Clough Global Equity Funds

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21712

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 Douglas

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: December 31, 2011

Item 1 – Schedule of Investments.

Clough Global Equity Fund

STATEMENT OF INVESTMENTS

December 31, 2011 (Unaudited)

 

       Shares         Value   

COMMON STOCKS 129.73%

      

Consumer Discretionary 15.90%

      

Amazon.com, Inc.(a)

      5,800         $1,003,980   

Arezzo Industria e Comercio S.A.

      44,369         551,862   

Bosideng International Holdings, Ltd.

      7,344,000         2,080,293   

CBS Corp. - Class B(b)

      72,895         1,978,370   

Cinemark Holdings, Inc.(b)

      49,800         920,802   

DIRECTV - Class A(a) (b)(c)

      28,700         1,227,212   

Dongfeng Motor Group Co., Ltd. - Class H

      810,969         1,390,841   

Focus Media Holding, Ltd. - ADR(a) (b)(c)

      85,538         1,667,136   

GOME Electrical Appliances Holdings, Ltd.

      3,188,000         738,856   

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

      582,631         8,255,881   

Great Wall Motor Co., Ltd.

      364,820         532,673   

H&R Block, Inc.(b)(c)

      189,959         3,102,030   

Lamar Advertising Co. - Class A(a) (b)(c)

      47,527         1,306,993   

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

      129,086         2,093,130   

Liberty Media Corp. - Liberty Capital(a) (b)

      25,687         2,004,870   

Man Wah Holdings, Ltd.

      2,456,000         1,473,613   

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

      83,217         867,953   

Monro Muffler Brake, Inc.(b)

      15,000         581,850   

News Corp.- Class A(b)

      116,900         2,085,496   

NIKE, Inc. - Class B(b)

      17,900         1,725,023   

Orient-Express Hotels, Ltd.(a) (b)

      84,600         631,962   

Parkson Retail Asia, Ltd.(a)(d)

      684,000         659,188   

Time Warner, Inc.(b)(c)

      22,926         828,546   

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

      52,108         1,002,037   

Viacom, Inc. - Class B(b)

      39,400         1,789,154   
     

 

 

  
        40,499,751   
     

 

 

  

Consumer Staples 1.98%

      

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

     109,224         497,737   

China Agri-Industries Holdings, Ltd.

      1,189,100         904,847   

China Resources Enterprise, Ltd.

      150,900         517,792   

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

      42,100         1,519,389   

Julio Simoes Logistica S.A.

      123,974         620,784   

Raia Drogasil S.A.

      42,007         292,095   

Vinda International Holdings, Ltd.

      528,391         678,297   
     

 

 

  
        5,030,941   
     

 

 

  

       Shares         Value   

Energy 22.30%

      

Natural Gas Leveraged Exploration & Production 1.22%

      

Forest Oil Corp.(a) (b)

      107,068         $1,450,771   

Quicksilver Resources, Inc.(a) (b)(c)

      247,033         1,657,592   
     

 

 

  
        3,108,363   
     

 

 

  

Non-North American Producers 2.75%

      

BP PLC - Sponsored ADR(b)

      29,700         1,269,378   

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

      50,734         2,594,030   

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

      43,181         3,156,099   
     

 

 

  
        7,019,507   
     

 

 

  

Oil Leveraged Exploration & Production 5.26%

      

Anadarko Petroleum Corp.(b)(c)

      50,751         3,873,824   

Energy XXI Bermuda, Ltd.(a) (b)

      18,998         605,656   

EOG Resources, Inc.(b)(c)

      13,000         1,280,630   

Exxon Mobil Corp.(b)(c)

      11,200         949,312   

Hess Corp.(b)

      37,600         2,135,680   

Kodiak Oil & Gas Corp.(a) (b)(c)

      79,713         757,273   

Kunlun Energy Co., Ltd.

      46,270         65,891   

Nexen, Inc.(b)(c)

      53,044         843,930   

Occidental Petroleum Corp.(b)(c)

      10,238         959,301   

Petrobank Energy & Resources, Ltd.(a)

      26,989         280,288   

Pioneer Natural Resources Co.(b)(c)

      18,500         1,655,380   
     

 

 

  
        13,407,165   
     

 

 

  

Oil Services & Drillers 9.84%

      

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

      53,100         2,611,989   

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

      36,360         1,814,728   

Ensco PLC - Sponsored ADR(b)(c)

      56,463         2,649,244   

Halliburton Co.(b)

      91,193         3,147,070   

Helmerich & Payne, Inc.(b)

      17,300         1,009,628   

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

      31,100         964,722   

Nabors Industries, Ltd.(a) (b)

      57,800         1,002,252   

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

      68,932         4,686,687   

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

      24,323         1,857,548   

Patterson-UTI Energy, Inc.(b)

      50,700         1,012,986   

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

      77,610         2,207,228   

Tenaris S.A. - ADR(b)

      56,236         2,090,854   
     

 

 

  
        25,054,936   
     

 

 

  

 

       Shares         Value   

Energy (continued)

      

Refiners 0.81%

      

Marathon Petroleum Corp.(b)

      62,195         $2,070,471   
     

 

 

  

Tankers 2.42%

      

Golar LNG Partners LP(b)

      23,036         706,054   

Golar LNG, Ltd.(b)(c)

      122,554         5,447,525   
     

 

 

  
        6,153,579   
     

 

 

  

TOTAL ENERGY

         56,814,021   
     

 

 

  

Financials 24.90%

      

Capital Markets 8.33%

      

Ares Capital Corp.(b)(c)

      433,139         6,691,998   

CITIC Securities Co., Ltd.(a)

      351,500         578,396   

The Goldman Sachs Group, Inc.(b)

      11,695         1,057,579   

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

      87,100         1,350,050   

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

      23,394         86,090   

Medley Capital Corp.(b)(c)

      55,928         581,651   

Morgan Stanley(b)(c)

      110,077         1,665,465   

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

      35,700         367,710   

PennantPark Investment Corp.(b)

      303,083         3,058,108   

Solar Capital, Ltd.(b)

      215,794         4,766,889   

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

      64,139         1,010,189   
     

 

 

  
        21,214,125   
     

 

 

  

Commercial Banks 3.73%

      

Banco do Brasil S.A.

      25,973         330,015   

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

      88,600         721,204   

China Construction Bank Corp. - Class H

      6,501,688         4,537,268   

China Merchants Bank Co., Ltd. - Class H

      297,000         600,378   

Chongqing Rural Commercial Bank - Class H(a)

      1,216,000         629,403   

Industrial & Commercial Bank of China - Class H

      2,744,600         1,629,105   

Valley National Bancorp(b)(c)

      84,545         1,045,822   
     

 

 

  
        9,493,195   
     

 

 

  

Consumer Finance 0.70%

      

American Express Co.(b)(c)

      37,978         1,791,422   
     

 

 

  

Diversified Financials 2.77%

      

Bank of America Corp.(b)(c)

      296,795         1,650,180   

Citigroup, Inc.(b)(c)

      124,606         3,278,384   

M&T Bank Corp.(b)

      27,902         2,130,039   
     

 

 

  
        7,058,603   
     

 

 

  

       Shares         Value   

Financials (continued)

      

Real Estate Investment Trusts 7.09%

      

AIMS AMP Capital Industrial REIT

      169,381         $123,407   

American Capital Agency Corp.(b)(c)

      173,546         4,873,172   

Ascendas Real Estate Investment Trust

      1,370,000         1,932,925   

Ascott Residence Trust

      682,302         520,781   

CapitaCommercial Trust

      1,478,231         1,202,370   

Capstead Mortgage Corp.(b)(c)

      316,378         3,935,742   

CYS Investments, Inc.(b)(c)

      75,939         997,838   

Dynex Capital, Inc.(b)(c)

      155,613         1,420,747   

Hatteras Financial Corp.(b)

      115,577         3,047,765   
     

 

 

  
        18,054,747   
     

 

 

  

Real Estate Management & Development 1.51%

      

Aliansce Shopping Centers S.A.

      60,208         459,973   

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

      42,939         356,818   

BR Malls Participacoes S.A.

      94,116         914,291   

CapitaMalls Asia, Ltd.

      190,822         166,245   

Iguatemi Empresa de Shopping Centers S.A.

      26,335         489,356   

Multiplan Empreendimentos Imobiliarios S.A.

      29,800         611,417   

Sonae Sierra Brasil S.A.

      65,400         841,496   
     

 

 

  
        3,839,596   
     

 

 

  

Thrift & Mortgage Finance 0.77%

      

People’s United Financial, Inc.(b)(c)

      153,975         1,978,579   
     

 

 

  

TOTAL FINANCIALS

         63,430,267   
     

 

 

  

Health Care 1.44%

      

Sanofi - ADR(b)(c)

      100,162         3,659,919   
     

 

 

  

Industrials 8.73%

      

Air China, Ltd.

      828,100         612,018   

Brenntag AG

      20,400         1,899,670   

Copa Holdings S.A.(b)

      21,731         1,274,958   

Delta Air Lines, Inc.(a) (b)(c)

      339,145         2,743,683   

GZI Transport, Ltd.

      1,254,117         549,017   

Jardine Strategic Holdings, Ltd.(b)

      39,314         1,087,819   

Santos Brasil Participacoes S.A.

      61,082         807,877   

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

      50,240         1,320,307   

TE Connectivity, Ltd.(b)(c)

      38,600         1,189,266   

Towers Watson & Co.(b)

      9,900         593,307   

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

      37,749         3,611,824   

       Shares         Value   

Industrials (continued)

      

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

      115,318         $2,176,051   

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

      30,600         1,227,978   

WABCO Holdings, Inc.(a) (b)

      9,023         391,598   

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

      76,600         1,071,634   

Zhejiang Expressway Co., Ltd. - Class H

      2,584,500         1,677,166   
     

 

 

  
        22,234,173   
     

 

 

  

Information Technology 20.84%

      

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

      24,856         10,066,680   

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

      112,000         4,189,920   

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

      100,000         3,109,000   

Dell, Inc.(a) (b)

      49,800         728,574   

Dena Co., Ltd.

      18,700         560,976   

eBay, Inc.(a) (b)

      52,650         1,596,874   

EMC Corp.(a) (b)(c)

      40,900         880,986   

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

      3,780         2,441,502   

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

      68,700         1,249,653   

International Business Machines Corp.

      6,677         1,227,767   

Lenovo Group, Ltd.

      5,538,000         3,693,616   

Mastercard, Inc.(b)

      8,486         3,163,751   

Micron Technology, Inc.(a) (b)

      204,500         1,286,305   

Microsoft Corp.(b)

      338,550         8,788,758   

priceline.com, Inc.(a)

      800         374,168   

SanDisk Corp.(a) (b)

      48,400         2,381,764   

Seagate Technology(b)

      70,900         1,162,760   

Visa, Inc.(b)

      29,528         2,997,978   

Xerox Corp.(b)

      296,582         2,360,793   

ZTE Corp.

      265,000         830,833   
     

 

 

  
        53,092,658   
     

 

 

  

Materials 1.70%

      

Crown Holdings, Inc.(a) (b)

      21,279         714,549   

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

      161,309         3,126,168   

WR Grace & Co.(a) (b)

      10,400         477,568   
     

 

 

  
        4,318,285   
     

 

 

  

Telecommunication Services 2.72%

      

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

      56,632         1,884,713   

DiGi.Com Bhd

      555,000         679,306   

Maxis Bhd

      1,262,900         2,183,183   

Philippine Long Distance Telephone Co.

      20,310         1,177,244   

StarHub, Ltd.

      172,669         387,392   

Telekom Malaysia Bhd

      395,200         618,357   
     

 

 

  
        6,930,195   
     

 

 

  

       Shares         Value   

Utilities 29.22%

      

AES Corp.(a) (b)

      82,142         $972,561   

Alliant Energy Corp.(b)(c)

      33,200         1,464,452   

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

      153,000         6,320,430   

Babcock & Wilcox Co.(a) (b)

      11,310         273,023   

Calpine Corp.(a) (b)

      106,329         1,736,353   

CenterPoint Energy, Inc.(b)(c)

      133,200         2,675,988   

CMS Energy Corp.(b)(c)

      166,000         3,665,280   

Constellation Energy Group, Inc.(b)

      28,500         1,130,595   

Dominion Resources, Inc.(b)(c)

      83,500         4,432,180   

DTE Energy Co.(b)(c)

      54,000         2,940,300   

Duke Energy Corp.(b)(c)

      209,000         4,598,000   

Edison International(b)(c)

      74,100         3,067,740   

Entergy Corp.(b)(c)

      16,700         1,219,935   

FirstEnergy Corp.(b)(c)

      61,000         2,702,300   

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

      242,100         11,737,008   

NiSource, Inc.(b)(c)

      156,766         3,732,598   

Northeast Utilities(b)(c)

      104,836         3,781,435   

NV Energy, Inc.(b)(c)

      223,200         3,649,320   

OGE Energy Corp.(b)

      39,956         2,265,905   

PG&E Corp.(b)(c)

      48,200         1,986,804   

Pinnacle West Capital Corp.(b)

      32,948         1,587,435   

Power Assets Holdings, Ltd.

      345,000         2,551,985   

PPL Corp.(b)(c)

      142,044         4,178,934   

The Williams Cos, Inc.(b)

      17,796         587,624   

Xcel Energy, Inc.(b)

      42,865         1,184,789   
     

 

 

  
        74,442,974   
     

 

 

  

TOTAL COMMON STOCKS

      

(Cost $315,285,415)

         330,453,184   
     

 

 

  

PREFERRED STOCKS 0.50%

      

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

      26,000         1,264,900   
     

 

 

  

TOTAL PREFERRED STOCKS

      

(Cost $1,301,625)

         1,264,900   
     

 

 

  

Description and

Maturity Date

    Principal
Amount		      Value  

CORPORATE BONDS 5.36%

      

American Axle & Manufacturing, Inc.

      

03/01/2017, 7.875% (b)(c)

      $1,335,000         $1,328,325   

ArvinMeritor, Inc.

      

03/15/2018, 10.625% (b)

      640,000         604,800   

Constellation Brands, Inc.

      

09/01/2016, 7.250% (b)

      415,000         458,056   

Crown Americas LLC / Crown Americas Capital Corp. III

      

Series WI, 02/01/2021, 6.250%(b)

      970,000         1,018,500   

Dana Holding Corp.

      

02/15/2021, 6.750% (b)

      830,000         854,900   

Ford Motor Credit Co. LLC

      

02/01/2021, 5.750% (b)

      1,460,000         1,524,624   

Forest Oil Corp.

      

06/15/2019, 7.250% (b)

      1,000,000         1,025,000   

Gol Finance

      

07/20/2020, 9.250% (b)(d)

      645,000         601,463   

Hanesbrands, Inc.

      

12/15/2020, 6.375% (b)

      860,000         877,200   

Manufacturers & Traders Trust Co.

      

12/01/2021, 5.629% (b)(f)

      1,435,000         1,351,497   

Newfield Exploration Co.

      

05/15/2018, 7.125% (b)

      700,000         750,750   

TAM Capital 2, Inc.

      

01/29/2020, 9.500% (b)(g)

      775,000         835,062   

Tenneco, Inc.

      

08/15/2018, 7.750% (b)

      450,000         479,250   

Terex Corp.

      

11/15/2017, 8.000% (b)

      485,000         477,725   

Visteon Corp.

      

04/15/2019, 6.750% (b)(d)

      1,455,000         1,458,638   
     

 

 

  

TOTAL CORPORATE BONDS

      

(Cost $13,352,095)

         13,645,790   
     

 

 

  

ASSET/MORTGAGE BACKED SECURITIES 0.30%

      

Freddie Mac REMICS

      

Series 2007-3271, Class AS,

      

02/15/2037, 37.150%(b)(e)(f)

      472,231         585,048   

Government National Mortgage Association (GNMA)

      

Series 2007-37, Class SA,

      

03/20/2037, 21.125%(b)(f)

      122,000         138,313   

Series 2007-37, Class SB,

      

03/20/2037, 21.125%(b)(f)

      40,543         51,158   
     

 

 

  

TOTAL ASSET/MORTGAGE BACKED SECURITIES

      

(Cost $617,835)

         774,519   
     

 

 

  

GOVERNMENT & AGENCY OBLIGATIONS 12.39%

      

U.S. Treasury Bonds

      

11/15/2020, 2.625% (b)

      6,095,000         6,560,695   

02/15/2021, 3.625% (b)

      9,890,000         11,480,124   

02/15/2027, 6.625% (b)

      6,120,000         9,412,370   

08/15/2040, 3.875% (b)

      3,425,000         4,097,156   

TOTAL GOVERNMENT & AGENCY OBLIGATIONS

      

(Cost $31,007,759)

         31,550,345   
     

 

 

  

      Number of
Contracts		      Value  

CALL OPTIONS PURCHASED 0.05%

      

HOLDRs Oil Services, Expires January, 2013, Exercise Price $160.00(e)

      313         $137,720   
     

 

 

  

TOTAL CALL OPTIONS PURCHASED

      

(Cost $626,633)

         137,720   
     

 

 

  
      Shares      Value  

SHORT-TERM INVESTMENTS 4.20%

      

Money Market Fund

      

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

      5,736,191         5,736,191   
     

 

 

  

Morgan Stanley Institutional Liquidity Fund (0.010% 7-day yield)

      463,447         463,447   
     

 

 

  

U.S. Treasury Bills

      

U.S. Treasury Bill Discount Notes

      

08/23/2012, 0.072%(b)(i)

      4,500,000         4,498,033   

TOTAL SHORT-TERM INVESTMENTS

      

(Cost $10,697,536)

         10,697,671   
     

 

 

  

Total Investments - 152.53%

      

(Cost $372,888,898)

         388,524,129   

Liabilities in Excess of Other Assets - (52.53%)

         (133,797,834)   
     

 

 

  

NET ASSETS - 100.00%

         $254,726,295   
     

 

 

  
SCHEDULE OF SECURITIES SOLD SHORT (a)    Shares      Value  

COMMON STOCK

      

Alfa Laval AB

      (26,252)         $(497,419)   

Apollo Group, Inc. - Class A

      (24,462)         (1,317,768)   

Barclays PLC - ADR

      (55,300)         (607,747)   

Berkshire Hathaway, Inc. - Class B

      (5,461)         (416,674)   

BHP Billiton, Ltd. - ADR

      (53,896)         (3,806,674)   

Caterpillar, Inc.

      (12,090)         (1,095,354)   

Cummins, Inc.

      (6,400)         (563,328)   

SCHEDULE OF SECURITIES SOLD SHORT (a) (continued)    Shares      Value  

Deutsche Bank AG

      (58,879)         $(2,229,159)   

Diamond Offshore Drilling, Inc.

      (7,387)         (408,206)   

First Quantum Minerals, Ltd.

      (18,633)         (366,716)   

Fortescue Metals Group, Ltd.

      (263,204)         (1,149,503)   

Freeport-McMoRan Copper & Gold, Inc.

      (22,988)         (845,728)   

HDFC Bank, Ltd. - ADR

      (20,468)         (537,899)   

ICICI Bank, Ltd. - ADR

      (20,511)         (542,106)   

Isetan Mitsukoshi Holdings, Ltd.

      (8,908)         (93,397)   

ITT Educational Services, Inc.

      (6,400)         (364,096)   

Joy Global, Inc.

      (13,463)         (1,009,321)   

Kohl’s Corp.

      (8,100)         (399,735)   

Komatsu, Ltd.

      (65,800)         (1,537,926)   

Li & Fung, Ltd.

      (255,421)         (472,917)   

The Mosaic Co.

      (11,769)         (593,511)   

PACCAR, Inc.

      (15,200)         (569,544)   

Potash Corp. of Saskatchewan, Inc.

      (17,172)         (708,860)   

Rio Tinto PLC

      (62,876)         (3,075,894)   

Rio Tinto, Ltd. - ADR

      (9,794)         (604,042)   

Salesforce.com, Inc.

      (16,894)         (1,714,065)   

Sandvik AB

      (56,896)         (698,174)   

Schneider Electric S.A.

      (29,500)         (1,553,174)   

Siemens AG - ADR

      (9,203)         (879,899)   

Suncor Energy, Inc.

      (58,031)         (1,673,034)   

TAL International Group, Inc.

      (3,789)         (109,085)   

United States Oil Fund LP

      (94,996)         (3,620,298)   

Vale SA - ADR

      (120,362)         (2,581,765)   

Volvo AB

      (56,307)         (616,083)   
     

 

 

  
        (37,259,101)   
     

 

 

  

EXCHANGE TRADED FUNDS

      

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

      (8,212)         (466,360)   

iShares® MSCI Australia Index Fund

      (52,787)         (1,131,753)   

iShares® MSCI Emerging Markets Index Fund

      (83,185)         (3,156,039)   

iShares® MSCI Germany Index Fund

      (20,386)         (391,819)   

iShares® Russell 2000® Index Fund

      (50,619)         (3,730,114)   

Market Vectors Oil Service ETF

      (17,800)         (2,044,330)   

Market Vectors Russia ETF

      (70,800)         (1,886,820)   

United States Natural Gas Fund LP

      (116,700)         (753,882)   

Vanguard REIT ETF

      (85,926)         (4,983,708)   
     

 

 

  
        (18,544,825)   
     

 

 

  

TOTAL SECURITIES SOLD SHORT

      

(Proceeds $57,639,761)

         $(55,803,926)   
     

 

 

  

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

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

 

(a) 

Non-income producing security.

(b) 

Pledged security;a portion or all of the security is pledged as collateral for securities sold short or borrowings as of December 31, 2011. (See Note 1)

(c) 

Loaned security; a portion or all of the security is on loan at December 31, 2011.

(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 December 31, 2011, these securities had a total value of $3,303,116 or 1.30% of net assets.

(e) 

Fair valued security; valued by management in accordance with procedures approved by the Fund’s Board of Trustees. As of December 31, 2011, these securities had a total value of $808,858 or 0.32% of total net assets.

(f)

  Floating or variable rate security - rate disclosed as of December 31, 2011.

(g) 

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 December 31, 2011, the aggregate market value of those securities was $835,062, representing 0.33% of net assets.

(h) 

Less than 0.0005%.

(i)

 Rate shown represents the bond equivalent yield to maturity at date of purchase.

See Notes to Quarterly Statement of Investments.

 

Income Tax Information:

       

Net unrealized appreciation/depreciation of investments based on federal tax costs were as follows:

   
     As of December 31, 2011   

Gross appreciation (excess of value over tax cost)

    $ 24,900,519   

Gross depreciation (excess of tax cost over value)

      (17,164,901 ) 

Net unrealized appreciation

    $ 7,735,618   
  

 

 

  

Cost of investments for income tax purposes

    $ 380,788,511   
  

 

 

  

CLOUGH GLOBAL EQUITY FUND

NOTES TO QUARTERLY STATEMENT OF INVESTMENTS

DECEMBER 31, 2011 (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING AND OPERATING POLICIES

 

Clough Global Equity Fund (the “Fund”) is a closed-end management investment company that was organized under the laws of the state of Delaware by an Amended Agreement and Declaration of Trust dated January 25, 2005. The 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 net asset value per share of the Fund is determined no less frequently than daily, on each day that the New York Stock Exchange (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 the Fund is not open for business. As a result, the Fund’s net asset value may change at times when it is not possible to purchase or sell shares of the Fund.

Investment Valuation: Securities held by the 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 Fund 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 the 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 December 31, 2011, securities which have been fair valued represented 0.32% of net assets of the Fund.

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 the 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 the 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

Level3 – 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 December 31, 2011 in valuing the Fund’s investments carried at value. The Fund recognizes 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 period ended December 31, 2011:

Clough Global Equity Fund

 

Investments in Securities at Value*

      Level 1        Level 2         Level 3         Total   

Assets

           

Common Stocks

           

Consumer Discretionary

    $ 40,499,751      $ –       $ –       $ 40,499,751   

Consumer Staples

      5,030,941        –         –         5,030,941   

Energy

      56,814,021        –         –         56,814,021   

Financials

      63,344,177        –         86,090         63,430,267   

Health Care

      3,659,919        –         –         3,659,919   

Industrials

      22,234,173        –         –         22,234,173   

Information Technology

      53,092,658        –         –         53,092,658   

Materials

      4,318,285        –         –         4,318,285   

Telecommunication Services

      6,930,195        –         –         6,930,195   

Utilities

      74,442,974        –         –         74,442,974   

Preferred Stocks

      1,264,900        –         –         1,264,900   

Corporate Bonds

      –        13,645,790         –         13,645,790   

Asset/Mortgage Backed Securities

      –        189,471         585,048         774,519   

Government & Agency Obligations

      31,550,345        –         –         31,550,345   

Call Options Purchased

      –        –         137,720         137,720   

Short-Term Investments

      10,697,671        –         –         10,697,671   

TOTAL

    $     373,880,010      $     13,835,261       $         808,858       $     388,524,129   
                                    

Other Financial Instruments*

           

Liabilities

                                   

Securities Sold Short

    $ (55,803,926 )    $ –       $ –       $ (55,803,926 ) 

TOTAL

    $ (55,803,926 )    $ –       $ –       $ (55,803,926 ) 
                                    

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

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

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
December 31,
2011		      Net Change in unrealized
appreciation/(depreciation)
included in the  statement of
operations attributable to
level 3 investments still held
at December 31, 2011		  

Common Stocks

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

Asset/Mortgage Backed Securities

      –         2,852         (33,924)         (228,092)         844,212         585,048         (33,924)   

Call Options Purchased

      –         –         (488,913)         626,633         –         137,720         (488,913)   
   

TOTAL

      $86,086         $2,852         $(522,833)         $398,541         $844,212         $808,858         $(522,833)   
   

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

The accounting records of the 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 Fund’s Statement of Operations.

A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The 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 the 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 the 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 Fund’s Statement of Assets and Liabilities as a receivable or a payable and in the Fund’s Statement 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 Fund as of December 31, 2011.

The 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 Statement of Operations.

Short Sales: The Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When the 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 the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.

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

The Fund’s investment objectives not only permit the Fund to purchase investment securities, they also allow the Fund to enter into various types of derivative contracts, including, but not limited to, purchased and written options and warrants. In doing so, the Fund will employ strategies in differing combinations to permit it 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 Fund to pursue its objective more quickly and efficiently than if it was to make direct purchases or sales of securities capable of effecting a similar response to market factors.

Market Risk Factors: In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease its 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 Fund’s use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where the Fund is using derivatives to decrease or hedge exposures to market risk factors for securities held by the Fund, 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 Fund to increase its market value exposure relative to its net assets and can substantially increase the volatility of the Fund’s performance.

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

Examples of these associated risks are liquidity risk, which is the risk that the Fund 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 Fund. 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: The Fund may purchase or write (sell) put and call options. One of the risks associated with purchasing an option among others, is that the Fund pays a premium whether or not the option is exercised. Additionally, the 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. The Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to options.

When the Fund writes an option, an amount equal to the premium received by the 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 the 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 the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The 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 nine months ended December 31, 2011 was as follows:

CLOUGH GLOBAL EQUITY FUND:

     Written Call Options        
     Contracts        Premiums       

  Outstanding, March 31, 2011

      –         $                          –        

  Positions opened

      2,383           519,512      

  Exercised

      –           –      

  Expired

      (1,122)           (90,774)      

  Closed

      (1,261)           (428,738)      

  Outstanding, December 31, 2011

      –         $ –        

  Market Value, December 31, 2011

      –         $ –        
                          

 

CLOUGH GLOBAL EQUITY FUND:

            
     Written Put Options        
     Contracts        Premiums       

  Outstanding, March 31, 2011

      –         $ –        

  Positions opened

      545           778,313      

  Exercised

      –           –      

  Expired

      (78)           (39,621)      

  Closed

      (467)           (738,692)        

  Outstanding, December 31, 2011

      –         $ –      

  Market Value, December 31, 2011

      –         $ –        
                          

Warrants: The 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 the Fund’s ability to exercise the warrants or rights at such times and in such quantities as the Fund would otherwise wish. The Fund held no rights or warrants at the end of the period.

Item 2 - Controls and Procedures.

 

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

 

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

Item 3 – Exhibits.

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

SIGNATURES

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

CLOUGH GLOBAL EQUITY FUND

 

By:   

/s/ Edmund J. Burke

   Edmund J. Burke
   President (principal executive officer)
Date:    February 28, 2012

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

 

By:   

/s/ Edmund J. Burke

   Edmund J. Burke
   President (principal executive officer)
Date:    February 28, 2012

 

By:   

/s/ Jeremy O. May

   Jeremy O. May
   Treasurer (principal financial officer)
Date:    February 28, 2012