Contents
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Letter to Shareholders
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2-3
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Fund Insights/Performance & Statistics
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4-9
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Schedules of Investments
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10-25
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Statements of Assets and Liabilities
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26
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Statements of Operations
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27
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Statements of Changes in Net Assets
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28
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Notes to Financial Statements
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29-35
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Financial Highlights
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36-37
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Report of Independent Registered Public Accounting Firm
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38
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Tax Information
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39
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Annual Shareholder Meeting Results/Proxy Voting Policies & Procedures
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40
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Privacy Policy
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41
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Dividend Reinvestment Plan
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42-43
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Board of Trustees
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44-45
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Fund Officers
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46
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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1
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Dear Shareholder:
The US economy continued to advance during the twelve-month fiscal reporting period ended January 31, 2013. The housing market nationwide showed strength, hiring continued at a steady pace, and export orders were on the rise. As consumer confidence increased, investors shifted from US Treasuries to equities. Bond yields rose from all-time lows and stocks approached their highest levels in five years.
Twelve Months in Review through January 31, 2013
For the twelve-month fiscal period ended January 31, 2013:
·
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund rose 9.77% on net asset value (NAV) and 6.83% on market price.
·
AllianzGI Equity & Convertible Income Fund increased 10.49% on NAV and returned 10.92% on market price.
The Russell 3000 Index, a broad measure of US stock market performance, increased 16.90% during the twelve-month period, the Russell 1000 Value Index, a measure of large-cap value-style stocks, rose 20.58%, and the Russell 1000 Growth Index, a measure of growth style stocks, increased 13.43%. Convertible securities, reflected by the BofA Merrill Lynch All Convertibles Index, returned 12.95% during the twelve-months ended January 31, 2013.
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Hans W. Kertess
Chairman
Brian S. Shlissel
President & CEO
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As the fiscal reporting period began, US gross domestic product (GDP), the value of goods and services produced in the country, the broadest measure of US economic activity and the principal indicator of economic performance, was growing at an annual rate of 2.0%. This slowed to a 1.3% pace during the second quarter, before accelerating to an annual rate of 3.1% during the third quarter of 2012. Growth was negative 0.1% during the fourth quarter of 2012, which the government indicated was due to the drop in defense spending.
There were many encouraging economic signs in the private sector. US unemployment fell to 7.9% from 8.3% during the twelve-month reporting period. The economy created an average 181,000 non-farm jobs each month during 2012. The S&P/Case-Shiller Home Price Index, a leading measure of the US residential housing market, indicated home prices rose 5.5% in its 20-City Composite during the twelve-month period ended November 30, 2012. According to a separate study by CoreLogic, a leading provider of consumer, financial, property analytics
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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AllianzGI Equity & Convertible Income Fund Annual Report
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and services to businesses and governments, home prices increased in 46 of 50 states during the 12-months ended December 31, 2012. Automobile sales were up 13% during the same period.
Outlook
In addition to reduced defense spending which contributed to weaker-than-expected GDP figure in the fourth quarter of 2012, additional government spending reductions postponed from January 1, 2013 began on March 1, 2013. These reductions (known as the sequester) are to be shared between defense and domestic spending. As designed, the sequester would cut federal spending by $1.2 trillion, spread out over the next ten years. Both the White House and Congress agree that these cuts may jeopardize the economic recovery. As of this writing, this issue has not been resolved.
Beyond this uncertainty, we see positive signs for the US economy in 2013. The economy is expected to grow 2.50% to 2.75%, driven in large part by the strengthening housing market. Home prices are anticipated to appreciate 10% on a national basis and the improving labor market is expected to drive wage gains beyond the drag created by the December 31, 2012 expiration of the 2% payroll tax holiday.
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Receive this report electronically and eliminate paper mailings. To enroll, go to www.allianzinvestors.com/edelivery.
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For specific information on the Funds and their performance, please review the following pages. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds shareholder servicing agent at (800) 254-5197. In addition, a wide range of information and resources is available on our website, www.us.allianzgi.com/closedendfunds.
Together with Allianz Global Investors Fund Management LLC, the Funds investment manager, and NFJ Investment Group LLC and Allianz Global Investors U.S. LLC, the Funds sub-advisers, we thank you for investing with us.
We remain dedicated to serving your investment needs.
Sincerely,
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Hans W. Kertess
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Brian S. Shlissel
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Chairman of the Board of Trustees
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President & Chief Executive Officer
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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3
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund &
AllianzGI Equity & Convertible Income Fund Market Environment
January 31, 2013 (unaudited)
The equity and convertible markets moved higher during the period, despite ongoing global macro uncertainties and episodes of heightened volatility.
During the first two months of the period, the markets reflected that the risks to the US economy had diminished. This sentiment shift was demonstrated by the credit and equity markets rallying and, ultimately, the Treasury market selling off. The most obvious factor driving the rally was the decoupling of US and European financial risk. As the economic statistics, corporate earnings and specifically, the housing market showed improvement, the odds of a double-dip recession appeared remote.
Investor sentiment over the following two months was in stark contrast to the sentiment shift signified earlier in the period. By early May 2012, fear and macro concerns returned. Despite some softening in the broad economic statistics in the US, the real focus was on the day-to-day developments throughout Europe. With little direction and no discernible timetable toward resolution of the financial woes across several countries, investors sold risk assets. Convertible securities, such as equities, were sold, and investors once again flocked to Treasuries and cash.
Macro factors led investor demand higher and enhanced returns in the months that ensued. The actions and language of global monetary policy leadership, specifically in the US and Europe, were decidedly accommodative. For the better part of the last two years, investors have been presented with strengthening corporate profits against a backdrop of macro volatility. During this period, the macro factors reversed and the markets responded with enthusiasm.
During the remaining months of the fiscal reporting period, market volatility continued. Initially, stocks sold off after the election on budget debate concerns. However, a fiscal cliff compromise, healthy fourth quarter corporate earnings, improving activity in China and signs of a bottoming in Europe led to higher equity prices through January 2013.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund &
AllianzGI Equity & Convertible Income Fund Market Environment
January 31, 2013 (unaudited) (continued)
As expected, the convertible market benefited from stock market strength. In addition, convertible bonds benefited from credit-spread tightening. Improving balance-sheet strength throughout the period was the primary driver of credit improvement.
Sector level performance was positive. Telecommunications, Health Care, Financials and Consumer Discretionary were among the strongest-performing sectors. In contrast, Information Technology, Utilities, Energy and Materials issuers underperformed on a relative basis.
Levels of implied volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), were muted compared to recent years. The average implied volatility for the period was 17.3, compared with 24.4 in 2011 and 22.3 in 2010. In fact, during May and June 2012, when the highest levels of implied volatility were registered amid uncertainty regarding the European debt crisis, the VIX Index only reached a peak of 26.7. During the second half of the reporting period, implied volatility remained mostly in the 14-18 range. However, as concerns rose in the final days of December 2012, regarding the impending US fiscal cliff, the VIX Index spiked up to 22.7. Once the fiscal cliff was avoided, the VIX fell immediately below 15 where it would remain until the end of January 2013. During this time, implied volatility reached a low of 12.43, the lowest level since April 2007.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Fund Insights
January 31, 2013 (unaudited)
For the period of February 1, 2012, through January 31, 2013, as provided by Ben Fischer, Portfolio Manager.
From February 1, 2012 through January 31, 2013, AllianzGI NFJ Dividend, Interest & Premium Strategy Fund (the Fund) returned 9.77% on net asset value (NAV) and 6.83% on market price.
Portfolio Specifics
The Fund rallied with the market during the reporting period. Strength was evident in a variety of holdings and industries. Exposure to convertible bonds helped cushion the Fund from downside volatility during equity market declines and provided upside participation when equities rallied.
In the equity sleeve, negative sector allocation drove underperformance, with stock selection a net detractor as well. In terms of stock selection, the Funds holdings in the Energy, Consumer Discretionary, and Financials sectors were the most beneficial to returns. Conversely, stock selection was net negative in the Industrials, Materials, and Health Care sectors. From a sector allocation perspective, overweights in the Energy and Materials sectors, as well as an underweight in Consumer Discretionary, detracted from performance. The Funds underweight in Utilities and overweight in Health Care resulted in a positive contribution to results.
In the convertibles sleeve, sector allocations that benefitted performance in the period relative to the convertibles universe were Industrials, Financials, Consumer Staples and Transportation. Security selection was positive across all four sectors. In addition, underweighting Technology issues had a positive impact on relative performance. Conversely, sector allocations which hindered relative performance in the reporting period were Energy, Telecommunications, Health Care and Consumer Discretionary. All of the aforementioned sectors exhibited negative issuer-specific performance.
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6
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AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI Equity & Convertible Income Fund Fund Insights
January 31, 2013 (unaudited)
For the period of February 1, 2012 through January 31, 2013, as provided by Doug Forsyth, Portfolio Manager.
For the twelve-month fiscal period ended January 31, 2013, AllianzGI Equity & Convertible Income Fund (the Fund) returned 10.49% on NAV and 10.92% on market price.
AllianzGI Equity & Convertible Income Fund Portfolio Specifics
The Fund rallied with the market during the reporting period. Strength was evident in a variety of holdings and industries. Exposure to convertible bonds helped cushion the Fund from downside volatility during equity market declines and provided upside participation when equities rallied.
In the equity sleeve, sector allocations that helped performance in the period were Healthcare, Telecommunications Services and Information Technology relative to the Russell 1000 Growth Index. Stock picking was positive across all three sectors. In contrast, security selection within the Consumer Discretionary, Industrials and Energy sectors negatively influenced relative returns.
In the convertibles sleeve, sector allocations that helped performance relative to the convertibles universe in the period were Technology, Materials and Financials. A relative underweight and positive issuer-specific performance helped in Technology and Materials. Conversely, sector allocations that hurt relative performance in the period were Energy, Telecommunications, Health Care and Consumer Discretionary. All of the aforementioned sectors exhibited negative issuer-specific performance.
The Fund benefitted from opportunistically over-writing individual equity positions. Single-stock implied volatilities for the front month continued to be low. Despite the challenging equity market, acceptable single-stock premiums were recognized. As select equity holdings moved higher, the covered calls were actively managed to higher strikes.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Performance & Statistics
January 31, 2013 (unaudited)
Dividend, Interest & Premium Strategy
Total Return
(1)
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Market Price
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Net Asset Value
(NAV)
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1 Year
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6.83%
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9.77%
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5 Year
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1.69%
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2.03%
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Commencement of Operations (2/28/05) to 1/31/13
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3.33%
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4.40%
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Market Price/NAV Performance:
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Market Price/NAV:
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Commencement of Operations (2/28/05) to 1/31/13
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Market Price
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$16.65
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NAV
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NAV
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$17.91
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Market Price
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Discount to NAV
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(7.04)%
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Market Price Yield
(2)
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4.02%
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Equity & Convertible Income
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Total Return
(1)
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Market Price
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NAV
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1 Year
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10.92%
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10.49%
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5 Year
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4.16%
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4.52%
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Commencement of Operations (2/27/07) to 1/31/13
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2.48%
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4.64%
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Market Price/NAV Performance:
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Market Price/NAV:
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Commencement of Operations (2/27/07) to 1/31/13
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Market Price
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$17.91
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NAV
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NAV
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$20.10
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Market Price
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Discount to NAV
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(10.90)%
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Market Price Yield
(2)
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6.25%
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Performance & Statistics
January 31, 2013 (unaudited) (continued)
(1)
Past performance is no guarantee of future results.
Total return is calculated by determining the percentage change in NAV or market price (as applicable) in the specified period. The calculation assumes that all income dividends, capital gain and return of capital distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges in connection with the purchase or sale of Fund shares. Total return for a period of more than one year represents the average annual total return.
Performance at market price will differ from results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about each Fund, market conditions, supply and demand for each Funds shares, or changes in each Funds dividends.
An investment in each Fund involves risk, including the loss of principal. Total return, market price, market price yield and NAV will fluctuate with changes in market conditions. This data is provided for information purposes only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a onetime public offering and once issued, shares of closed-end funds are traded in the open market through a stock exchange. NAV is equal to total assets less liabilities divided by the number of shares outstanding. Holdings are subject to change daily.
(2) Market Price Yield is determined by dividing the annualized current quarterly per share dividend (comprised of net investment income and net capital gains, if any) payable to shareholders by the market price per share at January 31, 2013.
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
Shares
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Value
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COMMON STOCK 71.9%
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Aerospace & Defense 1.5%
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115,300
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Lockheed Martin Corp.
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$10,016,111
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245,200
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Northrop Grumman Corp. (a)
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15,947,808
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25,963,919
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Beverages 0.7%
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284,300
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Molson Coors Brewing Co., Class B
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12,844,674
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Capital Markets 0.8%
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200,000
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Ameriprise Financial, Inc. (a)
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13,264,000
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Chemicals 1.4%
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492,800
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EI du Pont de Nemours & Co. (a)
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23,383,360
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Commercial Banks 5.2%
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1,544,600
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Fifth Third Bancorp (a)
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25,161,534
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405,900
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PNC Financial Services Group, Inc. (a)
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25,084,620
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1,074,300
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Wells Fargo & Co. (a)
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37,417,869
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87,664,023
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Commercial Services & Supplies 2.2%
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1,600,000
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Pitney Bowes, Inc.
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23,056,000
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1,500,000
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RR Donnelley & Sons Co. (a)
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13,800,000
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36,856,000
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Communications Equipment 1.0%
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750,000
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Cisco Systems, Inc.
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15,427,500
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24,500
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Harris Corp.
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1,131,900
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16,559,400
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Diversified Financial Services 1.7%
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600,000
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JP Morgan Chase & Co.
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28,230,000
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Diversified Telecommunication Services 0.3%
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150,000
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AT&T, Inc.
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5,218,500
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Electric Utilities 0.2%
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82,900
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American Electric Power Co., Inc.
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3,754,541
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Energy Equipment & Services 2.4%
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400,000
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Diamond Offshore Drilling, Inc. (a)
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30,036,000
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157,400
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Ensco PLC, Class A
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10,005,918
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40,041,918
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Food & Staples Retailing 0.3%
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75,000
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Wal-Mart Stores, Inc.
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5,246,250
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Food Products 0.2%
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39,038
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Bunge Ltd.
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3,109,767
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Health Care Equipment & Supplies 1.1%
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389,100
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Medtronic, Inc. (a)
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18,132,060
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Household Durables 0.5%
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75,000
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Whirlpool Corp. (a)
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8,653,500
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Household Products 0.5%
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100,000
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Kimberly-Clark Corp. (a)
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8,951,000
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Industrial Conglomerates 1.9%
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1,443,217
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General Electric Co. (a)
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32,154,875
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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10
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AllianzGI Equity & Convertible Income Fund Annual Report
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Shares
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Value
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Insurance 7.3%
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57,396
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American International Group, Inc. (b)
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$2,171,290
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256,898
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Assured Guaranty Ltd.
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4,657,561
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1,103,600
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Lincoln National Corp. (a)
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31,982,328
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592,541
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MetLife, Inc. (a)
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22,125,481
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700,000
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The Allstate Corp. (a)
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30,730,000
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400,000
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The Travelers Cos, Inc. (a)
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31,384,000
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123,050,660
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Metals & Mining 4.0%
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1,155,000
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Barrick Gold Corp. (a)
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36,867,600
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886,300
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Freeport-McMoRan Copper & Gold, Inc. (a)
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31,242,075
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68,109,675
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Multi-Utilities 1.3%
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682,600
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Ameren Corp. (a)
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22,143,544
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Office Electronics 1.8%
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3,855,800
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Xerox Corp. (a)
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30,884,958
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Oil, Gas & Consumable Fuels 14.7%
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800,000
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Chesapeake Energy Corp. (a)
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16,144,000
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200,000
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Chevron Corp. (a)
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23,030,000
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850,000
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ConocoPhillips (a)
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49,300,000
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400,000
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EnCana Corp. (a)
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7,744,000
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1,021,200
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Marathon Oil Corp. (a)
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34,322,532
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500,000
|
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Phillips 66
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30,285,000
|
|
500,000
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Royal Dutch Shell PLC, Class A, ADR
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35,260,000
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976,300
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Total SA, ADR (a)
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53,003,327
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249,088,859
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Paper & Forest Products 2.1%
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880,000
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International Paper Co. (a)
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36,449,600
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Pharmaceuticals 12.0%
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1,019,300
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AstraZeneca PLC, ADR (a)
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49,109,874
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1,180,000
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GlaxoSmithKline PLC, ADR (a)
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53,819,800
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|
350,000
|
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Johnson & Johnson (a)
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25,872,000
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430,200
|
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Merck & Co., Inc.
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18,606,150
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1,850,000
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Pfizer, Inc. (a)
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50,468,000
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132,342
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Teva Pharmaceutical Industries Ltd., ADR
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5,027,673
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202,903,497
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Real Estate Investment Trust 0.1%
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100,000
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Annaly Capital Management, Inc.
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1,487,000
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Semiconductors & Semiconductor Equipment 2.1%
|
|
|
|
1,665,700
|
|
Intel Corp. (a)
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|
35,046,328
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Software 1.3%
|
|
|
|
928,200
|
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CA, Inc.
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|
23,037,924
|
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Specialty Retail 1.6%
|
|
|
|
2,000,000
|
|
Staples, Inc.
|
|
26,960,000
|
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Thrifts & Mortgage Finance 0.9%
|
|
|
|
1,750,000
|
|
Hudson City Bancorp, Inc. (a)
|
|
14,962,500
|
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Tobacco 0.8%
|
|
|
|
300,000
|
|
Reynolds American, Inc. (a)
|
|
13,194,000
|
|
Total Common Stock (cost-$1,305,586,073)
|
|
1,217,346,332
|
|
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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11
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Principal
Amount
(000s)
|
|
|
|
|
Value
|
|
CONVERTIBLE BONDS & NOTES 18.1%
|
|
|
|
|
|
|
|
Aerospace & Defense 0.9%
|
|
|
|
$1,000
|
|
AAR Corp., 1.75%, 2/1/26
|
|
$1,003,750
|
|
3,895
|
|
GenCorp, Inc., 4.063%, 12/31/39
|
|
5,280,159
|
|
500
|
|
Textron, Inc., 4.50%, 5/1/13
|
|
1,098,125
|
|
3,075
|
|
Triumph Group, Inc., 2.625%, 10/1/26 (e)
|
|
7,966,172
|
|
|
|
|
|
15,348,206
|
|
Apparel 0.3%
|
|
|
|
4,000
|
|
Iconix Brand Group, Inc., 2.50%, 6/1/16 (c) (d)
|
|
4,322,500
|
|
Automobiles 0.5%
|
|
|
|
|
|
Ford Motor Co.,
|
|
|
|
3,200
|
|
4.25%, 11/15/16
|
|
5,130,000
|
|
1,750
|
|
4.25%, 12/15/36
|
|
2,787,969
|
|
|
|
|
|
7,917,969
|
|
Biotechnology 0.7%
|
|
|
|
8,750
|
|
Corsicanto Ltd., 3.50%, 1/15/32
|
|
11,653,906
|
|
300
|
|
Gilead Sciences, Inc., 1.625%, 5/1/16
|
|
538,502
|
|
|
|
|
|
12,192,408
|
|
Building Products 0.2%
|
|
|
|
2,430
|
|
Griffon Corp., 4.00%, 1/15/17 (c) (d)
|
|
2,654,775
|
|
Capital Markets 0.9%
|
|
|
|
7,580
|
|
Ares Capital Corp., 5.75%, 2/1/16
|
|
8,195,875
|
|
6,795
|
|
BGC Partners, Inc., 4.50%, 7/15/16
|
|
6,370,312
|
|
|
|
|
|
14,566,187
|
|
Commercial Services 0.2%
|
|
|
|
3,835
|
|
Cenveo Corp., 7.00%, 5/15/17 (c) (d)
|
|
3,537,787
|
|
Communications Equipment 1.2%
|
|
|
|
|
|
Ciena Corp.,
|
|
|
|
4,660
|
|
0.875%, 6/15/17
|
|
4,182,350
|
|
3,500
|
|
3.75%, 10/15/18 (c) (d)
|
|
3,950,625
|
|
7,800
|
|
Ixia, 3.00%, 12/15/15
|
|
9,594,000
|
|
2,000
|
|
JDS Uniphase Corp., 1.00%, 5/15/26
|
|
2,002,500
|
|
|
|
|
|
19,729,475
|
|
Computers & Peripherals 0.7%
|
|
|
|
3,425
|
|
EMC Corp., 1.75%, 12/1/13
|
|
5,298,064
|
|
5,550
|
|
NetApp, Inc., 1.75%, 6/1/13
|
|
6,476,156
|
|
|
|
|
|
11,774,220
|
|
Construction & Engineering 0.2%
|
|
|
|
1,785
|
|
MasTec, Inc., 4.00%, 6/15/14
|
|
3,269,897
|
|
Construction Materials 0.1%
|
|
|
|
1,005
|
|
Cemex S.A.B. de C.V., 4.875%, 3/15/15
|
|
1,157,634
|
|
Diversified Financial Services 0.1%
|
|
|
|
1,000
|
|
PHH Corp., 4.00%, 9/1/14
|
|
1,110,625
|
|
Diversified Telecommunication Services 0.2%
|
|
|
|
2,000
|
|
Level 3 Communications, Inc., 6.50%, 10/1/16
|
|
2,907,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
12
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Principal
Amount
(000s)
|
|
|
|
|
Value
|
|
|
|
|
|
Electrical Equipment 0.7%
|
|
|
|
$5,505
|
|
EnerSys, 3.375%, 6/1/38 (e)
|
|
$6,702,337
|
|
5,000
|
|
General Cable Corp., 4.50%, 11/15/29 (e)
|
|
5,903,125
|
|
|
|
|
|
12,605,462
|
|
Energy Equipment & Services 0.2%
|
|
|
|
3,500
|
|
Hornbeck Offshore Services, Inc., 1.50%, 9/1/19 (c) (d)
|
|
3,650,938
|
|
Health Care Equipment & Supplies 0.1%
|
|
|
|
2,000
|
|
Hologic, Inc., 2.00%, 12/15/37 (e)
|
|
2,482,500
|
|
Healthcare-Products 0.5%
|
|
|
|
9,810
|
|
Alere, Inc., 3.00%, 5/15/16
|
|
9,362,419
|
|
Hotels, Restaurants & Leisure 0.7%
|
|
|
|
9,995
|
|
MGM Resorts International, 4.25%, 4/15/15
|
|
10,857,069
|
|
1,930
|
|
Morgans Hotel Group Co., 2.375%, 10/15/14
|
|
1,828,675
|
|
|
|
|
|
12,685,744
|
|
Household Durables 0.2%
|
|
|
|
2,610
|
|
KB Home, 1.375%, 2/1/19
|
|
2,673,619
|
|
500
|
|
The Ryland Group, Inc., 1.625%, 5/15/18
|
|
725,000
|
|
|
|
|
|
3,398,619
|
|
Insurance 0.1%
|
|
|
|
1,465
|
|
American Equity Investment Life Holding Co., 3.50%, 9/15/15 (c) (d)
|
|
1,807,444
|
|
Internet Software & Services 0.2%
|
|
|
|
1,000
|
|
Equinix, Inc., 4.75%, 6/15/16
|
|
2,644,375
|
|
1,405
|
|
WebMD Health Corp., 2.50%, 1/31/18
|
|
1,247,816
|
|
|
|
|
|
3,892,191
|
|
Life Sciences Tools & Services 0.3%
|
|
|
|
4,540
|
|
Sequenom, Inc., 5.00%, 10/1/17 (c) (d)
|
|
5,056,425
|
|
Machinery 2.4%
|
|
|
|
5,000
|
|
Chart Industries, Inc., 2.00%, 8/1/18
|
|
6,121,875
|
|
8,190
|
|
Greenbrier Cos, Inc., 3.50%, 4/1/18
|
|
7,969,894
|
|
|
|
Meritor, Inc.,
|
|
|
|
7,000
|
|
4.625%, 3/1/26 (e)
|
|
6,593,125
|
|
5,020
|
|
7.875%, 3/1/26 (c) (d)
|
|
4,747,037
|
|
7,000
|
|
Navistar International Corp., 3.00%, 10/15/14
|
|
6,658,750
|
|
2,000
|
|
Terex Corp., 4.00%, 6/1/15
|
|
4,206,250
|
|
3,450
|
|
Wabash National Corp., 3.375%, 5/1/18
|
|
4,161,563
|
|
|
|
|
|
40,458,494
|
|
Marine 0.1%
|
|
|
|
3,090
|
|
DryShips, Inc., 5.00%, 12/1/14
|
|
2,624,569
|
|
Metals & Mining 0.3%
|
|
|
|
250
|
|
Alcoa, Inc., 5.25%, 3/15/14
|
|
359,375
|
|
4,805
|
|
Steel Dynamics, Inc., 5.125%, 6/15/14
|
|
5,411,631
|
|
|
|
|
|
5,771,006
|
|
Oil, Gas & Consumable Fuels 1.4%
|
|
|
|
10,800
|
|
Alpha Natural Resources, Inc., 2.375%, 4/15/15
|
|
10,152,000
|
|
2,190
|
|
Chesapeake Energy Corp., 2.50%, 5/15/37
|
|
2,140,725
|
|
2,000
|
|
Cobalt International Energy, Inc., 2.625%, 12/1/19
|
|
2,050,000
|
|
8,975
|
|
Peabody Energy Corp., 4.75%, 12/15/41
|
|
8,599,172
|
|
|
|
|
|
22,941,897
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
13
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Principal
Amount
(000s)
|
|
|
|
|
Value
|
|
|
|
|
|
Pharmaceuticals 0.7%
|
|
|
|
$5,000
|
|
Akorn, Inc., 3.50%, 6/1/16
|
|
$8,262,500
|
|
2,000
|
|
Endo Health Solutions, Inc., 1.75%, 4/15/15
|
|
2,468,750
|
|
1,000
|
|
ViroPharma, Inc., 2.00%, 3/15/17
|
|
1,570,000
|
|
|
|
|
|
12,301,250
|
|
Road & Rail 0.3%
|
|
|
|
170
|
|
Avis Budget Group, Inc., 3.50%, 10/1/14
|
|
246,500
|
|
2,000
|
|
Hertz Global Holdings, Inc., 5.25%, 6/1/14
|
|
4,506,250
|
|
|
|
|
|
4,752,750
|
|
Semiconductors & Semiconductor Equipment 1.5%
|
|
|
|
|
|
Micron Technology, Inc.,
|
|
|
|
9,250
|
|
1.50%, 8/1/31
|
|
9,487,031
|
|
5,500
|
|
1.875%, 6/1/27
|
|
5,331,563
|
|
1,250
|
|
Novellus Systems, Inc., 2.625%, 5/15/41
|
|
1,748,437
|
|
8,500
|
|
SunPower Corp., 4.75%, 4/15/14
|
|
8,255,625
|
|
350
|
|
Xilinx, Inc., 2.625%, 6/15/17
|
|
485,188
|
|
|
|
|
|
25,307,844
|
|
Software 1.4%
|
|
|
|
2,000
|
|
Bottomline Technologies de, Inc., 1.50%, 12/1/17
|
|
2,373,750
|
|
5,540
|
|
Electronic Arts, Inc., 0.75%, 7/15/16
|
|
5,259,537
|
|
5,760
|
|
Nuance Communications, Inc., 2.75%, 8/15/27
|
|
7,920,000
|
|
5,500
|
|
Symantec Corp., 1.00%, 6/15/13
|
|
6,397,188
|
|
1,090
|
|
TeleCommunication Systems, Inc., 4.50%, 11/1/14 (c) (d)
|
|
1,024,600
|
|
500
|
|
TiVo, Inc., 4.00%, 3/15/16 (c) (d)
|
|
703,750
|
|
|
|
|
|
23,678,825
|
|
Specialty Retail 0.2%
|
|
|
|
2,500
|
|
Group 1 Automotive, Inc., 2.25%, 6/15/36 (e)
|
|
3,070,312
|
|
Trading Companies & Distributors 0.6%
|
|
|
|
9,770
|
|
Titan Machinery, Inc., 3.75%, 5/1/19 (c) (d)
|
|
9,959,294
|
|
Total Convertible Bonds & Notes (cost-$316,494,266)
|
|
306,297,166
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE PREFERRED STOCK 8.6%
|
|
|
|
|
|
|
|
Airlines 0.4%
|
|
|
|
178,685
|
|
Continental Airlines Finance Trust II, 6.00%, 11/15/30
|
|
7,063,632
|
|
Auto Components 0.6%
|
|
|
|
218,060
|
|
Goodyear Tire & Rubber Co., 5.875%, 4/1/14
|
|
10,203,027
|
|
Automobiles 0.6%
|
|
|
|
253,705
|
|
General Motors Co., 4.75%, 12/1/13, Ser. B
|
|
10,990,501
|
|
Capital Markets 0.7%
|
|
|
|
199,820
|
|
AMG Capital Trust I, 5.10%, 4/15/36
|
|
11,327,296
|
|
Diversified Financial Services 0.6%
|
|
|
|
8,165
|
|
Bank of America Corp., 7.25%, 12/31/49, Ser. L (f)
|
|
9,681,812
|
|
Electric Utilities 0.2%
|
|
|
|
50,000
|
|
NextEra Energy, Inc., 7.00%, 9/1/13
|
|
2,746,500
|
|
Food Products 0.7%
|
|
|
|
113,830
|
|
Bunge Ltd., 4.875%, 12/31/49 (f)
|
|
12,282,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
14
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Shares
|
|
|
|
|
Value
|
|
|
|
|
|
Health Care Providers & Services 0.2%
|
|
|
|
2,500
|
|
HealthSouth Corp., 6.50%, 12/31/49, Ser. A (f)
|
|
$2,781,875
|
|
Household Durables 0.3%
|
|
|
|
36,085
|
|
Stanley Black & Decker, Inc., 4.75%, 11/17/15
|
|
4,454,693
|
|
Insurance 0.5%
|
|
|
|
179,180
|
|
MetLife, Inc., 5.00%, 3/26/14
|
|
8,742,192
|
|
IT Services 0.1%
|
|
|
|
31,360
|
|
Unisys Corp., 6.25%, 3/1/14
|
|
2,019,898
|
|
Metals & Mining 0.4%
|
|
|
|
315,000
|
|
Thompson Creek Metals Co., Inc., 6.50%, 5/15/15
|
|
6,441,750
|
|
Multi-Utilities 0.6%
|
|
|
|
204,100
|
|
AES Trust III, 6.75%, 10/15/29
|
|
10,235,615
|
|
Oil, Gas & Consumable Fuels 1.5%
|
|
|
|
140,100
|
|
Apache Corp., 6.00%, 8/1/13
|
|
6,630,933
|
|
45,100
|
|
ATP Oil & Gas Corp., 8.00%, 12/31/49 (c) (d) (f)
|
|
29,766
|
|
|
|
Chesapeake Energy Corp.,
|
|
|
|
114,950
|
|
5.00%, 12/31/49 (f)
|
|
9,670,169
|
|
8,990
|
|
5.75%, 12/31/49 (c) (d) (f)
|
|
9,187,600
|
|
8,050
|
|
Sanchez Energy Corp., 4.875%, 12/31/49 (c) (d) (f)
|
|
433,694
|
|
|
|
|
|
25,952,162
|
|
Real Estate Investment Trust 0.4%
|
|
|
|
176,800
|
|
Alexandria Real Estate Equities, Inc., 7.00%, 12/31/49 (f)
|
|
4,826,640
|
|
35,385
|
|
Health Care REIT, Inc., 6.50%, 12/31/49, Ser. I (f)
|
|
2,064,715
|
|
|
|
|
|
6,891,355
|
|
Road & Rail 0.8%
|
|
|
|
1,110,655
|
|
2010 Swift Mandatory Common Exchange Security Trust, 6.00%, 12/31/13 (d)
|
|
13,907,511
|
|
Total Convertible Preferred Stock (cost-$157,699,096)
|
|
145,722,076
|
|
|
|
|
|
|
|
|
Principal
Amount
(000s)
|
|
|
|
|
|
|
|
|
|
|
CORPORATE BONDS & NOTES 0.4%
|
|
|
|
|
|
|
|
Metals & Mining 0.4%
|
|
|
|
$272
|
|
ArcelorMittal, 6.00%, 1/15/16 (cost-$7,147,974)
|
|
7,081,181
|
|
|
|
|
|
SHORT-TERM INVESTMENTS 3.5%
|
|
|
|
|
|
|
|
Time Deposits 3.5%
|
|
|
|
18,186
|
|
Citibank-London, 0.03%, 2/1/13
|
|
18,186,250
|
|
41,226
|
|
Wells Fargo-Grand Cayman, 0.03%, 2/1/13
|
|
41,226,398
|
|
Total Short Term Investments (cost-$59,412,648)
|
|
59,412,648
|
|
Total Investments, before call options written
(cost-$1,846,340,057)
102.5%
|
|
1,735,859,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
15
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Schedule of Investments
January 31, 2013 (continued)
Contracts
|
|
|
|
|
Value
|
|
CALL OPTIONS WRITTEN
(b)
(2.1)%
|
|
|
|
|
|
Morgan Stanley Cyclical Index,
|
|
|
|
450
|
|
strike price $1040, expires 2/16/13
|
|
$(3,244,500
|
)
|
240
|
|
strike price $1050, expires 2/16/13
|
|
(1,500,000
|
)
|
350
|
|
strike price $1120, expires 3/16/13
|
|
(577,500
|
)
|
|
|
NASDAQ 100 Flex Index,
|
|
|
|
100
|
|
strike price $2790, expires 3/22/13
|
|
(264,356
|
)
|
|
|
NASDAQ 100 Index,
|
|
|
|
130
|
|
strike price $2715, expires 2/16/13
|
|
(510,900
|
)
|
130
|
|
strike price $2720, expires 2/16/13
|
|
(469,300
|
)
|
|
|
Philadelphia Oil Service Sector Flex Index,
|
|
|
|
1,900
|
|
strike price $228, expires 2/22/13
|
|
(3,616,979
|
)
|
2,000
|
|
strike price $240, expires 3/8/13
|
|
(1,927,298
|
)
|
1,800
|
|
strike price $250, expires 3/22/13
|
|
(872,579
|
)
|
|
|
Philadelphia Oil Service Sector Index,
|
|
|
|
2,312
|
|
strike price $230, expires 2/16/13
|
|
(4,092,240
|
)
|
1,000
|
|
strike price $240, expires 3/16/13
|
|
(1,095,000
|
)
|
2,500
|
|
strike price $245, expires 3/16/13
|
|
(1,925,000
|
)
|
500
|
|
strike price $250, expires 3/16/13
|
|
(257,500
|
)
|
|
|
Philadelphia Stock Exchange KBW Bank Flex Index,
|
|
|
|
8,000
|
|
strike price $51, expires 2/1/13
|
|
(2,240,203
|
)
|
5,000
|
|
strike price $52.25, expires 2/8/13
|
|
(860,035
|
)
|
5,000
|
|
strike price $52.50, expires 2/22/13
|
|
(912,330
|
)
|
8,000
|
|
strike price $54.75, expires 3/1/13
|
|
(595,022
|
)
|
|
|
Philadelphia Stock Exchange KBW Bank Index,
|
|
|
|
6,000
|
|
strike price $52, expires 2/16/13
|
|
(1,215,000
|
)
|
7,000
|
|
strike price $55, expires 3/16/13
|
|
(647,500
|
)
|
|
|
Standard & Poors 500 Flex Index,
|
|
|
|
300
|
|
strike price $1445, expires 2/1/13
|
|
(1,611,328
|
)
|
250
|
|
strike price $1445, expires 2/8/13
|
|
(1,354,400
|
)
|
300
|
|
strike price $1455, expires 2/8/13
|
|
(1,340,711
|
)
|
600
|
|
strike price $1485, expires 3/1/13
|
|
(1,656,884
|
)
|
|
|
Standard & Poors 500 Index,
|
|
|
|
250
|
|
strike price $1445, expires 2/16/13
|
|
(1,352,500
|
)
|
300
|
|
strike price $1450, expires 2/16/13
|
|
(1,488,000
|
)
|
250
|
|
strike price $1525, expires 3/16/13
|
|
(266,250
|
)
|
Total Call Options Written (premiums received-$14,374,714)
|
|
(35,893,315
|
)
|
Total Investments, net of call options written
(cost-$1,831,965,343)
100.4%
|
|
1,699,966,088
|
|
Other liabilities in excess of other assets
(0.4)%
|
|
(7,307,522
|
)
|
Net Assets 100.0%
|
|
$1,692,658,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
16
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
Shares
|
|
|
|
|
Value
|
|
COMMON STOCK 70.1%
|
|
|
|
|
|
|
|
Aerospace & Defense 3.0%
|
|
|
|
12,383
|
|
Engility Holdings, Inc. (b)
|
|
$238,373
|
|
74,300
|
|
L-3 Communications Holdings, Inc.
|
|
5,640,856
|
|
265,900
|
|
Textron, Inc. (a)
|
|
7,647,284
|
|
|
|
|
|
13,526,513
|
|
Auto Components 2.0%
|
|
|
|
32,973
|
|
BorgWarner, Inc. (b)
|
|
2,445,937
|
|
205,900
|
|
Johnson Controls, Inc.
|
|
6,401,431
|
|
|
|
|
|
8,847,368
|
|
Automobiles 1.6%
|
|
|
|
536,100
|
|
Ford Motor Co. (a)
|
|
6,942,495
|
|
Beverages 4.7%
|
|
|
|
197,800
|
|
Coca-Cola Co. (a)
|
|
7,366,072
|
|
127,300
|
|
Molson Coors Brewing Co., Class B
|
|
5,751,414
|
|
108,900
|
|
PepsiCo, Inc.
|
|
7,933,365
|
|
|
|
|
|
21,050,851
|
|
Biotechnology 1.7%
|
|
|
|
191,600
|
|
Gilead Sciences, Inc. (a) (b)
|
|
7,558,620
|
|
Chemicals 1.0%
|
|
|
|
42,600
|
|
Monsanto Co. (a)
|
|
4,317,510
|
|
Communications Equipment 4.7%
|
|
|
|
38,628
|
|
Aviat Networks, Inc. (b)
|
|
144,855
|
|
284,200
|
|
Cisco Systems, Inc.
|
|
5,845,994
|
|
155,500
|
|
Harris Corp.
|
|
7,184,100
|
|
122,500
|
|
Qualcomm, Inc.
|
|
8,088,675
|
|
|
|
|
|
21,263,624
|
|
Computers & Peripherals 3.0%
|
|
|
|
13,400
|
|
Apple, Inc.
|
|
6,101,154
|
|
289,800
|
|
EMC Corp. (b)
|
|
7,131,978
|
|
|
|
|
|
13,233,132
|
|
Diversified Financial Services 1.4%
|
|
|
|
53,055
|
|
Citigroup, Inc.
|
|
2,236,799
|
|
83,800
|
|
JP Morgan Chase & Co.
|
|
3,942,790
|
|
|
|
|
|
6,179,589
|
|
Diversified Telecommunication Services 1.6%
|
|
|
|
48,488
|
|
Frontier Communications Corp.
|
|
221,590
|
|
156,700
|
|
Verizon Communications, Inc.
|
|
6,833,687
|
|
|
|
|
|
7,055,277
|
|
Electric Utilities 1.4%
|
|
|
|
54,202
|
|
Entergy Corp.
|
|
3,501,449
|
|
85,560
|
|
Exelon Corp.
|
|
2,690,007
|
|
|
|
|
|
6,191,456
|
|
Electronic Equipment, Instruments & Components 1.7%
|
|
|
|
110,300
|
|
Amphenol Corp., Class A (a)
|
|
7,452,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
17
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
January 31, 2013 (continued)
Shares
|
|
|
|
|
Value
|
|
|
|
|
|
Energy Equipment & Services 4.6%
|
|
|
|
68,900
|
|
Diamond Offshore Drilling, Inc.
|
|
$5,173,701
|
|
89,700
|
|
National Oilwell Varco, Inc.
|
|
6,650,358
|
|
96,700
|
|
Schlumberger Ltd.
|
|
7,547,435
|
|
99,113
|
|
Weatherford International Ltd. (b)
|
|
1,323,159
|
|
|
|
|
|
20,694,653
|
|
Food Products 0.5%
|
|
|
|
72,805
|
|
Archer-Daniels-Midland Co.
|
|
2,077,127
|
|
Health Care Equipment & Supplies 3.3%
|
|
|
|
111,100
|
|
Baxter International, Inc. (a)
|
|
7,537,024
|
|
13,000
|
|
Intuitive Surgical, Inc. (b)
|
|
7,466,940
|
|
|
|
|
|
15,003,964
|
|
Health Care Providers & Services 2.0%
|
|
|
|
67,000
|
|
McKesson Corp. (a)
|
|
7,050,410
|
|
26,820
|
|
WellPoint, Inc.
|
|
1,738,472
|
|
|
|
|
|
8,788,882
|
|
Hotels, Restaurants & Leisure 1.6%
|
|
|
|
76,200
|
|
McDonalds Corp.
|
|
7,261,098
|
|
Household Products 1.7%
|
|
|
|
101,800
|
|
Procter & Gamble Co. (a)
|
|
7,651,288
|
|
Independent Power Producers & Energy Traders 0.8%
|
|
|
|
153,999
|
|
NRG Energy, Inc.
|
|
3,695,976
|
|
Industrial Conglomerates 1.7%
|
|
|
|
341,159
|
|
General Electric Co.
|
|
7,601,022
|
|
Insurance 2.6%
|
|
|
|
18,450
|
|
American International Group, Inc. (b)
|
|
697,964
|
|
107,041
|
|
Assured Guaranty Ltd.
|
|
1,940,653
|
|
81,910
|
|
MetLife, Inc.
|
|
3,058,519
|
|
101,900
|
|
Prudential Financial, Inc. (a)
|
|
5,897,972
|
|
|
|
|
|
11,595,108
|
|
Internet & Catalog Retail 0.6%
|
|
|
|
10,800
|
|
Amazon.com, Inc. (b)
|
|
2,867,400
|
|
Internet Software & Services 1.8%
|
|
|
|
10,700
|
|
Google, Inc., Class A (a) (b)
|
|
8,085,883
|
|
IT Services 2.2%
|
|
|
|
37,200
|
|
International Business Machines Corp.
|
|
7,554,204
|
|
13,900
|
|
Visa, Inc., Class A
|
|
2,194,949
|
|
|
|
|
|
9,749,153
|
|
Machinery 4.6%
|
|
|
|
151,500
|
|
AGCO Corp. (b)
|
|
8,029,500
|
|
80,300
|
|
Deere & Co.
|
|
7,553,018
|
|
81,300
|
|
Joy Global, Inc.
|
|
5,135,721
|
|
|
|
|
|
20,718,239
|
|
Metals & Mining 1.0%
|
|
|
|
132,400
|
|
Freeport-McMoRan Copper & Gold, Inc.
|
|
4,667,100
|
|
Multiline Retail 1.7%
|
|
|
|
124,200
|
|
Target Corp.
|
|
7,502,922
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
18
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
January 31, 2013 (continued)
Shares
|
|
|
|
|
Value
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 2.8%
|
|
|
|
77,900
|
|
Occidental Petroleum Corp.
|
|
$6,876,233
|
|
110,100
|
|
Peabody Energy Corp.
|
|
2,769,015
|
|
70,500
|
|
Valero Energy Corp. (a)
|
|
3,082,965
|
|
|
|
|
|
12,728,213
|
|
Pharmaceuticals 1.8%
|
|
|
|
105,100
|
|
Abbott Laboratories
|
|
3,560,788
|
|
106,200
|
|
Bristol-Myers Squibb Co.
|
|
3,838,068
|
|
23,345
|
|
Teva Pharmaceutical Industries Ltd., ADR
|
|
886,876
|
|
|
|
|
|
8,285,732
|
|
Semiconductors & Semiconductor Equipment 3.0%
|
|
|
|
270,000
|
|
Intel Corp.
|
|
5,680,800
|
|
239,000
|
|
Texas Instruments, Inc.
|
|
7,906,120
|
|
|
|
|
|
13,586,920
|
|
Software 3.3%
|
|
|
|
247,700
|
|
Microsoft Corp.
|
|
6,804,319
|
|
227,900
|
|
Oracle Corp.
|
|
8,092,729
|
|
|
|
|
|
14,897,048
|
|
Specialty Retail 0.7%
|
|
|
|
45,600
|
|
Home Depot, Inc.
|
|
3,051,552
|
|
Total Common Stock (cost-$388,201,557)
|
|
314,128,686
|
|
|
|
|
|
CONVERTIBLE PREFERRED STOCK 14.9%
|
|
|
|
|
|
|
|
Aerospace & Defense 0.6%
|
|
|
|
49,750
|
|
United Technologies Corp., 7.50%, 8/1/15
|
|
2,832,765
|
|
Airlines 0.7%
|
|
|
|
82,015
|
|
Continental Airlines Finance Trust II, 6.00%, 11/15/30
|
|
3,242,151
|
|
Auto Components 0.6%
|
|
|
|
59,600
|
|
Goodyear Tire & Rubber Co., 5.875%, 4/1/14
|
|
2,788,684
|
|
Automobiles 0.6%
|
|
|
|
63,000
|
|
General Motors Co., 4.75%, 12/1/13, Ser. B
|
|
2,729,160
|
|
Capital Markets 1.1%
|
|
|
|
54,100
|
|
AMG Capital Trust I, 5.10%, 4/15/36
|
|
3,066,794
|
|
33,400
|
|
Escrow Lehman Brothers Holdings, Inc., 28.00%, 3/6/09, Ser. RIG (b) (g) (h)
|
|
437,288
|
|
41,745
|
|
The Goldman Sachs Group, Inc., 8.00%, 3/14/13 (NetApp, Inc.) (b) (i)
|
|
1,458,654
|
|
|
|
|
|
4,962,736
|
|
Commercial Banks 1.1%
|
|
|
|
17,805
|
|
Fifth Third Bancorp, 8.50%, 12/31/49, Ser. G (f)
|
|
2,567,258
|
|
1,750
|
|
Wells Fargo & Co., 7.50%, 12/31/49, Ser. L (f)
|
|
2,259,075
|
|
|
|
|
|
4,826,333
|
|
Commercial Services & Supplies 0.5%
|
|
|
|
34,894
|
|
United Rentals, Inc., 6.50%, 8/1/28
|
|
2,192,872
|
|
Diversified Financial Services 1.1%
|
|
|
|
4,225
|
|
Bank of America Corp., 7.25%, 12/31/49, Ser. L (f)
|
|
5,009,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
19
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
January 31, 2013 (continued)
Shares
|
|
|
|
|
Value
|
|
|
|
|
|
Electric Utilities 1.0%
|
|
|
|
43,000
|
|
NextEra Energy, Inc., 5.599%, 6/1/15
|
|
$2,236,000
|
|
38,525
|
|
PPL Corp., 9.50%, 7/1/13
|
|
2,082,661
|
|
|
|
|
|
4,318,661
|
|
Food Products 0.9%
|
|
|
|
38,800
|
|
Bunge Ltd., 4.875%, 12/31/49 (f)
|
|
4,186,520
|
|
Health Care Providers & Services 0.7%
|
|
|
|
2,935
|
|
HealthSouth Corp., 6.50%, 12/31/49, Ser. A (f)
|
|
3,265,921
|
|
Household Durables 0.7%
|
|
|
|
23,400
|
|
Stanley Black & Decker, Inc., 4.75%, 11/17/15
|
|
2,888,730
|
|
Insurance 0.5%
|
|
|
|
40,700
|
|
MetLife, Inc., 5.00%, 3/26/14
|
|
1,985,753
|
|
IT Services 0.5%
|
|
|
|
33,000
|
|
Unisys Corp., 6.25%, 3/1/14
|
|
2,125,530
|
|
Multi-Utilities 0.5%
|
|
|
|
47,650
|
|
AES Trust III, 6.75%, 10/15/29
|
|
2,389,648
|
|
Oil, Gas & Consumable Fuels 1.0%
|
|
|
|
42,900
|
|
Apache Corp., 6.00%, 8/1/13
|
|
2,030,457
|
|
20,300
|
|
ATP Oil & Gas Corp., 8.00%, 12/31/49 (c) (d) (f)
|
|
13,398
|
|
27,350
|
|
Chesapeake Energy Corp., 5.00%, 12/31/49 (f)
|
|
2,300,819
|
|
|
|
|
|
4,344,674
|
|
Professional Services 0.6%
|
|
|
|
46,500
|
|
Nielsen Holdings NV, 6.25%, 2/1/13
|
|
2,707,695
|
|
Real Estate Investment Trust 1.5%
|
|
|
|
90,500
|
|
Alexandria Real Estate Equities, Inc., 7.00%, 12/31/49 (f)
|
|
2,470,650
|
|
98,900
|
|
FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A (f)
|
|
2,408,215
|
|
31,930
|
|
Health Care REIT, Inc., 6.50%, 12/31/49, Ser. I (f)
|
|
1,863,116
|
|
|
|
|
|
6,741,981
|
|
Road & Rail 0.7%
|
|
|
|
246,810
|
|
2010 Swift Mandatory Common Exchange Security Trust, 6.00%, 12/31/13 (d)
|
|
3,090,530
|
|
Total Convertible Preferred Stock (cost-$73,175,036)
|
|
66,630,222
|
|
|
|
|
|
Principal
Amount
(000s)
|
|
|
|
|
|
|
|
|
|
|
CONVERTIBLE BONDS & NOTES 13.4%
|
|
|
|
|
|
|
|
Aerospace & Defense 0.7%
|
|
|
|
$2,310
|
|
GenCorp, Inc., 4.063%, 12/31/39
|
|
3,131,494
|
|
Biotechnology 0.5%
|
|
|
|
2,650
|
|
Dendreon Corp., 2.875%, 1/15/16
|
|
2,206,125
|
|
Capital Markets 1.2%
|
|
|
|
2,400
|
|
Ares Capital Corp., 5.75%, 2/1/16
|
|
2,595,000
|
|
2,895
|
|
BGC Partners, Inc., 4.50%, 7/15/16
|
|
2,714,062
|
|
|
|
|
|
5,309,062
|
|
Coal 0.3%
|
|
|
|
1,525
|
|
Alpha Appalachia Holdings, Inc., 3.25%, 8/1/15
|
|
1,471,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
20
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
January 31, 2013 (continued)
Principal
Amount
(000s)
|
|
|
|
|
Value
|
|
|
|
|
|
Construction Materials 0.7%
|
|
|
|
$2,870
|
|
Cemex S.A.B. de C.V., 4.875%, 3/15/15
|
|
$3,305,881
|
|
Electrical Equipment 0.7%
|
|
|
|
2,535
|
|
EnerSys, 3.375%, 6/1/38 (e)
|
|
3,086,363
|
|
Electronic Equipment, Instruments & Components 0.3%
|
|
|
|
1,335
|
|
Anixter International, Inc., 1.00%, 2/15/13
|
|
1,606,172
|
|
Hotels, Restaurants & Leisure 1.0%
|
|
|
|
2,545
|
|
MGM Resorts International, 4.25%, 4/15/15
|
|
2,764,506
|
|
1,705
|
|
Morgans Hotel Group Co., 2.375%, 10/15/14
|
|
1,615,488
|
|
|
|
|
|
4,379,994
|
|
Internet Software & Services 0.2%
|
|
|
|
850
|
|
WebMD Health Corp., 2.50%, 1/31/18
|
|
754,906
|
|
IT Services 0.7%
|
|
|
|
1,500
|
|
Alliance Data Systems Corp., 1.75%, 8/1/13
|
|
2,999,062
|
|
Machinery 2.0%
|
|
|
|
2,800
|
|
Greenbrier Cos, Inc., 3.50%, 4/1/18
|
|
2,724,750
|
|
|
|
Meritor, Inc.,
|
|
|
|
3,000
|
|
4.625%, 3/1/26 (e)
|
|
2,825,625
|
|
850
|
|
7.875%, 3/1/26 (c) (d)
|
|
803,781
|
|
2,950
|
|
Navistar International Corp., 3.00%, 10/15/14
|
|
2,806,188
|
|
|
|
|
|
9,160,344
|
|
Marine 0.2%
|
|
|
|
1,100
|
|
DryShips, Inc., 5.00%, 12/1/14
|
|
934,312
|
|
Media 1.3%
|
|
|
|
|
|
Liberty Interactive LLC,
|
|
|
|
2,265
|
|
3.125%, 3/30/23
|
|
3,326,719
|
|
5,200
|
|
3.50%, 1/15/31
|
|
2,626,000
|
|
|
|
|
|
5,952,719
|
|
Metals & Mining 0.5%
|
|
|
|
2,100
|
|
Steel Dynamics, Inc., 5.125%, 6/15/14
|
|
2,365,125
|
|
Oil, Gas & Consumable Fuels 0.5%
|
|
|
|
2,765
|
|
Endeavour International Corp., 5.50%, 7/15/16
|
|
2,135,963
|
|
Real Estate Investment Trust 0.5%
|
|
|
|
2,000
|
|
Boston Properties LP, 3.75%, 5/15/36
|
|
2,147,500
|
|
Semiconductors & Semiconductor Equipment 0.7%
|
|
|
|
500
|
|
JA Solar Holdings Co., Ltd., 4.50%, 5/15/13
|
|
477,500
|
|
2,800
|
|
SunPower Corp., 4.75%, 4/15/14
|
|
2,719,500
|
|
|
|
|
|
3,197,000
|
|
Software 0.9%
|
|
|
|
1,400
|
|
Nuance Communications, Inc., 2.75%, 8/15/27
|
|
1,925,000
|
|
2,050
|
|
TeleCommunication Systems, Inc., 4.50%, 11/1/14 (c) (d)
|
|
1,927,000
|
|
|
|
|
|
3,852,000
|
|
Thrifts & Mortgage Finance 0.1%
|
|
|
|
1,000
|
|
MGIC Investment Corp., 9.00%, 4/1/63 (c) (d)
|
|
443,750
|
|
Trading Companies & Distributors 0.4%
|
|
|
|
1,800
|
|
Titan Machinery, Inc., 3.75%, 5/1/19 (c) (d)
|
|
1,834,875
|
|
Total Convertible Bonds & Notes (cost-$59,714,932)
|
|
60,274,272
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
21
|
AllianzGI Equity & Convertible Income Fund Schedule of Investments
January 31, 2013 (continued)
Principal
Amount
(000s)
|
|
|
|
|
Value
|
|
CORPORATE BONDS & NOTES 0.8%
|
|
|
|
|
|
|
|
Electric 0.2%
|
|
|
|
$2,000
|
|
Texas Competitive Electric Holdings Co. LLC, 15.00%, 4/1/21
|
|
$690,000
|
|
Metals & Mining 0.6%
|
|
|
|
112
|
|
ArcelorMittal, 6.00%, 1/15/16
|
|
2,923,170
|
|
Total Corporate Bonds & Notes (cost-$4,904,944)
|
|
3,613,170
|
|
|
|
|
|
SHORT-TERM INVESTMENT 0.4%
|
|
|
|
Time Deposit 0.4%
|
|
|
|
1,969
|
|
Wells Fargo-Grand Cayman, 0.03%, 2/1/13 (cost-$1,968,959)
|
|
1,968,959
|
|
Total Investments, before call options written
(cost-$527,965,428)
99.6%
|
|
446,615,309
|
|
|
|
|
|
|
|
|
Contracts
|
|
|
|
|
|
|
|
|
|
|
CALL OPTIONS WRITTEN
(b)
(0.1)%
|
|
|
|
|
|
Amphenol Corp.,
|
|
|
|
770
|
|
strike price $70, expires 2/16/13
|
|
(11,550
|
)
|
|
|
Baxter International, Inc.,
|
|
|
|
775
|
|
strike price $70, expires 2/16/13
|
|
(16,275
|
)
|
|
|
Ford Motor Co.,
|
|
|
|
545
|
|
strike price $15, expires 2/16/13
|
|
(3,543
|
)
|
|
|
Gilead Sciences, Inc.,
|
|
|
|
1,340
|
|
strike price $40, expires 2/16/13
|
|
(87,770
|
)
|
|
|
Google, Inc.,
|
|
|
|
75
|
|
strike price $785, expires 2/16/13
|
|
(6,187
|
)
|
|
|
McKesson Corp.,
|
|
|
|
470
|
|
strike price $105, expires 2/16/13
|
|
(85,775
|
)
|
|
|
Monsanto Co.,
|
|
|
|
300
|
|
strike price $105, expires 2/16/13
|
|
(6,450
|
)
|
|
|
Prudential Financial, Inc.,
|
|
|
|
105
|
|
strike price $60, expires 2/16/13
|
|
(5,775
|
)
|
|
|
Textron, Inc.,
|
|
|
|
865
|
|
strike price $29, expires 2/16/13
|
|
(33,303
|
)
|
|
|
Valero Energy Corp.,
|
|
|
|
495
|
|
strike price $45, expires 3/16/13
|
|
(59,895
|
)
|
Total Call Options Written (premiums received-$306,244)
|
|
(316,523
|
)
|
Total Investments, net of call options written
(cost-$527,659,184)
99.5%
|
|
446,298,786
|
|
Other assets less other liabilities
0.5%
|
|
2,084,800
|
|
Net Assets 100.0%
|
|
$448,383,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
22
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Schedule of Investments
January 31, 2013 (continued)
|
|
Notes to Schedule of Investments:
|
|
(a)
|
All or partial amount segregated for the benefit of the counterparty as collateral for call options written.
|
|
(b)
|
Non-income producing.
|
|
(c)
|
Private PlacementRestricted as to resale and may not have a readily available market. Securities with an aggregate value of $51,066,235 and $5,022,804, representing 3.0% and 1.1% of net assets in Dividend, Interest & Premium Strategy and Equity & Convertible Income, respectively.
|
|
(d)
|
144AExempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.
|
|
(e)
|
Step BondCoupon is a fixed rate for an initial period then resets at a specific date and rate.
|
|
(f)
|
Perpetual maturity. Maturity date shown is the next call date.
|
|
(g)
|
Fair-ValuedSecurity in Equity & Convertible Income, with a value of $437,288, representing 0.1% of net assets. See Note 1(a) in the Notes to Financial Statements.
|
|
(h)
|
In default.
|
|
(i)
|
Securities exchangeable or convertible into securities of an entity different than the issuer or structured by the issuer to provide exposure to securities of an entity different than the issuer (synthetic convertible securities). Such entity is identified in the parenthetical.
|
|
(j)
|
Transactions in call options written for the year ended January 31, 2013:
|
|
|
|
|
Dividend, Interest & Premium Strategy Fund:
|
|
Contracts
|
|
Premiums
|
|
Options outstanding, January 31, 2012
|
|
62,685
|
|
$14,705,028
|
|
Options written
|
|
357,197
|
|
94,995,636
|
|
Options terminated in closing purchase transactions
|
|
(199,105)
|
|
(50,840,588)
|
|
Options expired
|
|
(166,115)
|
|
(44,485,362)
|
|
Options outstanding, January 31,2013
|
|
54,662
|
|
$14,374,714
|
|
|
|
|
|
|
|
Equity & Convertible Income Fund:
|
|
Contracts
|
|
Premiums
|
|
Options outstanding, January 31, 2012
|
|
4,760
|
|
$228,176
|
|
Options written
|
|
89,989
|
|
5,026,054
|
|
Options terminated in closing purchase transactions
|
|
(29,885)
|
|
(2,300,901)
|
|
Options expired
|
|
(59,124)
|
|
(2,647,085)
|
|
Options outstanding, January 31,2013
|
|
5,740
|
|
$306,244
|
|
|
|
|
|
|
|
(k) Fair Value MeasurementSee Note 1(b) in Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
Dividend, Interest & Premium Strategy
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
Quoted Prices
|
|
Level 2
Other Significant
Observable
Inputs
|
|
Level 3
Significant
Unobservable
Inputs
|
|
Value at
1/31/13
|
|
Investments in Securities Assets
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
$1,217,346,332
|
|
|
|
|
|
$1,217,346,332
|
|
Convertible Bonds & Notes
|
|
|
|
$306,297,166
|
|
|
|
306,297,166
|
|
Convertible Preferred Stock:
|
|
|
|
|
|
|
|
|
|
Airlines
|
|
|
|
7,063,632
|
|
|
|
7,063,632
|
|
Capital Markets
|
|
|
|
11,327,296
|
|
|
|
11,327,296
|
|
Health Care Providers & Services
|
|
|
|
2,781,875
|
|
|
|
2,781,875
|
|
Oil, Gas & Consumable Fuels
|
|
16,252,227
|
|
9,699,935
|
|
|
|
25,952,162
|
|
Road & Rail
|
|
|
|
13,907,511
|
|
|
|
13,907,511
|
|
All Other
|
|
84,689,600
|
|
|
|
|
|
84,689,600
|
|
Corporate Bonds & Notes
|
|
|
|
7,081,181
|
|
|
|
7,081,181
|
|
Short-Term Investments
|
|
|
|
59,412,648
|
|
|
|
59,412,648
|
|
Total Investments in Securities Assets
|
|
$1,318,288,159
|
|
$417,571,244
|
|
|
|
$1,735,859,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
23
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Schedule of Investments
January 31, 2013 (continued)
|
|
Level 1
Quoted Prices
|
|
Level 2
Other Significant
Observable
Inputs
|
|
Level 3
Significant
Unobservable
Inputs
|
|
Value at
1/31/13
|
|
Investments in Securities Liabilities
|
|
|
|
|
|
|
|
|
|
Call Options Written, at value:
|
|
|
|
|
|
|
|
|
|
Market price
|
|
$(18,641,190)
|
|
$(17,252,125)
|
|
|
|
$(35,893,315)
|
|
Totals
|
|
$1,299,646,969
|
|
$400,319,119
|
|
|
|
$1,699,966,088
|
|
|
|
|
|
|
|
|
|
|
|
At January 31, 2013, the Fund had no transfers between Levels 1 and 2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity & Convertible Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 Quoted Prices
|
|
Level 2
Other Significant
Observable
Inputs
|
|
Level 3
Significant
Unobservable
Inputs
|
|
Value at
1/31/13
|
|
Investments in Securities Assets
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
$314,128,686
|
|
|
|
|
|
$314,128,686
|
|
Convertible Preferred Stock:
|
|
|
|
|
|
|
|
|
|
Airlines
|
|
|
|
$3,242,151
|
|
|
|
3,242,151
|
|
Capital Markets
|
|
|
|
3,066,794
|
|
$1,895,942
|
|
4,962,736
|
|
Commercial Banks
|
|
2,259,075
|
|
2,567,258
|
|
|
|
4,826,333
|
|
Commercial Services & Supplies
|
|
|
|
2,192,872
|
|
|
|
2,192,872
|
|
Health Care Providers & Services
|
|
|
|
3,265,921
|
|
|
|
3,265,921
|
|
Oil, Gas & Consumable Fuels
|
|
2,030,457
|
|
2,314,217
|
|
|
|
4,344,674
|
|
Professional Services
|
|
|
|
2,707,695
|
|
|
|
2,707,695
|
|
Road & Rail
|
|
|
|
3,090,530
|
|
|
|
3,090,530
|
|
All Other
|
|
37,997,310
|
|
|
|
|
|
37,997,310
|
|
Convertible Bonds & Notes
|
|
|
|
60,274,272
|
|
|
|
60,274,272
|
|
Corporate Bonds & Notes
|
|
|
|
3,613,170
|
|
|
|
3,613,170
|
|
Short-Term Investment
|
|
|
|
1,968,959
|
|
|
|
1,968,959
|
|
Total Investments in Securities Assets
|
|
$356,415,528
|
|
$88,303,839
|
|
$1,895,942
|
|
$446,615,309
|
|
Investments in Securities Liabilities
|
|
|
|
|
|
|
|
|
|
Call Options Written, at value:
|
|
|
|
|
|
|
|
|
|
Market price
|
|
$(316,523)
|
|
|
|
|
|
$(316,523)
|
|
Totals
|
|
$356,099,005
|
|
$88,303,839
|
|
$1,895,942
|
|
$446,298,786
|
|
|
|
|
|
|
At January 31, 2013, the Fund had no transfers between Levels 1 and 2.
|
|
|
|
|
|
|
|
|
|
A roll forward of fair value measurements using significant unobservable inputs (Level 3) for Equity & Convertible Income for the year ended January 31, 2013, was as follows:
|
|
|
|
|
|
Beginning
Balance 1/31/12
|
|
Purchases
|
|
Sales
|
|
Accrued
Discounts/
(Premiums)
|
|
Net
Realized
Gain (Loss)
|
|
Net
Change
in Unrealized
Appreciation/
(Depreciation)
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Ending
Balance
1/31/13
|
|
Investments in Securities Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets
|
$744,820
|
|
$1,610,522
|
|
$(307,532)
|
|
|
|
$(4,060,561)
|
|
$3,908,693
|
|
|
|
|
|
$1,895,942
|
|
Totals
|
|
$744,820
|
|
$1,610,522
|
|
$(307,532)
|
|
|
|
$(4,060,561)
|
|
$3,908,693
|
|
|
|
|
|
$1,895,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
24
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Schedule of Investments
January 31, 2013 (continued)
The net change in unrealized appreciation/depreciation of Level 3 investments, which the Fund held at Janaury 31, 2013, was $(151,868). Net change in unrealized appreciation/depreciation is reflected on the Statements of Operations.
The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized as Level 3 at January 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
at 1/31/13
|
|
Valuaton
Technique Used
|
|
Unobservable
Inputs
|
|
Input Values
|
|
Investments in Securities Assets
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock:
|
|
|
|
|
|
|
|
|
|
Capital Markets
|
|
$1,458,654
|
|
Third-Party pricing vendor
|
|
Single Broker Quote
|
|
$34.94
|
|
|
|
437,288
|
|
Analytical model
|
|
Discount factor
|
|
41.29%
|
|
|
|
|
|
|
|
|
|
|
|
(l) The following is a summary of the fair valuation of the Funds derivative instruments categorized by risk exposure:
|
|
|
|
|
|
|
|
|
|
|
|
The effect of derivatives on the Funds Statements of Assets and Liabilities at January 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Location
|
|
AllianzGI NFJ Dividend,
Interest & Premium
Strategy
|
|
AllianzGI Equity &
Convertible
Income
|
|
Liability derivatives:
|
|
|
|
|
|
Call options written, at value, Market Price
|
|
$(35,893,315)
|
|
$(316,523)
|
|
|
|
|
|
|
|
The effect of derivatives on the Funds Statements of Operations for the year ended January 31, 2013:
|
|
|
|
|
|
|
|
Location
|
|
AllianzGI NFJ Dividend,
Interest & Premium
Strategy
|
|
AllianzGI Equity &
Convertible
Income
|
|
Net realized gain (loss) on:
|
|
|
|
|
|
Investments (options purchased), Market Price
|
|
$(2,842,000)
|
|
|
|
Call options written, Market Price
|
|
(74,877,185)
|
|
$(1,804,363)
|
|
Total
|
|
$(77,719,185)
|
|
$(1,804,363)
|
|
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation of:
|
|
|
|
|
|
Call options written, Market Price
|
|
$(9,245,373)
|
|
$(136,087)
|
|
|
|
The average volume (measured at each fiscal quarter end) of derivative activity during the year ended January 31, 2013:
|
|
|
|
|
|
|
|
Call Options
Written Contracts
|
|
Dividend, Interest & Premium Strategy
|
|
|
|
57,685
|
|
Equity & Convertible Income
|
|
|
|
6,168
|
|
|
|
|
|
|
|
|
|
Glossary:
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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25
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Statements of Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend,
Interest &
Premium Strategy
|
|
Equity &
Convertible Income
|
|
Assets:
|
|
|
|
|
|
Investments, at value (cost-$1,846,340,057 and $527,965,428, respectively)
|
|
$1,735,859,403
|
|
$446,615,309
|
|
Receivable for investments sold
|
|
25,209,913
|
|
5,208,407
|
|
Dividends and interest receivable
|
|
4,799,321
|
|
1,278,533
|
|
Prepaid expenses
|
|
16,671
|
|
5,783
|
|
Total Assets
|
|
1,765,885,308
|
|
453,108,032
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Call options written, at value (premiums received-$14,374,714 and $306,244, respectively)
|
|
35,893,315
|
|
316,523
|
|
Payable for investments purchased
|
|
35,518,572
|
|
3,902,202
|
|
Investment management fees payable
|
|
1,270,266
|
|
372,799
|
|
Accrued expenses
|
|
544,589
|
|
132,922
|
|
Total Liabilities
|
|
73,226,742
|
|
4,724,446
|
|
Net Assets
|
|
$1,692,658,566
|
|
$448,383,586
|
|
|
|
|
|
|
|
Composition of Net Assets:
|
|
|
|
|
|
Common Stock:
|
|
|
|
|
|
Par value ($0.00001 per share applicable to 94,524,325 and 22,304,189 shares issued and outstanding, respectively)
|
|
$945
|
|
$223
|
|
Paid-in-capital in excess of par
|
|
2,006,583,618
|
|
517,419,139
|
|
Undistributed (dividends in excess of) net investment income
|
|
(3,494,252)
|
|
3,187,252
|
|
Accumulated net realized gain (loss)
|
|
(178,432,490)
|
|
9,137,370
|
|
Net unrealized depreciation
|
|
(131,999,255)
|
|
(81,360,398)
|
|
Net Assets
|
|
$1,692,658,566
|
|
$448,383,586
|
|
Net Asset Value Per Share
|
|
$17.91
|
|
$20.10
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
26
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13 |
See accompanying Notes to Financial Statements
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Statements of Operations
Year ended January 31, 2013
|
|
|
|
|
|
|
|
Dividend,
Interest &
Premium Strategy
|
|
Equity &
Convertible Income
|
|
Investment Income:
|
|
|
|
|
|
Dividends (net of foreign withholding taxes of $1,039,441 and $10,669, respectively)
|
|
$55,128,052
|
|
$10,445,410
|
|
Interest
|
|
10,723,364
|
|
3,043,521
|
|
Total Investment Income
|
|
65,851,416
|
|
13,488,931
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Investment management
|
|
15,034,292
|
|
4,283,126
|
|
Custodian and accounting agent
|
|
330,672
|
|
128,374
|
|
Shareholder communications
|
|
297,550
|
|
71,736
|
|
Directors
|
|
169,574
|
|
32,130
|
|
Audit and tax services
|
|
89,503
|
|
75,881
|
|
New York Stock Exchange listing
|
|
74,721
|
|
21,250
|
|
Legal
|
|
49,186
|
|
15,156
|
|
Insurance
|
|
45,321
|
|
13,369
|
|
Transfer agent
|
|
33,090
|
|
34,606
|
|
Miscellaneous
|
|
38,507
|
|
3,630
|
|
Total expenses
|
|
16,162,416
|
|
4,679,258
|
|
|
|
|
|
|
|
Net Investment Income
|
|
49,689,000
|
|
8,809,673
|
|
|
|
|
|
|
|
Realized and Change in Unrealized Gain (Loss):
|
|
|
|
|
|
Net realized gain (loss) on:
|
|
|
|
|
|
Investments
|
|
86,648,055
|
|
16,698,604
|
|
Call options written
|
|
(74,877,185)
|
|
(1,804,363)
|
|
Net change in unrealized appreciation/depreciation of: Investments
|
|
103,817,427
|
|
19,701,587
|
|
Call options written
|
|
(9,245,373)
|
|
(136,087)
|
|
Net realized and change in unrealized gain
|
|
106,342,924
|
|
34,459,741
|
|
Net Increase in Net Assets Resulting from Investment Operations
|
|
$156,031,924
|
|
$43,269,414
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
See accompanying Notes to Financial Statements
| 1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
27
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Statements of Changes in Net Assets
|
|
Dividend, Interest & Premium Strategy:
|
|
|
|
|
|
|
|
|
|
Year ended
January 31, 2013
|
|
Year ended
January 31, 2012
|
|
Investment Operations:
|
|
|
|
|
|
Net investment income
|
|
$49,689,000
|
|
$49,007,107
|
|
Net realized gain
|
|
11,770,870
|
|
109,901,630
|
|
Net change in unrealized appreciation/depreciation
|
|
94,572,054
|
|
(89,666,795)
|
|
Net increase in net assets resulting from investment operations
|
|
156,031,924
|
|
69,241,942
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders from:
|
|
|
|
|
|
Net investment income
|
|
(62,994,233)
|
|
(52,363,547)
|
|
Net realized gains
|
|
|
|
(80,500,219)
|
|
Return of capital
|
|
(107,149,551)
|
|
(37,280,018)
|
|
Total dividends and distributions to shareholders
|
|
(170,143,784)
|
|
(170,143,784)
|
|
Total decrease in net assets
|
|
(14,111,860)
|
|
(100,901,842)
|
|
|
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
Beginning of year
|
|
1,706,770,426
|
|
1,807,672,268
|
|
End of year (including dividends in excess of net investment income of $(3,494,252) and $(3,901,317), respectively)
|
|
$1,692,658,566
|
|
$1,706,770,426
|
|
|
|
|
|
Equity & Convertible Income:
|
|
|
|
|
|
Year ended
January 31, 2013
|
|
Year ended
January 31, 2012
|
|
Investment Operations:
|
|
|
|
|
|
Net investment income
|
|
$8,809,673
|
|
$8,034,567
|
|
Net realized gain
|
|
14,894,241
|
|
16,022,292
|
|
Net change in unrealized appreciation/depreciation
|
|
19,565,500
|
|
(21,387,683)
|
|
Net increase in net assets resulting from investment operations
|
|
43,269,414
|
|
2,669,176
|
|
|
|
|
|
|
|
Dividends and Distributions to Shareholders from:
|
|
|
|
|
|
Net investment income
|
|
(6,245,173)
|
|
(10,189,382)
|
|
Net realized gains
|
|
(18,735,519)
|
|
(14,791,310)
|
|
Total dividends and distributions to shareholders
|
|
(24,980,692)
|
|
(24,980,692)
|
|
Total increase (decrease) in net assets
|
|
18,288,722
|
|
(22,311,516)
|
|
|
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
Beginning of year
|
|
430,094,864
|
|
452,406,380
|
|
End of year (including undistributed (dividends in excess of) net investment income of $3,187,252 and $(515,800), respectively)
|
|
$448,383,586
|
|
$430,094,864
|
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
28
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13 |
See accompanying Notes to Financial Statements
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
1. Organization and Significant Accounting Policies
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund and AllianzGI Equity & Convertible Income Fund, formerly known as NFJ Dividend, Interest & Premium Strategy Fund and AGIC Equity & Convertible Income Fund, respectively, each a Fund and (collectively referred to as the Funds) were organized as Massachusetts business trusts on August 20, 2003 and December 12, 2006, respectively. Prior to commencing operations on February 28, 2005 and February 27, 2007, respectively, the Funds had no operations other than matters relating to their organization and registration as diversified, closed-end management investment companies under the Investment Company Act of 1940 and the rules and regulations thereunder, as amended. Allianz Global Investors Fund Management LLC (the Investment Manager) serves as the Funds investment manager and is an indirect wholly-owned subsidiary of Allianz Asset Management of America L.P., (AAM). AAM is an indirect, wholly-owned subsidiary of Allianz SE, a publicly traded European insurance and financial services company. Each Fund has authorized an unlimited amount of common shares with $0.00001 par value.
Dividend, Interest & Premium Strategys primary investment objective is to seek current income and gains, with a secondary objective of long-term capital appreciation. Under normal market conditions the Fund pursues its investment objectives by investing in a diversified portfolio of dividend-paying common stocks and income-producing convertible securities. The Fund will also employ a strategy of writing (selling) call options on equity indexes in an attempt to generate gains from option premiums.
Equity & Convertible Incomes investment objective is to seek total return comprised of capital appreciation, current income and gains. Under normal market conditions the Fund pursues its objective by investing in a diversified portfolio of equity securities and income-producing convertible securities. The Fund will also employ a strategy of writing (selling) call options on the equity securities held by the Fund.
There can be no assurance that the Funds will meet their stated objectives.
The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Funds financial statements. Actual results could differ from those estimates.
In the normal course of business, the Funds enter into contracts that contain a variety of representations that provide general indemnifications. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update No. 2011-11, Disclosures About Offsetting Assets and Liabilities, which requires enhanced disclosures that will enable users to evaluate the effect or potential effect of netting arrangements on an entitys financial position, including the effect or potential effect of rights of setoff associated with certain financial and derivative instruments. The amendments are effective for fiscal years beginning on or after January 1, 2013. Funds management is currently evaluating the effect that the guidance may have on the Funds financial statements.
The following is a summary of significant accounting policies consistently followed by the Funds:
(a) Valuation of Investments
Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Market value is generally determined on the basis of last reported sales prices, or if no sales are reported, on the basis of quotes obtained from a quotation reporting system, established market makers, or independent pricing services. The Funds investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the mean between the last quoted bid and ask price. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments of securities with similar characteristics.
The Board of Trustees (the Board) has adopted procedures for valuing portfolio securities and other financial derivative instruments in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Investment Manager, NFJ Investment Group LLC and Allianz Global Investors U.S. LLC (the Sub-Advisers), affiliates of the Investment Manager. The Funds Valuation Committee was established by the Board to oversee the implementation of the Funds valuation methods and to make fair value determinations on behalf of the Board, as instructed. The Sub-Advisers monitor the continued appropriateness of methods applied and determines if adjustments should be made in light of market changes, events affecting the issuer, or other factors. If
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
29
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
1. Organization and Significant Accounting Policies
(continued)
the Sub-Advisers determine that a valuation method may no longer be appropriate, another valuation method may be selected, or the Valuation Committee will be convened to consider the matter and take any appropriate action in accordance with procedures set forth by the Board. The Board shall review the appropriateness of the valuation methods and these methods may be amended or supplemented from time to time by the Valuation Committee.
Synthetic convertible securities are valued based on quotations obtained from unaffiliated brokers who are the principal market-makers in such securities. Such valuations are derived by the brokers from proprietary models which are generally based on readily available market information including valuations of the common stock underlying the synthetic security.
Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days.
The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold, and these differences could be material to the Funds financial statements. Each Funds net asset value (NAV) is normally determined as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open for business.
(b) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the exit price) in an orderly transaction between market participants. The three levels of the fair value hierarchy are described below:
·
Level 1 quoted prices in active markets for identical investments that the Funds have the ability to access
·
Level 2 valuations based on other significant observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates or other market corroborated inputs.
·
Level 3 valuations based on significant unobservable inputs (including the Sub-Advisers or Valuation Committees own assumptions and single broker quotes in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following are certain inputs and techniques that the Funds generally use to evaluate how to classify each major category of assets and liabilities for Level 2 and Level 3, in accordance with Generally Accepted Accounting Principles (GAAP).
Equity Securities (Common and Preferred Stock)
Equity securities traded in inactive markets are valued using inputs which include broker-dealer quotes, recently executed transactions adjusted for changes in the benchmark index, or evaluated price quotes received from independent pricing services that take into account the integrity of the market sector and issuer, the individual characteristics of the security, and information received from broker-dealers and other market sources pertaining to the issuer or security. To the extent that these inputs are observable, the values of equity securities are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Convertible Bonds & Notes
Convertible bonds & notes are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, the activity of the underlying equities, listed bonds and sector-specific trends. To the extent that these inputs are observable, the values of convertible bonds & notes are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Corporate Bonds & Notes
Corporate bonds & notes are generally comprised of two main categories: investment grade bonds and high yield bonds. Investment grade bonds are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations, live trading levels, recently executed transactions in securities of the issuer or comparable issuers, and option adjusted spread models that include base curve and spread curve inputs. Adjustments to individual bonds can be applied to recognize trading differences compared to other bonds issued by the same issuer. High yield bonds are valued by independent pricing services based primarily on broker-dealer
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
30
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
1. Organization and Significant Accounting Policies
(continued)
quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, and the activity of the underlying equities, listed bonds and sector-specific trends. To the extent that these inputs are observable, the values of corporate bonds & notes are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
Option Contracts
Option contracts traded over the counter (OTC) are valued by independent pricing services based on pricing models that incorporate various inputs such as interest rates, credit spreads, currency exchange rates and volatility measurements for in-the-money, at-the-money, and out-of-the-money contracts based on a given strike price. To the extent that these inputs are observable, the values of OTC option contracts are categorized as Level 2. To the extent that these inputs are unobservable the values are categorized as Level 3.
The valuation techiniques used by the Funds to measure fair value during the year ended January 31, 2013 were intended to maximize the use of observable inputs and minimize the use of unobservable inputs.
The Funds policy is to recognize transfers between levels at the end of the reporting period. An investment assets or liabilitys level within the fair value hierarchy is based on the lowest level input, individually or in aggregate, that is significant to fair value measurement. The objective of fair value measurement remains the same even when there is a significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation techniques used. Assets categorized as Level 1 or 2 as of period end may have been transferred between Levels 1 and 2 since the prior period due to changes in the valuation method utilized in valuing the investments.
(c) Investment Transactions and Investment Income
Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on an identified cost basis. Interest income adjusted for the accretion of discount and amortization of premium is recorded on an accrual basis. Discounts or premiums on debt securities purchased are accreted or amortized, respectively, to interest income. Conversion premium is not amortized. Dividend income is recorded on the ex-dividend date. Payments received from certain investments may be comprised of dividends, realized gains and return of capital. These payments may initially be recorded as dividend income and may subsequently be reclassified as realized gains and/or return of capital upon receipt of information from the issuer. Payments received on synthetic convertible securities are generally included in dividends.
(d) Federal Income Taxes
The Funds intend to distribute all of their taxable income and to comply with the other requirements of Subchapter M of the U.S. Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no provision for U.S. federal income taxes is required.
Accounting for uncertainty in income taxes establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Funds management has determined that its evaluation has resulted in no material impact on the Funds financial statements at January 31, 2013. The Funds federal tax returns for the prior three years remain subject to examination by the Internal Revenue Service.
(e) Dividends and Distributions
The Funds declare quarterly dividends and distributions from net investment income and gains from option premiums and the sale of portfolio securities. The Funds record dividends and distributions on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains is determined in accordance with federal income tax regulations, which may differ from GAAP. These book-tax differences are considered either temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal income tax treatment. Temporary differences do not require reclassification. To the extent dividends and/or distributions exceed current and accumulated earnings and profits for federal income tax purposes, they are reported as dividends and/or distributions to shareholders from return of capital.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
31
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
1. Organization and Significant Accounting Policies
(continued)
(f) Convertible Securities
It is the Funds policy to invest a portion of their assets in convertible securities. Although convertible securities do derive part of their value from the securities into which they are convertible, they are not considered derivative financial instruments. However, certain of the Funds investments in convertible securities include features which render them more sensitive to price changes in their underlying securities. The value of structured/synthetic convertible securities can be affected by interest rate changes and credit risks of the issuer. Such securities may be structured in ways that limit their potential for capital appreciation and the entire value of the security may be at risk of loss depending on the performance of the underlying equity security. Consequently, the Funds are exposed to greater downside risk than traditional convertible securities, but still less than that of the underlying stock.
2. Principal Risks
In the normal course of business, the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to, among other things, changes in the market (market risk) or failure of the other party to a transaction to perform (counterparty risk). The Funds also are exposed to other risks such as, but not limited to, interest rate, credit and leverage risks.
Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the values of certain fixed income securities held by the Funds are likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is used primarily as a measure of the sensitivity of a fixed income securitys market price to interest rate (
i.e
. yield) movements.
The Funds are exposed to credit risk, which is the risk of losing money if the issuer or guarantor of a fixed income security is unable or unwilling, or is perceived (whether by market participants, rating agencies, pricing services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.
The market values of securities may decline due to general market conditions (market risk) which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity-related investments generally have greater market price volatility than fixed income securities.
The Funds are exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss to the Funds could exceed the value of the financial assets recorded in the Funds financial statements. Financial assets, which potentially expose the Funds to counterparty risk, consist principally of cash due from counterparties and investments. The Sub-Advisers seek to minimize the Funds counterparty risk by performing reviews of each counterparty and by minimizing concentration of counterparty risk by undertaking transactions with multiple customers and counterparties on recognized and reputable exchanges. Delivery of securities sold is only made once the Funds have received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
The Funds are exposed to risks associated with leverage. Leverage may cause the value of the Funds shares to be more volatile than if the Funds did not use leverage. This is because leverage tends to exaggerate the effect of any increase or decrease in the value of the Funds portfolio securities. The Funds may engage in transactions or purchase instruments that give rise to forms of leverage. In addition, to the extend the Funds employ leverage, dividend and interest costs may not be recovered by any appreciation of the securities purchased with the leverage proceeds and could exceed the Funds investment returns, resulting in greater losses.
Equity & Convertible Income holds a convertible security in escrow with a Lehman Brothers entity as counterparty at the time the relevant Lehman Brothers entity filed for protection or convertible security was placed in administration. This security is valued using a discounted amount on a previous sale price.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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32
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| 1.31.13
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|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
3. Financial Derivative Instruments
Disclosure about derivatives and hedging activities requires qualitative disclosure regarding objectives and strategies for using derivatives, quantitative disclosure about fair value amounts of gains and losses on derivatives, and disclosure about credit-risk related contingent features in derivative agreements. The disclosure requirements distinguish between derivatives which are accounted for as hedges, and those that do not qualify for such accounting. Although the Funds sometimes use derivatives for hedging purposes, the Funds reflect derivatives at fair value and recognize changes in fair value through the Funds Statements of Operations, and such derivatives do not qualify for hedge accounting treatment.
Option Transactions
The Funds write (sell) call options on securities and indices to earn premiums, for hedging purposes, risk management purposes or otherwise as part of their investment strategies. When an option is written, the premium received is recorded as an asset with an equal liability that is subsequently marked to market to reflect the market value of the option written. These liabilities are reflected as options written in the Funds Statements of Assets and Liabilities. Premiums received from writing options which expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transactions as a realized loss. If a call option written is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of a written option could result in the Funds purchasing a security at a price different from its current market value.
4. Investment Manager/Sub-Advisers
Each Fund has an Investment Management Agreement (each an Agreement) with the Investment Manager. Subject to the supervision of the Funds Board of Trustees, the Investment Manager is responsible for managing, either directly or through others selected by it, the Funds investment activities, business affairs and administrative matters. Pursuant to its Agreement, Dividend, Interest & Premium Strategy pays the Investment Manager an annual fee, payable monthly, at the annual rate of 0.90% of its average daily total managed assets. Pursuant to its Agreement, Equity & Convertible Income pays the Investment Manager an annual fee, payable monthly, at the annual rate of 1.00% of its average daily total managed assets. Total managed assets refer to the total assets of each Fund (including forms of leverage that may be outstanding) minus accrued liabilities (other than liabilities representing leverage).
The Investment Manager has retained the Sub-Advisers to manage Dividend, Interest & Premium Strategy. NFJ Investment Group LLC manages the equity component and Allianz Global Investors U.S. LLC manages the convertible and index option strategy components. On January 1, 2013, Allianz Global Investors Capital LLC changed its name to Allianz Global Investors U.S. LLC. Allianz Global Investors U.S. LLC serves as the sole sub-adviser to Equity & Convertible Income. Pursuant to Sub-Advisory Agreements, the Investment Manager, and not the Funds, pays a portion of the fees it receives as Investment Manager to the Sub-Advisers in return for their services.
5. Investments in Securities
For the year ended January 31, 2013, purchases and sales of investments, other than short-term securities, were as follows:
|
|
Dividend,
Interest & Premium
Strategy
|
|
Equity &
Convertible
Income
|
Purchases
|
|
$761,384,605
|
|
$518,035,759
|
Sales
|
|
978,869,401
|
|
532,215,062
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
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33
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
6. Income Tax Information
The tax character of dividends and distributions paid were:
|
|
Year ended
January 31, 2013
|
|
Year ended
January 31, 2012
|
|
Year ended
January 31, 2013
|
|
Year ended
January 31, 2012
|
|
Year ended
January 31, 2013
|
|
Year ended
January 31, 2012
|
|
|
Ordinary
Income
(1)
|
|
Ordinary
Income
(1)
|
|
Long-Term
Capital Gains
|
|
Long-Term
Capital Gains
|
|
Return of
Capital
|
|
Return of
Capital
|
Dividend, Interest & Premium Strategy
|
|
$62,994,233
|
|
$132,863,766
|
|
|
|
|
|
$107,149,551
|
|
$37,280,018
|
Equity & Convertible Income
|
|
24,980,692
|
|
24,274,754
|
|
|
|
$705,938
|
|
|
|
|
(1) Includes short-term gains, if any.
At January 31, 2013, the tax character of distributable earnings were as follows.
|
|
Ordinary
Income
|
Dividend, Interest & Premium Strategy
|
|
|
Equity & Convertible Income
|
|
$13,689,168
|
Under the Regulated Investment Company Modernization Act of 2010, the Funds will be permitted to carryforward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term capital losses.
At January 31, 2013, Dividend, Interest & Premium Strategy had a capital loss carryforward of $178,206,717, which will expire in 2018.
For the year ended January 31, 2013, Dividend, Interest & Premium Strategy utilized $11,164,271 of available capital loss carryforwards. Future realized gains offset by the capital loss carryforwards are not required to be distributed to shareholders. However, under the Funds distribution policy, as described in Note 1 (e), such gains may be distributed to shareholders in the year gains are realized. Any gains distributed may be taxable to shareholders as ordinary income.
In accordance with U.S. Treasury regulations, Dividend Interest & Premium Strategy Fund elected to defer realized short-term capital loss of $3,904,443 and long-term capital loss of $6,352,274 arising after October 31, 2012.
In accordance with U.S. Treasury regulations, Equity & Convertible Income elected to defer realized Long-term capital losses of $625,611 arising after October 31, 2012.
For the fiscal year ended January 31, 2013, permanent book tax adjustments were as follows:
|
|
Dividends
in Excess of
Net Investment
Income
|
|
Accumulated
Net Realized
Gain (Loss)
|
|
Paid-in-Capital
in Excess of Par
|
Dividend, Interest & Premium Strategy
(a)(b)(c)
|
|
$13,712,298
|
|
$(2,832,633)
|
|
$(10,879,665)
|
Equity & Convertible Income
(a)
|
|
1,138,552
|
|
(1,146,973)
|
|
8,421
|
These permanent book-tax differences were primarily attributable to:
(a) Treatment of convertible securities
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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|
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AllianzGI Equity & Convertible Income Fund Annual Report
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|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Notes to Financial Statements
6. Income Tax Information
(continued)
(b) Reclassification of taxable overdistributions
(c) Treatment of investments in Real Estate Investment Trusts
Net investment income, net realized gains or losses and net assets were not affected by these adjustments.
At January 31, 2013, the aggregate cost basis and the net unrealized appreciation/depreciation of investments for federal income tax purposes were as follows:
|
|
Federal Tax
Cost Basis
(2)
|
|
Unrealized
Appreciation
|
|
Unrealized
Depreciation
|
|
Net
Unrealized
Depreciation
|
Dividend, Interest & Premium Strategy
|
|
$1,850,350,878
|
|
$123,528,544
|
|
$(238,020,019)
|
|
$(114,491,475)
|
Equity & Convertible Income
|
|
528,538,706
|
|
6,464,574
|
|
(88,387,971)
|
|
(81,923,397)
|
(2) Differences between book and tax cost basis are primarily attributable to the differing treatment of convertible securities, investments in Real Estate Investment Trusts, and wash sale loss deferrals.
7. Transfer Agent Change
American Stock Transfer & Trust Company, LLC (AST) assumed responsibility as the Funds transfer agent effective September 17, 2012 (the Effective Date). The amended Dividend Reinvestment Plan (the Plan) and ASTs role as transfer agent for Participants under the Plan commenced as of the Effective Date.
8. Subsequent Events
On March 8, 2013 quarterly dividends were declared to shareholders, payable March 28, 2013 to shareholders of record on March 18, 2013 as follows:
Dividend, Interest & Premium Strategy
|
$0.45 per share
|
Equity & Convertible Income
|
$0.28 per share
|
There were no other subsequent events that require recognition or disclosure. In preparing these financial statements the Funds management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
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|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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35
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund Financial Highlights
For a share outstanding throughout each year:
|
|
|
|
|
Year ended January 31,
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
Net asset value, beginning of year
|
|
$18.06
|
|
$19.12
|
|
$17.30
|
|
$14.12
|
|
$23.84
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
0.53
|
|
0.52
|
|
0.64
|
|
0.61
|
|
0.89
|
Net realized and change in unrealized gain (loss) on investments and call options written
|
|
1.12
|
|
0.22
|
|
2.08
|
|
3.17
|
|
(8.63)
|
Total from investment operations
|
|
1.65
|
|
0.74
|
|
2.72
|
|
3.78
|
|
(7.74)
|
Dividends and Distributions to Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(0.67)
|
|
(0.56)
|
|
(0.90)
|
|
(0.60)
|
|
(0.87)
|
Net realized gains
|
|
|
|
(0.85)
|
|
|
|
|
|
(1.11)
|
Return of capital
|
|
(1.13)
|
|
(0.39)
|
|
|
|
|
|
|
Total dividends and distributions to shareholders
|
|
(1.80)
|
|
(1.80)
|
|
(0.90)
|
|
(0.60)
|
|
(1.98)
|
Net asset value, end of year
|
|
$17.91
|
|
$18.06
|
|
$19.12
|
|
$17.30
|
|
$14.12
|
Market price, end of year
|
|
$16.65
|
|
$17.30
|
|
$17.60
|
|
$14.50
|
|
$12.97
|
Total Investment Return
(1)
|
|
6.83%
|
|
9.07%
|
|
28.20%
|
|
17.31%
|
|
(37.93)%
|
RATIOS/SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (000s)
|
|
$1,692,659
|
|
$1,706,770
|
|
$1,807,672
|
|
$1,635,728
|
|
$1,334,735
|
Ratio of expenses to average net assets
|
|
0.97%
|
|
0.97%
|
|
0.97%
|
|
0.98%
|
|
0.97%
|
Ratio of net investment income to average net assets
|
|
2.97%
|
|
2.83%
|
|
3.54%
|
|
3.95%
|
|
4.40%
|
Portfolio turnover rate
|
|
46%
|
|
50%
|
|
65%
|
|
57%
|
|
48%
|
(1) Total investment return is calculated assuming a purchase of a share of common stock at the market price on the first day and a sale of a share of common stock at the market price on the last day of each year reported. Income dividends, capital gain and return of capital distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
36
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13 |
See accompanying Notes to Financial Statements
|
|
AllianzGI Equity & Convertible Income Fund Financial Highlights
For a share outstanding throughout each year:
|
|
|
|
|
Year ended January 31,
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
Net asset value, beginning of year
|
|
$19.28
|
|
$20.28
|
|
$17.58
|
|
$13.41
|
|
$23.44
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
0.39
|
|
0.36
|
|
0.40
|
|
0.40
|
|
0.67
|
Net realized and change in unrealized gain (loss) on investments and call options written
|
|
1.55
|
|
(0.24)
|
|
3.42
|
|
4.89
|
|
(8.39)
|
Total from investment operations
|
|
1.94
|
|
0.12
|
|
3.82
|
|
5.29
|
|
(7.72)
|
Dividends and Distributions to Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(0.28)
|
|
(0.46)
|
|
(0.41)
|
|
(0.99)
|
|
(0.65)
|
Net realized gains
|
|
(0.84)
|
|
(0.66)
|
|
(0.71)
|
|
|
|
(1.66)
|
Return of capital
|
|
|
|
|
|
|
|
(0.13)
|
|
|
Total dividends and distributions to shareholders
|
|
(1.12)
|
|
(1.12)
|
|
(1.12)
|
|
(1.12)
|
|
(2.31)
|
Net asset value, end of year
|
|
$20.10
|
|
$19.28
|
|
$20.28
|
|
$17.58
|
|
$13.41
|
Market price, end of year
|
|
$17.91
|
|
$17.22
|
|
$19.30
|
|
$15.83
|
|
$13.10
|
Total Investment Return
(1)
|
|
10.92%
|
|
(4.85)%
|
|
30.16%
|
|
30.75%
|
|
(31.75)%
|
RATIOS/SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (000s)
|
|
$448,384
|
|
$430,095
|
|
$452,406
|
|
$392,092
|
|
$299,126
|
Ratio of expenses to average net assets
|
|
1.09%
|
|
1.08%
|
|
1.10%
|
|
1.10%
|
|
1.07%
|
Ratio of net investment income to average net assets
|
|
2.06%
|
|
1.87%
|
|
2.16%
|
|
2.54%
|
|
3.42%
|
Portfolio turnover rate
|
|
122%
|
|
118%
|
|
168%
|
|
94%
|
|
86%
|
(1) Total investment return is calculated assuming a purchase of a share of common stock at the market price on the first day and a sale of a share of common stock at the market price on the last day of each period reported. Income dividends, capital gain and return of capital distributions, if any are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
See accompanying Notes to Financial Statements
| 1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
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37
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
(formerly NFJ Dividend, Interest & Premium Strategy Fund)
AllianzGI Equity & Convertible Income Fund
(formerly AGIC Equity & Convertible Income Fund)
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AllianzGI NFJ Dividend, Interest & Premium Strategy Fund and AllianzGI Equity & Convertible Income Fund (the Funds) at January 31, 2013, the results of each of their operations for the year then ended, changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as financial statements) are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at January 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
March 22, 2013
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
38
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund Tax Information
(unaudited)
Subchapter M of the Internal Revenue Code of 1986, as amended, requires the Funds to advise shareholders as to the federal tax status of dividends and distributions received by shareholders during such tax year.
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003, the following percentages or ordinary dividends paid during the fiscal year ended January 31, 2013, are designated as qualified dividend income (or the maximum amount allowable):
Dividend, Interest & Premium Strategy
|
84.13%
|
Equity & Convertible Income
|
36.75%
|
Corporate shareholders are generally entitled to take the dividend received deduction on the portion of a Funds dividend distribution that qualifies under tax law. The percentage of the following Funds ordinary income dividends paid during the fiscal year ended January 31, 2013, that qualify for the corporate dividend received deduction is set below(or the maximum amount allowable):
Dividend, Interest & Premium Strategy
|
66.40%
|
Equity & Convertible Income
|
35.67%
|
Since the Funds tax year is not the calendar year, another notification will be sent with respect to calendar year 2013. In January 2014, shareholders will be advised on IRS Form 1099 DIV as to the federal tax status of dividends and distributions received during calendar 2013. The amount that will be reported will be the amount to use on the shareholders 2013 federal income tax returns and may differ from the amount which must be reported in connection with the Funds tax year ended January 31, 2013. Shareholders are advised to consult their tax advisers as to the federal, state and local tax status of the dividend income received from the Funds.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
|
1.31.13 | AllianzGI Equity & Convertible Income Fund Annual Report
|
39
|
|
Annual Shareholder
Meeting Results/
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
|
Proxy Voting Policies &
Procedures
(unaudited)
|
Annual Shareholder Meeting Results:
The Funds held their joint annual meeting of shareholders on July 19, 2012. Shareholders voted as indicated below:
|
|
Affirmative
|
|
Withheld
Authority
|
Dividend, Interest & Premium Strategy
|
|
|
|
|
Re-election of Hans W. Kertess Class I to serve until the Annual Meeting for the 2015-2016 fiscal year
|
|
81,270,610
|
|
1,945,642
|
Re-election of William B. Ogden, IV Class I to serve until the Annual Meeting for the 2015-2016 fiscal year
|
|
81,267,074
|
|
1,949,178
|
Deborah A. DeCotis, Bradford K. Gallagher, James A. Jacobson, John C. Maney, and Alan Rappaport continue to serve as Trustees.
|
|
Affirmative
|
|
Withheld
Authority
|
Equity & Convertible Income
|
|
|
|
|
Re-election of James A. Jacobson Class II to serve until the Annual Meeting for the 2015-2016 fiscal year
|
|
15,746,961
|
|
194,702
|
Re-election of John C. Maney Class II to serve until the Annual Meeting for the 2015-2016 fiscal year
|
|
15,759,136
|
|
182,527
|
Deborah A. DeCotis, Bradford K. Gallagher, Hans W. Kertess, William B. Ogden, IV, and Alan Rappaport continue to serve as Trustees.
_________________
Interested Trustee
Proxy Voting Policies & Procedures:
A description of the polices and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the most recent twelve month period ended June 30 is available (i) without charge, upon request, by calling the Funds shareholder servicing agent at (800) 254-5197; (ii) on the Funds website at www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and Exchange Commissions website at www.sec.gov.
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
|
|
40
|
AllianzGI Equity & Convertible Income Fund Annual Report
| 1.31.13
|
|
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Privacy Policy
(unaudited)
Our Commitment to You
We consider customer privacy to be a fundamental aspect of our relationship with shareholders and are committed to maintaining the confidentiality, integrity, and security of our current, prospective and former shareholders personal information. To ensure our shareholders privacy, we have developed policies that are designed to protect this confidentiality, while allowing shareholders needs to be served.
Obtaining Personal Information
In the course of providing shareholders with products and services, we may obtain non-public personal information about shareholders, which may come from sources such as account applications and other forms, from other written, electronic or verbal correspondence, from shareholder transactions, from a shareholders brokerage or financial advisory firm, financial adviser or consultant, and/or from information captured on our internet web sites.
Respecting Your Privacy
As a matter of policy, we do not disclose any personal or account information provided by shareholders or gathered by us to non-affiliated third parties, except as required for everyday business purposes, such as to process transactions or service a shareholders account, or as otherwise permitted by law. As is common in the industry, non-affiliated companies may from time to time be used to provide certain services, such as preparing and mailing prospectuses, reports, account statements and other information, and gathering shareholder proxies. We may also retain non-affiliated financial services providers, such as broker-dealers, to market our shares and products and we may enter in joint-marketing agreements with them and other financial companies. We may also retain marketing and research service firms to conduct research on shareholder satisfaction. These companies may have access to a shareholders personal and account information, but are permitted to use the information solely to provide the specific service or as otherwise permitted by law. We may also provide a shareholders personal and account information to their respective brokerage or financial advisory firm, Custodian, and/or to their financial adviser or consultant.
Sharing Information with Third Parties
We reserve the right to disclose or report personal information to non-affiliated third parties, in limited circumstances, where we believe in good faith that disclosure is required under law to cooperate with regulators or law enforcement authorities, to protect our rights or property or upon reasonable request by any Fund in which a shareholder has chosen to invest. In addition, we may disclose information about a shareholder or shareholders accounts to a non-affiliated third party only if we receive a shareholders written request or consent.
Sharing Information with Affiliates
We may share shareholder information with our affiliates in connection with our affiliates everyday business purposes, such as servicing a shareholders account, but our affiliates may not use this information to market products and services to you except in conformance with applicable laws or regulations. The information we share includes information about our experiences and transactions with a shareholder and may include, for example, shareholders participation in one of the Funds or in other investment programs, a shareholders ownership of certain types of accounts (such as IRAs), or other data about a shareholders transactions or accounts. Our affiliates, in turn, are not permitted to share shareholder information with non-affiliated entities, except as required or permitted by law.
Procedures to Safeguard Private Information
We take seriously the obligation to safeguard shareholder non-public personal information. In addition to this policy, we have also implemented procedures that are designed to restrict access to a shareholders non-public personal information only to internal personnel who need to know that information in order to provide products or services to such shareholders. In addition, we have physical, electronic and procedural safeguards in place to guard a shareholders non-public personal information.
Disposal of Confidential Records
We will dispose of records, if any, that are knowingly derived from data received from a consumer reporting agency regarding a shareholder that is an individual in a manner that ensures the confidentiality of the data is maintained. Such records include, among other things, copies of consumer reports and notes of conversations with individuals at consumer reporting agencies.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Dividend Reinvestment Plan
(unaudited)
Automatic Dividend Reinvestment Plan
Each Fund has adopted a Dividend Reinvestment Plan (the Plan) which allows common shareholders to reinvest Fund distributions in additional common shares of the Fund. American Stock Transfer & Trust Company, LLC (the Plan Agent) serves as agent for common shareholders in administering the Plan. It is important to note that participation in the Plan and automatic reinvestment of Fund distributions does not ensure a profit, nor does it protect against losses in a declining market.
Automatic enrollment / voluntary participation.
Under the Plan, common shareholders whose shares are registered with the Plan Agent (registered shareholders) are automatically enrolled as participants in the Plan and will have all Fund distributions of income, capital gains and returns of capital (together, distributions) reinvested by the Plan Agent in additional common shares of the Funds, unless the shareholder elects to receive cash. Registered shareholders who elect not to participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholder of record (or if the shares are held in street or other nominee name, to the nominee) by the Plan Agent. Participation in the Plan is voluntary. Participants may terminate or resume their enrollment in the Plan at any time without penalty by notifying the Plan Agent online at www.amstock.com, by calling (800) 254-5197, by writing to the Plan Agent, American Stock Transfer & Trust Company, LLC, at P.O. Box 922, Wall Street Station, New York, NY 10269-0560, or, as applicable, by completing and returning the transaction form attached to a Plan statement. A proper notification will be effective immediately and apply to the Funds next distribution if received by the Plan Agent at least three (3) days prior to the record date for the distribution; otherwise, a notification will be effective shortly following the Funds next distribution and will apply to the Funds next succeeding distribution thereafter. If you withdraw from the Plan and so request, the Plan Agent will arrange for the sale of your shares and send you the proceeds, minus a transaction fee and brokerage commissions.
How shares are purchased under the Plan.
For each Fund distribution, the Plan Agent will acquire common shares for participants either (i) through receipt of newly issued common shares from the Funds (newly issued shares) or (ii) by purchasing common shares of the Funds on the open market (open market purchases). If, on a distribution payment date, the net asset value per common share of the Funds (NAV) is equal to or less than the market price per common share plus estimated brokerage commissions (often referred to as a market premium), the Plan Agent will invest the distribution amount on behalf of participants in newly issued shares at a price equal to the greater of (i) NAV or (ii) 95% of the market price per common share on the payment date. If the NAV is greater than the market price per common share plus estimated brokerage commissions (often referred to as a market discount) on a distribution payment date, the Plan agent will instead attempt to invest the distribution amount through open market purchases. If the Plan Agent is unable to invest the full distribution amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agent will invest any un-invested portion of the distribution in newly issued shares at a price equal to the greater of (i) NAV or (ii) 95% of the market price per share as of the last business day immediately prior to the purchase date (which, in either case, may be a price greater or lesser than the NAV per common share on the distribution payment date). No interest will be paid on distributions awaiting reinvestment. Under the Plan, the market price of common shares on a particular date is the last sales price on the exchange where the shares are listed on that date or, if there is no sale on the exchange on that date, the mean between the closing bid and asked quotations for the shares on the exchange on that date. The NAV per common share on a particular date is the amount calculated on that date (normally at the close of regular trading on the New York Stock Exchange) in accordance with the Funds then current policies.
Fees and expenses.
No brokerage charges are imposed on reinvestments in newly issued shares under the Plan. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases. There are currently no direct service charges imposed on participants in the Plan, although the Funds reserve the right to amend the Plan to include such charges. The Plan Agent imposes a transaction fee (in addition to brokerage commissions that are incurred) if it arranges for the sale of your common shares held under the Plan.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Dividend Reinvestment Plan
(unaudited) (continued)
Shares held through nominees.
In the case of a registered shareholder such as a broker, bank or other nominee (together, a nominee) that holds common shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of common shares certified by the nominee/record shareholder as representing the total amount registered in such shareholders name and held for the account of beneficial owners who participate in the Plan. If your common shares are held through a broker, bank or other nominee and are not registered with the Plan Agent, neither you nor the nominee will be participants in or have distributions reinvested under the Plan. If you are a beneficial owner of common shares and wish to participate in the Plan, and your nominee is unable or unwilling to become a registered shareholder and a Plan participant on your behalf, you may request that your nominee arrange to have all or a portion of your shares re-registered with the Plan Agent in your name so that you may be enrolled as a participant in the Plan. Please contact your nominee for details or for other possible alternatives. Participants whose shares are registered with the Plan Agent in the name of one nominee firm may not be able to transfer the shares to another firm and continue to participate in the Plan.
Tax consequences.
Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions
i.e.
, automatic reinvestment in additional shares does not relieve shareholders of, or defer the need to pay, any income tax that may be payable (or that is required to be withheld) on Fund dividends and distributions. The Funds and the Plan Agent reserve the right to amend or terminate the Plan. Additional information about the Plan, as well as a copy of the full Plan itself, may be obtained from the Plan Agent, American Stock Transfer & Trust Company, LLC., at P.O. Box 922, Wall Street Station New York, NY 10269-0560; telephone number: (800) 254-5197; web site: www.amstock.com.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Board of Trustees
(unaudited)
Name, Year of Birth, Position(s) Held with
Funds, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
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Principal Occupation(s) During Past 5 Years:
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The address of each trustee is 1633 Broadway, New York, NY 10019.
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Hans W. Kertess
Year of Birth: 1939
Chairman of the Board of Trustees since: 2007
Trustee since: 2005 NFJ/ 2007 NIE
Term of office: Expected to stand for re-election at annual meeting of shareholders for the following fiscal year: 2015 2016 NFJ/ 2014 2015 NIE.
Trustee/Director of 65 funds in Fund Complex;
Trustee/Director of no funds outside of Fund Complex
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President, H. Kertess & Co., a financial advisory company. Formerly, Managing Director, Royal Bank of Canada Capital Markets.
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Deborah A. DeCotis
Year of Birth: 1952
Trustee since: 2011
Term of office: Expected to stand for re-election at annual meeting of shareholders for the 2013 2014 fiscal year.
Trustee/Director of 65 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
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Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Co-Chair Special Projects Committee, Memorial Sloan Kettering (since 2005); Board Member and Member of the Investment and Finance Committees, Henry Street Settlement (since 2007); Trustee, Stanford University (since 2010). Formerly, Director, Helena Rubenstein Foundation (1997-2012); and Advisory Council, Stanford Business School (2002-2008).
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Bradford K. Gallagher
Year of Birth: 1944
Trustee since: 2010
Term of office: Expected to stand for re-election at annual meeting of shareholders for the 2013 2014 fiscal year.
Trustee/Director of 65 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
Formerly, Chairman and Trustee of Grail Advisors ETF Trust (2009-2010) and Trustee of Nicholas-Applegate Institutional Funds (2007-2010)
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Partner, New Technology Ventures Capital Management LLC, a venture capital fund (since 2011); Chairman and Trustee, Atlantic Maritime Heritage Foundation (since 2007); Chairman and Trustee, The Common Fund (since 2005); Founder, Spyglass Investments LLC, a private investment vehicle (since 2001); and Founder, President and CEO, Cypress Holding Company and Cypress Tree Investment Management Company (since 1995).
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James A. Jacobson
Year of Birth:1945
Trustee since: 2009
Term of office: Expected to stand for re-election at annual meeting of shareholders for the following fiscal year: 2013 2014 NFJ/ 2015 2016-NIE.
Trustee/Director of 65 funds in Fund Complex
Trustee/Director of 17 funds in Alpine Mutual Funds Complex
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Retired. Formerly, Vice Chairman and Managing Director, Spear, Leeds & Kellogg Specialists, LLC, a specialist firm on the New York Stock Exchange.
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William B. Ogden, IV
Year of Birth: 1945
Trustee since: 2006 NFJ/ 2007 NIE
Term of office: Expected to stand for re-election at annual meeting of shareholders for the following fiscal year: 2015 2016 NFJ/ 2014 2015 NIE.
Trustee/Director of 65 funds in Fund Complex;
Trustee/Director of no funds outside of Fund Complex
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Asset Management Industry Consultant. Formerly, Managing Director, Investment Banking Division of Citigroup Global Markets Inc.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Board of Trustees
(unaudited) (continued)
Name, Year of Birth, Position(s) Held with
Funds, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
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Principal Occupation(s) During Past 5 Years:
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Alan Rappaport
Year of Birth: 1953
Trustee since: 2010
Term of office: Expected to stand for re-election at annual meeting of shareholders for the 2014 2015 fiscal year.
Trustee/Director of 65 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
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Advisory Director (since 2012), formerly, Vice Chairman, Roundtable Investment Partners (since 2009); Chairman (formerly President), Private Bank of Bank of America; Vice Chairman, US Trust (2001-2008); Trustee, American Museum of Natural History (since 2005) and Trustee, NYU Langone Medical Center (since 2007).
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John C. Maney
Year of Birth: 1959
Trustee since: 2006 NFJ/ 2007 NIE
Term of office: Expected to stand for re-election at annual meeting of shareholders for the following fiscal year: 2014 2015 NFJ/ 2015 2016 NIE.
Trustee/Director of 84 funds in Fund Complex
Trustee/Director of no funds outside the Fund Complex
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Management Board and Managing Director of Allianz Global Investors Fund Management LLC; Management Board and Managing Director of Allianz Asset Management of America L.P. (since January 2005) and Chief Operating Officer of Allianz Asset Management of America L.P. (since November 2006).
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Mr. Maney is an interested person of the Trust, as defined in Section 2(a)(19) of the 1940 Act, due to his positions set forth in the table above, among others with the Funds Investment Manager and various affiliated entities.
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AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Fund Officers
(unaudited)
Name, Year of Birth, Position(s) Held with Funds.
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Principal Occupation(s) During Past 5 Years:
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Brian S. Shlissel
Year of Birth: 1964
President & Chief Executive Officer since: 2005 NFJ/2007 NIE
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Management Board, Managing Director and Head of Mutual Fund Services of Allianz Global Investors Fund Management LLC; President and Chief Executive Officer of 30 funds in the Fund Complex; President of 54 funds in the Fund Complex; and Treasurer, Principal Financial and Accounting Officer of The Korea Fund, Inc. Formerly, Treasurer, Principal Financial and Accounting Officer of 50 funds in the Fund Complex (2005-2010).
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Lawrence G. Altadonna
Year of Birth: 1966
Treasurer, Principal Financial and Accounting Officer since: 2005 NFJ/2007 NIE
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Director, Director of Fund Administration of Allianz Global Investors Fund Management LLC; Treasurer, Principal Financial and Accounting Officer of 84 funds in the Fund Complex; and Assistant Treasurer of The Korea Fund, Inc. Formerly, Assistant Treasurer of 50 funds in the Fund Complex (2005-2010).
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Thomas J. Fuccillo
Year of Birth: 1968
Vice President, Secretary & Chief Legal Officer since: 2005 NFJ/2007 NIE
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Managing Director, Chief Legal Officer and Secretary of Allianz Global Investors Fund Management LLC and Allianz Global Investors Distributors LLC; Managing Director and Chief Regulatory Counsel of Allianz Global Investors U.S. Holdings LLC; Vice President, Secretary and Chief Legal Officer of 84 funds in the Fund Complex; and Secretary and Chief Legal Officer of The Korea Fund, Inc.
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Scott Whisten
Year of Birth: 1971
Assistant Treasurer since: 2007
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Director of Allianz Global Investors Fund Management LLC; and Assistant Treasurer of 84 funds in the Fund Complex.
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Richard J. Cochran
Year of Birth: 1961
Assistant Treasurer since: 2008
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Vice President of Allianz Global Investors Fund Management LLC; Assistant Treasurer of 84 funds in the Fund Complex and of The Korea Fund, Inc. Formerly, Tax Manager, Teachers Insurance Annuity Association/College Retirement Equity Fund (TIAA-CREF) (2002-2008).
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Orhan Dzemaili
Year of Birth: 1974
Assistant Treasurer since: 2011
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Vice President of Allianz Global Investors Fund Management LLC; Assistant Treasurer of 84 funds in the Fund Complex.
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Youse E. Guia
Year of Birth: 1972
Chief Compliance Officer since: 2005 NFJ/2007 NIE
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Director, Head of Compliance, Allianz Global Investors U.S. Holdings LLC and Chief Compliance Officer of 84 funds in the Fund Complex and of The Korea Fund, Inc.
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Lagan Srivastava
Year of Birth: 1977
Assistant Secretary since: 2006 NFJ/2007 NIE
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Vice President of Allianz Global Investors U.S. Holdings LLC; Assistant Secretary of 84 funds in the Fund Complex and of The Korea Fund, Inc.
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Officers hold office at the pleasure of the Board and until their successors are appointed and qualified or until their earlier resignation or removal.
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Trustees
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Fund Officers
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Hans W. Kertess
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Brian S. Shlissel
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Chairman of the Board of Trustees
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President & Chief Executive Officer
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Deborah A. DeCotis
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Lawrence G. Altadonna
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Bradford K. Gallagher
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Treasurer, Principal Financial & Accounting Officer
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James A. Jacobson
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Thomas J. Fuccillo
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John C. Maney
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Vice President, Secretary & Chief Legal Officer
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William B. Ogden, IV
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Scott Whisten
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Alan Rappaport
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Assistant Treasurer
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Richard J. Cochran
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Assistant Treasurer
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Orhan Dzemaili
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Assistant Treasurer
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Youse E. Guia
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Chief Compliance Officer
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Lagan Srivastava
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Assistant Secretary
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Investment Manager
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Allianz Global Investors Fund Management LLC
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1633 Broadway
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New York, NY 10019
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Sub-Advisers
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NFJ Investment Group LLC
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2100 Ross Avenue, Suite 700
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Dallas, TX 75201
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Allianz Global Investors U.S. LLC
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600 West Broadway, 30th Floor
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San Diego, CA 92101
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Allianz Global Investors U.S. LLC
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1633 Broadway
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New York, NY 10019
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Custodian & Accounting Agent
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Brown Brothers Harriman & Co.
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40 Water Street
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Boston, MA 02109
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Transfer Agent, Dividend Paying Agent and Registrar
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American Stock Transfer & Trust Company, LLC
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6201 15th Avenue
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Brooklyn, NY 11219
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Independent Registered Public Accounting Firm
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PricewaterhouseCoopers LLP
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300 Madison Avenue
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New York, NY 10017
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Legal Counsel
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Ropes & Gray LLP
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Prudential Tower
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800 Boylston Street
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Boston, MA 02199
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This report, including the financial information herein, is transmitted to the shareholders of AllianzGI NFJ Dividend, Interest & Premium Strategy Fund and AllianzGI Equity & Convertible Income Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Funds may purchase shares of its stock in the open market.
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of their fiscal year on Form N-Q. Each Funds Form N-Q is available on the SECs website at www.sec.gov and may be reviewed and copied at the SECs Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The information on Form N-Q is also available on the Funds website at www.allianzinvestors.com/closedendfunds.
Information on the Funds is available at www.allianzinvestors.com/closedendfunds or by calling the Funds shareholder servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper mailings.
To enroll, go to www.us.allianzgi.com/edelivery.
AGI-2013-02-05-5901
Allianz Global Investors Distributors LLC
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AZ601AR_013113
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