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. If a put option is exercised, the premium reduces the cost basis of the security. In writing an option, the Fund bears the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of a written option could result in the Fund purchasing a security at a price different from the current market.
As a seller in the credit default swap contract, the Fund would be required to pay the notional amount or other agreed-upon value of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or foreign corporate issuer, on the referenced debt obligation. In return, the Fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Fund would keep the stream of payments and would have no payment obligations. Such periodic payments are accrued daily and recorded as realized gain (loss).
The Fund may also purchase credit default swap contracts in order to hedge against the risk of default of debt securities held, in which case the Fund would function as the counterparty referenced in the preceding paragraph. As a purchaser of a credit default swap contract, the Fund would receive the notional amount or other agreed upon value of a referenced debt obligation from the counterparty in the event of default by a third party, such as a U.S. or foreign corporate issuer on the referenced obligation. In return, the Fund would make periodic payments to the counterparty over the term of the contract provided no event of default has occurred. Such periodic payments are accrued daily and recorded as realized gain (loss).
Interest rate swap agreements involve the exchange by the Fund with a counterparty of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal. Net periodic payments received by the Fund are included as part of realized gain (loss) and or change in unrealized appreciation/depreciation on the Statement of Operations.
PIMCO Global StocksPLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
1. Organization and Significant Accounting Policies (continued)
(g) Interest Rate/Credit Default/Total Return Swaps (continued)
Total return swap agreements involve commitments to pay interest in exchange for a market-linked return, both based on notional amounts. To the extent the total return on the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty.
Swaps are marked to market daily based upon quotations from brokers or market makers and the change in value, if any, is recorded as unrealized appreciation or depreciation in the Fund’s Statement of Operations. For a credit default swap sold by the Fund, payment of the agreed upon amount made by the Fund in the event of default of the referenced debt obligation is recorded as the cost of the referenced debt obligation purchased/received. For a credit default swap purchased by the Fund, the agreed upon amount received by the Fund in the event of default of the referenced debt obligation is recorded as proceeds from sale/ delivery of the referenced debt obligation and the resulting gain or loss realized on the referenced debt obligation is recorded as such by the Fund.
Entering into swaps involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in net interest rates.
(h) Senior Loans
The Fund purchases assignments of Senior Loans originated, negotiated and structured by a U.S. or foreign commercial bank, insurance company, finance company or other financial institution (the “Agent”) for a lending syndicate of financial institutions (the “Lender”). When purchasing an assignment, the Fund succeeds all the rights and obligations under the loan agreement with the same rights and obligations as the assigning Lender. Assignments may, however, be arranged through private negotiations between potential assignees and potential assignors, and the rights and obligations acquired by the purchaser of an assignment may differ from, and be more limited than, those held by the assigning Lender.
(i) Repurchase Agreements
The Fund enters into transactions with its custodian bank or securities brokerage firms whereby it purchases securities under agreements to resell at an agreed upon price and date (“repurchase agreements”). Such agreements are carried at the contract amount in the financial statements. Collateral pledged (the securities received), which consists primarily of U.S. government obligations and asset-backed securities, are held by the custodian bank until maturity of the repurchase agreement. Provisions of the repurchase agreements and the procedures adopted by the Fund require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited.
(j) Reverse Repurchase Agreements
In a reverse repurchase agreement, the Fund sells securities to a bank or broker-dealer and agrees to repurchase the securities at a mutually agreed upon date and price. Generally, the effect of such a transaction is that the Fund can recover and reinvest all or most of the cash invested in the portfolio securities involved during the term of the reverse repurchase agreement and still be entitled to the returns associated with those portfolio securities. Such transactions are advantageous if the interest cost to the Fund of the reverse repurchase transaction is less than the returns it obtains on investments purchased with the cash. Unless the Fund covers its positions in reverse repurchase agreements (by segregating liquid assets at least equal in amount to the forward purchase commitment), its obligations under the agreements will be subject to the Fund’s limitations on borrowings. Reverse repurchase agreements involve leverage risk and also the risk that the market value of the securities that the Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds of the agreement may be restricted pending determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities. At September 30, 2006, the Fund had reverse repurchase agreements outstanding of $41,318,000. The weighted average daily balance of reverse repurchase agreements outstanding for the six months ended September 30, 2006 was $43,926,033 at a weighted average interest rate of 5.13% .
| 9.30.06 | PIMCO Global StocksPLUS & Income Fund Semi-Annual Report 19
PIMCO Global StocksPLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
1. Organization and Significant Accounting Policies (continued)
(k) Forward Foreign Currency Contracts
A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. The Fund may enter into forward foreign currency contracts for the purpose of hedging against foreign currency risk arising from the investment or anticipated investment in securities denominated in foreign currencies. The Fund may also enter into these contracts for purposes of increasing exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The market value of a forward foreign currency contract fluctuates with changes in forward currency exchange rates. All commitments are marked to market daily at the applicable exchange rates and any resulting unrealized appreciation or depreciation is recorded. Realized gains or losses are recorded at the time the forward contract matures or by delivery of the currency. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.
(l) When-Issued/Delayed-Delivery Transactions
The Fund may purchase or sell securities on a when-issued or delayed-delivery basis. The transactions involve a commitment to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery purchases are outstanding, the Fund will set aside and maintain until the settlement date in a designated account, liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed-delivery basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. The Fund may dispose of or renegotiate a delayed-delivery transaction after it is entered into, and may sell when-issued securities before they are delivered, which may result in a realized gain or loss. When a security on a delayed-delivery basis is sold, the Fund does not participate in future gains and losses with respect to the security.
(m) Credit-Linked Trust Certificates
Credit-linked trust certificates are investments in a limited purpose trust or other vehicle formed under state law which, in turn, invests in a basket of derivative instruments, such as credit default swaps, interest rate swaps and other securities, in order to provide exposure to the high yield or another fixed income market.
Similar to an investment in a bond, investments in credit-linked trust certificates represent the right to receive periodic income payments (in the form of distributions) and payment of principal at the end of the term of the certificate. However, these payments are conditioned on the trust’s receipt of payments from, and the trust’s potential obligations to, the counterparties to the derivative instruments and other securities in which the trust invests.
(n) Custody Credits on Cash Balances
The Fund benefits from an expense offset arrangement with its custodian bank whereby uninvested cash balances earn credits which reduce monthly custodian and accounting agent expenses. Had these cash balances been invested in income producing securities, they would have generated income for the Fund.
2. Investment Manager/Sub-Adviser
The Fund has entered into an Investment Management Agreement (the “Agreement”) with the Investment Manager. Subject to the supervision of the Fund’s Board of Trustees, the Investment Manager is responsible for managing, either directly or through others selected by it, the Fund’s investment activities, business affairs and administrative matters. Pursuant to the Agreement, the Investment Manager receives an annual fee, payable monthly, at an annual rate of 1.00% of the Fund’s average daily total managed assets. Total managed assets refers to the total assets of the Fund (including any assets attributable to any borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). With respect to any reverse repurchase agreement, dollar roll or similar leveraging transactions, “total managed assets” includes any proceeds from the sale of an asset of the Fund to a counterparty in such a transaction, in addition to the value of the underlying assets as of the relevant measuring date.
The Investment Manager has retained its affiliate, Pacific Investment Management Company LLC (the “Sub-Adviser”), to manage the Fund’s investments. Subject to the supervision of the Investment Manager, the Sub-Adviser is responsible for making all the Fund’s investment decisions. The Investment Manager, not the Fund, pays a portion of the fees it receives as Investment Manager to the Sub-Adviser in return for its services, at an annual rate of 0.5525% of the Fund’s average daily total managed assets, for the period May 31, 2005 (commencement of operations) through May 31, 2010. Beginning June 1, 2010 and thereafter, the Manager will pay a monthly fee to Sub-Adviser at an annual rate of 0.75% of the Fund’s average daily total managed assets.
20 PIMCO Global StocksPLUS & Income Fund Semi-Annual Report | 9.30.06 |
PIMCO Global Stocks PLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
3. Investment in Securities
For the six months ended September 30, 2006, purchases and sales of investments, other than short-term securities and U.S. government obligations, were $41,978,620 and $17,044,012, respectively. Purchases in U.S. government obligations were $33,469,906.
(a) Futures contracts outstanding at September 30, 2006:
| | | | | Notional | | | | Unrealized |
| | | | | Amount | | Expiration | | Appreciation |
| Type | | | | (000) | | Date | | (Depreciation) |
| Long: S&P 500 Index | | | | $63 | | | 12/14/06 | | | $ | 2,240,254 | |
| S&P Mini 500 Index | | | | 27 | | | 12/15/06 | | | | 503,949 | |
| Short:U.S. Treasury Notes 10 yr. Futures | | | | (19,500 | ) | | 12/19/06 | | | | (124,922 | ) |
| | | | | | | | | | | $ | 2,619,281 | |
(b) Options written for the six months ended September 30, 2006:
| | Contracts/Notional | Premiums |
| Options outstanding, March 31, 2006 | | 2,000,300 | | | $ | 1,329,561 | |
| Options written | | 1,785 | | | | 8,594,342 | |
| Options terminated in closing purchase transactions | | (1,695 | ) | | | (8,005,177 | ) |
| Options exercised | | (95 | ) | | | (332,146 | ) |
| Options outstanding, September 30, 2006 | | 2,000,295 | | | $ | 1,586,580 | |
(c) Credit default swaps contracts outstanding at September 30, 2006:
| | | | | Notional | | | | | | | | |
| | | | | Amount | | | | Payments | | | |
| | | | | Payable on | | | | Received | | Unrealized |
| Swap Counterparty/ | | | | Default | | Termination | | (Paid) | | Appreciation |
| Referenced Debt Issuer | | | | (000) | | Date | | by Fund | | (Depreciation) |
| Bank of America | | | | | | | | | | | | | |
| Long Beach Mortgage Loan Trust | | | | $1,934 | | | 7/25/33 | | 4.50 | % | | $ 12,718 | |
| Barclay’s Bank | | | | | | | | | | | | | |
| Federation of Russia | | | | 4,900 | | | 7/20/11 | | 1.65 | % | | 100,094 | |
| Bear Stearns | | | | | | | | | | | | | |
| Dow Jones CDX | | | | 5,000 | | | 6/20/08 | | (0.12 | )% | | (9,072 | ) |
| Indymac Home Equity Loan | | | | 3,596 | | | 6/25/30 | | (0.45 | )% | | (2,911 | ) |
| Credit Suisse First Boston | | | | | | | | | | | | | |
| Citizens Communication Co. | | | | 1,000 | | | 3/20/08 | | (0.72 | )% | | (6,308 | ) |
| Citizens Communication Co. | | | | 2,000 | | | 3/20/13 | | (2.29 | )% | | (75,271 | ) |
| Citizens Communication Co. | | | | 3,000 | | | 3/20/11 | | 1.91 | % | | 101,454 | |
| Dow Jones CDX | | | | 2,000 | | | 12/20/10 | | 3.40 | % | | 87,167 | |
| Samis | | | | 1,600 | | | 3/20/09 | | 2.30 | % | | 10,699 | |
| Deutsche Bank | | | | | | | | | | | | | |
| Dow Jones CDX | | | | 5,000 | | | 12/20/10 | | (0.65 | )% | | (52,441 | ) |
| Dow Jones CDX High Yield | | | | 5,000 | | | 12/20/11 | | 3.25 | % | | (7,585 | ) |
| J.P. Morgan Chase | | | | | | | | | | | | | |
| Qwest Capital Funding | | | | 1,000 | | | 9/20/10 | | 4.20 | % | | 87,844 | |
| 9.30.06 | PIMCO Global StocksPLUS & Income Fund Semi-Annual Report 21
PIMCO Global StocksPLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
3. Investment in Securities (continued)
| | | | | Notional | | | | | | | | | |
| | | | | Amount | | | | Payments | | | | |
| | | | | Payable on | | | | Received | Unrealized |
| Swap Counterparty/ | | | | Default | | Termination | | (Paid) | Appreciation |
| Referenced Debt Issuer | | | | (000) | | Date | | by Fund | (Depreciation) |
| Lehman Brothers | | | | | | | | | | | | | | |
| ABX.HE.BBB | | | | $2,000 | | | 5/25/46 | | (1.33 | )% | | $ | (6,220 | ) |
| Dow Jones CDX | | | | 5,000 | | | 6/20/10 | | 0.90 | % | | | 121,711 | |
| Federal Republic of Brazil | | | | 6,000 | | | 6/20/16 | | 2.68 | % | | | 315,551 | |
| Merrill Lynch | | | | | | | | | | | | | | |
| Citizens Communication Co. | | | | 1,000 | | | 3/20/08 | | (0.75 | )% | | | (6,745 | ) |
| Citizens Communication Co. | | | | 2,000 | | | 3/20/13 | | (2.31 | )% | | | (77,400 | ) |
| Citizens Communication Co. | | | | 3,000 | | | 3/20/11 | | 1.95 | % | | | 106,215 | |
| Dow Jones CDX | | | | 10,000 | | | 12/20/15 | | (0.70 | )% | | | (66,474 | ) |
| Morgan Stanley | | | | | | | | | | | | | | |
| Aegis Asset Backed | | | | | | | | | | | | | | |
| Securities Trust | | | | 2,500 | | | 6/25/30 | | (1.15 | )% | | | (10,356 | ) |
| Federal Republic of Brazil | | | | 2,000 | | | 6/20/15 | | 4.23 | % | | | 323,566 | |
| Federation of Russia | | | | 5,000 | | | 6/20/15 | | 1.52 | % | | | 276,484 | |
| Indymac Home Equity Loan | | | | 3,514 | | | 6/25/30 | | 1.50 | % | | | 42,550 | |
| Morgan Stanley Dean Witter | | | | | | | | | | | | | | |
| Capital I | | | | 1,053 | | | 6/20/15 | | 2.15 | % | | | 20,353 | |
| Republic of Panama | | | | 5,000 | | | 8/25/32 | | 2.75 | % | | | 360,712 | |
| Republic of Peru | | | | 5,000 | | | 6/20/15 | | 2.90 | % | | | 366,384 | |
| United Mexican States | | | | 5,000 | | | 6/20/15 | | 1.40 | % | | | 224,644 | |
| UBS | | | | | | | | | | | | | | |
| Aegis Asset Backed | | | | | | | | | | | | | | |
| Securities Trust | | | | 2,500 | | | 6/25/34 | | 1.50 | % | | | 29,739 | |
| | | | | | | | | | | | | $ | 2,267,102 | |
(d) Interest rate swap agreements at September 30, 2006:
| | | | | | | | | | Rate Type | | | | | |
| | | | | Notional | | | | Payments | | Payments | | Unrealized |
| | | | | Amount | | Termination | | made by | | received by | | Appreciation |
| Swap Counterparty | | | | (000) | | Date | | Fund | | Fund | | (Depreciation) |
| Barclay’s Bank | | | | $500,000 | | | 6/13/07 | | 3.98% | | 3 month LIBOR | | | $ | 7,088,586 | |
| Goldman Sachs | | | | 97,000 | | | 2/23/16 | | 3 month LIBOR | | 5.80% | | | | 29,503 | |
| Goldman Sachs | | | | 97,000 | | | 2/26/16 | | 4.41% | | 3 month LIBOR | | | | 381,864 | |
| Lehman Brothers | | | | 260,000 | | | 2/23/16 | | 4.41% | | 3 month LIBOR | | | | 353,095 | |
| Lehman Brothers | | | | 260,000 | | | 2/23/16 | | 3 month LIBOR | | 5.80% | | | | 857,005 | |
| UBS | | | | 509,000 | | | 6/21/25 | | 5.70% | | 3 month LIBOR | | | | (30,329,834 | ) |
| UBS | | | | 535,000 | | | 6/21/25 | | 3 month LIBOR | | 5.70% | | | | 26,944,142 | |
| UBS | | | | 28,800 | | | 12/20/26 | | 5.00% | | 3 month LIBOR | | | | (1,672,016 | ) |
| | | | | | | | | | | | | | $ | 3,652,345 | |
| LIBOR – London Inter-bank Offered Rate | | | | | | | | | |
22 PIMCO Global StocksPLUS & Income Fund Semi-Annual Report | 9.30.06 |
PIMCO Global StocksPLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
3. Investment in Securities (continued)
(e) Total Return swap contracts outstanding at September 30, 2006:
| Swap | | Fund | | Fund | | Termination | | Notional | Unrealized |
| Counterparty | | Receives | | Pays | | Date | | Amount | Appreciation |
| Barclay’s Bank | | MSCI Daily | | 5.191% | | 9/28/07 | | $124,999,988 | | $(257,318 | ) |
| | | Total Return | | | | | | | | | |
| | | EAFE | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | |
EAFE – Europe and Australasia, Far East Equity Index
MSCI – Morgan Stanley Capital International
The Fund received $14,500,000 par value in U.S. Treasury Bills as collateral for swap contracts.
(f) Forward foreign currency contracts outstanding at September 30, 2006:
| | | | | U.S. $ Value | | | | U.S. $ Value | Unrealized |
| | | | | Origination Date | | | | September 30, 2006 | Appreciation |
| Sold: | | | | | | | | | | | |
| €4,578,000 settling 10/31/06 | | | | $5,825,001 | | | | $5,809,879 | | $15,122 | |
(g) Open reverse repurchase agreements at September 30, 2006:
| | | | | | Trade | | Maturity | | Principal & | | | | |
| Counter Party | | Rate | | Date | | Date | | Interest | Par |
| Lehman Securities | | 5.29 | % | | 9/20/06 | | 10/23/06 | | $40,599,519 | | | $ | 40,534,000 | |
| | | 5.38 | % | | 9/20/06 | | 10/23/06 | | 785,289 | | | | 784,000 | |
| | | | | | | | | | | | | $ | 41,318,000 | |
Details of underlying collateral for open reverse repurchase agreements at September 30, 2006 as reflected in the schedule of investments:
| | | | | | | | Maturity | | | | |
| Counter Party | | Description | | Rate | | Date | | Par | Value |
| Lehman Securities | | Freddie Mac | | 6.00 | % | | 5/1/34 | | $19,139,384 | | | $ | 19,274,652 | |
| | | Freddie Mac | | 6.50 | % | | 4/1/35 | | 7,181,144 | | | | 7,333,239 | |
| | | Freddie Mac | | 6.50 | % | | 2/1/36 | | 15,415,057 | | | | 15,723,002 | |
| | | Residential Asset | | | | | | | | | | | | |
| | | Securitization Trust | | 5.835 | % | | 2/25/34 | | 816,635 | | | | 819,859 | |
| | | | | | | | | | | | | $ | 43,150,752 | |
| 9.30.06 | PIMCO Global StocksPLUS & Income Fund Semi-Annual Report 23
PIMCO Global StocksPLUS & Income Fund Notes to Financial Statements
September 30, 2006 (unaudited)
4. Income Tax Information
The cost basis of portfolio securities of $287,994,620 is substantially the same for both federal income tax and financial reporting purposes. Aggregated gross unrealized appreciation for securities in which there is an excess value over tax cost is $1,105,561; aggregate gross unrealized depreciation for securities in which there is an excess of tax cost over value is $5,388,019; net unrealized depreciation for federal income tax purposes is $4,282,458.
5. Subsequent Dividend Declarations
On October 2, 2006, a dividend of $0.18335 per share was declared to shareholders payable November 1, 2006 to shareholders of record on October 12, 2006.
On November 1, 2006, a dividend of $0.18335 per share was declared to shareholders payable December 1, 2006 to shareholders of record on November 13, 2006.
6. Legal Proceedings
In June and September 2004, the Investment Manager, certain of its affiliates (including Allianz Global Investors Distributors LLC and PEA Capital LLC) and Allianz Global, agreed to settle, without admitting or denying the allegations, claims brought by the Securities and Exchange Commission (the “Commission”), the New Jersey Attorney General and the California Attorney General alleging violations of federal and state securities laws with respect to certain open-end funds for which the Investment Manager serves as investment adviser. Two settlements (with the Commission and New Jersey) related to an alleged “market timing” arrangement in certain open-end funds sub-advised by PEA Capital LLC. Two settlements (with the Commission and California) related to the alleged use of cash and fund portfolio commissions to finance “shelf-space” arrangements with broker-dealers for open-end funds. The Investment Manager and its affiliates agreed to pay a total of $68 million to settle the claims related to market timing and $20.6 million to settle the claims related to shelf space. In addition to monetary payments, the settling parties agreed to undertake certain corporate governance, compliance and disclosure reforms related to market timing, brokerage commissions, revenue sharing and shelf space arrangements, and consented to cease and desist orders and censures. The settling parties did not admit or deny the findings in these settlements. None of the settlements allege that any inappropriate activity took place with respect to the Fund.
Since February 2004, the Investment Manager and certain of its affiliates and their employees have been named as defendants in fifteen lawsuits filed in various jurisdictions. Eleven of those lawsuits concern market timing and have been transferred to and consolidated for pre-trial proceedings in a multi-district litigation proceeding in the U.S. District Court for the District of Maryland; the other four lawsuits concern revenue sharing and have been consolidated into a single action in the U.S. District Court for the District of Connecticut. The lawsuits generally relate to the same allegations that are the subject of the regulatory proceedings discussed above. The lawsuits seek, among other things, unspecified compensatory damages plus interest and, in some cases, punitive damages, the rescission of investment advisory contracts, the return of fees paid under those contracts, restitution, and waiver of or return of certain sales charges paid by open-end fund shareholders.
The Investment Manager and the Sub-Adviser believe that these matters are not likely to have a material adverse effect on the Fund or on their ability to perform their respective investment advisory activities relating to the Fund.
The foregoing speaks only as of the date hereof.
7. Corporate Changes
On September 12, 2006, the Fund’s Board of Trustees appointed William B. Ogden IV as a class I Trustee.
On October 10, 2006, David C. Flattum, an interested Trustee, resigned as a Class III Trustee.
24 PIMCO Global StocksPLUS & Income Fund Semi-Annual Report | 9.30.06 |
PIMCO Global StocksPLUS & Income Fund Financial Highlights
For a share of stock outstanding throughout each period
| | | Six months | | For the period |
| | | ended | | May 31, 2005* |
| | | September 30, 2006 | | through |
| | | (unaudited) | | March 31, 2006 |
| Net asset value, beginning of period | | $ | 26.04 | | | $ | 23.88 | ** |
| Investment Operations: | | | | | | | | |
| Net investment income | | | 0.45 | | | | 0.80 | |
| Net realized and change in unrealized gain on investments, futures | | | | | | | | |
| contracts, options written, swaps, unfunded loan commitments | | | | | | | | |
| and foreign currency transactions | | | 0.85 | | | | 3.52 | |
| Total from investment operations | | | 1.30 | | | | 4.32 | |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Net investment income | | | (1.10 | ) | | | (2.11 | ) |
| Net realized gains | | | (0.20 | ) | | | — | |
| Total dividends and distributions to shareholders | | | (1.30 | ) | | | (2.11 | ) |
| Capital Share Transactions: | | | | | | | | |
| Offering costs charged to paid-in capital in excess of par | | | — | | | | (0.05 | ) |
| Net asset value, end of period | | $ | 26.04 | | | $ | 26.04 | |
| Market price, end of period | | $ | 26.30 | | | $ | 24.49 | |
| Total Investment Return(1) | | | 12.99 | % | | | 6.80 | % |
| |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | |
| Net assets end of period (000) | | $ | 242,907 | | | $ | 242,981 | |
| Ratio of expenses to average net assets (2)(3) | | | 2.33 | % | | | 1.99 | % |
| Ratio of expenses to average net assets, excluding interest expenses (2)(3) | | | 1.37 | % | | | 1.31 | % |
| Ratio of net investment income to average net assets (3) | | | 3.57 | % | | | 3.82 | % |
| Portfolio turnover | | | 7 | % | | | 105 | % |
| * | Commencement of operations. |
| ** | Initial public offering price of $25.00 per share less underwriting discount of $1.125 per share. |
| (1) | Total investment return is calculated assuming a purchase of a share of stock at the current market price on the first day of each period and a sale of a share of stock at the current market price on the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized. |
| (2) | Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(n) in the Notes to Financial Statements). |
| (3) | Annualized. |
| |
| 9.30.06 | PIMCO Global StocksPLUS & Income Fund Semi-Annual Report 25
| PIMCO Global StocksPLUS & Income Fund | Annual Shareholder |
| September 30, 2006 (unaudited) | Meeting Results |
The Fund held its annual meeting of shareholders on July 19, 2006. Shareholders voted to re-elect Paul Belica and Hans W. Kertess and elect David C. Flattum and R. Peter Sullivan III as trustees as indicated below.
| | | Withheld |
| | Affirmative | Authority |
| Re-election of Paul Belica — Class I to serve until 2009 | 6,419,252 | 74,271 |
| Election of David C. Flatum — Class III to serve until 2008 | 6,428,624 | 64,899 |
| Re-election of Hans W. Kertess — Class I to serve until 2009 | 6,428,369 | 65,154 |
| Election of R. Peter Sullivan III — Class II to serve until 2007 | 6,431,180 | 62,343 |
Robert E. Connor, John J. Dalessandro II and William B. Ogden IV continue to serve as Trustees.
26 PIMCO Global StocksPLUS & Income Fund Semi-Annual Report | 9.30.06 |
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Trustees and Principal Officer
| Robert E. Connor | Brian S. Shlissel |
| Trustee, Chairman of the Board of Trustees | President & Chief Executive Officer |
| Paul Belica | Lawrence G. Altadonna |
| Trustee | Treasurer, Principal Financial & Accounting Officer |
| John J. Dalessandro II | Thomas J. Fuccillo |
| Trustee | Vice President, Secretary & Chief Legal Officer |
| Hans W. Kertess | Youse E. Guia |
| Trustee | Chief Compliance Officer |
| William B. Ogden IV | |
| Trustee | |
| R. Peter Sullivan III | |
| Trustee | |
Investment Manager
Allianz Global Investors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105
Sub-Adviser
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660
Custodian & Accounting Agent
State Street Bank & Trust Co.
801 Pennsylvania
Kansas City, MO 64105-1307
Transfer Agent, Dividend Paying Agent and Registrar
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Legal Counsel
Ropes & Gray LLP
One International Place
Boston, MA 02210-2624
This report, including the financial information herein, is transmitted to the shareholders of PIMCO Global StocksPLUS & Income Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.
The financial information included herein is taken from the records of the Fund without examination by an independent registered public accounting firm, who did not express an opinion hereon.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase shares of its common stock in the open market.
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarter of its fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
On August 1, 2006, the Fund submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Fund’s principal executive officer certified that he was not aware as of the date, 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 SEC rules, the Fund’s principal executive and principal financial officer 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, as applicable.
A description of the policies and procedures that the Fund has adopted to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities held during the twelve months ended June 30, 2006 is available (i) without charge upon request by calling the Fund’s shareholder servicing agent at (800) 331-1710; (ii) on the Fund’s website at www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and Exchange Commission website at sec.gov.
Information on the Fund is available at www.allianzinvestors.com/closedendfunds or by calling the Fund’s shareholder servicing agent at (800) 331-1710.
ITEM 2. CODE OF ETHICS
Not required in this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not required in this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not effective at the time of this filing
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END
MANAGEMENT INVESTMENT COMPANY AND AFFILIATED COMPANIES.
| | | | | | | Total Number | | |
| | | | | | | of Shares Purchased | | Maximum Number of |
| | | Total Number | | Average | | as Part of Publicly | | Shares that May yet Be |
| | | of Shares | | Price Paid | | Announced Plans or | | Purchased Under the Plans |
| Period | | Purchased | | Per Share | | Programs | | or Programs |
| |
| April 2006 | | N/A | | N/A | | N/A | | N/A |
| May 2006 | | N/A | | N/A | | N/A | | N/A |
| June 2006 | | N/A | | N/A | | N/A | | N/A |
| July 2006 | | N/A | | N/A | | N/A | | N/A |
| August 2006 | | N/A | | N/A | | N/A | | N/A |
| September 2006 | | N/A | | N/A | | N/A | | N/A |
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant's President and Chief Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended are effective
based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no significant changes in the registrant's internal controls or in factors that could affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS
| (a) (1) | Exhibit 99.302 CERT – Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | |
| (b) | Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Signature
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.
PIMCO Global StocksPLUS & Income Fund
By /s/ Brian S. Shlissel
-------------------------------
Brian S. Shlissel, President & Chief Executive Officer
Date: December 6, 2006
By /s/ Lawrence G. Altadonna
-------------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer
Date: December 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 below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/ Brian S. Shlissel
-------------------------------
Brian S. Shlissel, President & Chief Executive Officer
Date: December 6, 2006
By /s/ Lawrence G. Altadonna
-------------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer
Date: December 6, 2006
