Clough Global Opportunities Fund
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21846

Clough Global Opportunities Fund

(exact name of Registrant as specified in charter)

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

Erin D. Nelson, Secretary

Clough Global Opportunities Fund

1290 Broadway, Suite 1100

Denver, Colorado 80203

(Name and address of agent for service)

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

Date of fiscal year end:   March 31

Date of reporting period: April 1, 2014 - September 30, 2014


Table of Contents

Item 1. Reports to Stockholders.


Table of Contents

 

LOGO


Table of Contents
SECTION  19(B) DISCLOSURE

September 30, 2014 (Unaudited)

Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund (each a “Fund” and collectively, the “Funds”), acting pursuant to a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Fund’s Board of Trustees (the “Board”), have adopted a plan, consistent with each Fund’s investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the “Plan”). In accordance with the Plan, Clough Global Allocation Fund and Clough Global Equity Fund currently distribute $0.105 per share on a monthly basis and Clough Global Opportunities Fund distributes $0.095 per share on a monthly basis.

The fixed amount distributed per share is subject to change at the discretion of each Fund’s Board. Under the Plan, each Fund will distribute all available investment income to its shareholders, consistent with each Fund’s primary investment objectives and as required by the Internal Revenue Code of 1986, as amended (the “Code”). If sufficient investment income is not available on a monthly basis, each Fund will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable each Fund to comply with the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about each Fund’s investment performance from the amount of these distributions or from the terms of the Plan. Each Fund’s total return performance on net asset value is presented in its financial highlights table.

The Board may amend, suspend or terminate each Fund’s Plan without prior notice if it deems such action to be in the best interest of either the Fund or its shareholders. The suspension or termination of the Plan could have the effect of creating a trading discount (if a Fund’s stock is trading at or above net asset value) or widening an existing trading discount. Each Fund is subject to risks that could have an adverse impact on its ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, increased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to each Fund’s prospectus for a more complete description of its risks.

Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current fiscal period. Section 19(a) notices for each Fund, as applicable, are available on the Clough Global Closed-End Funds website www.cloughglobal.com.


Table of Contents

Clough Global Funds

   Table of Contents

 

 
         
       Shareholder Letter      2   
 
      

Portfolio Allocation

  
      

Global Allocation Fund

     5   
      

Global Equity Fund

     6   
      

Global Opportunities Fund

     7   
 
      

Statement of Investments

  
      

Global Allocation Fund

     8   
      

Global Equity Fund

     15   
      

Global Opportunities Fund

     21   
 
      

Statements of Assets and Liabilities

     29   
 
      

Statements of Operations

     30   
 
      

Statements of Changes in Net Assets

     31   
 
      

Statements of Cash Flows

     32   
 
      

Financial Highlights

  
      

Global Allocation Fund

     33   
      

Global Equity Fund

     34   
      

Global Opportunities Fund

     35   
 
      

Notes to Financial Statements

     36   
 
      

Dividend Reinvestment Plan

     49   
 
      

Additional Information

  
      

Fund Proxy Voting Policies & Procedures

     50   
      

Portfolio Holdings

     50   
      

Notice

     50   
      

Shareholder Meeting

     50   
      

Section 19(A) Notices

     50   
 
      

Investment Advisory Agreement Approval

     52   
 
         


Table of Contents

Shareholder Letter

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

To Our Shareholders:

Clough Global Allocation Fund (GLV)

During the six-months ended September 30, 2014, the Clough Global Allocation Fund’s total return, assuming reinvestment of all distributions, was -0.59% based on the net asset value and -1.74% based on the market price of the Fund. The S&P 500 and the MSCI World Index returned 6.41% and 2.92%, respectively, over the same period. During the six-months ended September 30, 2014, the Fund paid $0.63 per share in distributions. As of September 30th, the Fund had a dividend distribution rate on the market price of 8.81%.

Clough Global Equity Fund (GLQ)

During the six-months ended September 30, 2014, the Clough Global Equity Fund’s total return, assuming reinvestment of all distributions, was -1.09% based on the net asset value and -3.11% based on the market price of the Fund. The S&P 500 and the MSCI World Index returned 6.41% and 2.92%, respectively, over the same period. During the six-months ended September 30, 2014, the Fund paid $0.63 per share in distributions. As of September 30th, the Fund had a dividend distribution rate on the market price of 8.79%.

Clough Global Opportunities Fund (GLO)

During the six-months ended September 30, 2014, the Clough Global Opportunities Fund’s total return, assuming reinvestment of all distributions, was -0.81% based on the net asset value and -2.12% based on the market price of the Fund. The S&P 500 and the MSCI World Index returned 6.41% and 2.92%, respectively, over the same period. During the six-months ended September 30, 2014, the Fund paid $0.57 per share in distributions. As of September 30th, the Fund had a dividend distribution rate on the market price of 9.56%.

One thing that has been supportive of equities for the past two years has been the aggressive expansion of liquidity on the part of the Fed. That in turn has depressed securities market volatility. All has now changed. Volatility first emerged in the foreign exchange market several weeks ago, a market where trillions of dollars are traded weekly. One reason for its reemergence is clear: tapering removes that support central bank liquidity has provided the capital markets. Another reason for the rise in volatility is a slowing global economy and the fact that systemic weakness in Europe has finally reached into Germany, where export orders and industrial activity have weakened. Peripheral bond markets have fallen in response and that has brought the Euro under pressure. As an aside, Europe’s problems are actually positive for the Fund. As you know we have had a short European bank trade on for some time. Peripheral banks are particularly vulnerable here as they are largely a leveraged bet on their own sovereign spreads, and those spreads are beginning to widen out. We still believe very large capital raises lie ahead for the banks. While some of our strategies have been flat over the last six months, we still believe they have promise for high returns in this new environment.

Our positions in the housing sector encompass both homebuilders and companies involved in providing mortgage insurance. The mortgage insurance industry has the potential of being both rapidly growing and highly profitable in the absence of another collapse in residential housing prices. We think that is unlikely. The industry is under-building demand. Meanwhile apartment rents are 15% higher year-on-year so that alternative to single family housing is getting pricey at a time mortgage costs are declining. The cog in the machine is mortgage availability which is still depressed largely due to regulatory issues but they are likely to ease. Sheila Bair, the former FDIC (Federal Deposit Insurance Corporation) Chair, wrote a piece in Fortune suggesting a less restrictive mortgage lending environment. In addition, Fannie Mae and Freddie Mac announced a joint campaign to make credit more accessible to first time home buyers. The recent move lower in 30-year mortgage rates below 4% should also provide a tailwind for the sector. Meanwhile MGIC Investment Corp., a mortgage insurer held by the Fund, reported a 21% year-on-year rise in new insurance in the third quarter in a flat market as the private companies take share from the FHA (Federal Housing Administration). It may require some patience, but a housing cycle seems more likely.

Citigroup Corp., one of the Fund’s largest positions reported third quarter revenues rose 10% year-on-year while expenses dropped 6% and total credit costs dropped 11%. Citi Holdings (the so-called “bad bank”) was profitable for the second quarter in a row. Net interest margins and trading revenues improved, as did international consumer revenues. Citi’s capital and leverage ratios are far above peers, yet the stock still sells 15% below tangible book and 30% below stated book. It is notable that one-third of the company’s earnings came from its Asian consumer business. Citi is part of an oligopoly of only three global banks which can offer corporate banking services worldwide.

Healthcare continues to be the largest contributor to performance for 2014. The funds are long names that will continue to benefit from the M&A (Mergers and Acquisitions) environment. Large slow growing names in the space need to acquire companies to maintain product pipelines. We are long mid-cap names with launched products and no partners that make for attractive acquisition targets. The funds also continue to be long hospitals that benefit from the implementation of the Affordable Care Act. Medicaid is now correcting roughly 10% top line losses for hospitals. Potential losses of the past will now be backed by the government. The long position in Healthcare is hedged with shorts in Biotech and HMO’s (Health Maintenance Organization) where valuations look vulnerable.

On the Asia front, we think China’s A share market (SHCOMP, Shanghai Stock Exchange Composite Index) could be the world’s best performing index over the next few years. That index rose 6.9% in September on a 65% year-on-year rise in turnover while western stocks stumbled. Our thinking is based on China’s transformation from a credit dependent industrial economy with a mercantilist bent to a consumer-based services economy. The China consumer is spending big time. One piece of evidence of this is a structural change in its current account makeup. China’s merchandise trade

 

 

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Table of Contents

Clough Global Funds

   Shareholder Letter
   September 30, 2014 (Unaudited)

    

 

balance was a positive $358 billion in 2013, but that merely means it returned to its 2008 peak. However, China’s total current account is deteriorating because of a growing deficit in trade from services. That means services consumption is rising rapidly. A boom in transportation and tourism services is simply reflective of the boom in services spending generally across China.

One way to think about Asia is that everywhere in Asia, reform is underway. Reform governments are in power in China and India, the Abe government is the best Japan has had in 30 years outside of Junichiro Koizumi. A former salesperson is in power in Indonesia. The army is currently in charge in Thailand but the army is popular and business friendly. In brief, approximately 8-9% of the Fund is invested here at present, largely in China, India, Japan and South Korea, and we are seeking ways to increase that exposure.

The Funds have benefited this year by being long 30-year Treasuries and A-rated US corporate bonds. 30% of equity in GLV and GLO and 20% of equity in GLQ are currently in fixed income assets. The recent volatility has made pricing more attractive in corporate bonds and we will continue to add to this allocation opportunistically. We still believe we are in a low interest rate world and deflationary forces in Europe will continue to make US Treasuries and corporate debt an attractive source of income.

If you have any questions about your investment, please call 1-877-256-8445.

Sincerely,

 

LOGO

Charles I. Clough, Jr.

 

LOGO

Robert M. Zdunczyk

Past performance is no guarantee of future results.

The information in this letter represents the opinions of the individual Portfolio Managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice.

The Fund’s distribution policy will, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio.

Sources of distributions to shareholders may include net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital. If a distribution includes anything other than net investment income, the applicable Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current period. The actual amounts and sources of distributions for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The estimates may not match the final tax characterization (for the full year’s distributions) contained in the shareholder’s Form 1099-DIV. Distribution payments are not guaranteed; distribution rates may vary.

MSCI World Index – A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes.

S&P 500® Index – Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.

Shanghai Stock Exchange Composite-Index – A capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange.

30-year Treasuries – A U.S. Treasury debt obligation that has a maturity of 30 years. The 30-year Treasury used to be the bellwether U.S. bond but now most consider the 10-year Treasury to be the benchmark.

A-rated US corporate bonds – A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such as Standard & Poor’s, use different designations consisting of upper- and lower-case letters ‘A’ and ‘B’ to identify a bond’s credit quality rating. ‘AAA’ and ‘AA’ (high credit quality) and ‘A’ and ‘BBB’ (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations (‘BB’, ‘B’, ‘CCC’, etc.) are considered low credit quality, and are commonly referred to as “junk bonds”.

It is not possible to invest directly in an index.

 

 

Semi-Annual Report  |  September 30, 2014

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Table of Contents

Shareholder Letter

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

CLOUGH GLOBAL ALLOCATION FUND  

Top 10 Equity Holdings*

    % of Total Portfolio   

1. Bank of America Corp.

    3.84%   

2. Citigroup, Inc.

    3.81%   

3. DR Horton, Inc.

    3.00%   

4. Western Union Co.

    2.85%   

5. Lennar Corp. - Class A

    2.81%   

6. AutoNation, Inc.

    2.03%   

7. Lam Research Corp.

    2.02%   

8. Signet Jewelers, Ltd.

    2.00%   

9. Morgan Stanley

    1.96%   

10. Two Harbors Investment Corp.

    1.96%   
CLOUGH GLOBAL EQUITY FUND       

Top 10 Equity Holdings*

    % of Total Portfolio   

1. Bank of America Corp.

    3.84%   

2. Citigroup, Inc.

    3.81%   

3. DR Horton, Inc.

    2.96%   

4. Western Union Co.

    2.82%   

5. Lennar Corp. - Class A

    2.78%   

6. Lam Research Corp.

    2.00%   

7. AutoNation, Inc.

    1.99%   

8. Signet Jewelers, Ltd.

    1.98%   

9. Two Harbors Investment Corp.

    1.93%   

10. Morgan Stanley

    1.93%   
CLOUGH GLOBAL OPPORTUNITIES FUND  

Top 10 Equity Holdings*

    % of Total Portfolio   

1. Bank of America Corp.

    3.85%   

2. Citigroup, Inc.

    3.82%   

3. DR Horton, Inc.

    3.00%   

4. Western Union Co.

    2.85%   

5. Lennar Corp. - Class A

    2.82%   

6. AutoNation, Inc.

    2.06%   

7. Lam Research Corp.

    2.02%   

8. Signet Jewelers, Ltd.

    2.00%   

9. Morgan Stanley

    1.98%   

10. Two Harbors Investment Corp.

    1.96%   

Holdings are subject to change.

*Only long positions are listed.

 

 

4

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Table of Contents

Clough Global Allocation Fund

   Portfolio Allocation
   September 30, 2014 (Unaudited)

    

 

Asset Allocation*

 

Common Stocks - US

     69.72%   

Common Stocks - Foreign

     14.49%   

Exchange Traded Funds

     -15.13%   

 

 

Total Equities

     69.08%   

 

 

Government L/T

     4.42%   

Corporate Debt

     8.06%   

Asset/Mortgage Backed

     7.57%   

 

 

Total Fixed Income

     20.05%   

 

 

Short-Term Investments

     10.24%   

Other (Foreign Cash)

     0.41%   

Total Return Swap Contracts

     0.18%   

Warrants

     0.07%   

Options

     -0.03%   

 

 

Total Other

     10.87%   

 

 
  

 

 

TOTAL INVESTMENTS

     100.00%   

 

 

 

* 

Percentages are based on total investments, including options written and securities sold short. Holdings are subject to change.

^

Includes securities sold short and foreign cash balances.

 

US Multinational Corporations – has more than 50% of revenues derived outside of the U.S.

Global Securities Holdings^

 

United States

     68.49%   

U.S. Multinationals

     15.69%   

Japan

     4.27%   

United Kingdom

     3.17%   

China

     3.03%   

Brazil

     1.46%   

Canada

     1.24%   

Hong Kong

     0.92%   

South Korea

     0.65%   

European Union

     0.56%   

Other

     0.51%   

 

 

TOTAL INVESTMENTS

     100.00%   

 

 
 

 

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Table of Contents

Portfolio Allocation

   Clough Global Equity Fund
September 30, 2014 (Unaudited)   

    

 

Asset Allocation*

 

Common Stocks - US

     75.57%   

Common Stocks - Foreign

     16.68%   

Exchange Traded Funds

     -14.85%   

 

 

Total Equities

     77.41%   

 

 

Government L/T

     3.95%   

Corporate Debt

     5.16%   

Asset/Mortgage Backed

     1.04%   

 

 

Total Fixed Income

     10.15%   

 

 

Short-Term Investments

     11.68%   

Other (Foreign Cash)

     0.54%   

Total Return Swap Contracts

     0.17%   

Warrants

     0.07%   

Options

     -0.03%   

 

 

Total Other

     12.43%   

 

 
  

 

 

TOTAL INVESTMENTS

     100.00%   

 

 

 

* 

Percentages are based on total investments, including options written and securities sold short. Holdings are subject to change.

^ 

Includes securities sold short and foreign cash balances.

 

US Multinational Corporations – has more than 50% of revenues derived outside of the U.S.

Global Securities Holdings^

 

United States

     66.39%   

U.S. Multinationals

     15.48%   

Japan

     4.57%   

China

     3.72%   

United Kingdom

     3.13%   

Canada

     1.74%   

Hong Kong

     1.64%   

Brazil

     1.43%   

South Korea

     0.84%   

European Union

     0.55%   

Other

     0.50%   

 

 

TOTAL INVESTMENTS

     100.00%   

 

 
 

 

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Table of Contents

Clough Global Opportunities Fund

   Portfolio Allocation
   September 30, 2014 (Unaudited)

    

 

Asset Allocation*

 

Common Stocks - US

     70.03%   

Common Stocks - Foreign

     14.56%   

Exchange Traded Funds

     -15.18%   

 

 

Total Equities

     69.41%   

 

 

Government L/T

     4.39%   

Corporate Debt

     7.72%   

Asset/Mortgage Backed

     7.44%   

 

 

Total Fixed Income

     19.55%   

 

 

Short-Term Investments

     10.39%   

Other (Foreign Cash)

     0.41%   

Total Return Swap Contracts

     0.18%   

Warrants

     0.07%   

Options

     -0.01%   

 

 

Total Other

     11.04%   

 

 
  

 

 

TOTAL INVESTMENTS

     100.00%   

 

 

 

* 

Percentages are based on total investments, including options written and securities sold short. Holdings are subject to change.

^ 

Includes securities sold short and foreign cash balances.

 

US Multinational Corporations – has more than 50% of revenues derived outside of the U.S.

Global Securities Holdings^

 

United States

     68.43%   

U.S. Multinationals

     15.68%   

Japan

     4.29%   

United Kingdom

     3.17%   

China

     3.04%   

Brazil

     1.46%   

Canada

     1.24%   

Hong Kong

     0.92%   

South Korea

     0.65%   

European Union

     0.57%   

Other

     0.54%   

 

 

TOTAL INVESTMENTS

     100.00%   

 

 
 

 

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Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2014 (Unaudited)   

    

 

     Shares     Value  

COMMON STOCKS 109.02%

  

Consumer Discretionary 28.49%

  

Diversified Consumer Services 0.99%

  

 

Service Corp.
International(a)

    81,700        $1,727,138   
   

 

 

 

Hotels 2.34%

   

Melco Crown Entertainment,
Ltd. - ADR

    7,100        186,659   

SeaWorld Entertainment,
Inc.(a)

    42,900        824,967   

Wyndham Worldwide
Corp.(a)(b)

    37,780        3,070,003   
   

 

 

 
      4,081,629   
   

 

 

 

Household Durables 10.18%

  

 

DR Horton, Inc.(a)(b)

    261,426        5,364,462   

Lennar Corp. -
Class A(a)(b)

    129,700        5,036,251   

Man Wah Holdings, Ltd.

    408,065        600,154   

PulteGroup, Inc.(a)(b)

    183,549        3,241,475   

Sony Corp.

    35,600        646,269   

Toll Brothers, Inc.(a)(b)(c)

    91,225        2,842,571   
   

 

 

 
          17,731,182   
   

 

 

 

Internet & Catalog Retail 4.31%

  

 

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

    34,312        978,578   

Liberty TripAdvisor Holdings,
Inc. - Class A(a)(b)(c)

    54,217        1,837,956   

Liberty Ventures -
Series A(a)(b)(c)

    54,217        2,058,077   

Priceline Group, Inc.(a)(c)

    2,277        2,638,087   
   

 

 

 
      7,512,698   
   

 

 

 

Media 5.70%

  

 

Charter Communications,
Inc. - Class A(a)(b)(c)

    17,100        2,588,427   

Comcast Corp. - Class A(a)(b)

    47,400        2,549,172   

Imax Corp.(a)(b)(c)

    50,200        1,378,492   

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

    24,212        1,142,322   

Liberty Media Corp. -
Class C(a)(b)(c)

    48,424        2,275,444   
   

 

 

 
      9,933,857   
   

 

 

 

Multiline Retailing 0.34%

  

 

Don Quijote Holdings Co., Ltd.

    10,400        596,453   
   

 

 

 

Specialty Retail 4.25%

  

 

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

    72,036        3,624,131   

Penske Automotive Group,
Inc.(a)

    5,241        212,732   
     Shares     Value  

Consumer Discretionary (continued)

  

Signet Jewelers, Ltd.(a)(b)

    31,350        $3,571,079   
   

 

 

 
      7,407,942   
   

 

 

 

Textiles 0.38%

   

Samsonite International S.A.

    202,997        653,577   
   

 

 

 

TOTAL CONSUMER DISCRETIONARY

  

        49,644,476   
   

 

 

 

Consumer Staples 1.75%

   

Brasil Pharma S.A.(c)(d)

    241,474        367,970   

Hypermarcas S.A.(c)

    83,400        601,032   

M Dias Branco S.A.

    16,400        657,742   

Suntory Beverage & Food, Ltd.

    10,600        375,965   

Vinda International Holdings, Ltd.

    480,498        725,247   

WH Group, Ltd.(c)

    387,500        318,390   
   

 

 

 
      3,046,346   
   

 

 

 

Energy 9.78%

   

Anadarko Petroleum
Corp.(a)(b)

    8,300        841,952   

Cimarex Energy Co.(a)

    2,700        341,631   

Concho Resources,
Inc.(a)(c)

    7,400        927,886   

Continental Resources,
Inc.(a)(b)(c)

    7,400        491,952   

EOG Resources, Inc.

    7,100        703,042   

Halcon Resources Corp.(c)

    117,700        466,092   

Halliburton Co.(a)(b)

    20,300        1,309,553   

Helmerich & Payne,
Inc.(a)(b)

    7,800        763,386   

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

    23,919        1,297,845   

Marathon Petroleum
Corp.(a)

    15,100        1,278,517   

Nabors Industries, Ltd.(a)(b)

    44,300        1,008,268   

Patterson-UTI Energy, Inc.(a)(b)

    32,000        1,040,960   

Penn Virginia Corp.(a)(b)(c)

    135,300        1,719,663   

Phillips 66(a)

    8,900        723,659   

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

    19,039        499,964   

Stone Energy Corp.(a)(c)

    57,600        1,806,336   

Superior Energy Services,
Inc.(a)(b)

    17,800        585,086   

Valero Energy Corp.(a)

    18,300        846,741   

Western Refining, Inc.

    9,200        386,308   
   

 

 

 
      17,038,841   
   

 

 

 

Financials 26.15%

   

Capital Markets 2.95%

   

CITIC Securities Co., Ltd. -
Class H

    319,500        736,531   
 

 

8

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

      Shares      Value  

Financials (continued)

     

Haitong Securities Co.,
Ltd. - Class H

     224,000         $345,598   

Ladder Capital Corp. - Class A(a)(c)

     29,604         559,516   

Morgan Stanley(a)(b)

     101,387         3,504,948   
     

 

 

 
        5,146,593   
     

 

 

 

Commercial Banks 4.62%

  

  

Bank of Ireland(c)

     2,287,900         898,711   

Fifth Third Bancorp(a)

     51,200         1,025,024   

First Republic Bank(a)(b)

     36,200         1,787,556   

Grupo Financiero Banorte
SAB de CV - Class O

     105,888         678,115   

Mitsubishi UFJ Financial
Group, Inc.

     65,530         370,565   

Mizuho Financial Group, Inc.

     215,395         384,736   

Sumitomo Mitsui Financial
Group, Inc.

     13,029         531,139   

SunTrust Banks, Inc.(a)

     62,254         2,367,520   
     

 

 

 
        8,043,366   
     

 

 

 

Diversified Financials 8.89%

  

  

Atlas Mara Co.-Nvest,
Ltd.(c)(d)

     183,658         1,799,848   

Bank of America Corp.(a)

     402,591         6,864,177   

Citigroup, Inc.(a)(b)

     131,630         6,821,067   
     

 

 

 
            15,485,092   
     

 

 

 

Insurance 3.69%

     

American International
Group, Inc.(a)(b)

     51,800         2,798,236   

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

     146,593         1,920,368   

Hartford Financial Services
Group, Inc.(a)

     46,208         1,721,248   
     

 

 

 
        6,439,852   
     

 

 

 

Real Estate Investment Trusts 4.24%

  

  

Colony Financial, Inc.(a)

     79,800         1,785,924   

PennyMac Mortgage Investment Trust(a)

     97,714         2,094,011   

Two Harbors Investment
Corp.(a)

     362,100         3,501,507   
     

 

 

 
        7,381,442   
     

 

 

 

Real Estate Management & Development 0.57%

  

  

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

     59,300         433,167   

BR Properties S.A.

     107,200         564,959   
     

 

 

 
        998,126   
     

 

 

 
      Shares      Value  

Financials (continued)

  

  

Thrifts & Mortgage Finance 1.19%

  

  

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

     265,370         $2,072,540   
     

 

 

 

TOTAL FINANCIALS

        45,567,011   
     

 

 

 

Health Care 18.88%

  

  

AbbVie, Inc.(a)

     39,700         2,293,072   

Aegerion Pharmaceuticals, Inc.(a)(b)(c)

     29,900         998,062   

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

     32,500         1,178,775   

Alkermes PLC(a)(b)(c)

     25,100         1,076,037   

Astellas Pharma, Inc.

     76,700         1,142,020   

Auris Medical Holding AG(a)(c)

     30,600         177,786   

Biogen Idec, Inc.(a)(b)(c)

     6,780         2,242,892   

Bristol-Myers Squibb Co.(a)

     34,587         1,770,163   

CareFusion Corp.(a)(c)

     16,300         737,575   

Centene Corp.(a)(c)

     8,057         666,394   

Cerner Corp.(a)(c)

     9,000         536,130   

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

     34,900         1,912,171   

Endo International PLC(a)(b)(c)

     16,800         1,148,112   

Flamel Technologies S.A. -
Sponsored ADR(c)

     67,645         968,000   

GW Pharmaceuticals PLC -
ADR(a)(b)(c)

     16,100         1,301,685   

HCA Holdings, Inc.(a)(c)

     26,277         1,853,054   

Healthways, Inc.(c)

     90,129         1,443,867   

Intrexon Corp.(a)(b)(c)

     74,904         1,391,716   

Ironwood Pharmaceuticals,
Inc.(a)(b)(c)

     52,600         681,433   

Jazz Pharmaceuticals
PLC(a)(b)(c)

     5,677         911,499   

LifePoint Hospitals, Inc.(a)(c)

     11,227         776,796   

Medicines Co.(a)(b)(c)

     58,100         1,296,792   

Pfizer, Inc.(a)

     73,500         2,173,395   

Salix Pharmaceuticals,
Ltd.(a)(b)(c)

     1,920         299,981   

Sanofi - ADR

     17,153         967,944   

Team Health Holdings, Inc.(a)(c)

     15,534         900,817   

Veracyte, Inc.(a)(c)

     54,756         533,871   

WellPoint, Inc.(a)

     4,010         479,676   

Zimmer Holdings, Inc.(a)

     10,200         1,025,610   
     

 

 

 
            32,885,325   
     

 

 

 

Industrials 8.29%

     

Allegion PLC(a)

     47,000         2,239,080   

Allison Transmission Holdings,
Inc.(a)(b)(d)

     111,141         3,166,407   

Bombardier, Inc. - Class B

     354,900         1,194,672   

CIRCOR International, Inc.(a)

     3,100         208,723   

FLIR Systems, Inc.(a)(b)

     75,800         2,375,572   
 

 

Semi-Annual Report  |  September 30, 2014

  9


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2014 (Unaudited)   

    

 

      Shares      Value  

Industrials (continued)

  

IHI Corp.

     112,000         $580,041   

Localiza Rent A Car S.A.

     39,900         573,458   

Mitsubishi Heavy Industries, Ltd.

     182,000         1,170,907   

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

     40,749         2,246,085   

Wesco Aircraft Holdings, Inc.(a)(c)

     39,600         689,040   
     

 

 

 
        14,443,985   
     

 

 

 

Information Technology 12.69%

  

Alibaba Group Holding, Ltd. - Sponsored ADR(c)

     6,900         613,065   

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

     44,935         2,544,669   

EVERTEC, Inc.(a)

     37,842         845,390   

GCL-Poly Energy Holdings, Ltd.(c)

     1,501,000         550,925   

Google, Inc. - Class A(a)(c)

     2,836         1,668,731   

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

     3,240         1,870,647   

Hoya Corp.

     19,600         658,367   

Lam Research Corp.(a)(b)

     48,500         3,622,950   

NXP Semiconductor NV(a)(c)

     14,452         988,950   

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

     4,400         296,868   

Samsung Electronics Co., Ltd.

     574         644,033   

Semiconductor Manufacturing International Corp.(c)

     3,641,000         375,127   

Western Digital Corp.(a)(b)

     23,900         2,325,948   

Western Union Co.(a)(b)

     318,155         5,103,206   
     

 

 

 
        22,108,876   
     

 

 

 

Materials 1.53%

     

Berry Plastics Group, Inc.(a)(c)

     50,346         1,270,733   

Graphic Packaging Holding
Co.(a)(c)

     112,505         1,398,437   
     

 

 

 
        2,669,170   
     

 

 

 

Telecommunication Services 1.46%

  

China Mobile, Ltd.

     45,000         520,133   

KT Corp.

     16,100         523,317   

Nippon Telegraph & Telephone Corp.

     24,000         1,492,628   
     

 

 

 
        2,536,078   
     

 

 

 

TOTAL COMMON STOCKS

(Cost $184,365,906)

  

  

         189,940,108   
     

 

 

 
      Shares      Value  

Telecommunication Services (continued)

  

EXCHANGE TRADED FUNDS 1.76%

  

CSOP FTSE China A50 ETF

     997,600         $1,206,393   

SPDR® Gold Shares(a)(c)

     16,070         1,867,495   
     

 

 

 
            3,073,888   
     

 

 

 
TOTAL EXCHANGE TRADED FUNDS
(Cost $3,311,157)
         3,073,888   
     

 

 

 

WARRANTS 0.07%

     

Brasil Pharma S.A.,
Strike price 5.50 (BRL), Expires 6/24/2016(c)(e)

     24,186         3,557   
     

 

 

 

Atlas Mara Co.-Nvest, Ltd., Strike price $11.50,
Expires 12/17/2017(c)(d)

     116,958         116,958   
     

 

 

 

TOTAL WARRANTS

(Cost $1,169)

  

  

     120,515   
     

 

 

 

Description and

Maturity Date

   Principal
Amount
     Value  

CORPORATE BONDS 8.28%

     

Bank of America Corp.

     

Series U, Perpetual Maturity, 5.200%(a)(f)(g)

   $ 1,365,000         1,289,925   

Series V, Perpetual Maturity, 5.125%(a)(f)(g)

     1,550,000         1,507,375   

Caterpillar, Inc.

     

08/15/2042, 3.803%

     600,000         558,817   

Citigroup, Inc.

     

Series D, Perpetual Maturity, 5.350%(a)(f)(g)

     1,185,000         1,113,027   

Fifth Third Bancorp

     

Series J, Perpetual Maturity, 4.900%(f)(g)

     1,000,000         977,950   

John Deere Capital Corp.

     

03/15/2022, 2.750% (a) 

     800,000         792,049   

JPMorgan Chase & Co.

     

Series Q, Perpetual Maturity, 5.150%(a)(f)(g)

     1,335,000         1,274,925   

Series V, Perpetual Maturity, 5.000%(a)(f)(g)

     1,400,000         1,370,055   

Merck & Co., Inc.

     

09/15/2042, 3.600%

     400,000         365,088   

Morgan Stanley

     

Series H, Perpetual Maturity, 5.450%(f)(g)

     1,300,000         1,291,875   
 

 

10

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

 

Description and

Maturity Date

 

Principal

Amount

    Value  

CORPORATE BONDS (continued)

  

PNC Financial Services Group, Inc.,

   

Series R, Perpetual Maturity, 4.850%(a)(f)(g)

    $715,000        $679,250   

Provident Bank of Maryland

   

05/01/2018, 9.500%(a) 

    1,000,000        1,006,008   

Stifel Financial Corp.

   

07/18/2024, 4.250%(a) 

    1,200,000        1,209,592   

Wal-Mart Stores, Inc.

   

04/11/2043, 4.000%

    400,000        390,728   

Walt Disney Co.

   

Series E, 12/01/2041, 4.125%

    600,000        605,450   
   

 

 

 
TOTAL CORPORATE BONDS
(Cost $14,347,612)
            14,432,114   
   

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 7.78%

  

Federal Home Loan Mortgage Corp. REMICS

   

Series 2013-4185, Class PB, 03/15/2043, 3.000%

    594,481        568,122   

Federal National Mortgage Association REMICS

   

Series 2013-100, Class MS, 06/25/2043, 3.845%(f)

    732,241        695,723   

Series 2013-67, Class BP, 07/25/2043, 3.000%

    1,244,555        1,190,882   

Series 2013-132, Class LB, 01/25/2044, 3.000%

    758,409        741,667   

Government National Mortgage Association

   

Series 2014-33, Class A, 08/16/2039, 2.300%

    895,813        903,376   

Series 2014-86, Class A, 11/16/2040, 2.650%

    397,998        403,993   

Series 2014-112, Class AB, 12/16/2040, 2.350%

    1,195,698        1,216,088   

Series 2014-14, Class AH, 01/16/2042, 2.550%(e)

    1,185,507        1,186,062   

Series 2014-81, Class EC, 12/20/2042, 2.000%

    989,657        952,677   

Series 2014-54, Class AB, 10/16/2043, 2.619%

    1,389,792        1,407,753   

Series 2012-109, Class AC, 09/16/2044, 3.125%(f)

    952,815        972,012   

Series 2014-28, Class A, 01/16/2046, 2.000%

    544,518        545,158   

Series 2014-134, Class A, 09/16/2047, 3.100%

    800,000        815,340   

Series 2014-120, Class A, 04/16/2056, 2.800%(f)

    997,895        1,015,678   

Series 2014-120, Class AC, 04/16/2056, 2.650%(f)

    599,030        598,011   

Description and

Maturity Date

 

Principal

Amount

    Value  
ASSET/MORTGAGE BACKED SECURITIES (continued)   

Small Business Administration Participation Certificates

   

Series 2008-20L, Class 1, 12/01/2028, 6.220%(a)

    $297,445        $337,787   
   

 

 

 
TOTAL ASSET/MORTGAGE BACKED SECURITIES (Cost $13,564,171)         13,550,329   
 

 

 

 

GOVERNMENT & AGENCY OBLIGATIONS 4.54%

  

U.S. Treasury Bonds

   

05/15/2024, 2.500%(a)

    1,400,000        1,401,477   

02/15/2038, 4.375%(a)

    1,600,000        1,942,875   

11/15/2041, 3.125%(a)

    1,600,000        1,587,501   

02/15/2042, 3.125%

    3,000,000        2,971,875   
   

 

 

 
TOTAL GOVERNMENT & AGENCY OBLIGATIONS (Cost $7,808,313)         7,903,728   
   

 

 

 
    

Shares/
Principal

Amount

    Value  

SHORT-TERM INVESTMENTS 10.51%

  

Money Market Fund 8.79%

  

Morgan Stanley Institutional Liquidity Funds - Prime Portfolio (0.040% 7-day yield)

    15,318,675        15,318,675   
   

 

 

 

U.S. Treasury Bills 1.72%

  

U.S. Treasury Bills Discount Notes

   

10/30/2014, 0.038%(a)(h)

    $1,000,000        999,970   

11/28/2014, 0.040%(a)(h)

    2,000,000        1,999,871   
   

 

 

 
      2,999,841   
   

 

 

 
TOTAL SHORT-TERM INVESTMENTS
(Cost $18,318,516)
        18,318,516   
   

 

 

 

Total Investments - 141.96%

(Cost $241,716,844)

  

  

    247,339,198   

Liabilities in Excess of
Other Assets - (41.96%)(i) 

   

    (73,106,987)   
   

 

 

 

NET ASSETS - 100.00%

  

        $174,232,211   
   

 

 

 
SCHEDULE OF WRITTEN OPTIONS   Number of
Contracts
    Value  

CALL OPTIONS WRITTEN (0.02%)

  

eBay, Inc., Expires December, 2014, Exercise Price $57.50

    (50)        $(11,250)   
 

 

Semi-Annual Report  |  September 30, 2014

  11


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2014 (Unaudited)   

    

 

SCHEDULE OF WRITTEN OPTIONS    Number of
Contracts
     Value  

CALL OPTIONS WRITTEN

  

eBay, Inc.,
Expires December, 2014, Exercise Price $60.00

     (50)         $(6,625)   

Service Corp. International, Expires December, 2014, Exercise Price $22.50

     (200)         (8,000)   
     

 

 

 

TOTAL CALL OPTIONS WRITTEN

(Premiums received $33,994)

  

  

     (25,875)   
     

 

 

 

PUT OPTIONS WRITTEN (0.01%)

  

  

Comcast Corp.,
Expires October 2014, Exercise Price $55.00

     (132)         (20,064)   
     

 

 

 

TOTAL PUT OPTIONS WRITTEN

(Premiums received $5,539)

  

  

     (20,064)   
     

 

 

 

TOTAL WRITTEN OPTIONS

(Premiums received $39,533)

  

  

     $(45,939)   
     

 

 

 
SCHEDULE OF SECURITIES
SOLD SHORT (c)
   Shares      Value  

COMMON STOCKS (22.53%)

 

Consumer Discretionary (1.80%)

 

Auto Components (0.47%)

  

  

Johnson Controls, Inc.

     (18,800)         $(827,200)   
     

 

 

 

Hotels (0.72%)

     

MGM Resorts International

     (22,300)         (507,994)   

Wynn Resorts, Ltd.

     (3,950)         (738,966)   
     

 

 

 
            (1,246,960)   
     

 

 

 

Internet & Catalog Retail (0.61%)

  

  

Expedia, Inc.

     (12,200)         (1,068,964)   
     

 

 

 

TOTAL CONSUMER DISCRETIONARY

  

     (3,143,124)   
     

 

 

 

Energy (1.97%)

     

Chesapeake Energy Corp.

     (51,800)         (1,190,882)   

CONSOL Energy, Inc.

     (16,500)         (624,690)   

EQT Corp.

     (7,700)         (704,858)   

Southwestern Energy Co.

     (25,900)         (905,205)   
     

 

 

 
        (3,425,635)   
     

 

 

 

Financials (4.13%)

     

Capital Markets (0.58%)

  

  

Mediobanca SpA

     (117,797)         (1,013,221)   
     

 

 

 

Commercial Banks (1.51%)

  

  

BNP Paribas S.A.

     (9,600)         (636,823)   
SCHEDULE OF SECURITIES
SOLD SHORT (c)
   Shares      Value  

Financials (continued)

  

  

Credit Agricole S.A.

     (36,933)         $(557,216)   

Itau Unibanco Holding S.A.- Preferred ADR

     (42,128)         (584,737)   

Societe Generale S.A.

     (7,894)         (403,011)   

UniCredit SpA

     (56,909)         (449,964)   
     

 

 

 
        (2,631,751)   
     

 

 

 

Diversified Financials (1.17%)

  

  

Intercontinental Exchange, Inc.

     (3,546)         (691,647)   

NASDAQ OMX Group, Inc.

     (31,900)         (1,353,198)   
     

 

 

 
        (2,044,845)   
     

 

 

 

Insurance (0.87%)

  

  

Everest Re Group, Ltd.

     (4,542)         (735,850)   

PartnerRe, Ltd.

     (7,000)         (769,230)   
     

 

 

 
        (1,505,080)   
     

 

 

 

TOTAL FINANCIALS

  

     (7,194,897)   
     

 

 

 

Health Care (10.96%)

 

  

Amgen, Inc.

     (5,590)         (785,171)   

athenahealth, Inc.

     (12,210)         (1,607,935)   

Celgene Corp.

     (24,700)         (2,341,066)   

Charles River Laboratories International, Inc.

     (16,900)         (1,009,606)   

Covance, Inc.

     (24,150)         (1,900,605)   

CR Bard, Inc.

     (10,300)         (1,469,913)   

Gilead Sciences, Inc.

     (20,400)         (2,171,580)   

Laboratory Corp. of America Holdings

     (6,350)         (646,113)   

Mylan, Inc.

     (36,600)         (1,664,934)   

Quest Diagnostics, Inc.

     (13,700)         (831,316)   

Regeneron Pharmaceuticals, Inc.

     (5,000)         (1,802,600)   

St. Jude Medical, Inc.

     (39,400)         (2,369,122)   

WellCare Health Plans, Inc.

     (8,300)         (500,822)   
     

 

 

 
            (19,100,783)   
     

 

 

 

Industrials (1.04%)

     

Rolls-Royce Holdings PLC

     (30,300)         (473,768)   

Sandvik AB

     (48,651)         (548,807)   

SPX Corp.

     (8,300)         (779,619)   
        (1,802,194)   
     

 

 

 

Information Technology (1.34%)

 

  

International Business Machines Corp.

     (10,280)         (1,951,452)   

Paychex, Inc.

     (8,500)         (375,700)   
     

 

 

 
        (2,327,152)   
     

 

 

 

Materials (1.29%)

     

Anglo American PLC

     (42,402)         (951,355)   
 

 

12

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Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

 

SCHEDULE OF SECURITIES SOLD
SHORT (c)
   Shares      Value  

Materials (continued)

     

Bemis Co., Inc.

     (17,900)         $(680,558)   

BHP Billiton, Ltd.

     (20,865)         (618,749)   
     

 

 

 
        (2,250,662)   
TOTAL COMMON STOCKS
(Proceeds $39,591,934)
         (39,244,447)   

EXCHANGE TRADED FUNDS (17.30%)

 

iShares® MSCI Emerging Markets ETF

     (63,843)         (2,653,315)   

iShares® Nasdaq Biotechnology ETF

     (12,800)         (3,502,464)   

iShares® Russell 2000® ETF

     (123,338)         (13,487,010)   

Market Vectors® Semiconductor ETF

     (66,800)         (3,412,812)   

SPDR® S&P 500® ETF Trust

     (36,000)         (7,092,720)   
     

 

 

 
TOTAL EXCHANGE TRADED FUNDS
(Proceeds $29,023,921)
         (30,148,321)   
     

 

 

 
TOTAL SECURITIES SOLD SHORT
(Proceeds $68,615,855)
         $(69,392,768)   
     

 

 

 

 

(a)

Pledged security; a portion or all of the security is pledged as collateral for written options, securities sold short or borrowings. As of September 30, 2014, the aggregate market value of those securities was $177,616,348, representing 101.94% of net assets. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan as of September 30, 2014.

(c)

Non-income producing security.

(d)

Security exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of September 30, 2014, these securities had an aggregate market value of $5,769,573 or 3.31% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2014, these securities had an aggregate market value of $1,189,619 or 0.68% of total net assets.

(f)

Floating or variable rate security - rate disclosed as of September 30, 2014.

(g)

This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.

(h)

Rate shown represents the bond equivalent yield to maturity at date of purchase.

(i)

Includes cash which is being held as collateral for total return swap contracts.

 

 

Semi-Annual Report  |  September 30, 2014

  13


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2014 (Unaudited)   

    

 

TOTAL RETURN SWAP CONTRACTS

 

Counter Party   Reference Entity/Obligation   Notional
Amount
    Floating Rate
Paid by the Fund
    Floating
Rate Index
    Termination
Date
    Net
Unrealized
  Appreciation
 

 

 

Morgan Stanley

  Bharti Infratel, Ltd.   $     1,350,830        30 bps + 1D FEDEF        1D FEDEF        12/30/2014      $     246,070   

Morgan Stanley

 

Housing Development Finance Corp.

    299,253        30 bps + 1D FEDEF        1D FEDEF        01/15/2016        72,459   

 

 
    $ 1,650,083            $ 318,529   

 

 

 

See Notes to the Financial Statements.

 

14

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

      Shares      Value  

COMMON STOCKS 118.70%

  

Consumer Discretionary 32.33%

  

Diversified Consumer Services 1.00%

  

  

Service Corp. International(a)(b)

     136,700         $2,889,838   
     

 

 

 

Hotels 2.48%

     

Melco Crown Entertainment, Ltd. - ADR

     11,700         307,593   

SeaWorld Entertainment, Inc.(a)

     71,700         1,378,791   

Wyndham Worldwide Corp.(a)(b)

     67,844         5,513,003   
     

 

 

 
        7,199,387   
     

 

 

 

Household Durables 10.19%

  

  

DR Horton, Inc.(a)(b)

     436,821         8,963,567   

Lennar Corp. - Class A(a)(b)

     216,600         8,410,578   

Man Wah Holdings, Ltd.

     677,810         996,876   

PulteGroup, Inc.(a)(b)

     306,786         5,417,841   

Sony Corp.

     58,600         1,063,803   

Toll Brothers, Inc.(a)(b)(c)

     151,108         4,708,525   
     

 

 

 
        29,561,190   
     

 

 

 

Internet & Catalog Retail 4.90%

  

  

Liberty Interactive Corp. -
Class A(a)(b)(c)

     108,386         3,091,169   

Liberty TripAdvisor Holdings, Inc. - Class A(a)(b)(c)

     93,748         3,178,057   

Liberty Ventures - Series A(a)(b)(c)

     93,748         3,558,674   

Priceline Group, Inc.(a)(c)

     3,795         4,396,811   
     

 

 

 
        14,224,711   
     

 

 

 

Media 7.31%

     

Charter Communications, Inc. - Class A(a)(b)(c)

     28,700         4,344,319   

Comcast Corp. - Class A(a)(b)

     79,300         4,264,754   

Imax Corp.(a)(b)(c)

     139,495         3,830,533   

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

     45,468         2,145,180   

Liberty Media Corp. -
Class C(a)(b)(c)

     90,936         4,273,082   

Pandora Media, Inc.(c)

     97,900         2,365,264   
     

 

 

 
            21,223,132   
     

 

 

 

Multiline Retailing 0.34%

  

  

Don Quijote Holdings Co., Ltd.

     17,100         980,707   
     

 

 

 

Specialty Retail 4.25%

  

  

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

     119,367         6,005,354   
      Shares      Value  

Consumer Discretionary (continued)

  

Penske Automotive Group, Inc.(a)

     8,696         $352,970   

Signet Jewelers, Ltd.(a)(b)

     52,546         5,985,515   
     

 

 

 
        12,343,839   
     

 

 

 

Textiles 1.86%

  

  

Carter’s, Inc.

     36,500         2,829,480   

Samsonite International S.A.

     802,303         2,583,125   
     

 

 

 
        5,412,605   
     

 

 

 

TOTAL CONSUMER DISCRETIONARY

  

         93,835,409   
     

 

 

 

Consumer Staples 2.44%

  

Brasil Pharma S.A.(c)(d)

     396,047         603,516   

China Huishan Dairy Holdings Co., Ltd.

     2,541,000         562,860   

China Modern Dairy Holdings, Ltd.(c)

     1,224,000         567,480   

Hypermarcas S.A.(c)

     138,700         999,558   

M Dias Branco S.A.

     27,200         1,090,889   

Suntory Beverage & Food, Ltd.

     17,500         620,697   

Vinda International Holdings, Ltd.

     1,281,222         1,933,833   

WH Group, Ltd.(c)(d)

     861,100         707,524   
     

 

 

 
        7,086,357   
     

 

 

 

Energy 10.25%

  

Anadarko Petroleum Corp.(a)

     13,900         1,410,016   

Cimarex Energy Co.(a)

     4,500         569,385   

Concho Resources,
Inc.(a)(c)

     12,400         1,554,836   

Continental Resources, Inc.(a)(b)(c)

     12,300         817,704   

EOG Resources, Inc.

     11,800         1,168,436   

Halcon Resources Corp.(c)

     196,500         778,140   

Halliburton Co.(a)

     40,600         2,619,106   

Helmerich & Payne, Inc.(a)(b)

     12,700         1,242,949   

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

     39,484         2,142,402   

Marathon Petroleum Corp.(a)

     25,100         2,125,217   

Nabors Industries, Ltd.(a)(b)

     74,000         1,684,240   

Pacific Coast Oil Trust(d)

     95,800         981,950   

Patterson-UTI Energy,
Inc.(a)(b)

     53,300         1,733,849   

Penn Virginia Corp.(a)(b)(c)

     225,800         2,869,918   

Phillips 66(a)

     14,800         1,203,388   

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

     31,807         835,252   

Stone Energy Corp.(a)(c)

     95,900         3,007,424   

Superior Energy Services, Inc.(a)(b)

     28,900         949,943   

Valero Energy Corp.(a)

     30,400         1,406,608   
 

 

Semi-Annual Report  |  September 30, 2014

  15


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2014 (Unaudited)   

    

 

     Shares     Value  

Energy (continued)

   

Western Refining, Inc.

    15,500        $650,845   
   

 

 

 
      29,751,608   
   

 

 

 

Financials 28.08%

  

 

Capital Markets 3.29%

  

 

CITIC Securities Co., Ltd. - Class H

    534,500        1,232,162   

Haitong Securities Co., Ltd. - Class H

    375,200        578,877   

Ladder Capital Corp. -
Class A(a)(c)

    102,100        1,929,690   

Morgan Stanley(a)(b)

    168,496        5,824,907   
   

 

 

 
      9,565,636   
   

 

 

 

Commercial Banks 4.63%

  

 

Bank of Ireland(c)

    3,816,600        1,499,201   

Fifth Third Bancorp(a)

    85,400        1,709,708   

First Republic Bank(a)(b)

    60,500        2,987,490   

Grupo Financiero Banorte SAB de CV - Class O

    175,725        1,125,357   

Mitsubishi UFJ Financial Group, Inc.

    110,019        622,145   

Mizuho Financial Group, Inc.

    360,279        643,526   

Sumitomo Mitsui Financial Group, Inc.

    21,690        884,212   

SunTrust Banks, Inc.(a)

    104,029        3,956,223   
   

 

 

 
          13,427,862   
   

 

 

 

Diversified Financials 9.00%

  

 

Atlas Mara Co.-Nvest, Ltd.(c)(d)

    306,320        3,001,936   

Bank of America Corp.(a)

    680,805        11,607,725   

Citigroup, Inc.(a)(b)

    222,219        11,515,389   
   

 

 

 
      26,125,050   
   

 

 

 

Insurance 3.85%

  

 

American International Group, Inc.(a)(b)

    86,500        4,672,730   

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

    277,390        3,633,809   

Hartford Financial Services Group, Inc.(a)

    76,721        2,857,857   
   

 

 

 
      11,164,396   
   

 

 

 

Real Estate Investment Trusts 4.75%

  

 

Colony Financial, Inc.(a)

    133,300        2,983,254   

PennyMac Mortgage Investment Trust(a)

    163,388        3,501,405   

Starwood Waypoint Residential Trust

    55,800        1,451,358   
     Shares     Value  

Financials (continued)

   

Two Harbors Investment Corp.(a)

    604,700        $5,847,449   
   

 

 

 
      13,783,466   
   

 

 

 

Real Estate Management & Development 0.57%

  

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

    97,514        712,307   

BR Properties S.A.

    178,200        939,140   
   

 

 

 
      1,651,447   
   

 

 

 

Thrifts & Mortgage Finance 1.99%

  

 

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

    442,753        3,457,901   

NMI Holdings, Inc. - Class A(c)

    100,300        867,595   

Stonegate Mortgage Corp.(c)

    111,111        1,443,332   
   

 

 

 
      5,768,828   
   

 

 

 

TOTAL FINANCIALS

          81,486,685   
   

 

 

 

Health Care 20.15%

   

AbbVie, Inc.(a)

    66,300        3,829,488   

Aegerion Pharmaceuticals,
Inc.(a)(b)(c)

    49,900        1,665,662   

Akorn, Inc.(a)(c)

    72,400        2,625,948   

Alkermes PLC(a)(b)(c)

    42,000        1,800,540   

Astellas Pharma, Inc.

    127,000        1,890,960   

Auris Medical Holding AG(a)(c)

    50,900        295,729   

Biogen Idec, Inc.(a)(c)

    11,310        3,741,461   

Bristol-Myers Squibb Co.(a)(b)

    57,516        2,943,669   

CareFusion Corp.(a)(c)

    27,100        1,226,275   

Centene Corp.(a)(c)

    13,299        1,099,960   

Cerner Corp.(a)(c)

    15,100        899,507   

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

    58,600        3,210,694   

Endo International PLC(a)(b)(c)

    28,100        1,920,354   

Flamel Technologies S.A. - Sponsored ADR(c)

    116,697        1,669,934   

GW Pharmaceuticals PLC -
ADR(a)(b)(c)

    26,800        2,166,780   

HCA Holdings, Inc.(a)(c)

    43,815        3,089,834   

Healthways, Inc.(c)

    146,441        2,345,985   

Intrexon Corp.(a)(c)

    125,059        2,323,596   

Ironwood Pharmaceuticals,
Inc.(a)(b)(c)

    87,900        1,138,745   

Jazz Pharmaceuticals PLC(a)(b)(c)

    9,469        1,520,343   

LifePoint Hospitals, Inc.(a)(c)

    18,739        1,296,551   

Medequities Realty Trust, Inc.(c)(e)

    51,100        766,500   

Medicines Co.(a)(b)(c)

    97,100        2,167,272   

Pfizer, Inc.(a)

    122,600        3,625,282   

Salix Pharmaceuticals, Ltd.(a)(b)(c)

    3,220        503,093   
 

 

16

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

      Shares      Value  

Health Care (continued)

  

Sanofi - ADR

     28,498         $1,608,142   

Sinopharm Group Co., Ltd. - Class H

     94,800         346,732   

Team Health Holdings, Inc.(a)(c)

     25,762         1,493,938   

TESARO, Inc.(c)

     61,000         1,642,120   

Veracyte, Inc.(a)(c)

     115,235         1,123,541   

WellPoint, Inc.(a)

     6,710         802,650   

Zimmer Holdings, Inc.(a)

     17,000         1,709,350   
     

 

 

 
            58,490,635   
     

 

 

 

Industrials 9.41%

     

Allegion PLC(a)

     78,500         3,739,740   

Allison Transmission Holdings, Inc.(a)(b)(d)

     193,077         5,500,764   

Bombardier, Inc. - Class B

     594,500         2,001,219   

CIRCOR International, Inc.(a)

     5,200         350,116   

Daewoo International Corp.

     16,597         590,587   

FleetCor Technologies, Inc.(c)

     5,800         824,296   

FLIR Systems, Inc.(a)(b)

     125,600         3,936,304   

IHI Corp.

     431,044         2,232,350   

Localiza Rent A Car S.A.

     66,300         952,889   

Mitsubishi Heavy Industries, Ltd.

     302,000         1,942,933   

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

     74,442         4,103,243   

Wesco Aircraft Holdings, Inc.(a)(c)

     66,000         1,148,400   
     

 

 

 
        27,322,841   
     

 

 

 

Information Technology 13.07%

  

Alibaba Group Holding, Ltd. - Sponsored ADR(c)

     11,400         1,012,890   

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

     75,230         4,260,275   

Electronics For Imaging, Inc.(c)

     26,900         1,188,173   

EVERTEC, Inc.(a)

     63,498         1,418,545   

GCL-Poly Energy Holdings,
Ltd.(c)

     2,510,000         921,267   

Google, Inc. - Class A(a)(c)

     4,657         2,740,225   

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

     5,321         3,072,133   

Hoya Corp.

     32,600         1,095,039   

Lam Research Corp.(a)(b)

     80,900         6,043,230   

NXP Semiconductor NV(a)(c)

     23,308         1,594,966   

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

     7,400         499,278   

Samsung Electronics Co., Ltd.

     958         1,074,885   

Semiconductor Manufacturing International Corp.(c)

     6,071,000         625,485   

Western Digital Corp.(a)

     39,800         3,873,336   
      Shares      Value  

Information Technology (continued)

  

Western Union Co.(a)(b)

     530,939         $8,516,262   
     

 

 

 
        37,935,989   
     

 

 

 

Materials 1.51%

     

Berry Plastics Group,
Inc.(a)(b)(c)

     83,247         2,101,154   

Graphic Packaging Holding
Co.(a)(b)(c)

     182,887         2,273,286   
     

 

 

 
        4,374,440   
     

 

 

 

Telecommunication Services 1.46%

  

  

China Mobile, Ltd.

     75,500         872,667   

KT Corp.

     26,900         874,361   

Nippon Telegraph & Telephone Corp.

     40,100         2,493,933   
     

 

 

 
        4,240,961   
     

 

 

 

TOTAL COMMON STOCKS

(Cost $332,228,499)

  

  

       344,524,925   
     

 

 

 

EXCHANGE TRADED FUNDS 1.75%

  

  

CSOP FTSE China A50 ETF

     1,664,400         2,012,752   

SPDR® Gold Shares(a)(c)

     26,320         3,058,647   
     

 

 

 
        5,071,399   
     

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Cost $5,460,875)

  

  

     5,071,399   
     

 

 

 

WARRANTS 0.07%

     

Brasil Pharma S.A., Strike price 5.50 (BRL), Expires 6/24/2016(c)(e)

     39,668         5,834   
     

 

 

 

Atlas Mara Co.-Nvest, Ltd., Strike price $11.50,
Expires 12/17/2017(c)(d)

     195,720         195,720   
     

 

 

 

TOTAL WARRANTS

(Cost $1,957)

  

  

     201,554   
     

 

 

 
 

 

Semi-Annual Report  |  September 30, 2014

  17


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2014 (Unaudited)   

    

 

Description and

Maturity Date

   Principal
Amount
     Value  

CORPORATE BONDS 5.38%

  

Bank of America Corp.

     

Series U, Perpetual Maturity,
5.200%(a)(f)(g)

     $1,540,000         $1,455,300   

Series V, Perpetual
Maturity, 5.125%(a)(f)(g)

     2,450,000         2,382,625   

Citigroup, Inc.

     

Series D, Perpetual
Maturity, 5.350%(a)(f)(g)

     1,925,000         1,808,081   

John Deere Capital Corp.

     

03/15/2022, 2.750%(a)

     1,200,000         1,188,073   

JPMorgan Chase & Co.

     

Series Q, Perpetual
Maturity, 5.150%(a)(f)(g)

     2,145,000         2,048,475   

Series V, Perpetual
Maturity, 5.000%(a)(f)(g)

     1,900,000         1,859,361   

Morgan Stanley

     

Series H, Perpetual
Maturity, 5.450%(f)(g)

     1,900,000         1,888,125   

PNC Financial Services Group, Inc.,

     

Series R, Perpetual
Maturity, 4.850%(a)(f)(g)

     1,025,000         973,750   

Stifel Financial Corp.

     

07/18/2024, 4.250%(a)

     2,000,000         2,015,986   
     

 

 

 

TOTAL CORPORATE BONDS

(Cost $15,453,647)

  

  

         15,619,776   
     

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 1.09%

  

Government National Mortgage Association

     

Series 2014-112, Class AB, 12/16/2040, 2.350%

     1,893,188         1,925,473   

Series 2014-134, Class A, 09/16/2047, 3.100%

     1,200,000         1,223,010   
     

 

 

 

TOTAL ASSET/MORTGAGE

BACKED SECURITIES

(Cost $3,169,729)

  

  

  

     3,148,483   
     

 

 

 

GOVERNMENT & AGENCY OBLIGATIONS 4.11%

  

U.S. Treasury Bonds

     

05/15/2024, 2.500%(a)

     2,500,000         2,502,638   

02/15/2038, 4.375%(a)

     2,550,000         3,096,457   

11/15/2041, 3.125%(a)

     2,400,000         2,381,251   

02/15/2042, 3.125%

     4,000,000         3,962,500   
     

 

 

 

TOTAL GOVERNMENT & AGENCY

OBLIGATIONS

(Cost $11,800,104)

  

  

  

     11,942,846   
     

 

 

 
      Shares/
Principal
Amount
     Value  

SHORT-TERM INVESTMENTS 12.17%

  

Money Market Fund 9.93%

  

  

Morgan Stanley Institutional Liquidity Funds - Prime Portfolio (0.040% 7-day yield)

     28,829,257         $28,829,257   
     

 

 

 

U.S. Treasury Bills 2.24%

  

  

U.S. Treasury Bills Discount Notes

     

10/30/2014, 0.038%(a)(h)

     $1,500,000         1,499,954   

11/28/2014, 0.040%(a)(h)

     5,000,000         4,999,678   
     

 

 

 
        6,499,632   
     

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost $35,328,889)

  

  

     35,328,889   
     

 

 

 

Total Investments - 143.27%

(Cost $403,443,700)

  

  

     415,837,872   

Liabilities in Excess of Other Assets - (43.27%)(i) 

  

     (125,592,731)   
     

 

 

 

NET ASSETS - 100.00%

  

       $290,245,141   
     

 

 

 
SCHEDULE OF WRITTEN OPTIONS    Number of
Contracts
     Value  

CALL OPTIONS WRITTEN (0.02%)

  

eBay, Inc., Expires December, 2014, Exercise Price $57.50

     (80)         $(18,000)   

eBay, Inc., Expires December, 2014, Exercise Price $60.00

     (80)         (10,600)   

Service Corp. International, Expires December, 2014, Exercise Price $22.50

     (340)         (13,600)   
     

 

 

 

TOTAL CALL OPTIONS WRITTEN

(Premiums received $55,890)

  

  

     (42,200)   
     

 

 

 

PUT OPTIONS WRITTEN (0.01%)

  

Comcast Corp., Expires October 2014, Exercise Price $55.00

     (220)         (33,440)   
     

 

 

 

TOTAL PUT OPTIONS WRITTEN

(Premiums received $9,231)

  

  

     (33,440)   
     

 

 

 

TOTAL WRITTEN OPTIONS

(Premiums received $65,121)

  

  

     $(75,640)   
     

 

 

 
 

 

 

18

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

SCHEDULE OF SECURITIES
SOLD SHORT (c)
   Shares      Value  

COMMON STOCKS (22.58%)

  

Consumer Discretionary (1.82%)

  

Auto Components (0.48%)

  

  

Johnson Controls, Inc.

     (31,600)         $(1,390,400)   
     

 

 

 

Hotels (0.71%)

  

  

MGM Resorts International

     (37,400)         (851,972)   

Wynn Resorts, Ltd.

     (6,480)         (1,212,278)   
     

 

 

 
        (2,064,250)   
     

 

 

 

Internet & Catalog Retail (0.63%)

  

  

Expedia, Inc.

     (21,000)         (1,840,020)   
     

 

 

 

TOTAL CONSUMER DISCRETIONARY

  

     (5,294,670)   
     

 

 

 

Energy (1.98%)

     

Chesapeake Energy Corp.

     (86,800)         (1,995,532)   

CONSOL Energy, Inc.

     (27,600)         (1,044,936)   

EQT Corp.

     (13,100)         (1,199,174)   

Southwestern Energy Co.

     (43,400)         (1,516,830)   
     

 

 

 
        (5,756,472)   
     

 

 

 

Financials (4.12%)

     

Capital Markets (0.58%)

  

  

Mediobanca SpA

     (196,625)         (1,691,254)   
     

 

 

 

Commercial Banks (1.50%)

 

  

BNP Paribas S.A.

     (15,900)         (1,054,738)   

Credit Agricole S.A.

     (60,002)         (905,263)   

Itau Unibanco Holding S.A. - Preferred ADR

     (70,329)         (976,167)   

Societe Generale S.A.

     (13,140)         (670,833)   

UniCredit SpA

     (95,139)         (752,239)   
     

 

 

 
        (4,359,240)   
     

 

 

 

Diversified Financials (1.18%)

 

  

Intercontinental Exchange, Inc.

     (5,910)         (1,152,746)   

NASDAQ OMX Group, Inc.

     (53,200)         (2,256,744)   
     

 

 

 
        (3,409,490)   
     

 

 

 

Insurance (0.86%)

  

  

Everest Re Group, Ltd.

     (7,543)         (1,222,041)   

PartnerRe, Ltd.

     (11,600)         (1,274,724)   
     

 

 

 
        (2,496,765)   
     

 

 

 

TOTAL FINANCIALS

  

     (11,956,749)   
     

 

 

 

Health Care (10.98%)

     

Amgen, Inc.

     (9,300)         (1,306,278)   

athenahealth, Inc.

     (20,360)         (2,681,208)   

Celgene Corp.

     (41,100)         (3,895,458)   

Charles River Laboratories International, Inc.

     (28,100)         (1,678,694)   

SCHEDULE OF SECURITIES

SOLD SHORT (c)

   Shares      Value  

Health Care (continued)

     

Covance, Inc.

     (40,250)         $(3,167,675)   

CR Bard, Inc.

     (17,200)         (2,454,612)   

Gilead Sciences, Inc.

     (34,100)         (3,629,945)   

Laboratory Corp. of America Holdings

     (10,800)         (1,098,900)   

Mylan, Inc.

     (60,900)         (2,770,341)   

Quest Diagnostics, Inc.

     (22,900)         (1,389,572)   

Regeneron Pharmaceuticals, Inc.

     (8,300)         (2,992,316)   

St. Jude Medical, Inc.

     (65,800)         (3,956,554)   

WellCare Health Plans, Inc.

     (13,800)         (832,692)   
     

 

 

 
        (31,854,245)   
     

 

 

 

Industrials (1.04%)

     

Rolls-Royce Holdings PLC

     (50,700)         (792,740)   

Sandvik AB

     (81,221)         (916,212)   

SPX Corp.

     (13,800)         (1,296,234)   
     

 

 

 
        (3,005,186)   
     

 

 

 

Information Technology (1.34%)

 

International Business Machines Corp.

     (17,197)         (3,264,507)   

Paychex, Inc.

     (14,200)         (627,640)   
     

 

 

 
        (3,892,147)   
     

 

 

 

Materials (1.30%)

     

Anglo American PLC

     (70,903)         (1,590,820)   

Bemis Co., Inc.

     (30,000)         (1,140,600)   

BHP Billiton, Ltd.

     (34,880)         (1,034,362)   
     

 

 

 
        (3,765,782)   
     

 

 

 

TOTAL COMMON STOCKS

(Proceeds $66,117,859)

  

  

     (65,525,251)   
     

 

 

 

EXCHANGE TRADED FUNDS (17.22%)

 

iShares® MSCI Emerging Markets ETF

     (106,451)         (4,424,104)   

iShares® Nasdaq Biotechnology ETF

     (21,450)         (5,869,363)   

iShares® Russell 2000® ETF

     (206,379)         (22,567,544)   

Market Vectors® Semiconductor ETF

     (111,100)         (5,676,099)   

SPDR® S&P 500® ETF Trust

     (58,050)         (11,437,011)   
     

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Proceeds $48,202,682)

  

  

     (49,974,121)   
     

 

 

 

TOTAL SECURITIES SOLD SHORT

(Proceeds $114,320,541)

  

  

   $ (115,499,372)   
     

 

 

 
 

 

Semi-Annual Report  |  September 30, 2014

  19


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2014 (Unaudited)   

    

 

(a)

Pledged security; a portion or all of the security is pledged as collateral for written options, securities sold short or borrowings. As of September 30, 2014, the aggregate market value of those securities was $301,263,725, representing 103.80% of net assets. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan as of September 30, 2014.

(c)

Non-income producing security.

(d)

Security exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of September 30, 2014, these securities had an aggregate market value of $10,991,410 or 3.79% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2014, these securities had an aggregate market value of $772,334 or 0.27% of total net assets.

(f)

Floating or variable rate security - rate disclosed as of September 30, 2014.

(g)

This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.

(h)

Rate shown represents the bond equivalent yield to maturity at date of purchase.

(i)

Includes cash which is being held as collateral for total return swap contracts.

 

 

TOTAL RETURN SWAP CONTRACTS                          
Counter Party   

Reference

Entity/Obligation

  Notional
Amount
    Floating Rate
Paid by
the Fund
    Floating
Rate Index
   

Termination

Date

   

Net
Unrealized

Appreciation

 

 

 

Morgan Stanley

   Bharti Infratel, Ltd.   $     2,171,923        30 bps + 1D FEDEF        1D FEDEF        12/30/2014      $ 395,642   

Morgan Stanley

   Housing Development Finance Corp.     501,777        30 bps + 1D FEDEF        1D FEDEF        01/15/2016        121,497   

 

 
     $ 2,673,700            $ 517,139   

 

 

 

See Notes to the Financial Statements.

 

20

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

      Shares      Value  

COMMON STOCKS 110.26%

  

Consumer Discretionary 28.86%

  

Diversified Consumer Services 1.00%

  

  

Service Corp.
International(a)(b)

     340,200         $7,191,828   
     

 

 

 

Hotels 2.39%

  

  

Melco Crown Entertainment, Ltd. - ADR

     29,500         775,555   

SeaWorld Entertainment, Inc.(a)

     178,100         3,424,863   

Wyndham Worldwide
Corp.(a)(b)

     159,820         12,986,973   
     

 

 

 
        17,187,391   
     

 

 

 

Household Durables 10.26%

  

  

DR Horton, Inc.(a)(b)

     1,087,662         22,318,824   

Lennar Corp. - Class A(a)(b)

     541,200         21,014,796   

Man Wah Holdings, Ltd.

     1,723,046         2,534,136   

PulteGroup, Inc.(a)(b)

     763,969         13,491,692   

Sony Corp.

     146,000         2,650,431   

Toll Brothers, Inc.(a)(b)(c)

     378,175         11,783,933   
     

 

 

 
            73,793,812   
     

 

 

 

Internet & Catalog Retail 4.40%

  

  

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

     145,802         4,158,273   

Liberty TripAdvisor Holdings, Inc. - Class A(a)(b)(c)

     230,232         7,804,865   

Liberty Ventures -
Series A(a)(b)(c)

     230,232         8,739,607   

Priceline Group, Inc.(a)(c)

     9,449         10,947,422   
     

 

 

 
        31,650,167   
     

 

 

 

Media 5.76%

  

  

Charter Communications, Inc. - Class A(a)(b)(c)

     71,400         10,807,818   

Comcast Corp. - Class A(a)(b)

     197,300         10,610,794   

Imax Corp.(a)(c)

     210,300         5,774,838   

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

     100,956         4,763,104   

Liberty Media Corp. - Class C(a)(b)(c)

     201,912         9,487,845   
     

 

 

 
        41,444,399   
     

 

 

 

Multiline Retailing 0.34%

  

  

Don Quijote Holdings Co., Ltd.

     43,300         2,483,310   
     

 

 

 

Specialty Retail 4.33%

  

  

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

     305,109         15,350,034   
      Shares      Value  

Consumer Discretionary (continued)

  

Penske Automotive Group, Inc.(a)

     21,987         $892,452   

Signet Jewelers, Ltd.(a)(b)

     130,646         14,881,886   
     

 

 

 
        31,124,372   
     

 

 

 

Textiles 0.38%

  

  

Samsonite International S.A.

     862,193         2,775,949   
     

 

 

 

TOTAL CONSUMER DISCRETIONARY

  

         207,651,228   
     

 

 

 

Consumer Staples 1.78%

  

  

Brasil Pharma S.A.(c)(d)

     1,040,742         1,585,933   

Hypermarcas S.A.(c)

     345,000         2,486,283   

M Dias Branco S.A.

     67,600         2,711,181   

Suntory Beverage & Food, Ltd.

     44,500         1,578,345   

Vinda International Holdings, Ltd.

     2,060,714         3,110,372   

WH Group, Ltd.(c)

     1,605,500         1,319,161   
     

 

 

 
        12,791,275   
     

 

 

 

Energy 9.88%

     

Anadarko Petroleum
Corp.(a)(b)

     34,300         3,479,392   

Cimarex Energy Co.(a)

     11,300         1,429,789   

Concho Resources,
Inc.(a)(b)(c)

     31,000         3,887,090   

Continental Resources,
Inc.(a)(b)(c)

     30,400         2,020,992   

EOG Resources, Inc.

     29,400         2,911,188   

Halcon Resources Corp.(c)

     489,100         1,936,836   

Halliburton Co.(a)(b)

     85,800         5,534,958   

Helmerich & Payne, Inc.(a)(b)

     32,100         3,141,627   

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

     102,294         5,550,472   

Marathon Petroleum Corp.(a)

     62,600         5,300,342   

Nabors Industries, Ltd.(a)(b)

     184,800         4,206,048   

Patterson-UTI Energy,
Inc.(a)(b)

     133,700         4,349,261   

Penn Virginia Corp.(a)(b)(c)

     562,253         7,146,236   

Phillips 66(a)

     37,200         3,024,732   

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

     79,077         2,076,562   

Stone Energy Corp.(a)(c)

     239,798         7,520,065   

Superior Energy Services, Inc.(a)(b)

     73,700         2,422,519   

Valero Energy Corp.(a)

     76,500         3,539,655   

Western Refining, Inc.

     38,500         1,616,615   
     

 

 

 
        71,094,379   
     

 

 

 
 

 

Semi-Annual Report  |  September 30, 2014

  21


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund

September 30, 2014 (Unaudited)

  

    

 

 

      Shares      Value  

Financials 26.42%

     

Capital Markets 3.00%

  

  

CITIC Securities Co., Ltd. - Class H

     1,328,000         $3,061,386   

Haitong Securities Co., Ltd. - Class H

     931,600         1,437,319   

Ladder Capital Corp. - Class A(a)(c)

     123,096         2,326,514   

Morgan Stanley(a)(b)

     426,513         14,744,555   
     

 

 

 
        21,569,774   
     

 

 

 

Commercial Banks 4.65%

  

Bank of Ireland(c)

     9,502,900         3,732,841   

Fifth Third Bancorp(a)

     212,200         4,248,244   

First Republic Bank(a)(b)

     150,700         7,441,566   

Grupo Financiero Banorte SAB de CV - Class O

     447,444         2,865,467   

Mitsubishi UFJ Financial Group, Inc.

     272,911         1,543,282   

Mizuho Financial Group, Inc.

     894,969         1,598,581   

Sumitomo Mitsui Financial Group, Inc.

     53,919         2,198,057   

SunTrust Banks,
Inc.(a)(b)

     258,609         9,834,900   
     

 

 

 
            33,462,938   
     

 

 

 

Diversified Financials 8.98%

  

  

Atlas Mara Co.-Nvest, Ltd.(c)(d)

     764,522         7,492,316   

Bank of America
Corp.(a)

     1,683,310         28,700,435   

Citigroup, Inc.(a)(b)

     548,862         28,442,029   
     

 

 

 
        64,634,780   
     

 

 

 

Insurance 3.74%

  

  

American International

     

Group, Inc.(a)(b)

     215,400         11,635,908   

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

     615,355         8,061,150   

Hartford Financial Services Group,
Inc.(a)

     193,507         7,208,136   
     

 

 

 
        26,905,194   
     

 

 

 

Real Estate Investment Trusts 4.27%

  

Colony Financial, Inc.(a)

     332,300         7,436,874   

PennyMac Mortgage Investment Trust(a)

     406,991         8,721,817   

Two Harbors Investment Corp.(a)

     1,511,100         14,612,337   
     

 

 

 
        30,771,028   
     

 

 

 

Real Estate Management & Development 0.58%

  

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

     249,677         1,823,807   
      Shares      Value  

Financials (continued)

  

BR Properties S.A.

     443,300         $2,336,256   
     

 

 

 
        4,160,063   
     

 

 

 

Thrifts & Mortgage Finance 1.20%

  

  

MGIC Investment Corp.(a)(c)

     1,104,385         8,625,247   
     

 

 

 

TOTAL FINANCIALS

  

     190,129,024   
     

 

 

 

Health Care 19.06%

     

AbbVie, Inc.(a)

     165,200         9,541,952   

Aegerion Pharmaceuticals, Inc.(a)(b)(c)

     124,200         4,145,796   

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

     142,500         5,168,475   

Alkermes PLC(a)(b)(c)

     104,400         4,475,628   

Astellas Pharma, Inc.

     322,900         4,807,802   

Auris Medical Holding
AG(a)(c)

     126,400         734,384   

Biogen Idec, Inc.(a)(b)(c)

     28,230         9,338,766   

Bristol-Myers Squibb Co.(a)

     143,600         7,349,448   

CareFusion Corp.(a)(c)

     67,800         3,067,950   

Centene Corp.(a)(c)

     33,685         2,786,086   

Cerner Corp.(a)(c)

     37,600         2,239,832   

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

     145,400         7,966,466   

Endo International PLC(a)(c)

     69,700         4,763,298   

Flamel Technologies S.A. - Sponsored ADR(c)

     281,572         4,029,295   

GW Pharmaceuticals PLC - ADR(a)(b)(c)

     66,700         5,392,695   

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

     109,447         7,718,203   

Healthways, Inc.(c)

     363,963         5,830,687   

Intrexon Corp.(a)(b)(c)

     311,540         5,788,413   

Ironwood Pharmaceuticals, Inc.(a)(b)(c)

     219,100         2,838,441   

Jazz Pharmaceuticals PLC(a)(b)(c)

     23,743         3,812,176   

LifePoint Hospitals,
Inc.(a)(b)(c)

     46,576         3,222,593   

Medicines Co.(a)(b)(c)

     241,600         5,392,512   

Pfizer, Inc.(a)

     305,200         9,024,764   

Salix Pharmaceuticals,
Ltd.(a)(b)(c)

     8,090         1,263,982   

Sanofi - ADR

     72,550         4,093,997   

Team Health Holdings,
Inc.(a)(c)

     65,193         3,780,542   

Veracyte, Inc.(a)(c)

     228,605         2,228,899   

WellPoint, Inc.(a)

     17,250         2,063,445   

Zimmer Holdings, Inc.(a)

     42,300         4,253,265   
     

 

 

 
            137,119,792   
     

 

 

 

Industrials 8.43%

     

Allegion PLC(a)

     195,400         9,308,856   
 

 

22

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

      Shares      Value  

Industrials (continued)

  

Allison Transmission Holdings, Inc.(a)(b)(d)

     470,596         $13,407,280   

Bombardier, Inc. - Class B

     1,476,000         4,968,544   

CIRCOR International, Inc.(a)

     13,000         875,290   

FLIR Systems, Inc.(a)(b)

     319,800         10,022,532   

IHI Corp.

     470,000         2,434,101   

Localiza Rent A Car S.A.

     165,000         2,371,443   

Mitsubishi Heavy Industries, Ltd.

     768,000         4,940,969   

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

     171,335         9,443,985   

Wesco Aircraft Holdings,
Inc.(a)(c)

     164,300         2,858,820   
     

 

 

 
        60,631,820   
     

 

 

 

Information Technology 12.79%

  

Alibaba Group Holding, Ltd. - Sponsored ADR(c)

     28,300         2,514,455   

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

     187,468         10,616,313   

EVERTEC, Inc.(a)

     157,945         3,528,491   

GCL-Poly Energy Holdings,
Ltd.(c)

     6,245,000         2,292,156   

Google, Inc. - Class A(a)(c)

     11,741         6,908,522   

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

     13,423         7,749,903   

Hoya Corp.

     82,400         2,767,829   

Lam Research Corp.(a)

     201,100         15,022,170   

NXP Semiconductor NV(a)(c)

     61,586         4,214,330   

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

     18,500         1,248,195   

Samsung Electronics Co., Ltd.

     2,376         2,665,893   

Semiconductor Manufacturing International Corp.(c)

     15,120,000         1,557,789   

Western Digital Corp.(a)(b)

     99,800         9,712,536   

Western Union Co.(a)(b)

     1,323,241         21,224,786   
     

 

 

 
            92,023,368   
     

 

 

 

Materials 1.57%

     

Berry Plastics Group, Inc.(a)(c)

     212,253         5,357,266   

Graphic Packaging Holding
Co.(a)(b)(c)

     475,732         5,913,349   
     

 

 

 
        11,270,615   
     

 

 

 

Telecommunication Services 1.47%

  

China Mobile, Ltd.

     187,500         2,167,218   

KT Corp.

     67,000         2,177,778   
      Shares      Value  

Telecommunication Services (continued)

  

Nippon Telegraph & Telephone Corp.

     100,700         $6,262,819   
     

 

 

 
        10,607,815   
     

 

 

 

TOTAL COMMON STOCKS

(Cost $772,620,659)

  

  

     793,319,316   
     

 

 

 

EXCHANGE TRADED FUNDS 1.80%

  

CSOP FTSE China A50 ETF

     4,136,200         5,001,889   

SPDR® Gold Shares(a)(c)

     68,410         7,949,926   
     

 

 

 
        12,951,815   
     

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Cost $13,958,512)

  

  

     12,951,815   
     

 

 

 

WARRANTS 0.07%

     

Brasil Pharma S.A.,
Strike price 5.50 (BRL),
Expires 6/24/2016(c)(e)

     104,241         15,331   
     

 

 

 

Atlas Mara Co.-Nvest, Ltd., Strike price $11.50,
Expires 12/17/2017(c)(d)

     487,322         487,322   
     

 

 

 

TOTAL WARRANTS

(Cost $4,873)

  

  

     502,653   
     

 

 

 

Description and

Maturity Date

   Principal
Amount
     Value  

CORPORATE BONDS 7.98%

  

Bank of America Corp.

     

Series U, Perpetual
Maturity, 5.200%(a)(f)(g)

     $5,595,000         5,287,275   

Series V, Perpetual
Maturity, 5.125%(a)(f)(g)

     6,000,000         5,835,000   

Caterpillar, Inc.
08/15/2042, 3.803%

     2,400,000         2,235,269   

Citigroup, Inc.

     

Series D, Perpetual
Maturity, 5.350%(a)(f)(g)

     4,890,000         4,592,996   

Fifth Third Bancorp

     

Series J, Perpetual
Maturity, 4.900%(f)(g)

     4,000,000         3,911,800   

John Deere Capital Corp.
03/15/2022, 2.750%(a) 

     3,000,000         2,970,183   
 

 

Semi-Annual Report  |  September 30, 2014

  23


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
September 30, 2014 (Unaudited)   

    

 

Description and

Maturity Date

   Principal
Amount
     Value  

CORPORATE BONDS (continued)

  

JPMorgan Chase & Co.

     

Series Q, Perpetual
Maturity, 5.150%(a)(f)(g)

   $ 5,520,000         $5,271,600   

Series V, Perpetual
Maturity, 5.000%(a)(f)(g)

     5,700,000         5,578,083   

Merck & Co., Inc.

     

09/15/2042, 3.600%

     1,600,000         1,460,353   

Morgan Stanley
Series H, Perpetual
Maturity, 5.450%(f)(g)

     4,800,000         4,770,000   

PNC Financial Services Group, Inc.,
Series R, Perpetual
Maturity, 4.850%(a)(f)(g)

     2,760,000         2,622,000   

Provident Bank of Maryland 05/01/2018, 9.500% (a) 

     4,000,000         4,024,032   

Stifel Financial Corp.
07/18/2024, 4.250% (a) 

     4,800,000         4,838,366   

Wal-Mart Stores, Inc.
04/11/2043, 4.000%

     1,600,000         1,562,914   

Walt Disney Co.
Series E,
12/01/2041, 4.125%

     2,400,000         2,421,799   
     

 

 

 

TOTAL CORPORATE BONDS

(Cost $57,033,559)

  

  

         57,381,670   
     

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 7.70%

  

Federal Home Loan Mortgage Corp. REMICS

     

Series 2013-4185,
Class PB,
03/15/2043, 3.000%

     2,400,000         2,293,584   

Federal National Mortgage Association REMICS

     

Series 2013-100, Class MS, 06/25/2043, 3.845%(f)

     2,928,965         2,782,892   

Series 2013-67, Class BP, 07/25/2043, 3.000%

     5,170,000         4,947,038   

Series 2013-132, Class LB, 01/25/2044, 3.000%

     3,151,680         3,082,107   

Series 2014-26, Class YW, 04/25/2044, 3.500%

     1,375,538         1,368,381   

Government National Mortgage Association

     

Series 2014-33, Class A, 08/16/2039, 2.300%

     3,583,253         3,613,503   

Series 2014-86, Class A, 11/16/2040, 2.650%

     1,631,790         1,656,373   

Series 2014-112, Class AB, 12/16/2040, 2.350%

     4,882,433         4,965,693   

Series 2014-14, Class AH, 01/16/2042, 2.550%(e)

     4,742,026         4,744,249   

Series 2014-81, Class EC, 12/20/2042, 2.000%

     4,948,285         4,763,382   

Description and

Maturity Date

   Principal
Amount
     Value  

ASSET/MORTGAGE BACKED SECURITIES (continued)

  

Series 2014-54, Class AB, 10/16/2043, 2.619%

     $5,559,167         $5,631,013   

Series 2012-109, Class AC, 09/16/2044, 3.125%(f)

     3,811,261         3,888,047   

Series 2014-28, Class A, 01/16/2046, 2.000%

     2,178,074         2,180,631   

Series 2014-134, Class A, 09/16/2047, 3.100%

     3,000,000         3,057,525   

Series 2014-120, Class A, 04/16/2056, 2.800%(f)

     3,991,581         4,062,711   

Series 2014-120, Class AC, 04/16/2056, 2.650%(f)

     2,396,121         2,392,045   
     

 

 

 

TOTAL ASSET/MORTGAGE

BACKED SECURITIES

(Cost $55,652,287)

  

  

  

         55,429,174   
     

 

 

 

GOVERNMENT & AGENCY OBLIGATIONS 4.54%

  

U.S. Treasury Bonds

     

05/15/2024, 2.500% (a)

     6,100,000         6,106,436   

02/15/2038, 4.375% (a)

     6,350,000         7,710,786   

11/15/2041, 3.125% (a)

     6,000,000         5,953,128   

02/15/2042, 3.125%

     13,000,000         12,878,125   
     

 

 

 

TOTAL GOVERNMENT & AGENCY

OBLIGATIONS

(Cost $32,255,821)

  

  

  

     32,648,475   
     

 

 

 
      Number of
Contracts
     Value  

PURCHASED OPTIONS 0.02%

  

Call Options Purchased 0.02%

  

AstraZeneca PLC, Expires October 2014, Exercise Price $70.00

     230         57,500   

AstraZeneca PLC, Expires January 2015, Exercise Price $77.50

     350         83,125   
     

 

 

 

TOTAL Call Options Purchased

(Cost $314,424)

  

  

  
     140,625   
     

 

 

 

TOTAL PURCHASED OPTIONS

(Cost $314,424)

  

  

     140,625   
     

 

 

 
      Shares      Value  

SHORT-TERM INVESTMENTS 10.75%

  

Money Market Fund 8.80%

  

Morgan Stanley Institutional Liquidity Funds - Prime Portfolio (0.040% 7-day yield)

     63,346,162         63,346,162   
     

 

 

 
 

 

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

     Shares     Value  

SHORT-TERM INVESTMENTS (continued)

  

U.S. Treasury Bills 1.95%

  

U.S. Treasury Bills Discount Notes

  

 

10/30/2014, 0.038%(a)(h)

    $4,000,000        $3,999,877   

11/28/2014, 0.040%(a)(h)

    10,000,000        9,999,356   
   

 

 

 
      13,999,233   
   

 

 

 
   

TOTAL SHORT-TERM INVESTMENTS

(Cost $77,345,395)

  

  

    77,345,395   
   

 

 

 

Total Investments - 143.12%

(Cost $1,009,185,530)

  

  

      1,029,719,123   

Liabilities in Excess of

Other Assets - (43.12%)(i) 

  

  

    (310,231,894)   
   

 

 

 

NET ASSETS - 100.00%

  

    $719,487,229   
   

 

 

 
SCHEDULE OF WRITTEN OPTIONS   Number of
Contracts
    Value  

Call Options Written (0.02%)

  

eBay, Inc.,
Expires December, 2014,
Exercise Price $57.50

    (190)        $(42,750)   

eBay, Inc.,
Expires December, 2014,
Exercise Price $60.00

    (190)        (25,175)   

Service Corp. International,
Expires December, 2014,
Exercise Price $22.50

    (850)        (34,000)   
   

 

 

 

TOTAL CALL OPTIONS WRITTEN

(Premiums received $135,925)

  

  

    (101,925)   
   

 

 

 

PUT OPTIONS WRITTEN (0.01%)

  

Comcast Corp.,
Expires October 2014,
Exercise Price $55.00

    (548)        (83,296)   
   

 

 

 

TOTAL PUT OPTIONS WRITTEN

(Premiums received $22,995)

  

  

    (83,296)   
   

 

 

 

TOTAL WRITTEN OPTIONS

(Premiums received $158,920)

  

  

    $(185,221)   
   

 

 

 
SCHEDULE OF SECURITIES
SOLD SHORT (c)
   Shares     Value  

COMMON STOCKS (22.70%)

  

Consumer Discretionary (1.83%)

  

Auto Components (0.48%)

  

 

Johnson Controls, Inc.

     (78,300)        $(3,445,200
    

 

 

 

Hotels (0.72%)

    

MGM Resorts International

     (93,700)        (2,134,486)   

Wynn Resorts, Ltd.

     (16,410)        (3,069,983)   
    

 

 

 
       (5,204,469)   
    

 

 

 

Internet & Catalog Retail (0.63%)

  

Expedia, Inc.

     (51,800)        (4,538,716)   
    

 

 

 

TOTAL CONSUMER
DISCRETIONARY

   

    (13,188,385)   
    

 

 

 

Energy (1.99%)

    

Chesapeake Energy Corp.

     (215,700)        (4,958,943)   

CONSOL Energy, Inc.

     (68,700)        (2,600,982)   

EQT Corp.

     (32,400)        (2,965,896)   

Southwestern Energy Co.

     (107,700)        (3,764,115)   
    

 

 

 
       (14,289,936)   
    

 

 

 

Financials (4.15%)

 

Capital Markets (0.58%)

  

Mediobanca SpA

     (489,243)        (4,208,183)   
    

 

 

 

Commercial Banks (1.53%)

 

 

BNP Paribas S.A.

     (39,800)        (2,640,163)   

Credit Agricole S.A.

     (156,621)        (2,362,974)   

Itau Unibanco Holding S.A. - Preferred ADR

     (174,862)        (2,427,084)   

Societe Generale S.A.

     (32,840)        (1,676,573)   

UniCredit SpA

     (236,476)        (1,869,753)   
    

 

 

 
       (10,976,547)   
    

 

 

 

Diversified Financials (1.18%)

 

Intercontinental Exchange, Inc.

     (14,738)        (2,874,647)   

NASDAQ OMX Group, Inc.

     (131,900)        (5,595,198)   
    

 

 

 
       (8,469,845)   
    

 

 

 

Insurance (0.86%)

    

Everest Re Group, Ltd.

     (18,773)        (3,041,414)   

PartnerRe, Ltd.

     (28,900)        (3,175,821)   
    

 

 

 
       (6,217,235)   
    

 

 

 

TOTAL FINANCIALS

  

    (29,871,810)   
    

 

 

 

Health Care (11.04%)

 

Amgen, Inc.

     (23,080)        (3,241,817)   

athenahealth, Inc.

     (50,718)        (6,679,053)   

Celgene Corp.

     (102,300)        (9,695,994)   

Charles River Laboratories

    

International, Inc.

     (70,300)        (4,199,722)   
 

 

 

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Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
September 30, 2014 (Unaudited)   

    

 

SCHEDULE OF SECURITIES SOLD
SHORT (c)
   Shares      Value  

Health Care (continued)

  

  

Covance, Inc.

     (100,350)         $(7,897,545)   

CR Bard, Inc.

     (43,200)         (6,165,072)   

Gilead Sciences, Inc.

     (84,900)         (9,037,605)   

Laboratory Corp. of America

     

Holdings

     (26,710)         (2,717,743)   

Mylan, Inc.

     (151,700)         (6,900,833)   

Quest Diagnostics, Inc.

     (57,000)         (3,458,760)   

Regeneron Pharmaceuticals,

     

Inc.

     (20,800)         (7,498,816)   

St. Jude Medical, Inc.

     (164,400)         (9,885,372)   

WellCare Health Plans, Inc.

     (34,400)         (2,075,696)   
     

 

 

 
        (79,454,028)   
     

 

 

 

Industrials (1.04%)

     

Rolls-Royce Holdings PLC

     (126,000)         (1,970,122)   

Sandvik AB

     (202,357)         (2,282,686)   

SPX Corp.

     (34,400)         (3,231,192)   
     

 

 

 
        (7,484,000)   
     

 

 

 

Information Technology (1.35%)

 

International Business

     

Machines Corp.

     (42,726)         (8,110,676)   

Paychex, Inc.

     (35,400)         (1,564,680)   
     

 

 

 
        (9,675,356)   
     

 

 

 

Materials (1.30%)

     

Anglo American PLC

     (176,509)         (3,960,257)   

Bemis Co., Inc.

     (74,700)         (2,840,094)   

BHP Billiton, Ltd.

     (86,851)         (2,575,554)   
     

 

 

 
        (9,375,905)   
     

 

 

 

TOTAL COMMON STOCKS

(Proceeds $164,759,067)

  

  

     (163,339,420)   
     

 

 

 

EXCHANGE TRADED FUNDS (17.51%)

 

iShares® MSCI Emerging Markets ETF

     (267,206)         (11,105,081)   

iShares® Nasdaq Biotechnology ETF

     (53,300)         (14,584,479)   

iShares® Russell 2000® ETF

     (510,024)         (55,771,125)   

Market Vectors® Semiconductor ETF

     (279,000)         (14,254,110)   

SPDR® S&P 500® ETF Trust

     (153,350)         (30,213,017)   
     

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Proceeds $121,063,486)

  

  

     (125,927,812)   
     

 

 

 

TOTAL SECURITIES SOLD SHORT

(Proceeds $285,822,553)

  

  

     $(289,267,232)   
     

 

 

 
(a)

Pledged security; a portion or all of the security is pledged as collateral for written options, securities sold short or borrowings. As of September 30, 2014, the aggregate market value of those securities was $739,111,482, representing 102.73% of net assets. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan as of September 30, 2014.

(c)

Non-income producing security.

(d)

Security exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of September 30, 2014, these securities had an aggregate market value of $24,292,012 or 3.38% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2014, these securities had an aggregate market value of $4,759,580 or 0.66% of total net assets.

(f)

Floating or variable rate security - rate disclosed as of September 30, 2014.

(g)

This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.

(h)

Rate shown represents the bond equivalent yield to maturity at date of purchase.

(i)

Includes cash which is being held as collateral for total return swap contracts.

 

 

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Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2014 (Unaudited)

    

 

TOTAL RETURN SWAP CONTRACTS

 

Counter Party   

Reference

Entity/
Obligation

   Notional
Amount
     Floating Rate
Paid by the
Fund
  

Floating

Rate Index

   Termination
Date
     Net Unrealized
Appreciation
 

Morgan Stanley

   Bharti Infratel, Ltd.    $   2,171,923       30 bps + 1D FEDEF    1D FEDEF      12/30/2014       $ 1,037,355   

Morgan Stanley

   Housing Development Finance Corp.      501,777       30 bps + 1D FEDEF    1D FEDEF      01/15/2016         302,471   
          $   2,673,700                          $ 1,339,826   

 

See Notes to the Financial Statements.

 

Semi-Annual Report  |  September 30, 2014

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Table of Contents

Statement of Investments

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

Abbreviations:

1D FEDEF - Federal Funds Effective Rate (Daily)

AB - Aktiebolag is the Swedish equivalent of the term corporation

ADR - American Depositary Receipt

AG - Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders

Bps - Basis Points

BRL - Brazilian Real

ETF - Exchange Traded Fund

FTSE - Financial Times and the London Stock Exchange

Ltd. - Limited

MSCI - Morgan Stanley Capital International

NV - Naamloze Vennootschap (Dutch: Limited Liability Company)

PLC - Public Limited Liability

REMICS - Real Estate Mortgage Investment Conduits

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

SpA - Societa` Per Azioni is an Italian shared company

SAB de CV - Sociedad Anonima de Capital Variable (Spanish Variable Capital Company)

S&P - Standard & Poor’s

SPDR - Standard & Poor’s Depositary Receipt

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

 

See Notes to the Financial Statements.

 

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Table of Contents

Clough Global Funds

   Statements of Assets and Liabilities
   September 30, 2014 (Unaudited)

 

 

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

ASSETS:

     

Investments, at value (Cost - see below)*

  $ 247,339,198      $ 415,837,872      $ 1,029,719,123   

Cash

    9,746,430        12,558,823        38,162,992   

Foreign Currency, at value (Cost $1,528,493, $3,107,965 and $6,383,005)

    1,484,798        3,035,764        6,196,373   

Deposit with broker for written options and securities sold short

    71,769,561        119,452,506        295,480,489   

Deposit with broker for total return swap contracts

    1,969,896        3,192,267        8,289,487   

Unrealized appreciation on total return swap contracts

    318,529        517,139        1,339,826   

Dividends receivable

    256,095        454,018        1,070,553   

Interest receivable

    305,825        324,381        1,210,076   

Receivable for investments sold

    11,201,354        18,823,437        51,705,241   

Total return swap contracts payments receivable

    49,000        79,836        205,956   

Total Assets

    344,440,686        574,276,043        1,433,380,116   

LIABILITIES:

     

Loan payable

    93,300,000        156,000,000        388,900,000   

Interest due on loan payable

    5,106        8,537        21,283   

Securities sold short (Proceeds $68,615,855, $114,320,541 and $285,822,553)

    69,392,768        115,499,372        289,267,232   

Written options, at value (Premiums received $39,533, $65,121 and $158,920)

    45,939        75,640        185,221   

Payable for investments purchased

    7,003,854        11,552,822        33,167,803   

Dividends payable - short sales

    55,404        90,635        233,917   

Interest payable - margin account

    33,578        56,068        139,795   

Accrued investment advisory fee

    201,805        432,621        1,197,822   

Accrued administration fee

    166,472        311,684        776,290   

Accrued trustees fee

    3,289        3,288        3,288   

Other payables and accrued expenses

    260        235        236   

Total Liabilities

    170,208,475        284,030,902        713,892,887   

Net Assets

  $ 174,232,211      $ 290,245,141      $ 719,487,229   

Cost of Investments

  $ 241,716,844      $ 403,443,700      $ 1,009,185,530   

COMPOSITION OF NET ASSETS:

     

Paid-in capital

  $ 166,087,962      $ 266,419,905      $ 714,484,492   

Overdistributed net investment income

    (7,623,054)        (13,759,396)        (40,684,359)   

Accumulated net realized gain on investment securities, written options, securities sold short, total return swap contracts and foreign currency transactions

    10,655,891        25,939,615        27,481,576   

Net unrealized appreciation in value of investment securities, written options, securities sold short, total return swap contracts and translation of assets and liabilities denominated in foreign currency

    5,111,412        11,645,017        18,205,520   

Net Assets

  $ 174,232,211      $ 290,245,141      $ 719,487,229   

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

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

Net assets value per share

  $ 16.70      $ 16.27      $ 13.91   
  $ 87,146,707      $ 174,006,605      $ 365,197,520   

 

*

Securities Loaned, at value

 

See Notes to the Financial Statements.

Semi-Annual Report  |  September 30, 2014

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Table of Contents

Statements of Operations

   Clough Global Funds
For the Six Months Ended September 30, 2014 (Unaudited)   

    

 

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

INVESTMENT INCOME:

        

Dividends (net of foreign withholding taxes of $24,359, $44,268 and $101,448)

   $ 1,452,262       $ 2,637,658       $ 6,074,431   

Interest on investment securities

     483,792         488,296         1,941,068   

Hypothecated securities income (See Note 6)

     46,010         73,897         192,370   

Total Income

     1,982,064         3,199,851         8,207,869   

EXPENSES:

        

Investment advisory fee

     1,226,353         2,632,728         7,282,419   

Administration fee

     499,301         936,081         2,330,374   

Interest on loan

     465,366         778,104         1,939,774   

Interest expense - margin account

     209,923         352,202         875,787   

Trustees fee

     68,437         68,436         68,437   

Dividend expense - short sales

     526,767         878,695         2,199,588   

Other expenses

     9,456         15,024         35,910   

Total Expenses

     3,005,603         5,661,270         14,732,289   

Net Investment Loss

     (1,023,539)         (2,461,419)         (6,524,420)   

NET REALIZED GAIN/(LOSS) ON:

        

Investment securities

     9,853,019         21,439,797         53,229,523   

Securities sold short

     (5,781,908)         (9,819,654)         (24,095,471)   

Written options

     1,648,075         2,747,592         6,584,074   

Total return swap contracts

     128,314         209,234         539,194   

Foreign currency transactions

     (753,334)         (1,281,296)         (3,167,806)   

NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON:

        

Investment securities

     (10,398,030)         (22,814,595)         (54,993,401)   

Securities sold short

     4,187,551         7,186,041         17,389,558   

Written options

     (244,294)         (406,999)         (977,853)   

Total return swap contracts

     499,926         804,753         2,106,959   

Translation of assets and liabilities denominated in foreign currencies

     (46,287)         (76,796)         (197,244)   

Net loss on investment securities, securities sold short, written options, total return swap contracts and foreign currency transactions

     (906,968)         (2,011,923)         (3,582,467)   

Net Decrease in Net Assets Attributable to Common Shares from Operations

   $ (1,930,507)       $ (4,473,342)       $ (10,106,887)   

 

See Notes to the Financial Statements.

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Clough Global Funds

   Statements of Changes in Net Assets
  

    

 

    Clough Global Allocation
Fund
    Clough Global Equity Fund     Clough Global Opportunities Fund  
     For the
Six Months
Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
    For the
Six Months
Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
    For the
Six Months
Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
 

COMMON SHAREHOLDERS OPERATIONS:

  

   

Net investment loss

  $ (1,023,539)      $ (2,700,749)      $ (2,461,419)      $ (5,959,391)      $ (6,524,420)      $ (16,433,509)   

Net realized gain/(loss) from:

  

       

Investment securities

    9,853,019        33,757,575        21,439,797        59,677,261        53,229,523        154,280,979   

Securities sold short

    (5,781,908)        (11,724,746)        (9,819,654)        (19,377,471)        (24,095,471)        (49,230,469)   

Written options

    1,648,075        1,157,134        2,747,592        2,132,270        6,584,074        2,518,366   

Total return swap contracts

    128,314        (397,065)        209,234        (778,872)        539,194        (1,681,206)   

Foreign currency transactions

    (753,334)        (1,364,844)        (1,281,296)        (2,282,452)        (3,167,806)        (5,764,401)   

Net change in urealized appreciation/(depreciation) on:

           

Investment securities

    (10,398,030)        1,545,066        (22,814,595)        7,138,315        (54,993,401)        1,301,682   

Securities sold short

    4,187,551        (3,663,378)        7,186,041        (6,297,210)        17,389,558        (15,331,017)   

Written options

    (244,294)        237,888        (406,999)        396,480        (977,853)        951,552   

Total return swap contracts

    499,926        387,137        804,753        912,341        2,106,959        1,634,232   

Foreign currency transactions

    (46,287)        1,667        (76,796)        2,278        (197,244)        6,869   

Net Increase/(Decrease) in Net Assets From Operations

    (1,930,507)        17,235,685        (4,473,342)        35,563,549        (10,106,887)        72,253,078   

DISTRIBUTIONS TO COMMON SHAREHOLDERS:

  

   

Net investment income

    (6,573,801)        (2,508,129)        (11,239,644)        (6,725,986)        (29,490,009)        (5,714,309)   

Net realized gains

           (13,300,299)               (19,589,053)               (64,906,503)   

Net Decrease in Net Assets from Distributions

    (6,573,801)        (15,808,428)        (11,239,644)        (26,315,039)        (29,490,009)        (70,620,812)   

Net Increase/(Decrease) in Net Assets Attributable to Common Shares

    (8,504,308)        1,427,257        (15,712,986)        9,248,510        (39,596,896)        1,632,266   

NET ASSETS ATTRIBUABLE TO COMMON SHARES:

  

   

Beginning of period

    182,736,519        181,309,262        305,958,127        296,709,617        759,084,125        757,451,859   

End of period*

  $ 174,232,211      $ 182,736,519      $ 290,245,141      $ 305,958,127      $ 719,487,229      $ 759,084,125   
*Includes Overdistributed Net Investment Income of:   $ (7,623,054)      $ (25,714)      $ (13,759,396)      $ (58,333)      $ (40,684,359)      $ (4,669,930)   

 

See Notes to the Financial Statements.

Semi-Annual Report  |  September 30, 2014

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Table of Contents

Statements of Cash Flows

   Clough Global Funds
For the Six Months Ended September 30, 2014 (Unaudited)   

    

 

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

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net decrease in net assets from operations

   $ (1,930,507)       $ (4,473,342)       $ (10,106,887)   

Adjustments to reconcile net increase/(decrease) in net assets from operations to net cash provided by operating activities:

        

Purchase of investment securities

     (212,397,037)         (338,341,769)         (889,067,730)   

Proceeds from disposition of investment securities

     219,252,589         371,043,121         919,502,671   

Proceeds from securities sold short transactions

     108,457,970         181,334,609         451,000,345   

Cover securities sold short transactions

     (104,672,836)         (175,793,796)         (436,399,417)   

Premiums received from written options transactions

     1,878,651         3,137,483         7,546,149   

Premiums paid on closing written options transactions

     (490,431)         (823,749)         (2,000,707)   

Purchased options transactions

     (4,271,226)         (7,120,342)         (17,558,651)   

Proceeds from purchased options transactions

     1,464,389         2,438,795         5,928,096   

Net proceeds from/(purchases of) short-term investment securities

     4,148,442         (17,460,437)         15,448,813   

Net realized gain from investment securities

     (9,853,019)         (21,439,797)         (53,229,523)   

Net realized loss on securities sold short

     5,781,908         9,819,654         24,095,471   

Net realized gain on written options

     (1,648,075)         (2,747,592)         (6,584,074)   

Net realized gain on total return swap contracts

     (128,314)         (209,234)         (539,194)   

Net realized loss on foreign currency transactions

     676,298         1,148,221         2,846,605   

Net change in unrealized depreciation on investment securities

     10,398,030         22,814,595         54,993,401   

Net change in unrealized appreciation on securities sold short

     (4,187,551)         (7,186,041)         (17,389,558)   

Net change in unrealized depreciation on written options

     244,294         406,999         977,853   

Net change in unrealized appreciation on total return swap contracts

     (499,926)         (804,753)         (2,106,959)   

Net change in unrealized depreciation on translation of assets and liabilities denominated in foreign currencies

     46,287         76,796         197,244   

Net payments on total return swap contracts

     128,314         209,234         539,194   

Discount and premiums amortized

     22,826         30,493         84,245   

Decrease in deposits with broker for written options and securities sold short

     2,989,143         6,620,359         14,978,565   

Decrease in deposits with broker for total return swap contracts

     292,124         494,826         1,216,498   

Decrease in dividends receivable

     29,002         62,137         124,502   

Decrease in interest receivable

     65,957         154,616         238,008   

Increase in total return swap contracts payments receivable

     (49,000)         (79,836)         (205,956)   

Decrease in due to custodian for foreign currency

     (162,757)         (264,940)         (673,983)   

Decrease in interest due on loan payable

     (5,081)         (8,496)         (21,179)   

Decrease in dividends payable - short sales

     (42,314)         (70,808)         (176,574)   

Decrease in interest payable - margin account

     (2,526)         (4,573)         (11,283)   

Decrease in accrued investment advisory fee

     (9,663)         (20,773)         (59,519)   

Increase in accrued administration fee

     80,374         150,478         373,941   

Increase in accrued trustees fee

     789         788         788   

Increase in other payables

     40         15         16   

Net cash provided by operating activities

     15,607,164         23,092,941         63,961,211   

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Cash distributions paid

     (6,573,801)         (11,239,644)         (29,490,009)   

Net cash used in financing activities

     (6,573,801)         (11,239,644)         (29,490,009)   

Effect of exchange rates on cash

     (46,287)         (76,796)         (197,244)   

Net Change in Cash and Foreign Rates on Cash and Foreign Currency

     8,987,076         11,776,501         34,273,958   

Cash and foreign currency, beginning of period

   $ 2,244,152       $ 3,818,086       $ 10,085,407   

Cash and foreign currency, end of period

   $ 11,231,228       $ 15,594,587       $ 44,359,365   

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

        

Cash paid during the period for interest from bank borrowing:

   $ 470,447       $ 786,600       $ 1,960,953   

 

See Notes to the Financial Statements.

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Table of Contents

Clough Global Allocation Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated

    

 

     For the
Six Months
Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
    For the
Year Ended
March 31,
2013
    For the
Year Ended
March 31,
2012
    For the
Year Ended
March 31,
2011
    For the
Year Ended
March 31,
2010
 

PER COMMON SHARE OPERATING PERFORMANCE:

  

     

Net asset value - beginning of period

    $17.51        $17.38        $16.30        $18.35        $16.90        $13.24   

Income from investment operations:

  

       

Net investment income/(loss)*

    (0.10)        (0.26)        (0.01)        0.26        0.38        0.32   

Net realized and unrealized gain/(loss) on investments

    (0.08)        1.90        2.29        (1.11)        2.27        4.44   

Total Income from Investment Operations

    (0.18)        1.64        2.28        (0.85)        2.65        4.76   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

   

Net investment income

    (0.63)        (0.24)        (0.90)        (1.20)        (1.20)        (0.46)   

Net realized gains

           (1.27)        (0.30)                        

Tax return of capital

                                       (0.64)   

Total Distributions to Common Shareholders

    (0.63)        (1.51)        (1.20)        (1.20)        (1.20)        (1.10)   

Net asset value - end of period

    $16.70        $17.51        $17.38        $16.30        $18.35        $16.90   

Market price - end of period

    $14.31        $15.18        $15.07        $13.94        $16.24        $15.92   

Total Investment Return - Net Asset Value:(1)

    (0.59)%        11.14%        16.19%        (3.48)%        17.30%        38.14%   

Total Investment Return - Market
Price:(1)

    (1.74)%        11.12%        17.81%        (6.73)%        10.20%        61.32%   

RATIOS AND SUPPLEMENTAL DATA:

  

     

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

    $174,232        $182,737        $181,309        $170,120        $191,502        $176,317   

Ratios to average net assets attributable to common shareholders:

           

Total expenses

    3.31%(2)        3.34%        3.24%        3.05%        2.87%        3.22%   

Total expenses excluding interest expense and dividends on short sales expense

    1.98%(2)        1.94%        1.93%        1.80%        1.74%        1.88%   

Net investment income/(loss)

    (1.13)%(2)        (1.47)%        (0.04)%        1.61%        2.28%        1.96%   

Portfolio turnover rate

    83%        179%        250%        192%        172%        115%   

Borrowings at End of Period

  

     

Aggregate Amount Outstanding (000s)

    $93,300        $93,300        $89,800        $89,800        $89,800        $89,800   

Asset Coverage Per $1,000 (000s)

    $2,867        $2,959        $3,019        $2,894        $3,133        $2,963   

 

*

Based on average shares outstanding.

(1)

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

(2) 

Annualized.

 

See Notes to the Financial Statements.

Semi-Annual Report  |  September 30, 2014

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Table of Contents

Financial Highlights

   Clough Global Equity Fund
For a share outstanding throughout the periods indicated   

    

 

     For the
Six Months Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
    For the
Year Ended
March 31,
2013
    For the
Year Ended
March 31,
2012
    For the
Year Ended
March 31,
2011
    For the
Year Ended
March 31,
2010
 

PER COMMON SHARE OPERATING PERFORMANCE:

  

   

Net asset value - beginning of period

    $17.15        $16.63        $15.53        $17.62        $16.29        $12.28   

Income from investment operations:

  

   

Net investment income/(loss)*

    (0.14)        (0.33)        (0.06)        0.21        0.30        0.22   

Net realized and unrealized gain/(loss) on investments

    (0.11)        2.33        2.32        (1.14)        2.19        4.82   

Total Income from Investment Operations

    (0.25)        2.00        2.26        (0.93)        2.49        5.04   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

   

Net investment income

    (0.63)        (0.38)        (0.87)        (1.14)        (1.16)        (0.39)   

Net realized gains

           (1.10)        (0.29)                        

Tax return of capital

                         (0.02)               (0.64)   

Total Distributions to Common Shareholders

    (0.63)        (1.48)        (1.16)        (1.16)        (1.16)        (1.03)   

Net asset value - end of period

    $16.27        $17.15        $16.63        $15.53        $17.62        $16.29   

Market price - end of period

    $14.33        $15.42        $14.70        $13.09        $15.37        $14.33   

Total Investment Return - Net Asset Value:(1)

    (1.09)%        13.57%        16.90%        (4.08)%        17.05%        43.62%   

Total Investment Return - Market Price:(1)

    (3.11)%        15.52%        22.60%        (7.32)%        16.07%        58.80%   

RATIOS AND SUPPLEMENTAL DATA:

  

   

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

    $290,245        $305,958        $296,710        $277,061        $314,355        $290,577   

Ratios to average net assets attributable to common shareholders:

           

Total expenses

    3.73%(2)        3.76%        3.67%        3.43%        3.23%        3.57%   

Total expenses excluding interest expense and dividends on short sales expense

    2.41%(2)        2.36%        2.35%        2.18%        2.10%        2.25%   

Net investment income/(loss)

    (1.62)%(2)        (1.95)%        (0.37)%        1.34%        1.87%        1.43%   

Portfolio turnover rate

    77%        166%        250%        183%        173%        116%   

Borrowings at End of Period

  

   

Aggregate Amount Outstanding (000s)

    $156,000        $156,000        $147,000        $147,000        $147,000        $147,000   

Asset Coverage Per $1,000 (000s)

    $2,861        $2,961        $3,018        $2,885        $3,138        $2,977   

 

*

Based on average shares outstanding.

(1)

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

(2) 

Annualized.

 

See Notes to the Financial Statements.

34

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Table of Contents

Clough Global Opportunities Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated

    

 

     For the
Six Months Ended
September 30,
2014
(Unaudited)
    For the
Year Ended
March 31,
2014
    For the
Year Ended
March 31,
2013
    For the
Year Ended
March 31,
2012
    For the
Year Ended
March 31,
2011
    For the
Year Ended
March 31,
2010
 

PER COMMON SHARE OPERATING PERFORMANCE:

  

Net asset value - beginning of period

    $14.67        $14.64        $13.84        $15.72        $14.68        $11.55   

Income from investment operations:

           

Net investment income/(loss)*

    (0.13)        (0.32)        (0.09)        0.14        0.25        0.17   

Net realized and unrealized gain/(loss) on investments

    (0.06)        1.72        1.97        (0.94)        1.87        3.94   

Total Income from Investment Operations

    (0.19)        1.40        1.88        (0.80)        2.12        4.11   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

Net investment income

    (0.57)        (0.11)        (1.08)        (1.05)        (1.08)        (0.29)   

Net realized gains

           (1.26)                               

Tax return of capital

                         (0.03)               (0.69)   

Total Distributions to Common Shareholders

    (0.57)        (1.37)        (1.08)        (1.08)        (1.08)        (0.98)   

Net asset value - end of period

    $13.91        $14.67        $14.64        $13.84        $15.72        $14.68   

Market price - end of period

    $11.93        $12.75        $12.87        $11.78        $13.85        $13.04   

Total Investment Return - Net Asset Value:(1)

    (0.81)%        11.26%        15.87%        (3.88)%        16.21%        37.93%   

Total Investment Return - Market Price:(1)

    (2.12)%        9.99%        19.67%        (7.14)%        15.27%        53.82%   

RATIOS AND SUPPLEMENTAL DATA:

  

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

    $719,487        $759,084        $757,452        $716,213        $813,178        $759,601   

Ratios to average net assets attributable to common shareholders:

           

Total expenses

    3.91%(2)        3.97%        3.86%        3.61%        3.40%        3.72%   

Total expenses excluding interest expense and dividends on short sales expense

    2.58%(2)        2.55%        2.52%        2.35%        2.25%        2.39%   

Net investment income/(loss)

    (1.73)%(2)        (2.15)%        (0.64)%        1.04%        1.74%        1.19%   

Portfolio turnover rate

    84%        178%        241%        193%        171%        115%   

Borrowings at End of Period

           

Aggregate Amount Outstanding (000s)

    $388,900        $388,900        $388,900        $388,900        $388,900        $388,900   

Asset Coverage Per $1,000 (000s)

    $2,850        $2,952        $2,948        $2,842        $3,091        $2,953   

 

* 

Based on average shares outstanding.

(1)

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

(2)

Annualized.

 

See Notes to the Financial Statements.

Semi-Annual Report  |  September 30, 2014

  35


Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING AND OPERATING POLICIES

 

Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund, are closed-end management investment companies registered under the Investment Company Act of 1940 (the “1940 Act”). The Funds were organized under the laws of the state of Delaware by an Amended Agreement and Declaration of Trust dated April 27, 2004 and January 25, 2005, respectively for Clough Global Allocation Fund and Clough Global Equity Fund, and an Agreement and Declaration of Trust dated January 12, 2006, for Clough Global Opportunities Fund. The Funds were previously registered as non-diversified investment companies. As a result of ongoing operations, each of the Funds became a diversified company. The Funds may not resume operating in a non-diversified manner without first obtaining shareholder approval. Each Fund’s investment objective is to provide a high level of total return. Each Declaration of Trust provides that the Board of Trustees may authorize separate classes of shares of beneficial interest. The common shares of Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund are listed on the NYSE MKT and trade under the ticker symbols “GLV”, “GLQ” and “GLO” respectively.

The following is a summary of significant accounting policies followed by the Funds. These policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Funds ultimately realize upon sale of the securities. Each Fund is considered an investment company for financial reporting purposes under GAAP. The financial statements have been prepared as of the close of the New York Stock Exchange (“NYSE” or the “Exchange”) on September 30, 2014.

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

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

If the price of a security is unavailable in accordance with the aforementioned pricing procedures, or the price of a security is unreliable, e.g., due to the occurrence of a significant event, the security may be valued at its fair value determined by management pursuant to procedures adopted by the Board of Trustees. For this purpose, fair value is the price that a Fund reasonably expects to receive on a current sale of the security. Due to the number of variables affecting the price of a security; however, it is possible that the fair value of a security may not accurately reflect the price that a Fund could actually receive on a sale of the security.

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

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

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

 

Level 1 –

 

Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;

Level 2 –

 

Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

Level 3 –

 

Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

The following is a summary of the inputs used as of September 30, 2014, in valuing each Fund’s investments carried at value. The Funds recognize transfers between the levels as of the end of the period in which the transfer occurred. There were no transfers between Levels 1 and 2 during the six months ended September 30, 2014.

 

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

Common Stocks

   $     189,940,108       $       $       $     189,940,108       

Exchange Traded Funds

     3,073,888                         3,073,888       

Warrants

     116,958         3,557                 120,515       

Corporate Bonds

                 14,432,114                 14,432,114       

Asset/Mortgage Backed Securities

             13,550,329                 13,550,329       

Government & Agency Obligations

             7,903,728                 7,903,728       

Short-Term Investments

           

Money Market Fund

     15,318,675                         15,318,675       

U.S. Treasury Bills

             2,999,841                 2,999,841       

TOTAL

   $ 208,449,629       $ 38,889,569       $       $ 247,339,198       
Other Financial Instruments                                

Assets

           

Total Return Swap Contracts**

   $       $ 318,529       $       $ 318,529       

Liabilities

           

Written Options

     (45,939)                         (45,939)       

Securities Sold Short

           

Common Stocks

     (39,244,447)                         (39,244,447)       

Exchange Traded Funds

     (30,148,321)                         (30,148,321)       

TOTAL

   $ (69,438,707)       $ 318,529       $       $ (69,120,178)       

Clough Global Equity Fund

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

Common Stocks

           

Consumer Discretionary

   $ 93,835,409       $       $       $ 93,835,409       

Consumer Staples

     7,086,357                         7,086,357       

Energy

     29,751,608                         29,751,608       

Financials

     81,486,685                         81,486,685       

Health Care

     57,724,135         766,500                 58,490,635       

Industrials

     27,322,841                         27,322,841       

Information Technology

     37,935,989                         37,935,989       

Materials

     4,374,440                         4,374,440       

Telecommunication Services

     4,240,961                         4,240,961       

Exchange Traded Funds

     5,071,399                         5,071,399       

Warrants

     195,720         5,834                 201,554       

Corporate Bonds

             15,619,776                 15,619,776       

Asset/Mortgage Backed Securities

             3,148,483                 3,148,483       

Government & Agency Obligations

             11,942,846                 11,942,846       

Short-Term Investments

           

 

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Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

                                                                                       
Clough Global Equity Fund (continued)                            
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

Money Market Fund

     28,829,257                         28,829,257       

U.S. Treasury Bills

             6,499,632                 6,499,632       

TOTAL

   $ 377,854,801       $ 37,983,071       $       $ 415,837,872       

Other Financial Instruments

                                   

Assets

           

Total Return Swap Contracts**

   $       $ 517,139       $       $ 517,139       

Liabilities

           

Written Options

     (75,640)                         (75,640)       

Securities Sold Short

           

Common Stocks

     (65,525,251)                         (65,525,251)       

Exchange Traded Funds

     (49,974,121)                         (49,974,121)       

TOTAL

   $ (115,575,012)       $ 517,139       $       $ (115,057,873)       

Clough Global Opportunities Fund

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

Common Stocks

   $ 793,319,316       $       $       $ 793,319,316       

Exchange Traded Funds

     12,951,815                         12,951,815       

Warrants

     487,322         15,331                 502,653       

Corporate Bonds

             57,381,670                 57,381,670       

Asset/Mortgage Backed Securities

             55,429,174                 55,429,174       

Government & Agency Obligations

             32,648,475                 32,648,475       

Purchased Options

     140,625                         140,625       

Short-Term Investments

           

Money Market Fund

     63,346,162                         63,346,162       

U.S. Treasury Bills

             13,999,233                 13,999,233       

TOTAL

   $ 870,245,240       $ 159,473,883       $       $ 1,029,719,123       

Other Financial Instruments

                                   

Assets

           

Total Return Swap Contracts**

   $       $ 1,339,826       $       $ 1,339,826       

Liabilities

           

Written Options

     (185,221)                         (185,221)       

Securities Sold Short

           

Common Stocks

     (163,339,420)                         (163,339,420)       

Exchange Traded Funds

     (125,927,812)                         (125,927,812)       

TOTAL

   $ (289,452,453)       $ 1,339,826       $       $ (288,112,627)       

 

*

For detailed industry descriptions, see the accompanying Statement of Investments.

**

Swap contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date.

In the event a board approved independent pricing service is unable to provide an evaluated price for a security or Clough Capital Partners L.P. (the “Adviser” or “Clough”) believes the price provided is not reliable, securities of each Fund may be valued at fair value as described above. In these instances the Adviser may seek to find an alternative independent source, such as a broker/dealer to provide a price quote, or by using evaluated pricing models similar to the techniques and models used by the independent pricing service. These fair value measurement techniques may utilize unobservable inputs (Level 3).

On a monthly basis, the Fair Value Committee of each Fund meets and discusses securities that have been fair valued during the preceding month in accordance with the Fund’s Fair Value Procedures and reports quarterly to the Board of Trustees on the results of those meetings.

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

Foreign Securities: Each Fund may invest a portion of its assets in foreign securities. In the event that a Fund executes a foreign security transaction, the Fund will generally enter into a forward foreign currency contract to settle the foreign security transaction. Foreign securities may carry more risk than U.S. securities, such as political, market and currency risks.

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

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

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

The net U.S. dollar value of foreign currency underlying all contractual commitments held by a Fund and the resulting unrealized appreciation or depreciation are determined using prevailing forward foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency spot contracts are reported in the Funds’ Statements of Assets and Liabilities as a receivable or a payable and in the Funds’ Statements of Operations with the change in unrealized appreciation or depreciation on translation of assets and liabilities denominated in foreign currencies. These spot contracts are used by the broker to settle investments denominated in foreign currencies.

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

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

Each Fund’s obligation to replace the borrowed security will be secured by collateral deposited with the broker-dealer, usually cash, U.S. government securities or other liquid securities. Each Fund will also be required to designate on its books and records similar collateral with its custodian to the extent, if any, necessary so that the aggregate collateral value is at all times at least equal to the current market value of the security sold short. The cash amount is reported on the Statements of Assets and Liabilities as Deposit with broker for securities sold short. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to short sales. The interest incurred by the Funds for the six months ended September 30, 2014, is reported on the Statements of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of September 30, 2014, are reported on the Statements of Assets and Liabilities as Interest payable – margin account.

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

Derivatives Instruments and Hedging Activities: The following discloses the Funds’ use of derivative instruments and hedging activities.

The Funds’ investment objectives not only permit the Funds to purchase investment securities, they also allow the Funds to enter into various types of derivative contracts, including, but not limited to, purchased and written options, swaps, futures and warrants. In doing so, the Funds will employ strategies in differing combinations to permit them to increase, decrease, or change the level or types of exposure to market factors. Central to those strategies are features inherent to derivatives that make them more attractive for this purpose than equity securities: they require little or no initial cash investment, they can focus exposure on only certain selected risk factors, and they may not require the ultimate receipt or delivery of the underlying security (or securities) to the contract. This may allow the Funds to pursue their objectives more quickly and efficiently than if they were to make direct purchases or sales of securities capable of affecting a similar response to market factors.

Market Risk Factors: In pursuit of their investment objectives, certain Funds may seek to use derivatives to increase or decrease their exposure to the following market risk factors:

Equity Risk: Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

 

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Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

Risk of Investing in Derivatives: The Funds’ use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where the Funds are using derivatives to decrease or hedge exposures to market risk factors for securities held by the Funds, there are also risks that those derivatives may not perform as expected, resulting in losses for the combined or hedged positions.

Derivatives may have little or no initial cash investment relative to their market value exposure and therefore can produce significant gains or losses in excess of their cost. This use of embedded leverage allows the Funds to increase their market value exposure relative to their net assets and can substantially increase the volatility of the Funds’ performance.

Additional associated risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Funds. Typically, the associated risks are not the risks that the Funds are attempting to increase or decrease exposure to, per their investment objectives, but are the additional risks from investing in derivatives.

Examples of these associated risks are liquidity risk, which is the risk that the Funds will not be able to sell the derivative in the open market in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Funds. Associated risks can be different for each type of derivative and are discussed by each derivative type in the notes that follow.

Each Fund may acquire put and call options and options on stock indices and enter into stock index futures contracts, certain credit derivatives transactions and short sales in connection with its equity investments. In connection with a Fund’s investments in debt securities, it may enter into related derivatives transactions such as interest rate futures, swaps and options thereon and certain credit derivatives transactions. Derivatives transactions of the types described above subject a Fund to increased risk of principal loss due to imperfect correlation or unexpected price or interest rate movements. Each Fund also will be subject to credit risk with respect to the counterparties to the derivatives contracts purchased by a Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivatives contract due to financial difficulties, each Fund may experience significant delays in obtaining any recovery under the derivatives contract in a bankruptcy or other reorganization proceeding. Each Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.

Option Writing/Purchasing: Each Fund may purchase or write (sell) put and call options. One of the risks associated with purchasing an option among others, is that a Fund pays a premium whether or not the option is exercised. Additionally, a Fund bears the risk of loss of premium and change in market value should the counterparty not perform under the contract. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to options. The interest incurred on the Funds for the six months ended September 30, 2014 is reported on the Statements of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of September 30, 2014 are reported on the Statements of Assets and Liabilities as Interest payable – margin account.

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

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

Written option activity for the six months ended September 30, 2014, was as follows:

 

Clough Global Allocation Fund                 
  

 

 

           Written Call Options     Written Put Options      

 

     Contracts     Premiums     Contracts     Premiums      

 

Outstanding, March 31, 2014

          $        (300   $ 299,388     

Positions opened

     (1,098     95,672        (1,632                 1,782,979     

Closed

     448        (37,735     1,500        (1,582,440  

Excercised

     250        (16,949                

Expired

     100        (6,994     300        (494,388  

 

Outstanding, September 30, 2014

     (300   $         33,994        (132   $ 5,539     

 

Market Value, September 30, 2014

     $ (25,875     $ (20,064  

 

Clough Global Equity Fund           
  

 

 

           Written Call Options     Written Put Options      

 

     Contracts     Premiums     Contracts     Premiums      

 

Outstanding, March 31, 2014

          $        (500   $ 498,980     

Positions opened

     (1,934     165,852        (2,720     2,971,631     

Closed

     784        (65,463     2,500        (2,637,400  

Excercised

     450        (30,511                

Expired

     200        (13,988     500        (823,980  

 

Outstanding, September 30, 2014

     (500   $ 55,890        (220   $ 9,231     

 

Market Value, September 30, 2014

     $ (42,200     $ (33,440  

 

Clough Global Opportunities Fund           
  

 

 

           Written Call Options     Written Put Options      

 

     Contracts     Premiums     Contracts     Premiums      

 

Outstanding, March 31, 2014

          $        (1,200   $ 1,197,552     

Positions opened

     (4,862     413,395        (6,548     7,132,754     

Closed

     2,032        (168,124     6,000        (6,329,760  

Excercised

     1,200        (81,370                

Expired

     400        (27,976     1,200        (1,977,551  

 

Outstanding, September 30, 2014

     (1,230   $ 135,925        (548   $ 22,995     

 

Market Value, September 30, 2014

     $ (101,925     $ (83,296  

 

Swaps: During the period each Fund engaged in total return swaps. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Each Fund may utilize swap agreements as a means to gain exposure to certain assets and/or to “hedge” or protect the Fund from adverse movements in securities prices or interest rates. Each Fund is subject to equity risk and interest rate risk in the normal course of pursuing its investment objective through investments in swap contracts. Swap agreements entail the risk that a party will default on its payment obligation to a Fund. If the other party to a swap defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If each Fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund and reduce the Fund’s total return.

Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period. A Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between a Fund and the counterparty and by the posting of collateral to a Fund to cover the Fund’s exposure to the counterparty.

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) govern OTC financial derivative transactions entered into by a Fund and those counterparties. The ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to early terminate could be material to the financial statements.

During the six months ended September 30, 2014, the Funds invested in swap agreements consistent with the Funds’ investment strategies to gain exposure to certain markets or indices.

 

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Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

Warrants/Rights: Each Fund may purchase or otherwise receive warrants or rights. Warrants and rights generally give the holder the right to receive, upon exercise, a security of the issuer at a set price. Funds typically use warrants and rights in a manner similar to their use of purchased options on securities, as described in options above. Risks associated with the use of warrants and rights are generally similar to risks associated with the use of purchased options. However, warrants and rights often do not have standardized terms, and may have longer maturities and may be less liquid than exchange-traded options. In addition, the terms of warrants or rights may limit each Fund’s ability to exercise the warrants or rights at such times and in such quantities as each Fund would otherwise wish. Each Fund held no rights at the end of the period.

The effect of derivatives instruments on each Fund’s Statements of Assets and Liabilities as of September 30, 2014:

 

     Asset Derivatives           

 

Risk Exposure    Statements of Assets and Liabilities Location    Fair Value      

 

Clough Global Allocation Fund

       

Equity Contracts (Total Return Swap Contracts)

   Unrealized appreciation on total return swap contracts    $ 318,529     

Equity Contracts (Warrants)

   Investments, at value      120,515     

 

Total

      $ 439,044     

 

Clough Global Equity Fund

       

Equity Contracts (Total Return Swap Contracts)

   Unrealized appreciation on total return swap contracts    $ 517,139     

Equity Contracts (Warrants)

   Investments, at value      201,554     

 

Total

      $         718,693     

 

Clough Global Opportunities Fund

       

Equity Contracts (Total Return Swap Contracts)

   Unrealized appreciation on total return swap contracts    $ 1,339,826     

Equity Contracts (Purchased Options)

   Investments, at value      140,625     

Equity Contracts (Warrants)

   Investments, at value      502,653     

 

Total

      $ 1,983,104     

 

     Liability Derivatives           

 

Risk Exposure    Statements of Assets and Liabilities Location    Fair Value      

 

Clough Global Allocation Fund

       

Equity Contracts (Written Options)

   Written Options, at value    $ (45,939  

 

Total

      $ (45,939  

 

Clough Global Equity Fund

       

Equity Contracts (Written Options)

   Written Options, at value    $ (75,640  

 

Total

      $ (75,640  

 

Clough Global Opportunities Fund

       

Equity Contracts (Written Options)

   Written Options, at value    $ (185,221  

 

Total

      $ (185,221  

 

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

The effect of derivatives instruments on each Fund’s Statements of Operations for the six months ended September 30, 2014:

 

Risk Exposure    Statements of Operations Location   

Realized

Gain/(Loss)
on Derivatives
Recognized

in Income

   

Change in
Unrealized
Appreciation/
(Depreciation)
on Derivatives
Recognized

in Income

     

 

Clough Global Allocation Fund

         

Equity Contracts
(Written Options)

  

Net realized gain/(loss) on written options/Net change in unrealized appreciation/(depreciation) on written options

   $ 1,648,075      $ (244,294  

Equity Contracts
(Total Return Swap Contracts)

  

Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts

     128,314        499,926     

Equity Contracts
(Purchased Options)

  

Net realized gain/(loss) on investment securities/Net change in unrealized appreciation/(depreciation) on investment securities

     (3,570,499     503,112     

Equity Contracts
(Warrants)

  

Net realized gain/(loss) on investment securities/ Net change in unrealized appreciation/(depreciation) on investment securities

            (54,921  

 

Total

      $ (1,794,110   $ 703,823     

 

Clough Global Equity Fund

         

Equity Contracts
(Written Options)

  

Net realized gain/(loss) on written options/Net change in unrealized appreciation/(depreciation) on written options

   $ 2,747,592      $ (406,999  

Equity Contracts
(Total Return Swap Contracts)

  

Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts

     209,234        804,753     

Equity Contracts
(Purchased Options)

  

Net realized gain/(loss) on investment securities/Net change in unrealized appreciation/(depreciation) on investment securities

     (5,952,056     838,520     

Equity Contracts
(Warrants)

  

Net realized gain/(loss) on investment securities/ Net change in unrealized appreciation/(depreciation) on investment securities

            (92,026  

 

Total

      $ (2,995,230   $ 1,144,248     

 

Clough Global Opportunities Fund

         

Equity Contracts
(Written Options)

  

Net realized gain/(loss) on written options/Net change in unrealized appreciation/(depreciation) on written options

   $ 6,584,074      $ (977,853  

Equity Contracts
(Total Return Swap Contracts)

  

Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts

     539,194        2,106,959     

Equity Contracts
(Purchased Options)

  

Net realized gain/(loss) on investment securities/Net change in unrealized appreciation/(depreciation) on investment securities

     (14,357,208     1,838,649     

Equity Contracts
(Warrants)

  

Net realized gain/(loss) on investment securities/ Net change in unrealized appreciation/(depreciation) on investment securities

            (228,330  

 

Total

        $        (7,233,940)      $ 2,739,425     

 

The average purchased and written option contracts volume during the six months ended September 30, 2014, is noted below for each of the Funds.

 

Fund           Average Purchased Option Contract Volume           Average Written Option Contract Volume

 

Clough Global Allocation Fund

  298   514

Clough Global Equity Fund

  500   927

Clough Global Opportunities Fund

  1,685   2171

 

 

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Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

The average total return swap contracts notional volume during the six months ended September 30, 2014, is noted below for each of the Funds.

 

Fund    Average Swap Contract Notional Volume             

 

Clough Global Allocation Fund

   $        1,858,104                                    

Clough Global Equity Fund

   3,011,925                         

Clough Global Opportunities Fund

   7,818,591                         

 

The average warrant shares volume during the six months ended September 30, 2014, is noted below for each of the Funds.

 

Fund    Average Warrant Shares Volume                 

 

Clough Global Allocation Fund

   140,875           

Clough Global Equity Fund

   234,948           

Clough Global Opportunities Fund

   590,405           

 

Certain derivative contracts are executed under either standardized netting agreements or, for exchange-traded derivatives, the relevant contracts for a particular exchange which contain enforceable netting provisions. A derivative netting arrangement creates an enforceable right of set-off that becomes effective, and affects the realization of settlement on individual assets, liabilities and collateral amounts, only following a specified event of default or early termination. Default events may include the failure to make payments or deliver securities timely, material adverse changes in financial condition or insolvency, the breach of minimum regulatory capital requirements, or loss of license, charter or other legal authorization necessary to perform under the contract.

 

Offsetting of Derivatives Assets                    

 

September 30, 2014                    
                    Gross Amounts Not
Offset in the
Statements of
Assets and
Liabilities
   
       

 

Description   Gross Amounts of
Recognized Assets
  Gross Amounts
Offset in the
Statements of
Assets and
Liabilities
  Net Amounts
Presented in the
Statements of
Assets and
Liabilities
  Financial
Instruments (a)
  Cash Collateral
Pledged(a)
  Net Amount          

 

Clough Global Allocation Fund

           

Total Return Swap Contracts

  $318,529   $–   $318,529   $–   $–   $318,529        

 

Total

  $318,529   $–   $318,529   $–   $–   $318,529        

 

Clough Global Equity Fund

           

Total Return Swap Contracts

  $517,139   $–   $517,139   $–   $–   $517,139        

 

Total

  $517,139   $–   $517,139   $–   $–   $517,139        

 

Clough Global Opportunities Fund

           

Total Return Swap Contracts

  $1,339,826   $–   $1,339,826   $–   $–   $1,339,826        

 

Total

  $1,339,826   $–   $1,339,826   $–   $–   $1,339,826        

 

 

(a)

These amounts are limited to the derivative asset balance and, accordingly, do not include excess collateral received/pledged.

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

Income Taxes: Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. As of and during the six months ended September 30, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return but which can be extended to six years in certain circumstances. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

Distributions to Shareholders: Each Fund intends to make a level dividend distribution each month to Common Shareholders after payment of interest on any outstanding borrowings. The level dividend rate may be modified by the Board of Trustees from time to time. Any net capital gains earned by a Fund are distributed at least annually to the extent necessary to avoid federal income and excise taxes. Distributions to shareholders are recorded by each Fund on the ex-dividend date. Each Fund has received approval from the Securities and Exchange Commission (the “Commission”) for exemption from Section 19(b) of the 1940 Act, and Rule 19b-1 there under permitting each Fund to make periodic distributions of long-term capital gains, provided that the distribution policy of a fund with respect to its Common Shares calls for periodic (e.g. quarterly/monthly) distributions in an amount equal to a fixed percentage of each Fund’s average net asset value over a specified period of time or market price per common share at or about the time of distributions or pay-out of a level dollar amount.

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

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

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

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

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

The Funds may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the Funds to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity. At September 30, 2014, Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund each had a significant concentration of their investment securities (Investments, at value recorded on the Statements of Assets and Liabilities) in companies based in the United States: 86.46%, 85.31% and 87.05% of net assets, respectively.

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

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

 

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Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

2. TAXES

 

Classification of Distributions: Net investment income/(loss) and net realized gain/(loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Funds.

The tax character of the distributions paid by the Funds during the year ended March 31, 2014 were as follows:

 

Distributions Paid From:    Clough Global
Allocation Fund
     Clough Global
Equity Fund
     Clough Global
Opportunities Fund  
 

Ordinary Income

   $ 2,508,129       $ 6,725,986       $ 5,714,309     

Long-Term Capital Gains

     13,300,299         19,589,053         64,906,503     

Total

   $ 15,808,428       $ 26,315,039       $ 70,620,812     
   

Tax Basis of Investments: Net unrealized appreciation/(depreciation) of investments based on federal tax cost as of September 30, 2014, were as follows:

 

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

Gross appreciation (excess of value over tax cost)

   $ 11,118,371       $ 24,511,056       $ 44,347,830   

Gross depreciation (excess of tax cost over value)

     (7,460,373)         (15,201,813)         (31,628,678)   

 

 

Net unrealized appreciation

   $ 3,657,998       $ 9,309,243       $ 12,719,152   

 

 

Cost of investments for income tax purposes

   $ 243,681,200       $ 406,528,629       $ 1,016,999,971   

 

 

3. CAPITAL TRANSACTIONS

 

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

Transactions in common shares were as follows:

 

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

For the

Six Months
Ended
September 30,
2014

   

For the

Year
Ended
March 31,
2014

   

For the

Six Months
Ended
September 30,
2014

   

For the

Year
Ended
March 31,
2014

   

For the

Six Months
Ended
September 30,
2014

   

For the

Year
Ended
March 31,
2014

 

Common Shares Outstanding - beginning of period

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

Common Shares Issued as reinvestment of dividends

                                         

 

 

Common Shares Outstanding - end of period

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

 

 

4. PORTFOLIO SECURITIES

 

Purchases and sales of investment securities, other than short-term securities, for the six months ended September 30, 2014, are listed in the table below.

 

Fund    Cost of
Investments
Purchased
     Proceeds
From
Investments
Sold
     Purchases of
Long-Term
U.S. Government
Obligations
     Proceeds from
Sales of
Long-Term
U.S. Government
Obligations 
 

Clough Global Allocation Fund

     $        183,880,091       $         201,896,641       $ 13,788,616       $ 16,130,085   

Clough Global Equity Fund

     295,726,505         350,588,949         20,697,983         22,022,992   

Clough Global Opportunities Fund

     778,582,441         859,963,811         57,964,723         63,747,463   

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2014 (Unaudited)

    

 

5. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS

 

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

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

6. COMMITTED FACILITY AGREEMENT AND LENDING AGREEMENT

 

Each Fund entered into a financing package that includes a Committed Facility Agreement (the “Agreement”) dated January 16, 2009, as amended, between each Fund and BNP Paribas Prime Brokerage, Inc. (“BNP”) that allows each Fund to borrow funds from BNP. Each Fund is currently borrowing the maximum commitment covered by the agreement. Borrowings under the Agreement are secured by assets of each Fund that are held by a Fund’s custodian in a separate account (the “pledged collateral”) valued at $149,357,309, $256,936,690 and $623,818,518 for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund may, with 30 days notice, reduce the Maximum Commitment Financing (Initial Limit amount plus the increased borrowing amount in excess of the Initial Limit) to a lesser amount if drawing on the full amount would result in a violation of the applicable asset coverage requirement of Section 18 of the 1940 Act. Interest is charged at the three month LIBOR (London Inter-bank Offered Rate) plus 0.70% on the amount borrowed and 0.65% on the undrawn balance. Each Fund also pays a one-time arrangement fee of 0.25% on (i) the Initial Limit and (ii) any increased borrowing amount in the excess of the Initial Limit, paid in monthly installments for the six months immediately following the date on which borrowings were drawn by the Fund.

The Agreement was amended on December 31, 2013, to increase the Maximum Commitment Financing to $93,300,000 for the Clough Global Allocation Fund and $156,000,000 for the Clough Global Equity Fund. For the six months ended September 30, 2014 the average borrowings outstanding for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund under the agreement were $93,300,000, $156,000,000 and $388,900,000, respectively, and the average interest rate for the borrowings was 0.98%. As of September 30, 2014, the outstanding borrowings for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $93,300,000, $156,000,000 and $388,900,000, respectively. The interest rate applicable to the borrowings of Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund on September 30, 2014, was 0.99%.

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

Under the terms of the Lending Agreement, the Lent Securities are marked to market daily, and if the value of the Lent Securities exceeds the value of the then-outstanding borrowings owed by a Fund to BNP under the Agreement (the “Current Borrowings”), BNP must, on that day, either (1) return Lent Securities to each Fund’s custodian in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings; or (2) post cash collateral with each Fund’s custodian equal to the difference between the value of the Lent Securities and the value of the Current Borrowings. If BNP fails to perform either of these actions as required, each Fund will recall securities, as discussed below, in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings. Each Fund can recall any of the Lent Securities and BNP shall, to the extent commercially possible, return such security or equivalent security to each Fund’s custodian no later than three business days after such request. If a Fund recalls a Lent Security pursuant to the Lending Agreement, and BNP fails to return the Lent Securities or equivalent securities in a timely fashion, BNP shall remain liable for the ultimate delivery to each Fund’s custodian of such Lent Securities, or equivalent securities, and for any buy-in costs that the executing broker for the sales transaction may impose with respect to the failure to deliver. Under the terms of the Lending Agreement, each Fund shall have the right to apply and set-off an amount equal to one hundred percent (100%) of the then current fair market value of such Lent Securities against the Current Borrowings. As of September 30, 2014, the market value of the Lent Securities for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $80,435,667, $174,006,605 and $365,197,520, respectively.

 

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Notes to Financial Statements

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

The Board of Trustees has approved each Agreement and the Lending Agreement. No violations of the Agreement or the Lending Agreement have occurred during the six months ended September 30, 2014.

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

7. OTHER

 

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

8. SUBSEQUENT EVENT

 

The Board of Trustees of each Fund announced, on September 12, 2014, that it had approved a change to the Funds’ fiscal year-end from March 31 to October 31. The Funds intend to operate in a seven-month stub period from April 1, 2014 to October 31, 2014 and will then begin a new fiscal year on November 1, 2014.

 

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Clough Global Funds

   Dividend Reinvestment Plan
   September 30, 2014 (Unaudited)

    

 

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

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

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

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

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

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

All correspondence or questions concerning the Plan should be directed to the Plan Administrator, DST Systems, Inc., 333 West 11th Street, 5th Floor, Kansas City, Missouri 64105.

 

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Additional Information

   Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

FUND PROXY VOTING POLICIES & PROCEDURES

 

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

PORTFOLIO HOLDINGS

 

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

NOTICE

 

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

SHAREHOLDER MEETING

 

On July 15, 2014, the Funds held their annual meeting of Shareholders for the purpose of voting on a proposal to re-elect Trustees of the Funds. The results of the proposal for each Fund were as follows:

Proposal: To re-elect the following trustees to the Clough Global Allocation Fund Board.

 

      Adam D. Crescenzi    Jerry G. Rutledge    Vincent W. Versaci

For

   9,188,332    9,180,385    9,179,866

Withheld

      383,860       391,807       392,326

Proposal: To re-elect the following trustees to the Clough Global Equity Fund Board.

 

      Edmund J. Burke    John F. Mee      

For

   16,004,065.242    15,981,980.242   

Withheld

        895,718.390         917,803.390   

Proposal: To re-elect the following trustees to the Clough Global Opportunities Fund Board.

 

      Robert L. Butler    James E. Canty    Richard C. Rantzow

For

   47,803,248.84    47,897,307.84    47,708,607.84

Withheld

      1,288,686.00       1,194,627.00       1,383,327.00

SECTION 19(A) NOTICES

 

The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted there under. Each Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the fiscal year-to-date cumulative distribution amount per share for the Fund.

The amounts and sources of distributions reported in these 19(a) notices are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

 

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Clough Global Funds

   Additional Information
   September 30, 2014 (Unaudited)

    

 

    Total Cumulative Distributions
for the period ended
September 30, 2014
    % Breakdown of the Total Cumulative
Distributions for the period ended
September 30, 2014
 
     Net
Investment
Income
    Net
Realized
Capital
Gains
    Return of
Capital
    Total Per
Common
Share
    Net
Investment
Income
    Net
Realized
Capital
Gains
    Return of
Capital
    Total Per
Common
Share
 

Clough Global Allocation Fund

  $ 0.0000      $ 0.6300      $ 0.0000      $ 0.6300        0.00     100.00     0.00     100.00

Clough Global Equity Fund

  $ 0.0000      $ 0.6300      $ 0.0000      $ 0.6300        0.00     100.00     0.00     100.00

Clough Global Opportunities Fund

  $ 0.0000      $ 0.4278      $ 0.1422      $ 0.5700        0.00     75.06     24.94     100.00

Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, each Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by each Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. Each Fund’s current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 

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Investment Advisory Agreement Approval    Clough Global Funds
September 30, 2014 (Unaudited)   

    

 

On June 12, 2014, the Board of Trustees of each Fund met in person to, among other things, review and consider the renewal of the Advisory Agreements. In its consideration of the Advisory Agreements, the Trustees, including the non-interested Trustees, considered in general the nature, quality and scope of services to be provided by Clough.

Prior to the beginning of their review of the Advisory Agreements, counsel to the Funds, who also serves as independent counsel to the non-interested Trustees, discussed with the Trustees their fiduciary responsibilities in general and also specifically with respect to the renewal of the Advisory Agreements.

Representatives from Clough presented Clough’s materials regarding consideration of renewal of the Advisory Agreements. The Board noted that included in the Board materials were responses by Clough to a questionnaire drafted by legal counsel to the Funds to assist the Board in evaluating whether to renew the Advisory Agreements (the “15(c) Materials”). The Board noted that the 15(c) Materials were extensive, and included information relating to: each Fund’s investment results; portfolio composition; advisory fee and expense comparisons; financial information regarding Clough; descriptions such as compliance monitoring and portfolio trading practices; information about the personnel providing investment management services to the Funds; and the nature of services provided under the Advisory Agreements.

The Board reviewed the organizational structure of Clough and the qualifications of Clough and its principals to act as each Fund’s investment adviser. The Board considered the professional experience of the portfolio managers, Eric A. Brock, James E. Canty and Charles I. Clough, Jr., Partners at Clough, as well as Robert Zdunczyk, portfolio manager of the Clough Global Allocation Fund and Clough Global Opportunities Fund, emphasizing that Messrs. Brock, Canty, Clough and Zdunczyk each had substantial experience as an investment professional. The Trustees, all of whom currently serve as Trustees for the Funds, acknowledged their familiarity with the expertise and standing in the investment community of Messrs. Brock, Canty, Clough and Zdunczyk, and their satisfaction with the expertise of Clough and the services provided by Clough to the Funds. The Trustees concluded that the portfolio management team was well qualified to serve the Funds in those functions.

The Board next reviewed Clough’s procedures relating to compliance and oversight with respect to Clough’s brokerage allocation and soft dollar policies. The Trustees noted that Clough’s order management systems contain pre-trade compliance functions that review each trade against certain of the Funds’ investment restrictions and applicable 1940 Act and Internal Revenue Code restrictions, and noted the efforts that Clough’s Chief Compliance Officer will undertake to summarize monthly for Clough’s management, and quarterly for the Trustees, any violations that may occur, as well as any other violations detected through the manual monitoring that supplements the order management system’s testing. The Board noted the recent addition of certain personnel by Clough, including a new General Counsel. The Board discussed with representatives from Clough the various other investment products managed by Clough other than the Funds. The Board also noted the adequacy of Clough’s facilities. The Trustees concluded that Clough appeared to have adequate procedures and personnel in place to ensure compliance by Clough with applicable law and with each Fund’s investment objectives and restrictions.

The Board next reviewed the terms of the Advisory Agreements, noting that Clough would receive a fee of 0.70%, 0.90% and 1.00% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets. The Trustees reviewed the fees charged by Clough to other clients for which it provides comparable services. The Trustees then reviewed Clough’s income statement for the year ended December 31, 2013, and its balance sheet as of that date. The Trustees further reviewed a profit and loss analysis as it relates to Clough’s advisory business and compared the profitability analysis to that provided by Clough to the Board in previous years. In response to a question from a Trustee, representatives from Clough discussed the allocation of overhead expenses contained in Clough’s profitability analysis.

The Board discussed the possible benefits Clough may accrue because of its relationship with the Funds as well as potential benefits that accrue to the Funds because of their relationship with Clough. The Board noted that Clough does not realize any direct benefits due to the allocation of brokerage and related transactions on behalf of the Funds.

The Board reviewed and discussed materials prepared and distributed in advance of the meeting regarding the comparability of the investment advisory fees of the Funds with the investment advisory fees of other investment companies, which had been prepared at the request of ALPS by Lipper Analytical Services (“Lipper”). Lipper’s report contained information regarding investment performance, comparisons of cost and expense structures of each Fund with other funds’ cost and expense structures, as well as comparisons of each Fund’s performance with the performance during similar periods of members of an objectively identified peer group and related matters.

As the Funds are unique in the marketplace, the Board noted that Lipper had a difficult time presenting a large peer group for comparison. The Trustees compared fees from seven (7) other leveraged closed-end investment companies that Lipper classified as “global funds” versus each Fund’s fees as part of the expense group (the “Expense Group”) and an expense universe consisting of each Fund, the Expense Group, and all other leveraged closed-end global funds (the “Expense Universe”). For GLV, the investment advisory fee for the Expense Group ranged from 0.70% to 1.00%, with a median of 0.900%. For GLV, the Board noted that as prepared by Lipper, the gross total expenses for the Expense Group on common and leveraged assets ranged from 1.152% to 1.743%, with a median of 1.379%. For GLQ, the investment advisory fee for the Expense Group ranged from 0.850% to 1.000%, with a median of 0.900%. For GLQ, the Board noted that as prepared by Lipper, the gross total expenses for the Expense

 

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Clough Global Funds

   Investment Advisory Agreement Approval
   September 30, 2014 (Unaudited)

    

 

Group on common and leveraged assets ranged from 1.152% to 1.949%, with a median of 1.379%. For GLO, the investment advisory fee for the Expense Group ranged from 0.850% to 1.000%, with a median of 0.95%. For GLO, the Board noted that as prepared by Lipper, the gross total expenses for the Expense Group on common and leveraged assets ranged from 1.152% to 2.040%, with a median of 1.379%. The Board noted the Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s gross total expenses were 1.743%, 1.949% and 2.040%, respectively.

The Board discussed the other non-management expenses category included in Lipper’s expense ratio components. Discussion ensued and the Board noted that the total expense ratio includes investment related expenses such as the interest on each Fund’s leverage and dividend expense on short sales. The Board noted that through each Fund’s employment of leverage, the income generation capabilities of the underlying investments may be augmented. The Board also noted the extent to which each Fund utilizes leverage and short sales, thereby increasing its investment-related expenses and concluded that the use of leverage and short sales is an important part of each Fund’s investment strategy to attempt to meet each Fund’s investment objective. The Board noted that they believe investment related expenses are operational in nature and should not be considered a management expense. Excluding the investment related expenses from the total expense ratio, the Board noted that each Fund’s net overall expenses are comparable to their peer group.

The Trustees then reviewed each Fund’s performance as compared to the performance of the closed-end fund universe selected by Lipper (the “Performance Universe”). For the one year ended net total return performance as of April 30, 2014, the performance data ranged from a high of 19.69% to a low of 4.0% with a median of 10.81%. The Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s performance during such time period was 8.56%, 10.85% and 8.71%, respectively.

The Trustees further noted that the objectives of the funds in the Lipper analysis differed from each Fund’s objectives and policies. The Trustees believed that the Lipper report provided a sufficient comparative universe.

At this point, Mr. Burke and Mr. Canty, both “interested persons” of the Funds, as well as the other representatives of ALPS and Clough, left the meeting. The non-interested Trustees, with the assistance of legal counsel, reviewed and discussed in more detail the information that had been presented relating to Clough, the Advisory Agreements and Clough’s profitability.

Mr. Burke, Mr. Canty, and the representatives of ALPS and Clough re-joined the meeting. The Board of Trustees of the Fund, present in person, with the non-interested Trustees present in person voting separately, unanimously concluded that the investment advisory fee of 0.70% of Clough Global Allocation Fund’s total assets, 0.90% of Clough Global Equity Fund’s total assets and 1.00% of Clough Global Opportunities Fund’s total assets are fair and reasonable for each respective Fund and that the renewal of the Advisory Agreements is in the best interests of the Funds and their shareholders.

 

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LOGO

 

 

 

 

 

LOGO   

This Fund is neither insured nor guaranteed by the U.S. Government, the FDIC, the Federal Reserve Board or any other governmental agency or insurer.

 

For more information about the Fund, including a prospectus, please visit www.cloughglobal.com or call 1–877–256–8445.

 

1290 Broadway, Suite 1100, Denver, CO 80203


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Item 2. Code of Ethics.

Not applicable to semi-annual report.

 

Item 3. Audit Committee Financial Expert.

Not applicable to semi-annual report.

 

Item 4. Principal Accountant Fees and Services.

Not applicable to semi-annual report.

 

Item 5. Audit Committee of Listed Registrants.

Not applicable.

 

Item 6. Schedule of Investments.

 

  a. Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
  b. Not applicable to the Registrant.

 

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

Not applicable to semi-annual report.

 

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

 

  a. Not applicable to semi-annual report.
  b. Not applicable.

 

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


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Not applicable.

 

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

There have been no material changes by which shareholders may recommend nominees to the Board of Trustees.

 

Item 11.  Controls and Procedures.

 

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

 

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

 

Item 12.  Exhibits.

(a)(1) Not applicable to semi-annual report.

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

(a)(3) Not applicable.

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

(c) Pursuant to the Securities and Exchange Commission’s Order granting relief from Section 19(b) of the Investment Company Act of 1940 dated September 21, 2009, the form of 19(a) Notices to Beneficial Owners are attached hereto as Exhibit 12(c).


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SIGNATURES

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

CLOUGH GLOBAL OPPORTUNITIES FUND

 

By:      /s/ Edmund J. Burke                   
     Edmund J. Burke   
     President & Trustee   
Date:      December 5, 2014   

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

CLOUGH GLOBAL OPPORTUNITIES FUND

 

By:      /s/ Edmund J. Burke                   
     Edmund J. Burke   
     President/Principal Executive Officer   
Date:      December 5, 2014   
By:      /s/ Jeremy O. May                   
     Jeremy O. May   
     Treasurer/Principal Financial Officer   
Date:      December 5, 2014