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SECURITIES AND EXCHANGE COMMISSION
Radnor, PA 19087
ING Clarion Global Real Estate Income Fund
259 N. Radnor-Chester Road
Radnor, PA 19087
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Dear Shareholder,
The ING Clarion Global Real Estate Income Fund (“Fund”) generated positive performance for the six months ended June 30, 2005 with growth in the Net Asset Value (NAV) of +3.60% over this time period. Based on share price appreciation and dividends received, our shareholders gained slightly more or +6.61% for the six months ended June 30th as a result of a narrowing of the discount to NAV at which the Fund trades (the 12.8% discount to NAV at December 31, 2004 narrowed to a 10.7% discount at June 30, 2005). The closing price of the Fund on June 30th was $15.46 per share versus an NAV per share of $17.31. The Fund paid dividends of $0.707 per share for the six months time period including a special dividend of $0.077 per share on top of the monthly regular dividend of $0.105 per share. Therefore, the bulk (75%) of the +6.61% total return for the six months was generated by current income via the dividend. The Fund outperformed its benchmark for the six months both as measured by the increase in NAV as well as the total return via share price appreciation and dividends received. The benchmark is an 80%/20% blend of the S&P/ Citigroup World Property Index and the Morgan Stanley REIT Preferred Index, respectively. The benchmark was +3.49% for the six months with individual components of the S&P/ Citigroup World Property Index +3.61% and the Morgan Stanley REIT Preferred Index +2.82%. | |
At June 30th, the Fund’s investments remained well-diversified by property type and geography with an investment bias towards those countries and companies which generate income via above average dividend yields. The Fund at June 30th was 49% in US common stock, 11% in continental Europe, 11% in Australia, 9% in Canada, 5% in the U.K., 3% in Asia and 12% in preferred stock of US real estate companies. Though allowed to invest up to 30% in preferred stock of real estate companies, we chose to have significantly less with only 12% in preferred at period-end. This allocation contributed to Fund outperformance as common stocks outperformed preferred stocks for the six months. |
Geographic Diversification | Property Type Diversification | |
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Per the S&P/ Citigroup World Property Index, the best performing region for the six months was continental Europe (+10.6%) followed by North America (+7.0%) and the Asia-Pacific region (-1.1%) which saw softness in Japan, Australia and Hong Kong. The Fund’s geographic allocations generally served its investors well as the Fund was overweight the outperforming continental Europe (+10.6%) and U.S. (+6.9%) and markets as well as sharply underweight the underperforming United Kingdom (4.4%), Japan (-2.8%) and Hong Kong (-0.80%) markets. The most notable story of the first half was the strong rebound of the U.S. REIT market following a dismal first quarter (-7.1%). U.S. property stocks recorded second quarter total return of +15.1% in response to a combination of factors, including increased visibility of improving property fundamentals, reported earnings from the property companies which contained few surprises and had bias to the upside, and a bond market which exhibited declining yields rather than increasing yields. The yield on the U.S. 10-year Treasury declined from 4.26% at December 31, 2004 to 3.94% at June 30, 2005. Declining bond yields help to support the continued relative attractiveness of dividend yields offered by property stocks. | |
Shortly after its launch, the Fund issued auction rate preferred shares (AMPS) to raise additional capital for the Fund to invest and to potentially increase the net income received by common shareholders. The fund may also take on additional borrowings for the same purpose. At quarter end, total preferred stock |
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and debt of the Fund was approximately $837 million or 32% of the Fund’s total assets (which is below the 33% “leverage” discussed in the Fund’s offering documents). In an effort to reduce interest rate risk associated with variable rate AMPS, interest rate swaps agreements are used to exchange the Funds variable rate obligation for a fixed rate obligation for the term of the swap agreements. As of 6/30/05, $400 million (or 48% of the Fund’s total preferred and debt) was fixed at an interest rate of 4.0% with a weighted average term on the swaps of 3.00 years. | |
The Fund benefited from continued M&A activity in the property sector as its 1.5% position in French office/residential company Gecina appreciated as the result of a March, 2005 takeover offer by Spanish developer Metrovacesa which was ultimately successful. The all-cash offer of 89.75/euros per share was a 15% premium to the pre-announcement trading price of 78 euros per share. The merged company will be among the biggest in Europe and possibly presages an increased number of pan-European companies. We sold our position in Gecina at a substantial gain following the announcement in order to redeploy the capital into other attractive European property stocks. In the U.S., the Fund’s 1.6% position in Gables Residential benefited from the June 7th announcement that it was being taken private at $43.50/share or a 14% premium to the previous day’s close. The acquisitions serve to underpin the continued attractiveness of publicly traded property stocks in an investment environment characterized by declining yields and the search for income via earnings and dividend yields which remain attractive versus other asset classes. | |
Global property companies should continue to deliver positive performance in 2005 for many of the reasons they were positive last year including strong funds flow, continued attractive relative dividend yields, and improving real estate market fundamentals driving accelerating earnings growth. A potential macro structural catalyst is the continued creation of property companies with a REIT-type structure around the world. As an example, Japanese REITS (J-REITs) now number 19 companies with an aggregate equity market capitalization approaching US$20 billion from zero four years ago. These equal the entire size of the U.S. REIT market in 1993. REITs are also expanding in Singapore (S-REITs), Hong Kong (likely this year) and are being discussed at the legislative level in several countries in Europe. Both the United Kingdom and German governments are in the consultative stage with the intent of including a REIT structure in legislation for approval during the first half of 2006. The advent of the REIT structure in both the U.K. and Germany would make great strides in better representing Europe in the publicly traded property company universe, as Europe is currently underrepresented in the global universe, largely as the result of much of German property being owned by private market open-end funds and institutions rather than public property companies. With one-third of Europe’s GDP and a public property company potential universe size exceeding US$100 million, German represents significant potential opportunity. The fund is well positioned to take advantage of the increasing globalization of real estate. | |
We appreciate your continued faith and confidence. |
Sincerely,
T. Ritson Ferguson | Steven D. Burton | |
President and | Co-Portfolio Manager | |
Chief Executive Officer |
The S&P/Citigroup World Property Index is unmanaged and constructed to include all developed market property companies with an available market capitalization of at least US $100 million and derive more than half of their revenue from property-related activities. | |
The Morgan Stanley REIT Preferred Index is an unmanaged preferred stock market capitalization weighted index of all exchange traded preferred securities of equity REITS. Investors can not invest directly in an index. |
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U.S. $ | ||||||||
Shares | Value | |||||||
Common Stock – 128.9% | ||||||||
Real Estate Investment Trusts (“REIT”) – 128.9% | ||||||||
Australia – 15.8% | ||||||||
Building – Construction – 0.5% | ||||||||
4,203,297 | Multiplex Group | $ | 9,323,529 | |||||
Diversified – 4.4% | ||||||||
27,610,000 | DB RREEF Trust | 28,727,401 | ||||||
32,035,794 | Investa Property Group | 47,373,394 | ||||||
76,100,795 | ||||||||
Shopping Centers – 7.5% | ||||||||
11,384,178 | Macquarie CountryWide Trust | 16,617,578 | ||||||
8,484,633 | Westfield Group | 114,731,840 | ||||||
131,349,418 | ||||||||
Warehouse & Industrial – 3.4% | ||||||||
11,059,530 | Macquarie Goodman Industrial Trust | 34,394,905 | ||||||
28,584,000 | Macquarie ProLogis Trust | 25,492,131 | ||||||
59,887,036 | ||||||||
276,660,778 | ||||||||
Canada – 12.4% | ||||||||
Diversified – 4.4% | ||||||||
1,761,900 | Boardwalk Real Estate Investment Trust | 28,195,003 | ||||||
609,900 | Dundee Real Estate Investment Trust | 13,315,420 | ||||||
2,166,800 | Summit Real Estate Investment Trust | 36,284,347 | ||||||
77,794,770 | ||||||||
Health Care – 1.2% | ||||||||
2,111,800 | Retirement Residences Real Estate Investment Trust | 15,672,977 | ||||||
506,000 | Sunrise Senior Living Real Estate Investment Trust | 5,188,896 | ||||||
20,861,873 | ||||||||
Hotels – 1.3% | ||||||||
2,239,900 | InnVest Real Estate Investment Trust | 22,128,339 | ||||||
Office Property – 2.4% | ||||||||
3,403,700 | O&Y Real Estate Investment Trust | 41,684,765 | ||||||
Shopping Centers – 2.3% | ||||||||
205,100 | Calloway Real Estate Investment Trust | 3,588,580 | ||||||
2,276,600 | RioCan Real Estate Investment Trust | 37,175,049 | ||||||
40,763,629 | ||||||||
Warehouse & Industrial – 0.8% | ||||||||
884,800 | H&R Real Estate Investment Trust | 14,101,320 | ||||||
217,334,696 | ||||||||
France – 4.6% | ||||||||
Diversified – 3.6% | ||||||||
489,478 | Unibail | 62,873,399 | ||||||
Management Services – 1.0% | ||||||||
165,800 | Societe de la Tour Eiffel | 17,262,407 | ||||||
80,135,806 | ||||||||
Hong Kong – 2.1% | ||||||||
Diversified – 2.1% | ||||||||
8,133,000 | Hang Lung Properties Ltd. | 11,979,835 | ||||||
2,400,000 | Sun Hung Kai Properties Ltd. | 23,696,500 | ||||||
35,676,335 | ||||||||
Japan – 1.8% | ||||||||
Diversified – 0.6% | ||||||||
1,025,000 | Mitsubishi Estate Co., Ltd. | 11,294,333 | ||||||
Shopping Centers – 1.2% | ||||||||
2,388 | Japan Retail Fund Investment Corp. | 20,494,432 | ||||||
31,788,765 | ||||||||
Netherlands – 11.9% | ||||||||
Diversified – 10.3% | ||||||||
116,780 | Corio NV | 6,527,498 | ||||||
357,401 | Eurocommercial Properties NV | 13,023,887 | ||||||
1,083,730 | Nieuwe Steen Investments NV | 24,928,324 | ||||||
436,686 | Rodamco Europe NV | 35,817,638 | ||||||
935,400 | Wereldhave NV | 99,824,710 | ||||||
180,122,057 | ||||||||
Shopping Centers – 1.6% | ||||||||
417,161 | VastNed Retail NV | 28,054,733 | ||||||
208,176,790 | ||||||||
United Kingdom – 7.6% | ||||||||
Diversified – 6.5% | ||||||||
1,167,200 | British Land Co. Plc | 18,327,201 | ||||||
1,209,242 | Hammerson Plc | 19,279,951 | ||||||
1,604,300 | Land Securities Group Plc | 39,971,195 | ||||||
3,923,700 | Slough Estates Plc | 36,677,258 | ||||||
114,255,605 | ||||||||
Management Services – 0.3% | ||||||||
193,600 | Eurocastle Investment Ltd. | 4,359,500 | ||||||
Shopping Centers – 0.8% | ||||||||
853,400 | Liberty International Plc | 14,814,910 | ||||||
133,430,015 | ||||||||
United States – 72.7% | ||||||||
Apartments – 10.7% | ||||||||
1,119,600 | Amli Residential Properties Trust | 34,998,696 | ||||||
489,000 | Apartment Investment & Management Co. – Class A | 20,009,880 | ||||||
1,162,000 | Archstone-Smith Trust | 44,876,440 | ||||||
694,000 | Camden Property Trust | 37,302,500 | ||||||
264,600 | Home Properties, Inc. | 11,383,092 | ||||||
637,700 | Mid-America Apartment Communities, Inc. | 28,964,334 | ||||||
404,000 | United Dominion Realty Trust, Inc. | 9,716,200 | ||||||
187,251,142 | ||||||||
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U.S. $ | ||||||||
Shares | Value | |||||||
Common Stock (continued) | ||||||||
Diversified – 10.2% | ||||||||
898,200 | American Campus Communities, Inc. | $ | 20,371,176 | |||||
322,500 | BNP Residential Properties, Inc. | 5,160,000 | ||||||
402,900 | Colonial Properties Trust | 17,727,600 | ||||||
717,600 | iStar Financial, Inc. | 29,844,984 | ||||||
1,336,300 | Liberty Property Trust | 59,211,453 | ||||||
820,300 | Newcastle Investment Corp. | 24,732,045 | ||||||
1,273,500 | Trustreet Properties, Inc. | 21,152,835 | ||||||
178,200,093 | ||||||||
Health Care – 7.4% | ||||||||
1,258,500 | Health Care REIT, Inc. | 47,432,865 | ||||||
2,490,700 | Nationwide Health Properties, Inc. | 58,805,427 | ||||||
1,872,270 | OMEGA Healthcare Investors, Inc. | 24,077,392 | ||||||
130,315,684 | ||||||||
Hotels – 1.8% | ||||||||
371,000 | Hersha Hospitality Trust | 3,539,340 | ||||||
558,000 | Hospitality Properties Trust | 24,591,060 | ||||||
190,500 | Strategic Hotel Capital, Inc. | 3,429,000 | ||||||
31,559,400 | ||||||||
Mortgage – 0.5% | ||||||||
375,000 | Gramercy Capital Corp. | 9,172,500 | ||||||
Office Property – 18.9% | ||||||||
1,260,400 | Arden Realty, Inc. | 45,349,192 | ||||||
285,000 | Boston Properties, Inc. | 19,950,000 | ||||||
627,600 | Brandywine Realty Trust | 19,235,940 | ||||||
1,165,600 | Equity Office Properties Trust | 38,581,360 | ||||||
751,500 | Glenborough Realty Trust, Inc. | 15,473,385 | ||||||
941,484 | HRPT Properties Trust | 11,702,646 | ||||||
2,510,300 | Maguire Properties, Inc. | 71,141,902 | ||||||
1,657,000 | Prentiss Properties Trust | 60,381,080 | ||||||
642,500 | Reckson Associates Realty Corp. | 21,555,875 | ||||||
296,900 | SL Green Realty Corp. | 19,150,050 | ||||||
369,700 | Trizec Properties, Inc. | 7,604,729 | ||||||
330,126,159 | ||||||||
Regional Malls – 7.3% | ||||||||
678,600 | Glimcher Realty Trust | 18,831,150 | ||||||
994,000 | Pennsylvania Real Estate Investment Trust | 47,215,000 | ||||||
547,800 | The Macerich Co. | 36,729,990 | ||||||
418,600 | The Mills Corp. | 25,446,694 | ||||||
128,222,834 | ||||||||
Shopping Centers – 11.1% | ||||||||
1,136,800 | Cedar Shopping Centers, Inc. | 16,767,800 | ||||||
570,700 | Commercial Net Lease Realty | 11,682,229 | ||||||
276,300 | Developers Diversified Realty Corp. | 12,698,748 | ||||||
2,603,530 | Heritage Property Investment Trust | 91,175,621 | ||||||
1,344,400 | New Plan Excel Realty Trust | 36,527,348 | ||||||
147,000 | Pan Pacific Retail Properties, Inc. | 9,757,860 | ||||||
279,700 | Regency Centers Corp. | 15,998,840 | ||||||
194,608,446 | ||||||||
Storage – 1.3% | ||||||||
1,058,500 | Extra Space Storage, Inc. | 15,168,305 | ||||||
171,100 | Sovran Self Storage, Inc. | 7,778,206 | ||||||
22,946,511 | ||||||||
Warehouse & Industrial – 3.5% | ||||||||
1,211,100 | First Industrial Realty Trust, Inc. | 48,322,890 | ||||||
325,000 | ProLogis | 13,078,000 | ||||||
61,400,890 | ||||||||
1,273,803,659 | ||||||||
Total Common Stock (cost $1,955,812,373) | 2,257,006,844 | |||||||
Preferred Stock – 15.2% | ||||||||
Real Estate Investment Trusts (“REIT”) – 15.2% | ||||||||
United States – 15.2% | ||||||||
Apartments – 1.8% | ||||||||
80,500 | Apartment Investment & Management Co., Series U | 2,020,550 | ||||||
400,000 | Apartment Investment & Management Co., Series V | 10,160,000 | ||||||
400,000 | Apartment Investment & Management Co., Series Y | 10,040,000 | ||||||
174,000 | Associated Estates Realty Corp. | 4,572,946 | ||||||
200,000 | Mid-America Apartment Communities, Inc., Series H | 5,200,000 | ||||||
31,993,496 | ||||||||
Diversified – 1.8% | ||||||||
170,000 | Bedford Property Investors, Inc. | 4,293,350 | ||||||
36,000 | Bedford Property Investors, Inc. (b) | 1,785,377 | ||||||
1,015,000 | iStar Financial, Inc., Series I | 25,496,800 | ||||||
31,575,527 | ||||||||
Finance – 0.6% | ||||||||
240,000 | RAIT Investment Trust, Series A | 6,048,000 | ||||||
160,000 | RAIT Investment Trust, Series B | 4,131,200 | ||||||
10,179,200 | ||||||||
Health Care – 2.4% | ||||||||
520,000 | Health Care REIT, Inc., Series F | 13,140,400 | ||||||
1,000,000 | LTC Properties, Inc., Series F | 25,575,000 | ||||||
120,000 | OMEGA Healthcare Investors, Inc., Series D | 3,180,000 | ||||||
41,895,400 | ||||||||
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U.S. $ | ||||||||
Shares | Value | |||||||
Preferred Stock (continued) | ||||||||
Hotels – 3.4% | ||||||||
126,800 | Eagle Hospitality Properties Trust, Inc., Series A | $ | 3,213,594 | |||||
20,000 | FelCor Lodging Trust, Inc.(a) | 490,600 | ||||||
905,600 | Host Marriott Corp, Series E | 24,904,000 | ||||||
222,600 | Innkeepers USA Trust, Series C | 5,691,882 | ||||||
275,000 | Strategic Hotel Capital, Inc. (b) | 6,935,170 | ||||||
268,000 | Sunstone Hotel Investors, Inc., Series A | 6,901,000 | ||||||
464,400 | Winston Hotels, Inc., Series B | 11,932,758 | ||||||
60,069,004 | ||||||||
Manufactured Homes – 0.2% | ||||||||
140,000 | Affordable Residential Communities, Series A | 3,542,000 | ||||||
Office Property – 1.7% | ||||||||
450,000 | Alexandria Real Estate Corp., Series C | 11,875,500 | ||||||
291,800 | Maguire Properties, Inc., Series A | 7,376,704 | ||||||
192,500 | SL Green Realty Corp., Series C | 4,928,000 | ||||||
200,000 | SL Green Realty Corp., Series D | 5,130,000 | ||||||
29,310,204 | ||||||||
Regional Malls – 3.0% | ||||||||
430,700 | Glimcher Realty Trust, Series G | 11,004,385 | ||||||
342,600 | Taubman Centers, Inc., Series G | 8,787,690 | ||||||
573,500 | Taubman Centers, Inc., Series H (a) | 14,552,562 | ||||||
155,100 | The Mills Corp, Series E | 4,203,210 | ||||||
507,900 | The Mills Corp, Series G (a) | 13,053,030 | ||||||
51,600,877 | ||||||||
Shopping Centers – 0.3% | ||||||||
207,700 | Cedar Shopping Centers, Inc. | 5,545,590 | ||||||
Total Preferred Stock (cost $259,818,630) | 265,711,298 | |||||||
Convertible Preferred Stock – 2.0% | ||||||||
Real Estate Investment Trusts (“REIT”) – 2.0% | ||||||||
United States – 2.0% | ||||||||
Health Care – 0.3% | ||||||||
200,000 | Windrose Medical Properties Trust, 7.50%, Series A (a) | 4,998,000 | ||||||
Hotels – 1.3% | ||||||||
974,000 | FelCor Lodging Trust, Inc., Series A | 23,794,820 | ||||||
Shopping Centers – 0.4% | ||||||||
200,000 | Ramco-Gershenson Properties Trust, 7.95%, Series C | 6,283,000 | ||||||
Total Convertible Preferred Stock (cost $32,221,810) | 35,075,820 | |||||||
Investment Companies – 0.5% | ||||||||
United Kingdom – 0.5% | ||||||||
4,620,000 | Insight Foundation Property Trust Ltd. | |||||||
(cost $9,536,452) | 9,440,469 | |||||||
Total Investments – 146.6% (cost $2,257,389,265) | 2,567,234,431 | |||||||
Liabilities in Excess of Other Assets – (6.1%) | (106,055,971 | ) | ||||||
Preferred shares, at redemption value – (40.5%) | (710,000,000 | ) | ||||||
Net Assets Applicable to Common Shares – 100% (c) | $ | 1,751,178,460 | ||||||
(a) | Non-income producing security. |
(b) | Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At June 30, 2005, the securities amounted to $8,720,547 or 0.5% of net assets. |
(c) | Portfolio percentages are calculated based on net assets applicable to Common Shares. |
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Assets | ||||||
Investments, at value (cost $2,257,389,265) | $ | 2,567,234,431 | ||||
Foreign currency, at value (cost $108,189) | 108,620 | |||||
Cash | 32 | |||||
Receivable for investment securities sold | 49,127,588 | |||||
Dividends and interest receivable | 19,764,871 | |||||
Reclaims receivable | 978,051 | |||||
Other assets | 34,741 | |||||
Total Assets | 2,637,248,334 | |||||
Liabilities | ||||||
Line of credit payable | 126,771,800 | |||||
Payable for investment securities purchased | 44,793,121 | |||||
Unrealized depreciation on swap contracts | 2,107,316 | |||||
Management fee payable | 1,249,014 | |||||
Dividends payable – preferred shares | 466,229 | |||||
Payable to advisor for offering costs | 88,896 | |||||
Accrued expenses and other liabilities | 593,498 | |||||
Total Liabilities | 176,069,874 | |||||
Preferred Shares, at redemption value | ||||||
$.001 par value per share; 28,400 Auction Preferred Shares authorized, issued and outstanding at $25,000 per share liquidation preference | 710,000,000 | |||||
Net Assets Applicable to Common Shares | $ | 1,751,178,460 | ||||
Composition of Net Assets Applicable to Common Shares | ||||||
Common Shares, $.001 par value per share; unlimited number of shares authorized, 101,161,287 shares issued and outstanding | $ | 101,161 | ||||
Additional paid-in capital | 1,439,197,738 | |||||
Distributions in excess of net investment income | (29,121,034 | ) | ||||
Accumulated net realized gain on investments, swap contracts and foreign currency transactions | 33,382,059 | |||||
Net unrealized appreciation on investments, swap contracts and foreign currency denominated assets and liabilities | 307,618,536 | |||||
Net Assets Applicable to Common Shares | $ | 1,751,178,460 | ||||
Net Asset Value Applicable to Common Shares | ||||||
(based on 101,161,287 common shares outstanding) | $ | 17.31 | ||||
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Investment Income | ||||||||||
Dividends (net of foreign withholding taxes of $5,563,948) | $ | 79,771,057 | ||||||||
Interest | 736,965 | |||||||||
Total Investment Income | $ | 80,508,022 | ||||||||
Expenses | ||||||||||
Management fees | 10,358,591 | |||||||||
Interest expense on line of credit | 1,582,549 | |||||||||
Auction agent fees – preferred shares | 932,509 | |||||||||
Administration fees | 252,342 | |||||||||
Custodian fees | 201,821 | |||||||||
Transfer agent fees | 185,278 | |||||||||
Insurance fees | 97,760 | |||||||||
Printing fees | 74,027 | |||||||||
Trustees’ fees and expenses | 23,546 | |||||||||
Audit fees | 17,999 | |||||||||
Rating agency fees | 15,043 | |||||||||
AMEX listing fee | 8,819 | |||||||||
Legal fees | 549 | |||||||||
Miscellaneous expenses | 54,662 | |||||||||
Total Expenses | 13,805,495 | |||||||||
Management fee waived | (3,046,644 | ) | ||||||||
Net Expenses | 10,758,851 | |||||||||
Net Investment Income | 69,749,171 | |||||||||
Net Realized and Unrealized Gain (Loss) on Investments, Swap Contracts and Foreign Currency Transactions | ||||||||||
Net realized gain (loss) on: | ||||||||||
Investments | 31,970,414 | |||||||||
Swap contracts | (2,735,217 | ) | ||||||||
Foreign currency transactions | (364,487 | ) | ||||||||
28,870,710 | ||||||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||
Investments | (34,435,487 | ) | ||||||||
Swap contracts | 3,124,293 | |||||||||
Foreign currency denominated assets and liabilities | (116,239 | ) | ||||||||
(31,427,433 | ) | |||||||||
Net Loss on Investments, Swap Contracts and Foreign Currency Transactions | (2,556,723 | ) | ||||||||
Dividends and Distributions on Preferred Shares from | ||||||||||
Net investment income | (10,292,233 | ) | ||||||||
Net Increase in Net Assets Applicable to Common Shares Resulting from Operations | $ | 56,900,215 | ||||||||
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For the Six | For the Period | ||||||||
Months Ended | February 18, 2004* | ||||||||
June 30, 2005 | through | ||||||||
(unaudited) | December 31, 2004 | ||||||||
Change in Net Assets Applicable to Common Shares Resulting from Operations | |||||||||
Net investment income | $ | 69,749,171 | $ | 83,233,372 | |||||
Net realized gain (loss) on investments, swap contracts and foreign currency transactions | 28,870,710 | (11,917,462 | ) | ||||||
Net change in unrealized appreciation/(depreciation) on investments, swap contracts and foreign currency denominated assets and liabilities | (31,427,433 | ) | 339,045,969 | ||||||
Dividends and distributions on Preferred Shares from net investment income | (10,292,233 | ) | (8,005,004 | ) | |||||
Net increase in net assets applicable to Common Shares resulting from operations | 56,900,215 | 402,356,875 | |||||||
Dividends and Distributions on Common Shares** | |||||||||
Distribution of net investment income | (71,521,030 | ) | (75,856,499 | ) | |||||
Capital Share Transactions | |||||||||
Net proceeds from the issuance of Common Shares | — | 1,437,274,404 | |||||||
Reinvestment of dividends | — | 2,024,495 | |||||||
Net increase from capital share transactions | — | 1,439,298,899 | |||||||
Net Increase (Decrease) in Net Assets | (14,620,815 | ) | 1,765,799,275 | ||||||
Net Assets Applicable to Common Shares | |||||||||
Beginning of period | 1,765,799,275 | — | |||||||
End of period (net of distributions in excess of net investment income of $29,121,034 and $17,056,942, respectively) | $ | 1,751,178,460 | $ | 1,765,799,275 | |||||
* | Commencement of operations. |
** | The final determination of the source of the 2005 distributions for tax purposes will be made after the Fund’s fiscal year. |
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Cash Flows from Operating Activities: | ||||||
Net increase in net assets applicable to Common Shares resulting from operations | $ | 56,900,215 | ||||
Adjustments to Reconcile Net Increase in Net Assets Applicable to Common Shares Resulting From Operations to Net Cash Provided by Operating and Investing Activities: | ||||||
Decrease in unrealized depreciation on swap contracts | (3,124,293 | ) | ||||
Net change in unrealized appreciation on investments | 34,435,487 | |||||
Net realized gain on investments | (31,970,414 | ) | ||||
Cost of long-term securities purchased | (301,022,600 | ) | ||||
Proceeds from sale of long-term securities | 326,040,691 | |||||
Decrease in foreign currency, at value | 275,283 | |||||
Decrease in receivable for investment securities sold | 69,377,770 | |||||
Increase in dividends and interest receivable | (4,226,501 | ) | ||||
Increase in reclaims receivable | (704,031 | ) | ||||
Decrease in other assets | 102,935 | |||||
Decrease in payable for investment securities purchased | (121,192,939 | ) | ||||
Decrease in payable to advisor for offering costs | (965,321 | ) | ||||
Decrease in management fee payable | (12,617 | ) | ||||
Decrease in accrued expenses and other liabilities | (384,961 | ) | ||||
Net Cash Provided by Operating and Investing Activities | 23,528,704 | |||||
Cash Flows From Financing Activities: | ||||||
Cash distributions paid on Common Shares | (71,521,030 | ) | ||||
Increase in line of credit payable | 47,826,200 | |||||
Increase in dividends payable — preferred shares | 67,569 | |||||
Net Cash Used in Financing Activities | (23,627,261 | ) | ||||
Net decrease in cash | (98,557 | ) | ||||
Cash at Beginning of Period | 98,589 | |||||
Cash at End of Period | $ | 32 | ||||
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For the Six | For the Period | |||||||||
Months Ended | February 18, 2004(1) | |||||||||
Per share operating performance for a Common Share outstanding | June 30, 2005 | through | ||||||||
throughout the period | (unaudited) | December 31, 2004 | ||||||||
Net asset value, beginning of period | $ | 17.46 | $ | 14.33 | (2) | |||||
Income from investment operations | ||||||||||
Net investment income(3) | 0.69 | 0.84 | ||||||||
Net realized and unrealized gain (loss) on investments, swap contracts and foreign currency transactions | (0.03 | ) | 3.12 | |||||||
Dividends and distributions on Preferred Shares from net investment income (common stock equivalent basis) | (0.10 | ) | (0.08 | ) | ||||||
Total from investment operations | 0.56 | 3.88 | ||||||||
Dividends and distributions on Common Shares++ | ||||||||||
Net investment income | (0.71 | ) | (0.75 | ) | ||||||
Total dividends and distributions to Common Shareholders | (0.71 | ) | (0.75 | ) | ||||||
Net asset value, end of period | $ | 17.31 | $ | 17.46 | ||||||
Market value, end of period | $ | 15.46 | $ | 15.21 | ||||||
Total investment return | ||||||||||
Net asset value | 3.53 | % | 28.20 | %(4) | ||||||
Market value | 6.56 | % | 7.16 | %(4) | ||||||
Ratios and supplemental data | ||||||||||
Net assets, applicable to Common Shares, end of period (thousands) | $ | 1,751,178 | $ | 1,765,799 | ||||||
Ratios to average net assets applicable to Common Shares of: | ||||||||||
Net expenses, after fee waiver+ | 0.88 | %(5) | 0.82 | %(5) | ||||||
Net expenses, before fee waiver+ | 1.13 | %(5) | 1.07 | %(5) | ||||||
Net investment income, after preferred share dividends+ | 4.88 | %(5) | 4.35 | %(5) | ||||||
Preferred share dividends | 0.84 | %(5) | 0.46 | %(5) | ||||||
Net investment income, before preferred share dividends+ | 5.72 | %(5) | 4.81 | %(5) | ||||||
Portfolio turnover rate | 12.19 | % | 21.54 | % | ||||||
Leverage analysis: | ||||||||||
Preferred shares, at redemption value, ($25,000 per share liquidation preference) (thousands) | $ | 710,000 | $ | 710,000 | ||||||
Net asset coverage per share of preferred shares | $ | 86,661 | $ | 87,176 |
(1) | Commencement of operations. |
(2) | Net asset value at February 18, 2004. |
(3) | Based on average shares outstanding. |
(4) | Total investment return on net asset value is calculated assuming a purchase at the offering price of $15.00 (less $0.675 sales load) per share paid by the initial shareholder on the first day and a sale at net asset value on the last day of the period reported. Total investment return based upon market value is calculated assuming a purchase of Common Shares at the then-current market price of $15.00 on February 25, 2004 (initial public offering). Total investment return does not reflect brokerage commissions. A return calculated for a period of less than one year is not annualized. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s Dividend Reinvestment Plan. |
(5) | Annualized. |
+ | Calculated on the basis of income and expenses applicable to both Common and Preferred Shares relative to the average net assets applicable to Common Shares. |
++ | The final determination of the source of the 2005 distributions for tax purposes will be made after the end of the Fund’s fiscal year. |
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1. Fund Organization
2. Significant Accounting Policies
Securities Valuation – The net asset value of the common shares of the Trust will be computed based upon the value of the Trust’s portfolio securities and other assets. The Trust calculates net asset value per common share by subtracting the Trust’s liabilities (including accrued expenses, dividends payable and any borrowings of the Trust) and the liquidation value of any outstanding preferred shares from the Trust’s total assets (the value of the securities the Trust holds, plus cash or other assets, including interest accrued but not yet received) and dividing the result by the total number of common shares of the Trust outstanding. Net asset value per common share will be determined as of the close of the regular trading session (usually 4:00 p.m., EST) on the New York Stock Exchange (“NYSE”) on each business day on which the NYSE is open for trading.
For purposes of determining the net asset value of the Trust, readily marketable portfolio assets traded principally on an exchange, or on a similar regulated market reporting contemporaneous transaction prices, are valued, except as indicated below, at the last sale price for such assets on such principal markets on the business day on which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued by such method as the Trust’s board of trustees (the “Board”) shall determine in good faith to reflect its fair market value. Readily marketable assets not traded on such a market are valued at the current bid prices provided by dealers or other sources approved by the Board, including pricing services when such prices are believed by the Board to reflect the fair market value of such assets. The prices provided by a pricing service take into account institutional size trading in similar groups of assets and any developments related to specific assets. Foreign securities are valued based upon quotations from the primary market in which they are traded and are translated from the local currency into U.S. dollars using current exchange rates. In addition, if quotations are not readily available, or if the values have been materially affected by events occurring after the closing of a foreign market, assets may be valued by another method that the Board of Trustees believes accurately reflects fair value. Other assets are valued at fair value by or pursuant to guidelines approved by the Board.
Short-term securities, which mature in more than 60 days, are valued at current market quotations. Short-term securities, which mature in 60 days or less, are valued at amortized cost, which approximates market value.
Foreign Currency Translation – The books and records of the Trust are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) | market value of investment securities, other assets and liabilities – at the current rates of exchange; |
(ii) | purchases and sales of investment securities, income and expenses – at the rate of exchange prevailing on the respective dates of such transactions. |
Although the net assets of the Trust are presented at the foreign exchange rates and market values at the close of each fiscal period, the Trust does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term securities held at the end of the fiscal period. Similarly, the Trust does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the fiscal period. Accordingly, realized foreign currency gains or losses will be included in the reported net realized gains or losses on investment transactions.
Net realized gains or losses on foreign currency transactions represent net foreign exchange gains or losses from the holding of foreign currencies, currency gains or losses realized between the trade date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Trust’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets or liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation on investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political or economic instability, or the level of governmental supervision and regulation of foreign securities markets.
Forward Exchange Currency Contracts – The Trust may enter into forward exchange currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on it foreign portfolio holdings, to hedge certain firm purchase and sales commitments denominated in foreign currencies and for investment purposes. A forward exchange currency contract is a commitment to purchase or sell a foreign currency on a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contracts and the closing of such contracts would be included in net realized gain or loss on foreign currency transactions.
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Fluctuations in the value of open forward exchange currency contracts are recorded for financial reporting purposes as unrealized appreciation and depreciation by the Trust.
The Trust’s custodian will place and maintain cash not available for investment or other liquid assets in a separate account of the Trust having a value at least equal to the aggregate amount of the Trust’s commitments under forward exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The face or contract amount, in U.S. dollars, reflects the total exposure the Trust has in that particular currency contract. As of June 30, 2005, the Trust did not hold any forward exchange currency contracts.
Securities Transactions and Investment Income – Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the basis of identified cost. Dividend income is recorded on the ex-dividend date. The portion of dividend attributable to the return of capital is recorded against the cost basis of the security. Withholding taxes on foreign dividends are recorded net of reclaimable amounts, at the time the related income is earned. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, including accretion of original issue discount, where applicable, and accretion of discount on short-term investments, is recorded on the accrual basis. Realized gains and losses from securities transactions are recorded on the basis of identified cost.
Swaps – The Trust may enter into swap agreements. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The Trust enters into interest rate swap agreements to manage its exposure to interest rate and credit risk. Interest rate swap agreements involve the exchange by the Trust with another party of their respective commitments to pay or receive interest. Dividends and interest on the securities in the swap are included in the value of the exchange. The swaps are valued daily at current market value and any unrealized gain or loss is included in the Statement of Assets and Liabilities. Gain or loss is realized on the termination date of the swap and is equal to the difference between the Trust’s basis in the swap and the proceeds of the closing transaction, including any fees. During the period that the swap agreement is open, the Trust may be subject to risk from the potential inability of the counterparty to meet the terms of the agreement. The swaps involve elements of both market and credit risk in excess of the amounts reflected on the Statements of Assets and Liabilities.
The Trust entered into interest rate swap agreements for the six months ended June 30, 2005. Details of the swap agreements outstanding as of June 30, 2005 were as follows:
Notional | ||||||||||||||||||||
Termination | Amount | Fixed | Floating | Unrealized | ||||||||||||||||
Counterparty | Date | (000) | Rate | Rate | Depreciation | |||||||||||||||
Citigroup | 07/01/2007 | $200,000 | 3.68% | 1 Month LIBOR | $ | 843,438 | ||||||||||||||
Royal Bank of Canada | 07/01/2009 | 200,000 | 4.32% | 1 Month LIBOR | (2,950,754) | |||||||||||||||
$ | (2,107,316) | |||||||||||||||||||
For each swap noted, the Trust pays a fixed rate and receives a floating rate.
Dividends and Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid on a monthly basis. Distributions from net realized capital gains, if any, are normally distributed in December. Income dividends and capital gain distributions to common shareholders are recorded on the ex-dividend date. To the extent the Trust’s net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of the Trust not to distribute such gains.
The current monthly rate is $0.105 per share. The Trust continues to evaluate its monthly distribution policy in light of ongoing economic and market conditions and may change the amount of the monthly distributions in the future.
Use of Estimates – The preparation of financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Organizational and Offering Costs – Costs incurred in connection with the Trust’s organization and offering of its common shares will be borne by the Trust up to and including $0.03 per common share as of February 18, 2004. The Advisor has contractually agreed to pay all organizational and offering costs in excess of this amount. Organizational costs of approximately $35,000 were expensed by the Trust. Offering costs of approximately $2,585,596 incurred by the Trust in connection with the offering of its common and preferred shares were charged to paid-in capital upon the sale of those shares.
3. Concentration of Risk
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4. Investment Management Agreement and Other Agreements
The Trust has multiple service agreements with The Bank of New York (“BNY”). Under the servicing agreements, BNY will perform custodial, fund accounting, certain administrative services, and transfer agency services for the Trust. As custodian, BNY is responsible for the custody of the Trust’s assets. As administrator, BNY is responsible for maintaining the books and records of the Trust’s securities and cash. As transfer agent, BNY is responsible for performing transfer agency services for the Trust.
5. Portfolio Securities
6. Federal Income Taxes
The Trust distinguishes between dividends on a tax basis and on a financial reporting basis and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a tax return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes are classified as distributions in excess of net investment income or accumulated net realized gains in the components of net assets on the Statement of Assets and Liabilities. The tax character of current year distributions will be determined at the end of the current fiscal year.
In order to present paid-in capital in excess of par and accumulated net realized gains or losses on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to additional paid-in capital, undistributed net investment income and accumulated net realized gains or losses on investments. For the period ended December 31, 2004, the adjustments were to increase accumulated net realized gain on investments by $16,428,811 and decrease undistributed net investment income by $16,428,811 due to the difference in the treatment for book and tax purposes of certain investments.
The final determination of the source of the 2005 distributions for tax purposes will be made after the end of the Fund’s fiscal year and will be reported to shareholders in January 2006 on Form 1099-DIV.
Currency losses incurred after October 31, 2004 (“post-October” losses) within the taxable year are deemed to arise on the first business day of the Trust’s next taxable year. The Trust incurred and will elect to defer net currency losses during 2004 in the amount of $11,064.
Information on the components of net assets as of June 30, 2005 is as follows:
Gross | Gross | Net unrealized | ||||||||||
Cost of | unrealized | unrealized | appreciation | |||||||||
investments | appreciation | depreciation | on investments | |||||||||
$2,257,389,265 | $323,031,372 | $(13,186,206) | $309,845,166 |
For the period ended December 31, 2004, the tax character of distributions paid of $83,861,503, as reflected in the Statement of Changes in Net Assets, was ordinary income.
7. Borrowings
The Trust has access to a secured line of credit up to $700,000,000 from BNY for borrowing purposes. Borrowings under this arrangement bear interest at the Federal funds rate plus 50 basis points. At June 30, 2005, there was an outstanding borrowing of $126,771,800 in connection with the Trust’s line of credit.
The average daily amount of borrowings during the six months ended June 30, 2005 was $99,388,737, with a related weighted average interest rate of 3.21%. The maximum amount outstanding for the six months ended June 30, 2005, was $172,808,600.
8. Capital
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$15.00 per common share. On March 12, 2004, the underwriters purchased 6,000,000 common shares of the Trust pursuant to the over-allotment option. On April 8, 2004, the underwriters purchased 5,000,000 additional common shares of the Trust pursuant to the over-allotment option. In connection with the Trust’s DRIP plan, the Trust did not issue any common shares in 2005 and 154,306 in 2004. At June 30, 2005, the Trust had outstanding common shares of 101,161,287 with a par value of $0.001. The Advisor owned 6,981 shares of the common shares outstanding
On February 26, 2004, the Trust’s Board authorized the issuance of preferred shares, in addition to the existing common shares, as part of its leverage strategy. Preferred shares issued by the Trust have seniority over the common shares.
The Trust issued 4,000 shares of Preferred Shares Series T28A, 4,000 shares of Preferred Shares Series W28B, 4,000 shares of Preferred Shares Series T28C, 4,000 shares of Preferred Shares Series W28D, 6,200 shares of Preferred Shares Series T7 and 6,200 shares of Preferred Shares Series W7, each with a liquidation value of $25,000 per share plus accumulated and unpaid dividends. Dividends will be accumulated daily at an annual rate set through auction procedures. Distributions of net realized capital gains, if any, will be paid annually.
For the six months ended June 30, 2005, the annualized dividend rates range from:
High | Low | At June 30, 2005 | ||||||||||||
Series T28A | 3.50% | 2.30% | 3.38% | |||||||||||
Series W28B | 3.16 | 2.41 | 3.16 | |||||||||||
Series T28C | 3.12 | 2.40 | 3.12 | |||||||||||
Series W28D | 3.56 | 2.27 | 3.20 | |||||||||||
Series T7 | 3.44 | 2.20 | 3.43 | |||||||||||
Series W7 | 3.51 | 2.24 | 3.49 | |||||||||||
The Trust is subject to certain limitations and restrictions while preferred shares are outstanding. Failure to comply with these limitations and restrictions could preclude the Trust from declaring any dividends or distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of preferred shares at their liquidation value.
The holders of preferred shares have voting rights equal to the holders of common shares (one vote per share) and will vote together with holders of common shares as a single class. However, holders of preferred shares, voting as a separate class, are also entitled to elect two Trustees. In addition, the Investment Company Act of 1940, as amended, requires that, along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding preferred shares, voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the preferred shares, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions and (c) change the nature of its business so as to cease to be an investment company.
9. Indemnifications
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Trustees
Number of | ||||||||||||
Portfolios in | ||||||||||||
the Fund | ||||||||||||
Term of Office | Principal Occupations | Complex | Other Directorships | |||||||||
and Length of | During The Past | Overseen | Held by | |||||||||
Name and Age | Time Served(1) | Title | Five Years | by Trustee | Trustee | |||||||
Interested Trustees: | ||||||||||||
T. Ritson Ferguson* 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 46 | 1 year/since inception | Trustee, President and Chief Executive Officer | Managing Director and Chief Investment Officer of ING Clarion Real Estate Securities, L.P. since 1995. | 2 | ||||||||
Jarrett B. Kling* 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 62 | 2 years/since inception | Trustee | Managing Director of ING Clarion Real Estate Securities, L.P., member of the Investment Advisory Committee of the TDH Group of venture funds. | 2 | Trustee of The Hirtle and Callaghan Trust (1995 to present); National Trustee of the Boys and Girls Clubs of America (1997 to present); Trustee, Old Mutual Advisor Funds. | |||||||
Independent Trustees: | ||||||||||||
Asuka Nakahara 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 49 | 2 years/since inception | Trustee | Associate Director of the Zell-Lurie Real Estate Center at the Wharton School, University of Pennsylvania, since July 1999; Lecturer of Real Estate at the Wharton School, University of Pennsylvania; Chief Financial Officer of Trammell Crow Company from January 1, 1996 to December 31, 1999; Chief Knowledge Officer of Trammell Crow Company from September 1, 1998 to December 31, 1999. | 2 | Advisory board member of the HBS Club of Philadelphia and The Philadelphia Foundation (1989-2004). | |||||||
Frederick S. Hammer 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 69 | 1 year/since inception | Trustee | Co-Chairman of Inter-Atlantic Group since 1994 and a member of its investment committee; Co-Chairman of Guggenheim Securities Holdings, LLC from 2002 to 2003; non-executive. | 2 | Chairman of the Board of Annuity and Life Re (Holdings), Ltd. (1998 to present); Director on the Boards of Tri-Arc Financial Services, Inc. (1989- 2004) and Magellan Insurance Company Ltd. (1995 to 2001) until 2004; former Director of Medallion Financial Corporation (1999-2002), IKON Office Solutions, Inc. (1986-1999) and VISA International (1978 to present); trustee of the Madison Square Boys and Girls Club (1978 to present). | |||||||
Richard L. Sutton 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 70 | 3 years/since inception | Trustee | Of Counsel, Morris, Nichols, Arsht & Tunnell, 2000 to present; Partner, Morris, Nichols, Arsht & Tunnel, 1966-2000. | 2 | Trustee of the Unidel Foundation, Inc. since 2000; Board of Directors of Wilmington Country Club 1999-2004, Grand Opera House, Inc., 1976-92, University of Delaware Library Associates, Inc. 1981-99, Wilmington Club 1987-2003, American Judicature Society 1995-99. | |||||||
John Bartholdson 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 60 | 3 years/1 year | Trustee/Audit Committee Financial Expert | Senior Vice President and CFO of Triumph Group, Inc., 1993- present. | 2 | Serves on the Board of PBHG Funds, Inc. and PBHG Insurance Series Fund since 1997; the Philadelphia/ Washington Advisory Board of FM Global since 2004; and Board of Old Mutual Advisor Funds since 2004. |
(1) | After a trustee’s initial term, each trustee is expected to serve a three year term concurrent with the class of trustees for which he serves. Messrs. Ferguson and Hammer, as Class I trustees, are expected to stand for re-election at the Trust’s 2005 annual meeting of shareholders; Messrs. Kling and Nakahara, as Class II trustees, are expected to stand for re-election at the Trust’s 2006 annual meeting of shareholders; Mr. Sutton, as a Class III Trustee, is expected to stand for re-election at the Trust’s 2007 annual meeting of shareholders. |
* | Messrs. Ferguson and Kling are deemed to be interested persons of the Fund as defined in the Investment Company Act of 1940, as amended, due to their position with the Advisor. |
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Officers
Name, Address*, Age | Term of Office and | Principal Occupations | ||
and Position(s) held | Length of Time | During The Past | ||
with Registrant | Served | Five Years and Other Affiliations | ||
Officers: | ||||
Peter Zappulla 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 59 Treasurer and Chief Financial Officer | /since inception | Chief Financial Officer of ING Clarion Partners since 1989 | ||
Heather Trudel 259 N. Radnor-Chester Road Radnor, PA 19087 Age: 33 Secretary | /since inception | Senior Vice President of ING Clarion Real Estate Securities, L.P. since 1995 |
Additional Information
The Trust has delegated the voting of the Trust’s voting securities to the Trust’s advisor pursuant to the proxy voting policies and procedures of the advisor. You may obtain a copy of these policies and procedures by calling 1-888-711-4CRA. The policies may also be found on the web site of the Securities and Exchange Commission (http://www.sec.gov).
Information regarding how the Trust voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, 2005, is also available, without charge and upon request by calling the Trust at 1-888-711-4CRA or by accessing the Trust’s Form N-PX on the Commission’s website at http://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust’s Form N-Q are available on the SEC website at http://www.sec.gov. The Trust’s Form N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
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Pursuant to the Trust’s Dividend Reinvestment Plan (the “Plan”), shareholders of the Trust are automatically enrolled, to have all distributions of dividends and capital gains reinvested by The Bank of New York (the “Plan Agent”) in the Trust’s shares pursuant to the Plan. You may elect not to participate in the Plan and to receive all dividends in cash by sending written instructions or by contacting The Bank of New York, as dividend disbursing agent, at the address set forth below. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by contacting the Plan Agent before the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.
After the Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the NAV is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases.
The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by the Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any Federal income tax that may be payable on such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at The Bank of New York, P.O. Box 463, East Syracuse, New York 13057-0463; Attention: Shareholder Services Department, Phone number: (800) 433-8191.
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ING Clarion Global Real Estate Income Fund |
Fund Information | |
Board of Trustees | |
T. Ritson Ferguson | |
Jarrett B. Kling | |
Asuka Nakahara | |
Frederick S. Hammer | |
Richard L. Sutton | |
John Bartholdson | |
Officers | |
T. Ritson Ferguson | |
President and | |
Chief Executive Officer | |
Peter Zappulla | |
Treasurer and | |
Chief Financial Officer | |
Heather Trudel | |
Secretary | |
Investment Advisor | |
ING Clarion Real Estate Securities, L.P. | |
259 N. Radnor-Chester Road | |
Radnor, PA 19087 | |
Administrator, Custodian and | |
Transfer Agent | |
The Bank of New York | |
New York, New York | |
Preferred Shares – Dividend Paying Agent | |
The Bank of New York | |
New York, New York | |
Legal Counsel | |
Morgan, Lewis & Bockius, LLP | |
Washington, DC | |
Independent Registered Public Accounting Firm | |
Ernst & Young LLP | |
Philadelphia, Pennsylvania |
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(Registrant) ING Clarion Global Real Estate Income Fund | ||||
By: | /s/ T. Ritson Ferguson | |||
Name: | T. Ritson Ferguson | |||
Title: | President and Chief Executive Officer | |||
Date: | September 1, 2005 |
By: | /s/ T. Ritson Ferguson | |||
Name: | T. Ritson Ferguson | |||
Title: | President and Chief Executive Officer | |||
Date: | September 1, 2005 | |||
By: | /s/ Peter H. Zappulla | |||
Name: | Peter H. Zappulla | |||
Title: | Treasurer and Chief Financial Officer | |||
Date: | September 1, 2005 |