UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21791
Name of Fund: Global Income & Currency Fund Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Mitchell M. Cox, Chief Executive Officer,
Global Income & Currency Fund Inc., 4 World Financial Center, 5th Floor,
New York, New York 10080. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (212) 449-8118
Date of fiscal year end: 12/31/06
Date of reporting period: 01/01/06 - 06/30/06
Item 1 - Report to Stockholders
Global Income &
Currency Fund Inc.
Semi-Annual Report
June 30, 2006
[LOGO] IQ INVESTMENT [LOGO] NUVEEN
ADVISORS INVESTMENTS
Global Income & Currency Fund Inc.
Officers and Directors
Alan R. Batkin, Director and Chairman of the Board
Paul Glasserman, Director and Chairman of the Audit Committee
Steven W. Kohlhagen, Director
William J. Rainer, Director and Chairman of the Nominating and Corporate
Governance Committee
Mitchell M. Cox, President
Donald C. Burke, Vice President, Treasurer and Secretary
Martin G. Byrne, Chief Legal Officer
Jeffrey Hiller, Chief Compliance Officer
Justin C. Ferri, Vice President
Jay M. Fife, Vice President
Colleen R. Rusch, Vice President
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
The Bank of New York
101 Barclay Street -- 11 East
New York, NY 10286
NYSE Symbol
GCF
- --------------------------------------------------------------------------------
Andrew J. Donohue gave notice to the Fund and the Advisor of his intention to
resign his positions as a Director and Officer of the Fund and as an Officer of
the Advisor in May 2006 in order to assume the role of director of the
Securities and Exchange Commission's Division of Investment Management.
- --------------------------------------------------------------------------------
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
2 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
A Discussion With Your Fund's Portfolio Manager
We are pleased to provide you with this first shareholder report for
Global Income & Currency Fund Inc., a newly organized closed-end investment
company. While the Fund is advised by IQ Investment Advisors LLC, the following
discussion is provided by Nuveen Asset Management, the Fund's subadviser.
How did the Fund perform since its inception?
The investment objective of Global Income & Currency Fund Inc. (the "Fund") is
to provide current income while also seeking total returns by providing long and
short exposure to selected foreign currencies. Since the Fund's inception on
April 28, 2006 through June 30, 2006, the Common Stock of the Fund had a total
investment return of +.13%, based on a change in per share net asset value from
$19.10 to $18.85, assuming reinvestment of all distributions. The Fund's risk
reduction methodology was employed to prevent loss during this period of
volatility in the currency market.
For a description of the Fund's total investment return based on a change in per
share market value of the Fund's Common Stock (as measured by the trading price
of the Fund's shares on the New York Stock Exchange), and assuming reinvestment
of dividends, please refer to the Financial Highlights section of this report.
As a closed-end fund, the Fund's shares may trade in the secondary market at a
premium or a discount to the Fund's net asset value. As a result, total
investment returns based on changes in the market value of the Fund's Common
Stock can vary significantly from total investment returns based on changes in
the Fund's net asset value.
Describe the market environment during the reporting period.
In the second quarter of 2006, volatility rose sharply throughout the currency
market. Indications of more restrictive monetary policies in Asia and Europe
along with indications that the Federal Reserve Board may be near the end of
raising interest rates led to a rally in Euro- and Asian-block currencies versus
the U.S. Dollar, beginning in April and extending into the first two weeks of
May. The prospect of rising global interest rates subsequently triggered a
decline in equity markets in mid-May, accompanied by sharp sell-offs in emerging
market currencies as the general level of risk aversion rose across global
financial markets. The strong directional trends exhibited by many currencies in
May transitioned to a trendless, volatile environment in June. The
trade-weighted U.S. Dollar Index(R) began to rally back from its low at the
beginning of June as uncertainty developed over the course of Federal Reserve
Board action in the near term. Emerging market currencies began to rally toward
the end of June.
How did you manage the portfolio since its inception?
The Fund was launched on April 28, 2006, and began taking positions in
investments that provide long and short exposure to selected currency
investments. During the period from mid-May through mid-June, the Fund's risk
reduction models performed successfully as indicators of rising risk aversion
and emerging trends triggered an early exit from these positions. As a result,
the portfolio was positioned in low-risk U.S. Treasury securities throughout
this volatile period. In mid-June, our risk reduction models indicated that it
was time to re-establish new positions in the portfolio.
How would you characterize the Fund's position at the close of the period?
New positions were cautiously established toward the end of June as currency
markets began to stabilize and global risk aversion declined. As a result of the
Fund's investment process and positions, we believe the Fund is poised to meet
its objectives.
Andrew Stenwall
Portfolio Manager
July 14, 2006
U.S. Dollar Index is a registered trademark of the New York Board of Trade.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 3
Portfolio Information
As of June 30, 2006
Percent of
Geographic Allocation Total Investments
- --------------------------------------------------------------------------------
United States .......................................... 65.7%
Mexico ................................................. 9.0
New Zealand ............................................ 8.8
South Africa ........................................... 7.7
Turkey ................................................. 7.5
Multi-National ......................................... 1.3
- --------------------------------------------------------------------------------
Percent of
Notional Exposure by Country Net Assets
- --------------------------------------------------------------------------------
United States .......................................... 71.8%
Brazil ................................................. 9.6
Mexico ................................................. 9.5
Turkey ................................................. 7.3
Multi-National ......................................... 1.4
South Africa ........................................... 0.1
Chile .................................................. 0.1
Japan .................................................. (0.1)
New Zealand ............................................ (0.1)
Taiwan ................................................. (0.1)
Switzerland ............................................ (0.1)
Czech Republic ......................................... (2.3)
- --------------------------------------------------------------------------------
4 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Schedule of Investments (in U.S. dollars)
Face
Short-Term Securities Amount Value
===================================================================================
Mexico--9.8%
Foreign Commercial Paper**
Mexico Cetes, 7.281%
due 8/03/2006 MXN 154,340,000 $ 13,571,212
- -----------------------------------------------------------------------------------
Total Short-Term Securities in Mexico 13,571,212
===================================================================================
Multi-National--1.5%
Commercial Banks
International Bank for Reconstruction
& Development, 6.625%
due 8/21/2006 USD 2,000,000 2,003,004
- -----------------------------------------------------------------------------------
Total Short-Term Securities
in Multi-National 2,003,004
===================================================================================
New Zealand--9.6%
Foreign Commercial Paper**
New Zealand Treasury Bills,
7.079% due 8/09/2006 NZD 22,000,000 13,330,104
- -----------------------------------------------------------------------------------
Total Short-Term Securities in New Zealand 13,330,104
===================================================================================
South Africa--8.4%
Foreign Commercial Paper**
South Africa Treasury Bills,
6.695% due 8/16/2006 ZAR 84,000,000 11,671,161
- -----------------------------------------------------------------------------------
Total Short-Term Securities in South Africa 11,671,161
===================================================================================
Turkey--8.3%
Foreign Commercial Paper**
Turkey Government Bonds,
12.952% due 8/09/2006 TRY 18,500,000 11,437,799
- -----------------------------------------------------------------------------------
Total Short-Term Securities in Turkey 11,437,799
===================================================================================
United States--71.8%
U.S. Government & Agency
Obligations**--69.8%
Fannie Mae:
4.91% due 7/17/2006 USD 15,000,000 14,970,192
4.682% due 8/02/2006 12,000,000 11,948,500
Federal Home Loan Bank, 5.13%
due 7/18/2006 15,000,000 14,967,938
Freddie Mac, 4.76% due 7/03/2006 15,000,000 15,000,000
U.S. Treasury Bills:
3.227% due 7/06/2006 15,000,000 14,994,575
4.518% due 7/20/2006 2,000,000 1,995,689
4.60% due 7/20/2006 12,000,000 11,973,758
4.34% due 7/27/2006 11,000,000 10,966,112
------------
96,816,764
- -----------------------------------------------------------------------------------
Shares
Held
===================================================================================
Mutual Fund--2.0%
State Street Institutional Liquid
Reserves Fund, 5.226% (a) 2,764,014 2,764,014
- -----------------------------------------------------------------------------------
Total Short-Term Securities
in the United States 99,580,778
===================================================================================
Total Investments
(Cost--$156,723,780*)--109.4% 151,594,058
Liabilities in Excess of
Other Assets--(9.4%) (12,974,691)
------------
Net Assets--100.0% $138,619,367
============
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 5
Schedule of Investments (concluded)
* The cost and unrealized depreciation of investments as of June 30, 2006,
as computed for federal income tax purposes, were as follows:
Aggregate cost ........................................ $156,723,780
============
Gross unrealized appreciation ......................... --
Gross unrealized depreciation ......................... $ (5,129,722)
------------
Net unrealized depreciation ........................... $ (5,129,722)
============
** Foreign Commercial Paper and certain U.S. Government & Agency Obligations
are traded on a discount basis; the interest rates shown reflect the
discount rates paid at the time of purchase. Other securities bear
interest at the rates shown, payable at fixed dates or upon maturity. The
interest rates shown are the rates in effect at June 30, 2006.
(a) Represents the current yield as of 6/30/2006.
o For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets.
o Forward foreign exchange contracts as of June 30, 2006 were as follows:
--------------------------------------------------------------------------
Unrealized
Foreign Settlement Appreciation
Currency Purchased Date (Depreciation)
--------------------------------------------------------------------------
BRL 25,463,000 August 2006 $ (268,152)
BRL 29,919,000 September 2006 620,906
CHF 16,734,438 September 2006 39,725
CLP 7,191,975,000 August 2006 (426,285)
CLP 6,026,100,000 September 2006 160,891
CZK 221,773,000 September 2006 22,367
JPY 1,129,850,000 September 2006 14,442
MXN 148,980,000 August 2006 173,272
TRY 14,455,875 August 2006 (1,790,491)
TRY 16,780,500 September 2006 144,985
TWD 418,520,000 September 2006 53,459
--------------------------------------------------------------------------
Total Unrealized Depreciation on Forward Foreign Exchange
Contracts--Net (USD Commitment--$130,250,000) $(1,254,881)
===========
o Forward foreign exchange contracts as of June 30, 2006 were as follows:
--------------------------------------------------------------------------
Unrealized
Foreign Settlement Appreciation
Currency Sold Date (Depreciation)
--------------------------------------------------------------------------
BRL 26,276,000 August 2006 $ (106,431)
CHF 16,863,413 September 2006 (146,004)
CLP 7,100,062,500 August 2006 596,560
CLP 6,035,800,000 September 2006 (178,857)
CZK 292,376,000 September 2006 (213,058)
JPY 1,148,940,000 September 2006 (183,647)
MXN 154,348,275 August 2006 102,049
NZD 22,228,986 August 2006 213,451
TRY 33,042,800 August 2006 3,809,307
TWD 420,760,000 September 2006 (123,324)
ZAR 82,580,400 August 2006 1,285,319
--------------------------------------------------------------------------
Total Unrealized Appreciation on Forward Foreign Exchange
Contracts--Net (USD Commitment--$151,075,035) $5,055,365
==========
o Currency Abbreviations:
BRL Brazilian Real
CHF Swiss Franc
CLP Chile Pesos
CZK Czech Republic Koruny
JPY Japanese Yen
MXN Mexican Pesos
NZD New Zealand Dollar
TRY Turkish Lira
TWD Taiwan New Dollars
USD U.S. Dollar
ZAR South African Rand
See Notes to Financial Statements.
6 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Statement of Assets, Liabilities and Capital
As of June 30, 2006
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost--$156,723,780) $ 151,594,058
Unrealized appreciation on forward foreign exchange contracts ................... 7,236,733
Foreign cash (cost--$109,576) ................................................... 104,218
Interest receivable ............................................................. 88,352
-------------
Total assets .................................................................... 159,023,361
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign exchange contracts ................... 3,436,249
Payables:
Securities purchased ......................................................... $ 15,994,700
Dividends to shareholders .................................................... 579,115
Investment adviser ........................................................... 96,074 16,669,889
-------------
Accrued expenses ................................................................ 297,856
-------------
Total liabilities ............................................................... 20,403,994
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ...................................................................... $ 138,619,367
=============
===================================================================================================================================
Capital
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share, 100,000,000 shares authorized .......... $ 7,355
Paid-in capital in excess of par ................................................ 140,183,653
Accumulated distributions in excess of investment income--net ................... $ (670,524)
Undistributed realized capital gains--net ....................................... 433,479
Unrealized depreciation--net .................................................... (1,334,596)
-------------
Total accumulated losses--net ................................................... (1,571,641)
-------------
Total capital--Equivalent to $18.85 per share based on 7,355,236 shares of Common
Stock outstanding (market price--$17.34) ....................................... $ 138,619,367
=============
See Notes to Financial Statements.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 7
Statement of Operations
For the Period April 28, 2006+ to June 30, 2006
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest ........................................................................ $ 1,493,998
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ........................................................ $ 227,136
Custodian fees .................................................................. 29,487
Professional fees ............................................................... 24,080
Directors' fees and expenses .................................................... 16,801
Printing and shareholder reports ................................................ 9,950
Accounting services ............................................................. 6,014
Transfer agent fees ............................................................. 5,601
Pricing fees .................................................................... 337
Other ........................................................................... 4,292
-------------
Total expenses .................................................................. 323,698
-------------
Investment income--net .......................................................... 1,170,300
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss)--Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ............................................................. (250)
Foreign currency transactions--net ........................................... 433,729 433,479
-------------
Unrealized depreciation on:
Investments--net ............................................................. (5,129,722)
Foreign currency transactions--net ........................................... 3,795,126 (1,334,596)
-------------------------------
Total realized and unrealized loss--net ......................................... (901,117)
-------------
Net Increase in Net Assets Resulting from Operations ............................ $ 269,183
=============
+ Commencement of operations.
See Notes to Financial Statements.
8 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Statement of Changes in Net Assets
For the Period
April 28,
2006+ to
June 30,
Increase (Decrease) in Net Assets: 2006
======================================================================================================
Operations
- ------------------------------------------------------------------------------------------------------
Investment income--net ............................................ $ 1,170,300
Realized gain--net ................................................ 433,479
Unrealized depreciation--net ...................................... (1,334,596)
-------------
Net increase in net assets resulting from operations .............. 269,183
-------------
======================================================================================================
Dividends to Shareholders
- ------------------------------------------------------------------------------------------------------
Investment income--net ............................................ (1,840,824)
-------------
======================================================================================================
Common Stock Transactions
- ------------------------------------------------------------------------------------------------------
Net proceeds from issuance of Common Stock ........................ 140,385,000
Offering costs resulting from the issuance of Common Stock ........ (294,000)
-------------
Net increase in net assets resulting from Common Stock transactions 140,091,000
-------------
======================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------
Total increase in net assets ...................................... 138,519,359
Beginning of period ............................................... 100,008
-------------
End of period* .................................................... $ 138,619,367
=============
* Accumulated distributions in excess of investment income--net .. $ (670,524)
=============
+ Commencement of operations.
See Notes to Financial Statements.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 9
Financial Highlights
For the Period
April 28,
2006+ to
The following per share data and ratios have been derived June 30,
from information provided in the financial statements. 2006
=============================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period ..................... $ 19.10
-------------
Investment income--net*** ................................ .16
Realized and unrealized loss--net ........................ (.12)
-------------
Total from investment operations ......................... .04
-------------
Less dividends from investment income--net ............... (.25)
-------------
Offering costs resulting from the issuance of Common Stock (.04)
-------------
Net asset value, end of period ........................... $ 18.85
=============
Market price per share, end of period .................... $ 17.34
=============
=============================================================================================
Total Investment Return**
- ---------------------------------------------------------------------------------------------
Based on net asset value per share ....................... .13%@
=============
Based on market price per share .......................... (12.04%)@
=============
=============================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------
Expenses ................................................. 1.28%*
=============
Investment income--net ................................... 4.64%*
=============
=============================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ................. $ 138,619
=============
Portfolio turnover@@ ..................................... 0.00%
=============
* Annualized.
** Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
*** Based on average shares outstanding.
+ Commencement of operations.
@ Aggregate total investment return.
@@ For purposes of calculating portfolio turnover of the Fund, all of the
securities held in the portfolio have been classified as short-term
investments because the maturity dates at the time of acquisition were one
year or less, and therefore, the portfolio turnover is zero.
See Notes to Financial Statements.
10 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Notes to Financial Statements
1. Significant Accounting Policies:
Global Income & Currency Fund Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, closed-end
management investment company. Prior to commencement of operations on April 28,
2006, the Fund had no operations other than those relating to organizational
matters and the sale of 5,236 shares of Common Stock on March 8, 2006 to Merrill
Lynch Investment Managers, L.P. ("MLIM") for $100,008. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. These unaudited financial
statements reflect all adjustments, which are, in the opinion of management,
necessary to present a fair statement of the results for the interim period. All
such adjustments are of a normal, recurring nature. The Fund determines and
makes available for publication the net asset value of its Common Stock on a
daily basis. The Fund's Common Stock Shares are listed on the New York Stock
Exchange ("NYSE") under the symbol GCF. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments -- Debt securities are traded primarily in the
over-the-counter ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the general direction
of the Board of Directors. Such valuations and procedures will be reviewed
periodically by the Board of Directors of the Fund. Financial futures contracts
and options thereon, which are traded on exchanges, are valued at their closing
prices as of the close of such exchanges. Options written or purchased are
valued at the last sales price in the case of exchange-traded options. In the
case of options traded in the OTC market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap agreements are
valued based upon quoted fair valuations received daily by the Fund from a
pricing service or counterparty. Short-term investments with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value, under which method the investment is valued at cost and any
premium or discount is amortized on a straight line basis to maturity.
Repurchase agreements are valued at cost plus accrued interest. Valuation of
other short-term investment vehicles is generally based on the net asset value
of the underlying investment vehicle or amortized cost. Investments in open-end
investment companies are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Board of Directors of the Fund.
Equity securities that are held by the Fund, which are traded on stock exchanges
or the Nasdaq National Market, are valued at the last sale price or official
close price on the exchange, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price for long positions, and at the last available asked price for short
positions. In cases where equity securities are traded on more than one
exchange, the securities are valued on the exchange designated as the primary
market by or under the authority of the Board of Directors of the Fund. Long
positions traded in the OTC market, Nasdaq Small Cap or Bulletin Board are
valued at the last available bid price obtained from one or more dealers or
pricing services approved by the Board of Directors of the Fund. Short positions
traded in the OTC market are valued at the last available asked price. Portfolio
securities that are traded both in the OTC market and on a stock exchange are
valued according to the broadest and most representative market.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of business on the New York Stock Exchange
("NYSE"). The values of such securities used in computing the net asset value of
the Fund's shares are determined as of such times. Foreign currency exchange
rates also are generally determined prior to the close of business on the NYSE.
Occasionally, events affecting the values of such securities and such exchange
rates may occur between the times at which they are determined and the close of
business on the NYSE that may not be reflected in the computation of the Fund's
net asset value. If events (for example, a company announcement, market
volatility or a natural disaster) occur during such periods that are expected to
materially affect the value of such securities, those securities may be valued
at their fair value as determined in good faith by the Fund's Board of Directors
or by the Investment Adviser using a pricing service and/or procedures approved
by the Fund's Board of Directors.
(b) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 11
Notes to Financial Statements (continued)
include the effects of foreign exchange rates on investments. The Fund may
invest in foreign securities, which may involve a number of risk factors and
special considerations not present with investments in securities of U.S.
corporations.
(c) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
o Options -- The Fund may write and purchase call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund
is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added
to (or deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain
or loss on the option to the extent of the premiums received or paid (or
gain or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
o Swaps -- The Fund may enter into swap agreements, which are OTC contracts
in which the Fund and a counterparty agree to make periodic net payments
on a specified notional amount. The net payments can be made for a set
period of time or may be triggered by a predetermined credit event. The
net periodic payments may be based on a fixed or variable interest rate;
the change in market value of a specified security, basket of securities,
or index; or the return generated by a security. These periodic payments
received or made by the Fund are recorded in the accompanying Statement of
Operations as realized gains or losses, respectively. Gains or losses are
realized upon termination of the swap agreements. Swaps are
marked-to-market daily and changes in value are recorded as unrealized
appreciation (depreciation). Risks include changes in the returns of the
underlying instruments, failure of the counterparties to perform under the
contracts' terms and the possible lack of liquidity with respect to the
swap agreements.
o Forward foreign exchange contracts -- The Fund will enter into forward
foreign exchange contracts. The contract is marked-to-market daily and the
change in market value is recorded by the Fund as an unrealized gain or
loss. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value at the time it was opened
and the value at the time it was closed.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such futures contracts. Futures contracts
are contracts for delayed delivery of securities at a specific future date
and at a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount
of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as variation margin and are recorded by the
Fund as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the value
of the contract at the time it was opened and the value at the time it was
closed.
(d) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, withholding taxes may be imposed on interest, dividends and
capital gains at various rates.
(e) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Dividends from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Fund has determined the ex-dividend date.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(f) Dividends and distributions -- Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(g) Offering expenses -- Direct expenses relating to the public offering of the
Fund's Common Stock were charged to capital at the time of issuance of the
shares.
12 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Notes to Financial Statements (concluded)
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory and Management Agreement with
IQ Investment Advisors LLC ("IQ"), an indirect subsidiary of Merrill Lynch &
Co., Inc. ("ML & Co.").
IQ is responsible for the investment advisory, management and administrative
services to the Fund. In addition, IQ provides the necessary personnel,
facilities, equipment and certain other services necessary to the operations of
the Fund. For such services, the Fund will pay a monthly fee at an annual rate
equal to .90% of the average daily value of the Fund's net assets. IQ has
entered into a Subadvisory Agreement with Nuveen Asset Management ("Nuveen")
pursuant to which Nuveen provides certain investment advisory services to IQ
with respect to the Fund. For such services, IQ will pay Nuveen a monthly fee at
an annual rate equal to .40% of the average daily value of the Fund's net
assets. There was no increase in the aggregate fees paid by the Fund for these
services.
For the period April 28, 2006 to June 30, 2006, Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MLPF&S"), an affiliate of IQ, received gross fees from
underwriting of $3,041,019 in connection with the issuance of the Fund's Common
Stock. In addition, the Fund reimbursed MLPF&S $17,475 as a partial
reimbursement of expenses incurred in connection with the issuance of the Fund's
Common Stock.
Certain officers and/or directors of the Fund are officers and/or directors of
MLIM, IQ and ML & Co.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including MLIM, to the
investment management business of BlackRock, Inc. The transaction is expected to
close at the end of the third quarter of 2006.
3. Investments:
There were no purchases and sales of long-term investments for the period April
28, 2006 to June 30, 2006.
4. Common Stock Transactions:
The Fund is authorized to issue 100,000,000 shares of stock, all of which are
initially classified as Common Stock, par value $.001. The Board of Directors is
authorized, however, to classify and reclassify any unissued shares of Common
Stock without approval of the holders of Common Stock.
Shares issued and outstanding during the period April 28, 2006 to June 30, 2006
increased by 7,350,000 as a result of shares sold.
The Fund will make offers to repurchase its shares at annual (approximately
12-month) intervals. The shares tendered in the repurchase offer will be subject
to a repurchase fee retained by the Fund to compensate the Fund for expenses
directly related to the repurchase offer.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 13
Disclosure of Investment Advisory Agreement
Activities and Composition of the Board of Directors
All but one member, who was not present, of the Fund's Board of Directors that
approved the management agreement between the Fund and the Adviser (the
"Management Agreement") was not an "interested person," as such term is defined
in the Investment Company Act of 1940 (the "non-interested Directors"). The
Chairman of the Board is a non-interested Director. Director nominees are chosen
by the Board's Nominating and Corporate Governance Committee. The Directors are
responsible for the overall supervision of the operations of the Fund and
perform the various duties imposed on directors of investment companies by the
Investment Company Act and applicable Maryland law. Each non-interested Director
is a member of the Board's Audit Committee and Nominating and Corporate
Governance Committee. The non-interested Directors meet in executive session at
each regular Board meeting. Each of the Board and Audit Committee meet in person
for one day each quarter and conduct other in-person and telephone meetings
throughout the year; some of which are formal board meetings and some of which
are informational meetings. The independent counsel to the non-interested
Directors attends all in-person Board and Audit Committee meetings and other
meetings at the request of the non-interested Directors.
The Management Agreement through which the Adviser provides investment advisory,
management and administrative services to the Fund provides that, subject to the
supervision of the Fund's Board of Directors, the Adviser is responsible for
management and oversight of the Fund's portfolio. The Adviser for the Fund
provides certain oversight responsibility for the implementation of the strategy
by the Subadviser. The Adviser also provides certain investment advisory,
management and administrative services for the Fund.
Initial Approval of Management Agreement
The Board of Directors of the Fund, including a majority of the non-interested
Directors of the Fund, has the responsibility under the Investment Company Act
to approve the Fund's proposed Management Agreement for its initial two-year
term and for one-year renewal terms thereafter at meetings of the Board called
for the purpose of voting on such initial approvals or renewals. In addition,
the Fund's Board of Directors will receive, review and evaluate information
concerning the services and personnel of the Adviser and its affiliates at each
quarterly meeting of the Board of Directors. While particular emphasis will be
placed on information concerning profitability, comparability of fees, total
expenses and the Fund's investment performance at any future meeting at which a
renewal of the Management Agreement is considered, the process of evaluating the
Advisor and the Fund's investment advisory and administrative arrangements is an
ongoing one. In this regard, the Board's consideration of the nature, extent and
quality of the services to be provided by the Adviser under the Management
Agreement will include deliberations at future quarterly meetings.
At a board meeting held on September 20, 2005, all of the Directors present at
the meeting, including the non-interested Directors, approved the Management
Agreement for an initial two-year term. In considering whether to approve the
Management Agreement, the Fund's Board of Directors reviewed an organizational
meeting book and other materials from counsel to the Fund and from the Adviser
which: (i) included information concerning the services that will be rendered to
the Fund by the Adviser and the Adviser's affiliates and the fees that will be
paid by the Fund to the Adviser and the Adviser's affiliates, and (ii) outlined
the legal duties of the Board under the Investment Company Act. The Board also
received information from Lipper, Inc. ("Lipper") comparing the Fund's fee rate
for advisory and administrative services to those of other closed-end funds
chosen by Lipper. In particular, the Board considered the following:
(a) The nature, extent and quality of services to be provided by the Adviser --
The Directors reviewed the services that the Adviser would provide to the Fund.
In connection with the investment advisory services to be provided to the Fund,
the Board of Directors discussed in detail with officers of the Adviser the
management of the Fund's investments in accordance with the Fund's stated
investment objective and policies and the types of transactions that would be
entered into on behalf of the Fund. During this discussion, the Directors asked
detailed questions of, and received answers from, the officers of the Adviser
regarding the formulation of the investment strategy, its efficacy and potential
risks.
At a subsequent meeting of the Board of Directors held on March 7, 2006, the
Board discussed with representatives of the Adviser and the Subadviser,
revisions made to the Fund's investment objective and strategy as presented at
the September 20, 2005 meeting. The Board discussed the reasons for the
revisions to the Fund's investment objective and strategy, the costs associated
with implementing the revised strategy, the ability of the Subadviser to achieve
the Fund's investment objective utilizing the revised investment strategy, the
ability of the Subadviser to deliver the same anticipated level of service, and
whether the revised strategy would
14 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
increase the risk profile of the Fund. Following discussions with
representatives of the Adviser and a member of the Subadviser's portfolio
management team, the Board concluded that the change to the investment objective
and strategy was, and the Management Agreement remained, appropriate for the
Fund.
In addition to the investment advisory services to be provided to the Fund, the
Board of Directors considered that the Adviser and its affiliates also will
provide administrative services, stockholder services, oversight of Fund
accounting, marketing services, assistance in meeting legal and regulatory
requirements and other services necessary for the operation of the Fund. In
particular, the Board of Directors reviewed the compliance and administrative
services to be provided to the Fund by the Adviser, including its oversight of
the Fund's day-to-day operations and its oversight of Fund accounting. The Board
noted that the Adviser has an administrative, legal and compliance staff to
ensure a high level of quality in the compliance and administrative services to
be provided to the Fund. Based on the presentations on September 20, 2005 and
the Board members' experience as Board members of other investment companies
advised by the Adviser, the Board of Directors concluded that the services to be
provided to the Fund by the Adviser under the Management Agreement were likely
to be of a high quality and would benefit the Fund.
(b) Investment performance of the Fund and the Adviser -- Because the Fund is
newly formed, the Directors did not consider the investment performance of the
Fund. The Board based its review of the Adviser's performance primarily on the
experience of the Adviser in managing other registered investment companies,
noting that other accounts the Adviser manages might have investment objectives,
policies or restrictions different from those of the Fund. The Board also
considered the experience, resources and strengths of the Adviser and its
affiliates in developing investment strategies similar to the Fund in other
contexts. The Board of Directors considered the innovative nature of the
investment product and the creativity of the Adviser in developing the Fund's
investment program. Based on these factors, the Directors determined that the
Adviser would be an appropriate investment manager for the Fund.
(c) Cost of the services to be provided and profits to be realized by the
Adviser from the relationship with the Fund -- The Directors also considered the
anticipated cost of the services to be provided by the Adviser. Because the Fund
is newly formed, had not commenced operations as of September 20, 2005, and the
eventual aggregate amount of Fund assets was uncertain, the Adviser was not able
to provide the Directors with specific information concerning the cost of
services to be provided to the Fund and the expected profits to be realized by
the Adviser and its affiliates from their relationships with the Fund. The
Directors, however, did discuss with the Adviser its general level of
anticipated profitability and noted that the Adviser would provide the Directors
with profitability information from time to time after the Fund commences
operations.
(d) The extent to which economies of scale would be realized as the Fund grows
and whether fee levels would reflect such economies of scale -- Because the Fund
is newly formed and had not commenced operations as of September 20, 2005, and
the eventual aggregate amount of Fund assets was uncertain, the Adviser was not
able to provide the Directors with specific information concerning the extent to
which economies of scale would be realized as the Fund grows and whether fee
levels would reflect such economies of scale, if any. The Directors also
discussed the renewal requirements for investment advisory agreements, and
determined that they would revisit this issue no later than when they next
review the investment advisory fee after the initial two-year term of the
Management Agreement.
(e) Comparison of services to be rendered and fees to be paid to those under
other investment advisory contracts, such as contracts of the same and other
investment advisers or other clients -- The Directors compared both the services
to be rendered and the fees to be paid under the Management Agreement to other
contracts of the Adviser and to other contracts of other investment advisers
with respect to other similar closed-end registered investment companies. In
particular, the Board of Directors evaluated the Fund's proposed contractual fee
rate for advisory and administrative services as compared to the contractual fee
rate of other closed-end funds chosen by Lipper. In considering this
information, the Board of Directors took into account the relatively unique
nature of the investment strategies of the Fund and the fact that the peer group
of core, growth and value funds provided by Lipper for comparison might have
investment strategies and restrictions different from those of the Fund. The
Board did not consider compensation paid with respect to accounts other than
registered investment companies since the Adviser only utilizes the Fund's
strategy in connection with the Fund. In particular, the Board of Directors
noted that the Fund's contractual advisory fee rate at a common asset level
placed it in the second quintile for the group (that is, at least 60% of funds
in the group had a contractual advisory fee that was higher than the Fund's).
The Board of
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 15
Disclosure of Investment Advisory Agreement (concluded)
Directors also considered that, including investment-related expenses and taxes,
the Fund's projected total expense ratio at a common asset level placed it in
the second quintile for the group (that is, at least 60% of funds in the group
had a total expense ratio that was higher than the Fund's).
The Fund's Board of Directors then considered the potential direct and indirect
benefits to the Adviser and its affiliates from its relationship with the Fund,
including the underwriting arrangements relating to the initial distribution of
Fund shares. The Board of Directors concluded that the Fund would benefit from
those services.
Conclusion
No single factor was determinative to the decision of the Board. Based on the
foregoing and such other matters as were deemed relevant, all of the Directors
who were present at the September 20, 2005 meeting, including all of the
non-interested Directors, concluded that the proposed advisory fee rate and
projected total expense ratio are reasonable in relation to the services to be
provided by the Adviser to the Fund, as well as the costs to be incurred and
benefits to be gained by the Adviser and its affiliates in providing such
services, including the investment advisory and administrative components. The
Board also found the proposed investment advisory fee to be reasonable in
comparison to the fees charged by advisers to other comparable funds of similar,
actual or anticipated size. As a result, all of the Directors present at the
September 20, 2005 meeting, including the non-interested Directors, approved the
Management Agreement. The non-interested Directors were represented by
independent counsel who assisted them in their deliberations.
Disclosure of Investment Subadvisory Agreement
The Adviser has entered into a Subadvisory Agreement with the Subadviser,
pursuant to which the Adviser has delegated certain of its investment advisory
responsibilities to the Subadviser. The Subadvisory Agreement has been
structured to operate in the same manner as the Management Agreement and the
Subadviser will not be entitled to any fees unless and until the Adviser has
received the Management Fee from the Fund.
Unless earlier terminated as described below, the Subadvisory Agreement will
remain in effect for a period of two years from the date of execution and will
remain in effect from year to year thereafter if approved annually (a) by the
Board of Directors of the Fund or by a majority of the outstanding shares of the
Fund and (b) by a majority of the Directors who are not parties to such contract
or interested persons (as defined in the Investment Company Act) of any such
party. Such contract is not assignable and may be terminated without penalty on
60 days' written notice at the option of either party thereto or by the vote of
the stockholders of the Fund. The Subadvisory Agreement terminates automatically
if the Management Agreement terminates.
Initial Approval of Subadvisory Agreement
At a Board meeting held on September 20, 2005, all of the Directors present at
the meeting, including the non-interested Directors, approved the Subadvisory
Agreement for an initial two-year term. In considering whether to approve the
Subadvisory Agreement, the Fund's Board of Directors reviewed an organizational
meeting book and other materials from counsel to the Fund, and, noting that the
Subadviser manages each of the Defined Strategy Fund Inc.'s ("Defined Strategy")
and Dow 30(SM) Premium & Dividend Income Fund Income Fund Inc.'s ("Dow 30")
portfolio, took into account materials previously provided to the Directors
about the Subadviser and the services that it provides those funds, which (i)
included information describing the services of the Subadviser and the
Subadviser's affiliates; (ii) included information concerning the portfolio
manager; and (iii) outlined the legal duties of the Board under the Investment
Company Act. As part of its review of the selection of the Subadviser, the Board
engaged in a detailed discussion with the Adviser regarding its selection of the
Subadviser. The Board considered the Subadviser's experience in managing the
portfolios of Defined Strategy and Dow 30 and that the Subadviser, in the
Adviser's judgment, had the experience and expertise necessary to implement the
Fund's investment program. In particular, the Board also considered the
following:
(a) The nature, extent and quality of services to be provided by the Subadviser
- -- The Directors reviewed the services that the Subadviser would provide to the
Fund. In connection with the investment Subadvisory services to be provided to
the Fund, the Board of Directors discussed in detail with officers of the
Adviser the management of the Fund's investments in accordance with the Fund's
stated investment objective and policies and the types of transactions that
would be entered
16 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Disclosure of Investment Subadvisory Agreement (continued)
into on behalf of the Fund. Drawing on their collective industry experience, the
Directors discussed the Fund's investment strategy at length with
representatives from the Subadviser, including discussions regarding the
premises underlying the Fund's investment strategy, its efficacy and potential
risks. The Board of Directors also considered: the favorable history, reputation
and background of the Subadviser and its personnel; the Board's experience with
the Subadviser in connection with Defined Strategy and Dow 30; and the
substantial experience of the Subadviser's portfolio management team in managing
foreign exchange investments. The Board of Directors concluded that the services
to be provided to the Fund by the Subadviser under the Subadvisory Agreement
were likely to be of a high quality and would benefit the Fund.
At a subsequent meeting of the Board of Directors held on March 7, 2006, the
Board discussed with representatives of the Adviser and the Subadviser,
revisions made to the Fund's investment objective and strategy as presented at
the September 20, 2005 meeting. The Board discussed the reasons for the
revisions to the Fund's investment objective and strategy, the costs associated
with implementing the revised strategy, the ability of the Subadviser to achieve
the Fund's investment objective utilizing the revised investment strategy, the
ability of the Subadviser to deliver the same anticipated level of service, and
whether the revised strategy would increase the risk profile of the Fund.
Following discussions with representatives of the Adviser and a member of the
Subadviser's portfolio management team, the Board concluded that the change to
the investment objective and strategy was, and that the Subadvisory Agreement
remained, appropriate for the Fund.
(b) Investment performance of the Fund and the Subadviser's Quantitative
Investment Team -- Because the Fund is newly formed, the Directors did not
consider the investment performance of the Fund. The Board did consider the
performance history of Defined Strategy and Dow 30 and noted that, although this
performance history was limited, each fund was successfully following its
investment strategy. The Board did not consider the Subadviser's performance
with respect to most other accounts it manages, because these accounts might
have investment objectives, policies or restrictions different from those of the
Fund. The Board further considered the experience, resources and strengths of
the Subadviser, its affiliates and the portfolio manager in managing foreign
exchange transactions. As a result, the Directors determined that the Subadviser
would be an appropriate Subadviser for the Fund.
(c) Cost of the services to be provided and profits to be realized by the
Subadviser from the relationship with the Fund -- The Directors also considered
the anticipated cost of the services to be provided by the Subadviser. Because
the Fund is newly formed, the Board did not review and consider any information
relating to the Subadviser's anticipated profitability. Because the Board viewed
anticipated profitability as highly speculative given the early stage of the
relationship, the Board did not consider the anticipated profitability to the
Subadviser separately from its consideration of the appropriateness of the
overall fee being charged the Fund for the totality of services being provided.
(d) The extent to which economies of scale would be realized as the Fund grows
and whether fee levels would reflect such economies of scale -- Because the Fund
is newly formed and had not commenced operations as of September 20, 2005, and
the eventual aggregate amount of Fund assets was uncertain, the Adviser was not
able to provide the Directors with specific information concerning the extent to
which economies of scale would be realized as the Fund grows and whether fee
levels would reflect such economies of sale, if any. The Directors also noted
that the Subadviser's fees are paid by the Adviser out of its fees and not by
the Fund directly. The Directors also discussed the renewal requirements for
Subadvisory agreements, and determined that they would revisit this issue no
later than when they next review the Subadvisory fee after the initial two-year
term of the Subadvisory Agreement.
(e) Comparison of services to be rendered and fees to be paid to those under
other Subadvisory contracts, such as contracts of the same and other investment
advisers or other clients -- The Board discussed the services that would be
rendered by the Subadviser, and, based on its experience overseeing other
subadvised funds, including Defined Strategy and Dow 30, determined that such
services were consistent with those provided by subadvisers generally and
sufficient for the management of the Fund. Taking into account the totality of
the information and materials provided to the Board as noted above, including
the fact that the Subadvisory fee was negotiated with the Adviser on an arm's
length basis, the Board concluded that the Subadvisory fee was reasonable for
the services being rendered. The Board also concluded that the Subadvisory fees
appeared reasonable in relation to the fees charged by the Subadviser to other
subadvised funds.
The Fund's Board of Directors then considered the potential direct and indirect
benefits to the Subadviser and its affiliates
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 17
Disclosure of Investment Subadvisory Agreement (concluded)
from its relationship with the Fund, including the reputational benefits from
managing the Fund. The Board of Directors concluded that the potential benefits
to the Subadviser were consistent with those obtained by other subadvisers in
similar types of arrangements.
Conclusion
No single factor was determinative to the decision of the Board. Based on the
foregoing and such other matters as were deemed relevant, all of the Directors
present at the September 20, 2005 meeting, including all of the non-interested
Directors, concluded that the proposed advisory fee rate and projected total
expense ratio are reasonable in relation to the services to be provided by the
Subadviser. As a result, all of the Directors who were present at the September
20, 2005 meeting, including the non-interested Directors, approved the
Subadvisory Agreement. The non-interested Directors were represented by
independent counsel who assisted them in their deliberations.
"Dow 30" is a service mark of Dow Jones & Company, Inc.
Fundamental Periodic Repurchase Policy
The Board of Directors approved a fundamental policy whereby the Fund would
adopt an "interval fund" structure pursuant to Rule 23c-3 under the Investment
Company Act of 1940, as amended (the "1940 Act"). As an interval fund, the Fund
will make annual repurchase offers at net asset value (less repurchase fee not
to exceed 2%) to all Fund shareholders. The percentage of outstanding shares
that the Fund can repurchase in each offer will be established by the Fund's
Board of Directors shortly before the commencement of each offer, and will be
between 5% and 25% of the Fund's then outstanding shares.
The Fund has adopted the following fundamental policy regarding periodic
repurchases:
a) The Fund will make offers to repurchase its shares at annual (approximately
12-month) intervals pursuant to Rule 23c-3 under the 1940 Act ("Offers"). The
Board of Directors may place such conditions and limitations on an Offer, as may
be permitted under Rule 23c-3.
b) The repurchase request deadline for each Offer, by which the Fund must
receive repurchase requests submitted by shareholders in response to the most
recent Offer, will be determined by reference to the exercise date of the call
spreads and written call options that comprise the Fund's transactions (as
described in the Fund's prospectus) for an annual period; and will be the
fourteenth day prior to such exercise date; provided, that in the event that
such day is not a business day, the repurchase request deadline will be the
business day subsequent to the fourteenth day prior to the exercise date of the
call spreads and written call options (the "Repurchase Request Deadline").
c) The maximum number of days between a Repurchase Request Deadline and the next
repurchase pricing date will be fourteen days; provided that if the fourteenth
day after a Repurchase Request Deadline is not a business day, the repurchase
pricing date shall be the next business day (the "Repurchase Pricing Date").
d) Offers may be suspended or postponed under certain circumstances, as provided
for in Rule 23c-3.
18 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006
Electronic Delivery
The Fund offers electronic delivery of communications to its shareholders. In
order to receive this service, you must register your account and provide us
with e-mail information. To sign up for this service, simply access this Web
site at http://www.icsdelivery.com/live and follow the instructions. When you
visit this site, you will obtain a personal identification number (PIN). You
will need this PIN should you wish to update your e-mail address, choose to
discontinue this service and/or make any other changes to the service. This
service is not available for certain retirement accounts at this time.
Contact Information
For more information regarding the Fund, please visit www.IQIAFunds.com or
contact us at 1-877-449-4742.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2006 19
[LOGO] IQ
INVESTMENT
ADVISORS www.IQIAFunds.com
Global Income & Currency Fund Inc. seeks to achieve its investment objective by
constructing and actively managing a portfolio of investments that provides long
and short exposure to selected foreign currencies.
This report, including the financial information herein, is transmitted to
shareholders of Global Income & Currency Fund Inc. for their information. It is
not a prospectus. Past performance results shown in this report should not be
considered a representation of future performance. Statements and other
information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge at
www.IQIAFunds.com/proxyvoting.asp or upon request by calling toll-free
1-877-449-4742 or through the Securities and Exchange Commission's Web site at
http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available (1) at www.IQIAFunds.com/proxyvoting.asp; and (2) on
the Securities and Exchange Commission's Web site at http://www.sec.gov.
Global Income & Currency Fund Inc.
Box 9011
Princeton, NJ 08543-9011
#IQGCF -- 6/06
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual
report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable to this
semi-annual report
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable to this semi-annual
report
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable to this semi-annual report
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
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.
Global Income & Currency Fund Inc.
By: /s/ Mitchell M. Cox
----------------------------------
Mitchell M. Cox,
Chief Executive Officer of
Global Income & Currency Fund Inc.
Date: August 23, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Mitchell M. Cox
----------------------------------
Mitchell M. Cox,
Chief Executive Officer of
Global Income & Currency Fund Inc.
Date: August 23, 2006
By: /s/ Donald C. Burke
----------------------------------
Donald C. Burke,
Chief Financial Officer of
Global Income & Currency Fund Inc.
Date: August 23, 2006