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 811-22022
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Advent/Claymore Global Convertible Securities & Income Fund
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(Exact name of registrant as specified in charter)
1065 Avenue of the Americas, New York, NY 10018
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(Address of principal executive offices) (Zip code)
Robert White, Treasurer
1065 Avenue of the Americas, New York, NY 10018
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(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 479-0675
Date of fiscal year end: October 31
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Date of reporting period: April 30, 2009
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The registrant's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
SEMIANNUAL Advent/Claymore |
REPORT Global Convertible |AGC
April 30, 2009 Securities & Income Fund |
(Unaudited)
Photo: Bridge
Logo| ADVENT Logo
CAPITAL MANAGEMENT CLAYMORE(SM)
WWW.CLAYMORE.COM/AGC
... YOUR BRIDGE TO THE LATEST,
MOST UP-TO-DATE INFORMATION ABOUT THE
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND
AGC | Advent/Claymore
LISTED | Global Convertible
NYSE(R)| Securities & Income Fund
Photo: Bridge
Logo| ADVENT Logo
CAPITAL MANAGEMENT CLAYMORE(SM)
There can be no assurance that the Fund will achieve its investment objective.
The value of the Fund will fluctuate with the value of the underlying
secutities. Historically, closed-end funds often trade at a discount to their
net asset value.
NOT FDIC-INSURED NOT BANK-GUARANTEED MAY LOSE VALUE
The shareholder report you are reading right now is just the beginning of the
story. Online at WWW.CLAYMORE.COM/AGC, you will find:
o Daily, weekly and monthly data on share prices, net asset values,
distributions, and more
o Portfolio overviews and performance analyses
o Announcements, press releases and special notices
o Fund and adviser contact information
Advent Capital Management and Claymore are continually updating and expanding
shareholder information services on the Fund's website, in an ongoing effort to
provide you with the most current information about how your Fund's assets are
managed, and the results of our efforts. It is just one more small way we are
working to keep you better informed about your investment in the Fund.
2 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Photo of Tracy V. Maitland
Tracy V. Maitland
President and Chief Executive Officer
Dear Shareholder|
We thank you for your investment in the Advent/Claymore Global Convertible
Securities & Income Fund (the "Fund"). This report covers the Fund's performance
for the semiannual period ended April 30, 2009.
The Fund's investment objective is to provide total return through a combination
of capital appreciation and current income. Under normal market conditions, the
Fund will invest at least 50% of its managed assets in convertible securities,
the Fund may invest up to 40% of its managed assets in non-convertible
income-producing securities; and the Fund will invest at least 50% of its
managed assets in foreign securities. Due to recent market volatility, the Fund
may not be invested at these levels at all times. The Fund may invest in
securities of any credit quality, including securities that are of below
investment grade quality without restrictions on maintaining a minimum weighted
average portfolio rating of investment grade with respect to the portion of the
Fund's managed assets invested in convertible securities. Securities of below
investment grade quality are regarded as having speculative characteristics with
respect to the issuer's capacity to pay interest and repay principal and are
commonly referred to as "junk bonds" or "high yield securities." As of April 30,
2009, securities of issuers headquartered outside the U.S. represented 42.2% of
long-term investments, and convertible securities represented 84.2% of the
portfolio.
All Fund returns cited--whether based on net asset value ("NAV") or market
price--assume the reinvestment of all distributions. For the six-month period
ended April 30, 2009, the Fund generated a total return based on market price of
3.83% and a return of 4.28% based on NAV. As of April 30, 2009, the Fund's
market price of $5.75 represented a discount of 13.40% to NAV of $6.64. As of
October 31, 2008, the Fund's market price of $5.99 represented a discount of
12.04% to NAV of $6.81.
The Fund currently implements its leverage strategy through the issuance of
Auction Market Preferred Shares ("AMPS"). The Fund has two seven-day series of
AMPS, Series T7, which auctions each Tuesday, and Series W7, which auctions each
Wednesday. The broad auction-rate preferred securities market remains illiquid,
essentially frozen since February 2008. The auctions for nearly all auction-rate
preferred shares, including those issued by the Fund, continue to fail.
Investors need to be aware that a failed auction is not a default, nor does it
require the redemption of a fund's auction-rate preferred shares. Provisions in
the offering documents of the Fund's AMPS provide a mechanism to set a maximum
rate in the event of a failed auction, and thus, AMPS holders will continue to
be entitled to receive dividends on the AMPS they hold. This maximum rate is
determined based upon a multiple of or a spread to LIBOR, whichever is greater.
During the six-month period ended April 30, 2009, established maximum rates were
based on a spread of 125 basis points over the applicable LIBOR rates, with the
maximum rates ranging from 1.48% to 3.34%. We will continue to evaluate the
benefits and impacts of leverage on the Fund as well as explore other methods of
utilizing leverage.
The Fund paid a monthly distribution of $0.0950 per common share in October and
November 2008 and monthly distribution of $0.0664 per common share in each month
from December 2008 through April 2009. Given the weakness in the international
equity markets and in the credit markets, the Fund's distribution was reduced in
an effort to better achieve its
Semiannual Report | April 30, 2009 | 3
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
DEAR SHAREHOLDER continued
investment objective of providing total return through a combination of capital
appreciation and current income along with seeking to enhance the Fund's earning
power over time. We believe that maintaining and potentially growing the Fund's
net asset value could benefit the Fund's shareholders over time. There is no
guarantee of any future distributions or that the current returns and
distribution rate will be achieved in the future.
We encourage common shareholders to consider the opportunity to reinvest their
distributions from the Fund through the Dividend Reinvestment Plan ("DRIP"),
which is described in detail on page 27 of the Fund's semiannual report. When
shares trade at a discount to NAV, the DRIP takes advantage of the discount by
reinvesting the monthly dividend distribution in common shares of the Fund
purchased in the market at a price less than NAV. Conversely, when the market
price of the Fund's common shares is at a premium above NAV, the DRIP reinvests
participants' distributions in newly-issued common shares at NAV, subject to an
IRS limitation that the purchase price cannot be more than 5% below the market
price per share. The DRIP provides a cost-effective means to accumulate
additional shares and enjoy the benefits of compounding returns over time.
The Fund is managed by a team of experienced and seasoned professionals led by
myself in my capacity as Chief Investment Officer (as well as President and
Founder) of Advent Capital Management, LLC. We encourage you to read the
following Questions & Answers section, which provides more information about the
factors that impacted the Fund's performance.
We thank you for your investment in the Fund and we are honored that you have
chosen the Advent/Claymore Global Convertible Securities & Income Fund as part
of your investment portfolio. For the most up-to-date information on your
investment, please visit the Fund's website at www.claymore.com/agc.
Sincerely,
/s/Tracy V. Maitland
Tracy V. Maitland
President and Chief Executive Officer of the Advent/Claymore Global Convertible
Securities & Income Fund
June 2, 2009
4 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
QUESTIONS & ANSWERS|
Advent/Claymore Global Convertible Securities & Income Fund (the "Fund") is
managed by a team of seasoned professionals at Advent Capital Management, LLC
("Advent"), led by Tracy V. Maitland, Advent's President and Chief Investment
Officer. In the following interview, Mr. Maitland discusses the global
convertible securities and high-yield markets and the performance of the Fund
during the six-month period ended April 30, 2009.
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1. WILL YOU REMIND US OF THIS FUND'S OBJECTIVES AND THE WAY IT IS MANAGED?
The Fund's investment objective is to provide total return through a combination
of capital appreciation and current income. Under normal market conditions, the
Fund will invest at least 80% of its managed assets in a diversified portfolio
of convertible securities and non-convertible income-producing securities, each
of U.S. and non-U.S. issuers. Within this general investment policy, the Fund
will follow, under normal market conditions, the following investment
parameters:
o The Fund will invest at least 50% of its managed assets in convertible
securities;
o The Fund may invest up to 40% of its managed assets in non-convertible
income-producing securities; and
o The Fund will invest at least 50% of its managed assets in foreign
securities.
Due to recent market volatility, the Fund may not be invested at these levels at
all times.
The portion of the Fund's managed assets invested in convertible securities,
non-convertible income-producing securities and foreign securities will vary
from time to time consistent with the Fund's investment objective, changes in
equity prices and interest rates and other economic and market factors. The Fund
may invest in securities of any credit quality, including securities that are of
below investment grade quality. Investing in below investment grade securities
may increase the level of risk in the portfolio, as these securities are issued
by companies that are considered less financially strong than issuers of
investment-grade securities. We address this risk through rigorous credit
research, carefully scrutinizing each issuer's financial statements and
attempting to avoid securities of weaker companies that may be likely to
default.
In furtherance of the Fund's investment objective, the Fund intends to engage in
an option strategy of writing (selling) covered call options on up to 25% of the
securities held in the Fund's portfolio, to seek to generate current gains from
option premiums as a means to enhance distributions payable to the holders of
common shares.
The Fund currently uses financial leverage through the issuance of AMPS. It may
also use financial leverage through borrowing or the issuance of commercial
paper or other forms of debt, through reverse repurchase agreements, dollar
rolls or similar transactions or through a combination of the foregoing.
Although the use of financial leverage by the Fund may create an opportunity for
increased return for the common shares, it also results in additional risks and
can magnify the effect of any losses. If the income and gains earned on
securities purchased with the financial leverage proceeds are greater than the
cost of the financial leverage, the common shares' return will be greater than
if financial leverage had not been used. Conversely, if the income or gains from
the securities purchased with the proceeds of financial leverage are less than
the cost of the financial leverage, the common shares' return will be less than
if financial leverage had not been used. There is no assurance that a financial
leveraging strategy will be successful.
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2. PLEASE TELL US ABOUT THE ECONOMIC AND MARKET ENVIRONMENT OVER THE LAST SIX
MONTHS.
In the last annual report for this Fund, published six months ago, we described
a financial crisis that originated with the end of a housing boom fueled by
excessively easy credit. In early December 2008, the National Bureau of Economic
Research (NBER) officially declared that the U.S. economy had fallen into a
recession that began in December 2007. The U.S. economy continued to contract in
subsequent months, with drops in real Gross Domestic Product, a broad measure of
economic activity, at annual rates of more than 6% in the fourth quarter of 2008
and the first quarter of 2009.
After the September failure of Lehman Brothers Holdings Inc., credit markets
froze, with investors becoming intolerant of risk. As fearful investors sought
the protection of U.S. Treasury securities, spreads between Treasury securities
and bonds with any degree of credit risk widened dramatically, reducing market
values of risky bonds. Selling from hedge funds, the majority investor in
convertibles, on account of forced delevering, exacerbated the decline. In
September 2008, return of the Merrill Lynch All U.S. Convertibles Index was
-14.57%, and in October the return was -17.99%. These negative monthly returns
rival the biggest annual losses for convertibles since 1953, the earliest year
for which records of returns on the Merrill Lynch All U.S. Convertibles Index
are available.
The extreme market dislocation presented some uncommon opportunities. For
example, in October 2008 a convertible bond of Transocean, Inc., the largest
offshore drilling contractor in the world, with a 1.5% coupon dropped to a price
that provided a yield to the first put date in 2010 of 7.5%. (Transocean, Inc.,
Ser.
Semiannual Report | April 30, 2009 | 5
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
QUESTIONS & ANSWERS continued
A, BBB+, 1.625%, 12/15/37 represented 2.9% of long-term investments.) At the
same time, 5.25% coupon straight bonds of the same company, with the same
seniority in the credit structure, were selling at a price that provided a yield
of 6.65%. (Transocean 5.25% coupon straight bonds are provided as an example and
are not held in the portfolio.) This means that investors could purchase bonds
that are convertible to common stock and could receive more income than they
would receive from straight bonds with no conversion feature. Typically the
yield on convertible bonds is lower than the yield on regular non-convertible
bonds because the convertible has the potential of converting to common equity.
There are two ways for investors in convertible bonds to make money, from the
coupon and from participating in appreciation in the price of the common stock,
if any.
Not surprisingly, this extraordinary market situation attracted new investors.
Sometime in November, the hedge fund forced selling dissipated, and there was
considerable purchasing by non-traditional sources, most notably managers of
equity and bond funds that have the ability to invest in convertibles, since
they are debt instruments that convert into equities. As investors quickly tired
of near-zero yields in the Treasury markets, they began to seek risk again,
buying new securities and solving a major market concern about refinancing of
upcoming maturing issues. From mid-November through the first few months of
2009, there was a significant rebound in convertibles, so that return of the
Merrill Lynch All U.S. Convertibles Index for the six-month period ended April
30, 2009, was 11.50%.
Equity and bond markets began to recover at about the same time, though markets
have remained quite volatile, and returns for many indices were negative for the
six months ended April 30, 2009. Despite gains in March and April, the Standard
& Poor's 500 Index returned -8.53% for the six-month period ended April 30,
2009. For the same six-month period, returns of the MSCI World Index, which
measures performance of world equity markets, was -5.25%. Most European markets
were down for the period, but equity markets in some developing countries were
quite strong.
In contrast to prior periods, bonds with more credit risk generally performed
better than less risky bonds. The Barclays Capital US Aggregate Bond Index,
which measures return of the high-quality U.S. bond market as a whole, returned
7.74%, while the return of the Merrill Lynch High Yield Master II Index, which
measures performance of the high-yield bond market, was 15.20%. The Barclays
Capital 10-20 Year U.S. Treasury Index was also quite strong, with a return of
11.40%.
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3. HOW DID THE FUND PERFORM IN THIS ENVIRONMENT?
All Fund returns cited--whether based on net asset value ("NAV") or market
price--assume the reinvestment of all distributions. For the six-month period
ended April 30, 2009, the Fund generated a total return based on market price of
3.83% and a return of 4.28% based on NAV. As of April 30, 2009, the Fund's
market price of $5.75 represented a discount of 13.40% to NAV of $6.64. As of
October 31, 2008, the Fund's market price of $5.99 represented a discount of
12.04% to NAV of $6.81.
The market value of the Fund's shares fluctuates from time to time, and it may
be higher or lower than the Fund's NAV. The current discount to NAV may provide
an opportunity for suitable investors to purchase shares of the Fund below the
market value of the securities in the underlying portfolio. We believe that,
over the long term, the progress of the NAV will be reflected in the market
price return to shareholders although there can be no guarantee.
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4. HOW DID YOU ALLOCATE THE FUND AMONG ASSET CLASSES OVER THE LAST SIX MONTHS?
At the beginning of this period, October 31, 2008, convertible bonds represented
38.4% of the portfolio and convertible preferred stocks represented 24.0%.
Short-term investments represented 27.1%, leaving very small percentages in
common stocks and straight bonds. This positioning represented a significant
change from prior periods, when convertible preferred stocks represented a much
higher percentage of the Fund's assets. Many of these convertible preferreds
were synthetic convertibles created to gain desired exposure to global
companies. A change to one of the Fund's non-fundamental investment policies
effective in October 2008 provides for more flexibility, allowing the Fund to
invest without limit in convertible securities of any credit quality.
Previously, the Fund was required to maintain a weighted average portfolio
rating of investment grade on convertible securities held by the Fund, and many
of these synthetic convertibles were created in order to maintain
investment-grade credit while gaining access to international markets, where the
supply of convertible securities is often limited.
The extreme weakness in the convertible bond market in the fall of 2008
discussed above provided some unusual opportunities for the Fund to invest in
convertible bonds of quality companies at very attractive prices. Perceiving an
opportunity to simultaneously increase income and improve the portfolio's credit
quality, while also achieving participation in an improving equity market, we
shifted most of the Fund's assets into convertible bonds. As of April 30, 2009,
the Fund has no position in straight equities or synthetic convertibles. The
majority of the portfolio is invested in convertible securities, with 67.4% in
convertible bonds and 16.8% in convertible preferreds.
Under normal market conditions, the Fund will invest at least 50% of its assets
in foreign securities. Due to the market volatility we have experienced both
domestically and abroad over the past six months, we reduced the position in
foreign securities before the beginning of this period as we believe that there
is greater risk in foreign securities than in the U.S. at this
6 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
QUESTIONS & ANSWERS continued
time. As of April 30, 2009, securities of issuers headquartered outside the U.S.
represented 42.2% of long-term investments. Most world markets followed the U.S.
into recession, and we believe they will lag behind the U.S. in recovery. Also,
few governments or central banks are taking the aggressive approach of the U.S.
to calm markets and stimulate growth. In particular we have generally avoided
exposure to Japan, which is suffering from a strong yen, and from markets with
economies that are heavily dependent on exports.
In terms of industry representation, we have emphasized one of the most
defensive industry groups - health care - and one that has traditionally been a
major source of income but has recently been extremely volatile, financial
services. As of April 30, 2009, approximately 19% of the Fund's assets are
invested in each of these sectors.
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5. WHAT WERE THE MAJOR INVESTMENT DECISIONS THAT AFFECTED THE FUND'S
PERFORMANCE?
The decision to increase the Fund's emphasis on convertible bonds proved to be
highly positive, as the convertible bond market experienced a rather dramatic
recovery after mid-November.
We mentioned above the extreme dislocation last fall in the market for the
convertible bonds of Transocean, Inc. (2.9% of long-term investments), and the
Fund's performance benefited from a significant position in these bonds, which
moved up as market conditions became more normal. We initially had a small
position in these bonds and added to it last October when we believed they
represented extraordinary value. This is a company with good growth prospects,
ample free cash flow and a substantial order backlog, with the stock selling at
what we consider to be a very attractive price relative to the intrinsic value.
One of the worst performing positions was a preferred issue of SLM Corp. (0.8%
of long-term investments), which we had considered reasonably secure because the
majority of its assets were in government-guaranteed student loans. However,
legislation recently has been proposed to effectively nationalize the student
loan business, thereby bypassing much of SLM's business, and the preferred stock
lost most of its value. Most of the other negatives were also in the financial
sector, particularly preferred issues of Citigroup (1.1% of long-term
investments) and KeyCorp (0.6% of long-term investments), two bank holding
companies that have experienced a series of write-downs and have had to raise
additional capital.
One of the best performing holdings, a sizable short-dated bond of Banco
Espirito Santo SA (exchangeable into equity of Brazilian bank Banco Bradesco)
(not held in portfolio at period end), was also in the financial sector. The
issuer Banco Espirito Santo is a leading Portuguese bank that benefited from the
Portuguese government's efforts to shore up its native banks, helping the bonds'
spread tighten in the period.
Several positions in convertible bonds of health care companies performed well.
These include Shire PLC (2.4% of long-term investments), Teva Pharmaceutical
Finance (3.2% of long-term investments), a special purpose U.S. finance
subsidiary of Teva Pharmaceutical Industries, and Mylan, Inc. (2.0% of long-term
investments), the third largest generic pharmaceutical company in the world.
Shire is a U.K. pharmaceutical company that specializes in drugs for attention
deficit disorder; the bonds performed very well even though the company's stock
was down for the period. Besides the intrinsic attractiveness of this
convertible bond, Shire is a relatively small company that could become an
acquisition target as the pharmaceutical industry continues to consolidate. In
that event, the bonds, which are currently trading around $80, would likely move
up because of a change of control provision.
Another position that has performed well that we continue to favor is Inmarsat
PLC (1.0% of long-term investments). This is a U.K. company that provides via
satellite a portfolio of global mobile broadband communication services across
its main areas of maritime, aeronautical and land mobile. This company has a
stable business model with about 40% of its business from government sources; it
reported a 10% increase in revenue for the most recent quarter. Its revenue is
recorded in U.S. dollars, while its costs are denominated in British pounds, so
the company has benefited from the weakness of the pound versus the dollar.
Having essentially completed a major capital spending program, Inmarsat is well
positioned to increase profitability significantly in the future.
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6. HOW HAS THE FUND'S LEVERAGE STRATEGY AFFECTED PERFORMANCE?
The Fund utilizes leverage (borrowing) as part of its investment strategy, to
finance the purchase of additional securities that provide increased income and
potentially greater appreciation potential to common shareholders than could be
achieved from a portfolio that is not leveraged. The Fund currently implements
its leverage strategy through the issuance of Auction Market Preferred Shares
("AMPS").
The Fund has two seven-day series of AMPS, Series T7, which auctions each
Tuesday, and Series W7, which auctions each Wednesday. The broad auction-rate
preferred securities market remains essentially frozen, as it has been since
February 2008. The auctions for nearly all auction-rate preferred shares,
including those issued by the Fund, continue to fail. Investors need to be aware
that a failed auction is not a default, nor does it require the redemption of a
fund's auction-rate preferred shares. Provisions in the offering documents of
the Fund's AMPS provide a mechanism to set a maximum rate in the event of a
failed auction, and, thus, AMPS holders will continue to be entitled to receive
dividends on the AMPS they hold. This maximum rate is determined based upon a
multiple of or a spread to LIBOR, whichever is greater. During the six-month
period ended April 30, 2009, established maximum rates were based on a spread of
125 basis points over the applicable LIBOR rates, with
Semiannual Report | April 30, 2009 | 7
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
QUESTIONS & ANSWERS continued
the maximum rates ranging from 1.48% to 3.34%. We will continue to evaluate the
benefits and impacts of leverage on the Fund as well as explore other methods of
utilizing leverage.
We will continue to evaluate the benefits and effects of leverage on the Fund,
as well as explore other types of leverage. Given the very low interest rates
that have been established for the Fund's AMPs over the last six months, the
leverage has been helpful as the market has rebounded. During this period
leverage has helped to create capital appreciation and has contributed to
income, since the portfolio is yielding more than the cost of leverage.
There is no guarantee that the Fund's leverage strategy will be successful, and
the Fund's use of leverage may cause the Fund's NAV and market price of common
shares to be more volatile. Leverage adds value only when the return on
securities purchased exceeds the cost of leverage.
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7. WHAT IS YOUR CURRENT OUTLOOK FOR THE MARKETS AND THE FUND, AND WHAT DOES THAT
MEAN FOR THE WAY THE FUND IS INVESTED?
The convertible market has improved dramatically over the past few months, and
our outlook for the U.S. convertible market is very positive for the months
ahead. Rising prices of debt instruments such as high-yield bonds and bank loans
are positive, since these securities are the underpinning of convertible
securities. Experience from past recessions indicates that the economy and the
stock market recover after credit markets begin to improve. An improving economy
will mean more new issues of bonds and convertibles, as companies seek to fund
their growth.
After several months of frozen markets, in early 2009 the new issue market
reopened, and we found some attractive opportunities to invest in cyclical
companies that stand to benefit from an improving economy. These include Newmont
Mining Corporation (0.7% of long-term investments), which mines gold and other
minerals; Johnson Controls, Inc. (0.8% of long-term investments), a provider of
products that optimize energy usage in buildings and vehicles; and BorgWarner
Inc. (0.7% of long-term investments), a global supplier of engineered automotive
systems and components for power train applications.
We are somewhat less optimistic about near-term prospects for international
markets. Most foreign economies followed the U.S. into recession, and we believe
that they may lag behind the U.S. in resuming growth. Under normal market
conditions, the Fund will invest at least 50% of its assets in foreign
securities. Due to the market volatility we have experienced both domestically
and abroad over the past six months, we reduced the Fund's position in foreign
securities before the beginning of this period as we believe that there is
greater risk in foreign securities than in the U.S. at this time. As of April
30, 2009, securities of issuers headquartered outside the U.S. represented 42.2%
of long-term investments. We will continue to monitor world markets carefully,
seeking opportunities to increase international exposure as world economies
begin to recover.
A major advantage of this Fund is its ability to invest in multiple asset
classes, taking advantage of different opportunities and anomalies in various
markets. The last few months have provided many opportunities in the convertible
market. We believe that, over the long term, our careful security selection and
asset allocation will help the Fund's performance by providing favorable returns
in rising markets and a level of income that can help provide some protection
for overall return against down markets.
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INDEX DEFINITIONS
Indices are unmanaged and it is not possible to invest directly in any index.
The Merrill Lynch All U.S. Convertibles Index (VXA0) is comprised of
approximately 500 issues of convertible bonds and preferred stock of all
qualities.
S&P 500 Index is a capitalization-weighted index of 500 stocks. The index is
designed to measure performance of the broad domestic economy through changes in
the aggregate market value of 500 stocks representing all major industries.
MSCI World Index is a free float-adjusted market capitalization index that
measures global developed market equity performance of the developed market
country indices of Europe, Australasia, the Far East, the U.S. and Canada.
The Barclays Capital US Aggregate Bond Index covers the U.S. dollar-denominated,
investment-grade, fixed rate, taxable bond market of SEC-registered securities.
The Index includes bonds from the Treasury, government-related, corporate,
mortgage-backed securities (agency fixed-rate and hybrid ARM passthroughs),
asset-backed securities and collateralized mortgage-backed securities sectors.
U.S. Agency Hybrid Adjustable Rate Mortgage (ARM) securities were added to the
U.S. Aggregate Index on April 1, 2007 but are not eligible for the Global
Aggregate Index.
Merrill Lynch High Yield Master II Index is a commonly used benchmark index for
high yield corporate bonds. It is a measure of the broad high yield market.
The Barclays Capital 10-20 Year U.S. Treasury Index is comprised of securities
in the Treasury Index (i.e., public obligations of the U.S. Treasury) with a
maturity from 10 up to (but not including) 20 years.
8 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
QUESTIONS & ANSWERS continued
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AGC RISKS AND OTHER CONSIDERATIONS
The views expressed in this report reflect those of the Portfolio Managers and
Claymore only through the report period as stated on the cover. These views are
subject to change at any time, based on market and other conditions and should
not be construed as a recommendation of any kind. The material may also contain
forward-looking statements that involve risk and uncertainty, and there is no
guarantee they will come to pass. There can be no assurance that the Fund will
achieve its investment objectives. The value of the Fund will fluctuate with the
value of the underlying securities. Historically, closed-end funds often trade
at a discount to their net asset value. The Fund is subject to investment risk,
including the possible loss of the entire amount that you invest. Past
performance does not guarantee future results.
CONVERTIBLE SECURITIES. The Fund is not limited in the percentage of its assets
that may be invested in convertible securities. Convertible securities generally
offer lower interest or dividend yields than non-convertible securities of
similar quality. The market values of convertible securities tend to decline as
interest rates increase and, conversely, to increase as interest rates decline.
However, the convertible security's market value tends to reflect the market
price of the common stock of the issuing company when that stock price is
greater than the convertible's "conversion price," which is the predetermined
price at which the convertible security could be exchanged for the associated
stock.
STRUCTURED AND SYNTHETIC CONVERTIBLE SECURITIES RISK. The value of structured
convertible securities can be affected by interest rate changes and credit risks
of the issuer. Such securities may be structured in ways that limit their
potential for capital appreciation and the entire value of the security may be
at a risk of loss depending on the performance of the underlying equity
security. Structured convertible securities may be less liquid than other
convertible securities. The value of a synthetic convertible security will
respond differently to market fluctuations than a convertible security because a
synthetic convertible security is composed of two or more separate securities,
each with its own market value. In addition, if the value of the underlying
common stock or the level of the index involved in the convertible component
falls below the exercise price of the warrant or option, the warrant or option
may lose all value.
INTEREST RATE RISK. Convertible securities and non-convertible income producing
securities are subject to certain risks, including (i) if interest rates go up,
the value of convertible securities and non-convertible income-producing
securities in the Fund's portfolio generally will decline; (ii) during periods
of declining interest rates, the issuer of a security may exercise its option to
prepay principal earlier than scheduled, forcing the Fund to reinvest in lower
yielding securities (call or prepayment risk); and (iii) during periods of
rising interest rates, the average life of certain types of securities may be
extended because of slower than expected principal payments (extension risk).
CREDIT RISK. Credit risk is the risk that one or more securities in the Fund's
portfolio will decline in price, or fail to pay interest or principal when due,
because the issuer of the security experiences a decline in its financial
status. The Fund's investments in convertible and non-convertible debt
securities involve credit risk. However, in general, lower rated securities
carry a greater degree of risk that the issuer will lose its ability to make
interest and principal payments, which could have a negative impact on the
Fund's net asset value or dividends.
LOWER GRADE SECURITIES RISKS. Investing in lower grade securities (commonly
known as "junk bonds") involves additional risks, including credit risk. Credit
risk is the risk that one or more securities in the Fund's portfolio will
decline in price, or fail to pay interest or principal when due, because the
issuer of the security experiences a decline in its financial status.
PREFERRED SECURITIES RISKS. There are special risks associated with investing in
preferred securities, including risks related to deferral, noncumulative
dividends, subordination, liquidity, limited voting rights and special
redemption rights.
FOREIGN SECURITIES AND EMERGING MARKETS RISK. Investing in non-U.S. issuers may
involve unique risks, such as currency, political, economic and market risk. In
addition, investing in emerging markets entails additional risk including, but
not limited to (1) news and events unique to a country or region (2) smaller
market size, resulting in lack of liquidity and price volatility (3) certain
national policies which may restrict the Fund's investment opportunities.
SMALLER COMPANY RISK. The general risks associated with corporate
income-producing and equity securities are particularly pronounced for
securities issued by companies with smaller market capitalizations. These
companies may have limited product lines, markets or financial resources, or
they may depend on a few key employees. As a result, they may be subject to
greater levels of credit, market and issuer risk. Securities of smaller
companies may trade less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other securities.
Companies with medium-sized market capitalizations may have risks similar to
those of smaller companies.
RISK ASSOCIATED WITH THE FUND'S COVERED CALL OPTION WRITING STRATEGY. The
ability of the Fund to achieve its investment objective of providing total
return through a combination of current income and capital appreciation is
partially dependent on the successful implementation of its covered call option
strategy. There are significant differences between the securities and options
markets that could result in an imperfect correlation between these markets,
causing a given transaction not to achieve its objectives. A decision as to
whether, when and how to use options involves the exercise of skill and
judgment, and even a well conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events. As the writer of a
covered call option, the Fund forgoes, during the option's life, the opportunity
to profit from increases in the market value of the security covering the call
option above the sum of the premium and the strike price of the call, but has
retained the risk of loss should the price of the underlying security decline.
LEVERAGE RISK. Certain risks are associated with the leveraging of common stock.
Both the net asset value and the market value of shares of common stock may be
subject to higher volatility and a decline in value.
AUCTION MARKET PREFERRED SHARES (AMPS) RISK. The AMPS are redeemable, in whole
or in part, at the option of the Fund on any dividend payment date for the AMPS,
and are subject to mandatory redemption in certain circumstances. The AMPS are
not listed on an exchange. You may buy or sell AMPS only through an order placed
at an auction with or through a broker- dealer that has entered into an
agreement with the auction agent and the Fund or in a secondary market
maintained by certain broker-dealers. These broker-dealers are not required to
maintain this market, and it may not provide you with liquidity. In addition to
the risks described above, the Fund is also subject to: Foreign Currency Risk,
Derivatives Risk, Equity Securities Risk, Counterparty Risk, Liquidity Risk,
REIT, Mortgage-Related and Asset-Backed Securities Risks, Income Trust and
Master Limited Partnership Risks, Dividend Capture Trading Risk, Reinvestment
Risk, Management Risk, Market Disruption Risk, and Anti-Takeover Provisions.
Please see www. claymore.com/agc for a more detailed discussion about Fund risks
and considerations.
In addition to the risks described above, the Fund is also subject to:
Management Risk, Market Disruption Risk, and Anti-Takeover Provisions. Please
see www.claymore.com/agc for a more detailed discussion about Fund risks and
considerations.
Semiannual Report | April 30, 2009 | 9
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Fund SUMMARY | AS OF APRIL 30, 2009 (unaudited)
FUND STATISTICS
---------------------------------------------------------------------
Share Price $5.75
Common Share Net Asset Value $6.64
Premium/Discount to NAV -13.40%
Net Assets ($000) $211,609
---------------------------------------------------------------------
TOTAL RETURNS
---------------------------------------------------------------------
(INCEPTION 5/29/07) MARKET NAV
---------------------------------------------------------------------
Six-Month 3.83% 4.28%
One Year -53.24% -52.29%
Since Inception - annualized -40.68% -35.54%
---------------------------------------------------------------------
% OF LONG-TERM
TOP TEN INDUSTRIES INVESTMENTS
---------------------------------------------------------------------
Pharmaceuticals 10.3%
Diversified Financial Services 9.0%
Banks 8.6%
Telecommunications 8.5%
Real Estate Investment Trusts 7.8%
Oil & Gas 5.7%
Mining 5.1%
Chemicals 4.1%
Agriculture 3.1%
Holding Companies-Diversified 2.9%
---------------------------------------------------------------------
% OF LONG-TERM
TOP TEN SECURITIES INVESTMENTS
---------------------------------------------------------------------
Transocean, Inc., Ser. A 2.9%
Shire PLC, Ser. REGs 2.4%
Teva Pharmaceutical Finance Co. BV, Ser. D 2.4%
Mylan, Inc. 2.0%
Kreditanstalt fuer Wiederaufbau, Ser. DTE 1.8%
Golden Eagle Retail Group Ltd. 1.7%
Sagerpar 1.7%
Chaoda Modern Agriculture Holdings Ltd., Ser. CHAO 1.6%
Core Laboratories LP 1.6%
Reckson Operating Partnership LP/SL Green Realty Corp. 1.6%
---------------------------------------------------------------------
% OF LONG-TERM
PORTFOLIO BREAKDOWN BY COUNTRY INVESTMENTS
---------------------------------------------------------------------
United States 57.8%
Cayman Islands 9.6%
Jersey 5.6%
Bermuda 4.2%
Netherlands Antilles 2.4%
Netherlands 2.2%
France 1.9%
Germany 1.8%
Luxembourg 1.7%
Belgium 1.7%
Canada 1.6%
Panama 1.6%
Great Britain 1.6%
China 1.5%
Singapore 1.3%
Brazil 1.3%
Japan 0.9%
Australia 0.7%
South Korea 0.6%
---------------------------------------------------------------------
Past performance does not guarantee future results. All portfolio data is
subject to change daily. For more current information, please visit
www.claymore.com/agc. The above summaries are provided for informational
purposes only and should not be viewed as recommendations. Share Price & NAV
Performance
Line chart:
SHARE PRICE & NAV PERFORMANCE
Share price NAV
4/30/08 14.4 15.92
14.72 15.95
14.74 16.17
14.79 16.18
14.77 16.24
14.76 16.16
14.99 16.22
14.91 16.1
14.91 16.09
14.65 16.04
14.67 16.16
14.81 16.28
14.86 16.44
15.08 16.5
15.16 16.46
15.02 16.31
14.88 16.29
14.91 16.18
14.98 16.12
15.08 16.15
15.36 16.18
15.41 16.29
15.51 16.27
15.52 16.19
15.51 16.18
15.66 16.32
15.49 16.37
15.11 16.27
15.16 16.06
14.72 15.8
14.58 15.5
14.74 15.57
14.64 15.67
14.47 15.74
14.4 15.78
14.46 15.56
14.25 15.35
13.9 15.44
13.89 15.26
14 15.28
13.8 15.13
13.73 15.05
13.85 15.04
13.74 14.85
13.6 14.64
13.48 14.45
13.27 14.38
13.2 14.32
13.28 14.29
13.1 14.26
12.65 14.05
12.22 14.06
11.71 13.86
12.03 13.86
12.35 13.89
12.23 13.94
12.33 14.05
12.4 14.05
12.51 14.06
12.3 13.83
12.18 13.82
11.99 13.73
12.22 13.78
12.3 13.96
12.29 13.87
12.39 13.7
12.21 13.51
12.19 13.49
12.13 13.62
12.17 13.54
12.18 13.53
12.23 13.58
12.13 13.42
11.85 13.24
11.81 13.3
11.65 13.29
11.58 13.22
11.49 13.09
11.36 13.18
11.34 13.2
11.46 13.24
11.33 13.14
11.36 13.16
11.38 13.3
11.68 13.44
11.74 13.48
11.85 13.39
11.82 13.22
11.59 12.96
11.55 12.89
11.71 13.04
11.52 12.58
11.49 12.58
10.7 12.33
10.45 12.54
10 12.07
9.39 11.94
8.19 11.51
8.81 11.52
9.69 12.02
9.7 11.84
9.33 11.64
9.19 11.51
9.45 11.53
9.15 11.27
7.55 10.47
8.24 10.61
8.09 10.41
7.78 9.8
7.67 9.7
6.45 8.96
6.18 8.59
5.54 8.23
4.5 7.79
4.17 7.29
5.39 7.65
5.86 7.9
5.41 7.22
5.65 7.08
5.8 7.1
6.17 7.21
6.15 7.07
5.76 6.68
5.52 6.53
5.32 6.32
5.09 6.06
5.38 6.29
5.54 6.52
5.68 6.68
5.99 6.81
5.98 6.91
6.35 7.28
6.17 7.15
6.1 6.88
6.17 7
6.18 7
5.92 6.86
5.79 6.6
5.65 6.74
5.4 6.65
5.2 6.51
5.13 6.45
4.63 6.13
4.55 5.77
4.5 5.83
4.49 6.04
4.45 6.16
4.72 6.27
4.92 6.28
4.65 6.02
4.86 6.08
4.8 6.06
4.73 5.96
4.7 5.92
4.71 6.06
4.52 6.04
4.65 6.14
4.48 6.02
4.47 6.05
4.36 6.07
4.51 6.25
4.66 6.36
4.9 6.37
5.11 6.34
5.29 6.28
5.19 6.28
5.19 6.31
5.4 6.32
5.41 6.38
5.64 6.46
5.84 6.5
6.24 6.59
6.32 6.63
6.26 6.79
6.09 6.79
6.04 6.82
5.95 6.77
5.92 6.69
5.88 6.64
5.74 6.5
5.65 6.43
5.76 6.45
5.51 6.21
5.67 6.32
5.6 6.28
5.66 6.28
5.7 6.39
5.85 6.41
6.18 6.58
5.98 6.49
6 6.38
6.06 6.29
6.12 6.36
5.88 6.37
5.85 6.44
6.09 6.51
6 6.56
5.96 6.43
5.93 6.38
5.89 6.38
5.75 6.38
5.6 6.15
5.61 6.2
5.45 6.18
5.36 6.14
4.95 6.1
5.17 6.17
5.31 6.16
5.25 6.08
5.25 6.01
4.93 5.84
4.65 5.83
4.84 5.87
4.64 5.78
4.52 5.75
4.2 5.73
4.58 5.87
4.57 5.81
4.76 5.89
4.81 5.92
4.86 5.92
4.84 5.93
4.79 6.02
4.75 6.08
4.67 6.06
4.95 6.26
5.04 6.21
5.14 6.18
5.21 6.25
5.04 6.21
4.83 6.04
4.93 6.15
5.02 6.19
5.29 6.38
5.3 6.4
5.21 6.39
5.07 6.32
5.14 6.37
5.41 6.58
5.5 6.53
5.25 6.48
5.45 6.51
5.53 6.6
5.63 6.56
5.43 6.34
5.5 6.43
5.39 6.43
5.49 6.48
5.55 6.63
5.51 6.55
5.64 6.51
5.63 6.63
4/30/09 5.75 6.64
Bar Chart:
MONTHLY DIVIDENDS PER SHARE
Apr 08 0.15
May 0.15
Jun 0.15
Jul 0.15
Aug 0.15
Sep 0.15
Oct 0.1
Nov 0.1
Dec 0.07
Jan 09 0.07
Feb 0.07
Mar 0.07
Apr 09 0.07
PORTFOLIO COMPOSITION (% of Total Investments)
Asset Class
-----------------------------------
Convertible Bonds 67.4%
Convertible
Preferred Stocks 16.8%
Corporate Bonds 12.4%
Short Term
Investments 2.7%
Exchange Traded
Funds 0.7%
10 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Portfolio of INVESTMENTS | APRIL 30, 2009 (unaudited)
PRINCIPAL
AMOUNT VALUE
================================================================================
LONG-TERM INVESTMENTS - 162.8%
CONVERTIBLE BONDS - 112.7%
AEROSPACE AND DEFENSE - 2.2%
$ 4,475,000 Alliant Techsystems, Inc., BB-
2.75%, 9/15/11 $ 4,581,281
--------------------------------------------------------------------------------
AGRICULTURE - 2.6%
HKD
40,500,000 Chaoda Modern Agriculture Holdings Ltd., Ser. CHAO, BB-
0.00%, 5/8/11 (Cayman Islands) 5,572,363
--------------------------------------------------------------------------------
AUTO PARTS & EQUIPMENT - 1.2%
$ 2,200,000 BorgWarner, Inc., BBB
3.50%, 4/15/12 2,552,000
--------------------------------------------------------------------------------
BANKS - 5.2%
EUR 4,500,000 Kreditanstalt fuer Wiederaufbau, Ser. DTE, AAA
3.25%, 6/27/13 (Germany) 6,155,255
$ 3,799,000 National City Corp., A
4.00%, 2/1/11 3,556,814
$ 1,500,000 SVB Financial Group, NR
3.875%, 4/15/11 (a) 1,194,375
--------------------------------------------------------------------------------
10,906,444
--------------------------------------------------------------------------------
BEVERAGE - 0.5%
$ 900,000 Molson Coors Brewing Co., BBB-
2.50%, 7/30/13 959,625
--------------------------------------------------------------------------------
BIOTECHNOLOGY - 4.0%
$ 5,820,000 Amgen, Inc., A+
0.125%, 2/1/11 (b) 5,448,975
$ 750,000 Amylin Pharmaceuticals, Inc., NR
3.00%, 6/15/14 453,750
$ 2,500,000 United Therapeutics Corp., NR
0.50%, 10/15/11 2,556,250
--------------------------------------------------------------------------------
8,458,975
--------------------------------------------------------------------------------
CHEMICALS - 5.0%
EUR 3,700,000 Bayer Capital Corp. BV, BBB
6.625%, 6/1/09 (Netherlands) 4,946,653
CHF 2,525,000 Lonza Finance Ltd., NR
1.50%, 7/15/09 (Jersey) 2,545,294
HKD
20,000,000 Sinofert Holdings Ltd., NR
0.00%, 8/7/11 (Bermuda) 3,070,908
--------------------------------------------------------------------------------
10,562,855
--------------------------------------------------------------------------------
COAL - 0.6%
$ 2,000,000 Massey Energy Co., BB-
3.25%, 8/1/15 1,237,500
--------------------------------------------------------------------------------
COMPUTERS - 3.6%
$ 3,000,000 DST Systems, Inc., NR
4.125%, 8/15/23 (c) 2,962,500
EMC Corp., A-
$ 3,500,000 1.75% ,12/1/11 (b) 3,670,625
$ 1,000,000 1.75%, 12/1/13 1,032,500
--------------------------------------------------------------------------------
7,665,625
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
================================================================================
DIVERSIFIED FINANCIAL SERVICES - 5.6%
CHF 2,000,000 Actelion Finance SCA, NR
0.00%, 11/22/11 (Luxembourg) $ 1,957,587
EUR 3,500,000 International Power Ltd., BB-
3.25%, 7/20/13 (Jersey) 3,786,805
EUR 2,100,000 MTU Aero Engines Finance BV, Ser. MTU, BB+
2.75%, 2/1/12 (Netherlands) 2,502,764
$ 4,500,000 Nasdaq OMX Group, Inc. (The), BB+
2.50%, 8/15/13 3,605,625
--------------------------------------------------------------------------------
11,852,781
--------------------------------------------------------------------------------
ELECTRICAL COMPONENTS & EQUIPMENT - 3.0%
EUR 1,813,800 Nexans SA, BB+
1.50%, 1/1/13 (France) 1,740,939
$ 4,250,000 Suntech Power Holdings Co. Ltd., NR
0.25%, 2/15/12 (Cayman Islands) 3,830,313
$ 1,000,000 Yingli Green Energy Holding Co. Ltd., NR
0.00%, 12/15/12 (Cayman Islands) 760,000
--------------------------------------------------------------------------------
6,331,252
--------------------------------------------------------------------------------
ELECTRONICS - 2.2%
$ 5,000,000 Flextronics International Ltd., BB-
1.00%, 8/1/10 (Singapore) 4,637,500
--------------------------------------------------------------------------------
HEALTHCARE-PRODUCTS - 3.8%
$ 2,200,000 Beckman Coulter, Inc., BBB
2.50%, 12/15/36 (b) 2,230,250
$ 3,967,000 Hologic, Inc., B+
2.00%, 12/15/37 (c) 2,826,488
$ 2,000,000 Laboratory Corp. of America Holdings, BBB-
0.00%, 9/11/21 (b) 1,782,500
$ 1,250,000 NuVasive, Inc., NR
2.25%, 3/15/13 (a) 1,279,688
--------------------------------------------------------------------------------
8,118,926
--------------------------------------------------------------------------------
HOLDING COMPANIES-DIVERSIFIED - 2.8%
EUR 4,500,000 Sagerpar, NR
2.95%, 4/27/12 (Belgium) 5,881,568
--------------------------------------------------------------------------------
HOUSEWARES - 2.1%
$ 3,092,000 Newell Rubbermaid, Inc., BBB-
5.50%, 3/15/14 (b) 4,541,375
--------------------------------------------------------------------------------
INSURANCE - 2.1%
$ 4,420,000 Old Republic International Corp., NR
8.00%, 5/15/12 4,386,850
--------------------------------------------------------------------------------
IRON/STEEL - 3.6%
$ 3,900,000 ArcelorMittal, BBB+
5.00%, 5/15/14 (Luxembourg) 4,045,743
$ 3,250,000 United States Steel Corp., BB
4.00%, 5/15/14 3,477,500
--------------------------------------------------------------------------------
7,523,243
--------------------------------------------------------------------------------
LEISURE TIME - 2.6%
$ 5,545,000 Carnival Corp., BBB+
2.00%, 4/15/21 (Panama) (b) 5,420,238
--------------------------------------------------------------------------------
See notes to financial statements.
Semiannual Report | April 30, 2009 | 11
AGC | Advent/Claymore Global Convertible Securities & Income Fund | PORTFOLIO OF
INVESTMENTS (unaudited) continued
PRINCIPAL
AMOUNT VALUE
================================================================================
MINING - 4.2%
$ 3,000,000 Alumina Finance Ltd., Ser. AWC, BBB-
2.00%, 5/16/13 (Australia) $ 2,520,000
$ 1,500,000 Kinross Gold Corp., NR
1.75%, 3/15/28 (Canada) 1,353,750
$ 2,250,000 Newmont Mining Corp., BBB+
1.625%, 7/15/17 (b) 2,458,125
$ 2,000,000 Placer Dome, Inc./Barrick Gold Corp., A-
2.75%, 10/15/23 (Canada) 2,607,500
--------------------------------------------------------------------------------
8,939,375
--------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - 2.1%
$ 2,750,000 Danaher Corp., A+
0.00%, 1/22/21 2,481,875
$ 1,800,000 Textron, Inc., Ser. TXT, BBB-
4.50%, 5/1/13 1,943,604
--------------------------------------------------------------------------------
4,425,479
--------------------------------------------------------------------------------
OIL & GAS - 9.3%
HKD
40,000,000 China Petroleum & Chemical Corp., Ser. SINO, NR
0.00%, 4/24/14 (China) 5,328,929
EUR
16,000,000 Etablissements Maurel et Prom, NR
3.50%, 1/1/10 (France) 4,633,652
$ 10,500,000 Transocean, Inc., Ser. A, BBB+
1.625%, 12/15/37 (Cayman Islands) (b) 9,830,625
--------------------------------------------------------------------------------
19,793,206
--------------------------------------------------------------------------------
OIL & GAS SERVICES - 5.7%
$ 5,250,000 Core Laboratories LP, NR
0.25%, 10/31/11 5,479,687
$ 5,000,000 SOCO Finance Ltd., Ser. SIA, NR
4.50%, 5/16/13 (Jersey) 4,686,500
$ 2,500,000 Subsea 7, Inc., Ser. SUB, NR
2.80%, 6/6/11 (Cayman Islands) 1,925,000
--------------------------------------------------------------------------------
12,091,187
--------------------------------------------------------------------------------
PHARMACEUTICALS - 11.3%
$ 4,250,000 King Pharmaceuticals, Inc., BB
1.25%, 4/1/26 3,208,750
$ 2,000,000 Omnicare, Inc., Ser. OCR, B+
3.25%, 12/15/35 1,380,000
$ 10,000,000 Shire PLC, Ser. REGs, NR
2.75%, 5/9/14 (Jersey) 8,318,680
$ 7,500,000 Teva Pharmaceutical Finance Co. BV, Ser. D, BBB+
1.75%, 2/1/26 (Netherlands Antilles) 8,203,125
$ 2,750,000 Teva Pharmaceutical Finance LLC, Ser. C, BBB+
0.25%, 2/1/26 2,884,063
--------------------------------------------------------------------------------
23,994,618
--------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS - 12.7%
Boston Properties LP, A-
$ 2,000,000 2.875%, 2/15/37 1,697,500
$ 1,560,000 3.625%, 2/15/14 (a) 1,244,100
$ 2,800,000 BRE Properties, Inc., BBB
4.125%, 8/15/26 (b) 2,390,500
$ 3,599,000 Digital Realty Trust LP, NR
5.50%, 4/15/29 (a) 3,536,017
PRINCIPAL
AMOUNT VALUE
================================================================================
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
$ 1,800,000 Home Properties, Inc., NR
4.125%, 11/1/26 (a) $ 1,591,380
$ 3,848,000 Hospitality Properties Trust, BBB
3.80%, 3/15/27 3,001,440
$ 3,752,000 Host Hotels & Resorts LP, BB+
2.625%, 4/15/27(a) 3,034,430
$ 1,675,000 Macerich Co. (The), NR
3.25%, 3/15/12 (a) 1,187,156
$ 5,940,000 Reckson Operating Partnership LP/SL Green Realty
Corp., BB+
4.00%, 6/15/25 (b) 5,464,800
$ 2,177,000 UDR, Inc., BBB
4.00%, 12/15/35 1,981,070
$ 2,000,000 Vornado Realty Trust, BBB
3.625%, 11/15/26 (b) 1,795,000
--------------------------------------------------------------------------------
26,923,393
--------------------------------------------------------------------------------
RETAIL - 2.8%
HKD40,000,000 Golden Eagle Retail Group Ltd., NR
0.00%, 10/23/11 (Cayman Islands) 5,940,288
--------------------------------------------------------------------------------
SEMICONDUCTORS - 3.5%
$ 5,320,000 Linear Technology Corp., Ser. A, NR
3.00%, 5/1/27 4,435,550
$ 3,300,000 ON Semiconductor Corp., Ser B., B+
0.00%, 4/15/24 3,081,375
--------------------------------------------------------------------------------
7,516,925
--------------------------------------------------------------------------------
TELECOMMUNICATIONS - 8.4%
$ 3,679,000 Alcatel-Lucent USA, Inc., Ser. A, B+
2.875%, 6/15/23 (d) 3,398,476
$ 3,500,000 Inmarsat PLC, Ser. ISAT, NR
1.75%, 11/16/17 (United Kingdom) 3,300,972
$ 2,200,000 NII Holdings, Inc., NR
3.125%, 6/15/12 1,617,000
$ 4,500,000 Qwest Communications International, Inc., B+
3.50%, 11/15/25 4,426,875
JPY
372,000,000 Softbank Corp., BB
1.75%, 3/31/14 (Japan) 3,242,285
$ 2,500,000 Virgin Media, Inc., B-
6.50%, 11/15/16 (a) 1,834,375
--------------------------------------------------------------------------------
17,819,983
--------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 112.7%
(Cost $231,840,194) 238,634,855
--------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
================================================================================
CONVERTIBLE PREFERRED STOCKS --28.1%
ADVERTISING - 2.4%
436,540 Elf Special Financing Ltd./Interpublic Group
of Cos., Inc., 1.67%,
2009 (Cayman Islands) (a) (e) 5,127,720
--------------------------------------------------------------------------------
See notes to financial statements.
12 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund | PORTFOLIO OF
INVESTMENTS (unaudited) continued
NUMBER OF
SHARES VALUE
================================================================================
AGRICULTURE - 2.5%
76,000 Archer-Daniels-Midland Co., 6.25%, 2011 (b) $ 2,547,520
4,630 Bunge Ltd., 5.125%, 2010 (Bermuda) 2,187,675
7,100 Bunge Ltd., 4.875%, 2049 (Bermuda) 489,012
--------------------------------------------------------------------------------
5,224,207
--------------------------------------------------------------------------------
AUTO PARTS & EQUIPMENT - 2.8%
90,000 Autoliv, Inc., 8.00%, 2012 3,237,300
27,500 Johnson Controls, Inc., 11.50%, 2012 2,616,900
--------------------------------------------------------------------------------
5,854,200
--------------------------------------------------------------------------------
BANKS - 7.2%
9,444 Bank of America Corp., Ser. L, 7.25%, 2049 5,449,188
121,510 Citigroup, Inc., Ser. T, 6.50%, 2049 3,839,716
30,200 KeyCorp, Ser. A, 7.75%, 2049 1,978,100
6,212 Wells Fargo & Co., Ser. L, 7.50%, 2049 3,839,016
--------------------------------------------------------------------------------
15,106,020
--------------------------------------------------------------------------------
CHEMICALS - 1.7%
128,800 Celanese Corp., 4.25%, 2049 3,678,528
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 1.2%
8,825 SLM Corp., Ser. C, 7.25%, 2010 2,607,787
--------------------------------------------------------------------------------
MINING - 4.3%
Freeport-McMoRan Copper & Gold, Inc.
40,000 6.75%, 2010 (b) 2,690,000
2,050 5.50%, 2049 2,027,450
126,500 Vale Capital Ltd., Ser. RIO, 5.50%, 2010
(Brazil) (b) (d)4,428,765
--------------------------------------------------------------------------------
9,146,215
--------------------------------------------------------------------------------
PHARMACEUTICALS - 5.4%
8,030 Mylan, Inc., 6.50%, 2010 (b) 6,841,560
22,050 Schering-Plough Corp., 6.00%, 2010 4,657,842
--------------------------------------------------------------------------------
11,499,402
--------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.6%
2,869 Lucent Technologies Capital Trust I, 7.75%, 2017 1,164,814
--------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 28.1%
(Cost $66,393,164) 59,408,893
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
================================================================================
CORPORATE BONDS - 20.9%
BANKS - 1.6%
$ 4,300,000 Bank of America Corp., A
5.65%, 5/1/18 3,506,327
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 3.4%
4,200,000 American Express Co., BBB+
7.00%, 3/19/18 3,989,950
3,325,000 Axcan Intermediate Holdings, Inc., B
12.75%, 3/1/16 3,275,125
--------------------------------------------------------------------------------
7,265,075
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
================================================================================
HEALTHCARE-SERVICES - 1.8%
HCA , Inc., BB-
$ 2,750,000 8.50%, 4/15/19 (a) $ 2,780,938
HCA , Inc., BB
1,000,000 9.25%, 11/15/16 992,500
--------------------------------------------------------------------------------
3,773,438
--------------------------------------------------------------------------------
HOLDING COMPANIES-DIVERSIFIED - 2.0%
5,000,000 Leucadia National Corp., BB+
8.125%, 9/15/15 (d) 4,225,000
--------------------------------------------------------------------------------
HOUSEWARES - 1.7%
3,245,000 Newell Rubbermaid, Inc., BBB-
10.60%, 4/15/19 3,548,589
--------------------------------------------------------------------------------
IRON/STEEL - 1.0%
2,000,000 POSCO, A
8.75%, 3/26/14 (South Korea) (a) 2,128,544
--------------------------------------------------------------------------------
MINING - 1.8%
2,000,000 Anglo American Capital PLC, BBB
9.375%, 4/8/14 (United Kingdom) (a) 2,077,420
1,700,000 Freeport-McMoRan Copper & Gold, Inc., BBB-
8.375%, 4/1/17 1,668,363
--------------------------------------------------------------------------------
3,745,783
--------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - 1.9%
3,850,000 Ingersoll-Rand Global Holding Co. Ltd., BBB+
9.50%, 4/15/14 (Bermuda) 4,031,123
--------------------------------------------------------------------------------
OIL & GAS SERVICES- 0.8%
3,000,000 CCS, Inc., B-
11.00%, 11/15/15 (Canada) (a) 1,635,000
--------------------------------------------------------------------------------
TELECOMMUNICATIONS - 4.9%
3,500,000 CC Holdings GS V LLC/Crown Castle GS III Corp., BB
7.75%, 5/1/17 (a) 3,552,500
2,000,000 Centennial Communications Corp., CCC+
10.00%, 1/1/13 2,130,000
4,500,000 Intelsat Jackson Holdings Ltd., CCC+
11.25%, 6/15/16 (Bermuda) 4,623,750
--------------------------------------------------------------------------------
10,306,250
--------------------------------------------------------------------------------
TOTAL CORPORATE BONDS - 20.9%
(Cost $45,487,812) 44,165,129
--------------------------------------------------------------------------------
See notes to financial statements.
Semiannual Report | April 30, 2009 | 13
AGC | Advent/Claymore Global Convertible Securities & Income Fund | PORTFOLIO OF
INVESTMENTS (unaudited) continued
NUMBER OF
SHARES VALUE
================================================================================
EXCHANGE-TRADED FUNDS - 1.1%
23,930 ProShares UltraShort Dow30 $ 1,279,776
16,645 ProShares UltraShort S&P500 1,059,954
--------------------------------------------------------------------------------
(Cost $2,481,323) 2,339,730
--------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS - 162.8%
(Cost $346,202,493) 344,548,607
--------------------------------------------------------------------------------
MONEY MARKET FUNDS - 4.6%
2,420,000 Dreyfus Treasury & Agency Cash Management -
Investor Shares 2,420,000
7,209,377 Goldman Sachs Financial Prime Obligations 7,209,377
--------------------------------------------------------------------------------
(Cost $9,629,377) 9,629,377
--------------------------------------------------------------------------------
TOTAL INVESTMENTS - 167.4%
(Cost $355,831,870) 354,177,984
Total Options Written - (0.1%) (190,163)
Other Assets in excess of Liabilities - 13.0% 27,620,826
Preferred Stock, at redemption value -
(-80.3% of Net Assets
Applicable to Common Shareholders or -
48.0% of Total Investments) (170,000,000)
--------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS - 100.0% $211,608,647
================================================================================
LLC - Limited Liability Corp.
Ltd. - Limited
PLC - Public Limited Company
SA - Corporation
(a) Securities are 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. At April 30,
2009, these securities amounted to 15.2% of net assets.
(b) All or a portion of this security position represents cover (directly or
through conversion rights) for outstanding options written.
(c) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(d) All or a portion of these securities have been physically segregated in
connection with swap agreements.
(e) Floating rate security. The rate shown is as of April 30, 2009.
(f) Non-income producing security.
Ratings shown are per Standard & Poor's. Securities classified as NR are not
rated by Standard & Poor's.
All percentages shown in the Portfolio of Investments are based on Net Assets
Applicable to Common Shareholders unless otherwise noted.
CONTRACTS
(100 SHARES EXPIRATION EXERCISE MARKET
PER CONTRACT) CALL OPTIONS WRITTEN(f) DATE PRICE VALUE
-------------------------------------------------------------------------------------------------------
100 Akamai Technologies, Inc. May 2009 $ 22.50 $ 7,000
50 Amgen, Inc., A+, 0.125%, 2/1/11 May 2009 $ 50.00 3,800
75 Archer-Daniels-Midland Co., 6.25%, 2011 May 2009 $ 27.00 1,950
65 Beckman Coulter, Inc., BBB, 2.50%, 12/15/36 May 2009 $ 55.00 2,925
25 Beckman Coulter, Inc., BBB, 2.50%, 12/15/36 August 2009 $ 55.00 7,750
75 Beckman Coulter, Inc., BBB, 2.50%, 12/15/36 August 2009 $ 60.00 10,500
75 BRE Properties, Inc., BBB, 4.125%, 8/15/26 May 2009 $ 25.00 16,125
75 Carnival Corp., BBB+, 2.00%, 4/15/21 May 2009 $ 27.50 7,500
100 EMC Corp., A-, 1.75%, 12/1/11 May 2009 $ 13.00 2,900
100 Freeport-McMoRan Copper & Gold, Inc., 6.75%, 2010 May 2009 $ 46.00 8,400
50 Laboratory Corp. of America Holdings, BBB-,
0.00%, 9/11/21 May 2009 $ 65.00 5,500
125 Mylan, Inc., 6.50%, 2010 May 2009 $ 15.00 1,875
175 Newell Rubbermaid, Inc., BBB-, 5.50%, 3/15/14 May 2009 $ 7.50 50,750
75 Newmont Mining Corp., BBB+, 1.625%, 7/15/17 June 2009 $ 46.00 6,563
65 Reckson Operating Partnership LP/SL
Green Realty Corp., BB+, 4.00%, 6/15/25 May 2009 $ 17.50 14,625
125 Transocean, Inc., Ser. A, BBB+, 1.625%, 12/15/37 May 2009 $ 75.00 5,000
100 Vale Capital Ltd., Ser. RIO, 5.50%, 2010 May 2009 $ 17.00 5,400
175 Vale Capital Ltd., Ser. RIO, 5.50%, 2010 May 2009 $ 16.00 17,850
100 Vornado Realty Trust, BBB, 3.625%,
11/15/26 June 2009 $ 60.00 13,750
-------------------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS WRITTEN
(Premiums received $140,423) $ 190,163
-------------------------------------------------------------------------------------------------------
See notes to financial statements.
14 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Statement of ASSETS AND LIABILITIES | APRIL 30, 2009 (unaudited)
ASSETS
Investments in securities, at value (cost $355,831,870) $ 354,177,984
Receivable for securities sold 32,320,725
Restricted Cash 11,095,000
Cash 7,347,539
Dividends and interest receivable 3,423,271
Unrealized appreciation on forward currency exchange contracts 382,927
Receivable from swap counterparty 83,258
Other assets 131,835
----------------------------------------------------------------------------------------------------------------
Total assets 408,962,539
----------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for securities purchased 24,335,362
Custodian Bank 1,739,216
Unrealized depreciation on forward currency exchange contracts 242,791
Net unrealized depreciation on swaps 227,791
Options written, at value (premiums received of $140,423) 190,163
Investment management fee payable 185,220
Investment advisory fee payable 123,480
Offering costs payable 86,553
Payable to swap counterparty 25,844
Administration fee payable 7,369
Dividends payable - preferred shares 676
Accrued expenses and other liabilities 189,427
----------------------------------------------------------------------------------------------------------------
Total liabilities 27,353,892
----------------------------------------------------------------------------------------------------------------
PREFERRED STOCK, AT REDEMPTION VALUE
Auction Market Preferred Shares
$0.001 par value per share; 6,800 authorized, issued and outstanding at
$25,000 per share liquidation preference 170,000,000
----------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 211,608,647
================================================================================================================
COMPOSITION OF NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
Common Stock, $0.001 par value per share; unlimited number of shares
authorized, 31,867,616 shares issued and outstanding $ 31,868
Additional paid-in capital 591,419,380
Net unrealized appreciation on investments, options, swaps and foreign
currency translation 2,546,310
Accumulated net realized loss on investments, options, swaps and foreign
currency transactions (368,153,455)
Distributions in excess of net investment income (14,235,456)
----------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 211,608,647
================================================================================================================
NET ASSET VALUE APPLICABLE TO COMMON SHAREHOLDERS
(based on 31,867,616 common shares outstanding) $ 6.64
================================================================================================================
See notes to financial statements.
Semiannual Report | April 30, 2009 | 15
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Statement of OPERATIONS | FOR THE SIX MONTHS ENDED APRIL 30, 2009 (unaudited)
INVESTMENT INCOME
Interest $ 7,134,972
Dividends (net of foreign withholding taxes of $38,701) 4,871,300
----------------------------------------------------------------------------------------------------------------
Total income $12,006,272
----------------------------------------------------------------------------------------------------------------
EXPENSES
Management fee 1,106,066
Advisory fee 737,378
Auction agent fee - preferred shares 219,797
Professional fees 129,477
Trustees' fees and expenses 88,533
Fund accounting 58,456
Printing 53,207
Administration fee 44,307
Insurance 29,488
Custodian 29,326
NYSE listing fee 12,484
Rating agency fee 7,421
Transfer agent 6,813
Miscellaneous 8,495
----------------------------------------------------------------------------------------------------------------
Total expenses 2,531,248
----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 9,475,024
----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS, SWAPS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments (140,486,598)
Options 1,088,663
Swaps (37,073,869)
Foreign currency transactions 4,051,133
Net change in unrealized appreciation (depreciation) on:
Investments 149,787,961
Options 268,941
Swaps 26,594,728
Foreign currency translation (3,857,426)
----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS, OPTIONS SWAPS AND FOREIGN CURRENCY TRANSACTIONS 373,533
----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM NET INVESTMENT INCOME (1,524,928)
----------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS $ 8,323,629
================================================================================================================
* Commencement of investment operations.
See notes to financial statements.
16 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Statement of CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS |
FOR THE
SIX MONTHS ENDED FOR THE
APRIL 30, 2009 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2008
================================================================================================================
INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS:
Net investment income $ 9,475,024 $ 35,059,759
Net realized loss on investments, options, swaps and foreign currency
transactions (172,420,671) (191,396,664)
Net change in unrealized appreciation (depreciation) on investments,
options, swaps and foreign currency translation 172,794,204 (182,200,618)
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (1,524,928) (7,559,340)
----------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets applicable to Common
Shareholders resulting from operations 8,323,629 (346,096,863)
----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS:
From and in excess of net investment income (13,607,472) (40,370,050)
Return of Capital - (13,766,656)
----------------------------------------------------------------------------------------------------------------
Net realized gain on investments - -
Total increase/(decrease) in net assets (5,283,843) (400,233,569)
----------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
Beginning of period 216,892,490 617,126,059
----------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess of net investment
income $14,235,456 and $8,578,080, respectively) $ 211,608,647 $ 216,892,490
================================================================================================================
* Commencement of investment operations.
See notes to financial statements.
Semiannual Report | April 30, 2009 | 17
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Financial HIGHLIGHTS|
FOR THE FOR THE FOR THE PERIOD
SIX MONTHS ENDED YEAR ENDEDMAY 29, 2007(A)
PER SHARE OPERATING PERFORMANCE APRIL 30, 2009 OCTOBER 31, THROUGH
FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT THE PERIOD (UNAUDITED) 2008 OCTOBER 31, 2007
===================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.81 $ 19.37 $ 19.10(b)
-----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c) 0.30 1.10 0.42
Net realized and unrealized gain/(loss) on investments, options, swaps and
foreign currency transactions 0.01 (11.72) 0.44
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM NET INVESTMENT INCOME
(COMMON SHARE EQUIVALENT BASIS) (0.05) (0.24) (0.04)
-----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.26 (10.86) 0.82
-----------------------------------------------------------------------------------------------------------------------------------
Common and preferred shares' offering expenses charged to paid-in-capital - - (0.11)
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From and in excess of net investment income (0.43) (1.27) (0.44)
Return of capital - (0.43) -
-----------------------------------------------------------------------------------------------------------------------------------
(0.43) (1.70) (0.44)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 6.64 $ 6.81 $ 19.37
-----------------------------------------------------------------------------------------------------------------------------------
MARKET VALUE, END OF PERIOD $ 5.75 $ 5.99 $ 16.75
===================================================================================================================================
TOTAL INVESTMENT RETURN (d)
Net asset value 4.28% -60.31% 3.82%
Market value 3.83% -58.94% -14.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, applicable to Common Shareholders, end of period (thousands) $ 211,609 $ 216,892 $ 617,126
Preferred shares, at redemption value ($25,000 per share liquidation
preference) (thousands) $ 170,000 $ 170,000 $ 170,000
Preferred shares asset coverage per share $ 56,119 $ 56,955 $ 115,700
RATIOS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHARES:
Net Expenses, after balance credits 2.53%(e) 1.68% 1.33%(e)
Net Expenses, before balance credits 2.53%(e) 1.68% 1.35%(e)
Net Investment Income, after balance credits, prior to effect of
dividends to preferred shares 9.47%(e) 7.47% 5.22%(e)
Net Investment Income, before balance credits, prior to effect of
dividends to preferred shares 9.47%(e) 7.47% 5.20%(e)
Net Investment Income, after balance credits, after effect of
dividends to preferred shares 7.95%(e) 5.86% 4.70%(e)
Net Investment Income, before balance credits, after effect of
dividends to preferred shares 7.95%(e) 5.86% 4.68%(e)
RATIOS TO AVERAGE MANAGED ASSETS: (f)
Net Expenses, after balance credits 1.37%(e) 1.23% 1.22%(e)
Net Expenses, before balance credits 1.37%(e) 1.23% 1.24%(e)
Net Investment Income, after balance credits, prior to effect of
dividends to preferred shares 5.14%(e) 5.48% 4.79%(e)
Net Investment Income, before balance credits, prior to effect of
dividends to preferred shares 5.14%(e) 5.48% 4.77%(e)
Portfolio turnover rate 71% 118% 35%
(a) Commencement of investment operations.
(b) Before reimbursement of offering expenses charged to capital during the
period.
(c) Based on average shares outstanding during the period.
(d) Total investment return is calculated assuming a purchase of a common share
at the beginning of the period and a sale on the last day of the period
reported either at net asset value ("NAV") or market price per share.
Dividends and distributions are assumed to be reinvested at NAV for NAV
returns or the prices obtained under the Fund's Dividend Reinvestment Plan
for market value returns. Total investment return does not reflect
brokerage commissions. A return calculated for a period of less than one
year is not annualized.
(e) Annualized.
(f) Managed assets is equal to net assets applicable to common shareholders
plus outstanding leverage such as the liquidation value of preferred
shares.
See notes to financial statements.
18 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Notes to FINANCIAL STATEMENTS | APRIL 30, 2009 (unaudited)
Note 1 - ORGANIZATION:
Advent/Claymore Global Convertible Securities & Income Fund (the "Fund") was
organized as a Delaware statutory trust on February 26, 2007. The Fund is
registered as a diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended.
The Fund's primary investment objective is to provide total return, through a
combination of capital appreciation and current income. The Fund will pursue its
investment objective by investing 80% of its assets in a diversified portfolio
of convertible securities and non-convertible income-producing securities, each
of U.S. and non-U.S. issuers.
Note 2 - ACCOUNTING POLICIES:
The preparation of the financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates.
The following is a summary of significant accounting policies followed by the
Fund.
(a) VALUATION OF INVESTMENTS
Equity securities listed on an exchange are valued at the last reported sale
price on the primary exchange on which they are traded. Equity securities traded
on an exchange for which there are no transactions on a given day are valued at
the mean of the closing bid and asked prices. Securities traded on NASDAQ are
valued at the NASDAQ Official Closing Price. Equity securities not listed on a
securities exchange or NASDAQ are valued at the mean of the closing bid and
asked prices. Debt securities are valued by independent pricing services or
dealers using the mean of the closing bid and asked prices for such securities
or, if such prices are not available, at prices for securities of comparable
maturity, quality and type. Futures contracts are valued using the settlement
price established each day on the exchange on which they are traded.
Exchange-traded options are valued at the closing price, if traded that day. If
not traded, they are valued at the mean of the bid and asked prices on the
primary exchange on which they are traded. For those securities where quotations
or prices are not available, valuations are determined in accordance with
procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market value.
The Fund values synthetic convertible securities based on quotations obtained
from unaffiliated brokers who are the principal market-makers in such
securities. Such valuations are derived by the brokers from proprietary models
which are generally based on readily available market information including
valuations of the common stock underlying the synthetic security, and the
volatility observed in the market on such common stocks. Because of the inherent
uncertainty in the valuation process, it is reasonably possible that the
estimated values may differ from the values that would have been used had a more
active market for the investments existed, and such differences could be
material. As of April 30, 2009, the Fund did not hold synthetic convertible
securities.
In September, 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 157, "Fair Valuation
Measurements" ("FAS 157"). This standard clarifies the definition of fair value
for financial reporting, establishes a framework for measuring fair value and
requires additional disclosures about the use of fair value measurements. FAS
157 establishes three different categories for valuations. Level 1 valuations
are those based upon quoted prices in active markets. Level 2 valuations are
those based upon quoted prices in inactive markets or based upon significant
observable inputs (e.g. yield curves; benchmark interest rates; indices). Level
3 valuations are those based upon unobservable inputs (e.g. discounted cash flow
analysis; non-market based methods used to determine fair valuation). Details of
the valuations as of April 30, 2009 were as follows:
VALUATIONS AT APRIL 30, 2009
(VALUE IN $000S) SECURITIES DERIVATIVES TOTAL
================================================================================
Assets:
Level 1 $ 71,378 $ - $ 71,378
Level 2 282,800 383 283,183
Level 3 -
--------------------------------------------------------------------------------
Total $ 354,178 $ 383 $ 354,561
================================================================================
Liabilities:
Level 1 $ - $ 190 $ 190
Level 2 - 471 471
Level 3 - - -
--------------------------------------------------------------------------------
Total $ - $ 661 $ 661
================================================================================
(b) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized gains and
losses on investments are determined on the identified cost basis. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Discounts or premiums on debt securities purchased are accreted
or amortized to interest income over the lives of the respective securities
using the effective interest method.
Semiannual Report | April 30, 2009 | 19
AGC | Advent/Claymore Global Convertible Securities & Income Fund l NOTES TO
FINANCIAL STATEMENTS (unaudited) continued
(c) CURRENCY TRANSLATION Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars at the mean of the bid and asked
price of respective exchange rates on the last day of the period. Purchases and
sales of investments denominated in foreign currencies are translated at the
exchange rate on the date of the transaction.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Foreign exchange realized gain or loss resulting from holding of a foreign
currency, expiration of a currency exchange contract, difference in exchange
rates between the trade date and settlement date of an investment purchased or
sold, and the difference between dividends or interest actually received
compared to the amount shown in a Fund's accounting records on the date of
receipt is shown as net realized gains or losses on foreign currency
transactions in the Fund's Statement of Operations.
Foreign exchange unrealized gain or loss on assets and liabilities, other than
investments, is shown as unrealized appreciation (depreciation) on foreign
currency translation in the Fund's Statement of Operations.
(D) COVERED CALL OPTIONS
The Fund will pursue its primary objective by employing an option strategy of
writing (selling) covered call options on up to 25% of the securities held in
the portfolio of the Fund. The Fund seeks to generate current gains from option
premiums as a means to enhance distributions payable to shareholders.
An option on a security is a contract that gives the holder of the option, in
return for a premium, the right to buy from (in the case of a call) or sell to
(in the case of a put) the writer of the option the security underlying the
option at a specified exercise or "strike" price. The writer of an option on a
security has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price (in the case of a call)
or to pay the exercise price upon delivery of the underlying security (in the
case of a put).
There are several risks associated with transactions in options on securities.
As the writer of a covered call option, the Fund forgoes, during the option's
life, the opportunity to profit from increases in the market value of the
security covering the call option above the sum of the premium and the strike
price of the call, but has retained the risk of loss should the price of the
underlying security decline. The writer of an option has no control over the
time when it may be required to fulfill its obligation as writer of the option.
Once an option writer has received an exercise notice, it cannot effect a
closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying security at the exercise price.
When an option is written, the premium received is recorded as an asset with an
equal liability and is subsequently marked to market to reflect the current
market value of the option written. These liabilities are reflected as options
written in the Statement of Assets and Liabilities. Premiums received from
writing options which expire unexercised are recorded on the expiration date as
a realized gain. The difference between the premium received and the amount paid
on effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transactions, as a realized loss. If a call option is
exercised; the premium is added to the proceeds from the sale of the underlying
security in determining whether there has been a realized gain or loss.
(E) FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchases and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss arising
from the difference between the original contracts and the closing of such
contracts would be included in net realized gain or loss on foreign currency
transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Fund.
Risk may arise from the potential inability of a counterparty to meet the terms
of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, reflects the total exposure the Fund has in that particular currency
contract. Forward exchange currency contracts involve elements of both market
and credit risk in excess of the amounts reflected on the Statement of Assets
and Liabilities.
(F) SWAPS
A swap is an agreement to exchange the return generated by one instrument for
the return generated by another instrument. The Fund may enter into swap
agreements to manage its exposure to interest rates and/or credit risk as well
as to attempt to enhance return. Total return swap agreements are contracts in
which one party agrees to make payments of the total return from the underlying
asset during a specified period in return for receiving payments equal to a
fixed or floating rate of interest or the total return from another designated
underlying asset. The swaps are valued daily at current market value and any
unrealized gain or loss is included in the Statement of Assets and Liabilities.
Gain or loss is realized on the termination date of the swap and is equal to the
difference between the Fund's basis in the swap and the proceeds of the closing
transaction, including any fees. During the period that the swap agreement is
open, the Fund may be subject to risk from the potential inability of the
counterparty to meet the terms of the agreement. The swaps involve elements of
both market and credit risk in excess of the
20 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund | NOTES TO
FINANCIAL STATEMENTS (unaudited) continued
amounts reflected on the Statement of Assets and Liabilities. Upon termination
of a swap agreement, a payable to or receivable from swap counterparty is
established on the Statement of Assets and Liabilities to reflect the net
gain/loss, including interest income/expense, on terminated swap positions. This
line item is removed upon settlement according to the terms of the swap
agreement.
Credit default swap transactions involve the Fund's agreement to exchange the
credit risk of an issuer. A buyer of a credit default swap is said to buy
protection by paying periodic fees in return for a contingent payment from the
seller if the issuer has a credit event such as bankruptcy, a failure to pay
outstanding obligations or deteriorating credit while the swap is outstanding. A
seller of a credit default swap is said to sell protection and thus collects the
periodic fees and profits if the credit of the issuer remains stable or improves
while the swap is outstanding but the seller in a credit default swap contract
would be required to pay an agreed-upon amount, which approximates the notional
amount of the swap as disclosed in Note 5, to the buyer in the event of an
adverse credit event of the issuer.
Realized gain (loss) upon termination of swap contracts is recorded on the
Statement of Operations. Fluctuations in the value of swap contracts are
recorded as a component of net change in unrealized appreciation (depreciation)
of swap contracts. Net periodic payments received by the Fund are included as
part of realized gains (losses) and, in the case of accruals for periodic
payments, are included as part of unrealized appreciation (depreciation) on the
Statement of Operations.
(g) DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and pays monthly dividends to common shareholders. These
dividends consist of investment company taxable income, which generally includes
qualified dividend income, ordinary income and short-term capital gains. Any net
realized long-term gains are distributed annually to common shareholders.
Distributions to shareholders are recorded on the ex-dividend date. The amount
and timing of distributions are determined in accordance with federal income tax
regulations, which may differ from U.S. generally accepted accounting
principles.
Note 3 - INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS AND OTHER AGREEMENTS:
Pursuant to an Investment Advisory Agreement (the "Agreement") between Claymore
Advisors, LLC (the "Adviser") and the Fund, the Adviser furnishes offices,
necessary facilities and equipment, provides administrative services to the
Fund, oversees the activities of Advent Capital Management, LLC (the "Investment
Manager"), provides personnel and pays the compensation of all Trustees and
Officers of the Fund who are its affiliates. As compensation for these services,
the Fund pays the Adviser an annual fee, payable monthly in arrears, at an
annual rate equal to 0.40% of the average Managed Assets during such month.
Managed Assets means the total of assets of the Fund (including any assets
attributable to any preferred shares or otherwise attributable to the use of
financial leverage, if any) less the sum of accrued liabilities.
Pursuant to an Investment Management Agreement between the Investment Manager
and the Fund, the Fund has agreed to pay the Investment Manager an annual fee,
payable monthly in arrears, at an annual rate equal to 0.60% of the average
Managed Assets during such month for the services and facilities provided by the
Investment Manager to the Fund. These services include the day-to-day management
of the Fund's portfolio of securities, which includes buying and selling
securities for the Fund and investment research. The Investment Manager also
provides personnel to the Fund and pays the compensation of all Trustees and
Officers of the Fund who are its affiliates.
The Bank of New York Mellon ("BNY") acts as the Fund's custodian, accounting
agent, auction agent and transfer agent. As custodian, BNY is responsible for
the custody of the Fund's assets. As accounting agent, BNY is responsible for
maintaining the books and records of the Fund's securities and cash. As auction
agent, BNY is responsible for conducting the auction of the preferred shares. As
transfer agent, BNY is responsible for performing transfer agency services for
the Fund.
Claymore Advisors, LLC provides Fund Administration services to the Fund. As
compensation for its services performed under the Administration Agreement,
Claymore Advisors, LLC receives an administration fee payable monthly at the
annual rate set forth below as a percentage of the average daily managed assets
of the Fund:
MANAGED ASSETS RATE
=================================================================
First $200,000,000 0.0275%
Next $300,000,000 0.0200%
Next $500,000,000 0.0150%
Over $1,000,000,000 0.0100%
Certain Officers and Trustees of the Fund are also Officers and Directors of the
Adviser or Investment Manager. The Fund does not compensate its Officers or
Trustees who are Officers of the aforementioned firms.
Note 4 - FEDERAL INCOME TAXES:
The Fund intends to continue to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies. Accordingly, no provision for U.S. federal income taxes is
required. In addition, by distributing substantially all of its ordinary income
and long-term capital gains, if any, during each calendar year, the Fund intends
not to be subject to U.S. federal excise tax.
Semiannual Report | April 30, 2009 | 21
AGC | Advent/Claymore Global Convertible Securities & Income Fund | NOTES TO
FINANCIAL STATEMENTS (unaudited) continued
At April 30, 2009, the cost and related gross unrealized appreciation and
depreciation on investments for tax purposes, excluding written options and
foreign currency translations are as follows:
NET TAX
NET TAX UNREALIZED
COST OF UNREALIZED DEPRECIATION
INVESTMENTS GROSS TAX GROSS TAX DEPRECIATION ON DERIVATIVES
FOR TAX UNREALIZED UNREALIZED ON AND FOREIGN
PURPOSES APPRECIATION DEPRECIATION INVESTMENTS CURRENCY
================================================================================
$355,588,081 $21,693,479 $(23,103,576) $(1,410,097) $(132,042)
The differences between book basis and tax basis unrealized
appreciation/(depreciation) is attributable to the tax deferral of losses on
wash sales and the difference in the treatment for book and tax purposes of
certain convertible securities and Canadian income trusts.
As of October 31, 2008, the components of accumulated earnings/(loss) (excluding
paid-in-capital) on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM
INCOME/ GAINS/
(ACCUMULATED (ACCUMULATED
ORDINARY LOSS) CAPITAL LOSS)
================================================================================
$0 $(195,492,270)
At October 31, 2008, for federal income tax purposes, the Fund had a capital
loss carryforward of $195,492,270 available to offset possible future capital
gains. The capital loss carryforward is set to expire on October 31, 2016.
For the year ended October 31, 2008, the tax character of distributions paid, as
reflected in the Statement of Changes in Net Assets of $47,929,390 was ordinary
income and $13,766,656 was return of capital.
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No.48, "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Fund's tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. Management
has evaluated the implication of FIN 48 and has determined it does not have any
impact on the financial statements as of April 30, 2009.There is no tax
liability resulting from unrecognized tax benefits relating to uncertain income
tax positions taken or expected to be taken on the tax return for the fiscal
year-end October 31, 2008.The Fund is also not aware of any tax positions for
which it is reasonably possible that the total amounts of unrecognized tax
benefits will significantly change in the next twelve months.
FIN 48 requires the Fund to analyze all open tax years. Open tax years are those
years that are open for examination by the relevant income taxing authority. As
of April 30, 2009, open Federal and state income tax years include the tax years
ended October 31, 2007 and 2008.The Fund has no examination in progress.
Note 5 - INVESTMENTS IN SECURITIES:
For the six months ended April 30, 2009, purchases and sales of investments,
other than short-term securities, were $269,154,128 and $218,012,560
respectively.
The Fund entered into credit default swap agreements during the six months ended
April 30, 2009 to potentially enhance return. Details of the swap agreements
outstanding as of April 30, 2009 are as follows:
NOTIONAL UNREALIZED
BUY/SELL TERMINATION AMOUNT PAYING APPRECIATION/
COUNTERPARTY REFERENCE ENTITY PROTECTION DATE (000) FIXED RATE (DEPRECIATION)
=============================================================================================================================
Citibank NA Burlington Northern Santa Fe Buy 06/20/2014 $ 1,250 1.00% $ (17,062)
Citibank NA CSX Corp. Buy 06/20/2014 2,500 1.00% (79,635)
Citibank NA Home Depot, Inc. Buy 06/20/2014 2,050 1.00% (44,494)
JPMorgan Chase & Co. LVMH Moet Hennessy Louis Vuitton Buy 03/20/2014 3,000 1.45% (86,600)
-----------------------------------------------------------------------------------------------------------------------------
$ 8,800 $ (227,791)
=============================================================================================================================
For each swap noted, the Fund pays the fixed rate. The market value of the swaps
outstanding reflects the current payable for the underlying asset.
The Fund entered into written option contracts for the six months ended April
30, 2009.
22 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund | NOTES TO
FINANCIAL STATEMENTS (unaudited) continued
Details of the transactions were as follows:
NUMBER OF CONTRACTS PREMIUMS RECEIVED
================================================================================
Options outstanding, beginning of year 5,722 $ 778,779
Options written during the period 16,095 1,503,475
Options expired during the period (8,817) (907,258)
Options closed during the period (9,714) (920,558)
Options assigned during the period (1,556) (314,015)
--------------------------------------------------------------------------------
Options outstanding, end of period 1,730 $ 140,423
================================================================================
Note 6 - DERIVATIVES:
At April 30, 2009, the following forward exchange currency contracts were
outstanding:
UNREALIZED
APPRECIATION/
LONG CONTRACTS CURRENT VALUE (DEPRECIATION)
================================================================================
Canadian Dollar, 3,250,000 expiring 6/17/09 $ 2,736,257 $ 79,063
Euro, 9,000,000 expiring 6/17/09 11,923,534 (86,966)
Japanese Yen, 44,000,000 expiring 6/17/09 447,557 (462)
Swiss Franc, 10,400,000 expiring 6/17/09 9,138,038 (12,864)
--------------------------------------------------------------------------------
$ (21,229)
--------------------------------------------------------------------------------
UNREALIZED
APPRECIATION/
SHORT CONTRACTS CURRENT VALUE (DEPRECIATION)
================================================================================
Canadian Dollar, 4,969,060 expiring
5/04/09 to 6/17/09 $ 4,183,155 $ (142,499)
Euro, 10,530,854 expiring 5/05/09 to 6/17/09 13,952,069 178,312
Japanese Yen, 403,800,000 expiring 6/17/09 4,107,356 95,268
Swiss Franc, 12,122,604 expiring 5/05/09
to 6/17/09 10,650,487 30,284
--------------------------------------------------------------------------------
$ 161,365
--------------------------------------------------------------------------------
Note 7 - CAPITAL:
COMMON SHARES
The Fund has an unlimited number of common shares, $0.001 par value, authorized
and 31,867,616 issued and outstanding. In connection with the Fund's dividend
reinvestment plan, the Fund did not issue shares during the six months ended
April 30, 2009, or the year ended October 31, 2008.
PREFERRED SHARES
On June 12, 2007, the Fund's Board of Trustees authorized the issuance of
Preferred Shares, as part of the Fund's leverage strategy. Preferred Shares
issued by the Fund have seniority over the common shares.
On September 14, 2007, the Fund issued 3,400 shares of Preferred Shares Series
T7 and 3,400 shares of Preferred Shares Series W7, each with a liquidation value
of $25,000 per share plus accrued dividends.
Offering costs, including the 1% sales charge associated with the issuance of
preferred shares, estimated at $2,100,000 were borne by the common shareholders
as a direct reduction to paid-in-capital.
Dividends are accumulated daily at a rate set through an auction process and are
paid monthly. Distributions of net realized capital gains, if any, are made
annually. The broad auction-rate preferred securities market, including the
Fund's AMPS, has experienced considerable disruption since mid-February, 2008.
The result has been failed auctions on nearly all auction-rate preferred shares,
including the Fund's AMPS. A failed auction is not a default, nor does it
require the redemption of the Fund's AMPS.
Provisions in the AMPS offering documents establish a maximum rate in the event
of a failed auction. The AMPS reference rate is the LIBOR Rate for a dividend
period of fewer than 365 days. The maximum rate, for auctions for which the Fund
has not given notice that the auction will consist of net capital gains or other
taxable income, is the higher of the reference rate times 125% or the reference
rate plus 1.25%. Distributions of net realized gains, if any, are made annually.
Semiannual Report | April 30, 2009 | 23
AGC | Advent/Claymore Global Convertible Securities & Income Fund | NOTES TO
FINANCIAL STATEMENTS (unaudited) continued
for the six months ended April 30, 2009, the annualized dividend rates ranged
from:
HIGH LOW AT APRIL 30, 2009
================================================================================
Series T7 3.34% 1.49% 1.58%
Series W7 3.27% 1.48% 1.58%
The Fund is subject to certain limitations and restrictions while Preferred
Shares are outstanding. Failure to comply with these limitations and
restrictions could preclude the Fund from declaring any dividends or
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption on Preferred Shares at their liquidation value.
Preferred Shares, which are entitled to one vote per share, generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.
Note 8 - INDEMNIFICATIONS:
In the normal course of business, the Fund enters into contracts that contain a
variety of representations, which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown, as this would involve
future claims that may be made against the Fund that have not yet occurred.
However, the Fund expects the risk of loss to be remote.
Note 9 - SUBSEQUENT EVENT:
Subsequent to April 30, 2009, the Fund declared on May 1, 2009, a monthly
dividend to common shareholders of $0.0664 per common share. The dividend is
payable on May 29, 2009 to shareholders of record on May 15, 2009.
On June 1, 2009, the Fund declared a monthly dividend to common shareholders of
$0.0664 per common share. The dividend is payable on June 30, 2009 to
shareholders of record on June 15, 2009.
Note 10- ACCOUNTING PRONOUNCEMENTS:
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivatives instruments and related hedge fund
items are accounted for, and c) how derivative instruments and related hedge
items affect a fund's financial position, results of operations and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. In September 2008, the FASB
issued a Staff Position amending SFAs No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The amendment would require disclosures by
seller of credit derivatives, including credit derivatives embedded in hybrid
instrument. The amendment is effective for financial statements issued for
fiscal years and interim periods ending after November 15, 2008. As of April 30,
2009, management does not believe the adoption of SFAS No. 161 nor amendment
SFAS No. 133 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" (FSP 157-4). FSP
157-4 provides guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP 157-4
requires disclosure in interim and annual periods of the inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques. FSP 157-4 is effective for interim and annual reporting periods
ending after June 15, 2009. The adoption of FSP 157-4 is not expected to have a
significant impact on these financial statements.
24 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Supplemental INFORMATION | (unaudited)
FEDERAL INCOME TAX INFORMATION
In January 2010, you will be advised on IRS Form 1099 DIV or substitute 1099 DIV
as to the federal tax status of the distributions received by you in the
calendar year 2009.
TRUSTEES
The Trustees of the Advent/Claymore Global Convertible Securities & Income Fund
and their principal occupations during the past five years:
NUMBER OF
NAME, ADDRESS, YEAR OF TERM OF OFFICE* PRINCIPAL OCCUPATIONS DURING FUNDS IN
BIRTH AND POSITION(S) AND LENGTH OF THE PAST FIVE YEARS AND FUND COMPLEX** OTHER DIRECTORSHIPS
HELD WITH REGISTRANT TIME SERVED OTHER AFFILIATIONS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
===================================================================================================================================
INDEPENDENT TRUSTEES:
===================================================================================================================================
Daniel Black+ Since 2007 Partner, the Wicks Group of Cos., 3 Director of Penn
Year of birth: 1960 LLC (2003-present). Formerly, Managing Foster Education
Trustee Director and Co-head of the Merchant Group, Inc.
Banking Group at BNY Capital Markets,
a division of The Bank of New York Co.,
Inc. (1998-2003).
-----------------------------------------------------------------------------------------------------------------------------------
Randall C. Barnes++ Since 2007 Private Investor (2001-present). 44 None.
Year of birth: 1951 Formerly, Senior Vice President,
Trustee Treasurer, PepsiCo, Inc.. (1993-1997),
President, Pizza Hut International
(1991-1993) and Senior Vice President,
Strategic Planning and New Business
Development (1987-1990) of PepsiCo, Inc.
(1987-1997)
-----------------------------------------------------------------------------------------------------------------------------------
Derek Medina+ Since 2007 Senior Vice President, Business Affairs 3 Director of Young
Year of birth: 1966 at ABC News (2008-present), Vice Scholars' Institute.
Trustee President, Business Affairs and News
Planning at ABC News (2003-present).
Formerly, Executive Director, Office of
the President at ABC News (2000-2003).
Former Associate at Cleary Gottlieb Steen
& Hamilton (law firm) (1995-1998). Former
associate in Corporate Finance at J.P.
Morgan/ Morgan Guaranty (1988-1990).
-----------------------------------------------------------------------------------------------------------------------------------
Ronald A. Nyberg++ Since 2007 Principal of Nyberg & Cassioppi, 47 None.
Year of birth: 1953 LLC., a law firm specializing in
Trustee corporate law, estate planning and
business transactions (2000-present).
Formerly, Executive Vice President,
General Counsel and Corporate Secretary
of Van Kampen Investments (1982-1999).
-----------------------------------------------------------------------------------------------------------------------------------
Gerald L. Seizert, CFP+ Since 2007 Chief Executive Officer of Seizert 3 Former Director of
Year of birth: 1952 Capital Partners, LLC, where he directs Loomis, Sayles and
Trustee the equity disciplines of the firm and Co., L.P.
serves as a co-manager of the firmhedge
fund, Proper Associates, LLC (2000-present).
Formerly, Co-Chief Executive (1998-1999)
and a Managing Partner and Chief Investment
Officer- Equities of Munder Capital
Management, LLC (1995-1999). Former Vice
President and Portfolio Manager of Loomis,
Sayles & Co., L.P. (asset manager)
(1984-1995). Former Vice President and
Portfolio Manager at First of America
Bank (1978-1984).
-----------------------------------------------------------------------------------------------------------------------------------
Michael A. Smart+ Since 2007 Managing Partner, Cordova, Smart & 3 Director, Country Pure
Year of birth: 1960 Williams, LLC, Advisor First Atlantic Foods. Chairman, Board
Trustee Capital Ltd., (2001-present). Formerly, of Directors,
a Managing Director in Investment Berkshire Blanket,
Banking-The Private Equity Group Inc. President and
(1995-2001) and a Vice President in Chairman, Board of
Investment Banking-Corporate Finance Directors, Sqwincher
(1992-1995) at Merrill Lynch & Co. Holdings. Director,
Founding Partner of The Carpediem Group, Sprint Industrial
(1991-1992). Associate at Dillon, Read Holdings. Co-chairman,
and Co. (investment bank) (1988-1990). Board of Directors,
H2O Plus.
-----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES:
===================================================================================================================================
Tracy V. Maitland+O Since 2007 President of Advent Capital 3 None.
Year of birth: 1960 Management, LLC, which he founded
Trustee, President and in 1995. Prior to June, 2001,
Chief Executive Officer President of Advent Capital Management,
a division of Utendahl Capital.
-----------------------------------------------------------------------------------------------------------------------------------
Nicholas Dalmaso++OO Since 2007 Attorney. Formerly, Senior Managing 46 None.
Year of birth: 1965 Director and Chief Administrative
Trustee Officer (2007-2008) and General Counsel
(2001-2007) of Claymore Advisors, LLC
and Claymore Securities, Inc. Formerly,
Assistant General Counsel, John Nuveen
and Co., Inc. (1999-2000). Former Vice
President and Associate General Counsel
of Van Kampen Investments, Inc. (1992-1999).
-----------------------------------------------------------------------------------------------------------------------------------
+ Address for all Trustees noted: 1065 Avenue of the Americas, 31st Floor,
New York, NY 10018.
++ Address for all Trustees noted: 2455 Corporate West Drive, Lisle, IL 60532.
* After a Trustee's initial term, each Trustee is expected to serve a
three-year term concurrent with the class of Trustees for which he serves:
-Messrs. Seizert, Medina and Barnes, as Class I Trustees, are expected
to stand for re-election at the Fund's 2010 annual meeting of
shareholders.
-Messrs. Smart, Nyberg and Black, as Class II Trustees, are expected to
stand for re-election at the Fund's 2011 annual meeting of
shareholders.
-Messrs. Maitland and Dalmaso, as Class III Trustees, are expected to
stand for re-election at the Fund's 2009 annual meeting of
shareholders.
** The Claymore Fund Complex consists of U.S. registered investment companies
advised or serviced by Claymore Advisors, LLC or Claymore Securities, Inc.
The Claymore Fund Complex is overseen by multiple Boards of Trustees.
O Mr. Maitland is an "interested person" (as defined in section 2(a)(19) of
the 1940 Act) of the Fund because of his position as an officer of Advent
Capital Management, LLC, the Fund's Investment Manager.
OO Mr. Dalmaso is an "interested person" (as defined in section 2(a)(19) of
the 1940 Act) of the Fund as a result of his former position as an officer
of the Adviser and certain of its affiliated and his equity ownership of
the Adviser and certain of its affiliates.
Semiannual Report | April 30, 2009 | 25
AGC | Advent/Claymore Global Convertible Securities & Income Fund |
SUPPLEMENTAL INFORMATION (unaudited) continued
OFFICERS
The Officers of the Advent/Claymore Global Convertible Securities & Income Fund
and their principal occupations during the past five years:
NAME, ADDRESS*, YEAR OF BIRTH AND TERM OF OFFICE** AND PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
POSITION(S) HELD WITH REGISTRANT LENGTH OF TIME SERVED AND OTHER AFFILIATIONS
===================================================================================================================================
OFFICERS:
===================================================================================================================================
F. Barry Nelson Since 2007 Co-Portfolio Manager at Advent Capital Management, LLC
Year of birth: 1943 (2001-present). Prior to June 2001, Mr. Nelson held the same
Vice President and position at Advent Capital Management, a division of Utendahl
Assistant Secretary Capital.
-----------------------------------------------------------------------------------------------------------------------------------
Robert White Since 2007 Chief Financial Officer, Advent Capital Management, LLC
Year of birth: 1965 (2005-present). Previously, Vice President, Client Service
Treasurer and Manager, Goldman Sachs Prime Brokerage (1997-2005).
Chief Financial Officer
-----------------------------------------------------------------------------------------------------------------------------------
Rodd Baxter Since 2007 General Counsel, Advent Capital Management, LLC (2002-present).
Year of birth: 1950 Formerly, Director and Senior Counsel, SG Cowen Securities
Secretary and Corp. (1998-2002).
Chief Compliance Officer
-----------------------------------------------------------------------------------------------------------------------------------
* Address for all Officers: 1065 Avenue of the Americas, 31st Floor, New
York, NY 10018
** Officers serve at the pleasure of the Board of Trustees and until his or
her successor is appointed and qualified or until his or her earlier
resignation or removal.
26 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Dividend Reinvestment PLAN |(unaudited)
Unless the registered owner of common shares elects to receive cash by
contacting the Plan Administrator, all dividends declared on common shares of
the Fund will be automatically reinvested by The Bank of New York Mellon (the
"Plan Administrator"), Administrator for shareholders in the Fund's Dividend
Reinvestment Plan (the "Plan"), in additional common shares of the Fund.
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 of
the Fund for you. If you wish for all dividends declared on your common shares
of the Fund 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 the 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 the
Fund ("Newly Issued Common Shares") or (ii) by purchase of outstanding common
shares on the open market ("Open-Market Purchases") on the New York Stock
Exchange or elsewhere. If, on the payment date for any Dividend, the closing
market price plus estimated brokerage commission 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 commission, the Plan
Administrator will invest the Dividend amount in common shares acquired on
behalf of the participants 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 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 instruction of the participants.
There will be no brokerage charges with respect to common shares issued directly
by the Fund. However, each participant will pay a pro rata share of brokerage
commission 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.
The 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,
the 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, BNY Mellon Shareowner Services, P.O. Box 358015, Pittsburgh,
PA 15252-8015, Attention: Shareholder Services Department, Phone Number: (866)
488-3559.
Semiannual Report | April 30, 2009 | 27
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Investment Management Agreement and
INVESTMENT ADVISORY AGREEMENT RE-APPROVAL |(unaudited)
Section 15(c) of the Investment Company Act of 1940, as amended (the "1940 Act")
contemplates that the Board of Trustees (the "Board") of Advent/Claymore Global
Convertible Securities & Income Fund (the "Fund"), including a majority of the
Trustees who have no direct or indirect interest in the investment management
agreement and the investment advisory agreement and are not "interested persons"
of the Fund, as defined in the 1940 Act (the "Independent Trustees"), is
required to annually review and re-approve the terms of the Fund's existing
investment management agreement and investment advisory agreement and approve
any newly proposed terms therein. In this regard, the Board reviewed and
re-approved, during the most recent six month period covered by this report, the
investment management agreement (the "Management Agreement") with Advent Capital
Management, LLC ("Advent") and the investment advisory agreement (the "Advisory
Agreement") with Claymore Advisors, LLC ("Claymore"), for the Fund.
More specifically, at a meeting held on March 31, 2009, the Board, including the
Independent Trustees advised by their independent legal counsel, considered the
factors and reached the conclusions described below relating to the re-approval
of the Management Agreement and the Advisory Agreement, respectively.
NATURE, EXTENT AND QUALITY OF SERVICES
The Board received and considered various data and information regarding the
nature, extent and quality of services provided to the Fund by Advent and
Claymore under the Management Agreement and Advisory Agreement. The Board
reviewed and analyzed the responses of Advent and Claymore to a detailed series
of requests submitted by the Independent Trustees' independent legal counsel on
behalf of such Trustees which included, among other things, information about
the background and experience of the senior management and the expertise of, and
amount of attention devoted to the Fund by, personnel of Advent and Claymore. In
this regard, the Board specifically reviewed the qualifications, background and
responsibilities of the officers primarily responsible for day-to-day portfolio
management services for the Fund.
The Board evaluated the ability of Advent and Claymore, including their
resources, reputation and other attributes, to attract and retain highly
qualified investment professionals, including research, advisory and supervisory
personnel. In this connection, the Board considered information regarding the
compensation structures for the personnel of Advent involved in the management
of the Fund and the personnel of Claymore involved in the management of the
Fund.
Based on the above factors, together with those referenced below, the Board
concluded that it was satisfied with the nature, extent and quality of the
investment management and advisory services provided to the Fund by Advent and
Claymore.
FUND PERFORMANCE AND EXPENSES
The Board considered the performance results for the Fund on a market price and
net asset value basis over various time periods. They also considered these
results in comparison to the performance results of a group of other closed-end
funds that was determined to be the most similar to the Fund in terms of
investment strategy ("Peer Group").
The Board received and considered statistical information regarding the Fund's
total expense ratios (based on net assets applicable to common shares) and their
various components. The Board also considered comparisons of these expenses to
the expense information for the Fund's Peer Group.
Based on the above-referenced considerations and other factors, the Board
concluded that the overall performance results and expense comparison supported
the re-approval of the Management Agreement and Advisory Agreement of the Fund.
INVESTMENT MANAGEMENT FEE RATES
The Board reviewed and considered the contractual investment management fee rate
and the investment advisory fee rate for the Fund (collectively, the "Management
Agreement Rates") payable by the Fund to Advent and Claymore for investment
management and advisory services respectively. In addition, the Board reviewed
and considered all fee waiver arrangements applicable to the Management
Agreement Rates and considered the Management Agreement Rates after taking all
applicable waivers into account (the "Net Management Rates").
Additionally, the Board received and considered information comparing the
Management Agreement Rates (on a stand-alone basis exclusive of service
fee/administrative fee rates) with those of the other funds in the relevant Peer
Group. The advisory fees on managed assets for the Fund were at the median of
the Peer Group but expense ratios on common assets were above the median. In
some cases the comparison of fees and expenses was affected by fee waivers or
the unleveraged nature of a peer fund. These comparisons were also affected by
fee waivers by peer funds and potentially by the extent of leverage. The Board
also took note of the fact that the expense ratios of the Peer Group funds may
have increased since the date as of which the information was presented, given
the level of market declines in the fourth quarter of 2008 and the first quarter
of 2009. The Board concluded that the fees were fair and equitable based on
relevant factors, including the Fund's performance results and total expenses
ranking relative to its Peer Group.
PROFITABILITY
The Board received and considered an estimated profitability analysis of Advent
and Claymore based on the Net Management Rates. The Board concluded that, in
light of the costs of providing investment advisory services and investment
management and other services to the Fund, the profits and other ancillary
benefits that Advent and Claymore received with regard to providing these
services to the Fund were not unreasonable.
ECONOMIES OF SCALE
The Board received and considered information regarding whether there have been
economies of scale with respect to the management of the Fund, whether the Fund
has appropriately benefited from any economies of scale, and whether there is
potential for realization of any further economies of scale. The Board concluded
that the opportunity to benefit from economies of scale were diminished in the
context of closed-end funds.
INFORMATION ABOUT SERVICES TO OTHER CLIENTS
The Board also received and considered information about the nature, extent and
quality of services and fee rates offered by Advent and Claymore to their other
clients.
After considering the above-described factors and based on the deliberations and
their evaluation of the information provided to them, the Board concluded that
re-approval of the Management Agreement and Advisory Agreement was in the best
interest of the Fund and its shareholders. Accordingly, the Board unanimously
re-approved the Management Agreement and the Advisory Agreement.
28 | Semiannual Report | April 30, 2009
This Page Intentionally Left Blank.
AGC | Advent/Claymore Global Convertible Securities & Income Fund
Fund INFORMATION |
BOARD OF TRUSTEES
Randall C. Barnes
Daniel Black
Nicholas Dalmaso*
Tracy V. Maitland**
Chairman
Derek Medina
Ronald A. Nyberg
Gerald L. Seizert
Michael A. Smart
* Trustee is an "interested person" of the Fund as defined in the Investment
Company Act of 1940 as a result of his former position as an officer of the
Adviser and certain of its affiliates and his equity ownership of the
Adviser and certain of its affiliates.
** Trustee is an "interested person" of the Fund as defined in the Investment
Company Act of 1940, as amended.
OFFICERS
Tracy V. Maitland
President and Chief Executive Officer
F. Barry Nelson
Vice President and Assistant Secretary
Robert White
Treasurer and Chief Financial Officer
Rodd Baxter
Secretary and Chief Compliance Officer
INVESTMENT MANAGER
Advent Capital Management, LLC
New York, New York
INVESTMENT ADVISER
AND ADMINISTRATOR
Claymore Advisors, LLC
Lisle, Illinois
CUSTODIAN AND TRANSFER AGENT
The Bank of New York Mellon
New York, New York
PREFERRED STOCK-
DIVIDEND PAYING AGENT
The Bank of New York Mellon
New York, New York
LEGAL COUNSEL
Skadden, Arps, Slate,
Meagher & Flom LLP
New York, New York
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
New York, New York
================================================================================
PRIVACY PRINCIPLES OF THE FUND
The Fund is committed to maintaining the privacy of its shareholders and to
safeguarding their non-public personal information. The following information is
provided to help you understand what personal information the Fund collects, how
the Fund protects that information and why, in certain cases, the Fund may share
information with select other parties.
Generally, the Fund does not receive any non-public personal information
relating to its shareholders, although certain non-public personal information
of its shareholders may become available to the Fund. The Fund does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Fund restricts access to non-public personal information about its
shareholders to employees of the Fund's investment advisor and its affiliates
with a legitimate business need for the information. The Fund maintains
physical, electronic and procedural safeguards designed to protect the
non-public personal information of its shareholders.
QUESTIONS CONCERNING YOUR SHARES OF ADVENT/CLAYMORE GLOBAL CONVERTIBLE
SECURITIES & INCOME FUND?
o If your shares are held in a Brokerage Account, contact your Broker.
o If you have physical possession of your shares in certificate form,
contact the Fund's Custodian and Transfer Agent:
The Bank of New York Mellon, 101 Barclay 11E, New York, NY 10286;
(866) 488-3559.
This report is sent to shareholders of Advent/Claymore Global Convertible
Securities & Income Fund for their information. It is not a Prospectus, circular
or representation intended for use in the purchase or sale of shares of the Fund
or of any securities mentioned in this report.
A description of the Fund's proxy voting policies and procedures related to
portfolio securities is available without charge, upon request, by calling the
Fund at (866)274-2227.
Information regarding how the Fund voted proxies for
portfolio securities, if applicable, during the most recent 12-month period
ended June 30, is also available, without charge and upon request by calling the
Fund at (866)274-2227, by visiting Claymore's website at www.claymore.com/agc or
by accessing the Fund's Form N-PX on the the U.S. Securities & Exchange
Commission's ("SEC") website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is
available on the SEC website at www.sec.gov or by visiting Claymore's website at
www.claymore.com/agc. The Fund's Form N-Q may also be viewed and copied at the
SEC's Public Reference Room in Washington, DC; information on the operation of
the Public Reference Room may be obtained by calling (800) SEC-0330 or at
www.sec.gov.
In October 2008, the Fund submitted a CEO annual certification to the New York
Stock Exchange ("NYSE") in which the Fund's principal executive officer
certified that he was not aware, as of the date of the certification, of any
violation by the Fund of the NYSE's Corporate Governance listing standards. In
addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and
related SEC rules, the Fund's principal executive and principal financial
officers have made quarterly certifications, included in filings with the SEC on
Forms N-CSR and N-Q, relating to, among other things, the Fund's disclosure
controls and procedures and internal control over financial reporting.
NOTICE TO SHAREHOLDERS
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase at market prices
from time to time shares of its common and preferred stock in the open market or
in private transactions.
30 | Semiannual Report | April 30, 2009
AGC | Advent/Claymore Global Convertible Securities & Income Fund
ADVENT CAPITAL MANAGEMENT, LLC
Advent Capital Management, LLC ("Advent") is a registered investment adviser,
based in New York, which specializes in convertible and high-yield securities
for institutional and individual investors. The firm was established by Tracy V.
Maitland, a former Director in the Convertible Securities sales and trading
division of Merrill Lynch. Advent's investment discipline emphasizes capital
structure research, encompassing equity fundamentals as well as credit research,
with a focus on cash flow and asset values while seeking to maximize total
return.
INVESTMENT PHILOSOPHY
Advent believes that superior returns can be achieved while reducing risk by
investing in a diversified portfolio of global equity, convertible and
high-yield securities. The Fund Manager seeks securities with attractive
risk/reward characteristics. Advent employs a bottom-up security selection
process across all of the strategies it manages. Securities are chosen from
those that the Fund Manager believes have stable-to-improving fundamentals and
attractive valuations.
INVESTMENT PROCESS
Advent manages securities by using a strict four-step process:
1 Screen the convertible and high-yield markets for securities with
attractive risk/reward characteristics and favorable cash flows;
2 Analyze the quality of issues to help manage downside risk;
3 Analyze fundamentals to identify catalysts for favorable performance; and
4 Continually monitor the portfolio for improving or deteriorating trends in
the financials of each investment.
ADVENT CAPITAL MANAGEMENT, LLC AGC
1065 Avenue of the Americas LISTED
New York, New York 10018 NYSE(R)
AGC-SAR-0409
ITEM 2. CODE OF ETHICS.
Not applicable for a semi-annual reporting period.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for a semi-annual reporting period.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for a semi-annual reporting period.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for a semi-annual reporting period.
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments is included as part of Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable for a semi-annual reporting period.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) Not applicable for a semi-annual reporting period.
(b) There has been no change, as of the date of this filing, in the Portfolio
Manager identified in response to paragraph (a)(1) of this Item in the
registrant's most recent annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has not made any material changes to the procedures by which
shareholders may recommend nominees to the registrant's Board of Trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within
90 days of this filing and have concluded based on such evaluation, that the
registrant's disclosure controls and procedures were effective, as of that date,
in ensuring that information required to be disclosed by the registrant in this
Form N-CSR was recorded, processed, summarized, and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the registrant's second fiscal quarter of the period
covered by this report that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certification of principal executive officer and principal financial
officer pursuant to Rule 30a-2(a) of the Investment Company Act of 1940.
(a)(3) Not Applicable.
(b) Certification of principal executive officer and principal financial officer
pursuant to Rule 30a-2(b) of the Investment Company Act of 1940.
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.
(Registrant) Advent/Claymore Global Convertible Securities & Income Fund
By: /s/ Tracy V. Maitland
-----------------------------------------------------------------------
Name: Tracy V. Maitland
Title: President and Chief Executive Officer
Date: July 6, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Tracy V. Maitland
-----------------------------------------------------------------------
Name: Tracy V. Maitland
Title: President and Chief Executive Officer
Date: July 6, 2009
By: /s/ Robert White
-----------------------------------------------------------------------
Name: Robert White
Title: Treasurer and Chief Financial Officer
Date: July 6, 2009