UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21504
Advent/Claymore Enhanced Growth & Income Fund |
(Exact name of registrant as specified in charter) |
2455 Corporate West Drive, Lisle, IL 60532 |
(Address of principal executive offices) (Zip code) |
Robert White, Treasurer Advent/Claymore Enhanced Growth & Income Fund 2455 Corporate West Drive, Lisle, IL 60532 |
(Name and address of agent for service) |
Registrant’s telephone number, including area code: (630) 505-3700
Date of fiscal year end: October 31
Date of reporting period: October 31, 2005
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
Annual Report
October 31, 2005
Advent / Claymore Enhanced Growth & Income Fund | LCM
LCM | Advent/Claymore Enhanced Growth & Income Fund
Fund Summary | As of October 31, 2005 (unaudited)
Fund Statistics | ||||
Share Price | $ | 16.83 | ||
Common Share Net Asset Value | $ | 18.51 | ||
Premium/Discount to NAV | -9.08 | % | ||
Net Assets ($000) | $ | 251,349 |
Total Returns | Market | NAV | ||||
Since Inception | -12.08 | % | 1.12 | % |
Top Ten Industries | % of Total Investments | ||
Oil and Gas | 11.3 | % | |
Telecommunications | 8.5 | % | |
Aluminum, Steel and Other Metals | 8.5 | % | |
Communications, Media and Entertainment | 7.3 | % | |
Beverages, Food and Tobacco | 6.8 | % | |
Special Purpose Entity | 6.5 | % | |
Financial Services | 6.3 | % | |
Mining | 5.1 | % | |
Pharmaceuticals | 4.3 | % | |
Internet | 3.8 | % | |
Top Ten Issuers | % of Total Investments | ||
Dow Jones CDX HY | 5.1 | % | |
Altria Group, Inc. | 3.7 | % | |
Cameco Corp. | 2.4 | % | |
NRG Energy, Inc. | 2.2 | % | |
Johnson & Johnson | 2.0 | % | |
Monsanto Co. | 1.9 | % | |
Murphy Oil Corp. | 1.9 | % | |
General Maritime Corp. | 1.8 | % | |
Bunge Ltd. | 1.8 | % | |
InfoSpace, Inc. | 1.8 | % |
Share Price & NAV Performance
Portfolio Composition (% of Total Investments)
2 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Portfolio of Investments | October 31, 2005
Number of Shares | Value | ||||
Common Stocks – 60.4% | |||||
Aerospace and Defense – 0.3% | |||||
20,000 | Empresa Brasiliera de Aeronautica SA ADR (Brazil)(f) | $ | 775,800 | ||
Aluminum, Steel and Other Metals – 6.1% | |||||
22,000 | Alcoa, Inc.(f) | 534,380 | |||
125,000 | Cameco Corp. (Canada)(f) | 5,975,000 | |||
70,000 | Companhia Siderurgica Nacional SA ADR (Brazil)(f) | 1,344,000 | |||
50,000 | Companhia Vale do Rio Doce ADR (Brazil)(f) | 2,066,500 | |||
33,600 | Freeport-McMoRan Copper & Gold, Inc., Class B (c)(f) | 1,660,512 | |||
30,000 | Southern Copper Corp. (f) | 1,654,200 | |||
60,000 | United States Steel Corp. (c)(f) | 2,191,800 | |||
15,426,392 | |||||
Automotive – 1.4% | |||||
350,000 | Calsonic Kansei Corp. (Japan) | 2,062,626 | |||
50,000 | Honda Motor Co., Ltd. ADR (Japan)(f) | 1,390,500 | |||
3,453,126 | |||||
Beverages, Food and Tobacco – 6.7% | |||||
125,000 | Altria Group, Inc. (c)(f) | 9,381,250 | |||
85,000 | Bunge Ltd. (Bermuda)(f) | 4,414,900 | |||
157,500 | Vector Group Ltd. (f) | 3,143,700 | |||
16,939,850 | |||||
Building Products and Services – 0.5% | |||||
25,000 | Cemex SA de CV ADR (Mexico)(f) | 1,301,750 | |||
Chemicals – 1.9% | |||||
75,000 | Monsanto Co. (f) | 4,725,750 | |||
Communications, Media and Entertainment – 3.6% | |||||
100,000 | Cablevision Systems Corp., Class A (a)(f) | 2,480,000 | |||
25,000 | Nintendo Co., Ltd. (Japan) | 2,783,386 | |||
50,000 | Reuters Group PLC ADR (United Kingdom)(f) | 1,901,000 | |||
100,000 | Time Warner, Inc. (f) | 1,783,000 | |||
8,947,386 | |||||
Computers - Software and Peripherals – 0.8% | |||||
30,000 | Infosys Technologies Ltd. ADR (India)(f) | 2,040,000 | |||
Energy – 0.7% | |||||
225,000 | Primary Energy Recycling Corp. (Canada) (a)(b) | 1,688,144 | |||
Electronic Equipment and Components – 3.4% | |||||
25,000 | Hitachi Ltd. ADR (Japan)(f) | 1,541,750 | |||
150,000 | Infineon Technologies AG ADR (Germany) (a)(f) | 1,401,000 | |||
125,000 | LG. Phillips LCD Co., Ltd. ADR (South Korea) (a)(f) | 2,376,250 | |||
100,000 | SONY Corp. ADR (Japan)(f) | 3,280,000 | |||
8,599,000 | |||||
Financial Services – 3.5% | |||||
79,700 | Ameritrade Holding Corp. (a)(c)(f) | 1,676,091 | |||
100,000 | Charles Schwab Corp. (The)(c)(f) | 1,520,000 | |||
50,000 | International Securities Exchange, Inc., Class A (a)(f) | 1,230,500 | |||
150,000 | Nomura Holdings, Inc., ADR (Japan) | 2,323,500 | |||
50,000 | Nuveen Investments, Class A (f) | 2,023,500 | |||
8,773,591 | |||||
Health Care Products and Services – 2.6% | |||||
25,000 | Guidant Corp. (f) | $ | 1,575,000 | ||
80,000 | Johnson & Johnson (f) | 5,009,600 | |||
6,584,600 | |||||
Internet – 3.8% | |||||
25,000 | GTECH Holdings Corp. (f) | 796,000 | |||
175,000 | InfoSpace, Inc. (a)(c)(f) | 4,396,000 | |||
100,000 | Priceline.com, Inc. (a)(c)(f) | 1,897,000 | |||
100,000 | Shanda Interactive Entertainment Ltd. (Cayman Islands) (a)(f) | 2,477,000 | |||
9,566,000 | |||||
Leisure and Entertainment – 0.6% | |||||
32,000 | Wynn Resorts Ltd. (a)(f) | 1,493,760 | |||
Mining – 2.4% | |||||
76,700 | Alpha Natural Resources, Inc. (a)(f) | 1,821,625 | |||
195,000 | ICG, Inc. (a) | 2,661,750 | |||
80,000 | Meridian Gold, Inc. (Canada) (a)(f) | 1,502,400 | |||
5,985,775 | |||||
Oil and Gas – 9.6% | |||||
50,000 | CNOOC Ltd. ADR (Hong Kong)(f) | 3,285,000 | |||
100,000 | Murphy Oil Corp. (f) | 4,685,000 | |||
30,000 | Occidental Petroleum Corp. (f) | 2,366,400 | |||
70,000 | Penn West Energy Trust (Canada) | 1,854,521 | |||
40,000 | Petroleo Brasileiro SA ADR (Brazil)(f) | 2,556,000 | |||
30,000 | Petroleo Brasileiro SA ADR, Class A (Brazil) | 1,721,100 | |||
65,000 | Pride International, Inc. (a)(c)(f) | 1,824,550 | |||
50,000 | Suncor Energy, Inc. (Canada)(f) | 2,681,500 | |||
25,000 | Tesoro Corp. (f) | 1,528,750 | |||
28,400 | YPF SA ADR (Argentina) | 1,724,732 | |||
24,227,553 | |||||
Pharmaceuticals – 2.4% | |||||
70,000 | Biogen Idec, Inc. (a)(c)(f) | 2,844,100 | |||
25,000 | Chiron Corp. (a)(f) | 1,103,500 | |||
161,100 | Elan Corp. PLC ADR (Ireland) (a)(f) | 1,329,075 | |||
30,000 | Endo Pharmaceuticals Holdings, Inc. (a)(f) | 807,600 | |||
6,084,275 | |||||
Real Estate Investment Trusts – 1.1% | |||||
100,000 | American Home Mortgage Investment Corp. (f) | 2,703,000 | |||
Retail - Apparel and Shoes – 0.6% | |||||
90,000 | Deckers Outdoor Corp. (a)(f) | 1,543,500 | |||
Retail - Specialty Stores – 0.6% | |||||
50,000 | OfficeMax, Inc. (c)(f) | 1,401,000 | |||
Telecommunications – 5.7% | |||||
30,000 | ALLTEL Corp. (f) | 1,855,800 | |||
50,000 | America Movil SA de CV ADR, Ser. L (Mexico)(f) | 1,312,500 | |||
200,000 | Consolidated Communications Holdings, Inc. | 2,652,000 | |||
60,000 | Elisa Oyj, Class A (Finland) | 1,049,947 | |||
70,000 | Nextel Partners, Inc., Class A (a)(f) | 1,760,500 | |||
40,000 | NTL Inc. (a)(f) | 2,452,800 | |||
100,000 | Portugal Telecom, SGPS SA (Portugal) (a) | 903,103 |
See notes to financial statements.
Annual Report | October 31, 2005 | 3 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Portfolio of Investments continued
Number of Shares | Value | |||||
34,500 | Scientific-Atlanta, Inc. (f) | $ | 1,222,680 | |||
20,000 | TDC A/S (Denmark) | 1,118,681 | ||||
14,328,011 | ||||||
Transportation – 1.8% | ||||||
120,000 | General Maritime Corp. (Marshall Islands)(f) | 4,467,600 | ||||
Utilities – 0.3% | ||||||
50,000 | AES Corp. (The) (a)(f) | 794,500 | ||||
Total Common Stocks (Cost $158,682,712) | 151,850,363 | |||||
Convertible Preferred Stocks – 4.4% | ||||||
Aluminum, Steel and Other Metals – 0.4% | ||||||
1,000 | Freeport-McMoRan Copper & Gold, Inc., Ser.B, 5.50% (f) | 1,101,875 | ||||
Automotive – 1.0% | ||||||
75,000 | Ford Motor Co. Capital Trust II, 6.50%, 2032 (f) | 2,391,750 | ||||
Communications Equipment – 0.8% | ||||||
2,000 | Lucent Technologies Capital Trust I, 7.75%, 2017 (f) | 1,994,250 | ||||
Utilities – 2.2% | ||||||
4,500 | NRG Energy, Inc., Ser. 4 (2), 4.00% (f) | 5,530,500 | ||||
Total Convertible Preferred Stocks (Cost $11,280,637) | 11,018,375 | |||||
Principal Amount | Value | |||||
Corporate Bonds – 22.0% | ||||||
Aluminum, Steel and Other Metals – 1.9% | ||||||
$ | 2,900,000 | AK Steel Corp., B+ | ||||
7.75%, 6/15/12, Company Guarantee Notes (c)(f) | $ | 2,610,000 | ||||
2,000,000 | Chaparral Steel Co., B | |||||
10.00%, 7/15/13, Senior Unsecured Notes (b) | 2,070,000 | |||||
4,680,000 | ||||||
Automotive – 0.7% | ||||||
2,000,000 | Visteon Corp., B- | |||||
7.00%, 3/10/14, Senior Notes (c)(f) | 1,700,000 | |||||
Building Products and Services– 2.7% | ||||||
3,830,000 | U.S. Concrete, Inc., B- | |||||
8.375%, 4/01/14, Senior Subordinated Notes | 3,825,213 | |||||
3,000,000 | Votorantim Overseas IV, BBB- | |||||
7.75%, 6/24/20, Company Guarantee Notes (Cayman Islands) | 2,943,900 | |||||
6,769,113 | ||||||
Chemicals – 0.8% | ||||||
2,000,000 | Rhodia SA, CCC+ | |||||
8.875%, 6/01/11, Senior Subordinated Notes (France) | 1,890,000 | |||||
Commercial Services – 0.3% | ||||||
1,000,000 | Language Line, Inc., CCC+ | |||||
11.125%, 6/15/12, Senior Subordinated Notes | 850,000 | |||||
Communications, Media and Entertainment – 3.7% | ||||||
Charter Communications, Inc., CCC- | ||||||
2,339,000 | 10.00%, 5/15/14, Company Guarantee Notes (b) | 1,508,655 | ||||
1,855,000 | 11.00%, 10/01/15, Secured Notes (b) | 1,678,775 | ||||
$ | 3,500,000 | Mediacom LLC, B | ||||
9.50%, 1/15/13, Senior Notes (c)(f) | $ | 3,421,250 | ||||
3,000,000 | Sirius Satellite Radio, Inc., CCC | |||||
9.625%, 8/01/13, Senior Notes (b)(c)(f) | 2,838,750 | |||||
9,447,430 | ||||||
Computers - Software and Peripherals – 1.2% | ||||||
3,000,000 | Sungard Data Systems, Inc., B- | |||||
10.25%, 8/15/15, Senior Subordinated Notes (b)(c)(f) | 2,973,750 | |||||
Forest Products – 0.3% | ||||||
1,000,000 | Tembec Industries, Inc., CCC+ | |||||
8.50%, 2/01/11, Company Guarantee Notes (Canada) | 635,000 | |||||
Leisure and Entertainment – 1.9% | ||||||
3,000,000 | AMC Entertainment, Inc., CCC+ | |||||
9.875%, 2/01/12, Senior Subordinated Notes | 2,865,000 | |||||
2,000,000 | Six Flags, Inc., CCC | |||||
9.625%, 6/01/14, Senior Notes (c)(f) | 1,980,000 | |||||
4,845,000 | ||||||
Mining – 1.4% | ||||||
3,500,000 | Hudson Bay Mining and Smelting Co, Ltd., B | |||||
9.625%, 1/15/12, Secured Notes (Canada) | 3,613,750 | |||||
Oil and Gas – 1.6% | ||||||
2,000,000 | United Refining Co., B- | |||||
10.50%, 8/15/12, Senior Notes | 2,110,000 | |||||
2,000,000 | Venoco, Inc., CCC+ | |||||
8.75%, 12/15/11, Senior Unsecured Notes | 2,020,000 | |||||
4,130,000 | ||||||
Special Purpose Entity – 5.1% | ||||||
13,000,000 | Dow Jones CDX HY, Ser. 3-4, NR | |||||
10.50%, 12/29/09 (b) | 12,805,000 | |||||
Telecommunications – 0.4% | ||||||
1,000,000 | Hawaiian Telcom Communications, Inc., B- | |||||
12.50%, 5/01/15, Senior Subordinated Notes (b) | 977,500 | |||||
Total Corporate Bonds (Cost $56,374,704) | 55,316,543 | |||||
Convertible Bonds – 11.6% | ||||||
Commercial Services – 0.7% | ||||||
2,000,000 | BearingPoint, Inc., CCC+ | |||||
2.50%, 12/15/24, Convertible Notes (b) | 1,720,000 | |||||
Communications Equipment – 0.8% | ||||||
1,900,000 | Lucent Technologies, Inc., Ser. B, B | |||||
2.75%, 6/15/25, Senior Unsecured Convertible Notes | 2,075,750 | |||||
Electronic Equipment and Components – 0.4% | ||||||
1,000,000 | Mentor Graphics Corp., NR | |||||
5.397%, 8/06/23, Subordinated Convertible Notes (d)(f) | 897,050 | |||||
Financial Services – 2.9% | ||||||
4,000,000 | American Express Co., A+ | |||||
1.85%, 12/01/33, Senior Convertible Notes (e)(f) | 4,215,000 | |||||
62,138 | Merrill Lynch & Co., Inc., Ser. ECA, | |||||
8.00%, 10/26/06, Notes (g) | 2,903,709 | |||||
7,118,709 | ||||||
See notes to financial statements.
4 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Portfolio of Investments continued
Principal Amount | Value | ||||||
Mining – 1.2% | |||||||
$ | 2,800,000 | Placer Dome, Inc., BBB+ | |||||
2.75%, 10/15/23, Senior Convertible Notes (Canada)(f) | $ | 3,118,500 | |||||
Pharmaceuticals – 1.8% | |||||||
3,000,000 | Valeant Pharmaceuticals International, B | ||||||
4.00%, 11/15/13, Subordinated Convertible Notes (f) | 2,565,000 | ||||||
2,000,000 | Wyeth, A | ||||||
3.32%, 1/15/24, Senior Unsecured Notes (d)(f) | 2,050,180 | ||||||
4,615,180 | |||||||
Special Purpose Entity – 1.4% | |||||||
1,000,000 | Elan Capital Corp., Ltd., CCC+ | ||||||
6.50%, 11/10/08, Company Guarantee Notes (Ireland) | 1,312,400 | ||||||
2,000,000 | Qiagen Finance SA, NR | ||||||
1.50%, 8/18/24, Company Guarantee Notes (Luxembourg)(f) | 2,183,898 | ||||||
3,496,298 | |||||||
Telecommunications – 2.4% | |||||||
3,366,000 | Andrew Corp., B+ | ||||||
3.25%, 8/15/13, Subordinated Convertible Notes (f) | 3,378,622 | ||||||
3,000,000 | Millicom International Cellular SA, B- | ||||||
4.00%, 1/07/10, Convertible Debentures (Luxembourg)(f) | 2,579,646 | ||||||
5,958,268 | |||||||
Total Convertible Bonds (Cost $30,998,235) | 28,999,755 | ||||||
Number of Shares | Value | ||||||
Investment Companies - 1.3% | |||||||
100,000 | Semiconductor HOLDRs Trust (f) (Cost $3,480,000) | $ | 3,355,000 | ||||
Total Investments – 99.7% (Cost $260,816,288) | 250,540,036 | ||||||
Other assets less liabilities - 1.4% | 3,428,218 | ||||||
Total Options Written–(1.1%) | (2,619,361 | ) | |||||
Net Assets – 100.0% | $ | 251,348,893 | |||||
ADR – American Depositary Receipt.
HOLDRs – Holding Company Depositary Receipts.
PLC – Public Limited Company.
(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 exempt from registration, normally to qualified institutional buyers. At October 31, 2005, these securities amounted to 11.2% of net assets. |
(c) | All or a portion of these securities with an aggregate market value of $44,316,053 have been physically segregated or delivered to third parties to collateralize written call options. |
(d) | Variable rate or floating security. The rate shown is as of October 31, 2005. |
(e) | Step coupon. The rate is 1.85% to December 2006, then 0%. |
(f) | All or a portion of this security position represents cover (directly or through conversion rights) for outstanding options written. |
(g) | Variable principal amount dependent upon the value of Ecana stock. |
Ratings shown are per Standard & Poor’s and are unaudited. Securities classified as NR are not rated by Standard & Poor’s.
Contracts (100 shares per contract) | Call Options Written(a) | Expiration Date | Exercise Price | Market Value | ||||||
487 | AES Corp. (The) | January 2006 | $ | 17.50 | $ | 14,610 | ||||
1 | AK Steel Corp. (h) | December 2005 | 94.00 | 1,943 | ||||||
217 | Alcoa, Inc. | November 2005 | 25.00 | 5,425 | ||||||
300 | ALLTEL Corp. | November 2005 | 60.00 | 69,750 | ||||||
250 | Alpha Natural Resources, Inc. | November 2005 | 35.00 | 1,250 | ||||||
500 | Altria Group, Inc. | December 2005 | 80.00 | 62,500 | ||||||
500 | America Movil SA de CV ADR | November 2005 | 25.00 | 82,500 | ||||||
300 | American Express Co. | December 2005 | 50.00 | 47,250 | ||||||
196 | American Home Mortgage Investment Corp. | November 2005 | 25.00 | 46,550 | ||||||
520 | American Home Mortgage Investment Corp. | November 2005 | 30.00 | 11,700 | ||||||
284 | American Home Mortgage Investment Corp. | December 2005 | 25.00 | 86,620 | ||||||
500 | Ameritrade Holding Corp. | November 2005 | 20.00 | 62,500 | ||||||
150 | Ameritrade Holding Corp. | November 2005 | 22.50 | 1,500 | ||||||
51 | Andrew Corp. | January 2006 | 12.50 | 765 | ||||||
350 | Biogen Idec, Inc. | November 2005 | 40.00 | 52,500 | ||||||
350 | Biogen Idec, Inc. | December 2005 | 45.00 | 17,500 | ||||||
200 | Bunge Ltd. | November 2005 | 55.00 | 5,000 | ||||||
308 | Cablevision Systems Corp. | November 2005 | 25.00 | 16,940 | ||||||
250 | Cablevision Systems Corp. | November 2005 | 30.00 | 5,000 | ||||||
92 | Cablevision Systems Corp. | November 2005 | 32.50 | 460 | ||||||
300 | Cameco Corp. | November 2005 | 50.00 | 39,000 | ||||||
500 | Cameco Corp. | November 2005 | 55.00 | 13,750 | ||||||
250 | Cemex SA de CV ADR | December 2005 | 55.00 | 31,250 | ||||||
1,000 | Charles Schwab Corp. (The) | December 2005 | 15.00 | 65,000 | ||||||
90 | Chiron Corp. | December 2005 | 45.00 | 1,350 | ||||||
700 | Companhia Siderurgica Nacional SA ADR | November 2005 | 20.00 | 35,000 | ||||||
500 | Companhia Vale do Rio Doce ADR | November 2005 | 45.00 | 20,000 | ||||||
100 | CNOOC Ltd. ADR | November 2005 | 65.00 | 21,500 | ||||||
110 | CNOOC Ltd. ADR | November 2005 | 75.00 | 8,250 | ||||||
100 | CNOOC Ltd. ADR | December 2005 | 65.00 | 34,000 | ||||||
427 | Deckers Outdoor Corp. | November 2005 | 22.50 | 8,540 | ||||||
461 | Deckers Outdoor Corp. | December 2005 | 20.00 | 12,678 | ||||||
200 | Elan Corp PLC ADR | December 2005 | 10.00 | 5,000 | ||||||
200 | Empresa Brasileira de Aeronautica SA ADR | December 2005 | 40.00 | 24,500 | ||||||
300 | EnCana Corp. | December 2005 | 60.00 | 17,250 | ||||||
300 | Endo Pharmaceuticals Holdings, Inc. | November 2005 | 25.00 | 67,500 | ||||||
500 | Ford Motor Co. | January 2006 | 10.00 | 12,500 |
See notes to financial statements.
Annual Report | October 31, 2005 | 5 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Portfolio of Investments continued
Contracts (100 shares per contract) | Call Options Written(a) | Expiration Date | Exercise Price | Market Value | ||||||
271 | Freeport-McMoRan Copper & Gold, Inc. | November 2005 | $ | 50.00 | $ | 37,940 | ||||
100 | Freeport-McMoRan Copper & Gold, Inc. | December 2005 | 55.00 | 8,000 | ||||||
500 | General Maritime Corp. | November 2005 | 40.00 | 12,500 | ||||||
250 | GTECH Holdings Corp. | November 2005 | 32.50 | 17,500 | ||||||
250 | Guidant Corp. | November 2005 | 70.00 | 10,000 | ||||||
250 | Hitachi Ltd. ADR | November 2005 | 70.00 | 5,000 | ||||||
270 | Honda Motor Co., Ltd. ADR | November 2005 | 30.00 | 8,100 | ||||||
200 | Infineon Technologies AG ADR | December 2005 | 10.00 | 3,500 | ||||||
1,395 | Infospace, Inc. | November 2005 | 25.00 | 125,550 | ||||||
147 | Infospace, Inc. | December 2005 | 30.00 | 3,675 | ||||||
300 | Infosys Technologies Ltd. ADR | November 2005 | 70.00 | 37,500 | ||||||
2 | International Securities Exchange, Inc. | November 2005 | 25.00 | 110 | ||||||
340 | International Securities Exchange, Inc. | January 2006 | 25.00 | 53,550 | ||||||
500 | Johnson & Johnson | November 2005 | 65.00 | 25,000 | ||||||
364 | LG.Philips LCD Co., Ltd. ADR | December 2005 | 20.00 | 28,210 | ||||||
100 | Lucent Technologies, Inc. | January 2006 | 4.00 | 500 | ||||||
1 | Mediacom LLC (h) | December 2005 | 100.75 | 7,945 | ||||||
100 | Mentor Graphics Corp. | January 2006 | 10.00 | 2,000 | ||||||
360 | Meridian Gold, Inc. | November 2005 | 25.00 | 5,400 | ||||||
200 | Meridian Gold, Inc. | December 2005 | 22.50 | 5,000 | ||||||
250 | Millicom International Cellular SA | December 2005 | 20.00 | 14,375 | ||||||
500 | Monsanto Co. | November 2005 | 60.00 | 195,000 | ||||||
500 | Murphy Oil Corp. | November 2005 | 45.00 | 125,000 | ||||||
100 | Nextel Partners, Inc. | December 2005 | 25.00 | 8,250 | ||||||
400 | NRG Energy, Inc. | December 2005 | 50.00 | 20,000 | ||||||
400 | NTL, Inc. | November 2005 | 60.00 | 117,000 | ||||||
500 | Nuveen Investments | December 2005 | 40.00 | 63,750 | ||||||
300 | Occidental Petroleum Corp. | November 2005 | 80.00 | 51,750 | ||||||
250 | OfficeMax, Inc. | November 2005 | 32.50 | 3,750 | ||||||
400 | Petroleo Brasileiro SA ADR | December 2005 | 70.00 | 53,000 | ||||||
250 | Placer Dome, Inc. | December 2005 | 17.50 | 63,750 | ||||||
500 | Priceline.com, Inc. | November 2005 | $ | 20.00 | $ | 27,500 | ||||
10 | Pride International, Inc. | November 2005 | 30.00 | 525 | ||||||
200 | Pride International, Inc. | December 2005 | 30.00 | 21,500 | ||||||
100 | Qiagen Finance SA | December 2005 | 12.50 | 3,250 | ||||||
100 | Reuters Group PLC | November 2005 | 40.00 | 4,250 | ||||||
250 | Reuters Group PLC | November 2005 | 45.00 | 6,250 | ||||||
345 | Scientific-Atlanta, Inc. | November 2005 | 35.00 | 51,750 | ||||||
1,000 | Semiconductor HOLDRs Trust | November 2005 | 35.00 | 35,000 | ||||||
500 | Shanda Interactive Entertainment Ltd. | November 2005 | 25.00 | 75,000 | ||||||
500 | Shanda Interactive Entertainment Ltd. | November 2005 | 30.00 | 15,000 | ||||||
1 | Sirius Satellite Radio, Inc. (h) | December 2005 | 100.00 | 2,490 | ||||||
1 | Six Flags, Inc. (h) | December 2005 | 100.25 | 22,880 | ||||||
500 | SONY Corp. ADR | December 2005 | 35.00 | 17,500 | ||||||
62 | Southern Copper Corp. | December 2005 | 55.00 | 14,260 | ||||||
150 | Southern Copper Corp. | December 2005 | 60.00 | 12,000 | ||||||
250 | Suncor Energy, Inc. | December 2005 | 50.00 | 32,500 | ||||||
1 | Sunguard Data Systems, Inc. (h) | March 2006 | 102.00 | 18,720 | ||||||
250 | Tesoro Corp. | November 2005 | 65.00 | 40,000 | ||||||
1,000 | Time Warner, Inc. | December 2005 | 19.00 | 25,000 | ||||||
500 | United States Steel Corp. | November 2005 | 40.00 | 20,000 | ||||||
100 | Valeant Pharmaceuticals International | January 2006 | 20.00 | 3,250 | ||||||
500 | Vector Group Ltd. | November 2005 | 20.00 | 20,000 | ||||||
1 | Visteon Corp. (h) | December 2005 | 90.00 | 1,160 | ||||||
200 | Wyeth | January 2006 | 50.00 | 3,000 | ||||||
308 | Wynn Resorts Ltd. | November 2005 | 50.00 | 24,640 | ||||||
Total Call Options Written (Premiums received $2,755,762) | $ | 2,619,361 | ||||||||
(a) | Non-income producing security. |
(h) | Each contract represents the entire principal amount of the fixed-income security that covers the written option. |
See notes to financial statements.
6 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Statement of Assets and Liabilities | October 31, 2005
Assets | ||||
Investments at value (cost $260,816,288) | $ | 250,540,036 | ||
Foreign currency at value (cost $1,818,530) | 1,818,705 | |||
Dividends and interest receivable | 2,292,979 | |||
Receivable for securities sold | 1,649,512 | |||
Other assets | 28,211 | |||
Total assets | 256,329,443 | |||
Liabilities | ||||
Options written, at value (premiums received of $2,755,762) | 2,619,361 | |||
Payable for securities purchased | 1,810,366 | |||
Advisory fee payable | 213,347 | |||
Due to Custodian | 32,438 | |||
Accrued expenses and other liabilities | 305,038 | |||
Total liabilities | 4,980,550 | |||
Net Assets | $ | 251,348,893 | ||
Composition of Net Assets | ||||
Common stock, $.001 par value per share; unlimited number of shares authorized, 13,580,240 shares issued and outstanding | $ | 13,580 | ||
Additional paid-in capital | 258,826,004 | |||
Net realized gain on investments, options and foreign currency transactions | 2,627,928 | |||
Undistributed net investment income | 21,661 | |||
Net unrealized depreciation on investments, options and foreign currency translation | (10,140,280 | ) | ||
Net Assets | $ | 251,348,893 | ||
Net Asset Value (based on 13,580,240 common shares outstanding) | $ | 18.51 | ||
See notes to financial statements.
Annual Report | October 31, 2005 | 7 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Statement of Operations | For the Period January 31, 2005* through October 31, 2005
Investment Income | ||||
Interest | $ | 5,036,143 | ||
Dividends (net of foreign withholding taxes of $72,791) | 3,984,344 | |||
Total income | $ | 9,020,487 | ||
Expenses | ||||
Investment Management Fee | 968,883 | |||
Investment Advisory Fee | 930,887 | |||
Custodian fee | 188,036 | |||
Professional fees | 159,058 | |||
Printing expense | 92,800 | |||
Trustees’ fees and expenses | 88,569 | |||
Administration fee | 60,639 | |||
Fund accounting | 57,522 | |||
Transfer agent fee | 27,501 | |||
NYSE listing fee | 19,779 | |||
Insurance | 19,667 | |||
Miscellaneous | 4,631 | |||
Total expenses | 2,617,972 | |||
Net investment income | 6,402,515 | |||
Realized and Unrealized Gain (Loss) on Investments, Options and Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investments | (800,081 | ) | ||
Options | 7,964,773 | |||
Foreign currency transactions | (53,426 | ) | ||
Net unrealized appreciation (depreciation) on: | ||||
Investments | (10,276,252 | ) | ||
Options | 136,401 | |||
Foreign currency translation | (429 | ) | ||
Net loss on investments, options and foreign currency transactions | (3,029,014 | ) | ||
Net Increase in Net Assets Resulting from Operations | $ | 3,373,501 | ||
* | Commencement of investment operations. |
See notes to financial statements.
8 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Statement of Changes in Net Assets |
For the Period January 31, 2005* through October 31, 2005 | ||||
Increase in Net Assets from Operations | ||||
Net investment income | $ | 6,402,515 | ||
Net realized gain on investments, options and foreign currency transactions | 7,111,266 | |||
Net unrealized depreciation on investments, options and foreign currency translation | (10,140,280 | ) | ||
Net increase in net assets resulting from operations | 3,373,501 | |||
Distributions to Common Shareholders from | ||||
Net investment income | (10,864,192 | ) | ||
Capital Share Transactions | ||||
Proceeds from the issuance of common shares | 259,282,500 | |||
Common share offering costs charged to paid-in capital | (543,000 | ) | ||
Net increase from capital share transactions | 258,739,500 | |||
Total increase in net assets | 251,248,809 | |||
Net Assets | ||||
Beginning of period | 100,084 | |||
End of period (including undistributed net investment income of $21,661) | $ | 251,348,893 | ||
* | Commencement of investment operations. |
See notes to financial statements.
Annual Report | October 31, 2005 | 9 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Financial Highlights |
Per share operating performance | For the Period January 31, 2005* through October 31, 2005 | |||
Net asset value, beginning of period | $ | 19.10 | (b) | |
Income from investment operations | ||||
Net investment income(a) | 0.47 | |||
Net realized and unrealized loss on investments, options and foreign currency transactions | (0.22 | ) | ||
Total from investment operations | 0.25 | |||
Common shares’ offering expenses charged to paid-in capital | (0.04 | ) | ||
Distributions to Common Shareholders | ||||
Net investment income | (0.80 | ) | ||
Net asset value, end of period | $ | 18.51 | ||
Market value, end of period | $ | 16.83 | ||
Total investment return(c) | ||||
Net asset value | 1.12 | % | ||
Market value | -12.08 | % | ||
Ratios and supplemental data | ||||
Net assets, end of period (thousands) | $ | 251,349 | ||
Ratio of net expenses to average net assets | 1.38 | %(d) | ||
Ratio of net investment income to average net assets | 3.37 | %(d) | ||
Portfolio turnover rate | 246 | % |
* | Commencement of investment operations. |
(a) | Based on average shares outstanding during the period. |
(b) | Before deduction of offering expenses charged to capital. |
(c) | Total investment return is calculated assuming a purchase of a common share at the beginning of the period and a sale on the last day of the period reported either at net asset value (“NAV”) or market price per share. Dividends and distributions are assumed to be reinvested at NAV for NAV returns or the prices obtained under the Fund’s Dividend Reinvestment Plan for market value returns. Total investment return does not reflect brokerage commissions. A return calculated for a period of less than one year is not annualized. |
(d) | Annualized. |
See notes to financial statements.
10 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Notes to Financial Statements | October 31, 2005
Note 1 – Organization:
Advent/Claymore Enhanced Growth & Income Fund (the “Fund”) was organized as a Delaware statutory trust on January 30, 2004. The Fund is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended.
The Fund’s primary investment objective is to provide current income and current gains from trading in securities, with a secondary objective of long-term capital appreciation. The Fund will pursue its investment objectives by investing its assets in dividend and interest paying equity securities, convertible securities and non-convertible high-yield securities. Also, in pursuit of the Fund’s primary investment objective, the Fund intends to engage in an option strategy of writing (selling) covered call options on at least 50% of the securities held in the portfolio. There can be no assurance the Fund will achieve its investment objectives.
Note 2 – Accounting Policies:
The preparation of the financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.
The following is a summary of significant accounting policies followed by the Fund.
(a) Valuation of Investments
Equity securities listed on an exchange are valued at the last reported sale price on the primary exchange on which they are traded. Equity securities traded on an exchange for which there are no transactions on a given day are valued at the mean of the closing bid and asked prices. Securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Equity securities not listed on a securities exchange or NASDAQ are valued at the mean of the closing bid and asked prices. Debt securities are valued by independent pricing services or dealers using the closing bid prices for such securities or, if such prices are not available, at prices for securities of comparable maturity, quality and type. For those securities where quotations or prices are not available, valuations are determined in accordance with procedures established in good faith by the Board of Trustees. Futures contracts are valued using the settlement price established each day on the exchange on which they are traded. Exchange-traded options are valued at the closing price, if traded that day. If not traded, they are valued at the mean of the bid and asked prices on the primary exchange on which they are traded. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value.
(b) Investment Transactions and Investment Income
Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts or premiums on corporate debt securities purchased are accreted or amortized to interest income over the lives of the respective securities using the effective interest method. Discounts or premiums on convertible debt securities are not amortized.
(c) Currency Translation
Assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the mean of the bid and asked price of respective exchange rates on the last day of the period. Purchases and sales of investments denominated in foreign currencies are translated at the exchange rate on the date of the transaction.
Foreign exchange gain or loss resulting from the sale of an investment, holding of a foreign currency, expiration of a currency exchange contract, difference in exchange rates between the trade date and settlement date of an investment purchased or sold, and the difference between dividends actually received compared to the amount shown in a Fund’s accounting records on the date of receipt are shown as net realized gains or losses on foreign currency translation in the Fund’s Statement of Operations.
Foreign exchange gain or loss on assets and liabilities, other than investments, are shown as unrealized appreciation (depreciation) on foreign currency translation.
(d) Covered Call Options
The Fund will pursue its primary objective by employing an option strategy of writing (selling) covered call options on at least 50% of the securities held in the portfolio of the Fund. The Fund seeks to produce a high level of current income and gains generated from option writing premiums and, to a lesser extent, from dividends.
An option on a security is a contract that gives the holder of the option, in return for a premium, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the security underlying the option at a specified exercise or “strike” price. The writer of an option on a security has the obligation upon exercise of the option to deliver the underlying security upon payment of the exercise price (in the case of a call) or to pay the exercise price upon delivery of the underlying security (in the case of a put).
There are several risks associated with transactions in options on securities. As the writer of a covered call option, the Fund forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call, but has retained the risk of loss should the price of the underlying security decline. The writer of an option has no control over the time when it may be required to fulfill its obligation as writer of the option. Once an option writer has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate its obligation under the option and must deliver the underlying security at the exercise price.
When an option is written, the premium received is recorded as an asset with an equal liability and is subsequently marked to market to reflect the current market value of the option written. These liabilities are reflected as options written in the Statement of Assets and Liabilities. Premiums received from writing options which expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transactions, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss.
Note 3 – Investment Advisory Agreement, Investment Management Agreement and Other Agreements:
Pursuant to an Investment Advisory Agreement (the “Agreement”) between Claymore Advisors, LLC (the “Advisor”) and the Fund, the Advisor furnishes offices, necessary facilities and equipment, provides administrative services to the Fund, oversees the activities of Advent Capital Management, LLC (the “Investment Manager”), provides personnel and pays the compensation of all Trustees and Officers of the Fund who are its affiliates. As compensation for these services, the Fund pays the Advisor an annual fee, payable monthly in arrears, at an annual rate equal to 0.49% of the average Managed Assets during such month. Managed Assets means the total of assets of the Fund (including any assets attributable to any preferred shares or otherwise attributable to the use of financial leverage, if any) less the sum of accrued liabilities.
Pursuant to an Investment Management Agreement between the Investment Manager and the Fund, the Fund has agreed to pay the Investment Manager an annual fee, payable monthly in arrears, at an annual rate equal to 0.51% of the average Managed Assets during such month for the services and facilities provided by the Investment Manager to the Fund. These services include the day-to-day management of the Fund’s portfolio of securities, which includes buying and selling securities for the Fund and investment research. The Investment Manager also provides personnel to the Fund and pays the compensation of all Trustees and Officers of the Fund who are its affiliates.
Annual Report | October 31, 2005 | 11 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Notes to Financial Statements continued
The Bank of New York (“BNY”) acts as the Fund’s custodian, administrator and transfer agent. As custodian, BNY is responsible for the custody of the Fund’s assets. As administrator, BNY is responsible for maintaining the books and records of the Fund’s securities and cash. As transfer agent, BNY is responsible for performing transfer agency services for the Fund. Fimat USA, LLC and Credit Suisse First Boston act as the Fund’s custodian for covered call options.
Certain Officers and Trustees of the Fund are also Officers and Directors of the Advisor or Servicing Agent. The Fund does not compensate its Officers or Trustees who are Officers of the aforementioned firms.
Note 4 – Federal Income Taxes:
The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no provision for U.S. federal income taxes is required. In addition, by distributing substantially all of its ordinary income and long-term capital gains, if any, during each calendar year, the Fund intends not to be subject to U.S. federal excise tax.
In order to present paid-in-capital in excess of par, undistributed net investment income and net realized gains or losses in the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income and net realized gains or losses on investments. For the year ended October 31, 2005, a permanent book and tax difference in the amount of $4,483,338 primarily relating to distribution of short-term capital gains was reclassified from net realized gain to undistributed net investment income.
At October 31, 2005, the cost and related gross unrealized appreciation and depreciation, excluding written options and foreign currency translations are as follows:
Cost of Investments for Tax Purposes | Gross Tax Unrealized Appreciation | Gross Tax Unrealized Depreciation | Net Tax Unrealized Appreciation on Investments | Net Tax Unrealized Appreciation on Derivatives | Undistributed Ordinary Income/ (Accumulated Ordinary Loss) | Undistributed Long-Term Gains/ (Accumulated Capital Loss) | |||||||||||||||
$ | 262,094,239 | $ | 4,721,230 | $ | (16,275,433 | ) | $ | (11,554,203 | ) | $ | 112,683 | $ | 3,942,497 | $ | 8,333 |
The differences between book basis and tax basis unrealized appreciation/(depreciation) is attributable to the tax deferral of losses on wash sales and additional income accrued for tax purposes on the convertible preferred stock.
For the period ended October 31, 2005 the tax character of distributions paid, as reflected in the statement of changes in net assets of $10,864,192, was ordinary income.
Note 5 – Investments in Securities:
For the period ended October 31, 2005, purchases and sales of investments, excluding options and short-term securities, were $895,370,877 and $626,703,822, respectively.
The Fund entered into option contracts during the period ended October 31, 2005. Details of the transactions were as follows:
Number of Contracts | Premiums Received | ||||||
Options written during the period | 238,278 | $ | 24,558,357 | ||||
Options expired during the period | (41,828 | ) | (3,208,667 | ) | |||
Options closed during the period | (111,003 | ) | (11,959,543 | ) | |||
Options assigned during the period | (56,524 | ) | (6,634,385 | ) | |||
Options outstanding, end of period | 28,923 | $ | 2,755,762 | ||||
Note 6 – Capital:
Common Shares
In connection with its organization process, the Fund sold 5,240 shares of beneficial interest to Claymore Securities, Inc., an affiliate of the Advisor, for consideration of $100,084. The Fund has an unlimited amount of common shares, $0.01 par value, authorized and 13,580,240 issued and outstanding. Of this amount, the Fund issued 12,550,000 shares of common stock in its initial public offering and issued, pursuant to an over-allotment option to the underwriters, an additional 700,000 shares on February 11, 2005, 300,000 shares on February 23, 2005 and 25,000 shares on March 11, 2005. All of these shares were issued at $19.10 per share after deducting the sales load but before reimbursement of expenses to the underwriters of $0.00667 per share.
Offering expenses, estimated at $543,000 or $0.04 per share, in connection with the issuance of common shares have been borne by the Fund and were charged to paid-in capital. The Advisor and Investment Manager have agreed to pay offering expenses (other than sales load, but including reimbursement of expenses to the underwriters) in excess of $0.04 per common share.
Note 7 – Indemnifications:
In the normal course of business, the Fund enters into contracts that contain a variety of representations, which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund expects the risk of loss to be remote.
Note 8 – Subsequent Event:
On November 1, 2005, the Board of Trustees declared a quarterly dividend of $0.40 per common share. This dividend was payable on November 30 to shareholders of record on November 15.
12 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Report of Independent Registered Public Accounting Firm |
To the Board of Trustees and Shareholders of
Advent/Claymore Enhanced Growth & Income Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Advent/Claymore Enhanced Growth & Income Fund (the “Fund”) at October 31, 2005, and the results of its operations, the changes in its net assets and the financial highlights for the period January 31, 2005 (commencement of operations) through October 31, 2005, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at October 31, 2005 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 19, 2005
Annual Report | October 31, 2005 | 13 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Supplemental Information | (unaudited)
Federal Income Tax Information
Qualified dividend income of as much as $1,708,967 was received by the Fund through October 31, 2005. The Fund intends to designate the maximum amount of dividends that qualify for the reduced tax rate pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003.
For corporate shareholders, $1,274,804 of investment income (dividend income plus short-term gains, if any) qualifies for the dividends-received deduction.
In January 2006, you will be advised on IRS Form 1099 DIV or substitute 1099 DIV as to the federal tax status of the distributions received by you in the calendar year 2005.
Results of Shareholder Votes
The Annual Meeting of Shareholders of the Fund was held on September 20, 2005. Shareholders voted to amend the Declaration of Trust of the Trust to change the maximum number of Trustees allowed on the Trust’s Board of Trustees from seven to nine. In addition, shareholders voted on the election of Trustees.
With regard to the amendment of the maximum number of Trustee’s allowed on the Board of Trustees, 12,204,076 common shares voted in favor of the amendment, 569,278 common shares voted against the amendment and 256,240 common shares abstained from voting on the amendment.
With regard to the election of the following Trustees by common shareholders of the Fund:
# of Shares In Favor | # of Shares Withheld | |||
Randall C. Barnes | 12,844,817 | 184,777 | ||
Daniel Black | 12,856,492 | 173,102 | ||
Ronald A. Nyberg | 12,855,407 | 174,187 | ||
Michael A. Smart | 12,856,840 | 172,754 |
The other Trustees of the Fund whose terms did not expire in 2005 are Nicholas Dalmaso, Tracy Maitland, Derek Medina and Gerald Seizert.
Trustees
The Trustees of the Advent/Claymore Enhanced Growth & Income Fund and their principal occupations during the past five years:
Name, Address*, Age and | Term of Office** and Length of Time Served | Principal Occupation During the Past Five | Number of Funds in Fund Complex Overseen by Trustee | Other Directorships | ||||
Independent Trustees | ||||||||
Daniel Black 405 Park Avenue New York, NY 10022 Year of birth: 1960 Trustee | Since 2005 | Principal, the Wicks Group of Companies, LLC (2001-present). Formerly, Managing Director and Co-head of the Merchant Banking Group at BNY Capital Markets, a division of The Bank of New York Company, Inc. (1998-2003). | 2 | Trustee, Bank Street College of Education | ||||
Randall C. Barnes Year of birth: 1952 Trustee | Since 2005 | Investor, (2001-present). Formerly, Senior Vice President, Treasurer (1993-1997), President, Pizza Hut International (1991-1993) and Senior Vice President, Strategic Planning and New Business Development (1987-1990) of PepsiCo, Inc. (1987-1997). | 2 | Trustee of five other closed-end investment companies in the Claymore fund complex and four other open-end mutual funds in the Claymore family of mutual funds. | ||||
Derek Medina ABC News 47 West 66th Street New York, NY 10023 Year of Birth: 1967 Trustee | 3 years/since inception | Vice President, Business Affairs and News Planning at ABC News from 2003-present. Formerly, Executive Director, Office of the President at ABC News from (2000-2003). Former Associate at Cleary Gottlieb Steen & Hamilton (law firm) (1995-1998). Former associate in Corporate Finance at J.P. Morgan/ Morgan Guaranty (1988-1990). | 2 | Director of Young Scholar’s Institute. Former Director of Episcopal Social Services. | ||||
Ronald A. Nyberg Year of birth: 1953 Trustee | 3 years/since inception | Principal of Ronald A. Nyberg, Ltd., a law firm specializing in corporate law, estate planning and business transactions from 2000-present. Formerly, Executive Vice President, General Counsel and Corporate Secretary of Van Kampen Investments (1982-1999). | 2 | Trustee of ten other closed-end investment companies in the Claymore fund complex and four other open-end mutual funds in the Claymore family of mutual funds. | ||||
Gerald L. Seizert, CFP Seizert Capital Partners LLC 1668 S.Telegraph, Suite 120 Bloomfield Hills, MI 48302 Year of Birth: 1952 Trustee | 3 years/since inception | Chief Executive Officer of Seizert Capital Partners, LLC, where he directs the equity disciplines of the firm and serves as a co-manager of the firm’s hedge fund, Proper Associates, LLC from 2000-present. Formerly, Co-Chief Executive (1998-1999) and a Managing Partner and Chief Investment Officer-Equities of Munder Capital Management, LLC (1995-1999). Former Vice President and Portfolio Manager of Loomis, Sayles & Co., L.P. (asset manager) (1984-1995). Former Vice President and Portfolio Manager at First of America Bank (1978-1984). | 2 | Former Director of Loomis, Sayles and Co., L.P. | ||||
Michael A. Smart Williams Capital Partners, L.P. 650 Fifth Avenue New York, NY 10019 Year of Birth: 1960 Trustee | 3 years/since inception | Managing Partner, Williams Capital Partners, L.P., Advisor to First Atlantic Capital Ltd., equity firm (2001-present). Formerly, a Managing Director in Investment Banking- The Private Equity Group (1995-2001) and a Vice President in Investment Banking- Corporate Finance (1992-1995) at Merrill Lynch & Co. Founding Partner of The Carpediem Group, a private placement firm (1991-1992). Former Associate at Dillon, Read and Co. (investment bank) (1988-1990). | 2 | Director, Country Pure Foods. |
14 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Supplemental Information continued
Name, Address*, Age and | Term of Office** and Length of Time Served | Principal Occupation During the Past | Number of Funds in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||
Interested Trustees | ||||||||
Tracy V. Maitland† 1065 Avenue of the Americas, 31st Floor New York, NY 10018 Year of Birth: 1960 Trustee, President and Chief Executive Officer | 3 years/ since inception | President of Advent Capital Management, LLC, which he founded in June, 2001. Prior to June 2001, President of Advent Capital Management, a division of Utendahl Capital. | 2 | |||||
Nicholas Dalmaso†† Year of birth: 1965 | 3 years/ since inception | Senior Managing Director and General Counsel of Claymore Advisors, LLC and Claymore Securities, Inc. (2001-present). Formerly, Assistant General Counsel, John Nuveen and Co., Inc. (asset manager) (1999-2001). Former Vice President and Associate General Counsel of Van Kampen Investments, Inc. (1992-1999). | 2 | Trustee of ten other closed-end investment companies in the Claymore fund complex and four other open-end mutual funds in the Claymore family of mutual funds. |
* | Address for all Trustees unless otherwise noted: 2455 Corporate West Drive, Lisle, IL 60532 |
** | 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. Smart, Nyberg and Black, as Class I Trustees, are expected to stand for re-election at the Fund’s 2008 annual meeting of shareholders. |
• | Messrs. Maitland and Dalmaso, as Class II Trustees, are expected to stand for re-election at the Fund’s 2006 annual meeting of shareholders. |
• | Messrs. Seizert, Medina and Barnes, as Class III Trustees, are expected to stand for re-election at the Fund’s 2007 annual meeting of shareholders. |
† | Mr. Maitland is an “interested person” (as defined in section 2(a)(19) of the 1940 Act) of the Fund because of his position as an officer of Advent Capital Management, LLC, the Fund’s Investment Manager. |
†† | Mr. Dalmaso is an “interested person” (as defined in section 2(a)(19) of the 1940 Act) of the Fund because of his position as an officer of Claymore Advisors, LLC, the Fund’s Investment Advisor. |
Annual Report | October 31, 2005 | 15 |
LCM | Advent/Claymore Enhanced Growth & Income Fund | Supplemental Information continued
Officers
The officers of the Advent/Claymore Enhanced Growth & Income Fund and their principal occupations during the past five years:
Name, Address*, Age and | Term of Office** | Principal Occupation During the Past Five Years and Other Affiliations | ||
Officers | ||||
F. Barry Nelson Year of Birth: 1943 Vice President | Since 2005 | Co-Portfolio Manager and Research Director at Advent Capital Management, LLC from June 2001 to present. Prior to June 2001, Mr. Nelson held the same position at Advent Capital Management, a division of Utendahl Capital. | ||
Robert White Year of birth: 1965 Treasurer and Chief Financial Officer | Since 2005 | Chief Financial Officer, Advent Capital Management, LLC (July 2005-present). Previously, Vice President, Client Service Manager, Goldman Sachs Prime Brokerage (1997-2005). | ||
Rodd Baxter Year of Birth: 1950 Secretary and Chief Compliance Officer | Since 2005 | Advent Capital Management, LLC: General Counsel – Legal 2002 to present; SG Cowen Securities Corporation: Director and Senior Counsel, 1998-2002; Cowen & Co. | ||
Steven M. Hill 2455 Corporate West Drive Lisle, IL 60532 Year of Birth: 1964 Assistant Treasurer | Since 2005 | Senior Managing Director of Claymore Advisors, LLC and Claymore Securities, Inc (2003-present) and Chief Financial Officer (2005-present). Previously, Treasurer of Henderson Global Funds and Operations Manager for Henderson Global Investors (North America) Inc., from 2002-2003; Managing Director, FrontPoint Partners LLC (2001-2002); Vice President, Nuveen Investments (1999-2001); Chief Financial Officer, Skyline Asset Management LP, (1999); Vice President, Van Kampen Investments and Assistant Treasurer, Van Kampen mutual funds (1989-1999). |
* | Address for all Officers unless otherwise noted: 1065 Avenue of the Americas, 31st Floor, New York, NY 10018 |
** | Officers serve at the pleasure of the Board of Trustees and until his or her successor is appointed and qualified or until his or her earlier resignation or removal. |
16 | Annual Report | October 31, 2005 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Dividend Reinvestment Plan | (unaudited)
Unless the registered owner of common shares elects to receive cash by contacting the Bank of New York (the “Plan Administrator”), all dividends declared on common shares of the Fund will be automatically reinvested by the Plan Administrator for shareholders in the Fund’s Dividend Reinvestment Plan (the “Plan”), in additional common shares of the Fund. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re-invest that cash in additional common shares of the Fund for you. If you wish for all dividends declared on your common shares of the Fund to be automatically reinvested pursuant to the Plan, please contact your broker.
The Plan Administrator will open an account for each common shareholder under the Plan in the same name in which such common shareholder’s common shares are registered. Whenever the Fund declares a dividend or other distribution (together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in common shares. The common shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (“Newly Issued Common Shares”) or (ii) by purchase of outstanding common shares on the open market (“Open-Market Purchases”) on the New York Stock Exchange or elsewhere. If, on the payment date for any Dividend, the closing market price plus estimated brokerage commission per common share is equal to or greater than the net asset value per common share, the Plan Administrator will invest the Dividend amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the Dividend by the net asset value per common share on the payment date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95% of the closing market price per common share on the payment date. If, on the payment date for any Dividend, the net asset value per common share is greater than the closing market value plus estimated brokerage commission, the Plan Administrator will invest the Dividend amount in common shares acquired on behalf of the participants in Open-Market Purchases.
If, before the Plan Administrator has completed its Open-Market Purchases, the market price per common share exceeds the net asset value per common share, the average per common share purchase price paid by the Plan Administrator may exceed the net asset value of the common shares, resulting in the acquisition of fewer common shares than if the Dividend had been paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan Administrator is unable to invest the full Dividend amount in Open-Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open-Market Purchases and may invest the uninvested portion of the Dividend amount in Newly Issued Common Shares at net asset value per common share at the close of business on the Last Purchase Date provided that, if the net asset value is less than or equal to 95% of the then current market price per common share; the dollar amount of the Dividend will be divided by 95% of the market price on the payment date.
The Plan Administrator maintains all shareholders’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common shares in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with the instruction of the participants.
There will be no brokerage charges with respect to common shares issued directly by the Fund. However, each participant will pay a pro rata share of brokerage commission incurred in connection with Open-Market Purchases. The automatic reinvestment of Dividends will not relieve participants of any Federal, state or local income tax that may be payable (or required to be withheld) on such Dividends.
The Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants.
All correspondence or questions concerning the Plan should be directed to the Plan Administrator, The Bank of New York, P.O. Box 463, East Syracuse, New York 13057-0463, Attention: Shareholder Services Department, Phone Number: (800) 701-8178.
Annual Report | October 31, 2005 | 17 |
LCM | Advent/Claymore Enhanced Growth & Income Fund
Fund Information |
Board of Trustees
Daniel Black
Randall C. Barnes
Nicholas Dalmaso*
Tracy V. Maitland*
Chairman
Derek Medina
Ronald A. Nyberg
Gerald L. Seizert
Michael A. Smart
Officers
Tracy V. Maitland
Chief Executive Officer
F. Barry Nelson
Vice President
Robert White
Treasurer and Chief Financial Officer
Steven M. Hill
Assistant Treasurer
Rodd Baxter
Secretary and Chief Compliance Officer
Investment Manager
Advent Capital Management, LLC
1065 Avenue of the Americas,
31st Floor
New York, New York 10018
Investment Advisor
Claymore Advisors, LLC
Lisle, Illinois
Administrator, Custodian and Transfer Agent
The Bank of New York
New York, New York
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, New York
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
New York, New York
* | Trustee is an “interested person” of the Fund as defined in the Investment Company Act of 1940, as amended. |
Privacy Principles of the Fund
The Fund is committed to maintaining the privacy of its shareholders and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information the Fund collects, how the Fund protects that information and why, in certain cases, the Fund may share information with select other parties.
Generally, the Fund does not receive any non-public personal information relating to its shareholders, although certain non-public personal information of its shareholders may become available to the Fund. The Fund does not disclose any non-public personal information about its shareholders or former shareholders to anyone, except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third party administrator).
The Fund restricts access to non-public personal information about its shareholders to employees of the Fund’s investment advisor and its affiliates with a legitimate business need for the information. The Fund maintains physical, electronic and procedural safeguards designed to protect the non-public personal information of its shareholders.
Questions concerning your shares of Advent/Claymore Enhanced Growth & Income Fund?
• | If your shares are held in a Brokerage Account, contact your Broker. |
• | If you have physical possession of your shares in certificate form, contact the Fund’s Administrator, Custodian and Transfer Agent: |
The Bank of New York, 111 Sanders Creek Parkway, East Syracuse, NY 13057 (800) 701-8178
This report is sent to shareholders of Advent/Claymore Enhanced Growth & Income Fund for their information. It is not a Prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in this report.
A description of the Fund’s proxy voting policies and procedures related to portfolio securities is available without charge, upon request, by calling the Fund at (800) 345-7999 or on the Securities & Exchange Commission’s website at http://www.sec.gov.
Information regarding how the Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also available, without charge and upon request by calling the Fund at (800) 345-7999 or by accessing the Fund’s Form N-PX on the Commission’s website at http://www.sec.gov.
The Fund 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 Fund’s Form N-Q is available on the SEC website at http://www.sec.gov. The Fund’s Form N-Q may also be viewed 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 or at www.adventclaymore.com.
In January 2005, the Fund submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) in which the Fund’s principal executive officer certified that he was not aware, as of the date of the certification, of any violation by the Fund of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related Securities and Exchange Commission (“SEC”) rules, the Fund’s principal executive and principal financial officers have made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Fund’s disclosure controls and procedures and internal control over financial reporting.
18 | Annual Report | October 31, 2005 |
Advent Capital Management, LLC
1065 Avenue of the Americas
New York, New York 10018
LCM-AR-1005
Item 2. Code of Ethics.
(a) The registrant has adopted a code of ethics (the “Code of Ethics”) that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
(b) Not applicable.
(c) The registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.
(d) The registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics.
(e) Not applicable.
(f) (1) The registrant’s Code of Ethics is attached hereto as an exhibit.
(2) N/A
(3) N/A
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that it has three audit committee financial experts serving on its audit committee, each of whom is an “independent” Trustee: Gerald L. Seizert, Michael A. Smart and Ronald A. Nyberg. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
a). Audit Fees: the aggregate fees billed for the period January 31, 2005 to October 31, 2005, for professional services rendered by the principal accountant for the audit is $80,000. The aggregate fees billed for fiscal year 2004 for professional services rendered by the principal accountant is $0 as this fund was not in existence in 2004.
b). Audit-Related Fees: the aggregate fees billed for the period January 31, 2005 to October 31, 2005, for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this item is $0. Specifically, this amount represents the amount paid for the audit of the preferred shares asset coverage test. The Audit-Related Fees for 2004 is $0 as this fund was not in existence in 2004.
c). Tax Fees: the aggregate fees billed for the period January 31, 2005 to October 31, 2005, for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning is $8,500. The Tax Fees for 2004 is $0 as this fund was not in existence in 2004.
d). All Other Fees: the aggregate fees billed for the period January 31, 2005 to October 31, 2005, for products and services provided by the principal accountant, other than the services reported in paragraphs (a) and (c) of this Item is $0. The Other Audit Fees for 2004 is $0 as this fund was not in existence in 2004.
(e) | Audit Committee Pre-Approval Policies and Procedures. |
(i) The Audit Committee reviews, and in its sole discretion, pre-approves, pursuant to written pre-approval procedures (A) all engagements for audit and non-audit services to be provided by the principal accountant to the registrant and (B) all engagements for non-audit services to be provided by the principal accountant (1) to the registrant’s investment adviser (not including a sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser) and (2) to any entity controlling, controlled by or under common control with the registrant’s investment adviser that provides ongoing services to the registrant; but in the case of the services described in subsection (B)(1) or (2), only if the engagement relates directly to the operations and financial reporting of the registrant; provided that such pre-approval need not be obtained in circumstances in which the pre-approval requirement is waived under rules promulgated by the Securities and Exchange Commission or New York Stock Exchange listing standards. The pre-approval policies are attached as an exhibit hereto. The policies provide for both “general pre-approval” and “specific pre-approval” as defined therein. During the fiscal period ended October 31, 2005, the registrant utilized only the specific pre-approval method.
AUDIT COMMITTEE PRE-APPROVAL POLICY
OF
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
AS ADOPTED BY THE AUDIT COMMITTEE
March 30, 2004
Statement of Principles
The Audit Committee (the “Audit Committee”) of the Board of Trustees (the “Board”) of Advent/Claymore Enhanced Growth & Income Fund (the “Trust,”) is required to pre-approve all Covered Services (as defined in the Audit Committee Charter) in order to assure that the provision of the Covered Services does not impair the auditors’ independence. Unless a type of service to be provided by the Independent Auditor (as defined in the Audit Committee Charter) is pre-approved in accordance with the terms of this Audit Committee Pre-Approval Policy (the “Policy”), it will require specific pre-approval by the Audit Committee or by any member of the Audit Committee to which pre-approval authority has been delegated.
This Policy and the appendices to this Policy describe the Audit, Audit-Related, Tax and All Other services that are Covered Services and that have been pre-approved under this Policy. The appendices hereto sometimes are referred to herein as the “Service Pre-Approval Documents”. The term of any such pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. At its June meeting of each calendar year, the Audit Committee will review and re-approve this Policy and approve or re-approve the Service Pre-Approval Documents for that year, together with any changes deemed necessary or desirable by the Audit Committee. The Audit Committee may, from time to time, modify the nature of the services pre-approved, the aggregate level of fees pre-approved or both. The Audit Committee hereby directs that each version of this Policy and the Service Pre-Approval Documents approved, re-approved or amended from time to time be maintained with the books and records of the Trust.
Delegation
In the intervals between the scheduled meetings of the Audit Committee, the Audit Committee delegates pre-approval authority under this Policy to the Chairman of the Audit Committee (the “Chairman”). The Chairman shall report any pre-approval decisions under this Policy to the Audit Committee at its next scheduled meeting. At each scheduled meeting, the Audit Committee will review with the Independent Auditor the Covered Services pre-approved by the Chairman pursuant to delegated authority, if any, and the fees related thereto. Based on these reviews, the Audit Committee can modify, at its discretion, the pre-approval originally granted by the Chairman pursuant to delegated authority. This modification can be to the nature of services pre-approved, the aggregate level of fees approved, or both. The Audit Committee expects pre-approval of Covered Services by the Chairman pursuant to this delegated authority to be the exception rather than the rule and may modify or withdraw this delegated authority at any time the Audit Committee determines that it is appropriate to do so.
Pre-Approved Fee Levels
Fee levels for all Covered Services to be provided by the Independent Auditor and pre-approved under this Policy will be established annually by the Audit Committee and set forth in the Service Pre-Approval Documents. Any increase in pre-approved fee levels will require specific pre-approval by the Audit Committee (or the Chairman pursuant to delegated authority).
Audit Services
The terms and fees of the annual Audit services engagement for the Trust are subject to the specific pre-approval of the Audit Committee. The Audit Committee will approve, if necessary, any changes in terms, conditions or fees resulting from changes in audit scope, Trust structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, any other Audit services for the Trust not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the Audit Committee (or the Chairman pursuant to delegated authority).
Audit-Related Services
Audit-Related services are assurance and related services that are not required for the audit, but are reasonably related to the performance of the audit or review of the financial statements of the Trust and, to the extent they are Covered Services, the other Covered Entities (as defined in the Audit Committee Charter) or that are traditionally performed by the Independent Auditor. Audit-Related services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the Audit Committee (or the Chairman pursuant to delegated authority).
Tax Services
The Audit Committee believes that the Independent Auditor can provide Tax services to the Covered Entities such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the Independent Auditor in connection with a transaction initially recommended by the Independent Auditor, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. Tax services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the Audit Committee (or the Chairman pursuant to delegated authority).
All Other Services
All Other services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the Audit Committee (or the Chairman pursuant to delegated authority).
Procedures
Requests or applications to provide Covered Services that require approval by the Audit Committee (or the Chairman pursuant to delegated authority) must be submitted to the Audit Committee or the Chairman, as the case may be, by both the Independent Auditor and the Chief Financial Officer of the respective Covered Entity, and must include a joint statement as to whether, in their view, (a) the request or application is consistent with the SEC’s rules on auditor independence and (b) the requested service is or is not a non-audit service prohibited by the SEC. A request or application submitted to the Chairman between scheduled meetings of the Audit Committee should include a discussion as to why approval is being sought prior to the next regularly scheduled meeting of the Audit Committee.
(ii) 100% of services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(A) of Rule 2-01 of Regulation S-X.
(f) The percentage of hours expended on the principal accountant’s engagement to audit the Fund’s financial statements for the most recent fiscal year attributable to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
(g) The aggregate non-audit fees billed for the last two fiscal years by the registrant’s accountant for services rendered to the registrant, the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant (not including a sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that directly related to the operations and financial reporting of the registrant for the period from January 31, 2005 to October 31, 2005 were $0.
(h) Not Applicable.
Item 5. Audit Committee of Listed Registrants.
The registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit committee of the registrant is comprised of: Gerald L. Seizert, Michael A. Smart and Ronald A. Nyberg.
Item 6. Schedule of Investments.
The Schedule of Investments is included as part of Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The registrant has delegated the voting of proxies relating to its voting securities to its investment advisor, Advent Capital Management, LLC (the “Advisor”). The Advisor’s Proxy Voting Policies and Procedures are included as an exhibit hereto.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
None.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has not made any material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded based on such evaluation that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics.
(a) (2) Certification of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(b) Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(c) Proxy Voting Policies and Procedures.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Advent/Claymore Enhanced Growth & Income Fund
By: | /s/ Tracy V. Maitland | |
Name: | Tracy V. Maitland | |
Title: | President and Chief Executive Officer | |
Date: January 6, 2006 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Tracy V. Maitland | |
Name: | Tracy V. Maitland | |
Title: | President and Chief Executive Officer | |
Date: January 6, 2006 |
By: | /s/ Robert White | |
Name: | Robert White | |
Title: | Treasurer and Chief Financial Officer | |
Date: January 6, 2006 |