UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number: 811-21846

 

CLOUGH GLOBAL OPPORTUNITIES FUND

(Exact name of registrant as specified in charter)

 

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

 

Karen S. Gilomen, Secretary

Clough Global Opportunities Fund

1290 Broadway, Suite 1100

Denver, Colorado 80203

(Name and address of agent for service)

 

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

 

Date of fiscal year end: October 31

 

Date of reporting period: July 31, 2018

 

 

 

Item 1 – Schedule of Investments.

 

Clough Global Dividend and Income Fund

STATEMENT OF INVESTMENTS

July 31, 2018 (Unaudited)

 

   Shares   Value 
COMMON STOCKS 71.22%        
Consumer Discretionary 6.86%        
DR Horton, Inc.(a)(b)   47,226   $2,063,776 
The Home Depot, Inc.(a)(b)   2,800    553,056 
Lennar Corp. - Class A(a)(b)   39,700    2,075,119 
Panasonic Corp.   93,700    1,205,032 
PulteGroup, Inc.(a)(b)   13,100    373,219 
Service Corp. International(a)   6,700    263,645 
         6,533,847 
           
Energy 1.77%          
Fairway Energy LP(c)(d)(e)(f)(g)   130,700    294,467 
Kinder Morgan, Inc.(a)(b)   78,500    1,395,730 
         1,690,197 
           
Financials 36.49%          
Ares Capital Corp.(a)   218,800    3,686,780 
Bank of America Corp.(a)(b)   86,491    2,670,842 
Blackstone Mortgage Trust, Inc. - Class A(a)   89,700    2,972,658 
Citigroup, Inc.(a)(b)   55,030    3,956,107 
Community Healthcare Trust, Inc.(a)   94,900    2,847,000 
Golub Capital BDC, Inc.(a)   89,700    1,690,845 
Granite Point Mortgage Trust, Inc.(a)   43,700    830,300 
JPMorgan Chase & Co.(a)(b)   24,800    2,850,760 
Ladder Capital Corp.(a)   49,218    786,996 
Morgan Stanley(a)(b)   19,700    996,032 

Ping An Insurance Group Co. of China, Ltd. - Class H

   89,000    825,476 
Postal Savings Bank Of China Co., Ltd. - Class H   1,676,000    1,123,162 
Solar Capital, Ltd.(a)   93,900    1,998,192 
Starwood Property Trust, Inc.(a)   192,800    4,403,552 
TPG Specialty Lending, Inc.(a)   68,300    1,332,533 
Welltower, Inc.(a)(b)   28,300    1,771,580 
         34,742,815 
           
Health Care 6.59%          
Amgen, Inc.(a)(b)   8,300    1,631,365 
Bristol-Myers Squibb Co.(a)(b)   26,387    1,550,236 
Pfizer, Inc.(a)(b)   77,400    3,090,582 
         6,272,183 
           
Industrials 3.38%          
Airbus SE   13,129    1,627,355 
Ashtead Group PLC   51,689    1,588,239 
         3,215,594 
           
Information Technology 15.29%          
Apple, Inc.(a)(b)   8,600    1,636,494 
Intel Corp.(a)   8,000    384,800 
Keyence Corp.   1,400    737,593 

   Shares   Value 
Information Technology (continued)        
Largan Precision Co., Ltd.   10,241   $1,722,779 
Microsoft Corp.(a)(b)   52,100    5,526,768 
Monolithic Power Systems, Inc.(a)   7,600    1,008,368 
Nintendo Co., Ltd.   1,206    396,481 
NVIDIA Corp.(a)(b)   3,240    793,346 
Taiwan Semiconductor Manufacturing Co., Ltd. - Sponsored ADR   39,500    1,627,795 
Tencent Holdings, Ltd.   16,100    728,588 
         14,563,012 
           
Telecommunication Services 0.84%          
China Mobile, Ltd.   89,000    802,798 
           
TOTAL COMMON STOCKS          
(Cost $62,091,793)        67,820,446 
           
CLOSED-END FUNDS 1.34%          
KKR Income Opportunities Fund(a)   26,600    448,210 
Liberty All-Star Equity Fund(a)   63,200    412,696 
Wells Fargo Multi-Sector Income Fund(a)   32,500    411,450 
         1,272,356 
           
TOTAL CLOSED-END FUNDS          
(Cost $1,292,953)        1,272,356 
           
PREFERRED STOCKS 6.60%          
Annaly Capital Management, Inc.          
Series G, 6.500%(a)(b)   37,476    910,292 
Ares Management LP          
Series A, 7.000%(a)   35,000    938,000 
First Republic Bank          
Series D, 5.500%(a)(b)   35,000    880,600 
Global Medical REIT, Inc.          
Series A, 7.500%(a)   10,900    273,045 
MTGE Investment Corp.          
Series A, 8.125%(a)   10,640    273,448 
PennyMac Mortgage Investment Trust          
Series A, 3M US L + 5.831%(a)(b)(h)   22,000    554,840 
Series B, 3M US L + 5.99%(a)(b)(h)   10,000    252,300 
Summit Hotel Properties, Inc.          
Series E, 6.250%(a)(b)   40,000    942,400 
Two Harbors Investment Corp.          
Series A, 3M US L + 5.66%(a)(b)(h)   28,500    770,355 
Series C, 3M US L + 5.011%(a)(h)   20,000    491,200 
         6,286,480 
           
TOTAL PREFERRED STOCKS          
(Cost $6,136,714)        6,286,480 
           

 

 

 

Description and  Principal     
Maturity Date  Amount   Value 
CORPORATE BONDS 45.10%        
Bank of America Corp.        
10/21/2022, 2.503%(a)(b)  $1,000,000   $956,887 
Series FF, Perpetual Maturity, 3M US L + 2.931%(a)(h)(i)   1,000,000    993,250 
Series V, Perpetual Maturity, 3M US L + 3.387%(h)(i)   1,000,000    1,016,250 
Bayer US Finance II LLC          
07/15/2022, 2.200%(d)   1,000,000    940,665 
BMW US Capital LLC          
09/15/2021, 1.850%(a)(b)(d)   1,000,000    955,714 
Series REGS, 09/15/2021, 1.850%   500,000    477,917 
BP Capital Markets PLC          
05/10/2019, 2.237%(a)(b)   1,000,000    997,152 
09/19/2022, 2.520%(a)   700,000    676,922 
Branch Banking & Trust Co.          
06/01/2020, 2.250%(a)   500,000    491,364 
Citigroup, Inc.          
Series N, Perpetual Maturity, 3M US L + 4.0932%(a)(h)(i)   1,500,000    1,539,375 
Citizens Financial Group, Inc.          
09/28/2022, 4.150%(a)(b)(d)   1,325,000    1,330,122 
Discovery Communications LLC          
06/15/2022, 3.500%(a)(d)   1,000,000    987,716 
DR Horton, Inc.          
12/01/2020, 2.550%(a)(b)   1,000,000    979,154 
Goldman Sachs Group, Inc.          
Series P, Perpetual Maturity, 3M US L + 2.874%(a)(b)(h)(i)   1,000,000    936,250 
Hercules Capital, Inc.          
10/23/2022, 4.625%(a)(b)   1,000,000    996,432 
Huntington Ingalls Industries, Inc.          
11/15/2025, 5.000%(a)(d)   750,000    783,975 
Jackson National Life Global Funding          
04/29/2021, 2.250%(a)(b)(d)   1,000,000    969,200 
06/27/2022, 2.500%(a)(d)   1,000,000    963,391 
JPMorgan Chase & Co.          
Series I, Perpetual Maturity, 3M US L + 3.47%(a)(h)(i)   1,500,000    1,508,475 
Series Z, Perpetual Maturity, 3M US L + 3.80%(a)(h)(i)   1,000,000    1,020,000 
Lennar Corp.          
01/15/2022, 4.125%(a)(b)   2,000,000    1,990,000 
Lockheed Martin Corp.          
11/23/2020, 2.500%(a)   1,000,000    987,434 
Main Street Capital Corp.          
12/01/2019, 4.500%(a)(b)   1,000,000    1,000,652 
12/01/2022, 4.500%(a)   500,000    492,875 
Manufacturers & Traders Trust Co.          
05/18/2022, 2.500%(a)(b)   1,000,000    966,249 
Masco Corp.          
04/01/2021, 3.500%(a)(b)   1,000,000    997,095 
Morgan Stanley          
Series H, Perpetual Maturity, 3M US L + 3.61%(a)(h)(i)   1,500,000    1,524,375 
New York Life Global Funding          
06/10/2022, 3M US L + 0.52%(a)(d)(h)   1,000,000    1,006,115 

Description and  Principal     
Maturity Date  Amount   Value 
CORPORATE BONDS (continued)        
Penske Truck Leasing Co. LP / PTL Finance Corp.        
03/14/2023, 2.700%(a)(d)  $1,000,000   $946,711 
People's United Bank National Association          
07/15/2024, 4.000%(a)   1,000,000    990,117 
Philip Morris International, Inc.          
08/22/2022, 2.500%(a)   750,000    722,847 
PNC Bank National Association          
11/05/2020, 2.450%(a)(b)   650,000    638,571 
PNC Financial Services Group, Inc.          
08/11/2020, 4.375%(a)   1,000,000    1,021,713 
Solar Capital, Ltd.          
01/20/2023, 4.500%(a)   500,000    479,140 
Southwest Airlines Co.          
11/16/2022, 2.750%(a)   1,000,000    970,230 
Tencent Holdings, Ltd.          
Series REGS, 05/02/2019, 3.375%(a)   1,000,000    1,002,773 
01/19/2023, 2.985%(a)(d)   1,000,000    971,492 
TPG Specialty Lending, Inc.          
01/22/2023, 4.500%(a)   750,000    737,558 
Visa, Inc.          
12/14/2022, 2.800%(a)   750,000    736,825 
Wells Fargo & Co.          
Series MTN, 07/22/2022, 2.625%(a)(b)   1,000,000    965,860 
Series K, Perpetual Maturity, 3M US L + 3.77%(a)(b)(h)(i)   1,307,000    1,319,351 
Welltower, Inc.          
04/01/2019, 4.125%(a)(b)   1,000,000    1,005,224 
Xcel Energy, Inc.          
03/15/2021, 2.400%(a)(b)   2,000,000    1,951,690 
           
TOTAL CORPORATE BONDS          
(Cost $43,662,638)        42,945,108 
           
ASSET/MORTGAGE BACKED SECURITIES 4.10%      
Federal Home Loan Mortgage Corp. - REMICS          
Series 2017-4707, Class AD, 07/15/2047, 2.500%(a)   921,909    899,283 
Federal National Mortgage Association - REMICS          
Series 2017-16, Class NA, 03/25/2047, 3.000%   729,648    692,454 
SBA Small Business Investment Companies          
Series 2013-10B, Class 1, 09/10/2023, 3.644%   981,004    990,990 
Series 2016-10A, Class 1, 03/10/2026, 2.507%   483,346    468,452 
Series 2018-10A, Class 1, 03/10/2028, 3.187%   750,000    743,419 

 

 

 

 

Description and  Principal     
Maturity Date  Amount   Value 
ASSET/MORTGAGE BACKED SECURITIES (continued)        
United States Small Business Administration        
Series 2008-20L, Class 1, 12/01/2028, 6.220%  $99,997   $107,391 
           
TOTAL ASSET/MORTGAGE BACKED SECURITIES      
(Cost $3,981,326)        3,901,989 
           
GOVERNMENT & AGENCY OBLIGATIONS 10.86%      
U.S. Treasury Bonds          
08/15/2026, 6.750%(a)   750,000    955,459 
11/15/2026, 6.500%(a)   1,600,000    2,019,687 
08/15/2029, 6.125%(a)   1,250,000    1,619,214 
05/15/2030, 6.250%(a)   1,000,000    1,324,062 
02/15/2038, 4.375%(a)   1,000,000    1,200,020 
U.S. Treasury Notes          
04/30/2019, 1.625%(a)   1,250,000    1,243,188 
06/30/2019, 1.625%(a)   1,000,000    992,754 
12/31/2019, 1.625%(a)   1,000,000    986,895 
           
TOTAL GOVERNMENT & AGENCY OBLIGATIONS      
(Cost $10,770,557)        10,341,279 
           
    Shares/Principal Amount    Value 
SHORT-TERM INVESTMENTS 7.32%         
Money Market Funds  7.32%          
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (1.786% 7-day yield)   6,971,211    6,971,211 
           
TOTAL SHORT-TERM INVESTMENTS       
(Cost $6,971,211)        6,971,211 
           
           
           
           
Total Investments - 146.54%          
(Cost $134,907,192)        139,538,869 
           
Liabilities in Excess of Other Assets - (46.54%)(j)      (44,315,454)
           
NET ASSETS - 100.00%       $95,223,415 

 

SCHEDULE OF SECURITIES SOLD SHORT (c)  Shares   Value 
COMMON STOCKS (9.04%)        
Financials (2.94%)        
Deutsche Bank AG   (80,000)   (1,044,800)
Mediobanca Banca di Credito Finanziario SpA   (58,839)   (611,250)
Societe Generale S.A.   (12,562)   (559,812)
UniCredit SpA   (32,987)   (584,927)
         (2,800,789)
           

 

 

SCHEDULE OF SECURITIES SOLD SHORT (c) (continued)  Shares   Value 
Health Care (0.44%)        
McKesson Corp.   (3,300)  $(414,480)
           
Industrials (1.57%)          
Stericycle, Inc.   (12,600)   (880,236)
Triumph Group, Inc.   (29,200)   (608,820)
       (1,489,056)
           
Information Technology (2.41%)          
International Business Machines Corp.   (12,200)   (1,768,146)
Manhattan Associates, Inc.   (11,000)   (529,320)
       (2,297,466)
           
Materials (1.68%)          
Albemarle Corp.   (17,000)   (1,601,400)
           
TOTAL COMMON STOCKS          
(Proceeds $8,636,412)        (8,603,191)
           
EXCHANGE TRADED FUNDS (0.49%)          
United States Natural Gas Fund LP   (20,550)   (468,745)
           
TOTAL EXCHANGE TRADED FUNDS          
(Proceeds $618,847)        (468,745)
           
TOTAL SECURITIES SOLD SHORT          
(Proceeds $9,255,259)       $(9,071,936)

Investment Abbreviations:

1D FEDEF - Federal Funds Effective Rate (Daily)

LIBOR - London Interbank Offered Rate

 

Libor Rates:

3M US L - 3 Month LIBOR as of July 31, 2018 was 2.35%

 

(a)Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings. As of July 31, 2018, the aggregate value of those securities was $109,369,736, representing 114.86% of net assets. (See Note 1 and Note 2).
(b)Loaned security; a portion or all of the security is on loan as of July 31, 2018.
(c)Non-income producing security.
(d)Security exempt from registration of the Securities Act of 1933.  These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of July 31, 2018, these securities had an aggregate value of $10,149,568 or 10.66% of net assets.
(e)Private Placement; these securities may only be resold in transactions exempt from registration under the Securities Act of 1933. As of July 31, 2018, these securities had a total value of $294,467 or 0.31% of net assets and have been deemed illiquid by the Adviser based on procedures approved by the Board. (See Note 1).

 

 

 

 

(f)Fair valued security; valued by management in accordance with procedures approved by the Board. As of July 31, 2018, these securities had an aggregate value of $294,467 or 0.31% of total net assets.
(g)As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. (See Note 1).
(h)Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at July 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above.
(i)This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.
(j)Includes cash which is being held as collateral for total return swap contracts and securities sold short.

 

 

 

         
Counter Party 

Reference

Entity/Obligation

 

Notional

Amount

  

Floating Rate

Paid by the Fund

 

Floating

Rate Index

 

Termination

Date

  Value  

Net Unrealized

Appreciation

 
Credit Suisse  Housing Development Finance Corp.  $272,383   170 bps + 1M LIBOR  1 M LIBOR  12/31/2020  $407,165   $134,782 
Morgan Stanley  Housing Development Finance Corp.   2,020,030   225 bps + 1D FEDEF  1 D FEDEF  07/12/2019   2,727,210    707,180 
Credit Suisse  Indiabulls Housing Finance   1,300,748   187 bps + 1M LIBOR  1 M LIBOR  12/31/2020   1,603,218    302,470 
Credit Suisse  Larsen & Toubro, Ltd.   1,388,142   217 bps + 1M LIBOR  1 M LIBOR  12/31/2020   2,217,315    829,173 
Morgan Stanley  Larsen & Toubro, Ltd.   568,927   225 bps + 1D FEDEF  1 D FEDEF  07/12/2019   694,687    125,760 
Morgan Stanley  Mahindra & Mahindra, Ltd.   1,932,799   225 bps + 1D FEDEF  1 D FEDEF  07/12/2019   2,174,023    241,224 
Morgan Stanley  Sociedad Quimica   (1,187,633)  1 D FEDEF - 266 bps  1 D FEDEF  02/03/2020   (1,172,961)   14,672 
      $6,295,396            $8,650,657   $2,355,261 

 

Counter Party 

Reference

Entity/Obligation

 

Notional

Amount

  

Floating Rate

Paid by the Fund

 

Floating

Rate Index

 

Termination

Date

  Value  

Net Unrealized

Depreciation

 
Morgan Stanley  Banco Santander SA  $(571,621)  1D FEDEF - 50 bps  1 D FEDEF  05/18/2020  $(578,158)  $(6,537)
Morgan Stanley  Midea Group Co., Ltd.   1,308,707   250 bps + 1D FEDEF  1 D FEDEF  05/26/2020   1,260,254    (48,453)
      $737,086            $682,096   $(54,990)
      $7,032,482            $9,332,753   $2,300,271 

 

 

 

 

 

 

 

Clough Global Equity Fund

STATEMENT OF INVESTMENTS

July 31, 2018 (Unaudited)

 

   Shares   Value 
COMMON STOCKS 110.26%        
Consumer Discretionary 16.75%        
Amazon.com, Inc.(a)(b)(c)   3,500   $6,221,040 
Carvana Co.(a)(b)   132,900    5,714,700 
DR Horton, Inc.(b)(c)   84,821    3,706,678 
The Home Depot, Inc.(b)   4,600    908,592 
JD.com, Inc. - ADR(a)(b)   69,200    2,481,512 
Lennar Corp. - Class A(b)(c)   68,700    3,590,949 
Panasonic Corp.   152,900    1,966,375 
PulteGroup, Inc.(b)(c)   27,600    786,324 
TRI Pointe Group, Inc.(a)(b)(c)   52,600    745,342 
Wayfair, Inc. - Class A(a)(b)(c)   6,350    691,007 
zooplus AG(a)   6,862    1,189,169 
         28,001,688 
           
Consumer Staples 0.48%          
Orion Corp.   6,691    798,506 
           
Energy 1.59%          
Fairway Energy LP(a)(d)(e)(f)(g)   217,600    490,253 
Kinder Morgan, Inc.(b)(c)   122,300    2,174,494 
         2,664,747 
           
Financials 38.82%          
Arbor Realty Trust, Inc.(b)   86,300    981,231 
Ares Capital Corp.(b)   405,800    6,837,730 
Bank of America Corp.(b)(c)   142,105    4,388,202 
Blackstone Mortgage Trust, Inc. - Class A(b)   220,900    7,320,626 
Citigroup, Inc.(b)(c)   91,019    6,543,356 
Community Healthcare Trust, Inc.(b)   45,800    1,374,000 
Credit Acceptance Corp.(a)(b)(c)   6,260    2,401,336 
Golub Capital BDC, Inc.(b)   185,809    3,502,500 
Granite Point Mortgage Trust, Inc.(b)(c)   156,800    2,979,200 
JPMorgan Chase & Co.(b)(c)   40,900    4,701,455 
Ladder Capital Corp.(b)   117,779    1,883,286 
Morgan Stanley(b)(c)   32,300    1,633,088 
Ping An Insurance Group Co. of China, Ltd. - Class H   145,200    1,346,731 
Postal Savings Bank Of China Co., Ltd. - Class H   1,677,000    1,123,833 
Redfin Corp.(a)   55,200    1,352,400 
Solar Capital, Ltd.(b)   119,000    2,532,320 
Starwood Property Trust, Inc.(b)   350,500    8,005,420 
TCG BDC, Inc.(b)(c)   62,500    1,110,625 
TPG Specialty Lending, Inc.(b)   92,500    1,804,675 
Welltower, Inc.(b)   49,200    3,079,920 
         64,901,934 
           
Health Care 17.67%          
Align Technology, Inc.(a)(b)(c)   3,100    1,105,615 
Amgen, Inc.(b)(c)   8,570    1,684,433 

 

    Shares    Value 
Health Care (continued)          
Apellis Pharmaceuticals, Inc.(a)(b)(c)   97,397   $1,792,105 
Avanos Medical, Inc.(a)(b)   11,100    612,720 
BioMarin Pharmaceutical, Inc.(a)(b)(c)   7,400    744,144 
Bluebird Bio, Inc.(a)(b)(c)   7,700    1,192,730 
Boston Scientific Corp.(a)(b)(c)   54,000    1,814,940 
Bristol-Myers Squibb Co.(b)(c)   29,116    1,710,565 
Centrexion Therapeutics(a)(d)(e)(f)(g)   416,666    749,999 
Correvio Pharma Corp.(a)   355,500    1,688,625 
CRISPR Therapeutics AG(a)(b)(c)   60,767    2,901,017 
Express Scripts Holding Co.(a)(b)(c)   10,700    850,222 
Galapagos NV - Sponsored ADR(a)(b)(c)   9,800    1,073,296 
Gossamer Biosciences(a)(d)(e)(f)(g)   264,246    850,000 
GW Pharmaceuticals PLC - ADR(a)(b)   4,590    619,971 
Idorsia, Ltd.(a)(d)   27,100    673,839 
Illumina, Inc.(a)(b)(c)   5,310    1,722,352 
Intra-Cellular Therapies, Inc.(a)(b)   82,100    1,647,747 
Pfizer, Inc.(b)(c)   46,900    1,872,717 
Sienna Biopharmaceuticals, Inc.(a)(b)   27,631    418,333 
Teladoc, Inc.(a)(b)(c)   27,900    1,669,815 
Veracyte, Inc.(a)   91,600    992,028 
Vertex Pharmaceuticals, Inc.(a)(b)(c)   6,610    1,157,081 
         29,544,294 
           
Industrials 4.35%          
Airbus SE   22,968    2,846,910 
Ashtead Group PLC   90,414    2,778,135 
TransDigm Group, Inc.(b)   4,410    1,656,132 
         7,281,177 
           
Information Technology 25.98%          
Apple, Inc.(b)(c)   14,300    2,721,147 
Facebook, Inc. - Class A(a)(b)(c)   15,075    2,601,643 
GTT Communications, Inc.(a)(b)(c)   44,700    1,986,915 
HUYA, Inc. - ADR(a)   21,200    682,640 
Intel Corp.(b)(c)   14,100    678,210 
Keyence Corp.   2,300    1,211,761 
Largan Precision Co., Ltd.   13,497    2,270,515 
Luxoft Holding, Inc.(a)   18,900    718,200 
Microsoft Corp.(b)(c)   55,900    5,929,872 
Mimecast, Ltd.(a)(b)   41,200    1,479,492 
Monolithic Power Systems, Inc.(b)   12,300    1,631,964 
Nintendo Co., Ltd.   3,819    1,255,524 
NVIDIA Corp.(b)(c)   5,670    1,388,356 
Proofpoint, Inc.(a)(b)(c)   11,300    1,288,765 
Qorvo, Inc.(a)(b)(c)   20,100    1,643,376 
Red Hat, Inc.(a)   4,700    663,781 
salesforce.com, Inc.(a)(b)   6,000    822,900 
ServiceNow, Inc.(a)(b)(c)   7,800    1,372,488 

 

 

    Shares    Value 
Information Technology (continued)          
Taiwan Semiconductor Manufacturing Co., Ltd. - Sponsored ADR   51,300   $2,114,073 
Tencent Holdings, Ltd.   19,700    891,502 
TrueCar, Inc.(a)(b)   260,700    2,898,984 
ViaSat, Inc.(a)(b)(c)   35,442    2,492,990 
WNS Holdings, Ltd. - ADR(a)(b)   20,600    1,002,396 
Yelp, Inc.(a)(b)   71,300    2,629,544 
Zendesk, Inc.(a)(b)   19,600    1,067,612 
         43,444,650 
           
Telecommunication Services 4.62%          
GCI Liberty, Inc. - Class A(a)(b)(c)   160,421    7,717,854 
           
TOTAL COMMON STOCKS          
(Cost $165,875,305)        184,354,850 
           
CLOSED-END FUNDS 1.23%          
KKR Income Opportunities Fund(b)   43,100    726,235 
Liberty All-Star Equity Fund(b)   102,400    668,672 
Wells Fargo Multi-Sector Income Fund(b)   52,700    667,182 
         2,062,089 
           
TOTAL CLOSED-END FUNDS          
(Cost $2,095,473)        2,062,089 
           
PREFERRED STOCKS 4.60%          
Annaly Capital Management, Inc.          
Series G, 6.500%(b)   60,000    1,457,400 
Ares Management LP          
Series A, 7.000%(b)   71,000    1,902,800 
Global Medical REIT, Inc.          
Series A, 7.500%(b)   17,700    443,385 
PennyMac Mortgage Investment Trust          
Series A, 3M US L + 5.831%(b)(c)(h)   28,000    706,160 
Series B, 3M US L + 5.99%(b)(h)   10,000    252,300 
Summit Hotel Properties, Inc.          
Series E, 6.250%(b)(c)   40,000    942,400 
Two Harbors Investment Corp.          
Series A, 3M US L + 5.66%(b)(c)(h)   51,000    1,378,530 
Series C, 3M US L + 5.011%(b)(h)   25,000    614,000 
         7,696,975 
           
TOTAL PREFERRED STOCKS          
(Cost $7,402,820)        7,696,975 

 

Description and   Principal      
Maturity Date   Amount    Value 
CORPORATE BONDS 1.51%          
Morgan Stanley          
Series H, Perpetual Maturity, 3M US L + 3.61%(h)(i)  $500,000   $508,125 
Wells Fargo & Co.          
Series K, Perpetual Maturity, 3M US L + 3.77%(b)(h)(i)   2,000,000    2,018,900 
           
TOTAL CORPORATE BONDS          
(Cost $2,485,263)        2,527,025 
           
GOVERNMENT & AGENCY OBLIGATIONS 7.35%          
U.S. Treasury Bonds          
08/15/2026, 6.750%(b)   2,000,000    2,547,891 
11/15/2026, 6.500%(b)   1,600,000    2,019,687 
08/15/2029, 6.125%(b)   2,500,000    3,238,428 
U.S. Treasury Notes          
02/28/2019, 1.375%(b)   2,250,000    2,238,354 
04/30/2019, 1.625%(b)   2,250,000    2,237,739 
           
TOTAL GOVERNMENT & AGENCY OBLIGATIONS          
(Cost $12,750,115)        12,282,099 
           
    Shares/Principal Amount    Value 
SHORT-TERM INVESTMENTS 15.10%          
Money Market Funds 12.87%          
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (1.786% 7-day yield)   21,512,764    21,512,764 
           
U.S. Treasury Bills 2.23%          
U.S. Treasury Bills          
08/16/2018, 0.142%(b)(j)  $1,500,000    1,498,839 
12/06/2018, 0.922%(b)(j)   2,250,000    2,233,927 
         3,732,766 
TOTAL SHORT-TERM INVESTMENTS          
(Cost $25,247,046)        25,245,530 
           
Total Investments - 140.05%          
(Cost $215,856,022)        234,168,568 
           
Liabilities in Excess of Other Assets - (40.05%)(k)      (66,961,360) 
           
NET ASSETS - 100.00%       $167,207,208 

 

SCHEDULE OF SECURITIES SOLD SHORT (a)  Shares   Value 
COMMON STOCKS (13.70%)        
Consumer Staples (1.22%)        
Walgreens Boots Alliance, Inc.   (30,200)   (2,042,124)
           
Financials (2.89%)          
Deutsche Bank AG   (139,900)   (1,827,094)

 

 

 

SCHEDULE OF SECURITIES SOLD SHORT (a) (continued)   Shares    Value 
Financials (continued)         
Mediobanca Banca di Credito Finanziario SpA   (100,279)  $(1,041,749)
Societe Generale S.A.   (21,823)   (972,519)
UniCredit SpA   (56,221)   (996,913)
       (4,838,275)
           
Health Care (0.82%)          
Editas Medicine, Inc.   (21,800)   (648,332)
McKesson Corp.   (5,700)   (715,920)
       (1,364,252)
           
Industrials (1.54%)          
Stericycle, Inc.   (22,100)   (1,543,906)
Triumph Group, Inc.   (49,100)   (1,023,735)
       (2,567,641)
           
Information Technology (4.26%)          
Auto Trader Group PLC   (277,121)   (1,546,967)
Extreme Networks, Inc.   (75,900)   (645,150)
F5 Networks, Inc.   (5,890)   (1,009,429)
International Business Machines Corp.   (21,100)   (3,058,023)
Manhattan Associates, Inc.   (17,900)   (861,348)
       (7,120,917)
           
Materials (2.54%)          
Albemarle Corp.   (29,600)   (2,788,320)
FMC Corp.   (16,200)   (1,456,056)
       (4,244,376)
           
Telecommunication Services (0.43%)          
Boingo Wireless, Inc.   (31,500)   (727,965)
           
TOTAL COMMON STOCKS          
(Proceeds $22,314,848)        (22,905,550)
           
EXCHANGE TRADED FUNDS (0.45%)          
United States Natural Gas Fund LP   (32,825)   (748,738)
           
TOTAL EXCHANGE TRADED FUNDS          
(Proceeds $988,498)        (748,738)
           
TOTAL SECURITIES SOLD SHORT          
(Proceeds $23,303,346)       $(23,654,288)

 

InvestmentAbbreviations:
1DFEDEF - Federal Funds Effective Rate (Daily)
LIBOR- London Interbank Offered Rate

 

LiborRates:
3MUS L - 3 Month LIBOR as of July 31, 2018 was 2.35%
  
(a)Non-income producing security.

 

(b)Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings. As of July 31, 2018, the aggregate value of those securities was $179,345,354, representing 107.26% of net assets. (See Note 1 and Note 2).
(c)Loaned security; a portion or all of the security is on loan as of July 31, 2018.
(d)Security exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of July 31, 2018, these securities had an aggregate value of $2,764,091 or 1.65% of net assets.
(e)Private Placement; these securities may only be resold in transactions exempt from registration under the Securities Act of 1933. As of July 31, 2018, these securities had a total value of $2,090,252 or 1.25% of net assets and have been deemed illiquid by the Adviser based on procedures approved by the Board. (See Note 1).
(f)Fair valued security; valued by management in accordance with procedures approved by the Board. As of July 31, 2018, these securities had an aggregate value of $2,090,252 or 1.25% of total net assets.
(g)As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. (See Note 1).
(h)Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at July 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above.
(i)This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.
(j)Rate shown represents the bond equivalent yield to maturity at date of purchase.
(k)Includes cash which is being held as collateral for total return swap contracts and securities sold short.

 

 

 

 

TOTAL RETURN SWAP CONTRACTS        
         
   Reference  Notional   Floating Rate  Floating  Termination       Net Unrealized 
Counter Party  Entity/Obligation  Amount   Paid by the Fund  Rate Index  Date   Value   Appreciation 
Credit Suisse  Housing Development Finance Corp.  $765,588   170 bps + 1M LIBOR  1 M LIBOR   12/31/2020   $1,144,418   $378,830 
Morgan Stanley  Housing Development Finance Corp.   3,254,547   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    4,393,912    1,139,365 
Credit Suisse  Indiabulls Housing Finance   2,133,481   187 bps + 1M LIBOR  1 M LIBOR   12/31/2020    2,648,990    515,509 
Credit Suisse  Larsen & Toubro, Ltd.   2,141,517   217 bps + 1M LIBOR  1 M LIBOR   12/31/2020    3,453,230    1,311,713 
Morgan Stanley  Larsen & Toubro, Ltd.   906,980   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    1,107,481    200,501 
Credit Suisse  Mahindra & Mahindra, Ltd.   1,374,538   125 bps + 1M LIBOR  1 M LIBOR   12/31/2020    1,735,812    361,274 
Morgan Stanley  Mahindra & Mahindra, Ltd.   2,734,133   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    3,076,072    341,939 
Morgan Stanley  Sociedad Quimica   (2,077,136)  1 D FEDEF - 266 bps  1 D FEDEF   02/03/2020    (2,051,475)   25,661 
      $11,233,648              $15,508,440   $4,274,792 

 

   Reference  Notional   Floating Rate  Floating  Termination       Net Unrealized 
Counter Party  Entity/Obligation  Amount   Paid by the Fund  Rate Index  Date   Value   Depreciation 
Morgan Stanley  Banco Santander SA  $(989,123)  1D FEDEF - 50 bps  1 D FEDEF   05/18/2020   $(1,000,436)  $(11,313)
Morgan Stanley  Midea Group Co., Ltd.   2,147,592   250 bps + 1D FEDEF  1 D FEDEF   05/26/2020    2,063,693    (83,899)
Morgan Stanley  United Microelectronics Corp.   (813,015)  1D FEDEF - 50 bps  1 D FEDEF   07/25/2019    (906,335)   (93,320)
      $345,454              $156,922   $(188,532)
      $11,579,102              $15,665,362   $4,086,260 

 

 

 

 

 

Clough Global Opportunities Fund

STATEMENT OF INVESTMENTS

July 31, 2018 (Unaudited)

   Shares   Value 
COMMON STOCKS 90.63%
Consumer Discretionary 12.27%
Amazon.com, Inc.(a)(b)(c)   8,094   $14,386,599 
DR Horton, Inc.(b)(c)   194,501    8,499,694 
The Home Depot, Inc.(b)(c)   11,100    2,192,472 
JD.com, Inc. - ADR(a)(b)   160,800    5,766,288 
Lennar Corp. - Class A(b)(c)   160,800    8,405,016 
Panasonic Corp.   380,800    4,897,289 
PulteGroup, Inc.(b)(c)   54,800    1,561,252 
Wayfair, Inc. - Class A(a)(b)(c)   15,530    1,689,975 
         47,398,585 
           
Consumer Staples 0.50%          
Orion Corp.   16,161    1,928,658 
           
Energy 1.68%          
Fairway Energy LP(a)(d)(e)(f)(g)   536,000    1,207,608 
Kinder Morgan, Inc.(b)(c)   297,800    5,294,884 
         6,502,492 
           
Financials 32.75%          
Ares Capital Corp.(b)   773,900    13,040,215 
Bank of America Corp.(b)(c)   342,910    10,589,061 
Blackstone Mortgage Trust, Inc. - Class A(b)   364,700    12,086,158 
Citigroup, Inc.(b)(c)   218,627    15,717,095 
Credit Acceptance Corp.(a)(b)(c)   15,080    5,784,688 
Golub Capital BDC, Inc.(b)   313,957    5,918,089 
JPMorgan Chase & Co.(b)(c)   101,500    11,667,425 
Ladder Capital Corp.(b)   205,942    3,293,013 
Morgan Stanley(b)(c)   78,100    3,948,736 
Ping An Insurance Group Co. of China, Ltd. - Class H   349,200    3,238,833 
Postal Savings Bank Of China Co., Ltd. - Class H   4,036,000    2,704,704 
Redfin Corp.(a)   127,500    3,123,750 
Solar Capital, Ltd.(b)   270,331    5,752,644 
Starwood Property Trust, Inc.(b)   786,286    17,958,772 
TPG Specialty Lending, Inc.(b)   232,783    4,541,596 
Welltower, Inc.(b)(c)   114,900    7,192,740 
         126,557,519 
           
Health Care 13.31%          
Align Technology, Inc.(a)(b)(c)   7,330    2,614,245 
Amgen, Inc.(b)(c)   20,020    3,934,931 
Apellis Pharmaceuticals, Inc.(a)(b)(c)   238,201    4,382,898 
Avanos Medical, Inc.(a)(b)(c)   26,900    1,484,880 
BioMarin Pharmaceutical, Inc.(a)(b)(c)   9,200    925,152 
Boston Scientific Corp.(a)(b)(c)   41,300    1,388,093 
Bristol-Myers Squibb Co.(b)(c)   42,900    2,520,375 
Centrexion Therapeutics(a)(d)(e)(f)(g)   1,361,111    2,450,000 

    Shares     Value 
Health Care (continued)          
Correvio Pharma Corp.(a)   885,881   $4,207,935 
CRISPR Therapeutics AG(a)(b)(c)   142,010    6,779,557 
Express Scripts Holding Co.(a)(b)(c)   26,600    2,113,636 
Gossamer Biosciences(a)(d)(e)(f)(g)   512,948    1,650,000 
GW Pharmaceuticals PLC - ADR(a)(b)(c)   11,360    1,534,395 
Illumina, Inc.(a)(b)(c)   12,390    4,018,820 
Intra-Cellular Therapies, Inc.(a)(b)   206,174    4,137,912 
Pfizer, Inc.(b)(c)   86,400    3,449,952 
Sienna Biopharmaceuticals, Inc.(a)(b)   65,306    988,733 
Vertex Pharmaceuticals, Inc.(a)(b)(c)   16,150    2,827,058 
         51,408,572 
           
Industrials 4.40%          
Airbus SE   53,141    6,586,889 
Ashtead Group PLC   209,126    6,425,778 
TransDigm Group, Inc.(b)   10,620    3,988,235 
         17,000,902 
           
Information Technology 21.10%          
Apple, Inc.(b)(c)   34,300    6,526,947 
Facebook, Inc. - Class A(a)(b)(c)   35,015    6,042,889 
Intel Corp.(b)(c)   32,200    1,548,820 
Keyence Corp.   5,500    2,897,688 
Largan Precision Co., Ltd.   31,280    5,262,037 
Microsoft Corp.(b)(c)   111,450    11,822,616 
Mimecast, Ltd.(a)(b)(c)   95,900    3,443,769 
Monolithic Power Systems, Inc.(b)   29,900    3,967,132 
Nintendo Co., Ltd.   9,975    3,279,354 
NVIDIA Corp.(b)(c)   13,105    3,208,890 
Proofpoint, Inc.(a)(b)(c)   26,200    2,988,110 
Qorvo, Inc.(a)(b)(c)   49,600    4,055,296 
Red Hat, Inc.(a)(b)   10,900    1,539,407 
salesforce.com, Inc.(a)(b)(c)   19,700    2,701,855 
ServiceNow, Inc.(a)(b)(c)   18,830    3,313,327 
Taiwan Semiconductor Manufacturing Co., Ltd. - Sponsored ADR   118,900    4,899,869 
Tencent Holdings, Ltd.   46,900    2,122,407 
ViaSat, Inc.(a)(b)(c)   82,935    5,833,648 
Yelp, Inc.(a)(b)   164,900    6,081,512 
         81,535,573 
           
Telecommunication Services 4.62%          
GCI Liberty, Inc. - Class A(a)(b)(c)   371,362    17,866,226 
           
TOTAL COMMON STOCKS          
(Cost $318,836,570)        350,198,527 
           
PREFERRED STOCKS 3.26%          
Annaly Capital Management, Inc.          
Series G, 6.500%(b)(c)   65,000    1,578,850 

 

 

    Shares     Value 
PREFERRED STOCKS (continued)          
Ares Management LP          
Series A, 7.000%(b)   147,000   $3,939,600 
PennyMac Mortgage Investment Trust          
Series B, 3M US L + 5.99%(b)(c)(h)   70,000    1,766,100 
Summit Hotel Properties, Inc.          
Series E, 6.250%(b)(c)   116,000    2,732,960 
Two Harbors Investment Corp.          
Series C, 3M US L + 5.011%(b)(c)(h)   105,000    2,578,800 
         12,596,310 
           
TOTAL PREFERRED STOCKS          
(Cost $12,189,550)        12,596,310 
           
Description and   Principal      
Maturity Date   Amount     Value 
CORPORATE BONDS 29.40%          
Bank of America Corp.          
10/21/2022, 2.503%(b)  $2,500,000    2,392,219 
Series V, Perpetual Maturity, 3M US L + 3.387%(h)(i)   5,000,000    5,081,250 
Biogen, Inc.          
09/15/2020, 2.900%(b)   20,000    19,923 
BP Capital Markets PLC          
09/19/2022, 2.520%(b)   2,000,000    1,934,062 
Citigroup, Inc.          
Series N, Perpetual Maturity, 3M US L + 4.0932%(b)(h)(i)   8,000,000    8,210,000 
Citizens Financial Group, Inc.          
Series B, Perpetual Maturity, 3M US L + 3.003%(h)(i)   2,000,000    2,018,000 
Discovery Communications LLC          
06/15/2022, 3.500%(b)(d)   3,000,000    2,963,147 
DR Horton, Inc.          
12/01/2020, 2.550%(b)   3,000,000    2,937,463 
Exelon Corp.          
12/01/2020, 5.150%(b)   2,900,000    2,989,070 
Goldman Sachs Group, Inc.          
Series P, Perpetual Maturity, 3M US L + 2.874%(b)(h)(i)   4,000,000    3,745,000 
Hercules Capital, Inc.          
10/23/2022, 4.625%(b)(c)   3,000,000    2,989,296 
Huntington Ingalls Industries, Inc.          
11/15/2025, 5.000%(b)(d)   2,250,000    2,351,925 
Jackson National Life Global Funding          
04/29/2021, 2.250%(b)(c)(d)   4,160,000    4,031,871 
JPMorgan Chase & Co.          
Series I, Perpetual Maturity, 3M US L + 3.47%(b)(h)(i)   6,000,000    6,033,900 
Series Z, Perpetual Maturity, 3M US L + 3.80%(b)(h)(i)   4,000,000    4,080,000 
Lennar Corp.          
01/15/2022, 4.125%   4,000,000    3,980,000 
Lockheed Martin Corp.          
11/23/2020, 2.500%   2,000,000    1,974,867 

Description and   Principal      
Maturity Date   Amount     Value 
CORPORATE BONDS (continued)          
Main Street Capital Corp.          
12/01/2022, 4.500%(b)  $3,750,000   $3,696,560 
Morgan Stanley          
Series H, Perpetual Maturity, 3M US L + 3.61%(h)(i)   5,500,000    5,589,375 
New York Life Global Funding          
06/10/2022, 3M US L + 0.52%(d)(h)   4,000,000    4,024,461 
People's United Bank National Association          
07/15/2024, 4.000%   4,000,000    3,960,469 
Philip Morris International, Inc.          
08/22/2022, 2.500%(b)   1,600,000    1,542,074 
PNC Bank National Association          
11/05/2020, 2.450%(b)   2,000,000    1,964,834 
Solar Capital, Ltd.          
01/20/2023, 4.500%(b)   2,500,000    2,395,698 
Southwest Airlines Co.          
11/16/2022, 2.750%(b)   3,000,000    2,910,690 
Tencent Holdings, Ltd.          
Series REGS, 05/02/2019, 3.375%(b)   4,000,000    4,011,093 
01/19/2023, 2.985%(b)(d)   3,000,000    2,914,475 
Toronto-Dominion Bank          
Series GMTN, 12/14/2020, 2.500%(b)(c)   3,332,000    3,278,900 
TPG Specialty Lending, Inc.          
01/22/2023, 4.500%(b)   4,250,000    4,179,497 
Visa, Inc.          
12/14/2022, 2.800%(b)   1,750,000    1,719,259 
Wells Fargo & Co.          
Series MTN, 07/22/2022, 2.625%(b)(c)   5,000,000    4,829,300 
Series K, Perpetual Maturity, 3M US L + 3.77%(b)(h)(i)   3,750,000    3,785,437 
Welltower, Inc.          
04/01/2019, 4.125%(b)(c)   5,033,000    5,059,290 
           
TOTAL CORPORATE BONDS          
(Cost $115,258,593)        113,593,405 
           
ASSET/MORTGAGE BACKED SECURITIES 2.59%          
Federal National Mortgage Association - REMICS          
Series 2017-16, Class NA, 03/25/2047, 3.000%(b)   2,188,944    2,077,362 
SBA Small Business Investment Companies          
Series 2013-10B, Class 1, 09/10/2023, 3.644%   2,289,010    2,312,309 
Series 2016-10A, Class 1, 03/10/2026, 2.507%   1,450,038    1,405,356 
Series 2018-10A, Class 1, 03/10/2028, 3.187%   4,250,000    4,212,709 
           
TOTAL ASSET/MORTGAGE BACKED SECURITIES          
(Cost $10,196,967)        10,007,736 

 

 

Description and   Principal      
Maturity Date   Amount     Value 
GOVERNMENT & AGENCY OBLIGATIONS 11.97%          
U.S. Treasury Bonds          
08/15/2026, 6.750%(b)  $4,250,000   $5,414,268 
11/15/2026, 6.500%(b)   3,150,000    3,976,260 
08/15/2029, 6.125%(b)   3,375,000    4,371,877 
02/15/2038, 4.375%(b)   4,000,000    4,800,078 
U.S. Treasury Notes          
02/28/2019, 1.375%(b)   5,000,000    4,974,121 
04/30/2019, 1.625%(b)   5,000,000    4,972,754 
10/31/2019, 1.500%   6,000,000    5,923,477 
07/31/2020, 2.000%(b)   6,000,000    5,921,836 
01/31/2021, 2.125%   6,000,000    5,910,820 
           
TOTAL GOVERNMENT & AGENCY OBLIGATIONS          
(Cost $47,316,766)        46,265,491 
           
           
    Shares/Principal Amount     Value 
SHORT-TERM INVESTMENTS 7.74%          
Money Market Funds 4.91%          
BlackRock Liquidity Funds, T-Fund Portfolio - Institutional Class (1.786% 7-day yield)   18,956,713    18,956,713 
           
U.S. Treasury Bills 2.83%          
U.S. Treasury Bills          
09/20/2018, 0.550%(j)  $6,000,000    5,984,313 
12/06/2018, 0.922%(b)(j)   5,000,000    4,964,281 
         10,948,594 
TOTAL SHORT-TERM INVESTMENTS          
(Cost $29,908,604)        29,905,307 
           
           
           
           
Total Investments - 145.59%          
(Cost $533,707,050)        562,566,776 
           
Liabilities in Excess of Other Assets - (45.59%)(k)        (176,156,041)
           
NET ASSETS - 100.00%       $386,410,735 
           
           
SCHEDULE OF SECURITIES SOLD SHORT (a)    Shares     Value 
COMMON STOCKS (11.07%)          
Consumer Staples (1.31%)          
Walgreens Boots Alliance, Inc.   (75,000)   (5,071,500)
           
Financials (2.92%)          
Deutsche Bank AG   (324,100)   (4,232,746)
Mediobanca Banca di Credito Finanziario SpA   (234,969)   (2,440,978)
Societe Generale S.A.   (50,570)   (2,253,599)
UniCredit SpA   (131,733)   (2,335,894)
         (11,263,217)

SCHEDULE OF SECURITIES SOLD SHORT (a) (continued)    Shares     Value 
Health Care (0.84%)          
Editas Medicine, Inc.   (52,800)  $(1,570,272)
McKesson Corp.   (13,300)   (1,670,480)
         (3,240,752)
           
Industrials (1.56%)          
Stericycle, Inc.   (50,900)   (3,555,874)
Triumph Group, Inc.   (117,725)   (2,454,566)
         (6,010,440)
           
Information Technology (2.77%)          
Extreme Networks, Inc.   (178,600)   (1,518,100)
International Business Machines Corp.   (49,100)   (7,116,063)
Manhattan Associates, Inc.   (43,300)   (2,083,596)
         (10,717,759)
           
Materials (1.67%)          
Albemarle Corp.   (68,700)   (6,471,540)
           
TOTAL COMMON STOCKS          
(Proceeds $42,993,276)        (42,775,208)
           
EXCHANGE TRADED FUNDS (0.49%)          
United States Natural Gas Fund LP   (82,200)   (1,874,982)
           
TOTAL EXCHANGE TRADED FUNDS          
(Proceeds $2,475,245)        (1,874,982)
           
TOTAL SECURITIES SOLD SHORT          
(Proceeds $45,468,521)       $(44,650,190)

 

Investment Abbreviations:

1D FEDEF - Federal Funds Effective Rate (Daily)

LIBOR - London Interbank Offered Rate

 

Libor Rates:

3M US L - 3 Month LIBOR as of July 31, 2018 was 2.35%

 

(a)Non-income producing security.
(b)Pledged security; a portion or all of the security is pledged as collateral for securities sold short or borrowings. As of July 31, 2018, the aggregate value of those securities was $413,731,825, representing 107.07% of net assets. (See Note 1 and Note 2).
(c)Loaned security; a portion or all of the security is on loan as of July 31, 2018.
(d)Security exempt from registration of the Securities Act of 1933. These securities may be resold in transactions exempt from registration under Rule 144A, normally to qualified institutional buyers. As of July 31, 2018, these securities had an aggregate value of $21,593,487 or 5.59% of net assets.

 

 

(e)Private Placement; these securities may only be resold in transactions exempt from registration under the Securities Act of 1933. As of July 31, 2018, these securities had a total value of $5,307,608 or 1.37% of net assets and have been deemed illiquid by the Adviser based on procedures approved by the Board. (See Note 1).
(f)Fair valued security; valued by management in accordance with procedures approved by the Board. As of July 31, 2018, these securities had an aggregate value of $5,307,608 or 1.37% of total net assets.
(g)As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. (See Note 1).
(h)Variable rate investment. Interest rates reset periodically. Interest rate shown reflects the rate in effect at July 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above.
(i)This security has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest.
(j)Rate shown represents the bond equivalent yield to maturity at date of purchase.
(k)Includes cash which is being held as collateral for total return swap contracts and securities sold short.

 

 

 

 

TOTAL RETURN SWAP CONTRACTS

     

   Reference  Notional   Floating Rate  Floating  Termination       Net Unrealized 
Counter Party  Entity/Obligation  Amount   Paid by the Fund  Rate Index  Date   Value   Appreciation 
Credit Suisse  Housing Development Finance Corp.  $1,063,964   170 bps + 1M LIBOR  1 M LIBOR   12/31/2020   $1,590,441   $526,477 
Morgan Stanley  Housing Development Finance Corp.   8,000,581   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    10,801,457    2,800,876 
Credit Suisse  Indiabulls Housing Finance   5,141,354   187 bps + 1M LIBOR  1 M LIBOR   12/31/2020    6,338,324    1,196,970 
Credit Suisse  Larsen & Toubro, Ltd.   3,250,457   217 bps + 1M LIBOR  1 M LIBOR   12/31/2020    5,926,653    2,676,196 
Morgan Stanley  Larsen & Toubro, Ltd.   2,267,287   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    2,768,493    501,206 
Credit Suisse  Mahindra & Mahindra, Ltd.   3,470,932   125 bps + 1M LIBOR  1 M LIBOR   12/31/2020    4,383,198    912,266 
Morgan Stanley  Mahindra & Mahindra, Ltd.   6,905,454   225 bps + 1D FEDEF  1 D FEDEF   07/12/2019    7,768,496    863,042 
Morgan Stanley  Sociedad Quimica   (4,794,520)  1 D FEDEF - 266 bps  1 D FEDEF   02/03/2020    (4,735,287)   59,233 
      $25,305,509              $34,841,775   $9,536,266 

 

   Reference   Notional   Floating Rate  Floating   Termination         Net Unrealized 
Counter Party  Entity/Obligation   Amount   Paid by the Fund  Rate Index    Date    Value    Depreciation 
Morgan Stanley  Banco Santander SA  $(2,292,917)  1D FEDEF - 50 bps  1 D FEDEF   05/18/2020   $(2,319,141)  $(26,224)
Morgan Stanley  Midea Group Co., Ltd.   5,309,761   250 bps + 1D FEDEF  1 D FEDEF   05/26/2020    5,117,735    (192,026)
      $3,016,844              $2,798,594   $(218,250)
      $28,322,353              $37,640,369   $9,318,016 

 

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

 

See Notes to Quarterly Statement of Investments.

 

 

 

Clough Global FundS

Notes to Quarterly Statement of Investments

JULY 31, 2018 (unaudited)

 

1. Organization and SIGNIFICANT ACCOUNTING AND OPERATING POLICIES

 

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

 

The following is a summary of significant accounting policies followed by the Funds. These policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of the Statement of Investments in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Statement of Investments during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the Statement of Investments may differ from the value the Funds ultimately realize upon sale of the securities. Each Fund is considered an investment company for financial reporting purposes under GAAP and follows the accounting and reporting guidance applicable to investment companies as codified in Accounting Standards Codification Topic (“ASC”) 946 – Investment Companies.

 

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

 

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

 

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

 

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

 

 

 

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

 

Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

 

The following is a summary of the inputs used as of July 31, 2018, in valuing each Fund’s investments carried at value.

 

Clough Global Dividend and Income Fund

         

Investments in Securities at Value*  Level 1   Level 2   Level 3   Total 
Common Stocks                
Consumer Discretionary  $6,533,847   $   $   $6,533,847 
Energy   1,395,730        294,467    1,690,197 
Financials   34,742,815            34,742,815 
Health Care   6,272,183            6,272,183 
Industrials   3,215,594            3,215,594 
Information Technology   14,563,012            14,563,012 
Telecommunication Services   802,798            802,798 
Closed-End Funds   1,272,356            1,272,356 
Preferred Stocks   6,286,480            6,286,480 
Corporate Bonds       42,945,108        42,945,108 
Asset/Mortgage Backed Securities       3,901,989        3,901,989 
Government & Agency Obligations       10,341,279        10,341,279 
Short-Term Investments                    
Money Market Funds   6,971,211            6,971,211 
TOTAL  $82,056,026   $57,188,376   $294,467   $139,538,869 

 

Other Financial Instruments  Level 1   Level 2   Level 3   Total 
Assets                
Total Return Swap Contracts**  $   $2,355,261   $   $2,355,261 
                     
Liabilities                    
Securities Sold Short                    
Common Stocks   (8,603,191)           (8,603,191)
Exchange Traded Funds   (468,745)           (468,745)
Total Return Swap Contracts**          (54,990)       (54,990)
TOTAL  $(9,071,936)  $2,300,271   $   $(6,771,665)

 

Clough Global Equity Fund

         

Investments in Securities at Value*  Level 1   Level 2   Level 3   Total 
Common Stocks                
Consumer Discretionary  $28,001,688   $   $   $28,001,688 
Consumer Staples   798,506            798,506 
Energy   2,174,494        490,253    2,664,747 
Financials   64,901,934            64,901,934 
Health Care   27,944,295        1,599,999    29,544,294 
Industrials   7,281,177            7,281,177 
Information Technology   43,444,650            43,444,650 
Telecommunication Services   7,717,854            7,717,854 
Closed-End Funds   2,062,089            2,062,089 
Preferred Stocks   7,696,975            7,696,975 
Corporate Bonds       2,527,025        2,527,025 
Government & Agency Obligations       12,282,099        12,282,099 
Short-Term Investments                    
Money Market Funds   21,512,764            21,512,764 
U.S. Treasury Bills       3,732,766        3,732,766 
TOTAL  $213,536,426   $18,541,890   $2,090,252   $234,168,568 

 

 

 

Other Financial Instruments   Level 1    Level 2    Level 3    Total 
Assets                    
Total Return Swap Contracts**  $   $4,274,792   $   $4,274,792 
                     
Liabilities
Securities Sold Short                    
Common Stocks   (22,905,550)           (22,905,550)

 

Other Financial Instruments   Level 1    Level 2    Level 3    Total 
Exchange Traded Funds   (748,738)           (748,738)
Total Return Swap Contracts**       (188,532)       (188,532)
TOTAL  $(23,654,288)  $4,086,260   $   $(19,568,028)

 

Clough Global Opportunities Fund                                  

 

Investments in Securities at Value*   Level 1    Level 2    Level 3    Total 
Common Stocks                    
Consumer Discretionary  $47,398,585   $   $   $47,398,585 
Consumer Staples   1,928,658            1,928,658 
Energy   5,294,884        1,207,608    6,502,492 
Financials   126,557,519            126,557,519 
Health Care   47,308,572        4,100,000    51,408,572 
Industrials   17,000,902            17,000,902 
Information Technology   81,535,573            81,535,573 
Telecommunication Services   17,866,226            17,866,226 
Preferred Stocks   12,596,310            12,596,310 
Corporate Bonds       113,593,405        113,593,405 
Asset/Mortgage Backed Securities       10,007,736        10,007,736 
Government & Agency Obligations       46,265,491        46,265,491 
Short-Term Investments                    
Money Market Funds   18,956,713            18,956,713 
U.S. Treasury Bills       10,948,594        10,948,594 
TOTAL  $376,443,942   $180,815,226   $5,307,608   $562,566,776 

 

Other Financial Instruments   Level 1    Level 2    Level 3    Total 
Assets                    
Total Return Swap Contracts**  $   $9,536,266   $   $9,536,266 
                     
Liabilities
Securities Sold Short                    
Common Stocks   (42,775,208)           (42,775,208)
Exchange Traded Funds   (1,874,982)           (1,874,982)
Total Return Swap Contracts**       (218,250)       (218,250)
TOTAL  $(44,650,190)  $9,318,016   $   $(35,332,174)

 

*For detailed sector descriptions, see the accompanying Statements of Investments.
**Swap contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date.

 

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

 

 

 

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

 

The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining fair value:

 

Clough Global Dividend and Income Fund              

 

Investments in Securities  Balance as of October 31, 2017   Realized
Gain/(Loss)
   Change in Unrealized
Appreciation/ (Depreciation)
   Purchases   Sales Proceeds   Transfer
into
Level 3
   Transfer
out of
Level 3
   Balance as of July 31, 2018  

Net change in unrealized

appreciation/ (depreciation) attributable to Level 3 investments held at July 31, 2018

 
Common Stocks  $773,744   $   $(479,277)  $   $   $   $   $294,467   $(479,277)
Total  $773,744   $   $(479,277)  $   $   $   $   $294,467   $(479,277)

 

Clough Global Equity Fund              

 

Investments in Securities  Balance as of October 31, 2017   Realized
Gain/(Loss)
   Change in Unrealized
Appreciation/ (Depreciation)
   Purchases   Sales Proceeds   Transfer
into
Level 3
   Transfer
out of
Level 3
   Balance as of July 31, 2018  

Net change in unrealized

appreciation/ (depreciation) attributable to Level 3 investments held at July 31, 2018

 
Common Stocks  $1,596,923   $   $(70,805)  $1,599,999   $   $––   $(1,035,865)  $2,090,252   $(797,939)
Total  $1,596,923   $   $(70,805)  $1,599,999   $   $––   $(1,035,865)  $2,090,252   $(797,939)

 

Clough Global Opportunities Fund              

 

Investments in Securities  Balance as of October 31, 2017   Realized
Gain/(Loss)
   Change in Unrealized
Appreciation/ (Depreciation)
   Purchases   Sales Proceeds   Transfer
into
Level 3
   Transfer
out of
Level 3
   Balance as of July 31, 2018  

Net change in unrealized

appreciation/ (depreciation) attributable to Level 3 investments held at July 31, 2018

 
Common Stocks  $3,939,237   $   $(161,131)  $4,100,000   $   $   $(2,570,498)  $5,307,608   $(1,965,512)
Total  $3,939,237   $   $(161,131)  $4,100,000   $   $   $(2,570,498)  $5,307,608   $(1,965,512)

 

The following is a summary of valuation techniques and quantitative information used in determining the fair value of the Fund’s Level 3 investments at July 31, 2018:

 

Fund Sector Fair Value Valuation Technique Unobservable Input(a) Range/Premium
Clough Global Dividend and Income Fund Energy $294,467 Comparable Company Approach Implied Premium 17.51%
        Projected EV/EBITDA Multiple 0.00x – 0.00x
        Projected EV/Revenue Multiple 0.00x – 1.36x
        Adjusted Net Asset Value 0.34x – 2.38x
Clough Global Equity Fund Energy $490,253 Comparable Company Approach Implied Premium 17.51%
        Projected EV/EBITDA Multiple 0.00x – 0.00x
        Projected EV/Revenue Multiple 0.00x – 1.36x
        Adjusted Net Asset Value 0.34x – 2.38x
  Health Care $1,599,999 Recent Financings Transaction Price N/A
Clough Global Opportunities Fund Energy $1,207,608 Comparable Company Approach Implied Premium 17.51%
        Projected EV/EBITDA Multiple 0.00x – 0.00x
        Projected EV/Revenue Multiple 0.00x – 1.36x
        Adjusted Net Asset Value 0.34x – 2.38x
  Health Care $4,100,000 Recent Financings Transaction Price N/A

 

(a)A change to the unobservable input may result in a significant change to the value of the investment as follows:

 

 

 

Unobservable Input Impact to Value if Input Increases Impact to Value if Input Decreases
Implied Premium Increase Decrease
Projected EV/EBITDA Multiple Increase Decrease
Projected EV/Revenue Multiple Increase Decrease
Adjusted Net Asset Value Increase Decrease
Transaction Price Increase Decrease

 

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

 

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

 

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

 

Exchange Traded Funds: Each Fund may invest in exchange traded funds (“ETFs”), which are funds whose shares are traded on a national exchange. ETFs may be based on underlying equity or fixed income securities, as well as commodities or currencies. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as “creation units.” The investor purchasing a creation unit then sells the individual shares on a secondary market. Although similar diversification benefits may be achieved through an investment in another investment company, ETFs generally offer greater liquidity and lower expenses. Because an ETF incurs its own fees and expenses, shareholders of a Fund investing in an ETF will indirectly bear those costs. Such Funds will also incur brokerage commissions and related charges when purchasing or selling shares of an ETF. Unlike typical investment company shares, which are valued once daily, shares in an ETF may be purchased or sold on a securities exchange throughout the trading day at market prices that are generally close to the NAV of the ETF.

 

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

 

Each Fund's obligation to replace the borrowed security will be secured by collateral deposited with the broker-dealer, usually cash, U.S. government securities or other liquid securities. Each Fund will also be required to designate on its books and records similar collateral with its custodian to the extent, if any, necessary so that the aggregate collateral value is at all times at least equal to the current value of the security sold short. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to short sales.

 

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

 

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

 

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

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Foreign Exchange Rate Risk: Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the value of the foreign currency denominated security will increase as the dollar depreciates against the currency.

 

Option Writing/Purchasing: Each Fund may purchase or write (sell) put and call options. One of the risks associated with purchasing an option among others, is that a Fund pays a premium whether or not the option is exercised. Additionally, a Fund bears the risk of loss of premium and change in value should the counterparty not perform under the contract. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to options. Each Fund pledges cash or liquid assets as collateral to satisfy the current obligations with respect to written options.

 

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

 

There was no written option or purchased option activity for the period ended July 31, 2018.

 

Futures Contracts: Each Fund may enter into futures contracts. A futures contract is an agreement to buy or sell a security or currency (or to deliver a final cash settlement price in the case of a contract relating to an index or otherwise not calling for physical delivery at the end of trading in the contract) for a set price at a future date. If a Fund buys a security futures contract, the Fund enters into a contract to purchase the underlying security and is said to be "long" under the contract. If a Fund sells a security futures contact, the Fund enters into a contract to sell the underlying security and is said to be "short" under the contract. The price at which the contract trades (the "contract price") is determined by relative buying and selling interest on a regulated exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Such payables or receivables are recorded for financial statement purposes as variation margin payable or variation margin receivable by each Fund. Each Fund pledges cash or liquid assets as collateral to satisfy the current obligations with respect to futures contracts. Management has reviewed the futures agreement under which the futures contracts are traded and has determined that the Funds do not have the right to set-off, and therefore the futures contracts are not subject to enforceable
netting arrangements.

 

 

 

The Funds enter into such transactions for hedging and other appropriate risk-management purposes or to increase return. While a Fund may enter into futures contracts for hedging purposes, the use of futures contracts might result in a poorer overall performance for the Fund than if it had not engaged in any such transactions. If, for example, the Fund had insufficient cash, it might have to sell a portion of its underlying portfolio of securities in order to meet daily variation margin requirements on its futures contracts or options on futures contracts at a time when it might be disadvantageous to do so. There may be an imperfect correlation between the Funds’ portfolio holdings and futures contracts entered into by the Fund, which may prevent the Fund from achieving the intended hedge or expose the Fund to risk of loss.

 

Futures contract transactions may result in losses substantially in excess of the variation margin. There can be no guarantee that there will be a correlation between price movements in the hedging vehicle and in the portfolio securities being hedged. An incorrect correlation could result in a loss on both the hedged securities in a Fund and the hedging vehicle so that the portfolio return might have been greater had hedging not been attempted. There can be no assurance that a liquid market will exist at a time when the Fund seeks to close out a futures contract. Lack of a liquid market for any reason may prevent a Fund from liquidating an unfavorable position, and the Fund would remain obligated to meet margin requirements until the position is closed. In addition, the Fund could be exposed to risk if the counterparties to the contracts are unable to meet the terms of their contracts. With exchange-traded futures contracts, there is minimal counterparty credit risk to the Funds since futures contracts are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures contracts, guarantees the futures contracts against default.

 

Each Fund held no futures contracts at the end of the period.

 

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

 

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

 

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

 

During the period ended July 31, 2018, the Funds invested in swap agreements consistent with the Funds’ investment strategies to gain exposure to certain markets or indices.

 

Warrants/Rights: Each Fund may purchase or otherwise receive warrants or rights. Warrants and rights generally give the holder the right to receive, upon exercise, a security of the issuer at a set price. Funds typically use warrants and rights in a manner similar to their use of purchased options on securities, as described in options above. Risks associated with the use of warrants and rights are generally similar to risks associated with the use of purchased options. However, warrants and rights often do not have standardized terms, and may have longer maturities and may be less liquid than exchange-traded options. In addition, the terms of warrants or rights may limit each Fund’s ability to exercise the warrants or rights at such times and in such quantities as each Fund would otherwise wish. As of and during the period ended July 31, 2018, each Fund held no warrants or rights.

 

 

 

Restricted and Illiquid Securities: Although the Funds will invest primarily in publicly traded securities, they may invest a portion of their assets (generally, 5% of its value) in restricted securities and other investments which are illiquid. Restricted securities are securities that may not be sold to the public without an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") or, if they are unregistered, may be sold only in a privately negotiated transaction or pursuant to an exemption from registration.

 

The Funds may invest in securities for which there is no readily available trading market or which are otherwise illiquid. Illiquid securities include securities legally restricted as to resale, such as commercial paper issued pursuant to Section 4(2) of the Securities Act, and securities eligible for resale pursuant to Rule 144A thereunder. Section 4(2) and Rule 144A securities may, however, be treated as liquid by Clough pursuant to procedures adopted by the Board, which require consideration of factors such as trading activity, availability of market quotations and number of dealers willing to purchase the security.

 

The restricted securities held at July 31, 2018 are identified below and are also presented in the Funds' Statement of Investments:

 

Fund  Security 

% of

Net Assets

   Acquisition
Date
  Shares   Cost   Fair Value 
                       
Clough Global Dividend and Income Fund  Fairway Energy LP   0.31%  6/30/2015   130,700   $1,307,000   $294,467 
Total      0.31%          $1,307,000   $294,467 
                           
Clough Global Equity Fund  Centrexion Therapeutics   0.45%  12/18/2017   416,666    749,999   $749,999 
   Fairway Energy LP   0.29%  6/30/2015   217,600    2,176,000    490,253 
   Gossamer Biosciences   0.51%  7/20/2018   264,246    850,000    850,000 
Total      1.25%          $3,775,999   $2,090,252 
                           
Clough Global Opportunities Fund  Centrexion Therapeutics   0.63%  12/18/2017   1,361,111    2,450,000   $2,450,000 
   Fairway Energy LP   0.31%  6/30/2015   536,000    5,360,000    1,207,608 
   Gossamer Biosciences   0.43%  7/20/2018   512,948    1,650,000    1,650,000 
Total      1.37%          $9,460,000   $5,307,608 

 

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

 

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

 

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

 

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

 

The Funds may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the Funds to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity.

 

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

 

 

 

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

 

2. CommitTed facility agreement

 

Each Fund entered into a financing package that includes a Committed Facility Agreement (the “Agreement”) dated January 16, 2009, as amended, between each Fund and BNP Paribas Prime Brokerage, Inc. (“BNP”) that allows each Fund to borrow funds from BNP. Each Fund is currently borrowing the maximum commitment covered by the agreement. Each Fund entered a Special Custody and Pledge Agreement (the “Pledge Agreement”) dated December 9, 2013, as amended, between each Fund, the Funds’ custodian, and BNP. As of October 31, 2016, the Pledge Agreement was assigned from BNP to BNP Paribas Prime Brokerage International, Ltd. Per the Pledge Agreement, borrowings under the Agreement are secured by assets of each Fund that are held by the Fund’s custodian in a separate account (the “pledged collateral”). On July 31, 2018, the pledged collateral was valued at $101,107,934, $165,886,875 and $386,670,421 for the Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund may, with 30 days notice, reduce the Maximum Commitment Financing (Initial Limit amount plus the increased borrowing amount in excess of the Initial Limit) to a lesser amount if drawing on the full amount would result in a violation of the applicable asset coverage requirement of Section 18 of the 1940 Act. Interest is charged at the three month LIBOR (London Inter-bank Offered Rate) plus 0.70% on the amount borrowed and 0.65% on the undrawn balance. Each Fund also pays a one-time arrangement fee of 0.25% on (i) the Initial Limit and (ii) any increased borrowing amount in the excess of the Initial Limit, paid in monthly installments for the six months immediately following the date on which borrowings were drawn by the Fund.

 

The Agreement was amended on November 2, 2017, to decrease the Maximum Commitment Financing, effective November 15, 2017, to $55,000,000, $85,000,000 and $207,000,000 for the Clough Global Dividend and Income Fund, Clough Global Equity Fund and the Clough Global Opportunities Fund, respectively. Prior to November 15, 2017 the Maximum Commitment Financing was $72,000,000, $113,000,000 and $292,000,000 for the Clough Global Dividend and Income Fund, Clough Global Equity Fund and the Clough Global Opportunities Fund, respectively. For the period ended July 31, 2018, the average borrowings outstanding for Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund under the agreement were $55,414,286, $86,057,143 and $208,547,619, respectively, and the average interest rate for the borrowings was 2.72%. As of July 31, 2018, the outstanding borrowings for Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $55,000,000, $85,000,000 and $207,000,000, respectively. The interest rate applicable to the borrowings of Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund on July 31, 2018, was 3.05%.

 

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

 

Under the terms of the Lending Agreement, the Lent Securities are marked to market daily, and if the value of the Lent Securities exceeds the value of the then-outstanding borrowings owed by a Fund to BNP under the Agreement (the “Current Borrowings”), BNP must, on that day, either
(1) return Lent Securities to each Fund’s custodian in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings; or (2) post cash collateral with each Fund’s custodian equal to the difference between the value of the Lent Securities and the value of the Current Borrowings. If BNP fails to perform either of these actions as required, each Fund will recall securities, as discussed below, in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings. Each Fund can recall any of the Lent Securities and BNP shall, to the extent commercially possible, return such security or equivalent security to each Fund’s custodian no later than three business days after such request. If a Fund recalls a Lent Security pursuant to the Lending Agreement, and BNP fails to return the Lent Securities or equivalent securities in a timely fashion, BNP shall remain liable for the ultimate delivery to each Fund’s custodian of such Lent Securities, or equivalent securities, and for any buy-in costs that the executing broker for the sales transaction may impose with respect to the failure to deliver. Should the borrower of the securities fail financially, the Funds have the right to reduce the outstanding amount of the Current Borrowings against which the pledged collateral has been secured. Although risk is mitigated by the collateral, the Funds could experience a delay in recovering their securities and possible loss of income or value if the borrower fails to return the borrowed securities. Under the terms of the Lending Agreement, each Fund shall have the right to apply and set-off an amount equal to one hundred percent (100%) of the then current fair value of such Lent Securities against the Current Borrowings. As of July 31, 2018, the value of the Lent Securities for Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $48,370,751, $73,612,886 and $179,459,470, respectively.

 

 

 

The Board has approved each Agreement and the Lending Agreement. No violations of the Agreement or the Lending Agreement have occurred during the period ended July 31, 2018.

 

 

 

 

Item 2 - Controls and Procedures.

 

(a)The registrant’s Principal Executive Officer and Principal Financial Officer have evaluated the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date.

 

(b)There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 

Item 3 – Exhibits.

 

(a)Separate certifications for the registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT.

 

 

 

SIGNATURES

 

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

 

  CLOUGH GLOBAL OPPORTUNITIES FUND  
       
  By: /s/ Edmund J. Burke  
    Edmund J. Burke  
    President (Principal Executive Officer)  
       
  Date: September 27, 2018  

 

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

 

  By: /s/ Edmund J. Burke  
    Edmund J. Burke  
    President (Principal Executive Officer)  
       
  Date: September 27, 2018  
       
  By: /s/ Jeremy O. May  
    Jeremy O. May  
    Treasurer (Principal Financial Officer)  
       
  Date: September 27, 2018