OMB APPROVAL |
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OMB Number: 3235-0570 |
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Expires: January 31, 2014
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Estimated average burden hours per response: 20.6 |
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Annual Report to Shareholders |
February 29, 2012 |
2 |
Performance Summary | |
2 |
Management Discussion | |
4 |
Additional Information | |
5 |
Dividend Reinvestment Plan | |
6 |
Schedule of Investments | |
16 |
Financial Statements | |
19 |
Notes to Financial Statements | |
25 |
Financial Highlights | |
27 |
Auditors Report | |
28 |
Tax Information | |
29 |
Supplemental Information | |
T-1 |
Trustees and Officers |
Trust at NAV |
7.26 | % | ||
Trust at Market Value |
11.33 | |||
Barclays
U.S. Corporate High Yield 2% Issuer Cap Index▼ |
6.92 | |||
Market Price Premium to NAV as of 2/29/12 |
3.11 | |||
n | Low equity value to debt, high subordination and negative free cash flow coupled with negative news, declining expectations or an increasing risk profile. | |
n | Very low yields. | |
n | Presentation of a better relative value opportunity. |
A |
0.7 | % | ||
BBB |
5.5 | |||
BB |
35.6 | |||
B |
45.7 | |||
CCC |
7.7 | |||
CC |
0.2 | |||
C |
0.1 | |||
Non-Rated |
3.7 | |||
Cash |
0.8 | |||
1. | International Lease Finance Corp. |
3.1 | % | |||
2. | Ally Financial Inc. |
2.3 | ||||
3. | Intelsat Jackson Holdings S.A. |
1.7 | ||||
4. | AES Corp. (The) |
1.6 | ||||
5. | Ford Motor Credit Co. LLC |
1.6 | ||||
Total Net Assets |
$61.8 | million | ||||
Total Number of Holdings* |
340 | |||||
| Source: Standard & Poors. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. Non-Rated indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poors rating methodology, please visit standardandpoors.com and select Understanding Ratings under Rating Resources on the homepage. |
n | Unless otherwise stated, information presented in this report is as of February 29, 2012, and is based on total net assets. | |
n | Unless otherwise noted, all data provided by Invesco. | |
n | To access your Trusts reports, visit invesco.com/fundreports. |
n | The Barclays U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index that covers US corporate, fixed-rate, non-investment grade debt with at least one year to maturity and at least $150 million in par outstanding. Index weights for each issuer are capped at 2%. | |
n | The Trust is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Trust may deviate significantly from the performance of the index(es). | |
n | A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects trust expenses; performance of a market index does not. |
n | The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholders success in a rigorous and comprehensive study program in the field of investment management and research analysis. | |
n | The returns shown in managements discussion of Trust performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Trust at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. |
NYSE Symbol |
VLT |
n | Add to your account | |
You may increase the amount of shares in your Trust easily and automatically with the Plan. | ||
n | Low transaction costs | |
Transaction costs are low because the new shares are bought in blocks and the per share fee is shared among all participants. | ||
n | Convenience | |
You will receive a detailed account statement from Computershare Trust Company, N.A. (the Agent) which administers the Plan. The statement shows your total Distributions, date of investment, shares acquired, and price per share, as well as the total number of shares in your reinvestment account. You can also access your account via the Internet. To do this, please go to invesco.com/us. | ||
n | Safekeeping | |
The Agent will hold the shares it has acquired for you in safekeeping. |
1. | If you opt to continue to hold your non-certificated whole shares (Investment Plan Book Shares), they will be held by the Agent electronically as Direct Registration Book-Shares (Book-Entry Shares) and fractional shares will be sold at the then current market price. Proceeds will be sent via check to your address of record after deducting applicable fees. | ||
2. | If you opt to sell your shares through the Agent, we will sell all full and fractional shares and send the proceeds via check to your address of record after deducting a $2.50 service fee and per share fees. Per share fees include any applicable brokerage commissions the Agent is required to pay. | ||
3. | You may sell your shares through your financial adviser through the Direct Registration System (DRS). DRS is a service within the securities industry that allows Trust shares to be held in your name in electronic format. You retain full ownership of your shares, without having to hold a share certificate. You should contact your financial adviser to learn more about any restrictions or fees that may apply. |
Principal |
||||||||
Amount | Value | |||||||
|
||||||||
U.S. Dollar Denominated Bonds and
Notes119.33%(a)
|
||||||||
Aerospace & Defense1.11% |
||||||||
Bombardier Inc. (Canada), Sr. Unsec. Notes,
7.75%, 03/15/20(b)
|
$ | 295,000 | $ | 344,412 | ||||
Huntington Ingalls Industries Inc., Sr. Unsec. Gtd. Global
Notes,,
6.88%, 03/15/18 |
65,000 | 68,738 | ||||||
7.13%, 03/15/21
|
110,000 | 118,800 | ||||||
Spirit Aerosystems Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 12/15/20
|
140,000 | 152,600 | ||||||
684,550 | ||||||||
Airlines4.03% |
||||||||
American Airlines Inc., Sr. Sec. Gtd. Notes,
7.50%, 03/15/16(b)(c)
|
505,000 | 424,200 | ||||||
American Airlines Pass Through
TrustSeries 2011-1,
Class B, Sec. Gtd. Pass Through Ctfs.,
7.00%, 01/31/18(b)
|
148,853 | 146,993 | ||||||
Continental Airlines Pass Through Trust,
Series 2007-1, Class C, Sec. Global Pass Through Ctfs., 7.34%, 04/19/14 |
588,068 | 599,829 | ||||||
Series 2009-2,
Class B, Sec. Global Pass Through Ctfs.,
9.25%, 05/10/17
|
100,587 | 106,842 | ||||||
Delta Air Lines Pass Through Trust,
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.38%, 01/02/16(b) |
85,000 | 81,812 | ||||||
Series 2010-2,
Class B, Sec. Pass Through Ctfs.,
6.75%, 11/23/15(b)
|
100,000 | 96,500 | ||||||
Delta Air Lines, Inc.,
Sec. Notes, 12.25%, 03/15/15(b) |
85,000 | 92,650 | ||||||
Sr. Sec. Notes,
9.50%, 09/15/14(b)
|
428,000 | 461,170 | ||||||
UAL Pass Through Trust,
Series 2007-1, Class A, Sec. Gtd. Global Pass Through Ctfs., 6.64%, 07/02/22 |
93,509 | 98,593 | ||||||
Series 2009-2,
Class B, Sec. Gtd. Pass Through Ctfs.,
12.00%, 01/15/16(b)
|
189,306 | 205,397 | ||||||
US Airways Pass Through
TrustSeries 1998-1,
Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/14
|
195,940 | 177,816 | ||||||
2,491,802 | ||||||||
Alternative Carriers1.47% |
||||||||
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes,
8.38%, 02/15/18(b)
|
250,000 | 261,875 | ||||||
Level 3 Communications Inc., Sr. Unsec. Global Notes,
11.88%, 02/01/19
|
245,000 | 279,912 | ||||||
Level 3 Financing Inc.,
Sr. Unsec. Gtd. Global Notes, 9.38%, 04/01/19 |
125,000 | 138,438 | ||||||
Sr. Unsec. Gtd. Notes,
8.13%, 07/01/19(b) |
140,000 | 147,350 | ||||||
8.63%, 07/15/20(b)
|
75,000 | 80,250 | ||||||
907,825 | ||||||||
Aluminum1.00% |
||||||||
Century Aluminum Co., Sr. Sec. Gtd. Notes, 8.00%, 05/15/14
|
605,000 | 620,503 | ||||||
Apparel Retail1.74% |
||||||||
Express LLC/Express Finance Corp., Sr. Unsec. Gtd. Global Notes,
8.75%, 03/01/18
|
275,000 | 304,562 | ||||||
Gap, Inc. (The), Sr. Unsec. Notes, 5.95%, 04/12/21
|
315,000 | 316,969 | ||||||
J. Crew Group, Inc., Sr. Unsec. Gtd. Global Notes,
8.13%, 03/01/19
|
285,000 | 286,425 | ||||||
Limited Brands Inc.,
5.63%, 02/15/22 |
45,000 | 46,688 | ||||||
Sr. Unsec. Gtd. Notes,
6.63%, 04/01/21
|
110,000 | 121,825 | ||||||
1,076,469 | ||||||||
Apparel, Accessories & Luxury Goods3.53% |
||||||||
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes,
6.38%, 12/15/20
|
310,000 | 325,500 | ||||||
Jones Group Inc. (The), Sr. Unsec. Notes, 6.88%, 03/15/19
|
585,000 | 570,375 | ||||||
Levi Strauss & Co., Sr. Unsec. Global Notes,
7.63%, 05/15/20
|
770,000 | 820,050 | ||||||
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 04/15/15
|
460,000 | 462,300 | ||||||
2,178,225 | ||||||||
Auto Parts & Equipment1.57% |
||||||||
Allison Transmission Inc., Sr. Unsec. Gtd Notes,
7.13%, 05/15/19(b)
|
330,000 | 340,725 | ||||||
American Axle & Manufacturing, Inc., Sr. Unsec. Gtd.
Notes, 7.75%, 11/15/19
|
80,000 | 85,600 | ||||||
Dana Holding Corp., Sr. Unsec. Notes, 6.75%, 02/15/21
|
295,000 | 320,812 | ||||||
Tenneco Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 12/15/20
|
95,000 | 102,838 | ||||||
7.75%, 08/15/18
|
110,000 | 120,175 | ||||||
970,150 | ||||||||
Automobile Manufacturers1.30% |
||||||||
Chrysler Group LLC/CG Co.-Issuer Inc., Sec. Gtd. Global Notes,
8.00%, 06/15/19
|
400,000 | 406,000 | ||||||
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31
|
305,000 | 393,450 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Automobile Manufacturers(continued) |
||||||||
Motors Liquidation Corp., Sr. Unsec. Notes, 8.38%, 07/15/33
(Acquired 06/25/10-02/24/11;
Cost $15,590)(c)(d)
|
$ | 795,000 | $ | 6,600 | ||||
806,050 | ||||||||
Biotechnology0.26% |
||||||||
Grifols Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/18
|
70,000 | 76,125 | ||||||
STHI Holding Corp., Sec. Gtd. Notes,
8.00%, 03/15/18(b)
|
80,000 | 86,200 | ||||||
162,325 | ||||||||
Broadcasting1.08% |
||||||||
Allbritton Communications Co., Sr. Unsec. Global Notes,
8.00%, 05/15/18
|
155,000 | 164,688 | ||||||
Clear Channel Communications, Inc., Sr. Sec. Gtd. Global Notes,
9.00%, 03/01/21
|
385,000 | 353,237 | ||||||
Clear Channel Worldwide Holdings Inc., Sr. Sub. Gtd. Notes,
7.63%, 03/15/20(b)
|
150,000 | 150,000 | ||||||
667,925 | ||||||||
Building Products6.99% |
||||||||
American Standard Americas, Sr. Sec. Notes,
10.75%, 01/15/16(b)
|
205,000 | 147,600 | ||||||
Associated Materials LLC, Sr. Sec. Gtd. Global Notes,
9.13%, 11/01/17
|
315,000 | 309,488 | ||||||
Building Materials Corp. of America,
Sr. Sec. Gtd. Notes, 7.50%, 03/15/20(b) |
170,000 | 184,875 | ||||||
Sr. Unsec. Notes,
6.88%, 08/15/18(b)
|
575,000 | 621,000 | ||||||
Gibraltar Industries Inc.Series B, Sr. Unsec. Gtd.
Sub. Global Notes, 8.00%, 12/01/15
|
345,000 | 352,978 | ||||||
Nortek Inc, Sr. Unsec. Gtd. Global Notes,
8.50%, 04/15/21 |
625,000 | 607,031 | ||||||
10.00%, 12/01/18
|
195,000 | 206,700 | ||||||
Ply Gem Industries Inc., Sr. Sec. Gtd. Global Notes,
8.25%, 02/15/18 |
300,000 | 292,125 | ||||||
Sr. Unsec. Gtd. Sub. Global Notes,
13.13%, 07/15/14
|
145,000 | 143,550 | ||||||
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec.
Notes,
8.63%, 12/01/17(b)
|
486,000 | 527,918 | ||||||
USG Corp.,
Sr. Unsec. Gtd. Notes, |
||||||||
8.38%, 10/15/18(b)
|
30,000 | 30,675 | ||||||
9.75%, 08/01/14(b)
|
670,000 | 724,437 | ||||||
Sr. Unsec. Notes,
9.75%, 01/15/18 |
175,000 | 170,625 | ||||||
4,319,002 | ||||||||
Cable & Satellite1.79% |
||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., Sr. Unsec. Gtd.
Notes, 6.63%, 01/31/22
|
35,000 | 37,625 | ||||||
Hughes Satellite Systems Corp.,
Sr. Sec. Gtd. Global Notes, 6.50%, 06/15/19 |
120,000 | 127,800 | ||||||
Sr. Unsec. Gtd. Global Notes,
7.63%, 06/15/21
|
70,000 | 76,300 | ||||||
Kabel BW GmbH (Germany), Sr. Sec. Gtd. Notes,
7.50%, 03/15/19(b)
|
525,000 | 565,687 | ||||||
Nara Cable Funding Ltd. (Spain), Sr. Sec. Gtd. Notes,
8.88%, 12/01/18(b)
|
200,000 | 193,500 | ||||||
ViaSat Inc., Sr. Unsec. Gtd. Notes,
6.88%, 06/15/20(b)
|
100,000 | 103,500 | ||||||
1,104,412 | ||||||||
Casinos & Gaming5.96% |
||||||||
Ameristar Casinos Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 04/15/21
|
270,000 | 292,950 | ||||||
Caesars Entertainment Operating Co. Inc.,
Sec. Gtd. Global Notes, 12.75%, 04/15/18 |
260,000 | 224,900 | ||||||
Sr. Unsec. Gtd. Global Bonds,
5.63%, 06/01/15
|
295,000 | 228,625 | ||||||
Chester Downs & Marina LLC, Sr. Sec. Gtd. Sub. Notes,
9.25%, 02/01/20(b)
|
35,000 | 36,750 | ||||||
CityCenter Holdings LLC/CityCenter Finance Corp.,
Sec. Gtd. Global PIK Notes, 10.75%, 01/15/17 |
263,201 | 285,573 | ||||||
Sr. Sec. Gtd. Global Notes,
7.63%, 01/15/16
|
130,000 | 138,125 | ||||||
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes,
7.63%, 07/15/13
|
105,000 | 105,131 | ||||||
MGM Resorts International,
Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15 |
295,000 | 300,163 | ||||||
Sr. Unsec. Gtd. Notes,
8.63%, 02/01/19(b)
|
50,000 | 53,375 | ||||||
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes,
8.63%, 08/01/17
|
145,000 | 158,231 | ||||||
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global
Notes, 9.25%, 06/15/19
|
350,000 | 387,625 | ||||||
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes,
8.25%, 12/01/18(b)
|
245,000 | 248,675 | ||||||
Snoqualmie Entertainment Authority,
Sr. Sec. Floating Rate Notes, 4.53%, 02/01/14(b)(e) |
200,000 | 185,500 | ||||||
Sr. Sec. Notes,
9.13%, 02/01/15(b)
|
405,000 | 400,950 | ||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First
Mortgage Global Notes, 7.75%, 08/15/20
|
560,000 | 635,600 | ||||||
3,682,173 | ||||||||
Coal & Consumable Fuels0.58% |
||||||||
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 04/01/20
|
90,000 | 98,325 | ||||||
Peabody Energy Corp., Sr. Unsec. Gtd. Notes,
6.00%, 11/15/18(b)
|
180,000 | 189,675 | ||||||
Westmore Coal Co./Westmoreland Partners, Sr. Sec. Notes,
10.75%, 02/01/18(b)
|
70,000 | 67,725 | ||||||
355,725 | ||||||||
Commodity Chemicals0.77% |
||||||||
Westlake Chemical Corp., Sr. Unsec. Gtd. Notes,
6.63%, 01/15/16
|
465,000 | 475,172 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Communications Equipment0.76% |
||||||||
Avaya Inc.,
Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b) |
$ | 345,000 | $ | 349,744 | ||||
Sr. Unsec. Gtd. Global Notes,
9.75%, 11/01/15
|
120,000 | 120,900 | ||||||
470,644 | ||||||||
Computer & Electronics Retail0.41% |
||||||||
Rent-A-Center
Inc., Sr. Unsec. Gtd Global Notes, 6.63%, 11/15/20
|
240,000 | 251,400 | ||||||
Computer Storage & Peripherals0.66% |
||||||||
Seagate HDD Cayman,
Sr. Unsec. Gtd. Global Notes, 7.75%, 12/15/18 |
275,000 | 311,094 | ||||||
Sr. Unsec. Gtd. Notes,
7.00%, 11/01/21(b)
|
85,000 | 94,350 | ||||||
405,444 | ||||||||
Construction & Engineering2.11% |
||||||||
Dycom Investments Inc., Sr. Unsec. Gtd. Global Notes,
7.13%, 01/15/21
|
375,000 | 385,781 | ||||||
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17
|
245,000 | 252,350 | ||||||
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes,
7.63%, 11/01/18
|
660,000 | 666,600 | ||||||
1,304,731 | ||||||||
Construction & Farm Machinery & Heavy Trucks2.04% |
||||||||
Case New Holland Inc., Sr. Unsec. Gtd. Global Notes,
7.88%, 12/01/17
|
255,000 | 301,537 | ||||||
Commercial Vehicle Group, Inc., Sec. Gtd. Notes,
7.88%, 04/15/19(b)
|
275,000 | 281,188 | ||||||
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes,
8.50%, 11/01/20
|
145,000 | 161,675 | ||||||
Navistar International Corp., Sr. Unsec. Gtd. Notes,
8.25%, 11/01/21
|
234,000 | 256,815 | ||||||
Titan International Inc., Sr. Sec. Gtd. Global Notes,
7.88%, 10/01/17
|
240,000 | 256,200 | ||||||
1,257,415 | ||||||||
Construction Materials1.98% |
||||||||
Cemex Finance LLC, Sr. Sec. Gtd. Bonds,
9.50%, 12/14/16(b)
|
510,000 | 505,067 | ||||||
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes,
9.25%, 08/15/20
|
750,000 | 720,000 | ||||||
1,225,067 | ||||||||
Consumer Finance4.52% |
||||||||
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/20
|
1,210,000 | 1,337,050 | ||||||
8.00%, 03/15/20
|
80,000 | 91,000 | ||||||
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 5.00%, 05/15/18
|
485,000 | 512,888 | ||||||
5.88%, 08/02/21
|
400,000 | 450,000 | ||||||
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes,
10.38%, 12/15/16
|
360,000 | 400,500 | ||||||
2,791,438 | ||||||||
Data Processing & Outsourced Services1.19% |
||||||||
CoreLogic, Inc., Sr. Unsec. Gtd. Notes,
7.25%, 06/01/21(b)
|
420,000 | 424,200 | ||||||
First Data Corp., Sr. Sec. Gtd. Notes,
7.38%, 06/15/19(b)
|
120,000 | 122,700 | ||||||
SunGard Data Systems Inc.,
Sr. Unsec. Gtd. Global Notes, |
||||||||
7.38%, 11/15/18
|
105,000 | 113,400 | ||||||
7.63%, 11/15/20
|
70,000 | 75,950 | ||||||
736,250 | ||||||||
Department Stores0.44% |
||||||||
Sears Holdings Corp., Sr. Sec. Gtd. Global Notes,
6.63%, 10/15/18
|
310,000 | 269,700 | ||||||
Distillers & Vintners0.83% |
||||||||
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes,
9.13%, 12/01/16(b)
|
250,000 | 180,000 | ||||||
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes,
7.25%, 05/15/17
|
295,000 | 334,456 | ||||||
514,456 | ||||||||
Diversified Banks0.16% |
||||||||
RBS Capital Trust II, Jr. Unsec. Gtd. Sub. Global Bonds,
6.43%(f)(g)
|
140,000 | 97,300 | ||||||
Diversified Metals & Mining0.51% |
||||||||
Midwest Vanadium Pty. Ltd. (Australia), Sr. Sec. Gtd. Mortgage
Notes,
11.50%, 02/15/18(b)
|
240,000 | 169,209 | ||||||
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Notes,
9.50%, 07/18/18(b)
|
140,000 | 144,224 | ||||||
313,433 | ||||||||
Electrical Components & Equipment0.31% |
||||||||
Polypore International Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 11/15/17
|
180,000 | 189,900 | ||||||
Electronic Manufacturing Services0.48% |
||||||||
Sanmina-SCI Corp., Sr. Unsec. Gtd. Notes,
7.00%, 05/15/19(b)
|
290,000 | 296,163 | ||||||
Environmental & Facilities Services0.21% |
||||||||
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Global Notes,
10.75%, 08/15/18
|
130,000 | 130,650 | ||||||
Food Retail0.31% |
||||||||
Simmons Foods Inc., Sec. Notes,
10.50%, 11/01/17(b)
|
200,000 | 191,500 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Forest Products0.33% |
||||||||
Millar Western Forest Products Ltd. (Canada), Sr. Unsec. Notes,
8.50%, 04/01/21(b)
|
$ | 250,000 | $ | 190,625 | ||||
Sino-Forest Corp. (Canada), Sr. Unsec. Gtd. Notes,
6.25%, 10/21/17(b)
|
30,000 | 10,200 | ||||||
200,825 | ||||||||
Gas Utilities0.75% |
||||||||
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global
Notes, 6.50%, 05/01/21
|
275,000 | 245,437 | ||||||
Suburban Propane Partners, L.P./Suburban Energy Finance Corp.,
Sr. Unsec. Notes, 7.38%, 03/15/20
|
205,000 | 219,350 | ||||||
464,787 | ||||||||
Health Care Equipment0.52% |
||||||||
DJO Finance LLC/Corp.,
Sr. Unsec. Gtd. Global Notes, |
||||||||
7.75%, 04/15/18
|
35,000 | 30,100 | ||||||
10.88%, 11/15/14
|
220,000 | 223,850 | ||||||
Sr. Unsec. Gtd. Sub. Global Notes,
9.75%, 10/15/17 |
85,000 | 65,556 | ||||||
319,506 | ||||||||
Health Care Facilities3.71% |
||||||||
HCA, Inc., Sr. Sec. Gtd. Global Notes,
5.88%, 03/15/22
|
150,000 | 154,125 | ||||||
7.88%, 02/15/20
|
640,000 | 707,200 | ||||||
HealthSouth Corp., Sr. Unsec. Gtd. Notes,
7.25%, 10/01/18 |
270,000 | 292,275 | ||||||
7.75%, 09/15/22
|
90,000 | 98,325 | ||||||
8.13%, 02/15/20
|
70,000 | 77,350 | ||||||
Select Medical Holdings Corp., Sr. Unsec. Floating Rate Global
Notes,
6.27%, 09/15/15(e)
|
135,000 | 120,150 | ||||||
Tenet Healthcare Corp.,
Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18 |
350,000 | 407,312 | ||||||
Sr. Unsec. Global Notes,
|
||||||||
8.00%, 08/01/20
|
60,000 | 64,050 | ||||||
9.25%, 02/01/15
|
330,000 | 369,600 | ||||||
2,290,387 | ||||||||
Health Care Services0.45% |
||||||||
Radnet Management Inc., Sr. Unsec. Gtd. Global Notes,
10.38%, 04/01/18
|
220,000 | 211,750 | ||||||
Universal Hospital Services Inc., Sec. Gtd. Variable Rate Global
Notes,
8.50%, 06/01/15(e)
|
65,000 | 67,113 | ||||||
278,863 | ||||||||
Health Care Technology0.58% |
||||||||
MedAssets Inc., Sr. Unsec. Gtd. Global Notes,
8.00%, 11/15/18
|
335,000 | 360,962 | ||||||
Homebuilding2.58% |
||||||||
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 07/15/15 |
310,000 | 291,400 | ||||||
8.13%, 06/15/16
|
210,000 | 196,350 | ||||||
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes,
10.63%, 10/15/16
|
590,000 | 553,125 | ||||||
KB Home, Sr. Unsec. Gtd. Notes, 8.00%, 03/15/20
|
90,000 | 91,125 | ||||||
Lennar Corp., Sr. Unsec. Gtd. Global Notes, 6.95%, 06/01/18
|
265,000 | 280,900 | ||||||
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes,
8.63%, 11/15/18
|
95,000 | 90,488 | ||||||
Toll Brothers Finance Corp., Sr. Unsec. Gtd. Notes,
5.88%, 02/15/22
|
85,000 | 88,644 | ||||||
1,592,032 | ||||||||
Hotels, Resorts & Cruise Lines0.09% |
||||||||
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes,
7.25%, 03/15/18
|
50,000 | 54,125 | ||||||
Household Products0.39% |
||||||||
Central Garden & Pet Co., Sr. Gtd. Sub. Notes,
8.25%, 03/01/18
|
235,000 | 240,875 | ||||||
Housewares & Specialties0.24% |
||||||||
American Greetings Corp., Sr. Unsec. Gtd. Notes,
7.38%, 12/01/21
|
145,000 | 150,438 | ||||||
Independent Power Producers & Energy Traders2.66% |
||||||||
AES Corp. (The), Sr. Unsec. Global Notes, 7.75%, 10/15/15
|
900,000 | 1,012,500 | ||||||
AES Red Oak LLCSeries A, Sr. Sec. Bonds,
8.54%, 11/30/19
|
95,511 | 98,615 | ||||||
Calpine Corp.,
Sr. Sec. Gtd. Notes, 7.50%, 02/15/21(b) |
90,000 | 97,875 | ||||||
Sr. Sec. Notes,
7.25%, 10/15/17(b)
|
265,000 | 282,225 | ||||||
NRG Energy Inc., Sr. Unsec. Gtd. Global Notes,
7.63%, 01/15/18
|
150,000 | 153,000 | ||||||
1,644,215 | ||||||||
Industrial Machinery1.00% |
||||||||
Cleaver-Brooks Inc., Sr. Sec. Notes,
12.25%, 05/01/16(b)
|
255,000 | 266,475 | ||||||
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes,
7.88%, 02/01/19
|
25,000 | 26,312 | ||||||
SPX Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 09/01/17
|
290,000 | 324,075 | ||||||
616,862 | ||||||||
Industrial REITs0.72% |
||||||||
DuPont Fabros Technology L.P., Sr. Unsec. Gtd. Global Notes,
8.50%, 12/15/17
|
400,000 | 444,000 | ||||||
Integrated Telecommunication Services0.28% |
||||||||
Integra Telecom Holdings Inc., Sr. Sec. Notes,
10.75%, 04/15/16(b)
|
195,000 | 170,625 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Internet Software & Services0.82% |
||||||||
Equinix Inc., Sr. Unsec. Notes,
7.00%, 07/15/21 |
$ | 205,000 | $ | 228,062 | ||||
8.13%, 03/01/18
|
245,000 | 275,625 | ||||||
503,687 | ||||||||
Investment Banking & Brokerage0.59% |
||||||||
Cantor Fitzgerald L.P., Bonds,
7.88%, 10/15/19(b)
|
275,000 | 274,685 | ||||||
E*Trade Financial Corp., Sr. Unsec. Notes, 6.75%, 06/01/16
|
90,000 | 91,575 | ||||||
366,260 | ||||||||
Leisure Facilities0.12% |
||||||||
Speedway Motorsports Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 02/01/19
|
70,000 | 73,588 | ||||||
Leisure Products0.59% |
||||||||
Toys R US-Delaware Inc., Sr. Sec. Gtd. Notes,
7.38%, 09/01/16(b)
|
350,000 | 361,375 | ||||||
Life Sciences Tools & Services0.26% |
||||||||
Patheon Inc. (Canada), Sr. Sec. Gtd. Notes,
8.63%, 04/15/17(b)
|
175,000 | 158,375 | ||||||
Marine0.21% |
||||||||
Navios Maritime Acquisition Corp./Navios Acquisition Finance
U.S. Inc., Sr. Sec. Gtd. Global Notes, 8.63%, 11/01/17
|
35,000 | 29,225 | ||||||
Stena A.B. (Sweden), Sr. Unsec. Global Notes,
7.00%, 12/01/16
|
105,000 | 99,094 | ||||||
128,319 | ||||||||
Metal & Glass Containers0.07% |
||||||||
Ball Corp., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/22
|
45,000 | 46,125 | ||||||
Movies & Entertainment1.57% |
||||||||
AMC Entertainment Inc., Sr. Unsec. Gtd. Global Notes,
8.75%, 06/01/19
|
455,000 | 476,044 | ||||||
NAI Entertainment Holdings LLC, Sr. Sec. Notes,
8.25%, 12/15/17(b)
|
445,000 | 492,837 | ||||||
968,881 | ||||||||
Multi-Line Insurance2.62% |
||||||||
American International Group Inc., Jr. Unsec. Sub. Global Deb.,
8.18%, 05/15/58(e)
|
75,000 | 79,125 | ||||||
Fairfax Financial Holdings Ltd. (Canada), Sr. Unsec. Notes,
5.80%, 05/15/21(b)
|
135,000 | 126,056 | ||||||
Hartford Financial Services Group Inc., Jr. Unsec. Sub. Deb.,
8.13%, 06/15/38(e)
|
260,000 | 278,200 | ||||||
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds,
7.80%, 03/15/37
(Acquired 09/16/10-10/01/10;
Cost $571,290)(b)
|
599,000 | 587,020 | ||||||
Nationwide Mutual Insurance Co., Unsec. Sub. Notes,
9.38%, 08/05/39(b)
|
435,000 | 545,169 | ||||||
1,615,570 | ||||||||
Multi-Sector Holdings0.34% |
||||||||
Reynolds Group Issuer Inc./LLC/Luxembourg S.A., Sr. Sec. Gtd.
Notes,
7.13%, 04/15/19(b)
|
200,000 | 212,500 | ||||||
Office Services & Supplies0.26% |
||||||||
IKON Office Solutions, Inc., Sr. Unsec. Notes,
6.75%, 12/01/25
|
105,000 | 102,900 | ||||||
Interface Inc., Sr. Unsec. Gtd. Global Notes,
7.63%, 12/01/18
|
55,000 | 60,638 | ||||||
163,538 | ||||||||
Oil & Gas Drilling0.05% |
||||||||
Atwood Oceanics Inc., Sr. Unsec. Notes, 6.50%, 02/01/20
|
30,000 | 31,875 | ||||||
Oil & Gas Equipment & Services1.39% |
||||||||
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/17
|
315,000 | 331,537 | ||||||
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes,
6.75%, 03/01/21
|
365,000 | 384,162 | ||||||
SESI, LLC, Sr. Unsec. Gtd. Global Notes, 6.38%, 05/01/19
|
135,000 | 142,763 | ||||||
858,462 | ||||||||
Oil & Gas Exploration & Production7.48% |
||||||||
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20
|
95,000 | 101,413 | ||||||
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 09/01/21 |
295,000 | 320,075 | ||||||
8.88%, 02/01/17
|
110,000 | 115,500 | ||||||
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes,
6.13%, 02/15/21 |
445,000 | 450,562 | ||||||
6.63%, 08/15/20
|
95,000 | 99,394 | ||||||
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17
|
215,000 | 224,675 | ||||||
Continental Resources Inc.,
Sr. Unsec. Gtd. Global Notes, |
||||||||
7.13%, 04/01/21
|
80,000 | 89,500 | ||||||
7.38%, 10/01/20
|
135,000 | 150,525 | ||||||
8.25%, 10/01/19
|
130,000 | 146,250 | ||||||
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18
|
430,000 | 385,925 | ||||||
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes,
7.25%, 06/15/19
|
180,000 | 181,800 | ||||||
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes,
11.88%, 11/15/14
|
530,000 | 562,794 | ||||||
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes,
7.13%, 05/15/18
|
210,000 | 224,700 | ||||||
OGX Petroleo e Gas Participacoes S.A. (Brazil), Sr. Unsec. Gtd.
Notes,
8.50%, 06/01/18(b)
|
205,000 | 214,297 | ||||||
Plains Exploration & Production Co.,
Sr. Unsec. Gtd. Notes, |
||||||||
7.63%, 06/01/18
|
235,000 | 253,800 | ||||||
8.63%, 10/15/19
|
45,000 | 50,850 | ||||||
QEP Resources Inc., Sr. Unsec. Notes, 5.38%, 10/01/22
|
150,000 | 152,250 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Oil & Gas Exploration & Production(continued) |
||||||||
Range Resources Corp.,
Sr. Unsec. Gtd. Sub. Notes, |
||||||||
5.00%, 08/15/22
|
$ | 45,000 | $ | 45,675 | ||||
5.75%, 06/01/21
|
305,000 | 327,112 | ||||||
SM Energy Co.,
Sr. Unsec. Global Notes, 6.63%, 02/15/19 |
135,000 | 145,800 | ||||||
Sr. Unsec. Notes,
6.50%, 11/15/21(b)
|
50,000 | 54,500 | ||||||
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes,
6.50%, 10/01/18
|
140,000 | 150,675 | ||||||
WPX Energy Inc., Sr. Unsec. Notes,
6.00%, 01/15/22(b)
|
165,000 | 170,775 | ||||||
4,618,847 | ||||||||
Oil & Gas Refining & Marketing0.85% |
||||||||
United Refining Co., Sr. Sec. Gtd. Global Notes,
10.50%, 02/28/18
|
540,000 | 525,150 | ||||||
Oil & Gas Storage & Transportation4.74% |
||||||||
Atlas Pipeline Partners L.P./Atlas Pipeline Finance Corp., Sr.
Unsec. Gtd. Notes,
8.75%, 06/15/18(b)
|
195,000 | 209,869 | ||||||
Chesapeake Midstream Partners L.P./CHKM Finance Corp., Sr.
Unsec. Gtd. Notes,
|
||||||||
5.88%, 04/15/21(b)
|
230,000 | 235,175 | ||||||
6.13%, 07/15/22(b)
|
25,000 | 25,938 | ||||||
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd.
Notes, 7.13%, 04/01/21
|
545,000 | 579,062 | ||||||
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes,
7.50%, 10/15/20
|
290,000 | 333,137 | ||||||
Holly Energy Partners L.P./Holly Energy Finance Corp., Sr.
Unsec. Gtd. Notes,
6.50%, 03/01/20(b)
|
30,000 | 30,750 | ||||||
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes,
6.88%, 08/01/21
|
180,000 | 174,600 | ||||||
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr.
Unsec. Gtd. Notes,
|
||||||||
6.25%, 06/15/22
|
140,000 | 151,200 | ||||||
6.50%, 08/15/21
|
115,000 | 125,063 | ||||||
Overseas Shipholding Group, Inc., Sr. Unsec. Notes,
8.13%, 03/30/18
|
275,000 | 178,062 | ||||||
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr.
Unsec. Gtd. Notes, 6.88%, 12/01/18
|
205,000 | 222,681 | ||||||
Sabine Pass LNG, L.P, Sr. Sec Gtd. Global Notes,
7.50%, 11/30/16
|
100,000 | 107,750 | ||||||
Targa Resources Partners L.P./Targa Resources Partners Finance
Corp.,
Sr. Unsec. Gtd. Global Notes, 6.88%, 02/01/21 |
290,000 | 311,025 | ||||||
Sr. Unsec. Gtd. Notes,
6.38%, 08/01/22(b)
|
65,000 | 68,900 | ||||||
Teekay Corp. (Canada), Sr. Unsec. Global Notes,
8.50%, 01/15/20
|
170,000 | 175,950 | ||||||
2,929,162 | ||||||||
Other Diversified Financial Services3.10% |
||||||||
International Lease Finance Corp.,
Sr. Sec. Notes, |
||||||||
6.75%, 09/01/16(b)
|
120,000 | 130,425 | ||||||
7.13%, 09/01/18(b)
|
175,000 | 195,508 | ||||||
Sr. Unsec. Global Notes,
|
||||||||
5.75%, 05/15/16
|
55,000 | 56,066 | ||||||
6.25%, 05/15/19
|
90,000 | 92,025 | ||||||
8.75%, 03/15/17
|
1,057,000 | 1,196,392 | ||||||
Sr. Unsec. Medium-Term Notes,
5.63%, 09/20/13
|
115,000 | 117,875 | ||||||
Sr. Unsec. Notes,
8.25%, 12/15/20
|
115,000 | 128,584 | ||||||
1,916,875 | ||||||||
Packaged Foods & Meats0.33% |
||||||||
Del Monte Corp., Sr. Unsec. Gtd. Global Notes,
7.63%, 02/15/19
|
175,000 | 175,875 | ||||||
Post Holdings Inc., Sr. Unsec. Gtd. Notes,
7.38%, 02/15/22(b)
|
30,000 | 32,175 | ||||||
208,050 | ||||||||
Paper Packaging0.12% |
||||||||
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes,
7.88%, 01/15/20
|
70,000 | 71,925 | ||||||
Paper Products2.45% |
||||||||
Boise Cascade LLC, Sr. Unsec. Gtd. Sub. Global Notes,
7.13%, 10/15/14
|
610,000 | 615,719 | ||||||
Clearwater Paper Corp., Sr. Unsec. Gtd. Global Notes,
7.13%, 11/01/18
|
210,000 | 223,912 | ||||||
Mercer International Inc., Sr. Unsec. Gtd. Global Notes,
9.50%, 12/01/17
|
205,000 | 215,250 | ||||||
NewPage Corp., Sr. Sec. Gtd. Global Notes, 11.38%, 12/31/14
|
215,000 | 129,538 | ||||||
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes,
7.13%, 05/01/16
|
320,000 | 327,600 | ||||||
1,512,019 | ||||||||
Personal Products0.55% |
||||||||
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18
|
305,000 | 337,788 | ||||||
Pharmaceuticals1.45% |
||||||||
Aptalis Pharma Inc., Sr. Unsec. Gtd. Global Notes,
12.75%, 03/01/16
|
212,000 | 227,105 | ||||||
Elan Finance PLC/Corp. (Ireland), Sr. Unsec. Gtd. Global Notes,
8.75%, 10/15/16
|
145,000 | 160,950 | ||||||
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Global
Notes, 7.00%, 12/15/20
|
45,000 | 49,613 | ||||||
Mylan Inc., Sr. Unsec. Gtd. Notes,
6.00%, 11/15/18(b)
|
435,000 | 456,206 | ||||||
893,874 | ||||||||
Property & Casualty Insurance0.30% |
||||||||
XL Group PLC (Ireland)Series E, Jr. Sub. Variable
Rate Global Pfd. Bonds,
6.50%(e)(f)
|
220,000 | 185,900 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Real Estate Services0.37% |
||||||||
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Global Notes,
6.63%, 10/15/20
|
$ | 215,000 | $ | 229,513 | ||||
Regional Banks2.93% |
||||||||
AmSouth Bancorp., Unsec. Sub. Deb., 6.75%, 11/01/25
|
75,000 | 65,625 | ||||||
BB&T Capital Trust II, Jr. Unsec. Ltd. Gtd. Sub.
Global Notes, 6.75%, 06/07/36
|
170,000 | 173,624 | ||||||
CIT Group Inc.,
Sr. Sec. Gtd. Bonds, 7.00%, 05/02/17(b) |
365,000 | 366,369 | ||||||
Sec. Gtd. Notes,
5.50%, 02/15/19(b)
|
100,000 | 102,750 | ||||||
Regions Financial Corp.,
Sr. Unsec. Notes, 5.75%, 06/15/15 |
250,000 | 256,250 | ||||||
Unsec. Sub. Notes,
7.38%, 12/10/37
|
415,000 | 381,800 | ||||||
Synovus Financial Corp.,
Sr. Unsec. Global Notes, 7.88%, 02/15/19 |
155,000 | 160,425 | ||||||
Unsec. Sub. Global Notes,
5.13%, 06/15/17
|
330,000 | 301,950 | ||||||
1,808,793 | ||||||||
Research & Consulting Services0.44% |
||||||||
FTI Consulting Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 10/01/20
|
250,000 | 268,750 | ||||||
Semiconductor Equipment1.28% |
||||||||
Amkor Technology Inc., Sr. Unsec. Global Notes,
6.63%, 06/01/21
|
130,000 | 136,338 | ||||||
7.38%, 05/01/18
|
250,000 | 271,562 | ||||||
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes,
6.50%, 05/15/19(b)
|
365,000 | 379,600 | ||||||
787,500 | ||||||||
Semiconductors1.07% |
||||||||
Freescale Semiconductor Inc.,
Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b) |
361,000 | 401,612 | ||||||
Sr. Unsec. Gtd. Global Notes,
|
||||||||
8.05%, 02/01/20
|
225,000 | 223,875 | ||||||
10.75%, 08/01/20
|
30,000 | 33,225 | ||||||
658,712 | ||||||||
Specialized Finance0.11% |
||||||||
Aircastle Ltd., Sr. Notes,
9.75%, 08/01/18(b)
|
60,000 | 67,800 | ||||||
Specialized REITs0.88% |
||||||||
Host Hotels & Resorts L.P., Sr. Gtd. Global Notes,
6.00%, 11/01/20
|
205,000 | 223,963 | ||||||
MPT Operating Partnership L.P./MPT Finance Corp., Sr. Unsec.
Gtd. Global Notes, 6.88%, 05/01/21
|
140,000 | 149,800 | ||||||
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Global Notes,
6.75%, 10/15/22
|
155,000 | 167,206 | ||||||
540,969 | ||||||||
Specialty Chemicals2.42% |
||||||||
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18
|
270,000 | 284,175 | ||||||
Huntsman International LLC,
Sr. Unsec. Gtd. Global Notes, 5.50%, 06/30/16 |
260,000 | 260,325 | ||||||
Sr. Unsec. Gtd. Sub. Global Notes,
8.63%, 03/15/21
|
135,000 | 153,394 | ||||||
NewMarket Corp., Sr. Unsec. Gtd. Global Notes,
7.13%, 12/15/16
|
415,000 | 428,228 | ||||||
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20
|
340,000 | 367,200 | ||||||
1,493,322 | ||||||||
Specialty Stores0.47% |
||||||||
Michaels Stores Inc., Sr. Unsec. Gtd. Global Notes,
7.75%, 11/01/18
|
270,000 | 287,888 | ||||||
Steel1.30% |
||||||||
APERAM (Luxembourg), Sr. Unsec. Notes,
7.38%, 04/01/16(b)
|
150,000 | 142,125 | ||||||
ArcelorMittal (Luxembourg), Sr. Unsec. Global Notes,
6.25%, 02/25/22 |
90,000 | 93,183 | ||||||
4.50%, 02/25/17
|
165,000 | 170,834 | ||||||
FMG Resources Pty. Ltd. (Australia),
Sr. Unsec. Gtd. Notes, |
||||||||
6.38%, 02/01/16(b)
|
260,000 | 270,412 | ||||||
7.00%, 11/01/15(b)
|
35,000 | 37,275 | ||||||
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18
|
85,000 | 88,613 | ||||||
802,442 | ||||||||
Systems Software0.86% |
||||||||
Allen Systems Group Inc., Sec. Gtd. Notes, 10.50%, 11/15/16
(Acquired 11/12/10-01/06/11;
Cost $605,475)(b)
|
600,000 | 534,000 | ||||||
Tires & Rubber0.76% |
||||||||
Cooper Tire & Rubber Co., Sr. Unsec. Notes,
8.00%, 12/15/19
|
240,000 | 258,300 | ||||||
Goodyear Tire & Rubber Co. (The),
Sr. Unsec. Gtd. Notes, |
||||||||
7.00%, 05/15/22
|
75,000 | 76,594 | ||||||
8.25%, 08/15/20
|
125,000 | 136,875 | ||||||
471,769 | ||||||||
Trading Companies & Distributors3.52% |
||||||||
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec.
Gtd. Global Notes, 8.25%, 01/15/19
|
420,000 | 441,525 | ||||||
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes,
8.38%, 07/15/16
|
560,000 | 581,000 | ||||||
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes,
6.75%, 04/15/19 |
230,000 | 242,075 | ||||||
7.38%, 01/15/21
|
340,000 | 370,600 | ||||||
7.50%, 10/15/18
|
175,000 | 189,437 | ||||||
Interline Brands, Inc., Sr. Unsec. Gtd. Global Notes,
7.00%, 11/15/18
|
115,000 | 121,900 | ||||||
RSC Equipment Rental Inc./RSC Holdings III LLC, Sr. Unsec.
Global Notes, 8.25%, 02/01/21
|
105,000 | 111,300 | ||||||
Principal |
||||||||
Amount | Value | |||||||
Trading Companies & Distributors(continued) |
||||||||
UR Financing Escrow Corp.,
Sec. Gtd. Notes, 5.75%, 07/15/18(b) |
$ | 25,000 | $ | 25,688 | ||||
Sr. Unsec. Notes,
7.63%, 04/15/22(b)
|
85,000 | 87,762 | ||||||
2,171,287 | ||||||||
Trucking0.13% |
||||||||
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec.
Gtd. Global Notes, 9.75%, 03/15/20
|
75,000 | 82,125 | ||||||
Wireless Telecommunication Services8.13% |
||||||||
Clearwire Communications LLC/Clearwire Finance, Inc., Sr. Sec.
Gtd. Notes,
|
||||||||
12.00%, 12/01/15(b)
|
465,000 | 456,862 | ||||||
14.75%, 12/01/16(b)
|
50,000 | 52,625 | ||||||
Cricket Communications, Inc.,
Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16 |
195,000 | 207,431 | ||||||
Sr. Unsec. Gtd. Global Notes,
7.75%, 10/15/20
|
505,000 | 506,262 | ||||||
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes,
8.88%, 01/15/15(b)
|
100,000 | 102,375 | ||||||
Digicel Ltd. (Bermuda), Sr. Unsec. Notes,
8.25%, 09/01/17(b)
|
355,000 | 378,962 | ||||||
Intelsat Jackson Holdings S.A. (Luxembourg),
Sr. Unsec. Gtd. Global Notes, |
||||||||
7.25%, 10/15/20
|
880,000 | 932,800 | ||||||
7.50%, 04/01/21
|
125,000 | 132,813 | ||||||
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes,
6.63%, 11/15/20 |
255,000 | 263,287 | ||||||
7.88%, 09/01/18
|
235,000 | 251,891 | ||||||
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes,
6.90%, 05/01/19
|
275,000 | 243,375 | ||||||
Sprint Nextel Corp.,
Sr. Unsec. Gtd. Notes, |
||||||||
7.00%, 03/01/20(b)
|
95,000 | 97,019 | ||||||
9.00%, 11/15/18(b)
|
200,000 | 224,000 | ||||||
Sr. Unsec. Notes,
|
||||||||
8.38%, 08/15/17
|
30,000 | 29,513 | ||||||
11.50%, 11/15/21(b)
|
75,000 | 82,219 | ||||||
VimpelCom (Ireland),
Sec. Loan Participation Notes, 7.75%, 02/02/21(b) |
200,000 | 200,500 | ||||||
Sec. Notes,
6.49%, 02/02/16(b)
|
200,000 | 204,500 | ||||||
Wind Acquisition Finance S.A. (Luxembourg),
Sr. Sec. Gtd. Notes, |
||||||||
7.25%, 02/15/18(b)
|
400,000 | 394,000 | ||||||
11.75%, 07/15/17(b)
|
250,000 | 258,125 | ||||||
5,018,559 | ||||||||
Total U.S. Dollar Denominated Bonds and Notes
(Cost $71,501,190)
|
73,687,875 | |||||||
Non-U.S. Dollar Denominated Bonds & Notes12.95%(h) |
||||||||
Canada0.40% |
||||||||
Gateway Casinos & Entertainment Ltd., Sec. Gtd. Notes,
8.88%, 11/15/17(b)
|
CAD | 235,000 | 247,487 | |||||
Croatia0.47% |
||||||||
Agrokor D.D., Sr. Unsec. Gtd. Notes,
10.00%, 12/07/16(b)
|
EUR | 210,000 | 291,630 | |||||
Cyprus0.40% |
||||||||
Eileme 2 AB, Sr. Gtd. Notes,
11.75%, 01/31/20(b)
|
EUR | 180,000 | 246,971 | |||||
Czech Republic0.22% |
||||||||
CET 21 spol sro, Sr. Sec. Gtd. Notes,
9.00%, 11/01/17(b)
|
EUR | 100,000 | 135,208 | |||||
Ireland1.27% |
||||||||
Ardagh Packaging Finance PLC, Sr. Sec. Gtd. Notes,
9.25%, 10/15/20(b)
|
EUR | 405,000 | 554,337 | |||||
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes,
5.75%, 06/16/14
|
EUR | 170,000 | 229,430 | |||||
783,767 | ||||||||
Italy0.27% |
||||||||
Lottomatica S.p.AREGS, Jr. Unsec. Sub. Variable Rate
Bonds,
8.25%, 03/31/66(b)(e)
|
EUR | 135,000 | 164,098 | |||||
Luxembourg3.31% |
||||||||
Boardriders S.A., Sr. Unsec. Gtd. Notes,
8.88%, 12/15/17(b)
|
EUR | 100,000 | 133,876 | |||||
Cirsa Funding Luxembourg S.A.,
Sr. Unsec. Gtd. Notes, 8.75%, 05/15/18(b) |
EUR | 130,000 | 167,545 | |||||
REGS, Sr. Gtd. Notes,
8.75%, 05/15/18(b)
|
EUR | 200,000 | 257,761 | |||||
Codere Finance Luxembourg S.A., Sr. Sec. Gtd. Notes,
8.25%, 06/15/15(b)
|
EUR | 200,000 | 266,420 | |||||
ConvaTec Healthcare S.A.,
Sr. Sec. Gtd. Notes, 7.38%, 12/15/17(b) |
EUR | 100,000 | 139,537 | |||||
Sr. Unsec. Gtd. Notes,
10.88%, 12/15/18(b)
|
EUR | 100,000 | 134,542 | |||||
Mark IV Europe Lux SCA/Mark IV USA SCA, Sr. Sec. Gtd. Notes,
8.88%, 12/15/17(b)
|
EUR | 270,000 | 374,054 | |||||
TMD Friction Finance S.A., Sr. Sec. Gtd. Bonds,
10.75%, 05/15/17(b)
|
EUR | 260,000 | 368,859 | |||||
Wind Acquisition Finance S.A., Sr. Gtd. Notes,
11.75%, 07/15/17(b)
|
EUR | 50,000 | 65,772 | |||||
Xefin Lux SCA, Sr. Sec. Notes,
8.00%, 06/01/18(b)
|
EUR | 100,000 | 134,542 | |||||
2,042,908 | ||||||||
Netherlands1.49% |
||||||||
Carlson Wagonlit B.V. (Netherlands)- REGS, Sr. Sec. Gtd.
Floating Rate Notes,
6.88%, 05/01/15(b)(e)
|
EUR | 200,000 | 254,764 | |||||
Cemex Finance Europe BV, Gtd. Notes, 4.75%, 03/05/14
|
EUR | 130,000 | 159,614 | |||||
Principal |
||||||||
Amount | Value | |||||||
Netherlands(continued) |
||||||||
Goodyear Dunlop Tires Europe B.V., Sr. Unsec. Gtd. Notes,
6.75%, 04/15/19(b)
|
EUR | 100,000 | $ | 134,542 | ||||
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes,
8.00%, 05/15/18(b)
|
EUR | 265,000 | 375,069 | |||||
923,989 | ||||||||
Spain0.91% |
||||||||
Nara Cable Funding Ltd., Sr. Sec. Notes,
8.88%, 12/01/18(b)
|
EUR | 440,000 | 564,144 | |||||
Sweden0.32% |
||||||||
TVN Finance Corp II A.B., Sr. Unsec. Gtd. Notes,
10.75%, 11/15/17(b)
|
EUR | 140,000 | 197,684 | |||||
United Kingdom3.76% |
||||||||
Boparan Finance PLC-REGS, Sr. Unsec. Gtd. Notes,
9.75%, 04/30/18(b)
|
EUR | 500,000 | 661,055 | |||||
Exova PLC, Sr. Unsec. Gtd. Notes,
10.50%, 10/15/18(b)
|
GBP | 200,000 | 278,390 | |||||
Kerling PLC, Sr. Sec. Gtd. Notes,
10.63%, 02/01/17(b)
|
EUR | 180,000 | 233,784 | |||||
Odeon & UCI Finco PLC,
Sr. Sec. Gtd. Floating Rate Notes, |
||||||||
6.13%, 08/01/18(b)(e)
|
EUR | 100,000 | 128,548 | |||||
Sr. Sec. Gtd. Notes,
9.00%, 08/01/18(b)
|
GBP | 215,000 | 341,167 | |||||
Pipe Holdings PLC, Sr. Sec. Gtd. Bonds,
9.50%, 11/01/15(b)
|
GBP | 200,000 | 307,024 | |||||
R&R Ice Cream PLC, Sr. Sec. Gtd. Notes,
8.38%, 11/15/17(b)
|
EUR | 275,000 | 371,822 | |||||
2,321,790 | ||||||||
United States0.13% |
||||||||
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes,
8.88%, 12/01/16(b)
|
EUR | 85,000 | 78,129 | |||||
Total Non-U.S. Dollar Denominated Bonds & Notes
(Cost $8,122,495)
|
7,997,805 | |||||||
Shares | Value | |||||||
Preferred Stocks2.00%(a) |
||||||||
Diversified Banks0.58% |
||||||||
Ally Financial, Inc.Series G, 7.00%
Pfd.(b)
|
410 | $ | 355,777 | |||||
Industrial REITs0.12% |
||||||||
DuPont Fabros Technology, Inc., Series B,
7.63% Pfd. |
2,930 | 74,568 | ||||||
Regional Banks1.30% |
||||||||
Zions Bancorp., Series C, 9.50% Pfd.
|
30,600 | 803,862 | ||||||
Total Preferred Stocks (Cost $1,089,162)
|
1,234,207 | |||||||
Common Stocks & Other Equity Interests0.27%(a) |
||||||||
Apparel, Accessories & Luxury Goods0.00% |
||||||||
Hosiery Corp. of America, Inc.
Class A(i)
|
1,000 | 0 | ||||||
Automobile Manufacturers0.27% |
||||||||
General Motors
Co.(d)(i)
|
3,230 | 84,045 | ||||||
General Motors Co., Wts.
expiring 07/10/16(d)(i)
|
2,936 | 49,824 | ||||||
General Motors Co., Wts.
expiring 07/10/19(d)(i)
|
2,936 | 33,705 | ||||||
167,574 | ||||||||
Total Common Stocks & Other Equity Interests
(Cost $262,246)
|
167,574 | |||||||
Money Market Funds2.22% |
||||||||
Liquid Assets PortfolioInstitutional
Class(j)
|
686,064 | 686,064 | ||||||
Premier PortfolioInstitutional
Class(j)
|
686,063 | 686,063 | ||||||
Total Money Market Funds (Cost $1,372,127)
|
1,372,127 | |||||||
TOTAL INVESTMENTS136.77% (Cost $82,347,220)
|
84,459,588 | |||||||
OTHER ASSETS LESS LIABILITIES1.28%
|
795,511 | |||||||
BORROWINGS(38.05)%
|
(23,500,000 | ) | ||||||
NET ASSETS100.00%
|
$ | 61,755,099 | ||||||
CAD
|
Canadian Dollar | |
Ctfs.
|
Certificates | |
Deb.
|
Debentures | |
EUR
|
Euro | |
GBP
|
British Pound | |
Gtd.
|
Guaranteed | |
Jr.
|
Junior | |
Pfd.
|
Preferred | |
PIK
|
Payment in Kind | |
REGS
|
Regulation S | |
REIT
|
Real Estate Investment Trust | |
Sec.
|
Secured | |
Sr.
|
Senior | |
Sub.
|
Subordinated | |
Unsec.
|
Unsecured | |
Wts.
|
Warrants |
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. | |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 29, 2012 was $28,391,399, which represented 45.97% of the Trusts Net Assets. | |
(c) | Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at February 29, 2012 was $430,800, which represented less than 1% of the Trusts Net Assets. | |
(d) | Acquired as part of the General Motors reorganization. | |
(e) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 29, 2012. | |
(f) | Perpetual bond with no specified maturity date. | |
(g) | Interest payments have been suspended under European Union agreement for 24 months beginning April 30, 2010. | |
(h) | Foreign denominated security. Principal amount is denominated in currency indicated. | |
(i) | Non-income producing security. | |
(j) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Assets: |
||||
Investments, at value (Cost $80,975,093)
|
$ | 83,087,461 | ||
Investments in affiliated money market funds, at value and cost
|
1,372,127 | |||
Total investments, at value (Cost $82,347,220)
|
84,459,588 | |||
Foreign currencies, at value (Cost $188,568)
|
189,410 | |||
Receivable for:
|
||||
Investments sold
|
46,015 | |||
Dividends and interest
|
1,754,683 | |||
Total assets
|
86,449,696 | |||
Liabilities: |
||||
Payable for:
|
||||
Investments purchased
|
920,890 | |||
Amount due custodian
|
20,162 | |||
Dividends
|
24,079 | |||
Foreign currency contracts outstanding
|
63,567 | |||
Loan outstanding
|
23,500,000 | |||
Accrued fees to affiliates
|
17,757 | |||
Accrued other operating expenses
|
145,444 | |||
Accrued interest expense and line of credit fees
|
2,698 | |||
Total liabilities
|
24,694,597 | |||
Net assets applicable to shares outstanding
|
$ | 61,755,099 | ||
Net assets consist of: |
||||
Shares of beneficial interest
|
$ | 91,886,315 | ||
Undistributed net investment income
|
(104,254 | ) | ||
Undistributed net realized gain (loss)
|
(32,080,014 | ) | ||
Unrealized appreciation
|
2,053,052 | |||
$ | 61,755,099 | |||
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized: |
||||
Common shares outstanding
|
3,770,265 | |||
Net asset value per common share
|
$ | 16.38 | ||
Market value per common share
|
$ | 16.89 | ||
Investment income: |
||||
Interest
|
$ | 6,480,965 | ||
Dividends(net of foreign withholding taxes of $(325))
|
99,035 | |||
Dividends from affiliated money market funds
|
1,020 | |||
Total investment income
|
6,581,020 | |||
Expenses: |
||||
Advisory fees
|
590,468 | |||
Administrative services fees
|
50,000 | |||
Custodian fees
|
15,381 | |||
Interest, facilities and maintenance fees
|
258,559 | |||
Transfer agent fees
|
35,735 | |||
Trustees and officers fees and benefits
|
12,335 | |||
Professional services fees
|
374,259 | |||
Other
|
78,011 | |||
Total expenses
|
1,414,748 | |||
Less: Fees waived
|
(1,489 | ) | ||
Net expenses
|
1,413,259 | |||
Net investment income
|
5,167,761 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from:
|
||||
Investment securities
|
2,124,089 | |||
Foreign currencies
|
(19,071 | ) | ||
Foreign currency contracts
|
173,146 | |||
2,278,164 | ||||
Change in net unrealized appreciation (depreciation) of:
|
||||
Investment securities
|
(3,186,052 | ) | ||
Foreign currencies
|
(10,159 | ) | ||
Foreign currency contracts
|
42,462 | |||
(3,153,749 | ) | |||
Net realized and unrealized gain (loss)
|
(875,585 | ) | ||
Net increase in net assets resulting from operations
|
$ | 4,292,176 | ||
Two months |
||||||||||||
Year ended |
ended |
Year ended |
||||||||||
February 29, |
February 28, |
December 31, |
||||||||||
2012 | 2011 | 2010 | ||||||||||
Operations: |
||||||||||||
Net investment income
|
$ | 5,167,761 | $ | 896,053 | $ | 6,077,558 | ||||||
Net realized gain
|
2,278,164 | 647,749 | 2,852,360 | |||||||||
Change in net unrealized appreciation (depreciation)
|
(3,153,749 | ) | 1,125,554 | (135,837 | ) | |||||||
Distributions to preferred shareholders from net investment
income
|
| | (20,881 | ) | ||||||||
Net increase in net assets from operations
|
4,292,176 | 2,669,356 | 8,773,200 | |||||||||
Distributions to common shareholders from net investment income
|
(5,248,209 | ) | (874,701 | ) | (5,853,346 | ) | ||||||
Net increase (decrease) in net assets to common shares resulting
from investment activities
|
(956,033 | ) | 1,794,655 | 2,919,854 | ||||||||
Net assets: |
||||||||||||
Beginning of period
|
62,711,132 | 60,916,477 | 57,996,623 | |||||||||
End of period (includes undistributed net investment income of
$(104,254), $(72,529) and $(93,956), respectively)
|
$ | 61,755,099 | $ | 62,711,132 | $ | 60,916,477 | ||||||
Cash provided by operating activities: |
||||
Net increase in net assets resulting from operations
|
$ | 4,292,176 | ||
Adjustments to reconcile the change in net assets applicable to common shares from operations to net cash provided by operating activities: |
||||
Net realized gain from investments
|
(2,124,089 | ) | ||
Net change in unrealized depreciation on investments
|
3,186,052 | |||
Amortization of premium and accretion of discount
|
38,229 | |||
Cost of purchases of investments
|
(80,447,714 | ) | ||
Proceeds from sales of investments
|
82,550,776 | |||
Net change in foreign currency contracts
|
(42,462 | ) | ||
Increase in interest receivables and other assets
|
(5,037 | ) | ||
Decrease in accrued interest expense and line of credit fees
payables
|
(92,407 | ) | ||
Decrease in accrued expenses and other payables
|
(65,515 | ) | ||
Net cash provided by operating activities
|
7,290,009 | |||
Cash flows provided by (used in) financing activities: |
||||
Repayment of loans outstanding
|
(2,500,000 | ) | ||
Dividends paid to common shareholders from net investment income
|
(5,248,688 | ) | ||
Increase in payable for amount due custodian
|
20,162 | |||
Net cash provided by (used in) financing activities
|
(7,728,526 | ) | ||
Net decrease in cash
|
(438,517 | ) | ||
Cash at the beginning of the period
|
627,927 | |||
Cash at the end of the period
|
$ | 189,410 | ||
Supplemental disclosure: |
||||
Cash paid during the period for interest, facilities and
maintenance fees
|
$ | 348,366 | ||
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. | |
Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. | ||
A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an |
independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE). | ||
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. | ||
Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Trust may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trade is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. | ||
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans. | ||
Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value. | ||
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. | ||
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
The Trust may periodically participate in litigation related to Trust investments. As such, the Trust may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held. | ||
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Trusts net asset value and, accordingly, they reduce the Trusts total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Trust and the investment adviser. | ||
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. | |
D. | Distributions Distributions from income are declared and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Trust may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. | |
E. | Federal Income Taxes The Trust intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Trusts taxable earnings to shareholders. As such, the Trust will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. | |
The Trust files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Trust is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. |
F. | Interest, Facilities and Maintenance Fees Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate note obligations, if any. | |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Trust monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. | |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts, including the Trusts servicing agreements that contain a variety of indemnification clauses. The Trusts maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. | |
I. | Cash and Cash Equivalents For the purposes of the Statement of Cash Flows the Trust defines Cash and Cash Equivalents as cash (including foreign currency), money market funds and other investments held in lieu of cash and excludes investments made with cash collateral received. | |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Trust does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Trusts books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. | |
The Trust may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. | ||
K. | Foreign Currency Contracts The Trust may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Trust may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Trust owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
Level 1 | Prices are determined using quoted prices in an active market for identical assets. | |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. | |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Trusts own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities
|
$ | 2,418,131 | $ | 355,777 | $ | 0 | $ | 2,773,908 | ||||||||
Corporate Debt Securities
|
| 73,681,275 | 6,600 | 73,687,875 | ||||||||||||
Foreign Debt Securities
|
| 7,997,805 | | 7,997,805 | ||||||||||||
$ | 2,418,131 | $ | 82,034,857 | $ | 6,600 | $ | 84,459,588 | |||||||||
Foreign Currency Contracts*
|
| (63,567 | ) | | (63,567 | ) | ||||||||||
Total Investments
|
$ | 2,418,131 | $ | 81,971,290 | $ | 6,600 | $ | 84,396,021 | ||||||||
* | Unrealized appreciation (depreciation). |
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk
|
||||||||
Foreign currency contracts
|
$ | 2,182 | $ | (65,749 | ) | |||
Location of Gain
(Loss) on |
||||
Statement of Operations | ||||
Foreign
Currency |
||||
Contracts* | ||||
Realized Gain
|
||||
Currency risk
|
$ | 173,146 | ||
Change in Unrealized Appreciation
|
||||
Currency risk
|
42,462 | |||
Total
|
$ | 215,608 | ||
* | The average notional value outstanding of foreign currency contracts during the period was $8,203,903. |
Open Foreign Currency Contracts | ||||||||||||||||||||||
Settlement |
Contract to |
Notional |
Unrealized |
|||||||||||||||||||
Date | Counterparty | Deliver | Receive | Value | Appreciation | |||||||||||||||||
05/09/12
|
RBC Capital Markets Corp. | EUR | 172,000 | USD | 231,371 | $ | 229,189 | $ | 2,182 | |||||||||||||
$ | 2,182 | |||||||||||||||||||||
Unrealized |
||||||||||||||||||||||
Settlement |
Contract to |
Notional |
Appreciation |
|||||||||||||||||||
Date | Counterparty | Deliver | Receive | Value | (Depreciation) | |||||||||||||||||
05/09/12
|
RBC Capital Markets Corp. | EUR | 4,770,000 | USD | 6,303,078 | $ | 6,355,998 | $ | (52,920 | ) | ||||||||||||
05/17/12
|
Morgan Stanley & Co., Inc. | GBP | 563,000 | USD | 882,228 | 895,057 | (12,829 | ) | ||||||||||||||
$ | (65,749 | ) | ||||||||||||||||||||
Total open foreign currency contracts
|
$ | (63,567 | ) | |||||||||||||||||||
EUR
|
Euro | |
GBP
|
British Pound Sterling | |
USD
|
U.S. Dollar |
Two months |
||||||||||||
Year ended |
ended |
Year ended |
||||||||||
February 29, |
February 28, |
December 31, |
||||||||||
2012 | 2011 | 2010 | ||||||||||
Ordinary income
|
$ | 5,248,209 | $ | 874,701 | $ | 5,874,227 | ||||||
February 29, |
||||
2012 | ||||
Undistributed ordinary income
|
$ | 98,077 | ||
Net unrealized appreciation investments
|
1,909,254 | |||
Net unrealized appreciation other investments
|
4,250 | |||
Capital loss carryforward
|
(32,142,797 | ) | ||
Shares of beneficial interest
|
91,886,315 | |||
Total net assets
|
$ | 61,755,099 | ||
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
February 28, 2014
|
$ | 3,618,763 | $ | | $ | 3,618,763 | ||||||
February 28, 2015
|
47,559 | | 47,559 | |||||||||
February 29, 2016
|
9,476,998 | | 9,476,998 | |||||||||
February 28, 2017
|
18,999,477 | | 18,999,477 | |||||||||
$ | 32,142,797 | $ | | $ | 32,142,797 | |||||||
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities
|
$ | 3,303,381 | ||
Aggregate unrealized (depreciation) of investment securities
|
(1,394,127 | ) | ||
Net unrealized appreciation of investment securities
|
$ | 1,909,254 | ||
Cost of investments for tax purposes is $82,550,334. |
Two months |
||||||||||||
Year ended |
ended |
Year ended |
||||||||||
February 29, |
February 28, |
December 31, |
||||||||||
2012 | 2011 | 2010 | ||||||||||
Beginning shares
|
3,770,265 | 3,770,265 | 3,770,265 | |||||||||
Shares issued through Dividend Reinvestment
|
| | | |||||||||
Ending shares
|
3,770,265 | 3,770,265 | 3,770,265 | |||||||||
Declaration Date | Amount Per Share | Record Date | Payable Date | |||||||||
March 1, 2012
|
$ | 0.116 | March 14, 2012 | March 30, 2012 | ||||||||
April 2, 2012
|
$ | 0.116 | April 13, 2012 | April 30, 2012 | ||||||||
Two months |
||||||||||||||||||||||||
Year ended |
ended |
|||||||||||||||||||||||
February 29, |
February 28, |
Year ended December 31, | ||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Net asset value, beginning of period
|
$ | 16.63 | $ | 16.16 | $ | 15.38 | $ | 10.45 | $ | 20.40 | $ | 21.45 | ||||||||||||
Net investment
income(a)
|
1.37 | 0.24 | 1.61 | 1.83 | 2.45 | 2.55 | ||||||||||||||||||
Net gains (losses) on securities (both realized and unrealized)
|
(0.23 | ) | 0.46 | 0.73 | 4.93 | (9.90 | ) | (1.00 | ) | |||||||||||||||
Distributions paid to preferred shareholders from:
|
||||||||||||||||||||||||
Net investment income
|
| | (0.01 | ) | (0.42 | ) | (1.00 | ) | (0.95 | ) | ||||||||||||||
Total from investment operations
|
1.14 | 0.70 | 2.33 | 6.34 | (8.45 | ) | 0.60 | |||||||||||||||||
Less distributions from:
|
||||||||||||||||||||||||
Dividends from net investment income
|
(1.39 | ) | (0.23 | ) | (1.55 | ) | (1.41 | ) | (1.50 | ) | (1.65 | ) | ||||||||||||
Net asset value, end of period
|
$ | 16.38 | $ | 16.63 | $ | 16.16 | $ | 15.38 | $ | 10.45 | $ | 20.40 | ||||||||||||
Market value, end of period
|
$ | 16.89 | $ | 16.52 | $ | 16.02 | $ | 14.48 | $ | 8.90 | $ | 18.15 | ||||||||||||
Total return at net asset
value(b)
|
7.26 | % | 4.37 | % | 15.55 | % | | | | |||||||||||||||
Total return at market
value(c)
|
11.33 | % | 4.59 | % | 21.67 | % | 83.40 | % | (45.03 | )% | (1.71 | )% | ||||||||||||
Net assets, end of period (000s omitted)
|
$ | 61,755 | $ | 62,711 | $ | 60,916 | $ | 57,997 | $ | 39,414 | $ | 76,998 | ||||||||||||
Portfolio turnover
rate(d)
|
60 | % | 18 | % | 135 | % | 58 | % | 46 | % | 37 | % | ||||||||||||
Ratios/supplemental data based on average net assets applicable to common shares: |
||||||||||||||||||||||||
Ratio of expenses:
|
||||||||||||||||||||||||
With fee waivers
and/or
expense
reimbursements(e)
|
2.38 | %(f) | 2.44 | %(g) | 2.57 | % | 2.31 | % | 1.94 | % | 1.84 | % | ||||||||||||
With fee waivers
and/or
expense reimbursements excluding interest, facilities and
maintenance
fees(e)(h)
|
1.95 | %(f) | 1.71 | %(g) | 1.74 | % | ||||||||||||||||||
Without fee waivers
and/or
expense
reimbursements(e)
|
2.38 | %(f) | 2.44 | %(g) | 2.61 | % | 2.40 | % | 2.04 | % | 1.93 | % | ||||||||||||
Ratio of net investment income before preferred share dividends
|
8.69 | %(f) | 8.93 | %(g) | 10.34 | % | 14.13 | % | 14.65 | % | 12.06 | % | ||||||||||||
Preferred share dividends
|
| | (0.03 | )% | | | | |||||||||||||||||
Ratio of net investment income after preferred share dividends
|
8.69 | %(f) | 8.93 | %(g) | 10.31 | % | 10.90 | % | 8.56 | % | 7.61 | % | ||||||||||||
Senior securities: |
||||||||||||||||||||||||
Total amount of preferred shares outstanding (000s omitted)
|
N/A | N/A | N/A | $ | 4,400 | (i) | $ | 32,400 | (i) | $ | 65,400 | (i) | ||||||||||||
Asset coverage per $1,000 unit of senior
indebtedness(j)
|
$ | 3,628 | $ | 3,412 | ||||||||||||||||||||
Asset coverage per preferred
share(k)
|
N/A | N/A | N/A | $ | 354,600 | $ | 55,444 | $ | 54,487 | |||||||||||||||
Liquidating preference per preferred share
|
N/A | N/A | N/A | $ | 25,000 | $ | 25,000 | $ | 25,000 | |||||||||||||||
Total borrowings (000s omitted)
|
$ | 23,500 | $ | 26,000 | $ | 26,000 | $ | 28,000 | N/A | N/A | ||||||||||||||
(a) | Calculated using average shares outstanding. | |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for period less than one year, if applicable. | |
(c) | Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trusts dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. Not annualized for period less than one year, if applicable. | |
(d) | Portfolio turnover is not annualized for periods less than one year, if applicable. | |
(e) | Ratios do not reflect the effect of dividend payments to preferred shareholders. | |
(f) | Ratios are based on average daily net assets (000s omitted) of $59,489. | |
(g) | Annualized. | |
(h) | For the years ended December 31, 2010, and prior, ratio does not exclude facilities and maintenance fees. | |
(i) | Total shares outstanding for the years ended December 31, 2009, 2008 and 2007 were 176, 1,296 and 2,616, respectively. | |
(j) | Calculated by subtracting the Trusts total liabilities (not including the preferred shares and the borrowings) from the Trusts total assets and dividing by the total number of senior indebtedness units, where one unit equals $1,000 of senior indebtedness. | |
(k) | Calculated by subtracting the Trusts total liabilities (not including the preferred shares) from the Trusts total assets and dividing this by the number of preferred shares outstanding. |
Federal and State Income
Tax
|
||||
Qualified Dividend Income*
|
1.85% | |||
Corporate Dividends Received Deduction*
|
1.85% | |||
U.S. Treasury Obligations*
|
0% |
* | The above percentages are based on ordinary income dividends paid to shareholders during the Trusts fiscal year. |
Number of |
||||||||
Funds in |
||||||||
Fund Complex |
||||||||
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
Interested
Persons
|
||||||||
Colin Meadows 1971
Trustee, President and Principal Executive Officer |
2010 | Chief Administrative Officer, Invesco Advisers, Inc., since 2006; Prior to 2006, Senior Vice President of business development and mergers and acquisitions at GE Consumer Finance; Prior to 2005, Senior Vice President of strategic planning and technology at Wells Fargo Bank; From 1996 to 2003, associate principal with McKinsey & Company, focusing on the financial services and venture capital industries, with emphasis in banking and asset management sectors. | 18 | None | ||||
Wayne W.
Whalen1
1939
Trustee and Chair |
1989 | Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex | 158 | Director of the Abraham Lincoln Presidential Library Foundation | ||||
Independent
Trustees
|
||||||||
David C. Arch 1945
Trustee |
1989 | Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer. | 158 | Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan | ||||
Jerry D. Choate 1938
Trustee |
2003 | From 1995 to 1999, Chairman and Chief Executive Officer of the Allstate Corporation (Allstate) and Allstate Insurance Company. From 1994 to 1995, President and Chief Executive Officer of Allstate. Prior to 1994, various management positions at Allstate. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director since 1998 and member of the governance and nominating committee, executive committee, compensation and management development committee and equity award committee, of Amgen Inc., a biotechnological company. Director since 1999 and member of the nominating and governance committee and compensation and executive committee, of Valero Energy Corporation, a crude oil refining and marketing company. Previously, from 2006 to 2007, Director and member of the compensation committee and audit committee, of H&R Block, a tax preparation services company. | ||||
Rodney F. Dammeyer 1940
Trustee |
1989 |
Chairman of CAC, LLC, a private company offering capital investment and management advisory services.
Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co. |
158 | Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc. | ||||
Linda Hutton Heagy 1948
Trustee |
2003 | Prior to June 2008, Managing Partner of Heidrick & Struggles, the second largest global executive search firm, and from 2001-2004, Regional Managing Director of U.S. operations at Heidrick & Struggles. Prior to 1997, Managing Partner of Ray & Berndtson, Inc., an executive recruiting firm. Prior to 1995, Executive Vice President of ABN AMRO, N.A., a bank holding company, with oversight for treasury management operations including all non-credit product pricing. Prior to 1990, experience includes Executive Vice President of The Exchange National Bank with oversight of treasury management including capital markets operations, Vice President of Northern Trust Company and an Associate at Price Waterhouse. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Prior to 2010, Trustee on the University of Chicago Medical Center Board, Vice Chair of the Board of the YMCA of Metropolitan Chicago and a member of the Womens Board of the University of Chicago. | ||||
R. Craig Kennedy 1952
Trustee |
2003 | Director and President of the German Marshall Fund of the United States, an independent U.S. foundation created to deepen understanding, promote collaboration and stimulate exchanges of practical experience between Americans and Europeans. Formerly, advisor to the Dennis Trading Group Inc., a managed futures and option company that invests money for individuals and institutions. Prior to 1992, President and Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director of First Solar, Inc. | ||||
1 | Mr. Whalen is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex. |
Number of |
||||||||
Funds in |
||||||||
Fund Complex |
||||||||
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
Independent
Trustees
|
||||||||
Howard J Kerr 1935
Trustee |
1992 | Retired. Previous member of the City Council and Mayor of Lake Forest, Illinois from 1988 through 2002. Previous business experience from 1981 through 1996 includes President and Chief Executive Officer of Pocklington Corporation, Inc., an investment holding company, President and Chief Executive Officer of Grabill Aerospace, and President of Custom Technologies Corporation. United States Naval Officer from 1960 through 1981, with responsibilities including Commanding Officer of United States Navy destroyers and Commander of United States Navy Destroyer Squadron Thirty-Three, White House experience in 1973 through 1975 as military aide to Vice Presidents Agnew and Ford and Naval Aid to President Ford, and Military Fellow on the Council of Foreign Relations in 1978-through 1979. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director of the Lake Forest Bank & Trust. Director of the Marrow Foundation. | ||||
Jack E. Nelson 1936
Trustee |
2003 | President of Nelson Investment Planning Services, Inc., a financial planning company and registered investment adviser in the State of Florida. President of Nelson Ivest Brokerage Services Inc., a member of the Financial Industry Regulatory Authority (FINRA), Securities Investors Protection Corp. and the Municipal Securities Rulemaking Board. President of Nelson Sales and Services Corporation, a marketing and services company to support affiliated companies. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. | ||||
Hugo F. Sonnenschein 1940
Trustee |
1994 | Distinguished Service Professor and President Emeritus of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago. | 158 | Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences | ||||
Suzanne H. Woolsey, Ph.D. 1941 Trustee
|
2003 | Chief Communications Officer of the National Academy of Sciences and Engineering and Institute of Medicine/National Research Council, an independent, federally chartered policy institution, from 2001 to November 2003 and Chief Operating Officer from 1993 to 2001. Executive Director of the Commission on Behavioral and Social Sciences and Education at the National Academy of Sciences/National Research Council from 1989 to 1993. Prior to 1980, experience includes Partner of Coopers & Lybrand (from 1980 to 1989), Associate Director of the US Office of Management and Budget (from 1977 to 1980) and Program Director of the Urban Institute (from 1975 to 1977). | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Independent Director and audit committee chairperson of Changing World Technologies, Inc., an energy manufacturing company, since July 2008. Independent Director and member of audit and governance committees of Fluor Corp., a global engineering, construction and management company, since January 2004. Director of Intelligent Medical Devices, Inc., a private company which develops symptom-based diagnostic tools for viral respiratory infections. Advisory Board member of ExactCost LLC, a private company providing activity-based costing for hospitals, laboratories, clinics, and physicians, since 2008. Chairperson of the Board of Trustees of the Institute for Defense Analyses, a federally funded research and development center, since 2000. Trustee from 1992 to 2000 and 2002 to present, current chairperson of the finance committee, current member of the audit committee, strategic growth committee and executive committee, and former Chairperson of the Board of Trustees (from 1997 to 1999), of the German Marshall Fund of the United States, a public foundation. Lead Independent Trustee of the Rocky Mountain Institute, a non-profit energy and environmental institute; Trustee since 2004. Chairperson of the Board of Trustees of the Colorado College; Trustee since 1995. Trustee of California Institute of Technology. Previously, Independent Director and member of audit committee and governance committee of Neutrogena Corporation from 1998 to 2006; and Independent Director of Arbros Communications from 2000 to 2002 | ||||
Number of |
||||||||
Funds in |
||||||||
Fund Complex |
||||||||
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
Other
Officers
|
||||||||
John M. Zerr 1962
Senior Vice President, Chief Legal Officer and Secretary |
2010 | Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Van Kampen Exchange Corp.; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds Inc. and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust | N/A | N/A | ||||
Formerly: Director and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) | ||||||||
Karen Dunn Kelley 1960
Vice President |
2010 | Head of Invescos World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurers Series Trust (Invesco Treasurers Series Trust) and Short-Term Investments Trust); and President and Principal Executive Officer, The Invesco Funds (AIM Treasurers Series Trust (Invesco Treasurers Series Trust) and Short-Term Investments Trust only). | N/A | N/A | ||||
Formerly: Senior Vice President, Van Kampen Investments Inc.; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurers Series Trust (Invesco Treasurers Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only) | ||||||||
Sheri Morris 1964
Vice President, Principal Financial Officer and Treasurer |
2010 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). | N/A | N/A | ||||
Formerly: Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. | ||||||||
Number of |
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Funds in |
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Fund Complex |
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Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
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Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
Other
Officers
|
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Yinka Akinsola 1977
Anti-Money Laundering Compliance Officer |
2012 | Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Funds Inc., PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust | N/A | N/A | ||||
Formerly: Regulatory Analyst III, Financial Industry Regulatory Authority (FINRA). | ||||||||
Valinda Arnett-Patton 1959
Chief Compliance Officer |
2011 | Chief Compliance Officer, Invesco Van Kampen Closed-End Funds. | N/A | N/A | ||||
Office of the Fund 1555 Peachtree Street, N.E. Atlanta, GA 30309 |
Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309 |
Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678 |
Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801 |
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Counsel to the Fund Skadden, Arps, Slate, Meagher & Flom LLP 155 North Wacker Drive Chicago, IL 60606 |
Transfer Agent Computershare Trust Company, N.A. P.O. Box 43078 Providence, RI 02940-3078 |
VK-CE-HINC2-AR-1 | Invesco Distributors, Inc. |
Percentage of Fees | Percentage of Fees | |||||||||||
Billed Applicable to | Billed Applicable to | |||||||||||
Non-Audit Services | Non-Audit Services | |||||||||||
Fees Billed for | Provided for fiscal | Fees Billed for | Provided for fiscal | |||||||||
Services Rendered to | year end 2/29/2012 | Services Rendered to | year end 2/28/2011 | |||||||||
the Registrant for | Pursuant to Waiver of | the Registrant for | Pursuant to Waiver of | |||||||||
fiscal year end | Pre-Approval | fiscal year end | Pre-Approval | |||||||||
2/29/2012 | Requirement(1) | 2/28/2011 | Requirement(1) | |||||||||
Audit Fees |
$ | 36,300 | N/A | $ | 12,250 | N/A | ||||||
Audit-Related Fees |
$ | 0 | 0% | $ | 0 | 0% | ||||||
Tax Fees(2) |
$ | 6,500 | 0% | $ | 2,800 | 0% | ||||||
All Other Fees |
$ | 0 | 0% | $ | 0 | 0% | ||||||
Total Fees |
$ | 42,800 | 0% | $ | 15,050 | 0% |
(1) | With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrants Audit Committee and approved by the Registrants Audit Committee prior to the completion of the audit. | |
(2) | Tax fees for the fiscal year end February 29, 2012 includes fees billed for reviewing tax returns. Tax fees for the fiscal year end February 28, 2011 includes fees billed for reviewing tax returns. |
Fees Billed for Non- | Fees Billed for Non- | |||||||||||
Audit Services | Audit Services | |||||||||||
Rendered to Invesco | Rendered to Invesco | Percentage of Fees | ||||||||||
and Invesco Affiliates | Percentage of Fees | and Invesco Affiliates | Billed Applicable to | |||||||||
for fiscal year end | Billed Applicable to | for fiscal year end | Non-Audit Services | |||||||||
2/29/2012 That Were | Non-Audit Services | 2/28/2011 That Were | Provided for fiscal year | |||||||||
Required | Provided for fiscal year | Required | end 2/28/2011 | |||||||||
to be Pre-Approved | end 2/29/2012 | to be Pre-Approved | Pursuant to Waiver of | |||||||||
by the Registrants | Pursuant to Waiver of | by the Registrants | Pre-Approval | |||||||||
Audit Committee | Pre-Approval Requirement(1) | Audit Committee | Requirement(1) | |||||||||
Audit-Related Fees |
$ | 0 | 0% | $ | 0 | 0% | ||||||
Tax Fees |
$ | 0 | 0% | $ | 0 | 0% | ||||||
All Other Fees |
$ | 0 | 0% | $ | 0 | 0% | ||||||
Total Fees(2) |
$ | 0 | 0% | $ | 0 | 0% |
(1) | With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco and Invesco Affiliates to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrants Audit Committee and approved by the Registrants Audit Committee prior to the completion of the audit. | |
(2) | Including the fees for services not required to be pre-approved by the registrants audit committee, PWC billed Invesco and Invesco Affiliates aggregate non-audit fees of $0 for the fiscal year ended February 29, 2012, and $0 for the fiscal year ended February 28, 2011, for non-audit services rendered to Invesco and Invesco Affiliates. | |
The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PWCs independence. To the extent that such services were provided, the Audit Committee determined that the provision of such services is compatible with PWC maintaining independence with respect to the Registrant. |
1. | Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter: |
a. | The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and | ||
b. | Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service; |
2. | Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and | ||
3. | Document the substance of its discussion with the Audit Committees. |
| Bookkeeping or other services related to the accounting records or financial statements of the audit client | ||
| Financial information systems design and implementation | ||
| Appraisal or valuation services, fairness opinions, or contribution-in-kind reports | ||
| Actuarial services | ||
| Internal audit outsourcing services |
| Management functions | ||
| Human resources | ||
| Broker-dealer, investment adviser, or investment banking services | ||
| Legal services | ||
| Expert services unrelated to the audit | ||
| Any service or product provided for a contingent fee or a commission | ||
| Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance | ||
| Tax services for persons in financial reporting oversight roles at the Fund | ||
| Any other service that the Public Company Oversight Board determines by regulation is impermissible. |
(a) | The registrant has a separately-designed standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. Members of the audit committee are: Jerry D. Choate, Linda Hutton Heagy and R. Craig Kennedy. | ||
(a) | Not applicable. |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Applicable to
|
Retail Accounts | |
Risk Addressed by Policy
|
breach of fiduciary duty to client under Investment Advisers Act of 1940 by placing Invesco personal interests ahead of client best economic interests in voting proxies | |
Relevant Law and Other Sources
|
Investment Advisers Act of 1940 | |
Last Tested Date |
||
Policy/Procedure Owner
|
Advisory Compliance | |
Policy Approver
|
Fund Board | |
Approved/Adopted Date
|
January 1, 2010 |
January 2010 | I.2 1 |
| Elections of directors. In uncontested director elections for companies that do not have a controlling shareholder, Invesco votes in favor of slates if they are comprised of at least a majority of independent directors and if the boards key committees are fully independent. Key committees include the Audit, Compensation and Governance or Nominating Committees. Invescos standard of independence excludes directors who, in addition to the directorship, have any material business or family relationships with the companies they serve. |
January 2010 | I.2 2 |
Contested director elections are evaluated on a case-by-case basis and are decided within the context of Invescos investment thesis on a company. |
| Director performance. Invesco withholds votes from directors who exhibit a lack of accountability to shareholders, either through their level of attendance at meetings or by enacting egregious corporate-governance or other policies. In cases of material financial restatements, accounting fraud, habitually late filings, adopting shareholder rights plan (poison pills) without shareholder approval, or other areas of poor performance, Invesco may withhold votes from some or all of a companys directors. In situations where directors performance is a concern, Invesco may also support shareholder proposals to take corrective actions such as so-called clawback provisions. | ||
| Auditors and Audit Committee members. Invesco believes a companys Audit Committee has a high degree of responsibility to shareholders in matters of financial disclosure, integrity of the financial statements and effectiveness of a companys internal controls. Independence, experience and financial expertise are critical elements of a well-functioning Audit Committee. When electing directors who are members of a companys Audit Committee, or when ratifying a companys auditors, Invesco considers the past performance of the Committee and holds its members accountable for the quality of the companys financial statements and reports. | ||
| Majority standard in director elections. The right to elect directors is the single most important mechanism shareholders have to promote accountability. Invesco supports the nascent effort to reform the U.S. convention of electing directors, and votes in favor of proposals to elect directors by a majority vote. | ||
| Classified boards. Invesco supports proposals to elect directors annually instead of electing them to staggered multi-year terms because annual elections increase a boards level of accountability to its shareholders. | ||
| Supermajority voting requirements. Unless proscribed by law in the state of incorporation, Invesco votes against actions that would impose any supermajority voting requirement, and supports actions to dismantle existing supermajority requirements. | ||
| Responsiveness. Invesco withholds votes from directors who do not adequately respond to shareholder proposals that were approved by a majority of votes cast the prior year. | ||
| Cumulative voting. The practice of cumulative voting can enable minority shareholders to have representation on a companys board. Invesco supports proposals to institute the practice of cumulative voting at companies whose overall corporate-governance standards indicate a particular need to protect the interests of minority shareholders. |
January 2010 | I.2 3 |
| Shareholder access. On business matters with potential financial consequences, Invesco votes in favor of proposals that would increase shareholders opportunities to express their views to boards of directors, proposals that would lower barriers to shareholder action and proposals to promote the adoption of generally accepted best practices in corporate governance. |
| Executive compensation. Invesco evaluates compensation plans for executives within the context of the companys performance under the executives tenure. Invesco believes independent compensation committees are best positioned to craft executive-compensation plans that are suitable for their company-specific circumstances. We view the election of those independent compensation committee members as the appropriate mechanism for shareholders to express their approval or disapproval of a companys compensation practices. Therefore, Invesco generally does not support shareholder proposals to limit or eliminate certain forms of executive compensation. In the interest of reinforcing the notion of a compensation committees accountability to shareholders, Invesco supports proposals requesting that companies subject each years compensation record to an advisory shareholder vote, or so-called say on pay proposals. | ||
| Equity-based compensation plans. When voting to approve or reject equity-based compensation plans, Invesco compares the total estimated cost of the plans, including stock options and restricted stock, against a carefully selected peer group and uses multiple performance metrics that help us determine whether the incentive structures in place are creating genuine shareholder wealth. Regardless of a plans estimated cost relative to its peer group, Invesco votes against plans that contain structural features that would impair the alignment of incentives between shareholders and management. Such features include the ability to reprice or reload options without shareholder approval, the ability to issue options below the stocks current market price, or the ability to automatically replenish shares without shareholder approval. |
January 2010 | I.2 4 |
| Employee stock-purchase plans. Invesco supports employee stock-purchase plans that are reasonably designed to provide proper incentives to a broad base of employees, provided that the price at which employees may acquire stock is at most a 15 percent discount from the market price. | ||
| Severance agreements. Invesco generally votes in favor of proposals requiring advisory shareholder ratification of executives severance agreements. However, we oppose proposals requiring such agreements to be ratified by shareholders in advance of their adoption. |
January 2010 | I.2 5 |
January 2010 | I.2 6 |
January 2010 | I.2 7 |
January 2010 | I.2 8 |
| Peter Ehret, Portfolio Manager, who has been responsible for the Trust since 2010 and has been associated with Invesco and/or its affiliates since 2001. | ||
| Darren Hughes, Portfolio Manager, who has been responsible for the Trust since 2010 and has been associated with Invesco and/or its affiliates since 1992. | ||
| Scott Roberts, Portfolio Manager, who has been responsible for the Trust since 2010 and has been associated with Invesco and/or its affiliates since 2000. |
Dollar Range of | Dollar Range of Investments | Dollar Range of all Investments | ||||
Portfolio | Investments in each | in Invesco pooled | in Funds and Invesco pooled | |||
Manager | Fund1 | investment vehicles2 | investment vehicles | |||
Invesco Van Kampen High Income Trust II | ||||||
Peter Ehret |
None | N/A | $100,001-$500,000 | |||
Darren Hughes |
None | N/A | $100,001-$500,000 | |||
Scott Roberts |
None | N/A | $100,001-$500,000 |
1 | This column reflects investments in a Funds shares beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a) (2) under the Securities Exchange Act of 1934, as amended). Beneficial ownership includes ownership by a portfolio managers immediate family members sharing the same household. | |
2 | This column reflects portfolio managers investments made either directly or through a deferred compensation or a similar plan in Invesco pooled investment vehicles with the same or similar objectives and strategies as the Fund as of the most recent fiscal year end of the Fund. |
Other Registered Investment | Other Pooled Investment | Other Accounts | ||||||||||||||||||||||
Companies Managed (assets | Vehicles Managed (assets | Managed (assets in | ||||||||||||||||||||||
in millions) | in millions) | millions) | ||||||||||||||||||||||
Portfolio | Number of | Number of | Number of | |||||||||||||||||||||
Manager | Accounts | Assets | Accounts | Assets | Accounts | Assets | ||||||||||||||||||
Invesco Van Kampen High Income Trust II | ||||||||||||||||||||||||
Peter Ehret |
11 | $ | 3,634.5 | None | None | None | None | |||||||||||||||||
Darren Hughes |
7 | $ | 1,908.9 | None | None | None | None | |||||||||||||||||
Scott Roberts |
6 | $ | 1,885.8 | None | None | None | None |
Ø | The management of multiple Funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each Fund and/or other account. The Adviser and each Sub-Adviser seek to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the Funds. | |
Ø | If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one Fund or other account, a Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible Funds and other accounts. To deal with these situations, the Adviser, each Sub-Adviser and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts. | |
Ø | The Adviser and each Sub-Adviser determine which broker to use to execute each order for securities transactions for the Funds, consistent with its duty to seek best execution of the transaction. However, for certain other accounts (such as mutual funds for which Invesco or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), the Adviser and each Sub-Adviser may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a Fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or other account(s) involved. |
Ø | Finally, the appearance of a conflict of interest may arise where the Adviser or Sub-Adviser has an incentive, such as a performance-based management fee, which relates to the management of one Fund or account but not all Funds and accounts for which a portfolio manager has day-to-day management responsibilities. |
Sub-Adviser | Performance time period3 | |
Invesco 4 Invesco Australia4 Invesco Deutschland |
One-, Three- and Five-year performance against Fund peer group. | |
Invesco Advisors- Invesco Real Estate5
Invesco Senior Secured4, 6 |
Not applicable |
3 | Rolling time periods based on calendar year-end. | |
4 | Portfolio Managers may be granted an annual deferral award that vests on a pro-rata basis over a four year period and final payments are based on the performance of eligible Funds selected by the portfolio manager at the time the award is granted. | |
5 | Portfolio Managers for Invesco Global Real Estate Fund, Invesco Real Estate Fund, Invesco Global Real Estate Income Fund and Invesco V.I. Global Real Estate Fund base their bonus on new operating profits of the U.S. Real Estate Division of Invesco. | |
6 | Invesco Senior Secureds bonus is based on annual measures of equity return and standard tests of collateralization performance. |
Sub-Adviser | Performance time period3 | |
Invesco Canada4
|
One-year performance against Fund
peer group. Three- and Five-year performance against entire universe of Canadian funds. |
|
Invesco Hong Kong4 Invesco Asset Management |
One-, Three- and Five-year performance against Fund peer group. | |
Invesco Japan7
|
One-, Three- and Five-year performance against the appropriate Micropol benchmark. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
(a) | As of March 21, 2012, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrants disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the Act), as amended. Based on that evaluation, the Registrants officers, including the PEO and PFO, concluded that, as March 21, 2012, the Registrants disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. |
(b) | There have been no changes in the Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter |
7 | Portfolio Managers for Invesco Pacific Growth Funds compensation is based on the one-, three- and five-year performance against the appropriate Micropol benchmark. |
12(a) (1)
|
Code of Ethics. | |
12(a) (2)
|
Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
12(a) (3)
|
Not applicable. | |
12(b)
|
Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
Registrant: Invesco Van Kampen High Income Trust II | ||||
By:
|
/s/ Colin Meadows | |||
Colin Meadows | ||||
Principal Executive Officer | ||||
Date: May 7, 2012 |
By:
|
/s/ Colin Meadows | |||
Colin Meadows | ||||
Principal Executive Officer | ||||
Date: May 7, 2012 | ||||
By:
|
/s/ Sheri Morris | |||
Sheri Morris | ||||
Principal Financial Officer | ||||
Date: May 7, 2012 |
12(a)(1)
|
Code of Ethics. | |
12(a)(2)
|
Certifications of principal executive officer and principal Financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
12(a)(3)
|
Not applicable. | |
12(b)
|
Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |