| RiverNorth Opportunities Fund, Inc. |
| Statement of Investments |
| October 31, 2019 (Unaudited) |
| Description | Shares | Value (Note 2) | ||||||
| CLOSED-END FUNDS - COMMON SHARES (65.67%) | ||||||||
| Aberdeen Emerging Markets Equity Income Fund, Inc. | 174,576 | $ | 1,232,507 | |||||
| Aberdeen Total Dynamic Dividend Fund | 449,956 | 3,797,629 | ||||||
| AllianzGI Convertible & Income 2024 Target Term Fund | 4,538 | 43,202 | ||||||
| AllianzGI NFJ Dividend Interest & Premium Strategy Fund | 247,074 | 3,063,718 | ||||||
| BlackRock California Municipal Income Trust | 22,306 | 302,023 | ||||||
| BlackRock Debt Strategies Fund, Inc. | 133,089 | 1,433,368 | ||||||
| BlackRock New York Municipal Income Quality Trust | 76,542 | 1,042,502 | ||||||
| BlackRock Resources & Commodities Strategy Trust | 99,946 | 753,593 | ||||||
| BrandywineGLOBAL - Global Income Opportunities Fund, Inc.(a) | 369,974 | 4,569,179 | ||||||
| Clough Global Equity Fund | 104,435 | 1,229,200 | ||||||
| Clough Global Opportunities Fund(a) | 268,600 | 2,468,434 | ||||||
| Cornerstone Strategic Value Fund, Inc. | 65,552 | 732,871 | ||||||
| Delaware Enhanced Global Dividend & Income Fund | 188,049 | 1,839,119 | ||||||
| Duff & Phelps Utility and Corporate Bond Trust, Inc. | 40,222 | 367,629 | ||||||
| Eaton Vance Floating-Rate Income Plus Fund | 38,606 | 599,165 | ||||||
| Eaton Vance Limited Duration Income Fund | 372,553 | 4,757,502 | ||||||
| Eaton Vance Senior Income Trust | 75,005 | 464,281 | ||||||
| Eaton Vance Tax-Managed Buy-Write Strategy Fund | 101,142 | 980,066 | ||||||
| Franklin Limited Duration Income Trust | 1,678 | 15,622 | ||||||
| GDL Fund | 17,797 | 163,910 | ||||||
| Highland Global Allocation Fund/CEF | 36,833 | 348,072 | ||||||
| Highland Income Fund | 99,464 | 1,213,461 | ||||||
| India Fund, Inc. | 31,757 | 664,992 | ||||||
| Invesco Dynamic Credit Opportunities Fund | 414,514 | 4,584,525 | ||||||
| Invesco High Income Trust II | 168,152 | 2,434,841 | ||||||
| Invesco Municipal Opportunity Trust | 25,805 | 320,240 | ||||||
| Invesco Senior Income Trust(a) | 953,010 | 3,983,582 | ||||||
| John Hancock Tax-Advantaged Global Shareholder Yield Fund | 7,370 | 51,074 | ||||||
| Kayne Anderson MLP/Midstream Investment Co. | 138,217 | 1,817,554 | ||||||
| Lazard World Dividend & Income Fund, Inc. | 46,504 | 449,229 | ||||||
| Neuberger Berman California Municipal Fund, Inc. | 7,402 | 103,036 | ||||||
| Neuberger Berman High Yield Strategies Fund, Inc. | 49,034 | 584,976 | ||||||
| Neuberger Berman New York Municipal Fund, Inc. | 124,980 | 1,548,552 | ||||||
| NexPoint Credit Strategies Fund | 57,960 | 955,760 | ||||||
| Nuveen Connecticut Quality Municipal Income Fund | 94,355 | 1,289,833 | ||||||
| Nuveen Credit Strategies Income Fund | 435,461 | 3,209,348 | ||||||
| Nuveen Georgia Quality Municipal Income Fund | 97,607 | 1,223,992 | ||||||
| Nuveen Intermediate Duration Quality Municipal Term Fund | 46,594 | 641,133 | ||||||
| Nuveen Mortgage Opportunity Term Fund 2 | 27,396 | 608,293 | ||||||
| Nuveen North Carolina Quality Municipal Income Fund | 73,568 | 1,006,410 | ||||||
| PGIM Global High Yield Fund, Inc.(a) | 391,211 | 5,633,438 | ||||||
| PGIM High Yield Bond Fund, Inc. | 101,932 | 1,517,767 | ||||||
| PIMCO Energy & Tactical Credit Opportunities Fund | 26,799 | 444,595 | ||||||
| Putnam Municipal Opportunities Trust | 108,017 | 1,423,664 | ||||||
| Royce Micro-Cap Trust, Inc. | 164,907 | 1,330,799 | ||||||
| Source Capital, Inc. | 33,034 | 1,230,044 | ||||||
| Special Opportunities Fund, Inc. | 64,876 | 912,157 | ||||||
| The Swiss Helvetia Fund, Inc.(b) | 2,646 | 22,121 | ||||||
| Templeton Global Income Fund | 580,557 | 3,500,759 | ||||||
| Tortoise MLP Fund, Inc. | 49,290 | 552,541 | ||||||
| Voya Emerging Markets High Income Dividend Equity Fund | 51,673 | 378,246 | ||||||
| Voya Natural Resources Equity Income Fund | 20,050 | 73,984 | ||||||
| Voya Prime Rate Trust(a) | 774,338 | 3,716,822 | ||||||
| Description | Shares | Value (Note 2) | ||||||
| Western Asset Corporate Loan Fund, Inc. | 55,418 | $ | 520,929 | |||||
| Western Asset Global High Income Fund, Inc. | 186,521 | 1,827,906 | ||||||
| TOTAL CLOSED-END FUNDS - COMMON SHARES | ||||||||
| (Cost $78,917,962) | 79,980,195 | |||||||
| CLOSED-END FUNDS - PREFERRED SHARES (0.43%) | ||||||||
| PennantPark Investment Corp.(b) | 18,654 | 470,267 | ||||||
| WhiteHorse Finance, Inc. | 2,054 | 54,606 | ||||||
| TOTAL CLOSED-END FUNDS - PREFERRED SHARES | ||||||||
| (Cost $518,601) | 524,873 | |||||||
| BUSINESS DEVELOPMENT COMPANIES - COMMON SHARES (4.67%) | ||||||||
| Barings BDC, Inc.(a) | 388,690 | 3,991,846 | ||||||
| Garrison Capital, Inc. | 163,249 | 1,092,136 | ||||||
| OHA Investment Corp. | 468,165 | 608,615 | ||||||
| TOTAL BUSINESS DEVELOPMENT COMPANIES - COMMON SHARES | ||||||||
| (Cost $6,546,179) | 5,692,597 | |||||||
| BUSINESS DEVELOPMENT COMPANY NOTES - PREFERRED SHARES (4.44%) | ||||||||
| Capital Southwest Corp., 5.95%, 12/15/2022 | 18,588 | 482,544 | ||||||
| Monroe Capital Corp., 5.75%, 10/31/2023 | 1,997 | 50,963 | ||||||
| Oxford Square Capital Corp., 6.50%, 3/30/2024 | 78,540 | 1,992,953 | ||||||
| Portman Ridge Finance Corp., 6.13%, 9/30/2022 | 12,025 | 302,309 | ||||||
| Stellus Capital Investment Corp., 5.75%, 9/15/2022 | 12,767 | 328,035 | ||||||
| THL Credit, Inc., 6.75%, 12/30/2022 | 29,808 | 757,421 | ||||||
| THL Credit, Inc., 6.13%, 10/30/2023 | 45,456 | 1,186,402 | ||||||
| TriplePoint Venture Growth BDC Corp., 5.75%, 7/15/2022 | 12,191 | 312,081 | ||||||
| TOTAL BUSINESS DEVELOPMENT COMPANY NOTES - PREFERRED SHARES | ||||||||
| (Cost $5,288,233) | 5,412,708 | |||||||
| Rate | Maturity Date | Principal Amount | Value (Note 2) | |||||||||||
| CONVERTIBLE CORPORATE BOND (0.49%) | ||||||||||||||
| BlackRock Capital Investment Corp. | 5.000 | % | 06/15/22 | $ | 600,000 | $ | 601,579 | |||||||
| TOTAL CONVERTIBLE CORPORATE BOND | ||||||||||||||
| (Cost $600,000) | 601,579 | |||||||||||||
| Shares | Value (Note 2) | |||||||
| SPECIAL PURPOSE ACQUISITION COMPANIES - COMMON SHARES (14.37%) | ||||||||
| 8i Enterprises Acquisition Corp.(b) | 23,872 | 238,004 | ||||||
| Act II Global Acquisition Corp.(b) | 13,143 | 135,241 | ||||||
| Agba Acquisition, Ltd.(b) | 30,883 | 314,543 | ||||||
| Alberton Acquisition Corp.(b) | 22,730 | 239,347 | ||||||
| Allegro Merger Corp.(b) | 24,649 | 250,064 | ||||||
| Andina Acquisition Corp. III(b) | 29,708 | 311,934 | ||||||
| Apex Technology Acquisition Corp.(b) | 6,941 | 71,215 | ||||||
| B Riley Principal Merger Corp.(b) | 21,819 | 221,463 | ||||||
| Big Rock Partners Acquisition Corp.(b) | 35,482 | 376,109 | ||||||
| Boxwood Merger Corp.(b) | 47,428 | 479,497 | ||||||
| ChaSerg Technology Acquisition Corp.(b) | 16,106 | 173,139 | ||||||
| Churchill Capital Corp. II(b) | 56,978 | 615,362 | ||||||
| Crescent Acquisition Corp.(b) | 39,846 | 405,433 | ||||||
| DD3 Acquisition Corp.(b) | 48,831 | 494,902 | ||||||
| Edtechx Holdings Acquisition Corp.(b) | 16,106 | 184,092 | ||||||
| Far Point Acquisition Corp., Class A(b) | 5,103 | 52,110 | ||||||
| Description | Shares | Value (Note 2) | ||||||
| Fellazo, Inc.(b) | 23,580 | $ | 237,686 | |||||
| FinTech Acquisition Corp. III(b) | 35,478 | 378,550 | ||||||
| Galileo Acquisition Corp.(b) | 9,373 | 94,011 | ||||||
| GigCapital2, Inc.(b) | 23,193 | 241,439 | ||||||
| Graf Industrial Corp.(b) | 47,967 | 503,654 | ||||||
| Greenland Technologies Holding(b) | 1,171 | 8,548 | ||||||
| GX Acquisition Corp.(b) | 21,598 | 220,084 | ||||||
| Haymaker Acquisition Corp. II(b) | 15,939 | 164,969 | ||||||
| Health Sciences Acquisitions Corp.(b) | 13,788 | 139,948 | ||||||
| Hennessy Capital Acquisition Corp. IV(b) | 44,040 | 471,228 | ||||||
| HL Acquisitions Corp.(b) | 30,748 | 314,091 | ||||||
| Insurance Acquisition Corp.(b) | 6,376 | 66,023 | ||||||
| Leisure Acquisition Corp.(b) | 56,828 | 584,760 | ||||||
| LF Capital Acquisition Corp., Class A(b) | 33,437 | 343,732 | ||||||
| Longevity Acquisition Corp.(b) | 24,043 | 252,452 | ||||||
| Megalith Financial Acquisition Corp.(b) | 35,972 | 380,943 | ||||||
| Monocle Acquisition Corp.(b) | 7,363 | 76,943 | ||||||
| Netfin Acquisition Corp.(b) | 25,065 | 253,407 | ||||||
| New Providence Acquisition Corp.(b) | 16,868 | 170,198 | ||||||
| Nuveen Ohio Quality Municipal Income Fund | 19,902 | 311,864 | ||||||
| Orisun Acquisition Corp.(b) | 36,130 | 363,107 | ||||||
| Pivotal Acquisition Corp.(b) | 9,896 | 100,741 | ||||||
| Pivotal Investment Corp. II(b) | 11,579 | 117,645 | ||||||
| Proficient Alpha Acquisition Corp.(b) | 34,883 | 355,283 | ||||||
| Pure Acquisition Corp.(b) | 42,171 | 434,362 | ||||||
| Replay Acquisition Corp.(b) | 21,524 | 221,073 | ||||||
| SC Health Corp.(b) | 5,789 | 60,495 | ||||||
| Schultze Special Purpose Acquisition Corp.(b) | 30,224 | 315,539 | ||||||
| Silver Spike Acquisition Corp.(b) | 25,306 | 256,603 | ||||||
| South Mountain Merger Corp.(b) | 30,930 | 317,033 | ||||||
| Tenzing Acquisition Corp.(b) | 29,977 | 315,508 | ||||||
| Thunder Bridge Acquisition II, Ltd.(b) | 16,262 | 167,255 | ||||||
| TKK Symphony Acquisition Corp.(b) | 72,356 | 739,117 | ||||||
| Tottenham Acquisition I, Ltd.(b) | 24,729 | 256,192 | ||||||
| Trident Acquisitions Corp.(b) | 50,476 | 527,474 | ||||||
| Trine Acquisition Corp.(b) | 30,246 | 314,256 | ||||||
| Trinity Merger Corp., Class A(b) | 20,397 | 213,965 | ||||||
| Tuscan Holdings Corp.(b) | 43,548 | 458,125 | ||||||
| Tuscan Holdings Corp. II(b) | 92,638 | 937,497 | ||||||
| Twelve Seas Investment Co.(b) | 45,379 | 465,135 | ||||||
| Union Acquisition Corp. II(b) | 5,982 | 60,299 | ||||||
| VectoIQ Acquisition Corp.(b) | 47,906 | 491,755 | ||||||
| Wealthbridge Acquisition, Ltd.(b) | 22,108 | 229,371 | ||||||
| TOTAL SPECIAL PURPOSE ACQUISITION COMPANIES - COMMON SHARES | ||||||||
| (Cost $16,574,361) | 17,494,815 | |||||||
| RIGHTS (0.08%) | ||||||||
| 8i Enterprises Acquisition Corp., Strike Price $11.50, Expires 12/31/2049(b) | 23,872 | 9,167 | ||||||
| Allegro Merger Corp., Strike Price $11.50, Expires 01/07/2025(b) | 24,649 | 5,788 | ||||||
| Big Rock Partners Acquisition Corp., Strike Price $11.50, Expires 12/31/2049(b) | 35,482 | 9,225 | ||||||
| HL Acquisitions Corp., Strike Price $11.50, Expires 07/19/2023(b) | 30,748 | 8,813 | ||||||
| KBL Merger Corp. IV, Strike Price $11.50, Expires 07/01/2023(b) | 20,375 | 4,075 | ||||||
| Description | Shares | Value (Note 2) | ||||||
| Pensare Acquisition Corp., Strike Price $11.50, Expires 08/08/2022(b) | 38,862 | $ | 13,209 | |||||
| TKK Symphony Acquisition Corp., Strike Price $11.50, Expires 12/31/2049(b) | 72,356 | 18,089 | ||||||
| Tottenham Acquisition I, Ltd., Strike Price $11.50, Expires 12/31/2049(b) | 24,729 | 4,587 | ||||||
| Twelve Seas Investment Co., Strike Price $11.50, Expires 07/14/2023(b) | 45,379 | 26,179 | ||||||
| TOTAL RIGHTS | ||||||||
| (Cost $118,036) | 99,132 | |||||||
| WARRANTS (0.24%) | ||||||||
| 8i Enterprises Acquisition Corp., Strike Price $11.50, Expires 10/01/2025(b) | 23,872 | 9,262 | ||||||
| Akazoo SA, Strike Price $11.50, Expires 12/31/2024(b) | 4,122 | 3,050 | ||||||
| Allegro Merger Corp., Strike Price $11.50, Expires 01/07/2025(b) | 24,649 | 5,211 | ||||||
| Allied Esports Entertainment, Inc., Strike Price $11.50, Expires 10/25/2024(b) | 2,929 | 410 | ||||||
| Big Rock Partners Acquisition Corp., Strike Price $11.50, Expires 12/01/2022(b) | 17,741 | 3,934 | ||||||
| Boxwood Merger Corp., Strike Price $11.50, Expires 11/26/2025(b) | 47,428 | 37,942 | ||||||
| DD3 Acquisition Corp., Strike Price $11.50, Expires 10/23/2023(b) | 48,831 | 16,949 | ||||||
| Far Point Acquisition Corp., Strike Price $11.50, Expires 06/03/2025(b) | 1,701 | 2,118 | ||||||
| Greenland Technologies Holding, Strike Price $11.50, Expires 07/26/2023(b) | 23,749 | 3,087 | ||||||
| Health Sciences Acquisitions Corp., Strike Price $11.50, Expires 04/01/2024(b) | 13,788 | 14,064 | ||||||
| HL Acquisitions Corp., Strike Price $11.50, Expires 07/19/2023(b) | 30,748 | 5,612 | ||||||
| KBL Merger Corp. IV, Strike Price $11.50, Expires 07/01/2023(b) | 20,375 | 1,830 | ||||||
| Legacy Acquisition Corp., Strike Price $11.50, Expires 12/01/2022(b) | 29,594 | 13,480 | ||||||
| Leisure Acquisition Corp., Strike Price $11.50, Expires 12/28/2022(b) | 28,414 | 18,958 | ||||||
| LF Capital Acquisition Corp., Strike Price $11.50, Expires 06/28/2023(b) | 33,437 | 15,080 | ||||||
| Pensare Acquisition Corp., Strike Price $11.50, Expires 08/08/2022(b) | 19,431 | 6,121 | ||||||
| Pivotal Acquisition Corp., Strike Price $11.50, Expires 12/01/2025(b) | 9,896 | 12,964 | ||||||
| Pure Acquisition Corp., Strike Price $11.50, Expires 04/17/2023(b) | 21,085 | 23,826 | ||||||
| TKK Symphony Acquisition Corp., Strike Price $11.50, Expires 08/20/2023(b) | 72,356 | 5,788 | ||||||
| Tottenham Acquisition I, Ltd., Strike Price $11.50, Expires 06/06/2025(b) | 24,729 | 1,757 | ||||||
| Trident Acquisitions Corp., Strike Price $11.50, Expires 06/14/2021(b) | 50,476 | 5,552 | ||||||
| Trinity Merger Corp., Strike Price $11.50, Expires 06/01/2023(b) | 20,397 | 30,392 | ||||||
| Twelve Seas Investment Co., Strike Price $11.50, Expires 07/14/2023(b) | 45,379 | 24,954 | ||||||
| Description | Shares | Value (Note 2) | ||||||
| VectoIQ Acquisition Corp., Strike Price $11.50, Expires 06/12/2023(b) | 47,906 | $ | 25,869 | |||||
| TOTAL WARRANTS | ||||||||
| (Cost $279,587) | 288,210 | |||||||
| Description | 7-Day Yield | Shares | Value | |||||||||
| SHORT-TERM INVESTMENTS (10.35%) | ||||||||||||
| State Street Institutional Treasury Money Market Fund | 1.743 | % | 12,600,045 | 12,600,045 | ||||||||
| TOTAL SHORT-TERM INVESTMENTS | ||||||||||||
| (Cost $12,600,045) | 12,600,045 | |||||||||||
| TOTAL INVESTMENTS (100.74%) | ||||||||||||
| (Cost $121,443,004) | $ | 122,694,154 | ||||||||||
| Liabilities in Excess of Other Assets (-0.74%)(c) | (911,806 | ) | ||||||||||
| NET ASSETS (100.00%) | $ | 121,782,348 | ||||||||||
| SCHEDULE OF SECURITIES SOLD SHORT | ||||||||
| Description | Shares | Value | ||||||
| EXCHANGE TRADED FUNDS - COMMON SHARES (-11.06%) | ||||||||
| PowerShares Senior Loan Portfolio | (271,147 | ) | $ | (6,076,404 | ) | |||
| SPDR® Barclays Short Term High Yield Bond ETF | (114,385 | ) | (3,064,374 | ) | ||||
| SPDR® Bloomberg Barclays High Yield Bond ETF | (40,000 | ) | (4,327,600 | ) | ||||
| TOTAL EXCHANGE TRADED FUNDS - COMMON SHARES | (13,468,378 | ) | ||||||
| TOTAL SECURITIES SOLD SHORT | ||||||||
| (Proceeds $13,554,564) | $ | (13,468,378 | ) | |||||
| (a) | All or a portion of the security is pledged as collateral for securities sold short. As of October 31, 2019, the aggregate market value of those securities was $9,629,874 representing 7.91% of net assets. |
| (b) | Non-income producing security. |
| (c) | Includes cash, in the amount of $13,797,726 which is being held as collateral for securities sold short. |
See Notes to Quarterly Statement of Investments.
RiverNorth Opportunities Fund, Inc.
Notes to Quarterly Statement of Investments
October 31, 2019 (Unaudited)
1. ORGANIZATION
RiverNorth Opportunities Fund, Inc. (the “Fund”) is a Maryland corporation registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). Effective July 18, 2018, the Fund’s Board of Directors (the “Board”) approved changing the fiscal year-end of the Fund from October 31 to July 31.
The Fund’s investment objective is total return consisting of capital appreciation and current income. The Fund seeks to achieve its investment objective by pursuing a tactical asset allocation strategy and opportunistically investing under normal circumstances in closed-end funds and exchange-traded funds (“ETFs” and collectively, “Underlying Funds”). Underlying Funds also may include business development companies (“BDCs”) and special purpose acquisition companies (“SPACs”). All Underlying Funds are registered under the Securities Act of 1933, as amended (the “Securities Act”). The Fund incurs higher and additional expenses when it invests in Underlying Funds. There is also the risk that the Fund may suffer losses due to the investment practices or operations of the Underlying Funds. To the extent that the Fund invests in one or more Underlying Funds that concentrate in a particular industry, the Fund would be vulnerable to factors affecting that industry and the concentrating Underlying Funds’ performance, and that of the Fund, may be more volatile than Underlying Funds that do not concentrate. In addition, one Underlying Fund may purchase a security that another Underlying Fund is selling.
Under normal circumstances, the Fund intends to maintain long positions in Underlying Funds, but may engage in short sales for investment purposes. When the Fund engages in a short sale, it sells a security it does not own and, to complete the sale, borrows the same security from a broker or other institution. The Fund may benefit from a short position when the shorted security decreases in value.
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates: The Statement of Investments is prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Statement of Investments during the period reported. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the Statement of Investments may differ from the value the Fund ultimately realizes upon sale ofthe securities. The Fund is considered an investment company under GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards BoardAccounting Standards Codification Topic 946. The Statement of Investments has been prepared as of the close of the New York Stock Exchange (“NYSE”) on October 31, 2019.
Portfolio Valuation: The net asset value per common share of the Fund is determined daily, on each day that the NYSE is open for trading, as of the close of regular trading on the NYSE (normally 4:00 p.m. New York time). The Fund’s net asset value per common share is calculated by dividing the value of the Fund’s total assets, less its liabilities by the number of shares outstanding.
The Board of Directors (the “Board”) has established the following procedures for valuation of the Fund’s assets under normal market conditions. Marketable securities listed on foreign or U.S. securities exchanges generally are valued at closing sale prices or, if there were no sales, at the mean between the closing bid and ask prices on the exchange where such securities are primarily traded. If the independent primary or secondary pricing service is unable to provide a price for a security, if the price provided by the independent primary or secondary pricing service is deemed unreliable, or if events occurring after the close of the market for a security but before the time as of which the Fund values its common shares would materially affect net asset value, such security will be valued at its fair value as determined in good faith under procedures approved by the Board.
When applicable, fair value of an investment is determined by the Fund’s Fair Valuation Committee as a designee of the Board. In fair valuing the Fund’s investments, consideration is given to several factors, whichmay include, among others, the following: the fundamental business data relating to the issuer, borrower, or counterparty; an evaluation of the forces which influence the market in which the investments are purchased and sold; the type, size and cost of the investment; the information as to any transactions in or offers for the investment; the price and extent of public trading in similar securities (or equity securities) of the issuer, or comparable companies; the coupon payments, yield data/cash flow data; the quality, value and saleability of collateral, if any, securing the investment; the business prospects of the issuer, borrower, or counterparty, as applicable, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer’s, borrower’s, or counterparty’s management; the prospects for the industry of the issuer, borrower, or counterparty, as applicable, and multiples (of earnings and/or cash flow) being paid for similar businesses in that industry; one or more independent broker quotes for the sale price of the portfolio security; and other relevant factors.
Securities Transactions and Investment Income: Investment security transactions are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the cost basis method for both financial reporting and tax purposes.
Fair Value Measurements: The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.
These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 –Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date;
Level 2 –Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.
The following is a summary of the inputs used to value the Fund’s investments as of October 31, 2019:
| Investments in Securities at Value | Level 1 - Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
| Closed-End Funds - Common Shares | $ | 79,980,195 | $ | – | $ | – | $ | 79,980,195 | ||||||||
| Closed-End Funds - Preferred Shares | 524,873 | – | – | 524,873 | ||||||||||||
| Business Development Companies - Common Shares | 5,692,597 | – | – | 5,692,597 | ||||||||||||
| Business Development Company Notes - Preferred Shares | 5,412,708 | – | – | 5,412,708 | ||||||||||||
| Convertible Corporate Bond | – | 601,579 | – | 601,579 | ||||||||||||
| Special Purpose Acquisition Companies - Common Shares | 17,494,815 | – | – | 17,494,815 | ||||||||||||
| Rights | 99,132 | – | – | 99,132 | ||||||||||||
| Warrants | 288,210 | – | – | 288,210 | ||||||||||||
| Short-Term Investments | 12,600,045 | – | – | 12,600,045 | ||||||||||||
| Total | $ | 122,092,575 | $ | 601,579 | $ | – | $ | 122,694,154 | ||||||||
| Other Financial Instruments | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Securities Sold Short | ||||||||||||||||
| Exchange Traded Funds - Common Shares | $ | (13,468,378 | ) | $ | – | $ | – | $ | (13,468,378 | ) | ||||||
| Total | $ | (13,468,378 | ) | $ | – | $ | – | $ | (13,468,378 | ) | ||||||
The Fund did not have any securities that used significant unobservable inputs (Level 3) in determining fair value as of October 31, 2019. Therefore, a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value is not applicable.
Short Sale Risks:The Fund and the Underlying Funds may engage in short sales. A short sale is a transaction in which a fund sells a security it does not own in anticipation that the market price of that security will decline. To establish a short position, a fund must first borrow the security from a broker or other institution. The fund may not always be able to borrow a security at a particular time or at an acceptable price. Accordingly, there is a risk that a fund may be unable to implement its investment strategy due to the lack of available securities or for other reasons. After selling a borrowed security, a fund is obligated to “cover” the short sale by purchasing and returning the security to the lender at a later date. The Fund and the Underlying Funds cannot guarantee that the security will be available at an acceptable price. Positions in shorted securities are speculative and more risky than long positions (purchases) in securities because the maximum sustainable loss on a security purchased is limited to the amount paid for the security plus the transaction costs, whereas there is no maximum attainable price of the shorted security. Therefore, in theory, securities sold short have unlimited risk. Short selling will also result in higher transaction costs (such as interest and dividends), and may result in higher taxes, which reduce a fund’s return.
Special Purpose Acquisition Company Risk:The Fund may invest in special purpose acquisition companies (“SPACs”). SPACs are collective investment structures that pool funds in order to seek potential acquisition opportunities. Unless and until an acquisition is completed, a SPAC generally invests its assets (less an amount to cover expenses) in U.S. Government securities, money market fund securities and cash. SPACs and similar entities may be blank check companies with no operating history or ongoing business other than to seek a potential acquisition. Certain SPACs may seek acquisitions only in limited industries or regions. If an acquisition that meets the requirements for the SPAC is not completed within a predetermined period of time, the invested funds are returned to the entity’s shareholders. Investments in SPACs may be illiquid and/or be subject to restrictions on resale.
Private Debt Risk:The Fund may invest in notes issued by private funds (“private debt”). Private debt often may be illiquid and is typically not listed on an exchange and traded less actively than similar securities issued by public funds. For certain private debt, trading may only be possible through the assistance of the broker who originally brought the security to the market and has a relationship with the issuer. Due to the limited trading market, independent pricing services may be unable to provide a price for private debt, and as such the fair value of the securities may be determined in good faith under procedures approved by the Board, which typically will include the use of one or more independent broker quotes.
Rights and Warrants Risks: Warrants are securities giving the holder the right, but not the obligation, to buy the stock of an issuer at a given price (generally higher than the value of the stock at the time of issuance) during a specified period or perpetually. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holder to purchase and they do not represent any rights in the assets of the issuer. As a result, warrants may be considered to have more speculative characteristics than certain other types of investments. In addition, the value of a warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to its expiration date.
Rights are usually granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued to the public. The right entitles its holder to buy common stock at a specified price. Rights have similar features to warrants, except that the life of a right is typically much shorter, usually a few weeks.
During the period ended October 31, 2019, the Fund invested in rights and warrants, which are disclosed in the Statement of Investments.
