Net Assets from Distributions | (5,078,265 | ) | (8,926,340 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Proceeds from sales of shares, net of offering costs | – | 14,425,411 | ||||||
Offering costs | (14,998 | ) | – | |||||
Net Increase/(Decrease) in Net Assets From Share Transactions | (14,998 | ) | 14,425,411 | |||||
Net Increase/(Decrease) in Net Assets Attributable to Common Shares | (20,983,698 | ) | 14,790,463 | |||||
NET ASSETS ATTRIBUABLE TO COMMON SHARES: | ||||||||
Beginning of period | 102,670,280 | 87,879,817 | ||||||
End of period | $ | 81,686,582 | $ | 102,670,280 |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 29 |
Clough Global Equity Fund | Statements of Changes in Net Assets |
For the | ||||||||
Six Months Ended | For the | |||||||
April 30, 2020 | Year Ended | |||||||
(Unaudited) | October 31, 2019 | |||||||
COMMON SHAREHOLDERS OPERATIONS: | ||||||||
Net investment loss | $ | (444,249 | ) | $ | (676,852 | ) | ||
Net realized gain/(loss) | (17,390,110 | ) | 13,102,244 | |||||
Net change in unrealized appreciation | 2,880,905 | 175,187 | ||||||
Net Increase/(Decrease) in Net Assets From Operations | (14,953,454 | ) | 12,600,579 | |||||
DISTRIBUTIONS TO COMMON SHAREHOLDERS: | ||||||||
From distributable earnings | (8,672,808 | ) | (15,225,597 | ) | ||||
Net Decrease in Net Assets from Distributions | (8,672,808 | ) | (15,225,597 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Proceeds from sales of shares, net of offering costs | – | 24,582,751 | ||||||
Offering costs | (14,001 | ) | – | |||||
Net Increase/(Decrease) in Net Assets From Share Transactions | (14,001 | ) | 24,582,751 | |||||
Net Increase/(Decrease) in Net Assets Attributable to Common Shares | (23,640,263 | ) | 21,957,733 | |||||
NET ASSETS ATTRIBUABLE TO COMMON SHARES: | ||||||||
Beginning of period | 171,336,990 | 149,379,257 | ||||||
End of period | $ | 147,696,727 | $ | 171,336,990 | ||||
See Notes to the Financial Statements.
30 | www.cloughglobal.com |
Clough Global Opportunities Fund | Statements of Changes in Net Assets |
For the | ||||||||
Six Months Ended | For the | |||||||
April 30, 2020 | Year Ended | |||||||
(Unaudited) | October 31, 2019 | |||||||
COMMON SHAREHOLDERS OPERATIONS: | ||||||||
Net investment loss | $ | (975,437 | ) | $ | (1,334,560 | ) | ||
Net realized gain/(loss) | (28,394,733 | ) | 19,535,681 | |||||
Net change in unrealized appreciation | 1,369,950 | 13,493,165 | ||||||
Net Increase/(Decrease) in Net Assets From Operations | (28,000,220 | ) | 31,694,286 | |||||
DISTRIBUTIONS TO COMMON SHAREHOLDERS: | ||||||||
From distributable earnings | (17,172,389 | ) | (22,685,819 | ) | ||||
Tax return of capital | – | (11,314,158 | ) | |||||
Net Decrease in Net Assets from Distributions | (17,172,389 | ) | (33,999,977 | ) | ||||
Net Decrease in Net Assets Attributable to Common Shares | (45,172,609 | ) | (2,305,691 | ) | ||||
NET ASSETS ATTRIBUABLE TO COMMON SHARES: | ||||||||
Beginning of period | 340,277,900 | 342,583,591 | ||||||
End of period | $ | 295,105,291 | $ | 340,277,900 |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 31 |
Clough Global Funds | Statements of Cash Flows |
For the six months ended April 30, 2020 (Unaudited) |
Clough Global Dividend and Income Fund | Clough Global Equity Fund | Clough Global Opportunities Fund | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net decrease in net assets from operations | $ | (15,890,435 | ) | $ | (14,953,454 | ) | $ | (28,000,220 | ) | |||
Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities: | ||||||||||||
Purchase of investment securities | (173,853,001 | ) | (308,048,648 | ) | (647,201,003 | ) | ||||||
Proceeds from disposition of investment securities | 176,329,091 | 318,447,368 | 695,986,960 | |||||||||
Proceeds from securities sold short transactions | 79,381,064 | 142,024,640 | 284,716,189 | |||||||||
Cover securities sold short transactions | (89,228,340 | ) | (145,220,764 | ) | (293,611,656 | ) | ||||||
Premiums received from written options transactions | 1,814,509 | 3,647,535 | 7,299,981 | |||||||||
Premiums paid on closing written options transactions | (769,858 | ) | (8,284,645 | ) | (16,623,485 | ) | ||||||
Purchased options transactions | (3,571,785 | ) | (7,966,390 | ) | (15,564,404 | ) | ||||||
Proceeds from purchased options transactions | 1,533,151 | 12,137,261 | 24,192,619 | |||||||||
Net proceeds from/(purchases of) short-term investment securities | 3,927,884 | 9,459,377 | (4,654,302 | ) | ||||||||
Net realized (gain)/loss on: | ||||||||||||
Investment securities | 14,996,724 | 13,871,075 | 21,923,608 | |||||||||
Securities sold short | 1,186,200 | 2,339,762 | 4,187,579 | |||||||||
Total return swap contracts | (450,587 | ) | (1,662,334 | ) | (3,368,589 | ) | ||||||
Written options | (1,341,047 | ) | 4,143,118 | 8,310,820 | ||||||||
Net change in unrealized (appreciation)/depreciation on: | ||||||||||||
Investment securities | 6,346,184 | 1,027,888 | 6,936,415 | |||||||||
Securities sold short | 184,754 | 2,329,549 | 4,171,584 | |||||||||
Written options | 24,595 | 40,992 | 84,034 | |||||||||
Total return swap contracts | (102,527 | ) | 36,589 | 82,426 | ||||||||
Deferred capital gains tax | (19,802 | ) | (33,041 | ) | (58,892 | ) | ||||||
Net amortization/(accretion) of premiums/discounts | 195,345 | 82,434 | 344,279 | |||||||||
(Increase)/Decrease in assets: | ||||||||||||
Interest receivable - margin account | 19,389 | 38,001 | 80,481 | |||||||||
Dividends receivable | 23,165 | 39,917 | 89,622 | |||||||||
Interest receivable | 74,930 | 62,346 | 322,006 | |||||||||
Other assets | (1,336 | ) | (1,340 | ) | (4,245 | ) | ||||||
Increase/(Decrease) in liabilities: | ||||||||||||
Interest due on loan payable | (36,042 | ) | (59,518 | ) | (135,185 | ) | ||||||
Variation margin payable | 32,650 | 55,438 | 111,588 | |||||||||
Payable for total return swap contracts payments | 14,146 | 21,473 | 41,909 | |||||||||
Interest payable - margin account | 13,112 | 25,001 | 50,792 | |||||||||
Accrued investment advisory fee | (13,847 | ) | (19,934 | ) | (48,471 | ) | ||||||
Accrued administration fee | (5,670 | ) | (7,120 | ) | (15,543 | ) | ||||||
Accrued trustees fee | (395 | ) | (395 | ) | (395 | ) | ||||||
Other payables and accrued expenses | (7,616 | ) | 2,122 | (295 | ) | |||||||
Net cash provided by operating activities | 804,605 | 23,574,303 | 49,646,207 | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Loan payable | 1,000,000 | 3,000,000 | – | |||||||||
Offering costs | (14,998 | ) | (14,001 | ) | – | |||||||
Cash distributions paid | (5,078,265 | ) | (8,672,808 | ) | (17,172,389 | ) | ||||||
Payable due to custodian | – | – | (242,590 | ) | ||||||||
Net cash used in financing activities | (4,093,263 | ) | (5,686,809 | ) | (17,414,979 | ) | ||||||
Effect of exchange rates on cash | 315 | 542 | 885 | |||||||||
Net Change in Cash, Restricted Cash and Foreign Rates on Cash | (3,288,343 | ) | 17,888,036 | 32,232,113 | ||||||||
Cash and restricted cash, beginning of year | $ | 18,933,293 | $ | 33,708,191 | $ | 71,427,295 | ||||||
Cash and restricted cash, end of year | $ | 15,644,950 | $ | 51,596,227 | $ | 103,659,408 |
See Notes to the Financial Statements.
32 | www.cloughglobal.com |
Clough Global Funds | Statements of Cash Flows |
For the six months ended April 30, 2020 (Unaudited) |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 33 |
Clough Global Dividend and Income Fund | Financial Highlights |
For a share outstanding throughout the years indicated |
* | Based on average shares outstanding. |
(1) | Effective July 31, 2016, the Clough Global Allocation Fund name changed to Clough Global Dividend and Income Fund. |
(2) | Less than $0.005. |
(3) | Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported and that all rights in the Fund's rights offering were exercised. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund's dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund's common shares. Past performance is not a guarantee of future results. Total returns for the period indicated are not annualized. Total returns include adjustments in accordance with accounting principles generally accepted in the United States of America for financial reporting purposes and may differ from those reported to the market. |
(4) | Annualized. |
(5) | Portfolio turnover rate for periods less than one full year have not been annualized. |
See Notes to the Financial Statements.
34 | www.cloughglobal.com |
Clough Global Equity Fund | Financial Highlights |
For a share outstanding throughout the years indicated |
* | Based on average shares outstanding. |
(1) | Less than $0.005. |
(2) | Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported and that all rights in the Fund's rights offering were exercised. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund's dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund's common shares. Past performance is not a guarantee of future results. Total returns for the period indicated are not annualized. Total returns include adjustments in accordance with accounting principles generally accepted in the United States of America for financial reporting purposes and may differ from those reported to the market. |
(3) | In 2016, 0.07% of the Fund's total return consists of a reimbursement by the Adviser for a realized investment loss. Excluding this item, total return would have been (5.43)%. |
(4) | Annualized. |
(5) | Portfolio turnover rate for periods less than one full year have not been annualized. |
See Notes to the Financial Statements.
Semi-Annual Report | April 30, 2020 | 35 |
Clough Global Opportunities Fund | Financial Highlights |
For a share outstanding throughout the years indicated |