UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-22005
Wells Fargo Advantage Global Dividend Opportunity Fund
(Exact name of registrant as specified in charter)
525 Market St., San Francisco, CA 94105
(Address of principal executive offices) (Zip code)
C. David Messman
Wells Fargo Funds Management, LLC
525 Market St., San Francisco, CA 94105
(Name and address of agent for service)
Registrants telephone number, including area code: 800-222-8222
Date of fiscal year end: October 31
Date of reporting period: April 30, 2015
ITEM 1. REPORT TO STOCKHOLDERS
Wells Fargo Advantage
Global Dividend Opportunity Fund
Semi-Annual Report
April 30, 2015
This closed-end fund is no longer offered as an initial public offering and is only offered through broker/dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request.
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Contents
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4 | ||||
7 | ||||
Financial statements |
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13 | ||||
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25 |
The views expressed and any forward-looking statements are as of April 30, 2015, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.
NOT FDIC INSURED ¡ NO BANK GUARANTEE ¡ MAY LOSE VALUE
2 | Wells Fargo Advantage Global Dividend Opportunity Fund | Letter to shareholders (unaudited) |
1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stocks weight in the index proportionate to its market value. You cannot invest directly in an index. |
2 | The Morgan Stanley Capital International Europe, Australasia, and Far East (MSCI EAFE) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. |
3 | The Morgan Stanley Capital International (MSCI) Emerging Markets Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of emerging markets. The MSCI Emerging Markets Index (Net) consists of the following 23 emerging markets country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, the Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates. You cannot invest directly in an index. |
Letter to shareholders (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 3 |
For current information about your fund investments, contact your investment professional, visit our website at wellsfargoadvantagefunds.com, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.
4 | Wells Fargo Advantage Global Dividend Opportunity Fund | Performance highlights (unaudited) |
Derivatives involve risks, including interest-rate risk, credit risk, the risk of improper valuation, and the risk of non-correlation to the relevant instruments they are designed to hedge or closely track. There are numerous risks associated with transactions in options on securities and/or indexes. As a writer of an index call option, the Fund forgoes the opportunity to profit from increases in the values of securities held by the Fund. However, the Fund has retained the risk of loss (net of premiums received) should the price of the Funds portfolio securities decline. Similar risks are involved with writing call options or secured put options on individual securities and/or indexes held in the Funds portfolio. This combination of potentially limited appreciation and potentially unlimited depreciation over time may lead to a decline in the net asset value of the Fund. The Funds dividend capture strategy may lead to a similar result. Dividend capture strategies involve the Fund purchasing a stock before an ex-dividend date so it becomes entitled to the dividend and then typically selling the stock on or after the stocks ex-dividend date. Any decline in the value of the stock reflecting the dividend payment may over time lead to a decline in the net asset value of the Fund. Dividend capture also increases the portfolio turnover rate and related transaction costs of the Fund. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Risks of foreign investing are magnified in emerging or developing markets. Small- and mid-cap securities may be subject to special risks associated with narrower product lines and limited financial resources compared with their large-cap counterparts, and, as a result, small- and mid-cap securities may decline significantly in market downturns and may be more volatile than those of larger companies due to their higher risk of failure. High-yield, lower-rated bonds may contain more risk due to the increased possibility of default. Illiquid securities may be subject to wide fluctuations in market value. The Fund may be subject to significant delays in disposing of illiquid securities. Accordingly, the Fund may be forced to sell these securities at less than fair market value or may not be able to sell them when the adviser or subadviser believes that it is desirable to do so.
1 | Total returns based on market value are calculated assuming a purchase of common stock on the first day and sale on the last day of the period reported. Total returns based on NAV are calculated based on the NAV at the beginning of the period and end of period. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Funds Automatic Dividend Reinvestment Plan. |
2 | This chart does not reflect any brokerage commissions charged on the purchase and sale of the Funds common stock. Dividends and distributions paid by the Fund have the effect of reducing the Funds NAV. |
Performance highlights (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 5 |
MANAGERS DISCUSSION
The Funds average annual total return based on market value was (0.49)% during the six-month period that ended April 30, 2015. During the same period, the Funds average annual total return based on net asset value was 1.72%.
Overview
Despite bouts of heightened volatility, global equity markets gained in value during the period. U.S. economic growth continued at a slow to moderate pace. While U.S. job growth was lackluster, adding about 200,000 jobs per month on average, unemployment gradually trended lower although labor force participation remains below historical levels. Weak first-quarter gross domestic product and job growth data appeared to be a hiccup induced largely by harsh winter weather and labor unrest at U.S. port facilities. After several years of negligible economic growth, Europe and Japan may be turning the corner, although robust recovery remains elusive. Lingering concerns about eurozone weakness gave way to renewed optimism as the European Central Bank announced plans to implement a quantitative easing (QE) program in order to stimulate growth and combat subdued inflation. QE in the U.S., which ended in October 2014, buoyed domestic equity and debt markets. QE is just getting started in Europe, and many observers expect a similar beneficial effect for investment markets there.
During the period, the Fund was positioned less defensively compared with recent past periods. With the close of QE in the U.S. and the U.S. Federal Reserves articulated decision to begin the gradual return to more normal monetary policy as the financial crisis recedes into history, we deemed it prudent to reduce holdings of long-duration assets like preferred stocks, even though yields remain attractive. Dividend-paying stocks, particularly utilities, lagged badly in the past six months largely as a result of interest-rate concerns.
3 | The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified. |
4 | Amounts are calculated based on the total long-term investments of the Fund. These percentages are subject to change and may have changed since the date specified. |
6 | Wells Fargo Advantage Global Dividend Opportunity Fund | Performance highlights (unaudited) |
euro terms but the euros value relative to the U.S. dollar fell from $1.26 to $1.11 during the period, and investment gains suffered upon translation from euros to U.S. dollars. The British energy and water utilities National Grid and Pennon struggled due to investor concerns that a change in leadership after national elections in May would result in a more restrictive regulatory regime for utilities. As it happened, the elections resulted in a slim outright majority for the incumbent Tory government, which is likely to help allay investor concerns.
The options overlay portfolio detracted from the Funds performance. Options written on eurozone, Japan, and Hong Kong markets generated premiums from December 2014 through April 2015 that were more than offset by negative performance in November due to unexpected easing measures by the Bank of Japan.
Outlook
We are now seeing what appears to be a more solid economic recovery in the U.S. While stronger economic growth will be positive for the economy and for equity investors, stronger economic growth eventually will result in rising interest rates as monetary stimulus is withdrawn, and this could be a headwind for preferred and high-yielding common stocks. The options overlay portfolio holds agreements, called European Options, that obligate the management team to pay a counterparty an amount that is determined by the price of an underlying security or an index value at a specific time. When these positions are entered into, the management team collects a premium. These positions may generate losses in excess of the premium collected depending on changes in the price of the underlying security or index associated with the agreement. The key issue we consider in evaluating options is whether or not the premiums are sufficient rewards for the potential risks. To manage risks, we monitor the effect of underlying markets and volatility on the prices of securities or indexes associated with the options. If risk thresholds are exceeded, we will seek to neutralize risk by entering into offsetting agreements.
Portfolio of investmentsApril 30, 2015 (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 7 |
Security name | Shares | Value | ||||||||||
Common Stocks: 70.87% |
||||||||||||
Austria: 0.62% | ||||||||||||
Verbund AG (Utilities, Electric Utilities) |
150,000 | $ | 2,538,025 | |||||||||
|
|
|||||||||||
Canada: 5.89% | ||||||||||||
Enbridge Incorporated (Energy, Oil, Gas & Consumable Fuels) |
150,000 | 7,849,500 | ||||||||||
Veresen Incorporated (Energy, Oil, Gas & Consumable Fuels) |
1,075,000 | 16,162,868 | ||||||||||
24,012,368 | ||||||||||||
|
|
|||||||||||
Finland: 1.10% | ||||||||||||
Fortum Oyj (Utilities, Electric Utilities) |
227,912 | 4,500,671 | ||||||||||
|
|
|||||||||||
France: 13.87% | ||||||||||||
GDF Suez (Utilities, Multi-Utilities) |
1,050,000 | 21,363,707 | ||||||||||
Suez Environnement Company SA (Utilities, Multi-Utilities) |
999,999 | 20,395,302 | ||||||||||
Veolia Environnement SA (Utilities, Multi-Utilities) |
698,316 | 14,776,367 | ||||||||||
56,535,376 | ||||||||||||
|
|
|||||||||||
Germany: 3.88% | ||||||||||||
Deutsche Post AG (Industrials, Air Freight & Logistics) |
480,000 | 15,805,555 | ||||||||||
|
|
|||||||||||
Israel: 0.23% | ||||||||||||
Cellcom Israel Limited (Telecommunication Services, Wireless Telecommunication Services) |
206,800 | 951,530 | ||||||||||
|
|
|||||||||||
Italy: 6.76% | ||||||||||||
ENI SpA (Energy, Oil, Gas & Consumable Fuels) |
200,000 | 3,837,170 | ||||||||||
Hera SpA (Utilities, Multi-Utilities) |
8,000,000 | 21,102,688 | ||||||||||
Snam SpA (Utilities, Gas Utilities) |
500,000 | 2,604,571 | ||||||||||
27,544,429 | ||||||||||||
|
|
|||||||||||
Spain: 4.60% | ||||||||||||
Endesa SA (Utilities, Electric Utilities) |
100,000 | 1,981,330 | ||||||||||
Red Electrica Corporation SA (Utilities, Electric Utilities) |
200,000 | 16,784,958 | ||||||||||
18,766,288 | ||||||||||||
|
|
|||||||||||
Switzerland: 0.44% | ||||||||||||
Swiss Reinsurance AG (Financials, Insurance) |
20,000 | 1,774,147 | ||||||||||
|
|
|||||||||||
United Kingdom: 6.70% | ||||||||||||
National Grid plc (Utilities, Multi-Utilities) |
500,000 | 6,726,670 | ||||||||||
Pennon Group plc (Utilities, Water Utilities) |
400,000 | 5,249,817 | ||||||||||
Severn Trent plc (Utilities, Water Utilities) |
200,000 | 6,512,768 | ||||||||||
Vodafone Group plc ADR (Telecommunication Services, Wireless Telecommunication Services) |
250,000 | 8,800,000 | ||||||||||
27,289,255 | ||||||||||||
|
|
|||||||||||
United States: 26.78% | ||||||||||||
AG Mortgage Investment Trust Incorporated (Financials, REITs) |
20,000 | 384,400 | ||||||||||
Ameresco Incorporated Class A (Industrials, Construction & Engineering) |
131,000 | 880,320 | ||||||||||
Ashford Hospitality Prime Incorporated (Financials, REITs) |
302,100 | 4,730,886 | ||||||||||
Chatham Lodging Trust (Financials, REITs) |
600,000 | 16,584,000 |
The accompanying notes are an integral part of these financial statements.
8 | Wells Fargo Advantage Global Dividend Opportunity Fund | Portfolio of investmentsApril 30, 2015 (unaudited) |
Security name | Shares | Value | ||||||||||||||
United States (continued) | ||||||||||||||||
CorEnergy Infrastructure Trust Incorporated (Financials, REITs) |
90,000 | $ | 611,100 | |||||||||||||
Excel Trust Incorporated (Financials, REITs) |
700,000 | 11,095,000 | ||||||||||||||
GreenHunter Resources Incorporated (Energy, Energy Equipment & Services) |
500,000 | 433,000 | ||||||||||||||
Jernigan Capital Incorporated (Financials, REITs) |
400,000 | 8,612,000 | ||||||||||||||
NorthStar Asset Management Group Incorporated (Financials, Capital Markets) |
62,500 | 1,314,375 | ||||||||||||||
NorthStar Realty Finance Corporation (Financials, REITs) |
137,500 | 2,579,500 | ||||||||||||||
PacWest Bancorp (Financials, Banks) |
200,000 | 9,020,000 | ||||||||||||||
PG&E Corporation (Utilities, Multi-Utilities) |
55,000 | 2,910,600 | ||||||||||||||
Physicians Realty Trust (Financials, REITs) |
372,500 | 6,183,500 | ||||||||||||||
PNM Resources Incorporated (Utilities, Electric Utilities) |
100,000 | 2,778,000 | ||||||||||||||
Preferred Apartment Communities Incorporated (Financials, REITs) |
480,000 | 5,308,800 | ||||||||||||||
SCANA Corporation (Utilities, Multi-Utilities) |
50,000 | 2,649,000 | ||||||||||||||
Shenandoah Telecommunications Company (Telecommunication Services, Wireless Telecommunication Services) |
274,999 | 9,476,468 | ||||||||||||||
Spark Energy Incorporated Class A (Utilities, Electric Utilities) |
126,000 | 1,575,000 | ||||||||||||||
Summit Hotel Properties Incorporated (Financials, REITs) |
397,833 | 5,239,461 | ||||||||||||||
Tribune Media Company Class A (Consumer Discretionary, Media) |
200,000 | 11,214,000 | ||||||||||||||
United States Cellular Corporation (Telecommunication Services, Wireless Telecommunication Services) |
150,000 | 5,539,500 | ||||||||||||||
109,118,910 | ||||||||||||||||
|
|
|||||||||||||||
Total Common Stocks (Cost $249,782,042) |
288,836,554 | |||||||||||||||
|
|
|||||||||||||||
Interest rate | Maturity date | Principal | ||||||||||||||
Corporate Bonds and Notes: 1.74% | ||||||||||||||||
United States: 1.74% | ||||||||||||||||
BreitBurn Energy Partners LP (Energy, Oil, Gas & Consumable Fuels) |
8.63 | % | 10-15-2020 | $ | 5,680,000 | 4,799,600 | ||||||||||
Energy and Exploration Partners Incorporated (Energy, Oil, Gas & Consumable Fuels) (i) |
8.00 | 7-1-2019 | 5,000,000 | 2,300,000 | ||||||||||||
Total Corporate Bonds and Notes (Cost $9,693,670) |
7,099,600 | |||||||||||||||
|
|
|||||||||||||||
Dividend yield | Shares | |||||||||||||||
Preferred Stocks: 19.03% | ||||||||||||||||
Marshall Islands: 4.04% | ||||||||||||||||
Navios Maritime Holdings Incorporated (Industrials, Marine) |
8.63 | 59,000 | 1,268,500 | |||||||||||||
Safe Bulkers Incorporated (Industrials, Marine) |
8.00 | 50,000 | 1,037,500 | |||||||||||||
Scorpio Bulkers Incorporated (Industrials, Marine) |
7.50 | 105,000 | 2,448,600 | |||||||||||||
Scorpio Tankers Incorporated (Energy, Oil, Gas & Consumable Fuels) |
6.75 | 40,000 | 984,000 | |||||||||||||
Scorpio Tankers Incorporated (Energy, Oil, Gas & Consumable Fuels) |
7.50 | 280,000 | 7,168,000 | |||||||||||||
Seaspan Corporation (Industrials, Marine) |
6.38 | 63,600 | 1,603,356 | |||||||||||||
Seaspan Corporation Series E (Industrials, Marine) |
8.25 | 75,000 | 1,950,000 | |||||||||||||
16,459,956 | ||||||||||||||||
|
|
|||||||||||||||
Monaco: 0.16% | ||||||||||||||||
GasLog Limited Series A (Energy, Oil, Gas & Consumable Fuels) |
8.75 | 25,000 | 638,000 | |||||||||||||
|
|
|||||||||||||||
United States: 14.83% | ||||||||||||||||
Arlington Asset Investment Corporation (Financials, Capital Markets) |
6.63 | 110,000 | 2,728,000 | |||||||||||||
Arlington Asset Investment Corporation (Financials, Capital Markets) |
6.75 | 20,000 | 500,600 |
The accompanying notes are an integral part of these financial statements.
Portfolio of investmentsApril 30, 2015 (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 9 |
Security name | Dividend yield | Shares | Value | |||||||||||||
United States (continued) | ||||||||||||||||
Breitburn Energy Partner Incorporated Series A (Energy, Oil, Gas & Consumable Fuels) |
8.25 | % | 185,000 | $ | 4,168,050 | |||||||||||
Customers Bancorp Incorporated (Financials, Banks) |
6.38 | 450 | 12,083 | |||||||||||||
DTE Energy Company Series Q (Utilities, Multi-Utilities) |
5.25 | 3,265 | 81,854 | |||||||||||||
DTE Energy Company Series Z (Utilities, Multi-Utilities) |
6.50 | 1,900 | 50,597 | |||||||||||||
Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
4.75 | 11,600 | 278,864 | |||||||||||||
Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
4.90 | 120,000 | 3,019,200 | |||||||||||||
Entergy Louisiana LLC (Utilities, Electric Utilities) |
4.70 | 25,000 | 603,750 | |||||||||||||
Gastar Exploration Incorporated Series B (Energy, Oil, Gas & Consumable Fuels) |
10.75 | 56,900 | 1,418,517 | |||||||||||||
GreenHunter Resources Incorporated Series C (Energy, Energy Equipment & Services) |
10.00 | 61,786 | 1,272,174 | |||||||||||||
Hercules Technology Growth Capital Incorporated (Financials, Capital Markets) |
6.25 | 69,000 | 1,731,900 | |||||||||||||
Integrys Energy Group (Utilities, Multi-Utilities) ± |
2.74 | 50,000 | 1,368,500 | |||||||||||||
Legacy Reserves LP Series A (Energy, Oil, Gas & Consumable Fuels) ± |
4.61 | 29,500 | 640,445 | |||||||||||||
Legacy Reserves LP Series B (Energy, Oil, Gas & Consumable Fuels) ± |
4.60 | 100,000 | 2,173,000 | |||||||||||||
Magnum Hunter Resources Corporation (Energy, Oil, Gas & Consumable Fuels) |
8.00 | 75,000 | 1,241,250 | |||||||||||||
Miller Energy Resources Series D (Energy, Oil, Gas & Consumable Fuels) ± |
9.46 | 100,000 | 694,000 | |||||||||||||
National General Holdings Corporation Series B (Financials, Insurance) |
7.50 | 100,000 | 2,465,000 | |||||||||||||
NextEra Energy Capital Holding Incorporated Series I (Utilities, Electric Utilities) |
5.13 | 123,000 | 3,017,190 | |||||||||||||
NextEra Energy Capital Holding Incorporated Series J (Utilities, Electric Utilities) |
5.00 | 83,000 | 1,997,810 | |||||||||||||
PPL Capital Funding Incorporated Series B (Utilities, Electric Utilities) |
5.90 | 60,000 | 1,507,800 | |||||||||||||
Qwest Corporation (Telecommunication Services, Diversified Telecommunication Services) |
6.13 | 105,000 | 2,653,350 | |||||||||||||
Resource Capital Corporation (Financials, REITs) ± |
4.66 | 15,000 | 347,100 | |||||||||||||
SCE Trust II (Utilities, Electric Utilities) |
5.10 | 148,200 | 3,602,742 | |||||||||||||
Sotherly Hotels Incorporated (Financials, REITs) |
7.00 | 75,000 | 1,938,750 | |||||||||||||
Sotherly Hotels Incorporated (Financials, REITs) |
8.00 | 250,000 | 6,512,500 | |||||||||||||
THL Credit Incorporated (Financials, Capital Markets) |
6.75 | 75,000 | 1,912,500 | |||||||||||||
TravelCenters of America LLC (Consumer Discretionary, Specialty Retail) |
8.00 | 125,000 | 3,293,750 | |||||||||||||
United States Cellular Corporation (Telecommunication Services, Wireless Telecommunication Services) |
7.25 | 115,000 | 2,915,250 | |||||||||||||
Vanguard Natural Resources LLC Series B (Energy, Oil, Gas & Consumable Fuels) |
7.63 | 150,000 | 3,451,500 | |||||||||||||
Vanguard Natural Resources LLC Series C (Energy, Oil, Gas & Consumable Fuels) |
7.75 | 120,644 | 2,847,197 | |||||||||||||
60,445,223 | ||||||||||||||||
|
|
|||||||||||||||
Total Preferred Stocks (Cost $79,643,523) |
77,543,179 | |||||||||||||||
|
|
|||||||||||||||
Rights: 0.00% |
||||||||||||||||
United States: 0.00% | ||||||||||||||||
Safeway Casa Ley Contingent Value Rights (Consumer Staples, Food & Staples Retailing) (a)(i) |
750,000 | 0 | ||||||||||||||
Safeway PDC Contingent Value Rights (Consumer Staples, Food & Staples Retailing) (a)(i) |
750,000 | 0 | ||||||||||||||
|
|
|||||||||||||||
Total Rights (Cost $795,000) |
0 | |||||||||||||||
|
|
|||||||||||||||
Expiration date | ||||||||||||||||
Warrants: 0.01% | ||||||||||||||||
United States: 0.01% | ||||||||||||||||
GreenHunter Water LLC (Energy, Energy Equipment & Services) (a) |
|
12-31-2049 | 96,112 | 30,960 | ||||||||||||
|
|
|||||||||||||||
Total Warrants (Cost $0) |
30,960 | |||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
10 | Wells Fargo Advantage Global Dividend Opportunity Fund | Portfolio of investmentsApril 30, 2015 (unaudited) |
Security name | Yield | Shares | Value | |||||||||||
Short-Term Investments: 12.79% | ||||||||||||||
Investment Companies: 12.79% | ||||||||||||||
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class (l)(u) |
0.11 | % | 52,126,163 | $ | 52,126,163 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $52,126,163) |
52,126,163 | |||||||||||||
|
|
Total investments in securities (Cost $392,040,398) * | 104.44 | % | 425,636,456 | |||||
Other assets and liabilities, net |
(4.44 | ) | (18,097,501 | ) | ||||
|
|
|
|
|||||
Total net assets | 100.00 | % | $ | 407,538,955 | ||||
|
|
|
|
| Non-income-earning security |
(a) | The security is fair valued in accordance with procedures approved by the Board of Trustees. |
(i) | Illiquid security |
± | Variable rate investment. The rate shown is the rate in effect at period end. |
(l) | The security represents an affiliate of the Fund as defined in the Investment Company Act of 1940. |
(u) | The rate represents the 7-day annualized yield at period end. |
* | Cost for federal income tax purposes is $391,878,711 and unrealized gains (losses) consists of: |
Gross unrealized gains |
$ | 54,911,342 | ||
Gross unrealized losses |
(21,153,597 | ) | ||
|
|
|||
Net unrealized gains |
$ | 33,757,745 |
The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilitiesApril 30, 2015 (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 11 |
Assets |
||||
Investments |
||||
In unaffiliated securities, at value (cost $339,914,235) |
$ | 373,510,293 | ||
In affiliated securities, at value (cost $52,126,163) |
52,126,163 | |||
|
|
|||
Total investments, at value (cost $392,040,398) |
425,636,456 | |||
Foreign currency, at value (cost $15,091,980) |
|
14,964,020 |
| |
Receivable for investments sold |
7,844,712 | |||
Receivable for dividends and interest |
2,049,329 | |||
|
|
|||
Total assets |
450,494,517 | |||
|
|
|||
Liabilities |
||||
Payable for investments purchased |
11,232,994 | |||
Written options, at value (premiums received $42,991) |
16,069 | |||
Due to custodian bank |
|
31,317,808 |
| |
Advisory fee payable |
314,914 | |||
Administration fee payable |
16,574 | |||
Accrued expenses and other liabilities |
57,203 | |||
|
|
|||
Total liabilities |
42,955,562 | |||
|
|
|||
Total net assets |
$ | 407,538,955 | ||
|
|
|||
NET ASSETS CONSIST OF |
||||
Paid-in capital |
$ | 855,890,543 | ||
Overdistributed net investment income |
(5,689,988 | ) | ||
Accumulated net realized losses on investments |
(476,312,721 | ) | ||
Net unrealized gains on investments |
33,651,121 | |||
|
|
|||
Total net assets |
$ | 407,538,955 | ||
|
|
|||
NET ASSET VALUE PER SHARE |
||||
Based on $407,538,955 divided by 49,160,825 shares issued and outstanding (unlimited shares authorized) |
$8.29 | |||
|
|
The accompanying notes are an integral part of these financial statements.
12 | Wells Fargo Advantage Global Dividend Opportunity Fund | Statement of operationssix months ended April 30, 2015 (unaudited) |
Investment income |
||||
Dividends (net of foreign withholding taxes of $590,959) |
$ | 13,325,261 | ||
Interest |
393,808 | |||
Income from affiliated securities |
7,946 | |||
|
|
|||
Total investment income |
13,727,015 | |||
|
|
|||
Expenses |
||||
Advisory fee |
1,897,636 | |||
Administration fee |
99,876 | |||
Custody and accounting fees |
29,106 | |||
Professional fees |
38,521 | |||
Shareholder report expenses |
39,962 | |||
Trustees fees and expenses |
6,446 | |||
Transfer agent fees |
15,394 | |||
Other fees and expenses |
32,352 | |||
|
|
|||
Total expenses |
2,159,293 | |||
|
|
|||
Net investment income |
11,567,722 | |||
|
|
|||
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
||||
Net realized losses on: |
||||
Unaffiliated securities |
(19,055,478 | ) | ||
Written options |
(657,844 | ) | ||
|
|
|||
Net realized losses on investments |
(19,713,322 | ) | ||
|
|
|||
Net change in unrealized gains (losses) on: |
||||
Unaffiliated securities |
13,295,532 | |||
Written options |
829,636 | |||
|
|
|||
Net change in unrealized gains (losses) on investments |
14,125,168 | |||
|
|
|||
Net realized and unrealized gains (losses) on investments |
(5,588,154 | ) | ||
|
|
|||
Net increase in net assets resulting from operations |
$ | 5,979,568 | ||
|
|
The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets | Wells Fargo Advantage Global Dividend Opportunity Fund | 13 |
Six months ended April 30, 2015 (unaudited) |
Year ended October 31, 2014 |
|||||||
Operations |
||||||||
Net investment income |
$ | 11,567,722 | $ | 38,384,496 | ||||
Net realized gains (losses) on investments |
(19,713,322 | ) | 1,163,557 | |||||
Net change in unrealized gains (losses) on investments |
14,125,168 | 2,185,057 | ||||||
|
|
|||||||
Net increase in net assets resulting from operations |
5,979,568 | 41,733,110 | ||||||
|
|
|||||||
Distributions to shareholders from |
||||||||
Net investment income |
(17,697,897 | ) | (35,395,808 | ) | ||||
|
|
|||||||
Total increase (decrease) in net assets |
(11,718,329 | ) | 6,337,302 | |||||
|
|
|||||||
Net assets |
||||||||
Beginning of period |
419,257,284 | 412,919,982 | ||||||
|
|
|||||||
End of period |
$ | 407,538,955 | $ | 419,257,284 | ||||
|
|
|||||||
Undistributed (overdistributed) net investment income |
$ | (5,689,988 | ) | $ | 440,187 | |||
|
|
The accompanying notes are an integral part of these financial statements.
14 | Wells Fargo Advantage Global Dividend Opportunity Fund | Financial highlights |
(For a share outstanding throughout each period)
Six months ended April 30, 2015 (unaudited) |
Year ended October 31 | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
Net asset value, beginning of period |
$8.53 | $8.40 | $8.25 | $8.92 | $10.36 | $10.38 | ||||||||||||||||||
Net investment income |
0.24 | 0.78 | 0.84 | 0.91 | 1.00 | 0.99 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
(0.12 | ) | 0.07 | 0.15 | (0.46 | ) | (1.32 | ) | 0.11 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total from investment operations |
0.12 | 0.85 | 0.99 | 0.45 | (0.32 | ) | 1.10 | |||||||||||||||||
Distributions to shareholders from |
||||||||||||||||||||||||
Net investment income |
(0.36 | ) | (0.72 | ) | (0.83 | ) | (0.86 | ) | (1.12 | ) | (0.98 | )1 | ||||||||||||
Tax basis return of capital |
0.00 | 0.00 | (0.01 | ) | (0.26 | ) | 0.00 | (0.14 | )1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions to shareholders |
(0.36 | ) | (0.72 | ) | (0.84 | ) | (1.12 | ) | (1.12 | ) | (1.12 | ) | ||||||||||||
Net asset value, end of period |
$8.29 | $8.53 | $8.40 | $8.25 | $8.92 | $10.36 | ||||||||||||||||||
Market value, end of period |
$7.55 | $7.96 | $7.56 | $7.98 | $8.32 | $10.39 | ||||||||||||||||||
Total return based on market value2 |
(0.49 | )% | 15.29 | % | 5.55 | % | 9.79 | % | (9.76 | )% | 17.35 | % | ||||||||||||
Ratios to average net assets (annualized) |
||||||||||||||||||||||||
Gross expenses |
1.08 | % | 1.07 | % | 1.08 | % | 1.08 | % | 1.05 | % | 1.14 | % | ||||||||||||
Net expenses |
1.08 | % | 1.07 | % | 1.08 | % | 1.08 | % | 1.05 | % | 1.14 | % | ||||||||||||
Net investment income |
5.78 | % | 9.02 | % | 10.26 | % | 10.82 | % | 10.16 | % | 9.73 | % | ||||||||||||
Supplemental data |
||||||||||||||||||||||||
Portfolio turnover rate |
50 | % | 76 | % | 163 | % | 93 | % | 129 | % | 90 | % | ||||||||||||
Net assets, end of period (000s omitted) |
$407,539 | $419,257 | $412,920 | $405,457 | $438,084 | $507,765 |
1 | Calculated based upon average shares outstanding |
2 | Total return is calculated assuming a purchase of common stock on the first day and sale on the last day of the period reported. Dividends and distributions, if any, are assumed for purposes of these calculations to be reinvested at prices obtained under the Funds Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. |
The accompanying notes are an integral part of these financial statements.
Notes to financial statements (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 15 |
1. ORGANIZATION
The Wells Fargo Advantage Global Dividend Opportunity Fund (the Fund) was organized as a statutory trust under the laws of the state of Delaware on December 21, 2006 and is registered as a diversified closed-end management investment company under the Investment Company Act of 1940, as amended. As an investment company, the Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services Investment Companies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time).
Equity securities and options that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price. If no sale occurs on the primary exchange or market for the security that day, the prior days price will be deemed stale and a fair value price will be determined in accordance with the Funds Valuation Procedures.
Equity securities that are not listed on a foreign or domestic exchange or market, but have a public trading market, are valued at the quoted bid price from an independent broker-dealer that the Management Valuation Team of Wells Fargo Funds Management, LLC (Funds Management) has determined is an acceptable source.
Non-listed OTC options are valued at the evaluated price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Management Valuation Team.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of such securities, then fair value pricing procedures approved by the Board of Trustees of the Fund are applied. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Foreign securities that are fair valued under these procedures are categorized as Level 2 and the application of these procedures may result in transfers between Level 1 and Level 2. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in net asset values that are higher or lower than net asset values based on the last reported sales price or latest quoted bid price. On April 30, 2015, such fair value pricing was used in pricing foreign securities.
Debt securities are valued at the evaluated bid price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
Investments in registered open-end investment companies are valued at net asset value.
Investments which are not valued using any of the methods discussed above are valued at their fair value, as determined in good faith by the Board of Trustees. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Management Valuation Team. The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Management Valuation Team which may include items for ratification.
Valuations of fair valued securities are compared to the next actual sales price when available, or other appropriate market values, to assess the continued appropriateness of the fair valuation methodologies used. These securities are fair
16 | Wells Fargo Advantage Global Dividend Opportunity Fund | Notes to financial statements (unaudited) |
valued on a day-to-day basis, taking into consideration changes to appropriate market information and any significant changes to the inputs considered in the valuation process until there is a readily available price provided on an exchange or by an independent pricing service. Valuations received from an independent pricing service or independent broker-dealer quotes are periodically validated by comparisons to most recent trades and valuations provided by other independent pricing services in addition to the review of prices by the adviser and/or subadviser. Unobservable inputs used in determining fair valuations are identified based on the type of security, taking into consideration factors utilized by market participants in valuing the investment, knowledge about the issuer and the current market environment.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Management Valuation Team. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Options
The Fund is subject to equity price risk and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The Fund may write covered call options or secured put options on individual securities and/or indexes. When the Fund writes an option, an amount equal to the premium received is recorded as a liability and is subsequently adjusted to the current market value of the written option. Premiums received from written options that expire unexercised are recognized as realized gains on the expiration date. For exercised options, the difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated 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 in calculating the realized gain or loss on the sale. If a put option is exercised, the premium reduces the cost of the security purchased. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security and/or index underlying the written option.
The Fund may also purchase call or put options. The premium is included in the Statement of Assets and Liabilities as an investment, the value of which is subsequently adjusted based on the current market value of the option. Premiums paid for purchased options that expire are recognized as realized losses on the expiration date. Premiums paid for purchased options that are exercised or closed are added to the amount paid or offset against the proceeds received for the underlying security to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid.
Options traded on an exchange are regulated and terms of the options are standardized. Purchased options traded over-the-counter expose the Fund to counterparty risk in the event the counterparty does not perform. This risk can be mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Funds exposure to the counterparty.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily based on the effective interest method. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.
Notes to financial statements (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 17 |
Distributions to shareholders
Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with federal income tax regulations, which may differ in amount or character from net investment income and realized gains recognized for purposes of U.S. generally accepted accounting principles.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Funds income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Funds tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
Capital loss carryforwards that do not expire are required to be utilized prior to capital loss carryforwards that expire. As of October 31, 2014, capital loss carryforwards available to offset future net realized capital gains were as follows through the indicated expiration dates:
No expiration | ||||||||
2016 | 2017 | 2018 | Short-term | Long-term | ||||
$164,388,931 | $193,644,982 | $17,121,810 | $49,240,737 | $34,224,248 |
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Funds investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to significant unobservable inputs (Level 3). The Funds investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
n | Level 1 quoted prices in active markets for identical securities |
n | Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, use of amortized cost, etc.) |
n | Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
18 | Wells Fargo Advantage Global Dividend Opportunity Fund | Notes to financial statements (unaudited) |
The following is a summary of the inputs used in valuing the Funds assets and liabilities as of April 30, 2015:
Quoted prices (Level 1) |
Other significant observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
Total | |||||||||||||
Assets |
||||||||||||||||
Investments in : |
||||||||||||||||
Common stocks |
||||||||||||||||
Austria |
$ | 0 | $ | 2,538,025 | $ | 0 | $ | 2,538,025 | ||||||||
Canada |
24,012,368 | 0 | 0 | 24,012,368 | ||||||||||||
Finland |
0 | 4,500,671 | 0 | 4,500,671 | ||||||||||||
France |
0 | 56,535,376 | 0 | 56,535,376 | ||||||||||||
Germany |
0 | 15,805,555 | 0 | 15,805,555 | ||||||||||||
Israel |
0 | 951,530 | 0 | 951,530 | ||||||||||||
Italy |
0 | 27,544,429 | 0 | 27,544,429 | ||||||||||||
Spain |
0 | 18,766,288 | 0 | 18,766,288 | ||||||||||||
Switzerland |
0 | 1,774,147 | 0 | 1,774,147 | ||||||||||||
United Kingdom |
8,800,000 | 18,489,255 | 0 | 27,289,255 | ||||||||||||
United States |
109,118,910 | 0 | 0 | 109,118,910 | ||||||||||||
Corporate bonds and notes |
0 | 7,099,600 | 0 | 7,099,600 | ||||||||||||
Preferred stocks |
||||||||||||||||
Marshall Islands |
16,459,956 | 0 | 0 | 16,459,956 | ||||||||||||
Monaco |
638,000 | 0 | 0 | 638,000 | ||||||||||||
United States |
53,932,723 | 6,512,500 | 0 | 60,445,223 | ||||||||||||
Rights |
||||||||||||||||
United States |
0 | 0 | 0 | 0 | ||||||||||||
Warrants |
||||||||||||||||
United States |
0 | 30,960 | 0 | 30,960 | ||||||||||||
Short-term investments |
||||||||||||||||
Investment companies |
52,126,163 | 0 | 0 | 52,126,163 | ||||||||||||
Total assets |
$ | 265,088,120 | $ | 160,548,336 | $ | 0 | $ | 425,636,456 | ||||||||
Liabilities |
||||||||||||||||
Written options |
$ | 0 | $ | 16,069 | $ | 0 | $ | 16,069 | ||||||||
Total liabilities |
$ | 0 | $ | 16,069 | $ | 0 | $ | 16,069 |
The Fund recognizes transfers between levels within the fair value hierarchy at the end of the reporting period. At April 30, 2015, fair value pricing was used in pricing certain foreign securities and securities valued at $124,590,040 were transferred from Level 1 to Level 2. The Fund did not have any transfers into/out of Level 3.
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Advisory fee
Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (Wells Fargo), is the adviser to the Fund and is entitled to receive a fee at an annual rate of 0.95% of the Funds average daily total assets. Total assets consist of the net assets of the Fund plus borrowings or other leverage for investment purposes to the extent excluded in calculating net assets.
Funds Management has retained the services of certain subadvisers to provide daily portfolio management to the Fund. The fees for subadvisory services are borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is a subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.10% of the Funds average daily total assets. Crow Point Partners, LLC, which is not an affiliate of Funds Management, is also a subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.20% of the Funds average daily total assets.
Notes to financial statements (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 19 |
Administration fee
Funds Management also serves as the administrator to the Fund, providing the Fund with a wide range of administrative services necessary to the operation of the Fund. Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Funds average daily total assets.
5. CAPITAL SHARE TRANSACTIONS
The Fund has authorized an unlimited number of shares with no par value. For the six months ended April 30, 2015 and the year ended October 31, 2014, the Fund did not issue any shares.
6. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended April 30, 2015 were $188,767,209 and $191,851,351, respectively.
7. DERIVATIVE TRANSACTIONS
During the six months ended April 30, 2015, the Fund entered into written options for economic hedging purposes.
During the six months ended April 30, 2015, the Fund had written call option activities as follows:
Number of contracts |
Premiums received |
|||||||
Options outstanding at October 31, 2014 |
700 | $ | 238,429 | |||||
Options written |
2,226 | 441,320 | ||||||
Options expired |
(1,742 | ) | (452,264 | ) | ||||
Options closed |
(102 | ) | (61,810 | ) | ||||
Options exercised |
(1,005 | ) | (122,684 | ) | ||||
Options outstanding at April 30, 2015 |
77 | $ | 42,991 |
Open written call options at April 30, 2015 were as follows for the Fund:
Expiration date | Counterparty | Description | Number of contracts |
Strike price |
Value | |||||
5-15-2015 |
Citigroup | Hang Seng Index | 77 | 30,158 HKD | $(16,069) |
The Fund had an average of 445 written option contracts during the six months ended April 30, 2015.
The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the appropriate financial statements.
For certain types of derivative transactions, the Fund has entered into International Swaps and Derivatives Association, Inc. master agreements (ISDA Master Agreements) or similar agreements with approved counterparties. The ISDA Master Agreements or similar agreements may have requirements to deliver/deposit securities or cash to/with an exchange or broker-dealer as collateral and allows the Fund to offset, with each counterparty, certain derivative financial instruments assets and/or liabilities with collateral held or pledged. Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under ISDA Master Agreements or similar agreements, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Portfolio of Investments. With respect to balance sheet offsetting, absent an event of default by the counterparty or a termination of the agreement, the reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities are not offset across transactions between the Fund and the applicable counterparty. A reconciliation of the gross amounts on the Statement of Assets and Liabilities to the net amounts by derivative type, including any collateral exposure, is as follows:
Derivative type | Counterparty | Gross amounts of liabilities in the Statement of Assets and Liabilities |
Amounts subject to netting agreements |
Collateral pledged |
Net amount of liabilities |
|||||||||||
Written options |
Citigroup | $16,069 | $ | 0 | $ | 0 | $ | 16,069 |
20 | Wells Fargo Advantage Global Dividend Opportunity Fund | Notes to financial statements (unaudited) |
8. CONCENTRATION RISK
Concentration risks result from exposure to a limited number of sectors. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
9. INDEMNIFICATION
Under the Funds organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
10. SUBSEQUENT DISTRIBUTION
On May 20, 2015, the Fund declared a distribution of $0.18 per share payable on July 1, 2015 to shareholders of record on June 15, 2015.
This distribution is not reflected in the accompanying financial statements. The final determination of the source of all distributions is subject to change and made after the Funds tax year-end.
Other information (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 21 |
TAX INFORMATION
Pursuant to Section 853 of the Internal Revenue Code, the following amounts were designated as foreign taxes paid for the fiscal year ended October 30, 2014. These amounts may be less than the actual foreign taxes paid for financial statement purposes. Foreign taxes paid or withheld should be included in taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments. None of the income was derived from ineligible foreign sources as defined under Section 901(j) of the Internal Revenue Code.
Creditable foreign taxes paid |
Per share amount |
Foreign income as % of ordinary income distributions | ||
$2,598,551 | $0.0529 | 76.58% |
PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available upon request, by calling 1-800-222-8222, visiting our website at wellsfargoadvantagefunds.com, or visiting the SEC website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Funds website at wellsfargoadvantagefunds.com or by visiting the SEC website at sec.gov.
ANNUAL MEETING OF SHAREHOLDERS
On February 9, 2015, an Annual Meeting of Shareholders for the Fund was held to consider the following proposal. The results of the proposal are indicated below.
Proposal 1 Election of Trustees:
Shares voted For | William R. Ebsworth | 43,865,851 | ||||
Shares voted Withhold | 1,229,400 | |||||
Shares voted For | Jane A. Freeman | 43,875,242 | ||||
Shares voted Withhold | 1,220,009 | |||||
Shares voted For | Judith M. Johnson | 44,001,007 | ||||
Shares voted Withhold | 1,094,244 | |||||
Shares voted For | Donald C. Willeke | 43,963,412 | ||||
Shares voted Withhold | 1,131,839 |
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for the Fund are publicly available monthly on the Funds website (wellsfargoadvantagefunds.com), on a one-month delayed
basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available by visiting the SEC website at sec.gov. In addition, the Funds Form N-Q may be
reviewed and copied at the SECs Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be
obtained by calling
1-800-SEC-0330.
22 | Wells Fargo Advantage Global Dividend Opportunity Fund | Other information (unaudited) |
BOARD OF TRUSTEES AND OFFICERS
The following table provides basic information about the Board of Trustees (the Trustees) and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for each fund in the Wells Fargo Advantage family of funds, which consists of 134 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust, and four closed-end funds, including the Fund (collectively the Fund Complex). The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. The Board of Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected. Each Officer serves an indefinite term.
Independent Trustees
Name and year of birth |
Position held and length of service |
Principal occupations during past five years or longer | Other directorships during | |||
William R. Ebsworth (Born 1957) |
Trustee, since 2015* | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director at Fidelity Management and Research Company and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. in Boston, Tokyo, and Hong Kong where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Mr. Ebsworth is an Adjunct Lecturer, Finance, at Babson College and a Chartered Financial Analyst. | Asset Allocation Trust | |||
Jane A. Freeman (Born 1953) | Trustee, since 2015* | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Chartered Financial Analyst (inactive), Chair of Taproot Foundation (non-profit organization) and a Board Member of Ruth Bancroft Garden (non-profit organization). | Asset Allocation Trust | |||
Peter G. Gordon (Born 1942) | Trustee, since 2010; Chairman, since 2010 | Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College. | Asset Allocation Trust | |||
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2010 | Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy. Mr. Harris is a certified public accountant. | CIGNA Corporation; Asset Allocation Trust | |||
Judith M. Johnson (Born 1949) | Trustee, since 2010; Audit Committee Chairman, since 2010 | Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant. | Asset Allocation Trust | |||
David F. Larcker (Born 1950) | Trustee, since 2010 | James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Morgan Stanley Director of the Center for Leadership Development and Research and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | Asset Allocation Trust | |||
Olivia S. Mitchell (Born 1953) | Trustee, since 2010 | International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Whartons Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993. | Asset Allocation Trust |
Other information (unaudited) | Wells Fargo Advantage Global Dividend Opportunity Fund | 23 |
Name and year of birth |
Position held and length of service |
Principal occupations during past five years or longer | Other directorships during | |||
Timothy J. Penny (Born 1951) | Trustee, since 2010 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007. | Asset Allocation Trust | |||
Michael S. Scofield (Born 1943) | Trustee, since 2007 | Served on the Investment Company Institutes Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds complex (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield. | Asset Allocation Trust | |||
Donald C. Willeke (Born 1940) | Trustee, since 2010 | Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Tree Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation). | Asset Allocation Trust |
* | William R. Ebsworth and Jane A. Freeman each became a Trustee effective January 1, 2015. |
Officers
Name and year of birth |
Position held and length of service |
Principal occupations during past five years or longer | ||||
Karla M. Rabusch (Born 1959) | President, since 2010 | Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. | ||||
Nancy Wiser1 (Born 1967) |
Treasurer, since 2012 | Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011. Owned and operated a consulting business providing services to various hedge funds including acting as Chief Operating Officer and Chief Compliance Officer for a hedge fund from 2007 to 2008. Chief Operating Officer and Chief Compliance Officer of GMN Capital LLC from 2006 to 2007. | ||||
C. David Messman (Born 1960) |
Secretary, since 2010; Chief Legal Officer, since 2010 | Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Assistant General Counsel of Wells Fargo Bank, N.A. since 2013 and Vice President and Managing Counsel of Wells Fargo Bank N.A. from 1996 to 2013. | ||||
Debra Ann Early (Born 1964) |
Chief Compliance Officer, since 2010 | Senior Vice President of Wells Fargo Funds Management, LLC since 2007 and Chief Compliance Officer from 2007 to 2014. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004. | ||||
David Berardi (Born 1975) |
Assistant Treasurer, since 2009 | Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010. | ||||
Jeremy DePalma1 (Born 1974) |
Assistant Treasurer, since 2007 | Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
1 | Nancy Wiser acts as Treasurer of 73 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 61 funds and Assistant Treasurer of 73 funds in the Fund Complex. |
24 | Wells Fargo Advantage Global Dividend Opportunity Fund | Automatic dividend reinvestment plan |
AUTOMATIC DIVIDEND REINVESTMENT PLAN
All common shareholders are eligible to participate in the Automatic Dividend Reinvestment Plan (the Plan). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (Plan Agent), in additional common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as dividends) payable either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The shares are acquired by the Plan Agent for the participants account, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (newly issued common shares) or (ii) by purchase of outstanding common shares on the open-market (open-market purchases) on the NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (market premium), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participants account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value (market discount), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agents open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 30170, College Station, Texas 77842-3170 or by calling 1-800-730-6001.
List of abbreviations | Wells Fargo Advantage Global Dividend Opportunity Fund | 25 |
The following is a list of common abbreviations for terms and entities that may have appeared in this report.
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Transfer Agent, Registrar, Shareholder Servicing
Agent & Dividend Disbursing Agent
Computershare Trust Company, N.A.
P.O. Box 30170
College Station, TX 77842-3170
1-800-730-6001
Website: wellsfargoadvantagefunds.com
Wells Fargo Funds Management, LLC, is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Companys broker/dealer subsidiaries. Certain material contained in this report may be considered marketing material and has been reviewed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.
NOT FDIC INSURED ¡ NO BANK GUARANTEE ¡ MAY LOSE VALUE
© 2015 Wells Fargo Funds Management, LLC. All rights reserved.
233645 06-15 SGDO/SAR158 04-15 |
ITEM 2. CODE OF ETHICS
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. INVESTMENTS
A Portfolio of Investments for Wells Fargo Advantage Global Dividend Opportunity Fund is included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMEENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board of Trustees that have been implemented since the registrants last provided disclosure in response to the requirements of this Item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that the Wells Fargo Advantage Global Dividend Opportunity Fund (the Trust) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the Trusts internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
ITEM 12. EXHIBITS
(a)(1) Not applicable
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT.
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.
Wells Fargo Advantage Global Dividend Opportunity Fund | ||
By: |
/s/ Karla M. Rabusch | |
Karla M. Rabusch | ||
President | ||
Date: | June 25, 2015 |
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 date indicated.
Wells Fargo Advantage Global Dividend Opportunity Fund | ||
By: |
/s/ Karla M. Rabusch | |
Karla M. Rabusch | ||
President | ||
Date: | June 25, 2015 | |
By: |
/s/ Nancy Wiser | |
Nancy Wiser | ||
Treasurer | ||
Date: |
June 25, 2015 |