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 |
| NFJ Dividend, Interest & Premium Strategy Fund | |||
| (Exact name of registrant as specified in charter) | |||
| 1345 Avenue of the Americas, New York, | New York 10105 | ||
| (Address of principal executive offices) | (Zip code) | ||
| Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105 | |||
| (Name and address of agent for service) | |||
Registrant’s telephone number, including area code: |
212-739-3371 |
| Date of fiscal year end: | January 31, 2010 |
| Date of reporting period: | July 31, 2009 |
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, NW, 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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NFJ Dividend, Interest & Premium Strategy Fund |
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Nicholas-Applegate Equity & Convertible |
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Income Fund |
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Semi-Annual Report |
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July 31, 2009 |
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Contents |
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Annual
Shareholder Meeting Results/ |
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NFJ Dividend, Interest & Premium Strategy Fund |
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Nicholas-Applegate Equity & Convertible Income Fund |
Letter to Shareholders |
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September 15, 2009 |
Dear Shareholder:
Please find enclosed the semi-annual report for NFJ Dividend, Interest & Premium Strategy Fund and Nicholas-Applegate Equity & Convertible Income Fund (collectively the “Funds”) for the fiscal six-month period ended July 31, 2009.
U.S. stocks rallied during the fiscal six-month reporting period as early signs of economic improvement contributed to shifting investor sentiments away from low yielding U.S. Treasury securities and in favor of corporate stocks and bonds. In this environment, the Russell 3000 Index, a broad measure of U.S. stock market performance, returned 22.59% for the six-month reporting period. Large-cap value stocks, as represented by the Russell 1000 Value Index, returned 18.73% and large-cap growth stocks, as measured by the Russell 1000 Growth Index, posted a 25.49% return.
The Federal Reserve (the “Fed”) engaged in quantitative easing during the fiscal six-month reporting period, purchasing significant amounts of securities from banks in order to add to the supply of cash available for lending.
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.
Together with Allianz Global Investors Fund Management LLC, the Funds’ investment manager, and NFJ Investment Group LLC and Oppenheimer Capital LLC (sub-advisers to NFJ Dividend, Interest & Premium Strategy Fund) and Nicholas-Applegate Capital Management LLC (sub-adviser to both Funds) we thank you for investing with us.
We remain dedicated to serving your investment needs.
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Sincerely, |
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Hans W. Kertess |
Brian S. Shlissel |
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Chairman |
President & Chief Executive Officer |
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NFJ Dividend, Interest & Premium Strategy Fund |
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| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
1 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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July 31, 2009 (unaudited) |
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• |
For the fiscal six-month period ended July 31, 2009, the NFJ Dividend, Interest & Premium Strategy Fund (the “Fund”) returned 13.46% on a net-asset-value (“NAV”) basis and 0.06% on market price. |
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U.S. equities rose sharply during the fiscal six-month reporting period. Among large-cap value stocks, as represented by the Russell 1000 Value Index, all sectors posted positive returns. Recoveries in the financials and consumer discretionary sectors contributed most significantly to overall gains for the index. |
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In the energy sector, rising crude oil prices during the six-month period boosted the return of the equity holdings in exploration and production and oilfield services companies. Exploration company EnCana, contract driller Diamond Offshore Drilling and oilfield services firm Halliburton all posted gains relative to the large integrated oil companies that hold significant weightings in the Russell 1000 Value Index. Production oriented energy companies’ stocks are typically more sensitive to changes in energy commodity prices than are those of larger, more vertically integrated companies. |
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In the equity portion of the portfolio, underweight positions in large money-center banks, including Bank of America and JP Morgan Chase detracted from returns versus the benchmark. Large banks’ stocks rebounded during the six-month period on reports of improved earnings and forecasts for an economic recovery. |
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The convertible securities market produced a positive return during the fiscal six-month reporting period. Significant improvement in the prices of corporate bonds was the primary driver of convertible returns, given the low delta and high average premium of the market. |
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Historically, convertibles have had a high correlation to movements of the underlying equity. However, the past year, credit has been the greater driver of returns. Convertibles typically offer downside protection versus equities. In 2008, the convertible universe participated in most of the downside of the equity markets. Rapidly widening corporate bond spreads caused bond floors to decline. In the first half of 2009, the reverse was true. As capital markets opened up and access to capital improved, credit spreads tightened dramatically. |
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The Fund’s convertible positions performed in line with the Merrill Lynch All Convertibles All Qualities Index (a measure of the performance of U.S. dollar denominated convertibles not currently in bankruptcy with a total market value greater than $50 million at issuance) during the reporting period |
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The Fund’s positions in the financial, industrial and technology industries contributed positively to performance during the reporting period. Financial companies benefited from capital raises and improved trading and investment banking revenue. Industrial companies were positive during the period as earnings and margins exceeded expectations, despite a weaker top line. Technology issuers moved higher as end markets stabilized and a potential inventory replenishment was expected to drive upside to second quarter estimates. |
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The Fund’s positions in the health care and telecommunication industries detracted from performance. Health care issuers were down on the uncertainty of potential health care reform as well as a rotation into high beta industries. Telecommunication companies experienced similar sector rotation. |
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NFJ Dividend, Interest & Premium Strategy Fund |
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2 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
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NFJ Dividend, Interest & Premium Strategy Fund Performance & Statistics |
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July 31, 2009 (unaudited) |
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Total Return(1): |
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Market Price |
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Net Asset Value ("NAV") |
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Six months |
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0.06 |
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13.46 |
% |
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1 year |
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(30.72 |
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(22.37 |
)% |
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3 year |
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(9.98 |
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(5.93 |
)% |
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Commencement of Operations (2/28/05) to 7/31/09 |
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(6.57 |
)% |
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(1.31 |
)% |
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Market Price/NAV Performance:
Commencement of Operations (2/28/05) to 7/31/09
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Market Price/NAV: |
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Market Price |
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$12.63 |
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NAV |
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$15.68 |
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Discount to NAV |
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(19.45 |
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Market Price Yield(2) |
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4.75 |
% |
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Investment Allocation |
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(as a percentage of total investments |
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before call options written) |
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(1) Past performance is no guarantee of future results. Returns are calculated by determining the percentage change in net asset value or market share price (as applicable) in the period covered. The calculation assumes that all of the Fund’s income dividends and capital gain distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges. Total return for a period of less than one year is not annualized. Total return for a period of more than one year represents the average annual total return.
The Fund’s 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 Fund’s shares, or changes in Fund distributions.
An investment in the Fund involves risk, including the loss of principal. Total return, market price, market price yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering, and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is equal to total assets attributable to shareholders less total liabilities divided by the number of shares outstanding. Holdings are subject to change daily.
(2) Market Price Yield is determined by dividing the annualized current quarterly per share distribution payable to shareholders by the market price per share at July 31, 2009.
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NFJ Dividend, Interest & Premium Strategy Fund |
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| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
3 |
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Nicholas-Applegate Equity & Convertible Income Fund Fund Insights |
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July 31, 2009 (unaudited) |
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For the fiscal six-month period ended July 31, 2009, Nicholas-Applegate Equity & Convertible Income Fund (the "Fund") returned 25.98% on net asset value ("NAV") and 18.57% on market price. |
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Expectations of market volatility, as measured by the Chicago Board Options Exchange Volatility Index ("VIX"), were valued at 35.8. VIX values greater than 30 are generally associated with a large amount of expected volatility over the next 30 days as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets. The VIX Index began the reporting period at the mid forties and then declined to the mid twenties during the fiscal six-month reporting period. |
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The convertible securities market produced a positive return during the fiscal six-month reporting period. Significant improvement in the prices of corporate bonds was the primary driver of convertible returns, given the low delta and high average premium of the market. |
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The oversold condition of the markets reversed during the fiscal six-month reporting period. The technical lift was the most prominent cause of the price improvement. The fundamental picture improved for both issuers and the economy. |
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The Fund’s equity positions in the technology, energy and material sectors contributed positively to performance. The Fund’s equity holdings in the health care sector detracted from performance. |
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The Fund’s convertible positions in the financial, industrial and technology industries contributed positively to performance during the fiscal six-month reporting period. Financial companies benefited from capital raises and improved trading and investment banking revenue. Industrial companies were positive during the period as earnings and margins exceeded expectations, despite a weaker top line. Technology issuers moved higher as end markets stabilized. |
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The Fund’s convertible positions in the health care and telecommunication industries detracted from performance. Health care issuers were down on the potential uncertainty of health care reform as well as a rotation into high beta industries. Telecommunication companies experienced similar sector rotation. |
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NFJ Dividend, Interest & Premium Strategy Fund |
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4 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
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Nicholas-Applegate Equity & Convertible Income Fund Performance & Statistics |
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July 31, 2009 (unaudited) |
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Total Return(1): |
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Market Price |
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Net Asset Value ("NAV") |
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Six Months |
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18.57 |
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25.98 |
% |
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1 Year |
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(10.96 |
)% |
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(14.55 |
)% |
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Commencement of Operations (2/27/07) to 7/31/09 |
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(10.55 |
)% |
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(6.15 |
)% |
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Market Price/NAV Performance:
Commencement of Operations (2/27/07) to 7/31/09
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Market Price/NAV: |
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Market Price |
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$ |
14.86 |
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NAV |
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$ |
16.23 |
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Discount to NAV |
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(8.44 |
)% |
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Market Price Yield(2) |
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7.54 |
% |
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Investment Allocation |
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(as a percentage of total investments |
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before call options written) |
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(1) Past performance is no guarantee of future results. Returns are calculated by determining the percentage change in net asset value or market share price (as applicable) in the period covered. The calculation assumes that all of the Fund’s income dividends and capital gain distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges. Total return for a period of less than one year is not annualized. Total return for a period of more than one year represents the average annual total return.
The Fund’s 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 Fund’s shares, or changes in Fund distributions.
An investment in the Fund involves risk, including the loss of principal. Total return, market price, market price yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering, and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is equal to total assets attributable to shareholders less total liabilities divided by the number of shares outstanding. Holdings are subject to change daily.
(2) Market Price Yield is determined by dividing the annualized current quarterly per share distribution payable to shareholders by the market price per share at July 31, 2009.
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NFJ Dividend, Interest & Premium Strategy Fund |
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| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
5 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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July 31, 2009 (unaudited) |
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Shares |
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Value |
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COMMON STOCK—73.1% |
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Aerospace & Defense—2.8% |
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950 |
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Boeing Co. (a) |
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$ |
40,764,500 |
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Automobiles—0.7% |
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1,278 |
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Ford Motor Co. (b) |
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10,226,088 |
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Beverages—0.6% |
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186 |
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Coca-Cola Co. |
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9,255,089 |
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Commercial Banks—1.0% |
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110 |
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PNC Financial Services Group, Inc. |
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4,032,600 |
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400 |
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Wells Fargo & Co. |
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9,784,000 |
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13,816,600 |
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Commercial Services & Supplies—1.5% |
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400 |
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RR Donnelley & Sons Co. (a) |
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5,560,000 |
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573 |
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Waste Management, Inc. |
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16,095,786 |
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21,655,786 |
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Communications Equipment—1.4% |
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650 |
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Harris Corp. |
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20,351,500 |
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Diversified Financial Services—2.7% |
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3,900 |
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Citigroup, Inc. |
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12,361,513 |
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736 |
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J.P. Morgan Chase & Co. (a) |
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28,445,898 |
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40,807,411 |
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Diversified Telecommunication Services—5.2% |
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350 |
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AT&T, Inc. (a) |
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9,180,500 |
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287 |
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CenturyTel, Inc. (a) |
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9,018,002 |
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450 |
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Verizon Communications, Inc. (a) |
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14,431,500 |
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5,000 |
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Windstream Corp. (a) |
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43,850,000 |
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76,480,002 |
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Electric Utilities—1.2% |
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204 |
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Edison International (a) |
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6,593,280 |
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152 |
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Entergy Corp. |
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12,190,399 |
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18,783,679 |
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Energy Equipment & Services—4.1% |
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372 |
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Diamond Offshore Drilling, Inc. (a) |
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33,413,666 |
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1,225 |
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Halliburton Co. |
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27,060,250 |
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60,473,916 |
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Food & Drug Retailing—0.8% |
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843 |
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SUPERVALU, Inc. |
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12,498,724 |
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Food Products—1.2% |
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633 |
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Kraft Foods, Inc.—Cl. A |
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17,950,556 |
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Health Care Equipment & Supplies—1.1% |
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447 |
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Medtronic, Inc. (a) |
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15,825,656 |
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Health Care Providers & Services—0.6% |
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285 |
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Cardinal Health, Inc. (a) |
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9,500,490 |
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NFJ Dividend, Interest & Premium Strategy Fund |
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6 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
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NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
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July 31, 2009 (unaudited) |
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Shares |
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Value |
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Household Durables—2.5% |
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400 |
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Black & Decker Corp. (a) |
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$ |
15,040,000 |
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400 |
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Whirlpool Corp. |
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22,836,000 |
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37,876,000 |
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Household Products—1.4% |
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350 |
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Kimberly-Clark Corp. |
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20,457,500 |
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Industrial Conglomerates—2.7% |
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300 |
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3M Co. |
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21,156,000 |
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1,439 |
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General Electric Co. (a) |
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19,281,488 |
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40,437,488 |
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Insurance—5.4% |
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700 |
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Allstate Corp. (a) |
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18,837,000 |
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|
1,303 |
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Lincoln National Corp. (a) |
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|
27,602,094 |
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|
280 |
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MetLife, Inc. |
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9,504,676 |
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550 |
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Travelers Cos, Inc. |
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|
23,688,500 |
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|
19 |
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XL Capital Ltd.—Cl. A |
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270,758 |
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79,903,028 |
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Leisure Equipment & Products—1.7% |
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1,400 |
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Mattel, Inc. (a) |
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24,612,000 |
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Machinery—1.2% |
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|
400 |
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Caterpillar, Inc. (a) |
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17,624,000 |
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Media—1.1% |
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1,906 |
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CBS Corp.—Cl. B |
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15,606,864 |
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Multi-Utilities—1.4% |
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|
800 |
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Ameren Corp. (a) |
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|
20,344,000 |
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Office Electronics—1.7% |
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|
3,000 |
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Xerox Corp. |
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|
24,570,000 |
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Oil, Gas & Consumable Fuels—11.5% |
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|
300 |
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Chevron Corp. (a) |
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20,841,000 |
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|
525 |
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ConocoPhillips (a) |
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|
22,947,750 |
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|
535 |
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EnCana Corp. (a) |
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28,708,115 |
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|
900 |
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Marathon Oil Corp. (a) |
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|
29,025,000 |
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|
550 |
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Royal Dutch Shell PLC—Cl. A - ADR |
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28,952,000 |
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|
500 |
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Total SA - ADR |
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27,825,000 |
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|
681 |
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Valero Energy Corp. (a) |
|
|
12,256,200 |
|
|
|
|
|
|
|
170,555,065 |
|
|
|
|
Pharmaceuticals—6.4% |
|
|
|
|
|
1,180 |
|
GlaxoSmithKline PLC - ADR (a) |
|
|
45,186,029 |
|
|
169 |
|
Johnson & Johnson |
|
|
10,267,150 |
|
|
2,500 |
|
Pfizer, Inc. (a) |
|
|
39,825,000 |
|
|
|
|
|
|
|
95,278,179 |
|
|
|
|
Real Estate Investment Trusts (REIT)—1.4% |
|
|
|
|
|
1,200 |
|
Annaly Capital Management, Inc. |
|
|
20,220,000 |
|
|
|
|
Road & Rail—0.6% |
|
|
|
|
|
200 |
|
Norfolk Southern Corp. |
|
|
8,650,000 |
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
7 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Value |
|
||
|
|
|
|
Software—1.5% |
|
|
|
|
|
|
|
|
|
974 |
|
Microsoft Corp. (a) |
|
|
|
|
$ |
22,903,776 |
|
|
|
|
|
Specialty Retail—2.0% |
|
|
|
|
|
|
|
|
|
1,104 |
|
Home Depot, Inc. (a) |
|
|
|
|
|
28,642,948 |
|
|
|
143 |
|
Sonic Automotive, Inc.—Cl. A |
|
|
|
|
|
1,757,645 |
|
|
|
|
|
|
|
|
|
|
|
30,400,593 |
|
|
|
|
|
Textiles, Apparel & Luxury Goods—1.1% |
|
|
|
|
|
|
|
|
|
250 |
|
VF Corp. (a) |
|
|
|
|
|
16,172,500 |
|
|
|
|
|
Thrifts & Mortgage Finance—2.1% |
|
|
|
|
|
|
|
|
|
665 |
|
Hudson City Bancorp, Inc. |
|
|
|
|
|
9,352,712 |
|
|
|
2,000 |
|
New York Community Bancorp, Inc. |
|
|
|
|
|
21,880,000 |
|
|
|
|
|
|
|
|
|
|
|
31,232,712 |
|
|
|
|
|
Tobacco—2.5% |
|
|
|
|
|
|
|
|
|
1,014 |
|
Altria Group, Inc. (a) |
|
|
|
|
|
17,775,420 |
|
|
|
450 |
|
Reynolds American, Inc. (a) |
|
|
|
|
|
19,579,500 |
|
|
|
|
|
|
|
|
|
|
|
37,354,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock (cost-$1,478,957,640) |
|
|
|
|
|
1,082,588,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE BONDS & NOTES—15.9% |
|
|
|
|
|
|
|
|||
|
Principal |
|
|
|
Credit Rating |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biotechnology—0.1% |
|
|
|
|
|
|
|
|
$ |
1,500 |
|
United Therapeutics Corp., 0.50%, 10/15/11 |
|
|
NR/NR |
|
|
1,963,125 |
|
|
|
|
|
Commercial Services & Supplies—0.5% |
|
|
|
|
|
|
|
|
|
7,000 |
|
Covanta Holding Corp., 3.25%, 6/1/14 (e) |
|
|
Ba3/B |
|
|
7,752,500 |
|
|
|
|
|
Communications Equipment—0.2% |
|
|
|
|
|
|
|
|
|
6,585 |
|
Nortel Networks Corp., 2.125%, 4/15/14 (c) |
|
|
WR/NR |
|
|
2,708,081 |
|
|
|
|
|
Computers & Peripherals—1.1% |
|
|
|
|
|
|
|
|
|
4,000 |
|
EMC Corp., 1.75%, 12/1/13 |
|
|
NR/A- |
|
|
4,525,000 |
|
|
|
11,485 |
|
Maxtor Corp., 6.80%, 4/30/10 |
|
|
Ba3/NR |
|
|
11,571,138 |
|
|
|
|
|
|
|
|
|
|
|
16,096,138 |
|
|
|
|
|
Construction & Engineering—0.7% |
|
|
|
|
|
|
|
|
|
9,930 |
|
Quanta Services, Inc., 3.75%, 4/30/26 |
|
|
NR/NR |
|
|
11,605,687 |
|
|
|
|
|
Diversified Telecommunication Services—0.6% |
|
|
|
|
|
|
|
|
|
4,505 |
|
QWest Communications International, 3.50%, 11/15/25 |
|
|
B1/B+ |
|
|
4,499,369 |
|
|
|
5,495 |
|
tw telecom, Inc., 2.375%, 4/1/26 |
|
|
B3/B- |
|
|
4,725,700 |
|
|
|
|
|
|
|
|
|
|
|
9,225,069 |
|
|
|
|
|
Electrical Equipment—1.7% |
|
|
|
|
|
|
|
|
|
6,780 |
|
EnerSys, 3.375%, 6/1/38 (d) |
|
|
B2/BB |
|
|
5,390,100 |
|
|
|
7,510 |
|
General Cable Corp., 0.875%, 11/15/13 |
|
|
B1/B+ |
|
|
7,312,862 |
|
|
|
14,000 |
|
JA Solar Holdings Co. Ltd., 4.50%, 5/15/13 |
|
|
NR/NR |
|
|
11,130,000 |
|
|
|
|
|
|
|
|
|
|
|
23,832,962 |
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
8 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
||
|
|
|
|
Energy Equipment & Services—0.5% |
|
|
|
|
|
|
|
$ |
8,480 |
|
Hornbeck Offshore Services, Inc., 1.625%, 11/15/26 (d) |
|
NR/BB- |
|
$ |
7,102,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Health Care Equipment & Supplies—0.2% |
|
|
|
|
|
|
|
|
1,000 |
|
China Medical Technologies, Inc., 4.00%, 8/15/13, Ser. CMT |
|
NR/NR |
|
|
651,250 |
|
|
|
3,000 |
|
Inverness Medical Innovations, Inc., 3.00%, 5/15/16 |
|
NR/B- |
|
|
2,812,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
3,463,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Health Care Providers & Services—0.4% |
|
|
|
|
|
|
|
|
8,035 |
|
Omnicare, Inc., 3.25%, 12/15/35, Ser. OCR |
|
B3/B+ |
|
|
5,996,119 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Internet Software & Services—0.4% |
|
|
|
|
|
|
|
|
4,200 |
|
Equinix, Inc., 2.50%, 4/15/12 |
|
NR/B- |
|
|
4,032,000 |
|
|
|
2,300 |
|
VeriSign, Inc., 3.25%, 8/15/37 |
|
NR/NR |
|
|
1,759,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
5,791,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
IT Services—0.6% |
|
|
|
|
|
|
|
|
|
|
Alliance Data Systems Corp., |
|
|
|
|
|
|
|
|
7,300 |
|
1.75%, 8/1/13 (e) (f) |
|
NR/NR |
|
|
6,214,125 |
|
|
|
3,000 |
|
4.75%, 5/15/14 (e) (f) |
|
NR/NR |
|
|
3,720,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
9,934,125 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Lodging—0.1% |
|
|
|
|
|
|
|
|
1,402 |
|
Mandalay Resort Group, 1.359%, 3/21/33 (b) (g) (h) |
|
Caa2/CCC+ |
|
|
1,513,970 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Machinery—0.2% |
|
|
|
|
|
|
|
|
2,865 |
|
AGCO Corp., 1.25%, 12/15/36 |
|
NR/BB |
|
|
2,771,888 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Media—0.8% |
|
|
|
|
|
|
|
|
3,765 |
|
Liberty Media LLC, 3.125%, 3/30/23 |
|
Ba2/BB+ |
|
|
3,308,494 |
|
|
|
8,770 |
|
Regal Entertainment Group, 6.25%, 3/15/11 (e) (f) |
|
NR/NR |
|
|
8,430,162 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
11,738,656 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Metals & Mining—0.2% |
|
|
|
|
|
|
|
|
2,500 |
|
Steel Dynamics, Inc., 5.125%, 6/15/14 |
|
NR/BB+ |
|
|
3,018,750 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Oil, Gas & Consumable Fuels—0.7% |
|
|
|
|
|
|
|
|
3,500 |
|
Chesapeake Energy Corp., 2.50%, 5/15/37 |
|
Ba3/BB |
|
|
2,690,625 |
|
|
|
9,675 |
|
Peabody Energy Corp., 4.75%, 12/15/41 |
|
Ba3/B+ |
|
|
7,655,344 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
10,345,969 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Pharmaceuticals—1.1% |
|
|
|
|
|
|
|
|
5,500 |
|
Biovail Corp., 5.375%, 8/1/14 (e) (f) |
|
NR/NR |
|
|
6,201,250 |
|
|
|
|
|
Mylan, Inc., |
|
|
|
|
|
|
|
|
4,500 |
|
3.75%, 9/15/15 (e) (f) |
|
NR/B+ |
|
|
5,360,625 |
|
|
|
4,225 |
|
1.25%, 3/15/12 |
|
NR/B+ |
|
|
3,813,062 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
15,374,937 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Real Estate Investment Trusts (REIT)—1.5% |
|
|
|
|
|
|
|
|
2,950 |
|
Boston Properties LP, 3.75%, 5/15/36 |
|
NR/A- |
|
|
2,787,750 |
|
|
|
5,045 |
|
Developers Diversified Realty Corp., 3.00%, 3/15/12 |
|
NR/BB+ |
|
|
4,061,225 |
|
|
|
7,000 |
|
Digital Realty Trust LP, 4.125%, 8/15/26 (e) (f) |
|
NR/NR |
|
|
9,240,000 |
|
|
|
5,000 |
|
Health Care REIT, Inc., 4.75%, 12/1/26 |
|
Baa2/BBB- |
|
|
5,231,250 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
21,320,225 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Road & Rail—0.1% |
|
|
|
|
|
|
|
|
1,500 |
|
Hertz Global Holdings, Inc., 5.25%, 6/1/14 |
|
NR/CCC+ |
|
|
1,980,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
9 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
||
|
|
|
|
Semiconductors & Semiconductor Equipment—0.7% |
|
|
|
|
|
|
|
$ |
13,785 |
|
Advanced Micro Devices, Inc., 5.75%, 8/15/12 |
|
NR/CCC+ |
|
$ |
10,218,131 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Software—0.6% |
|
|
|
|
|
|
|
|
7,500 |
|
Lawson Software, Inc., 2.50%, 4/15/12 |
|
NR/NR |
|
|
6,815,625 |
|
|
|
2,000 |
|
Nuance Communications, Inc., 2.75%, 8/15/27 |
|
NR/B- |
|
|
1,827,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
8,643,125 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Specialty Retail—0.8% |
|
|
|
|
|
|
|
|
12,145 |
|
Sonic Automotive, Inc., 6.00%, 5/15/12, Ser. AI (e) (f) (g) |
|
Caa2/NR |
|
|
12,145,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Telecommunications—0.9% |
|
|
|
|
|
|
|
|
12,645 |
|
Nextel Communications, Inc., 5.25%, 1/15/10 |
|
Ba2/BB |
|
|
12,613,387 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Wireless Telecommunication Services—1.2% |
|
|
|
|
|
|
|
|
3,000 |
|
American Tower Corp., 3.00%, 8/15/12 |
|
NR/BB+ |
|
|
5,002,500 |
|
|
|
4,000 |
|
Leap Wireless International, Inc., 4.50%, 7/15/14 |
|
Caa1/CCC |
|
|
3,090,000 |
|
|
|
11,710 |
|
NII Holdings, Inc., 3.125%, 6/15/12 |
|
NR/NR |
|
|
9,821,762 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
17,914,262 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Bonds & Notes (cost-$230,253,293) |
|
|
|
|
235,069,356 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE PREFERRED STOCK—9.4% |
|
|
|
|
|
|
|||
|
Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Capital Markets—0.2% |
|
|
|
|
|
|
|
|
|
|
Lehman Brothers Holdings, Inc. (c) (g) (i), |
|
|
|
|
|
|
|
|
630 |
|
6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) |
|
NR/NR |
|
|
2,028,488 |
|
|
|
98 |
|
28.00%, 3/6/09, Ser. RIG (Transocean, Inc.) |
|
NR/NR |
|
|
1,331,778 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
3,360,266 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Chemicals—0.6% |
|
|
|
|
|
|
|
|
270 |
|
Celanese Corp., 4.25%, 12/31/49 |
|
NR/NR |
|
|
8,910,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Commercial Banks—1.1% |
|
|
|
|
|
|
|
|
60 |
|
Fifth Third Bancorp, 8.50%, 12/31/49, Ser. G |
|
Baa3/BB |
|
|
6,804,463 |
|
|
|
11 |
|
Wells Fargo & Co., 7.50%, 12/31/49, Ser. L |
|
Ba3/A- |
|
|
9,281,558 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
16,086,021 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Commercial Services & Supplies—0.2% |
|
|
|
|
|
|
|
|
161 |
|
United Rentals, Inc., 6.50%, 8/1/28 |
|
Caa1/CCC |
|
|
3,495,157 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Diversified Financial Services—1.5% |
|
|
|
|
|
|
|
|
15 |
|
Bank of America Corp., 7.25%, 12/31/49, Ser. L |
|
B3/B |
|
|
12,852,000 |
|
|
|
|
|
Vale Capital Ltd. (i), |
|
|
|
|
|
|
|
|
175 |
|
5.50%, 6/15/10, Ser. RIO (Compania Vale do Rio Doce) |
|
NR/NR |
|
|
7,364,875 |
|
|
|
21 |
|
5.50%, 6/15/10, Ser. RIO-P (Compania Vale ADS) |
|
NR/NR |
|
|
878,475 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
21,095,350 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Electric Utilities—0.7% |
|
|
|
|
|
|
|
|
244 |
|
AES Trust III, 6.75%, 10/15/29 |
|
B3/B |
|
|
10,496,300 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Food Products—0.8% |
|
|
|
|
|
|
|
|
|
|
Bunge Ltd., |
|
|
|
|
|
|
|
|
96 |
|
4.875%, 12/31/49 |
|
Ba1/BB |
|
|
8,864,200 |
|
|
|
4 |
|
5.125%, 12/1/10 |
|
NR/BB |
|
|
2,740,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
11,604,200 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
10 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Credit Rating |
|
Value |
|
||
|
|
|
|
Household Durables—0.8% |
|
|
|
|
|
|
|
|
16 |
|
Stanley Works, 5.125%, 5/17/12 (h) |
|
A3/BBB+ |
|
$ |
11,291,475 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Insurance—0.5% |
|
|
|
|
|
|
|
|
347 |
|
XL Capital Ltd., 10.75%, 8/15/11 |
|
Baa2/BBB- |
|
|
8,024,940 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Metals & Mining—0.4% |
|
|
|
|
|
|
|
|
57 |
|
Freeport-McMoRan Copper & Gold, Inc., 6.75%, 5/1/10 |
|
NR/BB |
|
|
5,241,538 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Oil, Gas & Consumable Fuels—0.4% |
|
|
|
|
|
|
|
|
85 |
|
Chesapeake Energy Corp., 5.00%, 12/31/49 |
|
NR/B |
|
|
6,116,400 |
|
|
|
6 |
|
Whiting Petroleum Corp., 6.25%, 12/31/49 |
|
NR/B- |
|
|
792,986 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
6,909,386 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Pharmaceuticals—0.7% |
|
|
|
|
|
|
|
|
43 |
|
Schering-Plough Corp., 6.00%, 8/13/10 |
|
Baa3/BBB |
|
|
9,924,362 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Real Estate Investment Trusts (REIT)—0.7% |
|
|
|
|
|
|
|
|
602 |
|
FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A |
|
Caa2/C |
|
|
4,499,928 |
|
|
|
131 |
|
Simon Property Group, Inc., 6.00%, 12/31/49, Ser. I |
|
Baa1/BBB |
|
|
6,392,800 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
10,892,728 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Wireless Telecommunication Services—0.8% |
|
|
|
|
|
|
|
|
239 |
|
Crown Castle International Corp., 6.25%, 8/15/12 |
|
NR/NR |
|
|
12,123,921 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Preferred Stock (cost-$187,531,120) |
|
|
|
|
139,455,644 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
SHORT-TERM INVESTMENT—4.1% |
|
|
|
|
|
|
|||
|
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Time Deposits—4.1% |
|
|
|
|
|
|
|
$ |
6,354 |
|
Royal Bank of Canada, London, 0.03%, 8/3/09, |
|
|
|
|
6,354,295 |
|
|
|
54,815 |
|
Wells Fargo, Grand Cayman, 0.03%, 8/3/09, |
|
|
|
|
54,815,469 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
(cost-$61,169,764) |
|
|
|
|
61,169,764 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Total Investments, before call options written |
|
|
|
|
|
|
|
|
|
|
(cost-$1,957,911,817—102.5%) |
|
|
|
|
1,518,283,386 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
CALL OPTIONS WRITTEN (b)—(3.9)% |
|
|
|
|
|
|
|||
|
Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
American Stock Exchange Morgan Stanley Cyclical Flex Index, |
|
|
|
|
|
|
|
|
600 |
|
strike price $575, expires 8/14/09 |
|
|
|
|
(6,525,240 |
) |
|
|
600 |
|
strike price $580, expires 9/11/09 |
|
|
|
|
(6,418,620 |
) |
|
|
600 |
|
strike price $600, expires 8/7/09 |
|
|
|
|
(5,014,920 |
) |
|
|
|
|
American Stock Exchange Morgan Stanley Cyclical Index, |
|
|
|
|
|
|
|
|
600 |
|
strike price $600, expires 8/22/09 |
|
|
|
|
(5,004,000 |
) |
|
|
600 |
|
strike price $610, expires 8/22/09 |
|
|
|
|
(4,452,000 |
) |
|
|
|
|
American Stock Exchange Oil Flex Index, |
|
|
|
|
|
|
|
|
350 |
|
strike price $950, expires 8/14/09 |
|
|
|
|
(792,715 |
) |
|
|
|
|
American Stock Exchange Oil Index, |
|
|
|
|
|
|
|
|
350 |
|
strike price $950, expires 8/22/09 |
|
|
|
|
(995,750 |
) |
|
|
350 |
|
strike price $950, expires 9/19/09 |
|
|
|
|
(1,470,000 |
) |
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
11 |
|
|
|
|
||||||
|
NFJ Dividend, Interest & Premium Strategy Fund |
Schedule of Investments |
||||||
|
July 31, 2009 (unaudited) |
|
||||||
|
|
|
|
|
|
|
|
|
|
Contracts |
|
|
|
Value |
|
||
|
|
350 |
|
strike price $970, expires 8/22/09 |
|
$ |
(647,500 |
) |
|
|
350 |
|
strike price $970, expires 9/19/09 |
|
|
(1,120,000 |
) |
|
|
350 |
|
strike price $980, expires 9/19/09 |
|
|
(966,000 |
) |
|
|
|
|
NASDAQ 100 Stock Index, |
|
|
|
|
|
|
200 |
|
strike price $1575, expires 9/19/09 |
|
|
(1,454,000 |
) |
|
|
|
|
Philadelphia Stock Exchange KBW Bank Flex Index, |
|
|
|
|
|
|
9,000 |
|
strike price $40, expires 9/4/09 |
|
|
(1,868,400 |
) |
|
|
|
|
Philadelphia Stock Exchange KBW Bank Index, |
|
|
|
|
|
|
5,000 |
|
strike price $40, expires 8/22/09 |
|
|
(787,500 |
) |
|
|
8,000 |
|
strike price $40, expires 9/19/09 |
|
|
(2,000,000 |
) |
|
|
5,000 |
|
strike price $42.50, expires 8/22/09 |
|
|
(287,500 |
) |
|
|
|
|
Standard & Poor’s 500 Flex Index, |
|
|
|
|
|
|
350 |
|
strike price $910, expires 9/4/09 |
|
|
(2,806,335 |
) |
|
|
350 |
|
strike price $920, expires 9/11/09 |
|
|
(2,578,100 |
) |
|
|
350 |
|
strike price $925, expires 8/14/09 |
|
|
(2,135,700 |
) |
|
|
350 |
|
strike price $950, expires 8/7/09 |
|
|
(1,279,320 |
) |
|
|
|
|
Standard & Poor’s 500 Index, |
|
|
|
|
|
|
350 |
|
strike price $935, expires 8/22/09 |
|
|
(1,989,750 |
) |
|
|
350 |
|
strike price $940, expires 8/22/09 |
|
|
(1,842,750 |
) |
|
|
350 |
|
strike price $945, expires 9/19/09 |
|
|
(2,070,250 |
) |
|
|
350 |
|
strike price $970, expires 9/19/09 |
|
|
(1,482,250 |
) |
|
|
350 |
|
strike price $975, expires 9/19/09 |
|
|
(1,377,250 |
) |
|
|
|
|
|
|
|||
|
|
|||||||
|
|
|
|
Total Call Options Written (premiums received-$18,739,524) |
|
|
(57,365,850 |
) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments, net of call options written |
|
|
|
|
|
|
|
|
(cost-$1,939,172,293)—98.6% |
|
|
1,460,917,536 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets less other liabilities—1.4% |
|
|
21,029,866 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets—100.0% |
|
$ |
1,481,947,402 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
12 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
||||||
|
Nicholas-Applegate Equity & Convertible Income Fund |
Schedule of Investments |
||||||
|
July 31, 2009 (unaudited) |
|
||||||
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Value |
|
||
|
COMMON STOCK—71.7% |
|
|
|
|
|||
|
|
|
|
Aerospace & Defense—1.5% |
|
|
|
|
|
|
74 |
|
L-3 Communications Holdings, Inc. |
|
$ |
5,609,650 |
|
|
|
|
|
|
|
|||
|
|
|
|
Auto Components—1.6% |
|
|
|
|
|
|
226 |
|
Johnson Controls, Inc. |
|
|
5,846,292 |
|
|
|
|
|
|
|
|||
|
|
|
|
Automobiles—1.1% |
|
|
|
|
|
|
497 |
|
Ford Motor Co. (b) |
|
|
3,978,256 |
|
|
|
|
|
|
|
|||
|
|
|
|
Beverages—6.5% |
|
|
|
|
|
|
223 |
|
Coca-Cola Co. (a) |
|
|
11,123,889 |
|
|
|
127 |
|
Molson Coors Brewing Co.—Cl. B |
|
|
5,755,233 |
|
|
|
114 |
|
PepsiCo, Inc. |
|
|
6,469,500 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
23,348,622 |
|
|
|
|
|
|
|
|||
|
|
|
|
Biotechnology—2.2% |
|
|
|
|
|
|
164 |
|
Gilead Sciences, Inc. (b) |
|
|
8,024,520 |
|
|
|
|
|
|
|
|||
|
|
|
|
Communications Equipment—6.4% |
|
|
|
|
|
|
314 |
|
Cisco Systems, Inc. (b) |
|
|
6,904,537 |
|
|
|
156 |
|
Harris Corp. |
|
|
4,868,705 |
|
|
|
39 |
|
Harris Stratex Networks, Inc.—Cl. A (b) |
|
|
268,078 |
|
|
|
142 |
|
Qualcomm, Inc. |
|
|
6,552,578 |
|
|
|
61 |
|
Research In Motion Ltd. (b) |
|
|
4,620,800 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
23,214,698 |
|
|
|
|
|
|
|
|||
|
|
|
|
Computers & Peripherals—4.9% |
|
|
|
|
|
|
25 |
|
Apple, Inc. (b) |
|
|
4,144,551 |
|
|
|
379 |
|
EMC Corp. (b) |
|
|
5,701,716 |
|
|
|
67 |
|
International Business Machines Corp. |
|
|
7,877,724 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
17,723,991 |
|
|
|
|
|
|
|
|||
|
|
|
|
Diversified Financial Services—2.0% |
|
|
|
|
|
|
1,232 |
|
Citigroup, Inc. |
|
|
3,904,942 |
|
|
|
84 |
|
J.P. Morgan Chase & Co. |
|
|
3,238,870 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
7,143,812 |
|
|
|
|
|
|
|
|||
|
|
|
|
Diversified Telecommunication Services—1.8% |
|
|
|
|
|
|
202 |
|
Verizon Communications, Inc. |
|
|
6,478,140 |
|
|
|
|
|
|
|
|||
|
|
|
|
Electric Utilities—1.2% |
|
|
|
|
|
|
54 |
|
Entergy Corp. |
|
|
4,354,047 |
|
|
|
|
|
|
|
|||
|
|
|
|
Electronic Equipment, Instruments & Components—1.4% |
|
|
|
|
|
|
149 |
|
Amphenol Corp.—Cl. A |
|
|
4,969,150 |
|
|
|
|
|
|
|
|||
|
|
|
|
Energy Equipment & Services—3.8% |
|
|
|
|
|
|
69 |
|
Diamond Offshore Drilling, Inc. |
|
|
6,192,043 |
|
|
|
96 |
|
National Oilwell Varco, Inc. (b) |
|
|
3,443,052 |
|
|
|
81 |
|
Schlumberger Ltd. |
|
|
4,354,900 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
13,989,995 |
|
|
|
|
|
|
|
|||
|
|
|
|
Health Care Equipment & Supplies—3.4% |
|
|
|
|
|
|
111 |
|
Baxter International, Inc. |
|
|
6,262,707 |
|
|
|
27 |
|
Intuitive Surgical, Inc. (b) |
|
|
6,130,820 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
12,393,527 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
13 |
|
|
|
|
||||||
|
Nicholas-Applegate Equity & Convertible Income Fund |
Schedule of Investments |
||||||
|
July 31, 2009 (unaudited) |
|
||||||
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
Value |
|
||
|
|
|
|
Health Care Providers & Services—4.5% |
|
|
|
|
|
|
140 |
|
McKesson Corp. |
|
$ |
7,161,000 |
|
|
|
172 |
|
Medco Health Solutions, Inc. (b) |
|
|
9,113,064 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
16,274,064 |
|
|
|
|
|
|
|
|||
|
|
|
|
Hotels Restaurants & Leisure—1.8% |
|
|
|
|
|
|
119 |
|
McDonald’s Corp. |
|
|
6,535,622 |
|
|
|
|
|
|
|
|||
|
|
|
|
Household Products—1.9% |
|
|
|
|
|
|
121 |
|
Procter & Gamble Co. (a) |
|
|
6,738,914 |
|
|
|
|
|
|
|
|||
|
|
|
|
Independent Power Producers & Energy Traders—1.9% |
|
|
|
|
|
|
92 |
|
Constellation Energy Group, Inc. |
|
|
2,640,400 |
|
|
|
154 |
|
NRG Energy, Inc. (b) |
|
|
4,190,313 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
6,830,713 |
|
|
|
|
|
|
|
|||
|
|
|
|
Industrial Conglomerates—0.9% |
|
|
|
|
|
|
122 |
|
General Electric Co. |
|
|
1,640,951 |
|
|
|
142 |
|
Textron, Inc. (a) |
|
|
1,913,856 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
3,554,807 |
|
|
|
|
|
|
|
|||
|
|
|
|
Insurance—1.6% |
|
|
|
|
|
|
53 |
|
MetLife, Inc. |
|
|
1,805,597 |
|
|
|
87 |
|
Prudential Financial, Inc. |
|
|
3,851,490 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
5,657,087 |
|
|
|
|
|
|
|
|||
|
|
|
|
Internet Software & Services—1.7% |
|
|
|
|
|
|
14 |
|
Google, Inc.—Cl. A (b) |
|
|
6,202,700 |
|
|
|
|
|
|
|
|||
|
|
|
|
Machinery—3.5% |
|
|
|
|
|
|
137 |
|
AGCO Corp. (b) |
|
|
4,313,166 |
|
|
|
101 |
|
Deere & Co. |
|
|
4,413,366 |
|
|
|
108 |
|
Joy Global, Inc. |
|
|
4,008,004 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
12,734,536 |
|
|
|
|
|
|
|
|||
|
|
|
|
Metals & Mining—1.2% |
|
|
|
|
|
|
70 |
|
Freeport-McMoRan Copper & Gold, Inc. |
|
|
4,221,000 |
|
|
|
|
|
|
|
|||
|
|
|
|
Multiline Retail—1.7% |
|
|
|
|
|
|
139 |
|
Target Corp. |
|
|
6,045,732 |
|
|
|
|
|
|
|
|||
|
|
|
|
Oil, Gas & Consumable Fuels—2.7% |
|
|
|
|
|
|
90 |
|
Occidental Petroleum Corp. |
|
|
6,406,332 |
|
|
|
97 |
|
Peabody Energy Corp. |
|
|
3,195,115 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
9,601,447 |
|
|
|
|
|
|
|
|||
|
|
|
|
Pharmaceuticals—2.8% |
|
|
|
|
|
|
137 |
|
Abbott Laboratories |
|
|
6,163,630 |
|
|
|
63 |
|
Johnson & Johnson |
|
|
3,853,606 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
10,017,236 |
|
|
|
|
|
|
|
|||
|
|
|
|
Semiconductors & Semiconductor Equipment—3.8% |
|
|
|
|
|
|
355 |
|
Intel Corp. |
|
|
6,824,125 |
|
|
|
289 |
|
Texas Instruments, Inc. |
|
|
6,945,640 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
13,769,765 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
14 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
Value |
|
||
|
|
|
|
Software—3.9% |
|
|
|
|
|
|
|
|
261 |
|
Microsoft Corp. |
|
|
|
$ |
6,126,960 |
|
|
|
367 |
|
Oracle Corp. |
|
|
|
|
8,128,349 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
14,255,309 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stock (cost-$375,490,220) |
|
|
|
|
259,513,632 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE BONDS & NOTES—13.8% |
|
|
|
|
|
|
|||
|
Principal |
|
|
|
Credit Rating |
|
|
|
|
|
|
|
|
|
Commercial Services & Supplies—1.3% |
|
|
|
|
|
|
|
$ |
4,800 |
|
Bowne & Co., Inc., 6.00%, 10/1/33 |
|
B3/CCC+ |
|
|
4,632,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Communications Equipment—0.4% |
|
|
|
|
|
|
|
|
3,730 |
|
Nortel Networks Corp., 2.125%, 4/15/14 (c) |
|
NR/NR |
|
|
1,533,963 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Computers & Peripherals—1.4% |
|
|
|
|
|
|
|
|
4,925 |
|
Maxtor Corp., 6.80%, 4/30/10 |
|
Ba3/NR |
|
|
4,961,937 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Electrical Equipment—1.2% |
|
|
|
|
|
|
|
|
800 |
|
EnerSys, 3.375%, 6/1/38 (d) |
|
B2/BB |
|
|
636,000 |
|
|
|
4,605 |
|
JA Solar Holdings Co. Ltd., 4.50%, 5/15/13 |
|
NR/NR |
|
|
3,660,975 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
4,296,975 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Electronic Equipment, Instruments & Components—0.3% |
|
|
|
|
|
|
|
|
1,335 |
|
Anixter International, Inc., 1.00%, 2/15/13 |
|
NR/BB- |
|
|
1,114,725 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Energy Equipment & Services—0.4% |
|
|
|
|
|
|
|
|
1,625 |
|
Hornbeck Offshore Services, Inc., 1.625%, 11/15/26 (d) |
|
NR/BB- |
|
|
1,360,938 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Health Care Providers & Services—0.4% |
|
|
|
|
|
|
|
|
1,850 |
|
Omnicare, Inc., 3.25%, 12/15/35, Ser. OCR |
|
B3/B+ |
|
|
1,380,562 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
IT Services—0.7% |
|
|
|
|
|
|
|
|
2,850 |
|
Alliance Data Systems Corp., 1.75%, 8/1/13 (e) (f) |
|
NR/NR |
|
|
2,426,063 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Media—2.2% |
|
|
|
|
|
|
|
|
4,415 |
|
Interpublic Group of Cos, Inc., 4.25%, 3/15/23 |
|
Ba3/B+ |
|
|
4,012,131 |
|
|
|
4,300 |
|
Regal Entertainment Group, 6.25%, 3/15/11 (e) (f) |
|
NR/NR |
|
|
4,133,375 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
8,145,506 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Oil, Gas & Consumable Fuels—1.0% |
|
|
|
|
|
|
|
|
3,845 |
|
Transocean, Inc., 1.50%, 12/15/37, Ser. C |
|
Baa2/BBB+ |
|
|
3,532,594 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Pharmaceuticals—0.7% |
|
|
|
|
|
|
|
|
1,050 |
|
Biovail Corp., 5.375%, 8/1/14 (e) (f) |
|
NR/NR |
|
|
1,183,875 |
|
|
|
1,600 |
|
Mylan, Inc., 1.25%, 3/15/12 |
|
NR/B+ |
|
|
1,444,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
2,627,875 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Real Estate Investment Trusts (REIT)—2.3% |
|
|
|
|
|
|
|
|
5,950 |
|
Developers Diversified Realty Corp., 3.00%, 3/15/12 |
|
NR/BB+ |
|
|
4,789,750 |
|
|
|
3,715 |
|
Vornado Realty Trust, 3.625%, 11/15/26 |
|
Baa2/BBB |
|
|
3,496,744 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
8,286,494 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Semiconductors & Semiconductor Equipment—0.4% |
|
|
|
|
|
|
|
|
1,950 |
|
Advanced Micro Devices, Inc., 5.75%, 8/15/12 |
|
NR/CCC+ |
|
|
1,445,437 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
15 |
|
|
|
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
||
|
|
|
|
Wireless Telecommunication Services—1.1% |
|
|
|
|
|
|
|
$ |
4,700 |
|
NII Holdings, Inc., 3.125%, 6/15/12 |
|
NR/NR |
|
$ |
3,942,125 |
|
|
|
|
|
|
|
|
|
|||
|
|
|||||||||
|
|
|
|
Total Convertible Bonds & Notes (cost-$53,075,891) |
|
|
|
|
49,687,194 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
|
CONVERTIBLE PREFERRED STOCK—9.3% |
|
|
|
|
|
|
|||
|
Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Capital Markets—0.3% |
|
|
|
|
|
|
|
|
|
|
Lehman Brothers Holdings, Inc. (c) (g) (i), |
|
|
|
|
|
|
|
|
209 |
|
6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) |
|
NR/NR |
|
|
673,534 |
|
|
|
33 |
|
28.00%, 3/6/09, Ser. RIG (Transocean, Inc.) |
|
NR/NR |
|
|
455,286 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
1,128,820 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Commercial Services & Supplies—0.6% |
|
|
|
|
|
|
|
|
102 |
|
United Rentals, Inc., 6.50%, 8/1/28 |
|
Caa1/CCC |
|
|
2,221,884 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Diversified Financial Services—1.7% |
|
|
|
|
|
|
|
|
4 |
|
Bank of America Corp., 7.25%, 12/31/49, Ser. L |
|
B3/B |
|
|
3,549,000 |
|
|
|
— |
(j) |
Preferred Blocker, Inc., 7.00%, 12/31/49 (e) (f) |
|
NR/C |
|
|
46,053 |
|
|
|
62 |
|
Vale Capital Ltd., 5.50%, 6/15/10, Ser. RIO |
|
NR/NR |
|
|
2,552,745 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
6,147,798 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Electric Utilities—1.2% |
|
|
|
|
|
|
|
|
102 |
|
AES Trust III, 6.75%, 10/15/29 |
|
B3/B |
|
|
4,405,350 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Food Products—1.0% |
|
|
|
|
|
|
|
|
39 |
|
Bunge Ltd., 4.875%, 12/31/49 |
|
Ba1/BB |
|
|
3,569,600 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Household Durables—1.0% |
|
|
|
|
|
|
|
|
5 |
|
Stanley Works, 5.125%, 5/17/12 (h) |
|
A3/BBB+ |
|
|
3,751,800 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Oil, Gas & Consumable Fuels—0.6% |
|
|
|
|
|
|
|
|
27 |
|
Chesapeake Energy Corp., 5.00%, 12/31/49 |
|
NR/B |
|
|
1,969,200 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Pharmaceuticals—1.1% |
|
|
|
|
|
|
|
|
17 |
|
Schering-Plough Corp., 6.00%, 8/13/10 |
|
Baa3/BBB |
|
|
3,867,119 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Real Estate Investment Trusts (REIT)—0.4% |
|
|
|
|
|
|
|
|
207 |
|
FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A |
|
Caa2/C |
|
|
1,548,531 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Wireless Telecommunication Services—1.4% |
|
|
|
|
|
|
|
|
98 |
|
Crown Castle International Corp., 6.25%, 8/15/12 |
|
NR/NR |
|
|
5,114,200 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Preferred Stock (cost-$58,669,548) |
|
|
|
|
33,724,302 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
|
CORPORATE BONDS & NOTES—3.6% |
|
|
|
|
|
|
|||
|
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Apparel—0.1% |
|
|
|
|
|
|
|
$ |
500 |
|
Levi Strauss & Co., 9.75%, 1/15/15 |
|
B2/B+ |
|
|
510,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Banks—0.1% |
|
|
|
|
|
|
|
|
400 |
|
GMAC LLC, 6.75%, 12/1/14 (e) (f) |
|
Ca/CCC |
|
|
348,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
16 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Schedule of Investments |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
|
|
Credit Rating |
|
Value |
|
||
|
|
|
|
Health Care Providers & Services—0.1% |
|
|
|
|
|
|
|
$ |
400 |
|
HCA, Inc., 9.25%, 11/15/16 |
|
B2/BB- |
|
$ |
418,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
IT Services—0.5% |
|
|
|
|
|
|
|
|
2,300 |
|
Unisys Corp., 8.00%, 10/15/12 |
|
Caa1/B |
|
|
1,943,500 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Miscellaneous Manufacturing—0.3% |
|
|
|
|
|
|
|
|
1,000 |
|
Polypore, Inc., 8.75%, 5/15/12 |
|
B3/B- |
|
|
935,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Paper & Forest Products—0.2% |
|
|
|
|
|
|
|
|
1,000 |
|
Neenah Paper, Inc., 7.375%, 11/15/14 |
|
B2/B+ |
|
|
705,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Pipelines—1.0% |
|
|
|
|
|
|
|
|
4,340 |
|
Dynegy Holdings, Inc., 7.75%, 6/1/19 |
|
B3/B |
|
|
3,477,425 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Wireless Telecommunication Services—1.3% |
|
|
|
|
|
|
|
|
4,600 |
|
Millicom International Cellular S.A., 10.00%, 12/1/13 |
|
B1/NR |
|
|
4,807,000 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Bonds & Notes (cost-$13,941,823) |
|
|
|
|
13,143,925 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GOVERNMENT SECURITIES—0.6% |
|
|
|
|
|
|
|||
|
|
2,000 |
|
U.S. Treasury Bond, 12.50%, 8/15/14 (cost-$2,197,500) |
|
|
|
|
2,008,126 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
SHORT-TERM INVESTMENT—2.2% |
|
|
|
|
|
|
|||
|
|
|
|
Time Deposit—2.2% |
|
|
|
|
|
|
|
|
7,973 |
|
Wells Fargo, Grand Cayman, 0.03%, 8/3/09 (cost-$7,973,102) |
|
|
|
|
7,973,102 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Investments, before call options written |
|
|
|
|
366,050,281 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
CALL OPTIONS WRITTEN (b)—(0.3)% |
|
|
|
|
|
|
|||
|
Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Standard & Poors 500 Index, |
|
|
|
|
|
|
|
|
1,735 |
|
strike price $1030, expires 8/21/09 |
|
|
|
|
(990,303 |
) |
|
|
|
|
|
|
|
|
|||
|
|
|
|
(premiums received-$1,056,615) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Investments, net of call options written |
|
|
|
|
365,059,978 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities in excess of other assets—(0.9)% |
|
|
|
|
(3,116,711 |
) |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets—100.0% |
|
|
|
$ |
361,943,267 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
17 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible
Income Fund |
Notes to |
|
|
|
|
Notes to Schedules of Investments: |
|
|
|
|
|
(a) |
All or partial amount segregated as collateral for call options written. |
|
|
|
|
(b) |
Non-income producing. |
|
|
|
|
(c) |
Issuer or security in default. |
|
|
|
|
(d) |
Step Bond—Coupon is a fixed rate for an initial period then resets at specific date and rate. |
|
|
|
|
(e) |
Private Placement. Restricted as to resale and may not have a readily available market. For NFJ Dividend, Interest & Premium Strategy Fund and Nicholas-Applegate Equity & Convertible Income Fund, securities with an aggregate market value of $50,964,226 and $8,137,366, representing 3.44% and 2.25%, of net assets, respectively. |
|
|
|
|
(f) |
144A Security-Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid. |
|
|
|
|
(g) |
Fair-valued—Securities in NFJ Dividend, Interest & Premium Strategy Fund and Nicholas-Applegate Equity & Convertible Income Fund, with an aggregate value of $17,019,236 and $1,128,820, representing 1.15% and 0.31% of net assets, respectively. See Note 1 (b) in the Notes to Financial Statements. |
|
|
|
|
(h) |
Variable rate security—Interest rate disclosed reflects the rate in effect on July 31, 2009. |
|
|
|
|
(i) |
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. Such entity is identified in the parenthetical. |
|
|
|
|
(j) |
Amount less than $500. |
|
|
|
Glossary: |
|
|
|
ADR — American Depositary Receipt |
|
NR — Not Rated |
|
REIT — Real Estate Investment Trust |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
18 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | See accompanying Notes to Financial Statements |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
Nicholas-Applegate |
||||
|
|
|
|
||||||
|
Assets: |
|
|
|
|
|
|
|
|
|
Investments, at value (cost—$1,957,911,817 and $511,348,084, respectively) |
|
$ |
1,518,283,386 |
|
|
$ |
366,050,281 |
|
|
|
|
|||||||
|
Receivable for investments sold |
|
|
51,928,778 |
|
|
|
1,056,615 |
|
|
|
|
|||||||
|
Dividends and interest receivable |
|
|
5,128,075 |
|
|
|
1,577,982 |
|
|
|
|
|||||||
|
Prepaid Expenses |
|
|
39,660 |
|
|
|
11,695 |
|
|
|
|
|||||||
|
Total Assets |
|
|
1,575,379,899 |
|
|
|
368,696,573 |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Call options written, at value (premiums received—$18,739,524 and $1,056,615, respectively) |
|
|
57,365,850 |
|
|
|
990,303 |
|
|
|
|
|||||||
|
Payable for investments purchased |
|
|
34,610,237 |
|
|
|
5,291,750 |
|
|
|
|
|||||||
|
Investment management fees payable |
|
|
1,082,130 |
|
|
|
291,573 |
|
|
|
|
|||||||
|
Payable to custodian for cash overdraft |
|
|
— |
|
|
|
54,178 |
|
|
|
|
|||||||
|
Accrued expenses |
|
|
374,280 |
|
|
|
125,502 |
|
|
|
|
|||||||
|
Total Liabilities |
|
|
93,432,497 |
|
|
|
6,753,306 |
|
|
|
|
|||||||
|
Net Assets |
|
$ |
1,481,947,402 |
|
|
$ |
361,943,267 |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
2,253,811,959 |
|
|
|
531,413,558 |
|
|
|
|
|||||||
|
Undistributed (dividends in excess of) net investment income |
|
|
6,557,394 |
|
|
|
(7,018,526 |
) |
|
|
|
|||||||
|
Accumulated net realized loss |
|
|
(300,168,139 |
) |
|
|
(17,220,497 |
) |
|
|
|
|||||||
|
Net unrealized depreciation of investments and call options written |
|
|
(478,254,757 |
) |
|
|
(145,231,491 |
) |
|
|
|
|||||||
|
Net Assets |
|
$ |
1,481,947,402 |
|
|
$ |
361,943,267 |
|
|
|
|
|||||||
|
Net Asset Value Per Share |
|
$ |
15.68 |
|
|
$ |
16.23 |
|
|
|
|
|||||||
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
See accompanying Notes to Financial Statements| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
19 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
Six months ended July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
|
Nicholas-Applegate |
|||
|
Investment Income: |
|
|
|
|
|
|
|
|
|
Dividends (net of foreign withholding taxes of $318,143 and $0, respectively) |
|
$ |
30,398,844 |
|
|
$ |
4,425,671 |
|
|
Interest |
|
|
6,767,532 |
|
|
|
2,466,089 |
|
|
Consent and other fee income |
|
|
200,871 |
|
|
|
64,481 |
|
|
Total Investment Income |
|
|
37,367,247 |
|
|
|
6,956,241 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
Investment management fees |
|
|
5,961,883 |
|
|
|
1,566,687 |
|
|
Shareholder communications |
|
|
186,171 |
|
|
|
27,933 |
|
|
Custodian and accounting agent fees |
|
|
165,155 |
|
|
|
34,356 |
|
|
Trustees’ fees and expenses |
|
|
77,839 |
|
|
|
27,479 |
|
|
Audit and tax services |
|
|
40,395 |
|
|
|
35,522 |
|
|
Legal fees |
|
|
39,258 |
|
|
|
8,558 |
|
|
New York Stock Exchange listing fees |
|
|
36,992 |
|
|
|
10,520 |
|
|
Insurance expenses |
|
|
27,795 |
|
|
|
7,150 |
|
|
Transfer agent fees |
|
|
14,481 |
|
|
|
14,068 |
|
|
Miscellaneous |
|
|
8,696 |
|
|
|
5,072 |
|
|
Total expenses |
|
|
6,558,665 |
|
|
|
1,737,345 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income |
|
|
30,808,582 |
|
|
|
5,218,896 |
|
|
|
|
|
|
|
|
|
|
|
|
Realized and Change in Unrealized Gain (Loss): |
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on: |
|
|
|
|
|
|
|
|
|
Investments |
|
|
(115,063,799 |
) |
|
|
2,248,804 |
|
|
Call options written |
|
|
(33,146,556 |
) |
|
|
(2,725,573 |
) |
|
Net change in unrealized appreciation/depreciation of: |
|
|
|
|
|
|
|
|
|
Investments |
|
|
342,395,983 |
|
|
|
71,698,483 |
|
|
Call options written |
|
|
(49,424,876 |
) |
|
|
(1,132,870 |
) |
|
Net realized and change in unrealized gain on investments and |
|
|
|
|
|
|
|
|
|
call options written |
|
|
144,760,752 |
|
|
|
70,088,844 |
|
|
Net Increase in Net Assets Resulting from Investment Operations |
|
$ |
175,569,334 |
|
|
$ |
75,307,740 |
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
20 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | See accompanying Notes to Financial Statements |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
Nicholas-Applegate |
||||||||||||
|
|
|
Six Months |
|
|
Year ended |
|
|
Six Months |
|
|
Year ended |
|||||
|
Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
30,808,582 |
|
|
$ |
84,406,751 |
|
|
$ |
5,218,896 |
|
|
$ |
14,885,809 |
|
|
Net realized loss on investments and call options written |
|
|
(148,210,355 |
) |
|
|
(145,432,489 |
) |
|
|
(476,769 |
) |
|
|
(16,646,180 |
) |
|
Net change in unrealized appreciation/depreciation of investments and call options written |
|
|
292,971,107 |
|
|
|
(670,259,789 |
) |
|
|
70,565,613 |
|
|
|
(170,382,972 |
) |
|
Net increase (decrease) in net assets resulting from investment operations |
|
|
175,569,334 |
|
|
|
(731,285,527 |
) |
|
|
75,307,740 |
|
|
|
(172,143,343 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
(28,357,298 |
) |
|
|
(82,700,334 |
) |
|
|
(12,490,346 |
) |
|
|
(14,481,526 |
) |
|
Net realized gains |
|
|
— |
|
|
|
(104,930,451 |
) |
|
|
— |
|
|
|
(37,096,911 |
) |
|
Total dividends and distributions to shareholders |
|
|
(28,357,298 |
) |
|
|
(187,630,785 |
) |
|
|
(12,490,346 |
) |
|
|
(51,578,437 |
) |
|
Total increase (decrease) in net assets |
|
|
147,212,036 |
|
|
|
(918,916,312 |
) |
|
|
62,817,394 |
|
|
|
(223,721,780 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
1,334,735,366 |
|
|
|
2,253,651,678 |
|
|
|
299,125,873 |
|
|
|
522,847,653 |
|
|
End of period (including undistributed (dividends in excess of) net investment income of $6,557,394, $4,106,110, $(7,018,526), and $252,924, respectively) |
|
$ |
1,481,947,402 |
|
|
$ |
1,334,735,366 |
|
|
$ |
361,943,267 |
|
|
$ |
299,125,873 |
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
See accompanying Notes to Financial Statements| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
21 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
July 31, 2009 (unaudited) |
|
|
|
|
1. Organization and Significant Accounting Policies
NFJ Dividend, Interest & Premium Strategy Fund and
Nicholas-Applegate 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 per share of common stock authorized.
NFJ Dividend, Interest & Premium Strategy’s 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.
Nicholas Applegate Equity & Convertible Income’s 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.
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 financial statements. Actual results could differ from these 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. However, the Funds expect the risk of any loss to be remote.
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, including over-the-counter options, 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 last quoted mean price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. 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, and the volatility observed in the market on such common stocks. Exchange traded options are valued at the settlement price determined by the relevant exchange. 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.
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
22 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Notes to Financial Statements |
|
July 31, 2009 (unaudited) |
|
|
|
|
1. Organization and Significant Accounting Policies (continued)
The prices used by the Fund to value securities may differ
from the value that would be realized if the securities were sold and these
differences could be material to the financial statements. Each Fund’s 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.
(b) Fair Value Measurements
The Funds have adopted Financial Accounting Standards Board
(“FASB”) Statement of Financial Accounting Standards No. 157, “Fair Value
Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value for
financial reporting, establishes a framework for measuring fair value and
requires additional disclosure about the use of the fair value measurements.
Under FAS 157, 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 under FAS 157 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). |
The Funds have adopted FASB Staff Position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly Decreased and Identifying Transactions that are not Orderly” (“FAS 157-4”). FAS 157-4 provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into a fair value measurement. FAS 157-4 emphasizes that even if there has been significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation techniques used, the objective of a fair value measurement remains the same.
An investment asset’s or liability’s 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 valuation techniques used by the Funds to measure fair value during the six months ended July 31, 2009 maximized the use of observable inputs and minimized the use of unobservable inputs. The Funds utilized the fair value techniques of 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.
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
23 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Notes to Financial Statements |
|
July 31, 2009 (unaudited) |
|
|
|
|
1. Organization and Significant Accounting Policies (continued)
A summary of the inputs used at July 31, 2009, in valuing
each Fund’s assets and liabilities is listed below by investment type.
NFJ Dividend, Interest & Premium Strategy Fund:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level
1 - Quoted |
|
Level
2 - Other |
|
Level
3 - |
|
Value |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities - Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1,082,588,622 |
|
|
|
— |
|
|
|
— |
|
|
$ |
1,082,588,622 |
|
|
|
Convertible Bonds & Notes |
|
|
— |
|
|
$ |
221,410,386 |
|
|
$ |
13,658,970 |
|
|
|
235,069,356 |
|
|
|
Convertible Preferred Stock |
|
|
129,290,915 |
|
|
|
6,804,463 |
|
|
|
3,360,266 |
|
|
|
139,455,644 |
|
|
|
Short-Term Investments |
|
|
— |
|
|
|
61,169,764 |
|
|
|
— |
|
|
|
61,169,764 |
|
|
|
Total Investments in Securities - Assets |
|
$ |
1,211,879,537 |
|
|
$ |
289,384,613 |
|
|
$ |
17,019,236 |
|
|
$ |
1,518,283,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities - Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options Written |
|
|
(27,946,500 |
) |
|
|
(29,419,350 |
) |
|
|
— |
|
|
|
(57,365,850 |
) |
|
|
Total Investments in Securities |
|
$ |
1,183,933,037 |
|
|
$ |
259,965,263 |
|
|
$ |
17,019,236 |
|
|
$ |
1,460,917,536 |
|
|
A roll forward of fair value measurements using significant unobservable inputs (Level 3) at July 31, 2009, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning |
|
Net Purchases |
|
Accrued |
|
Total |
|
Total |
|
Transfers in |
|
Ending |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities - Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Bonds & Notes |
|
$ |
1,513,970 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
$ |
12,145,000 |
|
|
$ |
13,658,970 |
|
|
Convertible Preferred Stock |
|
|
21,508,497 |
|
|
$ |
(24,948,141 |
) |
|
— |
|
|
— |
|
|
$ |
6,799,910 |
|
|
|
— |
|
|
|
3,360,266 |
|
|
Total Investments in Securities - Assets |
|
$ |
23,022,467 |
|
|
$ |
(24,948,141 |
) |
|
— |
|
|
— |
|
|
$ |
6,799,910 |
|
|
$ |
12,145,000 |
|
|
$ |
17,019,236 |
|
The net change in unrealized appreciation/depreciation of Investments at July 31, 2009 was $338.
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
24 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Notes to Financial Statements |
|
July 31, 2009 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 - Quoted |
|
|
Level 2 - Other |
|
|
Level 3 - |
|
|
Value |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Investments in Securities - Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Common Stock |
|
$ |
259,513,632 |
|
|
|
— |
|
|
|
— |
|
|
$ |
259,513,632 |
|
|
|
Convertible Bonds & Notes |
|
|
— |
|
|
$ |
49,687,194 |
|
|
|
— |
|
|
|
49,687,194 |
|
|
|
Convertible Preferred Stock |
|
|
32,595,482 |
|
|
|
— |
|
|
$ |
1,128,820 |
|
|
|
33,724,302 |
|
|
|
Corporate Bonds & Notes |
|
|
— |
|
|
|
13,143,925 |
|
|
|
— |
|
|
|
13,143,925 |
|
|
|
U.S. Government Securities |
|
|
— |
|
|
|
2,008,126 |
|
|
|
— |
|
|
|
2,008,126 |
|
|
|
Short-Term Investments |
|
|
— |
|
|
|
7,973,102 |
|
|
|
— |
|
|
|
7,973,102 |
|
|
|
Total Investments in Securities - Assets |
|
$ |
292,109,114 |
|
|
$ |
72,812,347 |
|
|
$ |
1,128,820 |
|
|
$ |
366,050,281 |
|
|
|
Investments in Securities - Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Options Written |
|
|
— |
|
|
|
(990,303 |
) |
|
|
— |
|
|
|
(990,303 |
) |
|
|
Total Investments in Securities |
|
$ |
292,109,114 |
|
|
$ |
71,822,044 |
|
|
$ |
1,128,820 |
|
|
$ |
365,059,978 |
|
|
A roll forward of fair value measurements using significant unobservable inputs (Level 3) at July 31, 2009, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning |
|
Net Purchases |
|
Accrued |
|
Total |
|
Total |
|
Transfers in |
|
Ending |
|
|||||||||||||
|
|
||||||||||||||||||||||||||||
|
Investments in Securities - Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Convertible Preferred Stock |
|
$ |
7,854,048 |
|
|
$ |
(9,225,491 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
2,500,263 |
|
|
|
— |
|
$ |
1,128,820 |
|
|
Realized gain (loss) and change in unrealized appreciation/depreciation is recorded on the Statement of Operations.
There was no change in unrealized appreciation/depreciation of investments at July 31, 2009.
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
25 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Notes to Financial Statements |
|
July 31, 2009 (unaudited) |
|
The Funds have applied FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (the “Interpretation”). The Interpretation 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. Fund management has determined that its evaluation of the Interpretation has resulted in no material impact to the Funds’ financial statements at July 31, 2009. NFJ Dividend, Interest & Premium Strategy’s federal tax returns for the prior three fiscal years and Nicholas-Applegate Equity & Convertible Income’s since inception (February 27, 2007) remain subject to examination by the Internal Revenue Service.
Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As normal 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 used primarily as a measure of the sensitivity of a fixed income security’s market price to interest rate (i.e. yield) movements.
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
26 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Notes to Financial Statements |
|
July 31, 2009 (unaudited) |
|
The Funds will be exposed to credit risk on parties with whom it trades and will also bear the risk of settlement default. The Funds seek to minimize concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on reorganized and reputable exchanges. The Funds could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a derivatives contract, repurchase agreement or a loan of portfolio securities, is 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.
Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that the issuers or counterparties to the agreements 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 Fund’s financial statements. Financial assets, which potentially expose the Funds to credit risk, consist principally of cash due from counterparties and investments.
NFJ Investment Group LLC (“NFJ”), Oppenheimer Capital LLC (“OCC”) and Nicholas-Applegate Capital Management (“NACM”), as the investment sub-advisers seek to minimize credit risks to each applicable Fund by performing reviews of each counterparty. All transactions in listed securities are settled/paid for upon delivery. Delivery of securities sold is only made once the Fund has 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.
During the six-months ended July 31, 2009, the Funds held synthetic convertible securities with Lehman Brothers Holdings, Inc. as the counterparty. On September 15, 2008, Lehman Brothers Holdings, Inc. filed for protection under Chapter 11 of the United States Bankruptcy Code. The value of the relevant securities has been written down to their estimated recoverable values.
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
27 |
|
|
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
|
The use of derivative transactions may involve elements of both market and credit risk in excess of the amounts reflected on the Statements of Assets and Liabilities of the Funds.
The effect of Derivative Instruments on the Funds’ Statements of Assets and Liabilities at July 31, 2009:
NFJ Dividend, Interest & Premium Strategy:
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
Equity Contracts |
|
Index Contracts |
|
Total |
|
|||
|
Liability Derivatives |
|
|
|
|
|
|
|
|
|
|
|
Call options written |
|
$(3,575,000) |
|
$(53,790,850) |
|
$(57,365,850) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas-Applegate Equity & Convertible Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
Equity Contracts |
|
Index Contracts |
|
Total |
|
|||
|
Liability Derivatives |
|
|
|
|
|
|
|
|
|
|
|
Call options written |
|
— |
|
$ (990,303) |
|
$ (990,303) |
|
|||
The effect of Derivative Instruments on the Funds’ Statements of Operations of the Funds for the six months ended July 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
Nicholas-Applegate |
|
||||||
|
|
|
|
|
||||||||
|
Location |
|
Contracts |
|
Contracts |
|
||||||
|
|
|||||||||||
|
Realized Gain (Loss) on: |
|
|
|
|
|
|
|
||||
|
Call options written |
|
|
$ |
(33,146,556 |
) |
|
|
|
$(2,725,573 |
) |
|
|
|
|||||||||||
|
Total Realized Gain (Loss) |
|
|
$ |
(33,146,556 |
) |
|
|
|
$(2,725,573 |
) |
|
|
|
|||||||||||
|
Net change in unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
Call options written |
|
|
$ |
(49,424,876 |
) |
|
|
|
$(1,132,870 |
) |
|
|
|
|||||||||||
|
Total change in unrealized |
|
|
$ |
(49,424,876 |
) |
|
|
|
$(1,132,870 |
) |
|
|
|
|||||||||||
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
28 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, |
|
Nicholas-Applegate |
|
||||||
|
Purchases |
|
|
$ |
324,545,437 |
|
|
|
$ |
80,682,043 |
|
|
|
Sales |
|
|
|
311,181,744 |
|
|
|
|
80,403,234 |
|
|
(a) Transactions in call options written for the six months ended July 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy: |
|
|
Contracts |
|
|
|
Premiums |
|
|
Options outstanding, January 31, 2009 |
|
|
28,100 |
|
$ |
16,215,450 |
|
|
|
Options written |
|
|
140,250 |
|
|
56,266,100 |
|
|
|
Options terminated in closing purchase transactions |
|
|
(37,199 |
) |
|
(18,923,456 |
) |
|
|
Options expired |
|
|
(95,700 |
) |
|
(34,818,534 |
) |
|
|
Options exercised |
|
|
(1 |
) |
|
(36 |
) |
|
|
|
|
|
||||||
|
Options outstanding, July 31, 2009 |
|
|
35,450 |
|
$ |
18,739,524 |
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Nicholas-Applegate Equity & Convertible Income: |
|
|
Contracts |
|
|
Premiums |
|
|
|
Options outstanding, January 31, 2009 |
|
|
1,682 |
|
$ |
1,451,482 |
|
|
|
Options written |
|
|
12,848 |
|
|
8,297,459 |
|
|
|
Options terminated in closing purchase transactions |
|
|
(5,007 |
) |
|
(4,238,340 |
) |
|
|
Options expired |
|
|
(7,788 |
) |
|
(4,453,986 |
) |
|
|
|
|
|||||||
|
Options outstanding, July 31, 2009 |
|
|
1,735 |
|
$ |
1,056,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of |
|
Gross |
|
Gross |
|
Net |
|
||||
|
NFJ Dividend, Interest & Premium Strategy |
|
$ |
1,957,911,817 |
|
$ |
35,210,377 |
|
$ |
(474,838,808 |
) |
$ |
(439,628,431 |
) |
|
Nicholas-Applegate Equity & Convertible Income |
|
$ |
511,348,084 |
|
|
410,445 |
|
|
(145,708,248 |
) |
$ |
(145,297,803 |
) |
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
29 |
|
|
|
|
|
NFJ
Dividend, Interest & Premium Strategy Fund |
|
Since February 2004, the Investment Manager, the Sub-Advisors and certain of their 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 multi-district litigation proceeding in the U.S. District Court for the District of Maryland. Any potential resolution of these matters may include, but not be limited to judgments or settlements for damages against the Investment Manager, the Sub-Adviser, or its affiliates or related injunctions.
The Investment Manager and the Sub-Advisers believe 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.
The foregoing speaks only as of the date hereof.
The objective of FAS 165 is to establish principles and requirements for subsequent events. In particular, FAS 165 sets forth:
|
|
|
|
|
|
a) |
The period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. |
|
|
|
|
|
|
b) |
The circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements. |
|
|
|
|
|
|
c) |
The disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. |
The subsequent events were as follows:
Diana L. Taylor resigned as Trustee of the Funds on September 10, 2009.
On September 11, 2009 the following quarterly dividends were declared to shareholders, payable September 25, 2009 to shareholders of record on September 21, 2009:
|
|
|
|
NFJ Dividend, Interest & Premium Strategy |
$0.15 per share |
|
Nicholas-Applegate Equity & Convertible Income |
$0.28 per share |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
30 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
Financial Highlights |
|
|
For a share outstanding throughout each period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
|
|
|
|
|
|
|
|
|
For the period |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
Year ended January 31, |
|
|
|
||||||||||||
|
|
|
|
2009 |
|
2008 |
|
2007 |
|
|
|
||||||||
|
Net asset value, beginning of period |
|
$14.12 |
|
|
$23.84 |
|
|
$25.72 |
|
|
$24.18 |
|
|
|
|
$23.88 |
** |
|
|
Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.33 |
|
|
0.89 |
|
|
0.80 |
|
|
0.75 |
|
|
|
|
0.70 |
|
|
|
Net realized and change in unrealized gain (loss) on investments, call options written and short sales |
|
1.53 |
|
|
(8.63 |
) |
|
(0.44 |
) |
|
2.89 |
|
|
|
|
1.28 |
|
|
|
Total from investment operations |
|
1.86 |
|
|
(7.74 |
) |
|
0.36 |
|
|
3.64 |
|
|
|
|
1.98 |
|
|
|
Dividends and Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
(0.30 |
) |
|
(0.87 |
) |
|
(1.01 |
) |
|
(0.73 |
) |
|
|
|
(0.65 |
) |
|
|
Net realized gains |
|
— |
|
|
(1.11 |
) |
|
(1.23 |
) |
|
(1.37 |
) |
|
|
|
(1.00 |
) |
|
|
Total dividends and distributions to shareholders |
|
(0.30 |
) |
|
(1.98 |
) |
|
(2.24 |
) |
|
(2.10 |
) |
|
|
|
(1.65 |
) |
|
|
Capital Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs charged to paid-in capital in excess of par |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
(0.03 |
) |
|
|
Net asset value, end of period |
|
$15.68 |
|
|
$14.12 |
|
|
$23.84 |
|
|
$25.72 |
|
|
|
|
$24.18 |
|
|
|
Market price, end of period |
|
$12.63 |
|
|
$12.97 |
|
|
$23.26 |
|
|
$25.87 |
|
|
|
|
$22.20 |
|
|
|
Total Investment Return (1) |
|
0.06 |
% |
|
(37.93 |
)% |
|
(1.65 |
)% |
|
27.15 |
% |
|
|
|
(4.65 |
)% |
|
|
RATIOS/SUPPLEMENTAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000) |
|
$1,481,947 |
|
|
$1,334,735 |
|
|
$2,253,652 |
|
|
$2,431,595 |
|
|
|
|
$2,285,652 |
|
|
|
Ratio of expenses to average net assets |
|
0.99 |
%(2) |
|
0.97 |
% |
|
0.95 |
% |
|
0.95 |
% |
|
|
|
0.94 |
%(2) |
|
|
Ratio of net investment income to average net assets |
|
4.65 |
%(2) |
|
4.40 |
% |
|
3.13 |
% |
|
3.08 |
% |
|
|
|
3.27 |
%(2) |
|
|
Portfolio turnover rate |
|
25 |
% |
|
48 |
% |
|
82 |
% |
|
69 |
% |
|
|
|
97 |
% |
|
|
|
|
|
* |
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. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized. |
|
|
|
|
(2) |
Annualized. |
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
31 |
|
|
|
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Financial Highlights |
|
For a share outstanding throughout each period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
Year Ended |
|
For the period |
|||||||||
|
|
|
|
|
||||||||||||
|
Net asset value, beginning of period |
|
|
|
$13.41 |
|
|
|
|
$23.44 |
|
|
|
|
$23.88 |
** |
|
|
|
|
|||||||||||||
|
Investment Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
0.23 |
|
|
|
|
0.67 |
|
|
|
|
0.62 |
|
|
|
|
|
|||||||||||||
|
Net realized and change in unrealized gain (loss) on investments and call options written |
|
|
|
3.15 |
|
|
|
|
(8.39 |
) |
|
|
|
0.68 |
|
|
|
|
|
|||||||||||||
|
Total from investment operations |
|
|
|
3.38 |
|
|
|
|
(7.72 |
) |
|
|
|
1.30 |
|
|
|
|
|
|||||||||||||
|
Dividends and Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
(0.56 |
) |
|
|
|
(0.65 |
) |
|
|
|
(0.70 |
) |
|
|
|
|
|||||||||||||
|
Net realized gains |
|
|
|
— |
|
|
|
|
(1.66 |
) |
|
|
|
(0.99 |
) |
|
|
|
|
|||||||||||||
|
Total dividends and distributions to shareholders |
|
|
|
(0.56 |
) |
|
|
|
(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 |
|
|
|
$16.23 |
|
|
|
|
$13.41 |
|
|
|
|
$23.44 |
|
|
|
|
|
|||||||||||||
|
Market price, end of period |
|
|
|
$14.86 |
|
|
|
|
$13.10 |
|
|
|
|
$22.02 |
|
|
|
|
|
|||||||||||||
|
Total Investment Return (1) |
|
|
|
18.57 |
% |
|
|
|
(31.75 |
)% |
|
|
|
(5.66 |
)% |
|
|
|
|
|||||||||||||
|
RATIOS/SUPPLEMENTAL DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000) |
|
|
$ |
361,943 |
|
|
|
$ |
299,126 |
|
|
|
$ |
522,848 |
|
|
|
|
|
|||||||||||||
|
Ratio of expenses to average net assets |
|
|
|
1.11 |
%(2) |
|
|
|
1.07 |
% |
|
|
|
1.08 |
%(2) |
|
|
|
|
|||||||||||||
|
Ratio of net investment income to average net assets |
|
|
|
3.33 |
%(2) |
|
|
|
3.42 |
% |
|
|
|
2.73 |
%(2) |
|
|
|
|
|||||||||||||
|
Portfolio turnover rate |
|
|
|
26 |
% |
|
|
|
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. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized. |
|
|
|
|
(2) |
Annualized. |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
|
|
32 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
July 31, 2009 (unaudited) |
Meeting Results/ |
|
|
Proxy Voting Policies |
|
|
& Procedures |
Annual Shareholder Meeting Results:
The Funds held their joint annual meeting of shareholders on July 14, 2009.
Shareholders of NFJ Dividend, Interest & Premium Strategy Fund voted to re-elect R. Peter Sullivan III and Diana L. Taylor as Trustees as indicated below.
|
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy |
|
Affirmative |
|
Withheld |
|
Re-election of R. Peter Sullivan III - Class II to serve until 2012 |
|
83,443,176 |
|
4,790,037 |
|
Re-election of Diana L. Taylor* - Class II to serve until 2012 |
|
83,417,820 |
|
4,815,393 |
Hans W. Kertess, Paul Belica, Robert E. Connor, John C. Maney and William B. Ogden IV, continue to serve as Trustees.
Shareholders of Nicholas-Applegate Equity & Convertible Income voted to re-elect Paul Belica, John C. Maney and Diana L. Taylor as Trustees as indicated below.
|
|
|
|
|
|
|
Nicholas Applegate Equity & Convertible Income |
|
Affirmative |
|
Withheld |
|
Re-election of Paul Belica - Class III to serve until 2010 |
|
20,387,674 |
|
429,724 |
|
Re-election of John C. Maney - Class II to serve until 2012 |
|
20,388,136 |
|
429,262 |
|
Election of Diana L. Taylor* - Class II to serve until 2012 |
|
20,339,002 |
|
478,396 |
Robert E. Connor, Hans W. Kertess, William B. Ogden IV and R. Peter Sullivan III, continue to serve as Trustees.
* Diana Taylor resigned as Trustee of the Funds on September 10, 2009.
|
|
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 Commission’s website at www.sec.gov.
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
33 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
|
|
|
the Trustees’ |
|
|
Consideration of the |
|
|
Investment |
|
|
Management & |
|
|
Portfolio Management |
|
|
Agreements |
|
|
(unaudited) |
The Investment Company Act of 1940, as amended, requires that both the full Board of Trustees (the “Trustees”) and a majority of the non-interested Trustees (the “Independent Trustees”), voting separately, approve the Funds’ Management Agreements (the “Advisory Agreements”) with the Investment Manager and Portfolio Management Agreements (the “Sub-Advisory Agreements”, and together with the Advisory Agreements, the “Agreements”) between the Investment Manager and the Sub-Advisers. The Trustees met in person on June 16-17, 2009 (the “contract review meeting”) for the specific purpose of considering whether to approve the continuation of the Advisory Agreements and the Sub-Advisory Agreements. The Independent Trustees were assisted in their evaluation of the Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately from Fund management during the contract review meeting.
Based on their evaluation of factors that they deemed to be material, including those factors described below, the Board of Trustees, including a majority of the Independent Trustees, concluded that the continuation of the Funds’ Advisory Agreements and the Sub-Advisory Agreements, as amended, should be approved for a one-year period commencing July 1, 2009.
In connection with their deliberations regarding the continuation of the Agreements, the Trustees, including the Independent Trustees, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Trustees considered the nature, quality, and extent of the various investment management, administrative and other services performed by the Investment Manager or the Sub-Advisers under the applicable Agreement.
In connection with their contract review meeting, the Trustees received and relied upon materials provided by the Investment Manager which included, among other items: (i) information provided by Lipper Inc. (“Lipper”) on the total return investment performance (based on net assets) of the Funds for various time periods, the investment performance of a group of funds with substantially similar investment classifications/objectives as the Funds identified by Lipper and the performance of applicable benchmark indices, (ii) information provided by Lipper on the Funds’ management fees and other expenses and the management fees and other expenses of comparable funds identified by Lipper, (iii) information regarding the investment performance and management fees of comparable portfolios of other clients of the Sub-Advisers, including institutional separate accounts, (iv) the profitability to the Investment Manager and the Sub-Advisers from their relationships with the Funds for the one year period ended March 31, 2009, (v) descriptions of various functions performed by the Investment Manager and the Sub-Advisers for the Funds, such as portfolio management, compliance monitoring and portfolio trading practices, and (vi) information regarding the overall organization of the Investment Manager and the Sub-Advisers, including information regarding senior management, portfolio managers and other personnel providing investment management, administrative and other services to the Funds.
The Trustees’ conclusions as to the continuation of the Agreements were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another, attributing different weights to various factors.
As part of their review, the Trustees examined each of the Investment Manager’s and the Sub-Advisers’ abilities to provide high quality investment management and other services to the Funds. The Trustees considered the investment philosophy and research and decision-making processes of the Sub-Advisers;the experience of key advisory personnel of the Sub-Advisers responsible for portfolio management of the Funds; the ability of the Investment Manager and the Sub-Advisers to attract and retain capable personnel; the capability and integrity of the senior management and staff of the Investment Manager and the Sub-Advisers; and the level of skill required to manage the Funds. In addition, the Trustees reviewed the quality of the Investment Manager’s and the Sub-Advisers’ services with respect to regulatory compliance and compliance with the investment policies of the Funds; the nature and quality of certain administrative services the Investment Manager is responsible for providing to the Funds; and conditions that might affect the Investment Manager’s or the Sub-Advisers’ ability to provide high quality services to the Funds in the future under the Agreements, including each organization’s respective business reputation, financial condition and operational stability. Based on the foregoing, the Trustees concluded that the Sub-Advisers’ investment process, research capabilities and philosophy were well suited to each of the Funds given their respective investment objectives and policies, and that the Investment Manager and the Sub-Advisers would be able to continue to meet any reasonably foreseeable obligations under the Agreements.
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
34 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Matters Relating to |
|
|
the Trustees’ |
|
|
Consideration of the |
|
|
Investment |
|
|
Management & |
|
|
Portfolio Management |
|
|
Agreements |
|
|
(unaudited) (continued) |
Based on information provided by Lipper, the Trustees also reviewed each Fund’s total return investment performance as well as the performance of comparable funds identified by Lipper. In the course of their deliberations, the Trustees took into account information provided by the Investment Manager in connection with the contract review meeting, as well as during investment review meetings conducted with portfolio management personnel during the course of the year regarding each Fund’s performance.
In assessing the reasonableness of each Fund’s fees under the Agreements, the Trustees considered, among other information, each Fund’s management fee and the total expense ratio as a percentage of average net assets attributable to common shares and the management fee and total expense ratios of comparable funds identified by Lipper.
For each of the Funds, the Trustees specifically took note of how each Fund compared to its Lipper peers as to performance, management fee expenses and total expenses. The Trustees noted that the Investment Manager had provided a memorandum containing comparative information on the performance and expenses information of the Funds compared to their Lipper peer categories. The Trustees noted that while the Funds are not charged a separate administration fee, it was not clear whether the peer funds in the Lipper categories were charged such a fee by their investment managers.
NFJ Dividend, Interest & Premium Strategy
The Trustees noted that NFJ ranked in the top quintile for actual management fees and total expenses as compared to a group of six peer funds. For the 1-year performance ranking, the Fund ranked 26 out of 32 and for the 3-year period ranked 18 out of 22, representing the bottom quintile for both periods. NFJ is ranked in the third quintile for the 3-months ended May 31, 2009 and has fourth quintile performance for the 3-year period as of that date.
Nicholas-Applegate Equity & Convertible Income
The Trustees noted that the expense group for NIE consists of only three funds. The Trustees also noted that the actual management fees were above the median and total actual expenses were at the median. The Trustees also noted that NIE was last out of 4 funds for the 1-year performance. NIE moved into the third quintile for performance during the 3-months period ended May 31, 2009..
After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions regarding the Agreements, that they were satisfied with the Investment Manager’s and the Sub-Advisers’ responses and efforts to continue to improve the Funds’ investment performance. The Trustees agreed to reassess the services provided by the Investment Manager and Sub-Advisers under the Agreements in light of the Fund’s ongoing performance at each quarterly Board meeting.
The Trustees also considered the management fees charged by Sub-Advisers to other clients, including institutional separate accounts with investment strategies similar to those of the Funds. Regarding the institutional separate accounts, they noted that the management fees paid by the Funds are generally higher than the fees paid by these clients of the Sub-Advisers, but the Trustees were advised by the Sub-Advisers that the administrative burden for the Investment Manager and the Sub-Advisers with respect to the Funds are also relatively higher, due in part to the more extensive regulatory regime to which the Funds are subject in comparison to institutional separate accounts. The Trustees noted that the management fees paid by the Funds are generally higher than the fees paid by the open-end funds offered for comparison but were advised that there are additional portfolio management challenges in managing the Funds, such as meeting a regular dividend.
Based on a profitability analysis provided by the Investment Manager, the Trustees also considered the profitability of the Investment Manager and the Sub-Advisers from their relationship with each Fund and determined that such profitability was not excessive.
The Trustees also took into account that, as closed-end investment companies, the Funds do not currently intend to raise additional assets, so the assets of the Funds will grow (if at all) only through the investment performance of each Fund. Therefore, the Trustees did not consider potential economies of scale as a principal factor in assessing the fee rates payable under the Agreements.
|
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
| 7.31.09 | Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report |
35 |
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
|
Nicholas-Applegate Equity & Convertible Income Fund |
Matters Relating to |
|
|
the Trustees’ |
|
|
Consideration of the |
|
|
Investment |
|
|
Management & |
|
|
Portfolio Management |
|
|
Agreements |
|
|
(unaudited) (continued) |
Additionally, the Trustees considered so-called “fall-out benefits” to the Investment Manager and the Sub-Advisers, such as reputational value derived from serving as Investment Manager and Sub-Advisers to the Funds.
After reviewing these and other factors described herein, the Trustees concluded with respect to each Fund, within the context of their overall conclusions regarding the Agreements, that the fees payable under the Agreements represent reasonable compensation in light of the nature and quality of the services being provided by the Investment Manager and Sub-Advisers to the Funds.
|
|
|
|
|
NFJ Dividend, Interest & Premium Strategy Fund |
|
36 |
Nicholas-Applegate Equity & Convertible Income Fund Semi-Annual Report | 7.31.09 | |
|
|
|
|
Trustees |
Principal Officers |
|
|
|
|
Hans W. Kertess |
Brian S. Shlissel |
|
Chairman of the Board of Trustees |
President & Chief Executive Officer |
|
Paul Belica |
Lawrence G. Altadonna |
|
Robert E. Connor |
Treasurer, Principal Financial & Accounting Officer |
|
John C. Maney |
Thomas J. Fuccillo |
|
William B. Ogden, IV |
Vice President, Secretary & Chief Legal Officer |
|
R. Peter Sullivan III |
Scott Whisten |
|
|
Assistant Treasurer |
|
|
Richard J. Cochran |
|
|
Assistant Treasurer |
|
|
Youse E. Guia |
|
|
Chief Compliance Officer |
|
|
Kathleen A. Chapman |
|
|
Assistant Secretary |
|
|
Lagan Srivastava |
|
|
Assistant Secretary |
|
|
|
|
Investment Manager |
|
|
Allianz Global Investors Fund Management LLC |
|
|
1345 Avenue of the Americas |
|
|
New York, NY 10105 |
|
|
Sub-Advisers |
|
|
NFJ Investment Group L.P. |
|
|
2100 Ross Avenue, Suite 1840 |
|
|
Dallas, TX 75201 |
|
|
|
|
|
Nicholas-Applegate Capital Management LLC |
|
|
600 West Broadway, 30th Floor |
|
|
San Diego, CA 92101 |
|
|
|
|
|
Oppenheimer 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 |
|
|
PNC Global Investment Servicing |
|
|
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 |
|
|
One International Place |
|
|
Boston, MA 02210-2624 |
|
This report, including the financial information herein, is transmitted to the shareholders of NFJ Dividend, Interest & Premium Strategy Fund and Nicholas-Applegate 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.
The financial information included herein is taken from the records of the Funds without examination by an independent registered public accounting firm, who did not express an opinion.
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 schedules 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’s are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s 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.
On July 22, 2009 (NFJ) and July 23, 2009 (NIE), submitted a CEO annual
certification to the New York Stock Exchange (“NYSE”) on which the Funds’
principal executive officer certified that he was not aware, as of the date, of
any violation by the Fund of the NYSE’s Corporate Governance listing standards.
In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and
related SEC rules, the Funds’ principal executive and principal financial
officer made quarterly certifications, included in filings with the SEC on
Forms N-CSR and N-Q relating to, among other things, the Funds’ disclosure
controls and procedures and internal control over financial reporting, as
applicable.
Information on the Funds are available at
www.allianzinvestors.com/closedendfunds or by calling the Funds’ shareholder
servicing agent at (800) 254-5197.
ITEM 2. CODE OF ETHICS
Not required in this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not required in this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not required in this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 9. Purchase 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 Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant’s President and Chief Executive Officer and Treasurer, Principal Financial & Accounting Officer have concluded that the registrant’s 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 changes over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a -3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants control over financial reporting.
ITEM 12. EXHIBITS
(a) Exhibit 99.302 Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(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 & Premium Strategy Fund
| By /s/ Brian S. Shlissel |
| President and Chief Executive Officer |
| Date October 7, 2009 |
| By /s/ Lawrence G. Altadonna |
| Treasurer, Principal Financial & Accounting Officer |
| Date October 7, 2009 |
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 October 7, 2009 |
| By /s/ Lawrence G. Altadonna |
| Treasurer, Principal Financial & Accounting Officer |
| Date October 7, 2009 |