NOTES TO FINANCIAL STATEMENTS
(unaudited) continued
On April 30, 2010, the aggregate cost of securities for federal income tax purposes was $184,748,650. The gross unrealized appreciation and depreciation on securities based on tax cost was $10,695,741 and $9,688,417, respectively, with a net unrealized appreciation of $1,007,324.
As of October 31, 2009, the Fund had $23,144,190 in capital loss carryovers for federal income tax purposes expiring in 2017.
6. DERIVATIVE TRANSACTIONS
During the six months ended April 30, 2010, the Fund entered into written options for speculative purposes.
During the six months ended April 30, 2010, the Fund had written option activities as follows:
|
|
Number of
Contracts
|
|
Premiums
Received
|
|
|
|
|
|
|
|
Options outstanding at October 31, 2009
|
|
2,344
|
|
|
$
|
661,852
|
|
Options written
|
|
18,711
|
|
|
|
2,177,912
|
|
Options expired
|
|
(14,265
|
)
|
|
|
(2,171,604
|
)
|
Options closed
|
|
(3,976
|
)
|
|
|
(461,732
|
)
|
|
|
|
|
|
|
|
|
Options outstanding at April 30, 2010
|
|
2,814
|
|
|
$
|
206,428
|
|
|
|
|
|
|
|
|
|
Open call options written at April 30, 2010 were as follows:
Expiration
|
|
|
|
Number of
|
|
Strike
|
|
Market
|
|
Premiums
|
Date
|
|
Index
|
|
Contracts
|
|
Price
|
|
Value
|
|
Received
|
|
|
|
|
|
|
|
|
|
|
|
05/21/2010
|
|
AEX Index
|
|
176
|
|
|
372
|
EUR
|
|
$ 5,858
|
|
|
$15,217
|
|
05/21/2010
|
|
CAC 40 Index
|
|
154
|
|
|
4,262
|
EUR
|
|
3,978
|
|
|
9,299
|
|
05/21/2010
|
|
DAX Index
|
|
199
|
|
|
6,601
|
EUR
|
|
5,630
|
|
|
21,978
|
|
05/21/2010
|
|
DJ Euro Stoxx 50 Index
|
|
208
|
|
|
3,156
|
EUR
|
|
4,459
|
|
|
13,512
|
|
05/21/2010
|
|
IBEX 35 Index
|
|
545
|
|
|
12,014
|
EUR
|
|
5,334
|
|
|
38,750
|
|
05/21/2010
|
|
NASDAQ 100 Index
|
|
41
|
|
|
2,130
|
USD
|
|
5,412
|
|
|
17,466
|
|
05/21/2010
|
|
OMX Stockholm 30 Index
|
|
572
|
|
|
1,113
|
SEK
|
|
31,983
|
|
|
11,007
|
|
05/21/2010
|
|
Russell 2000 Index
|
|
117
|
|
|
756
|
USD
|
|
27,612
|
|
|
40,413
|
|
05/21/2010
|
|
S&P 400 MidCap Index
|
|
102
|
|
|
867
|
USD
|
|
17,340
|
|
|
23,582
|
|
05/21/2010
|
|
SPY Equity Index
|
|
700
|
|
|
127
|
USD
|
|
4,200
|
|
|
15,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Fund had average premiums received on written options in the amount of $382,276 during the six months ended April 30, 2010.
During the six months ended April 30, 2010, the Fund entered into forward foreign currency exchange contracts for hedging purposes.
As of April 30, 2010, the Fund did not have any open forward foreign currency exchange contracts. The Fund only had forward foreign currency exchange contracts to buy during the six months ended April 30, 2010 with an average contract amount of $906,453.
25
NOTES TO FINANCIAL STATEMENTS
(unaudited) continued
A summary of derivative instruments by primary risk exposure is outlined in the following tables, unless the only primary risk exposure category is already reflected in the appropriate financial statements.
The effect of derivative instruments on the Statement of Operations for the six months ended April 30, 2010 was as follows:
|
|
Amount of Realized Gains or
Losses on Derivatives
|
|
|
|
|
|
|
|
Forward
Currency
Contracts
|
|
Written
Options
|
|
Total
|
|
|
|
|
|
|
|
|
|
Equity contracts
|
|
$
|
0
|
|
$
|
985,070
|
|
$
|
985,070
|
|
Forward foreign currency contracts
|
|
|
57,862
|
|
|
0
|
|
|
57,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
57,862
|
|
$
|
985,070
|
|
$
|
1,042,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Unrealized Gains or
Losses on Derivatives
|
|
|
|
|
|
|
|
Forward
Currency
Contracts
|
|
Written
Options
|
|
Total
|
|
|
|
|
|
|
|
|
|
Equity contracts
|
|
$
|
0
|
|
$
|
(500,405
|
)
|
$
|
(500,405
|
)
|
Forward foreign currency contracts
|
|
|
(38,769
|
)
|
|
0
|
|
|
(38,769
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(38,769
|
)
|
$
|
(500,405
|
)
|
$
|
(539,174
|
)
|
|
|
|
|
|
|
|
|
|
|
|
7. DEFERRED TRUSTEES FEES
Each Trustee of the Fund may defer any or all compensation related to performance of his or her duties as a Trustee. The Trustees deferred balances are allocated to deferral accounts, which are included in the accrued expenses for the Fund. The investment performance of the deferral accounts is based on the investment performance of certain Evergreen funds. Any gains earned or losses incurred in the deferral accounts are reported in the Funds Trustees fees and expenses. At the election of the Trustees, the deferral account will be paid either in one lump sum or in quarterly installments for up to ten years.
8. REGULATORY MATTERS AND LEGAL PROCEEDINGS
The Evergreen funds, EIMC and certain of EIMCs affiliates are involved in various legal actions, including private litigation and class action lawsuits, and are and may in the future be subject to regulatory inquiries and investigations.
EIMC and Evergreen Investment Services, Inc. (EIS) have reached final settlements with the Securities and Exchange Commission (SEC) and the Securities Division of the Secretary of the Commonwealth of Massachusetts (Commonwealth) primarily relating to the liquidation of Evergreen Ultra Short Opportunities Fund (Ultra Short Fund). The claims settled include the following: first, that during the period February 2007 through Ultra Short Funds liquidation on June 18, 2008, Ultra Short Funds former portfolio management team failed to properly take into account readily available
26
NOTES TO FINANCIAL STATEMENTS
(unaudited) continued
information in valuing certain non-agency residential mortgage-backed securities held by the Ultra Short Fund, resulting in the Ultra Short Funds net asset value (NAV) being overstated during the period; second, that EIMC and EIS acted inappropriately when, in an effort to explain the decline in Ultra Short Funds NAV, certain information regarding the decline was communicated to some, but not all, shareholders and financial intermediaries; third, that the Ultra Short Fund portfolio management team did not adhere to regulatory requirements for affiliated cross trades in executing trades with other Evergreen funds; and finally, that from at least September 2007 to August 2008, EIS did not preserve certain text and instant messages transmitted via personal digital assistant devices. In settling these matters, EIMC and EIS have agreed to payments totaling $41,125,000, up to
$40,125,000 of which will be distributed to eligible shareholders of Ultra Short Fund pursuant to a methodology and plan approved by the regulators. EIMC and EIS neither admitted nor denied the regulators conclusions.
In addition, the U.S. District Court for the District of Massachusetts has consolidated three purported class actions into
In re Evergreen Ultra Short Opportunities Fund Securities Litigation
. The plaintiffs filed a consolidated amended complaint on April 30, 2009 against various Evergreen entities, including EIMC and EIS, the Evergreen funds former distributor, and Evergreen Fixed Income Trust and its Trustees. The complaint generally alleges that investors in Ultra Short Fund suffered losses as a result of (i) misleading statements in Ultra Short Funds registration statement and prospectus, (ii) the failure to accurately price securities in Ultra Short Fund at different points in time and (iii) the failure of Ultra Short Funds risk disclosures and description of its investment strategy to inform
investors adequately of the actual risks of the fund. The complaint seeks damages in an amount to be determined at trial.
EIMC does not expect that any of the legal actions, inquiries or settlement of regulatory matters will have a material adverse impact on the financial position or operations of the Fund to which these financial statements relate. Any publicity surrounding or resulting from any legal actions or regulatory inquiries involving EIMC or its affiliates or any of the Evergreen Funds could result in reduced sales or increased redemptions of Evergreen fund shares, which could increase Evergreen fund transaction costs or operating expenses or have other adverse consequences on the Evergreen funds, including the Fund.
9. SUBSEQUENT DISTRIBUTIONS
The Fund declared the following distributions to common shareholders:
Declaration
|
Record
|
Payable
|
Net Investment
|
Date
|
Date
|
Date
|
Income
|
|
|
|
|
April 16, 2010
|
May 14, 2010
|
June 1, 2010
|
$0.06475
|
May 21, 2010
|
June 15, 2010
|
July 1, 2010
|
$0.06475
|
June 10, 2010
|
July 15, 2010
|
August 2, 2010
|
$0.06475
|
|
|
|
|
These distributions are not reflected in the accompanying financial statements.
27
NOTES TO FINANCIAL STATEMENTS
(unaudited) continued
10. SUBSEQUENT EVENTS
In June 2010, a notice of a Special Meeting of Shareholders was mailed to shareholders of record as of May 18, 2010. The Special Meeting of Shareholders is scheduled to be held on July 9, 2010. Among the proposals for consideration is the approval of a new advisory agreement with Wells Fargo Funds Management, LLC (Funds Managment) to replace the current advisory agreement with EIMC as well as a new sub-advisory agreement with First International Advisers, LLC and a new sub-advisory agreement with Wells Capital Management Incorporated (Wells Capital). If shareholders approve the new advisory agreement, the advisory fee rate paid by the Fund to Funds Management for providing such services will be identical to the advisory fee rate currently paid to EIMC. Since First International Advisers, LLC and Wells Capital will be compensated by Funds Management, and not the Fund
itself, the Fund will not incur additional advisory fees. Upon shareholder approval of the new advisory and sub-advisory arrangements, the Fund will also be renamed Wells Fargo Advantage International Balanced Income Fund.
28
ADDITIONAL INFORMATION
(unaudited)
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of the Fund was held on February 12, 2010 to consider the following proposal. The results of the proposal are indicated below.
Proposal 1
Election of Trustees:
|
|
Net Assets Voted
For
|
|
Net Assets Voted
Withheld
|
|
|
|
|
|
Carol A. Kosel
|
|
$
|
174,001,324
|
|
|
$
|
4,511,278
|
|
Gerald M. McDonnell
|
|
|
174,289,872
|
|
|
|
4,222,730
|
|
Richard J. Shima
|
|
|
174,072,468
|
|
|
|
4,440,134
|
|
|
|
|
|
|
|
|
|
|
29
AUTOMATIC DIVIDEND REINVESTMENT PLAN
(unaudited)
All common shareholders are eligible to participate in the Automatic Dividend Reinvestment Plan (the Plan). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (Plan Agent), in additional common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as dividends) payable either in shares or in cash, nonparticipating the Plan will receive cash, and participants in the Plan will receive the equivalent in shares of common shares. The shares are acquired by the Plan Agent for the participants account, depending upon the circumstances described below, either (i) through receipt of
additional unissued but authorized common shares from the Fund (newly issued common shares) or (ii) by purchase of outstanding common shares on the open market (open-market purchases) on the New York Stock Exchange Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (market premium), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participants account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset
value per share is greater than the market value or market premium (market discount), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agents open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 43010, Providence, Rhode Island 02940-3010 or by calling 1-800-730-6001.
30
This page left intentionally blank
31
TRUSTEES AND OFFICERS
TRUSTEES
1
|
|
Dr.
Leroy Keith, Jr.
Trustee
DOB: 2/14/1939
Term of office since: 1983
Other directorships: Trustee,
Phoenix Fund Complex
(consisting of 46 portfolios
as of 12/31/2009)
|
Chairman, Bloc Global Services (development and construction); Former Managing Director,
Almanac Capital Management (commodities firm); Trustee, Phoenix Fund Complex; Director,
Diversapack Co. (packaging company); Former Partner, Stonington Partners, Inc. (private
equity fund); Former Director, Obagi Medical Products Co.
|
|
|
Carol A. Kosel
Trustee
DOB: 12/25/1963
Term of office since: 2008
Other directorships: None
|
Former Consultant to the Evergreen Boards of Trustees; Former Vice President and Senior Vice
President, Evergreen Investments, Inc.; Former Treasurer, Evergreen Funds; Former Treasurer,
Vestaur Securities Fund
|
|
|
Gerald M. McDonnell
Trustee
DOB: 7/14/1939
Term of office since: 1988
Other directorships: None
|
Consultant, Rock Hill Metals Consultants LLC (Metals Consultant to steel industry); Former
Manager of Commercial Operations, CMC Steel (steel producer)
|
|
|
Patricia B. Norris
Trustee
DOB: 4/9/1948
Term of office since: 2006
Other directorships: None
|
President and Director of Buckleys of Kezar Lake, Inc. (real estate company); Former President
and Director of Phillips Pond Homes Association (home community); Former Partner,
PricewaterhouseCoopers, LLP (independent registered public accounting firm)
|
|
|
William Walt Pettit
2
Trustee
DOB: 8/26/1955
Term of office since: 1988
Other directorships: None
|
Shareholder, Rogers, Townsend & Thomas, PC (law firm); Director, Superior Packaging Corp.
(packaging company); Member, Superior Land, LLC (real estate holding company), Member,
K&P Development, LLC (real estate development); Former Vice President, Kellam & Pettit,
P.A. (law firm); Former Director, National Kidney Foundation of North Carolina, Inc.
(non-profit organization)
|
|
|
David M. Richardson
Trustee
DOB: 9/19/1941
Term of office since: 1982
Other directorships: None
|
President, Richardson, Runden LLC (executive recruitment advisory services); Director,
J&M Cumming Paper Co. (paper merchandising); Former Trustee, NDI Technologies, LLP
(communications); Former Consultant, AESC (The Association of Executive Search Consultants)
|
|
|
Russell A. Salton III, MD
Trustee
DOB: 6/2/1947
Term of office since: 1984
Other directorships: None
|
President/CEO, AccessOne MedCard, Inc.
|
|
|
Michael S. Scofield
Trustee
DOB: 2/20/1943
Term of office since: 1984
Other directorships: None
|
Retired Attorney, Law Offices of Michael S. Scofield; Former Director and Chairman, Branded
Media Corporation (multi-media branding company)
|
|
|
Richard J. Shima
Trustee
DOB: 8/11/1939
Term of office since: 1993
Other directorships: None
|
Independent Consultant; Director, Hartford Hospital; Trustee, Greater Hartford YMCA; Former
Director,Trust Company of CT; Former Trustee, Saint Joseph College (CT)
|
|
|
32
TRUSTEES AND OFFICERS
continued
Richard K. Wagoner, CFA
3
Trustee
DOB: 12/12/1937
Term of office since: 1999
Other directorships: None
|
Member and Former President, North Carolina Securities Traders Association; Member, Financial
Analysts Society
|
|
|
OFFICERS
|
|
W. Douglas Munn
4
President
DOB: 4/21/1963
Term of office since: 2009
|
Principal occupations: President and Chief Executive Officer, Evergreen Investment
Company, Inc.; Chief Operating Officer, Wells Fargo Funds Management, LLC;
Former Chief Operating Officer, Evergreen Investment Company, Inc.
|
|
|
Kasey Phillips
4
Treasurer
DOB: 12/12/1970
Term of office since: 2005
|
Principal occupations: Senior Vice President, Evergreen Investment Management Company, LLC;
Treasurer, Wells Fargo Advantage Funds; Former Vice President, Evergreen
Investment Services, Inc.
|
|
|
Michael H. Koonce
4
Secretary
DOB: 4/20/1960
Term of office since: 2000
|
Principal occupations: Managing Counsel, Wells Fargo & Company; Secretary and
Senior Vice President, Alternative Strategies Brokerage Services, Inc.; Evergreen Investment
Services, Inc.; Secretary and Senior Vice President, Evergreen Investment Management
Company, LLC and Evergreen Service Company, LLC
|
|
|
Robert Guerin
4
Chief Compliance Officer
DOB: 9/20/1965
Term of office since: 2007
|
Principal occupations: Chief Compliance Officer, Evergreen Funds and Senior Vice President of
Evergreen Investment Company, Inc.; Compliance Manager, Wells Fargo Funds Management
Group; Former Managing Director and Senior Compliance Officer, Babson Capital
Management LLC; Former Principal and Director, Compliance and Risk Management,
State Street Global Advisors; Former Vice President and Manager, Sales Practice Compliance,
Deutsche Asset Management
|
|
|
1
|
The Board of Trustees is classified into three classes of which one class is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected. Each Trustee oversaw 74 Evergreen funds as of December 31, 2009. Correspondence for each Trustee may be sent to Evergreen Board of Trustees, P.O. Box 20083, Charlotte, NC 28202.
|
2
|
It is possible that Mr. Pettit may be viewed as an interested person of the Evergreen funds, as defined in the 1940 Act, because of his law firms representation of affiliates of Wells Fargo & Company, the parent to the Evergreen funds investment advisor, EIMC. The Trustees are treating Mr. Pettit as an interested trustee for the time being.
|
3
|
Mr. Wagoner is an interested person of the Evergreen funds because of his ownership of shares in Wells Fargo & Company, the parent to the Evergreen funds investment advisor.
|
4
|
The address of the Officer is 200 Berkeley Street, Boston, MA 02116.
|
33
123660 575077 rv5 06/2010
Item 2 - Code of Ethics
Not required for this filing.
Item 3 - Audit Committee Financial Expert
Not applicable at this time.
Items 4 Principal Accountant Fees and Services
Not required for this filing.
Items 5 Audit Committee of Listed Registrants
Not required for this filing.
Item 6 Schedule of Investments
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.
Item 7 Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not required for this filing.
Item 8 Portfolio Managers of Closed-End Management Investment Companies.
Not required for this filing.
Item 9 Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
If applicable/not applicable at this time.
Item 10 Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrants board of trustees that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item.
Item 11 - Controls and Procedures
(a)
|
The Registrants principal executive officer and principal financial officer have evaluated the Registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the Registrants disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
|
(b)
|
There has been no changes in the Registrants internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to affect, the Registrants internal control over financial reporting.
|
Item 12 - Exhibits
File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(a)
|
Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit.
|
(b)(1)
|
Separate certifications for the Registrants principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX99.CERT.
|
(b)(2)
|
Separate certifications for the Registrants principal executive officer and principal financial officer, as required by Section 1350 of Title 18 of United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached as EX99.906CERT. The certifications furnished pursuant to this paragraph are not deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
|
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.
Evergreen International Balanced Income Fund
By:
|
/s/ W. Douglas Munn
|
|
|
|
W. Douglas Munn
|
|
Principal Executive Officer
|
Date: June 29, 2010
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/ W. Douglas Munn
|
|
|
|
W. Douglas Munn
|
|
Principal Executive Officer
|
Date: June 29, 2010
By:
|
/s/ Kasey Phillips
|
|
|
|
Kasey Phillips
|
|
Principal Financial Officer
|
Date: June 29, 2010
Grafico Azioni Evergreen Balanced Income Fund (NYSE:EBI)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Evergreen Balanced Income Fund (NYSE:EBI)
Storico
Da Giu 2023 a Giu 2024