NPORT-EX 1 NPORT_2899428201695006.htm

 

Schedule of Investments

AllianzGI Diversified Income & Convertible Fund

April 30, 2019 (unaudited)

 

Principal
Amount
(000s)

 

 

 

Value*

 

CONVERTIBLE BONDS & NOTES - 66.4%

 

 

 

Aerospace & Defense - 0.5%

 

 

 

$910

 

Aerojet Rocketdyne Holdings, Inc., 2.25%, 12/15/23 (g) 

 

$1,304,809

 

 

 

 

 

 

 

Apparel & Textiles - 0.1%

 

 

 

860

 

Iconix Brand Group, Inc., 5.75%, 8/15/23

 

344,000

 

 

 

 

 

 

 

Auto Components - 0.1%

 

 

 

340

 

Meritor, Inc., 3.25%, 10/15/37

 

351,329

 

 

 

 

 

 

 

Auto Manufacturers - 0.8%

 

 

 

1,845

 

Tesla, Inc., 2.375%, 3/15/22 (g) 

 

1,898,837

 

 

 

 

 

 

 

Biotechnology - 5.1%

 

 

 

165

 

Amicus Therapeutics, Inc., 3.00%, 12/15/23

 

374,522

 

1,655

 

BioMarin Pharmaceutical, Inc., 0.599%, 8/1/24 (g) 

 

1,705,516

 

1,595

 

Exact Sciences Corp., 0.375%, 3/15/27 (g) 

 

1,799,477

 

 

 

Illumina, Inc. (g),

 

 

 

1,830

 

zero coupon, 8/15/23 (a)(b)

 

1,981,708

 

210

 

0.50%, 6/15/21

 

288,225

 

1,410

 

Insmed, Inc., 1.75%, 1/15/25 (g) 

 

1,472,569

 

1,880

 

Intercept Pharmaceuticals, Inc., 3.25%, 7/1/23 (g) 

 

1,759,147

 

 

 

Medicines Co.,

 

 

 

1,300

 

2.75%, 7/15/23 (g)

 

1,195,478

 

380

 

3.50%, 1/15/24 (a)(b)

 

545,479

 

1,220

 

PTC Therapeutics, Inc., 3.00%, 8/15/22 (g) 

 

1,279,507

 

 

 

 

 

12,401,628

 

Commercial Services - 3.0%

 

 

 

2,095

 

Chegg, Inc., 0.125%, 3/15/25 (a)(b) 

 

2,013,819

 

1,795

 

Euronet Worldwide, Inc., 0.75%, 3/15/49 (a)(b) 

 

2,007,889

 

905

 

FTI Consulting, Inc., 2.00%, 8/15/23 (a)(b) 

 

972,992

 

1,875

 

Square, Inc., 0.50%, 5/15/23 (a)(b)(g) 

 

2,243,380

 

 

 

 

 

7,238,080

 

Computers - 1.6%

 

 

 

1,110

 

Lumentum Holdings, Inc., 0.25%, 3/15/24 (g) 

 

1,384,247

 

1,160

 

Pure Storage, Inc., 0.125%, 4/15/23

 

1,286,371

 

740

 

Rapid7, Inc., 1.25%, 8/1/23 (a)(b)(g) 

 

1,073,384

 

 

 

 

 

3,744,002

 

Diversified Financial Services - 0.9%

 

 

 

845

 

LendingTree, Inc., 0.625%, 6/1/22 (g) 

 

1,623,456

 

675

 

PRA Group, Inc., 3.00%, 8/1/20 (g) 

 

648,106

 

 

 

 

 

2,271,562

 

Electric Utilities - 0.9%

 

 

 

1,970

 

NRG Energy, Inc., 2.75%, 6/1/48 (a)(b)(g) 

 

2,222,088

 

 

 

 

 

 

 

Electronic Equipment, Instruments & Components - 0.8%

 

 

 

 

 

SunPower Corp. (g),

 

 

 

1,115

 

0.875%, 6/1/21

 

968,599

 

1,035

 

4.00%, 1/15/23

 

861,637

 

 

 

 

 

1,830,236

 

Electronics - 1.7%

 

 

 

1,545

 

Fortive Corp., 0.875%, 2/15/22 (a)(b)(g) 

 

1,633,876

 

1,095

 

II-VI, Inc., 0.25%, 9/1/22 (g) 

 

1,198,566

 

1,245

 

OSI Systems, Inc., 1.25%, 9/1/22 (g) 

 

1,295,862

 

 

 

 

 

4,128,304

 

Energy-Alternate Sources - 0.0%

 

 

 

3,615

 

SunEdison, Inc., 3.375%, 6/1/25 (a)(b)(c) 

 

81,337

 

 

 

 

 

 

 

Engineering & Construction - 0.7%

 

 

 

1,545

 

KBR, Inc., 2.50%, 11/1/23 (a)(b) 

 

1,688,866

 

 

 

 

 

 

 

Entertainment - 0.7%

 

 

 

1,425

 

Live Nation Entertainment, Inc., 2.50%, 3/15/23

 

1,678,736

 

 

 

Equity Real Estate Investment Trusts (REITs) - 1.2%

 

 

 

1,220

 

Blackstone Mortgage Trust, Inc., 4.375%, 5/5/22 (g) 

 

1,244,068

 

595

 

Extra Space Storage L.P., 3.125%, 10/1/35 (a)(b)(g) 

 

695,911

 

755

 

IIP Operating Partnership L.P., 3.75%, 2/21/24 (a)(b)(g) 

 

950,489

 

 

 

 

 

2,890,468

 

Healthcare-Products - 2.5%

 

 

 

1,840

 

CONMED Corp., 2.625%, 2/1/24 (a)(b)(g) 

 

2,017,627

 

1,450

 

Insulet Corp., 1.375%, 11/15/24 (a)(b)(g) 

 

1,655,814

 

205

 

Repligen Corp., 2.125%, 6/1/21

 

441,194

 

1,714

 

Wright Medical Group, Inc., 1.625%, 6/15/23 (a)(b)(g) 

 

1,868,089

 

 

 

 

 

5,982,724

 

Healthcare-Services - 1.0%

 

 

 

245

 

Anthem, Inc., 2.75%, 10/15/42

 

892,413

 

170

 

Molina Healthcare, Inc., 1.125%, 1/15/20

 

542,568

 

750

 

Teladoc Health, Inc., 1.375%, 5/15/25 (a)(b)(g) 

 

993,017

 

 

 

 

 

2,427,998

 

Internet - 9.0%

 

 

 

1,095

 

Boingo Wireless, Inc., 1.00%, 10/1/23 (a)(b) 

 

984,249

 

 

 

Booking Holdings, Inc. (g),

 

 

 

745

 

0.35%, 6/15/20

 

1,066,870

 

1,325

 

0.90%, 9/15/21

 

1,512,858

 

1,535

 

Ctrip.com International Ltd., 1.99%, 7/1/25 (g) 

 

1,725,570

 

550

 

Etsy, Inc., zero coupon, 3/1/23

 

1,072,844

 

775

 

IAC FinanceCo., Inc., 0.875%, 10/1/22 (a)(b)(g) 

 

1,205,609

 

690

 

MercadoLibre, Inc., 2.00%, 8/15/28 (a)(b) 

 

892,688

 

765

 

Okta, Inc., 0.25%, 2/15/23

 

1,696,627

 

1,750

 

Palo Alto Networks, Inc., 0.75%, 7/1/23 (a)(b)(g) 

 

1,992,305

 

415

 

Q2 Holdings, Inc., 0.75%, 2/15/23

 

583,653

 

1,125

 

RingCentral, Inc., zero coupon, 3/15/23

 

1,704,702

 

2,360

 

Twitter, Inc., 0.25%, 6/15/24 (a)(b)(g) 

 

2,388,827

 

970

 

Wayfair, Inc., 1.125%, 11/1/24 (a)(b)(g) 

 

1,513,222

 

1,745

 

Wix.com Ltd., zero coupon, 7/1/23 (a)(b)(g) 

 

2,056,592

 

945

 

Zendesk, Inc., 0.25%, 3/15/23

 

1,426,014

 

 

 

 

 

21,822,630

 

Lodging - 0.8%

 

 

 

1,315

 

Caesars Entertainment Corp., 5.00%, 10/1/24 (g) 

 

1,949,580

 

 

 

 

 

 

 

Machinery-Diversified - 0.9%

 

 

 

1,335

 

Chart Industries, Inc., 1.00%, 11/15/24 (a)(b)(g) 

 

2,138,146

 

 

 

 

 

 

 

Media - 3.8%

 

 

 

 

 

DISH Network Corp. (g),

 

 

 

910

 

2.375%, 3/15/24

 

794,392

 

2,390

 

3.375%, 8/15/26

 

2,198,352

 

 

 

Liberty Media Corp. (g),

 

 

 

1,315

 

1.00%, 1/30/23

 

1,575,980

 

2,090

 

2.125%, 3/31/48 (a)(b)

 

2,035,023

 

735

 

2.25%, 12/1/48 (a)(b)

 

830,602

 

485

 

World Wrestling Entertainment, Inc., 3.375%, 12/15/23

 

1,671,086

 

 

 

 

 

9,105,435

 

Oil, Gas & Consumable Fuels - 3.0%

 

 

 

2,035

 

Chesapeake Energy Corp., 5.50%, 9/15/26 (g) 

 

1,850,494

 

1,065

 

Ensco Jersey Finance Ltd., 3.00%, 1/31/24 (g) 

 

902,588

 

2,620

 

Nabors Industries, Inc., 0.75%, 1/15/24 (g) 

 

1,898,838

 

1,320

 

Oasis Petroleum, Inc., 2.625%, 9/15/23 (g) 

 

1,265,396

 

1,170

 

Transocean, Inc., 0.50%, 1/30/23 (g) 

 

1,255,571

 

 

 

 

 

7,172,887

 

Pharmaceuticals - 3.2%

 

 

 

500

 

Array BioPharma, Inc., 2.625%, 12/1/24 (a)(b)(g) 

 

825,929

 

1,055

 

DexCom, Inc., 0.75%, 12/1/23 (a)(b)(g) 

 

1,101,157

 

1,070

 

Herbalife Nutrition Ltd., 2.625%, 3/15/24

 

1,125,432

 

1,735

 

Horizon Pharma Investment Ltd., 2.50%, 3/15/22 (g) 

 

1,952,959

 

400

 

Neurocrine Biosciences, Inc., 2.25%, 5/15/24 (g) 

 

483,735

 

775

 

Sarepta Therapeutics, Inc., 1.50%, 11/15/24

 

1,385,313

 

960

 

Teva Pharmaceutical Finance Co. LLC, 0.25%, 2/1/26, Ser. C (g) 

 

893,978

 

 

 

 

 

7,768,503

 

 

 

Pipelines - 1.0%

 

 

 

2,960

 

Cheniere Energy, Inc., 4.25%, 3/15/45 (g) 

 

2,353,200

 

 

 

 

 

 

 

Retail - 0.9%

 

 

 

890

 

Guess?, Inc., 2.00%, 4/15/24 (a)(b) 

 

928,617

 

1,555

 

RH, zero coupon, 6/15/23 (a)(b)(g) 

 

1,353,259

 

 

 

 

 

2,281,876

 

Semiconductors - 7.6%

 

 

 

495

 

Advanced Micro Devices, Inc., 2.125%, 9/1/26 (g) 

 

1,747,875

 

1,590

 

Cree, Inc., 0.875%, 9/1/23 (a)(b)(g) 

 

2,017,045

 

1,950

 

Cypress Semiconductor Corp., 2.00%, 2/1/23 (g) 

 

2,122,273

 

 

 

Inphi Corp. (g),

 

 

 

585

 

0.75%, 9/1/21

 

623,025

 

990

 

1.125%, 12/1/20

 

1,247,400

 

515

 

Intel Corp., 3.25%, 8/1/39

 

1,287,382

 

3,355

 

Microchip Technology, Inc., 1.625%, 2/15/27 (g) 

 

4,361,033

 

260

 

Novellus Systems, Inc., 2.625%, 5/15/41

 

1,638,286

 

1,480

 

ON Semiconductor Corp., 1.625%, 10/15/23

 

1,947,014

 

450

 

Silicon Laboratories, Inc., 1.375%, 3/1/22

 

574,407

 

545

 

Teradyne, Inc., 1.25%, 12/15/23

 

894,707

 

 

 

 

 

18,460,447

 

Software - 11.8%

 

 

 

2,375

 

Akamai Technologies, Inc., 0.125%, 5/1/25 (a)(b)(g) 

 

2,519,940

 

585

 

Alteryx, Inc., 0.50%, 6/1/23 (a)(b)(g) 

 

1,225,778

 

1,360

 

Atlassian, Inc., 0.625%, 5/1/23 (a)(b) 

 

2,014,544

 

1,850

 

DocuSign, Inc., 0.50%, 9/15/23 (a)(b)(g) 

 

2,001,487

 

1,670

 

Envestnet, Inc., 1.75%, 6/1/23 (a)(b)(g) 

 

2,017,981

 

775

 

Five9, Inc., 0.125%, 5/1/23 (a)(b)(g) 

 

1,101,706

 

895

 

j2 Global, Inc., 3.25%, 6/15/29

 

1,216,641

 

1,885

 

LivePerson, Inc., 0.75%, 3/1/24 (a)(b) 

 

1,953,425

 

435

 

MongoDB, Inc., 0.75%, 6/15/24 (a)(b)(g) 

 

927,245

 

1,605

 

New Relic, Inc., 0.50%, 5/1/23 (a)(b)(g) 

 

1,879,589

 

1,895

 

Pluralsight, Inc., 0.375%, 3/1/24 (a)(b) 

 

2,164,628

 

955

 

RealPage, Inc., 1.50%, 11/15/22 (g) 

 

1,562,037

 

1,290

 

ServiceNow, Inc., zero coupon, 6/1/22 (g) 

 

2,613,847

 

1,720

 

Splunk, Inc., 1.125%, 9/15/25 (a)(b)(g) 

 

2,009,098

 

590

 

Twilio, Inc., 0.25%, 6/1/23 (a)(b) 

 

1,182,890

 

1,450

 

Workday, Inc., 0.25%, 10/1/22 (g) 

 

2,159,385

 

 

 

 

 

28,550,221

 

Telecommunications - 1.8%

 

 

 

2,060

 

GCI Liberty, Inc., 1.75%, 9/30/46 (a)(b)(g) 

 

2,328,251

 

1,755

 

Viavi Solutions, Inc., 1.00%, 3/1/24 (g) 

 

2,053,494

 

 

 

 

 

4,381,745

 

Transportation - 1.0%

 

 

 

2,320

 

Air Transport Services Group, Inc., 1.125%, 10/15/24 (g) 

 

2,324,350

 

 

 

 

 

 

 

Total Convertible Bonds & Notes (cost-$154,722,689)

 

160,794,024

 

 

Shares

 

 

 

 

COMMON STOCK - 34.4%

 

 

 

Aerospace & Defense - 0.7%

 

 

 

3,400

 

Boeing Co. (g) 

 

1,284,146

 

2,600

 

Raytheon Co. (g) 

 

461,734

 

 

 

 

 

1,745,880

 

Automobiles - 0.3%

 

 

 

72,600

 

Ford Motor Co. (g) 

 

758,670

 

 

 

 

 

 

 

Banks - 1.3%

 

 

 

42,300

 

Bank of America Corp.

 

1,293,534

 

4,911

 

CCF Holdings LLC Class A, (cost—$0; purchased 12/18/18) (d)(f)(h)(i) 

 

—

†

5,357

 

CCF Holdings LLC Class B, (cost—$0; purchased 12/12/18) (d)(f)(h)(i) 

 

1

 

17,000

 

JPMorgan Chase & Co.

 

1,972,850

 

 

 

 

 

3,266,385

 

Beverages - 0.5%

 

 

 

9,000

 

PepsiCo, Inc.

 

1,152,450

 

 

 

Biotechnology - 1.5%

 

 

 

13,200

 

AbbVie, Inc.

 

1,047,948

 

1,900

 

Biogen, Inc. (i) 

 

435,556

 

15,200

 

Gilead Sciences, Inc. (g) 

 

988,608

 

7,100

 

Vertex Pharmaceuticals, Inc. (i) 

 

1,199,758

 

 

 

 

 

3,671,870

 

Building Products - 0.3%

 

 

 

17,452

 

Johnson Controls International PLC

 

654,450

 

 

 

 

 

 

 

Capital Markets - 0.3%

 

 

 

2,800

 

S&P Global, Inc.

 

617,848

 

 

 

 

 

 

 

Chemicals - 0.5%

 

 

 

16,600

 

Chemours Co.

 

597,766

 

3,800

 

DOW, Inc. (i) 

 

215,574

 

11,400

 

DowDuPont, Inc.

 

438,330

 

 

 

 

 

1,251,670

 

Communications Equipment - 0.2%

 

 

 

7,200

 

Cisco Systems, Inc. (g) 

 

402,840

 

 

 

 

 

 

 

Construction & Engineering - 0.2%

 

 

 

15,300

 

Fluor Corp. (g) 

 

607,869

 

 

 

 

 

 

 

Diversified Telecommunication Services - 0.0%

 

 

 

32,499

 

Frontier Communications Corp. (i) 

 

92,622

 

 

 

 

 

 

 

Energy Equipment & Services - 0.3%

 

 

 

9,200

 

National Oilwell Varco, Inc.

 

240,488

 

12,800

 

Schlumberger Ltd. (g) 

 

546,304

 

 

 

 

 

786,792

 

Entertainment - 1.7%

 

 

 

4,600

 

Netflix, Inc. (g)(i) 

 

1,704,484

 

8,900

 

Take-Two Interactive Software, Inc. (i) 

 

861,787

 

11,200

 

Walt Disney Co. (g) 

 

1,534,064

 

 

 

 

 

4,100,335

 

Food & Staples Retailing - 1.4%

 

 

 

6,800

 

Costco Wholesale Corp. (g) 

 

1,669,604

 

32,900

 

Kroger Co. (g) 

 

848,162

 

16,700

 

Walgreens Boots Alliance, Inc. (g) 

 

894,619

 

 

 

 

 

3,412,385

 

Healthcare Equipment & Supplies - 1.4%

 

 

 

4,000

 

Align Technology, Inc. (i) 

 

1,298,720

 

22,500

 

Boston Scientific Corp. (i) 

 

835,200

 

2,400

 

Intuitive Surgical, Inc. (g)(i) 

 

1,225,512

 

 

 

 

 

3,359,432

 

Healthcare Providers & Services - 1.3%

 

 

 

3,500

 

Laboratory Corp. of America Holdings (i) 

 

559,720

 

9,300

 

McKesson Corp. (g) 

 

1,109,025

 

6,600

 

UnitedHealth Group, Inc.

 

1,538,262

 

 

 

 

 

3,207,007

 

Hotels, Restaurants & Leisure - 1.3%

 

 

 

6,800

 

McDonald’s Corp. (g) 

 

1,343,476

 

14,900

 

Starbucks Corp. (g) 

 

1,157,432

 

3,700

 

Wynn Resorts Ltd.

 

534,465

 

 

 

 

 

3,035,373

 

Household Durables - 0.4%

 

 

 

21,700

 

DR Horton, Inc. (g) 

 

961,527

 

 

 

 

 

 

 

Industrial Conglomerates - 0.8%

 

 

 

3,500

 

3M Co. (g) 

 

663,285

 

7,300

 

Honeywell International, Inc.

 

1,267,499

 

 

 

 

 

1,930,784

 

 

 

Insurance - 0.4%

 

 

 

11,400

 

Progressive Corp.

 

890,910

 

 

 

 

 

 

 

Interactive Media & Services - 2.0%

 

 

 

2,200

 

Alphabet, Inc., Class A (g)(i) 

 

2,637,712

 

11,800

 

Facebook, Inc., Class A (g)(i) 

 

2,282,120

 

 

 

 

 

4,919,832

 

Internet & Direct Marketing Retail - 1.6%

 

 

 

6,800

 

Alibaba Group Holding Ltd., ADR (g)(i) 

 

1,261,876

 

1,400

 

Amazon.com, Inc. (g)(i) 

 

2,697,128

 

 

 

 

 

3,959,004

 

IT Services - 2.3%

 

 

 

10,600

 

Fiserv, Inc. (i) 

 

924,744

 

6,000

 

International Business Machines Corp. (g) 

 

841,620

 

11,800

 

PayPal Holdings, Inc. (g)(i) 

 

1,330,686

 

15,300

 

Visa, Inc., Class A (g) 

 

2,515,779

 

 

 

 

 

5,612,829

 

Machinery - 1.1%

 

 

 

13,300

 

Caterpillar, Inc.

 

1,854,286

 

5,000

 

Deere & Co.

 

828,150

 

 

 

 

 

2,682,436

 

Media - 0.6%

 

 

 

31,500

 

Comcast Corp., Class A

 

1,371,195

 

13,574

 

LiveStyle, Inc. (d)(f)(i)(j) 

 

1

 

 

 

 

 

1,371,196

 

Multi-Line Retail - 0.5%

 

 

 

15,200

 

Target Corp.

 

1,176,784

 

 

 

 

 

 

 

Oil, Gas & Consumable Fuels - 0.8%

 

 

 

14,900

 

Occidental Petroleum Corp.

 

877,312

 

60,184

 

Southwestern Energy Co. (i) 

 

237,727

 

9,500

 

Valero Energy Corp. (g) 

 

861,270

 

 

 

 

 

1,976,309

 

Pharmaceuticals - 1.4%

 

 

 

10,000

 

Allergan PLC

 

1,470,000

 

16,200

 

Bristol-Myers Squibb Co.

 

752,166

 

7,300

 

Merck & Co., Inc. (g) 

 

574,583

 

43,950

 

Teva Pharmaceutical Industries Ltd., ADR (i) 

 

668,919

 

 

 

 

 

3,465,668

 

Road & Rail - 0.6%

 

 

 

8,800

 

Union Pacific Corp. (g) 

 

1,557,952

 

 

 

 

 

 

 

Semiconductors & Semiconductor Equipment - 2.5%

 

 

 

4,100

 

Broadcom, Inc. (g) 

 

1,305,440

 

29,100

 

Marvell Technology Group Ltd. (g) 

 

728,082

 

25,300

 

Micron Technology, Inc. (i) 

 

1,064,118

 

6,400

 

NVIDIA Corp.

 

1,158,400

 

9,700

 

QUALCOMM, Inc. (g) 

 

835,461

 

7,500

 

Texas Instruments, Inc. (g) 

 

883,725

 

 

 

 

 

5,975,226

 

Software - 3.7%

 

 

 

7,200

 

Adobe, Inc. (g)(i) 

 

2,082,600

 

3,200

 

Intuit, Inc. (g) 

 

803,392

 

21,300

 

Microsoft Corp.

 

2,781,780

 

8,000

 

Salesforce.com, Inc. (g)(i) 

 

1,322,800

 

4,700

 

ServiceNow, Inc. (g)(i) 

 

1,276,097

 

3,100

 

Workday, Inc., Class A (i) 

 

637,453

 

 

 

 

 

8,904,122

 

Specialty Retail - 0.8%

 

 

 

9,400

 

Home Depot, Inc.

 

1,914,780

 

 

 

 

 

 

 

Technology Hardware, Storage & Peripherals - 1.4%

 

 

 

12,000

 

Apple, Inc. (g) 

 

2,408,040

 

 

 

12,700

 

NetApp, Inc.

 

925,195

 

 

 

 

 

3,333,235

 

Textiles, Apparel & Luxury Goods - 0.3%

 

 

 

13,439

 

Iconix Brand Group, Inc. (i) 

 

22,712

 

7,600

 

NIKE, Inc., Class B (g) 

 

667,508

 

 

 

 

 

690,220

 

 

 

 

 

 

 

Total Common Stock (cost-$98,299,885)

 

83,446,692

 

 

Principal
Amount
(000s)

 

 

 

 

 

CORPORATE BONDS & NOTES - 27.6%

 

 

 

Aerospace & Defense - 0.6%

 

 

 

$1,000

 

TransDigm, Inc., 6.50%, 5/15/25 (g) 

 

1,013,750

 

350

 

Triumph Group, Inc., 7.75%, 8/15/25

 

350,000

 

 

 

 

 

1,363,750

 

Auto Components - 0.8%

 

 

 

360

 

Adient U.S. LLC, 7.00%, 5/15/26 (a)(b) 

 

369,450

 

1,000

 

Goodyear Tire & Rubber Co., 5.00%, 5/31/26 (g) 

 

975,868

 

475

 

Panther BF Aggregator 2 L.P., 8.50%, 5/15/27 (a)(b) 

 

491,625

 

 

 

 

 

1,836,943

 

Auto Manufacturers - 0.4%

 

 

 

435

 

Navistar International Corp., 6.625%, 11/1/25 (a)(b)(g) 

 

445,875

 

540

 

Tesla, Inc., 5.30%, 8/15/25 (a)(b) 

 

463,725

 

 

 

 

 

909,600

 

Banks - 0.3%

 

 

 

680

 

Royal Bank of Scotland Group PLC, 5.125%, 5/28/24 (g) 

 

707,299

 

 

 

 

 

 

 

Building Materials - 0.1%

 

 

 

185

 

Builders FirstSource, Inc., 5.625%, 9/1/24 (a)(b) 

 

186,156

 

 

 

 

 

 

 

Chemicals - 1.0%

 

 

 

1,000

 

Chemours Co., 7.00%, 5/15/25

 

1,060,000

 

305

 

Kraton Polymers LLC, 7.00%, 4/15/25 (a)(b)(g) 

 

316,727

 

85

 

Trinseo Materials Operating SCA, 5.375%, 9/1/25 (a)(b)(g) 

 

83,088

 

875

 

Tronox, Inc., 6.50%, 4/15/26 (a)(b)(g) 

 

885,937

 

 

 

 

 

2,345,752

 

Commercial Services - 1.7%

 

 

 

190

 

Cardtronics, Inc., 5.50%, 5/1/25 (a)(b)(g) 

 

188,100

 

350

 

Cenveo Corp., 6.00%, 5/15/24 (cost—$421,987; purchased 12/14/15) (a)(b)(c)(d)(f)(h) 

 

19,250

 

300

 

Gartner, Inc., 5.125%, 4/1/25 (a)(b)(g) 

 

308,016

 

750

 

Hertz Corp., 7.625%, 6/1/22 (a)(b)(g) 

 

775,781

 

475

 

Laureate Education, Inc., 8.25%, 5/1/25 (a)(b)(g) 

 

516,562

 

915

 

RR Donnelley & Sons Co., 6.00%, 4/1/24 (g) 

 

924,150

 

 

 

United Rentals North America, Inc.,

 

 

 

30

 

4.625%, 10/15/25

 

29,850

 

425

 

5.25%, 1/15/30

 

427,391

 

1,000

 

5.50%, 7/15/25 (g)

 

1,038,000

 

 

 

 

 

4,227,100

 

Computers - 0.4%

 

 

 

520

 

Dell International LLC, 7.125%, 6/15/24 (a)(b)(g) 

 

550,137

 

500

 

Harland Clarke Holdings Corp., 9.25%, 3/1/21 (a)(b)(g) 

 

513,750

 

 

 

 

 

1,063,887

 

Distribution/Wholesale - 0.2%

 

 

 

495

 

H&E Equipment Services, Inc., 5.625%, 9/1/25 (g) 

 

504,281

 

 

 

 

 

 

 

Diversified Financial Services - 1.4%

 

 

 

1,600

 

CCF Holdings LLC, 10.75%, 12/15/23, PIK 10.75% (a)(b)(d)(f) 

 

583,641

 

1,500

 

Community Choice Financial Issuer LLC, 9.00%, 6/15/23 (cost—$1,500,000; purchased 9/6/18) (a)(b)(g)(h) 

 

1,501,875

 

1,000

 

Springleaf Finance Corp., 8.25%, 10/1/23

 

1,137,500

 

 

 

250

 

Travelport Corporate Finance PLC, 6.00%, 3/15/26 (a)(b) 

 

269,375

 

 

 

 

 

3,492,391

 

Electric Utilities - 0.8%

 

 

 

1,000

 

NRG Energy, Inc., 6.25%, 5/1/24 (g) 

 

1,034,075

 

1,000

 

Talen Energy Supply LLC, 6.50%, 6/1/25 (g) 

 

882,500

 

 

 

 

 

1,916,575

 

Electrical Equipment - 0.3%

 

 

 

750

 

Energizer Holdings, Inc., 7.75%, 1/15/27 (a)(b)(g) 

 

814,688

 

 

 

 

 

 

 

Electronics - 0.1%

 

 

 

245

 

Sensata Technologies BV, 5.625%, 11/1/24 (a)(b) 

 

261,538

 

 

 

 

 

 

 

Engineering & Construction - 0.4%

 

 

 

500

 

AECOM, 5.875%, 10/15/24 (g) 

 

531,875

 

435

 

Tutor Perini Corp., 6.875%, 5/1/25 (a)(b)(g) 

 

436,631

 

 

 

 

 

968,506

 

Entertainment - 1.4%

 

 

 

885

 

AMC Entertainment Holdings, Inc., 6.125%, 5/15/27 (g) 

 

828,581

 

 

 

Cedar Fair L.P.,

 

 

 

250

 

5.375%, 6/1/24

 

256,875

 

190

 

5.375%, 4/15/27 (g)

 

194,786

 

665

 

Eldorado Resorts, Inc., 6.00%, 9/15/26

 

693,263

 

1,000

 

Scientific Games International, Inc., 5.00%, 10/15/25 (a)(b)(g) 

 

997,500

 

515

 

Stars Group Holdings BV, 7.00%, 7/15/26 (a)(b) 

 

541,394

 

 

 

 

 

3,512,399

 

Equity Real Estate Investment Trusts (REITs) - 0.1%

 

 

 

 

 

CyrusOne L.P. (g),

 

 

 

210

 

5.00%, 3/15/24

 

215,977

 

60

 

5.375%, 3/15/27

 

62,389

 

 

 

 

 

278,366

 

Food & Beverage - 0.3%

 

 

 

310

 

Albertsons Cos. LLC, 7.50%, 3/15/26 (a)(b)(g) 

 

330,150

 

495

 

Post Holdings, Inc., 5.75%, 3/1/27 (a)(b)(g) 

 

509,850

 

 

 

 

 

840,000

 

Food Service - 0.2%

 

 

 

390

 

Aramark Services, Inc., 5.00%, 2/1/28 (a)(b)(g) 

 

397,917

 

 

 

 

 

 

 

Healthcare-Products - 0.4%

 

 

 

260

 

Hill-Rom Holdings, Inc., 5.00%, 2/15/25 (a)(b)(g) 

 

265,850

 

750

 

Mallinckrodt International Finance S.A., 5.75%, 8/1/22 (a)(b) 

 

706,875

 

 

 

 

 

972,725

 

Healthcare-Services - 1.7%

 

 

 

1,000

 

Community Health Systems, Inc., 6.875%, 2/1/22 (g) 

 

659,375

 

800

 

DaVita, Inc., 5.125%, 7/15/24 (g) 

 

802,000

 

450

 

Encompass Health Corp., 5.75%, 11/1/24 (g) 

 

457,875

 

1,000

 

HCA, Inc., 7.50%, 2/15/22 (g) 

 

1,102,500

 

1,000

 

Tenet Healthcare Corp., 8.125%, 4/1/22 (g) 

 

1,070,710

 

 

 

 

 

4,092,460

 

Home Builders - 0.6%

 

 

 

365

 

Brookfield Residential Properties, Inc., 6.50%, 12/15/20 (a)(b)(g) 

 

366,369

 

1,000

 

KB Home, 8.00%, 3/15/20 (g) 

 

1,042,500

 

 

 

 

 

1,408,869

 

Internet - 0.5%

 

 

 

470

 

Netflix, Inc., 5.375%, 11/15/29 (a)(b) 

 

476,463

 

305

 

Symantec Corp., 5.00%, 4/15/25 (a)(b)(g) 

 

311,262

 

490

 

Zayo Group LLC, 5.75%, 1/15/27 (a)(b)(g) 

 

498,575

 

 

 

 

 

1,286,300

 

Lodging - 0.6%

 

 

 

355

 

MGM Resorts International, 5.50%, 4/15/27

 

366,981

 

1,000

 

Wynn Las Vegas LLC, 5.50%, 3/1/25 (a)(b)(g) 

 

1,012,190

 

 

 

 

 

1,379,171

 

 

 

Machinery-Construction & Mining - 0.1%

 

 

 

360

 

Terex Corp., 5.625%, 2/1/25 (a)(b)(g) 

 

364,950

 

 

 

 

 

 

 

Machinery-Diversified - 0.1%

 

 

 

220

 

Tennant Co., 5.625%, 5/1/25

 

227,150

 

 

 

 

 

 

 

Media - 2.4%

 

 

 

1,000

 

Cablevision Systems Corp., 8.00%, 4/15/20 (g) 

 

1,044,280

 

 

 

CCO Holdings LLC (g),

 

 

 

125

 

5.125%, 5/1/27 (a)(b)

 

127,188

 

300

 

5.50%, 5/1/26 (a)(b)

 

310,350

 

500

 

5.75%, 1/15/24

 

513,750

 

490

 

Clear Channel Worldwide Holdings, Inc., 9.25%, 2/15/24 (a)(b)(g) 

 

528,587

 

1,000

 

CSC Holdings LLC, 7.75%, 7/15/25 (a)(b)(g) 

 

1,077,187

 

220

 

DISH DBS Corp., 5.875%, 7/15/22 (g) 

 

215,479

 

1,000

 

Gray Television, Inc., 5.875%, 7/15/26 (a)(b) 

 

1,033,130

 

440

 

Meredith Corp., 6.875%, 2/1/26

 

459,800

 

500

 

Nexstar Broadcasting, Inc., 5.875%, 11/15/22 (g) 

 

512,500

 

 

 

 

 

5,822,251

 

Metal Fabricate/Hardware - 0.2%

 

 

 

470

 

Park-Ohio Industries, Inc., 6.625%, 4/15/27 (g) 

 

472,350

 

 

 

 

 

 

 

Mining - 0.8%

 

 

 

305

 

Alcoa Nederland Holding BV, 6.75%, 9/30/24 (a)(b)(g) 

 

323,300

 

695

 

Constellium NV, 6.625%, 3/1/25 (a)(b)(g) 

 

724,538

 

560

 

Freeport-McMoRan, Inc., 3.55%, 3/1/22 (g) 

 

556,500

 

270

 

Hudbay Minerals, Inc., 7.625%, 1/15/25 (a)(b)(g) 

 

282,150

 

 

 

 

 

1,886,488

 

Miscellaneous Manufacturing - 0.1%

 

 

 

285

 

Koppers, Inc., 6.00%, 2/15/25 (a)(b)(g) 

 

277,248

 

 

 

 

 

 

 

Oil, Gas & Consumable Fuels - 2.6%

 

 

 

235

 

AmeriGas Partners L.P., 5.875%, 8/20/26 (g) 

 

246,729

 

250

 

Callon Petroleum Co., 6.125%, 10/1/24 (g) 

 

258,050

 

1,000

 

Carrizo Oil & Gas, Inc., 6.25%, 4/15/23 (g) 

 

977,310

 

1,041

 

Chesapeake Energy Corp., 8.00%, 3/15/26 (a)(b) 

 

1,058,651

 

1,000

 

CVR Refining LLC, 6.50%, 11/1/22 (g) 

 

1,021,250

 

1,000

 

Ensco Rowan PLC, 7.75%, 2/1/26 (g) 

 

867,500

 

310

 

NGL Energy Partners L.P., 7.50%, 4/15/26 (a)(b) 

 

321,222

 

 

 

Sunoco L.P. (g),

 

 

 

300

 

5.50%, 2/15/26

 

306,000

 

170

 

5.875%, 3/15/28

 

174,675

 

495

 

Transocean, Inc., 7.50%, 1/15/26 (a)(b)(g) 

 

490,050

 

465

 

USA Compression Partners L.P., 6.875%, 9/1/27 (a)(b) 

 

491,737

 

 

 

 

 

6,213,174

 

Paper & Forest Products - 0.2%

 

 

 

365

 

Mercer International, Inc., 7.375%, 1/15/25 (a)(b) 

 

386,216

 

 

 

 

 

 

 

Pharmaceuticals - 1.2%

 

 

 

295

 

Bausch Health Americas, Inc., 8.50%, 1/31/27 (a)(b)(g) 

 

322,103

 

1,000

 

Bausch Health Cos., Inc., 6.125%, 4/15/25 (a)(b)(g) 

 

1,015,000

 

615

 

Endo Finance LLC, 5.375%, 1/15/23 (a)(b)(g) 

 

513,525

 

1,000

 

Horizon Pharma USA, Inc., 6.625%, 5/1/23

 

1,030,625

 

 

 

 

 

2,881,253

 

Pipelines - 0.2%

 

 

 

 

 

Targa Resources Partners L.P. (a)(b),

 

 

 

335

 

6.50%, 7/15/27

 

359,706

 

230

 

6.875%, 1/15/29

 

248,975

 

 

 

 

 

608,681

 

Real Estate - 0.3%

 

 

 

700

 

Kennedy-Wilson, Inc., 5.875%, 4/1/24 (g) 

 

708,750

 

 

 

 

 

 

 

Retail - 1.0%

 

 

 

1,000

 

Conn’s, Inc., 7.25%, 7/15/22 (g) 

 

1,005,000

 

300

 

L Brands, Inc., 6.875%, 11/1/35 (g) 

 

267,750

 

1,000

 

Neiman Marcus Group Ltd. LLC, 8.00%, 10/15/21 (a)(b)(g) 

 

637,500

 

480

 

Party City Holdings, Inc., 6.625%, 8/1/26 (a)(b) 

 

477,010

 

 

 

 

 

2,387,260

 

 

 

Semiconductors - 0.2%

 

 

 

475

 

Amkor Technology, Inc., 6.625%, 9/15/27 (a)(b) 

 

485,984

 

 

 

 

 

 

 

Software - 1.1%

 

 

 

800

 

Camelot Finance S.A., 7.875%, 10/15/24 (a)(b)(g) 

 

846,000

 

1,000

 

MSCI, Inc., 5.375%, 5/15/27 (a)(b)(g) 

 

1,053,750

 

230

 

Rackspace Hosting, Inc., 8.625%, 11/15/24 (a)(b)(g) 

 

215,050

 

480

 

SS&C Technologies, Inc., 5.50%, 9/30/27 (a)(b) 

 

493,200

 

 

 

 

 

2,608,000

 

Telecommunications - 2.7%

 

 

 

700

 

CenturyLink, Inc., 7.50%, 4/1/24, Ser. Y (g) 

 

753,816

 

800

 

Cincinnati Bell, Inc., 7.00%, 7/15/24 (a)(b)(g) 

 

742,024

 

1,000

 

Consolidated Communications, Inc., 6.50%, 10/1/22 (g) 

 

953,750

 

295

 

Frontier Communications Corp., 10.50%, 9/15/22 (g) 

 

216,825

 

385

 

GTT Communications, Inc., 7.875%, 12/31/24 (a)(b)(g) 

 

364,788

 

1,000

 

Hughes Satellite Systems Corp., 7.625%, 6/15/21 (g) 

 

1,070,000

 

750

 

Intelsat Jackson Holdings S.A., 5.50%, 8/1/23

 

679,687

 

500

 

Level 3 Financing, Inc., 5.375%, 5/1/25 (g) 

 

510,550

 

365

 

Sprint Corp., 7.625%, 3/1/26 (g) 

 

365,566

 

1,000

 

T-Mobile USA, Inc., 4.75%, 2/1/28 (g) 

 

1,012,500

 

 

 

 

 

6,669,506

 

Transportation - 0.1%

 

 

 

150

 

XPO Logistics, Inc., 6.50%, 6/15/22 (a)(b)(g) 

 

153,938

 

 

 

 

 

 

 

Total Corporate Bonds & Notes (cost-$68,545,713)

 

66,919,872

 

 

Shares

 

 

 

 

 

CONVERTIBLE PREFERRED STOCK - 11.5%

 

 

 

Banks - 3.2%

 

 

 

3,105

 

Bank of America Corp., 7.25%, Ser. L (e)(g) 

 

4,100,184

 

2,835

 

Wells Fargo & Co., 7.50%, Ser. L (e)(g) 

 

3,706,592

 

 

 

 

 

7,806,776

 

Chemicals - 0.7%

 

 

 

30,970

 

International Flavors & Fragrances, Inc., 6.00%, 9/15/21 (g) 

 

1,623,757

 

 

 

 

 

 

 

Electric Utilities - 2.3%

 

 

 

24,690

 

American Electric Power Co., Inc., 6.125%, 3/15/22

 

1,283,386

 

28,020

 

CenterPoint Energy, Inc., 7.00%, 9/1/21, Ser. B (g) 

 

1,491,785

 

44,455

 

NextEra Energy, Inc., 6.123%, 9/1/19 (g) 

 

2,773,992

 

 

 

 

 

5,549,163

 

Electronics - 0.7%

 

 

 

1,495

 

Fortive Corp., 5.00%, 7/1/21, Ser. A (g) 

 

1,613,479

 

 

 

 

 

 

 

Equity Real Estate Investment Trusts (REITs) - 0.8%

 

 

 

1,675

 

Crown Castle International Corp., 6.875%, 8/1/20, Ser. A (g) 

 

1,931,880

 

 

 

 

 

 

 

Hand/Machine Tools - 0.9%

 

 

 

7,305

 

Colfax Corp., 5.75%, 1/15/22

 

979,308

 

11,415

 

Stanley Black & Decker, Inc., 5.375%, 5/15/20 (g) 

 

1,168,097

 

 

 

 

 

2,147,405

 

Healthcare-Products - 1.7%

 

 

 

25,585

 

Becton Dickinson and Co., 6.125%, 5/1/20, Ser. A (g) 

 

1,526,018

 

2,410

 

Danaher Corp., 4.75%, 4/15/22, Ser. A (g) 

 

2,538,935

 

 

 

 

 

4,064,953

 

Insurance - 0.8%

 

 

 

19,420

 

Assurant, Inc., 6.50%, 3/15/21, Ser. D (g) 

 

2,019,874

 

 

 

 

 

 

 

Investment Companies - 0.4%

 

 

 

4,805

 

Mandatory Exchangeable Trust, 5.75%, 6/1/19 (a)(b)(g) 

 

995,764

 

 

 

 

 

 

 

Total Convertible Preferred Stock (cost-$27,053,109)

 

27,753,051

 

 

 

 

 

PREFERRED STOCK (a)(d)(f)(j)- 0.5%

 

 

 

Media - 0.5%

 

 

 

532

 

LiveStyle, Inc., Ser. A

 

72,379

 

11,500

 

LiveStyle, Inc., Ser. B (i)

 

1,150,000

 

 

 

1,250

 

LiveStyle, Inc., Ser. B (i)

 

12

 

 

 

 

 

 

 

Total Preferred Stock (cost-$2,429,842)

 

1,222,391

 

 

Units

 

 

 

 

 

WARRANTS (a)(d)(f)(i)(j) - 0.0%

 

 

 

Media - 0.0%

 

 

 

3,000

 

LiveStyle, Inc., expires 11/30/21, Ser. C (cost-$0)

 

—

†

 

Principal
Amount
(000s)

 

 

 

 

 

Repurchase Agreements - 4.2%

 

 

 

$10,156

 

State Street Bank and Trust Co., dated 4/30/19, 0.50%, due 5/1/19, proceeds $10,156,141; collateralized by U.S. Treasury Notes, 2.75%, due 5/31/23, valued at $10,363,810 including accrued interest (cost-$10,156,000)

 

10,156,000

 

 

 

 

 

 

 

Total Investments, before options written
(cost-$361,207,238)-144.6%

 

350,292,030

 

 

 

 

 

Total Options Written —(0.0)% (premiums received-$71,172) (i)(k)(l)

 

(76,185

)

 

 

 

 

Total Investments, net of options written
(cost-$361,136,066) (m)-144.6%

 

350,215,845

 

Other liabilities in excess of other assets-(44.6)%

 

(107,987,588

)

Net Assets-100.0%

 

$242,228,257

 

 

 

Notes to Schedule of Investments:

 

* Portfolio securities and other financial instruments for which market quotations are readily available are valued at market value. Market values for various types of securities and other instruments are determined on the basis of closing prices or last sales prices on an exchange or other market, or based on quotes or other market information obtained from quotation reporting systems, established market makers or pricing services. Investments in mutual funds are valued at the net asset value per share (“NAV”) as reported on each business day. The Fund’s investments are valued daily using prices supplied by an independent pricing service or broker/dealer quotations, or by using the last sale or settlement price on the exchange that is the primary market for such securities, or the mean between the last bid and ask quotations. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics.

 

The Board of Trustees of the Fund (the “Board”) has adopted procedures for valuing portfolio securities and other financial instruments in circumstances where market quotes are not readily available (including in cases where available market quotations are deemed to be unreliable), and has delegated primary responsibility for applying the valuation methods to the investment manager, Allianz Global Investors U.S. LLC (the “Investment Manager”). The Fund’s Valuation Committee was established by the Board to oversee the implementation of the Fund’s valuation methods and to make fair value determinations on behalf of the Board, as instructed. The Investment Manager monitors the continued appropriateness of methods applied and identifies circumstances and events that may require fair valuation. The Investment Manager determines if adjustments should be made in light of market changes, events affecting the issuer, or other factors. If the Investment Manager determines that a valuation method may no longer be appropriate, another valuation method previously approved by the Valuation Committee may be selected or the Fund’s 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.

 

Short-term debt instruments having a remaining maturity of 60 days or less will be valued at amortized cost unless the Board or its Valuation Committee determines that particular circumstances dictate otherwise.

 

The prices used by the Fund to value investments may differ from the value that would be realized if the investments were sold, and these differences could be material. The Fund’s 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. In unusual circumstances, the Board or the Valuation Committee may in good faith determine the NAV as of 4:00 p.m., Eastern Time, notwithstanding an earlier, unscheduled close or halt of trading on the NYSE.

 

†                                         Actual amount rounds to less than $1.

(a)                                 Private Placement—Restricted as to resale and may not have a readily available market. Securities with an aggregate value of $104,575,131, representing 43.2% of net assets.

(b)                                 144A—Exempt 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. Securities with an aggregate value of $103,352,740, representing 42.7% of net assets.

(c)                                  In default.

(d)                                 Fair-Valued—Securities with an aggregate value of $1,825,284, representing 0.8% of net assets.

(e)                                  Perpetual maturity. The date shown, if any, is the next call date.

(f)                                   Level 3 security.

(g)                                  All or partial amount segregated for the benefit of the counterparty as collateral for options written and long-term and short-term loan financing.

(h)                                 Restricted. The aggregate cost of such securities is $1,960,572. The aggregate value is $1,521,126, representing 0.6% of net assets.

(i)                                     Non-income producing.

(j)                                    A member of the Fund’s portfolio management team is a member of the board of directors of LiveStyle, Inc. The Fund’s aggregate value of investments in LiveStyle, Inc. represents 0.5% of net assets.

(k)                                 Exchange traded-Chicago Board Options Exchange.

(l)                                     Exchange traded option contracts outstanding at April 30, 2019:

 

Options written contracts outstanding at April 30, 2019:

 

Description

 

Exercise Price

 

Expiration
Date

 

Number of
Contracts

 

Notional
Amount

 

Market
Value

 

Premiums
Received

 

Unrealized
Appreciation
(Depreciation)

 

Call options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3M Co.

 

230.00 USD

 

5/17/19

 

(14

)

$(1,400

)

$(49

)

$(1,207

)

$1,158

 

Adobe, Inc.

 

315.00 USD

 

6/21/19

 

(20

)

(2,000

)

(5,670

)

(4,339

)

(1,331

)

Alibaba Group Holding Ltd.

 

210.00 USD

 

6/21/19

 

(35

)

(3,500

)

(5,320

)

(5,618

)

298

 

Alphabet, Inc.

 

1,370.00 USD

 

5/17/19

 

(6

)

(600

)

(120

)

(2,189

)

2,069

 

Amazon.com, Inc.

 

2,100.00 USD

 

5/17/19

 

(5

)

(500

)

(527

)

(2,934

)

2,407

 

Apple, Inc.

 

220.00 USD

 

5/17/19

 

(35

)

(3,500

)

(1,680

)

(2,143

)

463

 

Boeing Co.

 

420.00 USD

 

5/17/19

 

(16

)

(1,600

)

(200

)

(867

)

667

 

Broadcom, Inc.

 

340.00 USD

 

5/17/19

 

(15

)

(1,500

)

(637

)

(1,429

)

792

 

Costco Wholesale Corp.

 

260.00 USD

 

6/21/19

 

(17

)

(1,700

)

(3,060

)

(2,691

)

(369

)

DR Horton, Inc.

 

50.00 USD

 

5/17/19

 

(130

)

(13,000

)

(390

)

(3,820

)

3,430

 

Facebook, Inc.

 

195.00 USD

 

5/17/19

 

(20

)

(2,000

)

(6,600

)

(1,364

)

(5,236

)

Intuit, Inc.

 

262.50 USD

 

5/17/19

 

(8

)

(800

)

(700

)

(432

)

(268

)

 

 

Intuitive Surgical, Inc.

 

560.00 USD

 

6/21/19

 

(12

)

(1,200

)

(3,990

)

(3,279

)

(711

)

Marvell Technology Group Ltd.

 

28.00 USD

 

6/21/19

 

(145

)

(14,500

)

(7,758

)

(8,173

)

415

 

McDonald’s Corp.

 

210.00 USD

 

5/17/19

 

(34

)

(3,400

)

(136

)

(763

)

627

 

Merck & Co., Inc.

 

82.50 USD

 

6/21/19

 

(35

)

(3,500

)

(1,855

)

(1,191

)

(664

)

Netflix, Inc.

 

425.00 USD

 

6/21/19

 

(25

)

(2,500

)

(5,275

)

(5,867

)

592

 

NIKE, Inc.

 

95.00 USD

 

6/21/19

 

(40

)

(4,000

)

(1,000

)

(884

)

(116

)

PayPal Holdings, Inc.

 

116.00 USD

 

5/17/19

 

(60

)

(6,000

)

(4,620

)

(3,372

)

(1,248

)

Salesforce.com, Inc.

 

177.50 USD

 

5/17/19

 

(40

)

(4,000

)

(1,280

)

(1,287

)

7

 

ServiceNow, Inc.

 

280.00 USD

 

5/17/19

 

(22

)

(2,200

)

(6,160

)

(1,760

)

(4,400

)

Starbucks Corp.

 

80.00 USD

 

5/17/19

 

(75

)

(7,500

)

(1,200

)

(2,397

)

1,197

 

Texas Instruments, Inc.

 

124.00 USD

 

5/17/19

 

(35

)

(3,500

)

(542

)

(1,369

)

827

 

Union Pacific Corp.

 

185.00 USD

 

6/21/19

 

(45

)

(4,500

)

(7,223

)

(5,404

)

(1,819

)

Visa, Inc.

 

170.00 USD

 

5/17/19

 

(75

)

(7,500

)

(1,575

)

(4,647

)

3,072

 

Walt Disney Co.

 

140.00 USD

 

5/17/19

 

(45

)

(4,500

)

(8,618

)

(1,746

)

(6,872

)

Total options written contracts

 

 

 

 

 

 

 

 

 

$(76,185

)

$(71,172

)

$(5,013

)

 

(m)                             At April 30, 2019, the aggregate cost basis of portfolio securities for federal income tax purposes was $361,967,044. Gross unrealized appreciation was $16,938,428; gross unrealized depreciation was $28,689,627; and net unrealized depreciation was $11,751,199. The difference between book and tax cost basis was primarily attributable to wash sale loss deferrals and differing treatment of bond premium amortization.

 

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 Fund has 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 Investment Manager’s or the Fund’s  Valuation Committee’s own assumptions and securities whose price was determined by using a single broker’s quote)

 

The valuation techniques used by the Fund to measure fair value during the three months ended April 30, 2019 were intended to maximize the use of observable inputs and to minimize the use of unobservable inputs.

 

An investment asset’s or liability’s level within the fair value hierarchy is based on the lowest level input, individually or in aggregate, that is significant to the 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.

 

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 Fund generally uses to evaluate how to classify each major category of assets and liabilities within Level 2 and Level 3, in accordance with accounting principles generally accepted in the United States of America.

 

Equity Securities (Common and Preferred Stock and Warrants) — 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 based on 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, and 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 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”) and FLexible EXchange (“FLEX”) options 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 and FLEX option contracts are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.

 

A summary of the inputs used at April 30, 2019 in valuing the Fund’s assets and liabilities is listed below (refer to the Schedule of Investments for more detailed information on Investments in Securities):

 

 

 

 

Level 1 -
Quoted Prices

 

Level 2 -
Other Significant
Observable
Inputs

 

Level 3 -
Significant
Unobservable
Inputs

 

Value at
4/30/19

 

Investments in Securities - Assets

 

 

 

 

 

 

 

 

 

Convertible Bonds & Notes

 

—

 

$160,794,024

 

—

 

$160,794,024

 

Common Stock:

 

 

 

 

 

 

 

 

 

Banks

 

$3,266,384

 

—

 

$1

 

3,266,385

 

Media

 

1,371,195

 

—

 

1

 

1,371,196

 

All Other

 

78,809,111

 

—

 

—

 

78,809,111

 

Corporate Bonds & Notes:

 

 

 

 

 

 

 

 

 

Commercial Services

 

—

 

4,207,850

 

19,250

 

4,227,100

 

Diversified Financial Services

 

—

 

2,908,750

 

583,641

 

3,492,391

 

All Other

 

—

 

59,200,381

 

—

 

59,200,381

 

Convertible Preferred Stock:

 

 

 

 

 

 

 

 

 

Electronics

 

—

 

1,613,479

 

—

 

1,613,479

 

Equity Real Estate Investment Trusts (REITs)

 

—

 

1,931,880

 

—

 

1,931,880

 

Hand/Machine Tools

 

979,308

 

1,168,097

 

—

 

2,147,405

 

Healthcare-Products

 

2,538,935

 

1,526,018

 

—

 

4,064,953

 

Investment Companies

 

—

 

995,764

 

—

 

995,764

 

All Other

 

16,999,570

 

—

 

—

 

16,999,570

 

Preferred Stock

 

—

 

—

 

1,222,391

 

1,222,391

 

Repurchase Agreements

 

—

 

10,156,000

 

—

 

10,156,000

 

 

 

103,964,503

 

244,502,243

 

1,825,284

 

350,292,030

 

Investments in Securities - Liabilities

 

 

 

 

 

 

 

 

 

Options Written:

 

 

 

 

 

 

 

 

 

Market Price

 

(76,185

)

—

 

—

 

(76,185

)

Totals

 

$103,888,318

 

$244,502,243

 

$1,825,284

 

$350,215,845

 

 

A roll forward of fair value measurements using significant unobservable inputs (Level 3) for the three months ended April 30, 2019, was as follows:

 

 

 

Beginning
Balance
1/31/19

 

Purchases

 

Sales

 

Accrued
Discount
(Premiums)

 

Net
Realized
Gain (Loss)

 

Net Change
in Unrealized
Appreciation/
Depreciation

 

Transfers
into
Level 3

 

Transfers
out of
Level 3

 

Ending
Balance
4/30/19

 

Investments in Securities - Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banks

 

$1

 

$—

 

$—

 

$—

 

$—

 

$—

 

$—

 

$—

 

$1

 

Media

 

1

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

1

 

Corporate Bonds & Notes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Services

 

19,250

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

19,250

 

Diversified Financial Services

 

780,069

 

—

 

—

 

6,733

 

—

 

(203,161

)

—

 

—

 

583,641

 

Preferred Stock

 

1,173,631

 

—

 

—

 

—

 

—

 

48,760

 

—

 

—

 

1,222,391

 

Totals

 

$1,972,952

 

$—

 

$—

 

$6,733

 

$—

 

$(154,401

)

$—

 

$—

 

$1,825,284

 

 

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 at April 30, 2019:

 

 

 

Ending
Balance
at 4/30/19

 

Valuation
Technique Used

 

Unobservable
Inputs

 

Input Values (Ranges)

 

Investments in Securities - Assets

 

 

 

 

 

 

 

 

 

Corporate Bonds & Notes:

 

 

 

 

 

 

 

 

 

Diversified Financial Services

 

$583,641

 

Market and Company Comparables

 

Implied Price

 

$36.47

 

Preferred Stock

 

$1,222,379

 

Market and Company Comparables

 

EV Multiples

 

0.76x (0.30x - 1.37x)

 

 

 

 

 

 

 

Illiquidity Discount

 

25%

 

 

The table above does not include Level 3 investments that are valued by brokers or independent pricing services.

 

The net change in unrealized appreciation/depreciation of Level 3 investments held at April 30, 2019 was $(154,401).

 

Glossary:

 

ADR - American Depositary Receipt

 

PIK - Payment-in-Kind

 

REIT - Real Estate Investment Trust