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OMB APPROVAL |
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OMB Number: 3235-0570 |
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Expires: January 31, 2014 |
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Estimated average burden |
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hours per response 20.6 |
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 811-21417
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NFJ Dividend, Interest & Premium Strategy Fund |
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(Exact name of registrant as specified in charter) |
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1345 Avenue of the Americas, New York, |
New York 10105 |
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(Address of principal executive offices) |
(Zip code) |
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Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105 |
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(Name and address of agent for service) |
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Registrants telephone number, including area code: 212-739-3371 |
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Date of fiscal year end: January 31, 2011 |
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Date of reporting period: January 31, 2011 |
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Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (OMB) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-2001. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Report to Shareholders
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Annual Report |
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January 31, 2011
NFJ
Dividend, Interest & Premium Strategy Fund
AGIC Equity & Convertible Income Fund
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Contents |
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2 - 3 |
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4 - 9 |
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10 - 23 |
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24 |
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25 |
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26 |
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27 - 35 |
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36 - 37 |
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38 |
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39 |
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Annual
Shareholder Meeting Results/Changes |
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40 |
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Proxy
Voting Policies & Procedures/Changes |
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41 |
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42 |
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43 |
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44 - 45 |
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46 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
1 |
Supporting this recovery was the continued accommodative stance by the Federal Reserve (the Fed). The Fed revealed plans to purchase up to $900 billion of U.S. Treasury bonds. The goal of this quantitative easing was to keep stimulating the economy by lowering interest rates. The Fed maintained its closely watched Federal Funds rate, the interest rate banks charge to lend federal funds to other banks, usually on an overnight basis in the 0.0% to 0.25% range. The discount rate, however, the interest rate charged to banks for direct loans was raised to 0.75% from 0.50%.
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NFJ Dividend, Interest & Premium Strategy Fund |
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2 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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Twelve Months in Review
For the fiscal period
ended January 31, 2011:
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The NFJ Dividend, Interest & Premium Strategy Fund rose 16.02% on net asset value (NAV) and 28.20% on market price. |
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The AGIC Equity & Convertible Income Fund rose 22.56% on NAV and 30.16% on market price. |
In contrast, the Russell 3000 Index, a broad measure of U.S. stock market performance, rose 23.95% during the twelve-month fiscal period. The Russell 1000 Value Index, a measure of large-cap value-style stocks, returned 21.54% and the Russell 1000 Growth Index, a measure of growth style stocks, gained 25.14% during the reporting period. Convertible securities, as reflected by the Merrill Lynch All Convertibles Index, advanced 21.09% during the fiscal period.
For specific information on the Funds and their performance, please review the following pages. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds shareholder servicing agent at (800) 254-5197. In addition, a wide range of information and resources is available on our website, www.allianzinvestors.com/closedendfunds.
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Receive this report electronically and eliminate paper mailings. To enroll, go to www.allianzinvestors.com/edelivery. |
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Together with Allianz Global Investors Fund Management LLC, the Funds investment manager and NFJ Investment Group LLC and Allianz Global Investors Capital LLC, the Funds sub-advisers, we thank you for investing with us.
Sincerely,
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Hans W. Kertess |
Brian S. Shlissel |
Chairman |
President & Chief Executive Officer |
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
3 |
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Fund Insights |
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January 31, 2011 (unaudited) |
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For the fiscal year ended January 31, 2011, NFJ Dividend, Interest & Premium Strategy Fund returned 16.02% on net asset value and 28.20% on market price.
During the 12-month review period, investors risk appetite returned, supported by a number of factors. In the equity market, the Russell 1000 Value Index, a subset of the broad market measuring value-oriented stocks, advanced strongly during the period. Equities were led by more economically sensitive and commodity-driven sectors such as materials and energy, as well as the consumer discretionary sector. More defensive segments such as utilities and consumer staples underperformed, with health care delivering the lowest returns for the fiscal year. Smaller and mid-size capitalized companies outperformed the largest capitalized firms. The most nimble companies were able to benefit from the improved macroeconomic environment.
Although convertible market sentiment varied throughout the fiscal period, the net result was a solid year. After an impressive return in the fourth quarter of 2010, the Merrill Lynch All Convertibles Index registered another good year of performance advancing 21.09%.
The factors driving fourth quarter and full year performance did not change significantly from earlier in the period. Although several hiccups occurred throughout the period, including mixed economic statistical releases and European sovereign concerns, these risks rose then abated quickly. Ultimately, stronger corporate profitability and an improving economy had the greatest influence on investor sentiment. Improved balance sheets and operating performance of corporations were supplemented by the incredible new corporate issuance volume that bolstered liquidity and reduced high-cost debt. Political risk abated after the November elections, and more accommodative decisions were made in Washington regarding taxes and further monetary policy easing (QE2). These factors also led to a healthy year-end rally in the equity markets and a sell-off in the Treasury market, all of which added to the appetite for convertible and equity investing.
Convertibles moved up in line with their historical equity upside participation during the fourth quarter of the period. Contrary to the first half of the fiscal period whereby credit improvement was the largest driver of performance, equity contribution increased later in the year.
In the convertibles segment of the Funds portfolio, positions in the consumer discretionary, industrials and financial industries benefitted performance during the period. Select consumer discretionary issuers moved higher as automobile sales exceeded expectations and production schedules increased. Industrial issuers performed well on improving operating statistics and solid end-market demand. Financial companies gained on an improving global economic outlook and improving credit metrics.
Healthcare and consumer staples industries hindered relative performance during the reporting period. Generic drug manufacturing companies underperformed as international end-markets deteriorated, negatively impacting earnings. Consumer staples issuers were down as investors rotated into higher beta companies.
At the start of the reporting period, levels of implied volatility, as measured by the Chicago Board Options Exchange VIX Index (the VIX), trended from the mid 20s down to the teens before spiking above 45 in May. One of the instances of increased volatility occurred due to the flash crash on May 6, 2010, where there was a chaotic drop in equity prices during afternoon trading. The equity market would regain strength towards the second half of the reporting period, resulting in declining levels of the VIX, which ended the last few months in the mid teens. The average volatility through the period was 22.29.
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NFJ Dividend, Interest & Premium Strategy Fund |
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4 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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NFJ Dividend, Interest & Premium Strategy Fund |
Fund Insights (continued) |
January 31, 2011 (unaudited) |
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Our outlook for the convertible market is positive. The improvement in corporate earnings witnessed in the third quarter earnings continued in the fourth quarter of 2010. U.S. corporate cash levels are high, debt levels have been reduced and maturities have been extended. In addition, consumers are spending again and labor conditions are improving.
In 2011, we expect companies may use the high cash levels on their balance sheets and future free cash flow to boost shareholder value. Share buybacks, increased dividends and merger and acquisition activity are possible uses of excess cash. We believe these factors should benefit equity and convertible investors.
While we expect credit spread tightening should continue as high yield credit spreads remain above the historical average, positive convertible returns will be dependent on the equity markets going forward. Even though global and economic risk headlines persist, driving a continuation of choppy directional short-term performance, few companies have seen a change in demand or order patterns. We believe fundamentals remain intact and this should provide a positive backdrop for the U.S. equity markets. In such an environment, convertible bonds should benefit from credit spread tightening and higher equity prices, making them an attractive option for total return investors.
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
5 |
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AGIC Equity & Convertible Income Fund |
Fund Insights |
January 31, 2011 (unaudited) |
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For the fiscal year ended January 31, 2011, AGIC Equity & Convertible Income Fund returned 22.56% on net asset value and 30.16% on market price.
Although market sentiment varied throughout the period, the net result for the equity and convertible markets was a solid year.
The factors driving the Funds fiscal year end performance did not change significantly from earlier in the period. Although several hiccups occurred throughout the period, including mixed economic statistical releases and European sovereign concerns, these risks rose then abated quickly. Ultimately, stronger corporate profitability and an improving economy had the greatest influence on investor sentiment. Improved balance sheets and operating performance of issuers were supplemented by the incredible new corporate issuance volume that bolstered liquidity and reduced high-cost debt. Political risk abated after the November elections, and more accommodative decisions were made in Washington regarding taxes and further monetary policy easing (QE2). These factors also led to a healthy year-end rally in the equity markets and a sell-off in the Treasury market. All of which added to the appetite for convertible investing.
The equity move higher was broad-based among industries and market capitalizations. Lagging areas of performance included utilities, telecommunications, and healthcare. The best performing sectors were technology, energy and consumer discretionary.
As was the theme throughout the fiscal year, smaller and mid-sized capitalized companies in the Merrill Lynch All Convertibles Index outperformed the largest capitalized firms. The most nimble companies were able to benefit from the improved macroeconomic environment.
Convertibles moved up in line with their historical equity upside participation during the fourth quarter of the reporting period. Unlike the first half of the period, where credit improvement was the bigger driver of returns, equity contributed more later in the year.
The Chicago Board Options Exchange Volatility Index (VIX), a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices, began the fiscal period in the mid twenties, spiked in May and then moved lower with the rising equity market. The VIXs average volatility was 22.3, and remained in the mid to high teens during the last months of the period.
The Funds weakest equity performers were healthcare companies. The market rotated away from the group as inline sales were overshadowed by higher inputs costs and potential pressure on future margins.
Convertible positions in the consumer discretionary, industrials and financial industries contributed positively to performance during the period. Select consumer discretionary issuers were higher as automobile sales exceeded expectations and production schedules increased. Industrial issuers performed well on improving operating statistics and solid end-market demand. Financial companies moved higher on an improving global economic outlook and improving credit metrics.
Convertible positions in the healthcare and consumer staples industries hindered relative performance over the period. Generic drug manufacturing companies underperformed as international end markets deteriorated, negatively impacting earnings. Consumer staples issues declined as investors rotated into higher beta companies.
In 2011, we expect companies may use the high cash levels on their balance sheets and future free cash flow to help boost shareholder value. Share buybacks, increased dividends and merger and acquisition activity are possible uses of excess cash. We believe these factors will benefit investors in the convertible and equity markets.
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NFJ Dividend, Interest & Premium Strategy Fund |
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6 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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AGIC Equity & Convertible Income Fund |
Fund Insights (continued) |
January 31, 2011 (unaudited) |
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Even though global and economic risk headlines persist, driving a continuation of choppy directional short-term performance, few companies have seen a change in demand or order patterns. We believe fundamentals remain intact and this should provide a positive backdrop for the U.S. equity markets. Convertible bonds should benefit from credit spread tightening and higher equity prices, an attractive option for total return investors.
The Funds disciplined approach of focusing on companies that are exceeding expectations and improving their credit statistics may be rewarded should those companies differentiate themselves from their peer group. In this environment, we believe companies that have reasonable earnings visibility should command premium valuations relative to other companies.
The portfolio management team continues to build the Funds portfolio one company at a time, by seeking to identify those that are opportunistically capitalizing on change. In addition, we look to maintain our discipline of seeking to identify the best total return candidates with the optimal risk/reward profile.
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
7 |
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NFJ Dividend, Interest & Premium Strategy Fund |
Fund Performance & Statistics |
January 31, 2011 (unaudited) |
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Total Return(1): |
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Market Price |
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NAV |
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1 Year |
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28.20 |
% |
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16.02 |
% |
5 Year |
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3.14 |
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2.50 |
% |
Commencement of Operations (2/28/05) to 1/31/11 |
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1.82 |
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3.54 |
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Market Price |
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NAV |
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Market Price/NAV: |
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Market Price |
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$17.60 |
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NAV |
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$19.12 |
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Discount to NAV |
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(7.95)% |
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Market Price Yield(2) |
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10.23% |
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Investment
Allocation |
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(1) |
Past performance is no guarantee of future results. Total return is calculated by determining the percentage change in NAV or market price (as applicable) in the specified period. The calculation assumes that all income dividends and capital gain distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges in connection with the purchase or sale of Fund shares. Total return for a period of more than one year represents the average annual total return. |
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Performance at market price will differ from its results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Fund, market conditions, supply and demand for the Funds shares, or changes in Fund dividends. |
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An investment in the Fund involves risk, including the loss of principal. Total return, market price, market price yield and NAV will fluctuate with changes in market conditions. This data is provided for information purposes only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a onetime public offering and once issued, shares of closed-end funds are traded in the open market through a stock exchange. NAV is equal to total assets less total liabilities divided by the number of shares outstanding. Holdings are subject to change daily. |
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(2) |
Market Price Yield is determined by dividing the annualized current quarterly per share dividend (comprised of net investment income and net capital gains, if any) payable to shareholders by the market price per share at January 31, 2011. |
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NFJ Dividend, Interest & Premium Strategy Fund |
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8 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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AGIC Equity & Convertible Income Fund |
Fund Performance & Statistics |
January 31, 2011 (unaudited) |
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Total Return(1): |
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Market Price |
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NAV |
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1 Year |
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30.16 |
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22.56 |
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3 Year |
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5.12 |
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3.83 |
% |
Commencement of Operations (2/27/07) to 1/31/11 |
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2.36 |
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4.18 |
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Market Price |
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NAV |
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Market Price/NAV: |
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Market Price |
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$19.30 |
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NAV |
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$20.28 |
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Discount to NAV |
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(4.83)% |
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Market Price Yield(2) |
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5.80% |
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Investment
Allocation |
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(1) |
Past performance is no guarantee of future results. Total return is calculated by determining the percentage change in NAV or market price (as applicable) in the specified period. The calculation assumes that all income dividends, capital gain and return of capital distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges in connection with the purchase or sale of Fund shares. Total return for a period of more than one year represents the average annual total return. |
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Performance at market price will differ from its results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Fund, market conditions, supply and demand for the Funds shares, or changes in Fund dividends. |
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An investment in the Fund involves risk, including the loss of principal. Total return, market price, market price yield and NAV will fluctuate with changes in market conditions. This data is provided for information purposes only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a onetime public offering and once issued, shares of closed-end funds are traded in the open market through a stock exchange. NAV is equal to total assets less total liabilities divided by the number of shares outstanding. Holdings are subject to change daily. |
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(2) |
Market Price Yield is determined by dividing the annualized current quarterly per share dividend (comprised of net investment income and net capital gains, if any) payable to shareholders by the market price per share at January 31, 2011. |
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
9 |
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Schedule of Investments |
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January 31, 2011 |
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Shares |
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Value |
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COMMON STOCK69.9% |
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Aerospace & Defense2.1% |
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387 |
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Lockheed Martin Corp. |
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30,797,240 |
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100 |
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Northrop Grumman Corp. |
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6,930,000 |
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37,727,240 |
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Capital Markets1.4% |
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420 |
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Ameriprise Financial, Inc. (a) |
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25,893,000 |
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Chemicals0.8% |
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135 |
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Lubrizol Corp. |
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14,507,100 |
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Commercial Banks3.2% |
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456 |
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PNC Financial Services Group, Inc. (a) |
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27,354,000 |
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918 |
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Wells Fargo & Co. (a) |
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29,748,592 |
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57,102,592 |
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Commercial Services & Supplies2.1% |
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486 |
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Pitney Bowes, Inc. |
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11,797,652 |
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1,500 |
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RR Donnelley & Sons Co. (a) |
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26,580,000 |
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38,377,652 |
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Communications Equipment0.5% |
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200 |
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Harris Corp. |
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9,308,000 |
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Diversified Financial Services0.6% |
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236 |
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JP Morgan Chase & Co. |
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10,605,256 |
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Diversified Telecommunication Services2.5% |
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750 |
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AT&T, Inc. (a) |
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20,640,000 |
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150 |
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CenturyLink, Inc. |
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6,486,000 |
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530 |
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Verizon Communications, Inc. (a) |
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18,878,600 |
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46,004,600 |
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Electric Utilities1.8% |
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600 |
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Edison International (a) |
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21,768,000 |
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152 |
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Entergy Corp. |
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10,952,086 |
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32,720,086 |
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Energy Equipment & Services1.7% |
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421 |
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Diamond Offshore Drilling, Inc. (a) |
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30,204,252 |
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Food & Staples Retailing0.2% |
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600 |
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SUPERVALU, Inc. |
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4,374,000 |
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Food Products1.2% |
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39 |
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Bunge Ltd. |
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2,657,317 |
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633 |
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Kraft Foods, Inc. Cl. A (a) |
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19,363,038 |
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22,020,355 |
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Health Care Equipment & Supplies1.9% |
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|
|
|
|
|
400 |
|
Baxter International, Inc. (a) |
|
|
|
|
|
19,396,000 |
|
|
368 |
|
Medtronic, Inc. (a) |
|
|
|
|
|
14,109,424 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
33,505,424 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Household Durables0.8% |
|
|
|
|
|
|
|
|
200 |
|
Stanley Black & Decker, Inc. |
|
|
|
|
|
14,536,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Household Products1.8% |
|
|
|
|
|
|
|
|
504 |
|
Kimberly-Clark Corp. |
|
|
|
|
|
32,649,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
10 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Value |
|
||
|
|
|
Industrial Conglomerates1.8% |
|
|
|
|
|
|
|
|
1,653 |
|
General Electric Co. (a) |
|
|
|
|
$ |
33,295,790 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Insurance5.2% |
|
|
|
|
|
|
|
|
800 |
|
Allstate Corp. (a) |
|
|
|
|
|
24,912,000 |
|
|
1,104 |
|
Lincoln National Corp. (a) |
|
|
|
|
|
31,827,824 |
|
|
200 |
|
MetLife, Inc. |
|
|
|
|
|
9,154,000 |
|
|
490 |
|
Travelers Cos, Inc. (a) |
|
|
|
|
|
27,567,400 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
93,461,224 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
IT Services0.7% |
|
|
|
|
|
|
|
|
75 |
|
International Business Machines Corp. |
|
|
|
|
|
12,150,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Media2.1% |
|
|
|
|
|
|
|
|
1,300 |
|
CBS Corp. Cl. B |
|
|
|
|
|
25,779,000 |
|
|
399 |
|
Time Warner, Inc. |
|
|
|
|
|
12,532,825 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
38,311,825 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Metals & Mining1.2% |
|
|
|
|
|
|
|
|
200 |
|
Freeport-McMoRan Copper & Gold, Inc. (a) |
|
|
|
|
|
21,750,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Multi-Utilities1.2% |
|
|
|
|
|
|
|
|
750 |
|
Ameren Corp. (a) |
|
|
|
|
|
21,277,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Office Electronics1.2% |
|
|
|
|
|
|
|
|
2,125 |
|
Xerox Corp. (a) |
|
|
|
|
|
22,567,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Oil, Gas & Consumable Fuels14.9% |
|
|
|
|
|
|
|
|
200 |
|
Cenovus Energy, Inc. |
|
|
|
|
|
6,922,000 |
|
|
1,000 |
|
Chesapeake Energy Corp. (a) |
|
|
|
|
|
29,530,000 |
|
|
307 |
|
Chevron Corp. (a) |
|
|
|
|
|
29,171,989 |
|
|
800 |
|
ConocoPhillips (a) |
|
|
|
|
|
57,168,000 |
|
|
400 |
|
EnCana Corp. |
|
|
|
|
|
12,908,000 |
|
|
900 |
|
Marathon Oil Corp. (a) |
|
|
|
|
|
41,130,000 |
|
|
550 |
|
Royal Dutch Shell PLC Cl. A - ADR (a) |
|
|
|
|
|
39,044,500 |
|
|
900 |
|
Total SA - ADR (a) |
|
|
|
|
|
52,893,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
268,767,489 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Pharmaceuticals8.2% |
|
|
|
|
|
|
|
|
1,200 |
|
GlaxoSmithKline PLC - ADR (a) |
|
|
|
|
|
43,596,000 |
|
|
369 |
|
Johnson & Johnson |
|
|
|
|
|
22,032,298 |
|
|
3,000 |
|
Pfizer, Inc. (a) |
|
|
|
|
|
54,660,000 |
|
|
800 |
|
Sanofi-Aventis S.A. - ADR |
|
|
|
|
|
27,528,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
147,816,298 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Real Estate Investment Trust0.4% |
|
|
|
|
|
|
|
|
400 |
|
Annaly Capital Management, Inc. |
|
|
|
|
|
7,132,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Semiconductors & Semiconductor Equipment3.3% |
|
|
|
|
|
|
|
|
2,790 |
|
Intel Corp. (a) |
|
|
|
|
|
59,873,400 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Software2.0% |
|
|
|
|
|
|
|
|
986 |
|
Microsoft Corp. |
|
|
|
|
|
27,331,305 |
|
|
461 |
|
Symantec Corp. (b) |
|
|
|
|
|
8,112,716 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
35,444,021 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Textiles, Apparel & Luxury Goods0.5% |
|
|
|
|
|
|
|
|
100 |
|
VF Corp. |
|
|
|
|
|
8,272,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
11 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Value |
|
||
|
|
|
Thrifts & Mortgage Finance2.2% |
|
|
|
|
|
|
|
|
2,000 |
|
Hudson City Bancorp, Inc. (a) |
|
|
|
|
$ |
21,960,000 |
|
|
1,000 |
|
New York Community Bancorp, Inc. (a) |
|
|
|
|
|
18,320,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
40,280,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Tobacco2.4% |
|
|
|
|
|
|
|
|
780 |
|
Altria Group, Inc. (a) |
|
|
|
|
|
18,342,502 |
|
|
800 |
|
Reynolds American, Inc. (a) |
|
|
|
|
|
25,448,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
43,790,502 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock (cost$1,379,217,606) |
|
|
|
|
|
1,263,724,918 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE PREFERRED STOCK13.2% |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Airlines0.3% |
|
|
|
|
|
|
|
|
123 |
|
Continental Airlines Finance Trust II, 6.00%, 11/15/30 |
|
|
Caa1/CCC |
|
|
4,837,009 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Automobiles0.6% |
|
|
|
|
|
|
|
|
190 |
|
General Motors Co., 4.75%, 12/1/13 |
|
|
NR/NR |
|
|
10,331,663 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Banks0.4% |
|
|
|
|
|
|
|
|
147 |
|
Barclays Bank PLC, 10.00%, 3/15/11 |
|
|
|
|
|
|
|
|
|
|
(Teva Pharmaceuticals Industries Ltd.)(c) |
|
|
A1/A+ |
|
|
7,322,335 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Capital Markets0.7% |
|
|
|
|
|
|
|
|
188 |
|
AMG Capital Trust I, 5.10%, 4/15/36 |
|
|
NR/BB |
|
|
9,432,696 |
|
|
|
|
Lehman Brothers Holdings, Inc. (c)(d)(e), |
|
|
|
|
|
|
|
|
630 |
|
6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) |
|
|
WR/NR |
|
|
2,028,488 |
|
|
98 |
|
28.00%, 3/6/09, Ser. RIG (Transocean, Inc.) |
|
|
WR/NR |
|
|
1,331,778 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
12,792,962 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Commercial Banks0.9% |
|
|
|
|
|
|
|
|
75 |
|
Fifth Third Bancorp, 8.50%, 6/30/13, Ser. G (f) |
|
|
Ba1/BB |
|
|
11,429,375 |
|
|
6 |
|
Wells Fargo & Co., 7.50%, 3/15/13, Ser. L (f) |
|
|
Baa3/A- |
|
|
5,733,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
17,163,125 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Commercial Services & Supplies0.4% |
|
|
|
|
|
|
|
|
161 |
|
United Rentals, Inc., 6.50%, 8/1/28 |
|
|
Caa1/CCC |
|
|
7,322,708 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Diversified Financial Services3.7% |
|
|
|
|
|
|
|
|
189 |
|
2010 Swift Mandatory Common Exchange Security Trust, |
|
|
|
|
|
|
|
|
|
|
6.00%, 12/31/13 (g) |
|
|
NR/NR |
|
|
2,598,026 |
|
|
|
|
Bank of America Corp., |
|
|
|
|
|
|
|
|
10 |
|
7.25%, 1/30/13, Ser. L (f) |
|
|
Ba3/BB+ |
|
|
9,409,750 |
|
|
189 |
|
10.00%, 2/3/11, Ser. GILD (Gilead Sciences Inc.)(c) |
|
|
A2/A |
|
|
6,460,969 |
|
|
134 |
|
10.00%, 2/24/11, Ser. SLB (Schlumberger Ltd.)(c) |
|
|
A2/A |
|
|
9,648,907 |
|
|
74 |
|
Citigroup, Inc., 7.50%, 12/15/12 |
|
|
NR/NR |
|
|
10,185,944 |
|
|
|
|
Credit Suisse Securities USA LLC, |
|
|
|
|
|
|
|
|
173 |
|
7.00%, 7/27/11 (Target Corp.)(c) |
|
|
Aa2/A |
|
|
9,527,110 |
|
|
340 |
|
8.00%, 9/20/11 (Bristol-Myers Squibb Co.)(c) |
|
|
Aa2/A |
|
|
8,780,500 |
|
|
140 |
|
JP Morgan Chase & Co., 7.00%, 7/25/11 |
|
|
|
|
|
|
|
|
|
|
(McDonalds Corp.)(c) |
|
|
Aa3/A+ |
|
|
10,354,869 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
66,966,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
12 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Credit Rating |
|
Value |
|
|||
|
|
|
Electric Utilities0.4% |
|
|
|
|
|
|
|
|
|
|
NextEra Energy, Inc., |
|
|
|
|
|
|
|
|
50 |
|
7.00%, 9/1/13 |
|
|
NR/NR |
|
$ |
2,462,750 |
|
|
88 |
|
8.375%, 6/1/12 |
|
|
NR/NR |
|
|
4,416,340 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
6,879,090 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Food Products1.0% |
|
|
|
|
|
|
|
|
157 |
|
Archer-Daniels-Midland Co., 6.25%, 6/1/11 |
|
|
NR/BBB+ |
|
|
6,569,440 |
|
|
114 |
|
Bunge Ltd., 4.875%, 12/1/11 (f) |
|
|
Ba1/BB |
|
|
11,212,255 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
17,781,695 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Household Durables0.8% |
|
|
|
|
|
|
|
|
98 |
|
Newell Financial Trust I, 5.25%, 12/1/27 |
|
|
WR/BB |
|
|
4,194,036 |
|
|
93 |
|
Stanley Black & Decker, Inc., 4.75%, 11/17/15 |
|
|
Baa3/BBB+ |
|
|
10,824,373 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,018,409 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Insurance0.9% |
|
|
|
|
|
|
|
|
460 |
|
American International Group, Inc., 8.50%, 2/15/11 |
|
|
Baa2/NR |
|
|
2,969,257 |
|
|
66 |
|
Assured Guaranty Ltd., 8.50%, 6/1/12 |
|
|
NR/NR |
|
|
3,968,250 |
|
|
274 |
|
XL Group PLC, 10.75%, 8/15/11 |
|
|
Baa2/BBB- |
|
|
8,658,505 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,596,012 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Multi-Utilities0.6% |
|
|
|
|
|
|
|
|
244 |
|
AES Trust III, 6.75%, 10/15/29 |
|
|
B3/B+ |
|
|
11,899,875 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Oil, Gas & Consumable Fuels1.4% |
|
|
|
|
|
|
|
|
140 |
|
Apache Corp., 6.00%, 8/1/13 |
|
|
NR/NR |
|
|
9,168,144 |
|
|
45 |
|
ATP Oil & Gas Corp., 8.00%, 10/1/14 (f)(g)(h) |
|
|
NR/NR |
|
|
4,363,425 |
|
|
115 |
|
Chesapeake Energy Corp., 5.00%, 12/31/49 |
|
|
NR/B |
|
|
11,380,050 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
24,911,619 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Real Estate Investment Trust1.1% |
|
|
|
|
|
|
|
|
177 |
|
Alexandria Real Estate Equities, Inc., 7.00%, 4/20/13 (f) |
|
|
NR/NR |
|
|
4,420,000 |
|
|
602 |
|
FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A (f) |
|
|
Caa3/CCC- |
|
|
15,849,144 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
20,269,144 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Preferred Stock (cost-$263,800,753) |
|
|
|
|
|
239,091,721 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
CONVERTIBLE BONDS & NOTES12.6% |
|
|
|
|
|
|
|
|||
|
|
|
Building Products0.3% |
|
|
|
|
|
|
|
|
$5,875 |
|
Griffon Corp., 4.00%, 1/15/17 (g)(h) |
|
|
NR/NR |
|
|
6,073,281 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Capital Markets0.2% |
|
|
|
|
|
|
|
|
3,980 |
|
Ares Capital Corp., 5.75%, 2/1/16 (g)(h) |
|
|
NR/BBB |
|
|
4,109,350 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Computers & Peripherals0.6% |
|
|
|
|
|
|
|
|
315 |
|
EMC Corp., 1.75%, 12/1/13 |
|
|
NR/A- |
|
|
511,875 |
|
|
1,250 |
|
NetApp, Inc., 1.75%, 6/1/13 |
|
|
NR/NR |
|
|
2,220,313 |
|
|
6,500 |
|
SanDisk Corp., 1.50%, 8/15/17 |
|
|
NR/BB- |
|
|
7,109,375 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
9,841,563 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Construction & Engineering0.1% |
|
|
|
|
|
|
|
|
635 |
|
MasTec, Inc., 4.00%, 6/15/14 |
|
|
NR/NR |
|
|
783,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
13 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Credit Rating |
|
Value |
|
|||
|
|
|
Diversified Telecommunication Services0.3% |
|
|
|
|
|
|
|
|
$ 4,905 |
|
tw telecom, Inc., 2.375%, 4/1/26 |
|
|
B3/B- |
|
$ |
5,493,600 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Electrical Equipment1.2% |
|
|
|
|
|
|
|
|
8,780 |
|
EnerSys, 3.375%, 6/1/38 (i) |
|
|
B2/BB |
|
|
10,031,150 |
|
|
2,000 |
|
General Cable Corp., 4.50%, 11/15/29 (i) |
|
|
B2/B |
|
|
2,505,000 |
|
|
10,000 |
|
JA Solar Holdings Co., Ltd., 4.50%, 5/15/13 |
|
|
NR/NR |
|
|
9,675,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
22,211,150 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Energy Equipment & Services0.2% |
|
|
|
|
|
|
|
|
3,500 |
|
Newpark Resources, Inc., 4.00%, 10/1/17 |
|
|
NR/CCC+ |
|
|
3,228,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Hotels, Restaurants & Leisure0.9% |
|
|
|
|
|
|
|
|
3,495 |
|
International Game Technology, 3.25%, 5/1/14 |
|
|
Baa2/BBB |
|
|
4,067,306 |
|
|
1,402 |
|
Mandalay Resort Group, 1.054%, 3/21/33, FRN (d)(e) |
|
|
Caa1/CCC+ |
|
|
1,513,970 |
|
|
9,295 |
|
MGM Resorts International, 4.25%, 4/15/15 (g)(h) |
|
|
Caa1/CCC+ |
|
|
10,329,069 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,910,345 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Household Durables0.4% |
|
|
|
|
|
|
|
|
6,820 |
|
Lennar Corp., 2.00%, 12/1/20 (g)(h) |
|
|
B3/B+ |
|
|
7,050,175 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Insurance0.1% |
|
|
|
|
|
|
|
|
2,000 |
|
American Equity Investment Life Holding Co., |
|
|
|
|
|
|
|
|
|
|
3.50%, 9/15/15 (g)(h) |
|
|
NR/NR |
|
|
2,390,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Internet0.2% |
|
|
|
|
|
|
|
|
2,500 |
|
Symantec Corp., 1.00%, 6/15/13 |
|
|
NR/BBB |
|
|
2,906,250 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Internet Software & Services0.2% |
|
|
|
|
|
|
|
|
4,200 |
|
Equinix, Inc., 2.50%, 4/15/12 |
|
|
NR/B- |
|
|
4,378,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
IT Services0.4% |
|
|
|
|
|
|
|
|
6,325 |
|
Alliance Data Systems Corp., 1.75%, 8/1/13 |
|
|
NR/NR |
|
|
6,933,781 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Lodging0.1% |
|
|
|
|
|
|
|
|
1,000 |
|
Gaylord Entertainment Co., 3.75%, 10/1/14 (g)(h) |
|
|
NR/NR |
|
|
1,392,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Machinery1.0% |
|
|
|
|
|
|
|
|
6,035 |
|
AGCO Corp., 1.25%, 12/15/36 |
|
|
NR/BB+ |
|
|
8,283,038 |
|
|
3,500 |
|
Navistar International Corp., 3.00%, 10/15/14 |
|
|
NR/B |
|
|
5,114,375 |
|
|
1,790 |
|
Titan International, Inc., 5.625%, 1/15/17 (g)(h) |
|
|
NR/B+ |
|
|
3,797,037 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
17,194,450 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Media0.2% |
|
|
|
|
|
|
|
|
7,160 |
|
Liberty Media LLC, 3.50%, 1/15/31 |
|
|
B1/BB- |
|
|
4,027,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Metals & Mining0.7% |
|
|
|
|
|
|
|
|
4,805 |
|
Steel Dynamics, Inc., 5.125%, 6/15/14 |
|
|
NR/BB+ |
|
|
6,126,375 |
|
|
3,000 |
|
United States Steel Corp., 4.00%, 5/15/14 |
|
|
Ba2/BB |
|
|
5,808,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
11,935,125 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Multi-line Retail0.1% |
|
|
|
|
|
|
|
|
1,940 |
|
Saks, Inc., 2.00%, 3/15/24 |
|
|
B3/B+ |
|
|
2,109,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Oil, Gas & Consumable Fuels1.4% |
|
|
|
|
|
|
|
|
8,100 |
|
Alpha Natural Resources, Inc., 2.375%, 4/15/15 |
|
|
NR/BB |
|
|
10,276,875 |
|
|
7,475 |
|
Peabody Energy Corp., 4.75%, 12/15/41 |
|
|
Ba3/B+ |
|
|
9,511,938 |
|
|
3,855 |
|
Western Refining, Inc., 5.75%, 6/15/14 |
|
|
NR/CCC+ |
|
|
5,204,250 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
24,993,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
14 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
|||
|
|
|
Pharmaceuticals0.3% |
|
|
|
|
|
|
|
|
$ 1,860 |
|
Valeant Pharmaceuticals International, Inc., |
|
|
|
|
|
|
|
|
|
|
5.375%, 8/1/14 (g)(h) |
|
|
NR/NR |
|
$ |
4,903,425 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Real Estate Investment Trust1.0% |
|
|
|
|
|
|
|
|
3,125 |
|
Boston Properties LP, 3.75%, 5/15/36 |
|
|
NR/A- |
|
|
3,593,750 |
|
|
8,800 |
|
Developers Diversified Realty Corp., 1.75%, 11/15/40 |
|
|
NR/NR |
|
|
9,240,000 |
|
|
5,000 |
|
Health Care REIT, Inc., 4.75%, 12/1/26 |
|
|
Baa2/BBB- |
|
|
5,500,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
18,333,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Road & Rail0.2% |
|
|
|
|
|
|
|
|
2,000 |
|
Hertz Global Holdings, Inc., 5.25%, 6/1/14 |
|
|
NR/B- |
|
|
3,877,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Semiconductors & Semiconductor Equipment0.1% |
|
|
|
|
|
|
|
|
2,030 |
|
SunPower Corp., 4.75%, 4/15/14 |
|
|
NR/NR |
|
|
1,936,112 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Software1.5% |
|
|
|
|
|
|
|
|
2,000 |
|
Cadence Design Systems, Inc., 2.625%, 6/1/15 (g)(h) |
|
|
NR/NR |
|
|
2,635,000 |
|
|
3,000 |
|
Concur Technologies, Inc., 2.50%, 4/15/15 (g)(h) |
|
|
NR/NR |
|
|
3,555,000 |
|
|
5,000 |
|
Lawson Software, Inc., 2.50%, 4/15/12 |
|
|
NR/NR |
|
|
5,287,500 |
|
|
7,500 |
|
Nuance Communications, Inc., 2.75%, 8/15/27 |
|
|
NR/B- |
|
|
9,356,250 |
|
|
4,000 |
|
Salesforce.com, Inc., 0.75%, 1/15/15 (g)(h) |
|
|
NR/NR |
|
|
6,565,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
27,398,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Telecommunications0.4% |
|
|
|
|
|
|
|
|
6,000 |
|
Ciena Corp., 4.00%, 3/15/15 (g)(h) |
|
|
NR/NR |
|
|
7,875,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Thrifts & Mortgage Finance0.5% |
|
|
|
|
|
|
|
|
8,020 |
|
MGIC Investment Corp., 5.00%, 5/1/17 |
|
|
NR/CCC+ |
|
|
8,661,600 |
|
|
1,000 |
|
The PMI Group, Inc., 4.50%, 4/15/20 |
|
|
NR/CCC+ |
|
|
817,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
9,479,100 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Bonds & Notes (cost$218,536,288) |
|
|
|
|
|
226,766,201 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
YANKEE BOND0.2% |
|
|
|
|
|
|
|
|||
|
|
|
Marine0.2% |
|
|
|
|
|
|
|
|
3,090 |
|
DryShips, Inc., 5.00%, 12/1/14 (cost-$3,476,922) |
|
|
NR/NR |
|
|
3,024,337 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
SHORT-TERM INVESTMENTS4.4% |
|
|
|
|
|
|
|
|||
|
|
|
Time Deposits4.4% |
|
|
|
|
|
|
|
|
15,068 |
|
Citibank-London, 0.03%, 2/1/11, |
|
|
|
|
|
15,068,176 |
|
|
8,250 |
|
Royal Bank of Canada-Toronto, 0.03%, 2/1/11, |
|
|
|
|
|
8,249,846 |
|
|
56,721 |
|
Societe Generale-Paris, 0.03%, 2/1/11, |
|
|
|
|
|
56,720,898 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Total Short Term Investments (cost$80,038,920) |
|
|
|
|
|
80,038,920 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Total Investments, before call options written |
|
|
|
|
|
|
|
|
|
|
(cost$1,945,070,489)100.3% |
|
|
|
|
|
1,812,646,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
15 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Value |
|
||
CALL OPTIONS WRITTEN (b)(1.1)% |
|
|
|
|
|||
|
|
|
Morgan Stanley Cyclical Flex Index, |
|
|
|
|
|
350 |
|
strike price $1060, expires 2/4/11 |
|
$ |
(393,204 |
) |
|
|
|
Morgan Stanley Cyclical Index, |
|
|
|
|
|
400 |
|
strike price $1060, expires 2/19/11 |
|
|
(892,000 |
) |
|
400 |
|
strike price $1070, expires 2/19/11 |
|
|
(660,000 |
) |
|
|
|
NASDAQ 100 Flex Index, |
|
|
|
|
|
100 |
|
strike price $2275, expires 2/4/11 |
|
|
(197,524 |
) |
|
125 |
|
strike price $2275, expires 2/11/11 |
|
|
(389,108 |
) |
|
100 |
|
strike price $2350, expires 3/11/11 |
|
|
(215,736 |
) |
|
|
|
NASDAQ 100 Index, |
|
|
|
|
|
125 |
|
strike price $2275, expires 2/19/11 |
|
|
(537,500 |
) |
|
100 |
|
strike price $2375, expires 3/19/11 |
|
|
(197,000 |
) |
|
|
|
New York Stock Exchange Arca Mini Oil Flex Index, |
|
|
|
|
|
5,500 |
|
strike price $60.50, expires 2/11/11 |
|
|
(2,312,365 |
) |
|
5,000 |
|
strike price $63, expires 2/25/11 |
|
|
(1,147,200 |
) |
|
4,500 |
|
strike price $64, expires 3/4/11 |
|
|
(810,225 |
) |
|
6,000 |
|
strike price $65, expires 3/11/11 |
|
|
(853,680 |
) |
|
5,000 |
|
strike price $66.50, expires 3/25/11 |
|
|
(337,100 |
) |
|
|
|
New York Stock Exchange Arca Mini Oil Index, |
|
|
|
|
|
13,500 |
|
strike price $65, expires 3/19/11 |
|
|
(2,126,250 |
) |
|
|
|
Philadelphia Stock Exchange KBW Bank Flex Index, |
|
|
|
|
|
6,500 |
|
strike price $52.50, expires 2/4/11 |
|
|
(523,055 |
) |
|
6,500 |
|
strike price $56, expires 2/25/11 |
|
|
(186,550 |
) |
|
5,500 |
|
strike price $56.50, expires 3/4/11 |
|
|
(173,085 |
) |
|
6,000 |
|
strike price $57.50, expires 3/4/11 |
|
|
(106,800 |
) |
|
|
|
Philadelphia Stock Exchange KBW Bank Index, |
|
|
|
|
|
14,500 |
|
strike price $55, expires 3/19/11 |
|
|
(1,268,750 |
) |
|
|
|
Standard & Poors 500 Flex Index, |
|
|
|
|
|
550 |
|
strike price $1260, expires 2/4/11 |
|
|
(1,476,794 |
) |
|
300 |
|
strike price $1265, expires 2/11/11 |
|
|
(781,137 |
) |
|
300 |
|
strike price $1270, expires 2/11/11 |
|
|
(669,675 |
) |
|
250 |
|
strike price $1300, expires 3/4/11 |
|
|
(365,897 |
) |
|
300 |
|
strike price $1305, expires 3/11/11 |
|
|
(446,949 |
) |
|
300 |
|
strike price $1310, expires 3/11/11 |
|
|
(388,179 |
) |
|
|
|
Standard & Poors 500 Index, |
|
|
|
|
|
550 |
|
strike price $1285, expires 2/19/11 |
|
|
(965,250 |
) |
|
300 |
|
strike price $1305, expires 3/19/11 |
|
|
(517,500 |
) |
|
300 |
|
strike price $1315, expires 3/19/11 |
|
|
(391,500 |
) |
|
|
|
|
|
|||
|
|
|
Total Call Options Written (premiums received$14,849,891) |
|
|
(19,330,013 |
) |
|
|
|
|
|
|||
|
|
|
Total Investments, net of call options written |
|
|
|
|
|
|
|
(cost$1,930,220,598)99.2% |
|
|
1,793,316,084 |
|
|
|
|
|
|
|||
|
|
|
Other assets less other liabilities0.8% |
|
|
14,356,184 |
|
|
|
|
|
|
|||
|
|
|
Net Assets100.0% |
|
$ |
1,807,672,268 |
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
16 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Value |
|
||
COMMON STOCK71.7% |
|
|
|
|
|||
|
|
|
Aerospace & Defense1.3% |
|
|
|
|
|
74 |
|
L-3 Communications Holdings, Inc. |
|
$ |
5,813,975 |
|
|
|
|
|
|
|||
|
|
|
Auto Components1.7% |
|
|
|
|
|
206 |
|
Johnson Controls, Inc. (a) |
|
|
7,912,179 |
|
|
|
|
|
|
|||
|
|
|
Automobiles1.6% |
|
|
|
|
|
458 |
|
Ford Motor Co. (a)(b) |
|
|
7,309,885 |
|
|
|
|
|
|
|||
|
|
|
Beverages4.6% |
|
|
|
|
|
121 |
|
Coca-Cola Co. |
|
|
7,604,850 |
|
|
127 |
|
Molson Coors Brewing Co. Cl. B |
|
|
5,966,551 |
|
|
114 |
|
PepsiCo, Inc. |
|
|
7,331,340 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
20,902,741 |
|
|
|
|
|
|
|||
|
|
|
Biotechnology1.4% |
|
|
|
|
|
164 |
|
Gilead Sciences, Inc. (b) |
|
|
6,294,320 |
|
|
|
|
|
|
|||
|
|
|
Commercial Services & Supplies0.5% |
|
|
|
|
|
52 |
|
Avery Dennison Corp. |
|
|
2,168,098 |
|
|
|
|
|
|
|||
|
|
|
Communications Equipment5.7% |
|
|
|
|
|
39 |
|
Aviat Networks, Inc. (b) |
|
|
200,479 |
|
|
284 |
|
Cisco Systems, Inc. (b) |
|
|
6,010,830 |
|
|
156 |
|
Harris Corp. |
|
|
7,236,970 |
|
|
158 |
|
Qualcomm, Inc. (a) |
|
|
8,541,714 |
|
|
61 |
|
Research In Motion Ltd. (b) |
|
|
3,593,888 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
25,583,881 |
|
|
|
|
|
|
|||
|
|
|
Computers & Peripherals5.5% |
|
|
|
|
|
24 |
|
Apple, Inc. (a)(b) |
|
|
7,974,020 |
|
|
344 |
|
EMC Corp. (a)(b) |
|
|
8,567,138 |
|
|
53 |
|
International Business Machines Corp. (a) |
|
|
8,537,400 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
25,078,558 |
|
|
|
|
|
|
|||
|
|
|
Diversified Financial Services0.8% |
|
|
|
|
|
84 |
|
JP Morgan Chase & Co. |
|
|
3,765,972 |
|
|
|
|
|
|
|||
|
|
|
Diversified Telecommunication Services1.7% |
|
|
|
|
|
48 |
|
Frontier Communications Corp. |
|
|
444,635 |
|
|
202 |
|
Verizon Communications, Inc. |
|
|
7,195,240 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
7,639,875 |
|
|
|
|
|
|
|||
|
|
|
Electric Utilities0.9% |
|
|
|
|
|
54 |
|
Entergy Corp. |
|
|
3,911,758 |
|
|
|
|
|
|
|||
|
|
|
Electronic Equipment, Instruments & Components1.8% |
|
|
|
|
|
149 |
|
Amphenol Corp. Cl. A |
|
|
8,245,660 |
|
|
|
|
|
|
|||
|
|
|
Energy Equipment & Services5.0% |
|
|
|
|
|
69 |
|
Diamond Offshore Drilling, Inc. |
|
|
4,940,819 |
|
|
124 |
|
National Oilwell Varco, Inc. (a) |
|
|
9,126,650 |
|
|
97 |
|
Schlumberger Ltd. (a) |
|
|
8,605,333 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
22,672,802 |
|
|
|
|
|
|
|||
|
|
|
Health Care Equipment & Supplies2.6% |
|
|
|
|
|
111 |
|
Baxter International, Inc. |
|
|
5,387,239 |
|
|
20 |
|
Intuitive Surgical, Inc. (b) |
|
|
6,603,510 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
11,990,749 |
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
17 |
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Value |
|
||
|
|
|
Health Care Providers & Services3.4% |
|
|
|
|
|
101 |
|
McKesson Corp. |
|
$ |
7,554,585 |
|
|
126 |
|
Medco Health Solutions, Inc. (b) |
|
|
7,670,214 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
15,224,799 |
|
|
|
|
|
|
|||
|
|
|
Hotels, Restaurants & Leisure1.5% |
|
|
|
|
|
94 |
|
McDonalds Corp. |
|
|
6,888,145 |
|
|
|
|
|
|
|||
|
|
|
Household Products1.7% |
|
|
|
|
|
121 |
|
Procter & Gamble Co. |
|
|
7,663,982 |
|
|
|
|
|
|
|||
|
|
|
Independent Power Producers & Energy Traders1.4% |
|
|
|
|
|
92 |
|
Constellation Energy Group, Inc. |
|
|
2,967,000 |
|
|
154 |
|
NRG Energy, Inc. (b) |
|
|
3,195,479 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
6,162,479 |
|
|
|
|
|
|
|||
|
|
|
Industrial Conglomerates3.1% |
|
|
|
|
|
290 |
|
General Electric Co. |
|
|
5,843,802 |
|
|
310 |
|
Textron, Inc. (a) |
|
|
8,157,787 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
14,001,589 |
|
|
|
|
|
|
|||
|
|
|
Insurance1.7% |
|
|
|
|
|
53 |
|
MetLife, Inc. |
|
|
2,434,232 |
|
|
87 |
|
Prudential Financial, Inc. |
|
|
5,351,370 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
7,785,602 |
|
|
|
|
|
|
|||
|
|
|
Internet Software & Services1.9% |
|
|
|
|
|
14 |
|
Google, Inc. Cl. A (a)(b) |
|
|
8,405,040 |
|
|
|
|
|
|
|||
|
|
|
Machinery5.7% |
|
|
|
|
|
176 |
|
AGCO Corp. (a)(b) |
|
|
8,907,990 |
|
|
101 |
|
Deere & Co. |
|
|
9,171,810 |
|
|
90 |
|
Joy Global, Inc. (a) |
|
|
7,820,046 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
25,899,846 |
|
|
|
|
|
|
|||
|
|
|
Metals & Mining1.6% |
|
|
|
|
|
66 |
|
Freeport-McMoRan Copper & Gold, Inc. (a) |
|
|
7,199,250 |
|
|
|
|
|
|
|||
|
|
|
Multiline Retail1.7% |
|
|
|
|
|
139 |
|
Target Corp. |
|
|
7,599,438 |
|
|
|
|
|
|
|||
|
|
|
Oil, Gas & Consumable Fuels3.5% |
|
|
|
|
|
84 |
|
Occidental Petroleum Corp. (a) |
|
|
8,101,784 |
|
|
121 |
|
Peabody Energy Corp. (a) |
|
|
7,680,162 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
15,781,946 |
|
|
|
|
|
|
|||
|
|
|
Pharmaceuticals2.5% |
|
|
|
|
|
137 |
|
Abbott Laboratories |
|
|
6,186,920 |
|
|
63 |
|
Johnson & Johnson |
|
|
3,782,724 |
|
|
39 |
|
Merck & Co., Inc. |
|
|
1,286,200 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
11,255,844 |
|
|
|
|
|
|
|||
|
|
|
Semiconductors & Semiconductor Equipment3.4% |
|
|
|
|
|
342 |
|
Intel Corp. |
|
|
7,343,612 |
|
|
239 |
|
Texas Instruments, Inc. (a) |
|
|
8,104,490 |
|
|
|
|
|
|
|||
|
|
|
|
|
|
15,448,102 |
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
18 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
Value |
|
|||
|
|
|
Software3.5% |
|
|
|
|
|
|
|
|
248 |
|
Microsoft Corp. |
|
|
|
|
$ |
6,867,482 |
|
|
251 |
|
Oracle Corp. (a) |
|
|
|
|
|
8,026,718 |
|
|
42 |
|
Symantec Corp. (b) |
|
|
|
|
|
745,097 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,639,297 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock (cost$386,558,408) |
|
|
|
|
|
324,245,812 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE PREFERRED STOCK15.4% |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airlines0.4% |
|
|
|
|
|
|
|
|
51 |
|
Continental Airlines Finance Trust II, 6.00%, 11/15/30 |
|
|
Caa1/NR |
|
|
1,992,185 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Automobiles0.5% |
|
|
|
|
|
|
|
|
45 |
|
General Motors Co., 4.75%, 12/1/13 |
|
|
NR/NR |
|
|
2,443,950 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Banks0.3% |
|
|
|
|
|
|
|
|
26 |
|
Barclays Bank PLC, 10.00%, 3/15/11 |
|
|
|
|
|
|
|
|
|
|
(Teva Pharmaceuticals Industries Ltd.)(c) |
|
|
A1/A+ |
|
|
1,291,680 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Capital Markets1.3% |
|
|
|
|
|
|
|
|
40 |
|
AMG Capital Trust I, 5.10%, 4/15/36 |
|
|
NR/BB |
|
|
2,028,969 |
|
|
|
|
Lehman Brothers Holdings, Inc. (c)(d)(e), |
|
|
|
|
|
|
|
|
209 |
|
6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) |
|
|
WR/NR |
|
|
673,534 |
|
|
33 |
|
28.00%, 3/6/09, Ser. RIG (Transocean, Inc.) |
|
|
WR/NR |
|
|
455,286 |
|
|
104 |
|
The Goldman Sachs Group, Inc., |
|
|
|
|
|
|
|
|
|
|
7.00%, 8/1/11 (Weatherford Corp.)(c) |
|
|
A1/A |
|
|
2,429,246 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
5,587,035 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Commercial Banks1.2% |
|
|
|
|
|
|
|
|
18 |
|
Fifth Third Bancorp, 8.50%, 6/30/13, Ser. G (f) |
|
|
Ba1/BB |
|
|
2,721,316 |
|
|
3 |
|
Wells Fargo & Co., 7.50%, 3/15/13, Ser. L (f) |
|
|
Baa3/A- |
|
|
2,814,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
5,536,066 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Commercial Services & Supplies1.0% |
|
|
|
|
|
|
|
|
102 |
|
United Rentals, Inc., 6.50%, 8/1/28 |
|
|
Caa1/CCC |
|
|
4,655,072 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Diversified Financial Services3.5% |
|
|
|
|
|
|
|
|
|
|
Bank of America Corp., |
|
|
|
|
|
|
|
|
4 |
|
7.25%, 1/30/13, Ser. L (f) |
|
|
Ba3/BB+ |
|
|
4,184,862 |
|
|
31 |
|
10.00%, 2/24/11, Ser. SLB (Schlumberger Ltd.)(c) |
|
|
A2/A |
|
|
2,228,335 |
|
|
19 |
|
Citigroup, Inc., 7.50%, 12/15/12 |
|
|
NR/NR |
|
|
2,614,780 |
|
|
|
|
Credit Suisse Securities USA LLC, |
|
|
|
|
|
|
|
|
45 |
|
7.00%, 7/27/11 (Target Corp.)(c) |
|
|
Aa2/A |
|
|
2,485,034 |
|
|
79 |
|
8.00%, 9/20/11 (Bristol-Myers Squibb Co.)(c) |
|
|
Aa2/A |
|
|
2,045,340 |
|
|
33 |
|
JP Morgan Chase & Co., 7.00%, 7/25/11 |
|
|
|
|
|
|
|
|
|
|
(McDonalds Corp.)(c) |
|
|
Aa3/A+ |
|
|
2,435,594 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,993,945 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Electric Utilities0.3% |
|
|
|
|
|
|
|
|
23 |
|
NextEra Energy, Inc., 8.375%, 6/1/12 |
|
|
NR/NR |
|
|
1,177,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
19 |
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Credit Rating |
|
Value |
|
|||
|
|
|
Food Products1.4% |
|
|
|
|
|
|
|
|
58 |
|
Archer-Daniels-Midland Co., 6.25%, 6/1/11 |
|
|
NR/BBB+ |
|
$ |
2,407,244 |
|
|
39 |
|
Bunge Ltd., 4.875%, 12/1/11 (f) |
|
|
Ba1/BB |
|
|
3,821,800 |
|
|
|
|
|
|
|
|
|
|
6,229,044 |
|
|
|
|
Household Durables0.4% |
|
|
|
|
|
|
|
|
41 |
|
Newell Financial Trust I, 5.25%, 12/1/27 |
|
|
WR/BB |
|
|
1,756,440 |
|
|
|
|
Insurance0.9% |
|
|
|
|
|
|
|
|
148 |
|
American International Group, Inc., 8.50%, 2/15/11 |
|
|
Baa2/NR |
|
|
954,600 |
|
|
28 |
|
Assured Guaranty Ltd., 8.50%, 6/1/12 |
|
|
NR/NR |
|
|
1,653,437 |
|
|
53 |
|
XL Group PLC, 10.75%, 8/15/11 |
|
|
Baa2/BBB- |
|
|
1,663,212 |
|
|
|
|
|
|
|
|
|
|
4,271,249 |
|
|
|
|
Multi-Utilities1.1% |
|
|
|
|
|
|
|
|
102 |
|
AES Trust III, 6.75%, 10/15/29 |
|
|
B3/B+ |
|
|
4,951,050 |
|
|
|
|
Oil, Gas & Consumable Fuels1.6% |
|
|
|
|
|
|
|
|
37 |
|
Apache Corp., 6.00%, 8/1/13 |
|
|
NR/NR |
|
|
2,414,736 |
|
|
20 |
|
ATP Oil & Gas Corp., 8.00%, 10/1/14 (f)(g)(h) |
|
|
NR/NR |
|
|
1,964,025 |
|
|
27 |
|
Chesapeake Energy Corp., 5.00%, 12/31/49 |
|
|
NR/B |
|
|
2,707,650 |
|
|
|
|
|
|
|
|
|
|
7,086,411 |
|
|
|
|
Real Estate Investment Trust1.1% |
|
|
|
|
|
|
|
|
91 |
|
Alexandria Real Estate Equities, Inc., 7.00%, 4/20/13 (f) |
|
|
NR/NR |
|
|
2,262,500 |
|
|
99 |
|
FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A (f) |
|
|
Caa3/CCC- |
|
|
2,602,059 |
|
|
|
|
|
|
|
|
|
|
4,864,559 |
|
|
|
|
Road & Rail0.4% |
|
|
|
|
|
|
|
|
1 |
|
Kansas City Southern, 5.125%, 2/20/11 (f) |
|
|
NR/B- |
|
|
2,040,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Preferred Stock (cost$86,413,064) |
|
|
|
|
|
69,875,949 |
|
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE BONDS & NOTES9.8% |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto Components0.7% |
|
|
|
|
|
|
|
|
$1,425 |
|
BorgWarner, Inc., 3.50%, 4/15/12 |
|
|
NR/BBB |
|
|
2,974,687 |
|
|
|
|
Capital Markets0.7% |
|
|
|
|
|
|
|
|
2,900 |
|
Ares Capital Corp., 5.75%, 2/1/16 (g)(h) |
|
|
NR/BBB |
|
|
2,994,250 |
|
|
|
|
Electrical Equipment0.6% |
|
|
|
|
|
|
|
|
1,880 |
|
EnerSys, 3.375%, 6/1/38 (i) |
|
|
B2/BB |
|
|
2,147,900 |
|
|
500 |
|
JA Solar Holdings Co., Ltd., 4.50%, 5/15/13 |
|
|
NR/NR |
|
|
483,750 |
|
|
|
|
|
|
|
|
|
|
2,631,650 |
|
|
|
|
Electronic Equipment, Instruments & Components0.3% |
|
|
|
|
|
|
|
|
1,335 |
|
Anixter International, Inc., 1.00%, 2/15/13 |
|
|
NR/B+ |
|
|
1,561,950 |
|
|
|
|
Hotels, Restaurants & Leisure0.5% |
|
|
|
|
|
|
|
|
2,100 |
|
MGM Resorts International, 4.25%, 4/15/15 (g)(h) |
|
|
Caa1/CCC+ |
|
|
2,333,625 |
|
|
|
|
Internet Software & Services0.5% |
|
|
|
|
|
|
|
|
1,800 |
|
VeriSign, Inc., 3.25%, 8/15/37 |
|
|
NR/NR |
|
|
2,092,500 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
20 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
|||
|
|
|
IT Services0.5% |
|
|
|
|
|
|
|
|
$2,110 |
|
Alliance Data Systems Corp., 1.75%, 8/1/13 |
|
|
NR/NR |
|
$ |
2,313,088 |
|
|
|
|
Machinery0.6% |
|
|
|
|
|
|
|
|
1,200 |
|
Titan International, Inc., 5.625%, 1/15/17 (g)(h) |
|
|
NR/B+ |
|
|
2,545,500 |
|
|
|
|
Media1.2% |
|
|
|
|
|
|
|
|
|
|
Liberty Media LLC, |
|
|
|
|
|
|
|
|
1,365 |
|
3.125%, 3/30/23 |
|
|
B1/BB- |
|
|
1,568,044 |
|
|
4,000 |
|
3.50%, 1/15/31 |
|
|
B1/BB- |
|
|
2,250,000 |
|
|
1,600 |
|
Regal Entertainment Group, 6.25%, 3/15/11 (g)(h) |
|
|
NR/NR |
|
|
1,616,000 |
|
|
|
|
|
|
|
|
|
|
5,434,044 |
|
|
|
|
Metals & Mining0.5% |
|
|
|
|
|
|
|
|
1,800 |
|
Steel Dynamics, Inc., 5.125%, 6/15/14 |
|
|
NR/BB+ |
|
|
2,295,000 |
|
|
|
|
Oil, Gas & Consumable Fuels0.3% |
|
|
|
|
|
|
|
|
1,100 |
|
Western Refining, Inc., 5.75%, 6/15/14 |
|
|
NR/CCC+ |
|
|
1,485,000 |
|
|
|
|
Pharmaceuticals0.7% |
|
|
|
|
|
|
|
|
1,200 |
|
Valeant Pharmaceuticals International, Inc., |
|
|
|
|
|
|
|
|
|
|
5.375%, 8/1/14 (g)(h) |
|
|
NR/NR |
|
|
3,163,500 |
|
|
|
|
Real Estate Investment Trust1.0% |
|
|
|
|
|
|
|
|
2,000 |
|
Boston Properties LP, 3.75%, 5/15/36 |
|
|
NR/A- |
|
|
2,300,000 |
|
|
2,100 |
|
Health Care REIT, Inc., 4.75%, 12/1/26 |
|
|
Baa2/BBB- |
|
|
2,310,000 |
|
|
|
|
|
|
|
|
|
|
4,610,000 |
|
|
|
|
Semiconductors & Semiconductor Equipment0.5% |
|
|
|
|
|
|
|
|
2,500 |
|
SunPower Corp., 4.75%, 4/15/14 |
|
|
NR/NR |
|
|
2,384,375 |
|
|
|
|
Software0.4% |
|
|
|
|
|
|
|
|
1,400 |
|
Nuance Communications, Inc., 2.75%, 8/15/27 |
|
|
NR/B- |
|
|
1,746,500 |
|
|
|
|
Thrifts & Mortgage Finance0.8% |
|
|
|
|
|
|
|
|
|
|
MGIC Investment Corp., |
|
|
|
|
|
|
|
|
1,700 |
|
5.00%, 5/1/17 |
|
|
NR/CCC+ |
|
|
1,836,000 |
|
|
1,755 |
|
9.00%, 4/1/63 (g)(h) |
|
|
Caa3/CC |
|
|
1,816,425 |
|
|
|
|
|
|
|
|
|
|
3,652,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Bonds & Notes (cost-$44,326,221) |
|
|
|
|
|
44,218,094 |
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE BONDS & NOTES1.1% |
||||||||||
|
|
|
Electric0.4% |
|
|
|
|
|
|
|
|
2,000 |
|
Texas Competitive Electric Holdings Co. LLC / |
|
|
|
|
|
|
|
|
|
|
TCEH Finance, Inc., 15.00%, 4/1/21 (g)(h) |
|
|
Caa3/CCC- |
|
|
1,790,000 |
|
|
|
|
Independent Power Producer0.7% |
|
|
|
|
|
|
|
|
4,340 |
|
Dynegy Holdings, Inc., 7.75%, 6/1/19 |
|
|
Caa2/B- |
|
|
3,135,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Bonds & Notes (cost$5,920,612) |
|
|
|
|
|
4,925,650 |
|
|
|
|
|
|
|
|
|
|
|
|
YANKEE BOND0.2% |
||||||||||
|
|
|
Marine0.2% |
|
|
|
|
|
|
|
|
1,100 |
|
DryShips, Inc., 5.00%, 12/1/14 (cost-$1,241,382) |
|
|
NR/NR |
|
|
1,076,625 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
21 |
|
|
AGIC Equity & Convertible Income Fund |
Schedule of Investments |
January 31, 2011 |
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Value |
|
||
SHORT-TERM INVESTMENT2.5% |
|||||||
|
|
|
Time Deposit2.5% |
|
|
|
|
|
$11,432 |
|
Citibank-London, 0.03%, 2/1/11 (cost$11,432,418) |
|
$ |
11,432,418 |
|
|
|
|
Total Investments, before call options written |
|
|
|
|
|
|
|
(cost-$535,892,105)100.7% |
|
|
455,774,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALL OPTIONS WRITTEN (b)(0.1)% |
|||||||
|
|
|
|
|
|
|
|
Contracts |
|
|
|
|
|
|
|
|
|
|
AGCO Corp., |
|
|
|
|
|
270 |
|
strike price $55, expires 2/19/11 |
|
|
(13,500) |
|
|
|
|
Apple, Inc., |
|
|
|
|
|
165 |
|
strike price $360, expires 2/19/11 |
|
|
(15,840) |
|
|
|
|
EMC Corp., |
|
|
|
|
|
2,400 |
|
strike price $26, expires 2/19/11 |
|
|
(28,800) |
|
|
|
|
Ford Motor Co., |
|
|
|
|
|
3,200 |
|
strike price $19, expires 2/19/11 |
|
|
(11,200) |
|
|
|
|
Freeport-McMoRan Copper & Gold, Inc., |
|
|
|
|
|
460 |
|
strike price $64.50, expires 2/19/11 |
|
|
(8,050) |
|
|
|
|
Google, Inc., |
|
|
|
|
|
100 |
|
strike price $640, expires 2/19/11 |
|
|
(13,500) |
|
|
|
|
International Business Machines Corp., |
|
|
|
|
|
370 |
|
strike price $165, expires 2/19/11 |
|
|
(31,635) |
|
|
|
|
Johnson Controls, Inc., |
|
|
|
|
|
1,445 |
|
strike price $40, expires 2/19/11 |
|
|
(39,738) |
|
|
|
|
Joy Global, Inc., |
|
|
|
|
|
625 |
|
strike price $95, expires 2/19/11 |
|
|
(29,375) |
|
|
|
|
National Oilwell Varco, Inc., |
|
|
|
|
|
195 |
|
strike price $75, expires 2/19/11 |
|
|
(40,950) |
|
|
|
|
Occidental Petroleum Corp., |
|
|
|
|
|
585 |
|
strike price $100, expires 2/19/11 |
|
|
(53,527) |
|
|
|
|
Oracle Corp., |
|
|
|
|
|
1,755 |
|
strike price $33, expires 2/19/11 |
|
|
(42,120) |
|
|
|
|
Peabody Energy Corp., |
|
|
|
|
|
175 |
|
strike price $65, expires 2/19/11 |
|
|
(21,088) |
|
|
|
|
Qualcomm, Inc., |
|
|
|
|
|
1,105 |
|
strike price $55, expires 2/19/11 |
|
|
(79,007) |
|
|
|
|
Schlumberger Ltd., |
|
|
|
|
|
105 |
|
strike price $90, expires 2/19/11 |
|
|
(17,955) |
|
|
|
|
Texas Instruments, Inc., |
|
|
|
|
|
1,675 |
|
strike price $35, expires 2/19/11 |
|
|
(36,850) |
|
|
|
|
Textron, Inc., |
|
|
|
|
|
1,175 |
|
strike price $27, expires 2/19/11 |
|
|
(49,350) |
|
|
|
|
Total Call Options Written (premiums received-$1,063,613) |
|
|
(532,485) |
|
|
|
|
Total Investments, net of call options written |
|
|
|
|
|
|
|
(cost-$534,828,492)100.6% |
|
|
455,242,063 |
|
|
|
|
Other liabilities in excess of other assets(0.6)% |
|
|
(2,835,683) |
|
|
|
|
Net Assets100.0% |
|
|
$452,406,380 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
22 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
AGIC Equity & Convertible Income Fund |
Notes to Schedule |
January 31, 2011 |
of Investments |
|
|
|
Notes to Schedules of Investments: |
|
|
* |
[Unaudited] |
|
(a) |
All or partial amount segregated as collateral for the benefit of the counterparty for call options written. |
|
(b) |
Non-income producing. |
|
(c) |
Securities exchangeable or convertible into securities of an entity different than the issuer or structured by the issuer to provide exposure to securities of an entity different than the issuer (synthetic convertible securities). Such entity is identified in the parenthetical. |
|
(d) |
Fair-ValuedSecurities in NFJ Dividend, Interest & Premium Strategy and AGIC Equity & Convertible Income Fund, with an aggregate value of $4,874,236 and $1,128,820, representing 0.27% and 0.25% of net assets, respectively. See Note 1 (a) and Note 1 (b) in the Notes to Financial Statements. |
|
(e) |
In default. |
|
(f) |
Perpetual maturity. Maturity date shown is the first call date. |
|
(g) |
144AExempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid. |
|
(h) |
Private PlacementRestricted as to resale and may not have a readily available market. Securities in NFJ Dividend, Interest & Premium Strategy Fund & AGIC Equity & Convertible Income Fund, with an aggregate market value of $65,038,262 and $18,223,325, representing 3.60% and 4.03% of net assets, respectively. |
|
(i) |
Step-BondCoupon is a fixed rate for an initial period then resets at a specific date and rate. |
|
|
|
|
|
Glossary: |
ADRAmerican Depositary Receipt |
FRNFloating Rate Notes. The interest rate disclosed reflects the rate in effect on January 31, 2011. |
NRNot Rated |
WRWithdrawn Rating |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
See accompanying Notes to Financial Statements | 1.31.11 | |
AGIC Equity & Convertible Income Fund Annual Report |
23 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
AGIC Equity |
||||
Assets: |
|
|
|
|
|
|
|
|
Investments, at value (cost $1,945,070,489 and $535,892,105, respectively) |
|
$ |
1,812,646,097 |
|
|
$ |
455,774,548 |
|
Receivable for investments sold |
|
|
25,552,810 |
|
|
|
2,773,237 |
|
Dividends and interest receivable |
|
|
4,356,624 |
|
|
|
1,302,438 |
|
Prepaid expenses |
|
|
18,197 |
|
|
|
4,678 |
|
Total Assets |
|
|
1,842,573,728 |
|
|
|
459,854,901 |
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Call options written, at value (premiums received $14,849,891 and $1,063,613, respectively) |
|
|
19,330,013 |
|
|
|
532,485 |
|
Payable for investments purchased |
|
|
13,863,860 |
|
|
|
6,389,454 |
|
Investment management fees payable |
|
|
1,378,344 |
|
|
|
382,742 |
|
Accrued expenses |
|
|
329,243 |
|
|
|
143,840 |
|
Total Liabilities |
|
|
34,901,460 |
|
|
|
7,448,521 |
|
Net Assets |
|
$ |
1,807,672,268 |
|
|
$ |
452,406,380 |
|
|
|
|
|
|
|
|
|
|
Composition of Net Assets: |
|
|
|
|
|
|
|
|
Common Stock: |
|
|
|
|
|
|
|
|
Par value ($0.00001 per share applicable to 94,524,325 and 22,304,189 shares issued and outstanding, respectively) |
|
|
$945 |
|
|
|
$223 |
|
Paid-in-capital in excess of par |
|
|
2,242,686,741 |
|
|
|
517,458,932 |
|
Undistributed (Dividends in excess of) net investment income |
|
|
(3,316,174 |
) |
|
|
303,108 |
|
Accumulated net realized gain (loss) |
|
|
(294,794,730 |
) |
|
|
14,230,546 |
|
Net unrealized depreciation of investments and call options written |
|
|
(136,904,514 |
) |
|
|
(79,586,429 |
) |
Net Assets |
|
$ |
1,807,672,268 |
|
|
$ |
452,406,380 |
|
Net Asset Value Per Share |
|
|
$19.12 |
|
|
|
$20.28 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
24 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 | See accompanying Notes to Financial Statements |
|
|
NFJ Dividend, Interest & Premium
Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
AGIC Equity |
||||
Investment Income: |
|
|
|
|
|
|
|
|
Dividends (net of foreign withholding taxes of $1,084,557 and $0, respectively) |
|
$69,298,800 |
|
|
$10,454,793 |
|
||
Interest |
|
|
7,748,823 |
|
|
|
2,919,373 |
|
Total Investment Income |
|
|
77,047,623 |
|
|
|
13,374,166 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Investment management fees |
|
|
15,381,578 |
|
|
|
4,101,246 |
|
Custodian and accounting agent fees |
|
|
363,300 |
|
|
|
119,764 |
|
Shareholder communications |
|
|
296,240 |
|
|
|
82,212 |
|
Trustees fees and expenses |
|
|
141,075 |
|
|
|
33,405 |
|
Audit and tax services |
|
|
87,380 |
|
|
|
67,525 |
|
New York Stock Exchange listing fees |
|
|
74,721 |
|
|
|
21,250 |
|
Legal fees |
|
|
55,235 |
|
|
|
21,690 |
|
Insurance expenses |
|
|
44,519 |
|
|
|
11,285 |
|
Dividend expense |
|
|
35,968 |
|
|
|
|
|
Transfer agent fees |
|
|
29,930 |
|
|
|
31,965 |
|
Miscellaneous |
|
|
12,164 |
|
|
|
4,773 |
|
Total expenses |
|
|
16,522,110 |
|
|
|
4,495,115 |
|
|
|
|
|
|
|
|
|
|
Net Investment Income |
|
|
60,525,513 |
|
|
|
8,879,051 |
|
|
|
|
|
|
|
|
|
|
Realized and Change in Unrealized Gain (Loss): |
|
|
|
|
|
|
|
|
Net realized gain (loss) on: |
|
|
|
|
|
|
|
|
Investments |
|
|
96,344,271 |
|
|
|
34,230,888 |
|
Call Options written |
|
|
(76,157,888 |
) |
|
|
(489,209 |
) |
Net change in unrealized appreciation/depreciation of: |
|
|
|
|
|
|
|
|
Investments |
|
|
189,959,185 |
|
|
|
42,869,951 |
|
Call Options written |
|
|
(13,654,523 |
) |
|
|
(195,442 |
) |
Net realized and change in unrealized gain on investments and call options written |
|
|
196,491,045 |
|
|
|
76,416,188 |
|
Net Increase in Net Assets Resulting from Investment Operations |
|
$257,016,558 |
|
|
$85,295,239 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
See accompanying Notes to Financial Statements | 1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
25 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
AGIC Equity & Convertible Income Fund |
in Net Assets |
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
||||
Investments Operations: |
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
60,525,513 |
|
|
$ |
58,104,787 |
|
Net realized gain (loss) on investments and call options written |
|
|
20,186,383 |
|
|
|
(158,414,644 |
) |
Net change in unrealized appreciation/depreciation of investments and call options written |
|
|
176,304,662 |
|
|
|
458,016,688 |
|
Net increase in net assets resulting from investment operations |
|
|
257,016,558 |
|
|
|
357,706,831 |
|
|
|
|
|
|
|
|
|
|
Dividends to Shareholders from Net investment income |
|
|
(85,071,892 |
) |
|
|
(56,714,595 |
) |
Total increase in net assets |
|
|
171,944,666 |
|
|
|
300,992,236 |
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
Beginning of year |
|
|
1,635,727,602 |
|
|
|
1,334,735,366 |
|
End of year (including undistributed (dividends in excess of) net investment income of $(3,316,174), and $7,833,420, respectively) |
|
$ |
1,807,672,268 |
|
|
$ |
1,635,727,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGIC Equity & Convertible Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
||||
Investments Operations: |
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
8,879,051 |
|
|
$ |
9,004,789 |
|
Net realized gain on investments and call options written |
|
|
33,741,679 |
|
|
|
15,405,697 |
|
Net change in unrealized appreciation/depreciation of investments and call options written |
|
|
42,674,509 |
|
|
|
93,536,166 |
|
Net increase in net assets resulting from investment operations |
|
|
85,295,239 |
|
|
|
117,946,652 |
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
Net investment income |
|
|
(9,137,004 |
) |
|
|
(22,085,355 |
) |
Net realized gains |
|
|
(15,843,688 |
) |
|
|
|
|
Return of capital |
|
|
|
|
|
|
(2,895,337 |
) |
Total dividends and distributions to shareholders |
|
|
(24,980,692 |
) |
|
|
(24,980,692 |
) |
Total increase in net assets |
|
|
60,314,547 |
|
|
|
92,965,960 |
|
|
|
|
|
|
|
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
Beginning of year |
|
|
392,091,833 |
|
|
|
299,125,873 |
|
End of year (including undistributed (dividends in excess of) net investment income of $303,108, and $(647,147), respectively) |
|
|
$452,406,380 |
|
|
|
$392,091,833 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
26 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 | See accompanying Notes to Financial Statements |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
1. Organization and Significant Accounting Policies
NFJ Dividend,
Interest & Premium Strategy Fund and AGIC Equity & Convertible Income
Fund (collectively referred to as the Funds) were organized as Massachusetts
business trusts on August 20, 2003 and December 12, 2006, respectively. Prior
to commencing operations on February 28, 2005 and February 27, 2007, respectively,
the Funds had no operations other than matters relating to their organization
and registration as diversified, closed-end management investment companies
under the Investment Company Act of 1940 and the rules and regulations there
under, as amended. Allianz Global Investors Fund Management LLC (the
Investment Manager) serves as the Funds Investment Manager and is an
indirect wholly-owned subsidiary of Allianz Global Investors of America L.P.
(Allianz Global). Allianz Global is an indirect, wholly-owned subsidiary of
Allianz SE, a publicly traded European insurance and financial services
company. Each Fund has an unlimited amount of $0.00001 par value common shares
authorized.
NFJ Dividend, Interest & Premium Strategys primary investment objective is to seek current income and gains, with a secondary objective of long-term capital appreciation. Under normal market conditions the Fund pursues its investment objectives by investing in a diversified portfolio of dividend-paying common stocks and income-producing convertible securities. The Fund will also employ a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option premiums.
AGIC Equity & Convertible Incomes investment objective is to seek total return comprised of capital appreciation, current income and gains. Under normal market conditions the Fund pursues its objective by investing in a diversified portfolio of equity securities and income producing convertible securities. The Fund will also employ a strategy of writing (selling) call options on the equity securities held by the Fund.
There is no guarantee that the Funds will meet their stated objectives.
The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Funds financial statements. Actual results could differ from those estimates.
In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
The following is a summary of significant accounting policies consistently followed by the Funds:
(a) Valuation of Investments
Portfolio securities
and other financial instruments for which market quotations are readily available
are stated at market value. Market value is generally determined on the basis
of last reported sales prices, or if no sales are reported, on the basis of
quotes obtained from a quotation reporting system, established market makers,
or independent pricing services.
Portfolio securities and other financial instruments for which market quotations are not readily available or for which a development/event occurs that may significantly impact the value of a security are fair-valued, in good faith, pursuant to procedures established by the Board of Trustees, or persons acting at their discretion pursuant to procedures established by the Board of Trustees. The Funds investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the mean between the last quoted bid and ask price. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Synthetic convertible securities are valued based on quotations obtained from unaffiliated brokers who are the principal market-makers in such securities. Such valuations are derived by the brokers from proprietary models which are generally based on readily available market information including valuations of the common stock underlying the synthetic security. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days.
The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold and these differences could be material to each Funds financial statements. Each Funds net asset value (NAV) is normally determined as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open for business.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
27 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
1. Organization and Significant Accounting Policies (continued)
(b) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the exit price) in an orderly transaction between market participants. The three levels of the fair value hierarchy are described below:
|
|
|
Level 1 quoted prices in active markets for identical
investments that the Funds have the ability to access |
Level 2 valuations based on other significant observable
inputs (including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.) or quotes from inactive exchanges |
|
|
Level 3 valuations based on significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments) |
An investment assets or liabilitys level within the fair value hierarchy is based on the lowest level input, individually or in the aggregate, that is significant to fair value measurement. The objective of fair value measurement remains the same even when there is a significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation technique used.
The valuation techniques used by the Funds to measure fair value during the year ended January 31, 2011 maximized the use of observable inputs and minimized the use of unobservable inputs. When fair-valuing securities the Funds utilized multi-dimensional relational pricing models.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following are certain inputs and techniques that the Funds generally use to evaluate how to classify each major category of assets and liabilities, for Level 2 and Level 3, in accordance with Generally Accepted Accounting Principles (GAAP).
Equity Securities (Common and Preferred Stock) Equity securities traded in inactive markets are valued using inputs which include broker-dealer quotes, recently executed transactions adjusted for changes in the benchmark index, or evaluated price quotes received from independent pricing services that take into account the integrity of the market sector and issuer, the individual characteristics of the security, and information received from broker-dealers and other market sources pertaining to the issuer or security. To the extent that these inputs are observable, the values of equity securities are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Convertible Bonds & Notes Convertible bonds and notes are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, and the activity of the underlying equities, listed bonds and sector-specific trends. To the extent that these inputs are observable, the values of convertible bonds and notes are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Corporate Bonds & Notes Corporate bonds and notes are generally comprised of two main categories, investment grade bonds and high yield bonds. Investment grade bonds are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations, live trading levels, recently executed transactions in securities of the issuer or comparable issuers, and option adjusted spread models that include base curve and spread curve inputs. Adjustments to individual bonds can be applied to recognize trading differences compared to other bonds issued by the same issuer. High yield bonds are valued by independent pricing services based primarily on broker-dealer quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, and the activity of the underlying equities, listed bonds and sector-specific trends. To the extent that these inputs are observable, the values of corporate bonds and notes are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Option Contracts Option contracts traded over the counter (OTC) are valued by independent pricing services based on pricing models that incorporate various inputs such as interest rates, credit spreads, currency exchange rates and volatility measurements for in-the-money, at-the-money, and out-of-the-money contracts based on a given strike price. To the extent that these inputs are observable, the values of OTC option contracts are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
28 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
1. Organizational and Significant Accounting Policies (continued)
The Funds policy is to recognize transfers between levels at the end of the reporting period.
A summary of the inputs used at January 31, 2011 in valuing each Funds assets and liabilities is listed below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Value at |
|
||||
Investments in Securities Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1,263,724,918 |
|
|
|
|
|
|
|
$ |
1,263,724,918 |
|
Convertible Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Airlines |
|
|
|
|
$ |
4,837,009 |
|
|
|
|
|
4,837,009 |
|
Banks |
|
|
|
|
|
7,322,335 |
|
|
|
|
|
7,322,335 |
|
Capital Markets |
|
|
|
|
|
9,432,696 |
|
$ |
3,360,266 |
|
|
12,792,962 |
|
Commercial Banks |
|
|
5,733,750 |
|
|
11,429,375 |
|
|
|
|
|
17,163,125 |
|
Commercial Services & Supplies |
|
|
|
|
|
7,322,708 |
|
|
|
|
|
7,322,708 |
|
Diversified Financial Services |
|
|
19,595,694 |
|
|
47,370,381 |
|
|
|
|
|
66,966,075 |
|
Household Durables |
|
|
10,824,373 |
|
|
4,194,036 |
|
|
|
|
|
15,018,409 |
|
Oil, Gas & Consumable Fuels |
|
|
9,168,144 |
|
|
15,743,475 |
|
|
|
|
|
24,911,619 |
|
All Other |
|
|
82,757,479 |
|
|
|
|
|
|
|
|
82,757,479 |
|
Convertible Bonds & Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure |
|
|
|
|
|
14,396,375 |
|
|
1,513,970 |
|
|
15,910,345 |
|
All Other |
|
|
|
|
|
210,855,856 |
|
|
|
|
|
210,855,856 |
|
Yankee Bond |
|
|
|
|
|
3,024,337 |
|
|
|
|
|
3,024,337 |
|
Short-Term Investments |
|
|
|
|
|
80,038,920 |
|
|
|
|
|
80,038,920 |
|
Total Investments in Securities Assets |
|
$ |
1,391,804,358 |
|
$ |
415,967,503 |
|
$ |
4,874,236 |
|
$ |
1,812,646,097 |
|
Investments in Securities Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options Written, at value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price |
|
$ |
(7,555,750 |
) |
$ |
(11,774,263 |
) |
|
|
|
$ |
(19,330,013 |
) |
Total Investments |
|
$ |
1,384,248,608 |
|
$ |
404,193,240 |
|
$ |
4,874,236 |
|
$ |
1,793,316,084 |
|
There were no significant transfers into and out of Levels 1 and 2 during the year ended January 31, 2011.
A roll forward of fair value measurements using significant unobservable inputs (Level 3) for the year ended January 31, 2011, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning |
|
Net |
|
Net Change |
|
Transfers |
|
Transfers |
|
Ending |
|
||||||
Investments in Securities Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets |
|
$ |
3,360,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,360,266 |
|
Convertible Bonds & Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure |
|
|
1,513,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,513,970 |
|
Total Investments |
|
$ |
4,874,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,874,236 |
|
There was no change in unrealized appreciation/depreciation of Level 3 investments which the Fund held at January 31, 2011.
* There were no transfers into and out of Level 3 during the year ended January 31, 2011.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
29 |
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
|
|
1. Organization and Significant Accounting Policies (continued) |
|
|
|
AGIC Equity & Convertible Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Value at |
|
||||||||||||
Investments in Securities Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
$ |
324,245,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
324,245,812 |
|
|
Convertible Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airlines |
|
|
|
|
|
|
|
$ |
1,992,185 |
|
|
|
|
|
|
|
|
|
1,992,185 |
|
|
Banks |
|
|
|
|
|
|
|
|
1,291,680 |
|
|
|
|
|
|
|
|
|
1,291,680 |
|
|
Capital Markets |
|
|
|
|
|
|
|
|
4,458,215 |
|
|
|
$ |
1,128,820 |
|
|
|
|
5,587,035 |
|
|
Commercial Banks |
|
|
|
2,814,750 |
|
|
|
|
2,721,316 |
|
|
|
|
|
|
|
|
|
5,536,066 |
|
|
Commercial Services & Supplies |
|
|
|
|
|
|
|
|
4,655,072 |
|
|
|
|
|
|
|
|
|
4,655,072 |
|
|
Diversified Financial Services |
|
|
|
6,799,642 |
|
|
|
|
9,194,303 |
|
|
|
|
|
|
|
|
|
15,993,945 |
|
|
Household Durables |
|
|
|
|
|
|
|
|
1,756,440 |
|
|
|
|
|
|
|
|
|
1,756,440 |
|
|
Oil, Gas & Consumable Fuels |
|
|
|
2,414,736 |
|
|
|
|
4,671,675 |
|
|
|
|
|
|
|
|
|
7,086,411 |
|
|
Road & Rail |
|
|
|
|
|
|
|
|
2,040,243 |
|
|
|
|
|
|
|
|
|
2,040,243 |
|
|
All Other |
|
|
|
23,936,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,936,872 |
|
|
Convertible Bonds & Notes |
|
|
|
|
|
|
|
|
44,218,094 |
|
|
|
|
|
|
|
|
|
44,218,094 |
|
|
Corporate Bonds & Notes |
|
|
|
|
|
|
|
|
4,925,650 |
|
|
|
|
|
|
|
|
|
4,925,650 |
|
|
Yankee Bond |
|
|
|
|
|
|
|
|
1,076,625 |
|
|
|
|
|
|
|
|
|
1,076,625 |
|
|
Short-Term Investments |
|
|
|
|
|
|
|
|
11,432,418 |
|
|
|
|
|
|
|
|
|
11,432,418 |
|
|
Total Investments in Securities Assets |
|
|
$ |
360,211,812 |
|
|
|
$ |
94,433,916 |
|
|
|
$ |
1,128,820 |
|
|
|
$ |
455,774,548 |
|
|
Investments in Securities Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options Written, at value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price |
|
|
$ |
(532,485 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(532,485 |
) |
|
Total Investments |
|
|
$ |
359,679,327 |
|
|
|
$ |
94,433,916 |
|
|
|
$ |
1,128,820 |
|
|
|
$ |
455,242,063 |
|
|
There were no significant transfers into and out of Levels 1 and 2 during the year ended January 31, 2011.
A roll forward of fair value measurements using significant unobservable inputs (Level 3) for the year ended January 31, 2011, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning |
|
Net |
|
Net Change |
|
Transfers |
|
Transfers |
|
Ending |
|
||||||||||
Investments in Securities Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets |
|
|
$ |
1,128,820 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,128,820 |
|
|
||||
Total Investments |
|
|
$ |
1,128,820 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,128,820 |
|
|
||||
There was no change in unrealized appreciation/depreciation of Level 3 investments which the Fund held at January 31, 2011.
*There were no transfers into and out of Level 3 during the year ended January 31, 2011.
(c) Investment Transactions and Investment Income
Investment
transactions are accounted for on the trade date. Realized gains and losses on
investments are determined on the identified cost basis. Interest income
adjusted for the accretion of discount and amortization of premium is recorded
on an accrual basis. Discounts or premiums on debt securities purchased are
accreted or amortized, respectively, to interest income over the lives of the
respective securities. Dividend income is recorded on the ex-dividend date.
Conversion premium is not amortized. Payments received from certain investments
may be comprised of dividends, realized gains
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
30 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
1. Organization and Significant Accounting Policies (continued)
and return of capital. These payments may initially be recorded as dividend income and may be subsequently be reclassified as realized gains and/or return of capital upon receipt of information from the issuer. Payments received on synthetic convertible securities are generally included in dividends.
(d)
Federal Income Taxes
The Funds intend to distribute all of
their taxable income and to comply with the other requirements of Subchapter M
of the U.S. Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies. Accordingly, no provision for U.S. federal income taxes
is required.
Accounting for uncertainty in income taxes establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Funds management has determined that its evaluation has resulted in no material impact on the Funds financial statements at January 31, 2011. The Funds federal tax returns for the prior three years remain subject to examination by the Internal Revenue Service.
(e)
Dividends and Distributions
The Funds declare quarterly dividends
and distributions from net investment income and gains from option premiums and
the sale of portfolio securities. The Funds record dividends and distributions
to its shareholders on the ex-dividend date. The amount of dividends and
distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from GAAP. These book-tax differences are considered either temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their
federal income tax treatment. Temporary differences do not require
reclassification. To the extent dividends and/or distributions exceed current
and accumulated earnings and profits for federal income tax purposes, they are
reported as dividends and/or distributions of paid-in capital in excess of par.
(f)
Convertible Securities
It is the Funds policy to invest a
portion of their assets in convertible securities. Although convertible
securities do derive part of their value from that of the securities into which
they are convertible, they are not considered derivative financial instruments.
However, certain of the Funds investments in convertible securities include
features which render them more sensitive to price changes in their underlying
securities. The value of structured/synthetic convertible securities can be
affected by interest rate changes and credit risks of the issuer. Such
securities may be structured in ways that limit their potential for capital
appreciation and the entire value of the security may be at risk of loss
depending on the performance of the underlying equity security. Consequently,
the Funds are exposed to greater downside risk than traditional convertible
securities, but still less than that of the underlying stock.
(g)
Short Sales
Short sale transactions involve the
Fund selling securities it does not own in anticipation of a decline in the
market price of the securities. The Fund is obligated to deliver securities at
the market price at the time the short position is closed. Possible losses from
short sales may be unlimited whereas losses from purchases cannot exceed the
total amount invested. Dividend expense is recorded on ex-date.
2.
Principal Risks
In the normal course of business, the
Funds trade financial instruments and enter into financial transactions where
risk of potential loss exists due to, among other things, changes in the market
(market risk) or failure of the other party to a transaction to perform
(counterparty risk). The Funds also are exposed to various risks such as, but
not limited to, interest rate and credit risks.
Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Funds are likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income securitys market price to interest rate (i.e. yield) movements.
Variable and floating rate securities generally are less sensitive to interest rate changes but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not generally increase in value if interest rates decline. Inverse floating rate securities may decrease in value if interest rates increase. Inverse floating rate securities may also exhibit greater price volatility than a fixed rate obligation with similar
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
31 |
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
2. Principal Risks (continued)
credit quality. When a Fund holds a variable or floating rate securities, a decrease (or, in the case of inverse floating rate securities, an increase) in market interest rates will adversely affect the income received from such securities and the NAV of the Funds shares.
The Funds are exposed to credit risk, which is the risk of losing money if the issuer or guarantor of a fixed income security is unable or unwilling, or is perceived (whether by market participants, rating agencies, pricing services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.
The market values of equity securities, such as common and preferred stock, securities convertible into equity securities or equity-related investments such as options, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities generally have greater market price volatility than fixed income securities.
The Funds are exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss to the Funds could exceed the value of the financial assets recorded in the Funds financial statements. Financial assets, which potentially expose the Funds to counterparty risk, consist principally of cash due from counterparties and investments. The Funds Sub-Advisers, NFJ Investment Group LLC (NFJ) and Allianz Global Investors Capital LLC (AGIC), also affiliates of the Investment Manager, seek to minimize counterparty risks to each applicable Fund by performing reviews of each counterparty. Delivery of securities sold is only made once the Funds have received payment. Payment is made on the purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
The Funds held synthetic convertible securities with Lehman Brothers entities as counterparty at the time the relevant Lehman Brothers entity filed for protection or was placed in administration. The values of the relevant securities have been written down to their estimated recoverable values.
3.
Financial Derivatives Instruments
Disclosure about derivatives and
hedging activities require qualitative disclosures regarding objectives and
strategies for using derivatives, quantitative disclosures about fair value
amounts of gains and losses on derivatives, and disclosure about credit-risk related
contingent features in derivative agreements. The disclosure requirements
distinguish between derivatives which are accounted for as hedges and those
that do not qualify for such accounting. Although the Funds sometimes use
derivatives for hedging purposes, the Funds reflect derivatives at fair value
and recognize changes in fair value through the Funds Statements of
Operations, and such derivatives do not qualify for hedge accounting treatment.
Option Transactions
The Funds write (sell) call options
on securities and indices to earn premiums, for hedging purposes, risk
management purposes or otherwise as part of its investment strategies.
When an option is written, the premium received is recorded as an asset with an equal liability which is subsequently marked to market to reflect the market value of the option written. These liabilities are reflected as call options written in the Funds Statement of Assets and Liabilities. Premiums received from writing options which expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchased transactions, as a realized loss. If a call option written is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of a written option could result in the Funds purchasing a security at a price different from its current market value.
The following is a summary of the fair valuations of the Funds derivatives categorized by risk exposure.
The effect of derivatives on the Funds Statements of Assets and Liabilities at January 31, 2011:
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
32 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
3. Financial Derivatives Instruments (continued)
NFJ Dividend, Interest & Premium Strategy:
|
|
|
|
|
|
|
Location |
|
Market |
|
|||
Liability derivatives: |
|
|
|
|
|
|
Call options written, at value |
|
|
$ |
(19,330,013 |
) |
|
|
|
|
|
|
AGIC Equity & Convertible Income:
|
|
|
|
|
|
|
Location |
|
Market |
|
|||
Liability derivatives: |
|
|
|
|
|
|
Call options written, at value |
|
|
$ |
(532,485) |
|
|
|
|
|
|
|
The effect of derivatives on the Funds Statements of Operations for the year ended January 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
NFJ Dividend, |
|
AGIC |
|
||||||
Net realized loss on: |
|
|
|
|
|
|
|
|
|
|
|
Call options written, Market Price |
|
|
$ |
(76,157,888 |
) |
|
|
$ |
(489,209 |
) |
|
Net change in unrealized appreciation/depreciation of: |
|
|
|
|
|
|
|
|
|
|
|
Call options written, Market Price |
|
|
$ |
(13,654,523 |
) |
|
|
$ |
(195,442 |
) |
|
The average volumes of derivative activity during the year ended January 31, 2011 was:
|
|
|
|
|
|
|
|
|
Options |
|
|||
NFJ Dividend, Interest & Premium Strategy |
|
|
90,395 |
|
|
|
AGIC Equity & Convertible Income |
|
|
11,765 |
|
|
4. Investment Manager/Sub-Advisers
Each Fund has an Investment Management Agreement (the
Agreement) with the Investment Manager. Subject to the supervision of the
Funds Board of Trustees, the Investment Manager is responsible for managing,
either directly or through others selected by it, the Funds investment
activities, business affairs and administrative matters. Pursuant to its
Agreement, the NFJ Dividend, Interest & Premium Strategy Fund pays the
Investment Manager an annual fee, payable monthly, at the annual rate of 0.90%
of the Funds average daily total managed assets. Pursuant to its Agreement,
the AGIC Equity & Convertible Income Fund pays the Investment Manager an
annual fee, payable monthly, at the annual rate of 1.00% of the Funds average
daily total managed assets. Total managed assets refer to the total assets of
each Fund (including borrowings that may be outstanding) minus accrued
liabilities (other than liabilities representing borrowings).
The Investment Manager has retained its affiliates NFJ and AGIC (the Sub-Advisers), to manage NFJ Dividend, Interest & Premium Strategy. NFJ manages the Funds equity component and AGIC manages the Funds convertible and index option strategy components. AGIC serves as the sole sub-adviser to AGIC Equity & Convertible Income. Subject to the supervision of the Investment Manager, NFJ and AGIC make all of NFJ Dividend, Interest & Premium Strategys investment decisions in connection with their respective components of the Funds investments. Subject to the supervision of the Investment Manager, AGIC is responsible for making all of AGIC Equity & Convertible Incomes investment decisions. Pursuant to Sub-Advisory Agreements, the Investment Manager and not the Funds, pays a portion of the fees it receives as Investment Manager to the Sub-Advisers in return for their services.
Effective August 25, 2010, the Sub-Advisory Agreements between the Investment Manager and Nicholas-Applegate Capital Management LLC (NACM) relating to the Funds and the Sub-Advisory Agreement between the Investment Manager and Oppenheimer Capital LLC (OCC) relating to NFJ Dividend, Interest & Premium Strategy Fund were novated from NACM and OCC, respectively, to AGIC, the indirect parent of NACM and OCC and an affiliate of the Investment Manager.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
33 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
4. Investment Manager/Sub-Advisers (continued)
The novations coincided with a larger corporate reorganization transferring the advisory businesses of NACM and OCC to AGIC. Since 2009, AGIC has assumed a number of non-advisory functions from both NACM and OCC, and the transactions in August 2010 marked the last step in the full integration of these businesses under a single name.
5. Investment in Securities
For the year ended January 31, 2011, purchases and
sales of investments, other than short-term securities were:
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
AGIC |
|
||
Purchases |
|
|
$1,077,669,357 |
|
|
$672,798,955 |
|
Sales |
|
|
1,250,051,718 |
|
|
692,817,502 |
|
(a) Transactions in call options written for the year ended January 31, 2011:
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
Contracts |
|
Premiums |
|
||
Options outstanding, January 31, 2010 |
|
|
105,650 |
|
$ |
15,703,026 |
|
Options written |
|
|
652,005 |
|
|
103,678,353 |
|
Options terminated in closing purchase transactions |
|
|
(326,530 |
) |
|
(50,765,944 |
) |
Options expired |
|
|
(347,775 |
) |
|
(53,765,544 |
) |
Options outstanding, January 31, 2011 |
|
|
83,350 |
|
$ |
14,849,891 |
|
|
|
|
|
|
|
|
|
AGIC Equity & Convertible Income: |
|
Contracts |
|
Premiums |
|
||
Options outstanding, January 31, 2010 |
|
|
17,065 |
|
$ |
878,695 |
|
Options written |
|
|
139,240 |
|
|
7,240,028 |
|
Options terminated in closing purchase transactions |
|
|
(60,425 |
) |
|
(3,223,600 |
) |
Options expired |
|
|
(80,075 |
) |
|
(3,831,510 |
) |
Options outstanding, January 31, 2011 |
|
|
15,805 |
|
$ |
1,063,613 |
|
|
|
|
|
|
|
|
|
6. Income Tax Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
|
|
|
|
|
|
The tax character of dividends and distributions paid were: |
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
||
|
|
January 31, 2011 |
|
January 31, 2010 |
|
||
Ordinary Income |
|
$85,071,892 |
|
$56,714,595 |
|
||
At January 31, 2011, there were no distributable earnings.
For the year ended January 31, 2011, permanent differences are primarily attributable to the differing treatment of convertible securities, reclasses of taxable overdistributions, and investments in Real Estate Investment Trusts. These adjustments were to decrease dividends in excess of net investment income by $13,396,785, increase accumulated net realized loss by $2,271,567 and decrease paid-in capital in excess of par by $11,125,218.
At January 31, 2011, the Fund had a capital loss carryforward of $ 270,756,167, $17,766,745 of which will expire in 2017 and $252,989,422 of which will expire in 2018, and is available as a reduction, to the extent provided in the regulations, of any future net realized gains. To the extent that these losses are used to offset future realized capital gains, such gains will not be distributed.
During the year ended January 31, 2011, the Fund utilized available capital loss carryforwards of $38,126,673.
In accordance with U.S. Treasury regulations, the Fund elected to defer realized capital losses of $22,765,961 arising after October 31, 2010.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
34 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Notes to Financial Statements |
|
|
|
|
|
|
|
|
6. Income Tax Information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGIC Equity & Convertible Income: |
|
|
|
|
|
|
|
The tax character of dividends and distributions paid were: |
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
||
|
|
January 31, 2011 |
|
January 31, 2010 |
|
||
Ordinary Income |
|
|
$24,481,089 |
|
|
$22,085,355 |
|
Long-term capital gains |
|
|
499,603 |
|
|
|
|
Return of capital |
|
|
|
|
|
2,895,337 |
|
At January 31, 2011, the tax character of distributable earnings was comprised of $15,491,112 of ordinary income and $705,938 of long-term capital gains.
For the year ended January 31, 2011, permanent differences are primarily attributable to the differing treatment of convertible securities, premium adjustments and investments in Real Estate Investment Trusts. These adjustments were to increase undistributed net investment income by $1,208,208, decrease net realized gains by $1,208,208.
During the year ended January 31, 2011, the Fund utilized available capital loss carryforwards of $2,459,237.
The Funds cost of investments for federal income tax purposes and gross unrealized appreciation and gross unrealized depreciation of investments at January 31, 2011 were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
Gross |
|
Net |
|
||||
|
|
Cost of |
|
Unrealized |
|
Unrealized |
|
Unrealized |
|
||||
|
|
Investments |
|
Appreciation |
|
Depreciation |
|
Depreciation |
|
||||
NFJ Dividend, Interest & Premium Strategy |
|
$1,948,235,098 |
|
$111,177,035 |
|
$(246,766,036 |
) |
$(135,589,001 |
) |
||||
AGIC Equity & Convertible Income |
|
|
536,788,539 |
|
|
2,748,646 |
|
|
(83,762,637 |
) |
|
(81,013,991 |
) |
The difference between book and tax depreciation is attributable to wash sales and the tax treatment of convertible securities.
7. Legal Proceedings
In June and September
2004, the Investment Manager and certain of its affiliates (including PEA
Capital LLC (PEA), Allianz Global Investors Distributors LLC and Allianz
Global Investors of America, L.P.), agreed to settle, without admitting or
denying the allegations, claims brought by the Securities and Exchange
Commission (SEC) and the New Jersey Attorney General alleging violations of
federal and state securities laws with respect to certain open-end funds for
which the Investment Manager serves as investment adviser. The settlements
related to an alleged market timing arrangement in certain open-end funds
formerly sub-advised by PEA. The Investment Manager and its affiliates agreed
to pay a total of $68 million to settle the claims. In addition to monetary
payments, the settling parties agreed to undertake certain corporate
governance, compliance and disclosure reforms related to market timing, and
consented to cease and desist orders and censures. Subsequent to these events,
PEA deregistered as an investment adviser and dissolved. None of the
settlements alleged that any inappropriate activity took place with respect to
the Funds.
Since February 2004, the Investment Manager and certain of its affiliates and their employees have been named as defendants in a number of pending lawsuits concerning market timing, which allege the same or similar conduct underlying the regulatory settlements discussed above. The market timing lawsuits have been consolidated in a multidistrict litigation proceeding in the U.S. District Court for the District of Maryland (the MDL Court). After a number of claims in the lawsuits were dismissed by the MDL Court in April 2010, the parties entered into a stipulation of settlement, which was publicly filed with the MDL Court in April 2010, resolving all remaining claims, but the settlement remains subject to the approval of the MDL Court.
The Investment Manager believes that these matters are not likely to have a material adverse effect on the Funds or on their ability to perform their respective investment advisory activities relating to the Funds.
8. Subsequent Events
On March 11, 2011 the
following quarterly dividends were declared to shareholders, payable March 30,
2011 to shareholders of record on March 21, 2011:
|
|
|
|
NFJ Dividend, Interest & Premium Strategy |
$0.45 per share |
|
AGIC Equity & Convertible Income |
$0.28 per share |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
35 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
For a share outstanding throughout each year: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended January 31, |
||||||||||||||||||
|
|
2011 |
|
|
2010 |
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
|||||
Net asset value, beginning of year |
|
|
$17.30 |
|
|
|
$14.12 |
|
|
|
$23.84 |
|
|
|
$25.72 |
|
|
|
$24.18 |
|
Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
0.64 |
|
|
|
0.61 |
|
|
|
0.89 |
|
|
|
0.80 |
|
|
|
0.75 |
|
Net
realized and change in unrealized |
|
|
2.08 |
|
|
|
3.17 |
|
|
|
(8.63 |
) |
|
|
(0.44 |
) |
|
|
2.89 |
|
Total from investment operations |
|
|
2.72 |
|
|
|
3.78 |
|
|
|
(7.74 |
) |
|
|
0.36 |
|
|
|
3.64 |
|
Dividends and Distributions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
(0.90 |
) |
|
|
(0.60 |
) |
|
|
(0.87 |
) |
|
|
(1.01 |
) |
|
|
(0.73 |
) |
Net realized gains |
|
|
|
|
|
|
|
|
|
|
(1.11 |
) |
|
|
(1.23 |
) |
|
|
(1.37 |
) |
Total
dividends and distributions to |
|
|
(0.90 |
) |
|
|
(0.60 |
) |
|
|
(1.98 |
) |
|
|
(2.24 |
) |
|
|
(2.10 |
) |
Net asset value, end of year |
|
|
$19.12 |
|
|
|
$17.30 |
|
|
|
$14.12 |
|
|
|
$23.84 |
|
|
|
$25.72 |
|
Market price, end of year |
|
|
$17.60 |
|
|
|
$14.50 |
|
|
|
$12.97 |
|
|
|
$23.26 |
|
|
|
$25.87 |
|
Total Investment Return (1) |
|
|
28.20 |
% |
|
|
17.31 |
% |
|
|
(37.93 |
)% |
|
|
(1.65 |
)% |
|
|
27.15 |
% |
RATIOS/SUPPLEMENTAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (000s) |
|
$ |
1,807,672 |
|
|
$ |
1,635,728 |
|
|
$ |
1,334,735 |
|
|
$ |
2,253,652 |
|
|
$ |
2,431,595 |
|
Ratio of expenses to average net assets |
|
|
0.97 |
% |
|
|
0.98 |
% |
|
|
0.97 |
% |
|
|
0.95 |
% |
|
|
0.95 |
% |
Ratio of
net investment income to |
|
|
3.54 |
% |
|
|
3.95 |
% |
|
|
4.40 |
% |
|
|
3.13 |
% |
|
|
3.08 |
% |
Portfolio turnover rate |
|
|
65 |
% |
|
|
57 |
% |
|
|
48 |
% |
|
|
82 |
% |
|
|
69 |
% |
|
|
(1) |
Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock at the current market price on the last day of each year reported. Income dividends and capital gain distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
36 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 | |
See accompanying Notes to Financial Statements |
|
|
AGIC Equity & Convertible Income Fund |
Financial Highlights |
For a share outstanding throughout each period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the |
|||||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
|
Year ended January 31, |
|
|
||||||||||||
|
|
2011 |
|
|
2010 |
|
|
2009 |
|
|
||||||
Net asset value, beginning of period |
|
|
$17.58 |
|
|
|
$13.41 |
|
|
|
$23.44 |
|
|
|
$23.88 |
** |
Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
0.40 |
|
|
|
0.40 |
|
|
|
0.67 |
|
|
|
0.62 |
|
Net
realized and change in unrealized gain (loss) on |
|
|
3.42 |
|
|
|
4.89 |
|
|
|
(8.39 |
) |
|
|
0.68 |
|
Total from investment operations |
|
|
3.82 |
|
|
|
5.29 |
|
|
|
(7.72 |
) |
|
|
1.30 |
|
Dividends and Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
(0.41 |
) |
|
|
(0.99 |
) |
|
|
(0.65 |
) |
|
|
(0.70 |
) |
Net realized gains |
|
|
(0.71 |
) |
|
|
|
|
|
|
(1.66 |
) |
|
|
(0.99 |
) |
Return of capital |
|
|
|
|
|
|
(0.13 |
) |
|
|
|
|
|
|
|
|
Total dividends and distributions to shareholders |
|
|
(1.12 |
) |
|
|
(1.12 |
) |
|
|
(2.31 |
) |
|
|
(1.69 |
) |
Capital Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs charged to paid-in capital in excess of par |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.05 |
) |
Net asset value, end of period |
|
|
$20.28 |
|
|
|
$17.58 |
|
|
|
$13.41 |
|
|
|
$23.44 |
|
Market price, end of period |
|
|
$19.30 |
|
|
|
$15.83 |
|
|
|
$13.10 |
|
|
|
$22.02 |
|
Total Investment Return (1) |
|
|
30.16 |
% |
|
|
30.75 |
% |
|
|
(31.75 |
)% |
|
|
(5.66 |
)% |
RATIOS/SUPPLEMENTAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s) |
|
$ |
452,406 |
|
|
$ |
392,092 |
|
|
$ |
299,126 |
|
|
$ |
522,848 |
|
Ratio of expenses to average net assets |
|
|
1.10 |
% |
|
|
1.10 |
% |
|
|
1.07 |
% |
|
|
1.08 |
%(2) |
Ratio of net investment income to average net assets |
|
|
2.16 |
% |
|
|
2.54 |
% |
|
|
3.42 |
% |
|
|
2.73 |
%(2) |
Portfolio turnover rate |
|
|
168 |
% |
|
|
94 |
% |
|
|
86 |
% |
|
|
241 |
% |
|
|
* |
Commencement of operations. |
** |
Initial public offering price of $25.00 per share less underwriting discount of $1.125 per share. |
(1) |
Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock at the current market price on the last day of each period reported. Income dividends, capital gain and return of capital distributions, if any are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. |
|
Total investment return for a period of less than one year is not annualized. |
(2) |
Annualized. |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
See accompanying Notes to Financial Statements | 1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
37 |
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
AGIC Equity & Convertible Income Fund |
Registered Public |
|
Accounting Firm |
To the Shareholders and Board of Trustees
NFJ Dividend, Interest & Premium Strategy Fund
AGIC Equity & Convertible Income Fund
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the NFJ Dividend, Interest & Premium Strategy Fund and AGIC Equity & Convertible Income Fund (the Funds) at January 31, 2011, the results of each of their operations, changes in net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as financial statements) are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements 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 are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at January 31, 2011, by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
March 24, 2011
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
38 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
AGIC Equity & Convertible Income Fund |
|
Tax Information:
Subchapter M of the Internal Revenue Code of 1986, as amended, requires NFJ Dividend, Interest & Premium Strategy and AGIC Equity & Convertible Income Fund to advise shareholders within 60 days of the Funds tax year ended January 31, 2011 as to the federal tax status of dividends and distributions received by shareholders during such tax year. Total dividends and distributions for the tax year ended January 31, 2011 were as follows:
NFJ Dividend, Interest & Premium Strategy:
|
|
|
|
|
Dividends from ordinary income |
|
$ |
85,071,892 |
|
Pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003, the Fund designates qualified dividend income of 71.19%, or the maximum amount allowable.
The percentage of ordinary dividends paid during the year ended January 31, 2011 which qualified for the Dividends Received Deduction available to corporate shareholders was 61.90%.
AGIC Equity & Convertible Income:
|
|
|
|
|
Dividends from ordinary income |
|
$ |
24,481,089 |
|
Distributions from long-term gains |
|
|
$499,603 |
|
Pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003, the Fund designates qualified dividend income of 37.05%, or the maximum amount allowable.
The percentage of ordinary dividends paid during the year ended January 31, 2011 which qualified for the Dividends Received Deduction available to corporate shareholders was 36.90%.
Since the Funds tax year is not the calendar year, another notification will be sent with respect to calendar year 2011. In January 2012, shareholders will be advised on IRS Form 1099 DIV as to the federal tax status of dividends and distributions received during calendar 2011. The amount that will be reported will be the amount to use on your 2011 federal income tax return and may differ from the amount which must be reported in connection with the Funds tax year ended January 31, 2011. Shareholders are advised to consult their tax advisers as to the federal, state and local tax status of the dividend income received from the Funds.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
39 |
|
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
|
Annual
Shareholder |
|
The Funds held their joint annual meetings of shareholders on July 21, 2010. Shareholders voted as indicated below:
|
|
|
|
|
|
|
|
|
|
Affirmative |
|
Withheld |
|
||
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
|
|
|
|
|
|
Re-election of Paul Belica Class I to serve until 2012 |
|
|
82,137,502 |
|
|
6,447,365 |
|
Re-election of Hans W. Kertess Class I to serve until 2012 |
|
|
82,260,364 |
|
|
6,324,503 |
|
Re-election of William B. Ogden, IV Class I to serve until 2012 |
|
|
82,240,577 |
|
|
6,344,290 |
|
Re-election of R. Peter Sullivan III Class II to serve until 2013 |
|
|
82,286,373 |
|
|
6,298,494 |
|
Election of Alan Rappaport Class III to serve until 2011 |
|
|
82,290,170 |
|
|
6,294,697 |
|
Election of James A. Jacobson Class II to serve until 2013 |
|
|
82,294,420 |
|
|
6,290,447 |
|
|
|
|
|
|
|
|
|
Mr. John C. Maney, continued to serve as a Trustee. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affirmative |
|
Withheld |
|
||
|
|
|
|
|
|
|
|
AGIC Equity & Convertible Income: |
|
|
|
|
|
|
|
Re-election of Paul Belica Class III to serve until 2013 |
|
|
20,373,540 |
|
|
431,256 |
|
Re-election of R. Peter Sullivan III Class III to serve until 2013 |
|
|
20,383,082 |
|
|
421,714 |
|
Election of Alan Rappaport Class I to serve until 2011 |
|
|
20,393,694 |
|
|
411,102 |
|
Election of James A. Jacobson Class II to serve until 2012 |
|
|
20,389,533 |
|
|
415,263 |
|
|
|
|
|
|
|
|
|
Messrs. Hans W. Kertess, John C. Maney and William B. Ogden, IV, continued to serve as Trustees. |
|
|
|
|
|
|
|
|
Interested Trustee |
|
|
|
Changes to the Board of Trustees:
Robert E. Connor served as Trustee of the Funds until his death on April 8, 2010.
R. Peter Sullivan, III retired from the Funds Board of Trustees effective July 31, 2010.
Effective September 21, 2010, the Funds Board of Trustees appointed Brad Gallagher as a Class II Trustee for NFJ and Class III for NIE to serve until 2011.
Effective March 7, 2011, the Funds Board of Trustees appointed Deborah A. Zoullas as a Class II Trustee for NFJ and Class III for NIE to serve until 2011.
|
|
Change in Portfolio Manager (NFJ Dividend, Interest & Premium Strategy Fund only) |
Effective May 14, 2010, Mr. Baxter Hines replaced Mr. Jeff Partenheimer as a portfolio manager of the Funds equity component. Mr. Ben Fischer continues to be the lead portfolio manager of the equity component.
Mr. Baxter Hines is a Vice President and Portfolio Manager at NFJ. He has over 5 years experience in equity research and investment consulting. Prior to joining NFJ in 2008, Mr. Hines attended the University of Texas where he received an MBA from the McCombs School of Business. Before attending business school, Mr. Hines worked as a market data specialist for Reuters. He received a BA in Economics from the University of Virginia in 2001.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
40 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
Proxy Voting
Policies & |
Proxy Voting Policies & Procedures:
A description of the polices and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the most recent twelve month period ended June 30 is available (i) without charge, upon request, by calling the Funds shareholder servicing agent at (800) 254-5197; (ii) on the Funds website at www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and Exchange Commissions website at www.sec.gov.
|
|
Changes in Investment Policy (AGIC Equity & Convertible Income Fund only) |
Effective June 30, 2010, the description of AGIC Equity & Convertible Incomes option strategy was revised as follows:
AGIC Equity & Convertible Income employs its Option Strategy by writing (selling) call options on stocks held in its equity securities portfolio (the Equity Component). When the Fund writes a call option on an individual stock held in the Equity Component, it will ordinarily do so with respect to approximately 70% of the value of the position. Therefore, if the Fund determines to write call options on all or substantially all of the individual stocks held in the Equity Component, it is expected that the Fund will have written call options positions with respect to approximately 70% of the aggregate value of the Equity Component. However, the extent of the Funds use of the Option Strategy will vary depending on market conditions and other factors, and the Fund may determine from time to time to write call options on only a portion, or none, of the individual stocks held in the Equity Component.
The Funds Option Strategy, to the extent utilized, is designed to generate gains from option premiums in an attempt to enhance distributions payable to the Funds shareholders and to reduce overall portfolio risk. However, there is no assurance that the Funds Option Strategy will achieve its objectives.
There are various risks associated with the Funds Option Strategies, including that the Fund forgoes, during the life of a written call option, the opportunity to profit from increases in the market value of the underlying security or securities held by the Fund (in the case of an index option, to the extent the performance of the index is correlated with the corresponding securities held by the Fund) with respect to which the option was written above the sum of the premium and the strike price of the call. Therefore, an Option Strategy generally limits the Funds ability to benefit from the full upside potential of its equity holdings, while the Fund retains the risk of loss (net of premiums received) should the price of the Funds portfolio securities decline. The use of written call options by the Fund also potentially involves correlation, liquidity, valuation, tax and other risks.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
41 |
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
|
Our Commitment to You
We consider customer
privacy to be a fundamental aspect of our relationship with shareholders and
are committed to maintaining the confidentiality, integrity, and security of
our current, prospective and former shareholders personal information. To
ensure our shareholders privacy, we have developed policies that are designed
to protect this confidentiality, while allowing shareholders needs to be
served.
Obtaining Personnel Information
In the course of
providing shareholders with products and services, we may obtain non-public
personal information about shareholders, which may come from sources such as
account applications and other forms, from other written, electronic or verbal
correspondence, from shareholder transactions, from a shareholders brokerage
or financial advisory firm, financial adviser or consultant, and/or from
information captured on our internet web sites.
Respecting Your Privacy
As a matter of
policy, we do not disclose any personal or account information provided by
shareholders or gathered by us to non-affiliated third parties, except as
required for everyday business purposes, such as to process transactions or
service a shareholders account, or otherwise permitted by law. As is common in
the industry, non-affiliated companies may from time to time be used to provide
certain services, such as preparing and mailing prospectuses, reports, account
statements and other information, and gathering shareholder proxies. We may
also retain non-affiliated financial services providers, such as
broker-dealers, to market our shares and products and we may enter in
joint-marketing agreements with them and other financial companies. We may also
retain marketing and research service firms to conduct research on shareholder
satisfaction. These companies may have access to a shareholders personal and
account information, but are permitted to use the information solely to provide
the specific service or as otherwise permitted by law. We may also provide a
shareholders personal and account information to their respective brokerage or
financial advisory firm, Custodian, and/or to their financial adviser or
consultant.
Sharing Information with Third Parties
We reserve the right
to disclose or report personal information to non-affiliated third parties, in
limited circumstances, where we believe in good faith that disclosure is
required under law to cooperate with regulators or law enforcement authorities,
to protect our rights or property or upon reasonable request by any Fund in
which a shareholder has chosen to invest. In addition, we may disclose
information about a shareholder or shareholders accounts to a non-affiliated
third party only if we receive a shareholders written request or consent.
Sharing Information with Affiliates
We may share
shareholder information with our affiliates in connection with our affiliates
everyday business purposes, such as servicing a shareholders account, but our
affiliates may not use this information to market products and services to you
except in conformance with applicable laws or regulations. The information we
share includes information about our experiences and transactions with a
shareholder and may include, for example, shareholders participation in one of
the Funds or in other investment programs, a shareholders ownership of certain
types of accounts (such as IRAs), or other data about a shareholders
transactions or accounts. Our affiliates, in turn, are not permitted to share
shareholder information with non-affiliated entities, except as required or
permitted by law.
Procedures to Safeguard Private Information
We take seriously
the obligation to safeguard shareholder non-public personal information. In
addition to this policy, we have also implemented procedures that are designed
to restrict access to a shareholders non-public personal information only to
internal personnel who need to know that information in order to provide
products or services to such shareholders. In addition, we have physical,
electronic and procedural safeguards in place to guard a shareholders
non-public personal information.
Disposal of Confidential Records
We will dispose of
records, if any, that are knowingly derived from data received from a consumer
reporting agency regarding a shareholder that is an individual in a manner that
ensures the confidentiality of the data is maintained. Such records include,
among other things, copies of consumer reports and notes of conversations with
individuals at consumer agencies.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
42 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
|
|
|
NFJ Dividend, Interest & Premium Strategy
Fund |
|
Pursuant to the Funds Dividend Reinvestment Plan (the Plan), all Common Shareholders whose shares are registered in their own names will have all dividends, including any capital gain dividends, reinvested automatically in additional Common Shares by BNY Mellon, as agent for the Common Shareholders (the Plan Agent), unless the shareholder elects to receive cash. An election to receive cash may be revoked or reinstated at the option of the shareholder. In the case of record shareholders such as banks, brokers or other nominees that hold Common Shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common Shares certified from time to time by the record shareholder as representing the total amount registered in such shareholders name and held for the account of beneficial owners who are to participate in the Plan. Shareholders whose shares are held in the name of a bank, broker or nominee should contact the bank, broker or nominee for details. All distributions to investors who elect not to participate in the Plan (or whose broker or nominee elects not to participate on the investors behalf), will be paid cash by check mailed, in the case of direct shareholder, to the record holder by BNY Mellon, as the Funds dividend disbursement agent.
Unless you elect (or your broker or nominee elects) not to participate in the Plan, the number of Common Shares you will receive will be determined as follows:
|
|
(1) |
If on the payment date the net asset value of the Common Shares is equal to or less than the market price per Common Share plus estimated brokerage commissions that would be incurred upon the purchase of Common Shares on the open market, the Funds will issue new shares at the greater of (i) the net asset value per Common Share on the payment date or (ii) 95% of the market price per Common Share on the payment date; or |
|
|
(2) |
If on the payment date the net asset value of the Common Shares is greater than the market price per Common Share plus estimated brokerage commissions that would be incurred upon the purchase of Common Shares on the open market, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price on the payment date, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Funds. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market on or shortly after the payment date, but in no event later than the ex-dividend date for the next distribution. Interest will not be paid on any uninvested cash payments. |
You may withdraw from the Plan at any time by giving notice to the Plan Agent. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions.
The Plan Agent maintains all shareholders accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. The Plan Agent will also furnish each person who buys Common Shares with written instructions detailing the procedures for electing not to participate in the Plan and to instead receive distributions in cash. Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions.
The Funds and the Plan Agent reserve the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Funds reserve the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from the Funds shareholder servicing agent, BNY Mellon, P.O. Box 43027, Providence, RI 02940-3027, telephone number (800) 254-5197.
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
43 |
|
|
NFJ Dividend, Interest & Premium Strategy
Fund |
|
|
|
|
Name, Date of Birth, Position(s) Held
with |
|
Principal Occupation(s) During Past 5 years: |
|
|
|
The address of each trustee is 1345
Avenue of the |
|
|
|
|
|
Hans W. Kertess |
|
President, H. Kertess & Co., a financial advisory company. Formerly, Managing Director, Royal Bank of Canada Capital Markets. |
Date of Birth: 7/12/39 |
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Chairman of the Board of Trustees since: 2007 |
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Trustee since: 2005 - NFJ/ 2007 - NIE |
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Term of office: Expected to stand for re-election at |
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Trustee/Director of 54 Funds in Fund Complex; |
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Trustee/Director of no funds outside of Fund Complex |
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Paul Belica |
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Retired. Formerly, Director, Student Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Goal Funding II, Inc. and Surety Loan Fund, Inc.; Manager of Stratigos Fund LLC, Whistler Fund LLC, Xanthus Fund LLC & Wynstone Fund LLC. |
Date of Birth: 9/27/21 |
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Trustee since: 2005 - NFJ/ 2007 - NIE |
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Term of office: Expected to stand for re-election at |
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Trustee/Director of 54 funds in Fund Complex |
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Trustee/Director of no funds outside of Fund Complex |
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Bradford K. Gallagher |
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Founder, Spyglass Investments LLC, a private investment vehicle (since 2001); Founder, President and CEO of Cypress Holding Company and Cypress Tree Investment Management Company (since 1995); Trustee, The Common Fund (since 2005); Director, Anchor Point Inc. (since 1995); Chairman and Trustee, Atlantic Maritime Heritage Foundation (since 2007); and Director, Shielding Technology Inc. (since 2006). |
Date of Birth: 2/28/44 |
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Trustee since: 2010 |
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Term of office: Expected to stand for election at |
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Trustee/Director of 54 funds in Fund Complex |
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Trustee/Director of no funds outside of Fund Complex |
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Formerly, Chairman and Trustee of Grail Advisors |
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James A. Jacobson |
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Retired. Formerly, Vice Chairman and Managing Director of Spear, Leeds & Kellogg Specialists, LLC, a specialist firm on the New York Stock Exchange. |
Date of Birth: 2/3/45 |
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Trustee since: 2009 |
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Term of office: Expected to stand for re-election at |
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Trustee/Director of 54 funds in Fund Complex |
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Trustee/Director of16 funds in Alpine Mutual Funds Complex |
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John C. Maney |
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Chief Executive Officer of Allianz Global Investors Fund Management LLC since January 2011; Management Board of Allianz Global Investors Fund Management LLC; Management Board and Managing Director of Allianz Global Investors of America L.P. since January 2005 and also Chief Operating Officer of Allianz Global Investors of America L.P. since November 2006. |
Date of Birth: 8/3/59 |
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Trustee since: 2006 - NFJ/ 2007 - NIE |
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Term of office: Expected to stand for re-election at |
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Trustee/Director of 79 Funds in Fund Complex |
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Trustee/Director of no funds outside the Fund Complex |
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NFJ Dividend, Interest & Premium Strategy Fund |
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44 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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AGIC Equity & Convertible Income Fund |
Board of Trustees (unaudited) |
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Name, Date of Birth, Position(s) Held
with |
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Principal Occupation(s) During Past 5 years: |
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William B. Ogden, IV |
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Asset Management Industry Consultant. Formerly, Managing Director, Investment Banking Division of Citigroup Global Markets Inc. |
Date of Birth: 1/11/45 |
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Trustee since: 2006 - NFJ/ 2007 - NIE |
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Term of office: Expected to stand for re-election at 2012 - NFJ/ 2011 - NIE annual meetings of shareholders. |
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Trustee/Director of 54 Funds in Fund Complex; |
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Trustee/Director of no funds outside of Fund Complex |
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Alan Rappaport |
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Vice Chairman, Roundtable Investment Partners (since 2009); Chairman (formerly President), Private Bank of Bank of America; Vice Chairman, US Trust (2001-2008). |
Date of Birth: 3/3/53 |
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Trustee since: 2010 |
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Term of office: Expected to stand for election at 2011 annual meetings of shareholders. |
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Trustee/Director of 54 funds in Fund Complex |
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Trustee/Director of no funds outside of Fund Complex |
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Deborah A. Zoullas |
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Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Director, Helena Rubenstein Foundation (since 1997); Co-Chair Special Projects Committee, Memorial Sloan Kettering (since 2005); Board Member and Member of the Investment and Finance Committees, Henry Street Settlement (since 2007); Trustee, Stanford University (since 2010). Formerly, Advisory Council, Stanford Business School (2002-2008) and Director, Armor Holdings, a manufacturing company (2002-2007). |
Date of Birth: 11/13/52 |
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Trustee since: 2011 |
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Term of office: Expected to stand for election at 2011 annual meetings of shareholders. |
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Trustee/Director of 50 funds in Fund Complex |
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Trustee/Director of no funds outside of Fund Complex |
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Mr. Maney is an interested person of the Trust, as defined in Section 2(a)(19) of the 1940 Act, due to his affiliation with Allianz Global Investors of America L.P. In addition to Mr. Maneys positions set forth in the table above, he holds the following positions with affiliated persons: Management Board, Managing Director and Chief Operating Officer of Allianz Global Investors of America LLC; Member-Board of Directors and Chief Operating Officer of Allianz Global Investors of America Holdings Inc. and Oppenheimer Group, Inc.; Managing Director and Chief Operating Officer of Allianz Global Investors NY Holdings LLC; Managing Director and Chief Operating Officer of Allianz Hedge Fund Partners Holding L.P. and Allianz Global Investors U.S. Retail LLC; Compensation Committee of NFJ Investment Group LLC; Management Board of Nicholas-Applegate Holdings LLC; Member - Board of Directors and Chief Operating Officer of PIMCO Global Advisors (Resources) Limited; Executive Vice President of PIMCO Japan Ltd.; Chief Operating Officer of Allianz Global Investors U.S. Holding II LLC; and Member and Chairman - Board of Directors, President and Chief Operating Officer of PFP Holdings, Inc. and Managing Director of Allianz Global Investors Capital LLC. |
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NFJ Dividend, Interest & Premium Strategy Fund |
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1.31.11 | AGIC Equity & Convertible Income Fund Annual Report |
45 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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AGIC Equity & Convertible Income Fund |
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Name, Date of Birth, Position(s) |
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Principal Occupation(s) During Past 5 Years: |
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Brian S. Shlissel |
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Management Board, Managing Director and Head of Mutual Fund Services of Allianz Global Investors Fund Management LLC; President and Chief Executive Officer of 29 funds in the Fund Complex; President of 50 funds in the Fund Complex; and Treasurer, Principal Financial and Accounting Officer of The Korea Fund, Inc. Formerly, Treasurer, Principal Financial and Accounting Officer of 50 funds in the Fund Complex. |
Date of Birth: 11/14/64 |
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President & Chief Executive Officer since: 2005 - NFJ and 2007 - NIE |
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Lawrence G. Altadonna |
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Senior Vice President, Director of Fund Administration of Allianz Global Investors Fund Management LLC; Treasurer, Principal Financial and Accounting Officer of 79 funds in the Fund Complex; and Assistant Treasurer of The Korea Fund, Inc. Formerly, Assistant Treasurer of 50 Funds in the Fund Complex. |
Date of Birth: 3/10/66 |
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Treasurer, Principal Financial and Accounting Officer since: 2005 - NFJ and 2007 - NIE |
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Thomas J. Fuccillo |
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Executive Vice President, Chief Legal Officer and Secretary of Allianz Global Investors Fund Management LLC; Executive Vice President of Allianz Global Investors of America L.P. Vice President, Secretary and Chief Legal Officer of 79 funds in the Fund Complex; Secretary and Chief Legal Officer of The Korea Fund, Inc. |
Date of Birth: 3/22/68 |
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Vice President, Secretary & Chief Legal Officer since: 2005 - NFJ and 2007 - NIE |
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Scott Whisten |
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Senior Vice President, Allianz Global Investors Fund Management LLC; Assistant Treasurer of 79 funds in the Fund Complex. |
Date of Birth: 3/13/71 |
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Assistant Treasurer since: 2007 |
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Richard J. Cochran |
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Vice President, Allianz Global Investors Fund Management LLC; Assistant Treasurer of 79 funds in the Fund Complex and of The Korea Fund, Inc. Formerly, Tax Manager, Teachers Insurance Annuity Association/College Retirement Equity Fund (TIAA-CREF) (2002-2008). |
Date of Birth: 1/23/61 |
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Assistant Treasurer since: 2008 |
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Orhan Dzemaili |
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Vice President, Allianz Global Investors Fund Management LLC; Assistant Treasurer of 79 funds in the Fund Complex. Formerly, Accounting Manager, Prudential Investments LLC (2004-2007). |
Date of Birth: 4/18/74 |
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Assistant Treasurer since: 2011 |
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Youse E. Guia |
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Senior Vice President, Chief Compliance Officer, Allianz Global Investors of America L.P.; Chief Compliance Officer of 79 funds in the Fund Complex and of The Korea Fund, Inc. |
Date of Birth: 9/3/72 |
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Chief Compliance Officer since: 2005 - NFJ and 2007 - NIE |
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Lagan Srivastava |
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Vice President of Allianz Global Investors of America L.P.; Assistant Secretary of 79 funds in the Fund Complex and of The Korea Fund, Inc. |
Date of Birth: 9/20/77 |
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Assistant Secretary since: 2006 - NFJ and 2007 - NIE |
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Officers hold office at the pleasure of the Board and until their successors are appointed and qualified or until their earlier resignation or removal.
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NFJ Dividend, Interest & Premium Strategy Fund |
|
46 |
AGIC Equity & Convertible Income Fund Annual Report | 1.31.11 |
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Trustees |
Fund Officers |
Hans W. Kertess |
Brian S. Shlissel |
Chairman of the Board of Trustees |
President & Chief Executive Officer |
Paul Belica |
Lawrence G. Altadonna |
Bradford K. Gallagher |
Treasurer, Principal Financial & Accounting Officer |
James A. Jacobson |
Thomas J. Fuccillo |
John C. Maney |
Vice President, Secretary & Chief Legal Officer |
William B. Ogden, IV |
Scott Whisten |
Alan Rappaport |
Assistant Treasurer |
Deborah A. Zoullas |
Richard J. Cochran |
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Assistant Treasurer |
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Orhan Dzemaili |
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Assistant Treasurer |
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Youse E. Guia |
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Chief Compliance Officer |
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Lagan Srivastava |
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Assistant Secretary |
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Investment Manager |
Allianz Global Investors Fund Management LLC |
1345 Avenue of the Americas |
New York, NY 10105 |
Sub-Advisers |
NFJ Investment Group LLC |
2100 Ross Avenue, Suite 1840 |
Dallas, TX 75201 |
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Allianz Global Investors Capital LLC |
600 West Broadway, 30th Floor |
San Diego, CA 92101 |
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Allianz Global Investors Capital LLC |
1345 Avenue of the Americas |
New York, NY 10105 |
Custodian & Accounting Agent |
Brown Brothers Harriman & Co. |
40 Water Street |
Boston, MA 02109 |
Transfer Agent, Dividend Paying Agent and Registrar |
BNY Mellon |
P.O. Box 43027 |
Providence, RI 02940-3027 |
Independent Registered Public Accounting Firm |
PricewaterhouseCoopers LLP |
300 Madison Avenue |
New York, NY 10017 |
Legal Counsel |
Ropes & Gray LLP |
Prudential Tower |
800 Boylston Street |
Boston, MA 02199 |
This report, including the financial information herein, is transmitted to the shareholders of NFJ Dividend, Interest & Premium Strategy Fund and AGIC Equity & Convertible Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Funds may purchase shares of its stock in the open market.
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of their fiscal year on Form N-Q. The Funds Form N-Q is available on the SECs website at www.sec.gov and may be reviewed and copied at the SECs Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The information on Form N-Q is also available on the Funds website at www.allianzinvestors.com/closedendfunds.
Information on the Funds is available at www.allianzinvestors.com/closedendfunds or by calling the Funds shareholder servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper mailings. To enroll, go to
www.allianzinvestors.com/edelivery.
AGI-2011-02-28-0550
AZ601AR_013111
Table of Contents
ITEM 2. CODE OF ETHICS
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(a) |
As of the end of the period covered by this report, the registrant has adopted a code of ethics (the Section 406 Standards for Investment Companies- Ethical Standards for Principal Executive and Financial Officers) that applies to the registrants Principal Executive Officer and Principal Financial Officer; the registrants Principal Financial Officer also serves as the Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-254-5197. The code of ethics are included as an exhibit 99.CODE ETH here to. |
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(b) |
The CODE OF ETHICS PURSUANT TO SECTION 406 OF THE SARBANES-OXLEY ACT OF 2002 FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFCIERS (the code) was updated to remove interested trustees from being subject to the Code, which is not required under section 406 of the Sarbanes-Oxley Act of 2002. The Code also was updated to remove examples of specific conflict of interest situations and to add an annual certification requirement for Covered Officers. In addition, the approval or ratification process for material amendments to the Code was clarified to include approval by a majority of the independent trustees. |
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(c) |
During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above. |
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrants Board has determined that Mr. Paul Belica and James A. Jacobson, members of the Boards Audit Oversight Committee is an audit committee financial experts, and that they are independent, for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
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a) |
Audit fees. The aggregate fees billed for each of the last two fiscal years (the Reporting Periods) for professional services rendered by the Registrants principal accountant (the Auditor) for the audit of the Registrants annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $67,000 in 2010 and $67,000 in 2011. |
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b) |
Audit-Related Fees. There were no audit related fees billed for each of the last two fiscal years. |
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c) |
Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, |
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tax service and tax planning (Tax Services) were $14,175 in 2010 and $14,700 in 2011. These services consisted of review or preparation of U.S. federal, state, local and excise tax returns and calculation of excise tax distributions. |
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d) |
All Other Fees. There were no other fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant. |
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e) |
1. Audit Committee Pre-Approval Policies and Procedures. The Registrants Audit Committee has established policies and procedures for pre-approval of all audit and permissible non-audit services by the Auditor for the Registrant, as well as the Auditors engagements related directly to the operations and financial reporting of the Registrant. The Registrants policy is stated below. |
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NFJ Dividend, Interest & Premium Strategy Fund (the Fund) |
AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS
The Funds Audit Oversight Committee (Committee) is charged with the oversight of the Funds financial reporting policies and practices and their internal controls. As part of this responsibility, the Committee must pre-approve any independent accounting firms engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement by the independent accountants, the Committee will assess the effect that the engagement might reasonably be expected to have on the accountants independence. The Committees evaluation will be based on:
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a review of the nature of the professional services expected to provided, |
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the fees to be charged in connection with the services expected to be provided, |
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a review of the safeguards put into place by the accounting firm to safeguard independence, and |
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periodic meetings with the accounting firm. |
POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE FUND
On an annual basis, the Funds Committee will review and pre-approve the scope of the audits of the Fund and proposed audit fees and permitted non-audit (including audit-related) services that may be performed by the Funds independent accountants. At least annually, the Committee will receive a report of all audit and non-audit services that were rendered in the previous calendar year pursuant to this Policy. In addition to the Committees
pre-approval of services pursuant to this Policy, the engagement of the independent accounting firm for any permitted non-audit service provided to the Fund will also require the separate written pre-approval of the President of the Fund, who will confirm, independently, that the accounting firms engagement will not adversely affect the firms independence. All non-audit services performed by the independent accounting firm will be disclosed, as required, in filings with the Securities and Exchange Commission.
AUDIT SERVICES
The categories of audit services and related fees to be reviewed and pre-approved annually by the Committee are:
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Annual Fund
financial statement audits |
AUDIT-RELATED SERVICES
The following categories of audit-related services are considered to be consistent with the role of the Funds independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firms independence:
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Accounting
consultations |
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Agreed upon procedure reports |
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Other attestation
reports |
Individual audit-related services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firms independence, by the Committee Chair (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
TAX SERVICES
The following categories of tax services are considered to be consistent with the role of the Funds independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firms independence:
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Tax compliance services related to the filing or amendment of the following: |
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Federal, state and local income tax compliance; and, sales and use tax compliance |
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Timely RIC qualification reviews |
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Tax distribution analysis and planning |
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Tax authority examination services |
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Tax appeals support services |
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Accounting methods studies |
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Fund merger support service |
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Other tax consulting services and related projects |
Individual tax services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firms independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
PROSCRIBED SERVICES
The Funds independent accountants will not render services in the following categories of non-audit services:
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Bookkeeping or other services related to the accounting records or financial statements of the Fund |
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Financial information systems design and implementation |
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Appraisal or valuation services, fairness opinions, or contribution-in-kind reports |
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Actuarial services |
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Internal audit outsourcing services |
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Management functions or human resources |
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Broker or dealer, investment adviser or investment banking services |
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Legal services and expert services unrelated to the audit |
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Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible |
PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND COMPLEX
The Committee will pre-approve annually any permitted non-audit services to be provided to Allianz Global Investors Fund Management LLC (Formerly, PA Fund Management LLC) or any other investment manager to the Funds (but not including any sub-adviser whose role is primarily portfolio management and is sub-contracted by the investment manager) (the Investment Manager) and any entity
controlling, controlled by, or under common control with the Investment Manager that provides ongoing services to the Fund (including affiliated sub-advisers to the Funds), provided, in each case, that the engagement relates directly to the operations and financial reporting of the Fund (such entities, including the Investment Manager, shall be referred to herein as the Accounting Affiliates). Individual projects that are not presented to the Committee as part of the annual pre-approval process, may be pre-approved, if deemed consistent with the accounting firms independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
Although the Committee will not pre-approve all services provided to the Investment Manager and its affiliates, the Committee will receive an annual report from the Funds independent accounting firm showing the aggregate fees for all services provided to the Investment Manager and its affiliates.
DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF NON-AUDIT SERVICES
With respect to the provision of permitted non-audit services to a Fund or Accounting Affiliates, the pre-approval requirement is waived if:
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(1) |
The aggregate amount of all such permitted non-audit services provided constitutes no more than (i) with respect to such services provided to the Fund, five percent (5%) of the total amount of revenues paid by the Fund to its independent accountant during the fiscal year in which the services are provided, and (ii) with respect to such services provided to Accounting Affiliates, five percent (5%) of the total amount of revenues paid to the Funds independent accountant by the Fund and the Accounting Affiliates during the fiscal year in which the services are provided; |
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(2) |
Such services were not recognized by the Fund at the time of the engagement for such services to be non-audit services; and |
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(3) |
Such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this Committee Chairman or other delegate shall be reported to the full Committee at its next regularly scheduled meeting. |
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e) 2. No services were approved pursuant to the procedures contained in paragraph (C) (7) (i) (C) of Rule 2-01 of Registration S-X. |
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f) Not applicable |
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g) Non-audit fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to the Adviser, for the 2010 Reporting Period was $568,365 and the 2011 Reporting Period was $2,506,354. |
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h) Auditor Independence. The Registrants Audit Oversight Committee has considered whether the provision of non-audit services that were rendered to the Adviser which were not pre-approved is compatible with maintaining the Auditors independence. |
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ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
The Fund has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit committee of the Fund is comprised of Paul Belica, Hans W. Kertess, Alan Rappaport, William B. Ogden, IV, James J. Jacobson, Bradford K. Gallagher and Deborah A. Zoullas.
ITEM 6. SCHEDULE OF INVESTMENTS
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(a) |
The registrants Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form. |
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(b) |
Not applicable due to no such divestments during the period covered since the previous Form N-CSR filing. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
NFJ Dividend Interest & Premium Strategy
Fund
(the Trust)
PROXY VOTING POLICY
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1. |
It is the policy of the Trust that proxies should be voted in the interest of its shareholders, as determined by those who are in the best position to make this determination. The Trust believes that the firms and/or persons purchasing and selling securities for the Trust and analyzing the performance of the Trusts securities are in the best position and have the information necessary to vote proxies in the best interests of the Trust and its shareholders, including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the Trust, on the other. Accordingly, the Trusts policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the Trust. |
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2. |
The Trust delegates the responsibility for voting proxies to Allianz Global Investors Fund Management LLC (AGIFM), which will in turn delegate such responsibility to the sub-adviser of the Trust. AGIFMs Proxy Voting Policy Summary is attached as Appendix A hereto. A summary of the detailed proxy voting policies of the Trusts current sub-adviser is set forth in Appendix B attached hereto. Such summary may be revised from time to time to reflect changes to the sub-advisers detailed proxy voting policies. |
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3. |
The party voting the proxies (i.e., the sub-adviser or portfolio manager) shall vote such proxies in accordance with such partys proxy voting policies and, to the extent consistent with such policies, may rely on information and/or recommendations supplied by others. |
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4. |
AGIFM and the sub-adviser of the Trust with proxy voting authority shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the applicable Board of the Trust promptly after the adoption or amendment of any such policies. |
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5. |
The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for the Trusts regulatory filings including, without limitation, Form N-PX and the required disclosure of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by the Board or the Trusts Chief Compliance Officer. |
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6. |
This Proxy Voting Policy Statement (including Appendix B), the Proxy Voting Policy Summary of AGIFM and summary of the detailed proxy voting policy of the sub- |
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adviser of the Trust with proxy voting authority, shall be made available (i) without charge, upon request, by calling 1-800-426-0107 and (ii) on the Trusts website at www.allianzinvestors.com. In addition, to the extent required by applicable law or determined by the Trusts Chief Compliance Officer or Board of Trustees, the Proxy Voting Policy Summary of AGIFM and summaries of the detailed proxy voting policies of each sub-adviser with proxy voting authority shall also be included in the Trusts Registration Statements or Form N-CSR filings. |
-2-
Appendix A
ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC (AGIFM)
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1. |
It is the policy of AGIFM that proxies should be voted in the interest of the shareholders of the applicable fund, as determined by those who are in the best position to make this determination. AGIFM believes that the firms and/or persons purchasing and selling securities for the funds and analyzing the performance of the funds securities are in the best position and have the information necessary to vote proxies in the best interests of the funds and their shareholders, including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the fund, on the other. Accordingly, AGIFMs policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the funds. |
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2. |
AGIFM, for each fund which it acts as an investment adviser, delegates the responsibility for voting proxies to the sub-adviser for the respective fund, subject to the terms hereof. |
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3. |
The party voting the proxies (e.g., the sub-adviser) shall vote such proxies in accordance with such partys proxy voting policies and, to the extent consistent with such policies, may rely on information and/or recommendations supplied by others. |
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4. |
AGIFM and each sub-adviser of a fund shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the board of the relevant fund promptly after the adoption or amendment of any such policies. |
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5. |
The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for such funds regulatory filings including, without limitation, Form N-PX and the required disclosure of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by such funds respective boards or chief compliance officers. |
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6. |
This Proxy Voting Policy Summary and summaries of the proxy voting policies for each sub-adviser of a fund advised by AGIFM shall be available (i) without charge, upon request, by calling 1-800-426-0107 and (ii) at www.allianzinvestors.com. In addition, to the extent required by applicable law or determined by the relevant funds board of directors/trustees or chief compliance officer, this Proxy Voting Policy Summary and summaries of the detailed proxy voting policies of each sub-adviser and each other entity with proxy voting authority for a fund advised by AGIFM shall also be included in the Registration Statement or Form N-CSR filings for the relevant fund. |
A-1
Appendix B
Allianz Global Investors Capital LLC (AGI Capital)
Description of Proxy Voting Policy and Procedures
AGI Capital votes proxies on behalf of its clients pursuant to its written Proxy Policy Guidelines and Procedures (the Proxy Guidelines), unless a client requests otherwise. The Proxy Guidelines are designed to honor AGI Capitals fiduciary duties to its clients and protect and enhance its clients economic welfare and rights.
The Proxy Guidelines are established by a Proxy Committee consisting of executive, investment, client services, legal/compliance and operations personnel. The Proxy Guidelines reflect AGI Capitals normal voting positions on specific corporate actions, including but not limited to those relating to social and corporate responsibility issues, stock option plans and other management compensation issues, changes to a portfolio companys capital structure and corporate governance. For example, AGI Capital generally votes for proposals to declassify boards and generally supports proposals that remove restrictions on shareholders ability to call special meetings independently of management. Some issues will require a case-by-case analysis.
The Proxy Guidelines largely follow the recommendations of Glass, Lewis & Co. LLC (Glass Lewis), an investment research and proxy advisory firm. The Proxy Guidelines may not apply to every situation and AGI Capital may vote differently than specified by the Proxy Guidelines and/or contrary to Glass Lewis recommendation if AGI Capital reasonably determines that to do so is in its clients best interest. Any variance from the Proxy Guidelines is documented.
In the case of a potential conflict of interest, AGI Capitals Proxy Committee will review the voting decision to ensure that the voting decision has not been affected by the potential conflict.
Under certain circumstances, AGI Capital may in its reasonable discretion refrain from voting clients proxies due to cost or other factors.
NFJ Investment Group (NFJ)
Description of Proxy Voting Policy and Procedures
THE NFJ PROXY VOTING POLICY AND PROCEDURES IS CURRENTLY UNDER REVISION. ONCE COMPLETED, WE WILL SEND YOU THE UPDATED POLICY.
A-2
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
(a) (1) Allianz Global Investors Capital (AGI Capital)
As of April 4, 2011, the following individual has primary responsibility for the day-to-day implementation of the Convertible Component.
Douglas G. Forsyth, CFA
Managing Director
Doug Forsyth has portfolio management and
research responsibilities for the Income and Growth Strategies team and has
been a Portfolio Manager since the Funds inception in February 2005. Prior to
joining AGI Capital via a predecessor affiliate in 1994, Doug was a securities
analyst at AEGON USA. Doug was previously a research assistant at The
University of Iowa, where he earned his B.B.A. in finance. He has nineteen
years of investment industry experience.
As of April 4, 2011 the following individual has primary responsibility for the day-to-day implementation of the Index Option Strategy.
Stephen Bond-Nelson
Senior Vice President
Stephen Bond-Nelson has portfolio management and
research responsibilities for the Structured Products team, and has been with
the team since its inception in 2005. Prior to joining AGI Capital via a
predecessor affiliate in 1999, he was as a research analyst/ associate with
Prudential Mutual Funds. He earned his M.B.A. from Rutgers University and his
B.S. from Lehigh University. Stephen has eighteen years of investment industry
experience.
NFJ Investment Group LLC (NFJ)
As of April 4, 2011, the following individuals constitute the team that has primary responsibility for the day-to-day implementation of the Equity Component, with Mr. Fischer serving as head of the team:
BEN J. FISCHER, CFA - MANAGING DIRECTOR
Mr. Fischer is a founding partner of NFJ Investment Group and has been a
portfolio manager of the Fund since its inception in February 2005. He has over
45 years of experience in portfolio management, investment analysis and research.
Prior to founding NFJ in 1989, he was chief investment officer (institutional
and fixed income), senior vice president and senior portfolio manager at
NationsBank which he joined in 1971. Prior to joining NationsBank, Mr. Fischer
was a securities analyst at Chase Manhattan Bank and Clark, Dodge. He earned
his B.A. in Economics, a J.D. from Oklahoma University, and an M.B.A. from New
York University.
A-3
L. BAXTER HINES VICE PRESIDENT, PORTFOLIO MANAGER
Mr. Hines has over 5 years of experience in equity research and investment consulting. Prior to joining NFJ Investment Group in 2008, Mr. Hines attended the University of Texas where he completed an MBA from the McCombs School of Business. Before attending graduate school, Mr. Hines worked as a market data specialist for Reuters. Mr. Hines received his BA degree in Economics from the University of Virginia in 2001.
(a) (2) AGI Capital
The following summarizes information regarding each of the accounts, excluding the Fund, that were managed by the Portfolio Managers as of January 31, 2011 including accounts managed by a team, committee, or other group that includes the Portfolio Managers.
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Other RICs |
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Other Accounts |
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Other Pooled |
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PM |
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# |
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AUM($million) |
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# |
|
AUM($million) |
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# |
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AUM($million) |
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|
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|
|
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|
|
|
|
|
|
|
|
Douglas G. Forsyth, CFA |
|
|
7 |
|
|
3,564.9 |
|
|
11 |
|
|
1,494.6 |
|
|
6 |
|
|
626.5 |
* |
Stephen Bond-Nelson |
|
|
0 |
|
|
0 |
|
|
3 |
|
|
26.5 |
|
|
6 |
|
|
1,044.2 |
** |
*Of these other
pooled investment vehicles, two accounts totaling $381.6 million in assets pay
an advisory fee that is based in part on the performance of the account.
**Of
these other pooled investment vehicles, 6 accounts totaling $1,044.2 in assets
pay an advisory fee that is based in part on the performance of the account.
NFJ
The following summarizes information regarding each of the accounts, excluding the Fund, that were managed by the Portfolio Managers as of January 31, 2011 including accounts managed by a team, committee, or other group that includes the Portfolio Managers.
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|
Portfolio Manager |
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Account Type |
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Number |
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Assets Under |
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|
|
|
|
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|
||||||||
Ben Fischer, CFA |
|
Other investment companies |
|
4 |
|
$ |
168.8 |
|
|
|
Other accounts |
|
49 |
|
$ |
11,251 |
|
|
|
Registered Investment |
|
23 |
|
$ |
22,862 |
|
|
|
|
|
|
|
|
|
|
L. Baxter Hines |
|
Other investment companies |
|
2 |
|
$ |
80.1 |
|
|
|
Other accounts |
|
36 |
|
$ |
9,645 |
|
|
|
Registered Investment |
|
8 |
|
$ |
12,700 |
|
A-4
AGI Capital
Like other investment professionals with multiple clients, a Portfolio
Manager for a Fund may face certain potential conflicts of interest in
connection with managing both the Fund and other accounts at the same time. The
paragraphs below describe some conflicts faced by investment professionals at
most major financial firms.
AGI Capital has adopted compliance policies and procedures that address certain of these potential conflicts. The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:
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|
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|
|
The most attractive investments could be allocated to higher-fee accounts or performance fee accounts. |
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|
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|
|
The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher-fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time. |
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|
|
|
|
The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation. |
When AGI Capital considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, AGI Capitals trading desk may, to the extent permitted by applicable laws and regulations, aggregate the securities to be sold or purchased. Aggregation of trades may create the potential for unfairness to a Fund or another account if one account is favored over another in allocating the securities purchased or soldfor example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. AGI Capital considers many factors when allocating securities among accounts, including the accounts investment style, applicable investment restrictions, availability of securities, available cash and other current holdings. AGI Capital attempts to allocate investment opportunities among accounts in a fair and equitable manner. However, accounts are not assured of participating equally or at all in particular investment allocations due to such factors as noted above.
Cross trades, in which one Investment Adviser account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of interest when cross trades are effected in a manner perceived to favor one client over another. For example, if the Investment Advisor crosses a trade between performance fee account and a fixed fee account that result in a benefit to the performance fee account and a detriment to the fixed fee account.. AGI Capital has adopted compliance procedures that provide that all cross trades are to be made at an independent current market price, as required by law.
Another potential conflict of interest may arise from the different investment objectives and strategies of a Fund and other accounts. For example, another account may have a
A-5
shorter-term investment horizon or different investment objectives, policies or restrictions than a Fund. Depending on another accounts objectives or other factors, a Portfolio Manager may give advice and make decisions that may differ from advice given, or the timing or nature of decisions made, with respect to a Fund. In addition, investment decisions are subject to suitability for the particular account involved. Thus, a particular security may not be bought or sold for certain accounts even though it was bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by a Portfolio Manager when one or more other accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts.AGI Capital maintains trading policies designed to provide portfolio managers an opportunity to minimize the effect that short sales in one portfolio may have on holdings in other portfolios.
A Portfolio Manager who is responsible for managing multiple accounts may devote unequal time and attention to the management of those accounts. As a result, the Portfolio Manager may not be able to formulate as complete a strategy or identify equally attractive investment opportunities for each of those accounts as might be the case if he or she were to devote substantially more attention to the management of a single fund. The effects of this potential conflict may be more pronounced where funds and/or accounts overseen by a particular Portfolio Manager have different investment strategies.
A Funds Portfolio Manager(s) may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Fund. In addition to executing trades, some brokers and dealers provide AGI Capital with brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934), which may result in the payment of higher brokerage fees than might have otherwise be available. These services may be more beneficial to certain funds or accounts than to others. In order to be assured of continuing to receive services considered of value to its clients, AGI Capital has adopted a brokerage allocation policy embodying the concepts of Section 28(e) of the Securities Exchange Act of 1934. AGI Capital allocates the payment of brokerage commissions is subject to the requirement that the Portfolio Manager determine in good faith that the commissions are reasonable in relation to the value of the brokerage and research services provided to the Fund.
A Funds Portfolio Manager(s) may also face other potential conflicts of interest in managing a Fund, and the description above is not a complete description of every conflict that could be deemed to exist in managing both the Fund and other accounts. In addition, a Funds Portfolio Manager may also manage other accounts (including their personal assets or the assets of family members) in their personal capacity.
AGI Capitals investment personnel, including each Funds Portfolio Manager, are subject to restrictions on engaging in personal securities transactions pursuant to Allianz Global Investors of America L.P.s Codes of Ethics, which contain provisions and requirements designed to identify and address conflicts of interest between personal investment activities and the interests of the Fund. The Code of Ethics is designed to
A-6
ensure that the personal securities transactions, activities and interests of the employees of the Investment Adviser will not interfere with (i) making decisions in the best interest of advisory clients (including the Funds) or (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts.
NFJ
Potential Conflict of Interest
Like other investment professionals with multiple clients, a portfolio manager for a Fund may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. The paragraphs below describe some of these potential conflicts, which NFJ believes are faced by investment professionals at most major financial firms. NFJ, the Adviser and the Trustees have adopted compliance policies and procedures that attempt to address certain of these potential conflicts. The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:
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|
|
The most attractive investments could be allocated to higher-fee accounts or performance fee accounts. |
|
|
|
|
|
The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time. |
|
|
|
|
|
The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation. |
A potential conflict of interest may arise when a Fund and other accounts purchase or sell the same securities. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interest of a Fund as well as other accounts, the NFJs trading desk may, to the extent by applicable laws and regulations, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. Aggregation o trades may create the potential for unfairness to a Fund or another account if one account is favored over another in allocating securities purchased or sold for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account.
Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts. For example, another account may have a shorter-term investment horizon or different investment objective, policies or restrictions than a Fund. Depending on another accounts objectives or other factors, a portfolio manager may give advice and make decisions that may differ from advice given, or the timing or nature of decision made, with respect to a Fund. In addition, investment decisions are the product of many factors in addition to basic suitability for
A-7
the particular account involved. Thus, a particular security may be bought or sold for certain accounts even though it could have been bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by a portfolio manager when one or more other accounts are selling the security. There may be circumstances when purchased or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts.
Portfolio managers are responsible for managing multiple funds and/or accounts with unequal time and attention to the management of those funds and/or accounts. As a result, the portfolio manager may not be able to formulate as complete a strategy or identify equally attractive investment opportunities for ach of those accounts as might be the case if he or she were to devote substantially more attention to the management of a single fund. The effects of this potential conflict may be more pronounced where funds and/or accounts overseen by a particular portfolio manager have different investment strategies.
A Funds portfolio managers may be able to select or influence the selection of the brokers and dealers that are used to execute securities transactions for the Funds. In addition to executing trades, some brokers and dealers provide portfolio managers with brokerage an research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934), which may result in the payment of higher brokerage fees than might have otherwise been available. These services may be more beneficial to certain funs or accounts than to others. Although the payment of brokerage commissions is subject to the requirement that the portfolio manager determine in good faith and the commissions are reasonable in relation to the value of the brokerage and research services provided to the Fund and NFJs other clients, a portfolio managers decision as to the selection of brokers and dealers could yield disproportionate costs and benefits among the funds and/or accounts that he or she managers.
A Funds portfolio managers may also face other potential conflicts of interest in managing a Fund, and the description above is not complete description of every conflict that could be deemed to exist in managing both the Funds and other accounts. In addition, a Funds portfolio manger may also manage other accounts (including their personal assets or the assets of family members) in their personal capacity. The management of these accounts may also involve certain of the potential conflicts described above. Front-running could also exist if a portfolio manager transacted in his own account prior to placing an order for a Fund or other clients. NFJs investment personnel, including each Funds portfolio manager, are subject to restrictions on engaging in personal securities transactions, pursuant to a Code of Ethics adopted by NFJ, which contain provisions and requirements designed to identify and address certain conflicts of interest between personal investments activities and the interest of the Funds.
As part of NFJs Compliance Program, NFJ has established a Compliance Committee, a Best Execution Committee, a Proxy Voting Committee and a Pricing Committee to help develop policies and procedures that help NFJ avoid, mitigate, monitor and oversee areas that could present potential conflicts of interest.
A-8
(a) (3) AGI Capital
As of January 31, 2011 the following explains the compensation structure of each individual (as listed in the Prospectus) that shares primary responsibility for day-to-day portfolio management of the Fund (for the purposes of this section, Portfolio Managers):
AGI Capitals compensation plan is designed specifically to be aligned with the interests of our clients. We aim to provide rewards for exceptional investment performance and build an enduring firm with a long-term culture of shared success. To that end, in addition to competitive base salaries, we offer both short- and long-term incentive plans.
Compensation and Investment Performance
Short-term incentive pools for investment teams are annual
discretionary bonuses funded by the firms revenue and allocated based on the
performance of the strategies and the teams. The percentage allocated to an
investment team is adjusted to reflect performance relative to the benchmark
over a one-, three-, and five-year period (the timeframe may vary depending on
the strategy). The team pools are then subjectively allocated to team members
based on individual contributions to client accounts. This revenue sharing
arrangement directly aligns compensation with investment performance.
Long-Term Incentive Plan
A Long-Term Incentive Plan provides rewards to certain key staff and
executives of AGI Capital, NFJ Investment Group and the other Allianz Global
Investors companies to promote long-term growth and profitability. The Plan is
based on the firms operating earnings growth of both AGI Capital and Allianz
Global Investors, has a three-year vesting schedule and is paid in cash upon
vesting.
Ownership Interest
Managing Directors at AGI Capital and NFJ Investment Group are provided
with an interest that shares in the future growth and profitability of AGI
Capital. Each unit is designed to deliver an annual distribution and a value
based on the growth in profits. The plan has a five-year vesting schedule.
The long-term components of our compensation structure are designed to link successful investment performance and longer-term company performance with participant pay, further motivating key employees to continue making important contributions to the success of our business.
Overall, we believe that competitive compensation is essential to retaining top industry talent. With that in mind, we continually reevaluate our compensation policies against industry benchmarks. Our goal is to offer portfolio managers and analysts compensation and benefits in the top quartile for comparable experience, as measured by industry
A-9
benchmarks surveyed by independent firms such as McLagan and ECS (Watson Wyatt Data Services).
NFJ
The following information is provided as of January 31, 2011.
Our compensation plan is designed specifically to be aligned with the interests of our clients. We aim to provide rewards for exceptional investment performance and build an enduring firm with a long-term culture of shared success. To that end, in addition to competitive base salaries, we offer both short- and long-term incentive plans.
Compensation and Investment Performance
The short-term incentive pools for the NFJ investment team are annual
discretionary bonuses directly related to the revenue of the investment
business and the performance of the investment strategies relative to their
individual benchmarks over a five-year period. The percentage allocated to the
investment team increases based on the number of strategies outperforming. The
pool is then subjectively allocated to team members based on individual
contributions. This revenue sharing arrangement directly aligns compensation
with investment performance.
Long-Term Incentive Plan
A Long-Term Incentive Plan provides rewards to certain key staff and executives
of AGI Capital, NFJ Investment Group and the other Allianz Global Investors
companies to promote long-term growth and profitability. The plan is based on
the operating earnings growth of both AGI Capital and Allianz Global Investors
and has a three-year vesting schedule.
Ownership Interest
Managing Directors at AGI Capital and NFJ Investment Group are provided with an
interest that shares in the future growth and profitability of AGI Capital.
Each unit is designed to deliver an annual distribution and a value based on
the growth in profits. The plan has a five-year vesting schedule.
The long-term components of our compensation structure are designed to link successful investment performance and longer-term company performance with participant pay, further motivating key employees to continue making important contributions to the success of our business.
Overall, we believe that competitive compensation is essential to retaining top industry talent. With that in mind, we continually reevaluate our compensation policies against industry benchmarks. Our goal is to offer portfolio managers and analysts compensation and benefits in the top quartile for comparable experience, as measured by industry benchmarks surveyed by independent firms such as McLagan and ECS (Watson Wyatt Data Services).
4) The following information is provided as of January 31, 2011.
A-10
|
|
AGI Capital |
|
|
|
NFJ Dividend Interest and Premium Strategy |
|
|
|
|
PM Ownership |
|
|
Doug Forsyth, CFA |
None |
Stephen Bond-Nelson |
None |
|
|
NFJ |
|
|
|
NFJ Dividend Interest and Premium Strategy |
|
|
|
|
PM Ownership |
|
|
Ben Fischer, CFA |
$100,001 - $500,000 |
L. Baxter Hines |
None |
A-11
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED COMPANIES-
None
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 Funds Board of Trustees since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES
|
|
(a) The registrants President and Chief Executive Officer and Treasurer, Principal Financial Accounting Officer have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-3(c))), 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 were no significant change in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3 (d))) that that occurred during the second fiscal quarter of the period covered by this report that materially affected , or is reasonably likely to affect, the registrants control over financial reporting. |
ITEM 12. EXHIBITS
(a) (1) Exhibit 99.CODE ETH - Code of Ethics
(a) (2) Exhibit 99 Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(a) (3) Not Applicable
(b) Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Signature
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.
|
|
(Registrant) |
NFJ Dividend, Interest
& |
|
|
|
|
By |
/s/ Brian S. Shlissel |
|
|
President and Chief Executive Officer |
|
|
|
|
Date |
April 4, 2011 |
|
|
|
|
|
|
By |
/s/ Lawrence G. Altadonna |
|
|
Treasurer, Principal Financial & Accounting Officer |
|
|
|
|
Date |
April 4, 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.
|
|
By |
/s/ Brian S. Shlissel |
|
|
President and Chief Executive Officer |
|
|
|
|
Date |
April 4, 2011 |
|
|
|
|
|
|
By |
/s/ Lawrence G. Altadonna |
|
|
Treasurer, Principal Financial & Accounting Officer |
|
|
|
|
Date |
April 4, 2011 |
|
|