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, 6th Floor,
New York, New York 10080.
Registrant's telephone number, including area code: (212) 449-4742
Date of fiscal year end: 12/31/07
Date of reporting period: 01/01/07 - 06/30/07
Item 1 - Report to Stockholders
Global Income &
Currency Fund Inc.
Semi-Annual Report
(Unaudited)
June 30, 2007
[LOGO] IQ INVESTMENT [LOGO] NUVEEN
ADVISORS INVESTMENTS
Global Income & Currency Fund Inc.
Proxy Results
During the six-month period ended June 30, 2007, the shareholders of Global
Income & Currency Fund Inc. voted on the following proposal, which was approved
at an annual shareholders' meeting on April 27, 2007. A description of the
proposal and number of shares voted are as follows:
- -------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -------------------------------------------------------------------------------------------------
To elect the Fund's Board of Directors: Paul Glasserman 6,992,597 107,778
Steven W. Kohlhagen 6,993,047 107,328
William J. Rainer 6,993,047 107,328
- -------------------------------------------------------------------------------------------------
Directors and Officers
William J. Rainer, Director and Chairman of the Board
Paul Glasserman, Director and Chairman of the Audit Committee
Steven W. Kohlhagen, Director and Chairman of the Nominating and Corporate
Governance Committee
Donald C. Burke, Vice President and Secretary
Martin G. Byrne, Chief Legal Officer
Mitchell M. Cox, President
Justin C. Ferri, Vice President
Jay M. Fife, Vice President
James E. Hillman, Vice President and Treasurer
Catherine A. Johnston, Chief Compliance Officer
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
2 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Portfolio Information
As of June 30, 2007+
Percent of
Notional Exposure by Country/Region++ Net Assets
- --------------------------------------------------------------------------------
United States ...................................................... 50.0%
South Africa ....................................................... 0.2
Sweden ............................................................. 0.2
Turkey ............................................................. 0.1
Switzerland ........................................................ 0.1
Taiwan ............................................................. --*
Mexico ............................................................. --*
Japan .............................................................. --*
New Zealand ........................................................ --**
Brazil ............................................................. (0.1)
Czech Republic ..................................................... (0.1)
Hungary ............................................................ (0.6)
- --------------------------------------------------------------------------------
* Amount is less than 0.1%.
** Amount is less than (0.1%).
+ At the end of the period, the Fund was invested primarily in U.S. dollars
pursuant to its investment process awaiting an opportunity to re-enter the
global market.
++ This table denotes the notional exposure of Fund investments by country
(or geographic region through the use of European Currency contracts) as a
percentage of net assets of the Fund. For additional detail on the Fund's
holdings, please refer to the "Schedule of Investments" section included
in this report.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 3
A Discussion With Your Fund's Portfolio Manager
We are pleased to provide you with this shareholder report for Global
Income & Currency Fund Inc. While the Fund is advised by IQ Investment Advisors,
the following discussion is provided by Nuveen Asset Management, the Fund's
subadvisor.
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.
How did the Fund perform during the six-month period?
For the six-month period ended June 30, 2007, the Common Stock of the Fund had a
total investment return of +6.95%, based on a change in per share net asset
value from $19.09 to $19.66, and assuming reinvestment of all distributions paid
during the period ($.725). This exceeded the return of the 3-Month U.S. Dollar
LIBOR, as measured by the Lehman 3-Month Swap Index by 4.30% over the same
period.
For more detail with regard to 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. 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.
How did you manage the portfolio during the six-month period?
The Fund was fully invested in the strategy until the end of February 2007 when
the spike in investor risk aversion and a sharp change in exchange rate momentum
occurred. As a result, the portfolio was positioned in low-risk U.S. Treasury
securities throughout this volatile period. In mid-March, our risk reduction
models indicated that it was time to establish new positions in the portfolio.
The portfolio stayed fully invested according to our investment process through
most of June. At the end of the month, the increase in sub-prime mortgage
delinquencies and the risk of liquidation of sub-prime mortgage-backed
securities created another spike in risk aversion. This resulted in the
portfolio returning to positions in low-risk U.S. Treasury securities.
How would you characterize the Fund's position at the close of the six-month
period?
At the end of the period, the Fund was primarily invested in U.S. dollars and we
are waiting for an opportunity to re-enter the market. We believe that the Fund
is properly positioned to achieve its investment objective.
Andrew Stenwall
Portfolio Manager
July 13, 2007
4 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007 (Unaudited) (in U.S. dollars)
Face
Short-Term Securities Amount Value
=======================================================================================================
Hungary -- 8.9%
Foreign Commercial Paper** -- 8.9%
Hungary Government Bond
Series 07/G, 9.25%
due 10/12/2007 (a) HUF 2,216,000,000 $ 12,183,146
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in Hungary 12,183,146
=======================================================================================================
Mexico -- 9.7%
Foreign Commercial Paper** -- 9.7%
Mexican Cetes Treasury Bill,
7.183% due 7/19/2007 MXN 144,000,000 13,268,150
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in Mexico 13,268,150
=======================================================================================================
New Zealand -- 10.1%
Foreign Commercial Paper** -- 10.1%
New Zealand Treasury Bill,
7.318% due 8/22/2007 NZD 18,000,000 13,731,081
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in New Zealand 13,731,081
=======================================================================================================
South Africa -- 9.3%
Foreign Commercial Paper** -- 9.3%
South Africa Government
Bond Series R195, 10%
due 2/28/2008 (a) ZAR 90,000,000 12,738,168
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in South Africa 12,738,168
=======================================================================================================
Turkey -- 10.8%
Foreign Commercial Paper** -- 10.8%
Turkey Government Bond,
17.208% due 7/04/2007 TRY 3,500,000 2,664,080
Turkey Treasury Bill, 19.418%
due 7/18/2007 (a) 16,000,000 12,090,752
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in Turkey 14,754,832
=======================================================================================================
United States -- 49.9%
U.S. Government Agency Obligations** -- 49.9%
Fannie Mae:
5.12% due 7/18/2007 (a) USD 31,500,000 $ 31,428,413
5.269% due 9/12/2007 24,500,000 24,250,100
Freddie Mac, 5.252%
due 7/30/2007 (a) 12,500,000 12,450,222
- -------------------------------------------------------------------------------------------------------
Total Short-Term Securities in the United States 68,128,735
=======================================================================================================
Total Short-Term Securities
(Cost -- $132,895,785) -- 98.7% 134,804,112
=======================================================================================================
=======================================================================================================
Number of
Options Purchased Contracts
=======================================================================================================
Put Options Purchased -- 0.1%
Morgan Stanley,
expiring September 2007 at
USD 1.07, Broker Morgan
Stanley Capital Services, Inc. 13,500 115,682
- -------------------------------------------------------------------------------------------------------
Total Options Purchased
(Premiums Paid -- $104,760) -- 0.1% 115,682
=======================================================================================================
Total Investments (Cost -- $133,000,545*) -- 98.8% 134,919,794
Other Assets Less Liabilities -- 1.2% 1,663,639
------------
Net Assets -- 100.0% $136,583,433
============
* The cost and unrealized appreciation (depreciation) of investments as of
June 30, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost ......................................... $ 133,337,488
=============
Gross unrealized appreciation .......................... $ 1,736,846
Gross unrealized depreciation .......................... (154,540)
-------------
Net unrealized appreciation ............................ $ 1,582,306
=============
** 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 rates in effect at June 30, 2007.
(a) All or a portion of security held as collateral in connection with open
forward foreign exchange contracts.
o Forward foreign exchange contracts as of June 30, 2007 were as follows:
--------------------------------------------------------------------------
Foreign Settlement Unrealized
Currency Purchased Date Appreciation
--------------------------------------------------------------------------
BRL 29,260,000 September 2007 $241,703
CHF 17,150,000 September 2007 74,151
CZK 273,132,992 September 2007 34,225
JPY 1,651,000,000 September 2007 35,210
SEK 99,000,000 September 2007 79,974
TWD 427,180,000 October 2007 23,443
--------------------------------------------------------------------------
Total Unrealized Appreciation on Forward Foreign Exchange
Contracts -- Net (USD Commitment -- $82,763,093) $488,706
========
o Forward foreign exchange contracts as of June 30, 2007 were as follows:
--------------------------------------------------------------------------
Unrealized
Foreign Settlement Appreciation
Currency Sold Date (Depreciation)
--------------------------------------------------------------------------
BRL 29,260,000 September 2007 $ (112,295)
CHF 17,150,000 September 2007 (174,015)
CZK 273,132,992 September 2007 115,699
HUF 2,400,000,000 October 2007 (101,999)
JPY 1,651,000,000 September 2007 (49,428)
MXN 144,000,000 July 2007 (62,424)
NZD 18,000,000 August 2007 (41,664)
SEK 99,000,000 September 2007 (323,136)
TRY 19,500,000 July 2007 (188,967)
TWD 427,180,000 October 2007 (101,850)
ZAR 90,000,000 July 2007 (193,513)
--------------------------------------------------------------------------
Total Unrealized Depreciation on Forward Foreign Exchange
Contracts -- Net (USD Commitment -- $149,661,980) $(1,233,592)
===========
o Currency Abbreviations:
BRL Brazilian Real
CHF Swiss Franc
CZK Czech Republic Koruna
HUF Hungary Forint
JPY Japanese Yen
MXN Mexican New Peso
NZD New Zealand Dollar
SEK Swedish Krona
TRY Turkish Lira
TWD New Taiwan Dollar
USD U.S. Dollar
ZAR South African Rand
See Notes to Financial Statements.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 5
Statement of Assets, Liabilities and Capital
As of June 30, 2007 (Unaudited)
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost -- $132,895,785) $ 134,804,112
Cash ............................................................................. 1,929,539
Options purchased, at value (premiums paid -- $104,760) .......................... 115,682
Unrealized appreciation on forward foreign exchange contracts .................... 604,405
Foreign cash (cost -- $1,916) .................................................... 2,002
Interest receivable .............................................................. 1,256,139
Prepaid expenses and other assets ................................................ 15,654
-------------
Total assets ..................................................................... 138,727,533
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign exchange contracts .................... 1,349,291
Payables:
Dividends to Common Stock shareholders ....................................... 529,065
Investment adviser ........................................................... 94,962 624,027
-------------
Accrued expenses ................................................................. 170,782
-------------
Total liabilities ................................................................ 2,144,100
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ....................................................................... $ 136,583,433
=============
===================================================================================================================================
Capital
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share, 100,000,000 shares authorized ........... $ 6,947
Paid-in capital in excess of par ................................................. 132,069,404
Accumulated distributions in excess of investment income -- net .................. $ (1,250,454)
Undistributed realized capital gains -- net ...................................... 4,573,567
Unrealized appreciation -- net ................................................... 1,183,969
-------------
Total accumulated earnings -- net ................................................ 4,507,082
-------------
Total capital -- Equivalent to $19.66 per share based on 6,946,895 shares of
Common Stock outstanding (market price -- $18.91) .............................. $ 136,583,433
=============
See Notes to Financial Statements.
6 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Statement of Operations
For the Six Months Ended June 30, 2007 (Unaudited)
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest ......................................................................... $ 5,084,848
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ......................................................... $ 621,574
Custodian fees ................................................................... 49,141
Professional fees ................................................................ 41,961
Directors' fees and expenses ..................................................... 22,988
Transfer agent fees .............................................................. 16,213
Accounting services .............................................................. 16,115
Printing and shareholder reports ................................................. 15,878
Listing fees ..................................................................... 11,427
Repurchase fees .................................................................. 7,131
Other ............................................................................ 11,409
-------------
Total expenses ................................................................... 813,837
-------------
Investment income -- net ......................................................... 4,271,011
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on:
Investments -- net ........................................................... 3,259,910
Foreign currency transactions -- net ......................................... 3,002,446 6,262,356
-------------
Change in unrealized appreciation/depreciation on:
Investments -- net ........................................................... (790,045)
Foreign currency transactions -- net ......................................... (511,807) (1,301,852)
---------------------------------
Total realized and unrealized gain -- net ........................................ 4,960,504
-------------
Net Increase in Net Assets Resulting from Operations ............................. $ 9,231,515
=============
See Notes to Financial Statements.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 7
Statements of Changes in Net Assets
For the Six For the Period
Months Ended April 28,
June 30, 2006+ to
2007 December 31,
Increase (Decrease) in Net Assets: (Unaudited) 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ......................................................... $ 4,271,011 $ 5,195,899
Realized gain (loss) -- net ...................................................... 6,262,356 (284,747)
Change in unrealized appreciation/depreciation -- net ............................ (1,301,852) 2,485,821
---------------------------------
Net increase in net assets resulting from operations ............................. 9,231,515 7,396,973
---------------------------------
===================================================================================================================================
Dividends & Distributions to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ......................................................... (5,184,522)++ (5,412,680)
Realized gain -- net ............................................................. -- (1,524,204)
Tax return of capital ............................................................ -- (236,486)
---------------------------------
Net decrease in net assets resulting from dividends and distributions to
shareholders ................................................................... (5,184,522) (7,173,370)
---------------------------------
===================================================================================================================================
Common Stock Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net proceeds from issuance of Common Stock ....................................... -- 140,385,000
Value of shares issued to Common Stock shareholders in reinvestment of dividends . 654,837 --
Offering costs resulting from the issuance of Common Stock ....................... -- (294,000)
Redemption of Common Stock resulting from a repurchase offer
(including $8,861 of repurchase offer fees) .................................... (8,533,008) --
---------------------------------
Net increase (decrease) in net assets resulting from Common Stock transactions ... (7,878,171) 140,091,000
---------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .......................................... (3,831,178) 140,314,603
Beginning of period .............................................................. 140,414,611 100,008
---------------------------------
End of period* ................................................................... $ 136,583,433 $ 140,414,611
=================================
* Accumulated distributions in excess of investment income -- net ............ $ (1,250,454) $ (336,943)
=================================
+ Commencement of operations.
++ A portion of the dividends from net investment income may be deemed a tax
return of capital or net realized gain at fiscal year end.
See Notes to Financial Statements.
8 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Financial Highlights
For the Six For the Period
Months Ended April 28,
June 30, 2006+ to
The following per share data and ratios have been derived 2007 December 31,
from information provided in the financial statements. (Unaudited) 2006
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ............................................. $ 19.09 $ 19.10
------------------------------
Investment income -- net*** ...................................................... .59 .71
Realized and unrealized gain -- net .............................................. .71 .30
------------------------------
Total from investment operations ................................................. 1.30 1.01
------------------------------
Less dividends and distributions:
Investment income -- net ..................................................... (.73)@@ (.74)
Realized gain -- net ......................................................... -- (.21)
Tax return of capital ........................................................ -- (.03)
------------------------------
Total dividends and distributions ................................................ (.73) (.98)
------------------------------
Offering costs resulting from the issuance of Common Stock ....................... -- (.04)
------------------------------
Net asset value, end of period ................................................... $ 19.66 $ 19.09
==============================
Market price per share, end of period ............................................ $ 18.91 $ 18.05
==============================
=================================================================================================================================
Total Investment Return**
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ............................................... 6.95%@ 5.48%@
==============================
Based on market price per share .................................................. 8.80%@ (4.76%)@
==============================
=================================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ......................................................................... 1.18%* 1.19%*
==============================
Investment income -- net ......................................................... 6.18%* 5.45%*
==============================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ......................................... $ 136,583 $ 140,415
==============================
Portfolio turnover ............................................................... 0%++ 0%++
==============================
* 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.
++ 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.
@ Aggregate total investment return.
@@ A portion of the dividends from net investment income may be deemed a tax
return of capital or net realized gain at fiscal year end.
See Notes to Financial Statements.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 9
Notes to Financial Statements (Unaudited)
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. 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. Options, 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 sale 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 the
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.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of business on the 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 will generally be
determined as of 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 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. entities.
(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 resulting
from an unfavorable price change in the underlying security or index, or if the
counterparty does not perform under the contract.
o Forward foreign exchange contracts -- The Fund will enter into forward
foreign exchange contracts which include, but are not limited to, cash
settled currency forward contracts including non-deliverable currency
forward contracts. The contracts are marked-to-market daily and any 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. To the extent necessary, certain debt
securities will serve as collateral for the Fund's currency contracts.
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
10 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Notes to Financial Statements (continued)
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.
(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. For the current period ended June 30,
2007, Fund management believes it is likely total dividends and distributions
may exceed net investment income and accumulated realized capital gains,
resulting in a portion of the total distribution treated as a tax return of
capital. A portion of the distributions paid by the Fund during the period April
28, 2006 to December 31, 2006 was characterized as a tax return of capital.
(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.
(h) Recent accounting pronouncements -- Effective June 29, 2007, the Fund
implemented Financial Accounting Standards Board ("FASB") Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109" ("FIN 48"). FIN 48 prescribes the minimum recognition
threshold a tax position must meet in connection with accounting for
uncertainties in income tax positions taken or expected to be taken by an
entity, including investment companies, before being measured and recognized in
the financial statements. Management has evaluated the application of FIN 48 to
the Fund, and has determined that the adoption of FIN 48 does not have a
material impact on the Fund's financial statements. The Fund files U.S. and
various state tax returns. No income tax returns are currently under
examination.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 11
Notes to Financial Statements (continued)
financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. FAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types
of assets and liabilities. At this time, management is evaluating the
implications of FAS 159 and its impact on the Fund's financial statements, if
any, has not been determined.
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 plus borrowings for leverage and other investment purposes. In addition,
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 plus borrowings for leverage and other investment purposes.
There is no increase in the aggregate fees paid by the Fund for these services.
IQ has entered into an Administration Agreement with Princeton Administrators,
LLC (the "Administrator"). The Administration Agreement provides that IQ will
pay the Administrator a fee from its investment advisory fee at an annual rate
equal to .12% of the average daily value of the Fund's net assets plus
borrowings for leverage and other investment purposes, for the performance of
administrative and other services necessary for the operation of the Fund. There
is no increase in the aggregate fees paid by the Fund for these services. The
Administrator is an indirect subsidiary of BlackRock, Inc. ML & Co. is a
principal owner of BlackRock, Inc..
Certain officers of the Fund are officers of IQ, ML & Co., BlackRock, Inc. or
its affiliates.
3. Investments:
There were no purchases or sales of long-term investments for the six months
ended June 30, 2007.
4. Common Stock Transactions:
The Fund is authorized to issue 100,000,000 shares of stock, all of which were
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 six months ended June 30, 2007
decreased by 443,043 as a result of a repurchase offer and increased by 34,702
as a result of dividend reinvestment. For the period April 28, 2006 to December
31, 2006, shares issued and outstanding increased by 7,350,000 from 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.
5. Subsequent Event:
On June 20, 2007, Nuveen Investments Inc. ("Nuveen Investments"), the parent
company of Nuveen, the Fund's subadviser, announced that it had entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement") to be acquired
by an investor group majority-led by Madison Dearborn Partners, LLC. Madison
Dearborn Partners, LLC is a private equity investment firm based in Chicago,
Illinois. The investor group's financial advisors and investors include ML & Co.
and Merrill Lynch Global Private Equity (both affiliates of IQ), Wachovia and
Wachovia Capital Partners, LLC, Citi, Deutsche Bank and Deutsche Bank Investment
Partners and Morgan Stanley.
The merger is expected to be completed by the end of the year, subject to
customary conditions, including obtaining the approval of Nuveen Investments'
stockholders, obtaining necessary fund and client consents sufficient to satisfy
the terms of the Merger Agreement and the expiration of certain regulatory
waiting periods. There can be no assurance that the merger will be consummated
as contemplated or that necessary shareholder approvals will be obtained.
12 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
Notes to Financial Statements (concluded)
Nuveen does not anticipate any change to the portfolio management team or other
key personnel of Nuveen that currently provide services to the Fund as a result
of the merger.
The consummation of the merger will be deemed to be an "assignment" (as defined
in the Investment Company Act of 1940) of the current investment subadvisory
agreement (the"Subadvisory Agreement") between IQ and Nuveen. Under the terms of
the Subadvisory Agreement, an assignment will result in its automatic
termination. It is anticipated that the Board of Directors of the Fund will
consider a new investment subadvisory agreement between IQ and Nuveen prior to
the consummation of the merger. The new subadvisory agreement is expected to be
substantially the same as the Subadvisory Agreement, including providing for the
same subadvisory fee. If approved by the Board, the new agreement would be
presented to the Fund's shareholders for approval, and, if so approved by
shareholders, would take effect upon consummation of the merger. If the merger
is not consummated, then Nuveen will continue to operate in its current form. If
the merger is consummated prior to the shareholder vote, the Fund may rely on
Rule 15a-4 under the Investment Company Act of 1940 to operate under an interim
subadvisory agreement for up to 150 days pending shareholder approval of the new
subadvisory agreement.
Renewal of Current Investment Advisory and Management Agreements
The Board of Directors of each Fund, currently consisting solely of Independent
Directors, as defined in Section 2(a)(19) of the Investment Company Act of 1940
(the "Investment Company Act"), has the responsibility under the Investment
Company Act to consider annually the Investment Advisory and Management
Agreement of each Fund (each, a "Management Agreement" and together, the
"Management Agreements") with IQ Investment Advisors LLC ("IQ Advisors").
At a Board meeting held on June 14, 2007, all of the Directors present at the
meeting renewed the Management Agreement for each Fund for an additional
one-year term. Each Management Agreement was considered separately by the
relevant Fund's Directors. In considering whether to approve the Management
Agreements, the Directors reviewed a meeting book and other materials from
counsel to the Funds and from IQ Advisors which: (i) included information
concerning the services rendered to the Funds by IQ Advisors and IQ Advisors'
affiliates; (ii) contained information concerning the revenues and expenses
incurred by IQ Advisors and its affiliates from the operation of the Funds; and
(iii) outlined the legal duties of the Board under the Investment Company Act.
The Board also received information from Lipper, Inc. ("Lipper") comparing each
Fund's fee rate for advisory and administrative services to those of other
closed-end funds chosen by Lipper. In voting to approve the renewal of each
Fund's Management Agreement, the Directors considered in particular the
following factors:
(a) The nature, extent and quality of services provided by IQ Advisors and its
affiliates -- The Directors reviewed the services that IQ Advisors has provided
to the Funds. They considered the size and experience of IQ Advisors' staff, its
use of technology, and the degree to which IQ Advisors exercises supervision
over the actions of each Fund's subadviser. In connection with the investment
advisory services provided, the Directors took into account detailed discussions
they had with officers of IQ Advisors regarding the management of each Fund's
investments in accordance with the Fund's stated investment objective and
policies and the types of transactions entered into on behalf of each Fund.
During these discussions, the Directors asked detailed questions of, and
received answers from, the officers of IQ Advisors regarding the implementation
of each Fund's investment strategy, its efficacy and risks.
In addition to the investment advisory services provided to the Funds, the
Directors considered that IQ Advisors and its affiliates also 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 Funds. In particular, the
Directors reviewed the compliance and administrative services provided to the
Funds by IQ Advisors, including its oversight of each Fund's day-to-day
operations and its oversight of Fund accounting. The Directors noted that IQ
Advisors has access to administrative, legal and compliance resources that help
ensure a high level of quality in the compliance and administrative services
provided to the Funds. The Directors also considered each Fund's compliance
history. Following their consideration of this information, and based on the
presentations at the meeting and the Directors'
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 13
Renewal of Current Investment Advisory and Management Agreements (continued)
experience as Directors of other investment companies advised by IQ Advisors,
the Directors concluded that the services provided to each Fund by IQ Advisors
under the respective Management Agreement were of a high quality and benefited
the Funds.
(b) Investment performance of each Fund and IQ Advisors -- The Directors
considered the history, experience, resources and strengths of IQ Advisors and
its affiliates in developing and implementing the investment strategies used by
each Fund. The Directors also considered the innovative nature of each Fund. The
Directors noted that each Fund uses a unique investment strategy and that
comparisons of a Fund's investment performance to the performance of other
investment companies were generally not meaningful. The Directors reviewed each
Fund's investment performance and where applicable, compared such performance to
the performance of a relevant reference index. The Directors discussed the
degree to which each Fund was achieving its investment objective, noting that
each Fund had been in operation for a relatively short period of time. In
particular, the Directors noted that all of the Funds generally performed as
expected relative to their respective reference index and met their respective
investment objectives. As a result of their discussions and review, the
Directors concluded that each Fund's performance was satisfactory. Based on
these factors, the Directors determined that IQ Advisors continued to be an
appropriate investment adviser for the Funds.
(c) Cost of services provided and profits realized by IQ Advisors and its
affiliates from the relationship with each of the Funds -- The Directors
reviewed and considered a memorandum from IQ Advisors regarding the methodology
used by IQ Advisors in allocating its costs regarding the operations of the
Funds and calculating each Fund's profitability (if any) to IQ Advisors and its
affiliates. The Directors noted that IQ Advisors' methodology in calculating
profitability had previously been reviewed by independent consultants. The
Directors also reviewed a report detailing IQ Advisors' profitability. After
considering their discussion with IQ Advisors and reviewing its memorandum and
report, the Directors concluded that there was a reasonable basis for the
allocation of costs and the determination of profitability. The Directors
considered the cost of the services provided by IQ Advisors to each Fund and the
revenue derived by IQ Advisors and its affiliates. The Directors took into
account discussions that they had with representatives of IQ Advisors regarding
its general level of profitability (if any), and the profits derived by its
affiliates, including Merrill Lynch Investment Managers, L.P. ("MLIM") prior to
its merger with BlackRock, Inc. ("BlackRock"), from operating the Funds. The
Directors also considered the direct and indirect benefits derived by other IQ
Advisors affiliates, including Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S"), from the establishment of the Funds, including the
underwriting arrangements relating to the initial distribution of Fund shares.
The Directors considered federal court decisions discussing an investment
adviser's profitability and profitability levels considered to be reasonable in
those decisions. The Directors concluded that any profits made by IQ Advisors
and its affiliates (including MLIM and MLPF&S) are acceptable in relation to the
nature, extent and quality of services provided. The Directors also concluded
that each Fund benefited from such services provided by IQ Advisors' affiliates.
(d) The extent to which economies of scale would be realized as a Fund grows and
whether fee levels would reflect such economies of scale -- The Directors
considered the extent to which economies of scale might be realized if the
assets of the Funds increase and whether there should be changes in the
management fee rate or structure in order to enable a Fund to participate in
these economies of scale. The Directors noted that, because each Fund is a
closed-end fund, any increase in asset levels generally would have to come from
appreciation through investment performance. The Directors also noted that each
Fund, except for Dow 30SM Premium & Dividend Income Fund Inc. and S&P 500(R)
Covered Call Fund Inc., is an interval fund that periodically allows
stockholders to tender their shares to the Funds and that such tender offers
reduce the amount of Fund assets. In consideration of these and other factors,
the Directors determined that no changes were currently necessary to each Fund's
fee structure. 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 fees.
(e) Comparison of services rendered and fees 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
rendered and the fees paid under the Management Agreements to the contracts of
other investment advisers with respect to other closed-end registered investment
companies. In particular, the Directors evaluated each Fund's 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 Directors took into account the unique nature of the investment
strategies of the Funds and the fact that the relevant
14 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
peer group of funds provided by Lipper for comparison have investment strategies
and restrictions different from those of the Funds. The Directors did not
consider compensation paid to IQ Advisors with respect to accounts other than
registered investment companies because IQ Advisors utilizes each Fund's
strategy in connection with only registered funds. In particular, the Directors
noted that each Fund's contractual advisory fee rate at a common asset level was
lower than the median fee rate of its Lipper comparison funds. The Directors
concluded that the advisory fee rates were reasonable in comparison to the data
reflected in the Lipper materials.
(f) Conclusion -- No single factor was determinative to the decision of the
Directors. Based on the foregoing and such other matters as were deemed
relevant, all of the Directors concluded that the advisory fee rate of each Fund
was reasonable in relation to the services provided by IQ Advisors to the Funds,
as well as the costs incurred and benefits gained by IQ Advisors and its
affiliates in providing such services, including the investment advisory and
administrative components. The Directors also found the investment advisory fees
to be reasonable in comparison to the fees charged by advisers to other funds of
a similar size. As a result, the Board of Directors of each Fund approved the
Management Agreement for each Fund. The Directors were represented by
independent legal counsel who assisted them in their deliberations.
Renewal of Current Investment Subadvisory Agreements
The Board of Directors of each Fund, currently consisting solely of Independent
Directors, at a meeting held on June 14, 2007 considered and approved the
renewal of the Current Investment Subadvisory Agreement of each Fund (each a
"Subadvisory Agreement" and together, the "Subadvisory Agreements"). Each
Subadvisory Agreement was considered separately by the relevant Fund's
Directors. The Directors received, reviewed and evaluated information concerning
the services and personnel of BlackRock Investment Management, LLC
("BlackRock"), as subadviser to each of S&P 500(R) GEAREDSM Fund Inc. and Small
Cap Premium & Dividend Income Fund Inc.; Oppenheimer Capital LLC
("Oppenheimer"), as subadviser to each of S&P 500(R) Covered Call Fund Inc. and
Enhanced S&P 500(R) Covered Call Fund Inc.; and Nuveen Asset Management
("Nuveen," and together with BlackRock and Oppenheimer, the "Subadvisers"), as
subadviser to Dow 30SM Premium & Dividend Income Fund Inc. and Global Income &
Currency Fund Inc.
(a) The nature, extent and quality of services provided by each Subadviser --
The Directors reviewed the services that each Subadviser provides to each of
their respective Funds. The Directors considered their detailed discussions with
officers of IQ Advisors and members of each Subadviser's portfolio management
team, the management of each Fund's investments in accordance with the Fund's
stated investment objective and policies and the types of transactions that have
been entered into on behalf of the Funds. The Directors took into account the
annual due diligence investment review conducted by Merrill Lynch Global Private
Client Investment Management, an affiliate of IQ Advisors, of each Subadviser
and its report that concluded that each such Subadviser has thus far executed
its respective Fund's investment strategies in accordance with the Fund's
objectives and general expectations. The Directors noted that, drawing on their
collective industry experience, they had discussed each Fund's investment
strategy with representatives from each Subadviser, including discussions
regarding the premises underlying the Fund's investment strategy, its efficacy
and potential risks. The Directors also considered the favorable history,
reputation and background of each Subadviser and its personnel, and the
substantial experience of such Subadviser's portfolio management teams. The
Directors discussed the compliance program of each Subadviser and the report of
Mrs. Catherine Johnston, the chief compliance officer of the Funds. Following
consideration of this information, and based on management presentations during
the Board meeting and their discussion during an Executive Session, the
Directors concluded that the nature, extent and quality of services provided to
each Fund by the applicable Subadviser under its Subadvisory Agreement were of a
high quality and would continue to benefit the Fund.
(b) Investment performance of each Fund and each Subadviser -- The Directors
received and considered information about each Fund's investment performance in
comparison to the performance of its relative reference index, where applicable,
and also in light of its stated investment objective and made the determinations
discussed above under "Renewal of Current Investment Advisory and Management
Agreements." Based on these factors, the Directors determined that each
Subadviser continued to be appropriate for each of its respective Funds.
(c) Cost of services provided and profits realized by each Subadviser from the
relationship with each respective Fund -- The Directors considered the
profitability to MLIM, prior to its merger with BlackRock, of serving as
investment subadviser to two Funds and from its relationship with IQ Advisors
based on the information discussed above under "Renewal of Current Investment
Advisory and Management
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 15
Renewal of Current Investment Advisory and Management Agreements (concluded)
Agreements." Based on such information, the Directors concluded that MLIM's
profits were acceptable in relation to the nature, extent and quality of
services provided. The Directors noted that profitability data was not provided
with respect to the unaffiliated Subadvisers of the Funds and concluded that
such data was unnecessary because such subadvisory arrangements were entered
into at "arm's length" between the Subadviser and IQ Advisors. The Directors
then considered the potential direct and indirect benefits to each Subadviser
and its affiliates from their relationship with each of their respective Funds,
including the reputational benefits from managing the Funds. The Directors of
each Fund concluded that the potential benefits to each Subadviser were
consistent with those obtained by other subadvisers in similar types of
arrangements.
(d) The extent to which economies of scale would be realized as a Fund grows and
whether fee levels would reflect such economies of scale -- The Directors
considered the extent to which economies of scale might be realized if the
assets of the Funds increase and whether there should be changes in the
subadvisory fee rate or structure in order to enable a Fund to participate in
these economies of scale. The Directors noted that each Subadviser's fees are
paid by IQ Advisors out of its fees and not directly by the Funds. The Directors
noted that, because each Fund is a closed-end fund, any increase in asset levels
would have to come from appreciation due to investment performance. The
Directors also noted that each Fund, except for Dow 30SM Premium & Dividend
Income Fund Inc. and S&P 500(R) Covered Call Fund Inc., is an interval fund that
periodically allows stockholders to tender their shares to the Funds and that
such tender offers reduce the amount of Fund assets. 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.
(e) Comparison of services rendered and fees paid to those under other
subadvisory contracts, such as contracts of the same and other investment
advisers or other clients -- The Directors discussed the services rendered by
each Subadviser and determined that such services were consistent with those
provided by subadvisers generally and sufficient for the management of the
Funds. Taking into account the totality of the information and materials
provided to the Directors as noted above, including the fact that the
subadvisory fee for each Fund was negotiated with IQ Advisors and not payable
directly by the Fund, the Directors concluded that the subadvisory fee for each
Fund was reasonable for the services being rendered.
Conclusion -- No single factor was determinative to the decision of the
Directors. Based on the foregoing and such other matters as were deemed
relevant, all of the Directors concluded that the relevant subadvisory fee rate
was reasonable in relation to the services provided by each Subadviser. As a
result, all of the Directors approved the Subadvisory Agreement for each Fund.
The Directors were represented by independent legal counsel who assisted them in
their deliberations.
16 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
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 (the "1940 Act"), as amended. 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 fourth quarterly
rebalancing date of the current annual period for the currency investments (as
described in the Fund's prospectus); 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.
Under the terms of the Offer for the most recent annual period, the Fund offered
to purchase up to 1,847,484 shares from shareholders at an amount per share
equal to the Fund's net asset value per share calculated as of the close of
business of the New York Stock Exchange on April 27, 2007, ten business days
after Friday, April 13, 2007, the Repurchase Request Deadline. As of April 27,
2007, 443,043 shares, or 6% of the Fund's outstanding shares, were repurchased
by the Fund at $19.28 per share (subject to a repurchase fee of .12% of the net
asset value per share); the Fund's net asset value per share was determined as
of 4:00 p.m. EST, Friday, April 27, 2007.
GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007 17
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.
18 GLOBAL INCOME & CURRENCY FUND INC. JUNE 30, 2007
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, 2007 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.
P.O. Box 9011
Princeton, NJ 08543-9011
#IQGCF -- 6/07
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 - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
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 -
- ----------------------------------------------------------------------------------------------------------------------------
Period (a) Total (b) Average (c) Total Number of (d) Maximum Number (or
Number of Price Paid Shares Purchased as Part Approx. Dollar Value) of
Shares per Share of Publicly Announced Shares that May Yet Be
Purchased Plans or Programs Purchased Under the Plans
or Programs
- ----------------------------------------------------------------------------------------------------------------------------
January 1-31, 2007
- ----------------------------------------------------------------------------------------------------------------------------
February 1-28, 2007
- ----------------------------------------------------------------------------------------------------------------------------
March 1-31, 2007
- ----------------------------------------------------------------------------------------------------------------------------
April 1-30, 2007 443,043 $19.28 per Share(1) 443,043(2) 0
- ----------------------------------------------------------------------------------------------------------------------------
May 1-31, 2007
- ----------------------------------------------------------------------------------------------------------------------------
June 1-30, 2007
- ----------------------------------------------------------------------------------------------------------------------------
Total: 443,043 $19.28 per Share(1) 443,043(2) 0
- ----------------------------------------------------------------------------------------------------------------------------
(1) Subject to a repurchase fee of up to 0.12% of the net asset value per
share.
(2) On March 1, 2007, the repurchase offer was announced to repurchase up to
25% of outstanding shares. The expiration date of the offer was April 13,
2007. The registrant may conduct annual repurchases for between 5% and 25%
of its outstanding shares pursuant to Rule 23c-3 under the Investment
Company Act of 1940, as amended.
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that have materially affected,
or are 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 28, 2007
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 28, 2007
By: /s/ James E. Hillman
----------------------------------
James E. Hillman,
Chief Financial Officer of
Global Income & Currency Fund Inc.
Date: August 28, 2007