Item 1. Schedule of Investments | ||||||||
Item 2. Controls and Procedures | ||||||||
Item 3. Exhibits | ||||||||
SIGNATURES | ||||||||
Certifications |
Shares | Description (1) | Value | ||||||||||||
Common Stocks 83.7% (71.6% of Total Investments) |
||||||||||||||
Aerospace & Defense 2.6% |
||||||||||||||
105,563 | Raytheon Company |
$ | 6,820,425 | |||||||||||
Beverages 2.7% |
||||||||||||||
110,455 | Coca-Cola Company |
6,723,396 | ||||||||||||
Commercial Banks 7.1% |
||||||||||||||
162,633 | Bank of America Corporation |
6,165,417 | ||||||||||||
116,818 | Cullen/Frost Bankers, Inc. |
6,196,027 | ||||||||||||
187,709 | U.S. Bancorp |
6,074,263 | ||||||||||||
Total Commercial Banks |
18,435,707 | |||||||||||||
Commercial Services & Supplies 2.4% |
||||||||||||||
183,765 | Waste Management, Inc. |
6,167,153 | ||||||||||||
Communications Equipment 5.1% |
||||||||||||||
219,795 | Nokia Oyj, Sponsored ADR |
6,996,075 | ||||||||||||
156,400 | QUALCOMM Inc. |
6,412,400 | ||||||||||||
Total Communications Equipment |
13,408,475 | |||||||||||||
Diversified Telecommunication Services 5.0% |
||||||||||||||
180,103 | AT&T Inc. |
6,897,945 | ||||||||||||
70,800 | Telefonica SA |
6,124,893 | ||||||||||||
Total Diversified Telecommunication Services |
13,022,838 | |||||||||||||
Electric Utilities 7.1% |
||||||||||||||
76,752 | Exelon Corporation |
6,237,635 | ||||||||||||
98,114 | FPL Group Inc. |
6,155,672 | ||||||||||||
133,555 | PPL Corporation |
6,132,846 | ||||||||||||
Total Electric Utilities |
18,526,153 | |||||||||||||
Electrical Equipment 2.6% |
||||||||||||||
132,341 | Emerson Electric Co. |
6,810,268 | ||||||||||||
Gas Utilities 2.6% |
||||||||||||||
114,007 | Equitable Resources Inc. |
6,715,012 | ||||||||||||
Health Care Equipment & Supplies 2.5% |
||||||||||||||
77,140 | Becton, Dickinson and Company |
6,622,469 | ||||||||||||
Hotels Restaurants & Leisure 2.6% |
||||||||||||||
180,924 | YUM! Brands, Inc. |
6,732,182 | ||||||||||||
Household Products 2.4% |
||||||||||||||
89,550 | Procter & Gamble Company |
6,274,769 | ||||||||||||
Industrial Conglomerates 2.6% |
||||||||||||||
184,423 | General Electric Company |
6,825,495 | ||||||||||||
Insurance 4.8% |
||||||||||||||
340,141 | Fidelity National Title Group Inc., Class A |
6,234,785 | ||||||||||||
164,920 | Manulife Financial Corporation |
6,263,662 | ||||||||||||
Total Insurance |
12,498,447 | |||||||||||||
IT Services 2.7% |
||||||||||||||
203,058 | Paychex, Inc. |
6,956,767 | ||||||||||||
Machinery 2.4% |
||||||||||||||
137,093 | PACCAR Inc. |
6,169,185 | ||||||||||||
Media 2.0% |
||||||||||||||
392,488 | Pearson Public Limited Company |
5,329,987 | ||||||||||||
Metals & Mining 2.5% |
||||||||||||||
63,602 | Southern Copper Corporation |
6,603,796 | ||||||||||||
Oil, Gas, & Consumable Fuels 4.8% |
||||||||||||||
73,551 | Chevron Corporation |
6,278,313 | ||||||||||||
90,943 | Royal Dutch Shell PLC, Class A |
6,273,248 | ||||||||||||
Total Oil, Gas, & Consumable Fuels |
12,551,561 | |||||||||||||
Pharmaceuticals 5.3% |
||||||||||||||
126,459 | Abbott Laboratories |
6,974,214 | ||||||||||||
134,284 | Eli Lilly and Company |
6,927,712 | ||||||||||||
Total Pharmaceuticals |
13,901,926 | |||||||||||||
Semiconductors & Equipment 2.6% |
||||||||||||||
205,274 | Microchip Technology Incorporated |
6,718,617 | ||||||||||||
Thrifts & Mortgage Finance 4.7% |
||||||||||||||
349,923 | Hudson City Bancorp, Inc. |
6,186,639 | ||||||||||||
339,398 | New York Community Bancorp, Inc. |
6,183,832 | ||||||||||||
Total Thrifts & Mortgage Finance |
12,370,471 | |||||||||||||
Tobacco 4.6% |
||||||||||||||
84,504 | Loews Corp Carolina Group |
6,130,765 | ||||||||||||
116,334 | Philip Morris International, (3) |
5,884,174 | ||||||||||||
Total Tobacco |
12,014,939 | |||||||||||||
Total Common Stocks (cost $218,790,950) |
218,200,038 | |||||||||||||
Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||
$25 Par (or similar) Preferred Securities 23.2% (19.8% of Total Investments) |
||||||||||||||||||
Automobiles 0.3% |
||||||||||||||||||
30,900 | Daimler Finance NA LLC, Structured Asset Trust Unit Repackaging, Series DCX |
7.000% | A3 | $ | 717,343 | |||||||||||||
Capital Markets 1.6% |
||||||||||||||||||
25,000 | Deutsche Bank Capital Funding Trust IX |
6.625% | Aa3 | 574,500 | ||||||||||||||
74,500 | Goldman
Sachs Group Inc. |
6.200% | A | 1,778,315 | ||||||||||||||
75,000 | Lehman Brothers Holdings |
7.950% | A- | 1,547,250 | ||||||||||||||
12,500 | Morgan Stanley Capital Trust VII |
6.600% | A1 | 267,500 | ||||||||||||||
Total Capital Markets |
4,167,565 | |||||||||||||||||
Commercial Banks 6.8% |
||||||||||||||||||
75,000 | Banco Santander Finance |
6.800% | Aa3 | 1,668,750 | ||||||||||||||
50,000 | Banco Santander Finance |
6.500% | A | 1,062,500 | ||||||||||||||
25,000 | Bank of America Corporation, Series D |
6.204% | Aa3 | 543,500 | ||||||||||||||
1,000,000 | Bank of America Corporation |
8.000% | Aa3 | 1,002,890 | ||||||||||||||
20,000 | Bank of America Corporation |
6.625% | Aa3 | 452,000 | ||||||||||||||
50,000 | Barclays Bank PLC |
7.100% | Aa3 | 1,210,000 | ||||||||||||||
52,300 | Barclays Bank PLC |
6.625% | Aa3 | 1,241,079 | ||||||||||||||
60,000 | Credit Suisse Guernsey |
7.900% | Aa3 | 1,511,250 | ||||||||||||||
23,200 | Fleet Capital Trust VIII |
7.200% | Aa2 | 556,800 | ||||||||||||||
15,200 | HSBC Holdings PLC |
6.200% | A1 | 330,448 | ||||||||||||||
55,200 | HSBC USA Inc. |
6.500% | A | 1,242,000 | ||||||||||||||
50,000 | PNC Capital Trust |
7.750% | A2 | 1,228,750 | ||||||||||||||
50,000 | Royal Bank of Scotland Group PLC, Series T |
7.250% | Aa3 | 1,223,500 | ||||||||||||||
50,000 | Royal Bank of Scotland Group PLC |
6.600% | Aa3 | 1,115,000 | ||||||||||||||
7,000 | USB Capital Trust XI |
6.600% | Aa3 | 159,530 | ||||||||||||||
50,000 | Wachovia Corporation |
8.000% | A | 1,234,250 | ||||||||||||||
500,000 | Wachovia Corporation |
7.980% | A | 492,767 | ||||||||||||||
2,500 | Wells Fargo Capital Trust V |
7.000% | Aa2 | 60,175 | ||||||||||||||
45,000 | Wells Fargo Capital Trust XII |
7.875% | Aa2 | 1,139,625 | ||||||||||||||
Total Commercial Banks |
17,474,814 | |||||||||||||||||
Consumer Finance 0.5% |
||||||||||||||||||
16,700 | HSBC Finance Corporation |
6.360% | A | 360,720 | ||||||||||||||
38,900 | MBNA Corporation, Capital Trust D |
8.125% | Aa2 | 966,665 | ||||||||||||||
Total Consumer Finance |
1,327,385 | |||||||||||||||||
Diversified Financial Services 1.7% |
||||||||||||||||||
50,000 | CitiGroup Capital Trust XIX |
7.250% | A1 | 1,149,000 | ||||||||||||||
75,000 | Citigroup Inc., Series M |
8.125% | A | 1,804,687 | ||||||||||||||
25,000 | ING Group N.V. |
7.200% | A1 | 602,000 | ||||||||||||||
35,000 | ING Group N.V. |
7.050% | A | 820,750 | ||||||||||||||
2,000 | JPMorgan Chase Capital Trust X |
7.000% | Aa3 | 49,400 | ||||||||||||||
Total Diversified Financial Services |
4,425,837 | |||||||||||||||||
Electric Utilities 3.7% |
||||||||||||||||||
70,000 | Alabama Power Company |
5.625% | BBB+ | 1,715,000 | ||||||||||||||
50,000 | American Electric Power |
8.750% | Baa3 | 1,263,750 | ||||||||||||||
1,400 | Consolidated Edison Company of New York Inc. |
5.000% | A3 | 126,980 | ||||||||||||||
5,700 | DTE Energy Trust I |
7.800% | Baa3 | 144,894 | ||||||||||||||
3,000 | Entergy Louisiana LLC |
7.600% | A- | 75,660 | ||||||||||||||
19,800 | FPC Capital I |
7.100% | Baa2 | 488,466 | ||||||||||||||
50,000 | FPL Group Capital Inc. |
7.450% | A3 | 1,291,500 | ||||||||||||||
57,558 | PPL Capital Funding, Inc. |
6.850% | Baa2 | 1,400,386 | ||||||||||||||
50,000 | PPL Electric Utilities Corporation |
6.250% | BBB | 1,218,750 | ||||||||||||||
10,000 | Southern California Edison Company, Series C |
6.000% | Baa2 | 1,000,313 | ||||||||||||||
300 | Virginia Power Capital Trust |
7.375% | BBB | 7,551 | ||||||||||||||
40,000 | Xcel Energy Inc. |
7.600% | Baa2 | 994,500 | ||||||||||||||
Total Electric Utilities |
9,727,750 | |||||||||||||||||
Insurance 1.5% |
||||||||||||||||||
53,600 | Ace Ltd., Series C |
7.800% | BBB | 1,326,064 | ||||||||||||||
10,000 | Aegon N.V. |
6.875% | A- | 225,100 | ||||||||||||||
4,700 | Aegon N.V. |
6.375% | A- | 95,410 | ||||||||||||||
25,000 | American International Group |
7.700% | Aa3 | 623,000 | ||||||||||||||
21,800 | Arch Capital Group Limited |
8.000% | BBB- | 556,336 | ||||||||||||||
12,100 | Endurance Specialty Holdings Limited |
7.750% | BBB- | 284,471 | ||||||||||||||
1,300 | MetLife Inc., Series A |
4.000% | Baa1 | 26,000 | ||||||||||||||
17,625 | Phoenix Companies Inc. |
7.450% | BBB- | 352,324 | ||||||||||||||
23,900 | RenaissanceRe Holdings Limited, Series C |
6.080% | BBB+ | 452,905 | ||||||||||||||
Total Insurance |
3,941,610 | |||||||||||||||||
Media 0.8% |
||||||||||||||||||
50,000 | Comcast Corporation |
7.000% | BBB+ | 1,177,500 | ||||||||||||||
38,700 | Viacom Inc. |
6.850% | BBB | 900,549 | ||||||||||||||
Total Media |
2,078,049 | |||||||||||||||||
Oil, Gas, & Consumable Fuels 0.4% |
||||||||||||||||||
11,000 | Devon Energy Corporation, Series A |
6.490% | Baa3 | 1,113,063 | ||||||||||||||
Real Estate/Mortgage 0.8% |
||||||||||||||||||
50,000 | Kimco Realty Corporation, Series G |
7.750% | BBB+ | 1,191,250 | ||||||||||||||
40,000 | Wachovia Preferred Funding Corporation |
7.250% | A2 | 947,200 | ||||||||||||||
Total
Real Estate/Mortgage |
2,138,450 | |||||||||||||||||
Thrifts & Mortgage Finance 2.3% |
||||||||||||||||||
75,000 | Federal Home Loan Mortgage Corporation, Notes |
5.570% | AA- | 1,432,500 | ||||||||||||||
48,265 | Federal Home Loan Mortgage Corporation |
5.660% | AA- | 950,338 | ||||||||||||||
25,000 | Federal Home Loan Mortgage Corporation |
5.100% | AA- | 818,750 | ||||||||||||||
25,000 | Federal Home Loan Mortgage Corporation |
5.000% | AA- | 850,000 | ||||||||||||||
75,000 | Federal Home Loan Mortgage Corporation |
0.000% | AA- | 1,830,000 | ||||||||||||||
Total Thrifts & Mortgage Finance |
5,881,588 | |||||||||||||||||
U.S. Agency 2.5% |
||||||||||||||||||
32,900 | Federal National Mortgage Association |
7.625% | AA- | 783,431 | ||||||||||||||
40,000 | Federal National Mortgage Association |
6.750% | AA- | 902,400 | ||||||||||||||
25,000 | Federal National Mortgage Association |
5.810% | AA- | 994,000 | ||||||||||||||
25,000 | Federal National Mortgage Association |
5.380% | AA- | 935,000 | ||||||||||||||
125,000 | Federal National Mortgage Association |
0.000% | AA- | 3,006,250 | ||||||||||||||
Total
U.S. Agency |
6,621,081 | |||||||||||||||||
Wireless Telecommunication Services 0.3% |
||||||||||||||||||
25,600 | Telephone and Data Systems Inc. |
7.600% | BBB- | 534,016 | ||||||||||||||
11,800 | United States Cellular Corporation |
8.750% | A- | 295,118 | ||||||||||||||
Total Wireless Telecommunication Services |
829,134 | |||||||||||||||||
Total $25 Par (or similar) Preferred Securities (cost $63,949,022) |
60,443,669 | |||||||||||||||||
Principal | ||||||||||||||||||
Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||
Corporate Bonds 0.0% (0.0% of Total Investments) |
||||||||||||||||||
Airlines 0.0% |
||||||||||||||||||
$ | 8 | Continental Airlines |
6.541% | 9/15/09 | B | $ | 7,954 | |||||||||||
$ | 8 | Total Corporate Bonds (cost $7,796) |
7,954 | |||||||||||||||
Shares | Description (1) | Value | ||||||||||||||||
Investment Companies 0.3% (0.2% of Total Investments) |
||||||||||||||||||
50,000 | Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc. |
$ | 742,000 | |||||||||||||||
Total Investment Companies (cost $826,500) |
742,000 | |||||||||||||||||
Principal | ||||||||||||||||||
Amount (000) | Description (1) | Coupon | Maturity | Value | ||||||||||||||
Short-Term Investments 9.8% (8.4% of Total Investments) |
||||||||||||||||||
$ | 25,491 | Repurchase Agreement with State Street Bank, dated 3/31/08, repurchase price
$25,492,112, collateralized by $22,275,000 U.S. Treasury Bonds, 5.375%, due 2/15/31, value $25,796,415 and $200,000 U.S. Treasury Bonds, 4.375% due
2/15/38, value $205,500 |
1.100% | 4/01/08 | $ | 25,491,333 | ||||||||||||
Total Short-Term Investments (cost $25,491,333) |
25,491,333 | |||||||||||||||||
Total Investments (cost $309,065,601) 117.0% |
304,884,994 | |||||||||||||||||
Notional | Expiration | Strike | ||||||||||||||||
Contracts | Type | Amount (4) | Date | Price | Value | |||||||||||||
Call Options Written (0.8)% |
||||||||||||||||||
(130 | ) | S&P 500 Index |
$(16,900,000 | ) | 4/19/08 | $1,300 | $ | (562,250 | ) | |||||||||
(130 | ) | S&P 500 Index |
(17,550,000 | ) | 4/19/08 | 1,350 | (204,100 | ) | ||||||||||
(130 | ) | S&P 500 Index |
(16,900,000 | ) | 5/17/08 | 1,300 | (778,050 | ) | ||||||||||
(130 | ) | S&P 500 Index |
(17,225,000 | ) | 5/17/08 | 1,325 | (581,750 | ) | ||||||||||
(520 | ) | Total
Call Options Written (premiums received $2,464,540) |
(68,575,000 | ) | (2,126,150 | ) | ||||||||||||
Other Assets Less Liabilities (2.4)% |
(6,065,168 | ) | ||||||||||||||||
Fund Preferred Shares, at Liquidation Value (13.8)% (5) |
(36,000,000 | ) | ||||||||||||||||
Net Assets Applicable to Common Shares 100% |
$ | 260,693,676 | ||||||||||||||||
(1) | All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted. |
|
(2) | Ratings: Using the higher of Standard & Poors Group (Standard &
Poors) or Moodys Investor Service, Inc. (Moodys) rating. Ratings
below BBB by Standard & Poors or Baa by Moodys are considered to be
below investment grade. |
|
(3) | Non-income producing. |
|
(4) | For disclosure purposes, Notional Amount is calculated by multiplying
the number of Contracts by the Strike Price by 100. |
|
(5) | Fund
Preferred Shares, at Liquidation Value as of percentage of total
investment is (11.8)%. |
|
ADR | American Depositary Receipt. |
|
Level 1 - | Quoted prices in active markets for identical securities. |
Level 2 - | Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). |
Level 3 - | Significant unobservable inputs (including managements assumptions in determining the fair value of investments). |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Investments |
$ | 279,672,941 | $ | 25,212,053 | $ | - | $ | 304,884,994 | |||||||||
Call options
written |
(2,126,150 | ) | - | - | (2,126,150 | ) | |||||||||||
Total |
$ | 277,546,791 | $ | 25,212,053 | $ | - | $ | 302,758,844 | |||||||||
Gross unrealized: |
||||
Appreciation |
$ | 10,283,416 | ||
Depreciation |
(14,464,023 | ) | ||
Net unrealized appreciation (depreciation) of investments |
$ | (4,180,607 | ) | |
a. | The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the 1940 Act) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)). | ||
b. | There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrants last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting. |
By (Signature and Title)* | /s/ Kevin J. McCarthy | |||
Kevin J. McCarthy | ||||
Vice President and Secretary | ||||
By (Signature and Title)* | /s/ Gifford R. Zimmerman | |||
Gifford R. Zimmerman | ||||
Chief Administrative Officer (principal executive officer) | ||||
By (Signature and Title)* | /s/ Stephen D. Foy | |||
Stephen D. Foy | ||||
Vice President and Controller (principal financial officer) | ||||
* | Print the name and title of each signing officer under his or her signature. |