Performance Overview
|
2
|
Portfolio of Investments
|
7
|
Statement of Assets and Liabilities
|
11
|
Statement of Operations
|
12
|
Statements of Changes in Net Assets
|
13
|
Statement of Cash Flows
|
14
|
Financial Highlights
|
16
|
Notes to Financial Statements
|
19
|
Report of Independent Registered Public Accounting
Firm
|
31
|
Additional Information
|
32
|
Summary of Dividend Reinvestment Plan
|
35
|
Summary of Updated Information Regarding the
Fund
|
37
|
Directors & Officers
|
45
|
Annual Report | November
30, 2020
|
1
|
Boulder Growth & Income
Fund, Inc.
|
Performance
Overview
|
November
30, 2020 (Unaudited)
Annual
Update:
The
Boulder Growth & Income Fund, Inc. (the “Fund”) generated a return of 2.0% on net assets in the twelve-month period
ended November 30, 2020 (the “period”). This performance lagged the S&P 500 Index which returned 17.5%, the Dow
Jones Industrial Average (“DJIA”) which returned 8.1%, and the NASDAQ Composite which returned 42.1% during the same
period. The Fund outperformed the Morningstar US Large Value Index, which returned -1.8% during the same period. More detail on
various holding period returns can be found in the table below.
The
Fund has outperformed the Morningstar US Large Value Index on an annualized net assets basis since affiliates of Rocky Mountain
Advisers, LLC (“RMA”) became investment advisers to the Fund in January of 2002. However, the Fund has underperformed
the S&P 500 Index, the DJIA and the NASDAQ Composite on an annualized net assets basis during this same timeframe.
On
a market price basis, the Fund returned -0.5% for the period, underperforming the Fund’s return performance on a NAV basis
of 2.0%. The underperformance was due to a widening of the discount of the Fund’s share price relative to its net asset
value (the “discount”) over the period. At the beginning of the period the discount was -15.9% and at the end of the
period the discount was -17.9%.
|
3
Months
|
6
Months
|
One
Year
|
Three
Years*
|
Five
Years*
|
Ten
Years*
|
Since
January
2002**
|
BIF (NAV)
|
7.7%
|
16.4%
|
2.0%
|
5.1%
|
10.6%
|
10.1%
|
7.1%
|
BIF (Market)
|
7.7%
|
14.7%
|
-0.5%
|
4.2%
|
11.7%
|
10.0%
|
6.9%
|
S&P
500 Index†
|
3.9%
|
20.0%
|
17.5%
|
13.2%
|
14.0%
|
14.2%
|
8.6%
|
DJIA††
|
4.8%
|
18.0%
|
8.1%
|
9.4%
|
13.5%
|
13.2%
|
8.6%
|
NASDAQ
Composite†††
|
3.8%
|
29.1%
|
42.1%
|
22.3%
|
20.3%
|
18.5%
|
11.3%
|
Morningstar
US Large Value Index ††††
|
8.0%
|
12.9%
|
-1.8%
|
5.0%
|
9.0%
|
10.4%
|
6.7%
|
|
**
|
Annualized
since January 2002, when affiliates of RMA became investment advisers to the Fund. Does not include the effect of dilution on
non-participating stockholders from the December 2002 rights offering.
|
|
†
|
The S&P 500 Index is widely regarded as
the best single gauge of large-cap U.S. equities. There is over USD 11.2 trillion indexed or benchmarked to the index, with
indexed assets comprising approximately USD 4.6 trillion of this total. The index includes 500 leading companies and captures
approximately 80% coverage of available market capitalization
|
|
††
|
The
Dow Jones Industrial Average (DJIA), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries
except transportation and utilities.
|
|
†††
|
The NASDAQ Composite Index includes all
domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a
broad-based Index.
|
|
††††
|
The Morningstar US Large Value Index
measures the performance of US large-cap stocks with relatively low prices given anticipated per-share earnings, book value,
cash flow, sales and dividends. This Index does not incorporate Environment, Social, or Governance (ESG)
criteria.
|
The
performance data quoted represents past performance. Past performance is no guarantee of future results. Fund returns include
reinvested dividends and distributions, but do not reflect the reduction resulting from taxes a stockholder would pay on Fund
distributions or the sale of Fund shares and do not reflect brokerage commissions, if any. Returns of the S&P 500 Index, the
DJIA, the NASDAQ Composite and the Morningstar US Large Value Index include reinvested dividends and distributions, but do not
reflect the effect of commissions, expenses or taxes, as applicable. You cannot invest directly in any of these indices. The investment
return and the principal value of an investment will fluctuate and shares, if sold,
may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.
Boulder Growth & Income
Fund, Inc.
|
Performance
Overview
|
November
30, 2020 (Unaudited)
The
Fund has chosen the Morningstar US Large Value Index as a replacement benchmark to the NASDAQ Composite. In our opinion, the Fund’s
holding and investment strategy more closely relate to the Morningstar US Large Value Index, which holds large capitalization
value investments, than the NASDAQ Composite which has a high concentration in technology investments. We will continue to report
on both indices for one year. Then, next year, you can expect to see the Morningstar US Large Value Index in place of the NASDAQ
Composite.
The
largest contributors to performance during the period were Berkshire Hathaway, Inc. (BRK/A
&
BRK/B) contributing 1.70% and Caterpillar Inc. (CAT) contributing 1.26% to the total return on net assets. The largest detractors
to performance during the period were Wells Fargo & Co. (WFC) detracting -3.00% and JPMorgan Chase & Co. (JPM) detracting
-0.77% to the total return on net assets. During the period, positions were reduced in Caterpillar Inc. (CAT) and Walmart, Inc.
(WMT). The full positions in Heineken NV (HEIA), Viatris Inc. (VTRS), South Street Securities, and MidCountry Financial were sold.
During the period, the Fund purchased additional shares of American Express Co. (AXP), Cohen & Steers Infrastructure Fund
(UTF), Enterprise Product Partners (EPD), The Travelers Companies Inc. (TRV), and Yum! Brands, Inc. (YUM). New positions were
started in EBay Inc. (EBAY) and Intel Corp. (INTC).
The
Fund repurchased and retired 4,405,090 shares of its Common Stock during the period. The shares were repurchased at an average
price of $9.49. Since the Fund’s Board of Directors reinstated the share repurchase program in August 2017, the Fund repurchased
and retired 7,825,837 shares at an average price of $10.00 per share.
The
following table shows the top ten holdings in the Fund as of November 30, 2020:
Holding
|
Symbol(s)
|
Percentage
of Total
Managed Assets
|
Berkshire Hathaway, Inc.
|
BRK/A and BRK/B
|
31.2%
|
Cash and Short-Term Investments
|
SAMXX, SALXX, and
Treasuries
|
20.1%
|
JPMorgan Chase & Co.
|
JPM
|
7.9%
|
Yum! Brands, Inc.
|
YUM
|
5.9%
|
Cisco Systems, Inc.
|
CSCO
|
5.1%
|
Cohen & Steers Infrastructure Fund, Inc.
|
UTF
|
3.6%
|
Caterpillar, Inc.
|
CAT
|
3.4%
|
Walmart, Inc.
|
WMT
|
3.3%
|
Enterprise Product Partners LP
|
EPD
|
3.2%
|
Wells Fargo & Co.
|
WFC
|
2.6%
|
Annual Report | November
30, 2020
|
3
|
Boulder Growth & Income
Fund, Inc.
|
Performance
Overview
|
November
30, 2020 (Unaudited)
Recent
News:
On
November 5, 2020, the Fund announced that it agreed to issue and sell an aggregate principal amount of $225 million of senior
unsecured notes (“Notes”) in a private placement to certain “accredited investors” pursuant to Section
4(a)(2) of the Securities Act of 1933, as amended.
An
aggregate principal amount of $225 million of the Notes was issued on November 5, 2020, in three series with maturities of 10-,
12-, and 15-years. Fitch Ratings assigned long term ratings of “A” to each series of Notes on November 5, 2020.
The
10-, 12-, and 15-year series will pay interest semi-annually at the rate of 2.62%, 2.72%, and 2.87%, respectively. Interest on
the Notes is payable semiannually, on the 5th day of May and November in each year commencing on May 5, 2021. The proceeds
from the Notes will be used for making new portfolio investments and general corporate purposes.
The
successful issuance of these Notes provides Fund shareholders with an opportunity to benefit from the current interest rate environment
and opportunities that present themselves in the market. With its disciplined investment philosophy, RMA will attempt to take
advantage of market volatility to benefit Fund shareholders. Cash and cash equivalents may be at higher than usual levels while
the proceeds of the Notes issuance are being invested.
We
appreciate your continued support of the Fund.
Sincerely,
|
|
|
|
|
|
|
|
Stewart Horejsi
|
Joel Looney
|
Portfolio Manager
|
Portfolio Manager
|
Boulder Growth & Income
Fund, Inc.
|
Performance
Overview
|
November
30, 2020 (Unaudited)
The
views and opinions in the preceding commentary are as of the date of this letter and are subject to change at any time. This material
represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice
and is not intended to predict or depict performance of any investment.
Portfolio weightings and other figures in the foregoing
commentary are provided as of period-end, unless otherwise stated.
Note
to Stockholders on the Fund’s Discount. As most stockholders are aware, the Fund’s shares presently trade at a
significant discount to net asset value. The Board is aware of this, monitors the discount and periodically reviews the limited
options available to mitigate the discount. In addition, there are several factors affecting the Fund’s discount over which
the Board and management have little control. In the end, the market sets the Fund’s share price. For long-term stockholders
of a closed-end fund, we believe the Fund’s discount should only be one of many factors taken into consideration at the
time of your investment decision.
Note
to Stockholders on Concentration of Investments. The Board feels it is important that stockholders be aware of the Fund’s
high concentration in a small number of positions. Concentrating investments in fewer securities may involve a degree of risk
that is greater than a fund having less concentrated investments spread over a greater number of securities. In particular, the
Fund is highly concentrated in Berkshire Hathaway, Inc., which, in addition to other business risks, is largely dependent on Warren
Buffett for major investment and capital allocation decisions. When Mr. Buffett is no longer able to fulfill his responsibilities
with Berkshire Hathaway, Inc., the value of the Fund’s position in Berkshire Hathaway, Inc. could be materially impacted.
Growth
of $10,000 (as of November 30, 2020)
Comparison
of change in value of a hypothetical $10,000 investment in the Fund and the Underlying Indexes
Past
performance does not guarantee future results. Performance will fluctuate with changes in market conditions. Current performance
may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders
would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.
Annual Report | November
30, 2020
|
5
|
Boulder Growth & Income
Fund, Inc.
|
Performance
Overview
|
November
30, 2020 (Unaudited)
The
table below is a summary of the dividends paid for the year ended November 30, 2020.
|
|
Per Share of Common Stock
|
|
|
Net Asset
Value
|
|
Market
Price
|
|
Dividend
Paid*
|
1/31/20
|
|
|
$
|
13.46
|
|
|
$
|
11.42
|
|
|
$
|
0.102
|
|
4/30/20
|
|
|
|
11.47
|
|
|
|
9.66
|
|
|
|
0.102
|
|
7/31/20
|
|
|
|
11.88
|
|
|
|
9.80
|
|
|
|
0.102
|
|
10/31/20
|
|
|
|
11.74
|
|
|
|
9.52
|
|
|
|
0.102
|
|
|
*
|
Please
refer to page 33 for classifications of dividends for the year ended November 30, 2020.
|
INVESTMENTS
AS A % OF TOTAL NET ASSETS
APPLICABLE
TO COMMON STOCKHOLDERS
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
Dividend
income from investments in real estate investment trusts (“REITs”) is recorded at management’s estimate of income
included in distributions received. Distributions received in excess of this amount are recorded as a reduction of the cost of
investments. The actual amount of income and return of capital are determined by each REIT only after its fiscal year-end, and
may differ from the estimated amounts. Such differences, if any, are recorded by the Fund in the following annual financial reporting
period.
Foreign
Currency Translations: The Fund may invest a portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund will generally enter into a forward foreign currency contract to settle the foreign security
transaction. Foreign securities may carry more risk than U.S. securities, such as political, market and currency risks. See Foreign
Issuer Risk under Note 6.
The
Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized
and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes recorded on the Company’s books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the
fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange
rates.
Distributions
to Common Stockholders: It is the Fund’s policy to distribute substantially all net investment income and net realized
gains to stockholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code
of 1986, as amended. Distributions to common stockholders are recorded on the ex-dividend date.
The
Fund intends to distribute its net realized capital gains, if any, at least annually. At times, to maintain a stable level of
distributions, the Fund may pay out less than all of its net investment income or pay out accumulated undistributed income, or
return capital, in addition to current net investment income. Any distribution that is treated as a return of capital generally
will reduce a stockholder’s basis in his or her shares, which may increase the capital gain or reduce the capital loss realized
upon the sale of such shares. Any amounts received in excess of a stockholder’s basis are generally treated as capital gain,
assuming the shares are held as capital assets.
Indemnifications:
Like many other companies, the Fund’s organizational documents provide that its officers and directors are indemnified
against certain liabilities arising out of the performance of their duties to the Fund. In addition, both in some of its principal
service contracts and in the normal course of its business, the Fund enters into contracts that provide indemnifications to other
parties for certain types of losses or liabilities. The Fund’s maximum exposure under these arrangements is unknown as this
could involve future claims against the Fund.
Federal
Income Tax: For federal income tax purposes, the Fund currently qualifies, and intends to remain qualified as a regulated
investment company under the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended, by distributing substantially all of its earnings to its stockholders. Accordingly, no provision
for federal income or excise taxes has been made.
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
Income
and capital gain distributions are determined and characterized in accordance with income tax regulations, which may differ from
GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities held by
the Fund, timing differences and differing characterization of distributions made by the Fund as a whole.
As
of and during the year ended November 30, 2020, the Fund did not have a liability for any unrecognized tax benefits. The Fund
recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expenses, in the Statement of Operations.
The Fund files U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination
by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after
the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated
no uncertain tax positions that require a provision for income taxes.
NOTE
3. DERIVATIVE FINANCIAL INSTRUMENTS
As
a part of its investment strategy, the Fund may invest to a lesser extent in derivatives contracts. In doing so, the Fund will
employ strategies in differing combinations to permit them to increase, decrease, or change the level or types of exposure to
market factors. Central to those strategies are features inherent in derivatives that make them more attractive for this purpose
than equity or debt securities; they require little or no initial cash investment, they can focus exposure on only certain selected
risk factors, and they may not require the ultimate receipt or delivery of the underlying security (or securities) to the contract.
This may allow the Fund to pursue its objectives more quickly and efficiently than if it were to make direct purchases or sales
of securities capable of affecting a similar response to market factors.
Risk
of Investing in Derivatives: The Fund’s use of derivatives can result in losses due to unanticipated changes in the
market risk factors and the overall market. In instances where the Fund is using derivatives to decrease, or hedge, exposures
to market risk factors for securities held by the Fund, there are also risks that those derivatives may not perform as expected,
resulting in losses for the combined or hedged positions.
Derivatives
may have little or no initial cash investment relative to their market value exposure and therefore can produce significant gains
or losses in excess of their cost. This use of embedded leverage allows the Fund to increase its market value exposure relative
to its net assets and can substantially increase the volatility of the Fund’s performance.
Associated
risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative
and the Fund. Typically, the associated risks are not the risks that the Fund is attempting to increase or decrease exposure to,
per its investment objectives, but are the additional risks from investing in derivatives.
Examples
of these associated risks are liquidity risk, which is the risk that the Fund will not be able to sell or close out the derivative
in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the
Fund. In addition, use of derivatives may increase or decrease exposure to the following risk factors:
Equity
Risk: Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general
market. Associated risks can be different for each type of derivative and are discussed by each derivative type in the notes that
follow.
Annual Report | November
30, 2020
|
23
|
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
Option
Contracts: The Fund may enter into options transactions for hedging purposes and for non-hedging purposes such as seeking
to enhance return. The Fund may write put and call options on any stocks or stock indices, currencies traded on domestic and foreign
securities exchanges, or futures contracts on stock indices, interest rates and currencies traded on domestic and, to the extent
permitted by the Commodity Futures Trading Commission, foreign exchanges. A call option on an asset written by the Fund obligates
the Fund to sell the specified asset to the holder (purchaser) at a stated price (the exercise price) if the option is exercised
before a specified date (the expiration date). A put option on an asset written by the Fund obligates the Fund to buy the specified
asset from the purchaser at the exercise price if the option is exercised before the expiration date. Premiums received when writing
options are recorded as liabilities and are subsequently adjusted to the current value of the options written. Premiums received
from writing options that expire are treated as realized gains. Premiums received from writing options, which are either exercised
or closed, are offset against the proceeds received or amount paid on the transaction to determine realized gains or losses.
For
the year ended November 30, 2020, the effects of derivative instruments on the Statement of
Assets
and Liabilities were as follows:
Risk Exposure
|
|
Asset
Derivatives
Statement of
Assets and
Liabilities
Location
|
|
Fair Value
|
|
Liability
Derivatives
Statement of
Assets and
Liabilities
Location
|
|
Fair Value
|
Equity Contracts (Written Options)
|
|
N/A
|
|
|
N/A
|
|
|
Written options, at value
|
|
$
|
8,623,875
|
|
Total
|
|
|
|
|
N/A
|
|
|
|
|
$
|
8,623,875
|
|
For
the year ended November 30, 2020, the effects of derivative instruments on the Statement of Operations were as
follows:
Risk Exposure
|
|
Statement of Operations Location
|
|
Realized
Gain/(Loss) on
Derivatives
|
|
Change in Unrealized
Appreciation/Depreciation
on Derivatives
|
Equity Contracts (written options)
|
|
Net realized gain on written options/Net change in unrealized depreciation on written options
|
|
$
|
162,470
|
|
|
$
|
(6,311,709
|
)
|
Total
|
|
|
|
$
|
162,470
|
|
|
$
|
(6,311,709
|
)
|
The
average monthly notional value of written option contracts for the Fund was $15,183,800 during the year ended November 30, 2020.
NOTE
4. ADVISORY FEES, ADMINISTRATION FEES AND OTHER AGREEMENTS
ALPS
Advisors, Inc. (“ALPS”) serves as the Fund’s investment adviser pursuant to the advisory agreement. The Fund
pays ALPS an annual rate of 0.95% of the value of the Fund’s net assets plus the principal amount of leverage, if any (“Net
Assets”). Rocky Mountain Advisers, LLC (“RMA”) provides
sub-advisory services to the Fund pursuant to a sub-advisory agreement between RMA and ALPS. ALPS pays RMA an annual fee of 0.8125%
based on the Fund’s average monthly Net Assets.
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
RMA
is owned by the Susan L. Ciciora Trust (the “SLC Trust”), which is also a stockholder of the Fund.
RMA
is considered an “affiliated person”, as that term is defined in the 1940 Act, of the Fund.
ALPS
Fund Services, Inc. (“AFS”), an affiliate of ALPS, serves as the Fund’s administrator and provides all administrative
and fund accounting services to the Fund. As compensation for its services, AFS receives certain out-of-pocket expenses and asset-based
fees, which are accrued daily and paid monthly. The fees paid to AFS are calculated based on the Net Assets of the Fund.
ALPS,
AFS and RMA have agreed to voluntarily waive advisory, sub-advisory and administration fees on amounts attributable to the proceeds
of the senior notes issued that remain in cash or cash equivalents. The total fees waived during the year ended November 30, 2020
was $133,079.
No
persons (other than the Independent Directors) currently receive compensation from the Fund for acting as a director or officer;
however, officers of the Fund may also be officers or employees of ALPS, RMA or AFS and may receive compensation in such capacities.
The Fund pays each member of the Board (a “Director”) who is not a director, officer, employee, or affiliate of ALPS,
RMA or any of their affiliates a fee of $40,000 per annum, plus $5,000 for each in-person meeting, $3,000 for each audit committee
meeting, $1,000 for each nominating committee meeting and $1,000 for each telephonic meeting of the Board. The lead independent
Director of the Board receives an additional $3,125 for attending each regular quarterly meeting of the Board. The chairman of
the audit committee receives an additional $3,000 for attending each regular meeting of the audit committee. The Fund will also
reimburse all non-interested Directors for travel and out-of-pocket expenses incurred in connection with such meetings. AFS provides
the Fund with a chief compliance officer (“CCO”) and has waived any fees it would be entitled to receive for such
services during the period that ALPS serves as investment adviser to the Fund.
State
Street Bank & Trust Company (“State Street”) serves as the Fund’s custodian. Computershare Shareowner Services
(“Computershare”) serves as the Fund’s common stock servicing agent, dividend-paying agent and registrar. As
compensation for State Street’s and Computershare’s services, the Fund pays each a monthly fee plus certain out-of-pocket
expenses.
NOTE
5. SECURITIES TRANSACTIONS
Purchases
and sales of securities, excluding short term securities, during the year ended November 30, 2020 were $119,707,607 and $63,621,218
respectively.
NOTE
6. PORTFOLIO INVESTMENTS AND CONCENTRATION
Under
normal market conditions, the Fund intends to invest at least 80% of its net assets in common stocks. Common stocks include dividend-paying
closed-end funds, open-end funds and REITs. The portion of the Fund’s assets that are not invested in common stocks may
be invested in fixed income securities and cash equivalents. The term “fixed income securities” includes bonds, U.S.
Government securities, notes, bills, debentures, preferred stocks, convertible securities, bank debt obligations, repurchase agreements
and short-term money market obligations.
Concentration
Risk: The Fund operates as a “non-diversified” investment company, as defined in the 1940 Act. As a result of
being “non-diversified” with respect to 50% of the Fund’s portfolio, the Fund must limit the portion of its
assets invested in the securities of a single issuer to 5%, measured at the time of purchase. In addition, no single investment
can exceed 25% of the Fund’s total
assets at the time of purchase. A more concentrated portfolio may cause the Fund’s net asset value to be more volatile and
thus may subject stockholders to more risk. Thus, the volatility of the Fund’s net asset value and its performance in general,
depends disproportionately more on the performance of a smaller number of holdings than that of a more diversified fund. As a
result, the Fund is subject to a greater risk of loss than a fund that diversifies its investments more broadly.
Annual Report | November
30, 2020
|
25
|
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
As
of November 30, 2020, the Fund held more than 25% of its assets in Berkshire Hathaway, Inc. In addition to market appreciation
of the issuer since the time of purchase, the Fund acquired additional interest in Berkshire Hathaway, Inc. in the March 20, 2015
reorganization. After the reorganization was completed, shares held of the issuer were liquidated to bring the concentration to
25%. Concentration of the Berkshire Hathaway, Inc. position was a direct result of market appreciation and decreased leverage
since the time the Fund and the funds acquired in the reorganization purchased the security.
Foreign
Issuer Risk: Investment in non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers.
These risks may include, but are not limited to: (i) less information about non-U.S. issuers or markets may be available due to
less rigorous disclosure, accounting standards or regulatory practices; (ii) many non-U.S. markets are smaller, less liquid and
more volatile thus, in a changing market, ALPS may not be able to sell the Fund’s portfolio securities at times, in amounts
and at prices they consider reasonable; (iii) currency exchange rates or controls may adversely affect the value of the Fund’s
investments; (iv) the economies of non-U.S. countries may grow at slower rates than expected or may experience downturns or recessions;
and, (v) withholdings and other non-U.S. taxes may decrease the Fund’s return.
NOTE
7. SIGNIFICANT STOCKHOLDERS
On
November 30, 2020, trusts and other entities and individuals affiliated with Stewart R. Horejsi and the Horejsi family owned 45,384,254
shares of Common Stock of the Fund, representing approximately 46.18% of the total Common Stock outstanding. Stewart R. Horejsi
is the Chief Investment Officer of RMA and is a portfolio manager of the Fund.
NOTE
8. SHARE REPURCHASES AND REDEMPTIONS
In
accordance with Section 23(c) of the 1940 Act and the rules promulgated thereunder, the Fund may from time to time effect repurchases
and/or redemptions of its Common Stock.
For
the year ended November 30, 2020, the Fund repurchased 4,405,090 shares of Common Stock at a total purchase amount of $41,793,909.
For the year ended November 30, 2019, the Fund repurchased 2,981,322 shares of Common Stock at a total purchase amount of $31,801,183.
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
NOTE
9. TAX BASIS DISTRIBUTIONS AND TAX BASIS INFORMATION
As
determined on November 30, 2020, permanent differences resulting primarily from different book and tax accounting for partnership
investments, and certain other investments were reclassified at fiscal year-end. These reclassifications had no effect on net
increase in net assets resulting from operations, net assets applicable to common stockholders or net asset value per common share
outstanding. Permanent book and tax basis differences of $1,184,385 and $(1,184,385) were reclassified at November 30, 2020 among
total distributable earnings and paid-in capital, respectively, for the Fund.
The
character of distributions paid on a tax basis during the year ending November 30, 2020 is as follows:
Distributions Paid From:
|
|
|
Ordinary Income
|
|
$
|
4,938,798
|
|
Long-Term Capital Gain
|
|
|
34,017,701
|
|
Tax Return of Capital
|
|
|
1,968,760
|
|
|
|
$
|
40,925,259
|
|
The
character of distributions paid on a tax basis during the year ending November 30, 2019 is as follows:
Distributions Paid From:
|
|
|
Ordinary Income
|
|
$
|
8,307,068
|
|
Long-Term Capital Gain
|
|
|
31,029,532
|
|
Tax Return of Capital
|
|
|
2,988,825
|
|
|
|
$
|
42,325,425
|
|
On
November 30, 2020, based on cost of $790,989,441 for federal income tax purposes, aggregate gross unrealized appreciation for
all securities in which there is an excess of value over tax cost was $793,359,951, aggregate gross unrealized depreciation for
all securities in which there is an excess of tax cost over value was $28,378,331 and net depreciation of foreign currency was
$959, resulting in net unrealized appreciation of $764,980,661.
As
of November 30, 2020, the components of distributable earnings on a tax basis were as follows:
Unrealized Appreciation
|
|
$
|
764,980,661
|
|
Total
|
|
$
|
764,980,661
|
|
The
difference between book and tax basis distributable earnings is attributable primarily to temporary differences related to wash
sales and partnership book and tax differences.
Annual Report | November
30, 2020
|
27
|
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
NOTE
10. SENIOR NOTES
On
November 5, 2020, the Fund issued senior unsecured notes (“Notes”) in an aggregate amount of $225,000,000 in three
fixed-rate series. The Notes were issued in private placement offerings to institutional investors and are not listed on any exchange
or automated quotation system. The note purchase agreement (the “Agreement”) contains various covenants related to
other indebtedness and limits on the Fund’s overall leverage. Under the 1940 Act and the terms of the Notes, the Fund may
not declare dividends or make other distributions on shares of its common stock or make purchases of such shares if, at any time
of the declaration, distribution or purchase, asset coverage with respect to senior securities representing indebtedness (including
the Notes) would be less than 300%.
The
table below sets forth a summary of the key terms of each series of Notes outstanding at November 30, 2020.
Series
|
|
Principal
Outstanding
November
30, 2020
|
|
Payment
Frequency
|
|
Unamortized
Offering
Costs
|
|
Value
November
30, 2020
|
|
Fixed
Interest
Rate
|
|
Maturity Date
|
A
|
|
|
$
|
85,000,000
|
|
|
Semi-Annual
|
|
$
|
849,643
|
|
|
$
|
84,150,357
|
|
|
|
2.62%
|
|
November 5, 2030
|
B
|
|
|
$
|
85,000,000
|
|
|
Semi-Annual
|
|
$
|
850,619
|
|
|
$
|
84,149,381
|
|
|
|
2.72%
|
|
November 5, 2032
|
C
|
|
|
$
|
55,000,000
|
|
|
Semi-Annual
|
|
$
|
551,032
|
|
|
$
|
54,448,968
|
|
|
|
2.87%
|
|
November 5, 2035
|
The
value presented above approximates fair value and reflects the carrying amount of the liability as reported on the Statement of
Assets and Liabilities. The Fund categorizes the Notes as Level 2 securities within the fair value hierarchy.
The
Fund shall at all times maintain a current rating given by a NRSRO (Nationally Recognized Statistical Rating Organization) of
at least Investment Grade with respect to the Notes and shall not at any time have any rating given by a NRSRO of less than Investment
Grade with respect to the Notes. The Notes have been assigned an ‘A’ long-term rating by Fitch Ratings.
The
Fund incurred costs in connection with the issuance of the Notes. These costs, totaling $2,264,556, were recorded as a deferred
charge and are being amortized over the respective life of each series of notes. Amortization of $13,262 is included as Offering
Costs on the Statement of Operations and the unamortized balance is deducted from the carrying amount of the Notes on the Statement
of Assets and Liabilities.
At
November 30, 2020, the Fund was in compliance with all covenants under the Agreement.
NOTE
11. RESTRICTED SECURITIES
As
of November 30, 2020, investments in securities included issuers that are considered restricted. Restricted securities are often
purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions
on resale, and may be valued under methods approved by the Board as reflecting fair value.
Boulder
Growth & Income Fund, Inc.
|
Notes
to Financial Statements
|
November
30, 2020
Restricted
securities as of November 30, 2020, were as follows:
|
|
|
|
|
|
|
|
|
Issuer Description
|
|
Acquisition
Date
|
|
Cost
|
|
Value
November 30,
2020
|
|
Value as
Percentage of Net
Assets Applicable
to Common
Stockholders
November 30, 2020
|
Ithan Creek Partners L.P.
|
|
6/2/08
|
|
$
|
129,090
|
|
|
$
|
483,417
|
|
|
|
0.04%
|
|
|
|
|
|
$
|
129,090
|
|
|
$
|
483,417
|
|
|
|
0.04%
|
|
NOTE
12. INVESTMENT IN A HEDGE FUND
As
of November 30, 2020, the Fund holds a residual interest in Ithan Creek Partners L.P. (“Hedge Fund”). As of June 30,
2014, the Fund notified the managing general partner of the Hedge Fund that it was withdrawing its interest in the Hedge Fund.
A portion of the interest was withdrawn at that time. However, certain illiquid securities designated at the discretion of the
managing general partner of the Hedge Fund had been segregated in “side pockets” and were not immediately available
for distribution. Such illiquid securities are referred to as “Designated Investments”. As a result, the Fund continues
to maintain a residual, non-participating interest in the Hedge Fund, associated with the Designated Investments held in side
pockets. Due to the reorganization on March 20, 2015, the Fund acquired additional residual, nonparticipating interest in the
Hedge Fund. The Fund will maintain such interest until all the Designated Investments within the side pockets have been liquidated
and distributed, which will likely occur incrementally and over a period of years. Because of the illiquidity of the Designated
Investments, the limitation on withdrawal rights and because limited partnership interests are not tradable, the investment in
the Hedge Fund is an illiquid investment and involves a high degree of risk. A management fee at an annual rate of 1% of net assets
and an incentive fee of 20% of net profits is included in the partnership agreement. The value assigned to the Hedge Fund is based
on available information and may not necessarily represent the amount which might ultimately be realized.
Annual Report | November
30, 2020
|
29
|
Boulder
Growth & Income Fund, Inc.
|
Report
of Independent Registered
Public
Accounting Firm
|
To
the Shareholders and Board of Directors of
Boulder
Growth & Income Fund, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Boulder Growth &
Income Fund, Inc. (the “Fund”) as of November 30, 2020, the related statements of operations and cash flows for the
year then ended, the statements of changes in net assets for each of the two years in the period then ended, the related notes,
and the financial highlights for each of the three years in the period then ended (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position
of the Fund as of November 30, 2020, the results of its operations and its cash flows for the year then ended, the changes in
net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the
period then ended, in conformity with accounting principles generally accepted in the United States of America.
The
Fund’s financial highlights for the years ended November 30, 2017, and prior, were audited by other auditors whose report
dated January 26, 2018, expressed an unqualified opinion on those financial highlights.
Basis
for Opinion
These
financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the
Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or
fraud.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as
of November 30, 2020, by correspondence with the custodian, underlying fund managers and brokers. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We
have served as the auditor of one or more investment companies advised by ALPS Advisors, Inc. since 2013.
COHEN
& COMPANY, LTD.
Milwaukee,
Wisconsin
January
26, 2021
Boulder
Growth & Income Fund, Inc.
|
Additional
Information
|
November
30, 2020 (Unaudited)
PORTFOLIO
INFORMATION
The
Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an
exhibit to its report on Form N-PORT. The Fund’s N-PORT reports are available (i) on the Fund’s website at www.bouldercef.com;
or (ii) on the SEC’s website at www.sec.gov.
PROXY
VOTING
The
policies and procedures used by the Fund to determine how to vote proxies relating to portfolio securities held by the Fund
are available, without charge, (i) on the Fund’s website at www.bouldercef.com, (ii) on the SEC’s website at
www.sec.gov, or (iii) by calling toll-free (877) 561-7914. Information regarding how
the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available
at www.sec.gov.
SENIOR
OFFICER CODE OF ETHICS
The
Fund files a copy of its code of ethics that applies to its principal executive officer, principal financial officer or controller,
or persons performing similar functions (the “Senior Officer Code of Ethics”), with the SEC as an exhibit to its annual
report on Form N-CSR. The Fund’s Senior Officer Code of Ethics is available on the Fund’s website located at www.bouldercef.com.
PRIVACY
STATEMENT
Pursuant
to SEC Regulation S-P (Privacy of Consumer Financial Information) the Board established the following policy regarding information
about the Fund’s stockholders. We consider all stockholder data to be private and confidential, and we hold ourselves to
the highest standards in its safekeeping and use.
General
Statement. The Fund may collect nonpublic information (e.g., your name, address, email address, Social Security Number, Fund
holdings (collectively, “Personal Information”)) about stockholders from transactions in Fund shares. The Fund will
not release Personal Information about current or former stockholders (except as permitted by law) unless one of the following
conditions is met: (i) we receive your prior written consent; (ii) we believe the recipient to be you or your authorized representative;
(iii) to service or support the business functions of the Fund (as explained in more detail below), or (iv) we are required by
law to release Personal Information to the recipient. The Fund has not and will not in the future give or sell Personal Information
about its current or former stockholders to any company, individual, or group (except as permitted by law) and as otherwise provided
in this policy.
In
the future, the Fund may make certain electronic services available to its stockholders and may solicit your email address and
contact you by email, telephone or U.S. mail regarding the availability of such services. The Fund may also contact stockholders
by email, telephone or U.S. mail in connection with these services, such as to confirm enrollment in electronic stockholder communications
or to update your Personal Information. In no event will the Fund transmit your Personal Information via email without your consent.
Annual Report | November
30, 2020
|
31
|
Boulder
Growth & Income Fund, Inc.
|
Additional
Information
|
November
30, 2020 (Unaudited)
Use
of Personal Information. The Fund will only use Personal Information (i) as necessary to service or maintain stockholder accounts
in the ordinary course of business and (ii) to support business functions of the Fund and its affiliated businesses. This means
that the Fund may share certain Personal Information, only as permitted by law, with affiliated businesses of the Fund, and that
such information may be used for non-Fund-related solicitation. When Personal Information is shared with the Fund’s business
affiliates, the Fund may do so without providing you the option of preventing these types of disclosures as permitted by law.
Safeguards
Regarding Personal Information. Internally, we also restrict access to Personal Information to those who have a specific need
for the records. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard Personal
Information. Any doubts about the confidentiality of Personal Information, as required by law, are resolved in favor of confidentiality.
NOTICE
TO STOCKHOLDERS
The
Fund designated the following as a percentage of taxable ordinary income distributions, or up to the maximum amount allowable,
for the calendar year ended December 31, 2019:
Qualified Dividend Income:
|
100.00%
|
Dividend Received Deduction:
|
100.00%
|
In
early 2020, if applicable, stockholders of record received this information for the distributions paid to them by the Funds during
the calendar year 2019 via Form 1099. The Funds will notify shareholders in early 2021 of amounts paid to them by the Funds, if
any, during the calendar year 2020.
Pursuant
to Section 852(b)(3) of the Internal Revenue Code, the Fund designated $34,017,701 as long-term capital gain dividends for the
fiscal year ended November 30, 2020.
LICENSING
AGREEMENT
The
Fund is not sponsored, endorsed, sold or promoted by Morningstar, Inc. or any of its affiliates (all such entities, collectively,
“Morningstar Entities”). The Morningstar Entities make no representation or warranty, express or implied, to the owners
of the Fund or any member of the public regarding the advisability of investing in mutual funds generally or in the Fund in particular
or the ability of the Morningstar Index Data to track general mutual fund market performance.
THE
MORNINGSTAR ENTITIES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE MORNINGSTAR INDEX DATA OR ANY DATA INCLUDED
THEREIN AND MORNINGSTAR ENTITIES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
STOCKHOLDER
VOTING RESULTS
On
November 13, 2020, the Fund held its Annual Meeting of Stockholders to consider the proposals set forth below. The following votes
were recorded:
Proposal
1: To elect one Class II Director to the Board of Directors to serve until the 2023 Annual Meeting of Stockholders.
Election of Mr. Joel W. Looney
|
|
|
|
#
of Votes Cast
|
%
of Votes Cast
|
For
|
85,172,529
|
98.57%
|
Against/Withhold
|
1,239,970
|
1.43%
|
TOTAL
|
86,412,496
|
100.00%
|
Boulder
Growth & Income Fund, Inc.
|
Additional
Information
|
November
30, 2020 (Unaudited)
SECTION
19(A) NOTICES
The
following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company
Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total
distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage
of the total distribution amount. These percentages are disclosed for the fiscal year-to-date cumulative distribution amount per
share for the Fund.
The
amounts and sources of distributions reported in these 19(a) notices are only estimates and not for tax reporting purposes. The
actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during
the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV
for the calendar year that will tell you how to report these distributions for federal income tax purposes.
Total
Cumulative Distributions
for the fiscal period ended November 30, 2020
|
%
Breakdown of the Total Cumulative
Distributions for the fiscal period ended
November 30, 2020
|
|
Net
Investment
Income
|
Net
Realized
Capital
Gains
|
Return
of
Capital
|
Total
Per
Common
Share
|
Net
Investment
Income
|
Net
Realized
Capital
Gains
|
Return
of
Capital
|
Total
Per
Common
Share
|
|
$0.08322
|
$0.23898
|
$0.08580
|
$0.40800
|
20.39%
|
58.08%
|
21.53%
|
100.00%
|
|
Annual Report | November
30, 2020
|
33
|
Boulder
Growth & Income Fund, Inc.
|
Summary
of Dividend
Reinvestment Plan
|
November
30, 2020 (Unaudited)
Registered
holders (“Common Stockholders”) of common shares (the “Common Shares”) are automatically enrolled (the
“Participants”) in the Fund’s Dividend Reinvestment Plan (the “Plan”) whereupon all distributions
of income, capital gains or managed distributions (“Distributions”) are automatically reinvested in additional Common
Shares. Common Stockholders who elect to not participate in the Plan will receive all distributions in cash paid by check in U.S.
dollars mailed directly to the stockholders of record (or if the shares are held in street name or other nominee name, then the
nominee) by the custodian, as dividend disbursing agent.
Computershare
Shareowner Services (the “Agent”) serves as Agent for each Participant in administering the Plan. After the Fund declares
a Distribution, if (1) the net asset value per Common Share is equal to or less than the market price per Common Share plus estimated
brokerage commissions on the payment date for a Distribution, Participants will be issued Common Shares at the higher of net asset
value per Common Share or 95% of the market price per Common Share on the payment date; or if (2) the net asset value per Common
Share exceeds the market price plus estimated brokerage commissions on the payment date for a Distribution, the Agent shall apply
the amount of such Distribution to purchase Common Shares on the open market and Participants will receive the equivalent in Common
Shares valued at the weighted average market price (including brokerage commissions) determined as of the time of the purchase
(generally, following the payment date of the Distribution). If, before the Agent has completed its purchases, the market price
plus estimated brokerage commissions exceeds the net asset value of the Common Shares as of the payment date, the purchase price
paid by the Agent may exceed the net asset value of the Common Shares, resulting in the acquisition of fewer Common Shares than
if such Distribution had been paid in Common Shares issued by the Fund. If the Agent is unable to invest the full Distribution
amount in purchases in the open market or if the market discount shifts to a market premium during the purchase period then the
Agent may cease making purchases in the open market the instant the Agent is notified of a market premium and may invest the uninvested
portion of the Distribution in newly issued Common Shares at the net asset value per Common Share at the close of business provided
that, if the net asset value is less than or equal to 95% of the then current market price per Common Share, the dollar amount
of the Distribution will be divided by 95% of the market price on the payment date. The Fund will not issue Common Shares under
the Plan below net asset value.
There
is no charge to Participants for reinvesting Distributions, except for certain brokerage commissions, as described below. The
Agent’s fees for the handling of the reinvestment of Distributions will be paid by the Fund. There will be no brokerage
commissions charged with respect to shares issued directly by the Fund. However, each Participant will pay a pro rata share of
brokerage commissions incurred with respect to the Agent’s open market purchase in connection with the reinvestment of Distributions.
The automatic reinvestment of Distributions will not relieve Participants of any federal income tax that may be payable on such
Distributions.
The
Fund reserves the right to amend or terminate the Plan upon 90 days’ written notice to Common Stockholders of the Fund.
Participants
in the Plan may (i) request a certificate, (ii) request to sell their shares, or (iii) withdraw from the Plan upon written notice
to the Agent or by telephone in accordance with the specific procedures and will receive certificates for whole Common Shares
and cash for fractional Common Shares.
All
correspondence concerning the Plan should be directed to the Agent, Computershare Shareowner Services, P.O. Box 30170, College
Station, TX, 77842-3170. To receive a full copy of the Fund’s Dividend Reinvestment Plan, please contact the Agent at 1-866-228-4853.
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
The
following information in this annual report is a summary of certain information about the Fund and changes since the last annual
report dated February 5, 2020 (the “prior disclosure date”). This information may not reflect all of the changes that
have occurred since you purchased shares of the Fund.
Investment
Objective. The Fund’s investment objective is total return.
Principal
Investment Strategies.
The
Fund seeks to produce both income and long-term capital appreciation by investing in a portfolio of equity and debt securities.
Under normal market conditions, the Fund invests at least 80% of its total assets in common stocks, primarily domestic common
stocks and secondarily in foreign common stocks denominated in foreign currencies; investments in common stocks may include, but
are not limited to, investment companies whose objective is income, real estate investment trusts (“REITs”), and other
dividend-paying common stocks. The portion of the Fund’s assets that is not invested in common stocks may be invested in
fixed income securities, cash equivalents and other income-producing securities. The Fund has no limitation on the amount of its
assets that may be invested in securities which are not readily marketable or are subject to restrictions on resale. The Fund
may not, as a matter of fundamental policy, invest in the securities of companies conducting their principal business activity
in the same industry if, immediately after such investment, the value of its investments in such industry would exceed 25% of
the value of its total assets.
The
Fund is a “non-diversified” investment company, as defined in the Investment Company Act of 1940, as amended
(the “1940 Act”), which means that it is permitted to invest its assets in a more limited number of issuers than
“diversified” investment companies. A diversified company may not, with respect to 75% of its total assets,
invest more than 5% of its total assets in the securities of any one issuer and may not own more than 10% of the outstanding
voting securities of any one issuer. However, under Subchapter M of the Internal Revenue Code of 1986, as amended (the
“Code”), (A) not more than 25% of the Fund’s total assets may be invested in securities of any one issuer
(other than U.S. government securities and RICs) or of any two or more issuers controlled by the Fund which may be deemed to
be engaged in the same, similar or related trades or businesses; and (B) with respect to 50% of the total value of the
Fund’s portfolio, (i) the Fund must limit to 5% the portion of its assets
invested in the securities of a single issuer (other than U.S. government securities and RICs), and (ii) the Fund may not own
more than 10% of the outstanding voting securities of any one issuer (other than U.S. government securities and RICs). The
Fund intends to concentrate its common stock investments in a few issuers and to take large positions in those issuers,
consistent with being a “non-diversified” fund. As a result, the Fund may be subject to a greater risk of loss
than a diversified fund or a fund that has diversified its investments more broadly. Taking larger positions is also likely
to increase the volatility of the Fund’s NAV, reflecting fluctuation in the value of large Fund holdings.
Limitations
on investments expressed in percentages are measured and are applicable only at the time of investment. They are not measured
or applied on an ongoing basis. There is no requirement for the Fund to sell or change its portfolio investments resulting from
changes in the valuations of such investments.
Leverage
Under
normal market conditions, the Fund may utilize leverage through Borrowings (defined below) and the issuance of preferred shares
(if any) in an amount that represents approximately 33 1/3% or less of the Fund’s total assets, including proceeds from
such Borrowings and issuances (or approximately 50% of the Fund’s net assets). “Borrowings” are defined as:
amounts received by the Fund pursuant to loans from banks or other financial institutions; amounts borrowed from banks or other
parties using reverse repurchase agreements; or amounts received by the Fund from the Fund’s issuance of any senior notes
or similar debt securities. Other than with respect to reverse
repurchase agreements, Borrowings do not include trading practices or instruments that, according to the SEC or its staff, may
cause senior securities concerns.
Annual Report | November
30, 2020
|
35
|
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
The
Adviser is responsible for making recommendations to the Board regarding the Fund’s use of Borrowings. On November 5, 2020
the Fund issued senior unsecured notes (“Notes”) in an aggregate amount of $225,000,000 in three fixed-rate series.
The 10-, 12-, and 15-year series will pay interest semi-annually at the rate of 2.62%, 2.72%, and 2.87%, respectively. The Fund
must experience a 2.72% rate of return in order to cover annual interest payments on the Notes. The Notes were issued in private
placement offerings to institutional investors and are not listed on any exchange or automated quotation system. There can be
no assurance that the use of leverage will be successful in enhancing the level of the Fund’s total return.
Effects
of Leverage
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Fund
share total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held
in the Fund’s portfolio) of minus 10% to plus 10%. These assumed investment portfolio total returns are hypothetical figures
and are not necessarily indicative of the investment portfolio total returns experienced or expected to be experienced by the
Fund. Further, the assumed investment portfolio total returns are after (net of) all of the Fund’s expenses other than expenses
associated with leverage); but such leverage expenses are deducted when determining the Fund share total return. See “Risk
Factors.” The table further reflects the use of leverage representing 33 1/3% of the Fund’s total assets and estimated
leverage costs of 2.75%.
Assumed Portfolio Return
|
-10.00%
|
-5.00%
|
0.00%
|
5.00%
|
10.00%
|
Fund Share Total Return
|
-12.20%
|
-6.33%
|
-0.47%
|
5.39%
|
11.25%
|
Corresponding
Fund Share total return is composed of two elements: Fund dividends paid by the Fund (the amount of which is largely determined
by the Fund’s net distributable income after paying interest or dividends on the Fund’s leverage) and gains or losses
on the value of the securities the Fund owns. As required by SEC rules, the table above assumes that the Fund is more likely to
suffer capital losses than to enjoy capital appreciation. For example, to assume a total return of 0% would assume that the distributions
the Fund receives on its investments are entirely offset by losses in the value of those securities.
Risk
Factors
Investment
in the Fund may not be appropriate for all investors. The Fund is not intended to be a complete investment program and, due to
the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. Investors
should consider their long-term investment goals and financial needs when making an investment decision with respect to the Fund.
An investment in the Fund is intended to be a long-term investment, and you should not view the Fund as a trading vehicle. Your
shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of
Fund dividends and distributions, if applicable.
Investments
in Common Stocks. The Fund intends to invest, under normal market conditions, at least 80% of its total assets in publicly
traded common stocks. Common stocks generally have greater risk exposure and reward potential over time than bonds. The volatility
of common stock prices has historically been greater than bonds, and as the Fund invests primarily in common stocks, the Fund’s
NAV may also be volatile. Further, because the time horizon for the Fund’s investments in common stock is longer, the time
necessary for the Fund to achieve its objective of total return will likely be longer than for a fund that invests solely for
income.
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
Fixed
Income Securities. The Fund may invest in fixed income securities from time to time. Fixed income securities are affected
by changes in interest rates and credit quality. A rise in interest rates typically causes bond prices to fall. The longer the
average maturity of the bonds held by a Fund, the more sensitive the Fund is likely to be to interest-rate changes. There is the
possibility that the issuer of the security will not repay all or a portion of the principal borrowed and will not make all interest
payments.
Non-Diversified
Status Risk. The Fund is classified as “non-diversified” under the 1940 Act. As a result, it can invest a greater
portion of its assets in securities of a single issuer than a “diversified” fund. The Fund will therefore be more
susceptible than a diversified fund to being adversely affected by any single corporate, economic, political or regulatory occurrence.
The Fund intends to diversify its investments to the extent necessary to qualify, and maintain its status, as a regulated investment
company under U.S. federal income tax laws.
Issuer
Focus Risk. The Fund may hold significant positions in a few issuers. Taking larger positions is likely to increase the volatility
of the Fund’s NAV, reflecting fluctuation in the value of large Fund holdings. In addition, both the Code and 1940 Act allow
positions in single issuers to exceed statutory diversification thresholds if the excess occurs as a result of market variations.
In such cases, the Fund may continue to hold such excess positions for the sake of tax efficiency. Thus, in such circumstances,
the Fund may be even more susceptible to being adversely affected by any corporate, economic, political or regulatory occurrence
affecting issuer positions which exceed such thresholds. Note that the risk described here is distinct from the risk of concentration
as the term is generally understood under the 1940 Act, which refers whether a particular fund invests in excess of 25% of its
total assets in issuers within the same industry or group of industries. As a matter of fundamental policy, the Fund may not invest
in the securities of companies conducting their principal business activity in the same industry if, immediately after such investment,
the value of its investments in such industry would exceed 25% of the value of its total assets.
Investments
in Mid- and Small-cap Securities. The Fund may invest in small- and mid-cap companies from time to time. Generally, small-cap
stocks are those securities issued by companies with a total market capitalization of between $250 million to $2 billion, and
mid-cap stocks are those securities issued by companies with a total market capitalization of between $2 billion to $10 billion.
Small- and mid-cap stocks in which the Fund may invest may present greater opportunities for capital growth than larger companies,
but also may be more volatile and subject to greater risk. The small- and mid-cap stocks in which the Fund may invest may present
greater opportunities for capital growth than larger companies, but also may be more volatile and subject to greater risk. This
is because smaller companies generally may have limited financial resources, product lines and markets, and their securities may
trade less frequently and in more limited volumes than the securities of larger companies, which could lead to higher transaction
costs and reduced returns to holders of these securities, including potentially the Fund. In addition, there may be less publicly
available information about smaller companies which can also lead to higher risk in terms of arriving at an accurate valuation
for these smaller companies.
Leveraging
Risk. The Fund currently uses leverage. Use of leverage may have a number of adverse effects on the Fund and its stockholders
including without limitation: (i) leverage may magnify market fluctuations in the Fund’s underlying holdings thus causing
a disproportionate change in the Fund’s NAV; and (ii) the Fund’s cost of leverage may exceed the return on the underlying
securities acquired with the proceeds of the leverage, thereby diminishing rather than enhancing the return to stockholders and
generally making the Fund’s total return to stockholders more volatile.
Discount
From NAV. The common stock of closed-end funds frequently trades at market prices less than the value of the net assets attributable
to those shares (a “discount”). The possibility that the Fund’s shares will trade at a discount from NAV is
a risk separate and distinct from the risk that the
Fund’s NAV will decrease. The risk of purchasing shares of a closed-end fund that might trade at a discount is more pronounced
for investors who wish to sell their shares in a relatively short period of time because, for those investors, realization of
a gain or loss on their investments is likely to be more dependent upon the existence of a premium or discount than upon portfolio
performance.
Annual Report | November
30, 2020
|
37
|
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
Repurchase
of the Shares. The Fund is authorized to repurchase shares on the open market when the shares are trading at a discount from
NAV per share as determined by the Board from time to time. Any acquisition of shares by the Fund will decrease the total assets
of the Fund and, therefore, have the effect of increasing the Fund’s expense ratio and may adversely affect the ability
of the Fund to achieve its investment objective.
Issuer
Risk. The value of the Fund’s portfolio may decline for a number of reasons directly related to the issuers of the securities
in the portfolio, such as management performance, financial leverage and reduced demand for an issuer’s goods and services.
Inflation
Risk. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation
decreases the value of money. As inflation increases, the real value of the Fund’s portfolio can decline.
Foreign
Securities Risk. The Fund is permitted to invest in foreign securities without limitation. Investment in non-U.S. issuers
may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced to the extent that
the Fund invests a significant portion of its non-U.S. investments in one region or in the securities of emerging market issuers.
Currency
Risk. The Fund holds investments in foreign securities and thus a portion of the Fund’s assets may be quoted or denominated
in non-U.S. currencies. These securities may be adversely affected by fluctuations in relative currency exchange rates and by
exchange control regulations. The Fund’s investment performance may be negatively affected by a devaluation of a currency
in which the Fund’s investments are quoted or denominated. Further, the Fund’s investment performance may be significantly
affected, either positively or negatively, by currency exchange rates because the U.S. dollar value of securities quoted or denominated
in another currency will increase or decrease in response to changes in the value of such currency in relation to the U.S. dollar.
Sovereign
Debt Risk. An investment in debt obligations of non-U.S. governments and their political subdivisions (“sovereign debt”)
involves special risks that are not present in corporate debt obligations. The non-U.S. issuer of the sovereign debt or the non-U.S.
governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when
due, and the Fund may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices
of sovereign debt may be more volatile than prices of debt obligations of U.S. issuers.
Investments
in Registered Investment Companies. The Fund may invest in securities issued by other registered investment
companies subject to such limitations, restrictions and conditions as imposed by Federal law. Accordingly, the Fund will be
subject to the particular risks associated with investing in other funds that are separate from risks associated with the
underlying investments held by such registered investment companies. Both the Fund and any registered investment companies in
which it invests pay management fees. In addition, the registered investment companies in which the Fund invests will
typically incur other operating expenses that are borne by their investors, including the Fund. As a result, Fund
stockholders will bear not only the Fund’s management fees and operating expenses, but also the fees and expenses of
the registered investment companies in which the Fund invests. Investors would bear less expense if they invested directly in
the underlying registered investment companies in which the Fund invests.
The Fund may also invest in registered investment companies that are not limited in their portfolio trading activity and thus
may experience high portfolio turnover rates. Higher turnover rates generally result in correspondingly greater brokerage commissions
and other transactional expenses which may be borne by the Fund, directly or through its investment in registered investment companies.
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
Liquidity
Risk. Although the Fund invests primarily in securities traded on national exchanges, it may invest in less liquid
assets from time to time that are not readily marketable and may be subject to restrictions on resale. Illiquid securities may
be more difficult to value or may impair the Fund’s ability to realize the full value of its assets in the event of a voluntary
or involuntary liquidation of such assets and thus may cause a decline in the Fund’s NAV. The Fund is not limited in the
amount of its assets that may be invested in securities which are not readily marketable or are subject to restrictions on resale,
although it may not invest more than 30% of the value of its total assets in securities which have been acquired through private
placement. In certain situations, the Fund could find it more difficult to sell such securities at times, in amounts and at prices
they consider reasonable.
Derivatives
Risk. The Fund’s use of derivative instruments (such as options, futures and swaps) could produce disproportionate gains
or losses, more than the principal amount invested. Investing in derivative instruments involves risks different from, or possibly
greater than, the risks associated with investing directly in securities and other traditional investments (including, for example,
risks associated with the creditworthiness of counterparties). The Fund may also be indirectly exposed to derivatives risk through
an underlying fund’s use of such instruments. Under certain market conditions, derivatives may become harder to value or
sell at a fair price, and may thus entail liquidity risks.
Anti-Takeover
Risk. The Fund’s constituent documents, as amended, include provisions that could limit the ability of other entities
or persons to acquire control of the Fund or to change the composition of its Board. Such provisions could limit the ability of
stockholders to sell their shares at a premium over prevailing market prices by discouraging a third party from seeking to obtain
control of the Fund. These provisions include, for example, mechanisms governing the consideration of certain matters at stockholder
meetings and special voting requirements for the approval of certain transactions. The Fund’s Board is also “classified,”
which means that membership of the Board is divided into separate classes, each class serving staggered terms. Finally, the Horejsi
Affiliates (as defined below) will continue to own a substantial portion of the Fund’s common shares and thus may discourage
a third party from seeking to obtain control of the Fund. Such structures and share ownership may have the overall effect of making
any hostile attempt to take control of the Fund through a proxy contest more difficult.
Market
Disruption Risk. The Fund is subject to investment and operational risks associated with financial, economic and other global
market developments and disruptions, including the recent spread of an infectious respiratory illness caused by a novel strain
of coronavirus (known as COVID-19), which can negatively impact the securities markets and cause a Fund to lose value.
The
spread of COVID-19 has caused volatility, severe market dislocations and liquidity constraints in many markets, including markets
for the securities the Fund holds, and may adversely affect the Fund’s investments and operations. The transmission of COVID-19
and efforts to contain its spread have resulted in travel restrictions and disruptions, closed international borders, enhanced
health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, quarantines,
event and service cancellations or interruptions, disruptions to business operations and supply chains, and a reduction in consumer
and business spending, as well as general concern and uncertainty that has negatively affected the economy. These disruptions
have led to instability in the market place and the jobs market. The impact of COVID-19 could adversely affect the economies of
many nations or the entire global economy, the financial well-being
and performance of individual issuers, borrowers and sectors and the health of the markets generally in potentially significant
and unforeseen ways.
Annual Report | November
30, 2020
|
39
|
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
The
foregoing could lead to a significant economic downturn or recession, increased market volatility, a greater number of market
closures, higher default rates and adverse effects on the values and liquidity of the Fund’s securities or other assets.
Such impacts may adversely affect the performance of the Fund.
Cybersecurity
Risk. In connection with the increased use of technologies such as the Internet and the dependence on computer systems to
perform necessary business functions, the Fund is susceptible to operational, information security, and related risks due to the
possibility of cyber-attacks or other incidents. Cyber incidents may result from deliberate attacks or unintentional events.
Cyber-attacks include, but are not limited to, infection by computer viruses or other malicious software code, gaining unauthorized
access to systems, networks, or devices that are used to service the Fund’s operations through hacking or other means for
the purpose of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber-attacks
may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks
(which can make a website unavailable) on the Fund’s website. In addition, authorized persons could inadvertently or intentionally
release confidential or proprietary information stored on a Fund’s systems.
Cyber
security failures or breaches by the Fund’s service providers (including, but not limited to, the adviser, distributor,
custodian, transfer agent, financial intermediaries, and sub-adviser) may cause disruptions and impact the service providers’
and the Fund’s business operations, potentially resulting in financial losses, the inability of Fund shareholders to transact
business and the Fund to process transactions, inability to calculate the Fund’s net asset value, violations of applicable
privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional
compliance costs. The Fund and its shareholders could be negatively impacted as a result of successful cyber-attacks against,
or security breakdowns of, the Fund or its third party service providers.
The
Fund may incur substantial costs to prevent or address cyber incidents in the future. In addition, there is a possibility that
certain risks have not been adequately identified or prepared for. Furthermore, the Fund cannot directly control any cyber security
plans and systems put in place by third party service providers. Cyber security risks are also present for issuers of securities
in which the Fund invests, which could result in material adverse consequences for such issuers, and may cause the Fund’s
investment in such securities to lose value.
Fundamental
Investment Restrictions
The
following investment restrictions of the Fund are designated as fundamental policies and as such cannot be changed without the
approval of the holders of a majority of the Fund’s outstanding voting securities, which as used in this annual report means
the lesser of (a) 67% of the shares of the Fund present or represented by proxy at a meeting if the holders of more than 50% of
the outstanding shares are present or represented at the meeting or (b) more than 50% of outstanding shares of the Fund. As a
matter of fundamental policy the Fund may not:
|
(1)
|
Issue
any senior securities except as permitted under the 1940 Act.
|
|
(2)
|
Invest
in the securities of companies conducting their principal business activity in the same
industry if, immediately after such investment, the value of its investments in such
industry would exceed 25% of the value of its total assets.
|
|
(3)
|
Participate
on a joint or a joint and several basis in any trading account in securities, except
that the Fund may, to the extent permitted by rules, regulations or orders of the Securities
and Exchange Commission (the “SEC”), combine orders with others for the purchases
and sales of securities in order to achieve the best overall execution.
|
Boulder
Growth & Income Fund, Inc.
|
Summary of Updated Information
Regarding the Fund
|
November
30, 2020 (Unaudited)
|
(4)
|
Purchase
or sell interests in oil, gas or other mineral exploration or development programs.
|
|
(5)
|
Purchase
or sell real estate, except that the Fund may purchase or sell interests in REITs and
securities secured by real estate or interests therein issued by companies owning real
estate or interest therein.
|
|
(6)
|
Purchase
or sell commodities or commodity contracts.
|
|
(7)
|
Make
loans other than through the purchase of debt securities in private placements and the
loaning of portfolio securities.
|
|
(8)
|
Borrow
money in an amount exceeding the maximum permitted under the 1940 Act.
|
|
(9)
|
Underwrite
securities of other issuers, except insofar as it may be deemed to be an underwriter
in selling a portfolio security which may require registration under the Securities Act
of 1933, as amended (the “Securities Act”).
|
|
(10)
|
Invest
more than 30% of the value of its total assets in securities which have been acquired
through private placements.
|
|
(11)
|
Purchase
or retain the securities of any issuer, if, to the Fund’s knowledge, those officers
and directors of the Fund or its investment advisers who individually own beneficially
more than 1/2 of 1% of the outstanding securities of such issuer, together own beneficially
more than 5% of such outstanding securities.
|
|
(12)
|
Pledge,
mortgage or hypothecate its assets except in connection with permitted borrowing and
to the extent related to transactions in which the Fund is authorized to engage.
|
Portfolio
Manager Information
Since
the prior disclosure date, there have been no changes in the Fund’s portfolio managers or background.
Fund
Organizational Structure
Since
the prior disclosure date, there have been no changes in the Fund’s charter or by-laws that would delay or prevent a change
of control of the Fund that have not been approved by stockholders.
Annual Report | November
30, 2020
|
41
|