Revisions to the Descriptions of the Option Writing Strategies of: Nicholas-Applegate Equity & Convertible Income Fund, Nicho...
30 Giugno 2010 - 10:38PM
Business Wire
Allianz Global Investors Fund Management LLC (“AGIFM”),
investment manager to Nicholas-Applegate Equity & Convertible
Income Fund (NYSE:NIE), Nicholas-Applegate International &
Premium Strategy Fund (NYSE:NAI) and Nicholas-Applegate Global
Equity & Convertible Income Fund (NYSE:NGZ) (each a “Fund” and
collectively, the “Funds”) announced that the descriptions of the
Funds’ option writing strategies (each an “Option Strategy”) have
been revised as follows regarding the extent to which the
strategies may be utilized.
NIE
NIE employs its Option Strategy by writing (selling) call
options on stocks held in the Fund’s equity securities portfolio
(the “Equity Component”). When the Fund writes a call option on an
individual stock held in the Equity Component, it will ordinarily
do so with respect to approximately 70% of the value of the
position. Therefore, if the Fund determines to write call options
on all or substantially all of the individual stocks held in the
Equity Component, it is expected that the Fund will have written
call options positions with respect to approximately 70% of the
aggregate value of the Equity Component. However, the extent of the
Fund’s use of the Option Strategy will vary depending on market
conditions and other factors, and the Fund may determine from time
to time to write call options on only a portion, or none, of the
individual stocks held in the Equity Component.
NAI
In implementing NAI’s Option Strategy, the sub-adviser will
“sell” or “write” call options on stocks held in the Fund’s
international equity portfolio and on equity indexes. When the Fund
writes a call option on an individual stock held in the
international equity portfolio, it will generally do so with
respect to approximately 70% of the value of the position, and when
it writes a call option on an equity index, the face or notional
amount of the index subject to the option will generally be equal
to approximately 70% of the value of the corresponding securities
in the international equity portfolio. Therefore, if the Fund
determines to write call options on all or substantially all of the
securities held in the international equity portfolio, it is
expected that the Fund will have written call options positions
with respect to approximately 70% of the aggregate value of the
international equity portfolio. However, the extent of the Fund’s
use of the Option Strategy will vary depending on market conditions
and other factors, and the Fund may determine from time to time to
write call options (whether they be on individual stocks and/or or
on equity indexes) with respect to only a portion, or none, of the
securities held in the international equity portfolio.
NGZ
In implementing NGZ’s Option Strategy, the sub-adviser will
“sell” or “write” call options on stocks held in the Fund’s equity
securities portfolio (the “Equity Component”) and on equity
indexes. When the Fund writes a call option on an individual stock
held in the Equity Component, it will generally do so with respect
to approximately 70% of the value of the position, and when it
writes a call option on an equity index, the face or notional
amount of the index subject to the option will generally be equal
to approximately 70% of the value of the corresponding securities
in the Equity Component. Therefore, if the Fund determines to write
call options on all or substantially all of the securities held in
the Equity Component, it is expected that the Fund will have
written call options positions with respect to approximately 70% of
the aggregate value of the Equity Component. However, the extent of
the Fund’s use of the Option Strategy will vary depending on market
conditions and other factors, and the Fund may determine from time
to time to write call options (whether they be on individual stocks
and/or or on equity indexes) with respect to only a portion, or
none, of the securities held in the Equity Component.
Each Fund’s Option Strategy, to the extent utilized, is designed
to generate gains from option premiums in an attempt to enhance
distributions payable to the Fund’s shareholders and to reduce
overall portfolio risk. However, there is no assurance that a
Fund’s Option Strategy will achieve its objectives. There are
various risks associated with the Funds’ Option Strategies,
including that a Fund forgoes, during the life of a written call
option, the opportunity to profit from increases in the market
value of the underlying security or securities held by the Fund (in
the case of an index option, to the extent the performance of the
index is correlated with the corresponding securities held by the
Fund) with respect to which the option was written above the sum of
the premium and the strike price of the call. Therefore, an Option
Strategy generally limits a Fund’s ability to benefit from the full
upside potential of its equity holdings, while the Fund retains the
risk of loss (net of premiums received) should the price of the
Fund’s portfolio securities decline. The use of written call
options by the Funds also potentially involves correlation,
liquidity, valuation, tax and other risks.
The Board of Trustees formally approved the revised descriptions
of the Option Strategies of NIE, NAI and NGZ based on the
recommendation from AGIFM and the Funds’ sub-adviser,
Nicholas-Applegate Capital Management LLC (“NACM”).
The investment objective of NIE and NGZ is to seek total return
comprised of capital appreciation, current income and gains. NAI
seeks total return comprised of current income, current gains and
long-term capital appreciation. There can be no assurance that the
Funds will meet their objectives.
AGIFM, an indirect, wholly-owned subsidiary of Allianz Global
Investors of America L.P., serves as the Funds' investment manager
and is a member of Munich-based Allianz Group. NACM, an Allianz
Global Investors Fund Management affiliate, serves as each Fund’s
sub-adviser.
The Funds' New York Stock Exchange closing prices, net asset
values per share, as well as other information, including updated
portfolio statistics and performance, is available at
http://www.allianzinvestors.com or by calling the Funds'
shareholder servicing agent at (800) 254-5197.
Statements made in this release that look forward in time
involve risks and uncertainties and are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such risks and uncertainties include, without limitation,
the adverse effect from further declines in the securities markets
and in the Funds’ performance, a general downturn in the economy,
competition from other companies, changes in government policy or
regulation, inability to attract or retain key employees, inability
to implement their operating strategy and/or acquisition strategy,
and unforeseen costs and other effects related to legal proceedings
or investigations of governmental and self-regulatory
organizations. Each Fund’s ability to pay dividends to common
shareholders is subject to the restrictions in its registration
statement and other governing documents as well as the Investment
Company Act of 1940.
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