Annual Shareholder Meeting Results (unaudited)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
The Funds held their annual meeting of shareholders on July 9, 2020. Shareholders voted as indicated below:
Diversified Income & Convertible:
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Affirmative
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|
Withheld Authority
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Election of F. Ford Drummond
|
|
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10,102,638
|
|
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257,771
|
|
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Election of Thomas J. Fuccillo†
|
|
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10,194,710
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|
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165,700
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Election of James S. MacLeod
|
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10,112,515
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|
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247,893
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The other members of the Board of Trustees at the time of the meeting, namely, Mses. Sarah E. Cogan and Deborah A. DeCotis, and Messrs. Erick R. Holt†, James A. Jacobson, Hans W. Kertess, William B. Ogden, IV, Davey S. Scoon and Alan Rappaport continued to serve as Trustees of the Fund.
† Interested Trustee
Dividend, Interest & Premium Strategy:
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Affirmative
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Withheld Authority
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Election of Sarah E. Cogan
|
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75,068,666
|
|
|
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12,618,694
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Election of F. Ford Drummond
|
|
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75,007,666
|
|
|
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12,679,691
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|
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Election of Alan Rappaport
|
|
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74,989,445
|
|
|
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12,697,912
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Election of Davey S. Scoon
|
|
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74,969,819
|
|
|
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12,717,538
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The other members of the Board of Trustees at the time of the meeting, namely, Ms. Deborah A. DeCotis and Messrs. Thomas J. Fuccillo†, Erick R. Holt†, James A. Jacobson, Hans W. Kertess, James S. MacLeod and William B. Ogden, IV continued to serve as Trustees of the Fund.
† Interested Trustee
Equity & Convertible Income:
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Affirmative
|
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Withheld Authority
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Election of Hans W. Kertess
|
|
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22,607,139
|
|
|
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2,165,945
|
|
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Election of William B. Ogden, IV
|
|
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22,621,033
|
|
|
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2,152,050
|
|
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Election of Alan Rappaport
|
|
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22,651,433
|
|
|
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2,121,650
|
|
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Election of Davey S. Scoon
|
|
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22,703,576
|
|
|
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2,069,508
|
|
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The other members of the Board of Trustees at the time of the meeting, namely, Mses. Sarah E. Cogan and Ms. Deborah A. DeCotis, and Messrs. F. Ford Drummond, Thomas J. Fuccillo†, Erick R. Holt†, James A. Jacobson, and James S. MacLeod continued to serve as Trustees of the Fund.
† Interested Trustee
80 Semi-Annual Report | July 31, 2020
Proxy Voting Policies & Procedures (unaudited)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
A description of the policies 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 us.allianzgi.com/closedendfunds; and (iii) on the Securities and Exchange Commission website at www.sec.gov.
July 31, 2020 | Semi-Annual Report 81
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
AllianzGI Diversified Income & Convertible Fund/AllianzGI Equity & Convertible Income Fund/AllianzGI Dividend, Interest & Premium Strategy Fund (formerly, AllianzGI NFJ Dividend, Interest & Premium Strategy Fund)
The Investment Company Act of 1940, as amended (the "1940 Act"), requires that both the full Board of Trustees (the "Board" or the "Trustees") and a majority of the Trustees who are not interested persons of AllianzGI Diversified Income & Convertible Fund ("ACV"), AllianzGI Equity & Convertible Income Fund ("NIE"), or AllianzGI Dividend, Interest & Premium Strategy Fund ("NFJ") (each a "Fund" and together, the "Funds") (the "Independent Trustees"), voting separately, annually approve the continuation of each Fund's Investment Management Agreement (the "Agreements" and, with respect to each Fund, the "Agreement") with Allianz Global Investors U.S. LLC (the "Investment Manager"). Throughout the process, the Independent Trustees received separate legal advice from independent legal counsel that is experienced in 1940 Act matters and that is independent of the Investment Manager ("Independent Counsel"), and with whom they met separately from the Investment Manager during the contract review meetings.
The contract review process consisted of multiple meetings that included the Independent Trustees and Independent Trustee Counsel leading up to the full Board's consideration of the Agreement (the "contract review meetings"). Representatives from fund management participated in portions of those meetings to, among other topics, review the comparative fee and expense information and comparative performance information prepared and provided by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third party, for each Fund using its respective Broadridge peer groups for performance and expense comparisons. The Board's review and approval process reflected developments through the first half of the calendar year 2020, but did not reflect subsequent events, including the strategic partnership announced on July 7, 2020, between the Investment Adviser and Virtus Investment Partners, Inc.
At their meeting held on June 25, 2020, the Board and the Independent Trustees unanimously approved the continuation of each Agreement through June 30, 2021 with respect to each Fund. The material factors and conclusions that formed the basis of this approval for each Fund are discussed below.(1)
(1) The Board, including a majority of the Independent Trustees, determined to rely on the relief granted by an exemptive order issued by the U.S. Securities and Exchange Commission (the "SEC") that permits investment company boards of directors to remotely approve advisory contracts rather than in-person in response to the impact of COVID-19 on investment advisers and funds. The Board determined that reliance on the exemptive order was necessary and appropriate due to circumstances related to current or potential effects of COVID-19. Prior to commencing the approval meeting, the Board confirmed that all Board members could hear each other simultaneously during the meeting. The Board noted that it would ratify any actions taken at this meeting pursuant to the SEC relief at its next in-person meeting.
82 Semi-Annual Report | July 31, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
In connection with their deliberations regarding the approval of each Agreement, the Board, including the Independent Trustees, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Trustees considered the nature, quality and extent of the various investment management, administrative, and other services to be performed by the Investment Manager under the Agreements.
In evaluating the Agreement with respect to each Fund, the Trustees reviewed extensive materials provided by the Investment Manager in response to questions submitted by the Independent Trustees and Independent Counsel, and met with senior representatives of the Investment Manager regarding its personnel, operations, and financial condition as they relate to the Funds. The Board also considered the broad range of information relevant to the annual contract review that is provided to the Board (including its various standing committees) at meetings throughout the year, including reports on investment performance based on net asset value and common share market price and distribution yield, use of leverage, information regarding share price premiums and/or discounts, portfolio risk, and other portfolio information for each Fund, including the use of derivatives if used as part of the Fund's principal investment strategy, as well as periodic reports on, among other matters, pricing and valuation; quality and cost of portfolio trade execution; compliance; and shareholder and other services provided by
the Investment Manager and its affiliates. To assist with their review, the Board reviewed a summary for each Fund prepared by the Investment Manager that included, among other information, performance based on net asset value and market value (both absolute and comparisons between the Funds and their Broadridge Performance Universe (as defined below)), investment objective, total net assets, outstanding leverage, share price premium and/or discount information, annual fund operating expenses, portfolio managers, total expense ratio and management fee comparisons between each Fund and its Broadridge Expense Group (as defined below), and trends in the Investment Manager's profitability from its advisory relationship with each Fund. They also considered summaries assigning a quadrant placement to each Fund based on an average of certain measures of performance (including in relation to risk) and fees/expenses versus peer group medians. The Board also considered the risk profiles of the Funds.
The Trustees' conclusions as to the approval of each Agreement were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Individual Trustees may have evaluated the information presented differently from one another, attributing different weights to various factors. The Trustees recognized that the fee arrangements for the Funds are the result of review and discussion in the prior years between the Trustees and the Investment Manager, that certain aspects of
July 31, 2020 | Semi-Annual Report 83
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
such arrangements may receive greater scrutiny in some years than in others, and that the Trustees' conclusions may be based, in part, on their consideration of these same arrangements during the course of the year and in prior years. The Trustees evaluated information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund.
Performance Information
With respect to investment performance, the Trustees considered information regarding each Fund's short-, intermediate-, and long-term performance based on net asset value and market value, as applicable, net of the Fund's fees and expenses, both on an absolute basis and relative to an appropriate benchmark index that does not deduct the fees or expenses of investing. The Trustees also considered information provided by Broadridge for each Fund relative to the investment performance of a group of funds with investment classifications and/or objectives comparable to the Fund as identified by Broadridge (the "Broadridge Performance Universe"). The Independent Trustees recognized that the performance information, including the Broadridge performance information, was as of March 31, 2020, and, as such, included the period of extreme market volatility resulting from COVID-19. The Trustees also reviewed performance in relation to certain measures of the degree of investment risk undertaken by the portfolio managers, related share price premium and/or discount information, and each Fund's relative distribution yield as of March 31, 2020.
For Funds that underperformed, the Board considered the magnitude and duration of that underperformance relative to the Broadridge Performance Universe and/or the benchmark (e.g., the amount by which a Fund underperformed, including, for example, whether the Fund slightly underperformed or significantly underperformed). To the extent that the Trustees identified a Fund as having underperformed its benchmark indices and/or Broadridge Performance Universe to an extent, or over a period of time, that the Trustees felt warranted additional inquiry, the Trustees discussed with the Investment Manager the Fund's performance, potential reasons for the underperformance, and, if necessary, steps that the Investment Manager had taken, or intended to take, to improve performance. The Trustees also met with the portfolio managers of certain Funds during the 12 months prior to voting on the contract renewal and had the opportunity to discuss the Funds' performance, distribution levels, and use of leverage with the portfolio managers. The Trustees considered the Investment Manager's responsiveness with respect to the Funds that experienced lagging performance. The Trustees noted that performance, is only one of the factors that they deem relevant to their consideration of each Agreement and that, after considering all relevant factors, it may be appropriate to approve the continuation of the Agreement notwithstanding a Fund's relative performance.
Nature, Extent, and Quality of Services
As part of their review, the Trustees received and considered descriptions of various
84 Semi-Annual Report | July 31, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
functions performed by the Investment Manager for the Funds, such as portfolio management, compliance monitoring, portfolio trading practices and oversight of third party service providers. They also considered information regarding the overall organization and business functions of the Investment Manager, including, without limitation, information regarding senior management, portfolio managers and other personnel providing or proposed to provide investment management, administrative and other services, and corporate ownership and business operations unrelated to the Funds. They considered certain changes to the executive leadership and the organization of the governance structure, as well as the availability of research and other capabilities within the global organization. The Trustees examined the ability of the Investment Manager to provide high-quality investment management and other services to the Funds. Among other information, the Trustees considered the investment philosophy and research and decision-making processes of the Investment Manager, as well as the Investment Manager's broker selection process and trading operations; the experience of key advisory personnel of the Investment Manager and its affiliates, as applicable, responsible for portfolio management of the Funds; information regarding the Funds' use of leverage; the ability of the Investment Manager to attract and retain capable personnel; employee compensation philosophy; and the operational infrastructure, including technology and systems, of the Investment
Manager. The Independent Trustees also considered actions taken by the Investment Adviser to manage the impact on the Funds and their portfolio holdings of the market volatility resulting from COVID-19. In addition, the Board noted that the Investment Manager actively monitors any discount from net asset value per share at which each Fund's common stock trades and evaluates potential ways to reduce the discount and potential impacts on the discount, including the level of distributions that a Fund pays.
In addition, the Trustees noted the extensive range of services that the Investment Manager provides to the Funds beyond the investment management services. In this regard, the Trustees reviewed the extent and quality of the Investment Manager's services with respect to regulatory compliance and ability to comply with the investment policies of the Funds; the compliance programs and risk controls of the Investment Manager; the specific contractual obligations of the Investment Manager pursuant to the Agreements; the nature, extent and quality of certain administrative services the Investment Manager is responsible for providing to the Funds; the Investment Manager's risk management function; and conditions that might affect the ability of the Investment Manager to provide high quality services to the Funds in the future under the Agreements, including, but not limited to, the organization's financial condition and operational stability. The Trustees also considered that the Investment Manager assumes significant ongoing risks with respect to all Funds, including entrepreneurial and business risks the
July 31, 2020 | Semi-Annual Report 85
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Investment Manager has undertaken in serving as Investment Manager and sponsor of the Funds, for which it is entitled to reasonable compensation. The Trustees also noted the Investment Manager's activities under its contractual obligation to oversee the Funds' various outside service providers, including its ongoing evaluation of the quality of the services provided, negotiation of certain service providers' fees and its evaluation of service providers' infrastructure, cybersecurity programs, compliance programs, and business continuity programs, among other matters. It also considered the Investment Manager's ongoing development of its own infrastructure and information technology to support the Funds through, among other things, cybersecurity, business continuity planning, and risk management. The Independent Trustees also noted the Investment Adviser's effective operation and implementation of its business continuity plan in response to COVID-19.
In addition, the Trustees considered that the Investment Manager has (i) developed a leverage structure for the Funds tailored to its investment strategy and needs, (ii) monitored the Fund's ongoing compliance with legal and other restrictions associated with leverage, (iii) monitored the Funds' leverage structure, as appropriate, in response to the recent market downturn in 2020 to meet asset coverage and other applicable restrictions and (iv) reviewed possible options for potential changes in the leverage arrangements for certain Funds in light of recent market developments and the cost of the Funds' current forms of leverage.
The Trustees considered that the Investment Manager provides the Funds with office space, administrative services and personnel to serve as Fund officers, and that the Investment Manager and its affiliates pay all of the compensation of the Funds' interested Trustees and officers (in their capacities as employees of the Investment Manager or such affiliates). Based on the foregoing, the Trustees concluded that the Investment Manager's investment processes, research capabilities and philosophy were well-suited to each Fund given its investment objective and policies, that the Investment Manager would be able to continue to meet any reasonably foreseeable obligations under the Agreement, and that the Investment Manager would otherwise be able to provide services to the Funds of sufficient extent and quality.
Fee and Expense Information and Comparisons
In assessing the reasonableness of the Funds' fees and expenses under the Agreement, the Trustees considered, among other information, each Fund's management fee and the Fund's total expense ratio as a percentage of average daily net assets attributable to common shares and as a percentage of average managed assets (including assets attributable to common shares and leverage outstanding combined) and information regarding the management fees and other expenses of comparable funds identified by Broadridge (the "Broadridge Expense Group"). Where a Fund's management fees or total expense ratios were higher than the Broadridge Expense
86 Semi-Annual Report | July 31, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Group median, the Trustees considered whether specific factors, such as portfolio management, administration, or oversight needs contributed to the Fund's management fees or total expense ratios. The Trustees also considered, among other items, current Fund asset levels as compared to prior years.
The Trustees noted that while the Funds are not charged a separate administration fee (recognizing that their management fee includes a component for administrative services), it was not clear in all cases whether the peer funds in the Broadridge categories were separately charged such a fee by their investment managers, so that the total expense ratio (rather than any individual expense component) represented the most relevant comparison. For each Fund, the Board also considered that only leveraged closed-end funds were considered for inclusion in the Fund's peer group for comparison. The Board considered each Fund's contractual management fee on net assets attributable to common shares and on managed assets (generally consisting of net assets plus leverage proceeds), as well as the actual management fee on managed assets as a percentage of assets attributable to common shareholders as compared to each Fund's peer group. The Board was aware of the additional expenses borne by common shareholders as a result of each Fund's leveraged structure. The Trustees took into account that ACV has preferred shares and short-term loans outstanding to provide leverage, which increase the amount of management fees payable by the Fund under
the Agreements (because the Fund's fees are calculated based on average daily managed assets, including assets attributed to preferred shares or other forms of leverage outstanding). The Board took into account that the Investment Manager has a financial incentive for each Fund to continue to use leverage, which may create a conflict of interest. It also considered the Investment Manager's representation that the use of leverage continues to be appropriate and in the best interests of each Fund under current market conditions. The Trustees also considered the Investment Manager's representation that it will use leverage for each Fund solely as it determines to be in the best interests of each Fund from an investment perspective and without regard to the level of compensation the Investment Manager receives.
To the extent applicable, the Trustees considered information regarding the investment performance and fees for other funds and/or separately managed accounts, including institutional accounts, managed by the Investment Manager or its affiliates pursuing a similar investment strategy, if any ("similar accounts"). Specifically, the Trustees reviewed information showing the contractual management fees charged by the Investment Manager to the similar accounts. In comparing these fees, the Trustees considered information provided by the Investment Manager as to the generally broader and more extensive services provided to the Funds in comparison to institutional or separate accounts; the greater entrepreneurial, enterprise, and reputational
July 31, 2020 | Semi-Annual Report 87
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
risk in managing closed-end funds; and the impact on the Investment Manager and expenses associated with the more extensive regulatory regime to which the Funds are subject in comparison to institutional or separate accounts. The Board considered that, in comparison to certain other products managed by the Investment Manager, including open-end funds, there are additional portfolio management challenges in managing closed-end funds such as the Funds, including those associated with less liquid holdings and/or the use of leverage.
Economies of Scale and "Fall-Out" Benefits
The Trustees considered the extent to which the Investment Manager may realize economies of scale or other efficiencies in managing and supporting the Funds and noted that there is little expectation that closed-end funds will show significant economies of scale. The Trustees considered that, as closed-end investment companies, the Funds do not continually offer new shares to raise additional assets (as does a typical open-end investment company), but may experience asset growth through investment performance and/or the increased use of leverage. Accordingly, the Trustees did not consider potential economies of scale as a principal factor in assessing the fee rates payable under the Agreements. The Independent Trustees also considered that the Investment Manager shares the benefits of economies of scale with the Funds and their shareholders by adding and enhancing services to the Funds over time, including
expenditures in staff, technology, and infrastructure. Additionally, the Trustees considered so-called "fall-out benefits" to the Investment Manager and its affiliates, such as reputational value derived from serving as Investment Manager to the Funds and research.
Profitability
The Trustees considered the overall estimated profitability to the Investment Manager on a Fund-by-Fund basis for the twelve months ended December 31, 2019. They also reviewed the Investment Manager's aggregate profitability with respect to the Fund complex and the Investment Manager's overall profitability with respect to all products globally. As part of its considerations, the Board considered the cost allocation methodology that the Investment Manager used in developing its estimated profitability figures. In this connection, the Trustees considered that for certain Funds, profitability had increased as a result of expense reduction efforts or higher revenues from increased assets, although certain Funds' assets had declined over the last year. The Trustees recognized that it is difficult to make comparisons of profitability from mutual fund advisory and administration contracts because comparative information is not generally available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions about allocations and the adviser's capital structure and cost of capital. The Trustees recognized that the Investment
88 Semi-Annual Report | July 31, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Manager and its affiliates should be entitled to earn a reasonable level of profits for services they provide to each Fund and, based on their review, concluded that pre-tax profitability for advisory services was not unreasonable, nor did it appear to be excessive.
Fund-by-Fund Analysis
With regard to the investment performance of each Fund and the fees charged to each Fund, the Trustees considered the following information. The comparative performance, fee, and expense information was prepared and provided by Broadridge and was not independently verified by the Trustees.
With respect to all Funds, the Trustees reviewed, among other information, comparative information showing the Funds' performance against their respective Broadridge Performance Universes for the one-year, three-year, five-year and ten-year periods (to the extent each such Fund had been in existence), each ended March 31, 2020. Fund performance relative to the median for each Fund's Broadridge Performance Universe is described below, and for those Funds with performance that ranked below the median for their respective Broadridge Performance Universes, the specific quintile rankings are also noted below with respect to the relevant periods of underperformance. With respect to performance quintile rankings for a Fund compared to its Broadridge Performance Universe, the first quintile represents the highest (best) performance and the fifth quintile represents the lowest performance.
The Trustees reviewed, among other information, information provided by Broadridge comparing each Fund's management fee and ratios of total expenses to net assets to the Funds' respective Broadridge Expense Groups for the most recently reported fiscal year. The Trustees noted that the Broadridge data takes into account any fee reductions or expense limitations that were in effect during a Fund's last fiscal year. The information provided to the Trustees by Broadridge compared each Fund's fees and expenses to the Fund's respective Broadridge Expense Group median; such comparison is noted below. For the purposes of Broadridge Expense Group quintile rankings, higher fees and expenses result in a lower quintile ranking, with the first quintile corresponding to low fees and expenses the fifth quintile corresponding to high fees and expenses.
• AllianzGI Diversified Income & Convertible Fund (ACV): As compared to its Broadridge Performance Universe (based on net asset value), the Fund's performance was above the median for the one- and three-year periods (in the second quintile for each period). The Fund's inception date was May 27, 2015, and accordingly does not have five- and ten-year performance periods reflected. As compared to its Broadridge Expense Group, the Fund's management fees and total expense ratios based on common share and leveraged assets combined as well as based on common share assets were each above the median (on a net basis).
July 31, 2020 | Semi-Annual Report 89
Matters Relating to the Trustees' Consideration of the Investment Management Agreements (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
• AllianzGI Equity & Convertible Income Fund (NIE): As compared to its Broadridge Performance Universe (based on net asset value), the Fund's performance was above the median for the one-, three-, five- and ten-year periods (in the first quintile for each period). As compared to its Broadridge Expense Group, the Fund's management fees based on common share assets were at the median, and the Fund's total expense ratios based on common share assets were below the median (on a net basis). The Fund did not have leveraged assets for the period reviewed.
• AllianzGI Dividend, Interest & Premium Strategy Fund (NFJ): As compared to its Broadridge Performance Universe (based on net asset value), the Fund's performance was below the median for the one-, three-, five- and ten-year periods (in the fourth quintile for the one-, three- and ten-year periods and in the fifth quintile for the five-year period). As compared to its Broadridge Expense Group, the Fund's management fees and total expense ratios based on common share assets were both below the median (on a net basis). The Fund did not have leveraged assets for the period reviewed.
Conclusions
After reviewing these and other factors described herein, the Trustees concluded, with respect to each Fund, within the context of their overall conclusions regarding the Agreement and in their business judgment, that they were satisfied with the Investment Manager's responses and on-going efforts relating to the investment performance of the Funds, including efforts to improve performance for underperforming Funds. The Trustees also concluded that the fees payable under the Agreement represent reasonable compensation in light of the nature, extent and quality of services provided by the Investment Manager and should be continued. Based on their evaluation of factors that they deemed to be material, including, but not limited to, those factors described above, the Trustees unanimously concluded that the continuation of the Agreement with respect to the Funds was in the interests of the applicable Funds and their shareholders, and determined to approve the continuance of the Agreement.
90 Semi-Annual Report | July 31, 2020
Privacy Policy (unaudited)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Privacy Policy
Please read this Policy carefully. It gives you important information about how Allianz Global Investors U.S. and its U.S. affiliates ("AllianzGI US," "we" or "us") handle non-public personal information ("Personal Information") that we may receive about you. It applies to all of the past, present and future clients and shareholders of AllianzGI US and the funds and accounts it manages, advises, administers or distributes, and will continue to apply when you are no longer a client or shareholder. As used throughout this Policy, "AllianzGI US" means Allianz Global Investors U.S. LLC, Allianz Global Investors Distributors LLC, and the family of registered and unregistered funds managed by one or more of these firms. AllianzGI US is part of a global investment management group, and the privacy policies of other Allianz Global Investors entities outside of the United States may have provisions in their policies that differ from this Privacy Policy. Please refer to the website of the specific non-US Allianz Global Investors entity for its policy on privacy.
We Care about Your Privacy
We consider your privacy to be a fundamental aspect of our relationship with you, and we strive to maintain the confidentiality, integrity and security of your Personal Information. To ensure your privacy, we have developed policies that are designed to protect your Personal Information while allowing your needs to be served.
Information We May Collect
In the course of providing you with products and services, we may obtain Personal Information about you, which may come
from sources such as account application and other forms, from other written, electronic, or verbal communications, from account transactions, from a brokerage or financial advisory firm, financial advisor or consultant, and/or from information you provide on our website.
You are not required to supply any of the Personal Information that we may request. However, failure to do so may result in us being unable to open and maintain your account, or to provide services to you.
How Your Information Is Shared
We do not disclose your Personal Information to anyone for marketing purposes. We disclose your Personal Information only to those service providers, affiliated and non-affiliated, who need the information for everyday business purposes, such as to respond to your inquiries, to perform services, and/or to service and maintain your account. This applies to all of the categories of Personal Information we collect about you. The affiliated and non-affiliated service providers who receive your Personal Information also may use it to process your transactions, provide you with materials (including preparing and mailing prospectuses and shareholder reports and gathering shareholder proxies), and provide you with account statements and other materials relating to your account. These service providers provide services at our direction, and under their agreements with us, are required to keep your Personal Information confidential and to use it only for providing the contractually required services. Our service providers may not use your Personal
July 31, 2020 | Semi-Annual Report 91
Privacy Policy (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Information to market products and services to you except in conformance with applicable laws and regulations. We also may provide your Personal Information to your respective brokerage or financial advisory firm, custodian, and/or to your financial advisor or consultant.
In addition, 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 or pursuant to other legal process, or to protect our rights or property, including to enforce our Privacy Policy or other agreements with you. Personal Information collected by us may also be transferred as part of a corporate sale, restructuring, bankruptcy, or other transfer of assets.
Security of Your Information
We maintain your Personal Information for as long as necessary for legitimate business purposes or otherwise as required by law. In maintaining this information, we have implemented appropriate procedures that are designed to restrict access to your Personal Information only to those who need to know that information in order to provide products and/or services to you. In addition, we have implemented physical, electronic and procedural safeguards to help protect your Personal Information.
Privacy and the Internet
The Personal Information that you provide through our website, as applicable, is handled in the same way as the Personal Information that you provide by any other means, as
described above. This section of the Policy gives you additional information about the way in which Personal Information that is obtained online is handled.
• Online Enrollment, Account Access and Transactions: When you visit our website, you can visit pages that are open to the general public, or, where available, log into protected pages to enroll online, access information about your account, or conduct certain transactions. Access to these secure pages is permitted only after you have created a User ID and Password. The User ID and Password must be supplied each time you want to access your account information online. This information serves to verify your identity. When you enter Personal Information into our website to enroll or access your account online, you will log into secure pages. By using our website, you consent to this Privacy Policy and to the use of your Personal Information in accordance with the practices described in this Policy. If you provide Personal Information to effect transactions, a record of the transactions you have performed while on the site is retained by us. For additional terms and conditions governing your use of our website, please refer to the Investor Mutual Fund Access Disclaimer which is incorporated herein by reference and is available on our website.
• Cookies and Similar Technologies: Cookies are small text files stored in your computer's hard drive when you visit certain web pages. Clear GIFs (also known as Web Beacons) are typically transparent very small graphic images (usually 1 pixel x 1 pixel) that are placed on a website that may be included
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Privacy Policy (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
on our services provided via our website and typically work in conjunction with cookies to identify our users and user behavior. We may use cookies and automatically collected information to: (i) personalize our website and the services provided via our website, such as remembering your information so that you will not have to re-enter it during your use of, or the next time you use, our website and the services provided via our website; (ii) provide customized advertisements, content, and information; (iii) monitor and analyze the effectiveness of our website and the services provided via our website and third-party marketing activities; (iv) monitor aggregate site usage metrics such as total number of visitors and pages viewed; and (v) track your entries, submissions, and status in any promotions or other activities offered through our website and the services provided via our website. Tracking technology also helps us manage and improve the usability of our website, (i) detecting whether there has been any contact between your computer and us in the past and (ii) to identify the most popular sections of our website. Because an industry-standard Do-Not-Track protocol is not yet established, our website will continue to operate as described in this Privacy Policy and will not be affected by any Do-Not-Track signals from any browser.
• Use of Social Media Plugins Our website uses the following Social Media Plugins ("Plugins"):
• Facebook Share Button operated by Facebook Inc., 1601 S. California Ave, Palo Alto, CA 94304, USA
• Tweet Button operated by Twitter Inc., 795 Folsom St., Suite 600, San Francisco, CA 94107, USA
• LinkedIn Share Button operated by LinkedIn Corporation, 2029 Stierlin Court, Mountain View, CA 94043, USA
All Plugins are marked with the brand of the respective operators Facebook, Twitter and LinkedIn ("Operators"). When you visit our website that contains a social plugin, your browser establishes a direct connection to the servers of the Operator. The Operator directly transfers the plugin content to your browser which embeds the latter into our website, enabling the Operator to receive information about you having accessed the respective page of our website. Thus, AllianzGI US has no influence on the data gathered by the plugin and we inform you according to our state of knowledge: The embedded plugins provide the Operator with the information that you have accessed the corresponding page of our website. If you do not wish to have such data transferred to the Operators, you need to log out of your respective account before visiting our website. Please see the Operators' data privacy statements in order to get further information about purpose and scope of the data collection and the processing and use:
• Facebook: https://de-de.facebook.com/about/privacy
• Twitter: https://twitter.com/privacy
• Linked In: https://www.linkedin.com/legal/privacy-policy
July 31, 2020 | Semi-Annual Report 93
Privacy Policy (unaudited) (continued)
AllianzGI Diversified Income & Convertible Fund
AllianzGI Dividend, Interest & Premium Strategy Fund
AllianzGI Equity & Convertible Income Fund
Changes to Our Privacy Policy
We may modify this Privacy Policy from time-to-time to reflect changes in related practices and procedures, or applicable laws and regulations. If we make changes, we will notify you on our website and the revised Policy will become effective immediately upon posting to our website. We also will provide account owners with a copy of our Privacy Policy, annually if required. We encourage you to visit our website
periodically to remain up to date on our Privacy Policy. You acknowledge that by using our website after we have posted changes to this Privacy Policy, you are agreeing to the terms of the Privacy Policy as modified.
Obtaining Additional Information
If you have any questions about this Privacy Policy or our privacy related practices in the United States, you may contact us via our dedicated email at PrivacyUS@allianzgi.com.
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Trustees
Alan Rappaport
Chairman of the Board of Trustees
Sarah E. Cogan
Deborah A. DeCotis
F. Ford Drummond
Thomas J. Fuccillo
Erick R. Holt
James A. Jacobson
Hans W. Kertess
James S. MacLeod
William B. Ogden, IV
Davey S. Scoon
Fund Officers
Thomas J. Fuccillo
President and Chief Executive Officer
Scott Whisten
Treasurer, Principal Financial & Accounting Officer
Angela Borreggine
Chief Legal Officer & Secretary
Thomas L. Harter
Chief Compliance Officer
Richard J. Cochran
Assistant Treasurer
Orhan Dzemaili
Assistant Treasurer
Debra Rubano
Assistant Secretary
Craig A. Ruckman
Assistant Secretary
Investment Manager
Allianz Global Investors U.S. LLC
1633 Broadway
New York, NY 10019
Custodian & Accounting Agent
State Street Bank and Trust Co.
801 Pennsylvania Avenue
Kansas City, MO 64105
Transfer Agent, Dividend Paying Agent
and Registrar
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
1100 Walnut Street, Suite 1300
Kansas City, MO 64105
Legal Counsel
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
This report, including the financial information herein, is transmitted to the shareholders of AllianzGI Diversified Income & Convertible Fund, AllianzGI 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.
The financial information included herein is taken from the records of the Funds without examination by an independent registered public accounting firm, who did not express an opinion herein.
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 their stock in the open market.
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of their fiscal year on Form N-PORT. Each Fund's Form N-PORT is available on the SEC's website at www.sec.gov. The information on Form N-PORT is also available on the Funds' website at us.allianzgi.com/closedendfunds.
Information on the Funds is available at us.allianzgi.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 us.allianzgi.com/edelivery.
Allianz Global Investors Distributors LLC AZ601SA_073120