VIRTUS GLOBAL DIVIDEND & INCOME FUND INC

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  811-05620      

                Virtus Global Dividend & Income Fund Inc.                      

(Exact name of registrant as specified in charter)

101 Munson Street

                         Greenfield, MA 01301-9683                        

(Address of principal executive offices) (Zip code)

William Renahan, Esq.

Vice President, Chief Legal Officer and Secretary for Registrant

100 Pearl Street

                    Hartford, CT 06103-4506                        

(Name and address of agent for service)

Registrant’s telephone number, including area code:  (800) 272-2700

Date of fiscal year end:  December 31

Date of reporting period:  June 30, 2017

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 


Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.


LOGO

 

 

SEMIANNUAL REPORT

 

 

Not FDIC Insured

No Bank Guarantee

May Lose Value

  June 30, 2017


FUND DISTRIBUTIONS AND MANAGED DISTRIBUTION PLAN

The Fund has a Managed Distribution Plan to maintain a consistent distribution level that may be paid in part or in full from net investment income, realized capital gains, or, if necessary, return of capital. The Board believes that regular monthly, fixed cash payouts will enhance shareholder value and serve the long-term interests of shareholders. You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions or from the terms of the Fund’s Managed Distribution Plan.

On a tax basis, the Fund estimates it distributed more than its income and net realized capital gains in the fiscal year to date. Shareholders should note that if the Fund’s aggregate investment income and net realized capital gains are less than the amount of the distribution level, the difference will be paid from the Fund’s capital and will constitute a return of the shareholder’s capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”

The amounts and sources of distributions reported in the Fund’s notices pursuant to Section 19(a) of the Investment Company Act of 1940 are only estimates and are not being provided 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 its fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for 2017 that tells them how to report distributions for federal income tax purposes.

The Board may amend, suspend or terminate the Managed Distribution Plan at any time without prior notice to shareholders if it deems such action to be in the best interest of the Fund and its shareholders.

Information on the Fund is available at www.virtus.com. Section 19(a) notices are posted on the website at:
http://www.virtus.com/
our-products/closed-end-fund-details/ZTR.

 

1


MESSAGE TO SHAREHOLDERS

Dear Virtus Global Dividend & Income Fund Inc. Shareholder:

I am pleased to share the semiannual report for the Virtus Global Dividend & Income Fund Inc. for the six months ended June 30, 2017.

This report includes commentary from the fund’s co-portfolio managers, Kayne Anderson Rudnick Investment Management, LLC and Newfleet Asset Management, LLC, on the performance of the markets and their respective equity and fixed income portions of the portfolio during the period, as well as Newfleet’s discussion on the contribution of the options overlay strategy. Also included are the results of the annual meeting of shareholders held on June 6, 2017.

For the six months ended June 30, 2017, the fund’s NAV gained 11.36%, including $1.18 in reinvested distributions. During the same period, the fund’s composite benchmark, consisting of 60% Russell Developed Large Cap Index (net) and 40% Bloomberg Barclays U.S. Aggregate Bond Index, gained 7.22%, including reinvested dividends. Performance for the composite’s underlying indices over this period included a gain of 10.63% for the Russell Developed Large Cap Index (net) and a gain of 2.27% for the Bloomberg Barclays U.S. Aggregate Bond Index.

On behalf of Virtus Investment Partners and our affiliated portfolio managers, thank you for your investment. Should you have any questions or require support, the Virtus customer service team is ready to assist at 1-866-270-7788 or through the closed-end fund section of our website, www.virtus.com.

Sincerely,

 

LOGO

George R. Aylward

President, Chief Executive Officer, and Director

Virtus Global Dividend & Income Fund Inc.

August 2017

This information does not represent an offer, or the solicitation of an offer, to buy or sell securities of the Fund.

Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above.

For information regarding the indexes cited and key investment terms used in this report see page 9.

 

2


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited)

JUNE 30, 2017

 

About the Fund:

Virtus Global Dividend & Income Fund Inc. (NYSE: ZTR) (the “Fund”) is invested in a balance of approximately 60% equity and 40% fixed income investments. The Fund’s investment objective is to generate total return, consisting of capital appreciation and income. There is no guarantee that the Fund will achieve its investment objective.

The use of leverage enables the Fund to borrow at short-term rates and invest at higher yields on its investments. As of June 30, 2017, the Fund’s leverage consisted of $120 million of borrowings made pursuant to a line of credit, which represented approximately 27% of the Fund’s total assets.

Manager Comments – Kayne Anderson Rudnick Investment Management, LLC (KAR)

KAR manages the Fund’s equity portfolio, which has a target allocation of 60%, utilizing its global dividend yield strategy. The following commentary is provided by the portfolio management team at KAR, and it covers the period from January 1, 2017 through June 30, 2017.

How did the equity markets perform during the six months ended June 30, 2017?

As the first half of the year came to a close, stocks continued their steady march forward. Year to date through June 30, U.S. large-capitalization equities, as measured by the S&P 500® Index, were up 9.34%; international stocks, as measured by the MSCI EAFE® Index (net), were up 13.81%; and emerging market stocks, as measured by the MSCI Emerging Markets Index (net), performed even stronger, returning 18.43%. Small-cap stocks, as measured by the Russell 2000® Index, rose 4.99% – about half the return of the S&P 500®. Growth stocks and large-cap stocks continued to outpace value stocks and small-cap stocks in the first half of 2017 – the exact opposite of what occurred in 2016.

What factors affected the performance of the Fund’s equity portfolio during the period?

For the six months ended June 30, 2017, the Fund’s equity portfolio returned 12.35% (gross of fees), outperforming the 10.63% return of the Russell Developed Large Cap Index. For the period covered by this report, the Fund may and did employ leverage; the benchmark performance is unlevered. From a sector perspective, performance was helped by strong stock selection in the consumer staples and healthcare sectors, and hurt by poor stock selection in the industrials and information technology sectors.

The best performing positions during the period were Reynolds American and Vodafone Group. Reynolds American accepted an offer from British American Tobacco to acquire the remaining 58% of the company that it did not already own. The offer represented a 26% premium to Reynolds American stock, an increase to the offer made in the fourth quarter of 2016 of a 20% premium. Vodafone’s investment in its network in Europe has contributed to a continued improvement in the European market. Meanwhile, in India, the company is consolidating its business with a competitor, which should help contribute to a more rational market.

Holdings that contributed the least to performance were Vermilion Energy and AT&T. Weakness in oil prices detracted from the performance of Vermilion Energy’s stock. Increased competition from Sprint and T-Mobile, particularly in terms of unlimited data offerings, contributed to weakness in AT&T’s stock during the period.

What is your outlook for the equity markets?

Even in a mediocre GDP outlook environment, corporate earnings continue to look very solid for the next 6-12 months. As a

 

 

For information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 9

 

3


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)

JUNE 30, 2017

 

result, we believe that stocks should continue to generate positive returns for the foreseeable future, although markets may experience a correction along the way. We believe that the key takeaway for clients in this environment is to remember to focus on their longer-term objectives and to not get caught up in the day-to-day vagaries of the stock market.

Manager Comments – Newfleet Asset Management, LLC (Newfleet)

Newfleet manages the Fund’s fixed income portfolio, which has a target allocation of 40%, utilizing its multi-sector core plus strategy. Newfleet also manages the options overlay strategy employed by the Fund. The following commentary is provided by the portfolio management team at Newfleet, and it covers the period from January 1, 2017 through June 30, 2017.

How did the global fixed income markets perform during the six-month period ended June 30, 2017?

Most spread sectors outperformed U.S. Treasuries during the six-month period ended June 30, 2017 as spreads tightened. The outlook for global growth has remained favorable and the search for yield has persisted. Within most fixed income sectors, longer duration and lower quality assets were key drivers of performance.

Post-election expectations of faster economic growth and rising inflation continued into 2017 as optimistic investors watched and waited for policy clarity from President Trump and the new administration. As the period progressed, support for the “Trump trade” weakened as the president’s agenda appeared to face more challenges to implement than expected.

As anticipated, the Fed raised its target interest rate 0.25% on two separate occasions during the last six months to a

range of 0.75% to 1.00%. During the six-month period, the U.S. Treasury curve flattened.

What factors affected the performance of the Fund’s fixed income portfolio during the period?

For the six months ended June 30, 2017, the Fund’s fixed income portfolio excluding options overlay, returned 5.57% (gross of fees), outperforming the 2.27% return of the Bloomberg Barclays U.S. Aggregate Bond Index. For the period covered by this report, the Fund may and did employ leverage; the benchmark performance is unlevered.

The outperformance of most credit-sensitive sectors, such as investment grade and high yield corporate bonds, relative to U.S. Treasuries was the key positive contributor to Fund performance. In addition, the portfolio’s relative underweight to U.S. Treasuries and agency mortgage-backed securities positively impacted performance. Issue selection within the investment grade corporate sector also had a meaningful positive impact on performance during the period.

The Fund’s exposure to the leveraged bank loan sector negatively impacted performance during the period.

How did the Fund’s options overlay strategy perform over the period?

In early April 2016, the Fund added an options overlay strategy with the goal of increasing income and total return. This overlay strategy seeks to generate profits through the use of index-based, out-of-the-money put and call spreads. The strategy is adaptive to changes in the volatility environment, and is implemented using strict risk limits.

While the relatively range-bound market over the past six months generally was beneficial to the strategy, the Fund experienced losses on three occasions, as market moves exceeded the expectations of

 

 

For information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 9

 

4


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)

JUNE 30, 2017

 

the options trading community. All three of these losses were due to market appreciation, instead of downward gap moves.

The options overlay strategy maintains maximum profitability when the S&P 500® Index remains range-bound over a one- to two-week period. The price range is responsive to the volatility environment (as measured by the CBOE Volatility® Index (or “VIX”®), expanding as volatility rises and contracting when volatility compresses. In low volatility bull markets, such as we experienced over the past 12-18 months, the steady accumulation of daily gains can occasionally exceed the upper boundary of the price range set by the options overlay strategy.

In the aggregate, these three losses were relatively minor, and the vast majority of trades over the period were successful. During the six-month period, the options overlay strategy made a positive contribution, contributing 2.09% (gross of fees) to performance of the Fund.

What is your outlook for fixed income markets?

As the second half of 2017 begins, all eyes will be on the key central banks as they consider moves away from quantitative easing, and on the Fed as it takes steps to unwind its balance sheet. A change in direction and pace could have far-reaching global implications. We expect the U.S. economy will continue to grow at a moderate pace with the possibility for upside contingent on potential tax cuts, infrastructure spending, and deregulation. In this environment, we expect inflation to remain well contained barring a meaningful move higher in energy prices or an increase in wage inflation. Lingering concerns that could cause market volatility include the unfolding of President Trump’s policies amid political distractions, the path of oil prices, U.S. dollar strength, and ever-present geopolitical risk.

As always, we feel it is especially important to stay diversified, have granular positions, and focus on liquid investments. We continue to look for opportunities in all sectors of the bond market, striving to uncover any out-of-favor or undervalued sectors and securities. We are constructive on spread sectors and will maintain an overweight based on sound and improving fundamentals, strong technicals, still-accommodative central banks, and attractive valuations in certain areas of the fixed income markets. However, with spreads well inside of long-term averages, selection and positioning within sectors is critical. With strong demand for fixed income securities and a supportive environment, spread sectors continue to offer attractive opportunities to investors searching for total return and yield. Some of the specific sectors where we see value are: out-of-index/off-the-run asset-backed securities, non-agency residential mortgage-backed securities, corporate high-yield bonds, high-yield bank loans, and emerging market bonds.

Uncertainty in the current market environment creates opportunity. As our long-term performance record demonstrates, our process positions us well to take advantage of challenging situations.

The preceding information is the opinion of portfolio management only through the end of the period of the report as stated on the cover. Any such opinions are subject to change at any time based upon market conditions and should not be relied upon as investment advice.

The Fund’s portfolio holdings are subject to change and may not be representative of the portfolio managers’ current or future investments. The mention of individual securities held by the Fund is for informational purposes only and should not

 

 

For information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 9

 

5


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)

JUNE 30, 2017

 

be construed as a recommendation to purchase or sell any securities. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional.

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

Foreign Investing: Investing internationally involves additional risks such as currency, political, accounting, economic, and market risk.

High Yield / High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.

Call/Put Spreads: Buying and selling call and put option spreads on the SPX Index risks the loss of the premium when buying and may increase downside losses.

Market Price/NAV: At the time of purchase and/or sale, an investor’s shares may have a market price that is above or below the fund’s NAV, which may increase the investor’s risk of loss.

Fundamental Risk of Investing: There can be no assurance that the Fund will achieve its investment objectives. An investment in the shares of the Fund is subject to loss of principal; shares may decrease in value.

 

 

For information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 9

 

6


OUR PRIVACY COMMITMENT

Virtus Global Dividend & Income Fund Inc. recognizes that protecting the privacy and security of the confidential personal information we collect about you is an important responsibility. The following information will help you understand our privacy policy and how we will handle and maintain confidential personal information as we fulfill our obligations to protect your privacy. “Personal information” refers to the nonpublic financial information obtained by us in connection with providing you a financial product or service.

Information We Collect

We collect personal information to help us serve your financial needs, offer new products or services, provide customer service and fulfill legal and regulatory requirements. The type of information that we collect varies according to the products or services involved, and may include:

 

  Information we receive from you on applications and related forms (such as name, address, social security number, assets and income); and

 

  Information about your transactions and relationships with us, our affiliates, or others (such as products or services purchased, account balances and payment history).

Information Disclosed in Administering Products and Services

We will not disclose personal information about current or former customers to non-affiliated third parties except as permitted or required by law. We do not sell any personal information about you to any third party. In the normal course of business, personal information may be shared with persons or entities involved in servicing and administering products and services on our behalf, including your broker, financial advisor or financial planner and other service providers and affiliates assisting us.

Procedures to Protect Confidentiality and Security of Your Personal Information

We have procedures in place that limit access to personal information to those employees and service providers who need to know such information in order to perform business services on our behalf. We educate our employees on the importance of protecting the privacy and security of confidential personal information. We also maintain physical, electronic and procedural safeguards that comply with federal and state regulations to guard your personal information.

We will update our policy and procedures where necessary to ensure that your privacy is maintained and that we conduct our business in a way that fulfills our commitment to you. If we make any material changes in our privacy policy, we will make that information available to customers through our website and/or other communications.

 

 

7


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

JUNE 30, 2017 (Unaudited)

The following tables present the portfolio holdings within certain sectors or countries as a percentage of total investments, net of written options, at June 30, 2017.

 

 
Asset Allocation  
   
Common Stocks       63

Financials

    13      

Consumer Staples

    7      

Telecommunication Services

    7      

All other Common Stock

    36      

Corporate Bonds and Notes

      19  

Financials

    7      

Consumer Discretionary

    2      

All other Corporate Bonds and Notes

    10      

Mortgage-Backed Securities

      8  

U.S. Government Securities

      2  

Asset-Backed Securities

      2  

Other

      6  
     

 

 

 

Total

      100
           

 

 

 

 

   
Country Weightings      
   

United States

    58

United Kingdom

    19  

Canada

    7  

France

    5  

Switzerland

    3  

Australia

    1  

Germany

    1  

Other

    6  
   

 

 

 

Total

    100
   

 

 

 

 

8


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

KEY INVESTMENT TERMS (Unaudited)

JUNE 30, 2017

 

Bloomberg Barclays U.S. Aggregate Bond Index

The Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Chicago Board Options Exchange (CBOE) Volatility® Index

The Chicago Board Options Exchange (CBOE) Volatility® Index or (“VIX®”) shows the market’s

expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of

S&P 500® index options. This volatility is meant to be forward looking and is calculated from

both calls and puts. The VIX® is a widely used measure of market risk and is often referred to as the “investor fear gauge.” The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Exchange-Traded Funds (ETF)

An open-end fund that is traded on a stock exchange. Most ETFs have a portfolio of stocks or bonds that track a specific market index.

Federal Reserve (the “Fed”)

The central bank of the United States, responsible for controlling the money supply, interest rates and credit with the goal of keeping the U.S. economy and currency stable. Governed by a seven-member board, the system includes 12 regional Federal Reserve Banks, 25 branches and all national and state banks that are part of the system.

Global Dividend & Income Fund Linked Benchmark

Virtus Global Dividend & Income Fund Linked Benchmark consists of 60% Russell Developed Large Cap Index (net) and 40% Bloomberg Barclays U.S. Aggregate Bond Index. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment. Performance of the Virtus Global Dividend & Income Fund Linked Benchmark between 8/1/2007 and 9/6/2016 represents an allocation consisting of 50% S&P 500® Index and 50% Bloomberg Barclays U.S. Government Bond Index. Prior to 8/1/2007, the allocation consisted of 37.5% S&P 500® Index and 62.5% Bloomberg Barclays U.S. Government Bond Index.

Gross Domestic Product (GDP)

The gross domestic product (GDP) represents the market value of all goods and services produced by the economy during the period measured, including personal consumption, government purchases, private inventories, paid-in construction costs and the foreign trade balance.

MSCI EAFE® Index (net)

The MSCI EAFE® (Europe, Australasia, Far East) Index (net) is a free float-adjusted market capitalization-weighted index that measures developed foreign market equity performance, excluding the U.S. and Canada. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

 

9


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

KEY INVESTMENT TERMS (Unaudited) (Continued)

JUNE 30, 2017

 

MSCI Emerging Markets Index (net)

The MSCI Emerging Markets Index (net) is a free float-adjusted market capitalization-weighted index designed to measure equity market performance in the global emerging markets. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Quantitative Easing

A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Russell 2000® Index

The Russell 2000® Index is a market capitalization-weighted index of the 2,000 smallest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Russell Developed Large Cap Index (net)

The Russell Developed Large Cap Index is a free-float market capitalization-weighted index constructed to provide a comprehensive and unbiased barometer for the large-cap segment in the developed world, calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

S&P 500® Index

The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Sponsored American Depositary Receipt (Sponsored ADR)

An ADR which is issued with the cooperation of the company whose stock will underlie the ADR. Sponsored ADRs generally carry the same rights normally given to stockholders, such as voting rights. ADRs must be sponsored to be able to trade on a major U.S. exchange such as the NYSE.

Yield Curve

A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.

 

10


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
U.S. GOVERNMENT SECURITIES—3.2%  

U.S. Treasury Bond 2.500%, 2/15/46

  $ 10,655      $ 9,935  
TOTAL U.S. GOVERNMENT SECURITIES  
(Identified Cost $9,915)              9,935  
MUNICIPAL BONDS—2.1%  
California—1.0%             

State of California, Build America Bonds Taxable
7.600%, 11/1/40

    2,000        3,113  
    

 

 

 
New York—1.1%  

New York City Transitional Finance Authority Future Tax Secured Revenue
5.000%, 5/1/40

    1,640        1,892  

Port Authority of New York & New Jersey, Consolidated Bonds Revenue 5.000%, 4/15/57

    1,515        1,737  
    

 

 

 
               3,629  
TOTAL MUNICIPAL BONDS
(Identified Cost $6,814)
       6,742  
FOREIGN GOVERNMENT SECURITIES—2.0%  

Argentine Republic

    

7.500%, 4/22/26

    715        769  

7.625%, 4/22/46

    380        389  

Dominican Republic 144A
6.600%, 1/28/24(3)

    315        346  

Kingdom of Bahrain 144A
7.000%, 10/12/28(3)

    490        496  

Kingdom of Jordan 144A
5.750%, 1/31/27(3)

    490        487  

Republic of Costa Rica 144A 7.000%, 4/4/44(3)

    500        520  

Republic of Indonesia 144A 3.700%, 1/8/22(3)

    280        288  

144A 4.350%, 1/8/27(3)

    480        500  

Republic of South Africa
4.665%, 1/17/24

    410        415  

4.300%, 10/12/28

    430        402  

Republic of Turkey
7.375%, 2/5/25

    345        399  

4.875%, 10/9/26

    1,000        986  
    PAR VALUE      VALUE  
FOREIGN GOVERNMENT SECURITIES (continued)  

Sultanate of Oman 144A
4.750%, 6/15/26(3)

  $ 300      $ 295  
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified Cost $6,408)
       6,292  
MORTGAGE-BACKED SECURITIES—10.1%  
Agency—2.9%             

FNMA

    

4.000%, 1/1/46

    454        477  

3.500%, 4/1/46

    4,886        5,020  

3.500%, 5/1/46

    3,408        3,501  
    

 

 

 
       8,998  
    

 

 

 
Non-Agency—7.2%  

Agate Bay Mortgage Trust 13-1, A1 144A 3.500%, 7/25/43(2)(3)

    1,699        1,717  

American Homes 4 Rent Trust 14-SFR2, C 144A 4.705%, 10/17/36(3)

    610        648  

Ameriquest Mortgage Securities, Inc. Pass-Through Certificates, 03-AR3, M4
4.144%, 6/25/33(2)

    100        99  

AMSR Trust 16-SFR1, C 144A 3.459%, 11/17/33(2)(3)

    488        497  

16-SFR1, D 144A 3.609%, 11/17/33(2)(3)

    100        101  

Bank of America (Merrill Lynch) Commercial Mortgage Securities Trust 15-200P, A 144A 3.218%, 4/14/33(3)

    385        389  

Bayview Opportunity Master Fund III b Trust 17-RN2, A1 144A 3.475%, 4/28/32(2)(3)

    259        259  

Bayview Opportunity Master Fund IVa Trust 16-SPL1, B1 144A
4.250%, 4/28/55(3)

    395        409  

17-SLP5, B1 144A 4.000%, 6/28/57(2)(3)

    175        185  
 

 

See Notes to Financial Statements

 

 

11


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Non-Agency (continued)  

17-SPL1, B1 144A 4.250%, 10/28/64(2)(3)

  $ 263      $ 274  

Bayview Opportunity Master Fund IVb Trust 17-SPL3, B1 144A
4.250%, 11/28/53(2)(3)

    345        361  

Citigroup Commercial Mortgage Trust 16-SMPL, A 144A
2.228%, 9/10/31(3)

    685        677  

08-C7, AM 6.385%, 12/10/49(2)

    1,000        1,015  

Colony Starwood Homes Trust 16-2A, C 144A
3.359%, 12/17/33(2)(3)

    490        490  

COLT Mortgage Loan Trust Funding LLC 16-2, A1 144A
2.750%, 9/25/46(2)(3)

    105        106  

17-1, A3 144A
3.074%, 5/27/47(2)(3)

    224        225  

Credit Suisse First Boston Mortgage Securities Corp. 03-AR30, 5A1
3.277%, 1/25/34(2)

    255        259  

Credit Suisse Mortgage Loan Trust 15-1, B4 144A 3.893%, 5/25/45(2)(3)

    231        215  

Deephaven Residential Mortgage Trust 17-1A, A2 144A
2.928%, 12/26/46(2)(3)

    378        378  

Freddie Mac Structured Agency Credit Risk Debt Notes 16-DNA2, M2
3.416%, 10/25/28(2)

    1,150        1,174  

Galton Funding Mortgage Trust 17-1, A21 144A
3.500%, 7/25/56(2)(3)

    314        317  

Hilton USA Trust 16-SFP, B 144A
3.323%, 11/5/35(3)

    965        967  

Home Equity Mortgage Trust 05-2, M7
2.896%, 7/25/35(2)

    364        360  
    PAR VALUE      VALUE  
Non-Agency (continued)  

JPMorgan Chase (Bear Stearns) Alternate Loan Trust 04-5, 3A1
3.494%, 6/25/34(2)

  $ 650      $ 655  

JPMorgan Chase Commercial Mortgage Securities Trust 14-C22, A4
3.801%, 9/15/47

    1,320        1,381  

07-LDPX, AM 5.464%, 1/15/49(2)

    281        281  

JPMorgan Chase Mortgage Trust 16-2, M2 144A
3.750%, 12/25/45(2)(3)

    693        703  

16-1, A3 144A
3.500%, 5/25/46(2)(3)

    404        410  

16-5, A1 144A
2.605%, 12/25/46(2)(3)

    868        867  

Morgan Stanley Capital Barclays Bank Trust 16-MART, A 144A
2.200%, 9/13/31(3)

    1,000        989  

Motel 6 Trust 15-MTL6, D 144A 4.532%, 2/5/30(3)

    401        401  

New Residential Mortgage Loan Trust 16-4A, B1A 144A
4.500%, 11/25/56(2)(3)

    704        730  

17-2A, A3 144A
4.000%, 3/25/57(2)(3)

    269        280  

One Market Plaza Trust 17-1MKT, A 144A
3.614%, 2/10/32(3)

    345        359  

Sequoia Mortgage Trust 13-8, B1
3.533%, 6/25/43(2)

    366        370  

Structured Adjustable Rate Mortgage Loan Trust 04-4, 3A2
3.449%, 4/25/34(2)

    228        229  

Towd Point Mortgage Trust
15-1, A2 144A
3.250%, 10/25/53(2)(3)

    610        609  

15-6, M1 144A
3.750%, 4/25/55(2)(3)

    185        187  

15-2, 1M1 144A
3.250%, 11/25/60(2)(3)

    945        944  
 

 

See Notes to Financial Statements

 

 

12


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Non-Agency (continued)  

Tricon American Homes Trust 16-SFR1, C 144A
3.487%, 11/17/33(3)

  $ 975      $ 970  

Vericrest Opportunity Loan Trust LLC 16-NP11, A1 144A
3.500%, 10/25/46(2)(3)

    236        236  

17-NPL3, A1 144A
3.500%, 3/25/47(2)(3)

    349        350  

Wells Fargo Commercial Mortgage Trust 15-LC20, B
3.719%, 4/15/50

    675        679  
    

 

 

 
               22,752  
TOTAL MORTGAGE-BACKED SECURITIES
(Identified Cost $32,058)
       31,750  
ASSET-BACKED SECURITIES—2.5%  

American Credit Acceptance Receivables Trust 17-2, C 144A 2.860%, 6/12/23(3)

    430        430  

Centre Point Funding LLC 12-2A,1 144A
2.610%, 8/20/21(3)

    580        572  

CKE Restaurant Holdings, Inc. 13-1A, A2 144A
4.474%, 3/20/43(3)

    456        455  

Drug Royalty II LP 2 14-1, A2 144A
3.484%, 7/15/23(3)

    274        271  

Exeter Automobile Receivables Trust 15-2A, C 144A
3.900%, 3/15/21(3)

    580        589  

16-3A, B 144A
2.840%, 8/16/21(3)

    685        688  

GLS Auto Receivables Trust 17-1A, B 144A
2.980%, 12/15/21(3)

    525        524  

Mariner Finance Issuance Trust 17-AA, A 144A
3.620%, 2/20/29(3)

    425        428  
    PAR VALUE      VALUE  
ASSET-BACKED SECURITIES (continued)  

Murray Hill Marketplace Trust 16-LC1, A 144A
4.190%, 11/25/22(3)

  $ 183      $ 185  

Navistar Financial Dealer Note Master Owner Trust II 16-1, B 144A
2.966%, 9/27/21(2)(3)

    780        782  

OneMain Financial Issuance Trust 15-1A, A 144A 3.190%, 3/18/26(3)

    560        566  

Santander Drive Auto Receivables Trust 16-1, C
3.090%, 4/15/22

    990        1,004  

SoFi Consumer Loan Program LLC 16-3, A 144A 3.050%, 12/26/25(3)

    357        360  

TGIF Funding LLC 17-1A, A2 144A
6.202%, 4/30/47(3)

    425        429  

Trip Rail Master Funding LLC 14-1A, A1 144A
2.863%, 4/15/44(3)

    563        553  
TOTAL ASSET-BACKED SECURITIES
(Identified Cost $7,836)
             7,836  
CORPORATE BONDS AND NOTES—25.9%  
Consumer Discretionary—2.4%  

Caesars Growth Properties Holdings LLC
9.375%, 5/1/22

    180        195  

CalAtlantic Group, Inc.
5.250%, 6/1/26

    350        363  

Century Communities, Inc. 144A 5.875%, 7/15/25(3)

    350        348  

Charter Communications Operating LLC
4.908%, 7/23/25

    430        465  

Clear Channel Worldwide Holdings, Inc. Series B
7.625%, 3/15/20

    120        119  

Cooper-Standard Automotive, Inc. 144A
5.625%, 11/15/26(3)

    390        392  
 

 

See Notes to Financial Statements

 

 

13


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Consumer Discretionary (continued)  

Eldorado Resorts, Inc. 144A 6.000%, 4/1/25(3)

  $ 50      $ 53  

Gateway Casinos & Entertainment Ltd. 144A
8.250%, 3/1/24(3)

    150        156  

Hilton Worldwide Finance LLC
144A 4.875%, 4/1/27(3)

    100        105  

Horton (D.R.), Inc.
4.750%, 2/15/23

    510        550  

PetSmart, Inc.
144A 7.125%, 3/15/23(3)

    345        307  

Priceline Group, Inc. (The)
3.650%, 3/15/25(6)

    490        503  

QVC, Inc.
4.375%, 3/15/23(6)

    665        673  

Scientific Games International, Inc. 144A
7.000%, 1/1/22(3)

    100        107  

SFR Group S.A. 144A
7.375%, 5/1/26(3)

    415        450  

Signet UK Finance plc
4.700%, 6/15/24(6)

    525        511  

Sirius XM Radio, Inc. 144A 5.375%, 7/15/26(3)

    410        424  

TI Group Automotive Systems LLC 144A
8.750%, 7/15/23(3)

    200        212  

TRI Pointe Group, Inc.
5.875%, 6/15/24

    405        427  

Vista Outdoor, Inc.
5.875%, 10/1/23

    340        349  

Wyndham Worldwide Corp.
5.100%, 10/1/25(6)

    615        664  

4.500%, 4/1/27

    115        119  
    

 

 

 
       7,492  
    

 

 

 
Consumer Staples—0.6%  

CVS Health Corp.
2.875%, 6/1/26(6)

    635        615  

Flowers Foods, Inc.
4.375%, 4/1/22(6)

    690        739  

Safeway, Inc.
7.250%, 2/1/31

    285        268  
    PAR VALUE      VALUE  
Consumer Staples (continued)  

Smithfield Foods, Inc. 144A 4.250%, 2/1/27(3)

  $ 117      $ 120  
    

 

 

 
       1,742  
    

 

 

 
Energy—2.0%             

Alta Mesa Holdings LP 144A 7.875%, 12/15/24(3)

    190        191  

Anadarko Petroleum Corp.
6.600%, 3/15/46

    215        265  

Blue Racer Midstream LLC 144A
6.125%, 11/15/22(3)

    115        116  

Cheniere Corpus Christi Holdings LLC
5.875%, 3/31/25

    280        299  

Crestwood Midstream Partners LP
144A 5.750%, 4/1/25(3)

    290        289  

Energy Transfer Partners LP
4.200%, 4/15/27

    430        428  

EP Energy LLC 144A
8.000%, 11/29/24(3)

    165        165  

Helmerich & Payne International Drilling Co.
4.650%, 3/15/25

    290        304  

HollyFrontier Corp.
5.875%, 4/1/26(6)

    480        509  

Kinder Morgan Energy Partners LP
7.500%, 11/15/40(6)

    615        768  

MPLX LP
4.875%, 12/1/24(6)

    635        677  

NGL Energy Partners LP
5.125%, 7/15/19

    335        332  

Noble Holding International Ltd.
7.750%, 1/15/24

    220        174  

NuStar Logistics LP
5.625%, 4/28/27

    150        158  

Oasis Petroleum, Inc.
6.875%, 1/15/23

    165        160  

Petrobras Global Finance BV
8.750%, 5/23/26

    230        264  

7.375%, 1/17/27

    335        354  
 

 

See Notes to Financial Statements

 

 

14


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Energy (continued)  

Petroleos Mexicanos
6.875%, 8/4/26

  $ 395      $ 438  

Sabine Pass Liquefaction LLC
6.250%, 3/15/22

    355        402  
    

 

 

 
       6,293  
    

 

 

 
Financials—8.9%             

AerCap Ireland Capital Ltd.
3.950%, 2/1/22(6)

    495        515  

Allstate Corp. (The)
5.750%, 8/15/53(2)(4)

    445        487  

Ally Financial, Inc.
5.750%, 11/20/25

    300        316  

Apollo Management Holdings LP 144A
4.000%, 5/30/24(3)

    475        483  

Ares Capital Corp.
4.875%, 11/30/18

    65        67  

3.875%, 1/15/20

    175        178  

Ares Finance Co., LLC 144A
4.000%, 10/8/24(3)(6)

    675        648  

Banco de Credito del Peru 144A
6.125%, 4/24/27(2)(3)

    440        485  

Banco de Credito e Inversiones 144A
4.000%, 2/11/23(3)(6)

    680        707  

Banco Inbursa S.A. Institucion de Banca Multiple
144A 4.125%, 6/6/24(3)

    400        407  

Banco Nacional de Comercio Exterior SNC
144A 4.375%, 10/14/25(3)

    500        517  

Bancolombia S.A.
5.125%, 9/11/22

    655        684  

Bank of America Corp.
5.625%, 7/1/20(6)

    585        641  

4.200%, 8/26/24(6)

    853        885  

Brookfield Finance LLC
4.000%, 4/1/24

    543        557  
    PAR VALUE      VALUE  
Financials (continued)  

Capital One Financial Corp.
4.200%, 10/29/25

  $ 450      $ 454  

3.750%, 7/28/26

    495        483  

Citigroup, Inc.
5.500%, 9/13/25

    2,000        2,225  

Compass Bank
3.875%, 4/10/25(6)

    625        623  

Development Bank of Kazakhstan JSC 144A
4.125%, 12/10/22(3)

    720        720  

Discover Financial Services 3.950%, 11/6/24

    475        482  

Ford Motor Credit Co., LLC
5.000%, 5/15/18

    740        759  

FS Investment Corp.
4.250%, 1/15/20

    410        418  

4.750%, 5/15/22

    100        103  

Goldman Sachs Group, Inc. (The)
5.750%, 1/24/22(6)

    1,000        1,126  

Guanay Finance Ltd. 144A
6.000%, 12/15/20(3)

    593        607  

ICAHN Enterprises LP
5.875%, 2/1/22

    160        164  

6.250%, 2/1/22

    85        89  

iStar, Inc.
5.000%, 7/1/19

    160        162  

6.000%, 4/1/22

    120        123  

Jefferies Group LLC
5.125%, 1/20/23

    215        234  

4.850%, 1/15/27

    250        261  

Kazakhstan Temir Zholy Finance BV 144A
6.950%, 7/10/42(3)

    535        568  

Leucadia National Corp.
5.500%, 10/18/23

    375        401  

Liberty Mutual Group, Inc. 144A 4.250%, 6/15/23(3)(6)

    610        649  

Lincoln National Corp.
4.200%, 3/15/22(6)

    625        665  

Macquarie Group Ltd. 144A
6.250%, 1/14/21(3)(6)

    520        578  
 

 

See Notes to Financial Statements

 

 

15


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Financials (continued)  

Manulife Financial Corp.
4.150%, 3/4/26(6)

  $ 540      $ 571  

MetLife, Inc.
3.600%, 11/13/25(6)

    550        571  

Morgan Stanley
4.100%, 5/22/23

    385        402  

3.125%, 7/27/26

    865        841  

Navient Corp.
7.250%, 9/25/23

    100        107  

6.750%, 6/25/25

    250        258  

Nordea Bank AB 144A
2.125%, 5/29/20(3)

    300        300  

OM Asset Management plc
4.800%, 7/27/26

    495        499  

Powszechna Kasa Oszczednosci Bank Polski S.A. 144A
4.630%, 9/26/22(3)(5)(6)

    440        470  

Prudential Financial, Inc.
5.625%, 6/15/43(2)(4)

    400        439  

S&P Global, Inc.
4.000%, 6/15/25

    485        508  

Santander Holdings USA, Inc. 144A
3.700%, 3/28/22(3)

    425        430  

Societe Generale S.A. 144A 4.750%, 11/24/25(3)(6)

    500        524  

TC Ziraat Bankasi AS 144A 5.125%, 5/3/22(3)

    200        201  

Trinity Acquisition plc
4.400%, 3/15/26

    200        209  

Turkiye Vakiflar Bankasi TAO 144A
5.625%, 5/30/22(3)

    430        429  

UBS AG
7.625%, 8/17/22(6)

    1,235        1,450  

Wells Fargo & Co.
3.069%, 1/24/23

    225        228  
    

 

 

 
       27,908  
    

 

 

 
Health Care—2.3%  

Abbott Laboratories
3.400%, 11/30/23

    105        107  

3.750%, 11/30/26

    460        470  
    PAR VALUE      VALUE  
Health Care (continued)  

AbbVie, Inc.
2.850%, 5/14/23

  $ 335      $ 334  

3.600%, 5/14/25

    440        449  

3.200%, 5/14/26

    275        272  

Becton Dickinson & Co.
3.363%, 6/6/24

    89        89  

3.700%, 6/6/27

    530        531  

Cardinal Health, Inc.
3.200%, 3/15/23

    325        331  

3.079%, 6/15/24

    25        25  

3.410%, 6/15/27

    185        184  

Community Health Systems, Inc.
6.250%, 3/31/23

    210        217  

Eagle Holding Co. II, LLC PIK Interest Capitalization, 144A
7.625%, 5/15/22(3)(9)

    45        46  

Endo Dac 144A 6.000%, 7/15/23(3)

    275        231  

Envision Healthcare Corp.
144A 6.250%, 12/1/24(3)

    85        91  

Forest Laboratories LLC
144A 4.875%, 2/15/21(3)

    184        198  

HCA, Inc.
5.375%, 2/1/25

    200        211  

Hill-Rom Holdings, Inc.
144A 5.000%, 2/15/25(3)

    204        208  

MEDNAX, Inc. 144A 5.250%, 12/1/23(3)

    225        232  

Mylan, Inc. 4.200%, 11/29/23(6)

    500        523  

Ortho-Clinical Diagnostics, Inc. 144A 6.625%, 5/15/22(3)

    300        287  

Shire Acquisitions Investments 2.400%, 9/23/21

    200        198  

Surgery Center Holdings, Inc. 144A 8.875%, 4/15/21(3)

    305        331  

Team Health Holdings, Inc.
144A 6.375%, 2/1/25(3)

    225        218  
 

 

See Notes to Financial Statements

 

 

16


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Health Care (continued)  

Tenet Healthcare Corp. 4.746%, 6/15/20(2)

  $ 185      $ 187  

4.500%, 4/1/21

    215        218  

144A 7.500%, 1/1/22(3)

    15        16  

144A 4.625%, 7/15/24(3)

    75        76  

Teva Pharmaceutical Finance III BV 3.150%, 10/1/26

    295        280  

THC Escrow Corp. III 144A 4.625%, 7/15/24(3)

    95        95  

Valeant Pharmaceuticals International, Inc.
144A 6.500%, 3/15/22(3)

    25        26  

144A 7.000%, 3/15/24(3)

    40        42  

Zimmer Biomet Holdings, Inc.
3.550%, 4/1/25

    605        611  
    

 

 

 
       7,334  
    

 

 

 
Industrials—2.0%             

Carpenter Technology Corp.
4.450%, 3/1/23

    630        641  

CNH Industrial N.V. 4.500%, 8/15/23

    306        325  

Doric Nimrod Air Alpha Pass-Through-Trust 13-1, A 144A 5.250%, 5/30/23(3)

    390        406  

General Electric Capital Corp.
3.150%, 9/7/22

    2,000        2,075  

Hertz Corp. (The)
144A 7.625%, 6/1/22(3)

    125        125  

Masco Corp. 5.950%, 3/15/22

    213        240  

4.450%, 4/1/25

    140        150  

Owens Corning 3.400%, 8/15/26

    495        488  

Park Aerospace Holdings Ltd. 144A 5.250%, 8/15/22(3)

    135        141  

144A 5.500%, 2/15/24(3)

    205        214  

Pitney Bowes, Inc. 3.875%, 5/15/22

    410        410  

Prime Security Services Borrower LLC 144A 9.250%, 5/15/23(3)

    190        206  
    PAR VALUE      VALUE  
Industrials (continued)  

TransDigm, Inc. 6.500%, 5/15/25

  $ 115      $ 117  

UAL Pass-Through-Trust 07-01, A 6.636%, 7/2/22

    599        649  
    

 

 

 
       6,187  
    

 

 

 
Information Technology—0.9%             

Arrow Electronics, Inc. 3.875%, 1/12/28

    420        418  

Broadcom Corp. 144A 3.000%, 1/15/22(3)

    185        187  

144A 3.625%, 1/15/24(3)

    340        348  

Dell International LLC 144A 5.450%, 6/15/23(3)

    100        108  

144A 6.020%, 6/15/26(3)

    100        110  

144A 8.100%, 7/15/36(3)

    230        289  

First Data Corp. 144A 5.000%, 1/15/24(3)

    570        586  

Hewlett Packard Enterprise Co. 4.900%, 10/15/25(6)

    300        315  

Verisk Analytics, Inc. 4.000%, 6/15/25

    470        486  
    

 

 

 
       2,847  
    

 

 

 
Materials—1.9%             

Alpek SAB de C.V. 144A 5.375%, 8/8/23(3)(6)

    765        819  

CRH America Finance, Inc.
144A 3.400%, 5/9/27(3)

    425        425  

Freeport-McMoRan, Inc. 3.875%, 3/15/23

    180        167  

Glencore Funding LLC
144A 4.000%, 3/27/27(3)

    425        418  

INEOS Group Holdings S.A.
144A 5.625%, 8/1/24(3)

    495        510  

Inversiones CMPC S.A.
144A 4.375%, 5/15/23(3)

    935        968  

NOVA Chemicals Corp.
144A 4.875%, 6/1/24(3)

    175        174  

144A 5.000%, 5/1/25(3)

    240        239  

OCP SA 144A 5.625%, 4/25/24(3)

    500        541  

Rusal Capital DAC
144A 5.125%, 2/2/22(3)

    430        430  
 

 

See Notes to Financial Statements

 

 

17


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Materials (continued)  

Severstal OAO Via Steel Capital S.A. 144A 3.850%, 8/27/21(3)(5)

  $ 510      $ 515  

Standard Industries, Inc. 144A 6.000%, 10/15/25(3)

    410        439  

Vulcan Materials Co. 3.900%, 4/1/27

    425        437  
    

 

 

 
       6,082  
    

 

 

 
Real Estate—2.2%             

Alexandria Real Estate Equities, Inc. 3.950%, 1/15/27

    300        306  

Corporate Office Properties LP
3.600%, 5/15/23(6)

    660        656  

DDR Corp.
7.875%, 9/1/20

    395        452  

Digital Realty Trust LP
5.250%, 3/15/21

    415        449  

EPR Properties
4.750%, 12/15/26

    620        637  

Healthcare Trust of America Holdings LP
3.750%, 7/1/27

    435        430  

Hospitality Properties Trust
4.950%, 2/15/27

    510        533  

Kilroy Realty LP
4.375%, 10/1/25

    475        498  

Kimco Realty Corp.
3.400%, 11/1/22

    460        469  

LifeStorage LP
3.500%, 7/1/26

    310        297  

MPT Operating Partnership LP
6.375%, 3/1/24

    50        54  

5.500%, 5/1/24

    225        235  

National Retail Properties, Inc.
4.000%, 11/15/25

    150        153  

Select Income REIT
4.500%, 2/1/25

    470        471  

Uniti Group, Inc. (Communications Sales & Leasing, Inc.) 144A 7.125%, 12/15/24(3)

    370        367  
    PAR VALUE      VALUE  
Real Estate (continued)  

Welltower, Inc.
4.000%, 6/1/25(6)

  $ 500      $ 517  

WP Carey, Inc.
4.600%, 4/1/24

    400        417  
    

 

 

 
       6,941  
    

 

 

 
Telecommunication Services—1.4%  

Altice Financing S.A. 144A 6.625%, 2/15/23(3)

    200        212  

BellSouth Telecommunications LLC
6.375%, 6/1/28(6)

    2,000        2,305  

Frontier Communications Corp.
10.500%, 9/15/22

    370        353  

Sprint Spectrum Co., LLC 144A
3.360%, 9/20/21(3)

    200        202  

T-Mobile USA, Inc.
6.375%, 3/1/25

    285        308  

Telefonica Emisiones SAU
4.570%, 4/27/23(6)

    560        610  

Verizon Communications, Inc.
4.125%, 3/16/27

    430        444  
    

 

 

 
       4,434  
    

 

 

 
Utilities—1.3%             

Dominion Energy, Inc.
2.962%, 7/1/19(2)

    50        51  

Duke Energy Corp.
2.650%, 9/1/26

    505        480  

Dynegy, Inc.
7.375%, 11/1/22

    410        405  

Eskom Holdings SOC Ltd. 144A
7.125%, 2/11/25(3)

    410        418  

Exelon Corp.
3.497%, 6/1/22

    605        621  

FirstEnergy Transmission LLC
144A 4.350%, 1/15/25(3)

    520        543  

Southern Power Co.
4.150%, 12/1/25(6)

    570        595  
 

 

See Notes to Financial Statements

 

 

18


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Utilities (continued)  

State Grid Overseas Investment 2014 Ltd. 144A 4.125%, 5/7/24(3)

  $ 500      $ 530  

TerraForm Power Operating LLC 144A
6.375%, 2/1/23(2)(3)

    360        374  
    

 

 

 
               4,017  
TOTAL CORPORATE BONDS AND NOTES
(Identified Cost $81,096)
       81,277  
LOAN AGREEMENTS(2)—2.3%  
Consumer Discretionary—0.6%  

Boyd Gaming Corp. Refinancing Tranche B,
3.688%, 9/15/23

    383        383  

Caesars Entertainment Operating Co., Inc.
0.000%, 4/4/24(8)

    70        70  

Caesars Entertainment Resort Properties LLC Tranche B,
4.545%, 10/11/20

    388        390  

Caesars Growth Properties Holdings LLC Tranche 2017, First Lien,
4.226%, 5/8/21

    198        199  

Playa Resorts Holding B.V.
4.170%, 4/29/24

    45        45  

Seminole Tribe of Florida Tranche B,
0.000%, 6/26/24(8)

    270        270  

Station Casinos LLC Tranche B,
3.710%, 6/8/23

    241        241  

UFC Holdings LLC First Lien,
4.470%, 8/18/23

    246        247  
    

 

 

 
       1,845  
    

 

 

 
Consumer Staples—0.2%         

Albertson’s LLC 2017-1, Tranche B-4,
3.976%, 8/25/21

    258        254  
    PAR VALUE      VALUE  
Consumer Staples (continued)  

JBS USA Lux S.A.
5.750%, 10/30/22

  $ 254      $ 248  

TKC Holdings, Inc. First Lien,
5.376%, 2/1/23

    195        194  
    

 

 

 
       696  
    

 

 

 
Energy—0.1%             

Ultra Resources, Inc.
4.117%, 4/12/24

    235        233  
    

 

 

 
Health Care—0.6%             

CHG Healthcare Services, Inc. First Lien,
4.422%, 6/7/23

    262        265  

Endo Luxembourg Finance Co. S.a.r.l
5.500%, 4/29/24

    125        126  

Envision Healthcare Corp.
4.300%, 12/1/23

    358        359  

Grifols Worldwide Operations Ltd. Tranche B,
3.436%, 1/31/25

    70        70  

HLF Financing S.a.r.l. Senior Lien,
6.726%, 2/15/23

    83        84  

Inventiv Group Holdings, Inc.
4.952%, 11/9/23

    388        389  

lasis Healthcare LLC Tranche B-3,
5.296%, 2/17/21

    10        10  

NVA Holdings, Inc. Second Lien,
8.296%, 8/14/22

    214        216  

Quorum Health Corp.
7.976%, 4/29/22

    225        226  
    

 

 

 
       1,745  
    

 

 

 
Industrials—0.3%             

Advanced Disposal Services, Inc.
3.939%, 11/10/23

    41        41  

Navistar, Inc. Tranche B,
5.090%, 8/7/20

    298        301  
 

 

See Notes to Financial Statements

 

 

19


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    PAR VALUE      VALUE  
Industrials (continued)  

Sedgwick Claims Management Services, Inc. Second Lien,
6.952%, 2/28/22

  $ 300      $ 301  

Zodiac Pool Solutions LLC Tranche B-1, First Lien,
5.296%, 12/20/23

    274        276  
    

 

 

 
       919  
    

 

 

 
Information Technology—0.1%         

Rackspace Hosting, Inc. 2017 Refinancing Tranche B, First Lien,
0.000%, 11/3/23(8)

    302        302  
    

 

 

 
Materials—0.1%             

Anchor Glass Container Corp. First Lien,
4.407%, 12/7/23

    87        87  

CPI Acquisition, Inc. First Lien,
5.834%, 8/17/22

    375        319  
    

 

 

 
       406  
    

 

 

 
Real Estate—0.0%             

Capital Automotive LP Tranche B-2, First Lien,
4.220%, 3/25/24

    50        50  
    

 

 

 
Telecommunication Services—0.1%  

UPC Financing Partnership
3.909%, 4/15/25

    190        190  
    

 

 

 
Utilities—0.2%             

Energy Future Intermediate Holding Co. LLC
0.000%, 6/23/18(8)

    205        205  

Helix Gen Funding LLC
4.960%, 6/3/24

    10        10  

NRG Energy, Inc.
3.546%, 6/30/23

    331        330  

Vistra Operations Co. LLC
3.976%, 8/4/23

    162        160  
    PAR VALUE     VALUE  
Utilities (continued)  

Tranche C,
3.977%, 8/4/23

  $ 37     $ 37  
   

 

 

 
              742  
TOTAL LOAN AGREEMENTS
(Identified Cost $7,159)
      7,128  
    SHARES        
PREFERRED STOCKS—1.2%        
Energy—0.2%            

PTT Exploration & Production PCL 144A, 4.875%(2)(3)(6)

    500 (7)      512  
   

 

 

 
Financials—1.0%            

Citigroup, Inc.
Series J,
7.125%

    20,000       598  

Series T,
6.250%(2)

    390 (7)      433  

KeyCorp Series D,
5.000%(2)

    415 (7)      423  

M&T Bank Corp. Series F,
5.125%(2)

    190 (7)      197  

PNC Financial Services Group, Inc. (The)
Series R,
4.850%(2)(6)

    535 (7)      544  

Series S,
5.000%(2)

    485 (7)      499  

Wells Fargo & Co. Series K,
7.980%(2)(6)

    585 (7)      610  
   

 

 

 
              3,304  
TOTAL PREFERRED STOCKS
(Identified Cost $3,731)
      3,816  
COMMON STOCKS—83.5%  
Consumer Discretionary—7.6%        

Compass Group plc Sponsored ADR

    131,538       2,824  

Las Vegas Sands Corp.

    164,130       10,486  

Leggett & Platt, Inc.

    92,680       4,869  

Meredith Corp.

    93,860       5,580  
   

 

 

 
      23,759  
   

 

 

 
 

 

See Notes to Financial Statements

 

 

20


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    SHARES      VALUE  
Consumer Staples—9.2%  

Altria Group, Inc.

    169,780      $ 12,644  

British American Tobacco plc Sponsored ADR

    59,950        4,109  

Imperial Brands plc Sponsored ADR

    152,000        6,952  

Kimberly-Clark Corp.

    19,610        2,532  

Unilever plc Sponsored ADR

    47,640        2,578  
    

 

 

 
       28,815  
    

 

 

 
Energy—7.2%  

Royal Dutch Shell plc Class B Sponsored ADR

    181,210        9,863  

TOTAL S.A. Sponsored ADR

    128,650        6,380  

Vermilion Energy, Inc.

    200,590        6,365  
    

 

 

 
       22,608  
    

 

 

 
Financials—17.3%  

Bank of Hawaii Corp.

    42,320        3,511  

CI Financial Corp.

    189,540        4,045  

Cincinnati Financial Corp.

    39,710        2,877  

HSBC Holdings plc Sponsored ADR

    191,170        8,868  

Royal Bank of Canada

    117,830        8,545  

SCOR SE Sponsored ADR

    2,912,730        11,768  

Sonic Healthcare Ltd. ADR

    231,710        4,315  

Zurich Insurance Group AG ADR

    356,120        10,374  
    

 

 

 
       54,303  
    

 

 

 
Health Care—7.2%  

AstraZeneca plc Sponsored ADR

    253,790        8,652  

Coloplast A/S ADR

    350,790        2,939  

GlaxoSmithKline plc Sponsored ADR

    211,240        9,109  

Takeda Pharmaceutical Co., Ltd. Sponsored ADR

    77,200        1,962  
    

 

 

 
       22,662  
    

 

 

 
Industrials—3.9%  

BAE Systems plc Sponsored ADR

    211,170        7,083  

Waste Management, Inc.

    71,740        5,262  
    

 

 

 
       12,345  
    

 

 

 
    SHARES      VALUE  
Information Technology—4.0%  

Analog Devices, Inc.

    39,340      $ 3,061  

Cisco Systems, Inc.

    121,870        3,814  

Microchip Technology, Inc.

    39,080        3,016  

Paychex, Inc.

    47,590        2,710  
    

 

 

 
       12,601  
    

 

 

 
Materials—2.5%  

BASF SE Sponsored ADR

    45,370        4,232  

RPM International, Inc.

    65,880        3,594  
    

 

 

 
       7,826  
    

 

 

 
Real Estate—7.4%  

Crown Castle International Corp.

    87,220        8,738  

Lamar Advertising Co. Class A

    96,580        7,106  

Realty Income Corp.

    131,730        7,269  
    

 

 

 
       23,113  
    

 

 

 
Telecommunication Services—8.9%  

AT&T, Inc.

    236,970        8,941  

BCE, Inc.

    195,230        8,793  

Vodafone Group plc Sponsored ADR

    355,460        10,212  
    

 

 

 
       27,946  
    

 

 

 
Utilities—8.3%             

National Grid plc Sponsored ADR

    139,775        8,781  

PPL Corp.

    280,090        10,828  

WEC Energy Group, Inc.

    105,590        6,481  
    

 

 

 
               26,090  
TOTAL COMMON STOCKS
(Identified Cost $252,893)
       262,068  
EXCHANGE-TRADED FUNDS—0.7%  

iShares iBoxx $ High Yield Corporate Bond Index Fund(10)

    6,050        535  

iShares iBoxx $ Investment Grade Corporate Bond Index Fund(10)

    13,640        1,644  
TOTAL EXCHANGE-TRADED FUNDS
(Identified Cost $2,190)
       2,179  
 

 

See Notes to Financial Statements

 

 

21


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

    CONTRACTS      VALUE  
PURCHASED OPTIONS—0.1%  
Call Options—0.0%  

S&P 500® Index expiration 07/05/17 strike price $2,540

    637      $ 0  

S&P 500® Index expiration 07/07/17 strike price $2,535

    1,174        8  

S&P 500® Index expiration 07/12/17 strike price $2,540

    631        0  

S&P 500® Index expiration 07/14/17 strike price $2,535

    1,170        12  
    

 

 

 
       20  
    

 

 

 
Put Options—0.1%  

S&P 500® Index expiration 07/05/17 strike price $2,325

    637        19  

S&P 500® Index expiration 07/07/17 strike price $2,340

    1,174        76  

S&P 500® Index expiration 07/12/17 strike price $2,335

    631        89  

S&P 500® Index expiration 07/14/17 strike price $2,305

    1,170        164  
    

 

 

 
               348  
TOTAL PURCHASED OPTIONS—0.1%  
(Premiums Paid $591)        368  
TOTAL LONG TERM INVESTMENTS—133.6%  
(Identified Cost $410,691)        419,391 (11) 
TOTAL INVESTMENTS BEFORE WRITTEN
OPTIONS—133.6%
 
(Identified Cost $410,691)        419,391 (1) 
WRITTEN OPTIONS—(0.3)%  
Call Options—(0.0)%  

S&P 500® Index expiration 07/05/17 strike price $2,490

    637        (6

S&P 500® Index expiration 07/07/17 strike price $2,485

    1,174        (6
    CONTRACTS      VALUE  
Call Options (continued)  

S&P 500® Index expiration 07/12/17 strike price $2,490

    631      $ (9

S&P 500® Index expiration 07/14/17 strike price $2,485

    1,170        (23
    

 

 

 
       (44
    

 

 

 
Put Options—(0.3)%  

S&P 500® Index expiration 07/05/17 strike price $2,375

    637        (41

S&P 500® Index expiration 07/07/17 strike price $2,390

    1,174        (335

S&P 500® Index expiration 07/12/17 strike price $2,385

    631        (259

S&P 500® Index expiration 07/14/17 strike price $2,355

    1,170        (357
    

 

 

 
               (992
TOTAL WRITTEN OPTIONS—(0.3)%  
(Premiums Received $1,319)        (1,036 )(1) 
TOTAL INVESTMENTS NET OF WRITTEN
OPTIONS—133.3%
 
(Identified Cost $409,372)        418,355  

Other assets and liabilities,
net—(33.3)%

 

     (104,544
    

 

 

 
NET ASSETS—100.0%      $313,811  
    

 

 

 

Abbreviations

ADR American Depositary Receipt
FNMA Federal National Mortgage Association (“Fannie Mae”)
PIK Payment-in-Kind Security
REIT Real Estate Investment Trust

Footnote Legend:

(1)  Federal Income Tax Information: For tax information at June 30, 2017, see Note 11 Federal Income Tax Information in the Notes to Financial Statements.
 

 

See Notes to Financial Statements

 

 

22


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

(2)  Variable or step coupon security; interest rate shown reflects the rate in effect at June 30, 2017.
(3)  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2017, these securities amounted to a value of $51,625 or 16.4% of net assets.
(4)  Interest payments may be deferred.
(5)  This Note was issued for the sole purpose of funding a loan agreement between the issuer and the borrower. As the credit risk for this security lies solely with the borrower, the name represented here is that of the borrower.
(6)  All or a portion of the security is segregated as collateral for written options.
(7)  Value shown as par value.
(8)  This loan will settle after June 30, 2017, at which time the interest rate, based on the London Interbank Offered Rate (“LIBOR”) and the agreed upon spread on trade date, will be reflected.
(9)  100% of the income received was in cash.
(10)  Shares of this fund are publicly offered and its prospectus and annual report are publicly available.
(11)  All or a portion of the portfolio is segregated as collateral for borrowings.
 

 

See Notes to Financial Statements

 

 

23


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

SCHEDULE OF INVESTMENTS (Unaudited) (Continued)

JUNE 30, 2017

($ reported in thousands)

 

The following table provides a summary of inputs used to value the Fund’s investments as of June 30, 2017 (See Security Valuation Note 2A in the Notes to Financial Statements):

 

     Total Value at
June 30, 2017
    Level 1
Quoted Prices
    Level 2
Significant
Observable
Inputs
 

Debt Securities:

      

Asset-Backed Securities

   $ 7,836     $     $ 7,836  

Corporate Bonds And Notes

     81,277             81,277  

Foreign Government Securities

     6,292             6,292  

Loan Agreements

     7,128             7,128  

Mortgage-Backed Securities

     31,750             31,750  

Municipal Bonds

     6,742             6,742  

U.S. Government Securities

     9,935             9,935  

Equity Securities:

      

Common Stocks

     262,068       262,068        

Exchange-traded Funds

     2,179       2,179        

Preferred Stocks

     3,816       598       3,218  

Purchased Options

     368       368       0  
  

 

 

   

 

 

   

 

 

 

Total Investments before Written Options

   $ 419,391     $ 265,213     $ 154,178  
  

 

 

   

 

 

   

 

 

 

Written Options

   $ (1,036   $ (1,036   $  
  

 

 

   

 

 

   

 

 

 

Total Investments Net of Written Options

   $ 418,355     $ 264,177     $ 154,178  
  

 

 

   

 

 

   

 

 

 

There are no Level 3 (significant unobservable inputs) priced securities.

There were no transfers between Level 1 and Level 2 related to securities held at June 30, 2017.

 

See Notes to Financial Statements

 

24


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

STATEMENT OF ASSETS AND LIABILITIES (Unaudited)

JUNE 30, 2017

(Reported in thousands except shares and per share amounts)

 

Assets:   

Investment in securities at value (Identified cost $410,691)

   $ 419,391  

Cash

     2,698  

Segregated cash for options

     6,342  
Receivables:   

Investment securities sold

     5,465  

Dividends and interest

     3,014  

Tax reclaims

     31  

Prepaid directors’ retainer

     153  

Prepaid expenses

     8  
  

 

 

 

Total assets

     437,102  
  

 

 

 
Liabilities:   

Written options, at value (Premiums received $1,319) (Note 3)

     1,036  

Borrowings (Note 8)

     120,000  
Payables:   

Investment securities purchased

     1,877  

Investment advisory fee

     260  

Administration fee

     25  

Professional fees

     38  

Transfer agent fees and expenses

     14  

Interest payable on borrowings

     1  

Other accrued expenses

     40  
  

 

 

 

Total liabilities

     123,291  
  

 

 

 
Net Assets    $ 313,811  
  

 

 

 
Capital:   

Common stock $0.001 par value 500,000,000 shares authorized

   $ 24  

Capital paid in on shares of beneficial interest

     302,391  

Accumulated undistributed net investment income (loss)

     (10,163

Accumulated undistributed net realized gain (loss)

     12,576  

Net unrealized appreciation (depreciation) on investments

     8,700  

Net unrealized appreciation (depreciation) on written options

     283  
  

 

 

 
Net Assets    $ 313,811  
  

 

 

 

Net Asset Value Per Share
(Net assets/shares outstanding) Shares outstanding – 24,389,078

   $ 12.87  
  

 

 

 

 

See Notes to Financial Statements

 

25


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

STATEMENTS OF OPERATIONS (Unaudited)

SIX MONTHS ENDED JUNE 30, 2017

($ reported in thousands)

 

Investment Income:   

Dividends

   $ 7,321  

Interest

     3,051  

Foreign taxes withheld

     (478
  

 

 

 

Total investment income

     9,894  
  

 

 

 
Expenses:   

Investment advisory fees

     1,542  

Administration fees

     291  

Printing fees and expenses

     168  

Directors’ fees and expenses

     154  

Professional fees

     133  

Custodian fees

     120  

Transfer agent fees and expenses

     72  

Miscellaneous

     83  
  

 

 

 

Total expenses before interest expense

     2,563  

Interest expenses on borrowings (Note 8)

     1,051  
  

 

 

 

Total expenses after interest expense

     3,614  

Less Administration fee waived

     (143

Custody fees reimbursed (Note 12)

     (11

Earnings credit from custodian

     (1) 
  

 

 

 

Net expenses

     3,460  
  

 

 

 
Net investment income      6,434  
  

 

 

 
Net Realized and Unrealized Gain (Loss):   

Net realized gain (loss) on investments

     (5,006

Net realized gain (loss) on written options

     14,215  

Net change in unrealized appreciation (depreciation) on investments

     16,800  

Net change in unrealized appreciation (depreciation) on written options

     455  
  

 

 

 
Net realized and unrealized gain (loss)      26,464  
  

 

 

 
Net increase (decrease) in net assets resulting from operations    $ 32,898  
  

 

 

 

 

(1)  Amount is less than $500.

 

See Notes to Financial Statements

 

26


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

STATEMENTS OF CHANGES IN NET ASSETS

($ reported in thousands)

 

     Six Months Ended
June 30, 2017
(unaudited)
    Year Ended
December 31, 2016
 
INCREASE (DECREASE) IN NET ASSETS     
Operations     

Net investment income

   $ 6,434     $ 7,822  

Net realized gain (loss)

     9,209       47,906  

Net change in unrealized appreciation (depreciation)

     17,255       (46,891
  

 

 

   

 

 

 
Net increase (decrease) in net assets resulting from operations      32,898       8,837  
  

 

 

   

 

 

 
Dividends and distributions to shareholders from     

Net investment income

     (17,559 )(1)      (7,183

Net realized long-term gains

     (13,512     (25,980
  

 

 

   

 

 

 
Total dividends and distributions to shareholders      (31,071     (33,163
  

 

 

   

 

 

 
Capital share transactions (Note 7)     

Payments for tendered shares

     (33,148     (61,805
  

 

 

   

 

 

 
Net increase (decrease) in net assets derived from capital share transactions      (33,148     (61,805
  

 

 

   

 

 

 
Net increase (decrease) in net assets      (31,321     (86,131
Net Assets     

Beginning of period

     345,132       431,263  
  

 

 

   

 

 

 
End of period    $ 313,811     $ 345,132  
  

 

 

   

 

 

 

Accumulated undistributed net investment income (loss) at end of period

   $ (10,163   $ 962  
Supplemental – other information     
Capital share transactions were as follows:     

Common Shares outstanding at beginning of period

     27,023,909       31,792,834  

Common Shares tendered (Note 7)

     (2,634,831     (4,768,925
  

 

 

   

 

 

 

Common Shares outstanding at end of period

     24,389,078       27,023,909  
  

 

 

   

 

 

 

 

(1)  Please note that the tax status of our distributions is determined at the end of the taxable year. However, based on interim data as of June 30, 2017, we estimate that 38% of distributions will represent net investment income, 7% will represent short-term capital gains, 33% will represent long-term capital gains and 23% will represent return of capital. Also refer to inside front cover for information on the Managed Distribution Plan. See Note 2D in the Notes to Financial Statements.

 

See Notes to Financial Statements

 

27


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

STATEMENT OF CASH FLOWS (Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2017

($ reported in thousands)

 

Increase (Decrease) in cash   
Cash Flows Provided by (Used for) Operating Activities:   

Net increase (decrease) in net assets resulting from operations

   $ 32,898  
  

 

 

 

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

  

Proceeds from sales and paydowns of long-term investments

     130,388  

(Increase) Decrease in investment securities sold receivable

     (4,928

Purchases of long-term investments

     (99,146

Increase (Decrease) in investment securities purchased payable

     925  

Net (purchases) or sales of short-term securities

     32,661  

Net (purchases) or sales in purchased options

     (8,108

Net purchases or (sales) in written options

     14,336  

Net change in unrealized (appreciation)/depreciation on investments

     (17,255

Net realized (gains)/loss from sales of investments

     (9,209

Amortization of premium and accretion of discounts on investments

     489  

Return of capital distributions on investments

     163  

Cost adjustment for inflation linked securities

     136  

(Increase) Decrease in segregated cash for options

     (6,145

(Increase) Decrease in tax reclaims receivable

     (25

(Increase) Decrease in dividends and interest receivable

     (440

(Increase) Decrease in prepaid expenses

     43  

(Increase) Decrease in prepaid directors’ retainer

     (153

Increase (Decrease) in affiliated expenses payable

     (16

Increase (Decrease) in non-affiliated expenses payable

     (194
  

 

 

 

Cash provided by (used for) operating activities

     66,420  
  

 

 

 
Cash provided by (used for) financing activities:   

Payments for tendered shares (Note 8)

     (33,148

Cash dividends and distributions paid to shareholders

     (31,071
  

 

 

 

Cash provided by (used for) financing activities:

     (64,219
  

 

 

 
Net increase (decrease) in cash      2,201  
  

 

 

 
Cash:   

Beginning of period

     497  
  

 

 

 

End of period

   $ 2,698  
  

 

 

 

Supplemental cash flow information:

  

Cash paid during the period for interest payable on borrowings

   $ 1,116  

 

See Notes to Financial Statements

 

28


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

FINANCIAL HIGHLIGHTS

(Selected data for a share outstanding throughout each period)

 

    Six Months
Ended
June 30, 2017
(Unaudited)
    Year Ended December 31,  
    2016     2015     2014  
PER SHARE DATA        

Net asset value, beginning of period

  $ 12.77     $ 13.56     $ 15.43     $ 15.45  
 

 

 

   

 

 

   

 

 

   

 

 

 
Income from investment operations        

Net investment income (loss)(3)

    0.25       0.27       0.22       0.25  

Net realized and unrealized gains (losses)

    1.01       0.05       (1.02     0.78  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    1.26       0.32       (0.80     1.03  
 

 

 

   

 

 

   

 

 

   

 

 

 
Dividends and Distributions        

Dividends from net investment income

    (0.68     (0.27     (0.26     (0.24

Distributions from net realized gains

    (0.50     (0.89     (0.85     (0.85

Tax return of capital

                       
 

 

 

   

 

 

   

 

 

   

 

 

 

Total dividend and distributions

    (1.18     (1.16     (1.11     (1.09
 

 

 

   

 

 

   

 

 

   

 

 

 
Fund Share Transactions (Note 7)        

Anti-dilutive impact of repurchase plan

                0.04       0.04  

Anti-dilutive impact of tender offers

    0.02       0.05              
 

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

  $ 12.87     $ 12.77     $ 13.56     $ 15.43  
 

 

 

   

 

 

   

 

 

   

 

 

 

Market value, end of period(1)

  $ 12.62     $ 12.04     $ 12.18     $ 14.01  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total return market value(2)

    15.82 %(13)      8.90     (5.20 )%      8.54

Total return on net asset value(5)

    11.36 %(13)      3.74     (4.17 )%      7.86

Net assets, end of period (in thousands)

  $ 313,811     $ 345,132     $ 431,263     $ 500,825  
RATIOS/SUPPLEMENTAL DATA        

Ratio of net expenses to average net assets (after expense waivers, custody fees reimbursed, earnings credits and dividend and interest expense)

    2.15 %(11)(12)      1.61 %(9)      0.98 %      1.03

Ratio of total expenses to average net assets(7)

    2.25 %(11)(12)      1.64 %(9)      0.98 %      1.03

Ratio of net investment income (loss) to average net assets

    4.00 %(11)(12)      2.05 %(9)      1.49 %      1.61

Portfolio turnover rate

    23 %(13)      178 %(8)      77     38
Bank Borrowings:        

Loan Outstanding, End of Period (000’s)

  $ 120,000     $ 120,000     $     $  

Asset Coverage for Loan Outstanding, End of Period

    362     388        

The footnote legend is on page 31.

 

See Notes to Financial Statements

 

29


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

FINANCIAL HIGHLIGHTS (Continued)

(Selected data for a share outstanding throughout each period)

 

     Year Ended December 31,  
   2013     2012(10)  
PER SHARE DATA     

Net asset value, beginning of period

   $ 14.08     $ 14.28  
  

 

 

   

 

 

 
Income from investment operations     

Net investment income (loss)(3)

     0.29       0.28  

Net realized and unrealized gains (losses)

     2.02       0.64  
  

 

 

   

 

 

 

Total from investment operations

     2.31       0.92  
  

 

 

   

 

 

 
Dividends and Distributions     

Dividends from net investment income

     (0.27     (0.28

Distributions from net realized gains

     (0.70     (0.21

Tax return of capital

     (0.05     (0.63
  

 

 

   

 

 

 

Total dividend and distributions

     (1.02     (1.12
  

 

 

   

 

 

 
Fund Share Transactions (Note 7)     

Anti-dilutive impact of repurchase plan

     0.08        

Dilutive effect on net asset value as a result of rights offering

           (4) 
  

 

 

   

 

 

 

Net asset value, end of period

   $ 15.45     $ 14.08  
  

 

 

   

 

 

 

Market value, end of period(1)

   $ 13.94     $ 12.31  
  

 

 

   

 

 

 

Total return market value(2)

     22.37     10.92

Total return on net asset value(5)

     18.58     7.68

Net assets, end of period (in thousands)

   $ 514,350     $ 492,209  
RATIOS/SUPPLEMENTAL DATA     

Ratio of net expenses to average net assets (after expense waivers, earnings credits and dividend and interest expense)

     0.99     0.95 %(6) 

Ratio of total expenses to average net assets(7)

     1.04     1.09 %(6) 

Ratio of net investment income (loss) to average net assets

     1.97     1.95

Portfolio turnover rate

     52     47
Bank Borrowings:     

Loan Outstanding, End of Period (000’s)

   $     $  

Asset Coverage for Loan Outstanding, End of Period

        

The footnote legend is on page 31.

 

See Notes to Financial Statements

 

30


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

FINANCIAL HIGHLIGHTS (Continued)

(Selected data for a share outstanding throughout each period)

 

 

(1)  Closing Price – New York Stock Exchange.
(2)  Total investment return is calculated assuming a purchase of common shares of the opening on the first day and sale on the closing of the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s Automatic Reinvestment and Cash Purchase Plan. Total investment return is not annualized for periods of less than one year. Brokerage commissions that a shareholder may pay are not reflected. Total return does not reflect the deduction of taxes that a shareholder may pay on fund distributions or the sale of fund shares.
(3)  Computed using average shares outstanding.
(4)  Amount is less than $0.005.
(5)  NAV return is calculated using the opening Net Asset Value price of the Fund’s common stock on the first business day and the closing Net Asset Value price of the Fund’s common stock on the last business day of each period reported. Dividends and distributions, if any, are assumed for the purpose of this calculation, to be reinvested at prices obtained under the Fund’s Automatic Reinvestment and Cash Purchase Plan.
(6)  The Fund incurred certain non-recurring proxy and reverse stock split costs in 2012. When excluding these costs, the ratio of net expenses to average net assets (after expense waivers, custody fees reimbursed, earnings credits and dividend and interest expense) would be 0.87% and the ratio of total expenses to average net assets would be 1.01%.
(7)  Ratios of total expenses, excluding dividends and interest expense on short sales and borrowings for the fiscal periods ended, are as follows:

 

Six Months
Ended
June 30, 2017
     Period Ended December 31,  
   2016      2015      2014      2013      2012  
  1.59%        1.37%        0.98%        0.99%        1.02%        1.09%  

 

(8)  The increase in portfolio turnover rate is due to a change in the investment adviser and the appointment of two new subadvisers associated with a strategy change on the Fund.
(9)  The Fund incurred certain non-recurring proxy and tender offer costs in 2016. When excluding these costs, the ratio of net expenses to average net assets (after expense waivers, custody fees reimbursed, earnings credits and dividend and interest expense) would be 1.48%, the ratio of total expenses to average net assets would be 1.51%, and the ratio of net investment income/(loss) to average net assets would be 2.18%.
(10)  Per share data, including the proportionate impact to market price, has been restated to reflect the effects of a 1-for-4 reverse stock split effective as of the start of trading on the NYSE on June 27, 2012.
(11)  The Fund incurred certain non-recurring tender offer costs in 2017. When excluding these costs the ratio of net expenses to average net assets (after expense waivers, custody fees reimbursed, earnings credits and dividend and interest expense) would be 2.11%, the ratio of total expenses would be 2.21% and the ratio of net investment income/(loss) to average net assets would be 4.04%.
(12)  Annualized
(13)  Not Annualized

 

See Notes to Financial Statements

 

31


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2017

 

Note 1. Organization

Virtus Global Dividend & Income Fund Inc. (the “Fund”) is a closed-end, diversified management investment company registered under the Investment Company Act of 1940 (the “Act”). The Fund was incorporated under the laws of the State of Maryland on July 21, 1988. The Fund’s investment objective is to seek total return, consisting of capital appreciation and income.

Note 2. Significant Accounting Policies

The significant accounting policies consistently followed by the Fund in the preparation of its financial statements are summarized below and for derivatives, included in Note 3 below. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates, and those differences could be significant.

 

  A. Security Valuation

Security valuation procedures for the Fund, which include nightly price variance, as well as back-testing items such as bi-weekly unchanged price, monthly secondary source and transaction analysis, have been approved by the Board of Directors of the Fund (the “Board”, or the “Directors”). All internally fair valued securities are approved by a valuation committee appointed by the Board (the “Valuation Committee”). The Valuation Committee is comprised of certain members of management as identified to the Board and convenes independently from portfolio management. All internally fair valued securities, referred to below, are updated daily and reviewed in detail by the Valuation Committee monthly unless changes occur within the period. The Valuation Committee reviews the validity of the model inputs and any changes to the model. Fair valuations are reviewed quarterly by the Board.

The Fund utilizes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. It is the Fund’s policy to recognize transfers between levels at the end of the reporting period.

 

      Level 1 – quoted prices in active markets for identical securities (security types generally include listed equities).

 

      Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

 

      Level 3 – prices determined using significant unobservable inputs (including the Valuation Committee’s own assumptions in determining the fair value of investments).

A description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

Equity securities are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded or, if no closing price is available, at the last bid price and are categorized as Level 1 in the hierarchy. Restricted equity securities and private placements that are not widely traded, are illiquid, or are internally fair valued by the Valuation Committee, are generally categorized as Level 3 in the hierarchy.

 

32


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

Certain non-U.S. securities may be fair valued in cases where closing prices are not readily available or are deemed not reflective of readily available market prices. For example, significant events (such as movement in the U.S. securities market, or other regional and local developments) may occur between the time that non-U.S. markets close (where the security is principally traded) and the time that the Fund calculates its net asset value (“NAV”) (at the close of regular trading on the New York Stock Exchange (“NYSE”), generally 4 p.m. Eastern time) that may impact the value of securities traded in these non-U.S. markets. In such cases, the Fund fair values non-U.S. securities using an independent pricing service which considers the correlation of the trading patterns of the non-U.S. security to the intraday trading in the U.S. markets for investments such as ADRs, financial futures, exchange-traded funds (“ETFs”), and certain indexes, as well as prices for similar securities. Such fair valuations are categorized as Level 2 in the hierarchy. Because the frequency of significant events is not predictable, fair valuation of certain non-U.S. common stocks may occur on a frequent basis.

Debt securities, including restricted securities, are valued based on evaluated quotations received from independent pricing services or from dealers who make markets in such securities. For most bond types, the pricing service utilizes matrix pricing that considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type, and current day trade information, as well as dealer supplied prices. These valuations are generally categorized as Level 2 in the hierarchy. Structured debt instruments, such as mortgage-backed and asset-backed securities, may also incorporate collateral analysis and utilize cash flow models for valuation and are generally categorized as Level 2 in the hierarchy. Pricing services do not provide pricing for all securities and therefore indicative bids from dealers are utilized which are based on pricing models used by market makers in the security and are generally categorized as Level 2 in the hierarchy. Debt securities that are not widely traded, are illiquid, or are internally fair valued by the Valuation Committee are generally categorized as Level 3 in the hierarchy.

Listed derivatives, such as options, that are actively traded are valued based on quoted prices from the exchange and are categorized as Level 1 in the hierarchy. Over-the-counter derivative contracts, which include forward currency contracts and equity-linked instruments, do not require material subjectivity as pricing inputs are observed from actively quoted markets and are categorized as Level 2 in the hierarchy.

Investments in open-end mutual funds are valued at NAV. Investments in closed-end funds are valued as of the close of regular trading on the NYSE each business day. Both are categorized as Level 1 in the hierarchy.

A summary of the inputs used to value the Fund’s net assets by each major security type is disclosed at the end of the Schedule of Investments for the Fund. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

  B. Security Transactions and Investment Income

Security transactions are recorded on the trade date. Realized gains and losses from sales of securities are determined on the identified cost basis. Dividend income is recognized on the ex-dividend date or, in the case of certain foreign securities, as soon as the Fund is notified. Interest income is recorded on the accrual basis. The Fund amortizes premiums and accretes discounts using the effective interest method.

 

33


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

 

  C. Income Taxes

The Fund is treated as a separate taxable entity. It is the Fund’s intention to comply with the requirements of Subchapter M of the Internal Revenue Code and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes or excise taxes has been made.

The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable based upon current interpretations of the tax rules and regulations that exist in the markets in which it invests.

Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. As of May 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2014 forward (with limited exceptions).

 

  D. Dividends and Distributions to Shareholders

Distributions are recorded by the Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America.

The Fund has a Managed Distribution Plan which currently provides for the Fund to make a monthly distribution of $0.113 per share. Distributions may represent earnings from net investment income, realized capital gains, or, if necessary, return of capital. Shareholders should not draw any conclusions about the Fund’s investment performance from the terms of the Fund’s Managed Distribution Plan.

 

  E. Short Sales

A short sale is a transaction in which the Fund sells a security it does not own in anticipation of a decline in market price. To sell a security short, the Fund must borrow the security. The Fund’s obligation to replace the security borrowed and sold short will be fully collateralized at all times by the proceeds from the short sale retained by the broker and by cash and securities deposited in a segregated account with the Fund’s custodian. If the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will realize a loss, and if the price declines during the period, the Fund will realize a gain. Any realized gain will be decreased by, and any realized loss increased by, the amount of transaction costs. On ex-dividend dates, dividends on short sales are recorded as an expense to the Fund.

In accordance with the terms of its prime brokerage agreement, the Fund may receive rebate income or be charged a fee based on borrowed securities which is under interest expense on short sales on the Statement of Operations. Such income or fee is calculated on a daily basis based on the market value of each borrowed security and a variable rate that is dependent upon the availability of such security.

At June 30, 2017, the Fund did not hold any securities sold short.

 

  F. Foreign Currency Translation

Non-U.S. investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the foreign currency exchange rate

 

34


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

effective at the end of the reporting period. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement date of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates between the date income is accrued and the date it is paid is treated as a gain or loss on foreign currency. The Fund does not isolate that portion of the results of operations arising from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

 

  G. Earnings Credit and Interest

Through arrangements with the Fund’s custodian, the Fund either receives an earnings credit or interest on agreed upon target un-invested cash balances to reduce the Fund’s custody expenses. The credits are reflected as “Earnings credits from Custodian” and the interest is reflected under “Interest income” in the Fund’s Statements of Operations for the period, as applicable.

 

  H. Loan Agreements

The Fund may invest in direct debt instruments which are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates. Loan agreements are generally non-investment grade and often involve borrowers that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Loan agreements are typically senior in the corporate capital structure of the borrower. A loan is often administered by a bank or other financial institution (the “lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. The Fund’s investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When investing in loan participations, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the loan participation and only upon receipt by the lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund may be subject to the credit risk of both the borrower and the lender that is selling the loan agreement. When the Fund purchases assignments from lenders it acquires direct rights against the borrower on the loan.

The Fund may invest in multiple series or tranches of a loan, which may have varying terms and carry different associated risks. Loan agreements may involve foreign borrowers, and investments may be denominated in foreign currencies. Direct indebtedness of emerging countries involves a risk that the government entities responsible for the repayment of the debt may be unable, or unwilling, to pay the principal and interest when due.

The loan agreements have floating rate loan interests which generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally LIBOR (London Interbank Offered Rate), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. When a loan agreement is purchased, the Fund may pay an assignment fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn

 

35


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

portion of the underlying line of credit portion of a loan agreement. Prepayment penalty fees are received upon the prepayment of a loan agreement by a borrower. Prepayment penalty, facility, commitment, consent and amendment fees are recorded to income as earned or paid.

At June 30, 2017, all loan agreements held by the Fund were assignment loans.

 

  I. Expenses

Expenses incurred together by the Fund and other affiliated open- and closed-end funds are allocated in proportion to the net assets of each such fund, except where allocation of direct expense to each fund or an alternative allocation method can be more appropriately used.

In addition to the net annual operating expenses that the Fund bears directly, the shareholders of the Fund indirectly bear the Fund’s pro rata expenses of any underlying open- and closed-end funds in which the Fund invests.

Note 3. Derivative Financial Instruments and Transactions

($ reported in thousands)

Disclosures about derivative instruments and hedging activities are intended to enable investors to understand how and why the Fund uses derivatives, how derivatives are accounted for, and how derivative instruments affect the Fund’s results of operations and financial position. Summarized below is a specific type of derivative instrument used by the Fund.

 

  A. Options contracts

An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price. The Fund pursues an option income strategy whereby it purchases and sells out-of-the money puts and calls, creating an options spread designed to generate a consistent level of option cash flow which should result in additional yield. The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. Holdings of the Fund designated to cover outstanding written options are noted in the Schedule of Investments. Purchased options are reported as an asset within “Investment in securities at value”, and written options are reported as a liability within “Written options outstanding at value”, in the Statement of Assets and Liabilities. Changes in value of the purchased option are included in “Net change in unrealized appreciation (depreciation) on investments” in the Statement of Operations. Changes in value of written options are included in “Net change in unrealized appreciation (depreciation) on written options”. If an option expires unexercised, the Fund realizes a gain or loss to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost basis of the purchase. The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain or loss. Gain or loss on purchased options is included in “Net realized gain (loss) on investments” in the Statement of Operations. Gain or loss on written options is presented separately as “Net realized gain (loss) on written options” in the Statement of Operations.

 

36


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

The risk in writing covered put options is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the Fund pays a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. Writers (sellers) of options are normally subject to unlimited risk of loss, as the seller will be obligated to deliver or take delivery of the security at a predetermined price which may, upon exercise of the option, be significantly different from the then-market value. However, the Fund may limit its risk of loss when writing an option by purchasing an option similar to the one that is sold, except for the fact it is further “out of the money”.

The Fund invested in derivative instruments during the fiscal period in the form of writing put/call options and buying put/call options on the S&P 500® Index. The primary risk associated with these derivative instruments is equity risk.

The Fund had transactions in written options for the period ended June 30, 2017, as follows:

 

    Calls     Puts  
    Number of
Contracts
    Premiums
Received
    Number of
Contracts
    Premiums
Received
 

Written Options outstanding at December 31, 2016

    3,721     $ 298       3,721     $ 900  

Options written

    46,080       3,341       46,080       14,130  

Options closed

    (41,608     (3,031     (39,225     (11,836

Options expired

    (4,581     (489     (6,964     (1,994

Options exercised

                       
 

 

 

   

 

 

   

 

 

   

 

 

 

Written Options outstanding at June 30, 2017

    3,612     $ 119       3,612     $ 1,200  
 

 

 

   

 

 

   

 

 

   

 

 

 

The following is a summary of the Fund’s options contracts as presented in the Statement of Assets and Liabilities at June 30, 2017:

 

Assets: Purchased options at value

   $ 368 (1) 

Liabilities: Written options at value

     (1,036
  

 

 

 

Net asset (liability) balance

   $ (668
  

 

 

 

The following is a summary of the Fund’s options contracts as presented in the Statement of Operations at June 30, 2017.

 

Net realized gain (loss) on purchased options

   $ (7,998 )(2) 

Net realized gain (loss) on written options

     14,215  

Net change in unrealized appreciation (depreciation) on purchased options

     143 (3) 

Net change in unrealized appreciation (depreciation) on written options

     455  
  

 

 

 

Total realized and unrealized gain (loss) on purchased and written options

   $ 6,815  
  

 

 

 

 

  (1)  Amount included in Investment in securities at value.
  (2)  Amount included in Net realized gain (loss) on investments.
  (3)  Amount included in Net change in unrealized appreciation (depreciation) on investments.

 

37


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

For the period ended June 30, 2017, the average daily premiums paid by the Fund for purchased options were $513 (reported in thousands) and the average daily premiums received by the Fund for written options were $1,107 (reported in thousands).

Note 4. Investment Advisory Fees and Other Transactions with Affiliates

($ reported in thousands)

 

  A. Investment Advisory Fee

Virtus Investment Advisers, Inc. (the “Adviser”), an indirect wholly-owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”), is the investment adviser of the Fund. The Adviser manages the Fund’s investment program and general operations of the Fund, including oversight of the Fund’s subadvisers.

The Investment Advisory Agreement (the “Agreement”) between the Adviser and the Fund provides that, subject to the direction of the Board of Directors of the Fund and the applicable provisions of the Act, the Adviser is responsible for the management of the Fund’s portfolio. The responsibility for making decisions to buy, sell, or hold a particular investment rests with the Adviser, subject to review by the Board of Directors and the applicable provisions of the Act. For the services provided by the Adviser under the Agreement, the Fund pays the Adviser a monthly fee equal, on an annual basis, to 0.70% of the Fund’s average daily managed assets. The Fund’s “managed assets” are equal to the total assets of the Fund minus the sum of all accrued liabilities of the Fund (other than the aggregate amount of any outstanding borrowings or other indebtedness, entered into for the purpose of creating financial leverage).

 

  B. Subadvisers

Kayne Anderson Rudnick Investment Management, LLC (“KAR”), an indirect wholly-owned subsidiary of Virtus, is the subadviser of the equity portion of the Fund’s portfolio, and Newfleet Asset Management LLC (“Newfleet”), an indirect wholly-owned subsidiary of Virtus, is the subadviser of the fixed income portion and the options overlay strategy of the Fund’s portfolio. The subadvisers manage the investments of the Fund for which they are paid a fee by the Adviser.

 

  C. Administration Services

Virtus Fund Services, LLC, an indirect wholly-owned subsidiary of Virtus, serves as administrator to the Fund. For the services provided by the administrator under the Administration Agreement, the Fund pays the administrator a monthly asset-based fee calculated on the Fund’s average daily managed assets. On December 1, 2016, the Board of the Fund approved an amendment to the Administration Agreement, pursuant to which the fee paid by the Fund increased effective December 2, 2016.

In addition, the Board approved a new Sub-Administration and Accounting Services Agreement, whereby the Fund will pay a monthly asset-based fee calculated on the Fund’s average daily managed assets. Previously, the sub-administration fee was paid directly by Virtus Fund Services.

Virtus Fund Services has contractually committed, for a period of two years from December 2, 2016 to waive receipt of a portion of its fee, to offset the fee increases to the Fund. The waiver is calculated on the Fund’s average daily managed assets and is paid monthly. The administration fee, sub-administration fees and administration fee waiver are all reported in the Statement of Operations.

 

38


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

 

  D. Directors Fee

For the period ended June 30, 2017, the Fund incurred director fees totaling $137, which are included in the Statement of Operations.

Note 5. Purchases and Sales of Securities

($ reported in thousands)

Purchases and sales of securities (excluding U.S. Government and agency securities and short-term investments) for the period ended June 30, 2017, were as follows:

 

     Purchases        Sales  
   $ 82,784        $ 98,531  

Purchases and sales of long term U.S. Government and agency securities for the period ended June 30, 2017, were as follows:

 

     Purchases        Sales  
   $ 16,362        $ 31,857  

Note 6. Indemnifications

Under the Fund’s organizational documents, its directors and officers are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that provide a variety of indemnifications to other parties. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund and that have not occurred. However, the Fund has not had prior claims or losses pursuant to such arrangements and expects the risk of loss to be remote.

Note 7. Capital Stock and Reinvestment Plan; Repurchase Program; Tender Offers

At June 30, 2017, the Fund had one class of common stock, par value $0.001 per share, of which 500,000,000 shares are authorized and 24,389,078 shares are outstanding.

Registered shareholders may elect to have all distributions paid by check mailed directly to the shareholder by Computershare as dividend paying agent. Pursuant to the Automatic Reinvestment and Cash Purchase Plan (the “Plan”), shareholders not making such election will have all such amounts automatically reinvested by Computershare, as the Plan agent, in whole or fractional shares of the Fund, as the case may be. During the periods ended June 30, 2017 and December 31, 2016, there were no shares issued pursuant to the Plan.

Pursuant to the Board-approved stock repurchase program, the Fund may repurchase up to 20% of its outstanding shares in the open market at a discount to NAV. The Fund started its buyback of shares on April 11, 2012. From January 1, 2016 to June 30, 2017, there were no repurchases. From January 1, 2015 through December 31, 2015, the Fund repurchased 659,000 shares at an average price of $12.81. The average discount to NAV at which repurchases were executed during this period was 12.37%. Since the inception of the program through the period ended June 30, 2017, the Fund has repurchased 17.3% of its current shares outstanding.

On April 29, 2016, the Fund announced the commencement of a 15% tender offer (4,768,925 shares) at a price equal to 98% of the Fund’s net asset value per share on the

 

39


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

expiration date of the offer. The tender offer expired on May 26, 2016, at which time the offer was oversubscribed. The Fund purchased the maximum number of shares covered by the offer price of $12.96 per share, which represented a price equal to 98% of the net asset value per share as of the close of trading on the New York Stock Exchange on May 26, 2016. As a result of the tender offer, $61,805 (reported in thousands) was distributed to shareholders and there was an accretion of $0.05 to the net asset value per share of all the outstanding shares after the close of the tender offer.

On November 25, 2016, the Fund announced the commencement of a 5% tender offer (1,351,195 shares) at a price equal to 98% of the Fund’s net asset value per share on the expiration date of the offer. The tender offer expired on December 23, 2016. The Fund purchased the maximum number of shares covered by the offer price of $12.4950 per share, which represented a price equal to 98% of the net asset value per share as of the close of trading on the New York Stock Exchange on December 23, 2016. As a result of the tender offer, payment was made on January 5, 2017, at which time 1,351,195 shares outstanding were retired.

On March 20, 2017, the Fund announced the commencement of a 5% tender offer (1,283,636 shares) at price equal to 98% of the Fund’s net asset value per share on the expiration date of the offer. The tender offer expired on June 23, 2017. The Fund purchased the maximum number of shares covered by the offer price of $12.67 per share, which represented a price equal to 98% of the net asset value per share as of the close of trading on the New York Stock Exchange on June 23, 2017. As a result of the tender offer, payment was made on June 30, 2017, at which time 1,283,636 shares outstanding were retired.

Note 8. Borrowings

($ reported in thousands)

On December 23, 2016, the Fund entered into a Credit Agreement (the “Agreement”) with a commercial bank (the “Bank”) that allows the Fund to borrow cash from the Bank, up to a limit of $160,000,000 (“Commitment Amount”). Borrowings under the Agreement are collateralized by investments of the Fund. The Agreement results in the Fund being subject to certain covenants including asset coverage and portfolio composition (among others). If the Fund fails to meet or maintain certain covenants as required under the Agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the Agreement, necessitating the sale of securities at potentially inopportune times. Interest is charged at LIBOR (London Interbank Offered Rate) plus an additional percentage rate on the amount borrowed. Commitment fees are charged on the undrawn balance, if less than 75% of the Commitment Amount is outstanding as a loan to the Fund. There were no commitment fees paid or accrued for the period ended June 30, 2017. The Agreement has a term of 364 days and is renewable by the Fund with the Bank’s consent and approval of the Board. The Agreement can also be converted to a 179 day fixed term facility, one time at the Fund’s option. The Bank has the ability to require repayment of outstanding borrowings under the Agreement upon certain circumstances such as an event of default.

For the period ended June 30, 2017, the average daily borrowings under the Agreement and the weighted daily average interest rate were $120,000 and 1.74%, respectively. At June 30, 2017, the amount of such outstanding borrowings was as follows:

 

     Outstanding
Borrowings
       Interest
Rate
 
   $ 120,000          2.08

 

40


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

Note 9. Credit Risk and Asset Concentrations

In countries with limited or developing markets, investments may present greater risks than in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of these investments and the income they generate, as well as the Fund’s ability to repatriate such amounts.

High-yield/high risk securities typically entail greater price volatility and/or principal and interest rate risk. There is a greater chance that an issuer will not be able to make principal and interest payments on time. Analysis of the creditworthiness of issuers of high-yield/high risk securities may be complex, and as a result, it may be more difficult for the Adviser and/or subadviser to accurately predict risk.

The Fund may invest a high percentage of its assets in specific sectors of the market in the pursuit of its investment objective. Fluctuations in these sectors of concentration may have a greater impact on the Fund, positive or negative, than if the Fund did not concentrate its investments in such sectors.

The Fund borrows through its line of credit for the purpose of leveraging its portfolio. While leverage presents opportunities for increasing the Fund’s total return, it also has the effect of potentially increasing losses. Accordingly, any event which adversely affects the value of an investment held by the Fund would be magnified to the extent the Fund is leveraged.

Note 10. Regulatory Matters and Litigation

From time to time, the Adviser, KAR, Newfleet and/or their respective affiliates and/or subadvisers may be involved in litigation and arbitration as well as examinations and investigations by various regulatory bodies, including the Securities and Exchange Commission (“SEC”), involving compliance with, among other things, securities laws, client investment guidelines, laws governing the activities of broker-dealers and other laws and regulations affecting their products and other activities. At this time, the Fund’s investment adviser believes that the outcomes of such matters are not likely, either individually or in the aggregate, to be material to these financial statements.

Note 11. Federal Income Tax Information

($ reported in thousands)

At June 30, 2017, federal tax cost and aggregate gross unrealized appreciation (depreciation) of securities held by the Fund were as follows:

 

     Federal
Tax Cost
     Unrealized
Appreciation
       Unrealized
(Depreciation)
     Net Unrealized
Appreciation
(Depreciation)
 

Investments

   $ 410,671      $ 17,731        $ (9,011    $ 8,720  

Written Options

     (1,036                       

The differences between book basis cost and tax cost basis were attributable primarily to tax deferral of losses on wash sales and passive activity losses.

Note 12. Custody Fees Reimbursed

State Street Bank & Trust, custodian for the Fund through January 29, 2010, reimbursed the Fund for out-of-pocket custody expenses overbilled for the period 1998 through January 29, 2010. The amount reimbursed, including interest, is shown in the Statement of Operations under “Custody fees reimbursed.”

 

41


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

JUNE 30, 2017

 

Note 13. Recent Accounting Pronouncements

On October 13, 2016, the SEC amended existing rules intended to modernize reporting and disclosure of information. Certain of these amendments relate to Regulation S-X, which sets forth the requisite form and content of financial statements. At this time, management is evaluating the implications of adopting these amendments and their impact on the financial statements and accompanying notes.

Note 14. Subsequent Events

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued and has determined the following subsequent event requires recognition or disclosure in these financial statements.

On June 7, 2017, the Fund announced the monthly distribution of $0.113 per share to shareholders of record on July 13, 2017. This distribution had an ex-dividend date of July 11, 2017, and was paid on July 20, 2017.

 

42


KEY INFORMATION

Shareholder Relations: 1-866-270-7788

For general information and literature, as well as updates on net asset value, share price, major industry groups and other key information, shareholders may contact the above referenced toll-free number.

REINVESTMENT PLAN

Many of you have questions about our reinvestment plan. We urge shareholders who want to take advantage of this plan and whose shares are held in “Street Name,” to consult your broker as soon as possible to determine if you must change registration into your own name to participate.

REPURCHASE OF SECURITIES

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may from time to time purchase its shares of common stock in the open market when Fund shares are trading at a discount from their net asset value.

PROXY VOTING INFORMATION (FORM N-PX)

The Adviser, KAR and Newfleet vote proxies relating to portfolio securities in accordance with procedures that have been approved by the Fund’s Board of Directors. You may obtain a description of these procedures, along with information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, free of charge, by calling toll-free 1-866-270-7788

FORM N-Q INFORMATION

The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC’s website at http://www.sec.gov. Form N-Q may be reviewed and copied at the SEC’s Public Reference Room. Information on the operation of the SEC’s Public Reference Room can be obtained by calling toll-free 1-800-SEC-0330.

CERTIFICATION

The Fund’s Chief Executive Officer (“CEO”) will file the required annual CEO certification regarding compliance with the NYSE’s listing standards no more than 30 days after the Fund’s annual shareholder meeting and the Fund also has included the certifications of the Fund’s CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC for the period of this report.

 

43


Report on Annual Meeting of Shareholders

The Annual Meeting of Shareholders of Virtus Global Dividend & Income Fund Inc. was held on June 6, 2017. The meeting was held for purposes of electing two (2) nominees to the Board of Directors for a three-year term, or until a successor has been duly elected and qualified.

The results were as follows:

 

Election of Directors

  

Votes For

    

Votes Withheld

 

R. Keith Walton

     19,722,703        787,826  

Brian T. Zino

     19,723,394        787,135  

Based on the foregoing, R. Keith Walton and Brian T. Zino were re-elected to the Board of Directors. The Fund’s other Directors who continue in office are George R. Aylward, Philip R. McLoughlin, William R. Moyer, James M. Oates, James B. Rogers, Jr. and William H. Wright II (advisory member).

 

44


AUTOMATIC REINVESTMENT AND CASH PURCHASE PLAN

 

Virtus Global Dividend & Income Fund Inc. (the “Fund”) allows you to conveniently reinvest distributions monthly in additional Fund shares thereby enabling you to compound your returns from the Fund. By choosing to reinvest, you’ll be able to invest money regularly and automatically, and watch your investment grow.

It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market.

Enrollment in the Reinvestment Plan

It is the policy of the Fund to automatically reinvest distributions payable to shareholders. A “registered” shareholder automatically becomes a participant in the Fund’s Automatic Reinvestment and Cash Purchase Plan (the “Plan”). The Plan authorizes the Fund to credit all shares of common stock to participants upon a distribution regardless of whether the shares are trading at a discount or premium to the net asset value. Registered shareholders may terminate their participation and receive distributions in cash by contacting Computershare Trust Company, N.A. (the “Plan Administrator”). The termination will become effective with the next distribution if the Plan Administrator is notified at least 7 business days prior to the distribution payment date. Registered shareholders that wish to change their distribution option from cash payment to reinvest may do so by contacting the Plan Administrator at 1-866-270-7788. In the case of banks, brokers, or other nominees which hold your shares for you as the beneficial owner, the Plan Administrator will administer the Plan based on the information provided by the bank, broker or nominee. To the extent that you wish to participate in the Plan, you should contact the broker, bank or nominee holding your shares to ensure that your account is properly represented. If necessary, you may have your shares taken out of the name of the broker, bank or nominee and register them in your own name.

How shares are purchased through the Reinvestment Plan

When a distribution is declared, nonparticipants in the plan will receive cash. Participants in the Plan will receive shares of the Fund valued as described below:

If on the payable date of the distribution, the market price of the Fund’s common stock is less than the net asset value, the Plan Administrator will buy Fund shares on behalf of the Participant in the open market, on the New York Stock Exchange (NYSE) or elsewhere. The price per share will be equal to the weighted average price of all shares purchased, including commissions. Commission rates are currently $0.02 per share, although the rate is subject to change and may vary. If, following the commencement of purchases and before the Plan Administrator has completed its purchases, the trading price equals or exceeds the most recent net asset value of the common shares, the Plan Administrator may cease purchasing shares on the open market and the Fund may issue the remaining shares at a price equal to the greater of (a) the net asset value on the last day the Plan Administrator purchased shares or (b) 95% of the market price on such day. In the case where the Plan Administrator has terminated open market purchase and the Fund has issued the remaining shares, the number of shares received by the Participant in respect of the cash distribution will be based on the weighted average of prices paid for shares purchased in the open market and the price at which the Fund issued the remaining shares. Under certain circumstances, the rules and regulations of the Securities and Exchange Commission may require limitation or temporary suspension of market purchases of shares under the Plan. The Plan Administrator will not be accountable for its inability to make a purchase during such a period.

If on the payable date of the distribution, the market price is equal to or exceeds the net asset value, Participants will be issued new shares by the Fund at the greater of the (a) the net asset value on the payable date or (b) 95% of the market price on such date.

 

45


AUTOMATIC REINVESTMENT AND CASH PURCHASE PLAN (Continued)

 

The automatic reinvestment of distributions will not relieve Participants of any income tax which may be payable on such distributions. A Participant in the Plan will be treated for federal income tax purposes, as having received on a payment date, a distribution in an amount equal to the cash the participant could have received instead of shares. If you participate in the Plan, you will receive a Form 1099-DIV concerning the Federal tax status of distributions paid during the year.

Charges to Participate in the Plan

As a Participant in the Plan you will not pay any charge to have your distributions reinvested in additional shares. The Plan Administrator’s fees for handling the reinvestment of distributions will be paid by the Fund. There will be no brokerage commissions for shares issued directly by the Fund in payment of distributions. However, each Participant will pay a pro rata share of brokerage commissions incurred (currently $0.02 per share, but may vary and is subject to change) with respect to the Plan Administrator’s open market purchases in connection with the reinvestment of distributions.

Voluntary Cash Purchase Plan

Participants in the Plan have the option of making additional cash payments for investment in shares of the Fund. Such payments can be made in any amount from $100 per payment to $3,000 per month. The Plan Administrator will use the funds received to purchase Fund shares in the open market on the 15th of each month or the next business day if the 15th falls on a weekend or holiday (the “Investment Date”). The purchase price per share will be equal to the weighted average price of all shares purchased on the Investment Date, including commissions. There is no charge to shareholders for Cash Purchases. The plan administrator’s fee will be paid by the Fund. However, each participating shareholder will pay pro rata share of brokerage commissions incurred (currently $0.02 per share, but may vary and is subject to change) with respect to the Plan Administrator’s open market purchases in connection with all cash investments. Voluntary cash payments should be sent to Computershare Trust Company, N.A., PO Box 43078, Providence, RI 02940-3078.

Participants have an unconditional right to obtain the return of any cash payment if the Plan Administrator receives written notice at least 5 business days before such payment is to be invested.

Automatic Monthly Investment

Participants in the Plan may purchase additional shares by means of an Automatic Monthly Investment of not less than $100 nor more than $3,000 per month by electronic funds transfer from a predesignated U.S bank account. If a Participant has already established a Plan account and wishes to initiate Automatic Monthly Investments, the Participant must complete and sign an automatic monthly investment form and return it to the Plan Administrator together with a voided check or deposit slip for the account from which funds are to be withdrawn. Automatic monthly investment forms may be obtained from the Plan Administrator by calling 1-866-270-7788.

Termination of Shares

Shareholders wishing to liquidate shares held with the Plan Administrator must do so in writing or by calling 1-866-270-7788. The Plan Administrator does not charge a fee for liquidating your shares; however, a brokerage commission of $0.02 will be charged. This charge may vary and is subject to change.

Once terminated, you may re-enroll in the Plan (provided you still have shares registered in your name) by contacting the Plan Administrator at 1-866-270-7788.

 

46


AUTOMATIC REINVESTMENT AND CASH PURCHASE PLAN (Continued)

 

Additional Information

For more information regarding the Automatic Reinvestment and Cash Purchase Plan, please contact the Plan Administrator at 1-866-270-7788 or visit our website at Virtus.com.

The Fund reserves the right to amend or terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to written notice of the change sent to the members of the Plan at least 90 days before the record date for such distribution. The Plan also may be amended or terminated by the Plan Administrator with at least 90 days’ written notice to participants in the Plan.

 

47


VIRTUS GLOBAL DIVIDEND & INCOME FUND INC.

101 Munson Street

Greenfield, MA 01301-9668

 

Board of Directors

George R. Aylward

Philip R. McLoughlin, Chairman

William R. Moyer

James M. Oates

James B. Rogers, Jr.

R. Keith Walton

Brian T. Zino

William H. Wright II, Advisory Member

Officers

George R. Aylward, President and Chief Executive Officer

Frances G. Waltman, Executive Vice President

W. Patrick Bradley, Executive Vice President, Chief Financial Officer and Treasurer

William Renahan, Vice President, Chief Legal Officer, and Secretary

Jacqueline Porter, Vice President and Assistant Treasurer

Nancy Engberg, Senior Vice President and Chief Compliance Officer

Investment Adviser

Virtus Investment Advisers, Inc.

100 Pearl Street

Hartford, CT 06103-4506

Fund Administrator

Virtus Fund Services, LLC

100 Pearl Street

Hartford, CT 06103-4506

Custodian

JPMorgan Chase Bank, NA

1 Chase Manhattan Plaza

New York, NY 10005-1401

Transfer Agent

Computershare Trust Company, NA

P.O. Box 43078

Providence, RI 02940-3078

Fund Counsel

Sullivan & Worcester LLP

1666 K Street NW

7th Floor

Washington D.C. 20006

 

 

This report is transmitted to the shareholders of Virtus Global Dividend & Income Fund Inc. for their information. This is not a prospectus, circular, or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.


 

For more information about

Virtus Closed-End Funds, please

contact us at 1-866-270-7788

or closedendfunds@virtus.com

or visit Virtus.com.

 

   05-17

 

LOGO

c/o Computershare Investor Services

P.O. Box 43078

Providence, RI 02940

 


Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

 

  (a)

Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

 

  (b)

Not applicable.

 

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

Not applicable.

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


There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR.

 

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

REGISTRANT PURCHASES OF EQUITY SECURITIES

 

Period

 

  

(a) Total Number

of Shares (or

Units) Purchased

 

  

(b) Average

Price Paid per

Share (or Unit)

 

  

(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs

 

  

(d) Maximum Number (or
Approximate Dollar Value) of
Shares (or Units) that May  Yet
Be Purchased Under the Plans or
Programs

 

January 2017

 

   0    $0    0    2,654,033

February 2017 

 

   0    $0    0    2,654,033

March 2017

 

   0    $0    0    2,654,033

April 2017

 

   0    $0    0    2,654,033

May 2017

 

   0    $0    0    2,654,033

June 2017

 

   0    $0    0    2,654,033

Total

 

   0    $0    0    2,654,033

 

a.

The date each plan or program was announced: Share repurchase program announced 3/13/12 and expanded 9/19/12 and 2/10/14.

b.

The dollar amount (or share or unit amount) approved: 6,884,886 shares.

c.

The expiration date (if any) of each plan or program: None.

d.

Each plan or program that has expired during the period covered by the table: None.

e.

Each plan or program the registrant has determined to terminate prior to expiration, or under which the registrant does not intend to make further purchases: None.

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

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-


K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. [In addition, there are no newly identified portfolio managers as the date of this filing.]

Item 11. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, 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 (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  (b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s 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.

 

  (a)(2)

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

  (a)(3)

Not applicable.

 

  (b)

Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

  (c)

A copy of the Registrant’s notice to shareholders pursuant to Rule 19(a) under the 1940 Act which accompanied distributions paid during the period ended June 30, 2017 pursuant to the Registrant’s Managed Distribution Plan are filed herewith as required by the terms of the Registrant’s exemptive order issued on November 17, 2008.


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.

 

(Registrant)    Virtus Global Dividend & Income Fund Inc.                                                    

By (Signature and Title)*    /s/ George R. Aylward                                                                  

                                                   George R. Aylward, President

                                                   (principal executive officer)

Date    9/07/2017                                                                                                                         

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

 

By (Signature and Title)*    /s/ George R. Aylward                                                                 

                                                   George R. Aylward, President

                                                   (principal executive officer)

Date    9/07/2017                                                                                                                         

 

By (Signature and Title)*    /s/ W. Patrick Bradley                                                                   

                                                   W. Patrick Bradley, Executive Vice President,

                                                   Chief Financial Officer, and Treasurer

                                                   (principal financial officer)

Date    9/07/2017                                                                                                                         

* Print the name and title of each signing officer under his or her signature.