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
|
19
|
Clough Global Opportunities Fund
|
23
|
Statements of Assets and Liabilities
|
28
|
Statements of Operations
|
29
|
Statements of Changes in Net Assets
|
30
|
Statements of Cash Flows
|
33
|
Financial Highlights
|
|
Clough Global Dividend and Income Fund
|
35
|
Clough Global Equity Fund
|
36
|
Clough Global Opportunities Fund
|
37
|
Notes to Financial Statements
|
38
|
Report of Independent Registered Public Accounting
Firm
|
56
|
Dividend Reinvestment Plan
|
57
|
Additional Information
|
|
Fund Proxy Voting Policies & Procedures
|
58
|
Portfolio Holdings
|
58
|
Notice
|
58
|
Section 19(A) Notices
|
58
|
Trustees & Officers
|
60
|
Privacy Policy
|
65
|
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
|
October
31, 2019 (Unaudited)
For
the fiscal year ending October 31, 2019, the Clough Global Dividend and Income Fund (“GLV” or the “Fund”)
was up 11.57% on net asset value (“NAV”) and 9.97% on market price. The Fund’s benchmark, 50% of the MSCI World
Index and 50% of the Barclays US Aggregate Index, was up 12.81% for the same time.
The
economy in the United States is growing modestly but China and Europe are slowing. The Federal Reserve is once again growing its
balance sheet, and the global easing cycle is regaining dominance. This should support bonds and stocks. We believe global short
rates will reach new lows and bonds are likely to benefit because the Treasury will issue more bills and fewer bonds to satisfy
the Fed’s needs. A shortage of long-term yield should re-emerge sooner rather than later. Consumers are ok but investment
is weak and eventually that is likely to flow back to slow the economy.
Monetary
easing is less powerful than it once was, and capital investment is systemically weaker in an asset light ecosystem. A slower
housing cycle leaves the economy even further cash rich because the households are saving as they age. Eleven years after the
Global Financial Crisis the European and Japanese banking systems remain so burdened with bad debt they cannot create credit.
While
reducing exposure at the end of 2018, we decided to keep our high conviction long ideas intact, because we believed that attempts
to trade around the steep equity selloffs simply risked being whipsawed. That strategy allowed the Fund to participate in the
rally that started in January 2018. As political headlines resurfaced in India ahead of May elections and in China -U.S. trade
negotiations, we have kept our long positions in our two preferred emerging markets tactical while adding to long duration 30-year
United States Treasury bonds.
We
do not base our investment strategies on economic forecasts, but we do follow investment and credit cycles and we draw three conclusions
from what we see today: (1) the dominant price trends are deflationary; (2) the Federal Reserve is more likely to ease than tighten;
and (3) the economy will likely slow rather than fall into recession. No serious inventory imbalances are present and no serious
overbuild in the nation’s capital stock which would undermine pricing and profitability is visible, such as the technology
boom in 2000 or housing in 2008. We believe that although temporary technical factors can knock the market down, the likelihood
of a serious liquidity squeeze seems remote at this point.
We
are currently focused on four key themes: A) earnings power and product cycles in the technology space, B) the evolving business
models in the U.S. money center banks and other high dividend specialty finance companies, C) the emerging consumer in China and
India, and D) long the U.S. Treasury bond as an investment in declining yields.
Facing
low interest rates, we think investors looking for yield will turn to equities, and companies that generate free cash flow that
can support growing dividends will perform well. Free cash flow can essentially be a proxy for yield. Citigroup (C), the Fund’s
largest holding, sports a 3.3% dividend yield and is building excess capital that may support even higher dividends in the future.
Microsoft’s (MSFT) yield is in the vicinity of half that but its 7% free cash flow yield can still support very strong dividend
growth over the years.
TOP
FIVE PERFORMERS
The
Fund has been using a holding in 30-year U.S. Treasury bonds as a hedge to the equity portfolio this year and the position was
the top contributor to performance. We believe we have a differentiated view on treasury bonds and hold them as a source of returns
as well as a hedge to the equity portfolio as the global yield shortage worsens. Private debt to gross domestic product (GDP)
ratios are too high to permit adding more debt and that keeps GDP growth low. The multi-decade decline in interest rates occurred
in tandem with the rise in debt. Until debt loads are reduced, interest rates will continue to decline. Banks in Europe and Japan
are burdened by bad balance sheets and cannot create significant new credit. Corporate capital spending is low because capital
light business models proliferate (we are not building auto and steel plants but cloud centers), and outside of technology there
has been little net capital spending in this cycle. In short, we believe the shortage of quality bonds in this market place will
persist, and indeed, intensify. Meanwhile, the baby boomers are saving, and they are seeking yield. People cannot borrow and they
want to save.
Community
Healthcare Trust (CHCT) is a best in class medical office REIT. CEO Timothy Wallace is a well-respected operator in the space
with a proven track record and owns over 3% of the shares outstanding. CHCT has been able to grow earnings and dividends with
an effective acquisition plan in the highly fragmented medical office sector.
Microsoft
(MSFT) continues to be a core position for our Fund. They are a leading player in cloud computing which we expect to drive growth
for years to come. With one of the best management teams in tech, and strong free cash flows, we remain very excited about this
name.
Citigroup
(C) was the Fund’s largest position as of 10/31/2019 and a top performer. Lower costs and rising fees are the keys to higher
returns on equity and valuations for money center banks like Citigroup. Their fee businesses have generated most of the revenue
growth, particularly in credit cards
and investment banking. Revenue from credit cards rose 11% at Citigroup in the calendar third quarter. As mentioned above, Citigroup’s
ability to maintain and potentially grow a very attractive 3.3% yield in a low rate world should continue to drive price performance.
Clough Global Dividend and
Income Fund
|
Shareholder
Letter
|
October
31, 2019 (Unaudited)
SBA
Communications (SBAC) is one of the largest telecom tower operators in the U.S. These towers are great businesses with very nice
free cash flow growth. Furthermore, their growth should accelerate in the next few years as U.S. telecom providers deploy 5G through
their networks.
BOTTOM
FIVE PERFORMERS
Qualcomm
(QCOM) was a short idea which went against us. Our view was that their core modem technology was getting commoditized and their
royalty business model was unsustainable. At the same time, consensus was modeling an aggressive roll out of 5G technology handset
which was different from our view. We have since exited the position.
A
short in a large biotechnology company detracted from performance. We believe the company will face competitive pressure for its
core product from emerging companies. However, the company generated better than expected results during the period, which resulted
in street analysts raising their estimates in 2020, and the stock gained.
A
short position in Mediobanca (MB IM) was a bottom performer. The Italian bank, like other European banks, rallied off of very
depressed levels during the year. We continue to believe there is little value in the equity of MB IM and other banks as they
have yet to clear their balance sheet of crisis era bad loans. Their damaged balance sheets, along with the Euro Zone’s
slumping economy and negative interest rates, makes it very difficult to expand credit and start to grow profits.
The
Fund’s short position in AT&T (T) was a detractor for the year. We continue to believe that management will have a difficult
task reigning in costs while staying relevant in markets with well positioned competitors. This will ultimately put their 5% dividend
at risk. However, the move lower in rates has rallied the stock. The Fund has stepped aside for now but will look for an attractive
entry point to reestablish the trade in the future.
Apple
(AAPL), another bottom performer, is a company we like for multiple reasons. First, the services business is high margin and is
growing at a healthy teens rate and in wearables (e.g., AirPods) it has found another successful product in addition to the iPhones.
Furthermore, we believe CY 2019 will mark a trough in iPhone volumes as it is greatly under shipping what we believe to steady
state demand driven by replacement cycles. The 5G phone to be introduced next year should drive a strong replacement cycle as
well. While we believe we have been right on our broader thesis, it has been a very hard stock to own given its China exposure
and sensitivity to China risk offs driven by presidential tweets. We will look to re-establish a position when the appropriate
risk reward emerges.
CORPORATE
UPDATE FROM CHUCK CLOUGH
We
would like to close with some exciting news as Clough Capital Partners, L.P. (“Clough Capital” or the “Firm”)
celebrates its 20th year. Please join us in congratulating Michael J. Hearle, a Partner of the Firm and a Portfolio
Manager on several of the Firm’s products, on his promotion to Chief Executive Officer and Co-Chief Investment Officer of
the Firm. This will allow me to devote even more of my time to the markets. Rob Zdunczyk and I will continue to manage the Clough
Global Dividend and Income Fund.
Together,
our talented Partners, Portfolio Managers, and investment staff, share a long-term commitment to rigorous investment analysis,
careful discipline in portfolio construction and above all, careful stewardship of our investors’ capital and trust. We
are excited about this news and believe advancements in our leadership are critical to best position our Firm for success for
years to come.
Sincerely,
Charles
I Clough, Jr.
Robert
M. Zdunczyk
Annual Report | October 31,
2019
|
3
|
Clough Global Dividend and
Income Fund
|
Shareholder
Letter
|
October
31, 2019 (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 stock market index of world stocks. It is maintained by MSCI Inc. and is often used as a common benchmark for world
or global stock funds. The index includes a collection of stocks of all the developed markets in the world as defined by MSCI.
Bloomberg
Barclays U.S. Aggregate Bond Index: Measures the performance of the U.S. investment grade bond market. The 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.
Clough
Global Dividend and Income Fund
|
Portfolio
Allocation
|
October
31, 2019 (Unaudited)
Top
10 Equity Holdings^^
|
%
of Total Portfolio
|
1.
Citigroup, Inc.
|
5.00%
|
2.
Samsung Electronics Co., Ltd.
|
4.20%
|
3.
Community Healthcare Trust, Inc.
|
4.07%
|
4.
Broadcom, Ltd.
|
3.03%
|
5.
Bank of America Corp.
|
2.99%
|
6.
Visa, Inc.
|
2.69%
|
7.
JPMorgan Chase & Co.
|
2.51%
|
8.
Taiwan Semiconductor Manufacturing Co., Ltd.
|
2.33%
|
9.
MediaTek, Inc.
|
2.14%
|
10.
Golub Capital BDC, Inc.
|
2.10%
|
Global
Securities Holdings^
|
%
of Total Portfolio
|
United
States
|
66.13%
|
U.S.
Multinationals†
|
14.25%
|
India
|
7.36%
|
China
|
4.63%
|
Taiwan
|
4.47%
|
South
Korea
|
4.20%
|
Hong
Kong
|
2.33%
|
France
|
0.58%
|
United
Kingdom
|
0.23%
|
Other
|
-4.18%
|
TOTAL
INVESTMENTS
|
100.00%
|
Asset
Allocation*
|
%
of Total Portfolio
|
Common
Stock - US
|
29.27%
|
Common
Stock - Foreign
|
33.48%
|
Exchange
Traded Funds
|
-3.75%
|
Total
Return Swap Contracts
|
0.73%
|
Total
Equities
|
59.73%
|
|
|
Corporate
Debt
|
20.94%
|
Government
L/T
|
12.15%
|
Preferred
Stock
|
3.81%
|
Asset-Backed
Securities
|
0.06%
|
Total
Fixed Income
|
36.96%
|
|
|
Short-Term
Investments
|
4.33%
|
Purchased
& Written Options
|
0.22%
|
Other
(Cash)
|
-1.24%
|
|
|
TOTAL
INVESTMENTS
|
100.00%
|
Country
Allocation**
|
Long
Exposure
%TNA
|
Short
Exposure
%TNA
|
Gross
Exposure
%TNA
|
Net
Exposure
%TNA
|
United
States
|
91.8%
|
-9.3%
|
101.1%
|
82.5%
|
U.S.
Multinationals†
|
25.9%
|
-8.1%
|
34.0%
|
17.8%
|
India
|
9.2%
|
0.0%
|
9.2%
|
9.2%
|
China
|
5.8%
|
0.0%
|
5.8%
|
5.8%
|
Taiwan
|
5.6%
|
0.0%
|
5.6%
|
5.6%
|
South
Korea
|
5.2%
|
0.0%
|
5.2%
|
5.2%
|
Hong
Kong
|
2.9%
|
0.0%
|
2.9%
|
2.9%
|
France
|
1.5%
|
-0.7%
|
2.2%
|
0.8%
|
United
Kingdom
|
0.3%
|
0.0%
|
0.3%
|
0.3%
|
Other
|
0.0%
|
-5.2%
|
5.2%
|
-5.2%
|
TOTAL
INVESTMENTS
|
148.2%
|
-23.3%
|
171.5%
|
124.9%
|
|
*
|
Percentages
are based on total investments, including securities sold short and derivative contracts.
Holdings are subject to change.
|
|
^
|
Includes
securities sold short, derivative contracts and foreign cash balances.
|
|
†
|
US
Multinational Corporations – has more than 50% of revenues derived outside of the U.S.
|
|
**
|
Calculated
as percent of total net assets using value of cash traded securities and foreign cash
balances, and notional value of derivative contracts.
|
|
^^
|
Only
long positions are listed.
|
Annual
Report | October 31, 2019
|
5
|
Clough
Global Equity Fund
|
Shareholder
Letter
|
October
31, 2019 (Unaudited)
For
the fiscal year ending October 31, 2019, the Clough Global Equity Fund (“GLQ” or the “Fund”) was up 9.31%
on net asset value (“NAV”) and 0.20% on market price. The Fund’s benchmark, the MSCI World Index, was up 13.35%
for the same time.
The
economy in the United States is growing modestly but China and Europe are slowing. The Federal Reserve is once again growing its
balance sheet, and the global easing cycle is regaining dominance. This should support bonds and stocks. We believe global short
rates will reach new lows and bonds are likely to benefit because the Treasury will issue more bills and fewer bonds to satisfy
the Fed’s needs. A shortage of long-term yield should re-emerge sooner rather than later. Consumers are ok but investment
is weak and eventually that is likely to flow back to slow the economy.
Monetary
easing is less powerful than it once was, and capital investment is systemically weaker in an asset light ecosystem. A slower
housing cycle leaves the economy even further cash rich because the households are saving as they age. Eleven years after the
Global Financial Crisis the European and Japanese banking systems remain so burdened with bad debt they cannot create credit.
While
reducing exposure at the end of 2018, we decided to keep our high conviction long ideas intact, because we believed that attempts
to trade around the steep equity selloffs simply risked being whipsawed. That strategy allowed the Fund to participate in the
rally that started in January. As political headlines resurfaced in India ahead of May elections and in China -U.S. trade negotiations,
we have kept our long positions in our two preferred emerging markets tactical while adding to long duration 30-year United States
Treasury bonds.
We
do not base our investment strategies on economic forecasts, but we do follow investment and credit cycles and we draw three conclusions
from what we see today: (1) the dominant price trends are deflationary; (2) the Federal Reserve is more likely to ease than tighten;
and (3) the economy will likely slow rather than fall into recession. No serious inventory imbalances are present and no serious
overbuild in the nation’s capital stock which would undermine pricing and profitability is visible, such as the technology
boom in 2000 or housing in 2008. We believe that although temporary technical factors can knock the market down, the likelihood
of a serious liquidity squeeze seems remote at this point.
We
are currently focused on four key themes: A) earnings power and product cycles in the technology space, B) merger and acquisition
targets and innovation in the healthcare space, C) the evolving business models in the U.S. money center banks and other high
dividend specialty finance companies, D) the emerging consumer in China and India.
Facing
low interest rates, we think investors looking for yield will turn to equities, and companies that generate free cash flow that
can support growing dividends will perform well. Free cash flow can essentially be a proxy for yield. Citigroup (C), the Fund’s
largest holding, sports a 3.3% dividend yield and is building excess capital that may support even higher dividends in the future.
Microsoft’s (MSFT) yield is in the vicinity of half that but its 7% free cash flow yield can still support very strong dividend
growth over the years.
TOP
FIVE PERFORMERS
Carvana
(CVNA) is a highly volatile stock that has landed in both the Fund’s top five and bottom five recently. During the fiscal
year, the online distributer of used cars was a top performer. It is a controversial stock with an astonishing 60% of the stock
free float held short. Because the company’s long-term plan seeks to capture the profits from financing many of its vehicles,
there has been concern that it is selling its auto loan receivables to related parties and possibly inflating profits. But last
month the company secured asset backed financing in the public markets, dramatically reducing financial costs, a testimony to
its market presence and dominant business model. The company is expected to soon reach desired markets throughout the United States,
and its investment needs will slow. Revenues have continued to grow more than 100% annually. Free cash flow could potentially
reach $1 billion annually by 2022, according to some estimates. We think the company has the potential to grow several times its
current size.
Transdigm
(TDG) is a manufacturer and distributor of aircraft parts. It has grown organically and by acquisition, consistently improving
its return on investment. Its acquisition of Esterline Corp in early 2019, which is a large addition to its operation, will open
up the likelihood of an acceleration in earnings growth. Management’s incentives are based totally on returns derived from
acquisitions. Their record on this score is impressive.
Apellis
Pharmaceuticals (APLS), a rare disease company, gained due to positive efficacy data for its trial in paroxysmal nocturnal hemoglobinuria
(PNH), a rare disease of the blood. Apellis is expected to report phase 3 data for this program in early 2020. Apellis also provided
a positive update on its trial in geographic atrophy, a disease that causes vision loss. Apellis expects to complete enrollment
for its phase 3 trial in early 2020.
The
Fund has been using a holding in 30-year U.S. Treasury bonds as a hedge to the equity portfolio this year and the position was
a top contributor to performance. We believe we have a differentiated view on treasury bonds and hold them as a source of returns
as well as a hedge to the equity portfolio as the global yield shortage worsens. Private debt to gross domestic product (“GDP”)
ratios are too high to permit adding more debt and that keeps GDP growth low. The multi-decade decline in interest rates occurred
in tandem with the rise in debt. Until debt loads are reduced, interest rates will continue to decline. Banks in Europe and Japan
are burdened by bad balance sheets and cannot create significant new credit. Corporate capital spending is low because capital
light business models proliferate (we are not building auto and steel plants but cloud centers), and outside of technology there
has been little net capital spending in this cycle. In short, we believe the shortage of quality bonds in this market place will
persist, and indeed, intensify. Meanwhile, the baby boomers are saving, and they are seeking yield. People cannot borrow and they
want to save.
Clough
Global Equity Fund
|
Shareholder
Letter
|
October
31, 2019 (Unaudited)
Microsoft
(MSFT) continues to be a core position for our Fund. They are a leading player in cloud computing which we expect to drive growth
for years to come. With one of the best management teams in tech, and strong free cash flows, we remain very excited about this
name.
BOTTOM
FIVE PERFORMERS
Wayfair
(W) is a pure-play in the e-commerce market for home furnishings. The position in the name was a negative drag on performance
during the fiscal year. We have been following the company since its initial public offering in 2014, and we remain impressed
with management’s ability to scale the brand, the customer-base, and the company’s logistics capabilities over that
period. The stock has always been volatile, but the overall growth trajectory of the business and management’s ability to
generate equity value has been impressive. More recently, tariffs and trade tensions between the U.S. and China have weighed on
the stock. In addition to trade concerns, investors have also become less patient regarding management’s decision to ramp
near-term investments on things like advertising and logistics in order to generate growth in the future. Ultimately, we think
Wayfair is a truly disruptive player in the home furnishing space with room to grow, so we’ll continue to monitor the business
and look for opportunities to participate.
Qualcomm
(QCOM) was a short idea which went against us. Our view was that their core modem technology was getting commoditized and their
royalty business model was unsustainable. At the same time, consensus was modelling an aggressive roll out of 5G technology handset,
which was different from our view.
Yelp
(YELP) is a business with a strong following both amongst businesses and consumers. However, management has mis-executed on several
occasions in the last couple of years. While the stock is cheap, we have rotated towards higher conviction ideas.
A
short position in a rare blood disease company Alexion (ALXN) detracted from performance. During the fiscal year, the stock gained
as the company generated strong Q4 2018 results and provided conservative 2019 guidance. The company also hosted an analyst day
that was well received by Wall Street as it focused on diversifying its pipeline. We continue to hold the short position as we
believe the competitive pressures from emerging companies and biosimilars are underappreciated.
Finally,
a short position in Mediobanca (MB IM) was a bottom performer. The Italian bank, like other European banks, rallied off of very
depressed levels during the year. We continue to believe there is little value in the equity of MB IM and other banks as they
have yet to clear their balance sheet of crisis era bad loans. Their damaged balance sheets, along with the Euro Zone’s
slumping economy and negative interest rates, makes it very difficult to expand credit and start to grow profits.
CORPORATE
UPDATE FROM CHUCK CLOUGH
We
would like to close with some exciting news as Clough Capital Partners, L.P. (“Clough Capital” or the “Firm”)
celebrates its 20th year. Please join us in congratulating Michael J. Hearle, a Partner of the Firm and a Portfolio
Manager on several of the Firm’s products, on his promotion to Chief Executive Officer and Co-Chief Investment Officer of
the Firm. This will allow me to devote even more of my time to the markets. Rob Zdunczyk and I will continue to manage the Clough
Global Equity Fund.
Together,
our talented Partners, Portfolio Managers, and investment staff, share a long-term commitment to rigorous investment analysis,
careful discipline in portfolio construction and above all, careful stewardship of our investors’ capital and trust. We
are excited about this news and believe advancements in our leadership are critical to best position our Firm for success for
years to come.
Sincerely,
Charles
I Clough, Jr.
Robert
M. Zdunczyk
Annual
Report | October 31, 2019
|
7
|
Clough
Global Equity Fund
|
Shareholder
Letter
|
October
31, 2019 (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 stock market index of world stocks. It is maintained by MSCI Inc. and is often used as a common benchmark for world
or global stock funds. The index includes a collection of stocks of all the developed markets in the world as defined by MSCI.
Bloomberg
Barclays U.S. Aggregate Bond Index: Measures the performance of the U.S. investment grade bond market. The 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.
Clough
Global Equity Fund
|
Portfolio
Allocation
|
October
31, 2019 (Unaudited)
Top
10 Equity Holdings^^
|
%
of Total Portfolio
|
1.
Citigroup, Inc.
|
4.64%
|
2.
Samsung Electronics Co., Ltd.
|
4.30%
|
3.
salesforce.com, Inc.
|
3.52%
|
4.
Micron Technology, Inc.
|
3.50%
|
5.
Broadcom, Ltd.
|
3.10%
|
6.
TransDigm Group, Inc.
|
2.77%
|
7.
Carvana Co.
|
2.72%
|
8.
Bank of America Corp.
|
2.57%
|
9.
Visa, Inc.
|
2.55%
|
10.
Amazon.com, Inc.
|
2.46%
|
Global
Securities Holdings^
|
%
of Total Portfolio
|
United
States
|
62.61%
|
U.S.
Multinationals†
|
13.33%
|
India
|
8.35%
|
China
|
6.00%
|
Taiwan
|
4.61%
|
South
Korea
|
4.30%
|
Switzerland
|
2.30%
|
Hong
Kong
|
1.44%
|
Belgium
|
0.61%
|
United
Kingdom
|
0.50%
|
Other
|
-4.05%
|
TOTAL
INVESTMENTS
|
100.00%
|
Asset
Allocation*
|
%
of Total Portfolio
|
Common
Stock - US
|
47.40%
|
Common
Stock - Foreign
|
39.47%
|
Exchange
Traded Funds
|
-4.52%
|
Total
Return Swap Contracts
|
1.56%
|
Total
Equities
|
83.91%
|
|
|
Government
L/T
|
11.25%
|
Preferred
Stock
|
0.62%
|
Total
Fixed Income
|
11.87%
|
|
|
Short-Term
Investments
|
4.77%
|
Purchased
& Written Options
|
0.22%
|
Other
(Cash)
|
-0.77%
|
|
|
TOTAL
INVESTMENTS
|
100.00%
|
Country
Allocation**
|
Long
Exposure
%TNA
|
Short
Exposure
%TNA
|
Gross
Exposure
%TNA
|
Net
Exposure
%TNA
|
United
States
|
86.2%
|
-8.8%
|
95.0%
|
77.4%
|
U.S.
Multinationals†
|
25.6%
|
-9.1%
|
34.7%
|
16.5%
|
India
|
10.3%
|
0.0%
|
10.3%
|
10.3%
|
China
|
7.4%
|
0.0%
|
7.4%
|
7.4%
|
Taiwan
|
5.7%
|
0.0%
|
5.7%
|
5.7%
|
South
Korea
|
5.3%
|
0.0%
|
5.3%
|
5.3%
|
Switzerland
|
2.8%
|
0.0%
|
2.8%
|
2.8%
|
Hong
Kong
|
1.8%
|
0.0%
|
1.8%
|
1.8%
|
Belgium
|
0.8%
|
0.0%
|
0.8%
|
0.8%
|
United
Kingdom
|
0.6%
|
0.0%
|
0.6%
|
0.6%
|
Other
|
1.2%
|
-6.2%
|
7.4%
|
-5.0%
|
TOTAL
INVESTMENTS
|
147.7%
|
-24.1%
|
171.8%
|
123.6%
|
|
*
|
Percentages
are based on total investments, including securities sold short and derivative contracts.
Holdings are subject to change.
|
|
^
|
Includes
securities sold short, derivative contracts and foreign cash balances.
|
|
†
|
US
Multinational Corporations – has more than 50% of revenues derived outside of the U.S.
|
|
**
|
Calculated
as percent of total net assets using value of cash traded securities and foreign cash
balances, and notional value of derivative contracts.
|
|
^^
|
Only
long positions are listed.
|
Annual
Report | October 31, 2019
|
9
|
Clough
Global Opportunities Fund
|
Shareholder
Letter
|
October
31, 2019 (Unaudited)
For
the fiscal year ending October 31, 2019, the Clough Global Opportunities Fund (“GLO” or the “Fund”) was
up 11.08% on net asset value (“NAV”) and 7.49% on market price. The Fund’s benchmark, the 75% of the MSCI World
Index and 25% of the Barclay US Aggregate Index, was up 13.18% for the same time.
The
economy in the United States is growing modestly but China and Europe are slowing. The Federal Reserve is once again growing its
balance sheet, and the global easing cycle is regaining dominance. This should support bonds and stocks. We believe global short
rates will reach new lows and bonds are likely to benefit because the Treasury will issue more bills and fewer bonds to satisfy
the Fed’s needs. A shortage of long-term yield should re-emerge sooner rather than later. Consumers are ok but investment
is weak and eventually that is likely to flow back to slow the economy.
Monetary
easing is less powerful than it once was, and capital investment is systemically weaker in an asset light ecosystem. A slower
housing cycle leaves the economy even further cash rich because the households are saving as they age. Eleven years after the
Global Financial Crisis the European and Japanese banking systems remain so burdened with bad debt they cannot create credit.
While
reducing exposure at the end of 2018, we decided to keep our high conviction long ideas intact, because we believed that attempts
to trade around the steep equity selloffs simply risked being whipsawed. That strategy allowed the Fund to participate in the
rally that started in January 2018. As political headlines have resurfaced in India ahead of May elections and in China -US trade
negotiations, we have kept our long positions in our two preferred emerging markets tactical while adding to long duration 30-year
United States Treasury bonds.
We
do not base our investment strategies on economic forecasts, but we do follow investment and credit cycles and we draw three conclusions
from what we see today: (1) the dominant price trends are deflationary; (2) the Federal Reserve is more likely to ease than tighten;
and (3) the economy will likely slow rather than fall into recession. No serious inventory imbalances are present and no serious
overbuild in the nation’s capital stock which would undermine pricing and profitability is visible, such as the technology
boom in 2000 or housing in 2008. We believe that although temporary technical factors can knock the market down, the likelihood
of a serious liquidity squeeze seems remote at this point.
We
are currently focused on five key themes: A) earnings power and product cycles in the technology space, B) merger and acquisition
targets and innovation in the healthcare space, C) the evolving business models in the US money center banks and other high dividend
specialty finance companies, D) the emerging consumer in China and India, and E) long the U.S. Treasury bond as an investment
in declining yields.
Facing
low interest rates, we think investors looking for yield will turn to equities, and companies that generate free cash flow that
can support growing dividends will perform well. Free cash flow can essentially be a proxy for yield. Citigroup (C), the Fund’s
largest holding, sports a 3.3% dividend yield and is building excess capital that may support even higher dividends in the future.
Microsoft’s (MSFT) yield is in the vicinity of half that but its 7% free cash flow yield can still support very strong dividend
growth over the years.
TOP
FIVE PERFORMERS
The
Fund has been using a holding in 30-year U.S. Treasury bonds as a hedge to the equity portfolio this year and the position was
a top contributor to performance. We believe we have a differentiated view on treasury bonds and hold them as a source of returns
as well as a hedge to the equity portfolio as the global yield shortage worsens. Private debt to gross domestic product (GDP)
ratios are too high to permit adding more debt and that keeps GDP growth low. The multi-decade decline in interest rates occurred
in tandem with the rise in debt. Until debt loads are reduced, interest rates will continue to decline. Banks in Europe and Japan
are burdened by bad balance sheets and cannot create significant new credit. Corporate capital spending is low because capital
light business models proliferate (we are not building auto and steel plants but cloud centers), and outside of technology there
has been little net capital spending in this cycle. In short, we believe the shortage of quality bonds in this market place will
persist, and indeed, intensify. Meanwhile, the baby boomers are saving, and they are seeking yield. People cannot borrow and they
want to save.
Transdigm
(TDG) is a manufacturer and distributor of aircraft parts. It has grown organically and by acquisition, consistently improving
its return on investment. Its acquisition of Esterline Corp in early 2019, which is a large addition to its operation, open up
the likelihood of an acceleration in earnings growth. Management’s incentives are based totally on returns derived from
acquisitions. Their record on this score is impressive.
Carvana
(CVNA) is a highly volatile stock that has landed in both the Funds top five and bottom five recently. During the fiscal year,
the online distributer of used cars was a top performer. It is a controversial stock with an astonishing 60% of the stock free
float held short. Because the company’s long-term plan seeks to capture the profits from financing many of its vehicles,
there has been concern that it is selling its auto loan receivables to related parties and possibly inflating profits. But last
month the company secured asset backed financing in the public markets, dramatically reducing financial costs, a testimony to
its market presence and dominant business model. The company is expected to soon reach desired markets throughout the United States,
and its investment needs will slow. Revenues have continued to grow more than 100% annually. Free cash flow could potentially
reach $1 billion annually by 2022 according to some estimates. We think the company has the potential to grow several times its
current size.
Clough
Global Opportunities Fund
|
Shareholder
Letter
|
October
31, 2019 (Unaudited)
GCI
Liberty (GLIBA) provides exposure to Charter Communications, one of the best run cable companies in the U.S. Our view is that
cable is likely to be a structural winner as data consumption grows. Cable is the most efficient way to provide high bandwidth
internet into the homes. While the multiples remain constrained given concerns over cord cutting, in our view the market is under
appreciating the free cash flow power of the broadband business.
Apellis
Pharmaceuticals (APLS), a rare disease company, gained due to positive efficacy data for its trial in paroxysmal nocturnal hemoglobinuria
(PNH), a rare disease of the blood. Apellis is expected to report phase 3 data for this program in early 2020. Apellis also provided
a positive update on its trial in geographic atrophy, a disease that causes vision loss. Apellis expects to complete enrollment
for its phase 3 trial in early 2020.
BOTTOM
FIVE PERFORMERS
Wayfair
(W) is a pure-play in the e-commerce market for home furnishings. The position in the name was a negative drag on performance
during the fiscal year. We have been following the company since its initial public offering in 2014, and we remain impressed
with management’s ability to scale the brand, the customer-base, and the company’s logistics capabilities over that
period. The stock has always been volatile, but the overall growth trajectory of the business and management’s ability to
generate equity value has been impressive. More recently, tariffs and trade tensions between the U.S. and China have weighed on
the stock. In addition to trade concerns, investors have also become less patient regarding management’s decision to ramp
near-term investments on things like advertising and logistics in order to generate growth in the future. Ultimately, we think
Wayfair is a truly disruptive player in the home furnishing space with room to grow, so we’ll continue to monitor the business
and look for opportunities to participate.
Qualcomm
(QCOM) was a short idea which went against us. Our view was that their core modem technology was getting commoditized and their
royalty business model was unsustainable. At the same time, consensus was modelling an aggressive roll out of 5G technology handset,
which was different from our view.
Yelp
(YELP) is a business with a strong following both amongst businesses and consumers. However, management has mis-executed on several
occasions in the last couple of years. While the stock is cheap, we have rotated towards higher conviction ideas.
A
short position in a rare blood disease company Alexion (ALXN) detracted from performance. During the fiscal year, the stock gained
as the company generated strong Q4 2018 results and provided conservative 2019 guidance. The company also hosted an analyst day
that was well received by Wall Street as it focused on diversifying its pipeline. We continue to hold the short position as we
believe the competitive pressures from emerging companies and biosimilars are underappreciated.
Finally,
a short position in Mediobanca (MB IM) was a bottom performer. The Italian bank, like other European banks, rallied off of very
depressed levels during the year. We continue to believe there is little value in the equity of MB IM and other banks as they
have yet to clear their balance sheet of crisis era bad loans. Their damaged balance sheets, along with the Euro Zone’s
slumping economy and negative interest rates, makes it very difficult to expand credit and start to grow profits.
CORPORATE
UPDATE FROM CHUCK CLOUGH
We
would like to close with some exciting news as Clough Capital Partners, L.P. (“Clough Capital” or the “Firm”)
celebrates its 20th year. Please join us in congratulating Michael J. Hearle, a Partner of the Firm and a Portfolio Manager on
several of the Firm’s products, on his promotion to Chief Executive Officer and Co-Chief Investment Officer of the Firm.
This will allow me to devote even more of my time to the markets. Rob Zdunczyk and I will continue to manage the Clough Global
Allocation Fund.
Together,
our talented Partners, Portfolio Managers, and investment staff, share a long-term commitment to rigorous investment analysis,
careful discipline in portfolio construction and above all, careful stewardship of our investors’ capital and trust. We
are excited about this news and believe advancements in our leadership are critical to best position our Firm for success for
years to come.
Sincerely,
Charles
I Clough, Jr.
Robert
M. Zdunczyk
Annual
Report | October 31, 2019
|
11
|
Clough
Global Opportunities Fund
|
Shareholder
Letter
|
October
31, 2019 (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 stock market index of world stocks. It is maintained by MSCI Inc. and is often used as a common benchmark for world
or global stock funds. The index includes a collection of stocks of all the developed markets in the world as defined by MSCI.
Bloomberg
Barclays U.S. Aggregate Bond Index: Measures the performance of the U.S. investment grade bond market. The 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.
Clough
Global Opportunities Fund
|
Portfolio
Allocation
|
October
31, 2019 (Unaudited)
Top
10 Equity Holdings^^
|
%
of Total Portfolio
|
1.
Citigroup, Inc.
|
5.36%
|
2.
Samsung Electronics Co., Ltd.
|
4.40%
|
3.
salesforce.com, Inc.
|
3.59%
|
4.
Micron Technology, Inc.
|
3.57%
|
5.
Broadcom, Ltd.
|
3.15%
|
6.
Bank of America Corp.
|
3.12%
|
7.
TransDigm Group, Inc.
|
2.83%
|
8.
Carvana Co.
|
2.78%
|
9.
Taiwan Semiconductor Manufacturing Co., Ltd.
|
2.45%
|
10.
MediaTek, Inc.
|
2.30%
|
Global
Securities Holdings^
|
%
of Total Portfolio
|
United
States
|
62.13%
|
U.S.
Multinationals†
|
13.69%
|
India
|
8.40%
|
China
|
6.10%
|
Taiwan
|
4.75%
|
South
Korea
|
4.40%
|
Switzerland
|
2.23%
|
Hong
Kong
|
1.46%
|
Belgium
|
0.62%
|
United
Kingdom
|
0.57%
|
Other
|
-4.35%
|
TOTAL
INVESTMENTS
|
100.00%
|
Asset
Allocation*
|
%
of Total Portfolio
|
Common
Stock - US
|
44.74%
|
Common
Stock - Foreign
|
39.18%
|
Exchange
Traded Funds
|
-4.61%
|
Total
Return Swap Contracts
|
1.59%
|
Total
Equities
|
80.90%
|
|
|
Government
L/T
|
11.59%
|
Corporate
Debt
|
8.86%
|
Preferred
Stock
|
0.49%
|
Total
Fixed Income
|
20.94%
|
|
|
Short-Term
Investments
|
0.47%
|
Purchased
& Written Options
|
0.22%
|
Other
(Cash)
|
-2.53%
|
|
|
TOTAL
INVESTMENTS
|
100.00%
|
Country
Allocation**
|
Long
Exposure
%TNA
|
Short
Exposure
%TNA
|
Gross
Exposure
%TNA
|
Net
Exposure
%TNA
|
United
States
|
88.5%
|
-11.4%
|
99.9%
|
77.1%
|
U.S.
Multinationals†
|
26.4%
|
-9.4%
|
35.8%
|
17.0%
|
India
|
10.4%
|
0.0%
|
10.4%
|
10.4%
|
China
|
7.6%
|
0.0%
|
7.6%
|
7.6%
|
Taiwan
|
5.9%
|
0.0%
|
5.9%
|
5.9%
|
South
Korea
|
5.5%
|
0.0%
|
5.5%
|
5.5%
|
Switzerland
|
2.8%
|
0.0%
|
2.8%
|
2.8%
|
Hong
Kong
|
1.8%
|
0.0%
|
1.8%
|
1.8%
|
Belgium
|
0.8%
|
0.0%
|
0.8%
|
0.8%
|
United
Kingdom
|
0.7%
|
0.0%
|
0.7%
|
0.7%
|
Other
|
1.4%
|
-6.8%
|
8.2%
|
-5.4%
|
TOTAL
INVESTMENTS
|
151.8%
|
-27.6%
|
179.4%
|
124.2%
|
|
*
|
Percentages
are based on total investments, including securities sold short and derivative contracts.
Holdings are subject to change.
|
|
^
|
Includes
securities sold short, derivative contracts and foreign cash balances.
|
|
†
|
US
Multinational Corporations – has more than 50% of revenues derived outside of the U.S.
|
|
**
|
Calculated
as percent of total net assets using value of cash traded securities and foreign cash
balances, and notional value of derivative contracts.
|
|
^^
|
Only
long positions are listed.
|
Annual
Report | October 31, 2019
|
13
|