Clough Global Equity Funds
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21712

Clough Global Equity Fund

(exact name of registrant as specified in charter)

1290 Broadway, Suite 1100, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

Erin E. Douglas, Secretary

Clough Global Equity Fund

1290 Broadway, Suite 1100

Denver, Colorado 80203

(Name and address of agent for service)

Registrant’s telephone number, including area code: 303-623-2577

Date of fiscal year end: March 31

Date of reporting period: September 30, 2011


Table of Contents

Item 1. Reports to Stockholders.


Table of Contents

LOGO


Table of Contents

Table of Contents

   Clough Global Funds

 

 

    

Shareholder Letter

     1   
 
    

Portfolio Allocation

  
    

 

Global Allocation Fund

     3   
    

 

Global Equity Fund

     4   
    

 

Global Opportunities Fund

     5   
 
    

Statement of Investments

  
    

 

Global Allocation Fund

     6   
    

 

Global Equity Fund

     12   
    

 

Global Opportunities Fund

     18   
 
    

Statements of Assets and Liabilities

     24   
 
    

Statements of Operations

     25   
 
    

Statements of Changes in Net Assets

     26   
 
    

Statements of Cash Flows

     27   
 
    

Financial Highlights

  
    

 

Global Allocation Fund

     28   
    

 

Global Equity Fund

     30   
    

 

Global Opportunities Fund

     32   
 
    

Notes to Financial Statements

     34   
 
    

Dividend Reinvestment Plan

     45   
 
    

Additional Information

  
    

 

Fund Proxy Voting Policies & Procedures

     46   
    

 

Portfolio Holdings

     46   
    

 

Notice

     46   
    

 

Shareholder Meeting

     46   
 
    

Investment Advisory Agreement

     47   
 
       


Table of Contents

Clough Global Funds

   Shareholder Letter
   September 30, 2011 (Unaudited)

    

 

To our Shareholders:

Performance:

During the twelve months ended September 30, 2011, the Clough Global Allocation Fund’s total return, assuming reinvestment of all distributions, was -5.76% based on the net asset value and -10.11% based on the market price of the stock. That compares with 1.14% return for the S&P 500 for the same period. Since the Fund’s inception on July 28, 2004, the total growth in net asset value assuming reinvestment of all distributions has been 4.69%, this compares to an average annual total return of 2.53% for the S&P 500 through September 30, 2011. Total distributions since inception has been $11.71 per share, and based on the current dividend rate of $0.30 per share, offer a yield of 9.68% on market price as of September 30, 2011, of $12.40.

During the twelve months ended September 30, 2011, the Clough Global Equity Fund’s total return, assuming reinvestment of all distributions, was -6.41% based on the net asset value and -11.12% based on the market price of the stock. That compares with 1.14% return for the S&P 500 for the same period. Since the Fund’s inception on April 27, 2005, the total growth in net asset value assuming reinvestment of all distributions has been 3.42%, this compares to an average annual total return of 1.76% for the S&P 500 through September 30, 2011. Total distributions since inception has been $9.69 per share, and based on the current dividend rate of $0.29 per share, offer a yield of 9.94% on market price as of September 30, 2011, of $11.67.

During the twelve months ended September 30, 2011, the Clough Global Opportunities Fund’s total return, assuming reinvestment of all distributions, was -6.56% based on the net asset value and -9.89% based on the market price of the stock. That compares with 1.14% return for the S&P 500 for the same period. Since the Fund’s inception on April 25, 2006, the total growth in net asset value assuming reinvestment of all distributions has been -0.14%, this compares to an average annual total return of -0.46% for the S&P 500 through September 30, 2011. Total distributions since inception has been $6.39 per share, and based on the current dividend rate of $0.27 per share, offer a yield of 10.24% on market price as of September 30, 2011, of $10.55.

Six Month Review and Outlook:

Over the last six months, the capital markets have been characterized by a general sentiment of equity risk aversion, mixed with bouts of high volatility and a seemingly interminable stretch of low interest rates. With that somewhat precarious backdrop for equities, it may seem defensible for asset managers to allow fundamentals to take a backseat to the high frequency trading and short-term momentum investing that has influenced the markets in recent quarters. In the long-run, we don’t think this is an appropriate response and we will remain focused on our intrinsic belief that fundamental research, profit cycle analysis and identifying strong cash flows will be the hallmarks of equity outperformance looking forward.

Much of the recent volatility in the markets has been a function of the headlines out of Europe; both the extent of the financial crisis there and the prospects for a reasonable solution that averts another global recession. The debate about funding requirements and fiscal austerity is taking place in a very public manner, which demonstrates that this is in part an economic crisis and in part a

political crisis for members of the European Union. There are bound to be lending losses and some version of fiscal austerity will need to be adopted across the region. We think the European Central Bank has no choice but to monetize the sovereign debt it is buying, a move which equates to quantitative easing. In addition, the persistent weakness of the US economy will likely force the Federal Reserve into further balance sheet expansion, or QE 3. Identifying the appropriate dosage of lending losses and austerity in Europe is creating a challenge for the capital markets, as investors try to assess and appropriately discount the depth of this crisis and the appropriate prescription, in real-time. While it has proven to be a less rewarding endeavor than simply trading on paranoia and market gyrations, our internal investment analysis continues to be focused on fundamentals, cash flows, and valuations.

Several themes that have contributed favorably to our long-term fund performance are among the same investments that have presented a headwind for more recent performance. The energy complex has been an easy sell order for investors concerned about economic cyclicality and the volatility in commodity markets, so we have suffered losses in securities leveraged to spending on the energy infrastructure and the price of oil. Our work here continues to indicate that valuations are low, there is a large and profitable backlog for service providers and we think the energy cycle will last for years. Crude oil is the one commodity we are willing to invest in thematically, as global production growth is getting more difficult and more expensive to achieve, and because it is essentially a consumable product with little demand cyclicality. Valuations have been made even more attractive based on concerns of a global economic slowdown.

Another area that has been a source of frustration and asset deterioration for our funds is the US financial sector. Today, we view the major US banks as a very attractive one to three year investments. We’ve maintained a view that the European banks would have a difficult role to play in terms of accepting lending losses in the region, but US financials have far less balance sheet leverage than their European counterparts, and we think the valuations for US banks more than appropriately discount for the risks of a global slowdown. The US economy is indeed deleveraging, yield curves are flattening and regulation is becoming more intimidating for the financial sector, so we have little doubt in our minds that growth opportunities for US financials will be meager. However, with several bank stocks down 30-50% in 2011, and selling at large discounts to tangible book value, we believe they have been more than adequately discounted for these risks. Funding costs are moving negative and as a result net interest margins are actually quite favorable. Bank balance sheets have been substantially repaired, bad loans are down and many more liabilities have already been reserved against. Further, a retrenchment from US markets by European banks offers market share opportunities. A slowing economy does threaten bank and non-bank profits, but only bank stocks have moved to severe discounts to book value. As the markets become more comfortable with regulation that has been introduced and a lower leverage ratio for financials, we think US banks could turn into very good investments in the years ahead.

A third theme which we have discussed in the past is our exposure to emerging markets. As we sift through the economic data available to us from both Asia and Brazil, we feel quite comfortable with our long-term bullish outlook for consumer spending in these regions. Ultimately, we feel that the growth prospects in the emerging markets are not reflected in today’s valuations. That said, we’ve needed to be sensitive to the risk aversion taking place in the equity

 

 

Semi-Annual Report | September 30, 2011

  1


Table of Contents

Shareholder Letter

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

markets, nowhere more apparent than in the outflows from emerging market stocks. As a result, our emerging market exposure is currently lower than usual, and the holdings we have maintained are comprised mostly of Chinese consumer and Brazilian retail mall companies. As in earlier cycles, Shanghai often leads markets higher and that is not yet happening. China has the savings, the cash, and the external surpluses to sustain demand while the developed economies do not. There are admittedly serious credit imbalances in China largely because its private sector is hugely liquid, and sidecar lenders, trust operations and private lenders have been lending at rates that few projects could support. The banks are only peripherally involved in this part of the lending boom. China’s liquidity crunch is policy induced, and well along in time. Property sales and investments are falling and that will likely take some leveraged developers and non-bank lenders down, but China’s economy is huge and still growing. Its private sector is unlevered and savings are equally huge. The liquidations that are coming in the real estate sector can be easily absorbed in our view. We think the government can easily recapitalize the banks if needed and tight policy can be reversed.

The corollary of rising wages in China is a growing and vibrant consumer. Our analysis suggests that consumption is rising and increasingly driving the economy. Exports, net of imports are now 3 — 4% of Gross Domestic Product and shrinking, leaving China a lot less exposed to the global economy than the markets are assuming. Credit issues relating to shadow banks and borrowing by local governments are real but China’s government is asset rich and domestic private savings in China are huge. Inflation should peak as commodity prices decline.

An important issue in China is that the financial sector needs reform. It is far too heavily based on state-owned banks which we believe are very inefficient at allocating credit and very poor at supporting private enterprise. Moreover current growth rates of credit are unsustainable and that suggests a shift to less credit intensive consumption as the economic driver going forward. We also think concerns over excessive infrastructure building are wrong. Construction is 14% of Chinese GDP according to the Wall Street Journal. China’s capital stock per capita is perhaps 6 — 7% that of the US according to Dragonomics research, and the transportation infrastructure that is being built out should lead to higher productivity in China’s services sector. Productivity and profits are highly correlated and that is why we think profits will boom among consumer related companies in the years ahead.

The list of investments that have aided performance in the most recent semi-annual period is regrettably shorter than the list of investments that have worked against us, but they are worth mentioning. Our long-held view that interest rate levels around the world would remain almost inconceivably low, for an extended period of time has been playing out. As a result, our exposure to US Government bonds has benefitted the portfolio, and has helped reduce exposure from some of the large swings in equity prices we are observing on a seemingly regular basis. The funds have held between 10 and 15 percent of the portfolio in US Treasuries during the year. The majority of the holdings have been in the eight to thirty year part of the yield curve. This positioning has benefited from the anticipation of the Fed’s ‘operation twist.’ In an attempt to keep long rates low in yield, the Fed will be selling the front end of the yield curve and purchasing the middle and long end of the curve until June 2012. The anticipation of the program caused the 30 year treasury to rally 33% and the 10 year to rally 14% for the year.

Another investment strategy which has helped to buffer some of the equity losses has been our short exposure to industrial companies that we think suffer from reduced fixed asset investment in a slowing global economy.

I hope we have articulated what has worked and what has not worked in the portfolio in recent quarters as we aim to preserve your patience in our investment strategy. We are a fundamental investment firm and our emphasis on investing in long term profit trends can be subject to market volatility from time to time. We think from the perspective a year or two out, current equity prices will look like they provided great value. Our decades of experience navigating the capital markets have revealed to us that volatile, sentiment-driven markets often create investment opportunities for patient, fundamental investors. We feel the current period of market turmoil will prove no different, and we have positioned the portfolio with this longer-term perspective in mind.

We appreciate your confidence in us and endeavor to do the best job we can of investing our clients’ assets. We sincerely appreciate your interest in our funds. If you have any questions about your investment, please call 1-877-256-8445.

Sincerely,

LOGO

Charles I. Clough, Jr.

Past performance is no guarantee of future results.

The information in this Portfolio Managers’ Shareholder Commentary represents the opinions of the individual Portfolio Managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice.

The S&P 500 Index - Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. It is not possible to invest directly in an Index.

Sovereign Debt - Bonds issued by a national government in a foreign currency, in order to finance the issuing country’s growth. Sovereign debt is generally a riskier investment when it comes from a developing country, and a safer investment when it comes from a developed country. The stability of the issuing government is an important factor to consider, when assessing the risk of investing in sovereign debt, and sovereign credit ratings help investors weigh this risk.

Quantitative Easing - A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.

Quantitative Easing Round 3, or “QE3” - Refers to a third, still rumored, round of monetary policy which may be implemented by the US Federal Reserve to further stimulate the economy. (Also refer to: “quantitative easing”)

Book Value - The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation.

 

 

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Table of Contents
Clough Global Allocation Fund    Portfolio Allocation
   September 30, 2011 (Unaudited)

    

 

Asset Allocation*

        

Common Stocks - US

     44.25

Common Stocks - Foreign

     15.25

ETFs

     -1.71

Total Equities

     57.79
          

Government L/T

     16.00

Corporate Debt

     7.20

Asset/Mortgage Backed Securities

     0.31

Preferred Stocks

     0.29

Total Fixed Income

     23.80
          

Short-Term Investments

     18.39

Options

     0.01

Other (Foreign Cash)

     0.01

Total Other

     18.41
          

    

        

TOTAL INVESTMENTS

     100.00
          

Global Securities Holdings^

        

United States

     83.57

Great Britain

     4.17

China

     3.84

Brazil

     2.15

Canada

     1.34

Singapore

     1.25

Norway

     1.17

Hong Kong

     1.00

Malaysia

     0.89

France

     0.71

Netherlands

     0.46

Taiwan

     0.42

Philippines

     0.21

Chile

     0.19

Italy

     0.17

South Korea

     0.05

Germany

     -0.33

Australia

     -0.60

Sweden

     -0.66

TOTAL INVESTMENTS

     100.00
          
 

 

 

 

 

*

Includes securities sold short.

^

Includes securities sold short and foreign cash balances.

 

Semi-Annual Report | September 30, 2011

  3


Table of Contents

Portfolio Allocation

   Clough Global Equity Fund
September 30, 2011 (Unaudited)   

    

 

Asset Allocation*

        

Common Stocks - US

     50.28

Common Stocks - Foreign

     15.63

ETFs

     -1.93

Total Equities

     63.98
          

Government L/T

     9.49

Corporate Debt

     7.01

Preferred Stocks

     0.29

Asset/Mortgage Backed Securities

     0.26

Total Fixed Income

     17.05
          

Short-Term Investments

     18.95

Options

     0.01

Other (Foreign Cash)

     0.01

Total Other

     18.97
          

    

        

TOTAL INVESTMENTS

     100.00
          

Global Securities Holdings^

        

United States

     83.38

Great Britain

     4.33

China

     3.86

Brazil

     1.99

Canada

     1.33

Norway

     1.29

Singapore

     1.26

Hong Kong

     1.04

Malaysia

     0.90

France

     0.72

Netherlands

     0.46

Taiwan

     0.42

Philippines

     0.21

Italy

     0.17

Chile

     0.17

South Korea

     0.05

Germany

     -0.33

Australia

     -0.60

Sweden

     -0.65

TOTAL INVESTMENTS

     100.00
          
 

 

 

 

 

 

*

Includes securities sold short.

^

Includes securities sold short and foreign cash balances.

 

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Table of Contents
Clough Global Opportunities Fund    Portfolio Allocation
   September 30, 2011 (Unaudited)

    

 

Asset Allocation*

        

Common Stocks - US

     44.16

Common Stocks - Foreign

     15.36

ETFs

     -2.25

Total Equities

     57.27
          

Government L/T

     16.97

Corporate Debt

     7.14

Preferred Stocks

     0.29

Asset/Mortgage Backed Securities

     0.06

Total Fixed Income

     24.46
          

Short-Term Investments

     18.11

Options

     0.15

Other (Foreign Cash)

     0.01

Total Other

     18.27
          

    

        

TOTAL INVESTMENTS

     100.00
          

Global Securities Holdings^

        

United States

     83.50

Great Britain

     4.18

China

     3.85

Brazil

     2.13

Canada

     1.35

Singapore

     1.26

Norway

     1.16

Hong Kong

     1.05

Malaysia

     0.90

France

     0.71

Netherlands

     0.46

Taiwan

     0.42

Philippines

     0.21

Chile

     0.19

Italy

     0.17

South Korea

     0.05

Germany

     -0.33

Australia

     -0.60

Sweden

     -0.66

TOTAL INVESTMENTS

     100.00
          
 

 

 

 

 

*

Includes securities sold short.

^

Includes securities sold short and foreign cash balances.

 

Semi-Annual Report | September 30, 2011

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Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

COMMON STOCKS 96.37%

  

Consumer Discretionary 9.41%

  

Arezzo Industria e Comercio S.A.

     27,052         $287,749   

Bosideng International Holdings, Ltd.

     1,972,000         412,764   

CBS Corp. -
Class B
(a)(b)

     53,629         1,092,959   

Cie Generale des Etablissements Michelin - Class B

     10,305         624,173   

Coach, Inc.(a)

     5,537         286,983   

DIRECTV(a)(c)

     17,700         747,825   

Dongfeng Motor Group Co., Ltd. - Class H

     215,000         295,965   

Focus Media Holding, Ltd.(a)(c)

     5,748         96,509   

Gafisa S.A. - ADR(a)

     27,100         156,367   

The Goodyear Tire & Rubber Co.(a)(b)(c)

     372,996         3,763,530   

Guangzhou Automobile Group Co., Ltd.

     7,036         6,930   

Hanesbrands, Inc.(a)(c)

     10,200         255,102   

Liberty Interactive Corp. - Class A(a)(c)

     78,912         1,165,530   

Liberty Media Corp. - Capital -
Series A
(a)(c)

     7,870         520,365   

Liberty Media Corp. - Starz - Series A(a)(c)

     1,407         89,429   

Man Wah Holdings, Ltd.

     869,800         342,898   

MGM Resorts International(a)(b)(c)

     51,393         477,441   

NIKE, Inc. -
Class B
(a)(b)

     10,900         932,059   

Prada S.p.A.(c)

     87,800         370,371   

Regal Entertainment Group(a)(b)

     21,000         246,540   

Time Warner, Inc.

     7,700         230,769   

Valassis Communications, Inc.(a)(b)(c)

     20,500         384,170   

Viacom, Inc. -
Class B
(a)

     24,100         933,634   

Visteon Corp.(a)(b)(c)

     7,732         332,476   
     

 

 

 
        14,052,538   
     

 

 

 

Consumer Staples 1.23%

  

  

Brazil Pharma S.A.(c)(d)

     33,386         248,586   

China Resources Enterprise, Ltd.

     92,800         312,217   

Cia de Bebidas das Americas - ADR(a)(b)

     25,700         787,705   

Julio Simoes Logistica S.A.

     75,641         337,121   

Raia S.A.(c)

     11,170         147,627   
     

 

 

 
        1,833,256   
     

 

 

 

Energy 16.64%

     

Natural Gas Leveraged Exploration & Production 0.98%

  

Carrizo Oil & Gas,
Inc.
(a)(b)(c)

     14,000         301,700   

Chesapeake Energy Corp.(a)

     12,100         309,155   
      Shares      Value  

Energy (continued)

     

El Paso Corp.(a)

     12,464         $217,871   

Forest Oil Corp.(a)(c)

     24,024         345,945   

Quicksilver Resources,
Inc.
(a)(c)

     37,900         287,282   
     

 

 

 
        1,461,953   
     

 

 

 

Non-North American Producers 1.68%

  

InterOil Corp.(a)(b)(c)

     31,159         1,518,067   

Royal Dutch Shell PLC - ADR(a)(b)

     16,200         996,624   
     

 

 

 
        2,514,691   
     

 

 

 

Oil & Gas & Consumable Fuels 0.79%

  

Newfield Exploration
Co.
(a)(b)(c)

     10,200         404,838   

Seadrill, Ltd.(a)

     27,900         768,087   
     

 

 

 
        1,172,925   
     

 

 

 

Oil Leveraged Exploration & Production 3.48%

  

Anadarko Petroleum
Corp.
(a)(b)

     28,903         1,822,334   

BP PLC - Sponsored ADR

     32,000         1,154,240   

Canadian Natural Resources,
Ltd.
(a)

     21,200         620,524   

Cenovus Energy,
Inc.
(a)

     10,900         334,739   

EOG Resources,
Inc.
(a)

     3,900         276,939   

Exxon Mobil
Corp.
(a)(b)

     6,800         493,884   

Kodiak Oil & Gas
Corp.
(a)(c)

     48,746         253,967   

Occidental Petroleum
Corp.
(a)(b)

     3,470         248,105   
     

 

 

 
        5,204,732   
     

 

 

 

Oil Services & Drillers 8.28%

  

Baker Hughes,
Inc.
(a)(b)

     34,500         1,592,520   

Basic Energy Services, Inc.(a)(c)

     10,600         150,096   

Calfrac Well Services, Ltd.(a)

     14,400         336,536   

Cameron International Corp.(a)(b)(c)

     23,500         976,190   

Complete Production Services,
Inc.
(a)(b)(c)

     11,208         211,271   

Dresser-Rand Group,
Inc.
(a)(c)

     26,880         1,089,446   

Ensco PLC - Sponsored
ADR
(a)

     40,772         1,648,412   

Halliburton Co.(a)

     19,614         598,619   

Helmerich & Payne, Inc.(a)

     7,160         290,696   

Hornbeck Offshore Services,
Inc.
(a)(c)

     26,800         667,588   

National Oilwell Varco, Inc.(a)(b)

     49,183         2,519,153   

Oil States International,
Inc.
(a)(c)

     3,800         193,496   

Rowan Cos.,
Inc.
(a)(b)(c)

     56,400         1,702,716   

Schlumberger,
Ltd.
(a)(b)

     6,591         393,681   
     

 

 

 
        12,370,420   
     

 

 

 

Tankers 1.43%

  

  

Golar LNG Partners
LP
(a)

     14,043         359,079   
 

 

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Table of Contents
Clough Global Allocation Fund    Statement of Investments
   September 30, 2011 (Unaudited)

    

 

      Shares      Value  

Energy (continued)

     

Golar LNG, Ltd.(a)(b)

     55,882         $1,775,930   
     

 

 

 
        2,135,009   
     

 

 

 

TOTAL ENERGY

        24,859,730   
     

 

 

 

Financials 22.85%

     

Capital Markets 7.47%

     

Apollo Investment Corp.(a)(b)

     232,132         1,745,633   

Ares Capital Corp.(a)(b)

     230,724         3,177,069   

Golub Capital BDC, Inc.(a)(b)

     53,100         788,535   

Indochina Capital Vietnam Holdings, Ltd.(c)(d)(e)

     15,596         57,393   

Medley Capital
Corp.
(a)(b)

     34,088         343,607   

PennantPark Floating Rate Capital,
Ltd.
(a)(b)

     21,800         229,990   

PennantPark Investment Corp.(a)

     177,530         1,583,568   

Solar Capital, Ltd.(a)(b)

     132,378         2,664,769   

Solar Senior Capital, Ltd.(a)(b)

     39,147         559,411   
     

 

 

 
        11,149,975   
     

 

 

 

Commercial Banks 3.09%

  

  

Agricultural Bank of China, Ltd. -
Class H

     3,653,000         1,210,255   

Banco do Brasil S.A.

     15,971         206,746   

Banco Santander Brasil S.A. -
ADR
(a)(b)

     54,100         396,012   

Bank of China, Ltd. - Class H

     2,419,023         761,051   

China Construction Bank Corp. -
Class H

     425,757         261,881   

Industrial & Commercial Bank of China - Class H

     2,771,646         1,359,592   

Lloyds Banking Group
PLC
(c)

     378,200         205,593   

Standard Chartered PLC

     10,539         215,046   
     

 

 

 
        4,616,176   
     

 

 

 

Diversified Financials 2.32%

  

  

Bank of America
Corp.
(a)(b)

     95,377         583,707   

Citigroup, Inc.(a)(b)

     62,338         1,597,100   

First Niagara Financial Group, Inc.(a)(b)

     40,800         373,320   

People’s United Financial, Inc.(a)(b)

     40,697         463,946   

Valley National Bancorp(a)(b)

     41,580         440,332   
     

 

 

 
        3,458,405   
     

 

 

 

Insurance 0.20%

     

China Pacific Insurance Group Co., Ltd.(d)

     28,382         82,914   

Ping An Insurance Group Co. of China, Ltd. - Class H

     38,308         217,430   
     

 

 

 
        300,344   
     

 

 

 
      Shares      Value  

Financials (continued)

  

Real Estate Investment Trusts 9.15%

  

American Capital Agency
Corp.
(a)(b)

     31,418         $851,428   

Annaly Capital Management,
Inc.
(a)

     112,362         1,868,580   

Apollo Commercial Real Estate Finance,
Inc.
(a)(b)

     47,600         626,892   

Ascendas Real Estate Investment Trust

     838,000         1,300,665   

Ascott Residence Trust

     416,874         321,923   

CapitaCommercial Trust

     1,201,000         927,449   

Capstead Mortgage
Corp.
(a)(b)

     164,903         1,902,981   

CYS Investments, Inc.(a)(b)

     69,481         840,025   

Dynex Capital,
Inc.
(a)(b)

     94,894         764,846   

Hatteras Financial Corp.(a)(b)

     118,063         2,970,465   

Host Hotels & Resorts,
Inc.
(a)(b)

     19,862         217,290   

MFA Financial,
Inc.
(a)(b)

     42,663         299,494   

Starwood Property Trust, Inc.(a)(b)

     45,533         781,346   
     

 

 

 
        13,673,384   
     

 

 

 

Real Estate Management & Development 0.52%

  

Aliansce Shopping Centers S.A.

     15,800         104,619   

BHG S.A. - Brazil Hospitality
Group
(c)

     26,103         249,889   

BR Malls Participacoes S.A.

     22,626         226,711   

Iguatemi Empresa de Shopping Centers S.A.

     5,547         91,897   

Sonae Sierra Brasil S.A.

     9,300         109,360   
     

 

 

 
        782,476   
     

 

 

 

Thrifts & Mortgage Finance 0.10%

  

MGIC Investment Corp.(a)(b)(c)

     57,922         108,314   

Radian Group,
Inc.
(a)(b)

     20,070         43,953   
     

 

 

 
        152,267   
     

 

 

 

TOTAL FINANCIALS

  

     34,133,027   
     

 

 

 

Health Care 1.71%

     

Abbott
Laboratories
(a)(b)

     11,731         599,924   

Health Management Associates, Inc. - Class A(a)(b)(c)

     26,800         185,456   

LifePoint Hospitals,
Inc.
(a)(c)

     7,000         256,480   

Sanofi - ADR(a)(b)

     40,200         1,318,560   

Shanghai Pharmaceuticals Holding Co.,
Ltd.
(c)

     14,100         30,708   

Tenet Healthcare Corp.(a)(b)(c)

     38,600         159,418   
     

 

 

 
        2,550,546   
     

 

 

 

Industrials 6.96%

     

Air China, Ltd.

     124,900         88,053   

Daelim Industrial Co., Ltd.

     1,169         95,759   
 

 

Semi-Annual Report | September 30, 2011

  7


Table of Contents

Statement of Investments

   Clough Global Allocation Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

Industrials (continued)

     

GZI Transport, Ltd.

     765,700         $272,362   

Jardine Strategic
Holdings, Ltd.
(a)

     21,295         560,271   

Jiangsu Expressway Co., Ltd. - Class H

     1,174,889         897,680   

McDermott
International, Inc.
(a)(c)

     30,279         325,802   

MSCI, Inc. - Class A(a)(b)(c)

     7,800         236,574   

Santos Brasil Participacoes S.A.

     37,264         465,738   

Sensata Technologies Holding NV(a)(b)(c)

     30,512         807,347   

TE Connectivity, Ltd.(a)(b)

     23,600         664,104   

TransDigm Group,
Inc.
(a)(b)(c)

     23,006         1,878,900   

United Continental Holdings, Inc.(a)(b)(c)

     76,032         1,473,500   

Verisk Analytics, Inc. - Class A(a)(c) 

     17,921         623,113   

WABCO Holdings,
Inc.
(a)(c)

     5,471         207,132   

Wesco Aircraft Holdings, Inc.(a)(b)(c) 

     46,800         511,524   

Zhejiang Expressway Co., Ltd. - Class H

     2,106,000         1,284,575   
     

 

 

 
        10,392,434   
     

 

 

 

Information Technology 13.75%

  

  

Apple, Inc.(a)(b)(c)

     15,473         5,897,998   

Arrow Electronics,
Inc.
(a)(b)(c)

     45,400         1,261,212   

Avnet, Inc.(a)(c)

     36,200         944,096   

Dell, Inc.(a)(b)(c)

     30,300         428,745   

eBay, Inc.(c)

     7,800         230,022   

Google, Inc. -
Class A
(a)(b)(c)

     3,350         1,723,173   

Ingram Micro, Inc. -
Class A
(a)(b)(c)

     41,800         674,234   

International Business Machines Corp.(a)(b)

     17,900         3,133,037   

Microsoft Corp.(a)(b)

     205,170         5,106,681   

Netease.com(a)(c)

     467         17,821   

SanDisk Corp.(a)(c)

     5,900         238,065   

Sina Corp.(a)(c)

     3,549         254,144   

Sohu.com, Inc.(a)(c)

     1,600         77,120   

Xerox Corp.(a)(b)

     78,537         547,403   
     

 

 

 
        20,533,751   
     

 

 

 

Materials 5.47%

     

Agnico- Eagle
Mines, Ltd.
(a)

     9,142         544,132   

Anglo American PLC -
Unsponsored ADR
(a)

     6,794         116,042   

Barrick Gold Corp.(a)

     10,200         475,830   

Gerdau S.A. - Sponsored
ADR
(a)(b)

     24,229         172,753   

Goldcorp, Inc.(a)

     17,500         798,700   
      Shares      Value  

Materials (continued)

     

Market Vectors Gold
Miners ETF
(a)

     37,000         $2,042,030   

Newmont Mining Corp.(a)

     5,415         340,603   

Owens- Illinois, Inc.(a)(b)(c)

     98,312         1,486,477   

SPDR® Gold Shares(a)(c)

     13,879         2,193,992   
     

 

 

 
        8,170,559   
     

 

 

 

Telecommunication Services 2.46%

  

Chunghwa Telecom Co., Ltd. - ADR(a)

     34,835         1,149,555   

DiGi.Com Bhd

     33,800         322,066   

Maxis Bhd

     771,900         1,286,298   

Philippine Long
Distance Telephone Co.

     9,050         454,932   

StarHub, Ltd.

     72,438         158,401   

Telekom Malaysia Bhd

     240,900         308,624   
     

 

 

 
        3,679,876   
     

 

 

 

Utilities 15.89%

     

American Electric Power Co., Inc.(a)(b)

     42,800         1,627,256   

Babcock & Wilcox Co.(a)(c)

     8,025         156,889   

CenterPoint Energy, Inc.(a)(b)

     62,100         1,218,402   

CMS Energy Corp.(a)(b)

     49,300         975,647   

Dominion Resources,
Inc.
(a)(b)

     30,100         1,528,177   

DTE Energy Co.(a)

     24,100         1,181,382   

Edison International(a)(b)

     21,100         807,075   

FirstEnergy Corp.(a)

     15,500         696,105   

National Grid PLC - Sponsored ADR(a)(b)

     137,300         6,810,080   

NiSource, Inc.(a)(b)

     69,557         1,487,128   

Northeast Utilities(a)(b)

     53,276         1,792,737   

Oneok, Inc.(a)(b)

     31,000         2,047,240   

Power Assets
Holdings, Ltd.

     211,000         1,621,639   

PPL Corp.(a)(b)

     62,807         1,792,512   
     

 

 

 
        23,742,269   
     

 

 

 

TOTAL COMMON STOCKS

(Cost $159,694,105)

  

  

     143,947,986   
     

 

 

 

EXCHANGE TRADED FUNDS 1.72%

  

  

iShares® iBoxx® High Yield
Corporate Bond Fund
(a)(b)

     31,101         2,572,986   
     

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Cost $2,179,797)

        2,572,986   
     

 

 

 
 

 

8

  www.cloughglobal.com


Table of Contents

Clough Global Allocation Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

 

      Shares      Value  

PREFERRED STOCKS 0.41%

     

The Goodyear Tire & Rubber Co., 5.875%(a)

     15,900       $ 619,305   
     

 

 

 

TOTAL PREFERRED STOCKS

(Cost $795,994)

        619,305   
     

 

 

 

Description and

Maturity Date

    
 
Principal
Amount
  
  
     Value   

CORPORATE BONDS 10.46%

     

American Axle & Manufacturing, Inc.
03/01/2017, 7.875%
(a)(b)

     $900,000         850,500   

Anheuser-Busch InBev Worldwide, Inc.
11/17/2015, 9.750%
(a) 

     600,000         323,893   

ArvinMeritor, Inc.
03/15/2018, 10.625%
(a) 

     425,000         411,187   

BE Aerospace, Inc.
07/01/2018, 8.500%
(a) 

     525,000         564,375   

Bombardier, Inc.
05/01/2034, 7.450%
(a)(d)

     165,000         166,650   

China Liansu Group Holdings, Ltd.
05/13/2016, 7.875%
(a)(d)

     445,000         331,525   

CITIC Resources Holdings, Ltd. 05/15/2014, 6.750% (a)(f)

     450,000         405,000   

Constellation Brands, Inc.
09/01/2016, 7.250%
(a) 

     675,000         712,125   

Crown Americas LLC / Crown Americas Capital Corp. III
02/01/2021, 6.250%
(a)(d)

     595,000         597,975   

Dana Holding Corp.
02/15/2021, 6.750%
(a) 

     505,000         482,275   

Felcor Lodging LP
06/01/2019, 6.750%
(a)(d)

     600,000         540,000   

Ford Motor Credit Co. LLC 02/01/2021, 5.750% (a) 

     890,000         884,073   

Forest Oil Corp.
06/15/2019, 7.250%
(a) 

     600,000         588,000   

Fosun International, Ltd.
05/12/2016, 7.500%
(a)(d)

     445,000         353,775   

General Cable Corp.
04/01/2017, 7.125%
(a) 

     700,000         703,500   

Gol Finance
07/20/2020, 9.250%
(a)(d) 

     545,000         457,800   

Graphic Packaging International, Inc.
10/01/2018, 7.875%
(a) 

     305,000         314,150   

Hanesbrands, Inc.
12/15/2020, 6.375%
(a) 

     535,000         521,625   

Hidili Industry International Development, Ltd.
11/04/2015, 8.625%
(a)(d)

     585,000         368,550   

Lear Corp.
03/15/2018, 7.875%
(a) 

     600,000         621,000   

Levi Strauss & Co.
05/15/2020, 7.625%
(a)(b)

     740,000         691,900   

Description and

Maturity Date

   Principal
Amount
     Value  
CORPORATE BONDS (continued)         

Manufacturers & Traders Trust Co.
12/01/2021, 5.629%
(a)(g)

     $740,000         $717,283   

Newfield Exploration Co.
05/15/2018, 7.125%
(a) 

     250,000         260,000   

Pioneer Natural Resources Co. 03/15/2017, 6.650% (a) 

     525,000         565,018   

Range Resources Corp.
05/15/2019, 8.000%
(a) 

     600,000         660,000   

Rearden G Holdings Eins GmbH
03/30/2020, 7.875%
(a)(d)

     440,000         431,200   

TAM Capital 2, Inc.
01/29/2020, 9.500%
(a)(f)

     520,000         518,700   

TAM Capital 3, Inc.
06/03/2021, 8.375%
(d) 

     225,000         209,250   

Tenneco, Inc.
08/15/2018, 7.750%
(a)(d)

     300,000         303,000   

Terex Corp.
11/15/2017, 8.000%
(a) 

     300,000         267,000   

Visteon Corp.
04/15/2019, 6.750%
(a)(d)

     895,000         809,975   
     

 

 

 

TOTAL CORPORATE BONDS

(Cost $16,220,916)

        15,631,304   
     

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 0.45%

  

Freddie Mac REMICS

     

Series 2006-3155, Class SA, 11/15/2035, 36.726%(a)(g) 

     18,796         19,263   

Government National Mortgage Association (GNMA)

  

  

Series 2007-37, Class SA, 03/20/2037, 21.301%(a)(g)

     88,528         99,333   

Series 2007-37, Class SB, 03/20/2037, 21.301%(a)(g)

     23,838         28,046   

Small Business Administration Participation Certificates

  

  

Series 2008-20L, Class 1, 12/01/2028, 6.220%(a)

     463,260         525,664   
     

 

 

 

TOTAL ASSET/MORTGAGE BACKED

SECURITIES

(Cost $586,601)

  

  

  

     672,306   
     

 

 

 

FOREIGN GOVERNMENT BONDS 0.71%

  

  

Brazilian Government International Bonds

  

  

01/05/2016, 12.500% (a) 

     1,525,000         908,390   

01/10/2028, 10.250% (a) 

     259,000         145,324   
     

 

 

 

TOTAL FOREIGN GOVERNMENT BONDS

(Cost $1,065,498)

  

  

     1,053,714   
     

 

 

 

GOVERNMENT & AGENCY OBLIGATIONS 22.56%

  

U.S. Treasury Bonds

     

11/15/2020, 2.625% (a) 

     5,075,000         5,435,802   

02/15/2021, 3.625% (a) 

     4,625,000         5,351,268   

05/15/2040, 4.375% (a) 

     4,750,000         6,133,423   
 

 

Semi-Annual Report | September 30, 2011

  9


Table of Contents

Statement of Investments

   Clough Global Allocation Fund

September 30, 2011 (Unaudited)

  

    

 

Description and

Maturity Date

   Principal
Amount
     Value  

GOVERNMENT & AGENCY OBLIGATIONS (continued)

  

05/15/2041, 4.375%

     $2,500,000         $3,240,240   

U.S. Treasury Notes
06/30/2018,
2.375%
(a) 

     12,700,000         13,535,419   
     

 

 

 

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

(Cost $32,036,667)

   

  

     33,696,152   
     

 

 

 
      Number of
Contracts
     Value  

CALL OPTIONS PURCHASED 0.02%

  

HOLDRs Oil Services, Expires
January, 2013, Exercise
Price $160.00

     208         23,920   
     

 

 

 

TOTAL CALL OPTIONS PURCHASED

(Cost $416,421)

  

  

     23,920   
     

 

 

 
      Shares      Value  

SHORT-TERM INVESTMENTS 26.72%

  

Money Market Fund

     

Dreyfus Treasury Prime Money
Market Fund (0.000% 7-day yield)
(h)

     36,211,149         36,211,149   
     

 

 

 

Morgan Stanley Institutional
Liquidity Fund (0.080% 7-day yield)

     3,705,948         3,705,948   
     

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost $39,917,097)

  

  

     39,917,097   
     

 

 

 
              Value  

Total Investments - 159.42%

(Cost $252,913,096)

  

  

     238,134,770   

Liabilities in Excess of Other
Assets - (59.42%)

   

     (88,760,172)   
     

 

 

 

NET ASSETS - 100.00%

  

     $149,374,598   
     

 

 

 
SCHEDULE OF SECURITIES SOLD  
SHORT (c)    Shares      Value  

COMMON STOCK

     

Aetna, Inc.

     (5,400)         $(196,290)   

Alfa Laval AB

     (19,067)         (303,456)   

Atlas Copco AB

     (37,200)         (667,408)   

Berkshire Hathaway, Inc. - Class B

     (9,631)         (684,186)   

BHP Billiton, Ltd.

     (6,795)         (451,460)   

Caterpillar, Inc.

     (21,991)         (1,623,815)   

Cie Generale d’Optique Essilor
International S.A.

     (5,600)         (405,064)   

Cliffs Natural Resources, Inc.

     (9,791)         (501,005)   

Deutsche Bank AG

     (20,146)         (697,253)   
SCHEDULE OF SECURITIES SOLD  
SHORT(c) (continued)    Shares      Value  

First Solar, Inc.

     (3,500)         $(221,235)   

Fluor Corp.

     (5,350)         (249,043)   

Joy Global, Inc.

     (14,355)         (895,465)   

Kohl’s Corp.

     (5,000)         (245,500)   

Petroleo Brasileiro S.A. - ADR

     (36,198)         (812,645)   

Sandvik AB

     (39,200)         (457,053)   

Siemens AG

     (262)         (23,525)   

Starwood Hotels & Resorts
Worldwide, Inc.

     (6,300)         (244,566)   

Suncor Energy, Inc.

     (14,517)         (369,313)   

TAL International Group, Inc.

     (2,309)         (57,586)   

Tesla Motors, Inc.

     (10,400)         (253,656)   

United States Oil Fund LP

     (117,460)         (3,582,530)   

Vale SA

     (65,722)         (1,498,462)   

Wynn Resorts, Ltd.

     (2,700)         (310,716)   
     

 

 

 
        (14,751,232)   
     

 

 

 

EXCHANGE TRADED FUNDS

  

iShares® Dow Jones U.S. Real
Estate Index Fund

     (5,002)         (252,951)   

iShares® FTSE China 25 Index
Fund

     (32,498)         (1,001,913)   

iShares® MSCI Australia Index
Fund

     (42,281)         (848,157)   

iShares® MSCI Taiwan Index
Fund

     (19,645)         (232,007)   

iShares® Russell 2000® Index
Fund

     (19,919)         (1,279,796)   

Vanguard REIT ETF

     (52,610)         (2,676,271)   
     

 

 

 
        (6,291,095)   
     

 

 

 

TOTAL SECURITIES SOLD SHORT

(Proceeds $24,780,972)

  

  

     $(21,042,327)   
     

 

 

 
 

 

10

  www.cloughglobal.com


Table of Contents
Clough Global Allocation Fund    Statement of Investments
   September 30, 2011 (Unaudited)

    

 

(a) 

Pledged security;a portion or all of the security is pledged as collateral for securities sold short or borrowings as of September 30, 2011. (See Note 1 and Note 6)

(b) 

Loaned security; a portion or all of the security is on loan at September 30, 2011.

(c) 

Non-income producing security.

(d) 

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of September 30, 2011, these securities had a total value of $4,958,593 or 3.32% of net assets.

(e) 

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2011, these securities had a total value of $57,393 or 0.04% of total net assets.

(f) 

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of September 30, 2011, the aggregate market value of those securities was $923,700, representing 0.62% of net assets.

(g) 

Floating or variable rate security - rate disclosed as of September 30, 2011.

(h) 

Less than 0.0005%.

 

 

See Notes to the Financial Statements.

 

Semi-Annual Report | September 30, 2011

  11


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

COMMON STOCKS 105.90%

  

Consumer Discretionary 9.76%

  

Arezzo Industria e Comercio S.A.

     44,369         $471,948   

Bosideng International Holdings, Ltd.

     3,234,000         676,916   

CBS Corp. - Class B(a)(b)

     87,698         1,787,285   

Cie Generale des Etablissements Michelin - Class B

     16,916         1,024,601   

Coach, Inc.(a)

     9,043         468,699   

DIRECTV(a)(c)

     28,700         1,212,575   

Dongfeng Motor Group Co., Ltd. - Class H

     350,000         481,804   

Focus Media Holding,
Ltd.
(a)(c)

     9,338         156,785   

Gafisa S.A. - ADR(a)

     44,200         255,034   

The Goodyear Tire &
Rubber Co.
(a)(b)(c)

     613,520         6,190,417   

Guangzhou Automobile Group Co., Ltd.

     12,375         12,188   

Hanesbrands, Inc.(a)(b)(c)

     33,400         835,334   

Liberty Interactive Corp. - Class A(a)(c)

     129,086         1,906,600   

Liberty Media Corp. - Capital -
Series A
(a)(b)(c)

     12,787         845,476   

Liberty Media Corp. - Starz -
Series A
(a)(c)

     2,279         144,853   

Man Wah Holdings, Ltd.

     1,430,400         563,902   

MGM Resorts International(a)(b)(c)

     84,337         783,491   

NIKE, Inc. - Class B(a)(b)

     17,900         1,530,629   

Prada S.p.A.(c)

     143,500         605,334   

Regal Entertainment Group(a)(b)

     34,300         402,682   

Time Warner, Inc.

     12,500         374,625   

Valassis Communications,
Inc.
(a)(b)(c)

     45,200         847,048   

Viacom, Inc. -
Class B
(a)

     39,400         1,526,356   

Visteon Corp.(a)(c)

     12,610         542,230   
     

 

 

 
        23,646,812   
     

 

 

 

Consumer Staples 1.24%

     

Brazil Pharma S.A.(c)(d)

     54,612         406,631   

China Resources Enterprise, Ltd.

     150,900         507,689   

Cia de Bebidas das Americas - ADR(a)(b)

     42,100         1,290,365   

Julio Simoes Logistica S.A.

     123,974         552,534   
      Shares      Value  

Consumer Staples (continued)

  

  

Raia S.A.(c)

     18,337         $242,348   
     

 

 

 
        2,999,567   
     

 

 

 

Energy 17.21%

     

Natural Gas Leveraged Exploration & Production 0.99%

   

Carrizo Oil & Gas,
Inc.
(a)(b)(c)

     22,900         493,495   

Chesapeake Energy
Corp.
(a)

     19,800         505,890   

El Paso Corp.(a)

     21,055         368,042   

Forest Oil Corp.(a)(c)

     39,368         566,899   

Quicksilver Resources,
Inc.
(a)(c)

     62,000         469,960   
     

 

 

 
        2,404,286   
     

 

 

 

Non-North American Producers 1.70%

  

InterOil Corp.(a)(c)

     50,734         2,471,761   

Royal Dutch Shell PLC - ADR(a)

     26,600         1,636,432   
     

 

 

 
        4,108,193   
     

 

 

 

Oil & Gas & Consumable
Fuels 0.86%

   

  

Newfield Exploration
Co.
(a)(b)(c)

     20,800         825,552   

Seadrill, Ltd.(a)

     45,300         1,247,109   
     

 

 

 
        2,072,661   
     

 

 

 

Oil Leveraged Exploration & Production 3.61%

  

Anadarko Petroleum
Corp.
(a)(b)

     46,851         2,953,955   

BP PLC - Sponsored ADR

     52,100         1,879,247   

Canadian Natural Resources,
Ltd.
(a)

     32,800         960,056   

Cenovus Energy,
Inc.
(a)

     17,700         543,567   

EOG Resources,
Inc.
(a)(b)

     6,400         454,464   

Exxon Mobil
Corp.
(a)

     11,200         813,456   

Kodiak Oil & Gas
Corp.
(a)(c)

     79,713         415,305   

Occidental Petroleum Corp.(a)(b)

     10,238         732,017   
     

 

 

 
        8,752,067   
     

 

 

 

Oil Services & Drillers 8.44%

  

  

Baker Hughes,
Inc.
(a)(b)

     58,650         2,707,284   

Basic Energy Services,
Inc.
(a)(c)

     17,300         244,968   

Calfrac Well Services,
Ltd.
(a)

     24,900         581,927   

Cameron International
Corp.
(a)(b)(c)

     38,300         1,590,982   

Complete Production Services,
Inc.
(a)(c)

     17,886         337,151   

Dresser-Rand Group,
Inc.
(a)(b)(c)

     44,160         1,789,805   

Ensco PLC - Sponsored
ADR
(a)(b)

     66,563         2,691,142   

Halliburton Co.(a)

     35,321         1,077,997   

Helmerich & Payne,
Inc.
(a)

     14,179         575,667   

Hornbeck Offshore Services,
Inc.
(a)(c)

     43,600         1,086,076   

National Oilwell Varco,
Inc.
(a)(b)

     80,732         4,135,093   

Oil States International,
Inc.
(a)(c)

     6,200         315,704   
 

 

12

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

      Shares      Value  

Energy (continued)

  

  

Rowan Cos., Inc.(a)(b)(c)

     88,300         $2,665,777   

Schlumberger, Ltd.(a)(b)

     11,059         660,554   
     

 

 

 
        20,460,127   
     

 

 

 

Tankers 1.61%

  

  

Golar LNG Partners
LP
(a)

     23,036         589,030   

Golar LNG, Ltd.(a)(b)

     104,352         3,316,307   
     

 

 

 
        3,905,337   
     

 

 

 

TOTAL ENERGY

        41,702,671   
     

 

 

 

Financials 23.19%

     

Capital Markets 7.61%

  

  

Apollo Investment Corp.(a)(b)

     379,660         2,855,043   

Ares Capital Corp.(a)(b)

     383,982         5,287,432   

Golub Capital BDC, Inc.(a)(b)

     87,100         1,293,435   

Indochina Capital Vietnam Holdings, Ltd.(c)(d)(e)

     23,394         86,090   

Medley Capital Corp.(a)

     55,928         563,754   

PennantPark Floating Rate Capital,
Ltd.
(a)(b)

     35,700         376,635   

PennantPark Investment
Corp.
(a)

     303,083         2,703,501   

Solar Capital, Ltd.(a)(b)

     215,794         4,343,933   

Solar Senior Capital, Ltd.(a)(b)

     64,139         916,546   
     

 

 

 
        18,426,369   
     

 

 

 

Commercial Banks 3.12%

  

  

Agricultural Bank of China, Ltd. -
Class H

     5,983,000         1,982,194   

Banco do Brasil S.A.

     25,973         336,223   

Banco Santander Brasil S.A. - ADR(a)

     88,600         648,552   

Bank of China, Ltd. - Class H

     3,959,921         1,245,834   

China Construction Bank Corp. -
Class H

     692,588         426,008   

Industrial & Commercial Bank of China - Class H

     4,537,129         2,225,625   

Lloyds Banking Group PLC(c)

     622,700         338,505   

Standard Chartered PLC

     17,241         351,799   
     

 

 

 
        7,554,740   
     

 

 

 

Diversified Financials 2.36%

  

  

Bank of America
Corp.
(a)(b)

     163,795         1,002,425   

Citigroup, Inc.(a)(b)

     102,472         2,625,333   

First Niagara Financial Group, Inc.(a)(b)

     67,000         613,050   

People’s United Financial, Inc.(a)(b)

     66,795         761,463   

Valley National Bancorp(a)(b)

     68,145         721,656   
     

 

 

 
        5,723,927   
     

 

 

 
      Shares      Value  

Financials (continued)

  

  

Insurance 0.20%

  

  

China Pacific Insurance Group
Co., Ltd.
(d)

     46,583         $136,087   

Ping An Insurance Group Co. of China, Ltd. - Class H

     62,017         351,998   
     

 

 

 
        488,085   
     

 

 

 

Real Estate Investment Trusts 9.27%

  

American Capital Agency
Corp.
(a)

     51,462         1,394,620   

Annaly Capital Management,
Inc.
(a)

     183,146         3,045,718   

Apollo Commercial Real Estate Finance, Inc.(a)

     78,200         1,029,894   

Ascendas Real Estate Investment Trust

     1,370,000         2,126,386   

Ascott Residence Trust

     682,302         526,894   

CapitaCommercial Trust

     1,966,000         1,518,205   

Capstead Mortgage
Corp.
(a)(b)

     270,178         3,117,854   

CYS Investments,
Inc.
(a)(b)

     113,839         1,376,313   

Dynex Capital,
Inc.
(a)(b)

     155,613         1,254,241   

Hatteras Financial
Corp.
(a)(b)

     196,310         4,939,160   

Host Hotels & Resorts,
Inc.
(a)(b)

     32,394         354,390   

MFA Financial,
Inc.
(a)(b)

     69,350         486,837   

Starwood Property Trust,
Inc.
(a)(b)

     74,566         1,279,553   
     

 

 

 
        22,450,065   
     

 

 

 

Real Estate Management & Development 0.53%

   

  

Aliansce Shopping Centers S.A.

     25,900         171,496   

BHG S.A. - Brazil Hospitality Group(c)

     42,939         411,063   

BR Malls Participacoes S.A.

     37,016         370,898   

Iguatemi Empresa de Shopping Centers S.A.

     9,124         151,157   

Sonae Sierra Brasil S.A.

     15,300         179,914   
     

 

 

 
        1,284,528   
     

 

 

 

Thrifts & Mortgage Finance 0.10%

  

MGIC Investment
Corp.
(a)(b)(c)

     94,894         177,452   

Radian Group,
Inc.
(a)(b)

     32,784         71,797   
     

 

 

 
        249,249   
     

 

 

 

TOTAL FINANCIALS

  

     56,176,963   
     

 

 

 

Health Care 1.73%

     

Abbott Laboratories(a)

     19,219         982,860   

Health Management Associates, Inc. - Class A(a)(b)(c)

     43,900         303,788   

LifePoint Hospitals,
Inc.
(a)(b)(c)

     11,500         421,360   

Sanofi - ADR(a)(b)

     65,900         2,161,520   
 

 

Semi-Annual Report | September 30, 2011

  13


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

Health Care (continued)

  

  

Shanghai Pharmaceuticals Holding Co., Ltd.(c)

     23,150         $50,418   

Tenet Healthcare
Corp.
(a)(b)(c)

     63,400         261,842   
     

 

 

 
        4,181,788   
     

 

 

 

Industrials 7.09%

  

  

Air China, Ltd.

     204,100         143,887   

Daelim Industrial Co., Ltd.

     1,912         156,622   

GZI Transport, Ltd.

     1,254,117         446,093   

Jardine Strategic Holdings, Ltd.(a)

     39,314         1,034,351   

Jiangsu Expressway Co., Ltd. - Class H

     1,922,359         1,468,788   

McDermott International, Inc.(a)(c)

     49,651         534,245   

MSCI, Inc. - Class A(a)(b)(c)

     12,700         385,191   

Santos Brasil Participacoes S.A.

     61,082         763,423   

Sensata Technologies Holding NV(a)(c)

     50,240         1,329,350   

TE Connectivity, Ltd.(a)(b)

     38,600         1,086,204   

TransDigm Group,
Inc.
(a)(b)(c)

     37,749         3,082,961   

United Continental Holdings, Inc.(a)(b)(c)

     124,015         2,403,411   

Verisk Analytics, Inc. - Class A(a)(c)

     30,600         1,063,962   

WABCO Holdings, Inc.(a)(c)

     9,023         341,611   

Wesco Aircraft Holdings, Inc.(a)(b)(c)

     76,600         837,238   

Zhejiang Expressway Co., Ltd. - Class H

     3,446,000         2,101,921   
     

 

 

 
        17,179,258   
     

 

 

 

Information Technology 14.03%

  

  

Apple, Inc.(a)(b)(c)

     25,265         9,630,513   

Arrow Electronics,
Inc.
(a)(b)(c)

     74,100         2,058,498   

Avnet, Inc.(a)(b)(c)

     59,500         1,551,760   

Dell, Inc.(a)(b)(c)

     49,800         704,670   

eBay, Inc.(c)

     12,700         374,523   

Google, Inc. -
Class A
(a)(b)(c)

     5,559         2,859,438   

Ingram Micro, Inc.
- Class A
(a)(b)(c)

     68,700         1,108,131   

International Business Machines Corp.(a)(b)

     29,400         5,145,882   

Microsoft Corp.(a)(b)

     336,710         8,380,712   

Netease.com(a)(c)

     772         29,459   

SanDisk Corp.(a)(c)

     9,600         387,360   

Sina Corp.(a)(c)

     5,914         423,502   

Sohu.com, Inc.(a)(c)

     2,600         125,320   
      Shares      Value  

Information Technology (continued)

  

  

Xerox Corp.(a)(b)

     175,082         $1,220,322   
     

 

 

 
        34,000,090   
     

 

 

 

Materials 5.50%

  

  

Agnico-Eagle Mines,
Ltd.
(a)(b)

     14,942         889,348   

Anglo American PLC - Unsponsored ADR(a)

     12,536         214,115   

Barrick Gold Corp.(a)(b)

     16,600         774,390   

Gerdau S.A. - Sponsored ADR(a)(b)

     39,858         284,188   

Goldcorp, Inc.(a)

     28,300         1,291,612   

Market Vectors Gold Miners ETF(a)

     60,300         3,327,957   

Newmont Mining Corp.(a)

     8,755         550,689   

Owens-Illinois, Inc.(a)(b)(c)

     161,309         2,438,992   

SPDR® Gold Shares(a)(c)

     22,504         3,557,432   
     

 

 

 
        13,328,723   
     

 

 

 

Telecommunication Services 2.48%

  

  

Chunghwa Telecom Co., Ltd. - ADR(a)(b)

     56,632         1,868,856   

DiGi.Com Bhd

     55,500         528,836   

Maxis Bhd

     1,262,900         2,104,504   

Philippine Long Distance Telephone Co.

     14,825         745,234   

StarHub, Ltd.

     118,669         259,495   

Telekom Malaysia Bhd

     395,200         506,301   
     

 

 

 
        6,013,226   
     

 

 

 

Utilities 23.67%

  

  

Alliant Energy Corp.(a)(b)

     33,200         1,284,176   

American Electric Power Co., Inc.(a)(b)

     127,100         4,832,342   

Babcock & Wilcox
Co.
(a)(b)(c)

     11,310         221,110   

CenterPoint Energy,
Inc.
(a)(b)

     113,900         2,234,718   

CMS Energy Corp.(a)(b)

     98,100         1,941,399   

Constellation Energy Group, Inc.(a)(b)

     28,500         1,084,710   

Dominion Resources,
Inc.
(a)(b)

     56,200         2,853,274   

DTE Energy Co.(a)

     46,300         2,269,626   

Duke Energy Corp.(a)(b)

     209,000         4,177,910   

Edison International(a)(b)

     38,600         1,476,450   

Entergy Corp.(a)(b)

     16,700         1,107,043   

FirstEnergy Corp.(a)

     25,400         1,140,714   

National Grid PLC - Sponsored ADR(a)(b)

     233,700         11,591,520   

NiSource, Inc.(a)(b)

     121,166         2,590,529   

Northeast Utilities(a)(b)

     92,736         3,120,566   

NV Energy, Inc.(a)(b)

     223,200         3,283,272   

Oneok, Inc.(a)(b)

     59,400         3,922,776   
 

 

14

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

    

 

Shares

    Value  

Utilities (continued)

  

 

PG&E Corp.(a)(b)

    58,900        $2,492,059   

Power Assets Holdings, Ltd.

    345,000        2,651,495   

PPL Corp.(a)(b)

    107,444        3,066,452   
   

 

 

 
      57,342,141   
   

 

 

 

TOTAL COMMON STOCKS

(Cost $280,020,879)

  

  

    256,571,239   
   

 

 

 

EXCHANGE TRADED FUNDS 1.42%

  

 

iShares® iBoxx® High Yield Corporate Bond Fund(a)(b)

    41,782        3,456,625   
   

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Cost $2,949,748)

  

  

    3,456,625   
   

 

 

 

PREFERRED STOCKS 0.42%

  

 

The Goodyear Tire & Rubber Co., 5.875%(a)

    26,000        1,012,700   
   

 

 

 

TOTAL PREFERRED STOCKS

(Cost $1,301,625)

  

  

    1,012,700   
   

 

 

 

Description and

Maturity Date

  Principal
Amount
    Value  

CORPORATE BONDS 10.18%

  

 

American Axle & Manufacturing, Inc.
03/01/2017, 7.875%
(a)(b)

  $ 1,335,000        1,261,575   

Anheuser-Busch InBev Worldwide, Inc.
11/17/2015, 9.750%
(a)

    950,000        512,831   

ArvinMeritor, Inc.
03/15/2018, 10.625%
(a) 

    640,000        619,200   

BE Aerospace, Inc.
07/01/2018, 8.500%
(a) 

    725,000        779,375   

Bombardier, Inc.
05/01/2034, 7.450%
(a)(d)

    265,000        267,650   

China Liansu Group Holdings, Ltd.
05/13/2016, 7.875%
(a)(d)

    720,000        536,400   

CITIC Resources Holdings, Ltd.
05/15/2014, 6.750%
(a)(f)

    650,000        585,000   

Constellation Brands, Inc.
09/01/2016, 7.250%
(a) 

    1,175,000        1,239,625   

Crown Americas LLC / Crown Americas Capital Corp. III
02/01/2021, 6.250%
(a)(d)

    970,000        974,850   

Dana Holding Corp.
02/15/2021, 6.750%
(a) 

    830,000        792,650   

Felcor Lodging LP
06/01/2019, 6.750%
(a)(d)

    940,000        846,000   

Ford Motor Credit Co. LLC
02/01/2021, 5.750%
(a) 

    1,460,000        1,450,276   

Description and

Maturity Date

  Principal
Amount
    Value  

CORPORATE BONDS (continued)

  

 

Forest Oil Corp.
06/15/2019,
7.250%
(a) 

    $1,000,000        $980,000   

Fosun International, Ltd.
05/12/2016,
7.500%
(a)(d)

    720,000        572,400   

General Cable Corp.
04/01/2017,
7.125%
(a) 

    1,050,000        1,055,250   

Gol Finance
07/20/2020,
9.250%
(a)(d)

    645,000        541,800   

Graphic Packaging International, Inc.
10/01/2018,
7.875%
(a) 

    495,000        509,850   

Hanesbrands, Inc.
12/15/2020,
6.375%
(a) 

    860,000        838,500   

Hidili Industry International Development, Ltd.
11/04/2015,
8.625%
(a)(d)

    940,000        592,200   

Lear Corp.
03/15/2018,
7.875%
(a) 

    950,000        983,250   

Levi Strauss & Co.
05/15/2020,
7.625%
(a)(b)

    1,205,000        1,126,675   

Manufacturers & Traders Trust Co.
12/01/2021,
5.629%
(a)(g)

    1,200,000        1,163,161   

Newfield Exploration Co.
05/15/2018,
7.125%
(a) 

    700,000        728,000   

Pioneer Natural Resources Co.
03/15/2017,
6.650%
(a) 

    775,000        834,074   

Range Resources Corp.
05/15/2019,
8.000%
(a) 

    810,000        891,000   

Rearden G Holdings EINS GmbH
03/30/2020,
7.875% 
(a)(d)

    685,000        671,300   

TAM Capital 2, Inc.
01/29/2020,
9.500% 
(a)(f)

    775,000        773,063   

TAM Capital 3, Inc.
06/03/2021,
8.375% 
(d) 

    365,000        339,450   

Tenneco, Inc.
08/15/2018,
7.750% 
(a)(d)

    450,000        454,500   

Terex Corp.
11/15/2017,
8.000% 
(a) 

    485,000        431,650   

Visteon Corp.
04/15/2019,
6.750% 
(a)(d)

    1,455,000        1,316,775   
   

 

 

 

TOTAL CORPORATE BONDS

(Cost $25,611,347)

  

  

    24,668,330   
   

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 0.39%

  

Freddie Mac REMICS

  

 

Series 2007-3271,
Class AS, 02/15/2037,
37.446%
(a)(e)(g)

    583,652        723,086   

Government National Mortgage Association (GNMA)

  

Series 2007-37,
Class SA, 03/20/2037,
21.301%
(a)(g)

    150,569        168,947   
 

 

Semi-Annual Report | September 30, 2011

  15


Table of Contents

Statement of Investments

   Clough Global Equity Fund
September 30, 2011 (Unaudited)   

    

 

Description and

Maturity Date

 

Principal

Amount

    Value  
ASSET/MORTGAGE BACKED SECURITIES (continued)    

Series 2007-37, Class SB,
03/20/2037,
21.301%
(a)(g)

    $40,543        $47,701   
   

 

 

 

TOTAL ASSET/MORTGAGE BACKED SECURITIES

(Cost $754,859)

   

  

    939,734   
   

 

 

 

FOREIGN GOVERNMENT BONDS 0.58%

  

Brazilian Government International Bonds

  

 

01/05/2016, 12.500% (a) 

    1,950,000        1,161,548   

01/10/2028, 10.250% (a) 

    424,000        237,904   
   

 

 

 

TOTAL FOREIGN GOVERNMENT BONDS

(Cost $1,422,048)

  

  

    1,399,452   
   

 

 

 
GOVERNMENT & AGENCY OBLIGATIONS 13.23%   

U.S. Treasury Bonds

   

11/15/2020, 2.625% (a) 

    6,095,000        6,528,318   

02/15/2021, 3.625% (a) 

    6,475,000        7,491,775   

05/15/2040, 4.375% (a) 

    7,400,000        9,555,228   

05/15/2041, 4.375%

    3,500,000        4,536,336   

U.S. Treasury Notes
06/30/2018, 2.375%
(a) 

    3,700,000        3,943,390   
   

 

 

 

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

(Cost $30,371,884)

   

  

    32,055,047   
   

 

 

 
    

Number of

Contracts

    Value  

CALL OPTIONS PURCHASED 0.02%

  

 

HOLDRs Oil Services, Expires January, 2013, Exercise Price $160.00

    313        35,995   
   

 

 

 

TOTAL CALL OPTIONS PURCHASED

(Cost $626,633)

  

  

    35,995   
   

 

 

 
     Shares     Value  

SHORT-TERM INVESTMENTS 27.59%

  

 

Money Market Fund

   

Dreyfus Treasury Prime Money Market Fund (0.000% 7-day
yield)
(h)

    60,752,322        60,752,322   
   

 

 

 

Morgan Stanley Institutional Liquidity Fund (0.080% 7-day yield)

    6,103,599        6,103,599   
   

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost $66,855,921)

  

  

    66,855,921   
   

 

 

 
           

 

Value

 

Total Investments - 159.73%

(Cost $409,914,944)

  

  

    $386,995,043   
Liabilities in Excess of Other
Assets - (59.73%)
        (144,710,560)   
   

 

 

 

NET ASSETS - 100.00%

  

    $242,284,483   
   

 

 

 
SCHEDULE OF SECURITIES
SOLD SHORT(c)
  Shares     Value  

COMMON STOCK

   

Aetna, Inc.

    (8,800)        $(319,880)   

Alfa Laval AB

    (30,867)        (491,256)   

Atlas Copco AB

    (60,300)        (1,081,847)   

Berkshire Hathaway,
Inc. - Class B

    (15,520)        (1,102,541)   

BHP Billiton, Ltd.

    (11,076)        (735,889)   

Caterpillar, Inc.

    (35,974)        (2,656,320)   

Cie Generale d’Optique Essilor
International S.A.

    (9,100)        (658,229)   

Cliffs Natural Resources, Inc.

    (15,918)        (814,524)   

Deutsche Bank AG

    (32,738)        (1,133,062)   

First Solar, Inc.

    (5,800)        (366,618)   

Fluor Corp.

    (8,674)        (403,775)   

Joy Global, Inc.

    (23,449)        (1,462,749)   

Kohl’s Corp.

    (8,100)        (397,710)   

Petroleo Brasileiro S.A. - ADR

    (58,956)        (1,323,562)   

Sandvik AB

    (63,600)        (741,545)   

Siemens AG

    (433)        (38,879)   

Starwood Hotels & Resorts
Worldwide, Inc.

    (10,200)        (395,964)   

Suncor Energy, Inc.

    (23,631)        (601,173)   

TAL International Group, Inc.

    (3,789)        (94,498)   

Tesla Motors, Inc.

    (16,900)        (412,191)   

United States Oil Fund LP

    (191,229)        (5,832,484)   

Vale SA

    (106,988)        (2,439,326)   

Wynn Resorts, Ltd.

    (4,400)        (506,352)   
   

 

 

 
      (24,010,374)   
   

 

 

 

EXCHANGE TRADED FUNDS

  

 

iShares® Dow Jones U.S. Real
Estate Index Fund

    (8,212)        (415,281)   

iShares® FTSE China 25 Index Fund

    (52,845)        (1,629,211)   

iShares® MSCI Australia Index Fund

    (68,928)        (1,382,696)   

iShares® MSCI Taiwan Index
Fund

    (32,214)        (380,447)   

iShares® Russell 2000® Index
Fund

    (32,580)        (2,093,265)   

Vanguard REIT ETF

    (85,926)        (4,371,056)   
   

 

 

 
      (10,271,956)   
   

 

 

 

TOTAL SECURITIES SOLD SHORT

(Proceeds $40,384,557)

  

  

    $(34,282,330)   
   

 

 

 
 

 

16

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Table of Contents

Clough Global Equity Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

(a)

Pledged security;a portion or all of the security is pledged as collateral for securities sold short or borrowings as of September 30, 2011. (See Note 1 and Note 6)

(b)

Loaned security; a portion or all of the security is on loan at September 30, 2011.

(c)

Non-income producing security.

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of September 30, 2011, these securities had a total value of $7,742,133 or 3.20% of net assets.

(e)

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2011, these securities had a total value of $809,176 or 0.33% of total net assets.

(f)

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of September 30, 2011, the aggregate market value of those securities was $1,358,063, representing 0.56% of net assets.

(g)

Floating or variable rate security - rate disclosed as of September 30, 2011.

(h)

Less than 0.0005%.

 

 

See Notes to the Financial Statements.

 

Semi-Annual Report | September 30, 2011

  17


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

COMMON STOCKS 96.99%

  

  

Consumer Discretionary 9.49%

  

  

Arezzo Industria e Comercio S.A.

     115,295         $1,226,379   

Bosideng International Holdings, Ltd.

     8,454,000         1,769,528   

CBS Corp. - Class B(a)(b)

     228,822         4,663,392   

Cie Generale des Etablissements Michelin - Class B

     44,205         2,677,494   

Coach, Inc.(a)

     23,698         1,228,267   

DIRECTV(a)(c)

     75,400         3,185,650   

Dongfeng Motor Group Co., Ltd. - Class H

     911,000         1,254,067   

Focus Media Holding,
Ltd.
(a)(c)

     24,554         412,262   

Gafisa S.A. -
ADR
(a)

     115,700         667,589   

The Goodyear Tire & Rubber Co.(a)(b)(c)

     1,587,346         16,016,321   

Guangzhou Automobile Group Co., Ltd.

     30,786         30,322   

Hanesbrands,
Inc.
(a)(c)

     43,600         1,090,436   

Liberty Interactive Corp. -
Class A
(a)(c)

     334,902         4,946,503   

Liberty Media Corp. - Capital -
Series A
(a)(b)(c)

     33,546         2,218,062   

Liberty Media Corp. - Starz -
Series A
(a)(b)(c)

     6,036         383,648   

Man Wah Holdings, Ltd.

     3,753,700         1,479,808   

MGM Resorts
International
(a)(c)

     219,728         2,041,273   

NIKE, Inc. -
Class B
(a)(b)

     46,600         3,984,766   

Prada S.p.A.(c)

     371,600         1,567,540   

Regal Entertainment
Group
(a)(b)

     89,600         1,051,904   

Time Warner, Inc.

     32,800         983,016   

Valassis Communications,
Inc.
(a)(b)(c)

     87,300         1,636,002   

Viacom, Inc. - Class B(a)(b)

     102,700         3,978,598   

Visteon Corp.(a)(c)

     32,963         1,417,409   
     

 

 

 
        59,910,236   
     

 

 

 

Consumer Staples 1.24%

  

  

Brazil Pharma
S.A.
(c)(d)

     141,487         1,053,486   

China Resources Enterprise, Ltd.

     390,600         1,314,138   

Cia de Bebidas das Americas -
ADR
(a)

     109,900         3,368,435   

Julio Simoes Logistica S.A.

     322,786         1,438,610   
      Shares      Value  

Consumer Staples (continued)

  

  

Raia S.A.(c)

     47,602         $629,124   
     

 

 

 
        7,803,793   
     

 

 

 

Energy 16.87%

     

Natural Gas Leveraged Exploration & Production 1.02%

   

Carrizo Oil & Gas,
Inc.
(a)(c)

     59,700         1,286,535   

Chesapeake Energy Corp.(a)

     51,800         1,323,490   

El Paso Corp.(a)

     64,008         1,118,860   

Forest Oil Corp.(a)(c)

     102,485         1,475,784   

Quicksilver Resources,
Inc.
(a)(c)

     161,800         1,226,444   
     

 

 

 
        6,431,113   
     

 

 

 

Non-North American Producers 1.70%

  

InterOil Corp.(a)(b)(c)

     133,009         6,480,199   

Royal Dutch Shell PLC - ADR(a)(b)

     69,300         4,263,336   
     

 

 

 
        10,743,535   
     

 

 

 

Oil & Gas & Consumable
Fuels 0.79%

   

  

Newfield Exploration
Co.
(a)(b)(c)

     42,800         1,698,732   

Seadrill, Ltd.(a)

     118,800         3,270,564   
     

 

 

 
        4,969,296   
     

 

 

 

Oil Leveraged Exploration & Production 3.57%

  

Anadarko Petroleum Corp.(a)(b)

     121,982         7,690,965   

BP PLC - Sponsored ADR

     136,600         4,927,162   

Canadian Natural Resources, Ltd.(a)

     91,800         2,686,986   

Cenovus Energy,
Inc.
(a)

     46,200         1,418,802   

EOG Resources,
Inc.
(a)

     16,800         1,192,968   

Exxon Mobil
Corp.
(a)(b)

     29,200         2,120,796   

Kodiak Oil & Gas
Corp.
(a)(c)

     208,017         1,083,769   

Occidental Petroleum
Corp.
(a)(b)

     19,967         1,427,640   
     

 

 

 
        22,549,088   
     

 

 

 

Oil Services & Drillers 8.36%

  

Baker Hughes,
Inc.
(a)(b)

     148,400         6,850,144   

Basic Energy Services,
Inc.
(a)(b)(c)

     45,300         641,448   

Calfrac Well Services,
Ltd.
(a)

     61,000         1,425,604   

Cameron International
Corp.
(a)(c)

     100,200         4,162,308   

Complete Production Services,
Inc.
(a)(c)

     46,591         878,240   

Dresser-Rand Group,
Inc.
(a)(b)(c)

     114,949         4,658,883   

Ensco PLC - Sponsored
ADR
(a)(b)

     173,198         7,002,395   

Halliburton
Co.
(a)(b)

     82,011         2,502,976   

Helmerich & Payne,
Inc.
(a)(b)

     37,893         1,538,456   

Hornbeck Offshore Services,
Inc.
(a)(c)

     114,400         2,849,704   
 

 

18

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

      Shares      Value  

Energy (continued)

  

  

National Oilwell Varco,
Inc.
(a)(b)

     211,087         $10,811,876   

Oil States International,
Inc.
(a)(c)

     16,100         819,812   

Rowan Cos.,
Inc.
(a)(c)

     229,600         6,931,624   

Schlumberger,
Ltd.
(a)

     28,309         1,690,896   
     

 

 

 
        52,764,366   
     

 

 

 

Tankers 1.43%

     

Golar LNG Partners
LP
(a)

     59,844         1,530,211   

Golar LNG,
Ltd.
(a)(b)

     235,183         7,474,116   
     

 

 

 
        9,004,327   
     

 

 

 

TOTAL ENERGY

        106,461,725   
     

 

 

 

Financials 22.90%

     

Capital Markets 7.42%

  

  

Apollo Investment
Corp.
(a)(b)

     990,507         7,448,612   

Ares Capital
Corp.
(a)(b)

     971,969         13,384,013   

Golub Capital BDC,
Inc.
(a)(b)

     226,900         3,369,465   

Indochina Capital Vietnam Holdings,
Ltd.
(c)(d)(e)

     54,585         200,873   

Medley Capital
Corp.
(a)(b)

     146,188         1,473,575   

PennantPark Floating Rate Capital,
Ltd.
(a)

     92,500         975,875   

PennantPark Investment
Corp.
(a)

     707,590         6,311,703   

Solar Capital,
Ltd.
(a)(b)

     559,577         11,264,285   

Solar Senior Capital,
Ltd.
(a)(b)

     167,431         2,392,589   
     

 

 

 
        46,820,990   
     

 

 

 

Commercial Banks 3.12%

  

  

Agricultural Bank of China,
Ltd. - Class H

     15,608,000         5,170,999   

Banco do Brasil S.A.

     66,954         866,725   

Banco Santander Brasil S.A.
- ADR
(a)

     229,200         1,677,744   

Bank of China,
Ltd. - Class H

     10,327,753         3,249,223   

China Construction Bank
Corp. - Class H

     1,816,103         1,117,078   

Industrial & Commercial Bank of China
- Class H

     11,834,575         5,805,285   

Lloyds Banking Group
PLC
(c)

     1,633,400         887,931   

Standard Chartered PLC

     44,965         917,500   
     

 

 

 
        19,692,485   
     

 

 

 

Diversified Financials 2.35%

  

  

Bank of America
Corp.
(a)(b)

     406,708         2,489,053   

Citigroup, Inc.(a)(b)

     266,380         6,824,656   

First Niagara Financial Group,
Inc.
(a)(b)

     175,200         1,603,080   

People’s United Financial,
Inc.
(a)(b)

     174,693         1,991,500   
      Shares      Value  

Financials (continued)

  

  

Valley National Bancorp(a)(b)

     178,185         $1,886,979   
     

 

 

 
        14,795,268   
     

 

 

 

Insurance 0.20%

     

China Pacific Insurance Group
Co., Ltd.
(d)

     120,646         352,454   

Ping An Insurance Group Co. of China,
Ltd. - Class H

     163,777         929,571   
     

 

 

 
        1,282,025   
     

 

 

 

Real Estate Investment Trusts 9.18%

  

American Capital Agency
Corp.
(a)(b)

     133,586         3,620,181   

Annaly Capital Management,
Inc.
(a)(b)

     455,477         7,574,582   

Apollo Commercial Real Estate Finance,
Inc.
(a)

     202,400         2,665,608   

Ascendas Real Estate Investment Trust

     3,597,000         5,582,927   

Ascott Residence Trust

     1,781,824         1,375,978   

CapitaCommercial Trust

     5,159,000         3,983,936   

Capstead Mortgage
Corp.
(a)(b)

     704,979         8,135,458   

CYS Investments,
Inc.
(a)(b)

     297,822         3,600,668   

Dynex Capital,
Inc.
(a)(b)

     405,253         3,266,339   

Hatteras Financial
Corp.
(a)(b)

     500,992         12,604,959   

Host Hotels & Resorts,
Inc.
(a)(b)

     84,281         922,034   

MFA Financial,
Inc.
(a)

     182,205         1,279,079   

Starwood Property Trust,
Inc.
(a)(b)

     194,950         3,345,342   
     

 

 

 
        57,957,091   
     

 

 

 

Real Estate Management & Development 0.53%

  

Aliansce Shopping Centers S.A.

     67,600         447,611   

BHG S.A. - Brazil Hospitality
Group
(c)

     111,949         1,071,709   

BR Malls Participacoes S.A.

     96,558         967,506   

Iguatemi Empresa de Shopping Centers S.A.

     23,796         394,227   

Sonae Sierra Brasil S.A.

     39,800         468,011   
     

 

 

 
        3,349,064   
     

 

 

 

Thrifts & Mortgage Finance 0.10%

  

MGIC Investment
Corp.
(a)(b)(c)

     243,573         455,482   

Radian Group,
Inc.
(a)(b)

     84,576         185,221   
     

 

 

 
        640,703   
     

 

 

 

TOTAL FINANCIALS

  

     144,537,626   
     

 

 

 

Health Care 1.73%

     

Abbott
Laboratories
(a)(b)

     50,252         2,569,887   
 

 

Semi-Annual Report | September 30, 2011

  19


Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
September 30, 2011 (Unaudited)   

    

 

      Shares      Value  

Health Care (continued)

  

  

Health Management Associates,
Inc. - Class A
(a)(c)

     114,500         $792,340   

LifePoint Hospitals,
Inc.
(a)(b)(c)

     30,000         1,099,200   

Sanofi - ADR(a)(b)

     172,000         5,641,600   

Shanghai Pharmaceuticals Holding
Co., Ltd.
(c)

     59,800         130,237   

Tenet Healthcare
Corp.
(a)(b)(c)

     165,200         682,276   
     

 

 

 
        10,915,540   
     

 

 

 

Industrials 7.12%

     

Air China, Ltd.

     531,200         374,488   

Daelim Industrial
Co., Ltd.

     4,990         408,756   

GZI Transport, Ltd.

     3,273,315         1,164,327   

Jardine Strategic Holdings,
Ltd.

     105,255         2,769,259   

Jiangsu Expressway Co.,
Ltd. - Class H

     5,044,918         3,854,594   

McDermott International,
Inc.
(a)(c)

     129,295         1,391,214   

MSCI, Inc. -
Class A
(a)(b)(c)

     33,300         1,009,989   

Santos Brasil Participacoes S.A.

     159,042         1,987,761   

Sensata Technologies
Holding NV
(a)(b)(c)

     131,100         3,468,906   

TE Connectivity,
Ltd.
(a)(b)

     100,500         2,828,070   

TransDigm Group,
Inc.
(a)(b)(c)

     97,447         7,958,496   

United Continental Holdings,
Inc.
(a)(b)(c)

     324,574         6,290,244   

Verisk Analytics, Inc. -
Class A
(a)(b)(c)

     81,313         2,827,253   

WABCO Holdings,
Inc.
(a)(c)

     23,496         889,559   

Wesco Aircraft Holdings,
Inc.
(a)(b)(c)

     198,300         2,167,419   

Zhejiang Expressway
Co., Ltd. - Class H

     9,044,000         5,516,475   
     

 

 

 
        44,906,810   
     

 

 

 

Information Technology 13.92%

  

  

Apple, Inc.(a)(b)(c)

     65,871         25,108,708   

Arrow Electronics,
Inc.
(a)(b)(c)

     193,600         5,378,208   

Avnet, Inc.(a)(b)(c)

     155,300         4,050,224   

Dell, Inc.(a)(b)(c)

     129,500         1,832,425   

eBay, Inc.(c)

     33,300         982,017   

Google, Inc. -
Class A
(a)(b)(c)

     14,441         7,428,162   

Ingram Micro, Inc. -
Class A
(a)(b)(c)

     179,300         2,892,109   

International Business Machines
Corp.
(a)(b)

     76,800         13,442,304   

Microsoft Corp.(a)(b)

     880,159         21,907,157   

Netease.com(a)(c)

     1,980         75,557   
      Shares      Value  

Information Technology (continued)

  

  

SanDisk Corp.(a)(c)

     25,100         $1,012,785   

Sina Corp.(a)(c)

     15,436         1,105,372   

Sohu.com, Inc.(a)(c)

     6,700         322,940   

Xerox Corp.(a)(b)

     331,794         2,312,604   
     

 

 

 
        87,850,572   
     

 

 

 

Materials 5.52%

     

Agnico-Eagle Mines,
Ltd.
(a)(b)

     39,298         2,339,017   

Anglo American PLC -
Unsponsored
ADR
(a)

     31,180         532,554   

Barrick Gold Corp.(a)

     43,700         2,038,605   

Gerdau S.A. - Sponsored
ADR
(a)(b)

     103,111         735,182   

Goldcorp, Inc.(a)

     74,200         3,386,488   

Market Vectors Gold Miners
ETF
(a)

     157,800         8,708,982   

Newmont Mining
Corp.
(a)

     23,016         1,447,706   

Owens-Illinois,
Inc.
(a)(b)(c)

     418,697         6,330,699   

SPDR® Gold
Shares
(a)(c)

     59,079         9,339,208   
     

 

 

 
        34,858,441   
     

 

 

 

Telecommunication Services 2.49%

  

  

Chunghwa Telecom Co.,
Ltd. - ADR
(a)

     147,418         4,864,794   

DiGi.Com Bhd

     145,000         1,381,644   

Maxis Bhd

     3,314,700         5,523,635   

Philippine Long Distance
Telephone Co.

     38,690         1,944,897   

StarHub, Ltd.

     308,893         675,460   

Telekom Malaysia Bhd

     1,033,200         1,323,661   
     

 

 

 
        15,714,091   
     

 

 

 

Utilities 15.71%

     

American Electric Power Co.,
Inc.
(a)(b)

     182,400         6,934,848   

Babcock & Wilcox
Co.
(a)(b)(c)

     33,771         660,223   

CenterPoint Energy,
Inc.
(a)(b)

     259,600         5,093,352   

CMS Energy
Corp.
(a)(b)

     185,500         3,671,045   

Dominion Resources,
Inc.
(a)(b)

     129,100         6,554,407   

DTE Energy Co.(a)

     100,700         4,936,314   

Edison
International
(a)(b)

     90,500         3,461,625   

FirstEnergy Corp.(a)

     66,100         2,968,551   

National Grid PLC - Sponsored
ADR
(a)(b)

     585,400         29,035,840   

NiSource, Inc.(a)(b)

     223,543         4,779,350   

Northeast Utilities(a)(b)

     228,648         7,694,005   

Oneok, Inc.(a)(b)

     129,900         8,578,596   

Power Assets Holdings, Ltd.

     905,500         6,959,213   
 

 

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

 

      Shares     Value  

Utilities (continued)

    

PPL Corp.(a)(b)

     273,165        $7,796,129   
    

 

 

 
       99,123,498   
    

 

 

 

TOTAL COMMON STOCKS

(Cost $679,294,339)

  

  

    612,082,332   
    

 

 

 

EXCHANGE TRADED FUNDS 0.93%

  

 

iShares® iBoxx® High Yield Corporate Bond Fund(a)(b)

     70,841        5,860,676   
    

 

 

 

TOTAL EXCHANGE TRADED FUNDS

(Cost $5,033,273)

  

  

    5,860,676   
    

 

 

 

PREFERRED STOCKS 0.42%

  

 

The Goodyear Tire & Rubber Co., 5.875%(a)

     67,800        2,640,810   
    

 

 

 

TOTAL PREFERRED STOCKS

(Cost $3,394,237)

  

  

    2,640,810   
    

 

 

 

Description and

Maturity Date

   Principal
Amount
    Value  

CORPORATE BONDS 10.44%

  

 

American Axle & Manufacturing, Inc.
03/01/2017, 7.875%
(a)(b)

   $ 3,765,000        3,557,925   

Anheuser-Busch InBev Worldwide, Inc.
11/17/2015, 9.750%
(a) 

     2,500,000        1,349,555   

ArvinMeritor, Inc.
03/15/2018, 10.625%
(a)

     1,805,000        1,746,337   

BE Aerospace, Inc.
07/01/2018, 8.500%
(a) 

     2,100,000        2,257,500   

Bombardier, Inc.
05/01/2034, 7.450%
(a)(d)

     720,000        727,200   

China Liansu Group Holdings, Ltd.
05/13/2016, 7.875%
(a)(d)

     1,835,000        1,367,075   

CITIC Resources Holdings, Ltd.
05/15/2014, 6.750%
(a)(f)

     1,900,000        1,710,000   

Constellation Brands, Inc.
09/01/2016, 7.250%
(a) 

     3,050,000        3,217,750   

Crown Americas LLC / Crown Americas Capital Corp. III
02/01/2021, 6.250%
(a)(d)

     2,435,000        2,447,175   

Dana Holding Corp.
02/15/2021, 6.750%
(a) 

     2,165,000        2,067,575   

Felcor Lodging LP
06/01/2019, 6.750%
(a)(d)

     2,460,000        2,214,000   

Ford Motor Credit Co. LLC
02/01/2021, 5.750%
(a) 

     3,650,000        3,625,691   

Forest Oil Corp.
06/15/2019, 7.250%
(a) 

     2,400,000        2,352,000   

Description and

Maturity Date

   Principal
Amount
    Value  

CORPORATE BONDS (continued)

  

Fosun International, Ltd.
05/12/2016, 7.500%
(a)(d)

     $1,835,000        $1,458,825   

General Cable Corp.
04/01/2017, 7.125%
(a) 

     2,900,000        2,914,500   

Gol Finance
07/20/2020, 9.250%
(a)(d)

     2,310,000        1,940,400   

Graphic Packaging International, Inc.
10/01/2018, 7.875%
(a) 

     1,300,000        1,339,000   

Hanesbrands, Inc.
12/15/2020, 6.375%
(a) 

     2,105,000        2,052,375   

Hidili Industry International Development, Ltd.
11/04/2015, 8.625%
(a)(d)

     2,475,000        1,559,250   

Lear Corp.
03/15/2018, 7.875%
(a) 

     2,450,000        2,535,750   

Levi Strauss & Co.
05/15/2020, 7.625%
(a)(b)

     3,055,000        2,856,425   

Manufacturers & Traders Trust Co.
12/01/2021, 5.629%
(a)(g)

     3,060,000        2,966,061   

Newfield Exploration Co.
05/15/2018, 7.125%
(a) 

     1,900,000        1,976,000   

Pioneer Natural Resources Co.
03/15/2017, 6.650%
(a) 

     2,200,000        2,367,695   

Range Resources Corp.
05/15/2019, 8.000%
(a) 

     2,490,000        2,739,000   

Rearden G Holdings EINS GmbH
03/30/2020, 7.875%
(a)(d)

     1,875,000        1,837,500   

TAM Capital 2, Inc.
01/29/2020, 9.500%
(a)(f)

     2,205,000        2,199,488   

TAM Capital 3, Inc.
06/03/2021, 8.375%
(d) 

     910,000        846,300   

Tenneco, Inc.
08/15/2018, 7.750%
(a)(d)

     1,250,000        1,262,500   

Terex Corp.
11/15/2017, 8.000%
(a) 

     1,215,000        1,081,350   

Visteon Corp.
04/15/2019, 6.750%
(a)(d)

     3,650,000        3,303,250   
    

 

 

 

TOTAL CORPORATE BONDS

(Cost $68,316,403)

  

  

    65,875,452   
    

 

 

 

ASSET/MORTGAGE BACKED SECURITIES 0.09%

  

Government National Mortgage Association (GNMA)

  

Series 2007-37, Class SA,

03/20/2037, 21.301%(a)(g)

     405,891        455,432   

Series 2007-37, Class SB,

03/20/2037, 21.301%(a)(g)

     109,293        128,590   
    

 

 

 

TOTAL ASSET/MORTGAGE BACKED SECURITIES

(Cost $480,787)

   

  

    584,022   
    

 

 

 
 

 

Semi-Annual Report | September 30, 2011

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Table of Contents

Statement of Investments

   Clough Global Opportunities Fund
September 30, 2011 (Unaudited)   

    

 

Description and

Maturity Date

 

Principal

Amount

    Value  

FOREIGN GOVERNMENT BONDS 0.69%

  

Brazilian Government International Bonds

  

01/05/2016, 12.500% (a) 

    $6,275,000        $3,737,801   

01/10/2028, 10.250% (a) 

    1,099,000        616,644   
   

 

 

 

TOTAL FOREIGN GOVERNMENT BONDS

(Cost $4,399,075)

  

  

    4,354,445   
   

 

 

 

GOVERNMENT & AGENCY OBLIGATIONS 24.11%

  

U.S. Treasury Bonds

   

11/15/2020, 2.625% (a) 

    23,330,000        24,988,623   

02/15/2021, 3.625% (a) 

    31,115,000        36,001,019   

05/15/2040, 4.375% (a) 

    16,850,000        21,757,512   

05/15/2041, 4.375%

    11,000,000        14,257,056   

U.S. Treasury Notes

   

06/30/2018, 2.375% (a) 

    51,750,000        55,154,167   
   

 

 

 

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

(Cost $145,159,683)

   

  

    152,158,377   
   

 

 

 
    

Number of

Contracts

    Value  

CALL OPTIONS PURCHASED 0.21%

  

 

AMR Corp., Expires January, 2012, Exercise Price $10.00

    2,000        4,000   

HOLDRs Oil Services, Expires January, 2013, Exercise Price $160.00

    838        96,370   

Microsoft Corp., Expires January, 2012, Exercise Price $27.50

    13,500        1,019,250   

Microsoft Corp., Expires January, 2013, Exercise Price $30.00

    1,792        241,024   
   

 

 

 

TOTAL CALL OPTIONS PURCHASED

(Cost $6,856,097)

  

  

    1,360,644   
   

 

 

 
     Shares     Value  

SHORT-TERM INVESTMENTS 26.48%

  

Money Market Fund

   

Dreyfus Treasury Prime Money Market Fund (0.000% 7-day
yield)
(h)

    151,346,809        151,346,809   
   

 

 

 

Morgan Stanley Institutional Liquidity Fund (0.080% 7-day yield)

    15,745,173        15,745,173   
   

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost $167,091,982)

  

  

    167,091,982   
   

 

 

 
            Value  

Total Investments - 160.36%

(Cost $1,080,025,876)

  

  

  $ 1,012,008,740   

Liabilities in Excess of Other Assets - (60.36%)

   

    (380,936,357)   
   

 

 

 

NET ASSETS - 100.00%

  

    $631,072,383   
   

 

 

 

SCHEDULE OF SECURITIES SOLD

  

SHORT (c)   Shares     Value  

COMMON STOCK

   

Aetna, Inc.

    (22,600)        $(821,510)   

Alfa Laval AB

    (81,334)        (1,294,450)   

Atlas Copco AB

    (158,800)        (2,849,043)   

Berkshire Hathaway, Inc. - Class B

    (40,814)        (2,899,427)   

BHP Billiton, Ltd.

    (28,992)        (1,926,228)   

Caterpillar, Inc.

    (93,990)        (6,940,222)   

Cie Generale d’Optique Essilor International S.A.

    (24,700)        (1,786,623)   

Cliffs Natural Resources, Inc.

    (41,827)        (2,140,288)   

Deutsche Bank AG

    (85,903)        (2,973,103)   

First Solar, Inc.

    (15,100)        (954,471)   

Fluor Corp.

    (22,866)        (1,064,412)   

Joy Global, Inc.

    (61,450)        (3,833,251)   

Kohl’s Corp.

    (20,900)        (1,026,190)   

Petroleo Brasileiro S.A. - ADR

    (154,223)        (3,462,306)   

Sandvik AB

    (167,300)        (1,950,636)   

Siemens AG

    (1,146)        (102,899)   

Starwood Hotels & Resorts Worldwide, Inc.

    (26,900)        (1,044,258)   

Suncor Energy, Inc.

    (61,833)        (1,573,031)   

TAL International Group, Inc.

    (9,889)        (246,632)   

Tesla Motors, Inc.

    (44,400)        (1,082,916)   

United States Oil Fund LP

    (500,961)        (15,279,310)   

Vale SA

    (280,562)        (6,396,814)   

Wynn Resorts, Ltd.

    (11,500)        (1,323,420)   
   

 

 

 
      (62,971,440)   
   

 

 

 

EXCHANGE TRADED FUNDS

  

 

iShares® Dow Jones U.S. Real Estate Index Fund

    (21,424)        (1,083,412)   

iShares® FTSE China 25 Index Fund

    (138,673)        (4,275,289)   

iShares® MSCI Australia Index Fund

    (180,341)        (3,617,640)   

iShares® MSCI Taiwan Index Fund

    (84,038)        (992,489)   

iShares® Russell 2000® Index Fund

    (85,036)        (5,463,563)   

Vanguard REIT ETF

    (221,797)        (11,282,813)   
   

 

 

 
      (26,715,206)   
   

 

 

 

TOTAL SECURITIES SOLD SHORT

(Proceeds $105,631,811)

  

  

    $(89,686,646)   
   

 

 

 
 

 

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Table of Contents

Clough Global Opportunities Fund

   Statement of Investments
   September 30, 2011 (Unaudited)

    

 

(a) 

Pledged security;a portion or all of the security is pledged as collateral for securities sold short or borrowings as of September 30, 2011. (See Note 1 and Note 6)

(b) 

Loaned security; a portion or all of the security is on loan at September 30, 2011.

(c) 

Non-income producing security.

(d) 

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of September 30, 2011, these securities had a total value of $20,570,288 or 3.26% of net assets.

(e) 

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of September 30, 2011, these securities had a total value of $200,873 or 0.03% of total net assets.

(f) 

Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. As of September 30, 2011, the aggregate market value of those securities was $3,909,488, representing 0.62% of net assets.

(g) 

Floating or variable rate security - rate disclosed as of September 30, 2011.

(h) 

Less than 0.0005%.

 

 

Abbreviations:

AB - Aktiebolag is the Swedish equivalent of the term corporation

ADR - American Depositary Receipt

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

Bhd - Berhad (in Malaysia, a form of a public company)

ETF - Exchange Traded Fund

FTSE - Financial Times and the London Stock Exchange

GmbH - a form of a limited liability corporation common in German-speaking countries

HOLDRs - Holding Company Depository Receipt

LLC - Limited Liability Corporation

LP - Limited Partnership

Ltd. - Limited

MSCI - Morgan Stanley Capital International

NV - Naamloze Vennootschap (Dutch: Limited Liability Company)

PLC - Public Limited Liability

REIT - Real Estate Investment Trust

REMICS - Real Estate Mortgage Investment Conduits

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

S.p.A. - Societa` Per Azioni is an Italian shared company

SPDR - Standard & Poor’s Depositary Receipt

For Fund compliance purposes, each Fund’s industry classifications refer to any one of the industry sub-classifications used by one or more widely recognized market indexes, and/or as defined by each Fund’s management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percent of net assets. These industry classifications are unaudited.

 

See Notes to the Financial Statements.

 

Semi-Annual Report | September 30, 2011

  23


Table of Contents

Statements of Assets and Liabilities

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

     

Clough Global

Allocation Fund

    

Clough Global

Equity Fund

    

Clough Global

Opportunities Fund

 

ASSETS:

        

Investments, at value (Cost - see below)

   $ 238,134,770       $ 386,995,043       $ 1,012,008,740   

Cash

     152,097         254,974         644,115   

Foreign Currency, at value (Cost $19,343, $31,613 and $83,063)

     19,343         31,613         83,063   

Deposit with broker for securities sold short

     24,920,939         40,603,222         106,229,474   

Dividends receivable

     716,826         1,220,467         3,019,089   

Interest receivable

     653,754         852,744         2,626,408   

Receivable for investments sold

     3,471,763         5,412,738         14,681,876   

Total Assets

     268,069,492         435,370,801         1,139,292,765   

LIABILITIES:

        

Loan payable

     89,800,000         147,000,000         388,900,000   

Interest due on loan payable

     7,350         12,031         31,830   

Securities sold short (Proceeds $24,780,972, $40,384,557 and $105,631,811)

     21,042,327         34,282,330         89,686,646   

Payable for investments purchased

     7,596,871         11,302,320         28,225,235   

Dividends payable - short sales

     3,444         5,616         14,684   

Interest payable - margin account

     17,558         28,611         74,777   

Accrued investment advisory fee

     159,581         333,900         973,045   

Accrued administration fee

     64,972         118,720         311,374   

Accrued trustees fee

     2,791         2,790         2,791   

Total Liabilities

     118,694,894         193,086,318         508,220,382   

Net Assets

   $ 149,374,598       $ 242,284,483       $ 631,072,383   
                            

Cost of Investments

   $ 252,913,096       $ 409,914,944       $ 1,080,025,876   
                            

COMPOSITION OF NET ASSETS:

        

Paid-in capital

   $ 181,095,134       $ 298,604,829       $ 838,408,606   

Overdistributed net investment income

     (4,614,406)         (8,068,105)         (23,120,725)   

Accumulated net realized loss on investment securities, written options, securities sold short and foreign currency transactions

     (16,049,534)         (31,416,190)         (132,094,146)   

Net unrealized depreciation in value of investment securities, written options, securities sold short and translation of assets and liabilities denominated in foreign currency

     (11,056,596)         (16,836,051)         (52,121,352)   

Net Assets

   $ 149,374,598       $ 242,284,483       $ 631,072,383   
                            

Shares of common stock outstanding of no par value, unlimited shares authorized

     10,434,606         17,840,705         51,736,859   
                            

Net assets value per share

   $ 14.32       $ 13.58       $ 12.20   
                            

 

See Notes to the Financial Statements.

 

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Clough Global Funds

   Statements of Operations
   For the Six Months Ended September 30, 2011 (Unaudited)

    

 

     

Clough Global

Allocation Fund

    

Clough Global

Equity Fund

    

Clough Global

Opportunities Fund

 

INVESTMENT INCOME:

        

Dividends (net of foreign withholding taxes of $77,596, $127,295 and $332,622)

   $ 3,395,032       $ 5,913,941       $ 14,164,451   

Interest on investment securities

     1,331,946         1,940,793         5,761,966   

Hypothecated securities income (See Note 6)

     37,304         51,594         135,449   

Total Income

     4,764,282         7,906,328         20,061,866   

EXPENSES:

        

Investment advisory fee

     1,035,658         2,176,275         6,315,432   

Administration fee

     421,661         773,787         2,020,938   

Interest on loan

     630,148         1,031,534         2,729,005   

Interest expense - margin account

     98,683         161,237         419,799   

Trustees fee

     66,753         66,753         66,753   

Dividend expense - short sales

     165,786         270,731         704,107   

Other expenses

     355         355         355   

Total Expenses

     2,419,044         4,480,672         12,256,389   

Net Investment Income

     2,345,238         3,425,656         7,805,477   
                            

NET REALIZED GAIN ON:

        

Investment securities

     1,444,418         1,078,187         7,994,044   

Securities sold short

     1,991,167         3,280,504         8,605,711   

Written options

     50,268         75,696         203,700   

Foreign currency transactions

     674,417         1,121,303         2,854,640   

NET CHANGE IN UNREALIZED APPRECIATION/

(DEPRECIATION) ON:

        

Investment securities

     (43,805,909)         (73,037,056)         (187,673,589)   

Securities sold short

     1,686,391         2,742,224         7,107,575   

Translation of assets and liabilities denominated in foreign currencies

     (252,567)         (409,296)         (1,064,773)   

Net loss on investment securities, written options, securities sold short and foreign currency transactions

     (38,211,815)         (65,148,438)         (161,972,692)   

Net Decrease in Net Assets Attributable to Common Shares from Operations

   $ (35,866,577)       $ (61,722,782)       $ (154,167,215)   
                            

 

See Notes to the Financial Statements.

 

Semi-Annual Report | September 30, 2011

  25


Table of Contents

Statements of Changes in Net Assets

   Clough Global Funds
  

    

 

     Clough Global Allocation Fund      Clough Global Equity Fund      Clough Global Opportunities Fund  
     

For the Six

Months

Ended

September 30,

2011

(Unaudited)

    

For the

Year Ended

March 31,

2011

    

For the Six

Months

Ended

September 30,

2011

(Unaudited)

    

For the

Year Ended

March 31,

2011

    

For the Six

Months

Ended

September 30,

2011

(Unaudited)

    

For the

Year

Ended

March 31,

2011

 

COMMON SHAREHOLDERS OPERATIONS:

  

           

Net investment income

   $ 2,345,238       $ 3,976,232       $ 3,425,656       $ 5,360,821       $ 7,805,477       $ 13,033,273   

Net realized gain/(loss) from:

                 

Investment securities

     1,444,418         25,713,336         1,078,187         39,676,674         7,994,044         109,950,500   

Securities sold short

     1,991,167         (7,980,536)         3,280,504         (13,094,188)         8,605,711         (33,435,924)   

Written options

     50,268         4,495,684         75,696         7,275,856         203,700         18,887,512   

Foreign currency transactions

     674,417         (320,679)         1,121,303         (528,398)         2,854,640         (1,387,326)   

Net change in unrealized appreciation/(depreciation) on investment securities, written options, securities sold short and translation of assets and liabilities denominated in foreign currencies

     (42,372,085)         1,822,685         (70,704,128)         5,782,193         (181,630,787)         2,404,284   

Net Increase/(Decrease) in Net Assets From Operations

     (35,866,577)         27,706,723         (61,722,782)         44,472,958         (154,167,215)         109,452,318   

DISTRIBUTIONS TO COMMON SHAREHOLDERS:

  

           

Net investment income

     (6,260,763)         (12,521,527)         (10,347,609)         (20,695,217)         (27,937,903)         (55,875,807)   

Net Decrease in Net Assets from Distributions

     (6,260,763)         (12,521,527)         (10,347,609)         (20,695,217)         (27,937,903)         (55,875,807)   

Net Increase/(Decrease) in Net Assets Attributable to Common Shares

     (42,127,340)         15,185,196         (72,070,391)         23,777,741         (182,105,118)         53,576,511   
                                                       

NET ASSETS ATTRIBUABLE TO COMMON SHARES:

  

     

Beginning of period

     191,501,938         176,316,742         314,354,874         290,577,133         813,177,501         759,600,990   

End of period*

   $ 149,374,598       $ 191,501,938       $ 242,284,483       $ 314,354,874       $ 631,072,383       $ 813,177,501   
                                                       
*Includes Overdistributed Net Investment Income of:    $ (4,614,406)       $ (698,881)       $ (8,068,105)       $ (1,146,152)       $ (23,120,725)       $ (2,988,299)   

 

See Notes to the Financial Statements.

 

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Table of Contents

Clough Global Funds

   Statements of Cash Flows
   For the Six Months Ended September 30, 2011 (Unaudited)

    

 

     

Clough Global

Allocation Fund

    

Clough Global

Equity Fund

    

Clough Global

Opportunities Fund

 

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net decrease in net assets from operations

   $ (35,866,577)       $ (61,722,782)       $ (154,167,215)   

Adjustments to reconcile net increase/(decrease) in net assets from operations to net cash provided in operating activities:

        

Purchase of investment securities

     (184,974,683)         (280,959,077)         (792,616,478)   

Proceeds from disposition of investment securities

     213,266,907         331,066,044         917,182,648   

Proceeds from securities sold short transactions

     78,200,394         127,850,062         333,831,881   

Cover securities sold short transactions

     (65,468,512)         (107,140,407)         (279,333,127)   

Premiums received from written options transactions

     145,177         218,463         584,894   

Premiums paid on closing written options transactions

     (94,908)         (142,766)         (381,193)   

Purchased options transactions

     (416,421)         (626,633)         (1,677,695)   

Net proceeds from short-term investment securities

     (35,676,082)         (61,825,781)         (153,352,760)   

Net realized gain from investment securities

     (1,444,418)         (1,078,187)         (7,994,044)   

Net realized gain on securities sold short

     (1,991,167)         (3,280,504)         (8,605,711)   

Net realized gain on written options

     (50,268)         (75,696)         (203,700)   

Net realized gain on foreign currency transactions

     (674,417)         (1,121,303)         (2,854,640)   

Net change in unrealized depreciation on investment securities

     42,372,085         70,704,128         181,630,787   

Premium amortization

     94,044         107,692         475,237   

Discount accretion

     (19,512)         (29,549)         (81,580)   

Increase in deposits with brokers for securities sold short and written options

     (8,901,002)         (14,433,828)         (38,150,041)   

Increase in dividends receivable

     (17,492)         (25,375)         (45,737)   

Decrease in interest receivable

     148,827         277,213         904,091   

Increase in interest due on loan payable

     347         567         1,501   

Increase in dividends payable - short sales

     2,626         4,280         11,189   

Increase in interest payable - margin account

     5,733         9,237         24,747   

Decrease in accrued investment advisory fee

     (18,393)         (41,786)         (114,288)   

Decrease in accrued administration fee

     (7,489)         (14,857)         (36,573)   

Decrease in accrued trustees fee

     (1,063)         (1,064)         (1,063)   

Net cash provided by operating activities

     (1,386,264)         (2,281,909)         (4,968,870)   

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Cash distributions paid

     (6,260,763)         (10,347,609)         (27,937,903)   

Net cash used in financing activities

     (6,260,763)         (10,347,609)         (27,937,903)   

Net decrease in cash

     (7,647,027)         (12,629,518)         (32,906,773)   

Cash and foreign currency, beginning of period

   $ 7,818,467       $ 12,916,105       $ 33,633,951   

Cash and foreign currency, ending of period

   $ 171,440       $ 286,587       $ 727,178   

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

        

Cash paid during the period for interest from bank borrowing:

   $ 629,801       $ 1,030,967       $ 2,727,504   

 

See Notes to the Financial Statements.

 

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Table of Contents

Financial Highlights

   Clough Global Allocation Fund
For a share outstanding throughout the periods indicated.   

    

 

     

For the

Six Months

Ended

September 30, 2011

(Unaudited)

    

For the

Year Ended

March 31, 2011

    

For the

Year Ended

March 31, 2010

    

For the
Year Ended

March 31, 2009

    

For the
Year Ended

March 31, 2008

    

For the
Year Ended

March 31, 2007

 

PER COMMON SHARE OPERATING PERFORMANCE:

  

        

Net asset value - beginning of period

     $18.35         $16.90         $13.24         $21.60         $22.61         $24.42   

Income from investment operations:

                 

Net investment income

     0.22*         0.38*         0.32*         0.30*         0.46*         1.79   

Net realized and unrealized gain/(loss) on investments

     (3.65)         2.27         4.44         (7.05)         1.47         (0.98)   

Distributions to preferred shareholders from:

                 

Net investment income

                             (0.05)         (0.49)         (0.47)   

Total Income from Investment Operations

     (3.43)         2.65         4.76         (6.80)         1.44         0.34   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

  

Net investment income

     (0.60)         (1.20)         (0.46)         (0.81)         (1.72)         (1.44)   

Net realized gains

                             (0.31)         (0.73)         (0.71)   

Tax return of capital

                     (0.64)         (0.44)                   

Total Distributions to Common Shareholders

     (0.60)         (1.20)         (1.10)         (1.56)         (2.45)         (2.15)   

Net asset value - end of period

     $14.32         $18.35         $16.90         $13.24         $21.60         $22.61   
                                                       

Market price - end of period

     $12.40         $16.24         $15.92         $10.68         $18.90         $20.82   
                                                       

Total Investment Return - Net Asset Value:(1)

     (18.92)%         17.30%         38.14%         (32.20)%         7.10%         1.59%   

Total Investment Return - Market Price:(1)

     (20.67)%         10.20%         61.32%         (37.50)%         1.77%         (4.77)%   

RATIOS AND SUPPLEMENTAL DATA:

  

        

Net assets attributable to common shares, end of period (000s)

     $149,375         $191,502         $176,317         $138,185         $225,359         $235,962   

Ratios to average net assets attributable to common shareholders:

                 

Total expenses

     2.73%(2)         2.87%         3.22%         3.35%(3)         2.10%(3)         2.02%(3)   

Total expenses excluding interest expense and dividends on short sales expense

     1.72%(2)         1.74%         1.88%         2.76%(3)         1.73%(3)         1.75%(3)   

Net investment income

     2.65%(2)         2.28%         1.96%         1.73%(3)         2.02%(3)         2.63%(3)   

Preferred share dividends

     N/A         N/A         N/A         0.30%         2.14%         2.10%   

Portfolio turnover rate

     78%         172%         115%         233%         136%         187%   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

     

Liquidation value, end of period, including dividends on preferred shares (000s)

     N/A         N/A         N/A         (4)         $95,052         $95,042   

Total shares outstanding (000s)

     N/A         N/A         N/A         (4)         3.8         3.8   

Asset coverage per share(5)

     N/A         N/A         N/A         (4)         $84,319         $87,106   

Liquidation preference per share

     N/A         N/A         N/A         (4)         $25,000         $25,000   

Average market value per share(6)

     N/A         N/A         N/A         (4)         $25,000         $25,000   

Borrowings at End of Period

  

              

Aggregate Amount Outstanding (000s)

     $89,800         $89,800         $89,800         $60,200         N/A         N/A   

Asset Coverage Per $1,000 (000s)

     $2,663         $3,133         $2,963         $3,295         N/A         N/A   

 

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Table of Contents

Clough Global Allocation Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated.

    

 

* 

Based on average shares outstanding.

(1) 

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Past performance is not a guarantee of future results.

(2) 

Annualized.

(3) 

Ratios do not reflect dividend payments to preferred shareholders.

(4) 

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 22, 2008.

(5) 

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(6) 

Based on monthly prices.

 

See Notes to the Financial Statements.

 

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Table of Contents

Financial Highlights

   Clough Global Equity Fund
For a share outstanding throughout the periods indicated.   

    

 

     

For the

Six Months

Ended

September 30,

2011

(Unaudited)

    

For the

Year Ended

March 31, 2011

    

For the

Year Ended

March 31, 2010

    

For the

Year Ended

March 31, 2009

    

For the

Year Ended

March 31, 2008

    

For the

Year Ended

March 31, 2007

 

PER COMMON SHARE OPERATING PERFORMANCE:

   

           

Net asset value - beginning of period

     $17.62         $16.29         $12.28         $20.88         $22.17         $23.74   

Income from investment operations:

                 

Net investment income

     0.19*         0.30*         0.22*         0.16*         0.34*         1.77   

Net realized and unrealized gain/(loss) on investments

     (3.65)         2.19         4.82         (7.21)         1.38         (0.88)   

Distributions to preferred shareholders from:

                 

Net investment income

                             (0.03)         (0.53)         (0.51)   

Total Income from Investment Operations

     (3.46)         2.49         5.04         (7.08)         1.19         0.38   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

  

Net investment income

     (0.58)         (1.16)         (0.39)         (0.24)         (1.67)         (1.70)   

Net realized gains

                             (0.48)         (0.81)         (0.25)   

Tax return of capital

                     (0.64)         (0.80)                   

Total Distributions to Common Shareholders

     (0.58)         (1.16)         (1.03)         (1.52)         (2.48)         (1.95)   

Net asset value - end of period

     $13.58         $17.62         $16.29         $12.28         $20.88         $22.17   
                                                       

Market price - end of period

     $11.67         $15.37         $14.33         $9.77         $18.00         $20.13   
                                                       

Total Investment Return - Net Asset Value:(1)

     (19.88)%         17.05%         43.62%         (34.55)%         6.24%         2.03%   

Total Investment Return - Market Price:(1)

     (21.07)%         16.07%         58.80%         (39.60)%         0.86%         (2.08)%   

RATIOS AND SUPPLEMENTAL DATA:

  

           

Net assets attributable to common shares, end of period (000s)

     $242,284         $314,355         $290,577         $219,059         $372,490         $395,594   

Ratios to average net assets attributable to common shareholders:

                 

Total expenses

     3.15%(2)         3.23%         3.57%         3.81%(3)         2.50%(3)         2.43%(3)   

Total expenses excluding interest expense and dividends on short sales expense

     2.12%(2)         2.10%         2.25%         2.26%(3)         2.14%(3)         2.16%(3)   

Net investment income

     2.41%(2)         1.87%         1.43%         0.95%(3)         1.53%(3)         1.45%(3)   

Preferred share dividends

     N/A         N/A         N/A         0.20%         2.35%         2.28%   

Portfolio turnover rate

     72%         173%         116%         207%         155%         200%   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

     

Liquidation value, end of period, including dividends on preferred shares (000s)

     N/A         N/A         N/A         - (4)         $175,346         $175,444   

Total shares outstanding (000s)

     N/A         N/A         N/A         - (4)         7         7   

Asset coverage per share(5)

     N/A         N/A         N/A         - (4)         $78,262         $81,577   

Liquidation preference per share

     N/A         N/A         N/A         - (4)         $25,000         $25,000   

Average market value per share(6)

     N/A         N/A         N/A         - (4)         $25,000         $25,000   

Borrowings at End of Period

                 

Aggregate Amount Outstanding (000s)

     $147,000         $147,000         $147,000         $98,200         N/A         N/A   

Asset Coverage Per $1,000 (000s)

     $2,648         $3,138         $2,977         $3,231         N/A         N/A   

 

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Table of Contents

Clough Global Equity Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated.

    

 

* 

Based on average shares outstanding.

(1) 

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Past performance is not a guarantee of future results.

(2) 

Annualized.

(3) 

Ratios do not reflect dividend payments to preferred shareholders.

(4) 

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 5, 2008.

(5) 

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(6) 

Based on monthly prices.

 

See Notes to the Financial Statements.

 

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Table of Contents

Financial Highlights

   Clough Global Opportunities Fund
For a share outstanding throughout the periods indicated.   

    

 

  

 

For the

Six Months
Ended
September 30,
2011
(Unaudited)

    For the
Year Ended
March 31, 2011
    For the
Year Ended
March 31, 2010
    For the
Year Ended
March 31, 2009
    For the
Year Ended
March 31, 2008
    For the Period
April 2006
(inception) to
March 31, 2007
 

PER COMMON SHARE OPERATING PERFORMANCE:

  

   

Net asset value - beginning of period

    $15.72        $14.68        $11.55        $19.03        $19.17        $19.10   

Income from investment operations:

           

Net investment income

    0.15*        0.25*        0.17*        0.12*        0.35*        0.90   

Net realized and unrealized gain/(loss) on investments

    (3.13)        1.87        3.94        (6.20)        1.50        0.40   

Distributions to preferred shareholders from:

           

Net investment income

                         (0.04)        (0.46)        (0.20)   

Total Income from Investment Operations

    (2.98)        2.12        4.11        (6.12)        1.39        1.10   

DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:

  

   

Net investment income

    (0.54)        (1.08)        (0.29)        (0.06)        (1.46)        (0.90)   

Net realized gains

                         (0.03)        (0.07)          

Tax return of capital

                  (0.69)        (1.27)                 

Total Distributions to Common Shareholders

    (0.54)        (1.08)        (0.98)        (1.36)        (1.53)        (0.90)   

CAPITAL SHARE TRANSACTIONS:

  

       

Common share offering costs charged to paid-in capital

                                       (0.04)   

Preferred share offering costs and sales load charged to paid-in capital

                         0.00(1)               (0.09)   

Total Capital Share Transactions

                         0.00(1)               (0.13)   

Net asset value - end of period

    $12.20        $15.72        $14.68        $11.55        $19.03        $19.17   
                                                 

Market price - end of period

    $10.55        $13.85        $13.04        $9.20        $16.32        $17.44   
                                                 

Total Investment Return - Net Asset Value:(2)

    (19.22)%        16.21%        37.93%        (32.68)%        8.06%        5.45%   

Total Investment Return - Market Price:(2)

    (20.71)%        15.27%        53.82%        (37.48)%        1.86%        (8.38)%   

RATIOS AND SUPPLEMENTAL DATA:

  

     

Net assets attributable to common shares, end of period (000s)

    $631,072        $813,178        $759,601        $597,605        $984,608        $991,948   

Ratios to average net assets attributable to common shareholders:

           

Total expenses

    3.32%(3)        3.40%        3.72%        3.84%(4)        2.52%(4)        2.12%(3)(4)   

Total expenses excluding interest expense and dividends on short sales expense

    2.28%(3)        2.25%        2.39%        2.38%(4)        2.29%(4)        1.90%(3)(4)   

Net investment income

    2.12%(3)        1.74%        1.19%        0.80%(4)        1.76%(4)        1.75%(3)(4)   

Preferred share dividends

    N/A        N/A        N/A        0.23%        2.34%        1.13%(3)   

Portfolio turnover rate

    77%        171%        115%        224%        171%        246%   

AUCTION MARKET PREFERRED SHARES (“AMPS”)

  

     

Liquidation value, end of period, including dividends on preferred shares (000s)

    N/A        N/A        N/A        (5)        $450,380        $450,450   

Total shares outstanding (000s)

    N/A        N/A        N/A        (5)        18        18   

Asset coverage per share(6)

    N/A        N/A        N/A        (5)        $79,722        $80,133   

Liquidation preference per share

    N/A        N/A        N/A        (5)        $25,000        $25,000   

Average market value per share(7)

    N/A        N/A        N/A        (5)        $25,000        $25,000   

Borrowings at End of Period

  

       

Aggregate Amount Outstanding (000s)

    $388,900        $388,900        $388,900        $239,500        N/A        N/A   

Asset Coverage Per $1,000 (000s)

    $2,623        $3,091        $2,953        $3,495        N/A        N/A   

 

 

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Table of Contents

Clough Global Opportunities Fund

   Financial Highlights
   For a share outstanding throughout the periods indicated.

    

 

* 

Based on average shares outstanding.

(1)

Less than $0.005.

(2)

Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at the closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at price obtained under the Fund’s dividend reinvestment plan. Total investment returns do not reflect brokerage commissions on the purchase or sale of the Fund’s common shares. Total investment returns for less than a full year are not annualized. Past performance is not a guarantee of future results.

(3)

Annualized.

(4)

Ratios do not reflect dividend payments to preferred shareholders.

(5)

All series of AMPS issued by the Fund were fully redeemed, at par value, on May 23, 2008.

(6)

Calculated by subtracting the Fund’s total liabilities (excluding preferred shares) from the Fund’s total assets and dividing by the number of preferred shares outstanding.

(7)

Based on monthly prices.

 

See Notes to the Financial Statements.

 

Semi-Annual Report | September 30, 2011

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Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING AND OPERATING POLICIES

 

Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund,(each, a “Fund” and collectively, the “Funds”) are closed-end management investment companies that were organized under the laws of the state of Delaware by an Amended Agreement and Declaration of Trust dated April 27, 2004 and January 25, 2005, respectively for Clough Global Allocation Fund and Clough Global Equity Fund and an Agreement and Declaration of Trust dated January 12, 2006 for Clough Global Opportunities Fund. Each Fund is a non-diversified series with an investment objective to provide a high level of total return. Each Declaration of Trust provides that the Trustees may authorize separate classes of shares of beneficial interest.

The following is a summary of significant accounting policies followed by the Funds. These policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Funds ultimately realize upon sale of the securities. The financial statements have been prepared as of the close of the New York Stock Exchange (“NYSE” or the “Exchange”) on September 30, 2011.

The net asset value per share of each Fund is determined no less frequently than daily, on each day that the Exchange is open for trading, as of the close of regular trading on the Exchange (normally 4:00 p.m. New York time). Trading may take place in foreign issues held by the Fund at times when a Fund is not open for business. As a result, each Fund’s net asset value may change at times when it is not possible to purchase or sell shares of a Fund.

Investment Valuation: Securities held by each Fund for which exchange quotations are readily available are valued at the last sale price, or if no sale price or if traded on the over-the-counter market, at the mean of the bid and asked prices on such day. Most securities listed on a foreign exchange are valued at the last sale price at the close of the exchange on which the security is primarily traded. In certain countries market maker prices are used since they are the most representative of the daily trading activity. Market maker prices are usually the mean between the bid and ask prices. Certain markets are not closed at the time that the Funds prices its portfolio securities. In these situations, snapshot prices are provided by the individual pricing services or other alternate sources at the close of the NYSE as appropriate. Securities not traded on a particular day are valued at the mean between the last reported bid and the asked quotes, or the last sale price when appropriate; otherwise fair value will be determined by the board-appointed fair valuation committee. Debt securities for which the over-the-counter market is the primary market are normally valued on the basis of prices furnished by one or more pricing services or dealers at the mean between the latest available bid and asked prices. As authorized by the Trustees, debt securities (other than short-term obligations) may be valued on the basis of valuations furnished by a pricing service which determines valuations based upon market transactions for normal, institutional-size trading units of securities or a matrix method which considers yield or price of comparable bonds provided by a pricing service. Short-term obligations maturing within 60 days are valued at amortized cost, which approximates value, unless the Trustees determine that under particular circumstances such method does not result in fair value. Over-the-counter options are valued at the mean between bid and asked prices provided by dealers. Financial futures contracts listed on commodity exchanges and exchange-traded options are valued at closing settlement prices.

If the price of a security is unavailable in accordance with the aforementioned pricing procedures, or the price of a security is unreliable, e.g., due to the occurrence of a significant event, the security may be valued at its fair value determined by management pursuant to procedures adopted by the Board of Trustees. For this purpose, fair value is the price that a Fund reasonably expects to receive on a current sale of the security. Due to the number of variables affecting the price of a security, however; it is possible that the fair value of a security may not accurately reflect the price that a Fund could actually receive on a sale of the security. As of September 30, 2011, securities which have been fair valued represented 0.04%, 0.33% and 0.03% of net assets of Clough Global Allocation Fund, Clough Global Equity Fund, and Clough Opportunities Equity Fund, respectively.

A three-tier hierarchy has been established to classify 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 entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. These inputs are categorized in the following hierarchy under applicable financial accounting standards:

 

Level 1

        

Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;

Level 2

        

Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2011 (Unaudited)

    

 

Level 3

        

Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

The following is a summary of the inputs used as of September 30, 2011 in valuing each Fund’s investments carried at value. The Funds recognize transfers between the levels as of the beginning of the annual period in which the transfer occurred. There were no significant transfers between Levels 1 and 2 during the six months ended September 30, 2011.

Clough Global Allocation Fund

 

Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

Assets

           

Common Stocks

           

Consumer Discretionary

   $ 14,052,538       $       $       $ 14,052,538   

Consumer Staples

     1,833,256                         1,833,256   

Energy

     24,859,730                         24,859,730   

Financials

     34,075,634                 57,393         34,133,027   

Health Care

     2,550,546                         2,550,546   

Industrials

     10,392,434                         10,392,434   

Information Technology

     20,533,751                         20,533,751   

Materials

     8,170,559                         8,170,559   

Telecommunication Services

     3,679,876                         3,679,876   

Utilities

     23,742,269                         23,742,269   

Exchange Traded Funds

     2,572,986                         2,572,986   

Preferred Stocks

     619,305                         619,305   

Corporate Bonds

             15,631,304                 15,631,304   

Asset/Mortgage Backed Securities

             672,306                 672,306   

Foreign Government Bonds

             1,053,714                 1,053,714   

Government & Agency Obligations

     33,696,152                         33,696,152   

Call Options Purchased

     23,920                         23,920   

Short-Term Investments

     39,917,097                         39,917,097   

TOTAL

   $     220,720,053       $     17,357,324       $     57,393       $     238,134,770   
                                     
         

Other Financial Instruments*

                                   

Liabilities

           

Securities Sold Short

   $ (21,042,327)       $       $       $ (21,042,327)   

TOTAL

   $ (21,042,327)       $       $       $ (21,042,327)   
                                     
         
Clough Global Equity Fund            
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

Assets

           

Common Stocks

           

Consumer Discretionary

   $ 23,646,812       $       $       $ 23,646,812   

Consumer Staples

     2,999,567                         2,999,567   

Energy

     41,702,671                         41,702,671   

Financials

     56,090,873                 86,090         56,176,963   

Health Care

     4,181,788                         4,181,788   

Industrials

     17,179,258                         17,179,258   

Information Technology

     34,000,090                         34,000,090   

Materials

     13,328,723                         13,328,723   

Telecommunication Services

     6,013,226                         6,013,226   

Utilities

     57,342,141                         57,342,141   

Exchange Traded Funds

     3,456,625                         3,456,625   

Preferred Stocks

     1,012,700                         1,012,700   

Corporate Bonds

             24,668,330                 24,668,330   

 

 

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Table of Contents
Notes to Financial Statements    Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

 

Clough Global Equity Fund (continued)

           

Investments in Securities at Value*

     Level 1         Level 2         Level 3         Total   

Assets (continued)

           

Asset/Mortgage Backed Securities

   $       $ 216,648       $ 723,086       $ 939,734   

Foreign Government Bonds

             1,399,452                 1,399,452   

Government & Agency Obligations

     32,055,047                         32,055,047   

Call Options Purchased

     35,995                         35,995   

Short-Term Investments

     66,855,921                         66,855,921   

TOTAL

   $ 359,901,437       $ 26,284,430       $ 809,176       $ 386,995,043   
                                     

Other Financial Instruments*

                                   

Liabilities

           

Securities Sold Short

   $ (34,282,330)       $       $       $ (34,282,330)   

TOTAL

   $ (34,282,330)       $       $       $ (34,282,330)   
                                     
Clough Global Opportunities Fund            

Investments in Securities at Value*

     Level 1         Level 2         Level 3         Total   

Assets

           

Common Stocks

           

Consumer Discretionary

   $ 59,910,236       $       $       $ 59,910,236   

Consumer Staples

     7,803,793                         7,803,793   

Energy

     106,461,725                         106,461,725   

Financials

     144,336,753                 200,873         144,537,626   

Health Care

     10,915,540                         10,915,540   

Industrials

     44,906,810                         44,906,810   

Information Technology

     87,850,572                         87,850,572   

Materials

     34,858,441                         34,858,441   

Telecommunication Services

     15,714,091                         15,714,091   

Utilities

     99,123,498                         99,123,498   

Exchange Traded Funds

     5,860,676                         5,860,676   

Preferred Stocks

     2,640,810                         2,640,810   

Corporate Bonds

             65,875,452                 65,875,452   

Asset/Mortgage Backed Securities

             584,022                 584,022   

Foreign Government Bonds

             4,354,445                 4,354,445   

Government & Agency Obligations

     152,158,377                         152,158,377   

Call Options Purchased

     1,360,644                         1,360,644   

Short-Term Investments

     167,091,982                         167,091,982   

TOTAL

   $ 940,993,948       $ 70,813,919       $ 200,873       $ 1,012,008,740   
                                     

Other Financial Instruments*

                                   

Liabilities

           

Securities Sold Short

   $ (89,686,646)       $       $       $ (89,686,646)   

TOTAL

   $ (89,686,646)       $       $       $ (89,686,646)   
                                     

*For detailed Industry descriptions, see the accompanying Statement of Investments.

 

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2011 (Unaudited)

    

 

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

CLOUGH GLOBAL ALLOCATION FUND

 

Investments

in Securities

  

Balance

as of

March 31, 2011

     Realized
gain/(loss)
    

Change in
unrealized
appreciation/

(depreciation)

    

Net

purchases/

(sales)

    

Transfers
in and/or (out)

of Level 3

     Balance as of
September 30, 2011
    

Net Change in unrealized
appreciation/(depreciation)
included in the statement of
operations attributable to

Level 3 investments still held

at September 30, 2011

 

Common Stocks

   $ 57,389       $       $ 4       $       $       $ 57,393       $ 4   

Total

   $ 57,389       $       $ 4       $       $       $ 57,393       $ 4   
                                                                

CLOUGH GLOBAL EQUITY FUND

 

Investments

in Securities

  

Balance

as of

March 31, 2011

    

Realized

gain/(loss)

    

Change in
unrealized
appreciation/

(depreciation)

    

Net

purchases/

(sales)

    

Transfers

in and/or (out)

of Level 3

    

Balance as of

September 30, 2011

    

Net Change in unrealized
appreciation/(depreciation)

included in the statement of

operations attributable to

Level 3 investments still held

at September 30, 2011

 

Common Stocks

   $ 86,086       $       $ 4       $       $       $ 86,090       $ 4   

Asset/Mortgage Backed Securities

             1,157         (29,731)         (92,552)         844,212         723,086         (5,913)   

Total

   $ 86,086       $ 1,157       $ (29,727)       $ (92,552)       $ 844,212       $ 809,176       $ (5,909)   
                                                                

CLOUGH GLOBAL OPPORTUNITIES FUND

 

Investments

in Securities

  

Balance

as of

March 31, 2011

    

Realized

gain/(loss)

    

Change in
unrealized
appreciation/

(depreciation)

    

Net

purchases/

(sales)

    

Transfers

in and/or (out)

of Level 3

    

Balance as of

September 30, 2011

    

Net Change in unrealized
appreciation/(depreciation)

included in the statement of

operations attributable to

Level 3 investments still held

at September 30, 2011

 

Common Stocks

   $ 200,869       $       $ 4       $       $       $ 200,873       $ 4   

Total

   $ 200,869       $       $ 4       $       $  –       $ 200,873       $ 4   
                                                                

Foreign Securities: Each Fund may invest a portion of its assets in foreign securities. In the event that a Fund executes a foreign security transaction, the Fund will generally enter into a forward foreign currency contract to settle the foreign security transaction. Foreign securities may carry more risk than U.S. securities, such as political, market and currency risks.

The accounting records of each Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange at period end. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions.

The effect of changes in foreign currency exchange rates on investments is reported with all other foreign currency realized and unrealized gains and losses in the Funds’ Statements of Operations.

A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. Each Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to a Fund include the potential inability of the counterparty to meet the terms of the contract.

The net U.S. dollar value of foreign currency underlying all contractual commitments held by a Fund and the resulting unrealized appreciation or depreciation are determined using prevailing forward foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Funds’ Statements of Assets and Liabilities as a receivable or a payable and in the Funds’ Statements of Operations with the change in unrealized appreciation or depreciation on translation of assets and liabilities denominated in foreign currencies. There were no outstanding foreign currency contracts for the Funds as of September 30, 2011.

A Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statements of Operations.

 

Semi-Annual Report | September 30, 2011

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Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

Short Sales: Each Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When a Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which a Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.

Each Fund’s obligation to replace the borrowed security will be secured by collateral deposited with the broker-dealer, usually cash, U.S. government securities or other liquid securities. Each Fund will also be required to designate on its books and records similar collateral with its custodian to the extent, if any, necessary so that the aggregate collateral value is at all times at least equal to the current market value of the security sold short. The cash amount is reported on the Statement of Assets and Liabilities as Deposit with broker for securities sold short. The market value of securities held as collateral for securities sold short as of September 30, 2011, was $174,545,582, $279,938,848 and $733,674,516 for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to short sales. The interest incurred on the Funds for the six months ended September 30, 2011 is reported on the Statement of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of September 30, 2011 are reported on the Statement of Assets and Liabilities as Interest payable – margin account.

Each Fund may also sell a security short if it owns at least an equal amount of the security sold short or another security convertible or exchangeable for an equal amount of the security sold short without payment of further compensation (a short sale against-the-box). In a short sale against-the-box, the short seller is exposed to the risk of being forced to deliver stock that it holds to close the position if the borrowed stock is called in by the lender, which would cause gain or loss to be recognized on the delivered stock. The Fund expects normally to close its short sales against-the-box by delivering newly acquired stock.

Derivatives Instruments and Hedging Activities: The following discloses the Funds’ use of derivative instruments and hedging activities.

The Funds’ investment objectives not only permit the Funds to purchase investment securities, they also allow the Funds to enter into various types of derivative contracts, including, but not limited to, purchased and written options and warrants. In doing so, the Funds will employ strategies in differing combinations to permit them to increase, decrease, or change the level or types of exposure to market factors. Central to those strategies are features inherent to derivatives that make them more attractive for this purpose than equity securities; they require little or no initial cash investment, they can focus exposure on only certain selected risk factors, and they may not require the ultimate receipt or delivery of the underlying security (or securities) to the contract. This may allow the Funds to pursue their objectives more quickly and efficiently than if they were to make direct purchases or sales of securities capable of effecting a similar response to market factors.

Market Risk Factors: In pursuit of their investment objectives, certain Funds may seek to use derivatives to increase or decrease their exposure to the following market risk factors:

Equity Risk: Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

Risk of Investing in Derivatives: The Funds use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where the Funds are using derivatives to decrease or hedge exposures to market risk factors for securities held by the Funds, there are also risks that those derivatives may not perform as expected, resulting in losses for the combined or hedged positions.

Derivatives may have little or no initial cash investment relative to their market value exposure and therefore can produce significant gains or losses in excess of their cost. This use of embedded leverage allows the Funds to increase their market value exposure relative to their net assets and can substantially increase the volatility of the Funds’ performance.

Additional associated risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Funds. Typically, the associated risks are not the risks that the Funds are attempting to increase or decrease exposure to, per their investment objectives, but are the additional risks from investing in derivatives.

Examples of these associated risks are liquidity risk, which is the risk that the Funds will not be able to sell the derivative in the open market in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Funds. Associated risks can be different for each type of derivative and are discussed by each derivative type in the notes that follow.

Option Writing/Purchasing: Each Fund may purchase or write (sell) put and call options. One of the risks associated with purchasing an option among others, is that a Fund pays a premium whether or not the option is exercised. Additionally, a Fund bears the risk of loss of premium and change in market value should the counterparty not perform under the contract. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to options. The interest incurred on the Funds for the fiscal

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2011 (Unaudited)

    

 

six months ended September 30, 2011 is reported on the Statement of Operations as Interest expense – margin account. Interest amounts payable by the Funds as of September 30, 2011 are reported on the Statement of Assets and Liabilities as Interest payable – margin account.

When a Fund writes an option, an amount equal to the premium received by a Fund is recorded as a liability and is subsequently adjusted to the current value of the option written. Premiums received from writing options that expire unexercised are treated by a Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is recorded as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether a Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by a Fund. Each Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option.

Written option activity for the six months ended September 30, 2011 was as follows:

CLOUGH GLOBAL ALLOCATION FUND:

 

    Written Call Options       
     Contracts           Premiums        

Outstanding, March 31, 2011

            $      

Positions opened

    208           145,177      

Exercised

                   

Expired

                   

Closed

    (208)             (145,177)        

Outstanding, September 30, 2011

              $        

Market Value, September 30, 2011

              $        
                           

CLOUGH GLOBAL EQUITY FUND:

 

    Written Call Options       
     Contracts                Premiums        

Outstanding, March 31, 2011

              $      

Positions opened

    313             218,463      

Exercised

                     

Expired

                     

Closed

    (313)                 (218,463)        

Outstanding, September 30, 2011

                  $        

Market Value, September 30, 2011

                  $        
                               

CLOUGH GLOBAL OPPORTUNITIES FUND:

 

    Written Call Options       
     Contracts           Premiums        

Outstanding, March 31, 2011

            $      

Positions opened

    838           584,894      

Exercised

                   

Expired

                   

Closed

    (838)             (584,894)        

Outstanding, September 30, 2011

              $        

Market Value, September 30, 2011

              $        
                           

Warrants: Each Fund may purchase or otherwise receive warrants or rights. Warrants and rights generally give the holder the right to receive, upon exercise, a security of the issuer at a set price. Funds typically use warrants and rights in a manner similar to their use of purchased options on securities, as described in options above. Risks associated with the use of warrants and rights are generally similar to risks associated with the use of purchased options. However, warrants and rights often do not have standardized terms, and may have longer maturities and may be less liquid than exchange-traded options. In addition, the terms of warrants or rights may limit each Fund’s ability to exercise the warrants or rights at such times and in such quantities as each Fund would otherwise wish. Each Fund held no rights or warrants at the end of the period. The following tables disclose the amounts related to each Fund’s use of derivative instruments.

 

Semi-Annual Report | September 30, 2011

  39


Table of Contents

Notes to Financial Statements

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

The effect of derivatives instruments on each Fund’s Balance Sheet as of September 30, 2011:

 

            Asset Derivatives  
Fund    Risk Exposure     

Statement of Assets and

Liabilities Location

   Contracts      Fair Value  

Clough Global Allocation Fund

   Equity Contracts      Investments, at value      208       $ 23,920   

Clough Global Equity Fund

   Equity Contracts      Investments, at value      313       $ 35,995   

Clough Global Opportunities Fund

   Equity Contracts      Investments, at value      18,130       $ 1,360,644   

The effect of derivatives instruments on each Fund’s Statement of Operations for the six months ended September 30, 2011:

 

Fund    Risk Exposure    Statement of Operations Location   

Realized Gain/(Loss) on

Derivatives Recognized

in Income

  

Change in
Unrealized

Gain/(Loss) on
Derivatives
Recognized in

Income

Clough Global Allocation Fund

   Equity

Contracts

   Net realized gain on Written options/Net change in unrealized appreciation/ (depreciation) on investment securities    $  50,268    $  (392,501)

Clough Global Equity Fund

   Equity
Contracts
   Net realized gain on Written options/Net change in unrealized appreciation/ (depreciation) on investment securities    $  75,696    $  (590,638)

Clough Global Opportunities Fund

   Equity
Contracts
   Net realized gain on Written options/Net change in unrealized appreciation/ (depreciation) on investment securities    $  203,700    $  (2,301,061)

The average purchased and written option contracts volume and the average purchased and written option contracts notional volume during the six months ended September 30, 2011 is noted below for each of the Funds.

 

Fund   

Average Purchased

Option Contract

Volume

    

Average Purchased Option

Contract Notional Volume

    

Average Written Option

Contract Volume

   Average Written Option
Contract Notional Volume
 

Clough Global Allocation Fund

     104       $ 1,368,709       35    $ 547,387   

Clough Global Equity Fund

     157       $ 2,059,644       52    $ 823,712   

Clough Global Opportunities Fund

     17,711       $ 46,172,977       140    $ 2,205,337   

Income Taxes: Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. During the six months ended September 30, 2011, none of the Funds recorded a liability of any uncertain tax positions in the accompanying financial statements.

Each Fund files income tax returns in the U.S. federal jurisdiction and Colorado. The statute of limitations on each Fund’s federal and state tax filings remains open for the fiscal years ended March 31, 2011, March 31, 2010, March 31, 2009, and March 31, 2008 as well as for March 31, 2007 for state purposes only.

Under the Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”), net capital losses recognized in tax years beginning after December 22, 2010 may be carried forward indefinitely, and the character of the losses is retained as short-term and/or long-term. Under the law in effect prior to the Modernization Act, net capital losses were carried forward for eight years and treated as short-term. As a transition rule, the Modernization Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

Distributions to Shareholders: Each Fund intends to make a level dividend distribution each quarter to Common Shareholders after payment of interest on any outstanding borrowings. The level dividend rate may be modified by the Board of Trustees from time to time. Any net capital gains earned by a Fund are distributed at least annually to the extent necessary to avoid federal income and excise taxes. Distributions to shareholders are recorded by each Fund on the ex-dividend date. Each Fund has received approval from the Securities and Exchange Commission (the “Commission”) for exemption from Section 19(b) of the Investment Company Act of 1940, as amended (the “1940 Act”), and Rule 19b-1 thereunder permitting each Fund to make periodic distributions of long-term capital gains, provided that the distribution policy of a fund with respect to its Common Shares calls for periodic (e.g. quarterly/monthly) distributions in an amount equal to a fixed percentage of each Fund’s average net asset value over

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2011 (Unaudited)

    

 

a specified period of time or market price per common share at or about the time of distributions or pay-out of a level dollar amount. At this time, none of the Funds have implemented a managed distribution plan as permitted under the exemption.

Securities Transactions and Investment Income: Investment security transactions are accounted for as of trade date basis. Dividend income is recorded on the ex-dividend date. Certain dividend income from foreign securities will be recorded, in the exercise of reasonable diligence, as soon as a Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date and may be subject to withholding taxes in these jurisdictions. Interest income, which includes amortization of premium and accretion of discount, is recorded on the accrual basis. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the highest cost basis for both financial reporting and income tax purposes.

Counterparty Risk: Each of the Funds run the risk that the issuer or guarantor of a fixed income security, the counterparty to an over-the-counter derivatives contract, a borrower of each Fund’s securities or the obligor of an obligation underlying an asset-backed security will be unable or unwilling to make timely principal, interest, or settlement payments or otherwise honor its obligations. In addition, to the extent that each of the Funds use over-the-counter derivatives, and/or has significant exposure to a single counterparty, this risk will be particularly pronounced for each of the Funds.

Other Risk Factors: Investing in the Funds may involve certain risks including, but not limited to, the following:

Unforeseen developments in market conditions may result in the decline of prices of, and the income generated by, the securities held by the Funds. These events may have adverse effects on the Funds such as a decline in the value and liquidity of many securities held by the Funds, and a decrease in net asset value. Such unforeseen developments may limit or preclude the Funds’ ability to achieve their investment objective.

Investing in stocks may involve larger price fluctuation and greater potential for loss than other types of investments. This may cause the securities held by the Funds to be subject to larger short-term declines in value.

The Funds may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the Funds to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity. At September 30, 2011, Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund each had a significant concentration of their investment securities in companies based in the United States – 121.47%, 121.40% and 122.04% of net assets, respectively.

Fixed income securities are subject to credit risk, which is the possibility that a security could have its credit rating downgraded or that the issuer of the security could fail to make timely payments or default on payments of interest or principal. Additionally, fixed income securities are subject to interest rate risk, meaning the decline in the price of debt securities that accompanies a rise in interest rates. Bonds with longer maturities are subject to greater price fluctuations than bonds with shorter maturities.

The Funds invest in bonds which are rated below investment grade. These high yield bonds may be more susceptible than higher grade bonds to real or perceived adverse economic or industry conditions. The secondary market, on which high yield bonds are traded, may also be less liquid than the market for higher grade bonds.

Application of Recent Accounting Pronouncement: In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRSs”). ASU No.2011-04 amends FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRSs. ASU No.2011- 04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. Management is currently evaluating the impact these amendments may have on the Funds financial statements.

On December 22, 2010, The Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”) was signed into law. The Modernization Act is the first major piece of legislation affecting regulated investment companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs. Some highlights of the enacted provisions are as follows:

New capital losses may now be carried forward indefinitely, and retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital losses, irrespective of the character of the original loss.

The Modernization Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Modernization Act exempts RICs from the preferential dividend rule, and repealed the 60-day designation requirement for certain types of pay-through income and gains.

 

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Notes to Financial Statements

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

Finally, the Modernization Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.

2. TAXES

 

Classification of Distributions: Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Funds. The amount and characteristics of the tax basis distributions and composition of distributable earnings/(accumulated losses) are finalized at fiscal year end; accordingly, tax basis balances have not been determined as of September 30, 2011.

The tax character of the distributions paid by the Funds during the year ended March 31, 2011, were as follows:

 

    Clough Global Allocation Fund      Clough Global Equity Fund      Clough Global Opportunities Fund

Ordinary Income

  $ 12,521,527           $ 20,695,217           $ 55,875,807     

Long-Term Capital Gain

                                

Return of Capital

                                      

Total

  $ 12,521,527             $ 20,695,217             $ 55,875,807       
                                           

Net unrealized appreciation/(depreciation) of investments based on federal tax cost as of September 30, 2011, were as follows:

 

      Clough Global
Allocation Fund
     Clough Global
Equity Fund
     Clough Global
Opportunities Fund
 

Gross unrealized appreciation on investments (excess of value over tax cost)

   $ 9,638,648       $ 17,464,311       $ 39,057,495   

Gross unrealized depreciation on investments (excess of tax cost over value)

     (26,531,765)         (43,912,107)         (116,563,168)   

Net unrealized depreciation

     (16,893,117)         (26,447,796)         (77,505,673)   
                            

Cost of investments for income tax purposes

   $     255,027,887       $     413,442,839       $   1,089,514,413   
                            

3. CAPITAL TRANSACTIONS

 

Common Shares: There are an unlimited number of no par value common shares of beneficial interest authorized for each Fund.

Transactions in common shares were as follows:

 

   

Clough Global Allocation Fund

    

Clough Global Equity Fund

    

Clough Global Opportunities

Fund

 
    

For the

Six Months

Ended

September 30,
2011

    

For the

Year Ended

March 31, 2011

    

For the

Six Months

Ended

September 30,

2011

    

For the

Year Ended
March 31, 2011

    

For the

Six Months

Ended

September 30,

2011

    

For the

Year Ended

March 31, 2011

 

Common Shares Outstanding - beginning of period

    10,434,606         10,434,606         17,840,705         17,840,705         51,736,859         51,736,859   

Common shares issued as reinvestment of dividends

                                              

Common shares outstanding - end of period

    10,434,606         10,434,606         17,840,705         17,840,705         51,736,859         51,736,859   
                                                      

 

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Clough Global Funds

   Notes to Financial Statements
   September 30, 2011 (Unaudited)

    

 

4. PORTFOLIO SECURITIES

 

Purchases and sales of investment securities, other than short-term securities, for the six months ended September 30, 2011, are listed in the table below.

 

Fund   Purchases of Securities     Proceeds from
Sales of Securities
   

Purchases of Long-Term

U.S. Government Obligations

   

Proceeds from Sales

of Long-Term U.S.

Government Obligations

 

Clough Global Allocation Fund

  $ 147,187,791      $ 173,807,539      $ 41,202,185      $ 35,234,372   

Clough Global Equity Fund

    244,460,674        288,851,950        40,505,507        35,020,821   

Clough Global Opportunities Fund

    623,881,941        736,373,539        179,115,814        162,634,764   

5. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS

 

Clough Capital Partners L.P. (“Clough”) serves as each Fund’s investment adviser pursuant to an Investment Advisory Agreement (each an “Advisory Agreement” and collectively, the “Advisory Agreements”) with each Fund. As compensation for its services to the Fund, Clough receives an annual investment advisory fee of 0.70%, 0.90% and 1.00% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets, computed daily and payable monthly. ALPS Fund Services, Inc. (“ALPS”) serves as each Fund’s administrator pursuant to an Administration, Bookkeeping and Pricing Services Agreement with each Fund. As compensation for its services to the Fund, ALPS receives an annual administration fee of 0.285%, 0.32%, and 0.32% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets, computed daily and payable monthly. ALPS will pay all expenses incurred by each Fund, with the exception of advisory fees, trustees’ fees, portfolio transaction expenses, litigation expenses, taxes, expenses of conducting repurchase offers for the purpose of repurchasing fund shares, interest on margin accounts, interest on loans, dividends on short sales, and extraordinary expenses.

Both Clough and ALPS are considered to be “affiliates” of the Funds as defined in the 1940 Act.

6. COMMITTED FACILITY AGREEMENT AND LENDING AGREEMENT

 

In January 2009, each Fund entered into a financing package that includes a Committed Facility Agreement (the “Agreement”) with BNP Paribas Prime Brokerage, Inc. (“BNP”) that allowed Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund to borrow up to an initial limit of $60,200,000, $98,200,000 and $239,500,000, respectively, (the “Initial Limit”) and a Lending Agreement, as defined below. During the year ended March 31, 2010, each Fund and BNP amended the Agreement to increase the borrowing limit on several occasions, subject to the applicable asset coverage requirements of Section 18 of the 1940 Act. In April, June and September of 2009 Clough Global Allocation Fund borrowed additional amounts of $11,000,000, $11,000,000 and $7,600,000, respectively. In April, June and September of 2009 Clough Global Equity Fund borrowed additional amounts of $16,000,000, $20,200,000 and $12,600,000 respectively. In April, June and September of 2009 Clough Global Opportunities Fund borrowed additional amounts of $69,000,000, $49,100,000 and $31,300,000. Borrowings under the Agreement are secured by assets of each Fund that are held by a Fund’s custodian in a separate account (the “pledged collateral”) valued at $174,545,582, $279,938,848 and $733,674,516 for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund may, with 30 days notice, reduce the Maximum Commitment Financing (Initial Limit amount plus the increased borrowing amount in excess of the Initial Limit) to a lesser amount if drawing on the full amount would result in a violation of the applicable asset coverage requirement of Section 18 of the 1940 Act. Interest is charged at the three month LIBOR (London Inter-bank Offered Rate) plus 1.10% on the amount borrowed and 1.00% on the undrawn balance. Each Fund also pays a one time arrangement fee of 0.25% on (i) the Initial Limit and (ii) any increased borrowing amount in the excess of the Initial Limit, paid in monthly installments for the six months immediately following the date on which borrowings were drawn by the Fund. For the six months ended September 30, 2011 the average borrowings outstanding for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund under the agreement were $89,800,000, $147,000,000 and $388,900,000, respectively, and the average interest rate for the borrowings was 1.38%. As of September 30, 2011, the outstanding borrowings for Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $89,800,000, $147,000,000 and $388,900,000, respectively. The interest rate applicable to the borrowings of Clough Global Allocation Fund, Clough Global Equity Fund and Clough Global Opportunities Fund on September 30, 2011 was 1.47%.

The Lending Agreement is a separate side-agreement between each Fund and BNP pursuant to which BNP may borrow a portion of the pledged collateral (the “Lent Securities”) in an amount not to exceed the outstanding borrowings owed by a Fund to BNP under the Agreement. The Lending Agreement is intended to permit each Fund to significantly reduce the cost of its borrowings under the Agreement. BNP has the ability to reregister the Lent Securities in its own name or in another name other than the Fund to pledge, re-pledge, sell, lend or otherwise transfer or use the collateral with all attendant rights of ownership. (It is each Fund’s understanding that BNP will perform due diligence to determine the creditworthiness of any party that borrows Lent Securities from BNP.) Each Fund may designate any security within the pledged collateral as ineligible to be a Lent Security, provided there are eligible securities within the pledged collateral in an amount equal to the outstanding borrowing owed by a Fund. During the period in which

 

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Notes to Financial Statements

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

the Lent Securities are outstanding, BNP must remit payment to each Fund equal to the amount of all dividends, interest or other distributions earned or made by the Lent Securities.

Under the terms of the Lending Agreement, the Lent Securities are marked to market daily, and if the value of the Lent Securities exceeds the value of the then-outstanding borrowings owed by a Fund to BNP under the Agreement (the “Current Borrowings”), BNP must, on that day, either (1) return Lent Securities to each Fund’s custodian in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings; or (2) post cash collateral with each Fund’s custodian equal to the difference between the value of the Lent Securities and the value of the Current Borrowings. If BNP fails to perform either of these actions as required, each Fund will recall securities, as discussed below, in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings. Each Fund can recall any of the Lent Securities and BNP shall, to the extent commercially possible, return such security or equivalent security to each Fund’s custodian no later than three business days after such request. If a Fund recalls a Lent Security pursuant to the Lending Agreement, and BNP fails to return the Lent Securities or equivalent securities in a timely fashion, BNP shall remain liable for the ultimate delivery to each Fund’s custodian of such Lent Securities, or equivalent securities, and for any buy-in costs that the executing broker for the sales transaction may impose with respect to the failure to deliver. Each Fund shall also have the right to apply and set-off an amount equal to one hundred percent (100%) of the then-current fair market value of such Lent Securities against the Current Borrowings.

The Board of Trustees has approved each Agreement and the Lending Agreement. No violations of the Agreement or the Lending Agreement have occurred during the six months ended September 30, 2011.

Each Fund receives income from BNP based on the value of the Lent Securities. This income is recorded as Hypothecated Securities income on the Statements of Operations. The interest incurred on borrowed amounts is recorded as Interest on Loan in the Statements of Operations, a part of Total Expenses.

7. OTHER

 

The Independent Trustees of each Fund receive from each Fund a quarterly retainer of $3,500 and an additional $1,500 for each board meeting attended. The Chairman of the Board of Trustees of each Fund receives a quarterly retainer from each Fund of $4,200 and an additional $1,800 for each board meeting attended. The Chairman of the Audit Committee of each Fund receives a quarterly retainer from each Fund of $3,850 and an additional $1,650 for each board meeting attended.

8. SUBSEQUENT EVENTS

 

The Funds have evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements as of September 30, 2011.

 

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   Dividend Reinvestment Plan
   September 30, 2011 (Unaudited)

    

 

Unless the registered owner of Common Shares elects to receive cash by contacting The Bank of New York Mellon (the “Plan Administrator” or “BNY Mellon”), all dividends declared on Common Shares will be automatically reinvested by the Plan Administrator for shareholders in each Fund’s Dividend Reinvestment Plan (the “Plan”), in additional Common Shares. Shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash paid by check mailed directly to the shareholder of record (or, if the Common Shares are held in street or other nominee name, then to such nominee) by BNY Mellon as dividend disbursing agent. You may elect not to participate in the Plan and to receive all dividends in cash by contacting BNY Mellon, as dividend disbursing agent, at the address set forth below. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re–invest that cash in additional Common Shares for you. If you wish for all dividends declared on your Common Shares to be automatically reinvested pursuant to the Plan, please contact your broker.

The Plan Administrator will open an account for each Common Shareholder under the Plan in the same name in which such Common Shareholder’s Common Shares are registered. Whenever a Fund declares a dividend or other distribution (together, a “Dividend”) payable in cash, non–participants in the Plan will receive cash and participants in the Plan will receive the equivalent in Common Shares. The Common Shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized Common Shares from a Fund (“Newly Issued Common Shares”) or (ii) by purchase of outstanding Common Shares on the open market (“Open–Market Purchases”) on the American Stock Exchange or elsewhere. If, on the payment date for any Dividend, the closing market price plus estimated brokerage commissions per Common Share is equal to or greater than the net asset value per Common Share, the Plan Administrator will invest the Dividend amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the Dividend by the net asset value per Common Share on the payment date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95% of the closing market price per Common Share on the payment date. If, on the payment date for any Dividend, the net asset value per Common Share is greater than the closing market value plus estimated brokerage commissions, the Plan Administrator will invest the Dividend amount in Common Shares acquired on behalf of the participants in Open–Market Purchases. In the event of a market discount on the payment date for any Dividend, the Plan Administrator will have until the last business day before the next date on which the Common Shares trade on an “ex–dividend” basis or 30 days after the payment date for such Dividend, whichever is sooner (the “Last Purchase Date”), to invest the Dividend amount in Common Shares acquired in Open–Market Purchases. If, before the Plan Administrator has completed its Open–Market Purchases, the market price per Common Share exceeds the net asset value per Common Share, the average per Common Share purchase price paid by the Plan Administrator may exceed the net asset value of the Common Shares, resulting in the acquisition of fewer Common Shares than if the Dividend had been paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open–Market Purchases, the Plan provides that if the Plan Administrator is unable to invest the full Dividend amount in Open–Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open–Market Purchases and may invest the uninvested portion of the Dividend amount in Newly Issued Common Shares at the net asset value per Common Share at the close of business on the Last Purchase Date provided that, if the net asset value is less than or equal to 95% of the then current market price per Common Share; the dollar amount of the Dividend will be divided by 95% of the market price on the payment date.

The Plan Administrator maintains all shareholders’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common Shares in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with the instructions of the participants.

In the case of Common Shareholders such as banks, brokers or nominees which hold shares for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of Common Shares certified from time to time by the record shareholder’s name and held for the account of beneficial owners who participate in the Plan.

There will be no brokerage charges with respect to Common Shares issued directly by a Fund. However, each participant will pay a pro rata share of brokerage commissions incurred in connection with Open–Market Purchases. The automatic reinvestment of Dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such Dividends. Participants that request a sale of Common Shares through the Plan Administrator are subject to brokerage commissions.

Each Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan; however, each Fund reserves the right to amend the Plan to include a service charge payable by the participants.

All correspondence or questions concerning the Plan should be directed to the Plan Administrator, The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286, 11E, Transfer Agent Services, 800 433–8191.

 

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Additional Information

   Clough Global Funds
September 30, 2011 (Unaudited)   

    

 

FUND PROXY VOTING POLICIES & PROCEDURES

 

Each Fund’s policies and procedures used in determining how to vote proxies relating to portfolio securities are available on the Funds’ website at http://www.cloughglobal.com. Information regarding how each Fund voted proxies relating to portfolio securities held by each Fund for the period ended June 30, 2011, are available without charge, upon request, by contacting the Funds at 1-877-256-8445 and on the Commission’s website at http://www.sec.gov.

PORTFOLIO HOLDINGS

 

The Funds file their complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N–Q within 60 days after the end of the period. Copies of the Funds’ Form N–Q are available without a charge, upon request, by contacting the Funds at 1–877–256–8445 and on the Commission’s website at http://www.sec.gov. You may also review and copy Form N–Q at the Commission’s Public Reference Room in Washington, D.C. For more information about the operation of the Public Reference Room, please call the Commission at 1–800–SEC–0330.

NOTICE

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that each Fund may purchase at market prices from time to time shares of its common stock in the open market.

SHAREHOLDER MEETING

 

On July 15, 2011, the Funds held their annual meeting of Shareholders for the purpose of voting on a proposal to re-elect Trustees of the Funds. The results of the proposal for each Fund were as follows:

Proposal: To re-elect the following trustees to the Clough Global Allocation Fund Board.

 

      Andrew C. Boynton      Adam D. Crescenzi      Jerry G. Rutledge  

For

     9,560,678         9,599,907         9,602,768   

Withheld

     442,131         402,902         400,041   

Proposal: To re-elect the following trustees to the Clough Global Equity Fund Board.

 

      Edmund J. Burke              John F. Mee       

For

     16,559,866              16,562,609     

Withheld

     387,438              384,695     

Proposal: To re-elect the following trustees to the Clough Global Opportunities Fund Board.

 

      Robert L. Butler      James E. Canty      Richard Rantzow  

For

     48,578,110         48,747,893         48,535,371   

Withheld

     1,575,434         1,405,651         1,618,173   

 

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Clough Global Funds

   Investment Advisory Agreement
   September 30, 2011 (Unaudited)

    

 

On July 13, 2011, the Board of Trustees of each Fund met in person to, among other things, review and consider the renewal of the Advisory Agreements. In its consideration of the Advisory Agreements, the Trustees, including the non-interested Trustees, considered in general the nature, quality and scope of services to be provided by Clough.

Prior to the beginning of their review of the Advisory Agreements, counsel to the Funds, who also serves as independent counsel to the non-interested Trustees, discussed with the Trustees their fiduciary responsibilities in general and also specifically with respect to the renewal of the Advisory Agreements.

Representatives from Clough presented Clough’s materials regarding consideration of renewal of the Advisory Agreements. The Board noted that included in the Board materials were responses by Clough to a questionnaire drafted by legal counsel to the Funds to assist the Board in evaluating whether to renew the Advisory Agreements (the “15(c) Materials”). The Board noted that the 15(c) Materials were extensive, and included information relating to: each Fund’s investment results; portfolio composition; advisory fee and expense comparisons; financial information regarding Clough; descriptions such as compliance monitoring and portfolio trading practices; information about the personnel providing investment management services to the Funds; and the nature of services provided under the Advisory Agreements.

The Board reviewed the organizational structure of Clough and the qualifications of Clough and its principals to act as each Fund’s investment adviser. The Board considered the professional experience of the portfolio managers, including the biographies of Eric A. Brock, James E. Canty and Charles I. Clough, Jr., emphasizing that Mr. Brock, Mr. Canty, and Mr. Clough each had substantial experience as an investment professional. The Trustees, all of whom currently serve as Trustees for the Funds, acknowledged their familiarity with the expertise and standing in the investment community of Messrs. Brock, Canty and Clough, and their satisfaction with the expertise of Clough and the services provided by Clough to the Funds. The Trustees concluded that the portfolio management team was well qualified to serve the Funds in those functions.

The Board next reviewed Clough’s procedures relating to compliance and oversight with respect to Clough’s brokerage allocation and soft dollar policies. The Trustees noted that Clough’s order management systems contain pre-trade compliance functions that review each trade against certain of the Funds’ investment restrictions and applicable 1940 Act and Internal Revenue Code restrictions, and noted the efforts that Clough’s Chief Compliance Officer will undertake to summarize monthly for Clough’s management and quarterly for the Trustees any violations that may occur, as well any other violations detected through the manual monitoring that supplements the order management system’s testing. The Board noted the recent addition of certain personnel by Clough. The Board discussed with representatives from Clough the various other investment products managed by Clough other than the Funds. The Board also noted the adequacy of Clough’s facilities. The Trustees concluded that Clough appeared to have adequate procedures and personnel in place to ensure compliance by Clough with applicable law and with each Fund’s investment objectives and restrictions.

The Board next reviewed the terms of the Advisory Agreements, noting that Clough would receive a fee of 0.70%, 0.90% and 1.00% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets. The Trustees reviewed the fees charged by Clough to other clients for which it provides comparable services. The Trustees then reviewed Clough’s income statement for the year ended December 31, 2010, and its balance sheet as of that date. The Trustees further reviewed a profit and loss analysis as it relates to Clough’s advisory business and compared the profitability analysis to that provided by Clough Capital to the Board in previous years.

The Board discussed the possible benefits Clough may accrue because of its relationship with the Funds as well as potential benefits that accrue to the Funds because of their relationship with Clough. The Board noted that Clough does not realize any direct benefits due to the allocation of brokerage and related transactions on behalf of the Funds.

The Board reviewed and discussed materials prepared and distributed in advance of the meeting regarding the comparability of the investment advisory fees of the Funds with the investment advisory fees of other investment companies, which had been prepared at the request of ALPS by Lipper Analytical Services (“Lipper”.) Lipper’s report contained information regarding investment performance, comparisons of cost and expense structures of each Fund with other funds’ cost and expense structures, as well as comparisons of each Fund’s performance with the performance during similar periods of members of an objectively identified peer group and related matters.

As the Funds are unique in the marketplace, Lipper had a difficult time presenting a large peer group for comparison. The Trustees compared fees from nine (9) leveraged closed-end investment companies versus each Fund’s fees. The investment advisory fee for this group ranged from 0.694% to 1.000%, with a median of 0.978% . The Board noted that as prepared by Lipper, the net total expenses for this group ranged from 1.155% to 2.017%, with a median of 1.612% and the Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s net total expenses were 1.705%, 1.922% and 2.017%, respectively. The Board discussed the other non-management expenses category included in Lipper’s expense ratio components. Discussion ensued and the Board noted that the total expense ratio includes investment related expenses. The Board noted that they believe investment related expenses are operational in nature and should not be considered a management expense. Excluding the investment related expenses from the total expense ratio, the Board noted that each Fund’s overall expenses are comparable to their peer group. The Board further noted that in addition to the Lipper report, the Board also received from Clough a comparative fund universe. The

 

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Investment Advisory Agreement

  

Clough Global Funds

   September 30, 2011 (Unaudited)

    

 

Trustees then reviewed each Fund’s performance as compared to the performance of the closed-end fund universe selected by Lipper. For the one-year ended performance as of March 31, 2011, the performance data ranged from a high of 25.03% to a low of 4.11% with a median of 16.58%. The Cough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s performance during such time period was 17.30%, 17.05% and 16.21%, respectively.

The Trustees further noted that the objectives of the funds in the Lipper analysis differed from each Fund’s objectives and policies. The Trustees believed that the Lipper report, augmented by Clough’s analysis, provided a sufficient comparative universe.

At this point, Mr. Burke and Mr. Canty, both “interested persons” of the Funds, as well as the other representatives of ALPS and Clough, left the meeting. The non-interested Trustees, with the assistance of legal counsel, reviewed and discussed in more detail the information that had been presented relating to Clough, the Advisory Agreements and Clough’s profitability.

Mr. Burke, Mr. Canty, and the representatives of ALPS and Clough re-joined the meeting. The Board of Trustees of the Fund, present in person, with the non-interested Trustees present in person voting separately, unanimously concluded that the investment advisory fee of 0.70%, 0.90% and 1.00% based on Clough Global Allocation Fund’s, Clough Global Equity Fund’s and Clough Global Opportunities Fund’s, respectively, average daily total assets are fair and reasonable for each respective Fund and that the renewal of the Advisory Agreements is in the best interests of each Fund and its shareholders.

 

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  www.cloughglobal.com


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LOGO


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Item 2. Code of Ethics.

Not applicable to semi-annual report.

Item 3. Audit Committee Financial Expert.

Not applicable to semi-annual report.

Item 4. Principal Accountant Fees and Services.

Not applicable to semi-annual report.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to semi-annual report.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to semi-annual report.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.


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There have been no material changes by which shareholders may recommend nominees to the Board of Trustees.

Item 11. Controls and Procedures.

 

  (a) The registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

 

  (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, as amended) during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Not applicable to semi-annual report.

(a)(2) The certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex-99.Cert.

(a)(3) Not applicable.

(b) A certification for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex-99.906Cert.


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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.

CLOUGH GLOBAL EQUITY FUND

 

By:             

/s/ Edmund J. Burke

   Edmund J. Burke
   President & Trustee
Date:    December 8, 2011

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.

CLOUGH GLOBAL EQUITY FUND

 

By:                 

/s/ Edmund J. Burke

   Edmund J. Burke
   President/Principal Executive Officer
Date:    December 8, 2011
By:   

/s/ Jeremy O. May

   Jeremy O. May
   Treasurer/Principal Financial Officer
Date:    December 8, 2011