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: | 811-07460 | |
Exact name of registrant as specified in charter: | Delaware Investments® Dividend and | |
Income Fund, Inc. | ||
Address of principal executive offices: | 610 Market Street | |
Philadelphia, PA 19106 | ||
Name and address of agent for service: | David F. Connor, Esq. | |
610 Market Street | ||
Philadelphia, PA 19106 | ||
Registrant’s telephone number, including area code: | (800) 523-1918 | |
Date of fiscal year end: | November 30 | |
Date of reporting period: | November 30, 2020 |
Item 1. Reports to Stockholders
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3 | |
6 | |
7 | |
15 | |
16 | |
17 | |
18 | |
19 | |
20 | |
30 | |
31 | |
46 | |
50 |
Delaware Investments Dividend and Income Fund, Inc. @ market price | 1-year return | -31.05% |
Delaware Investments Dividend and Income Fund, Inc. @ NAV | 1-year return | -4.95% |
Lipper Closed-end Income and Preferred Stock Funds Average @ market price | 1-year return | +0.35% |
Lipper Closed-end Income and Preferred Stock Funds Average @ NAV | 1-year return | +2.07% |
-31.05% at market price (both figures reflect all distributions reinvested). Complete annualized performance for the Fund is shown in the table on page 3.
while actively managing risk. The Fund, therefore, seeks to deliver returns that are derived from tactical asset allocation decisions as
well as from active management of individual asset classes and investment styles.
Fund performance | ||||
Average annual total returns through November 30, 2020 | 1 year | 5 year | 10 year | Lifetime |
At market price (inception date March 26, 1993) | -31.05% | +7.87% | +9.72% | +7.95% |
At net asset value (inception date March 26, 1993) | -4.95% | +6.74% | +10.35% | +8.49% |
Fund’s investments.
Fund basics | |
As of November 30, 2020 | |
Fund objectives | Fund start date |
The Fund’s primary investment objective is to seek high current income; capital appreciation is a secondary objective. | March 26, 1993 |
Total Fund net assets | NYSE symbol |
$72.8 million | DDF |
Number of holdings | |
286 |
For period beginning November 30, 2019 through November 30, 2020 | Starting value | Ending value | |
Delaware Investments Dividend and Income Fund, Inc. @ NAV | $10.99 | $9.57 | |
Delaware Investments Dividend and Income Fund, Inc. @ market price | $14.09 | $8.90 |
For period beginning November 30, 2010 through November 30, 2020 | Starting value | Ending value | |
Delaware Investments Dividend and Income Fund, Inc. @ NAV | $10,000 | $26,764 | |
Lipper Closed-end Income and Preferred Stock Funds Average @ market price | $10,000 | $26,252 | |
Delaware Investments Dividend and Income Fund, Inc. @ market price | $10,000 | $25,285 | |
Lipper Closed-end Income and Preferred Stock Funds Average @ NAV | $10,000 | $22,906 |
includes fees, but does not include the initial sales charge or any brokerage commissions for purchases. Investments in the Fund are not available at NAV.
Security type / sector | Percentage of net assets |
Convertible Bonds | 4.59% |
Corporate Bonds | 40.89% |
Automotive | 1.61% |
Banking | 1.35% |
Basic Industry | 4.18% |
Capital Goods | 2.74% |
Communications | 3.86% |
Consumer Cyclical | 2.81% |
Consumer Non-Cyclical | 2.54% |
Energy | 4.50% |
Financials | 1.09% |
Healthcare | 3.88% |
Insurance | 0.87% |
Media | 4.11% |
Real Estate Investment Trusts | 0.78% |
Services | 2.73% |
Technology & Electronics | 1.17% |
Transportation | 0.80% |
Utilities | 1.87% |
Common Stock | 85.71% |
Communication Services | 9.19% |
Consumer Discretionary | 4.56% |
Consumer Staples | 6.71% |
Energy | 2.44% |
Financials | 9.69% |
Healthcare | 13.89% |
Industrials | 9.41% |
Information Technology | 14.07% |
Materials | 2.49% |
REIT Diversified | 0.45% |
REIT Healthcare | 1.31% |
REIT Hotel | 0.44% |
REIT Industrial | 0.94% |
REIT Information Technology | 1.07% |
REIT Mall | 0.21% |
Security type / sector | Percentage of net assets |
REIT Manufactured Housing | 0.35% |
REIT Multifamily | 3.51% |
REIT Office | 0.68% |
REIT Self-Storage | 0.68% |
REIT Shopping Center | 0.55% |
REIT Single Tenant | 0.59% |
REIT Specialty | 0.08% |
Utilities | 2.40% |
Convertible Preferred Stock | 1.58% |
Preferred Stock | 0.34% |
Exchange-Traded Funds | 0.02% |
Borrowing Under Line of Credit | (35.56%) |
Short-Term Investments | 3.35% |
Total Value of Securities | 100.92% |
Liabilities Net of Receivables and Other Assets | (0.92%) |
Total Net Assets | 100.00% |
Top 10 equity holdings | Percentage of net assets |
Equity Residential | 2.53% |
American International Group | 2.52% |
Raytheon Technologies | 2.50% |
DuPont de Nemours | 2.49% |
Cardinal Health | 2.48% |
CVS Health | 2.47% |
Dollar Tree | 2.46% |
Caterpillar | 2.46% |
ConocoPhillips | 2.44% |
Walt Disney | 2.43% |
Principal amount° | Value (US $) | ||
Convertible Bonds — 4.59% | |||
Capital Goods — 0.06% | |||
Aerojet Rocketdyne Holdings 2.25% exercise price $26.00, maturity date 12/15/23 | 28,000 | $ 41,420 | |
41,420 | |||
Communications — 0.61% | |||
DISH Network 3.375% exercise price $65.18, maturity date 8/15/26 | 112,000 | 111,933 | |
InterDigital 2.00% exercise price $81.29, maturity date 6/1/24 | 126,000 | 132,095 | |
Liberty Broadband 144A 1.25% exercise price $900.01, maturity date 9/30/50 # | 117,000 | 119,282 | |
Liberty Media 2.25% exercise price $33.41, maturity date 9/30/46 | 170,000 | 80,136 | |
443,446 | |||
Consumer Cyclical — 0.18% | |||
Team 5.00% exercise price $21.70, maturity date 8/1/23 | 145,000 | 130,616 | |
130,616 | |||
Consumer Non-Cyclical — 0.89% | |||
BioMarin Pharmaceutical 0.599% exercise price $124.67, maturity date 8/1/24 | 105,000 | 109,552 | |
Chefs' Warehouse 144A 1.875% exercise price $44.20, maturity date 12/1/24 # | 98,000 | 92,414 | |
Coherus Biosciences 144A 1.50% exercise price $19.26, maturity date 4/15/26 # | 10,000 | 11,915 | |
Collegium Pharmaceutical 2.625% exercise price $29.19, maturity date 2/15/26 | 60,000 | 56,363 | |
Integra LifeSciences Holdings 144A 0.50% exercise price $73.67, maturity date 8/15/25 # | 98,000 | 99,164 |
Principal amount° | Value (US $) | ||
Convertible Bonds (continued) | |||
Consumer Non-Cyclical (continued) | |||
Jazz Investments I 144A 2.00% exercise price $155.81, maturity date 6/15/26 # | 63,000 | $ 75,096 | |
Neurocrine Biosciences 2.25% exercise price $75.92, maturity date 5/15/24 | 37,000 | 51,314 | |
Paratek Pharmaceuticals 4.75% exercise price $15.90, maturity date 5/1/24 | 177,000 | 153,295 | |
649,113 | |||
Electric — 0.19% | |||
NRG Energy 2.75% exercise price $46.25, maturity date 6/1/48 | 128,000 | 138,830 | |
138,830 | |||
Energy — 0.70% | |||
Cheniere Energy 4.25% exercise price $138.38, maturity date 3/15/45 | 259,000 | 196,358 | |
Helix Energy Solutions Group 6.75% exercise price $6.97, maturity date 2/15/26 | 125,000 | 121,847 | |
PDC Energy 1.125% exercise price $85.39, maturity date 9/15/21 | 193,000 | 189,150 | |
507,355 | |||
Financials — 0.15% | |||
FTI Consulting 2.00% exercise price $101.38, maturity date 8/15/23 | 86,000 | 105,264 | |
105,264 | |||
Industrials — 0.17% | |||
Chart Industries 144A 1.00% exercise price $58.73, maturity date 11/15/24 # | 67,000 | 125,248 | |
125,248 |
Principal amount° | Value (US $) | ||
Convertible Bonds (continued) | |||
REITs — 0.18% | |||
Blackstone Mortgage Trust 4.75% exercise price $36.23, maturity date 3/15/23 | 134,000 | $ 133,196 | |
133,196 | |||
Technology — 1.46% | |||
Boingo Wireless 1.00% exercise price $42.32, maturity date 10/1/23 | 169,000 | 151,677 | |
Knowles 3.25% exercise price $18.43, maturity date 11/1/21 | 55,000 | 61,109 | |
Ligand Pharmaceuticals 0.75% exercise price $248.48, maturity date 5/15/23 | 98,000 | 91,263 | |
Microchip Technology 1.625% exercise price $94.91, maturity date 2/15/27 | 61,000 | 119,712 | |
ON Semiconductor 1.625% exercise price $20.72, maturity date 10/15/23 | 49,000 | 75,975 | |
Palo Alto Networks 0.75% exercise price $266.35, maturity date 7/1/23 | 91,000 | 113,271 | |
Pluralsight 0.375% exercise price $38.76, maturity date 3/1/24 | 163,000 | 148,133 | |
Quotient Technology 1.75% exercise price $17.36, maturity date 12/1/22 | 127,000 | 122,309 | |
Synaptics 0.50% exercise price $73.02, maturity date 6/15/22 | 49,000 | 59,903 | |
Travere Therapeutics 2.50% exercise price $38.80, maturity date 9/15/25 | 129,000 | 122,356 | |
1,065,708 | |||
Total Convertible Bonds (cost $3,195,046) | 3,340,196 | ||
Principal amount° | Value (US $) | ||
Corporate Bonds — 40.89% | |||
Automotive — 1.61% | |||
Allison Transmission 144A 5.875% 6/1/29 # | 330,000 | $ 368,400 | |
Ford Motor 9.00% 4/22/25 | 140,000 | 170,312 | |
Ford Motor Credit | |||
3.375% 11/13/25 | 310,000 | 311,845 | |
4.542% 8/1/26 | 305,000 | 320,250 | |
1,170,807 | |||
Banking — 1.35% | |||
Morgan Stanley 5.875% μ, ψ | 425,000 | 473,344 | |
Natwest Group 8.625% μ, ψ | 200,000 | 208,516 | |
Popular 6.125% 9/14/23 | 280,000 | 302,720 | |
984,580 | |||
Basic Industry — 4.18% | |||
Avient 144A 5.75% 5/15/25 # | 88,000 | 94,160 | |
Chemours 144A 5.75% 11/15/28 # | 155,000 | 158,003 | |
First Quantum Minerals | |||
144A 7.25% 4/1/23 # | 200,000 | 205,195 | |
144A 7.50% 4/1/25 # | 200,000 | 208,000 | |
Freeport-McMoRan | |||
4.55% 11/14/24 | 170,000 | 186,129 | |
5.45% 3/15/43 | 185,000 | 231,594 | |
Hudbay Minerals 144A 7.625% 1/15/25 # | 115,000 | 119,528 | |
Koppers 144A 6.00% 2/15/25 # | 215,000 | 222,122 | |
NOVA Chemicals 144A 5.00% 5/1/25 # | 130,000 | 134,794 | |
Olin | |||
5.00% 2/1/30 | 175,000 | 182,405 | |
5.125% 9/15/27 | 195,000 | 202,556 | |
PowerTeam Services 144A 9.033% 12/4/25 # | 290,000 | 319,181 | |
Standard Industries 144A 4.75% 1/15/28 # | 145,000 | 152,975 | |
Steel Dynamics 5.00% 12/15/26 | 280,000 | 298,913 | |
Tronox 144A 6.50% 4/15/26 # | 315,000 | 327,594 | |
3,043,149 | |||
Capital Goods — 2.74% | |||
Ardagh Packaging Finance 144A 5.25% 8/15/27 # | 300,000 | 313,155 | |
Bombardier 144A 6.00% 10/15/22 # | 325,000 | 309,831 |
Principal amount° | Value (US $) | ||
Corporate Bonds (continued) | |||
Capital Goods (continued) | |||
Crown Americas 4.75% 2/1/26 | 285,000 | $ 296,880 | |
Mauser Packaging Solutions Holding 144A 5.50% 4/15/24 # | 310,000 | 314,328 | |
Reynolds Group Issuer 144A 4.00% 10/15/27 # | 310,000 | 315,642 | |
TransDigm 144A 6.25% 3/15/26 # | 125,000 | 132,657 | |
Vertical US Newco 144A 5.25% 7/15/27 # | 300,000 | 315,562 | |
1,998,055 | |||
Communications — 3.86% | |||
Altice France 144A 7.375% 5/1/26 # | 420,000 | 441,441 | |
Altice France Holding 144A 6.00% 2/15/28 # | 305,000 | 310,126 | |
CenturyLink 144A 5.125% 12/15/26 # | 285,000 | 296,769 | |
Frontier Communications 144A 5.875% 10/15/27 # | 145,000 | 152,703 | |
Level 3 Financing 144A 4.25% 7/1/28 # | 280,000 | 289,380 | |
Sprint | |||
7.125% 6/15/24 | 190,000 | 221,352 | |
7.875% 9/15/23 | 103,000 | 118,836 | |
T-Mobile USA 6.50% 1/15/26 | 305,000 | 317,337 | |
Zayo Group Holdings | |||
144A 4.00% 3/1/27 # | 350,000 | 348,668 | |
144A 6.125% 3/1/28 # | 295,000 | 312,470 | |
2,809,082 | |||
Consumer Cyclical — 2.81% | |||
Caesars Entertainment 144A 6.25% 7/1/25 # | 295,000 | 314,985 | |
Carnival 144A 7.625% 3/1/26 # | 55,000 | 58,488 | |
H&E Equipment Services 144A 3.875% 12/15/28 # | 90,000 | 90,000 | |
Hilton Domestic Operating 144A 4.00% 5/1/31 # | 475,000 | 500,531 | |
L Brands 144A 6.875% 7/1/25 # | 290,000 | 314,000 | |
MGM Resorts International 4.75% 10/15/28 | 60,000 | 62,588 | |
Scientific Games International 144A 8.25% 3/15/26 # | 137,000 | 147,180 |
Principal amount° | Value (US $) | ||
Corporate Bonds (continued) | |||
Consumer Cyclical (continued) | |||
William Carter 144A 5.625% 3/15/27 # | 160,000 | $ 168,900 | |
Wyndham Hotels & Resorts 144A 4.375% 8/15/28 # | 379,000 | 388,333 | |
2,045,005 | |||
Consumer Non-Cyclical — 2.54% | |||
JBS USA LUX | |||
144A 5.75% 6/15/25 # | 170,000 | 175,738 | |
144A 6.50% 4/15/29 # | 160,000 | 183,402 | |
144A 6.75% 2/15/28 # | 20,000 | 22,275 | |
Kraft Heinz Foods 5.20% 7/15/45 | 280,000 | 330,554 | |
Pilgrim's Pride | |||
144A 5.75% 3/15/25 # | 315,000 | 323,962 | |
144A 5.875% 9/30/27 # | 65,000 | 69,956 | |
Post Holdings | |||
144A 5.00% 8/15/26 # | 100,000 | 103,924 | |
144A 5.625% 1/15/28 # | 180,000 | 191,812 | |
144A 5.75% 3/1/27 # | 170,000 | 179,350 | |
Primo Water Holdings 144A 5.50% 4/1/25 # | 260,000 | 269,100 | |
1,850,073 | |||
Energy — 4.50% | |||
Cheniere Corpus Christi Holdings | |||
5.125% 6/30/27 | 40,000 | 46,451 | |
5.875% 3/31/25 | 80,000 | 91,740 | |
7.00% 6/30/24 | 200,000 | 230,784 | |
CNX Resources | |||
144A 6.00% 1/15/29 # | 155,000 | 156,938 | |
144A 7.25% 3/14/27 # | 70,000 | 74,114 | |
Crestwood Midstream Partners 6.25% 4/1/23 | 225,000 | 226,441 | |
DCP Midstream Operating 5.125% 5/15/29 | 220,000 | 233,433 | |
Energy Transfer Operating 5.50% 6/1/27 | 115,000 | 132,348 | |
EQM Midstream Partners 144A 6.50% 7/1/27 # | 280,000 | 309,096 | |
Genesis Energy 6.50% 10/1/25 | 40,000 | 37,075 | |
Murphy Oil 5.875% 12/1/27 | 227,000 | 205,789 | |
Murphy Oil USA 5.625% 5/1/27 | 415,000 | 441,377 | |
NuStar Logistics 5.625% 4/28/27 | 160,000 | 164,370 |
Principal amount° | Value (US $) | ||
Corporate Bonds (continued) | |||
Energy (continued) | |||
Occidental Petroleum 3.50% 8/15/29 | 355,000 | $311,193 | |
Precision Drilling 144A 7.125% 1/15/26 # | 20,000 | 13,271 | |
Southwestern Energy 7.75% 10/1/27 | 220,000 | 232,513 | |
Targa Resources Partners 5.375% 2/1/27 | 300,000 | 314,195 | |
Transocean Proteus 144A 6.25% 12/1/24 # | 58,500 | 54,698 | |
3,275,826 | |||
Financials — 1.09% | |||
AerCap Global Aviation Trust 144A 6.50% 6/15/45 #, μ | 200,000 | 192,500 | |
Ally Financial 5.75% 11/20/25 | 435,000 | 508,531 | |
DAE Funding 144A 5.75% 11/15/23 # | 93,000 | 95,906 | |
796,937 | |||
Healthcare — 3.88% | |||
Bausch Health 144A 5.50% 11/1/25 # | 300,000 | 309,330 | |
Centene | |||
3.375% 2/15/30 | 245,000 | 257,173 | |
4.625% 12/15/29 | 165,000 | 181,120 | |
144A 5.375% 8/15/26 # | 275,000 | 291,156 | |
Community Health Systems 144A 6.625% 2/15/25 # | 140,000 | 142,772 | |
Encompass Health 5.75% 9/15/25 | 120,000 | 124,200 | |
HCA | |||
5.375% 2/1/25 | 405,000 | 454,011 | |
5.875% 2/15/26 | 165,000 | 190,162 | |
7.58% 9/15/25 | 80,000 | 96,000 | |
Hill-Rom Holdings 144A 5.00% 2/15/25 # | 180,000 | 185,963 | |
Ortho-Clinical Diagnostics 144A 7.25% 2/1/28 # | 70,000 | 74,682 | |
Service Corp. International 4.625% 12/15/27 | 159,000 | 168,838 | |
Tenet Healthcare | |||
5.125% 5/1/25 | 175,000 | 176,960 | |
144A 6.125% 10/1/28 # | 170,000 | 172,656 | |
2,825,023 |
Principal amount° | Value (US $) | ||
Corporate Bonds (continued) | |||
Insurance — 0.87% | |||
HUB International 144A 7.00% 5/1/26 # | 315,000 | $ 329,098 | |
USI 144A 6.875% 5/1/25 # | 295,000 | 303,294 | |
632,392 | |||
Media — 4.11% | |||
AMC Networks 4.75% | 370,000 | 381,468 | |
CCO Holdings | |||
144A 4.50% 8/15/30 # | 175,000 | 184,735 | |
144A 4.50% 5/1/32 # | 40,000 | 42,326 | |
144A 5.125% 5/1/27 # | 120,000 | 126,414 | |
144A 5.375% 6/1/29 # | 130,000 | 142,173 | |
144A 5.875% 5/1/27 # | 190,000 | 198,598 | |
CSC Holdings 144A 3.375% 2/15/31 # | 250,000 | 243,438 | |
Gray Television | |||
144A 4.75% 10/15/30 # | 290,000 | 294,713 | |
144A 7.00% 5/15/27 # | 55,000 | 60,706 | |
Lamar Media 5.75% 2/1/26 | 167,000 | 173,350 | |
Netflix 5.875% 11/15/28 | 315,000 | 380,981 | |
Sinclair Television Group 144A 5.125% 2/15/27 # | 195,000 | 191,953 | |
Sirius XM Radio 144A 5.00% 8/1/27 # | 395,000 | 416,206 | |
Terrier Media Buyer 144A 8.875% 12/15/27 # | 145,000 | 156,872 | |
2,993,933 | |||
Real Estate Investment Trusts — 0.78% | |||
GLP Capital 5.375% 4/15/26 | 110,000 | 124,565 | |
Iron Mountain 144A 4.50% 2/15/31 # | 265,000 | 270,652 | |
MGM Growth Properties Operating Partnership | |||
144A 3.875% 2/15/29 # | 75,000 | 75,891 | |
5.75% 2/1/27 | 85,000 | 94,872 | |
565,980 | |||
Services — 2.73% | |||
Aramark Services 144A 5.00% 2/1/28 # | 345,000 | 362,767 | |
Ashtead Capital 144A 5.25% 8/1/26 # | 530,000 | 561,800 | |
Covanta Holding 5.875% 7/1/25 | 210,000 | 219,428 | |
GFL Environmental 144A 3.75% 8/1/25 # | 59,000 | 60,291 |
Principal amount° | Value (US $) | ||
Corporate Bonds (continued) | |||
Services (continued) | |||
Prime Security Services Borrower 144A 5.75% 4/15/26 # | 220,000 | $ 238,975 | |
United Rentals North America 3.875% 2/15/31 | 379,000 | 396,766 | |
Univar Solutions USA 144A 5.125% 12/1/27 # | 140,000 | 147,964 | |
1,987,991 | |||
Technology & Electronics — 1.17% | |||
CommScope Technologies 144A 5.00% 3/15/27 # | 100,000 | 99,687 | |
RP Crown Parent 144A 7.375% 10/15/24 # | 20,000 | 20,442 | |
Sensata Technologies UK Financing 144A 6.25% 2/15/26 # | 200,000 | 207,875 | |
SS&C Technologies 144A 5.50% 9/30/27 # | 490,000 | 524,859 | |
852,863 | |||
Transportation — 0.80% | |||
Delta Air Lines | |||
144A 7.00% 5/1/25 # | 285,000 | 325,852 | |
7.375% 1/15/26 | 87,000 | 97,906 | |
Mileage Plus Holdings 144A 6.50% 6/20/27 # | 150,000 | 162,938 | |
586,696 | |||
Utilities — 1.87% | |||
AES | |||
5.50% 4/15/25 | 160,000 | 165,212 | |
6.00% 5/15/26 | 25,000 | 26,371 | |
Calpine | |||
144A 5.00% 2/1/31 # | 150,000 | 158,287 | |
144A 5.25% 6/1/26 # | 145,000 | 150,445 | |
Enel 144A 8.75% 9/24/73 #, μ | 200,000 | 234,440 | |
PG&E 5.25% 7/1/30 | 300,000 | 327,375 | |
Vistra Operations | |||
144A 5.50% 9/1/26 # | 205,000 | 214,758 | |
144A 5.625% 2/15/27 # | 85,000 | 89,910 | |
1,366,798 | |||
Total Corporate Bonds (cost $28,471,094) | 29,785,190 |
Number of shares | Value (US $) | ||
Common Stock — 85.71% | |||
Communication Services — 9.19% | |||
AT&T | 51,900 | $ 1,492,125 | |
Century Communications =, † | 500,000 | 0 | |
Comcast Class A | 34,048 | 1,710,571 | |
Verizon Communications | 28,400 | 1,715,644 | |
Walt Disney | 11,979 | 1,773,012 | |
6,691,352 | |||
Consumer Discretionary — 4.56% | |||
Dollar Tree † | 16,400 | 1,791,536 | |
Lowe's | 9,800 | 1,527,036 | |
3,318,572 | |||
Consumer Staples — 6.71% | |||
Archer-Daniels-Midland | 34,000 | 1,692,180 | |
Conagra Brands | 43,563 | 1,592,663 | |
Mondelez International Class A | 27,900 | 1,602,855 | |
4,887,698 | |||
Energy — 2.44% | |||
ConocoPhillips | 44,979 | 1,779,369 | |
1,779,369 | |||
Financials — 9.69% | |||
Allstate | 16,200 | 1,658,070 | |
American International Group | 47,800 | 1,837,432 | |
Bank of New York Mellon | 7,841 | 306,740 | |
Discover Financial Services | 20,944 | 1,595,305 | |
Truist Financial | 35,700 | 1,657,194 | |
7,054,741 | |||
Healthcare — 13.89% | |||
Brookdale Senior Living † | 2,860 | 12,126 | |
Cardinal Health | 33,100 | 1,806,929 | |
Cigna | 8,408 | 1,758,449 | |
CVS Health | 26,500 | 1,796,435 | |
Johnson & Johnson | 11,100 | 1,605,948 | |
Merck & Co. | 20,300 | 1,631,917 | |
Pfizer | 20,801 | 796,886 | |
Viatris † | 42,131 | 708,644 | |
10,117,334 | |||
Industrials — 9.41% | |||
Caterpillar | 10,303 | 1,788,498 | |
Honeywell International | 8,324 | 1,697,430 | |
Northrop Grumman | 5,100 | 1,541,526 | |
Raytheon Technologies | 25,414 | 1,822,692 | |
6,850,146 | |||
Information Technology — 14.07% | |||
Broadcom | 4,400 | 1,766,952 |
Number of shares | Value (US $) | ||
Common Stock (continued) | |||
Information Technology (continued) | |||
Cisco Systems | 41,000 | $ 1,763,820 | |
Cognizant Technology Solutions Class A | 22,482 | 1,756,519 | |
Intel | 33,300 | 1,610,055 | |
Motorola Solutions | 10,100 | 1,732,453 | |
Oracle | 28,000 | 1,616,160 | |
10,245,959 | |||
Materials — 2.49% | |||
DuPont de Nemours | 28,632 | 1,816,414 | |
1,816,414 | |||
REIT Diversified — 0.45% | |||
Colony Capital | 18,610 | 80,395 | |
Duke Realty | 3,390 | 129,023 | |
Lamar Advertising | 320 | 25,475 | |
Lexington Realty Trust | 7,760 | 79,230 | |
Outfront Media | 770 | 14,584 | |
328,707 | |||
REIT Healthcare — 1.31% | |||
Alexandria Real Estate Equities | 1,090 | 178,466 | |
CareTrust REIT | 1,850 | 35,945 | |
Healthcare Trust of America Class A | 4,160 | 108,285 | |
Healthpeak Properties | 4,310 | 124,387 | |
Medical Properties Trust | 6,520 | 126,488 | |
National Health Investors | 610 | 39,443 | |
Omega Healthcare Investors | 730 | 25,711 | |
Sabra Health Care REIT | 440 | 7,251 | |
Ventas | 2,730 | 130,794 | |
Welltower | 2,820 | 177,603 | |
954,373 | |||
REIT Hotel — 0.44% | |||
Apple Hospitality REIT | 2,610 | 34,609 | |
Gaming and Leisure Properties | 1,450 | 60,233 | |
Host Hotels & Resorts | 3,070 | 43,072 | |
Park Hotels & Resorts | 860 | 14,035 | |
Pebblebrook Hotel Trust | 940 | 17,390 | |
Ryman Hospitality Properties | 360 | 23,108 | |
VICI Properties | 5,000 | 126,450 | |
318,897 | |||
REIT Industrial — 0.94% | |||
Americold Realty Trust | 1,890 | 64,506 | |
CyrusOne | 840 | 58,724 |
Number of shares | Value (US $) | ||
Common Stock (continued) | |||
REIT Industrial (continued) | |||
Prologis | 5,640 | $ 564,282 | |
687,512 | |||
REIT Information Technology — 1.07% | |||
Digital Realty Trust | 1,970 | 265,458 | |
Equinix | 660 | 460,541 | |
QTS Realty Trust Class A | 920 | 54,657 | |
780,656 | |||
REIT Mall — 0.21% | |||
Simon Property Group | 1,880 | 155,232 | |
155,232 | |||
REIT Manufactured Housing — 0.35% | |||
Equity LifeStyle Properties | 1,670 | 97,845 | |
Sun Communities | 1,150 | 159,850 | |
257,695 | |||
REIT Multifamily — 3.51% | |||
American Campus Communities | 320 | 12,736 | |
American Homes 4 Rent Class A | 1,840 | 52,845 | |
Apartment Investment and Management Class A | 296 | 8,970 | |
AvalonBay Communities | 820 | 136,604 | |
Camden Property Trust | 670 | 66,216 | |
Equity Residential | 31,807 | 1,842,261 | |
Essex Property Trust | 710 | 174,575 | |
Invitation Homes | 5,020 | 143,472 | |
Mid-America Apartment Communities | 270 | 34,063 | |
UDR | 2,100 | 80,787 | |
2,552,529 | |||
REIT Office — 0.68% | |||
Alpine Income Property Trust | 340 | 5,443 | |
Boston Properties | 1,790 | 175,707 | |
Cousins Properties | 2,240 | 74,838 | |
Douglas Emmett | 2,500 | 77,425 | |
Highwoods Properties | 2,200 | 84,260 | |
Kilroy Realty | 220 | 13,455 | |
SL Green Realty | 260 | 15,054 | |
VEREIT | 3,510 | 24,886 | |
Vornado Realty Trust | 650 | 25,292 | |
496,360 | |||
REIT Self-Storage — 0.68% | |||
Extra Space Storage | 1,150 | 129,640 | |
Iron Mountain | 910 | 25,025 | |
Life Storage | 600 | 65,832 |
Number of shares | Value (US $) | ||
Common Stock (continued) | |||
REIT Self-Storage (continued) | |||
National Storage Affiliates Trust | 980 | $ 33,300 | |
Public Storage | 1,090 | 244,661 | |
498,458 | |||
REIT Shopping Center — 0.55% | |||
Agree Realty | 650 | 42,835 | |
Brixmor Property Group | 5,810 | 88,719 | |
Federal Realty Investment Trust | 270 | 23,549 | |
Kimco Realty | 5,420 | 78,265 | |
Regency Centers | 1,260 | 57,431 | |
Retail Opportunity Investments | 2,660 | 34,527 | |
Urban Edge Properties | 3,620 | 46,988 | |
Weingarten Realty Investors | 1,450 | 30,319 | |
402,633 | |||
REIT Single Tenant — 0.59% | |||
Four Corners Property Trust | 1,610 | 45,096 | |
National Retail Properties | 1,670 | 62,959 | |
Realty Income | 3,060 | 183,508 | |
Spirit Realty Capital | 1,310 | 48,260 | |
STORE Capital | 2,640 | 85,959 | |
425,782 | |||
REIT Specialty — 0.08% | |||
WP Carey | 820 | 56,752 | |
56,752 | |||
Utilities — 2.40% | |||
Edison International | 28,500 | 1,748,760 | |
1,748,760 | |||
Total Common Stock (cost $52,376,591) | 62,425,931 | ||
Convertible Preferred Stock — 1.58% | |||
2020 Mandatory Exchangeable Trust 144A 6.50% exercise price $47.09, maturity date 5/16/23 # | 85 | 150,947 | |
AMG Capital Trust II 5.15% exercise price $195.47, maturity date 10/15/37 | 2,953 | 141,929 | |
Assurant 6.50% exercise price $106.55, maturity date 3/15/21 | 738 | 90,700 |
Number of shares | Value (US $) | ||
Convertible Preferred Stock (continued) | |||
Bank of America 7.25% exercise price $50.00 ψ | 54 | $ 80,088 | |
El Paso Energy Capital Trust I 4.75% exercise price $34.49, maturity date 3/31/28 | 4,121 | 209,677 | |
Elanco Animal Health 5.00% exercise price $38.40, maturity date 2/1/23 | 2,344 | 111,246 | |
Essential Utilities 6.00% exercise price $42.29, maturity date 4/30/22 | 1,750 | 102,918 | |
Lyondellbasell Advanced Polymers 6.00% exercise price $52.33 ψ | 199 | 205,468 | |
QTS Realty Trust 6.50% exercise price $46.81 ψ | 420 | 56,708 | |
Total Convertible Preferred Stock (cost $944,525) | 1,149,681 | ||
Preferred Stock — 0.34% | |||
Bank of America 6.50% μ | 220,000 | 248,600 | |
Total Preferred Stock (cost $226,900) | 248,600 | ||
Exchange-Traded Funds — 0.02% | |||
iShares Core US REIT ETF | 240 | 11,357 | |
Vanguard Real Estate ETF | 70 | 5,880 | |
Total Exchange-Traded Funds (cost $17,259) | 17,237 | ||
Short-Term Investments — 3.35% | |||
Money Market Mutual Funds — 3.35% | |||
BlackRock FedFund – Institutional Shares (seven-day effective yield 0.00%) | 610,620 | 610,620 | |
Fidelity Investments Money Market Government Portfolio – Class I (seven-day effective yield 0.01%) | 610,620 | 610,620 | |
GS Financial Square Government Fund – Institutional Shares (seven-day effective yield 0.01%) | 610,620 | 610,620 |
Number of shares | Value (US $) | ||
Short-Term Investments (continued) | |||
Money Market Mutual Funds (continued) | |||
Morgan Stanley Government Portfolio – Institutional Share Class (seven-day effective yield 0.00%) | 610,620 | $ 610,620 | |
Total Short-Term Investments (cost $2,442,480) | 2,442,480 | ||
Total Value of Securities—136.48% (cost $87,673,895) | $ 99,409,315 |
° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2020, the aggregate value of Rule 144A securities was $19,010,127, which represents 26.10% of the Fund's net assets. See Note 10 in “Notes to financial statements.” |
μ | Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at November 30, 2020. Rate will reset at a future date. |
ψ | No contractual maturity date. |
= | The value of this security was determined using significant unobservable inputs and is reported as a Level 3 security. |
† | Non-income producing security. |
Summary of abbreviations: |
ETF – Exchange-Traded Fund |
GS – Goldman Sachs |
REIT – Real Estate Investment Trust |
USD – US Dollar |
Assets: | |
Investments, at value* | $ 99,409,315 |
Receivable for securities sold | 366,587 |
Interest receivable | 573,065 |
Foreign tax reclaims receivable | 3,607 |
Total Assets | 100,352,574 |
Liabilities: | |
Due to custodian | 172,816 |
Borrowing under line of credit | 25,900,000 |
Payable for securities purchased | 1,270,581 |
Other accrued expenses | 124,884 |
Investment management fees payable to affiliates | 43,823 |
Legal fees payable to affiliates | 1,140 |
Interest expense payable on line of credit | 700 |
Accounting and administration expenses payable to affiliates | 597 |
Reports and statements to shareholders expenses payable to affiliates | 70 |
Total Liabilities | 27,514,611 |
Total Net Assets | $ 72,837,963 |
Net Assets Consist of: | |
Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund | 61,303,536 |
Total distributable earnings (loss) | 11,534,427 |
Total Net Assets | 72,837,963 |
Net Asset Value | |
Common Shares: | |
Net assets | $ 72,837,963 |
Shares of beneficial interest outstanding, unlimited authorization, no par | 7,611,159 |
Net asset value per share | $ 9.57 |
*Investments, at cost | $ 87,673,895 |
Investment Income: | |
Dividends | $ 1,837,376 |
Interest | 1,650,949 |
Foreign tax withheld | 671 |
3,488,996 | |
Expenses: | |
Management fees | 548,434 |
Interest Expense | 432,849 |
Reports and statements to shareholders expenses | 115,120 |
Legal fees | 105,879 |
Dividend disbursing and transfer agent fees and expenses | 103,598 |
Accounting and administration expenses | 57,425 |
Audit and tax fees | 45,094 |
Custodian fees | 5,565 |
Directors' fees and expenses | 4,078 |
Other | 91,239 |
1,509,281 | |
Less expenses paid indirectly | (30) |
Total operating expenses | 1,509,251 |
Net Investment Income | 1,979,745 |
Net Realized and Unrealized Gain (Loss): | |
Net realized gain (loss) on: | |
Investments | 1,294,651 |
Foreign currencies | 852 |
Foreign currency exchange contracts | (1,083) |
Net realized gain | 1,294,420 |
Net change in unrealized appreciation (depreciation) of: | |
Investments | (7,778,230) |
Foreign currencies | 4,469 |
Net change in unrealized appreciation (depreciation) | (7,773,761) |
Net Realized and Unrealized Loss | (6,479,341) |
Net Decrease in Net Assets Resulting from Operations | $(4,499,596) |
Year ended | |||
11/30/20 | 11/30/19 | ||
Increase (Decrease) in Net Assets from Operations: | |||
Net investment income | $ 1,979,745 | $ 2,405,403 | |
Net realized gain | 1,294,420 | 5,441,218 | |
Net change in unrealized appreciation (depreciation) | (7,773,761) | (217,362) | |
Net increase (decrease) in net assets resulting from operations | (4,499,596) | 7,629,259 | |
Dividends and Distributions to Shareholders from: | |||
Distributable earnings | (3,347,827) | (8,391,625) | |
Return of capital | (3,172,112) | — | |
Total Distributions to Shareholders | (6,519,939) | (8,391,625) | |
Capital Share Transactions: | |||
Cost of shares redeemed 1 | (623,838) | — | |
Decrease in net assets derived from capital share transactions | (623,838) | — | |
Net Decrease in Net Assets | (11,643,373) | (762,366) | |
Net Assets: | |||
Beginning of year | 84,481,336 | 85,243,702 | |
End of year | $ 72,837,963 | $84,481,336 |
1 | See Note 6 in “Notes to financial statements.” |
Cash flows provided by (used for) operating activities: | |
Net increase (decrease) in net assets resulting from operations | $ (4,499,596) |
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by (used for) operating activities: | |
Amortization of premium and accretion of discount on investments, net | (91,728) |
Proceeds from disposition of investment securities | 65,826,136 |
Purchase of investment securities | (53,678,740) |
Purchase (Proceeds) from disposition of short-term investment securities, net | 3,423,073 |
Net realized (gain) loss on investments | (1,294,651) |
Net change in unrealized (appreciation) depreciation of investments | 7,778,230 |
Net change in unrealized (appreciation) depreciation of foreign currencies | (4,469) |
(Increase) decrease in receivable for securities sold | 497,406 |
(Increase) decrease in dividends and interest receivable | 112,012 |
Return of capital distributions on investments | 321,754 |
(Increase) decrease in foreign dividend reclaim receivable | 1,205 |
Increase (decrease) in payable for securities purchased | (2,546,366) |
Increase (decrease) in directors' fees and expenses payable to affiliates | (1) |
Increase (decrease) in accounting and administration expenses payable to affiliates | (60) |
Increase (decrease) in investment management fees payable to affiliates | (10,398) |
Increase (decrease) in reports and statements to shareholders expenses payable to affiliates | 22 |
Increase (decrease) in legal fees payable to affiliates | (7,750) |
Increase (decrease) in other accrued expenses payable | 20,832 |
Increase (decrease) in interest expense payable on line of credit | (17,585) |
Total adjustments | 20,328,922 |
Net cash provided by (used for) operating activities | 15,829,326 |
Cash provided by (used for) financing activities: | |
Cash received from borrowings under line of credit | (9,100,000) |
Cost of shares redeemed | (623,838) |
Cash dividends and distributions paid to shareholders | (6,519,939) |
Increase in bank overdraft | 172,816 |
Net cash provided by (used for) financing activities | (16,071,961) |
Effect of exchange rates on cash | 4,469 |
Net increase (decrease) in cash | (237,166) |
Cash at beginning of year | 237,166 |
Cash at end of year | $ — |
Cash paid during the period for interest expense from borrowings | $ 450,434 |
Year ended | |||||||||
11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | 11/30/16 | |||||
Net asset value, beginning of period | $ 10.99 | $ 11.09 | $ 12.09 | $ 10.96 | $ 10.20 | ||||
Income (loss) from investment operations | |||||||||
Net investment income1 | 0.26 | 0.31 | 0.28 | 0.34 | 0.38 | ||||
Net realized and unrealized gain (loss) | (0.83) | 0.68 | 0.01 | 1.27 | 0.97 | ||||
Total from investment operations | (0.57) | 0.99 | 0.29 | 1.61 | 1.35 | ||||
Less dividends and distributions from: | |||||||||
Net investment income | (0.44) | (1.09) | (0.95) | (0.48) | (0.59) | ||||
Net realized gain | — | — | (0.34) | — | — | ||||
Return of capital | (0.41) | — | — | — | — | ||||
Total dividends and distributions | (0.85) | (1.09) | (1.29) | (0.48) | (0.59) | ||||
Net asset value, end of period | $ 9.57 | $ 10.99 | $ 11.09 | $ 12.09 | $ 10.96 | ||||
Market value, end of period | $ 8.90 | $ 14.09 | $ 12.42 | $ 10.85 | $ 9.70 | ||||
Total return based on:2 | |||||||||
Net asset value | (4.95%) | 7.51% 3 | 2.55% | 15.49% | 14.50% | ||||
Market value | (31.05%) | 23.07% | 27.97% | 17.11% | 14.85% | ||||
Ratios and supplemental data: | |||||||||
Net assets, end of period (000 omitted) | $ 72,838 | $ 84,481 | $ 85,244 | $ 92,916 | $ 88,664 | ||||
Ratio of expenses to average net assets4, 5, 6, 7 | 2.12% | 3.15% | 2.48% | 2.09% | 1.95% | ||||
Ratio of net investment income to average net assets8 | 2.78% | 2.88% | 2.37% | 2.94% | 3.68% | ||||
Portfolio turnover | 56% | 52% | 29% | 36% | 47% | ||||
Leverage analysis: | |||||||||
Debt outstanding at end of period at par (000 omitted) | $ 25,900 | $ 35,000 | $ 40,000 | $ 40,000 | $ 40,000 | ||||
Asset coverage per $1,000 of debt outstanding at end of period | $ 3,812 | $ 3,414 | $ 3,131 | $ 3,323 | $ 3,217 |
1 | The average shares outstanding method has been applied for per share information. |
2 | Total return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for the purpose of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an increase in the discount or decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total return based on net asset value will be lower than total return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of such periods. |
3 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.18% lower. See Note 12 in “Notes to financial statements.” |
4 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
5 | The ratio of expenses before interest expense to adjusted average net assets (excluding debt outstanding) for the years ended November 30, 2020, 2019, 2018, 2017, and 2016 were 1.08%, 1.26%, 0.86%, 0.87%, and 0.95%, respectively. |
6 | The ratio of interest expense to average net assets for the years ended November 30, 2020, 2019, 2018, 2017, and 2016 were 0.61%, 1.35%, 1.23%, 0.84%, and 0.59% respectively. |
7 | The ratio of interest expense to adjusted average net assets (excluding debt outstanding) for the years ended November 30, 2020, 2019, 2018, 2017, and 2016 were 0.43%, 0.95%, 0.85%, 0.58%, and 0.41%, respectively. |
8 | The ratio of net investment income to adjusted average net assets (excluding debt outstanding) for the years ended November 30, 2020, 2019, 2018, 2017, and 2016 were 1.99%, 2.03%, 1.64%, 2.05%, and 2.56%, respectively. |
Purchases | $53,678,740 |
Sales | 65,826,136 |
Cost of investments | $87,874,888 |
Aggregate unrealized appreciation of investments | $13,028,202 |
Aggregate unrealized depreciation of investments | (1,493,775) |
Net unrealized appreciation of investments | $11,534,427 |
Level 1 | Level 2 | Level 3 | Total | ||||||
Securities | |||||||||
Assets: | |||||||||
Common Stock | $62,425,931 | $ — | $— | $62,425,931 | |||||
Convertible Bonds | — | 3,340,196 | — | 3,340,196 | |||||
Convertible Preferred Stock1 | 651,337 | 498,344 | — | 1,149,681 | |||||
Corporate Bonds | — | 29,785,190 | — | 29,785,190 | |||||
Exchange-Traded Funds | 17,237 | — | — | 17,237 | |||||
Preferred Stock | — | 248,600 | — | 248,600 | |||||
Short-Term Investments | 2,442,480 | — | — | 2,442,480 | |||||
Total Value of Securities | $65,536,985 | $33,872,330 | $— | $99,409,315 |
1Security type is valued across multiple levels. Level 1 investments represent exchange-traded investments, Level 2 investments represent investments with observable inputs or matrix-priced investments, and Level 3 investments represent investments without observable inputs. The amounts attributed to Level 1 investments, Level 2 investments, and Level 3 investments represent the following percentages of the total market value of these security types: |
Level 1 | Level 2 | Level 3 | Total | ||||
Convertible Preferred Stock | 56.65% | 43.35% | — | 100.00% |
Year ended | |||
11/30/20 | 11/30/19 | ||
Ordinary income | $2,085,627 | $1,784,345 | |
Long-term capital gains | 1,262,200 | 6,607,280 | |
Return of capital | 3,172,112 | — | |
Total | $6,519,939 | $8,391,625 |
Shares of beneficial interest | $61,303,536 |
Net unrealized appreciation on investments and foreign currencies | 11,534,427 |
Net assets | $72,837,963 |
Long Derivative Volume | Short Derivative Volume | ||||
Foreign currency exchange contracts (average notional value) | $— | $2,323 |
Philadelphia, Pennsylvania
January 21, 2021
Nominee | Shares voted for | Shares withheld | No ballot received | |||
Shawn K. Lytle | 4,793,610 | 279,719 | 2,614,829 | |||
Jerome D. Abernathy | 4,767,087 | 306,242 | 2,614,829 | |||
Thomas L. Bennett | 4,794,382 | 278,947 | 2,614,829 | |||
Ann D. Borowiec | 4,778,823 | 294,506 | 2,614,829 | |||
Joseph W. Chow | 4,795,392 | 277,937 | 2,614,829 | |||
John A. Fry | 4,790,911 | 282,418 | 2,614,829 | |||
Lucinda S. Landreth | 4,772,393 | 300,936 | 2,614,829 | |||
Frances A. Sevilla-Sacasa | 4,783,887 | 289,442 | 2,614,829 | |||
Thomas K. Whitford | 4,796,036 | 277,293 | 2,614,829 | |||
Christianna Wood | 4,796,639 | 276,690 | 2,614,829 | |||
Janet L. Yeomans | 4,783,054 | 290,275 | 2,614,829 |
For | Against | Abstain | ||
3,493,769 | 223,934 | 231,324 |
Vice President, Senior Portfolio Manager
Managing Director, Senior Portfolio Manager
Senior Vice President, Head of Equity Quantitative Research
Vice President, Portfolio Manager
Senior Vice President, Senior Portfolio Manager, Team Leader
Managing Director, Co-Head of Systematic Investments, Head of Research
Senior Vice President, Chief Investment Officer — Global Multi Asset Team
Managing Director, Senior Client Portfolio Manager
Managing Director, Co-Head of Systematic Investments, Portfolio Manager
Vice President, Senior Portfolio Manager
Senior Managing Director, Head of US Credit and Insurance
Vice President, Deputy Head of Portfolio Management, Senior Investment Manager — Global Multi Asset Team
Total Cumulative Distributions for the year ended November 30, 2020 | ||||||||||
Net Investment Income | Net Realized Short- Term Capital Gains | Net Realized Long- Term Capital Gains | Return Of Capital | Total Per Common Share | ||||||
$0.4360 | $— | $— | $0.4140 | $0.8500 |
Percentage Breakdown of the Total Cumulative Distributions for the year ended November 30, 2020 | ||||||||||
Net Investment Income | Net Realized Short- Term Capital Gains | Net Realized Long- Term Capital Gains | Return of Capital | Total Per Common Share | ||||||
33.01% | 0.00% | 18.40% | 48.59% | 100.00% |
Fiscal Year (12/01/19 through 11/30/20) | |
Annualized Distribution Rate as a Percentage of NAV^ | 7.07% |
Cumulative Distribution Rate on NAV^^ | 0.59% |
Cumulative Total Return on NAV* for fiscal year ended 11/30/20* | (4.95)% |
Average Annual Total Return on NAV for the 5 Year Period Ending 11/30/20** | 6.74% |
(A)Long-term Capital Gain Distributions (Tax Basis) | 19.36% |
(B) Ordinary Income Distributions (Tax Basis)* | 31.99% |
(C) Return of Capital Distributions (Tax Basis) | 48.65% |
Total Distributions (Tax Basis) | 100.00% |
(D) Qualifying Dividends 1 | 76.91% |
additional income.
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Interested Trustee | |||||
Shawn K. Lytle1 610 Market Street Philadelphia, PA 19106-2354 February 1970 | President, Chief Executive Officer, and Trustee | President and Chief Executive Officer since August 2015 Trustee since September 2015 | Global Head of Macquarie Investment Management2 (January 2019–Present) Head of Americas of Macquarie Group (December 2017–Present) Deputy Global Head of Macquarie Investment Management (2017–2019) Head of Macquarie Investment Management Americas (2015–2017) | 85 | Trustee — UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Independent Trustees | |||||
Jerome D. Abernathy 610 Market Street Philadelphia, PA 19106-2354 July 1959 | Trustee | Since January 2019 | Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present) | 85 | None |
Thomas L. Bennett 610 Market Street Philadelphia, PA 19106-2354 October 1947 | Chair and Trustee | Trustee since March 2005 Chair since March 2015 | Private Investor (March 2004–Present) | 85 | None |
Ann D. Borowiec 610 Market Street Philadelphia, PA 19106-2354 November 1958 | Trustee | Since March 2015 | Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005– 2011) — J.P. Morgan Chase & Co. | 85 | Director — Banco Santander International (October 2016–December 2019) Director — Santander Bank, N.A. (December 2016–December 2019) |
Joseph W. Chow 610 Market Street Philadelphia, PA 19106-2354 January 1953 | Trustee | Since January 2013 | Private Investor (April 2011–Present) | 85 | Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014) |
John A. Fry 610 Market Street Philadelphia, PA 19106-2354 May 1960 | Trustee | Since January 2001 | President — Drexel University (August 2010–Present) President — Franklin & Marshall College (July 2002–June 2010) | 85 | Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004–Present) Director — Drexel Morgan & Co. (2015–2019) Director and Audit Committee Member — vTv Therapeutics Inc. (2017–Present) Director and Audit Committee Member — FS Credit Real Estate Income Trust, Inc. (2018–Present) Director — Federal Reserve Bank of Philadelphia (January 2020–Present) |
Lucinda S. Landreth 610 Market Street Philadelphia, PA 19106-2354 June 1947 | Trustee | Since March 2005 | Private Investor (2004–Present) | 85 | None |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Frances A. Sevilla-Sacasa 610 Market Street Philadelphia, PA 19106-2354 January 1956 | Trustee | Since September 2011 | Private Investor (January 2017–Present) Chief Executive Officer — Banco Itaú International (April 2012–December 2016) Executive Advisor to Dean (August 2011– March 2012) and Interim Dean (January 2011–July 2011) — University of Miami School of Business Administration President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007-December 2008) | 85 | Trust Manager and Audit Committee Chair — Camden Property Trust (August 2011–Present) Director; Strategic Planning and Reserves Committee and Nominating and Governance Committee Member — Callon Petroleum Company (December 2019–Present) Director; Audit Committee Member — Carrizo Oil & Gas, Inc. (March 2018– December 2019) |
Thomas K. Whitford 610 Market Street Philadelphia, PA 19106-2354 March 1956 | Trustee | Since January 2013 | Vice Chairman (2010–April 2013) — PNC Financial Services Group | 85 | Director — HSBC North America Holdings Inc. (December 2013–Present) Director — HSBC USA Inc. (July 2014–Present) Director — HSBC Bank USA, National Association (July 2014–March 2017) Director — HSBC Finance Corporation (December 2013–April 2018) |
Christianna Wood 610 Market Street Philadelphia, PA 19106-2354 August 1959 | Trustee | Since January 2019 | Chief Executive Officer and President — Gore Creek Capital, Ltd. (August 2009–Present) | 85 | Director; Finance Committee and Audit Committee Member — H&R Block Corporation (July 2008–Present) Director; Investments Committee, Capital and Finance Committee, and Audit Committee Member — Grange Insurance (2013–Present) Trustee; Chair of Nominating and Governance Committee and Audit Committee Member — The Merger Fund (2013–Present), The Merger Fund VL (2013– Present); WCM Alternatives: Event-Driven Fund (2013–Present), and WCM Alternatives: Credit Event Fund (December 2017–Present) Director; Chair of Governance Committee and Audit Committee Member — International Securities Exchange (2010–2016) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Janet L. Yeomans 610 Market Street Philadelphia, PA 19106-2354 July 1948 | Trustee | Since April 1999 | Vice President and Treasurer (January 2006– July 2012), Vice President — Mergers & Acquisitions (January 2003–January 2006), and Vice President and Treasurer (July 1995–January 2003) — 3M Company | 85 | Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company (2009–2017) |
Officers | |||||
David F. Connor 610 Market Street Philadelphia, PA 19106-2354 December 1963 | Senior Vice President, General Counsel, and Secretary | Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005 | David F. Connor has served in various capacities at different times at Macquarie Investment Management. | 85 | None 3 |
Daniel V. Geatens 610 Market Street Philadelphia, PA 19106-2354 October 1972 | Vice President and Treasurer | Vice President and Treasurer since October 2007 | Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management. | 85 | None 3 |
Richard Salus 610 Market Street Philadelphia, PA 19106-2354 October 1963 | Senior Vice President and Chief Financial Officer | Senior Vice President and Chief Financial Officer since November 2006 | Richard Salus has served in various capacities at different times at Macquarie Investment Management. | 85 | None |
Chief Executive Officer
Delaware Funds® by Macquarie
Philadelphia, PA
Delaware Funds by Macquarie
Private Investor
Rosemont, PA
Stonebrook Capital Management, LLC
Jersey City, NJ
Private Wealth Management
J.P. Morgan Chase & Co.
New York, NY
State Street Corporation
Boston, MA
Drexel University
Philadelphia, PA
Assurant, Inc.
New York, NY
Banco Itaú International
Miami, FL
PNC Financial Services Group
Pittsburgh, PA
Gore Creek Capital, Ltd.
Golden, CO
3M Company
St. Paul, MN
General Counsel, and Secretary
Delaware Funds by Macquarie
Philadelphia, PA
Delaware Funds by Macquarie
Philadelphia, PA
Chief Financial Officer
Delaware Funds by Macquarie
Philadelphia, PA
of Macquarie Investment Management
Business Trust (MIMBT)
Philadelphia, PA
Philadelphia, PA 19106-2354
accounting firm
Two Commerce Square
Suite 1800
2001 Market Street
Philadelphia, PA 19103-7042
480 Washington Blvd.
Jersey City, NJ 07310
866 437-0252
computershare.com/investor
Income Fund, Inc. offers an automatic dividend reinvestment program. If you would like to change your reinvestment option, and shares are registered in your name, contact Computershare, Inc. at 866 437-0252. You will be asked to put your request in writing. If you have shares registered in “street” name, contact the broker/dealer holding the shares or your financial advisor.
cash, you may now elect to receive them by
ACH transfer. Contact Computershare at
the phone number above for more
information.
and use
Delaware Investments Fund Services Company
Delaware Management Company
(Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Funds® by Macquarie Internet Web site at www.delawarefunds.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.
Item 3. Audit Committee Financial Expert
The registrant’s Board of Directors has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
Jerome D. Abernathy
John A. Fry
Thomas K. Whitford, Chair
Christianna Wood
Item 4. Principal Accountant Fees and Services
(a) Audit fees.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $37,070 for the fiscal year ended November 30, 2020.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $37,830 for the fiscal year ended November 30, 2019.
(b) Audit-related fees.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2020.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $903,282 for the registrant’s fiscal year ended November 30, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year-end audit procedures; group reporting and subsidiary statutory audits.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2019.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $909,000 for the registrant’s fiscal year ended November 30, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year-end audit procedures; group reporting and subsidiary statutory audits.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $7,611 for the fiscal year ended November 30, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2020.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $7,611 for the fiscal year ended November 30, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2019.
(d) All other fees.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended November 30, 2020.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended November 30, 2019.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Funds® by Macquarie.
Service | Range of Fees |
Audit Services | |
Statutory audits or financial audits for new Funds | up to $40,000 per Fund |
Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters | up to $10,000 per Fund |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) | up to $25,000 in the aggregate |
Audit-Related Services | |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and /or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) | up to $25,000 in the aggregate |
Tax Services | |
U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) | up to $25,000 in the aggregate |
U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) | up to $5,000 per Fund |
Review of federal, state, local and international income, franchise and other tax returns | up to $5,000 per Fund |
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
Service | Range of Fees |
Non-Audit Services | |
Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters | up to $10,000 in the aggregate |
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $8,455,000 and $4,687,000 for the registrant’s fiscal years ended November 30, 2020 and November 30, 2019, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
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 members of the registrant’s Audit Committee are Jerome D. Abernathy, John A. Fry, Thomas K. Whitford and Christianna Wood.
Item 6. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
The registrant has formally delegated to its investment adviser, Delaware Management Company, a series of Macquarie Investment Management Business Trust (the “Adviser”) the responsibility for making all proxy voting decisions in relation to portfolio securities held by the registrant. If and when proxies need to be voted on behalf of the registrant, the Adviser and any Macquarie affiliates advising the registrant will vote such proxies pursuant to its Proxy Voting Policies and Procedures (the “Procedures”). The Adviser has established a Proxy Voting Committee (the “Committee”), which is responsible for overseeing the Adviser’s proxy voting process for the registrant. One of the main responsibilities of the Committee is to review and approve the Procedures to ensure that the Procedures are designed to allow the Adviser to vote proxies in a manner consistent with the goal of voting in the best interests of the registrant.
In order to facilitate the actual process of voting proxies, the Adviser has contracted with Institutional Shareholder Services Inc. (“ISS”) to analyze proxy statements on behalf of the registrant and other Adviser clients and provide the Adviser with research recommendations on upcoming proxy votes in accordance with the Procedures. The Committee is responsible for overseeing ISS’s services. If a proxy has been voted for the registrant, ISS will create a record of the vote. By no later than August 31 of each year, information (if any) regarding how the registrant voted proxies relating to portfolio securities during the most recently disclosed 12- month period ended June 30 is available without charge (i) through the registrant’s website at http://delawarefunds.com/proxy; and (ii) on the Securities and Exchange Commission’s website at http://www.sec.gov.
When determining whether to invest in a particular company, one of the factors the Adviser may consider is the quality and depth of the company’s management. As a result, the Adviser believes that recommendations of management on any issue (particularly routine issues) should be given a fair amount of weight in determining how proxy issues should be voted. Thus, on many issues, the Adviser’s votes are cast in accordance with the recommendations of the company’s management. However, the Adviser may vote against management’s position when it runs counter to its specific Proxy Voting Guidelines (the “Guidelines”), and the Adviser will also vote against management’s recommendation when it believes that such position is not in the best interests of the registrant.
As stated above, the Procedures also list specific Guidelines on how to vote proxies on behalf of the registrant. Some examples of the Guidelines are as follows: (i) generally vote for shareholder proposals asking that a majority or more of directors be independent; (ii) generally vote for management or shareholder proposals to reduce supermajority vote requirements, taking into account: ownership structure; quorum requirements; and vote requirements; (iii) votes on mergers and acquisitions should be considered on a case-by-case basis; (iv) generally vote reincorporation proposals on a case-by-case basis; (v) votes with respect to equity-based compensation plans are generally determined on a case-by-case basis; (vi) generally vote for proposals requesting that a company report on its policies, initiatives, oversight mechanisms, and ethical standards related to social, economic, and environmental sustainability, unless company already provides similar reports through other means or the company has formally committed to the implementation of a reporting program based on Global Reporting Initiative guidelines or a similar standard; and (vii) generally vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.
Because the registrant has delegated proxy voting to the Adviser, the registrant is not expected to encounter any conflict of interest issues regarding proxy voting and therefore does not have procedures regarding this matter. However, the Adviser does have a section in its Procedures that addresses the possibility of conflicts of interest. Most of the proxies which the Adviser receives on behalf of its clients are voted in accordance with the Procedures. Since the Procedures are pre-determined by the Committee, application of the Procedures by the Adviser’s portfolio management teams when voting proxies after reviewing the proxy and research provided by ISS should in most instances adequately address any potential conflicts of interest. If the Adviser becomes aware of a conflict of interest in an upcoming proxy vote, the proxy vote will generally be referred to the Committee or the Committee’s delegates for review. If the portfolio management team for such proxy intends to vote in accordance with ISS’s recommendation pursuant to our Procedures, then no further action is needed to be taken by the Committee. If the Adviser’s portfolio management team is considering voting a proxy contrary to ISS’s research recommendation under the Procedures, the Committee or its delegates will assess the proposed vote to determine if it is reasonable. The Committee or its delegates will also assess whether any business or other material relationships between the Adviser and a portfolio company (unrelated to the ownership of the portfolio company’s securities) could have influenced an inconsistent vote on that company’s proxy. If the Committee or its delegates determines that the proposed proxy vote is unreasonable or unduly influenced by a conflict, the portfolio management team will be required to vote the proxy in accordance with ISS’s research recommendation or abstain from voting.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
The information in the annual report under “Other Fund information – Fund management” is incorporated by reference into this Item 8.
Other Accounts Managed
The following chart lists certain information about types of other accounts for which each Fund manager is primarily responsible as of November 30, 2020. Any accounts managed in a personal capacity appear under “Other Accounts” along with the other accounts managed on a professional basis. The personal account information is current as of June 30, 2020.
Total Assets in | ||||||||
No. of Accounts with | Accounts with | |||||||
No. of | Total Assets | Performance- | Performance- | |||||
Accounts | Managed | Based Fees | Based Fees | |||||
Kristen E. Bartholdson | ||||||||
Registered Investment | 11 | $15.0 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 4 | $582.5 million | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 30 | $6.1 billion | 1 | $778.9 million | ||||
Adam H. Brown | ||||||||
Registered Investment | 11 | $1.4 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 3 | $444.3 million | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 4 | $1.0 billion | 0 | $0 | ||||
Chris Gowlland | ||||||||
Registered Investment | 7 | $1.3 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 0 | $0 | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 0 | $0 | 0 | $0 | ||||
Erin Ksenak | ||||||||
Registered Investment | 4 | $11.3 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 0 | $0 | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 4 | $633.9 million | 0 | $0 | ||||
Nikhil G. Lalvani | ||||||||
Registered Investment | 12 | $15.2 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 4 | $582.5 million | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 30 | $6.1 billion | 1 | $778.9 million |
John P. McCarthy | ||||||||
Registered Investment | 11 | $1.4 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 2 | $444.3 million | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 4 | $1.0 billion | 0 | $0 | ||||
Robert A. Vogel, Jr. | ||||||||
Registered Investment | 11 | $15.0 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 4 | $582.5 million | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 30 | $6.1 billion | 1 | $778.9 million | ||||
Stefan Löwenthal | ||||||||
Registered Investment | 8 | $1.7 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 44 | $1.9 billion | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 17 | $1.7 billion | 0 | $0 | ||||
Juergen Wurzer | ||||||||
Registered Investment | 8 | $1.7 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 44 | $1.9 billion | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 17 | $1.7 billion | 0 | $0 | ||||
Michael G. Wildstein | ||||||||
Registered Investment | 6 | $2.3 billion | 0 | $0 | ||||
Companies | ||||||||
Other Pooled Investment | 9 | $1.2 billion | 0 | $0 | ||||
Vehicles | ||||||||
Other Accounts | 17 | $12.2 billion | 0 | $0 | ||||
Benjamin Leung* | ||||||||
Registered Investment Companies | 1 | $377.3 million | 0 | $0 | ||||
Other Pooled Investment | 33 | $7.0 billion | 11 | $4.4 billion | ||||
Vehicles | ||||||||
Other Accounts | 9 | $10.3 billion | 2 | $339.2 million | ||||
Scot Thompson* | ||||||||
Registered Investment Companies | 1 | $377.3 million | 0 | $0 | ||||
Other Pooled Investment | 33 | $7.0 billion | 11 | $4.4 billion | ||||
Vehicles | ||||||||
Other Accounts | 9 | $10.3 billion | 2 | $339.2 million |
* Benjamin Leung and Scot Thompson became portfolio managers in January 2021.
DESCRIPTION OF MATERIAL CONFLICTS OF INTEREST
Individual portfolio managers may perform investment management services for other funds or accounts similar to those provided to the Funds and the investment action for such other fund or account and the Funds may differ. For example, an account or fund may be selling a security, while another account or fund may be purchasing or holding the same security. As a result, transactions executed for one fund or account may adversely affect the value of securities held by another fund, account or the Funds. Additionally, the management of multiple other funds or accounts and the Funds may give rise to potential conflicts of interest, as a portfolio manager must allocate time and effort to multiple other funds or accounts and the Funds. A portfolio manager may discover an investment opportunity that may be suitable for more than one account or fund. The investment opportunity may be limited, however, so that all funds or accounts for which the investment would be suitable may not be able to participate. The Adviser has adopted procedures designed to allocate investments fairly across multiple funds or accounts.
Some of the accounts managed by the portfolio managers have a performance-based fee. This compensation structure presents a potential conflict of interest. The portfolio manager has an incentive to manage this account so as to enhance its performance, to the possible detriment of other accounts for which the investment manager does not receive a performance-based fee.
A portfolio manager’s management of personal accounts also may present certain conflicts of interest. While Delaware’s code of ethics is designed to address these potential conflicts, there is no guarantee that it will do so.
Compensation Structure
Each portfolio’s manager’s compensation consists of the following:
Base Salary – Each named portfolio manager receives a fixed base salary. Salaries are determined by a comparison to industry data prepared by third parties to ensure that portfolio manager salaries are in line with salaries paid at peer investment advisory firms.
Bonus – (Mr. Lalvani, Ms. Bartholdson, Mr. Vogel, and Ms. Ksenak only) Each named portfolio manager is eligible to receive an annual cash bonus. The bonus pool is determined by the revenues associated with the products a portfolio manager manages. Macquarie Investment Management keeps a percentage of the revenues and the remaining percentage of revenues (minus appropriate expenses associated with relevant product and the investment management team) creates the "bonus pool" for the product. Various members of the team have the ability to earn a percentage of the bonus pool. The pool is allotted based on subjective factors and objective factors. The primary objective factor is the 1-, 3-, and 5-year performance of the funds managed relative to the performance of the appropriate Broadridge Financial Solutions, Inc. (formerly, Lipper Inc.) (“Broadridge”) peer groups and the performance of institutional composites relative to the appropriate indices. Three- and five-year performance is weighted more heavily and there is no objective award for a fund whose performance falls below the 50th percentile for a given time period.
Individual allocations of the bonus pool are based on individual performance measurements, both objective and subjective, as determined by senior management.
(Messrs. Brown, McCarthy and Wildstein only) An objective component is added to the bonus for each manager that is reflective of account performance relative to an appropriate peer group or database. The following paragraph describes the structure of the non-guaranteed bonus.
Each portfolio manager is eligible to receive an annual cash bonus, which is based on quantitative and qualitative factors. There is one pool for bonus payments for the fixed income department. The pool is allotted based on subjective factors and objective factors. The amount of the pool for bonus payments is determined by assets managed (including investment companies, insurance product-related accounts and other separate accounts), management fees and related expenses (including fund waiver expenses) for registered investment companies, pooled vehicles, and managed separate accounts. For investment companies, each manager is compensated according to the Fund’s Broadridge or Morningstar peer group percentile ranking on a 1-, 3-, and 5-year basis, with longer term performance more heavily weighted. For managed separate accounts the portfolio managers are compensated according to the composite percentile ranking against the eVestment Alliance database (or similar sources of relative performance data) on a one-, three-, and five-year basis, with longer term performance more heavily weighted; composite performance relative to the benchmark is also evaluated for the same time periods. Incentives reach maximum potential at the top 25th-30th percentile. The remaining portion of the bonus is discretionary as determined by Macquarie Investment Management and takes into account subjective factors.
For new and recently transitioned portfolio managers, the compensation may be weighted more heavily towards a portfolio manager’s actual contribution and ability to influence performance, rather than longer-term performance. Management intends to move the compensation structure towards longer-term performance for these portfolio managers over time.
(Messrs. Löwenthal and Wurzer only) MIMAK believes that client satisfaction will ultimately be driven by its ability to deliver strong performance and an excellent level of service. Consistent with this, MIMAK’s investment team performance assessment structure and remuneration processes are designed to align the interests of its staff with those of its clients. MIMAK’s remuneration structure is tailored to individual roles so that MIMAK attracts and retains high quality people who are appropriately incentivized to deliver optimal outcomes to clients. Total remuneration at MIMAK is broadly divided into two components: (i) fixed remuneration, which is determined by the individual's skill set and level of expertise, business contribution, and consideration of market data obtained through industry specific salary surveys; and (ii) performance based remuneration, which is profit share that is discretionary in nature and truly variable.
The following principles underpin MIMAK’s remuneration framework: (i) competitiveness: remuneration is structured to be competitive with that of its international peers, enabling MIMAK to attract and retain high caliber investment professionals; (ii) retention mechanisms: performance-based remuneration incorporates both short- and long-term incentives to encourage a long-term perspective and stability of investment teams. MIMAK has a profit share retention policy in place whereby a proportion of profit share retention is invested in underlying assets or funds that the individual is responsible for. Many staff also choose to invest in MIMAK’s managed funds; (iii) consistency: MIMAK has maintained a consistent framework over time to ensure the staff members are confident that their efforts will be rewarded over the long-term; and (iv) performance emphasis: discretionary profit share is awarded annually based on each individual staff member's performance across a number of key metrics.
For investment team members, these key metrics include:
● | Portfolio performance: fund returns against client investment objectives, benchmarks and risk profile. For MIMAK, consistent performance is rated more highly than one-off performance; |
● | Teamwork: input into investment decision making processes, generation of investment ideas and insights contribution to client service initiatives and contribution to investment capability development; and |
● | Business building. |
(Messrs. Leung and Thompson only) Each named portfolio manager is eligible to receive an annual cash bonus. The bonus pool is determined by the revenues associated with the products a portfolio manager manages. Macquarie Investment Management keeps a percentage of the revenues and the remaining percentage of revenues (minus appropriate expenses associated with relevant product and the investment management team) creates the "bonus pool" for the product. Various members of the team have the ability to earn a percentage of the bonus pool with the most senior contributor generally having the largest share. Individual allocations of the bonus pool are based on individual performance measurements, both objective and subjective, as determined by senior management.
Portfolio managers participate in retention programs, including the Macquarie Investment Management Notional Investment Plan and the Macquarie Group Employee Retained Equity Plan, for alignment of interest purposes.
Macquarie Investment Management Notional Investment Plan - A portion of a portfolio manager’s retained profit share may be notionally exposed to the return of certain funds within the MIM Funds pursuant to the terms of the Macquarie Investment Management Notional Investment Plan. The retained amount will vest in equal tranches over a period ranging from four to five years after the date of investment (depending on the level of the employee).
Macquarie Group Employee Retained Equity Plan - A portion of a portfolio manager’s retained profit share may be invested in the Macquarie Group Employee Retained Equity Plan (“MEREP”), which is used to deliver remuneration in the form of Macquarie equity. The main type of award currently being offered under the MEREP is units comprising a beneficial interest in a Macquarie share held in a trust for the employee, subject to the vesting and forfeiture provisions of the MEREP. Subject to vesting conditions, vesting and release of the shares occurs in a period ranging from four to five years after the date of investment (depending on the level of the employee).
Other Compensation - Portfolio managers may also participate in benefit plans and programs available generally to all similarly situated employees.
Ownership of Securities
As of November 30, 2020, the portfolio managers did not own any shares of the Fund.
(a) | (b) | (c) | (d) | |
Total Number of | Maximum Number (or | |||
Shares Purchased | Approximate Dollar | |||
Average | as Part of | Value) of Shares that | ||
Total Number of | Price | Publicly | May Yet Be Purchased | |
Shares | Paid per | Announced Plans | Under the Plans or | |
Period | Purchased(1) | Share | or Program | Programs |
Month #1 (6/1/2020 - 6/30/2020) | 0 | - | 0 | 7,688,158.1587 |
Month #2 (7/1/2020 - 7/31/2020) | 0 | - | 0 | 7,688,158.1587 |
Month #3 (8/1/2020 - 8/31/2020) | 0 | - | 0 | 7,688,158.1587 |
Month #4 (9/1/2020 - 9/30/2020) | 0 | - | 0 | 7,688,158.1587 |
Month #5 (10/1/2020 - 10/31/2020) | 30,893 | $7.89 | 0 | 7,657,265.1587 |
Month #6 (11/1/2020 - 11/30/2020) | 46,107 | $8.37 | 0 | 7,611,158.1587 |
Total | 77,000 | $8.13 | 0 | 7,611,158.1587 |
1. | The Board previously authorized an open-market share repurchase program pursuant to which the Fund may purchase, from time to time, Fund shares in open-market transactions, at the discretion of management. Effective August 1, 2017, the Board approved a modification to the Fund’s previously announced open-market share repurchase program to authorize the Fund to repurchase up to 10% of the Fund’s shares outstanding in open market transactions as of that date, at the discretion of management. |
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
(a) (1) Code of Ethics
Not applicable.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
Not applicable.
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.
DELAWARE INVESTMENTS® DIVIDEND AND INCOME FUND, INC.
/s/SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | February 3, 2021 |
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.
/s/SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | February 3, 2021 |
/s/RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | February 3, 2021 |