N-Q 1 c84183_nq.htm

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21980

ALPINE TOTAL DYNAMIC DIVIDEND FUND

(Exact name of registrant as specified in charter)

2500 Westchester Avenue, Suite 215, Purchase, New York 10577

(Address of principal executive offices) (Zip code)

Alpine Woods Capital Investors, LLC

2500 Westchester Avenue, Suite 215

Purchase, New York 10577

(Name and address of agent for service)

Copies of information to:

     
Rose F. DiMartino, Esq.   Sarah E. Cogan, Esq.
Willkie Farr & Gallagher LLP   Simpson Thacher &
Bartlett LLP
787 Seventh Avenue   425 Lexington Ave
New York, NY 10019-6099   New York, NY 10174

Registrant’s telephone number, including area code: 914-251-0880

Date of fiscal year end: October 31, 2016

Date of reporting period: January 31, 2016

 

Item 1. Schedule of Investments.

 

  Schedule of Portfolio Investments Alpine Total Dynamic Dividend Fund
  January 31, 2016 (Unaudited)  

 

  Shares   Security
Description
  Value
         
  Common Stocks-96.0% 
  
  Aerospace & Defense-1.0%  
 112,500   B/E Aerospace, Inc.$ 4,550,625 
 34,800   Raytheon Co.   4,462,752 
         9,013,377 
           
  Air Freight & Logistics-0.9%    
 65,900   FedEx Corp. (a)   8,756,792 
           
  Airlines-0.8%     
 200,000   Japan Airlines Co., Ltd.   7,506,666 
           
  Auto Components-1.3%     
 63,000   Delphi Automotive PLC   4,091,220 
 1,898,000   GKN PLC   7,594,191 
         11,685,411 
      
  Automobiles-0.9%     
 679,000   Ford Motor Co.   8,107,260 
           
  Banks-4.7%     
 540,815   Banco Bilbao Vizcaya Argentaria SA   3,480,997 
 466,000   Bangkok Bank PCL-NVDR   2,000,090 
 467,967   Citizens Financial Group, Inc.   9,944,299 
 204,000   Hana Financial Group, Inc.   3,671,131 
 461,000   Mitsubishi UFJ Financial Group, Inc.   2,363,960 
 1,296,200   Regions Financial Corp. (a)   10,525,144 
 361,500   Standard Chartered PLC   2,438,676 
 55,000   Sumitomo Mitsui Financial Group, Inc.   1,845,173 
 147,500   Wells Fargo & Co. (a)   7,408,925 
         43,678,395 
      
  Beverages-1.6%     
 117,300   Anheuser-Busch InBev NV-SP ADR (a)   14,761,032 
           
  Biotechnology-0.5%     
 51,000   Gilead Sciences, Inc.   4,233,000 
           
  Capital Markets-3.2%     
 60,000   Amundi SA (b)(c)   2,498,199 
 295,500   Daiwa Securities Group, Inc.   1,846,553 
 292,000   Invesco, Ltd. (a)   8,739,560 
 106,500   Lazard, Ltd.-Class A   3,832,935 
 425,811   Mediobanca SpA   3,412,617 
 140,000   Schroders PLC   5,469,974 
 74,500   State Street Corp.   4,151,885 
         29,951,723 
      
  Chemicals-2.4%     
 420,000   Clariant AG (b)   6,858,355 
 237,055   Johnson Matthey PLC   8,385,706 
 104,500   Symrise AG   6,776,746 
         22,020,807 
     
  Commercial Services & Supplies-0.6%    
 149,400   ISS A/S   5,281,774 

 

The accompanying notes are an integral part of these financial statements.

 
  Schedule of Portfolio Investments Alpine Total Dynamic Dividend Fund
  January 31, 2016 (Unaudited)  

 

  Communications Equipment-3.4%    
 360,500   Cisco Systems, Inc. (a)   8,576,295 
 146,500   Harris Corp.   12,741,105 
 1,386,000   Nokia OYJ   9,983,999 
        31,301,399 
           
  Construction & Engineering-2.6%     
 4,329,000   China Railway Construction Corp., Ltd.-Class H   4,358,778 
 427,500   Ferrovial SA   9,367,734 
 157,500   Vinci SA   10,670,185 
        24,396,697 
      
  Consumer Finance-1.0%     
 195,000   Discover Financial Services (a)   8,929,050 
           
  Diversified Financial Services-1.8%     
 723,100   Bank of America Corp. (a)   10,224,634 
 146,000   Citigroup, Inc. (a)   6,216,680 
        16,441,314 
     
  Diversified Telecommunication Services-1.6%    
 427,500   BT Group PLC-SP ADR (a)   14,902,650 
           
  Electric Utilities-1.4%     
 118,500   NextEra Energy, Inc.   13,237,635 
           
  Electronic Equipment, Instruments & Components-1.0%    
 160,000   TE Connectivity, Ltd. (a)   9,145,600 
           
  Food & Staples Retailing-1.9%     
 178,900   CVS Health Corp. (a)   17,279,951 
           
  Food Products-2.9%     
 296,500   Mondelez International, Inc.-Class A (a)   12,779,150 
 128,000   Nestle SA   9,430,062 
 65,000   The Kraft Heinz Co.   5,073,900 
        27,283,112 
     
  Health Care Equipment & Supplies-2.3%    
 151,700   Medtronic PLC (a)   11,517,064 
 98,000   Zimmer Biomet Holdings, Inc.   9,727,480 
        21,244,544 
      
  Health Care Providers & Services-3.6%     
 97,800   HCA Holdings, Inc. (b)   6,804,924 
 39,200   Humana, Inc. (a)   6,381,368 
 62,000   McKesson Corp. (a)   9,980,760 
 47,000   UnitedHealth Group, Inc. (a)   5,412,520 
 42,700   Universal Health Services, Inc.-Class B   4,809,728 
        33,389,300 
      
  Hotels, Restaurants & Leisure-3.1%     
 138,000   Aramark   4,409,100 
 161,000   Carnival Corp.   7,748,930 
 61,500   Darden Restaurants, Inc.   3,878,190 
 58,000   McDonald’s Corp.   7,179,240 
 69,000   Royal Caribbean Cruises, Ltd. (a)   5,655,240 
        28,870,700 
      
  Household Durables-1.2%     
 124,330   CalAtlantic Group, Inc.   4,039,482 
 169,500   Lennar Corp.-Class A (a)   7,144,425 
        11,183,907 

 

The accompanying notes are an integral part of these financial statements.

 
  Schedule of Portfolio Investments Alpine Total Dynamic Dividend Fund
  January 31, 2016 (Unaudited)  

 

  Household Products-1.6%     
 118,000   Energizer Holdings, Inc.   3,780,720 
 389,577   Svenska Cellulosa AB SCA-B Shares   11,546,144 
        15,326,864 
           
  Independent Power and Renewables-1.3%     
 545,000   NRG Yield, Inc.-Class C   7,215,800 
 282,100   Pattern Energy Group, Inc.   5,345,795 
         12,561,595 
      
  Industrial Conglomerates-1.5%     
 319,000   CK Hutchison Holdings, Ltd.   3,992,014 
 100,500   Siemens AG   9,632,898 
         13,624,912 
     
  Insurance-0.8%    
 47,300   Allianz SE   7,654,858 
           
  IT Services-1.0%     
 91,900   Accenture PLC-Class A (a)   9,699,126 
           
  Life Sciences Tools & Services-1.2%     
 84,200   Thermo Fisher Scientific, Inc. (a)   11,119,452 
           
  Machinery-1.6%     
 1,805,950   CRRC Corp., Ltd.-Class H   1,690,128 
 79,000   Snap-on, Inc. (a)   12,763,240 
         14,453,368 
      
  Media-3.4%     
 146,000   CBS Corp.-Class B   6,935,000 
 99,000   Comcast Corp.-Class A   5,515,290 
 2,393,500   ITV PLC   9,150,041 
 49,200   The Walt Disney Co. (a)   4,714,344 
 247,500   WPP PLC   5,382,504 
         31,697,179 
           
  Multi-Utilities-1.5%     
 355,000   CMS Energy Corp. (a)   13,802,400 
           
  Multiline Retail-1.6%     
 204,000   Dollar General Corp. (a)   15,312,240 
           
  Oil, Gas & Consumable Fuels-5.4%     
 311,000   BP PLC-SP ADR   10,067,070 
 60,500   Chevron Corp.   5,231,435 
 188,000   Enbridge, Inc. (a)   6,504,800 
 110,500   EOG Resources, Inc.   7,847,710 
 64,000   Exxon Mobil Corp.   4,982,400 
 139,500   Kinder Morgan, Inc.   2,294,775 
 148,000   Marathon Petroleum Corp.   6,184,920 
 69,500   Occidental Petroleum Corp. (a)   4,783,685 
 114,000   The Williams Cos., Inc.   2,200,200 
         50,096,995 
           
  Personal Products-0.5%     
 114,000   Unilever NV   5,049,761 

 

The accompanying notes are an integral part of these financial statements.

 
  Schedule of Portfolio Investments Alpine Total Dynamic Dividend Fund
  January 31, 2016 (Unaudited)  

 

  Pharmaceuticals-6.1%     
 158,000   AstraZeneca PLC-SP ADR (a)   5,090,760 
 57,700   Bayer AG   6,493,917 
 117,800   Mylan NV (b)   6,206,882 
 129,500   Novartis AG-SP ADR (a)   10,097,115 
 47,500   Perrigo Co. PLC   6,867,550 
 196,000   Pfizer, Inc.   5,976,040 
 19,000   Roche Holding AG   4,921,459 
 185,700   Teva Pharmaceutical Industries, Ltd.-SP ADR (a)   11,416,836 
         57,070,559 
           
  Real Estate Investment Trusts-6.3%     
 103,000   American Tower Corp. (a)   9,717,020 
 220,000   Colony Starwood Homes   4,734,400 
 116,000   Digital Realty Trust, Inc. (a)   9,289,280 
 700,000   Fibra Uno Administracion SA de CV   1,402,489 
 300,000   Four Corners Property Trust, Inc.   5,070,000 
 780   Nippon Building Fund, Inc.   4,034,352 
 351,000   NorthStar Realty Europe Corp.   3,313,440 
 421,500   NorthStar Realty Finance Corp.   5,003,205 
 840,723   Scentre Group   2,626,214 
 302,500   The Geo Group, Inc. (a)   8,947,950 
 674,738   Westfield Corp.   4,803,192 
         58,941,542 
           
  Real Estate Management & Development-1.4%     
 4,210,000   Global Logistic Properties, Ltd.   4,989,577 
 357,000   Mitsui Fudosan Co., Ltd.   8,404,091 
         13,393,668 
           
  Road & Rail-2.7%     
 76,000   Canadian Pacific Railway, Ltd. (a)   9,099,480 
 109,000   Kansas City Southern (a)   7,725,920 
 672,029   Rumo Logistica Operadora Multimodal SA (b)   317,550 
 112,000   Union Pacific Corp. (a)   8,064,000 
         25,206,950 
           
  Semiconductors & Semiconductor Equipment-2.9%     
 268,000   Applied Materials, Inc.   4,730,200 
 90,500   Avago Technologies, Ltd. (a)   12,100,755 
 177,000   Intel Corp.   5,490,540 
 192,000   SK Hynix, Inc.   4,431,554 
         26,753,049 
           
  Specialty Retail-2.0%     
 119,000   Dick’s Sporting Goods, Inc.   4,650,520 
 31,000   The Home Depot, Inc.   3,898,560 
 148,000   TJX Cos., Inc. (a)   10,543,520 
         19,092,600 
           
  Technology, Hardware, Storage & Peripherals-4.8%     
 159,500   Apple, Inc. (a)   15,525,730 
 551,500   EMC Corp. (a)   13,660,655 
 9,600   Samsung Electronics Co., Ltd.   9,287,541 
 119,000   Western Digital Corp.   5,709,620 
         44,183,546 
           
  Textiles, Apparel & Luxury Goods-0.6%     
 57,500   Carter’s, Inc. (a)   5,590,150 
           
  Water Utilities-0.8%     
 108,500   American Water Works Co., Inc.   7,042,735 

 

The accompanying notes are an integral part of these financial statements.

 
  Schedule of Portfolio Investments Alpine Total Dynamic Dividend Fund
  January 31, 2016 (Unaudited)  

 

  Wireless Telecommunication Services-1.3%     
 368,500   Vodafone Group PLC-SP ADR (a)   11,865,700 
     Total Common Stocks (Cost $897,352,678)   892,141,345 
           
  Equity-Linked Structured Notes-1.3%     
      
  Multi-Utilities-1.3%     
 496,000   Veolia Environnement SA-Morgan Stanley BV   11,958,117 
     Total Equity-Linked Structured Notes (Cost $10,698,026)   11,958,117 
           
Total Investments (Cost $908,050,704) (d) -97.3%904,099,462 
   
Other Assets in Excess of Liabilities-2.7%   24,968,359 
      
TOTAL NET ASSETS 100.0%$ 929,067,821 

 

Percentages are stated as a percent of net assets.

(a) All or a portion of the security has been designated as collateral for the line of credit.

(b) Non-income producing security.

(c) Restricted under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. Liquid securities restricted under Rule 144A comprised 0.3% of the Fund’s net assets.

(d) See Note 2 for the cost of investments for federal tax purposes.

 

Common Abbreviations

AG-Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders.

A/S-Aktieselskab is the Danish term for a stock-based corporation.

BV-Besloten Vennootschap is the Dutch equivalent of a private limited liability company.

NV-Naamloze Vennootschap is the Dutch term for a public limited liability corporation.

NVDR-Non-Voting Depositary Receipts

PCL-Public Company Limited

PLC-Public Limited Company

SA-Generally designates corporations in various countries, mostly those employing the civil law.

SA de CV-Sociedad Anonima de Capital Variable is the Spanish equivalent to Variable Capital Company.

SCA-Societe en Commandite par actions is the French equivalent of a limited partnership.

SE-SE Regulation. A European Company which can operate on a Europe-wide basis and be governed by Community law directly applicable in all Member States.

SP ADR-Sponsored American Depositary Receipt

SpA-Societa’ Per Azioni is an Italian shared company.

 

The accompanying notes are an integral part of these financial statements.

 

Alpine Total Dynamic Dividend Fund

Notes to Schedule of Portfolio Investments

January 31, 2016 (Unaudited)

 

1. Organization:

 

Alpine Total Dynamic Dividend Fund (the “Fund”) is a diversified, closed-end management investment company. The Fund was organized as a Delaware Statutory Trust on October 27, 2006, and had no operating history prior to January 26, 2007. The Board of Trustees (the “Board”) authorized an unlimited number of shares with no par value. The Fund’s primary investment objective is to seek high current dividend income. The Fund also focuses on long-term growth of capital as a secondary investment objective.

 

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 946 Financial Services - Investment Companies.

 

2. Significant Accounting Policies:

 

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from those estimates. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.

 

A. Valuation of Securities:

 

The net asset value (“NAV”) of shares of the Fund is calculated by dividing the value of the Fund’s net assets by the number of outstanding shares. NAV is determined each day the New York Stock Exchange (“NYSE”) is open as of the close of regular trading (normally, 4:00 p.m., Eastern Time). In computing NAV, portfolio securities of the Fund are valued at their current fair values determined on the basis of market quotations or if market quotations are not readily available or determined to be unreliable, through procedures and/or guidelines established by the Board. In computing the Fund’s NAV, equity securities that are traded on a securities exchange in the United States, except for those listed on NASDAQ Global Market, NASDAQ Global Select Market and NASDAQ Capital Market exchanges (collectively, “NASDAQ”) and option securities are valued at the last reported sale price as of the time of valuation. Securities traded on NASDAQ will be valued at the NASDAQ Official Closing Prices (“NOCP”). If, on a particular day, an exchange traded or NASDAQ security does not trade, then the mean between the most recent quoted bid and asked prices will be used. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used. Equity-linked structured notes are valued by referencing the last reported sale or settlement price of the underlying security on the day of valuation. Foreign exchange adjustments are applied to the last reported price to convert the underlying security’s trading currency to the equity-linked structured note’s settlement currency. Each option security traded on a securities exchange in the United States is valued at the last current reported sales price as of the time of valuation if the last current reported sales price falls within the consolidated bid/ask quote. If the last current reported sale price does not fall within the consolidated bid/ask quote, the security is valued at the mid-point of the consolidated bid/ask quote for the option security. Forward currency contracts are valued based on third-party vendor quotations. Each security traded in the over-the-counter market and quoted on the NASDAQ National Market System is valued at the NOCP, as determined by NASDAQ, or lacking an NOCP, the last current reported sale price as of the time of valuation by NASDAQ, or lacking any current reported sale on NASDAQ at the time of valuation, at the mean between the most recent bid and asked quotations. Each over-the-counter option that is not traded through the Options Clearing Corporation is valued by the counterparty of the option, or if the counterparty’s price is not readily available, then by using the Black-Scholes method. Debt and short-term securities are valued based on an evaluated bid price as furnished by pricing services approved by the Board, which may be based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders, a computerized matrix system, or appraisals derived from information concerning the securities or similar securities received from recognized dealers in those securities. Each other security traded over-the-counter is valued at the mean between the most recent bid and asked quotations.

 

Securities that are principally traded in a foreign market are valued at the last current sale price at the time of valuation or lacking any current or reported sale, at the time of valuation, at the mean between the most recent bid and asked quotations as of the close of the appropriate exchange or other designated time. Trading in securities on European and Far Eastern securities exchanges and over-the-counter markets is normally completed at various times before the close of business on each day on which the NYSE is open. Trading of these securities may not take place on every NYSE business day. In addition, trading may take place in various foreign markets on Saturdays or on other days when the NYSE is not open and on which the Fund’s NAV is not calculated.

 

When market quotations are not readily available or when the valuation methods mentioned above are not reflective of a fair value of the security, the security is valued at fair value following procedures and/or guidelines approved by the Board. The Fund may also use fair value pricing, if the value of a security it holds is, pursuant to the Board guidelines, materially affected by events occurring before the Fund’s NAV is calculated but after the close of the primary market or market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders, a computerized matrix system, or appraisals derived from information concerning the securities or similar securities received from recognized dealers in those securities. The Board has approved the use of a third-party pricing vendor’s proprietary fair value pricing model to assist in determining current valuation for foreign equities and OTC derivatives traded in markets that close prior to the NYSE. When fair value pricing is employed, the value of the portfolio security used to calculate the Fund’s NAV may differ from quoted or official closing prices. The Fund may also fair value a security if the Fund or Adviser believes that the market price is stale. Other types of securities that the Fund may hold for which fair value pricing might be required include illiquid securities including restricted securities and private placements for which there is no public market.

 

For securities valued by the Fund, valuation techniques are used to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

 

The Board of Trustees adopted procedures which utilize fair value procedures when any assets for which reliable market quotations are not readily available or for which the Fund’s pricing service does not provide a valuation or provides a valuation that in the judgment of the Adviser does not represent fair value. The Board of Trustees has established a Valuation Committee which is responsible for (1) monitoring the valuation of Fund securities and other investments; and (2) as required, when the Board of Trustees is not in session, reviewing and approving the fair value of illiquid and other holdings after consideration of all relevant factors, which determinations are reported to the Board of Trustees.

 

Fair Value Measurement:

 

In accordance with FASB ASC, “Fair Value Measurement” (“ASC 820”), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 uses a three-tier hierarchy to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entities’ own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

 

Level 1 -  Unadjusted quoted prices in active markets for identical investments.
   
Level 2 -  Other significant observable inputs (including quoted prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, etc.).
   
Level 3 -  Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

Various inputs are used in determining the value of the Fund’s investments as of the reporting period end. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under ASC 820.

 

The following is a summary of the inputs used to value the Fund’s assets and liabilities carried at fair value as of January 31, 2016:

 

      Valuation Inputs  
Investments in Securities at Value*  Level 1  Level 2  Level 3  Total Value
Common Stocks            
Consumer Discretionary  $109,412,711   $22,126,736   $   $131,539,447 
Consumer Staples   58,724,514    20,976,206        79,700,720 
Energy   50,096,995            50,096,995 
Financials   119,949,095    59,041,455        178,990,550 
Health Care   115,641,479    11,415,376        127,056,855 
Industrials   55,740,359    52,500,177        108,240,536 
Information Technology   97,379,626    23,703,094        121,082,720 
Materials       22,020,807        22,020,807 
Telecommunication Services   26,768,350            26,768,350 
Utilities   46,644,365            46,644,365 
Equity-Linked Structured Notes       11,958,117        11,958,117 
Total  $680,357,494   $223,741,968   $   $904,099,462 
         
      Valuation Inputs  
Other Financial Instruments  Level 1  Level 2  Level 3  Total Value
Assets            
Forward Currency Contracts  $   $1,780,692   $   $1,780,692 
Total  $   $1,780,692   $   $1,780,692 

 

* For detailed industry descriptions, see accompanying Schedule of Portfolio Investments.

 

As of the period ended January 31, 2016, certain securities were transferred from one level (as of October 31, 2015) to another. Based on beginning of period market values as of November 1, 2015, approximately $196,421,144 was transferred from Level 1 to Level 2 as a result of a decrease in the number of observable inputs that were readily available to the independent pricing service. As of the period ended January 31, 2016, the Fund had no transfers between Levels 2 and 3.

 

B. Federal and Other Income Taxes:

 

It is the Fund’s policy to comply with the Federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies and to distribute timely, all of its investment company taxable income and net realized capital gains to shareholders in accordance with the timing requirements imposed by the Code. Therefore, no Federal income tax provision is required. Capital gains realized on some foreign securities are subject to foreign taxes. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such capital gains and withholding taxes, which are accrued as applicable, may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake procedural steps to claim the benefits of such treaties. Where available, the Fund will file refund claims for foreign taxes withheld.

 

As of January 31, 2016, net unrealized appreciation/(depreciation) of investments, excluding foreign currency, based on Federal tax costs was as follows:*

 

  Cost of
investments
    Gross unrealized
appreciation
    Gross unrealized
depreciation
    Net unrealized
depreciation
$908,050,704   $91,532,368   $(95,483,610)   $(3,951,242) 

 

* Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous fiscal year end. For the previous fiscal year’s Federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.

 

C. Distributions to Shareholders:

 

The Fund intends to make a level distribution each month to its shareholders of the net investment income of the Fund after payment of Fund operating expenses. The level distribution rate may be modified or eliminated by the Board from time to time.

 

If a monthly distribution exceeds the Fund’s monthly estimated investment company taxable income (which may include net short-term capital gain) and net tax-exempt income, the excess could result in a tax-free return of capital distribution from the Fund’s assets. The determination of a tax-free return of capital is made on an annual basis as further described below. The Fund’s final distribution for each calendar year will include any remaining investment company taxable income and net tax-exempt income undistributed during the year, as well as all net capital gains, if any, realized during the year. If the total distributions made in any fiscal year exceed annual investment company taxable income, net tax-exempt income and net capital gain, such excess distributed amount would be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits. Distributions in excess of the accumulated investment company taxable income, net tax-exempt income and net capital gain would first be a tax-free return of capital to the extent of the adjusted tax basis in the shares. After such adjusted tax basis is reduced to zero, the distribution would constitute capital gain (assuming the shares are held as capital assets). Distributions to shareholders are recorded by the Fund on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

 

D. Foreign Currency Translation Transactions:

 

The Fund may invest a portion of its assets in foreign securities. In the event that the Fund executes a foreign security transaction, the Fund will generally enter into a forward foreign currency contract to settle the foreign security transaction. The books and records of the Fund are maintained in U.S. dollars. Non-U.S. dollar-denominated amounts are translated into U.S. dollars as follows, with the resultant translations gains and losses recorded in the Statement of Operations:

 

i) fair value of investment securities and other assets and liabilities at the exchange rate on the valuation date.

 

ii) purchases and sales of investment securities, income and expenses at the exchange rate prevailing on the respective date of such transactions.

 

E. Risks Associated with Foreign Securities and Currencies:

 

Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of domestic issuers. Such risks include future political and economic developments and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is a possibility of expropriation of assets, confiscatory taxation, political or social instability or diplomatic developments, which could adversely affect investments in those countries. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund’s investments denominated in that currency will lose value because that currency is worth fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value.

 

Certain countries may also impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers or industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available to the Fund or result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.

 

F. Equity-Linked Structured Notes:

 

The Fund may invest in equity-linked structured notes. Equity-linked structured notes are securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, and equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.

 

G. Forward Currency Contracts:

 

The Fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objective. The Fund may use forward currency contracts to gain exposure to or economically hedge against changes in the value of foreign currencies. A forward currency contract (“forward”) is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of the forward contract fluctuates with changes in forward currency exchange rates. The forward contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation.

 

When the forward contract is closed, a Fund records a realized gain or loss equal to the fluctuation in value during the period the forward contract was open. A Fund could be exposed to risk if a counterparty is unable to meet the terms of a forward or if the value of the currency changes unfavorably. The Fund’s forward contracts are not subject to a master netting agreement or similar agreement.

 

The following forward currency contracts were held as of January 31, 2016:

 

Description  Counterparty   Settlement
Date
  Currency  Settlement
Value
  Current
Value
  Unrealized
Appreciation
Contracts Sold:                         
Euro  State Street Bank and Trust Company  06/09/16  34,500,000 EUR  $37,753,522   $37,515,293   $238,229 
British Pound  State Street Bank and Trust Company  06/09/16  20,600,000 GBP   30,907,004    29,364,541    1,542,463 
                 $66,879,834   $1,780,692 
 

Item 2 - Controls and Procedures.

 

  (a) The Registrant’s principal executive officer and principal financial officer have evaluated the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures were effective, as of that date.

 

  (b) There was no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3 – Exhibits.

Separate certifications for the Registrant’s principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    ALPINE TOTAL DYNAMIC DIVIDEND FUND
     
      By:  

/s/ Samuel A. Lieber

        Samuel A. Lieber
        President (Principal Executive Officer)
     
      Date:   March 23, 2016

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

      By:  

/s/ Samuel A. Lieber

        Samuel A. Lieber
        President (Principal Executive Officer)
     
      Date:    March 23, 2016
     
      By:  

/s/ Ronald G. Palmer, Jr.

        Ronald G. Palmer, Jr.
       

Chief Financial Officer (Principal

Financial Officer)

     
      Date:   March 23, 2016