Clough Global Equity
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21712

Clough Global Equity Fund

(exact name of registrant as specified in charter)

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

Erin E. Douglas, Secretary

Clough Global Equity Fund

1290 Broadway, Suite 1100

Denver, Colorado 80203

(Name and address of agent for service)

Registrant’s telephone number, including area code: 303-623-2577

Date of fiscal year end:     March 31

Date of reporting period: March 31, 2011


Table of Contents

Item 1. Reports to Stockholders.


Table of Contents

LOGO


Table of Contents

Table of Contents

   Clough Global Funds

 

 

 

      

Shareholder Letter

     1   
 
      

Portfolio Allocation

     3   
      

Global Allocation Fund

     3   
      

Global Equity Fund

     4   
      

Global Opportunities Fund

     5   
 
      

Report of Independent Registered Public Accounting Firm

     6   
 
      

Statement of Investments

     7   
      

Global Allocation Fund

     7   
      

Global Equity Fund

     12   
      

Global Opportunities Fund

     17   
 
      

Statements of Assets and Liabilities

     23   
 
      

Statements of Operations

     24   
 
      

Statements of Changes in Net Assets

     25   
 
      

Statements of Cash Flows

     26   
 
      

Financial Highlights

     27   
      

Global Allocation Fund

     27   
      

Global Equity Fund

     28   
      

Global Opportunities Fund

     29   
 
      

Notes to Financial Statements

     31   
 
      

Dividend Reinvestment Plan

     41   
 
      

Additional Information

     42   
      

Fund Proxy Voting Policies & Procedures

     42   
      

Portfolio Holdings

     42   
      

Notice

     42   
      

Tax Designations

     42   
 
      

Trustees & Officers

     43   


Table of Contents

Clough Global Funds

   Shareholder Letter
   March 31, 2011

 

To our Shareholders:

Performance:

During the twelve-months ended March 31, 2011, the Clough Global Allocation Fund’s total return, assuming reinvestment of all distributions, was 17.30% based on the net asset value and 10.20% based on the market price of the stock. That compares with 15.65% return for the S&P 500 for the same period. Since the Fund’s inception on July 28, 2004, the total growth in net asset value assuming reinvestment of all distributions has been 8.42%, this compares to a average annual total return of 5.03% for the S&P 500 through March 31, 2011. Total distributions since inception has been $8.41 per share, and based on the current dividend rate of $0.30 per share, offer a yield of 7.39% on market price as of March 31, 2011, of $16.24.

During the twelve-months ended March 31, 2011, the Clough Global Equity Fund’s total return, assuming reinvestment of all distributions, was 17.05% based on the net asset value and 16.07% based on the market price of the stock. That compares with 15.65% return for the S&P 500 for the same period. Since the Fund’s inception on April 27, 2005, the total growth in net asset value assuming reinvestment of all distributions has been 7.67%, this compares to a average annual total return of 4.49% for the S&P 500 through March 31, 2011. Total distributions since inception has been $7.47 per share, and based on the current dividend rate of $0.29 per share, offer a yield of 7.55% on market price as of March 31, 2011, of $15.37.

During the twelve-months ended March 31, 2011, the Clough Global Opportunities Fund’s total return, assuming reinvestment of all distributions, was 16.21% based on the net asset value and 15.27% based on the market price of the stock. That compares with 15.65% return for the S&P 500 for the same period. Since the Fund’s inception on April 25, 2006, the total growth in net asset value assuming reinvestment of all distributions has been 4.28%, this compares to a average annual total return of 2.53% for the S&P 500 through March 31, 2011. Total distributions since inception has been $5.85 per share, and based on the current dividend rate of $0.27 per share, offer a yield of 7.80% on market price as of March 31, 2011, of $13.85.

Fiscal Year Fund Review:

The last twelve months have been characterized by volatile financial markets despite an upward trend in global equities. Early in 2010, the sovereign debt crisis in Europe reminded investors of the still lengthy restructuring ahead for the European Union. Concerns over the solvency of the peripheral EU governments and ultimately the health of the Continent’s banking system pressured markets and led to the first of a series of on-going government bailouts. Later in the Fall, in response to slowing growth, the U.S. Federal Reserve embarked upon a second campaign of “quantitative easing” (“QE2”) which helped restore a bid to asset prices, in particular for equities and commodities. Periodic taxpayer-led bailouts and unconventional monetary policies are to be expected in an environment of ongoing

 

balance sheet deleveraging by overly-indebted banking systems and households in Europe and the United States.

The Fed’s QE2 policy also helped push the value of the US dollar lower, as the US dollar index declined more than 15% from its 2010 high. The weak dollar was a catalyst for a broad sentiment shift as global investors pared their emerging markets equity holdings in favor of those in developed markets. In essence that shift has been away from tighter monetary policy of Asia and Brazil, who are dealing with cyclical inflation pressures, towards the United States and Europe where the markets were being assisted by easy money, government bailouts and low interest rates. This was a headwind for the Funds’ emerging markets exposure.

The strongest performing areas for the Funds came from our energy, aerospace manufacturing holdings, as well as from consumer cyclical stocks. Despite a relatively weak year for emerging markets, our strategies focused on Asian household consumption growth also worked well.

We thought that free cash flow would be the equity story for 2010 but the performance of that strategy was mixed. Some stocks we thought were particularly undervalued actually declined. These include Microsoft (MSFT), a company which, although it offers an 11% free cash flow yield and double digit growth as technology upgrade cycles emerge, was nevertheless down 11.39% in 2010. Google (GOOG), still one of the fastest growing large companies in the world, appreciated a mere 3.46%. We continue to believe these holdings have great promise for 2011.

Other free cash flow stories, however, performed quite well. Transdigm Group Corp. Inc. (TDG), a leading global designer and producer of aircraft components and The Goodyear Tire and Rubber Company (GT), a leading manufacturer and distributer of tires benefited from rebounds in end-market demand, which was amplified by significant pricing power at both companies.

The energy sector also performed well as high energy prices supported increased earnings for both exploration and production companies and oil equipment and service providers. National Oilwell Varco (NOV), one of the largest providers of machinery and related equipment for oil-drilling rigs benefited from higher spending budgets from its customers, as well as market share gains due to its leading technology position. Another holding, Golar LNG Inc (GLNG), owns and operates a fleet of liquid natural gas (LNG) tankers. The increased demand for LNG from Europe and Asia has benefited Golar as has China’s ongoing need to increase and diversify its sources of energy. High barriers to entry in Golar’s business have supported its higher valuation.

Our position in Bank of America has been a drag on Fund performance. Despite strong lending margins, helped by what is likely to be an extended period of very low deposit rates, a marked decrease in credit losses and a significant increase in the bank’s capital adequacy ratios, Bank of America stock has lagged. The shares now trade at a discount to tangible book value suggesting that firm is worth no more than its liquidation value. We believe the national consumer and corporate franchise, which includes the

 

 

Annual Report | March 31, 2011

  

1


Table of Contents

Shareholder Letter

   Clough Global Funds
   March 31, 2011

 

Merrill Lynch and Countrywide Financial platforms, are severely undervalued and believe that management will successfully execute its turnaround strategy.

The Funds’ position in Genworth Financial shares also hurt returns. Genworth is a mortgage insurance provider and was hobbled during the 2008 credit crisis and housing bust, though fundamentals are much better today. We believe housing is undergoing a gradual recovery in the US, albeit the slope of that recovery is far from steep. While Glenworth’s balance sheet has improved meaningfully, we have not seen a recovery in new policy issuance that we expected and that growth is necessary for the thesis to play out. We have exited this position for now.

The Funds continued to maintain a focus on generating income with a portion of the portfolio allocated to fixed income markets. This allocation helps us generate our managed distribution target and also provides diversification for the Funds to help reduce volatility. Low yields on US Treasury bonds have made the task of generating attractive returns in fixed income markets more difficult, so we have expanded our “yield-focused strategies” beyond just US Treasuries and mortgage-backed securities. Corporate bonds were the biggest allocation to our yield-focused strategies and we believe they continue to produce equity-like returns. Our corporate bond allocation averaged approximately 10% of total assets over the period.

Our yield-generating strategies also included specialty finance company equities such as Business Development Companies (BDC’s) and Mortgage Real Estate Investment Trusts (M-REITs). BDCs are REIT-like structures that invest in the debt structures of companies not large enough to finance themselves in the public markets. The Funds’ exposure to BDCs was on average 3% during the fiscal year and the BDC holdings returned roughly 30% in 2010. Finally, M-REIT’s are publically traded portfolios of agency and non-agency mortgage backed securities. We believe the mortgage REIT’s are the best way to monetize the historically steep yield curve. The Funds had approximately 6% on average allocated to this sector and our holdings of M-REITs returned nearly 20% for the year.

Outlook for the Next Twelve Months:

We have seen a strong global economic recovery since the depths of the 2008 credit crisis. This recovery was driven by extraordinary fiscal stimulus, bank and government bailouts and unorthodox monetary policies. Nonetheless, the underlying trend towards fiscal consolidation and balance sheet restructuring, particularly in the developed world economies continues. As these policies normalize, and in some instances reverse, we would expect global growth to slow over the next couple of years. Such an environment is not necessarily bearish for equity markets and we see plenty of opportunity for investors over the next several years. We have made modest changes to our long-term thematic exposures as we enter 2011.

The Funds remain focused on quality, large cap multi-nationals with dominant strategic positions, and high free cash levels which can be used to benefit shareholders. As far as sectors are concerned, we continue to prefer North American auto, auto parts and aerospace

manufacturers, and firms leveraged to the high growth being seen in the wireless device sector. Further, our yield focused strategies continue to emphasize BDCs, M-REITs and corporate bonds. We have been reducing our holdings in the commodity sector, including some of our long-held investments in the energy sector which have performed well. The flip side of slower growth is likely a reduction in inflationary pressures in the emerging markets which will improve sentiment. We think emerging markets are likely to return as market leaders later in the year, particularly if growth in the developed economies falters. We are rebuilding our holdings of Chinese consumer-oriented equities.

We sincerely appreciate your interest in our Funds. If you have any questions about your investment, please call 1-877-256-8445.

Sincerely,

LOGO

Charles I. Clough, Jr.

 

 

Past performance is no guarantee of future results.

The information in this Portfolio Managers’ Shareholder Commentary 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.

The S&P 500 Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. It is not possible to invest directly in an Index.

 

 

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Table of Contents

Clough Global Allocation Fund

   Portfolio Allocation
   March 31, 2011

 

 

 

Asset Allocation*

  
   

Common Stock US

     56.86%   

Common Stock Foreign

     19.16%   

ETFs

 

    

 

-0.24%

 

  

 

   

Total Equities

     75.78%   
   

Corporate Debt

     8.95%   

Government L/T

     10.30%   

Asset/Mortgage-backed

     0.09%   

Preferred Stock

 

    

 

0.31%

 

  

 

   

Total Fixed Income

     19.65%   
   

Short-Term Investments

     1.63%   

Options

     0.00%   

Other (Foreign Cash)

     2.94%   

Rights & Warrants

 

    

 

0.00%

 

  

 

   

Total Other

     4.57%   
   

TOTAL INVESTMENTS

     100.00%   
   

 

Global Securities Holdings^

  
   

United States

     74.66%   

Brazil

     8.94%   

China

     4.10%   

Great Britain

     2.30%   

Canada

     2.05%   

Bermuda

     1.78%   

Singapore

     1.16%   

Hong Kong

     0.93%   

South Korea

     0.82%   

Malaysia

     0.78%   

The Netherlands

     0.75%   

Switzerland

     0.55%   

Taiwan

     0.53%   

Russia

     0.21%   

Indonesia

     0.20%   

Philippines

     0.19%   

France

     0.09%   

Japan

     0.09%   

Cayman Islands

 

    

 

-0.13%

 

  

 

   

TOTAL INVESTMENT

     100.00%   
   
 

 

 

 

* 

Includes securities sold short.

^ 

Includes securities sold short and foreign cash balances.

 

Annual Report | March 31, 2011

  

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Table of Contents

Portfolio Allocation

   Clough Global Equity Fund
   March 31, 2011 (Unaudited)

 

Asset Allocation*

  
   

Common Stock US

     62.08%   

Common Stock Foreign

     19.21%   

ETFs

 

    

 

-0.47%

 

  

 

   

Total Equities

     80.82%   
   

Corporate Debt

     8.49%   

Government L/T

     5.97%   

Asset/Mortgage-backed

     0.26%   

Preferred Stock

 

    

 

0.31%

 

  

 

   

Total Fixed Income

     15.03%   
   

Short-Term Investments

     1.17%   

Options

     0.00%   

Other (Foreign Cash)

     2.98%   

Rights & Warrants

 

    

 

0.00%

 

  

 

   

Total Other

     4.15%   
   
  
   

TOTAL INVESTMENTS

     100.00%   
   

Global Securities Holdings^

  
   

United States

     74.84%   

Brazil

     8.75%   

China

     4.08%   

Great Britain

     2.30%   

Canada

     2.02%   

Bermuda

     1.85%   

Singapore

     1.15%   

Hong Kong

     0.93%   

South Korea

     0.81%   

Malaysia

     0.78%   

The Netherlands

     0.75%   

Switzerland

     0.58%   

Taiwan

     0.53%   

Russia

     0.21%   

Philippines

     0.19%   

Indonesia

     0.18%   

France

     0.09%   

Japan

     0.09%   

Cayman Islands

 

    

 

-0.13%

 

  

 

   

TOTAL INVESTMENTS

     100.00%   
   
 

 

 

 

*

Includes securities sold short.

^

Includes securities sold short and foreign cash balances.

 

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Table of Contents

Clough Global Opportunities Fund

   Portfolio Allocation
   March 31, 2011 (Unaudited)

 

 

Asset Allocation*

  
   

Common Stock US

     56.45%   

Common Stock Foreign

     19.13%   

ETFs

 

    

 

-0.80%

 

  

 

   

Total Equities

     74.78%   
   

Corporate Debt

     8.96%   

Government L/T

     11.49%   

Asset/Mortgage-backed

     0.06%   

Preferred Stock

 

    

 

0.31%

 

  

 

   

Total Fixed Income

     20.82%   
   

Short-Term Investments

     1.23%   

Options

     0.18%   

Other (Foreign Cash)

     2.99%   

Rights & Warrants

 

    

 

0.00%

 

  

 

   

Total Other

     4.40%   
   
  
   

TOTAL INVESTMENTS

     100.00%   
   

Global Securities Holdings^

  
   

United States

     74.70%   

Brazil

     8.91%   

China

     4.10%   

Great Britain

     2.31%   

Canada

     2.05%   

Bermuda

     1.80%   

Singapore

     1.16%   

Hong Kong

     0.93%   

South Korea

     0.82%   

Malaysia

     0.78%   

The Netherlands

     0.75%   

Taiwan

     0.53%   

Switzerland

     0.52%   

Russia

     0.21%   

Indonesia

     0.19%   

Philippines

     0.19%   

Japan

     0.09%   

France

     0.09%   

Cayman Islands

 

    

 

-0.13%

 

  

 

   

TOTAL INVESTMENTS

     100.00%   
   
 

 

 

 

*

Includes securities sold short.

^

Includes securities sold short and foreign cash balances.

 

Annual Report | March 31, 2011

  

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Table of Contents

Report of Independent Registered

Public Accounting Firm

    
  

 

To the Shareholders and Board of Trustees of

Clough Global Allocation Fund,

Clough Global Equity Fund, and

Clough Global Opportunities Fund:

We have audited the accompanying statements of assets and liabilities of Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund (each a “Fund”, collectively the “Funds”), including the statements of investments, as of March 31, 2011, and 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, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2011, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund as of March 31, 2011, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Denver, Colorado

May 18, 2011

 

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   March 31, 2011

 

 

     Shares           Value    

COMMON STOCKS 105.54%

 

Basic Materials 0.91%

 

Anglo American PLC - Unsponsored ADR(a)

  6,794   $175,421

Gerdau S.A. - Sponsored A DR(a)(b)

  24,229   302,862

Walter Energy, Inc.(a)

  9,300   1,259,499
     
    1,737,782
     

Communications 10.39%

 

CBS Corp. - Class B(a)

  20,029   501,526

Chunghwa Telecom Co., Ltd. - ADR(a)

  34,835   1,085,459

Cisco Systems, Inc.(a)

  69,000   1,183,350

DiGi.Com Bhd

  33,800   319,168

Google, Inc. -
Class A
(a)(b)(c)

  10,154   5,952,376

Liberty Media Corp. - Capital - Series A(a)(b)(c)

  6,070   447,177

Liberty Media Corp. - Class A(a)(c)

  41,200   660,848

Liberty Media Corp. - Starz - Series A(a)(b)(c)

  1,407   109,183

Maxis Bhd

  771,900   1,371,134

NII Holdings, Inc.(a)(b)(c)

  16,318   679,971

Philippine Long Distance Telephone Co.

  9,050   484,613

Qihoo 360 Technology Co., Ltd. - ADR(c)

  3,334   98,653

Telekom Malaysia Bhd

  240,900   321,333

Valassis Communications, Inc.(a)(b)(c)

  7,000   203,980

Verizon Communications, Inc.(a)(b)

  106,813   4,116,573

Viacom, Inc. - Class B(a)

  12,500   581,500

The Walt Disney Co.(a)(b)

  41,358   1,782,116
     
    19,898,960
     

Consumer Cyclical 8.13%

   

Arezzo Industria e Comercio S.A.(c)

  27,052   376,953

Bosideng International Holdings, Ltd.

  1,140,000   338,546

Cie Generale des Etablissements Michelin - Class B

  7,673   648,098

Cooper Tire & Rubber
Co.
(a)(b)

  77,582   1,997,736

Gol Linhas Aereas Inteligentes S.A. -
ADR
(a)(b)(c)

  117,074   1,607,426

The Goodyear Tire & Rubber Co.(a)(b)(c)

  362,948   5,436,961

Hanesbrands, Inc.(c)

  10,200   275,808

Localiza Rent A Car S.A.

  52,156   831,225

MGM Resorts International(a)(c)

  52,000   683,800

Tenneco, Inc.(a)(c)

  42,833   1,818,261

TRW Automotive Holdings Corp.(a)(b)(c)

  20,646   1,137,182
     Shares           Value    

Consumer Cyclical (continued)

 

Visteon Corp.(a)(b)(c)

  6,681   $417,496
     
    15,569,492
     

Consumer Non - cyclical 3.85%

 

Abbott Laboratories(a)

  14,100   691,605

Celltrion, Inc.

  9,390   297,891

Cia de Bebidas das Americas - ADR(a)

  25,700   727,567

Community Health Systems, Inc.(a)(b)(c)

  6,600   263,934

Health Management Associates, Inc. -
Class A
(a)(c)

  26,800   292,120

Hypermarcas S.A.(c)

  18,600   244,939

Julio Simoes Logistica S.A.

  116,852   707,847

LifePoint Hospitals, Inc.(a)(c)

  7,000   281,260

Man Wah Holdings, Ltd.

  869,800   1,127,149

Raia S.A.(c)

  18,700   294,820

Safeway, Inc.(a)(b)

  34,757   818,180

Santos Brasil Participacoes S.A.

  57,000   924,485

Tenet Healthcare Corp.(a)(b)(c)

  38,600   287,570

Thermo Fisher Scientific, Inc.(a)(b)(c)

  7,500   416,625
     
    7,375,992
     

Energy 25.93%

   

Coal 4.08%

 

Alpha Natural Resources, Inc.(a)(b)(c)

  35,643   2,116,125

Arch Coal, Inc.(a)

  33,307   1,200,384

Consol Energy, Inc.(a)

  19,374   1,039,028

Massey Energy Co.(a)

  17,300   1,182,628

Peabody Energy Corp.(a)(b)

  31,604   2,274,224
     
    7,812,389
     

Oil & Gas Producers 14.08%

 

Anadarko Petroleum
Corp.
(a)(b)

  25,007   2,048,573

Brigham Exploration Co.(a)(c)

  26,218   974,785

Canadian Natural Resources, Ltd.(a)

  33,500   1,655,905

Chesapeake Energy Corp.(a)

  23,400   784,368

Devon Energy Corp.(a)(b)

  5,800   532,266

Golar LNG, Ltd.(a)(b)

  61,389   1,570,331

Hess Corp.(a)(b)

  19,200   1,636,032

InterOil Corp.(a)(b)(c)

  34,350   2,563,884

Marathon Oil Corp.(a)

  67,400   3,593,094

Newfield Exploration
Co.
(a)(b)(c)

  10,200   775,302

Nexen, Inc.(a)

  39,000   971,880

OAO Lukoil - Sponsored ADR(a)

  7,723   553,353

Occidental Petroleum
Corp.
(a)

  17,326   1,810,394

OGX Petroleo e Gas Participacoes S.A.(c)

  125,300   1,501,927

Petrohawk Energy Corp.(a)(c)

  66,600   1,634,364

Southwestern Energy
Co.
(a)(c)

  29,700   1,276,209
 

 

Annual Report | March 31, 2011

  

7


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
   March 31, 2011

 

     Shares             Value    

Energy (continued)

   

Suncor Energy, Inc.(a)

    39,282      $1,761,405

Ultra Petroleum Corp.(a)(c)

    8,500      418,625

Whiting Petroleum
Corp.
(a)(b)(c)

    12,200      896,090
     
    26,958,787
     

Oil & Gas Services 7.77%

   

Baker Hughes, Inc.(a)(b)

    44,000      3,230,920

Calfrac Well Services,
Ltd.
(a)

    14,400      464,157

Cameron International Corp.(a)(b)(c)

    60,463      3,452,437

Core Laboratories NV(a)

    8,759      894,907

Ensco PLC - Sponsored ADR(a)(b)

    30,072      1,739,364

National Oilwell Varco,
Inc.
(a)

    43,993      3,487,325

Tenaris S.A. - ADR(a)(b)

    3,800      187,948

Transocean, Ltd.(a)(b)(c)

    10,900      849,655

Weatherford International,
Ltd.
(a)(b)(c)

    25,951      586,493
     
    14,893,206
     

TOTAL ENERGY

    49,664,382
     

Financial 30.41%

   

Banks 4.80%

   

Agricultural Bank of China, Ltd. - Class H(c)

    1,583,000      897,472

Banco Bradesco S.A. - ADR

    8,335      172,951

Banco do Brasil S.A.

    15,971      288,088

Banco Santander Brasil S.A. - ADR(a)

    54,100      663,266

Bank of China, Ltd. - Class H

    3,126,300      1,740,283

China Construction Bank Corp. - Class H

    1,664,870      1,560,304

China Merchants Bank Co., Ltd. - Class H

    306,000      847,754

Industrial & Commercial Bank of China - Class H

    1,378,000      1,144,414

Itau Unibanco Holding S.A. - ADR

    12,039      289,538

Lloyds Banking Group PLC(a)(c)

    378,200      352,439

M&T Bank Corp.(a)(b)

    14,057      1,243,623

Standard Chartered PLC

    1      26
     
    9,200,158
     

Diversified Financial Services 7.41%

Bank of America Corp.(a)

    287,452      3,831,735

CIT Group, Inc.(a)(b)(c)

    13,800      587,190

Citigroup, Inc.(a)(b)(c)

    832,342      3,678,952

First Niagara Financial Group, Inc.(a)(b)

    40,800      554,064

IntercontinentalExchange,
Inc.
(a)(c)

    3,271      404,099

MGIC Investment
Corp.
(a)(b)(c)

    195,797      1,740,635
     Shares           Value    

Financial (continued)

   

New York Community Bancorp, Inc.(a)(b)

  30,896   $533,265

People’s United Financial, Inc.(a)

  40,697   511,968

The PMI Group, Inc.(a)(b)(c)

  199,042   537,413

Radian Group, Inc.(a)

  185,755   1,264,992

Valley National Bancorp(a)

  39,600   552,816
     
    14,197,129
     

Insurance 2.67%

   

Genworth Financial, Inc. - Class A(a)(b)(c)

  146,957   1,978,041

Hartford Financial Services Group, Inc.(a)(b)

  76,567   2,061,950

Maiden Holdings, Ltd.(a)(d)

  23,900   179,011

XL Capital, Ltd.(a)(b)

  36,000   885,600
     
    5,104,602
     

Investment Companies 5.34%

Ares Capital Corp.(a)

  142,024   2,400,206

Golub Capital BDC, Inc.(a)

  53,100   837,918

Indochina Capital Vietnam Holdings, Ltd.(a)(c)(e)

  15,595   57,389

Knight Capital Group, Inc. - Class A(a)(b)(c)

  39,717   532,208

Medley Capital Corp.(a)(b)(c)

  34,088   415,192

PennantPark Investment Corp.(a)

  177,530   2,116,157

Solar Capital, Ltd.(a)

  131,618   3,143,031

Solar Senior Capital,
Ltd.
(a)(c)

  39,147   729,309
     
    10,231,410
     

Real Estate 0.12%

   

BHG S.A. - Brazil Hospitality Group(c)

  10,279   143,232

BHG S.A. - Brazil Hospitality Group, Receipt Shares(c)(e)

  1,315   18,324

Mingfa Group International Co., Ltd.(d)

  217,014   67,794
     
    229,350
     

REITs 10.07%

   

American Capital Agency Corp.(a)

  30,044   875,482

Annaly Capital Management, Inc.(a)

  161,700   2,821,665

Apollo Commercial Real Estate Finance, Inc.(a)(b)

  47,600   778,260

Ascendas Real Estate Investment Trust

  838,000   1,356,224

Ascott Residence Trust

  346,374   329,749

CapitaCommercial Trust

  1,201,000   1,324,387

Capstead Mortgage
Corp.
(a)(b)

  157,584   2,013,924

Cypress Sharpridge Investments,
Inc.
(a)(b)

  86,800   1,100,624

Dynex Capital, Inc.(a)

  90,102   906,426
 

 

8

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   March 31, 2011

 

     Shares         Value    

Financial (continued)

   

Hatteras Financial
Corp.
(a)(b)

    131,208      $3,689,569

Host Hotels & Resorts,
Inc.
(a)

    19,862      349,770

Invesco Mortgage Capital, Inc.(a)

    70,782      1,546,587

MFA Financial, Inc.(a)(b)

    177,662      1,456,828

Starwood Property Trust, Inc.(a)

    32,633      727,716
     
    19,277,211
     

TOTAL FINANCIAL

    58,239,860
     

Industrial 8.63%

   

BE Aerospace, Inc.(a)(c)

    53,395      1,897,124

China State Construction International Holdings, Ltd.

    798,200      728,570

Crown Holdings, Inc.(a)(b)(c)

    18,121      699,108

Goodrich Corp.(a)(b)

    6,700      573,051

GZI Transport, Ltd.

    765,700      433,125

Jardine Strategic Holdings, Ltd.(a)

    21,295      568,577

Jiangsu Expressway Co., Ltd. - Class H

    1,330,493      1,491,525

KBR, Inc.(a)

    5,864      221,483

MSCI, Inc. -Class A(a)(c)

    7,800      287,196

Omron Corp.

    7,375      207,295

Owens Corning(a)(b)(c)

    23,298      838,495

Owens-Illinois, Inc.(a)(c)

    72,454      2,187,386

Sensata Technologies Holding NV(a)(b)(c)

    30,512      1,059,682

TE Connectivity, Ltd.(a)

    15,600      543,192

TransDigm Group,
Inc.
(a)(b)(c)

    24,135      2,023,237

Verisk Analytics, Inc. -Class A(a)(c)

    25,895      848,320

Zhejiang Expressway Co., Ltd. - Class H

    2,106,000      1,916,871
     
    16,524,237
     

Technology 11.92%

   

Apple, Inc.(a)(c)

    5,473      1,907,067

Arrow Electronics,
Inc.
(a)(b)(c)

    45,400      1,901,352

Avnet, Inc.(a)(c)

    36,200      1,234,058

Broadcom Corp. -
Class A
(a)(b)(c)

    13,500      531,630

Fidelity National Information

   

Services, Inc.(a)(b)

    30,300      990,507

Fiserv, Inc.(a)(b)(c)

    9,900      620,928

HTC Corp.

    8,000      312,856

Ingram Micro, Inc. -
Class A
(a)(b)(c)

    41,800      879,054

International Business Machines Corp.(a)(b)

    40,300      6,571,721

Microsoft Corp.(a)(b)

    194,214      4,925,267

Oracle Corp.(a)(b)

    2,384      79,554

Samsung Electronics Co., Ltd.

    2,163      1,837,747

SanDisk Corp.(a)(c)

    4,383      202,012

Xerox Corp.(a)(b)

    78,537      836,419
     
    22,830,172
     
     Shares         Value      

Utilities 5.37%

   

Babcock & Wilcox
Co.
(a)(b)(c)

    8,025        $267,874   

CMS Energy Corp.(a)(b)

    29,300        575,452   

DPL, Inc.(a)(b)

    38,100        1,044,321   

Edison International(a)(b)

    7,100        259,789   

National Grid PLC -Sponsored ADR(a)(b)

    113,700        5,462,148   

Northeast Utilities(a)(b)

    17,200        595,120   

Oneok, Inc.(a)(b)

    9,900        662,112   

Power Assets Holdings, Ltd.

    211,000        1,410,546   
         
      10,277,362   
         

TOTAL COMMON STOCKS

(Cost $174,025,317)

  

  

    202,118,239   
         

EXCHANGE TRADED FUNDS 5.77%

  

 

iShares FTSE China 25 Index Fund(a)

    64,500        2,899,920   

iShares iBoxx $ High Yield Corporate Bond Fund(a)(b)

    31,101        2,860,048   

SPDR Gold Trust(a)(b)(c)

    37,800        5,285,196   
         
      11,045,164   
         

TOTAL EXCHANGE TRADED FUNDS

(Cost $8,708,729)

  

  

    11,045,164   
         

PREFERRED STOCKS 0.43%

  

 

The Goodyear Tire & Rubber Co., 5.875%

    15,900        812,172   
         

TOTAL PREFERRED STOCKS

(Cost $795,993)

  

  

    812,172   
         

Description and

Maturity Date

  Principal
Amount
        Value      

CORPORATE BONDS 12.17%

  

 

American Axle & Manufacturing, Inc. 03/01/2017, 7.875% (a) 

    $755,000        770,100   

Anheuser-Busch InBev Worldwide, Inc. 11/17/2015, 9.750% (a) 

    1,585,000        1,002,366   

ArvinMeritor, Inc. 03/15/2018, 10.625% (a) 

    425,000        480,250   

BE Aerospace, Inc. 07/01/2018, 8.500% (a) 

    525,000        582,750   

Bombardier, Inc. 05/01/2034, 7.450% (a)(d)

    505,000        487,325   

CITIC Resources
Holdings, Ltd.
05/15/2014, 6.750%
(a)(f)

    450,000        472,500   

Citigroup, Inc. 03/05/2038, 6.875% (a) 

    585,000        644,949   

Constellation Brands, Inc. 09/01/2016, 7.250% (a) 

    675,000        733,219   
 

 

Annual Report | March 31, 2011

  

9


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
   March 31, 2011

 

Description and

Maturity Date

  Principal
Amount
          Value    

CORPORATE BONDS (continued)

 

Crown Americas LLC / Crown Americas Capital Corp. II

05/15/2017, 7.625%(a) 

  $700,000   $764,750

Dana Holding Corp.

   

02/15/2021, 6.750% (a) 

  430,000   432,150

Felcor Lodging LP

   

10/01/2014, 10.000%(a) 

  450,000   516,375

Ford Motor Credit Co., LLC

   

10/01/2014, 8.700%(a) 

  850,000   964,736

Forest Oil Corp.

   

06/15/2019, 7.250%(a) 

  600,000   630,000

General Cable Corp.

   

04/01/2017, 7.125%(a)(b)

  700,000   725,375

Genworth Financial, Inc.

   

06/15/2020, 7.700%(a)

  490,000   502,285

Gol Finance

   

07/20/2020, 9.250%(a)(d)

  545,000   585,194

The Goldman Sachs Group, Inc.

02/01/2041, 6.250% (a) 

  580,000   579,541

Graphic Packaging International, Inc.

10/01/2018, 7.875%(a) 

  305,000   328,256

Hanesbrands, Inc.

   

12/15/2016, 8.000%(a) 

  490,000   533,487

Hidili Industry International Development, Ltd.

11/04/2015, 8.625%(a)(d)

  585,000   590,850

Iron Mountain, Inc.

   

01/01/2016, 6.625%(a) 

  625,000   631,250

Itau Unibanco Holding S.A.

   

11/23/2015, 10.500%(a)(d)

  1,520,000   963,587

JPMorgan Chase & Co.

   

04/23/2019, 6.300%(a) 

  675,000   747,387

Lear Corp.

   

03/15/2018, 7.875%(a) 

  600,000   655,500

Morgan Stanley

   

01/25/2021, 5.750%(a) 

  435,000   439,207

Newfield Exploration Co.

   

05/15/2018, 7.125%(a) 

  250,000   270,000

Petrohawk Energy Corp.

   

06/01/2015, 7.875%(a)

  675,000   718,875

Pioneer Natural Resources Co.

03/15/2017, 6.650%(a) 

  525,000   571,398

President and Fellows of Harvard College

10/01/2037, 6.300%(a) 

  826,000   930,726

Range Resources Corp.

   

05/15/2019, 8.000%(a) 

  600,000   664,500

Rearden G Holdings EINS GmbH

03/30/2020, 7.875%(a)(d)

  440,000   479,600

Silgan Holdings, Inc.

   

08/15/2016, 7.250%(a) 

  500,000   545,000

Spirit Aerosystems, Inc.

   

10/01/2017, 7.500%(a) 

  550,000   594,000

Star Energy Geothermal Wayang Windu, Ltd.

02/12/2015, 11.500%(a)(d)

  450,000   517,500

Starwood Hotels & Resorts Worldwide, Inc.

05/15/2018, 6.750%(a)(b)

  675,000   736,594

Description and

Maturity Date

  Principal
Amount
          Value    

CORPORATE BONDS (continued)

TAM Capital 2, Inc.

   

01/29/2020, 9.500%(a)(f)

  $520,000   $574,600

Tenneco, Inc.

   

08/15/2018, 7.750%(a) 

  300,000   321,750

Terex Corp.

   

11/15/2017, 8.000%(a) 

  582,000   616,192
     

TOTAL CORPORATE BONDS

(Cost $21,518,766)

  23,304,124
     

ASSET/MORTGAGE BACKED SECURITIES 0.39%

Freddie Mac REMICS

   

Series 2006-3155, Class SA,

11/15/2035, 36.570%(a)(g)

  66,656   70,190

Government National Mortgage Association (GNMA)

Series 2007-37, Class SA,

03/20/2037, 21.227%(a)(g)

  115,428   130,727

Series 2007-37, Class SB,

03/20/2037, 21.227%(a)(g)

  23,838   28,092

Small Business Administration Participation Certificates

Series 2008-20L, Class 1,

12/01/2028, 6.220%(a)

  485,722   530,749
     

TOTAL ASSET/MORTGAGE BACKED

SECURITIES

(Cost $681,537)

  759,758
     

FOREIGN GOVERNMENT BONDS 1.97%

Brazilian Government International Bonds

01/05/2016, 12.500%(a) 

  5,150,000   3,608,549

01/10/2028, 10.250%(a) 

  259,000   159,832
     

TOTAL FOREIGN GOVERNMENT

BONDS

(Cost $3,498,294)

  3,768,381
     

GOVERNMENT & AGENCY OBLIGATIONS 11.76%

U.S. Treasury Bonds

   

05/15/2040, 4.375%(a) 

  1,550,000   1,514,406

U.S. Treasury Notes

   

04/30/2016, 2.625% (a) 

  7,000,000   7,114,296

08/15/2018, 4.000% (a) 

  13,000,000   13,891,722
     

TOTAL GOVERNMENT & AGENCY

OBLIGATIONS

(Cost $22,333,398)

  22,520,424
     
 

 

10

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   March 31,2011

 

     Shares   Value

SHORT-TERM INVESTMENTS 2.21%

 

Dreyfus Treasury Prime Money Market Fund (0.000% 7-day yield)(h)

  4,241,015   $4,241,015
     

TOTAL SHORT-TERM INVESTMENTS

(Cost $4,241,015)

  4,241,015
     
          Value

Total Investments -140.24%

(Cost $235,803,049)

    268,569,277

Liabilities in Excess of Other Assets - (40.24%)

    (77,067,339)
     

NET ASSETS - 100.00%

    $191,501,938
     

SCHEDULE OF SECURITIES

SOLD SHORT (c)

  Shares       Value

COMMON STOCKS

   

Aetna, Inc.

  (5,400)   $(202,122)

Apollo Group, Inc. -
Class A

  (7,004)   (292,137)

Bed Bath & Beyond, Inc.

  (4,400)   (212,388)

Berkshire Hathaway, Inc. - Class B

  (11,800)   (986,834)

Cie Generale d’Optique Essilor International S.A.

  (5,600)   (415,861)

Diamond Offshore Drilling, Inc.

  (12,373)   (961,382)

Kohl’s Corp.

  (5,000)   (265,200)

Macy’s, Inc.

  (16,360)   (396,894)

Noble Corp.

  (7,231)   (329,878)

Toll Brothers, Inc.

  (318)   (6,287)
     
    (4,068,983)
     

EXCHANGE TRADED FUNDS

   

Energy Select Sector SPDR Fund

  (18,258)   (1,457,171)

iShares Dow Jones U.S. Real Estate Index Fund

  (5,002)   (297,119)

iShares MSCI South Korea Index Fund

  (16,433)   (1,057,463)

United States Oil Fund LP

  (63,139)   (2,688,459)

Vanguard REIT ETF

  (105,410)   (6,165,431)
     
    (11,665,643)
     

TOTAL SECURITIES SOLD

SHORT (Proceeds $14,048,235)

  $(15,734,626)
     

 

(a)

Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings as of March 31, 2011. (See Note 1 and Note 6)

 
(b)

Loaned security; a portion or all of the security is on loan at March 31, 2011.

(c)

Non-income producing security.

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of March 31, 2011, these securities had a total value of $3,870,861 or 2.02% of net assets.

(e) 

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of March 31, 2011, these securities had a total value of $75,713 or 0.04% of total net assets.

(f)

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of March 31, 2011, the aggregate market value of those securities was $1,047,100, representing 0.55% of net assets.

(g)

Floating or variable rate security - rate disclosed as of March 31, 2011.

(h)

Less than 0.0005%.

 

 

 

  

See Notes to the Financial Statements.

 

Annual Report | March 31, 2011

  

11


Table of Contents

Statement of Investments

   Clough Global Equity Fund
   March 31, 2011

 

    

Shares

          Value    

COMMON STOCKS 112.81%

 

Basic Materials 0.91%

   

Anglo American PLC - Unsponsored ADR(a)

  12,536   $323,679

Gerdau S.A.- Sponsored ADR(a)(b)

  39,858   498,225

Walter Energy, Inc.(a)

  15,100   2,044,993
     
    2,866,897
     

Communications 10.71%

   

CBS Corp. - Class B(a)

  32,698   818,758

Chunghwa Telecom Co., Ltd. - ADR(a)(b)

  56,632   1,764,653

Cisco Systems, Inc.(a)(b)

  113,700   1,949,955

DiGi.Com Bhd

  55,500   524,078

Google, Inc. -
Class A
(a)(c)

  16,616   9,740,465

Liberty Media Corp. - Capital -
Series A
(a)(b)(c)

  9,887   728,375

Liberty Media Corp. -
Class A
(a)(c)

  67,400   1,081,096

Liberty Media Corp. - Starz - Series A(a)(b)(c)

  2,279   176,851

Maxis Bhd

  1,262,900   2,243,302

NII Holdings, Inc.(a)(c)

  32,991   1,374,735

Philippine Long Distance Telephone Co.

  14,825   793,855

Qihoo 360 Technology Co., Ltd. - ADR(c)

  5,473   161,946

Telekom Malaysia Bhd

  395,200   527,151

Valassis Communications, Inc.(a)(c)

  23,000   670,220

Verizon Communications, Inc.(a)(b)

  174,763   6,735,366

Viacom, Inc. - Class B(a)

  20,500   953,660

The Walt Disney Co.(a)(b)

  79,320   3,417,899
     
    33,662,365
     

Consumer Cyclical 8.26%

   

Arezzo Industria e Comercio S.A.(c)

  44,369   618,255

Bosideng International Holdings, Ltd.

  1,872,000   555,929

Cie Generale des Etablissements Michelin - Class B

  12,646   1,068,141

Cooper Tire & Rubber
Co.
(a)(b)

  127,138   3,273,803

Gol Linhas Aereas Inteligentes
S.A. - ADR
(a)(b)(c)

  191,827   2,633,785

The Goodyear Tire & Rubber Co.(a)(b)(c)

  597,058   8,943,929

Hanesbrands, Inc.(c)

  33,400   903,136

Localiza Rent A Car S.A.

  84,973   1,354,238

MGM Resorts
International
(a)(c)

  85,300   1,121,695

Tenneco, Inc.(a)(b)(c)

  70,008   2,971,840
     Shares           Value    

Consumer Cyclical (continued)

 

TRW Automotive Holdings
Corp.
(a)(b)(c)

  33,373   $1,838,185

Visteon Corp.(a)(c)

  10,908   681,641
     
    25,964,577
     

Consumer Non-cyclical 3.84%

 

Abbott Laboratories(a)

  23,100   1,133,055

Celltrion, Inc.

  15,420   489,189

Cia de Bebidas das Americas - ADR(a)(b)

  42,100   1,191,851

Community Health Systems, Inc.(a)(c)

  10,900   435,891

Health Management Associates, Inc. -
Class A
(a)(c)

  43,900   478,510

Hypermarcas S.A.(c)

  30,200   397,697

Julio Simoes Logistica S.A.

  192,308   1,164,932

LifePoint Hospitals,
Inc.
(a)(c)

  11,500   462,070

Man Wah Holdings, Ltd.

  1,430,400   1,853,614

Raia S.A.(c)

  30,700   484,010

Safeway, Inc.(a)(b)

  57,022   1,342,298

Santos Brasil Participacoes S.A.

  92,500   1,500,260

Tenet Healthcare
Corp.
(a)(b)(c)

  63,400   472,330

Thermo Fisher Scientific, Inc.(a)(b)(c)

  12,200   677,710
     
    12,083,417
     

Energy 27.42%

   

Coal 4.39%

   

Alpha Natural Resources, Inc.(a)(b)(c)

  75,235   4,466,702

Arch Coal, Inc.(a)(b)

  56,237   2,026,781

Consol Energy, Inc.(a)(b)

  31,358   1,681,730

Massey Energy Co.(a)

  28,200   1,927,752

Peabody Energy Corp.(a)(b)

  51,406   3,699,176
     
    13,802,141
     

Oil & Gas Producers 15.29%

 

Anadarko Petroleum
Corp.
(a)(b)

  40,302   3,301,540

Brigham Exploration
Co.
(a)(c)

  43,044   1,600,376

Canadian Natural Resources, Ltd.(a)

  52,700   2,604,961

Chesapeake Energy
Corp.
(a)

  38,300   1,283,816

Devon Energy Corp.(a)

  19,700   1,807,869

Golar LNG, Ltd.(a)(b)

  113,120   2,893,610

Hess Corp.(a)(b)

  30,800   2,624,468

InterOil Corp.(a)(b)(c)

  69,026   5,152,101

Marathon Oil Corp.(a)

  110,500   5,890,755

Newfield Exploration
Co.
(a)(b)(c)

  20,800   1,581,008

Nexen, Inc.(a)

  63,900   1,592,388

OAO Lukoil - Sponsored
ADR
(a)

  12,574   900,927

Occidental Petroleum
Corp.
(a)

  44,176   4,615,950
 

 

12

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   March 31, 2011

 

     Shares           Value    

Energy (continued)

OGX Petroleo e Gas Participacoes S.A.(c)

  205,100   $2,458,461

Petrohawk Energy Corp.(a)(b)(c)

  108,900   2,672,406

Southwestern Energy Co.(a)(c)

  48,500   2,084,045

Suncor Energy, Inc.(a)(b)

  63,393   2,842,542

Ultra Petroleum
Corp.
(a)(c)

  13,900   684,575

Whiting Petroleum Corp.(a)(b)(c)

  20,000   1,469,000
     
            48,060,798
     

Oil & Gas Services 7.74%

Baker Hughes, Inc.(a)(b)

  74,650   5,481,549

Calfrac Well Services, Ltd.(a)

  24,900   802,604

Cameron International Corp.(a)(b)(c)

  95,500   5,453,050

Core Laboratories
NV
(a)(b)

  14,318   1,462,870

Ensco PLC - Sponsored ADR(a)(b)

  49,363   2,855,156

National Oilwell Varco, Inc.(a)(b)

  69,099   5,477,478

Tenaris S.A. - ADR (a)(b)

  6,200   306,652

Transocean, Ltd.(a)(b)(c)

  17,100   1,332,945

Weatherford International,
Ltd.
(a)(b)(c)

  50,618   1,143,967
     
    24,316,271
     

TOTAL ENERGY

  86,179,210
     

Financial 30.50%

Banks 4.80%

   

Agricultural Bank of China, Ltd. -
Class H
(c)

  2,593,000   1,470,085

Banco Bradesco S.A. - ADR

  13,639   283,009

Banco do Brasil S.A.

  25,973   468,505

Banco Santander Brasil S.A. - ADR(a)(b)

  88,600   1,086,236

Bank of China, Ltd. - Class H

  5,122,400   2,851,430

China Construction Bank Corp. - Class H

  2,726,550   2,555,303

China Merchants Bank Co., Ltd. - Class H

  501,500   1,389,375

Industrial & Commercial Bank of China - Class H

  2,257,000   1,874,414

Itau Unibanco Holding S.A. - ADR

  19,677   473,232

Lloyds Banking Group PLC(a)(c)

  622,700   580,285

M&T Bank Corp.(a)(b)

  23,209   2,053,300
     
    15,085,174
     

Diversified Financial Services 7.45%

Bank of America
Corp.
(a)

  481,505   6,418,462

CIT Group, Inc.(a)(c)

  22,600   961,630

Citigroup, Inc.(a)(c)

  1,365,274   6,034,511

First Niagara Financial Group, Inc.(a)(b)

  67,000   909,860
     Shares           Value    

Financial (continued)

   

IntercontinentalExchange, Inc.(a)(b)(c)

  5,371   $663,533

MGIC Investment
Corp.
(a)(b)(c)

  320,768   2,851,628

New York Community Bancorp, Inc.(a)(b)

  50,670   874,564

People’s United Financial, Inc.(a)(b)

  66,795   840,281

The PMI Group, Inc.(a)(b)(c)

  325,778   879,601

Radian Group, Inc.(a)

  303,372   2,065,963

Valley National Bancorp(a)

  64,900   906,004
     
    23,406,037
     

Insurance 2.67%

   

Genworth Financial, Inc. - Class A(a)(b)(c)

  241,586   3,251,748

Hartford Financial Services Group, Inc.(a)(b)

  125,537   3,380,711

Maiden Holdings, Ltd.(a)(d)

  40,100   300,349

XL Capital, Ltd.(a)(b)

  59,000   1,451,400
     
    8,384,208
     

Investment Companies 5.40%

Ares Capital Corp.(a)

  238,982   4,038,796

Golub Capital BDC, Inc.(a)

  87,100   1,374,438

Indochina Capital Vietnam Holdings, Ltd.(a)(c)(e)

  23,393   86,086

Knight Capital Group, Inc. - Class A(a)(b)(c)

  65,722   880,675

Medley Capital Corp.(a)(c)

  55,928   681,203

PennantPark Investment Corp.(a)

  303,083   3,612,749

Solar Capital, Ltd.(a)

  214,578   5,124,112

Solar Senior Capital,
Ltd.
(a)(c)

  64,139   1,194,910
     
    16,992,969
     

Real Estate 0.12%

   

BHG S.A. - Brazil Hospitality Group(c)

  16,948   236,160

BHG S.A. - Brazil Hospitality

   

Group, Receipt Shares(c)(e)

  2,169   30,224

Mingfa Group International Co., Ltd.(d)

  357,737   111,756
     
    378,140
     

REITs 10.06%

   

American Capital Agency Corp.(a)

  49,216   1,434,154

Annaly Capital Management, Inc.(a)

  263,700   4,601,565

Apollo Commercial Real Estate Finance, Inc.(a)

  78,200   1,278,570

Ascendas Real Estate Investment Trust

  1,370,000   2,217,215
 

 

Annual Report | March 31, 2011

  

13


Table of Contents

Statement of Investments

   Clough Global Equity Fund
   March 31, 2011

 

     Shares           Value    

Financial (continued)

 

Ascott Residence Trust

  567,002   $539,788

CapitaCommercial Trust

  1,966,000   2,167,981

Capstead Mortgage
Corp.
(a)(b)

  258,187   3,299,630

Cypress Sharpridge Investments, Inc.(a)(b)

  142,300   1,804,364

Dynex Capital, Inc.(a)

  147,762   1,486,486

Hatteras Financial
Corp.
(a)(b)

  218,180   6,135,222

Host Hotels & Resorts, Inc.(a)(b)

  32,394   570,458

Invesco Mortgage Capital, Inc.(a)

  116,216   2,539,319

MFA Financial, Inc.(a)(b)

  288,400   2,364,880

Starwood Property Trust, Inc.(a)

  53,466   1,192,292
     
    31,631,924
     

TOTAL FINANCIAL

    95,878,452
     

Industrial 8.60%

   

BE Aerospace, Inc.(a)(b)(c)

  84,591   3,005,518

China State Construction International Holdings, Ltd.

  1,305,600   1,191,708

Crown Holdings, Inc.(a)(b)(c)

  28,569   1,102,192

Goodrich Corp.(a)(b)

  10,900   932,277

GZI Transport, Ltd.

  1,254,117   709,401

Jardine Strategic Holdings, Ltd.(a)

  39,314   1,049,684

Jiangsu Expressway Co., Ltd. - Class H

  2,176,959   2,440,440

KBR, Inc.(a)

  9,553   360,817

MSCI, Inc. - Class A(a)(c)

  12,700   467,614

Omron Corp.

  12,071   339,288

Owens Corning(a)(b)(c)

  38,125   1,372,119

Owens - Illinois, Inc.(a)(c)

  118,803   3,586,663

Sensata Technologies Holding NV(a)(c)

  50,240   1,744,835

TE Connectivity, Ltd.(a)

  25,500   887,910

TransDigm Group,
Inc.
(a)(b)(c)

  39,597   3,319,416

Verisk Analytics, Inc. -
Class A
(a)(c)

  42,563   1,394,364

Zhejiang Expressway Co., Ltd. - Class H

  3,446,000   3,136,533
     
    27,040,779
     

Technology 12.06%

   

Apple, Inc.(a)(c)

  8,965   3,123,854

Arrow Electronics,
Inc.
(a)(b)(c)

  74,100   3,103,308

Avnet, Inc.(a)(c)

  59,500   2,028,355

Broadcom Corp. -
Class A
(a)(b)(c)

  22,100   870,298

Fidelity National Information Services, Inc.(a)(b)

  49,700   1,624,693

Fiserv, Inc.(a)(b)(c)

  16,100   1,009,792

HTC Corp.

  13,000   508,391
     Shares               Value    

Technology (continued)

 

Ingram Micro, Inc. -
Class A
(a)(b)(c)

  68,700   $1,444,761

International Business Machines Corp.(a)(b)

  66,100   10,778,927

Microsoft Corp.(a)(b)

  318,748   8,083,449

Oracle Corp.(a)

  3,924   130,944

Samsung Electronics Co., Ltd.

  3,529   2,998,339

SanDisk Corp.(a)(c)

  7,055   325,165

Xerox Corp.(a)(b)

  175,082   1,864,624
     
    37,894,900
     

Utilities 10.51%

   

Alliant Energy Corp.(a)(b)

  33,200   1,292,476

American Electric Power Co., Inc.(a)

  57,000   2,002,980

Babcock & Wilcox
Co.
(a)(b)(c)

  11,310   377,528

CMS Energy Corp.(a)(b)

  48,100   944,684

Constellation Energy Group, Inc.(a)(b)

  28,500   887,205

DPL, Inc.(a)(b)

  108,000   2,960,280

Duke Energy Corp.(a)(b)

  209,000   3,793,350

Edison International(a)

  11,600   424,444

Entergy Corp.(a)

  16,700   1,122,407

National Grid PLC - Sponsored ADR(a)(b)

  186,400   8,954,656

Northeast Utilities(a)

  28,200   975,720

NV Energy, Inc.(a)

  223,200   3,323,448

Oneok, Inc.(a)(b)

  16,200   1,083,456

PG&E Corp.(a)(b)

  58,900   2,602,202

Power Assets Holdings, Ltd.

  345,000   2,306,342
     
    33,051,178
     

TOTAL COMMON STOCKS

(Cost $305,427,312)

    354,621,775
     

EXCHANGE TRADED FUNDS 5.43%

 

iShares FTSE China 25 Index Fund(a)

  105,700   4,752,272

iShares iBoxx $ High Yield Corporate Bond
Fund
(a)(b)

  41,782   3,842,272

SPDR Gold Trust(a)(c)

  60,700   8,487,074
     
    17,081,618
     

TOTAL EXCHANGE TRADED FUNDS

(Cost $13,555,035)

  17,081,618
     
 

 

14

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   March 31, 2011

 

 

     Shares           Value    

PREFERRED STOCKS 0.42%

   

The Goodyear Tire & Rubber Co., 5.875%(c)

  26,000   $1,328,080
     

TOTAL PREFERRED STOCKS

(Cost $1,301,625)

  1,328,080
     

Description and

Maturity Date

  Principal
Amount
          Value    

CORPORATE BONDS 11.56%

American Axle & Manufacturing, Inc.

03/01/2017, 7.875% (a) 

  $1,100,000   1,122,000

Anheuser - Busch InBev Worldwide, Inc.

11/17/2015, 9.750% (a) 

  2,555,000   1,615,801

ArvinMeritor, Inc.

   

03/15/2018, 10.625% (a) 

  640,000   723,200

BE Aerospace, Inc.

   

07/01/2018, 8.500% (a) 

  725,000   804,750

Bombardier, Inc.

   

05/01/2034, 7.450% (a)(d)

  825,000   796,125

CITIC Resources Holdings, Ltd.

05/15/2014, 6.750% (a)(f)

  650,000   682,500

Citigroup, Inc.

   

03/05/2038, 6.875% (a) 

  940,000   1,036,328

Constellation Brands, Inc.

   

09/01/2016, 7.250% (a) 

  1,175,000   1,276,344

Crown Americas LLC / Crown Americas Capital Corp. II

05/15/2017, 7.625% (a) 

  1,100,000   1,201,750

Dana Holding Corp.

   

02/15/2021, 6.750% (a) 

  710,000   713,550

Felcor Lodging LP

   

10/01/2014, 10.000% (a) 

  700,000   803,250

Ford Motor Credit Co., LLC

   

10/01/2014, 8.700% (a) 

  1,400,000   1,588,978

Forest Oil Corp.

   

06/15/2019, 7.250% (a) 

  1,000,000   1,050,000

General Cable Corp.

   

04/01/2017, 7.125% (a)(b)

  1,050,000   1,088,062

Genworth Financial, Inc.

   

06/15/2020, 7.700% (a) 

  725,000   743,176

Gol Finance

   

07/20/2020, 9.250% (a)(d)

  645,000   692,569

The Goldman Sachs Group, Inc.

02/01/2041, 6.250% (a) 

  940,000   939,256

Graphic Packaging International, Inc.

10/01/2018, 7.875% (a) 

  495,000   532,744

Hanesbrands, Inc.

   

12/15/2016, 8.000% (a) 

  675,000   734,906

Hidili Industry International Development, Ltd.

11/04/2015, 8.625% (a)(d)

  940,000   949,400

Iron Mountain, Inc.

   

01/01/2016, 6.625% (a) 

  975,000   984,750

Description and

Maturity Date

  Principal
Amount
          Value    

CORPORATE BONDS (continued)

 

Itau Unibanco Holding S.A.

   

11/23/2015, 10.500% (a)(d)

  $2,360,000   $1,496,095

JPMorgan Chase & Co.

   

04/23/2019, 6.300% (a)(b)

  1,050,000   1,162,602

Lear Corp.

   

03/15/2018, 7.875% (a) 

  950,000   1,037,875

Morgan Stanley

   

01/25/2021, 5.750% (a) 

  705,000   711,818

Newfield Exploration Co.

   

05/15/2018, 7.125% (a) 

  700,000   756,000

Petrohawk Energy Corp.

   

06/01/2015, 7.875% (a) 

  1,100,000   1,171,500

Pioneer Natural Resources Co.

03/15/2017, 6.650% (a)

  775,000   843,493

President and Fellows of Harvard College

10/01/2037, 6.300% (a) 

  1,335,000   1,504,261

Range Resources Corp.

   

05/15/2019, 8.000% (a) 

  810,000   897,075

Rearden G Holdings EINS GmbH

03/30/2020, 7.875% (a)(d)

  685,000   746,650

Silgan Holdings, Inc.

   

08/15/2016, 7.250% (a) 

  650,000   708,500

Spirit Aerosystems, Inc.

   

10/01/2017, 7.500% (a) 

  850,000   918,000

Star Energy Geothermal Wayang Windu, Ltd.

02/12/2015, 11.500% (a)(d)

  675,000   776,250

Starwood Hotels & Resorts Worldwide, Inc.

05/15/2018, 6.750% (a) 

  1,100,000   1,200,375

TAM Capital 2, Inc.

   

01/29/2020, 9.500% (a)(f)

  775,000   856,375

Tenneco, Inc.

   

08/15/2018, 7.750% (a) 

  450,000   482,625

Terex Corp.

   

11/15/2017, 8.000% (a) 

  935,000   989,931
     

TOTAL CORPORATE BONDS

(Cost $33,586,302)

  36,338,864
     

ASSET/MORTGAGE BACKED SECURITIES 0.36%

Freddie Mac REMICS

Series 2007-3271, Class AS,

02/15/2037, 37.290%(a)(g)

  700,324   844,212

Government National Mortgage Association (GNMA)

Series 2007-37, Class SA,

03/20/2037, 21.227%(a)(g)

  196,320   222,342

Series 2007-37, Class SB,

03/20/2037, 21.227%(a)(g)

  40,543   47,779
     

TOTAL ASSET/MORTGAGE BACKED SECURITIES

(Cost $913,155)

    1,114,333
     
 

 

Annual Report | March 31, 2011

  

15


Table of Contents

Statement of Investments

   Clough Global Equity Fund
   March 31, 2011

 

 

Description and

Maturity Date

  Principal
Amount
  Value

FOREIGN GOVERNMENT BONDS 1.83%

Brazilian Government International Bonds

01/05/2016,
12.500% 
(a)(b)

  $7,850,000   $5,500,409

01/10/2028, 10.250% (a) 

  424,000   261,656
     

TOTAL FOREIGN GOVERNMENT BONDS

(Cost $5,359,111)

  5,762,065
     

GOVERNMENT & AGENCY OBLIGATIONS 6.30%

U.S. Treasury Bonds

 

05/15/2040, 4.375% (a) 

  2,600,000   2,540,294

U.S. Treasury Notes

 

04/30/2016, 2.625% (a) 

  9,000,000   9,146,952

08/15/2018, 4.000% (a) 

  7,600,000   8,121,314
     

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

(Cost $19,693,372)

  19,808,560
     
     Shares   Value

SHORT-TERM INVESTMENTS 1.60%

Dreyfus Treasury Prime Money Market Fund (0.000% 7- day
yield)
(h)

  5,030,141   5,030,141
     

TOTAL SHORT-TERM INVESTMENTS

(Cost $5,030,141)

  5,030,141
     

Total Investments -140.31%

(Cost $384,866,053)

  441,085,436

Liabilities in Excess of Other Assets -(40.31%)

  (126,730,562)
     

NET ASSETS -100.00%

    $314,354,874
     

SCHEDULE OF SECURITIES

SOLD SHORT (c)

  Shares   Value

COMMON STOCKS

   

Aetna, Inc.

  (8,800)   $(329,384)

Apollo Group, Inc. -
Class A

  (11,492)   (479,331)

Bed Bath & Beyond, Inc.

  (7,100)   (342,717)

Berkshire Hathaway, Inc. - Class B

  (18,950)   (1,584,788)

Cie Generale d’Optique Essilor International S.A.

  (9,100)   (675,775)

Diamond Offshore Drilling, Inc.

  (20,363)   (1,582,205)

Kohl’s Corp.

  (8,100)   (429,624)

Macy’s, Inc.

  (26,724)   (648,324)

Noble Corp.

  (11,822)   (539,320)

Toll Brothers, Inc.

  (523)   (10,340)
     
    (6,621,808)
     

SCHEDULE OF SECURITIES

SOLD SHORT (c) (continued)

  Shares   Value

EXCHANGE TRADED FUNDS

   

Energy Select Sector SPDR Fund

  (29,894)   $(2,385,840)

iShares Dow Jones U.S. Real Estate Index Fund

  (8,212)   (487,793)

iShares MSCI South Korea Index Fund

  (26,939)   (1,733,524)

United States Oil Fund LP

  (103,527)   (4,408,180)

Vanguard REIT ETF

  (172,226)   (10,073,499)
     
    (19,088,836)
     

TOTAL SECURITIES SOLD SHORT

(Proceeds $22,968,420)

  $(25,710,644)
     

 

(a)

Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings as of March 31, 2011. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan at March 31, 2011.

(c)

Non-income producing security.

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of March 31, 2011, these securities had a total value of $5,869,194 or 1.87% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of March 31, 2011, these securities had a total value of $116,310 or 0.04% of total net assets.

(f) 

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of March 31, 2011, the aggregate market value of those securities was $1,538,875, representing 0.49% of net assets.

(g) 

Floating or variable rate security - rate disclosed as of March 31, 2011.

(h) 

Less than 0.0005%.

 

 

See

Notes to the Financial Statements.

 

 

16

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   March 31, 2011

 

     Shares           Value    

COMMON STOCKS 105.69%

   

Basic Materials 0.92%

   

Anglo American PLC - Unsponsored ADR(a)

  31,180   $805,068

Gerdau S.A. -Sponsored ADR(a)(b)

  103,111   1,288,887

Walter Energy, Inc.(a)

  39,600   5,363,028
     
    7,456,983
     

Communications 10.44%

 

CBS Corp. - Class B(a)

  85,522   2,141,471

Chunghwa Telecom Co., Ltd. - ADR(a)

  147,418   4,593,545

Cisco Systems, Inc.(a)(b)

  301,700   5,174,155

DiGi.Com Bhd

  145,000   1,369,212

Google, Inc. -
Class A
(a)(b)(c)

  43,530   25,517,721

Liberty Media Corp. -Capital - Series A(a)(b)(c)

  25,946   1,911,442

Liberty Media Corp. - Class A(a)(c)

  174,000   2,790,960

Liberty Media Corp. - Starz - Series A(a)(b)(c)

  6,036   468,394

Maxis Bhd

  3,314,700   5,887,936

NII Holdings, Inc.(a)(c)

  69,330   2,888,981

Philippine Long Distance Telephone Co.

  38,690   2,071,787

Qihoo 360 Technology Co., Ltd. - ADR(c)

  14,162   419,053

Telekom Malaysia Bhd

  1,033,200   1,378,168

Valassis Communications, Inc.(a)(c)

  29,600   862,544

Verizon Communications, Inc.(a)(b)

  449,427   17,320,917

Viacom, Inc. - Class B(a)

  53,400   2,484,168

The Walt Disney Co.(a)(b)

  176,453   7,603,360
     
    84,883,814
     

Consumer Cyclical 8.14%

 

Arezzo Industria e Comercio S.A.(c)

  115,295   1,606,567

Bosideng International Holdings, Ltd.

  4,904,000   1,456,343

Cie Generale des Etablissements Michelin - Class B

  32,963   2,784,211

Cooper Tire & Rubber
Co.
(a)(b)

  327,102   8,422,876

Gol Linhas Aereas Inteligentes S.A. -
ADR
(a)(b)(c)

  496,664   6,819,197

The Goodyear Tire & Rubber Co.(a)(b)(c)

  1,544,359   23,134,498

Hanesbrands, Inc.(c)

  43,600   1,178,944

Localiza Rent A Car S.A.

  222,022   3,538,427

MGM Resorts International(a)(c)

  222,400   2,924,560

Tenneco, Inc.(a)(b)(c)

  182,377   7,741,904
     Shares           Value    

Consumer Cyclical (continued)

 

TRW Automotive Holdings Corp.(a)(b)(c)

  87,099   $4,797,413

Visteon Corp.(a)(b)(c)

  28,597   1,787,026
     
    66,191,966
     

Consumer Non-cyclical 3.88%

 

Abbott Laboratories(a)

  60,400   2,962,620

Celltrion, Inc.

  40,170   1,274,366

Cia de Bebidas das Americas - ADR(a)

  109,900   3,111,269

Community Health Systems, Inc.(a)(c)

  28,300   1,131,717

Health Management Associates, Inc. -
Class A
(a)(b)(c)

  114,500   1,248,050

Hypermarcas S.A.(c)

  77,500   1,020,580

Julio Simoes Logistica S.A.

  499,741   3,027,250

LifePoint Hospitals,
Inc.
(a)(c)

  30,000   1,205,400

Man Wah Holdings, Ltd.

  3,753,700   4,864,312

Raia S.A.(c)

  79,700   1,256,533

Safeway, Inc.(a)(b)

  148,606   3,498,185

Santos Brasil Participacoes S.A.

  242,200   3,928,249

Tenet Healthcare
Corp.
(a)(b)(c)

  165,200   1,230,740

Thermo Fisher Scientific, Inc.(a)(b)(c)

  32,000   1,777,600
     
    31,536,871
     

Energy 26.09%

 

Coal 4.09%

Alpha Natural Resources, Inc.(a)(c)

  152,402   9,048,107

Arch Coal, Inc.(a)

  145,184   5,232,431

Consol Energy, Inc.(a)(b)

  80,517   4,318,127

Massey Energy Co.(a)

  73,800   5,044,968

Peabody Energy Corp.(a)(b)

  133,211   9,585,863
     
    33,229,496
     

Oil & Gas Producers 14.34%

Anadarko Petroleum
Corp.
(a)

  103,964   8,516,731

Brigham Exploration
Co.
(a)(b)(c)

  112,115   4,168,436

Canadian Natural Resources, Ltd.(a)(b)

  144,500   7,142,635

Chesapeake Energy
Corp.
(a)

  100,300   3,362,056

Devon Energy Corp.(a)(b)

  24,900   2,285,073

Golar LNG, Ltd.(a)(b)

  258,400   6,609,872

Hess Corp.(a)(b)

  83,500   7,115,035

InterOil Corp.(a)(b)(c)

  144,589   10,792,123

Marathon Oil Corp.(a)

  289,000   15,406,590

Newfield Exploration
Co.
(a)(b)(c)

  42,800   3,253,228

Nexen, Inc.(a)

  167,100   4,164,132

OAO Lukoil -Sponsored ADR(a)

  32,876   2,355,565

Occidental Petroleum Corp.(a)

  91,869   9,599,392
 

 

Annual Report | March 31, 2011

  

17


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
   March 31, 2011

 

     Shares           Value    

Energy (continued)

   

OGX Petroleo e Gas Participacoes S.A.(c)

  523,900   $6,279,805

Petrohawk Energy
Corp.
(a)(c)

  284,800   6,988,992

Southwestern Energy Co.(a)(c)

  127,100   5,461,487

Suncor Energy, Inc.(a)

  167,709   7,520,071

Ultra Petroleum
Corp.
(a)(b)(c)

  36,400   1,792,700

Whiting Petroleum
Corp.
(a)(b)(c)

  52,200   3,834,090
     
    116,648,013
     

Oil & Gas Services 7.66%

Baker Hughes, Inc.(a)(b)

  188,700   13,856,241

Calfrac Well Services,
Ltd.
(a)

  61,000   1,966,220

Cameron International Corp.(a)(b)(c)

  250,663   14,312,857

Core Laboratories NV(a)(b)

  37,448   3,826,062

Ensco PLC - Sponsored ADR(a)(b)

  128,798   7,449,676

National Oilwell Varco, Inc.(a)(b)

  181,187   14,362,694

Tenaris S.A. - ADR (a)(b)

  16,300   806,198

Transocean, Ltd.(a)(b)(c)

  41,000   3,195,950

Weatherford International, Ltd.(a)(b)(c)

  111,158   2,512,171
     
    62,288,069
     

TOTAL ENERGY

    212,165,578
     

Financial 30.36%

Banks 4.84%

Agricultural Bank of China, Ltd. - Class H(c)

  6,769,000   3,837,642

Banco Bradesco S.A. - ADR

  35,614   738,990

Banco do Brasil S.A.

  66,954   1,207,727

Banco Santander Brasil S.A. - ADR(a)(b)

  229,200   2,809,992

Bank of China, Ltd. -Class H

  13,391,500   7,454,499

China Construction Bank Corp. - Class H

  7,122,450   6,675,108

China Merchants Bank Co., Ltd. - Class H

  1,309,000   3,626,505

Industrial & Commercial Bank of China - Class H

  5,891,000   4,892,411

Itau Unibanco Holding S.A. - ADR

  51,396   1,236,074

Lloyds Banking Group PLC(a)(c)

  1,633,400   1,522,141

M&T Bank Corp.(a)(b)

  60,476   5,350,312
     
    39,351,401
     

Diversified Financial Services 7.42%

Bank of America Corp.(a)

  1,221,871   16,287,540

CIT Group, Inc.(a)(b)(c)

  58,200   2,476,410

Citigroup, Inc.(a)(c)

  3,554,149   15,709,339

First Niagara Financial Group, Inc.(a)(b)

  175,200   2,379,216
     Shares           Value    

Financial (continued)

   

IntercontinentalExchange, Inc.(a)(b)(c)

  14,120   $1,744,385

MGIC Investment
Corp.
(a)(b)(c)

  823,707   7,322,755

New York Community Bancorp, Inc.(a)(b)

  132,535   2,287,554

People’s United Financial, Inc.(a)(b)

  174,693   2,197,638

The PMI Group, Inc.(a)(b)(c)

  840,892   2,270,408

Radian Group, Inc.(a)(b)

  781,230   5,320,176

Valley National Bancorp(a)

  169,700   2,369,012
     
    60,364,433
     

Insurance 2.68%

Genworth Financial, Inc. - Class A(a)(b)(c)

  629,756   8,476,516

Hartford Financial Services Group, Inc.(a)(b)

  324,630   8,742,286

Maiden Holdings, Ltd.(a)(d)

  100,900   755,741

XL Capital, Ltd.(a)(b)

  154,000   3,788,400
     
    21,762,943
     

Investment Companies 5.25%

Ares Capital Corp.(a)

  593,669   10,033,006

Golub Capital BDC, Inc.(a)

  226,900   3,580,482

Indochina Capital Vietnam Holdings, Ltd.(a)(c)(e)

  54,584   200,869

Knight Capital Group, Inc. - Class A(a)(b)(c)

  168,417   2,256,788

Medley Capital Corp.(a)(b)(c)

  146,188   1,780,570

PennantPark Investment Corp.(a)

  707,590   8,434,472

Solar Capital, Ltd.(a)

  556,484   13,288,834

Solar Senior Capital,
Ltd.
(a)(c)

  167,431   3,119,240
     
    42,694,261
     

Real Estate 0.12%

BHG S.A. -Brazil Hospitality Group(c)

  44,270   616,876

BHG S.A. - Brazil Hospitality Group, Receipt Shares(c)(e)

  5,665   78,938

Mingfa Group International Co., Ltd.(d)

  925,249   289,046
     
    984,860
     

REITs 10.05%

American Capital Agency Corp.(a)

  127,380   3,711,853

Annaly Capital Management, Inc.(a)(b)

  657,400   11,471,630

Apollo Commercial Real Estate Finance, Inc.(a)

  202,400   3,309,240

Ascendas Real Estate Investment Trust

  3,597,000   5,821,404
 

 

18

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   March 31, 2011

 

     Shares           Value    

Financial (continued)

   

Ascott Residence Trust

  1,481,624   $1,410,511

CapitaCommercial Trust

  5,159,000   5,689,020

Capstead Mortgage
Corp.
(a)(b)

  673,752   8,610,551

Cypress Sharpridge Investments, Inc.(a)(b)

  372,200   4,719,496

Dynex Capital, Inc.(a)(b)

  384,796   3,871,048

Hatteras Financial
Corp.
(a)(b)

  556,847   15,658,538

Host Hotels & Resorts, Inc.(a)(b)

  84,281   1,484,188

Invesco Mortgage Capital, Inc.(a)

  303,750   6,636,938

MFA Financial, Inc.(a)(b)

  759,457   6,227,547

Starwood Property Trust, Inc.(a)

  140,050   3,123,115
     
    81,745,079
     

TOTAL FINANCIAL

    246,902,977
     

Industrial 8.68%

   

BE Aerospace, Inc.(a)(b)(c)

  219,862   7,811,697

China State Construction International Holdings, Ltd.

  3,425,500   3,126,682

Crown Holdings, Inc.(a)(b)(c)

  76,662   2,957,620

Goodrich Corp.(a)

  28,400   2,429,052

GZI Transport, Ltd.

  3,273,315   1,851,577

Jardine Strategic Holdings, Ltd.(a)

  105,255   2,810,308

Jiangsu Expressway Co., Ltd. - Class H

  5,713,076   6,404,538

KBR, Inc.(a)

  24,722   933,750

MSCI, Inc. - Class A(a)(c)

  33,300   1,226,106

Omron Corp.

  31,482   884,887

Owens Corning(a)(b)(c)

  98,942   3,560,923

Owens-Illinois, Inc.(a)(b)(c)

  307,580   9,285,840

Sensata Technologies Holding NV(a)(c)

  131,100   4,553,103

TE Connectivity, Ltd.(a)

  66,500   2,315,530

TransDigm Group,
Inc.
(a)(b)(c)

  101,771   8,531,463

Verisk Analytics, Inc. - Class A(a)(c)

  111,225   3,643,731

Zhejiang Expressway Co., Ltd. - Class H

  9,044,000   8,231,807
     
    70,558,614
     

Technology 12.00%

   

Apple, Inc.(a)(c)

  23,371   8,143,625

Arrow Electronics,
Inc.
(a)(b)(c)

  193,600   8,107,968

Avnet, Inc.(a)(c)

  155,300   5,294,177

Broadcom Corp. -
Class A
(a)(b)(c)

  57,600   2,268,288

Fidelity National Information Services, Inc.(a)(b)

  130,000   4,249,700

Fiserv, Inc.(a)(b)(c)

  41,600   2,609,152

HTC Corp.

  33,000   1,290,531
     Shares           Value    

Technology (continued)

   

Ingram Micro, Inc. - Class A(a)(b)(c)

  179,300   $3,770,679

International Business Machines Corp.(a)(b)

  172,800   28,178,496

Microsoft Corp.(a)(b)

  833,364   21,134,111

Oracle Corp.(a)(b)

  10,336   344,912

Samsung Electronics Co., Ltd.

  9,223   7,836,124

SanDisk Corp.(a)(c)

  18,495   852,435

Xerox Corp.(a)(b)

  331,794   3,533,606
     
    97,613,804
     

Utilities 5.18%

   

Babcock & Wilcox Co.(a)(c)

  33,771   1,127,276

CMS Energy Corp.(a)(b)

  125,500   2,464,820

DPL, Inc.(a)(b)

  93,700   2,568,317

Edison International(a)(b)

  30,500   1,115,995

National Grid PLC - Sponsored ADR(a)(b)

  487,400   23,414,696

Northeast Utilities(a)

  73,600   2,546,560

Oneok, Inc.(a)(b)

  42,400   2,835,712

Power Assets Holdings, Ltd.

  905,500   6,053,313
     
    42,126,689
     

TOTAL COMMON STOCKS

(Cost $739,179,056)

  859,437,296
     

EXCHANGE TRADED FUNDS 4.99%

iShares FTSE China 25 Index Fund(a)

  276,000   12,408,960

iShares iBoxx $ High Yield Corporate Bond Fund(a)(b)

  70,841   6,514,538

SPDR Gold Trust(a)(c)

  154,800   21,644,136
     
    40,567,634
     

TOTAL EXCHANGE TRADED FUNDS

(Cost $32,296,407)

  40,567,634
     

PREFERRED STOCKS 0.42%

   

The Goodyear Tire & Rubber Co., 5.875%

  67,800   3,463,224
     

TOTAL PREFERRED STOCKS

(Cost $3,394,238)

  3,463,224
     

Description and

Maturity Date

  Principal
Amount
          Value    

CORPORATE BONDS 12.27%

American Axle & Manufacturing, Inc.

03/01/2017, 7.875% (a) 

  $3,145,000   3,207,900

Anheuser-Busch InBev Worldwide, Inc.

11/17/2015, 9.750% (a) 

  6,710,000   4,243,454
 

 

Annual Report | March 31, 2011

  

19


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
   March 31, 2011

 

Description and

Maturity Date

  Principal
Amount
      Value    

CORPORATE BONDS (continued)

 

ArvinMeritor, Inc.

   

03/15/2018, 10.625% (a) 

  $1,805,000   $2,039,650

BE Aerospace, Inc.

   

07/01/2018, 8.500% (a) 

  2,100,000   2,331,000

Bombardier, Inc.

   

05/01/2034, 7.450% (a)(d)

  2,170,000   2,094,050

CITIC Resources Holdings, Ltd.

 

05/15/2014, 6.750% (a)(f)

  1,900,000   1,995,000

Citigroup, Inc.

   

03/05/2038, 6.875% (a) 

  2,475,000   2,728,631

Constellation Brands, Inc.

   

09/01/2016, 7.250% (a) 

  3,050,000   3,313,062

Crown Americas LLC / Crown Americas Capital Corp. II

05/15/2017, 7.625% (a)

  3,050,000   3,332,125

Dana Holding Corp.

   

02/15/2021, 6.750% (a) 

  1,860,000   1,869,300

Felcor Lodging LP

   

10/01/2014, 10.000% (a) 

  1,850,000   2,122,875

Ford Motor Credit Co., LLC

   

10/01/2014, 8.700% (a) 

  3,775,000   4,284,565

Forest Oil Corp.

   

06/15/2019, 7.250% (a) 

  2,400,000   2,520,000

General Cable Corp.

   

04/01/2017, 7.125% (a)(b)

  2,900,000   3,005,125

Genworth Financial, Inc.

   

06/15/2020, 7.700% (a) 

  2,055,000   2,106,521

Gol Finance

   

07/20/2020, 9.250% (a)(d)

  2,310,000   2,480,362

The Goldman Sachs Group, Inc.

02/01/2041, 6.250% (a) 

  2,480,000   2,478,036

Graphic Packaging International, Inc.

10/01/2018, 7.875% (a) 

  1,300,000   1,399,125

Hanesbrands, Inc.

   

12/15/2016, 8.000% (a) 

  2,035,000   2,215,606

Hidili Industry International Development, Ltd.

11/04/2015, 8.625% (a)(d)

  2,475,000   2,499,750

Iron Mountain, Inc.

   

01/01/2016, 6.625% (a) 

  2,550,000   2,575,500

Itau Unibanco Holding S.A.

   

11/23/2015, 10.500% (a)(d)

  6,120,000   3,879,705

JPMorgan Chase & Co.

   

04/23/2019, 6.300% (a)(b)

  2,775,000   3,072,591

Lear Corp.

   

03/15/2018, 7.875% (a) 

  2,450,000   2,676,625

Morgan Stanley

   

01/25/2021, 5.750% (a) 

  1,860,000   1,877,988

Newfield Exploration Co.

   

05/15/2018, 7.125% (a) 

  1,900,000   2,052,000

Petrohawk Energy Corp.

   

06/01/2015, 7.875% (a) 

  2,925,000   3,115,125

Pioneer Natural Resources Co.

 

03/15/2017, 6.650% (a) 

  2,200,000   2,394,432

President and Fellows of Harvard College

10/01/2037, 6.300% (a) 

  3,527,000   3,974,178

Description and

Maturity Date

  Principal
Amount
      Value    

CORPORATE BONDS (continued)

Range Resources Corp.

05/15/2019, 8.000% (a) 

  $2,490,000   $2,757,675

Rearden G Holdings EINS GmbH

03/30/2020, 7.875% (a)(d)

  1,875,000   2,043,750

Silgan Holdings, Inc.

   

08/15/2016, 7.250% (a) 

  2,225,000   2,425,250

Spirit Aerosystems, Inc.

10/01/2017, 7.500% (a) 

  2,275,000   2,457,000

Star Energy Geothermal Wayang Windu, Ltd.

02/12/2015, 11.500% (a)(d)

  1,875,000   2,156,250

Starwood Hotels & Resorts Worldwide, Inc.

05/15/2018, 6.750% (a)(b)

  3,325,000   3,628,406

TAM Capital 2, Inc.

   

01/29/2020, 9.500% (a)(f)

  2,205,000   2,436,525

Tenneco, Inc.

   

08/15/2018, 7.750% (a) 

  1,250,000   1,340,625

Terex Corp.

   

11/15/2017, 8.000% (a) 

  2,510,000   2,657,462
     

TOTAL CORPORATE BONDS

(Cost $92,148,887)

  99,787,224
     

ASSET/MORTGAGE BACKED SECURITIES 0.09%

Government National Mortgage Association (GNMA)

Series 2007-37, Class SA,

 

03/20/2037, 21.227%(a)(g) 529,225

  599,372

Series 2007-37, Class SB,

 

03/20/2037, 21.227%(a)(g) 109,293

  128,797
     

TOTAL ASSET/MORTGAGE BACKED SECURITIES

(Cost $597,334)

  728,169
     

FOREIGN GOVERNMENT BONDS 1.96%

Brazilian Government International Bonds

01/05/2016, 12.500% (a) 

  21,750,000   15,239,987

01/10/2028, 10.250% (a) 

  1,099,000   678,208
     

TOTAL FOREIGN GOVERNMENT BONDS

(Cost $14,780,585)

  15,918,195
     

GOVERNMENT & AGENCY OBLIGATIONS 13.79%

U.S. Treasury Bonds

   

11/15/2017, 4.250% (a) 

  14,000,000   15,243,592

05/15/2040, 4.375% (a) 

  6,850,000   6,692,697

U.S. Treasury Notes

   

04/30/2016, 2.625% (a) 

  33,000,000   33,538,824

08/15/2018, 4.000% (a) 

  53,000,000   56,635,482
     

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

(Cost $110,819,820)

  112,110,595
     
 

 

20

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   March 31, 2011

 

     Number of
Contracts
    Value

CALL OPTIONS PURCHASED 0.24%

AMR Corp., Expires January, 2012, Exercise Price $10.00

    2,000      $66,000

Microsoft Corp., Expires January, 2012, Exercise Price $27.50

    13,500      1,640,250

Microsoft Corp., Expires January, 2013, Exercise Price $30.00

    1,792      277,760
     

TOTAL CALL OPTIONS PURCHASED

(Cost $5,178,402)

  

  

  1,984,010
     
     Shares     Value

SHORT-TERM INVESTMENTS 1.69%

  

 

Dreyfus Treasury Prime Money Market Fund (0.000% 7-day yield)(h)

    13,739,223      13,739,223
     

TOTAL SHORT-TERM INVESTMENTS

(Cost $13,739,223)

  

  

  13,739,223
     

Total Investments -141.14%

(Cost $1,012,133,952)

    1,147,735,570

Liabilities in Excess of Other Assets -(41.14%)

    (334,558,069)
     

NET ASSETS -100.00%

    $813,177,501
     

SCHEDULE OF SECURITIES SOLD

SHORT (c)

  Shares     Value

COMMON STOCKS

   

Aetna, Inc.

    (22,600   $(845,918)

Apollo Group, Inc. - Class A

    (29,989   (1,250,841)

Bed Bath & Beyond, Inc.

    (18,300   (883,341)

Berkshire Hathaway, Inc. - Class B

    (49,800   (4,164,774)

Cie Generale d’Optique Essilor International S.A.

    (24,700   (1,834,245)

Diamond Offshore Drilling, Inc.

    (53,081   (4,124,394)

Kohl’s Corp.

    (20,900   (1,108,536)

Macy’s, Inc.

    (69,892   (1,695,580)

Noble Corp.

    (30,873   (1,408,426)

Toll Brothers, Inc.

    (1,362   (26,927)
     
    (17,342,982)
     

EXCHANGE TRADED FUNDS

  

 

Energy Select Sector SPDR Fund

    (78,038   (6,228,213)

iShares Dow Jones U.S. Real Estate Index Fund

    (21,424   (1,272,586)

SCHEDULE OF SECURITIES SOLD

SHORT (c) (continued)

  Shares     Value  

iShares MSCI South Korea Index Fund

    (70,286   $ (4,522,904

United States Oil Fund LP

    (270,297     (11,509,246

Vanguard REIT ETF

    (444,597     (26,004,478
         
      (49,537,427
         

TOTAL SECURITIES SOLD SHORT

(Proceeds $59,772,835)

  

  

  $ (66,880,409
         

 

(a)

Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings as of March 31, 2011. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan at March 31, 2011.

(c)

Non-income producing security.

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of March 31, 2011, these securities had a total value of $16,198,654 or 1.99% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of March 31, 2011, these securities had a total value of $279,807 or 0.03% of total net assets.

(f)

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of March 31, 2011, the aggregate market value of those securities was $4,431,525, representing 0.54% of net assets.

(g)

Floating or variable rate security - rate disclosed as of March 31, 2011.

(h)

Less than 0.0005%.

 

 

See Notes to the Financial Statements.

 

 

Annual Report | March 31, 2011

  

21


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
   March 31, 2011

 

Abbreviations:

ADR - American Depositary Receipt

Bhd - Berhad (in Malaysia, a form of a public company)

ETF - Exchange Traded Fund

GmbH - a form of a limited liability corporation common in German-speaking countries

LLC - Limited Liability Corporation

LP - Limited Partnership

Ltd. - Limited

MSCI - Morgan Stanley Capital International

NV - Naamloze Vennootschap (Dutch: Limited Liability Company)

OAO - Otkrytoe Aktsionernoe Obschestvo (a Russian open joint stock corporation)

PLC - Public Limited Liability

REIT - Real Estate Investment Trust

REMICS - Real Estate Mortgage Investment Conduits

S.A. - Generally designates corporations in various countries, mostly those employing the civil law

SPDR - Standard & Poor’s Depositary Receipt

For Fund compliance purposes, each Fund’s industry classifications refer to any one of the industry sub-classifications used by one or more widely recognized market indexes, and/or as defined by each Fund’s management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percent of net assets. These industry classifications are unaudited.

 

 

See Notes to the Financial Statements.

 

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Table of Contents

Cough Global Funds

   Statements of Assets and Liabilities
   March 31, 2011 (Unaudited)

 

     

Clough Global

Allocation Fund

    

Clough Global

Equity Fund

     Clough Global
Opportunities Fund
 

ASSETS:

        

Investments, at value (Cost - see below)

   $ 268,569,277       $ 441,085,436       $ 1,147,735,570   

Cash

     157,130         164,471         422,665   

Foreign Currency, at value (Cost $7,425,396, $12,364,283 and $32,205,640)

     7,661,337         12,751,634         33,211,286   

Deposit with broker for securities sold short

     16,019,937         26,169,394         68,079,433   

Dividends receivable

     699,334         1,195,092         2,973,352   

Interest receivable

     802,581         1,129,957         3,530,499   

Receivable for investments sold

     7,582,481         12,410,041         32,372,051   
   

Total Assets

     301,492,077         494,906,025         1,288,324,856   
   

LIABILITIES:

        

Loan payable

     89,800,000         147,000,000         388,900,000   

Interest due on loan payable

     7,003         11,464         30,329   

Securities sold short (Proceeds $14,048,235, $22,968,420 and $59,772,835)

     15,734,626         25,710,644         66,880,409   

Payable for investments purchased

     4,181,578         7,295,216         17,843,958   

Dividends payable - short sales

     818         1,336         3,495   

Interest payable - margin account

     11,825         19,374         50,030   

Accrued investment advisory fee

     177,974         375,686         1,087,333   

Accrued administration fee

     72,461         133,577         347,947   

Accrued trustees fee

     3,854         3,854         3,854   
   

Total Liabilities

     109,990,139         180,551,151         475,147,355   
   

Net Assets

   $ 191,501,938       $ 314,354,874       $ 813,177,501   
   

Cost of Investments

   $ 235,803,049       $ 384,866,053       $ 1,012,133,952   
   

COMPOSITION OF NET ASSETS:

        

Paid-in capital

   $ 181,095,134       $ 298,604,829       $ 838,408,606   

Overdistributed net investment income

     (698,881)         (1,146,152)         (2,988,299)   

Accumulated net realized loss on investments, options, securities sold short and foreign currency transactions

     (20,209,804)         (36,971,880)         (151,752,241)   

Net unrealized appreciation in value of investments, options, securities sold short and translation of assets and liabilities denominated in foreign currency

     31,315,489         53,868,077         129,509,435   
   

Net Assets

   $ 191,501,938       $ 314,354,874       $ 813,177,501   
   

Shares of common stock outstanding of no par value, unlimited shares authorized

     10,434,606         17,840,705         51,736,859   
   

Net assets value per share

   $ 18.35       $ 17.62       $ 15.72   
   

 

 

See Notes to the Financial Statements.

 

Annual Report | March 31, 2011

  

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Table of Contents

Statements of Operations

   Clough Global Funds
   For the Six Months Ended March 31, 2011 (Unaudited)

 

 

 

     Clough Global
Allocation Fund
     Clough Global
Equity Fund
     Clough Global
Opportunities Fund
 
   

INVESTMENT INCOME:

        

Dividends (net of foreign withholding taxes of $76,184, $127,903 and $329,183)

   $ 5,411,401       $ 9,599,988       $ 22,754,220       

Interest on investment securities

     3,500,991         4,883,749         15,365,098       

Hypothecated securities income (See Note 6)

     74,891         128,402         327,994       
   

Total Income

     8,987,283         14,612,139         38,447,312       
   

EXPENSES:

 

        

Investment advisory fee

     2,056,463         4,332,518         12,604,090       

Administration fee

     837,274         1,540,451         4,033,309       

Interest on loan

     1,325,433         2,169,707         5,740,149       

Interest expense - margin account

     243,190         404,071         1,193,011       

Trustees fee

     146,211         146,211         146,211       

Dividend expense - short sales

     400,355         656,235         1,694,993       

Other expenses

     2,125         2,125         2,276       
   

Total Expenses

     5,011,051         9,251,318         25,414,039       
   

Net Investment Income

     3,976,232         5,360,821         13,033,273       
   

NET REALIZED GAIN/(LOSS) ON:

        

Investment securities

     25,713,336         39,676,674         109,950,500       

Securities sold short

     (7,980,536)         (13,094,188)         (33,435,924)       

Written options

     4,495,684         7,275,856         18,887,512       

Foreign currency transactions

     (320,679)         (528,398)         (1,387,326)       

NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON:

  

Investment securities

     1,062,904         4,561,217         (276,427)       

Securities sold short

     3,017,165         4,938,473         12,513,622       

Written options

     (2,474,148)         (4,070,800)         (10,726,030)       

Translation of assets and liabilities denominated in foreign currencies

     216,765         353,303         893,118       
   

Net gain on investments, options, securities sold short and foreign currency transactions

     23,730,491         39,112,137         96,419,045       
   

Net Increase in Net Assets Attributable to Common Shares from Operations

   $ 27,706,723       $ 44,472,958       $ 109,452,318       
   

 

See Notes to the Financial Statements.

 

 

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Clough Global Funds

   Statements of Changes in Net Assets
   March 31, 2011

 

 

    Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities Fund  
    

For the

Year Ended
March 31, 2011

   

For the

Year Ended
March 31, 2010

   

For the

Year Ended
March 31, 2011

   

For the

Year Ended
March 31, 2010

   

For the

Year Ended
March 31, 2011

   

For the

Year Ended
March 31, 2010

 

COMMON SHAREHOLDERS OPERATIONS:

 

  

Net investment income

  $ 3,976,232      $ 3,306,035      $ 5,360,821      $ 3,946,856      $ 13,033,273      $ 8,678,959   

Net realized gain/(loss) from:

           

Investment securities

    25,713,336        (9,280,504)        39,676,674        (11,512,814)        109,950,500        (50,138,051)   

Securities sold short

    (7,980,536)        (10,892,481)        (13,094,188)        (17,370,998)        (33,435,924)        (45,685,772)   

Written options

    4,495,684        9,954,687        7,275,856        16,836,515        18,887,512        43,669,348   

Foreign currency transactions

    (320,679)        (92,011)        (528,398)        (155,633)        (1,387,326)        (405,192)   

Net change in unrealized appreciation/(depreciation) on investments, options, securities sold short and translation of assets and liabilities denominated in foreign currencies

    1,822,686        56,613,978        5,782,193        98,150,460        2,404,283        256,578,865   
   

Net Increase in Net Assets From Operations

    27,706,723        49,609,704        44,472,958        89,894,386        109,452,318        212,698,157   
   

DISTRIBUTIONS TO COMMON SHAREHOLDERS:

  

   

Net investment income

    (12,521,527)        (4,763,937)        (20,695,217)        (6,903,467)        (55,875,807)        (15,069,409)   

Tax return of capital

           (6,714,129)               (11,472,459)               (35,632,712)   
   

Net Decrease in Net Assets from Distributions

    (12,521,527)        (11,478,066)        (20,695,217)        (18,375,926)        (55,875,807)        (50,702,121)   
   

Net Increase in Net Assets Attributable to Common Shares

    15,185,196        38,131,638        23,777,741        71,518,460        53,576,511        161,996,036   
   

NET ASSETS ATTRIBUTABLE TO COMMON SHARES:

  

Beginning of period

    176,316,742        138,185,104        290,577,133        219,058,673        759,600,990        597,604,954   
   

End of period*

  $ 191,501,938      $ 176,316,742      $ 314,354,874      $ 290,577,133      $ 813,177,501      $ 759,600,990   
   

*Includes Overdistributed Net Investment Income of:

  $ (698,881)      $ (352,131)      $ (1,146,152)      $ (585,155)      $ (2,988,299)      $ (1,532,363)   
   

 

 

 

 

See Notes to the Financial Statements.

 

Annual Report | March 31, 2011

  

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Table of Contents

Statements of Cash Flows

   Clough Global Funds
   March 31, 2011

 

 

      Clough Global
Allocation Fund
     Clough Global
Equity Fund
     Clough Global
Opportunities Fund
 

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net increase in net assets from operations

   $ 27,706,723       $ 44,472,958       $ 109,452,318       

Adjustments to reconcile net increase/(decrease) in net assets from operations to net cash

        

provided in operating activities:

        

Purchase of investment securities

     (440,089,860)         (726,493,837)         (1,912,849,152)       

Proceeds from disposition of investment securities

     462,221,970         760,644,540         2,053,020,270       

Proceeds from securities sold short transactions

     106,852,569         174,740,129         456,837,578       

Cover securities sold short transactions

     (123,936,338)         (202,647,642)         (529,904,777)       

Premiums received from written options transactions

     13,568,256         22,103,274         58,102,278       

Premiums paid on closing written options transactions

     (11,635,030)         (19,043,364)         (50,324,044)       

Purchased options transactions

     (25,705,475)         (41,810,700)         (114,637,955)       

Proceeds from purchased options transactions

     19,622,508         32,011,957         85,136,023       

Proceeds from litigation settlements

     23,539         59,247         86,305       

Net proceeds from short-term investment securities

     16,848,928         32,606,204         82,504,022       

Net realized gain from investment securities

     (25,713,336)         (39,676,674)         (109,950,500)       

Net realized loss on securities sold short

     7,980,536         13,094,188         33,435,924       

Net realized gain on written options

     (4,495,684)         (7,275,856)         (18,887,512)       

Net realized loss on foreign currency transactions

     320,679         528,398         1,387,326       

Net change in unrealized appreciation on investment securities

     (1,822,686)         (5,782,193)         (2,404,283)       

Premium amortization

     177,844         210,467         915,626       

Discount accretion

     (85,127)         (122,683)         (365,567)       

Increase in deposits with brokers for securities sold short and written options

     (2,183,571)         (4,899,963)         (53,333,822)       

Decrease in dividends receivable

     108,918         186,216         478,223       

Increase in interest receivable

     (5,415)         (155,374)         (62,545)       

Increase in interest due on loan payable

     63         103         272       

Decrease in dividends payable - short sales

     (19,637)         (31,389)         (84,364)       

Decrease in interest payable - margin account

     (11,551)         (19,661)         (74,234)       

Increase/(Decrease) in accrued investment advisory fee

     909         1,722         (3,189)       

Increase/(Decrease) in accrued administration fee

     370         612         (1,020)       

Decrease in accrued trustees fee

     (1,581)         (1,581)         (1,581)       

Net cash provided by operating activities

     19,728,521         32,699,098         88,471,620       

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Cash distributions paid

     (12,521,527)         (20,695,217)         (55,875,807)       

Net cash used in financing activities

     (12,521,527)         (20,695,217)         (55,875,807)       

Net increase in cash

     7,206,994         12,003,881         32,595,813       

Cash and foreign currency, beginning of period

   $ 611,473       $ 912,224       $ 1,038,138       

Cash and foreign currency, ending of period

   $ 7,818,467       $ 12,916,105       $ 33,633,951       

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

        

Cash paid during the period for interest from bank borrowing:

   $ 1,325,370       $ 2,169,604       $ 5,739,877       

 

See Notes to the Financial Statements.

 

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Table of Contents

Clough Global Allocation Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated

 

    For the
Year Ended
March 31, 2011
    For the
Year Ended
March 31, 2010
    For the
Year Ended
March 31, 2009
    For the
Year Ended
March 31, 2008
    For the
Year Ended
March 31, 2007
 
   

PER COMMON SHARE OPERATING PERFORMANCE:

  

 

Net asset value - beginning of period

    $16.90        $13.24        $21.60        $22.61        $24.42   
   

Income from investment operations:

    0.38*        0.32*        0.30*        0.46*        1.79   

Net investment income

         

Net realized and unrealized gain/(loss) on investments

    2.27        4.44        (7.05)        1.47        (0.98)   

Distributions to preferred shareholders from:

         

Net investment income

                  (0.05)        (0.49)        (0.47)   
   

Total from Investment Operations

    2.65        4.76        (6.80)        1.44        0.34   
   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

   

Net investment income

    (1.20)        (0.46)        (0.81)        (1.72)        (1.44)   

Net realized gains

                  (0.31)        (0.73)        (0.71)   

Tax return of capital

           (0.64)        (0.44)                 
   

Total Distributions to Common Shareholders

    (1.20)        (1.10)        (1.56)        (2.45)        (2.15)   
   

Net asset value - end of period

    $18.35        $16.90        $13.24        $21.60        $22.61   
   

Market price - end of period

    $16.24        $15.92        $10.68        $18.90        $20.82   
   

Total Investment Return - Net Asset Value:(1)

    17.30%        38.14%        (32.20)%        7.10%        1.59%   

Total Investment Return - Market Price:(1)

    10.20%        61.32%        (37.50)%        1.77%        (4.77)%   

RATIOS AND SUPPLEMENTAL DATA:

  

 

Net assets attributable to common shares, end of period (000s)

    $191,502        $176,317        $138,185        $225,359        $235,962   

Ratios to average net assets attributable to common shareholders:

         

Total expenses

    2.87%        3.22%        3.35%(2)        2.10%(2)        2.02%(2)   

Total expenses excluding interest expense and dividends on short sales expense

    1.74%        1.88%        2.76%(2)        1.73%(2)        1.75%(2)   

Net investment income

    2.28%        1.96%        1.73%(2)        2.02%(2)        2.63%(2)   

Preferred share dividends

    N/A        N/A        0.30%        2.14%        2.10%   

Portfolio turnover rate

    172%        115%        233%        136%        187%   
   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

 

Liquidation value, end of period, including dividends on preferred shares (000)

    N/A        N/A        (3)        $95,052        $95,042   

Total shares outstanding (000)

    N/A        N/A        (3)        3.8        3.8   

Asset coverage per share(4)

    N/A        N/A        (3)        $84,319        $87,106   

Liquidation preference per share

    N/A        N/A        (3)        $25,000        $25,000   

Average market value per share(5)

    N/A        N/A        (3)        $25,000        $25,000   
   

Borrowings at End of Period

  

       

Aggregate Amount Outstanding (000)

    $89,800        $89,800        $60,200        N/A        N/A   

Asset Coverage Per $1,000 (000)

    $3,133        $2,963        $3,295        N/A        N/A   

 

* 

Based on average shares outstanding.

(1)

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Past performance is not a guarantee of future results.

(2) 

Ratios do not reflect dividend payments to preferred shareholders.

(3)

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 22, 2008.

(4)

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(5)

Based on monthly prices.

See Notes to the Financial Statements.

 

Annual Report | March 31, 2011

  

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Table of Contents

Financial Highlights

   Clough Global Equity Fund

For a share outstanding throughout the periods indicated

  

 

 

   

For the

Year Ended

March 31, 2011

   

For the

Year Ended

March 31, 2010

   

For the

Year Ended

March 31, 2009

   

For the

Year Ended

March 31, 2008

   

For the

Year Ended

March 31, 2007

 
   

PER COMMON SHARE OPERATING PERFORMANCE:

  

 

Net asset value - beginning of period

    $16.29        $12.28        $20.88        $22.17        $23.74   
   

Income from investment operations:

         

Net investment income

    0.30*        0.22*        0.16*        0.34*        1.77   

Net realized and unrealized gain/(loss) on investments

    2.19        4.82        (7.21)        1.38        (0.88)   

Distributions to preferred shareholders from:

         

Net investment income

                  (0.03)        (0.53)        (0.51)   
   

Total from Investment Operations

    2.49        5.04        (7.08)        1.19        0.38   
   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

   

Net investment income

    (1.16)        (0.39)        (0.24)        (1.67)        (1.70)   

Net realized gains

                  (0.48)        (0.81)        (0.25)   

Tax return of capital

           (0.64)        (0.80)                 
   

Total Distributions to Common Shareholders

    (1.16)        (1.03)        (1.52)        (2.48)        (1.95)   
   

Net asset value - end of period

    $17.62        $16.29        $12.28        $20.88        $22.17   
   

Market price - end of period

    $15.37        $14.33        $9.77        $18.00        $20.13   
   

Total Investment Return - Net Asset Value:(1)

    17.05%        43.62%        (34.55)%        6.24%        2.03%   

Total Investment Return - Market Price:(1)

    16.07%        58.80%        (39.60)%        0.86%        (2.08)%   

RATIOS AND SUPPLEMENTAL DATA:

  

       

Net assets attributable to common shares, end of period (000s)

    $314,355        $290,577        $219,059        $372,490        $395,594   

Ratios to average net assets attributable to common shareholders:

         

Total expenses

    3.23%        3.57%        3.81%(2)        2.50%(2)        2.43%(2)   

Total expenses excluding interest expense and dividends on short sales expense

    2.10%        2.25%        2.26%(2)        2.14%(2)        2.16%(2)   

Net investment income

    1.87%        1.43%        0.95%(2)        1.53%(2)        1.45%(2)   

Preferred share dividends

    N/A        N/A        0.20%        2.35%        2.28%   

Portfolio turnover rate

    173%        116%        207%        155%        200%   
   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

 

Liquidation value, end of period, including dividends on preferred shares (000)

    N/A        N/A        -(3)        $175,346        $175,444   

Total shares outstanding (000)

    N/A        N/A        -(3)        7        7   

Asset coverage per share(4)

    N/A        N/A        -(3)        $78,262        $81,577   

Liquidation preference per share

    N/A        N/A        -(3)        $25,000        $25,000   

Average market value per
share(5)

    N/A        N/A        -(3)        $25,000        $25,000   
   

Borrowings at End of Period

         

Aggregate Amount Outstanding (000)

    $147,000        $147,000        $98,200        N/A        N/A   

Asset Coverage Per $1,000 (000)

    $3,138        $2,977        $3,231        N/A        N/A   

 

* 

Based on average shares outstanding.

(1) 

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Past performance is not a guarantee of future results.

(2) 

Ratios do not reflect dividend payments to preferred shareholders.

(3) 

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 5, 2008.

(4) 

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(5) 

Based on monthly prices.

See Notes to the Financial Statements.

 

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Clough Global Opportunities Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated

 

 

    

For the

Year Ended

March 31, 2011

   

For the

Year Ended
March 31, 2010

   

For the

Year Ended
March 31, 2009

   

For the

Year Ended
March 31, 2008

   

For the Period

April 2006

(inception) to

March 31, 2007

 

PER COMMON SHARE OPERATING PERFORMANCE:

  

       

Net asset value - beginning of period

    $14.68        $11.55        $19.03        $19.17        $19.10   
   

Income from investment operations:

         

Net investment income

    0.25*        0.17*        0.12*        0.35*        0.90   

Net realized and unrealized gain/(loss) on investments

    1.87        3.94        (6.20)        1.50        0.40   

Distributions to preferred shareholders from:

         

Net investment income

                  (0.04)        (0.46)        (0.20)   
   

Total from Investment Operations

    2.12        4.11        (6.12)        1.39        1.10   
   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

       

Net investment income

    (1.08)        (0.29)        (0.06)        (1.46)        (0.90)   

Net realized gains

                  (0.03)        (0.07)          

Tax return of capital

           (0.69)        (1.27)                 
   

Total Distributions to Common Shareholders

    (1.08)        (0.98)        (1.36)        (1.53)        (0.90)   
   

CAPITAL SHARE TRANSACTIONS:

  

       

Common share offering costs charged to paid-in capital

                                (0.04)   

Preferred share offering costs and sales load charged to paid-in capital

                  (1)               (0.09)   
   

Total Capital Share Transactions

                                (0.13)   
   

Net asset value - end of period

    $15.72        $14.68        $11.55        $19.03        $19.17   
   

Market price - end of period

    $13.85        $13.04        $9.20        $16.32        $17.44   
   

Total Investment Return - Net Asset Value:(2)

    16.21%        37.93%        (32.68)%        8.06%        5.45%   

Total Investment Return - Market Price:(2)

    15.27%        53.82%        (37.48)%        1.86%        (8.38)%   

RATIOS AND SUPPLEMENTAL DATA:

  

       

Net assets attributable to common shares, end of period (000s)

    $813,178        $759,601        $597,605        $984,608        $991,948   
Ratios to average net assets attributable to common shareholders:          

Total expenses

    3.40%        3.72%        3.84%(3)        2.52%(3)        2.12%(3)(4)   

Total expenses excluding interest expense and dividends on short sales expense

    2.25%        2.39%        2.38%(3)        2.29%(3)        1.90%(3)(4)   

Net investment income

    1.74%        1.19%        0.80%(3)        1.76%(3)        1.75%(3)(4)   

Preferred share dividends

    N/A        N/A        0.23%        2.34%        1.13%(4)   

Portfolio turnover rate

    171%        115%        224%        171%        246%   
   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

       

Liquidation value, end of period, including dividends on preferred shares (000)

    N/A        N/A        (5)        $450,380        $450,450   

Total shares outstanding (000)

    N/A        N/A        (5)        18        18   

Asset coverage per share(6)

    N/A        N/A        (5)        $79,722        $80,133   

Liquidation preference per share

    N/A        N/A        (5)        $25,000        $25,000   

Average market value per share(7)

    N/A        N/A        (5)        $25,000        $25,000   
   

Borrowings at End of Period

  

       

Aggregate Amount Outstanding (000)

    $388,900        $388,900        $239,500        N/A        N/A   

Asset Coverage Per $1,000 (000)

    $3,091        $2,953        $3,495        N/A        N/A   

 

* 

Based on average shares outstanding.

(1) 

Less than $0.005.

 

Annual Report | March 31, 2011

  

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Table of Contents

Financial Highlights

   Clough Global Opportunities Fund

For a share outstanding throughout the periods indicated

  

 

 

(2)

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Total investment returns for less than a full year are not annualized. Past performance is not a guarantee of future results.

(3) 

Ratios do not reflect dividend payments to preferred shareholders.

(4)

Annualized.

(5)

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 23, 2008.

(6)

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(7) 

Based on monthly prices.

 

 

 

See Notes to the Financial Statements.

 

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Notes to Financial Statements

   Clough Global Funds
   March 31, 2011

 

 

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING AND OPERATING POLICIES

 

Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund,(each, a “Fund” and collectively, the “Funds”) are closed-end management investment companies that were organized under the laws of the state of Delaware by an Amended Agreement and Declaration of Trust dated April 27, 2004 and January 25, 2005, respectively for Clough Global Allocation Fund and Clough Global Equity Fund and an Agreement and Declaration of Trust dated January 12, 2006 for Clough Global Opportunities Fund. Each Fund is a non-diversified series with an investment objective to provide a high level of total return. Each Declaration of Trust provides that the Trustees may authorize separate classes of shares of beneficial interest.

The net asset value per share of each Fund is determined no less frequently than daily, on each day that the New York Stock Exchange (the “Exchange”) is open for trading, as of the close of regular trading on the Exchange (normally 4:00 p.m. New York time). Trading may take place in foreign issues held by the Fund at times when a Fund is not open for business. As a result, each Fund’s net asset value may change at times when it is not possible to purchase or sell shares of a Fund.

Investment Valuation: Securities held by each Fund for which exchange quotations are readily available are valued at the last sale price, or if no sale price or if traded on the over-the-counter market, at the mean of the bid and asked prices on such day. Most securities listed on a foreign exchange are valued at the last sale price at the close of the exchange on which the security is primarily traded. In certain countries market maker prices are used since they are the most representative of the daily trading activity. Market maker prices are usually the mean between the bid and ask prices. Certain markets are not closed at the time that the Funds prices its portfolio securities. In these situations, snapshot prices are provided by the individual pricing services or other alternate sources at the close of the NYSE as appropriate. Securities not traded on a particular day are valued at the mean between the last reported bid and the asked quotes, or the last sale price when appropriate; otherwise fair value will be determined by the board-appointed fair valuation committee. Debt securities for which the over-the-counter market is the primary market are normally valued on the basis of prices furnished by one or more pricing services or dealers at the mean between the latest available bid and asked prices. As authorized by the Trustees, debt securities (other than short-term obligations) may be valued on the basis of valuations furnished by a pricing service which determines valuations based upon market transactions for normal, institutional-size trading units of securities or a matrix method which considers yield or price of comparable bonds provided by a pricing service. Short-term obligations maturing within 60 days are valued at amortized cost, which approximates value, unless the Trustees determine that under particular circumstances such method does not result in fair value. Over-the-counter options are valued at the mean between bid and asked prices provided by dealers. Financial futures contracts listed on commodity exchanges and exchange-traded options are valued at closing settlement prices.

If the price of a security is unavailable in accordance with the aforementioned pricing procedures, or the price of a security is unreliable, e.g., due to the occurrence of a significant event, the security may be valued at its fair value determined by management pursuant to procedures adopted by the Board of Trustees. For this purpose, fair value is the price that a Fund reasonably expects to receive on a current sale of the security. Due to the number of variables affecting the price of a security, however; it is possible that the fair value of a security may not accurately reflect the price that a Fund could actually receive on a sale of the security. As of March 31, 2011, securities which have been fair valued represented 0.04%, 0.04% and 0.03% of net assets of Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Opportunities Equity Fund, respectively.

A three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. These inputs are categorized in the following hierarchy under applicable financial accounting standards:

Level 1 – Unadjusted quoted prices in active markets for identical investments

Level 2 – Significant observable inputs (including quoted prices for similar investments, interest rates, prepayments speeds, credit risk, etc.)

Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

Annual Report | March 31, 2011

  

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Table of Contents

Notes to Financial Statements (continued)

   Clough Global Funds
   March 31, 2011

 

The following is a summary of the inputs used as of March 31, 2011 in valuing each Fund’s investments carried at value. The Funds recognize transfers between the levels as of the beginning of the annual period in which the transfer occurred. There were no significant transfers between Levels 1 and 2 during the year ended March 31, 2011:

Clough Global Allocation Fund

 

Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  
   

Common Stocks

           

Basic Materials

   $ 1,737,782       $       $       $ 1,737,782   

Communications

     19,898,960                         19,898,960   

Consumer Cyclical

     15,569,492                         15,569,492   

Consumer Non-cyclical

     7,375,992                         7,375,992   

Energy

     49,664,382                         49,664,382   

Financial

     58,164,147         18,324         57,389         58,239,860   

Industrial

     16,524,237                         16,524,237   

Technology

     22,830,172                         22,830,172   

Utilities

     10,277,362                         10,277,362   

Exchange Traded Funds

     11,045,164                         11,045,164   

Preferred Stocks

     812,172                         812,172   

Corporate Bonds

             23,304,124                 23,304,124   

Asset/Mortgage Backed Securities

             759,758                 759,758   

Foreign Government Bonds

             3,768,381                 3,768,381   

Government & Agency Obligations

     22,520,424                         22,520,424   

Short-Term Investments

     4,241,015                         4,241,015   
   

TOTAL

   $ 240,661,301       $ 27,850,587       $ 57,389       $ 268,569,277   
   
Other Financial Instruments*            
   
Liabilities            

Securities Sold Short

   $ (15,734,626)       $       $       $ (15,734,626)   
   

TOTAL

   $ (15,734,626)       $       $       $ (15,734,626)   
   
Clough Global Equity Fund            
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  
   

Common Stocks

           

Basic Materials

   $ 2,866,897       $       $       $ 2,866,897   

Communications

     33,662,365                         33,662,365   

Consumer Cyclical

     25,964,577                         25,964,577   

Consumer Non-cyclical

     12,083,417                         12,083,417   

Energy

     86,179,210                         86,179,210   

Financial

     95,762,142         30,224         86,086         95,878,452   

Industrial

     27,040,779                         27,040,779   

Technology

     37,894,900                         37,894,900   

Utilities

     33,051,178                         33,051,178   

Exchange Traded Funds

     17,081,618                         17,081,618   

Preferred Stocks

     1,328,080               1,328,080   

Corporate Bonds

             36,338,864                 36,338,864   

Asset/Mortgage Backed Securities

             1,114,333                 1,114,333   

Foreign Government Bonds

             5,762,065                 5,762,065   

Government & Agency Obligations

     19,808,560                         19,808,560   

Short-Term Investments

     5,030,141                         5,030,141   
   

TOTAL

   $   397,753,864       $     43,245,486       $         86,086       $     441,085,436   
   
Other Financial Instruments*            
   
Liabilities            

Securities Sold Short

   $ (25,710,644)       $       $       $ (25,710,644)   
   

TOTAL

   $ (25,710,644)       $       $       $ (25,710,644)   
   

 

 

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Clough Global Funds    Notes to Financial Statements (continued)
   March 31, 2011

 

Clough Global Opportunities Fund           
Investments in Securities at Value*    Level 1     Level 2      Level 3      Total  
   

Common Stocks

          

Basic Materials

   $ 7,456,983      $       $       $ 7,456,983   

Communications

     84,883,814                        84,883,814   

Consumer Cyclical

     66,191,966                _         66,191,966   

Consumer Non-cyclical

     31,536,871                        31,536,871   

Energy

     212,165,578                        212,165,578   

Financial

     246,623,170        78,938         200,869         246,902,977   

Industrial

     70,558,614                        70,558,614   

Technology

     97,613,804                        97,613,804   

Utilities

     42,126,689                        42,126,689   

Exchange Traded Funds

     40,567,634                        40,567,634   

Preferred Stocks

     3,463,224                   3,463,224   

Corporate Bonds

            99,787,224                 99,787,224   

Asset/Mortgage Backed Securities

            728,169                 728,169   

Foreign Government Bonds

            15,918,195         _         15,918,195   

Government & Agency Obligations

     112,110,595                        112,110,595   

Call Options Purchased

     1,984,010                        1,984,010   

Short-Term Investments

     13,739,223                        13,739,223   
   

TOTAL

   $   1,031,022,175      $   116,512,526       $         200,869       $   1,147,735,570   
   

Other Financial Instruments*

          
   

Liabilities

          

Securities Sold Short

   $ (66,880,409   $       $       $ (66,880,409
   

TOTAL

   $ (66,880,409   $       $       $ (66,880,409
   

 

*For

detailed Industry descriptions, see the accompanying Statement of Investments.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

Clough Global Allocation Fund

 

Investments in Securities  

Balance

as of

March 31, 2010

 

Realized

gain/(|oss)

 

Change in

unrealized

appreciation/

(depreciation)

 

Net purchases/

(sales)

 

Transfers in

and/or (out)

of Level 3

 

Balance as of

March 31, 2011

 

Net Change in unrealized

appreciation/depreciation)

included in the statement of

operations attributable to

level 3 investments still held

at March 31, 2011

 

Common Stocks

  $–   $(51,282)   $64,656   $(37,288)   $81,303   $57,389   $64,656
 

TOTAL

  $–   $(51,282)   $64,656   $(37,288)   $81,303   $57,389   $64,656
 

Clough Global Equity Fund

 

Investments in Securities  

Balance

as of

March 31, 2010

 

Realized

gain/(loss)

 

Change in

unrealized

appreciation/

(depreciation)

 

Net purchases/

(sales)

 

Transfers in

and/or (out)

of Level 3

 

Balance as of

March 31, 2011

 

Net Change in unrealized

appreciation/(depreciation)

included in the statement of

operations attributable to

level 3 investments still held

at March 31, 2011

 

Common Stocks

  $–   $(76,926)   $96,988   $(55,934)   $121,958   $86,086   $96,988
 

TOTAL

  $–   $(76,926)   $96,988   $(55,934)   $121,958   $86,086   $96,988
 

 

 

 

Annual Report | March 31, 2011

  

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Table of Contents

Notes to Financial Statements (continued)

   Clough Global Funds
   March 31, 2011

 

Clough Global Opportunities Fund

Investments in Securities  

Balance

as of
March 31, 2010

  Realized
gain/(loss)
  Change in
unrealized
appreciation/
(depreciation)
  Net purchases/
(sales)
  Transfers in
and/or (out)
of Level 3
  Balance as of
March 31, 2011
  Net Change in unrealized
appreciation/(depreciation)
included in the statement  of
operations attributable to
level 3 investments still held
at March 31, 2011

Common Stocks

  $–   $(179,490)   $226,302   $(130,510)   $284,567   $200,869   $226,302
 

TOTAL

  $–   $(179,490)   $226,302   $(130,510)   $284,567   $200,869   $226,302
 

Foreign Securities: Each Fund may invest a portion of its assets in foreign securities. In the event that a 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.

The accounting records of each Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange at period end. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions.

The effect of changes in foreign currency exchange rates on investments is reported with all other foreign currency realized and unrealized gains and losses in the Funds’ Statements of Operations.

A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. Each Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to a Fund include the potential inability of the counterparty to meet the terms of the contract.

The net U.S. dollar value of foreign currency underlying all contractual commitments held by a Fund and the resulting unrealized appreciation or depreciation are determined using prevailing forward foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Funds’ Statements of Assets and Liabilities as a receivable or a payable and in the Funds’ Statements of Operations with the change in unrealized appreciation or depreciation on translation of assets and liabilities denominated in foreign currencies. There were no outstanding foreign currency contracts for the Funds as of March 31,2011.

A Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statements of Operations.

Options: Each Fund may purchase or write (sell) put and call options. One of the risks associated with purchasing an option among others, is that a Fund pays a premium whether or not the option is exercised. Additionally, a Fund bears the risk of loss of premium and change in market value should the counterparty not perform under the contract. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to options. The interest incurred on the Funds for the fiscal year ended March 31, 2011 is reported on the Statement of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of March 31, 2011 are reported on the Statement of Assets and Liabilities as Interest payable – margin account.

When a Fund writes an option, an amount equal to the premium received by a Fund is recorded as a liability and is subsequently adjusted to the current value of the option written. Premiums received from writing options that expire unexercised are treated by a Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is recorded as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether a Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by a Fund. Each Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option.

Written option activity for the year ended March 31, 2011 was as follows:

 

CLOUGH GLOBAL ALLOCATION FUND:               
     Written Call Options      Written Put Options       
      Contracts      Premiums      Contracts      Premiums        

Outstanding, March. 31, 2010

     930       $ 452,200         1,070       $ 2,110,258      

Positions opened

     235         1,021,243         13,543         12,547,014      

Exercised

                                  

Expired

     (580)         (403,546)         (2,245)         (4,926,178)      

Closed

     (585)         (1,069,897)         (12,368)         (9,731,094)      
 

Outstanding, March 31, 2011

           $               $      
 

Market Value, March 31, 2011

      $          $      
 

 

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Clough Global Funds

   Notes to Financial Statements (continued)
   March 31, 2011

 

CLOUGH GLOBAL EQUITY FUND:               
     Written Call Options      Written Put Options        
      Contracts      Premiums      Contracts      Premiums        

Outstanding, March 31, 2010

     1,522       $ 741,677         1,762       $ 3,474,257      

Positions opened

     383         1,661,609         22,060         20,441,665      

Exercised

     _         _         _         _      

Expired

     (952)         (662,440)         (3,662)         (8,025,009)      

Closed

     (953)         (1,740,846)         (20,160)         (15,890,913)      
 

Outstanding, March 31, 2011

           $               $      
 

Market Value, March 31, 2011

      $          $      
 

CLOUGH GLOBAL OPPORTUNITIES FUND:

  

           
     Written Call Options      Written Put Options        
      Contracts      Premiums      Contracts      Premiums        

Outstanding, March 31, 2010

     4,000       $ 1,948,313         4,647       $ 9,160,965      

Positions opened

     1,019         4,450,995         57,850         53,651,283      

Exercised

                                  

Expired

     (2,500)         (1,739,789)         (9,547)         (20,877,438)      

Closed

     (2,519)         (4,659,519)         (52,950)         (41,934,810)      
 

Outstanding, March 31, 2011

           $               $      
 

Market Value, March 31, 2011

      $          $      
 

Short Sales: Each Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When a Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which a Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.

Each Fund’s obligation to replace the borrowed security will be secured by collateral deposited with the broker-dealer, usually cash, U.S. government securities or other liquid securities. Each Fund will also be required to designate on its books and records similar collateral with its custodian to the extent, if any, necessary so that the aggregate collateral value is at all times at least equal to the current market value of the security sold short. The cash amount is reported on the Statement of Assets and Liabilities as Deposit with broker for securities sold short. The market value of securities held as collateral for securities sold short as of March 31, 2011, was $25,563,246, $39,095,595 and $87,902,969 for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to short sales. The interest incurred on the Funds for the fiscal year ended March 31, 2011 is reported on the Statement of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of March 31, 2011 are reported on the Statement of Assets and Liabilities as Interest payable – margin account.

Each Fund may also sell a security short if it owns at least an equal amount of the security sold short or another security convertible or exchangeable for an equal amount of the security sold short without payment of further compensation (a short sale against-the-box). In a short sale against-the-box, the short seller is exposed to the risk of being forced to deliver stock that it holds to close the position if the borrowed stock is called in by the lender, which would cause gain or loss to be recognized on the delivered stock. The Fund expects normally to close its short sales against-the-box by delivering newly acquired stock.

Derivatives Instruments: Each Fund may write or purchase option contracts to adjust risk and return of their overall investment positions. Each Fund may purchase or otherwise receive warrants or rights. Warrants and rights generally give the holder the right to receive, upon exercise, a security of the issuer at a set price. Funds typically use warrants and rights in a manner similar to their use of purchased options on securities, as described in options above. Risks associated with the use of warrants and rights are generally similar to risks associated with the use of purchased options. However, warrants and rights often do not have standardized terms, and may have longer maturities and may be less liquid than exchange-traded options. In addition, the terms of warrants or rights may limit each Fund’s ability to exercise the warrants or rights at such times and in such quantities as each Fund would otherwise wish. Each Fund held no rights or warrants at the end of the period. The following tables disclose the amounts related to each Fund’s use of derivative instruments.

The effect of derivatives instruments on each Fund’s Balance Sheet as of March 31, 2011:

 

          Asset Derivatives  
Fund    Risk Exposure    Statement of Assets and
Liabilities Location
   Contracts    Fair Value  

Clough Global Opportunities Fund

   Equity Contracts    Investments, at value    17,292    $ 1,984,010   

 

Annual Report | March 31, 2011

  

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Table of Contents

Notes to Financial Statements (continued)

   Clough Global Funds
   March 31, 2011

 

The average purchased and written option contracts volume and the average purchased and written option contracts notional volume during the year ended March 31, 2011 is noted below for each of the Funds.

 

      Average Purchased
Option Contract
Volume
   Average Purchased Option
Contract Notional Volume
     Average Written Option
Contract Volume
   Average Written Option
Contract Notional Volume
 

Clough Global Allocation Fund

   1,841    $ 4,006,098       1,767    $ 2,076,890   

Clough Global Equity Fund

   3,007    $ 6,540,245       2,885    $ 3,401,310   

Clough Global Opportunities Fund

   24,014    $ 20,225,521       7,556    $ 8,930,835   

The effect of derivatives instruments on each Fund’s Statement of Operations for the year ended March 31, 2011:

 

Fund   Risk Exposure   Statement of Operations Location   Realized Gain/(Loss) on
Derivatives Recognized
in Income
  Change in
Unrealized
Gain/(Loss) on
Derivatives
Recognized in
Income

Clough Global Allocation Fund

  Equity Contracts   Net realized gain/(loss) on Investment securities and Written options/Net change in unrealized appreciation/(depreciation) on investments, options, securities sold short and translation of assets and liabilities denominated in foreign currencies   $(7,306,354)   $2,783,844

Clough Global Equity Fund

  Equity Contracts   Net realized gain/(loss) on Investment securities and Written options/Net change in unrealized appreciation/(depreciation) on investments, options, securities sold short and translation of assets and liabilities denominated in foreign currencies   $(11,932,336)   $4,582,343

Clough Global Opportunities Fund

  Equity Contracts   Net realized gain/(loss) on Investment securities and Written options/Net change in unrealized appreciation/(depreciation) on investments, options, securities sold short and translation of assets and liabilities denominated in foreign currencies   $(34,730,739)   $9,833,058

Income Taxes: Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. During the year ended March 31, 2011, none of the Funds recorded a liability of any uncertain tax positions in the accompanying financial statements.

Each Fund files income tax returns in the U.S. federal jurisdiction and Colorado. The statute of limitations on each Fund’s federal and state tax filings remains open for the fiscal years ended March 31, 2011, March 31, 2010, March 31, 2009, and March 31, 2008 as well as for March 31, 2007 for state purposes only.

Under the Regulated Investment Company Modernization Act of 2010 (the Act), net capital losses recognized in tax years beginning after December 22, 2010 may be carried forward indefinitely, and the character of the losses is retained as short-term and/or long-term. Under the law in effect prior to the Act, net capital losses were carried forward for eight years and treated as short-term. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

Distributions to Shareholders: Each Fund intends to make a level dividend distribution each quarter to Common Shareholders after payment of interest on any outstanding borrowings. The level dividend rate may be modified by the Board of Trustees from time to time. Any net capital gains earned by a Fund are distributed at least annually to the extent necessary to avoid federal income and excise taxes. Distributions to shareholders are recorded by each Fund on the ex-dividend date. Each Fund has received approval from the Securities and Exchange Commission (the “Commission”) for exemption from Section 19(b)-1 of the Investment Company Act of 1940, as amended (the “1940 Act”), and Rule 19b-1 thereunder permitting each Fund to make periodic distributions of long-term capital gains, provided that the distribution policy of a fund with respect to its Common Shares calls for periodic (e.g. quarterly/monthly) distributions in an amount equal to a fixed percentage of each Fund’s average net asset value over a specified period of time or market price per common share at or about the time of distributions or pay-out of a level dollar amount. At this time, none of the Funds have implemented a managed distribution plan as permitted under the exemption.

 

 

 

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Clough Global Funds

   Notes to Financial Statements (continued)
   March 31, 2011

 

Securities Transactions and Investment Income: Investment security transactions are accounted for as of trade date. Dividend income is recorded on the ex-dividend date. Certain dividend income from foreign securities will be recorded as soon as a Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date and may be subject to withholding taxes in these jurisdictions. Interest income, which includes amortization of premium and accretion of discount, is accrued as earned. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the highest cost basis for both financial reporting and income tax purposes.

Use of Estimates: Each Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Counterparty Risk: Each of the Funds run the risk that the issuer or guarantor of a fixed income security, the counterparty to an over-the-counter derivatives contract, a borrower of each Fund’s securities or the obligor of an obligation underlying an asset-backed security will be unable or unwilling to make timely principal, interest, or settlement payments or otherwise honor its obligations. In addition, to the extent that each of the Funds use over-the-counter derivatives, and/or has significant exposure to a single counterparty, this risk will be particularly pronounced for each of the Funds.

Other Risk Factors: Investing in the Funds may involve certain risks including, but not limited to, the following:

Unforeseen developments in market conditions may result in the decline of prices of, and the income generated by, the securities held by the Funds. These events may have adverse effects on the Funds such as a decline in the value and liquidity of many securities held by the Funds, and a decrease in net asset value. Such unforeseen developments may limit or preclude the Funds’ ability to achieve their investment objective.

Investing in stocks may involve larger price fluctuation and greater potential for loss than other types of investments. This may cause the securities held by the Funds to be subject to larger short-term declines in value.

The Funds may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the Funds to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity. At March 31, 2011, Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund each had a significant concentration of their investment securities in companies based in the United States – 101.55%, 101.92% and 102.34% of net assets, respectively.

Fixed income securities are subject to credit risk, which is the possibility that a security could have its credit rating downgraded or that the issuer of the security could fail to make timely payments or default on payments of interest or principal. Additionally, fixed income securities are subject to interest rate risk, meaning the decline in the price of debt securities that accompanies a rise in interest rates. Bonds with longer maturities are subject to greater price fluctuations than bonds with shorter maturities.

The Funds invest in bonds which are rated below investment grade. These high yield bonds may be more susceptible than higher grade bonds to real or perceived adverse economic or industry conditions. The secondary market, on which high yield bonds are traded, may also be less liquid than the market for higher grade bonds.

Application of Recent Accounting Pronouncement: In January 2010, the FASB issued ASU No. 2010-06 “Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements” (ASU No. 2010-06). ASU No. 2010-06 provides for disclosure of significant transfers in and out of the fair value hierarchy Levels 1 and 2, and the reasons for these transfers. In addition, ASU No. 2010-06 provides for separate disclosure about purchases, sales, issuances and settlements in the Level 3 hierarchy roll forward activity. ASU No. 2010-06 is effective for interim and annual periods beginning after December 31, 2009 except for the provisions relating to purchases, sales, issuances and settlements of Level 3 investments, which are effective for fiscal years beginning after December 15, 2010. Each Fund adopted the disclosure provisions of ASU 2010-06 for its fiscal year beginning April 1, 2010 and will adopt the Level 3 purchase, sales, issuances and settlement provisions for its fiscal year beginning April 1, 2011. To date, the adoption of ASC No. 2010-06 has not had an impact on the Funds’ financial position, the results of its operations, or disclosures.

2. TAXES

 

Classification of Distributions: Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes.

 

Annual Report | March 31, 2011

  

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Notes to Financial Statements (continued)

   Clough Global Funds
   March 31, 2011

 

The tax character of the distributions paid by the Funds during the years ended March 31, 2011 and March 31, 2010 were as follows:

 

     Clough Global Allocation Fund         Clough Global Equity Fund         Clough Global Opportunities Fund   
     2011         2010         2011         2010         2011         2010   

Ordinary Income

   $ 12,521,527       $ 4,763,937       $ 20,695,217       $ 6,903,467       $ 55,875,807       $ 15,069,409   

Long-Term

                 

Capital Gain

                                               

Return of Capital

             6,714,129                 11,472,459                 35,632,712   

Total

   $ 12,521,527       $ 11,478,066       $ 20,695,217       $ 18,375,926       $ 55,875,807       $ 50,702,121   
   

Components of Earnings: Tax components of distributable earnings are determined in accordance with income tax regulations which may differ from composition of net assets reported under accounting principles generally accepted in the United States. Accordingly, for the year ended March 31, 2011, certain differences were reclassified. These differences were primarily due to the differing tax treatment of certain investments.

The reclassifications were as follows:

 

     Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities Fund  

Undistributed Ordinary Income

  $ 8,198,545      $ 14,773,399      $ 41,386,598   

Accumulated Capital Gain/(Loss)

    2,027        614,060        (218,559)   

Paid-In Capital

  $ (8,200,572)      $ (15,387,459)      $ (41,168,039)   

As of March 31, 2011 the Funds had capital loss carryforwards which will reduce the Funds’ taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Funds of any liability for federal tax. Pursuant to the Code, such capital loss carryforwards will expire as follows:

 

     Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities Fund  

Capital Losses Expiring March 31, 2018

  $ 18,347,062      $ 33,834,064      $ 142,961,798   

As of March 31, 2011, the components of distributable earnings on a tax basis were as follows:

 

    Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities Fund  

Undistributed net investment income

  $ –        $ –        $ –       

Accumulated net realized loss

    (18,347,062)        (33,834,064)        (142,961,798)       

Unrealized appreciation

    28,847,852        49,742,735        118,167,240       

Other cumulative effect of timing differences

    (93,986)        (158,626)        (436,547)       

Total

  $ 10,406,804      $ 15,750,045      $ (25,231,105)       
   

Net unrealized appreciation/(depreciation) of investments based on federal tax cost as of March 31, 2011, were as follows:

 

     Clough Global
Allocation Fund
    Clough Global Equity
Fund
    Clough Global
Opportunities Fund
 

Gross appreciation on investments (excess of value over tax cost)

  $ 34,426,549      $ 59,189,054      $ 141,381,737   

Gross depreciation on investments (excess of tax cost over value)

    (4,127,958)        (7,095,013)        (17,122,314)   

Net depreciation (excess of tax cost over value) of foreign currency and derivatives

    (1,450,739)        (2,351,306)        (6,092,183)   

Net unrealized appreciation

    28,847,852        49,742,735        118,167,240   
   

Cost of investments for income tax purposes

  $ 238,270,686      $ 388,991,395      $ 1,023,476,147   
   

 

 

 

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Clough Global Funds

   Notes to Financial Statements (continued)
   March 31, 2011

 

Post October Loss: Under current tax law, capital and currency losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended March 31, 2011, the Funds elected to defer capital losses occurring between November 1, 2010 and March 31, 2011 in the amounts listed below.

 

    Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities Fund  

Capital losses deferred

  $      $      $   

Currency losses deferred

    93,986        158,626        436,547   

Total losses deferred

  $ 93,986      $ 158,626      $ 436,547   
   

 

3.

CAPITAL TRANSACTIONS

 

Common Shares: There are an unlimited number of no par value common shares of beneficial interest authorized for each Fund.

Transactions in common shares were as follows:

 

    Clough Global Allocation Fund     Clough Global Equity Fund     Clough Global Opportunities
Fund
 
    For the
Year Ended
March 31, 2011
     For the
Year Ended
March 31, 2010
    For the
Year Ended
March 31, 2011
     For the
Year Ended
March 31, 2010
    For the
Year Ended
March 31, 2011
     For the
Year Ended
March 31, 2010
 
   

Common Shares Outstanding - beginning of period

    10,434,606         10,434,606        17,840,705         17,840,705        51,736,859         51,736,859   

Common shares issued as reinvestment of dividends

                                            
   

Common shares outstanding - end of period

    10,434,606         10,434,606        17,840,705         17,840,705        51,736,859         51,736,859   
   

 

4.

PORTFOLIO SECURITIES

 

Purchases and sales of investment securities, other than short-term securities, for the year ended March 31, 2011 are listed in the table below.

 

Fund   Purchases of Securities     Proceeds from
Sales of Securities
    Purchases of Long-Term
U.S. Government Obligations
    Proceeds from Sales
of Long-Term U.S.
Government Obligations
 
   

Clough Global Allocation Fund

  $ 435,507,902      $ 462,394,834      $ 54,843,346      $ 37,704,291   

Clough Global Equity Fund

    719,395,215        760,542,800        90,406,994        79,004,861   

Clough Global Opportunities Fund

    1,892,595,867        2,049,112,154        265,998,113        228,665,768   
   

 

5.

INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS

 

Clough Capital Partners L.P. (“Clough”) serves as each Fund’s investment adviser pursuant to an Investment Advisory Agreement (each an “Advisory Agreement” and collectively, the “Advisory Agreements”) with each Fund. As compensation for its services to the Fund, Clough receives an annual investment advisory fee of 0.70%, 0.90% and 1.00% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets, computed daily and payable monthly. ALPS Fund Services, Inc. (“ALPS”) serves as each Fund’s administrator pursuant to an Administration, Bookkeeping and Pricing Services Agreement with each Fund. As compensation for its services to the Fund, ALPS receives an annual administration fee of 0.285%, 0.32%, and 0.32% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets, computed daily and payable monthly. ALPS will pay all expenses incurred by each Fund, with the exception of advisory fees, trustees’ fees, portfolio transaction expenses, litigation expenses, taxes, expenses of conducting repurchase offers for the purpose of repurchasing fund shares, interest on margin accounts, interest on loans, dividends on short sales, and extraordinary expenses.

Both Clough and ALPS are considered to be “affiliates” of the Funds as defined in the 1940 Act.

 

6.

COMMITED FACILITY AGREEMENT AND LENDING AGREEMENT

 

In January 2009, each Fund entered into a financing package that includes a Committed Facility Agreement (the “Agreement”) with BNP Paribas Prime Brokerage, Inc. (“BNP”) that allowed Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund to borrow up to an initial limit of $60,200,000, $98,200,000 and $239,500,000, respectively, (the “Initial Limit”) and a Lending Agreement, as defined below. During the year ended March 31, 2010, each Fund and BNP amended the Agreement to increase the borrowing limit on several occasions, subject to the applicable asset coverage requirements of Section 18 of the 1940 Act. In April, June and September of 2009 Clough Global Allocation

 

Annual Report | March 31, 2011

  

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Table of Contents

Notes to Financial Statements (continued)

   Clough Global Funds
   March 31, 2011

 

Fund borrowed additional amounts of $11,000,000, $11,000,000 and $7,600,000, respectively. In April, June and September of 2009 Clough Global Equity Fund borrowed additional amounts of $16,000,000, $20,200,000 and $12,600,000 respectively. In April, June and September of 2009 Clough Global Opportunities Fund borrowed additional amounts of $69,000,000, $49,100,000 and $31,300,000. Borrowings under the Agreement are secured by assets of each Fund that are held by a Fund’s custodian in a separate account (the “pledged collateral”) valued at $210,062,854, $350,424,514 and $921,615,093 for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund may, with 30 days notice, reduce the Maximum Commitment Financing (Initial Limit amount plus the increased borrowing amount in excess of the Initial Limit) to a lesser amount if drawing on the full amount would result in a violation of the applicable asset coverage requirement of Section 18 of the 1940 Act. Interest is charged at the three month LIBOR (London Inter-bank Offered Rate) plus 1.10% on the amount borrowed and 1.00% on the undrawn balance. Each Fund also pays a one time arrangement fee of 0.25% on (i) the Initial Limit and (ii) any increased borrowing amount in the excess of the Initial Limit, paid in monthly installments for the six months immediately following the date on which borrowings were drawn by the Fund. For the year ended March 31, 2011 the average borrowings outstanding for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund under the agreement were $89,800,000, $147,000,000 and $388,900,000, respectively, and the average interest rate for the borrowings was 1.46%. As of March 31, 2011, the outstanding borrowings for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $89,800,000, $147,000,000 and $388,900,000, respectively. The interest rate applicable to the borrowings of Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund on March 31, 2011 was 1.40%.

The Lending Agreement is a separate side-agreement between each Fund and BNP pursuant to which BNP may borrow a portion of the pledged collateral (the “Lent Securities”) in an amount not to exceed the outstanding borrowings owed by a Fund to BNP under the Agreement. The Lending Agreement is intended to permit each Fund to significantly reduce the cost of its borrowings under the Agreement. BNP has the ability to reregister the Lent Securities in its own name or in another name other than the Fund to pledge, re-pledge, sell, lend or otherwise transfer or use the collateral with all attendant rights of ownership. (It is each Fund’s understanding that BNP will perform due diligence to determine the creditworthiness of any party that borrows Lent Securities from BNP.) Each Fund may designate any security within the pledged collateral as ineligible to be a Lent Security, provided there are eligible securities within the pledged collateral in an amount equal to the outstanding borrowing owed by a Fund. During the period in which the Lent Securities are outstanding, BNP must remit payment to each Fund equal to the amount of all dividends, interest or other distributions earned or made by the Lent Securities.

Under the terms of the Lending Agreement, the Lent Securities are marked to market daily, and if the value of the Lent Securities exceeds the value of the then-outstanding borrowings owed by a Fund to BNP under the Agreement (the “Current Borrowings”), BNP must, on that day, either (1) return Lent Securities to each Fund’s custodian in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings; or (2) post cash collateral with each Fund’s custodian equal to the difference between the value of the Lent Securities and the value of the Current Borrowings. If BNP fails to perform either of these actions as required, each Fund will recall securities, as discussed below, in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings. Each Fund can recall any of the Lent Securities and BNP shall, to the extent commercially possible, return such security or equivalent security to each Fund’s custodian no later than three business days after such request. If a Fund recalls a Lent Security pursuant to the Lending Agreement, and BNP fails to return the Lent Securities or equivalent securities in a timely fashion, BNP shall remain liable for the ultimate delivery to each Fund’s custodian of such Lent Securities, or equivalent securities, and for any buy-in costs that the executing broker for the sales transaction may impose with respect to the failure to deliver. Each Fund shall also have the right to apply and set-off an amount equal to one hundred percent (100%) of the then-current fair market value of such Lent Securities against the Current Borrowings.

The Board of Trustees has approved each Agreement and the Lending Agreement. No violations of the Agreement or the Lending Agreement have occurred during the year ended March 31, 2011.

Each Fund receives income from BNP based on the value of the Lent Securities. This income is recorded as Hypothecated Securities income on the Statements of Operations. The interest incurred on borrowed amounts is recorded as Interest on Loan in the Statements of Operations, a part of Total Expenses.

 

7.

OTHER

 

The Independent Trustees of each Fund receive from each Fund a quarterly retainer of $3,500 and an additional $1,500 for each board meeting attended. The Chairman of the Board of Trustees of each Fund receives a quarterly retainer from each Fund of $4,200 and an additional $1,800 for each board meeting attended. The Chairman of the Audit Committee of each Fund receives a quarterly retainer from each Fund of $3,850 and an additional $1,650 for each board meeting attended.

 

 

 

 

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Clough Global Funds

   Dividend Reinvestment Plan
   March 31, 2011 (Unaudited)

 

 

Unless the registered owner of Common Shares elects to receive cash by contacting The Bank of New York Mellon (the “Plan Administrator” or “BNY Mellon”), all dividends declared on Common Shares will be automatically reinvested by the Plan Administrator for shareholders in each Fund’s Dividend Reinvestment Plan (the “Plan”), in additional Common Shares. Shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash paid by check mailed directly to the shareholder of record (or, if the Common Shares are held in street or other nominee name, then to such nominee) by BNY Mellon as dividend disbursing agent. You may elect not to participate in the Plan and to receive all dividends in cash by contacting BNY Mellon, as dividend disbursing agent, at the address set forth below. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re-invest that cash in additional Common Shares for you. If you wish for all dividends declared on your Common Shares to be automatically reinvested pursuant to the Plan, please contact your broker.

The Plan Administrator will open an account for each Common Shareholder under the Plan in the same name in which such Common Shareholder’s Common Shares are registered. Whenever a Fund declares a dividend or other distribution (together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in Common Shares. The Common Shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized Common Shares from a Fund (“Newly Issued Common Shares”) or (ii) by purchase of outstanding Common Shares on the open market (“Open-Market Purchases”) on the American Stock Exchange or elsewhere. If, on the payment date for any Dividend, the closing market price plus estimated brokerage commissions per Common Share is equal to or greater than the net asset value per Common Share, the Plan Administrator will invest the Dividend amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the Dividend by the net asset value per Common Share on the payment date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95% of the closing market price per Common Share on the payment date. If, on the payment date for any Dividend, the net asset value per Common Share is greater than the closing market value plus estimated brokerage commissions, the Plan Administrator will invest the Dividend amount in Common Shares acquired on behalf of the participants in Open-Market Purchases. In the event of a market discount on the payment date for any Dividend, the Plan Administrator will have until the last business day before the next date on which the Common Shares trade on an “ex-dividend” basis or 30 days after the payment date for such Dividend, whichever is sooner (the “Last Purchase Date”), to invest the Dividend amount in Common Shares acquired in Open-Market Purchases. If, before the Plan Administrator has completed its Open-Market Purchases, the market price per Common Share exceeds the net asset value per Common Share, the average per Common Share purchase price paid by the Plan Administrator may exceed the net asset value of the Common Shares, resulting in the acquisition of fewer Common Shares than if the Dividend had been paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan Administrator is unable to invest the full Dividend amount in Open-Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open-Market Purchases and may invest the uninvested portion of the Dividend amount in Newly Issued Common Shares at the net asset value per Common Share at the close of business on the Last Purchase Date 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 Dividend will be divided by 95% of the market price on the payment date.

The Plan Administrator maintains all shareholders’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common Shares in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with the instructions of the participants.

In the case of Common Shareholders such as banks, brokers or nominees which hold shares for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of Common Shares certified from time to time by the record shareholder’s name and held for the account of beneficial owners who participate in the Plan.

There will be no brokerage charges with respect to Common Shares issued directly by a Fund. However, each participant will pay a pro rata share of brokerage commissions incurred in connection with Open-Market Purchases. The automatic reinvestment of Dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such Dividends. Participants that request a sale of Common Shares through the Plan Administrator are subject to brokerage commissions.

Each Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan; however, each Fund reserves the right to amend the Plan to include a service charge payable by the participants.

All correspondence or questions concerning the Plan should be directed to the Plan Administrator, The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286, 11E, Transfer Agent Services, 800 433–8191.

 

 

 

Annual Report | March 31, 2011

  

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Table of Contents

Additional Information

   Clough Global Funds
   March 31, 2011 (Unaudited)

 

FUND PROXY VOTING POLICIES & PROCEDURES

 

Each Fund’s policies and procedures used in determining how to vote proxies relating to portfolio securities are available on the Funds’ website at http://www.cloughglobal.com. Information regarding how each Fund voted proxies relating to portfolio securities held by each Fund for the period ended June 30, 2010, are available without charge, upon request, by contacting the Funds at 1-877-256-8445 and on the Commission’s website at http://www.sec.gov.

PORTFOLIO HOLDINGS

 

The Funds file their complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q within 60 days after the end of the period. Copies of the Funds’ Form N-Q are available without a charge, upon request, by contacting the Funds at 1-877-256-8445 and on the Commission’s website at http://www.sec.gov. You may also review and copy Form N-Q at the Commission’s Public Reference Room in Washington, D.C. For more information about the operation of the Public Reference Room, please call the Commission at 1-800-SEC-0330.

NOTICE

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that each Fund may purchase at market prices from time to time shares of its common stock in the open market.

TAX DESIGNATIONS

 

The Funds hereby designate the following as a percentage of taxable ordinary income distributions, or up to the maximum amount allowable, for the fiscal year ended March 31, 2011:

 

    Clough Global Allocation Fund   Clough Global Equity Fund   Clough Global Opportunities Fund

Corporate Dividends Received Deduction

  16.16%   19.67%   15.39%

Qualified Dividend Income

  18.26%   22.25%   17.43%

 

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Clough Global Funds

   Trustees & Officers
   March 31, 2011 (Unaudited)

 

 

Name, Address1 and Age   Position(s) Held
with the Funds
  Term of office
and length of
service with
GLV2, GLQ3 &
GLO4
 

Principal Occupation(s) During Past

Five Years

  Number of
Portfolios in
Fund Complex
Overseen by
Trustee5
  Other Directorships
Held by Trustee During
the Past Five Years
Non-Interested Trustees                         

Andrew C. Boynton

Age, 55

 

Dean, Carroll School of Management Boston College, Fulton Bldg., Room 510, 140 Commonwealth Ave.

Chestnut Hill, MA 02467

  Trustee  

Trustee since: GLV: 2005 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2011 GLQ: 2012 GLO: 2013

  Mr. Boynton is currently the Dean of the Carroll School of Management at Boston College. Mr. Boynton served as Professor of Strategy from 1996 to 2005 and Program Director of the Executive MBA Program from 1998 to 2005 at International Institute of Management Development, Lausanne, Switzerland.   3    

Robert L. Butler

Age, 70

  Chairman of the Board and Trustee  

Trustee since:

GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2012 GLQ: 2013 GLO: 2011

  Since 2001, Mr. Butler has been an independent consultant for businesses. Mr. Butler has over 45 years experience in the investment business, including 17 years as a senior executive with a global investment management/natural resources company and 20 years with a securities industry regulation organization, neither of which Mr. Butler has been employed by since 2001.   3    

Adam D. Crescenzi

Age, 68

  Trustee and Chairman of the Nominating Committee  

Trustee since: GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2011 GLQ: 2012 GLO: 2013

  Mr. Crescenzi is a Trustee of Dean College. He has been a founder and investor of several start-up technology and service firms. He currently is the Founding Partner of Simply Tuscan Imports LLC since 2007. He also serves as a Director of two non-profit organizations. He retired from CSC Index as Executive Vice-President of Management Consulting Services.   3    

John F. Mee

Age, 67

  Trustee  

Trustee since: GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2013 GLQ: 2011 GLO: 2012

  Mr. Mee is an attorney practicing commercial law, family law, product liability and criminal law. Mr. Mee is currently a member of the Bar of the Commonwealth of Massachusetts. He serves on the Board of Directors of The College of the Holy Cross Alumni Association and Concord Carlisle Scholarship Fund, a Charitable Trust. Mr. Mee was from 1990 to 2009 an Advisor at the Harvard Law School Trial Advocacy Workshop.   3  

 

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Trustees & Officers

   Clough Global Funds
   March 31, 2011 (Unaudited)

 

Name, Address1 and Age

 

  

Position(s) Held
with the Funds

 

  

Term of office

and length of

service with

GLV2, GLQ3 &

GLO4

  

Principal Occupation(s) During Past

Five Years

 

  

Number of

Portfolios in

Fund Complex

Overseen by

Trustee5

  

Other Directorships

Held by Trustee During

the Past Five Years

Non-Interested Trustees                              

Richard C. Rantzow

Age, 72

   Trustee and Chairman of the Audit Committee   

Trustee since: GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2012 GLQ: 2013 GLO: 2011

   Mr. Rantzow has over 40 years experience in the financial industry. His professional experience includes serving as an audit partner with Ernst & Young which specifically involved auditing financial institutions. Mr. Rantzow has also served in several executive positions in both financial and non-financial industries. Mr. Rantzow’s educational background is in accounting and he is a Certified Public Accountant who has continued to serve on several audit committees of various financial organizations.    3    Mr. Rantzow is a Trustee and Chairman of the Audit Committee of the Liberty All-Star Equity Fund and Director and Chairman of the Audit Committee of the Liberty All-Star Growth Fund, Inc.

Jerry G. Rutledge

Age, 66

   Trustee   

Trustee since: GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2011 GLQ: 2012 GLO: 2013

   Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. Mr. Rutledge was from 1994 to 2007 a Regent of the University of Colorado. In addition, Mr. Rutledge is currently serving as a Director of the University of Colorado Hospital. Mr. Rutledge also served as a Director of the American National Bank from 1985 to 2009.    4    Mr. Rutledge is currently a Trustee of the Financial Investor Trust.
Interested Trustees6                        

Edmund J. Burke7

Age, 50

  

Trustee and

President

  

Trustee since: GLV: 2006 GLQ: 2006 GLO: 2006

 

Term expires: GLV: 2013 GLQ: 2011 GLO: 2012

 

President since: GLV: 2004 GLQ: 2005 GLO: 2006

   Mr. Burke joined ALPS in 1991 and is currently the Chief Executive Officer and President of ALPS Holdings, Inc., and a Director of ALPS Advisors, Inc., ALPS Distributors, Inc., ALPS Fund Services, Inc., and FTAM Distributors, Inc. Mr. Burke is deemed an affiliate of each Fund as defined under the 1940 Act.    3    Mr. Burke is also Trustee, Chairman and President of Financial Investors Trust. Mr. Burke is a Trustee and Vice President of the Liberty All-Star Equity Fund and is a Director and Vice President of the Liberty All-Star Growth Fund, Inc.

James E. Canty8

Age, 48

 

 

Clough Capital

Partners, LP

One Post Office Square

40th Floor

Boston, MA 02109

   Trustee   

Trustee since: GLV: 2004 GLQ: 2005 GLO: 2006

 

Term expires: GLV: 2012 GLQ: 2013 GLO: 2011

   Mr. Canty is a founding partner and General Counsel for Clough. Mr. Canty is deemed an affiliate of each Fund as defined under the 1940 Act. Mr. Canty is currently a member of the Board of Directors of Clough Offshore Fund, Ltd.    3   

 

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Clough Global Funds

   Trustees & Officers
   March 31, 2011 (Unaudited)

 

Name, Address1 and

Age

 

  

Position(s) Held

with the Funds

 

   Term of office
and length of
service with
GLV2, GLQ3 &
GLO4
    

Principal Occupation(s) During Past

Five Years

 

  

Number of
Portfolios in Fund

Complex Overseen
by Trustee5

  

Other Directorships Held

by Trustee During the
Past Five Years

Officers                                

Jeremy O. May

Age, 41

   Treasurer    Officer since9: GLV: 2004 GLQ: 2005 GLO: 2006      Mr. May joined ALPS in 1995 and is currently President and Director of ALPS and Director of ALPS Advisors, Inc., ALPS Distributors, Inc., ALPS Holdings, Inc. and FTAM Distributors, Inc. Mr. May is deemed an affiliate of each Fund as defined under the 1940 Act. Mr. May is also the Treasurer of the Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc., Financial Investors Trust and Financial Investors Variable Insurance Trust. Mr. May is also Treasurer and Trustee of the Reaves Utility Income Fund. Mr. May is currently on the Board of Directors of the University of Colorado Foundation.    N/A    N/A
Monette R. Nickels Age, 39    Tax Officer    Officer since9: GLV: 2009 GLQ: 2009 GLO: 2009      Ms. Nickels joined ALPS in 2004 and is currently Senior Vice President and Director of Tax Administration of ALPS. Ms. Nickels is deemed an affiliate of each Fund as defined under the 1940 Act. Ms. Nickels is also Tax Officer of ALPS ETF Trust, Financial Investors Trust, Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc., Reaves Utility Income Fund and Financial Investors Variable Insurance Trust.    N/A    N/A

Erin E. Douglas

Age, 34

   Secretary    Officer since9: GLV: 2004 GLQ: 2005 GLO: 2006      Ms. Douglas joined ALPS in 2003 and is currently Vice-President and Senior Associate Counsel of ALPS and Vice-President of ALPS Advisors, Inc., ALPS Distributors, Inc., and FTAM Distributors, Inc. Ms. Douglas is deemed an affiliate of each Fund as defined under the 1940 Act. Ms. Douglas was formerly Secretary of Financial Investors Trust from 2004 to 2007 and Caldwell & Orkin Funds Inc. from December 2009 to June 2010.    N/A    N/A

 

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Trustees & Officers

   Clough Global Funds
   March 31, 2011 (Unaudited)

 

 

Name, Address1 and
Age

 

    

Position(s) Held

with the Funds

 

    

Term of office

and length of

service with

GLV2, GLQ3 &

GLO4

 

  

Principal Occupation(s) During Past

Five Years

  

Number of

Portfolios in Fund

Complex Overseen

by Trustee5

 

  

Other Directorships Held

by Trustee During the

Past Five Years

 

Officers

                            

Theodore J.Uhl

Age, 36

     Chief Compliance Officer     

Officer since9:

GLV: 2010

GLQ: 2010

GLO: 2010

   Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served as Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is currently Chief Compliance Office of Cook and Bynum Funds, Financial Investors Trust, Reaves Utility Income Fund and Transparent Value Trust.    N/A    N/A

Dawn Cotten

Age, 33

     Assistant Treasurer     

Officer since9:

GLV: 2010

GLQ: 2010

GLO: 2010

   Ms. Cotten joined ALPS in June 2009 as a Fund Controller. Prior to joining ALPS, Ms. Cotten served as Assistant Vice President of Fund Accounting for Madison Capital Management from February 2009 to June 2009. Prior to this, Ms. Cotten served as Financial Reporting Manager for Janus Capital Group. Ms. Cotten is deemed an affiliate of each Fund as defined under the 1940 Act. Ms. Cotten is currently Assistant Treasurer of the James Advantage Funds.    N/A    N/A

 

1 

Address: 1290 Broadway, Suite 1100, Denver, Colorado 80203, unless otherwise noted.

2 

GLV commenced operations on July 28, 2004.

3 

GLQ commenced operations on April 27, 2005.

4 

GLO commenced operations on April 25, 2006.

5 

The Fund Complex for all Trustees, except Mr. Rutledge and Mr. Burke, consists of the Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund. The Fund Complex for Mr. Rutledge and Mr. Burke consists of Clough Global Allocation Fund, Clough Global Equity Fund, Clough Global Opportunities Fund and the Clough China Fund, a series of the Financial Investors Trust.

6 

“Interested Trustees “ of a Fund as defined in the 1940 Act.

7 

Mr. Burke is considered to be an “Interested Trustee” because of his affiliation with ALPS, which acts as each Fund’s administrator.

8 

Mr. Canty is considered to be an “Interested Trustee” because of his affiliation with Clough, which acts as each Fund’s investment adviser.

9 

Officers are elected annually and each officer will hold such office until a successor has been elected by the Board.

 

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Clough Global Funds

   Notes
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  


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Notes

   Clough Global Funds
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  


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LOGO


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Item 2. Code of Ethics.

 

  (a) The registrant, as of the end of the period covered by the report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or any persons performing similar functions on behalf of the registrant.

 

  (b) Not Applicable.

 

  (c) During the period covered, by this report, no amendments were made to the provisions of the code of ethics adopted in 2 (a) above.

 

  (d) During the period covered by this report, no implicit or explicit waivers to the provision of the code of ethics adopted in 2 (a) above were granted.

 

  (e) Not Applicable.

 

  (f) The registrant’s Code of Ethics is attached as an Exhibit 12.A.1 hereto.

Item 3. Audit Committee Financial Expert.

The registrant’s Board of Trustees has determined that the registrant has as least one audit committee financial expert serving on its audit committee. The Board of Trustees has designated Richard C. Rantzow as the registrant’s “audit committee financial expert.” Mr. Rantzow is “independent” as defined in paragraph (a)(2) of Item 3 to Form N-CSR.

Mr. Rantzow was the Chief Financial Officer and a Director of Ron Miller Associates, Inc. Prior to that, Mr. Rantzow was managing partner of the Memphis office of Ernst & Young until 1990.

Item 4. Principal Accounting Fees and Services.

 

  (a)

Audit Fees: The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2011 and 2010 were $28,333 and $28,333, respectively.

 

  (b)

Audit-Related Fees: The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 in 2011 and $0 in 2010.


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  (c)

Tax Fees: The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were $3,040 in 2011 and $2,760 in 2010. These fees are comprised of fees relating income tax return preparation fees, excise tax return preparation fees and review of dividend distribution calculation fees.

 

  (d)

All Other Fees: The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item were $0 in 2011 and $0 in 2010. These services include agreed upon procedures related to the ratings for the Auction Market Preferred Shares.

 

  (e)(1) Audit Committee Pre-Approval Policies and Procedures: All services to be performed by the registrant’s principal auditors must be pre-approved by the registrant’s audit committee.

 

  (e)(2) No services described in paragraphs (b) through (d) were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

  (f) Not applicable.

 

  (g)

The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were $0 for 2011 and $0 for 2010.

 

  (h)

Not applicable.

Item 5. Audit Committee of Listed Registrant.

The registrant has a separately designated standing audit committee established in accordance with Section 3 (a)(58)(A) of the Exchange Act and is comprised of the following members:

Andrew C. Boynton

Robert L. Butler

Adam D. Crescenzi

John F. Mee

Richard C. Rantzow, Committee Chairman

Jerry G. Rutledge

Item 6. Schedule of Investments.


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Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.

 

Item 7.   Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment   Companies.

Attached, as Exhibit Item 7, is a copy of the registrant’s policies and procedures.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) As of: March 31, 2011

 

Portfolio Managers

Name

   Title   

Length of

Service

  

Business Experience: 5

Years

Charles I. Clough, Jr.   

Partner and

Portfolio Manager

   Since Inception    Founding Partner Clough Capital Partners LP. Portfolio Manager for pooled investment accounts, separately managed accounts, and investment companies for over ten years.
Eric A. Brock   

Partner and

Portfolio Manager

   Since Inception    Founding Partner Clough Capital Partners LP. Portfolio Manager for pooled investment accounts, separately managed accounts, and investment companies for over ten years.
James E. Canty   

Partner and

Portfolio Manager

   Since Inception    Founding Partner of Clough Capital LP. Portfolio Manager, Chief Financial Officer and General Counsel for pooled investment accounts, separately managed accounts, and investment companies for over ten years. Mr. Canty is currently a member of the Board of Directors of Clough Offshore Fund, Ltd and Board of Trustees of Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund. Because of his affiliation with Clough, Mr. Canty is an “interested” Trustee of the Fund.


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(a)(2) As of March 31, 2011, the Portfolio Managers listed above are also responsible for the day-to-day management of the following:

 

Portfolio

Managers

Name

 

Registered

Investment

Companies

 

Other Pooled
Investment

Vehicles (1)

 

Other

Accounts(2)

 

Material

Conflicts

If Any

Charles I

Clough, Jr.

 

4 Accounts

$2,169.8

million Total

Assets

 

4 Accounts

$1,369.7

million

Total Assets

 

 

5 Accounts

$370.8 million

Total Assets

  See below (3)
Eric A. Brock  

4 Accounts

$2,169.8

million Total

Assets

 

4 Accounts

$1,369.7

million

Total Assets

 

 

5 Accounts

$370.8 million

Total Assets

  See below (3)
James E. Canty  

4 Accounts

$2,169.8

million Total

Assets

 

4 Accounts

$1,369.7

million

Total Assets

 

 

5 Accounts

$370.8 million

Total Assets

  See below (3)
  (1) The advisory fees are based in part on the performance for each account.
  (2) The advisory fee is based in part on the performance for four accounts totaling $365.2 million in assets.
  (3) Material Conflicts:

Material conflicts of interest may arise as a result of the fact that the Portfolio Managers also have day-to-day management responsibilities with respect to both the Fund and the various accounts listed above (collectively with the Fund, the “Accounts”). These potential conflicts include:

Limited Resources. The Portfolio Managers cannot devote their full time and attention to the management of each of the Accounts. Accordingly, the Portfolio Managers may be limited in their ability to identify investment opportunities for each of the Accounts that are as attractive as might be the case if the Portfolio Managers were to devote substantially more attention to the management of a single Account. The effects of this potential conflict may be more pronounced where the Accounts have different investment strategies.

Limited Investment Opportunities. If the Portfolio Managers identify a limited investment opportunity that may be appropriate for more than one Account, the investment opportunity may be allocated among several Accounts. This could limit any single Account’s ability to take full advantage of an investment opportunity that might not be limited if the Portfolio Managers did not provide investment advice to other Accounts.


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Different Investment Strategies. The Accounts managed by the Portfolio Managers have differing investment strategies. If the Portfolio Managers determine that an investment opportunity may be appropriate for only some of the Accounts or decide that certain of the Accounts should take different positions with respect to a particular security, the Portfolio Managers may effect transactions for one or more Accounts which may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more other Accounts.

Variation in Compensation. A conflict of interest may arise where Clough or Clough Associates, LLC, as applicable, is compensated differently by the Accounts that are managed by the Portfolio Managers. If certain Accounts pay higher management fees or performance-based incentive fees, the Portfolio Managers might be motivated to prefer certain Accounts over others. The Portfolio Managers might also be motivated to favor Accounts in which they have a greater ownership interest or Accounts that are more likely to enhance the Portfolio Managers’ performance record or to otherwise benefit the Portfolio Managers.

Selection of Brokers. The Portfolio Managers select the brokers that execute securities transactions for the Accounts that they supervise. In addition to executing trades, some brokers provide the Portfolio Managers with research and other services which may require the payment of higher brokerage fees than might otherwise be available. The Portfolio Managers’ decision as to the selection of brokers could yield disproportionate costs and benefits among the Accounts that they manage, since the research and other services provided by brokers may be more beneficial to some Accounts than to others.

(a)(3) Portfolio Manager Compensation as of March 31, 2011.

The Portfolio Managers each receive a fixed base salary from Clough. The base salary for each Portfolio Manager is typically determined based on market factors and the skill and experience of each Portfolio Manager. Additionally, Clough distributes its annual net profits to the three Portfolio Managers, with Mr. Clough receiving a majority share and the remainder being divided evenly between Mr. Brock and Mr. Canty.

(a)(4) Dollar Range of Securities Owned as of March 31, 2011.

 

Portfolio Managers

  

Dollar Range of the Registrant’s Securities

Owned by the Portfolio Managers

Charles I. Clough, Jr.

  

Over $1,000,000

  

Eric A. Brock

  

$50,001 - $100,000

  

James E. Canty

  

$50,001 - $100,000

  

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.


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None

Item 10. Submission of Matters to Vote of Security Holders.

No material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Trustees have been implemented after the registrant’s last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

 

  (a) The registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

 

  (b) There was no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.


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(a)(1) The Code of Ethics that applies to the registrant’s principal executive officer and principal financial officer is attached hereto as Exhibit 12.A.1.

(a)(2) The certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex-99.Cert.

(a)(3) Not applicable.

(b) A certification for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex-99.906Cert.

(c) The Proxy Voting Policies and Procedures is attached hereto as Ex99. Item 7.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CLOUGH GLOBAL EQUITY FUND   

By:

  

/s/ Edmund J. Burke

  
   Edmund J. Burke   
   President & Trustee   

Date:

   June 3, 2011   

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

CLOUGH GLOBAL EQUITY FUND

 

By:

  

/s/ Edmund J. Burke

  
   Edmund J. Burke   
   President/Principal Executive Officer   

 

Date:

   June 3, 2011   

 

By:

  

/s/ Jeremy O. May

  
   Jeremy O. May   
   Treasurer/Principal Financial Officer   

 

Date:

   June 3, 2011