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: 811-21269
Allspring
Income Opportunities Fund
(Exact name of registrant as specified in charter)
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Address of principal executive offices) (Zip code)
Matthew
Prasse
Allspring Funds Management, LLC
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-222-8222
Date of fiscal year end: April 30
Date of reporting period: April 30, 2023
ITEM 1. REPORT TO STOCKHOLDERS
2
Allspring Income Opportunities Fund (EAD)
Annual Report
April 30, 2023
The views expressed and any forward-looking statements are as of April 30, 2023, unless otherwise noted, and are those of the Fund’s portfolio
managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations.
Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time
in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed
or forward-looking statements.
Allspring Income Opportunities Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring
Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Income Opportunities Fund for the 12-month
period that ended April 30, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by
the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s
strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For
the period, U.S. stocks, based on the S&P 500 Index,1 returned 2.66%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 3.05%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 6.51%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -0.43%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 3.90%, the Bloomberg Municipal Bond Index6
gained 2.87%, and the ICE BofA U.S. High Yield Index7 returned 1.12%.
High inflation and central bank rate hikes rocked markets.
Market volatility that had followed Russia’s February invasion of Ukraine
continued into May, although stocks recovered ground late in the month. Value stocks outperformed growth stocks.
The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Federal Reserve (Fed) raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants
persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds
didn’t fare much better. Driving the losses were the familiar factors: rising
global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The
Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
“ In June, stocks posted
further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much
better. Driving the losses were the familiar factors: rising global
inflation and fears of recession as central banks increased rates to try to curb soaring
inflation. ”
1
The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index
proportionate to its market value. You cannot invest directly in an index.
2
The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA
Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets,
excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index.
3
The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of emerging markets. You cannot invest directly in an index.
4
The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the
investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities
(agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an
index.
5
The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index.
6
The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term
tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.
7
The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of
domestic and Yankee high yield bonds. The index tracks the performance of high yield securities traded in the U.S. bond market. You cannot invest directly in an index.
Copyright 2023. ICE Data Indices, LLC. All rights reserved.
2 | Allspring Income Opportunities Fund
Letter to shareholders (unaudited)
Markets rebounded in July,
led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained strong: July nonfarm payrolls grew by more
than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices—major
contributors to recent overall inflation—fell substantially from earlier highs. And while U.S. home prices rose, sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to
2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly
challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and
gasoline prices from their June peak. One positive was the resilient U.S. jobs market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include to reduce
inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on
results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound
in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets
outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial
market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record
low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S.
labor market strength. Although central banks kept increasing rates, hopes rose for an easing in the pace of rate
hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a
monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with flat overall monthly
returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in
June. Other countries and regions reported still-high but declining inflation rates as the year wound
down.
1
The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index.
Allspring Income Opportunities Fund | 3
Letter to shareholders (unaudited)
The
year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of
China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job
gains—employers added more than 500,000 jobs—and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many
more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to
resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this
environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February.
Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a
classic bank run that spread to Europe where Switzerland’s Credit Suisse was taken over by its rival, UBS. The banking industry turmoil created an additional challenge for
central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data
pointed to economic strength in the U.S., Europe, and China. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in
March.
Economic data released in April pointed to global resilience,
as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%.
Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and
abroad.
Don’t let short-term uncertainty derail long-term investment
goals.
Periods of investment uncertainty can present challenges, but
experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to
manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain
committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
“ The collapse of Silicon
Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic
bank run that spread to Europe where
Switzerland’s Credit Suisse was taken over by its rival, UBS. ”
For further information about your fund, contact
your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
1
The Purchasing Managers Index (PMI) is an index of the prevailing direction of
economic trends in the manufacturing and service sectors. You cannot invest directly in an index.
4 | Allspring Income Opportunities Fund
Letter to shareholders (unaudited)
| |
• On November 16, 2022, the Fund announced a renewal of its open-market share repurchase program (the “Buyback
Program”). Under the renewed Buyback Program, the Fund may repurchase up to 5%
of its outstanding shares in open market transactions during the period
beginning on January 1, 2023 and ending on December 31, 2023. The Fund’s Board of Trustees has delegated to Allspring Funds Management, LLC, the Fund’s adviser, discretion to administer the Buyback
Program, including the determination of the amount and timing of repurchases in
accordance with the best interests of the Fund and subject to applicable
legal limitations. |
• The Fund’s managed distribution plan provides for the declaration of monthly distributions to common shareholders of the
Fund at an annual minimum fixed rate of 8% based on the Fund’s average monthly
net asset value per share over the prior 12 months. Under the managed
distribution plan, monthly distributions may be sourced from income, paid-in capital, and/or capital gains, if any. To the extent that sufficient investment income is not available on a monthly basis, the Fund
may distribute paid-in capital and/or capital gains, if any, in order to maintain its
managed distribution level. You should not draw any conclusions about
the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the managed distribution plan. Shareholders may elect to reinvest distributions received pursuant to the
managed distribution plan in the Fund under the existing dividend reinvestment plan,
which is described later in this report. |
Allspring Income Opportunities Fund | 5
Performance highlights (unaudited)
Performance highlights
| |
The Fund seeks a high level of current income. Capital appreciation is a secondary objective. |
| |
Under normal market conditions, the Fund invests at least 80% of its total assets in below-investment-
grade (high yield) debt securities, loans and preferred stocks. These securities are rated Ba or
lower by Moody’s or BB or lower by S&P, or are unrated securities of comparable
quality as determined by the subadviser. |
| |
Allspring Funds Management, LLC |
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Allspring Global Investments, LLC |
| |
Chris Lee, CFA, Michael J. Schueller, CFA |
Average annual total returns (%) as of April 30, 20231
|
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Based on net asset value (NAV) |
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ICE BofA U.S. High Yield Constrained Index2
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Figures quoted represent past performance, which is no
guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance
may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Performance figures of the Fund do
not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. If taxes and such brokerage commissions had been
reflected, performance would have been lower. To obtain performance information current to the most recent month-end, please call
1-800-222-8222.
The Fund’s expense ratio for the year ended April 30, 2023, was 2.74% which
includes 1.70% of interest expense.
| |
| |
Total returns based on market value are calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Total returns
based on NAV are calculated based on the NAV at the beginning of the
period and at the end of the period. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. |
| |
The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and
payment-in-kind securities. Issues included in the index have maturities
of one year or more and have a credit rating lower than BBB-/Baa3 but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE
Data Indices, LLC. All rights reserved. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring Income Opportunities Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of April 30, 20231 |
| |
The chart compares the performance of the Fund for the most recent ten years with the ICE BofA U.S. High Yield Constrained Index. The chart assumes a hypothetical
investment of $10,000 investment and reflects all operating expenses of the
Fund. |
Comparison of NAV vs. market value1 |
| |
This chart does not reflect any brokerage commissions charged on the purchase and sale of the Fund’s common stock. Dividends and distributions paid by the Fund are
included in the Fund’s average annual total returns but have the effect of
reducing the Fund’s NAV. |
Allspring Income Opportunities Fund | 7
Performance highlights (unaudited)
Risk summary
This closed-end fund is no longer available as an initial public offering and is only offered
through broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the Fund may trade at either a
premium or discount relative to the Fund’s net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated
by, securities held by the Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Debt
securities are subject to credit risk and interest rate risk, and high yield securities and unrated securities of similar credit quality have a much greater risk of default
and their values tend to be more volatile than higher-rated securities with similar maturities. The Fund is leveraged through a revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks including, among others, the likelihood of greater volatility of the net asset value and the market value of common shares. Derivatives involve additional risks including interest rate risk, credit risk, the risk of improper valuation, and the risk of non-correlation to the relevant instruments that they are designed to hedge or closely track.
More detailed information about the Fund’s investment objective, principal investment
strategies and the principal risks associated with investing in the Fund can be found on page
11.
8 | Allspring Income Opportunities Fund
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Overview
The
Fund’s return based on market value was -6.70% for the 12-month period that ended April 30, 2023. During the same period, the Fund’s return based on its net asset
value (NAV) was -1.09%. Based on its market value and NAV returns, the Fund underperformed the ICE BofA U.S. High Yield Constrained Index, which returned 1.10% for the same
period.
Market overview
Federal Reserve (Fed) actions to combat inflation and its effects and geopolitical tension in
Eastern Europe and Asia were key drivers of market performance over the past twelve months. A hawkish Fed resulted in continued high interest rate volatility, contributing in part to financials sector instability in the spring of
2023. Meanwhile, economic growth has decelerated, which, coupled with inflation, has placed the economy at risk of recession, or even stagflation. Yields in the high yield market peaked at nearly 10% in October but have
since moderated to roughly 8.5%, while the bond default rate rose from 1.2% in October 2022 to 2.2% in April 2023.
As the largest sector in the high yield market, energy continues to be a focal point for investors. The continued fallout from the Russia-Ukraine war placed a spotlight on the energy
sector as prices became uncertain but demand for U.S. supplies was strong. Within the sector, fundamentals were robust throughout the period, making energy arguably a defensive sector in the current environment despite
having recently undergone two default cycles.
Ten largest holdings (%) as of April 30, 20231 |
Enviva Partners LP/Enviva Partners Finance Corp., 6.50%, 1-15-2026 |
|
CoreCivic, Inc., 8.25%, 4-15-2026 |
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Enact Holdings, Inc., 6.50%, 8-15-2025 |
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Occidental Petroleum Corp., 6.45%, 9-15-2036 |
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Geo Group, Inc., 12.11%, 3-23-2027 |
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PG&E Corp., 5.25%, 7-1-2030 |
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CCM Merger, Inc., 6.38%, 5-1-2026 |
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Match Group Holdings II LLC, 5.63%, 2-15-2029 |
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Pattern Energy Operations LP/Pattern Energy Operations, Inc., 4.50%, 8-15-2028 |
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CCO Holdings LLC/CCO Holdings Capital Corp., 4.25%, 1-15-2034 |
|
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Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Performance
The
portfolio underperformed the benchmark based on market value and NAV for the 12-month period. In the year that ended April 2022, we had positioned the portfolio to benefit from rising rates and stable credit spreads. Since April 2022, we have begun
repositioning the portfolio in an effort to protect it from recession while maintaining exposure to mispriced credits that we believe offer attractive value in the medium to long term. Establishing positions in disfavored
names that in our view the market has
unfairly punished and that are mispriced which has hurt recent short-term performance. However,
we believe the long-term performance potential warrants their inclusion in the portfolio.
In terms of ratings allocation, we reduced our allocations to single-B-rated and CCC-rated bonds
and we increased our allocations to BBB-rated and BB-rated bonds. We were one-fifth of a year shorter in duration than the index at the end of the period, which reflects the value we see in shorter-term bonds. Our underweight
allocation* to CCC-rated bonds contributed to performance, while our underweight to BB-rated bonds and slight overweight to B-rated bonds detracted from
performance. In terms of sectors, our consumer cyclical services and finance company holdings
contributed, while our health care and media entertainment holdings detracted from relative
returns. Royal Caribbean Cruises and TerraForm Power were the two best-performing individual credits. Underweight allocations to Carvana and Ligado Networks also contributed. Gray Television and QVC Inc**. were our two worst-performing credits.
Credit quality as of April 30, 20231 |
| |
The credit quality distribution of portfolio holdings reflected in the chart is based
on ratings from Standard & Poor’s, Moody’s Investors Service, and/or
Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings
of the Fund and not to the Fund itself. The percentages of the portfolio
with the ratings depicted in the chart are calculated based on the market
value of fixed income securities held by the Fund. If a security was rated
by all three rating agencies, the middle rating was utilized. If rated by
two of the three rating agencies, the lower rating was utilized, and if
rated by one of the rating agencies, that rating was utilized. Standard
& Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the rating categories. Standard &
Poor’s rates the creditworthiness of short-term notes from SP-1
(highest) to SP-3 (lowest). Moody’s rates the creditworthiness of
bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be
modified by the addition of a number 1 (highest) to 3 (lowest) to show
relative standing within the ratings categories. Moody’s rates the
creditworthiness of short-term U.S. tax-exempt municipal securities from
MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of
bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is
subject to change and may have changed since the date specified. |
*
Allocations and relative weights are measured as the average over the period,
unless otherwise stated.
**
This security was no longer held at the end of the reporting period.
Allspring Income Opportunities Fund | 9
Performance highlights (unaudited)
Effective maturity distribution as of April 30, 20231 |
| |
Figures represent the percentage of the Fund’s fixed-income securities. Allocations are subject to change and may have changed since the date specified. |
Leverage impact
The Fund’s use
of leverage through bank borrowings had a negative impact on total return performance during this reporting period. As of April 30, 2023, the Fund had approximately 31% of total assets in leverage.
Market outlook
The Fed hiked rates for what may be the final time this cycle while retaining a hawkish bias. Rates are in restrictive territory and will likely remain higher for longer. The potential for
further banking stress or volatility relating to resolution of the debt ceiling crisis remains a near-term risk and will likely keep high yield spreads range-bound until resolved. Significant concerns remain that 500 basis points (bps; 100
bps equal 1.00%) of rate hikes in the past year will precipitate a recession as the effect of tighter monetary policy circulates through the economy.
High yield spreads would likely move wider in a recession but would have room to rally should inflation normalize and should the economy muddle through. Yields, being near the high end
of the post–Global Financial Crisis range, provide a valuation offset to buffer the market. Relative to previous credit cycles, today’s high yield market has more BB-rated and fewer CCC-rated companies. High yield
issuers also have stronger balance sheets than in past cycles. In summary, we believe these conditions merit a moderately defensive stance combined with a few opportunistic long-term value ideas to take advantage of the
volatility experienced over the past twelve months.
10 | Allspring Income Opportunities Fund
Objective, strategies and risks (unaudited)
Objective, strategies and
risks
Investment objective
The Fund seeks a high level of current income. The Fund may, as a secondary objective, also seek
capital appreciation to the extent consistent with its primary investment objective. The Fund’s investment objectives are fundamental policies and may not be changed
without the approval of a majority of the outstanding voting securities as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) of the
Fund.
Principal investment strategies
Under normal market conditions, the Fund allocates at least 80% of its total assets to U.S.
dollar-denominated below investment-grade bonds, debentures, and other income obligations, including loans and preferred stocks (often called “high yield”
securities or “junk bonds”). These securities are rated Ba or lower by Moody’s or BB or lower by S&P, or are unrated securities of comparable quality as
determined by the portfolio managers. We may invest in below investment-grade debt securities of any credit quality, however, we may not purchase securities rated CCC or
below at a time when 20% of the Fund’s total assets are already held with such a rating. We are not required to sell securities rated CCC or below if the 20% limit is
exceeded due to security downgrades. Securities may be issued by domestic or foreign issuers (including foreign governments). The Fund may invest up to 10% of its total
assets in U.S. dollar-denominated securities of foreign issuers, excluding emerging markets securities.
For purposes of the Fund’s credit quality policies, if a security receives different
ratings from nationally recognized securities rating organizations, the Fund will use the rating that the portfolio managers believe is most representative of the
security’s credit quality. The Fund’s high yield securities may have fixed or variable principal payments and all types of interest rate and dividend payment and
reset terms, including fixed rate, adjustable rate, contingent, deferred, payment in kind and auction rate features. The Fund may invest in securities with a broad range of
maturities.
The Fund is managed following a rigorous investment process that
emphasizes both quality and value. The research driven approach includes both a top-down review of macroeconomic factors and intensive, bottom-up scrutiny of individual
securities. We consider both broad economic and issuer specific factors in selecting securities for the Fund. In assessing the appropriate maturity and duration for the Fund
and the credit quality parameters and weighting objectives for each sector and industry, we consider a variety of factors that are expected to influence the economic
environment and the dynamics of the high yield market. These factors include fundamental economic indicators, such as interest rate trends, the rates of economic growth
and inflation, the performance of equity markets, commodities prices, Federal Reserve monetary policy and the relative value of the U.S. dollar compared to other currencies. Once we determine the preferable portfolio characteristics, we conduct further evaluation to determine capacity and inventory levels in each targeted industry. We also identify any circumstances that may lead to improved business conditions, thus increasing the attractiveness of a particular industry. We select individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, sector, and issuer diversification. We also employ due diligence and fundamental research to assess an issuer’s credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management ability.
The analysis of issuers may include, among other things, historic and current financial conditions, current and anticipated cash flow and borrowing requirements, value of assets in relation to historical costs, strength of management, responsiveness to business conditions, credit standing, the company’s leverage versus industry norms and current and anticipated results of operations. While we consider as one factor in our credit analysis the ratings assigned by the rating services, we perform our own independent credit analysis of issuers.
In making decisions for the Fund, we rely on the knowledge, experience and judgment of our team who have access to a wide variety of research. We apply a strict sell discipline, which is as important as purchase criteria in determining the performance of the Fund. We routinely meet to review profitability outlooks and discuss any deteriorating business fundamentals, as well as consider changes in equity valuations and market perceptions before selling securities.
In other than normal market conditions, when changing economic conditions and other factors cause the yield difference between lower rated and higher rated securities to narrow, the Fund may purchase higher rated U.S. debt instruments if we believe that the risk of loss of income and principal may be reduced substantially with only a relatively small reduction in yield.
We regularly review the investments of the portfolio and may sell a portfolio holding when it has achieved its valuation target, there is deterioration in the underlying fundamental of the business, or we have identified a more attractive investment opportunity.
The Fund currently utilizes leverage through bank borrowings. By using leverage, the Fund seeks to obtain a higher return for holders of common shares than if it did not use leverage. Leveraging is a speculative technique, and there are special risks involved. There can be no assurance that the leveraging strategy employed by the Fund will be successful, and such strategy can result in losses to the Fund.
In contrast to the investment objectives of the Fund, which are fundamental, the investment policies of the Fund described above are non-fundamental and may be changed by the Board of Trustees of the Fund so long as shareholders are provided with at least 60 days prior written notice of any change to the extent required by the rules under the 1940 Act.
Allspring Income Opportunities Fund | 11
Objective, strategies and risks (unaudited)
Material Changes
During the Report Period: There have been no material changes made to the Fund during the report period.
Other investment techniques and strategies
As part of or in addition to the principal investment strategies discussed above, the Fund may at times invest a portion of its assets in the investment strategies and may use certain investment techniques as described below.
Convertible and Other Securities. The Fund’s investment in fixed income
securities may include bonds and preferred stocks that are convertible into the equity securities of the issuer or a related company. The Fund will not invest more than 20%
of its total assets in convertible securities. Depending upon the relationship of the conversion price to the market value of the underlying securities, convertible
securities may trade more like equity securities than debt instruments. Consistent with its objectives and other investment policies, the Fund may also invest a portion of
its assets in equity securities, including common stocks, depositary receipts, warrants, rights, and other equity interests.
Loans.
The Fund may invest in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans in which the Fund invests primarily
consist of direct obligations of a borrower. The Fund may invest in a loan at origination as a co-lender or by acquiring in the secondary market participations in,
assignments of or novations of a corporate loan. By purchasing a participation, the Fund acquires some or all of the interest of a bank or other lending institution in a loan
to a borrower. The participations typically will result in the Fund having a contractual relationship only with the lender, not the borrower. The Fund will have the right to
receive payments of principal, interest, and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the
payments from the borrower. Many such loans are secured, although some may be unsecured. Loans that are fully secured offer the Fund more protection than an unsecured loan in
the event of non-payment of scheduled interest or principal. However, there is no assurance that the liquidation of collateral from a secured loan would satisfy the corporate borrower’s obligation, or that the collateral can be liquidated. Direct debt instruments may involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the Fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The markets in loans are not regulated by federal securities laws or the U.S. Securities and Exchange Commission.
Preferred Shares. The Fund may invest in preferred shares. Preferred shares are
equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer’s
common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the
Fund’s fixed income securities.
Structured Securities. The Fund may invest in structured securities. The value of the principal and/or interest on such securities is determined by reference to changes in the value of specific currencies, interest rates, commodities, indices, or other financial indicators (“Reference”) or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption may be increased or decreased depending upon changes in the Reference. The terms of the structured securities may provide in certain circumstances that no principal is due at maturity and, therefore, may result in a loss of the Fund’s investment. Changes in the interest rate or principal payable at maturity may be a multiple of the changes in the value of the Reference. Consequently, structured securities may entail a greater degree of market risk than other types of fixed income securities.
Asset-Backed Securities. The Fund may invest in asset-backed securities but
will not invest in mortgage-backed securities. Asset-backed securities are securities that represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool or pools of similar assets (e.g., trade receivables). The credit quality of these securities depends primarily upon
the quality of the underlying assets and the level of credit support and/or enhancement provided. The underlying assets (e.g., loans) are subject to prepayments which shorten
the securities’ weighted average maturity and may lower their return. If required payments of principal and interest are not made and any credit support or enhancement is exhausted, losses or delays in payment may result. The value of these securities also may change because of changes in the market’s perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution or Fund providing the credit support or enhancement.
Real Estate Investment Trusts. The Fund may invest a portion of its assets in
real estate investment trusts (“REITs”). REITs primarily invest in income-producing real estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs, or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest
the majority of their assets in real estate mortgages and derive income from the collection of interest payments. The Fund will indirectly bear its proportionate share of any
management and other expenses paid by REITs in which it invests in addition to the expenses paid by the Fund. Distributions received by the Fund from REITs may consist of dividends, capital gains, and/or return of capital.
U.S. Government Securities. The Fund may invest in U.S. government securities,
including debt securities issued or guaranteed by the U.S. Treasury, U.S. Government agencies or government-sponsored entities. These securities may have fixed, floating, or
variable rates.
Zero-Coupon, Step-Up Coupon, and Pay-in-Kind
Securities. Zero-coupon, step-up coupon, and pay-in-kind securities are types of debt securities that do not make regular cash interest payments. Asset-backed securities, convertible securities, corporate debt securities, foreign securities, high yield
12 | Allspring Income Opportunities Fund
Objective, strategies and risks (unaudited)
securities,
mortgage-backed securities, municipal securities, participation interests, stripped securities, U.S. Government and related obligations and other types of debt instruments
may be structured as zero-coupon, step-up coupon, and pay-in-kind securities.
Instead of making periodic interest payments, zero-coupon securities are sold at discounts from
face value. The interest earned by the investor from holding this security to maturity is the difference between the maturity value and the purchase price. Step-up coupon
bonds are debt securities that do not pay interest for a specified period of time and then, after the initial period, pay interest at a series of different rates. Pay-in-kind
securities normally give the issuer an option to pay cash at a coupon payment date or to give the holder of the security a similar security with the same coupon rate and a
face value equal to the amount of the coupon payment that would have been made. To the extent these securities do not pay current cash income, the market prices of these securities would generally be more volatile and likely to respond to a greater degree to changes in interest rates than the market prices of securities that pay cash interest periodically having similar maturities and credit qualities.
Investments in Equity Securities. The Fund may invest in equity securities.
Equity securities, such as common stock, generally represent an ownership interest in a company. While equity securities have historically generated higher average returns
than fixed income securities, equity securities have also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings
report, may depress the value of a particular equity security held by the Fund. Also, the price of equity securities, particularly common stocks, are sensitive to general
movements in the stock market. A drop in the stock market may depress the price of equity securities held by the Fund.
Other Investment Companies. The Fund may invest in other investment companies to the extent permitted under the 1940 Act and the rules, regulations, and exemptive orders thereunder. The Fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies’ expenses, including advisory fees. These expenses are in addition to the direct expenses of the Fund’s own operations.
Defensive and Temporary Investments. The Fund may hold some of its assets in cash or in money market instruments, including U.S. Government
obligations, shares of other mutual funds and repurchase agreements, or make other short-term investments for purposes of maintaining liquidity or for short-term defensive purposes when we believe it is in the best interests of the shareholders to do so. During these periods, the Fund may not achieve its objectives.
Derivatives. The Fund may invest up to 10% of its total assets in futures and
options on securities and indices and in other derivatives. In addition, the Fund may enter into interest rate swap transactions with respect to the total amount the Fund is
leveraged in order to hedge against adverse changes in interest rates affecting dividends payable on any preferred shares or interest payable on borrowings constituting
leverage. In connection with any such swap transaction, the Fund will segregate liquid securities in the amount of its obligations under the transaction. A derivative is a
security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices, or other financial
instruments. The Fund does not use derivatives as a primary investment technique and generally does not anticipate using derivatives for non-hedging purposes. In the event the Advisor uses derivatives for non-hedging purposes, no more than 3% of the Fund’s total assets will be committed to initial margin for derivatives for such purposes. The Fund may use derivatives for a variety of purposes, including:
•As a hedge against adverse changes in securities market prices or interest rates;
and
•As a substitute
for purchasing or selling securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the Fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. We review and monitor the creditworthiness of any institution which enters into a repurchase agreement with the Fund. The counterparty’s obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is held by the Fund’s custodian in a segregated, safekeeping account for the benefit of the Fund. Repurchase agreements afford the Fund an opportunity to earn income on temporarily available cash at low risk. In the event that the counterparty to a repurchase agreement is unwilling or unable to fulfill its contractual obligations to repurchase the underlying security, the Fund may lose money, suffer delays, or incur costs arising from holding or selling the underlying security.
Portfolio Turnover. It is the policy of the Fund not to engage in trading for short-term profits although portfolio turnover is not considered a limiting factor in the execution of investment decisions for the Fund.
Principal risks
An
investment in the Fund may lose money, is not a deposit of a bank, is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency,
and is primarily subject to the risks briefly summarized below.
Market Risk. The values of, and/or the income generated by, securities held by the Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Securities markets are volatile and may decline significantly in response to adverse issuer, regulatory, political, or economic developments. Different sectors of the market and different security types may react differently to such developments. Political, geopolitical, natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures, natural and environmental disasters, epidemics, pandemics and other public health crises and related events have led, and in the future may lead, to economic
Allspring Income Opportunities Fund | 13
Objective, strategies and risks (unaudited)
uncertainty,
decreased economic activity, increased market volatility and other disruptive effects on U.S. and global economies and markets. Such events may have significant adverse
direct or indirect effects on the Fund and its investments. In addition, economies and financial markets throughout the world are becoming increasingly interconnected, which
increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers in other countries or regions.
Debt Securities Risk. Debt securities are subject to credit risk and interest rate risk. Credit risk is the possibility that the issuer or guarantor of a debt security may be unable, or perceived to be unable or unwilling, to pay interest or repay principal when they become due. In these instances, the value of an investment could decline and the Fund could lose money. Credit risk increases as an issuer’s credit quality or financial strength declines. The credit quality of a debt security may deteriorate rapidly and cause significant deterioration in the Fund’s net asset value. Interest rate risk is the possibility that interest rates will change over time. When interest rates rise, the value of debt securities tends to fall. The longer the terms of the debt securities held by a Fund, the more the Fund is subject to this risk. If interest rates decline, interest that the Fund is able to earn on its investments in debt securities may also decline, which could cause the Fund to reduce the dividends it pays to shareholders, but the value of those securities may increase. Some debt securities give the issuers the option to call, redeem or prepay the securities before their maturity dates. If an issuer calls, redeems or prepays a debt security during a time of declining interest rates, the Fund might have to reinvest the proceeds in a security offering a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Very low or negative interest rates may magnify interest rate risk. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. Changes in market conditions and government policies may lead to periods of heightened volatility in the debt securities market, reduced liquidity Fund investments and an increase in Fund redemptions.
High Yield Securities Risk. High yield securities and unrated securities of
similar credit quality (commonly known as “junk bonds”) have a much greater risk of default (or in the case of bonds currently in default, of not returning
principal) and their values tend to be more volatile than higher-rated securities with similar maturities. Additionally, these securities tend to be less liquid and more
difficult to value than higher-rated securities.
Leverage
Risk. The use of leverage through the issuance of preferred shares and/or debt securities, or from borrowing money, may result in certain risks to the Fund as described below. Certain transactions, such as derivatives, also may give rise to a form of economic leverage. Leveraging is a speculative technique, and there are special risks involved, including the risk that downside outcomes for common shareholders are magnified as a result of losses and declines in value of portfolio securities purchased with borrowed money. In addition, the costs of the financial leverage may exceed the income from investments made with such leverage, interest rates or dividends payable on the financial leverage may affect the yield and distributions to the common shareholders, and the net asset value and market value of common shares may be more volatile than if the Fund had not been leveraged. The use of leverage may cause the Fund to have to liquidate portfolio positions when it may not be advantageous to do so. There can be no assurance that any leveraging strategies will be successful. Because many derivatives have a leverage component (i.e., a notional value in excess of the assets needed to establish and/or maintain the derivative position), adverse changes in the value or level of the underlying asset, rate or index may result in a loss substantially greater than the amount invested in the derivative itself.
Closed-end Fund Risk. Closed-end funds involve investment risks different from
those associated with other investment companies. Shares of closed-end funds frequently trade at either a premium or discount relative to their net asset value
(“NAV”). There can be no assurance that the discount will decrease. It is possible that a market discount may increase and the Fund may suffer realized or
unrealized capital losses due to further decline in the market price of the securities held by the Fund, thereby adversely affecting the NAV of the Fund’s shares.
Similarly, there can be no assurance that the Fund’s shares will trade at a premium, will continue to trade at a premium or that the premium will not decrease over
time. The Fund’s shares are designed primarily for long-term investors, and the Fund should not be viewed as a vehicle for short-term trading purposes.
Anti-takeover Provisions Risk. The Fund’s governing documents include provisions that could limit the ability of other entities or persons to acquire control of the Fund or to change the composition of its Board of Trustees. Such provisions could limit the ability of shareholders to sell their shares at a premium over prevailing market prices by discouraging a third party from seeking to obtain control of the Fund. These provisions include staggered terms of office for the Trustees, advance notice requirements for shareholder proposals, and supermajority voting requirements for open-ending the Fund or a merger, liquidation, asset sale or similar transactions.
Asset-Backed Securities Risk. Asset-backed securities are securities that
represent a participation in, or are secured by and payable from, a stream of payments generated by particular assets, most often a pool or pools of similar assets (e.g.,
trade receivables). The credit quality of these securities depends primarily upon the quality of the underlying assets and the level of credit support and/or enhancement
provided. Asset-backed securities are subject to risk of default on the underlying assets, particularly during periods of economic downturn. Defaults on the underlying assets
may cause such securities to decline in value and become less liquid. Rising interest rates tend to extend the duration of these securities, making them more sensitive to
changes in interest rates than instruments with fixed payment schedules. As a result, in a period of rising interest rates, these securities may exhibit additional volatility. When interest rates decline or are low, borrowers may pay off their debts sooner than expected, which can reduce the returns of the Fund. The underlying assets (e.g., loans) are subject to prepayments which shorten the securities’ weighted average maturity and may lower their return. If required payments of principal and interest are not made and any credit support or enhancement is exhausted, losses or delays in payment may result. The value of these securities also may change because of changes in the market’s perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution or Fund providing the credit support or enhancement.
14 | Allspring Income Opportunities Fund
Objective, strategies and risks (unaudited)
Convertible Securities Risk. A convertible security has characteristics of both equity and debt securities and, as a result, is exposed to risks that are typically associated with both types of securities. The market value of a convertible security tends to decline as interest rates increase but also tends to reflect changes in the market price of the common stock of the issuing company. A convertible security is also exposed to the risk that an issuer is unable to meet its obligation to make dividend or interest and principal payments when due as a result of changing financial or market conditions. In the event of a liquidation of the issuer, holders of a convertible security would generally be paid only after holders of any senior debt obligations. The Fund may be forced to convert a convertible security before it would otherwise choose to do so, which may decrease the Fund’s return.
Derivatives Risk. The use of derivatives, such as futures, options, and swap agreements, presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the derivatives’ underlying assets, indexes or rates and the derivatives themselves, which may be magnified by certain features of the derivatives. These risks are heightened when derivatives are used to enhance the Fund’s return or as a substitute for a position or security, rather than solely to hedge (or mitigate) the risk of a position or security held by the Fund. The success of a derivative strategy will be affected by the portfolio manager’s ability to assess and predict market or economic developments and their impact on the derivatives’ underlying assets, indexes or rates and the derivatives themselves. Certain derivative instruments may become illiquid and, as a result, may be difficult to sell when the portfolio manager believes it would be appropriate to do so. Certain derivatives create leverage, which can magnify the impact of a decline in the value of their underlying assets, indexes or rates and increase the volatility of the Fund’s net asset value. Certain derivatives (e.g., over-the-counter swaps) are also subject to the risk that the counterparty to the derivative contract will be unwilling or unable to fulfill its contractual obligations, which may cause the Fund to lose money, suffer delays or incur costs arising from holding or selling an underlying asset. Changes in laws or regulations may make the use of derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the use, value, or performance of derivatives.
Equity Securities Risk. The values of equity securities may experience periods of substantial price volatility and may decline significantly over short time periods. In general, the values of equity securities are more volatile than those of debt securities. Equity securities fluctuate in value and price in response to factors specific to the issuer of the security, such as management performance, financial condition, and market demand for the issuer’s products or services, as
well as factors unrelated to the fundamental condition of the issuer, including general market, economic and political conditions. Investing in equity securities poses risks
specific to an issuer, as well as to the particular type of company issuing the equity securities. For example, investing in the equity securities of small- or
mid-capitalization companies can involve greater risk than is customarily associated with investing in stocks of larger, more-established companies. Different parts of a
market, industry and sector may react differently to adverse issuer, market, regulatory, political, and economic developments. Negative news or a poor outlook for a
particular industry or sector can cause the share prices of securities of companies in that industry or sector to decline. This risk may be heightened for a Fund that invests
a substantial portion of its assets in a particular industry or sector.
Foreign Investment Risk. Foreign investments may be subject to lower liquidity,
greater price volatility and risks related to adverse political, regulatory, market or economic developments. Foreign companies may be subject to significantly higher levels
of taxation than U.S. companies, including potentially confiscatory levels of taxation, thereby reducing the earnings potential of such foreign companies. Foreign investments
may involve exposure to changes in foreign currency exchange rates. Such changes may reduce the U.S. dollar value of the investments. Foreign investments may be subject
to additional risks such as potentially higher withholding and other taxes, and may also be subject to greater trade settlement, custodial, and other operational risks than domestic investments. Certain foreign markets may also be characterized by less stringent investor protection and disclosure standards.
Futures Contracts Risk. A Fund that uses futures contracts, which are a type of
derivative, is subject to the risk of loss caused by unanticipated market movements. In addition, there may at times be an imperfect correlation between the movement in the
prices of futures contracts and the value of their underlying instruments or indexes, and there may at times not be a liquid secondary market for certain futures
contracts.
Loan Risk. Loans may be unrated, less liquid, and more difficult to value than traditional debt securities. Loans may be made to finance highly leveraged corporate operations or acquisitions. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in financial, economic or market conditions. Loans generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such loans in secondary markets. As a result, the Fund may be unable to sell loans at a desired time or price. If the Fund acquires only an assignment or a participation in a loan made by a third party, the Fund may not be able to control amendments, waivers, or the exercise of any remedies that a lender would have under a direct loan and may assume liability as a lender.
Management Risk. Investment decisions, techniques, analyses, or models
implemented by the Fund’s manager or sub-advisor in seeking to achieve the Fund’s investment objectives may not produce the returns expected, may cause the
Fund’s shares to lose value or may cause the Fund to underperform other funds with similar investment objectives.
Market Price of Shares Risk. Whether investors will realize a gain or loss upon the sale of the Fund’s common shares will depend upon whether the market value of the shares at the time of sale is above or below the price the investor paid, taking into account transaction costs, for the shares and is not directly dependent upon the Fund’s net asset value. Because the market value of the Fund’s shares will be determined by factors such as the relative demand for and supply of the shares in the market, general market conditions and other factors beyond the control of the Fund, the Fund cannot predict whether its common shares will trade at, below or above net asset value, or below or above the initial offering price for the shares.
Options Risk. A Fund that purchases options, which are a type of derivative, is subject to the risk that gains, if any, realized on the position, will be less than
Allspring Income Opportunities Fund | 15
Objective, strategies and risks (unaudited)
the amount paid as
premiums to the writer of the option. A Fund that writes options receives a premium that may be small relative to the loss realized in the event of adverse changes in the
value of the underlying instruments. A Fund that writes covered call options gives up the opportunity to profit from any price increase in the underlying security above the
option exercise price while the option is in effect. Options may be more volatile than the underlying instruments. In addition, there may at times be an imperfect correlation
between the movement in values of options and their underlying securities and there may at times not be a liquid secondary market for certain options.
U.S. Government Obligations Risk. U.S. Government obligations may be adversely impacted by changes in interest rates, and securities issued or
guaranteed by U.S. Government agencies or government-sponsored entities may not be backed by the full faith and credit of the U.S. Government. If a government-sponsored entity is unable to meet its obligations or its creditworthiness declines, the performance of a Fund that holds securities issued or guaranteed by the entity will be adversely impacted. U.S. Government obligations may be adversely affected by a default by, or decline in the credit quality, of the U.S. government.
16 | Allspring Income Opportunities Fund
Portfolio of investments—April 30, 2023
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Energy equipment & services: 0.24% |
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Oil, gas & consumable fuels: 0.26% |
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Mortgage real estate investment trusts (REITs): 0.18% |
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Starwood Property Trust, Inc. |
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Total common stocks (Cost $1,994,800) |
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Corporate bonds and notes: 114.66% |
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Clear Channel Outdoor Holdings, Inc. 144A |
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Outfront Media Capital LLC/Outfront Media Capital Corp. 144A
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Outfront Media Capital LLC/Outfront Media Capital Corp. 144A
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Cablevision Lightpath LLC 144A |
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Cablevision Lightpath LLC 144A |
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Match Group Holdings II LLC 144A |
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Uber Technologies, Inc. 144A |
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Uber Technologies, Inc. 144A |
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CCO Holdings LLC/CCO Holdings Capital Corp. 144A |
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CCO Holdings LLC/CCO Holdings Capital Corp. 144A |
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CCO Holdings LLC/CCO Holdings Capital Corp. |
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CCO Holdings LLC/CCO Holdings Capital Corp. 144A |
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CCO Holdings LLC/CCO Holdings Capital Corp. 144A |
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CCO Holdings LLC/CCO Holdings Capital Corp. 144A |
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Directv Financing LLC/Directv Financing Co.-Obligor, Inc. 144A
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The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 17
Portfolio of investments—April 30, 2023
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Gray Escrow II, Inc. 144A |
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Gray Television, Inc. 144A |
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Scripps Escrow II, Inc. 144A |
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Scripps Escrow II, Inc. 144A |
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Scripps Escrow, Inc. 144A |
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Sirius XM Radio, Inc. 144A |
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Townsquare Media, Inc. 144A |
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Telecommunications: 0.59% |
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CommScope Technologies LLC 144A |
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Consumer, cyclical: 22.10% |
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American Airlines, Inc./AAdvantage Loyalty IP Ltd. 144A
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American Airlines, Inc./AAdvantage Loyalty IP Ltd. 144A
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Hawaiian Airlines Pass-Through Certificates Series 2013-1 Class 1A |
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Hawaiian Brand Intellectual Property Ltd./HawaiianMiles Loyalty Ltd. 144A |
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|
|
Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd. 144A
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Auto manufacturers: 3.63% |
|
|
|
|
|
|
Allison Transmission, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Auto parts & equipment: 0.57% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Distribution/wholesale: 1.07% |
|
|
|
|
|
|
G-III Apparel Group Ltd. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Churchill Downs, Inc. 144A |
|
|
|
|
|
|
Churchill Downs, Inc. 144A |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
18 | Allspring Income Opportunities Fund
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
Entertainment (continued) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Live Nation Entertainment, Inc. 144A |
|
|
|
|
|
|
Live Nation Entertainment, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Toll Brothers Finance Corp. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Carnival Holdings Bermuda Ltd. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Bath & Body Works, Inc. 144A |
|
|
|
|
|
|
Dave & Buster’s, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
LSF9 Atlantis Holdings LLC/Victra Finance Corp. 144A
|
|
|
|
|
|
|
Macy’s Retail Holdings LLC 144A |
|
|
|
|
|
|
Macy’s Retail Holdings LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
NMG Holding Co., Inc./Neiman Marcus Group LLC 144A |
|
|
|
|
|
|
PetSmart, Inc./PetSmart Finance Corp. 144A |
|
|
|
|
|
|
PetSmart, Inc./PetSmart Finance Corp. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Consumer, non-cyclical: 11.09% |
|
|
|
|
|
|
Commercial services: 9.00% |
|
|
|
|
|
|
Allied Universal Holdco LLC/Allied Universal Finance Corp. 144A
|
|
|
|
|
|
|
Allied Universal Holdco LLC/Allied Universal Finance Corp. 144A
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
MPH Acquisition Holdings LLC 144A |
|
|
|
|
|
|
MPH Acquisition Holdings LLC 144A |
|
|
|
|
|
|
PECF USS Intermediate Holding III Corp. 144A |
|
|
|
|
|
|
Prime Security Services Borrower LLC/Prime Finance, Inc. 144A
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Service Corp. International |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 19
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
Healthcare-services: 2.09% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
CHS/Community Health Systems, Inc. 144A |
|
|
|
|
|
|
CHS/Community Health Systems, Inc. 144A |
|
|
|
|
|
|
Pediatrix Medical Group, Inc. 144A |
|
|
|
|
|
|
Select Medical Corp. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Energy-alternate sources: 4.39% |
|
|
|
|
|
|
Enviva Partners LP/Enviva Partners Finance Corp. 144A
|
|
|
|
|
|
|
TerraForm Power Operating LLC 144A |
|
|
|
|
|
|
TerraForm Power Operating LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Aethon United BR LP/Aethon United Finance Corp. 144A
|
|
|
|
|
|
|
Encino Acquisition Partners Holdings LLC 144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co. 144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co. 144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co. 144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co. 144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Occidental Petroleum Corp. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Oil & gas services: 3.51% |
|
|
|
|
|
|
Archrock Partners LP/Archrock Partners Finance Corp. 144A
|
|
|
|
|
|
|
Archrock Partners LP/Archrock Partners Finance Corp. 144A
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Oceaneering International, Inc. |
|
|
|
|
|
|
Oceaneering International, Inc. |
|
|
|
|
|
|
USA Compression Partners LP/USA Compression Finance Corp. |
|
|
|
|
|
|
USA Compression Partners LP/USA Compression Finance Corp. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
CQP Holdco LP/BIP-V Chinook Holdco LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
EnLink Midstream LLC 144A |
|
|
|
|
|
|
EnLink Midstream LLC 144A |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
20 | Allspring Income Opportunities Fund
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
| |
|
|
|
|
|
|
EnLink Midstream Partners LP |
|
|
|
|
|
|
EnLink Midstream Partners LP |
|
|
|
|
|
|
EQM Midstream Partners LP 144A |
|
|
|
|
|
|
EQM Midstream Partners LP 144A |
|
|
|
|
|
|
Harvest Midstream I LP 144A |
|
|
|
|
|
|
Hess Midstream Operations LP 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Rockies Express Pipeline LLC 144A |
|
|
|
|
|
|
Rockies Express Pipeline LLC 144A |
|
|
|
|
|
|
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. 144A
|
|
|
|
|
|
|
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. 144A
|
|
|
|
|
|
|
Venture Global Calcasieu Pass LLC 144A |
|
|
|
|
|
|
Venture Global Calcasieu Pass LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Diversified financial services: 8.25% |
|
|
|
|
|
|
Enact Holdings, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Oppenheimer Holdings, Inc. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Rocket Mortgage LLC/Rocket Mortgage Co.-Issuer, Inc. 144A
|
|
|
|
|
|
|
Rocket Mortgage LLC/Rocket Mortgage Co.-Issuer, Inc. 144A
|
|
|
|
|
|
|
United Wholesale Mortgage LLC 144A |
|
|
|
|
|
|
United Wholesale Mortgage LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
AssuredPartners, Inc. 144A |
|
|
|
|
|
|
BroadStreet Partners, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
GLP Capital LP/GLP Financing II, Inc. |
|
|
|
|
|
|
HAT Holdings I LLC/HAT Holdings II LLC 144A |
|
|
|
|
|
|
HAT Holdings I LLC/HAT Holdings II LLC 144A |
|
|
|
|
|
|
HAT Holdings I LLC/HAT Holdings II LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. 144A |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 21
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
| |
|
|
|
|
|
|
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. 144A |
|
|
|
|
|
|
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. 144A |
|
|
|
|
|
|
MPT Operating Partnership LP/MPT Finance Corp. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Starwood Property Trust, Inc. 144A |
|
|
|
|
|
|
Starwood Property Trust, Inc. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Spirit AeroSystems, Inc. 144A |
|
|
|
|
|
|
Spirit AeroSystems, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Building materials: 1.20% |
|
|
|
|
|
|
Camelot Return Merger Sub, Inc. 144A |
|
|
|
|
|
|
Hand/machine tools: 1.08% |
|
|
|
|
|
|
Werner FinCo LP/Werner FinCo, Inc. 144A |
|
|
|
|
|
|
Machinery-diversified: 1.37% |
|
|
|
|
|
|
Chart Industries, Inc. 144A |
|
|
|
|
|
|
Chart Industries, Inc. 144A |
|
|
|
|
|
|
TK Elevator U.S. Newco, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Packaging & containers: 2.34% |
|
|
|
|
|
|
Ardagh Metal Packaging Finance USA LLC/Ardagh Metal Packaging Finance PLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Clearwater Paper Corp. 144A |
|
|
|
|
|
|
Clydesdale Acquisition Holdings, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Trucking & leasing: 1.63% |
|
|
|
|
|
|
Fortress Transportation & Infrastructure Investors LLC 144A
|
|
|
|
|
|
|
Fortress Transportation & Infrastructure Investors LLC 144A
|
|
|
|
|
|
|
Fortress Transportation & Infrastructure Investors LLC 144A
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
22 | Allspring Income Opportunities Fund
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Cloud Software Group, Inc. |
|
|
|
|
|
|
SS&C Technologies, Inc. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
NextEra Energy Operating Partners LP 144A |
|
|
|
|
|
|
NSG Holdings LLC/NSG Holdings, Inc. 144A |
|
|
|
|
|
|
Pattern Energy Operations LP/Pattern Energy Operations, Inc.
144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Vistra Corp. (5 Year Treasury Constant
Maturity +5.74%) 144Aʊ± |
|
|
|
|
|
|
Vistra Operations Co. LLC 144A |
|
|
|
|
|
|
Vistra Operations Co. LLC 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Total corporate bonds and notes (Cost $519,607,061) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Clear Channel Outdoor Holdings, Inc. (U.S. SOFR 3
Month +3.50%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Hubbard Radio LLC (1 Month LIBOR +4.25%) ± |
|
|
|
|
|
|
Telecommunications: 0.52% |
|
|
|
|
|
|
Intelsat Jackson Holdings SA (U.S. SOFR 6
Month +4.50%) ± |
|
|
|
|
|
|
Consumer, cyclical: 1.50% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Mileage Plus Holdings LLC (3 Month LIBOR +5.25%) ± |
|
|
|
|
|
|
SkyMiles IP Ltd. (U.S. SOFR 3 Month +3.75%) ˂± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Dave & Buster’s, Inc. (U.S. SOFR 1 Month +5.00%) ± |
|
|
|
|
|
|
Consumer, non-cyclical: 2.00% |
|
|
|
|
|
|
Commercial services: 1.79% |
|
|
|
|
|
|
Geo Group, Inc. (U.S. SOFR 1 Month +7.13%) ± |
|
|
|
|
|
|
Healthcare-services: 0.21% |
|
|
|
|
|
|
Surgery Center Holdings, Inc. (1 Month LIBOR +3.75%) ± |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 23
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
GIP II Blue Holding LP (3 Month LIBOR +4.50%) ˂± |
|
|
|
|
|
|
M6 ETX Holdings II Midco LLC (U.S. SOFR 1
Month +4.50%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Diversified financial services: 1.24% |
|
|
|
|
|
|
Resolute Investment Managers, Inc. (3 Month
LIBOR +4.25%) ± |
|
|
|
|
|
|
Resolute Investment Managers, Inc. (3 Month
LIBOR +8.00%) ౠ|
|
|
|
|
|
|
Russell Investments U.S. Institutional Holdco, Inc. (U.S. SOFR 1 Month +3.50%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Asurion LLC (1 Month LIBOR +3.25%) ˂± |
|
|
|
|
|
|
Asurion LLC (1 Month LIBOR +5.25%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Claros Mortgage Trust, Inc. (U.S. SOFR 1
Month +4.50%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Machinery-diversified: 0.29% |
|
|
|
|
|
|
Chart Industries, Inc. (U.S. SOFR 1 Month +3.75%) ± |
|
|
|
|
|
|
Vertical U.S. Newco, Inc. (3 Month LIBOR +3.50%) ± |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Metal fabricate/hardware: 0.63% |
|
|
|
|
|
|
Werner FinCo LP (3 Month LIBOR +4.00%) ± |
|
|
|
|
|
|
Total loans (Cost $38,310,000) |
|
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
Communication services: 0.00% |
|
|
|
|
|
|
Diversified telecommunication services: 0.00% |
|
|
|
|
|
|
Intelsat Jackson Holdings SA Series A Contingent Value Rights
♦† |
|
|
|
|
|
|
Intelsat Jackson Holdings SA Series B Contingent Value Rights
♦† |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
Yankee corporate bonds and notes: 15.17% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
24 | Allspring Income Opportunities Fund
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
Telecommunications: 0.00% |
|
|
|
|
|
|
Intelsat Jackson Holdings SA ♦† |
|
|
|
|
|
|
Consumer, cyclical: 6.94% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Air Canada Pass-Through Trust Series 2020-1 Class C 144A
|
|
|
|
|
|
|
Auto parts & equipment: 0.40% |
|
|
|
|
|
|
Adient Global Holdings Ltd. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
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|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd. 144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd. 144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd. 144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd. 144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd. 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
1011778 BC ULC/New Red Finance, Inc. 144A |
|
|
|
|
|
|
Consumer, non-cyclical: 1.53% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Grifols Escrow Issuer SA 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Teva Pharmaceutical Finance Netherlands III BV |
|
|
|
|
|
|
Teva Pharmaceutical Finance Netherlands III BV |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Northriver Midstream Finance LP 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Diversified financial services: 1.73% |
|
|
|
|
|
|
Castlelake Aviation Finance DAC 144A |
|
|
|
|
|
|
Macquarie Airfinance Holdings Ltd. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Sensata Technologies BV 144A |
|
|
|
|
|
|
Sensata Technologies BV 144A |
|
|
|
|
|
|
| |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 25
Portfolio of investments—April 30, 2023
| |
|
|
|
|
|
Trucking & leasing: 1.24% |
|
|
|
|
|
|
| |
|
|
|
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|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Total yankee corporate bonds and notes (Cost $68,504,418) |
|
|
|
|
|
|
| |
|
|
|
|
|
Short-term investments: 2.80% |
|
|
|
|
|
|
Investment companies: 2.80% |
|
|
|
|
|
|
Allspring Government Money Market Fund Select Class ♠∞## |
|
|
|
|
|
|
Total short-term investments (Cost $11,927,014) |
|
|
|
|
|
|
Total investments in securities (Cost $640,343,293) |
|
|
|
|
|
|
Other assets and liabilities, net |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Non-income-earning security |
| |
The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of
1933. |
| |
Security is perpetual in nature and has no stated maturity date. The date shown reflects the next call date. |
| |
Variable rate investment. The rate shown is the rate in effect at period end. |
| |
All or a portion of the position represents an unfunded loan commitment. The rate represents the current interest rate if the loan is partially funded.
|
| |
Security is valued using significant unobservable inputs. |
| |
The security is fair valued in accordance with Allspring Funds
Management’s valuation procedures, as the
Board-designated valuation designee. |
| |
The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| |
The rate represents the 7-day annualized yield at period end. |
| |
All or a portion of this security is segregated for unfunded loans. |
| |
| |
London Interbank Offered Rate |
| |
Real estate investment trust |
| |
Secured Overnight Financing Rate |
Investments in affiliates
An affiliated
investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the
issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| |
Value,
beginning of
period |
|
|
Net
realized
gains
(losses) |
Net
change in
unrealized
gains
(losses) |
|
|
Income
from
affiliated
securities |
| |
|
|
|
|
|
|
|
|
Allspring Government Money Market Fund Select Class |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial statements.
26 | Allspring Income Opportunities Fund
Statement of assets and liabilities—April 30, 2023
Financial statements
Statement of assets and liabilities
| |
|
Investments in unaffiliated securities, at value (cost $628,416,279) |
|
Investments in affiliated securities, at value (cost $11,927,014) |
|
| |
|
| |
|
Receivable for investments sold |
|
Prepaid expenses and other assets |
|
| |
|
| |
|
Secured borrowing payable |
|
Payable for investments purchased |
|
| |
|
| |
|
Administration fee payable |
|
Accrued expenses and other liabilities |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net asset value per share |
|
Based on $425,866,901 divided by 59,664,357 shares issued and outstanding (100,000,000 shares
authorized) |
|
The accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 27
Statement of operations—year ended April 30, 2023
Statement of
operations
| |
|
| |
|
Income from affiliated securities |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Custody and accounting fees |
|
| |
|
Shareholder report expenses |
|
Trustees’ fees and expenses |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Realized and unrealized gains (losses) on investments |
|
Net realized losses on investments |
|
Net change in unrealized gains (losses) on investments |
|
Net realized and unrealized gains (losses) on investments |
|
Net decrease in net assets resulting from operations |
|
The accompanying notes are an integral part of these financial statements.
28 | Allspring Income Opportunities Fund
Statement of changes in net assets
Statement of
changes in net assets
| |
Year ended
April 30, 2023 |
Year ended
April 30, 2022 |
| |
|
|
|
|
| |
|
|
|
|
Net realized gains (losses) on investments |
|
|
|
|
Net change in unrealized gains (losses) on investments |
|
|
|
|
Net decrease in net assets resulting from operations |
|
|
|
|
Distributions to shareholders from |
|
|
|
|
Net investment income and net realized gains |
|
|
|
|
Tax basis return of capital |
|
|
|
|
Total distributions to shareholders |
|
|
|
|
Capital share transactions |
|
|
|
|
Cost of shares repurchased |
|
|
|
|
Total decrease in net assets |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
The
accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 29
Statement of cash flows—year ended April 30, 2023
Statement of cash
flows
Cash flows from operating activities |
|
Net decrease in net assets resulting from operations |
|
Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities |
|
Purchase of long-term securities |
|
Proceeds from the sales of long-term securities |
|
| |
|
Purchases and sales of short-term securities, net |
|
Increase in receivable for investments sold |
|
Increase in receivable for interest |
|
Increase in prepaid expenses and other assets |
|
Decrease in payable for investments purchased |
|
Decrease in trustees’ fees and expenses payable |
|
Decrease in advisory fee payable |
|
Increase in administration fee payable |
|
Increase in accrued expenses and other liabilities |
|
Net realized losses on investments |
|
Net change in unrealized gains (losses) on investments |
|
Net cash provided by operating activities |
|
Cash flows from financing activities |
|
Decrease in secured borrowing payable |
|
Cost of shares repurchased |
|
| |
|
Net cash used in financing activities |
|
| |
|
| |
|
| |
|
| |
|
Supplemental cash disclosure |
|
| |
|
The accompanying notes are an integral part of these financial statements.
30 | Allspring Income Opportunities Fund
Financial
highlights
(For a share
outstanding throughout each period)
| |
|
| |
|
|
|
|
|
Net asset value, beginning of period |
|
|
|
|
|
| |
|
|
|
|
|
Net realized and unrealized gains (losses) on investments |
|
|
|
|
|
Total from investment operations |
|
|
|
|
|
Distributions to shareholders from |
|
|
|
|
|
| |
|
|
|
|
|
Tax basis return of capital |
|
|
|
|
|
Total distributions to shareholders |
|
|
|
|
|
Anti-dilutive effect of shares repurchased |
|
|
|
|
|
Net asset value, end of period |
|
|
|
|
|
Market value, end of period |
|
|
|
|
|
Total return based on market value3 |
|
|
|
|
|
Ratios to average net assets (annualized) |
|
|
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| |
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| |
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| |
|
|
|
|
|
| |
|
|
|
|
|
Net assets, end of period (000s omitted) |
|
|
|
|
|
Borrowings outstanding, end of period (000s omitted) |
|
|
|
|
|
Asset coverage per $1,000 of borrowing, end of period |
|
|
|
|
|
| |
Ratios include interest expense relating to interest associated with borrowings and/or leverage transactions as follows: |
Year ended April 30, 2023 |
|
Year ended April 30, 2022 |
|
Year ended April 30, 2021 |
|
Year ended April 30, 2020 |
|
Year ended April 30, 2019 |
|
| |
Calculated based upon average shares outstanding |
| |
Amount is less than $0.005. |
| |
Total return is calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Dividends and distributions, if any,
are assumed for purposes of these calculations to be reinvested at prices
obtained under the Fund’s Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. |
The
accompanying notes are an integral part of these financial statements.
Allspring Income Opportunities Fund | 31
Notes to financial statements
Notes to financial
statements
Allspring Income Opportunities Fund (the “Fund”) was organized as a statutory
trust under the laws of the state of Delaware on December 3, 2002 and is registered as a diversified closed-end management investment company under the Investment Company Act
of 1940, as amended (the “1940 Act”). As an investment company, the Fund follows the accounting and reporting guidance in Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification Topic 946, Financial
Services – Investment Companies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting
policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles
which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing
price or, if none, the last sales price.
Investments in registered open-end
investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using any of the methods discussed above are valued at their
fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of
Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these
responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of
portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
When-issued transactions
The Fund
may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at
least equal in value to the Fund’s commitment to purchase when-issued securities. Securities
purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.
Loans
The Fund may invest in direct
debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans pay interest at rates which are periodically reset by reference to
a base lending rate plus a spread. Investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When the
Fund purchases participations, it generally has no rights to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund assumes the
credit risk of both the borrower and the lender that is selling the participation. When the Fund purchases assignments from lenders, it acquires direct rights against the
borrower on the loan and may enforce compliance by the borrower with the terms of the loan agreement. Loans may include fully funded term loans or unfunded loan commitments,
which are contractual obligations for future funding.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified
cost.
Interest income is accrued daily and bond discounts are accreted and premiums
are amortized daily. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the
collection of all or a portion of interest has been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer
subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.
Dividend income is recognized on the ex-dividend date.
32 | Allspring Income Opportunities Fund
Notes to financial statements
Distributions to
shareholders
Under a managed distribution plan, the Fund pays monthly distributions to shareholders
at an annual minimum fixed rate of 8% based on the Fund’s average monthly net asset value per share over the prior 12 months. The monthly distributions may be sourced
from income, paid-in capital, and/or capital gains, if any. To the extent that sufficient investment income is not available on a monthly basis, the Fund may distribute
paid-in capital and/ or capital gains, if any, in order to maintain its managed distribution level.
Distributions to shareholders from net investment income and net realized gains, if any, are
recorded on the ex-dividend date. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting
principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a
portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does
not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of April 30, 2023, the aggregate cost of all investments for federal income tax purposes was $644,304,179 and the unrealized gains (losses) consisted of:
As of April 30, 2023, the Fund had capital loss carryforwards which consisted of $39,189,805 in short-term capital losses and $50,280,007 in long-term capital losses.
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments
are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s
investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest
priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is
significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•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 the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an
indication of the risk associated with investing in those securities.
Allspring Income Opportunities Fund | 33
Notes to financial statements
The following is a summary of the
inputs used in valuing the Fund’s assets and liabilities as of April 30, 2023:
| |
|
Other significant
observable inputs
(Level 2) |
Significant
unobservable inputs
(Level 3) |
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Corporate bonds and notes |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Yankee corporate bonds and notes |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended April 30, 2023, the Fund had no material transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding
company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the adviser to the Fund and is entitled to receive a fee at an annual
rate of 0.60% of the Fund’s average daily total assets. Total assets consist of the net assets of the Fund plus borrowings or other leverage for investment purposes to
the extent excluded in calculating net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate of 0.40% of the Fund’s average daily total assets.
Administration fee
Allspring Funds
Management also serves as the administrator to the Fund, providing the Fund with a wide range of administrative services necessary to the operation of the Fund. Allspring
Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Fund’s average daily total assets.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $17,993,909, $0 and $0 in interfund purchases, sales and net realized gains (losses), respectively, during the year ended April 30, 2023.
5.
CAPITAL SHARE TRANSACTIONS
The Fund has authorized capital of
100,000,000 shares with no par value. For the years ended April 30, 2023 and April 30, 2022, the Fund did not issue any shares.
Under an open-market share repurchase program (the “Buyback Program”), the Fund is
authorized to repurchase up to 5% of its outstanding shares in open market transactions. The Fund’s Board of Trustees has delegated to Allspring Funds Management full
discretion to administer the Buyback Program including the determination of the amount and timing of repurchases in accordance with the best interests of the Fund and subject
to applicable legal limitations. During the year ended April 30, 2023, the Fund purchased 581,767 of its shares on the open market at a total cost of $3,838,602 (weighted
average price per share of $6.59). The weighted average discount of these repurchased shares was 8.93%. For the year ended April 30, 2022, the Fund purchased 340,090 of its shares on the open market at a total cost of $2,622,416.
34 | Allspring Income Opportunities Fund
Notes to financial statements
The Fund has borrowed $189,000,000 through a revolving credit facility administered by a
major financial institution (the “Facility”). The Facility has a commitment amount of up to $194,000,000. The Fund is charged interest at the 1 Month Secured
Overnight Financing Rate (SOFR) plus a spread and a commitment fee based on the unutilized amount of the commitment amount. The financial institution holds a security
interest in all the assets of the Fund as collateral for the borrowing. Based on the nature of the terms of the Facility and comparative market rates, the carrying amount of
the borrowings at April 30, 2023 approximates its fair value. If measured at fair value, the borrowings would be categorized as a Level 2 under the fair value
hierarchy.
During the year ended April 30, 2023, the Fund had average borrowings
outstanding of $190,342,466 at an average interest rate of 3.87% and recorded interest in the amount of $7,364,166, which represents 1.70% of its average daily net
assets.
7.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments,
excluding U.S. government obligations (if any) and short-term securities, for the year ended April 30, 2023 were $316,806,496 and $331,029,810, respectively.
As of April 30, 2023, the Fund had unfunded loan commitments of $1,442,676 with unrealized losses of
$12,604.
8.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years
ended April 30, 2023 and April 30, 2022 were as follows:
| |
|
| |
|
|
| |
|
|
Tax basis return of capital |
|
|
As of April 30, 2023, the components of distributable earnings on a tax basis were as
follows:
| |
Capital loss
carryforward |
| |
|
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights
against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts
indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
10.
SUBSEQUENT DISTRIBUTIONS
Under the managed distribution plan, the Fund declared
the following distributions to common shareholders:
These distributions are not reflected in the accompanying financial statements.
Allspring Income Opportunities Fund | 35
Report of independent registered public accounting firm
To the Shareholders and Board of
Trustees
Allspring Income Opportunities Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Income Opportunities Fund (the Fund), including the portfolio of investments, as of April 30, 2023, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of April 30, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s
management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of April 30, 2023, by correspondence with the custodian, transfer agent, agent banks and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one
or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least
1955.
Boston, Massachusetts
June 26, 2023
36 | Allspring Income Opportunities Fund
Other information (unaudited)
Other information
Tax information
For the fiscal year ended April 30, 2023, $24,455,353 has been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
Proxy voting information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities
were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Delaware statutory trust act – control share acquisitions
Because the Fund is organized as a Delaware statutory trust, it is subject to the control share acquisition statute (the “Control Share Statute”) contained
in Subchapter III of the Delaware Statutory Trust Act (the “DSTA”), which became automatically applicable to listed closed-end funds, such as the Fund, upon its effective date of August 1, 2022 (the “Effective Date”).
The Control Share Statute provides for a series of voting power thresholds above which shares are considered control shares. The first such threshold is 10% or more, but less than 15%, of all voting power. Voting power is defined by the Control Share Statute as the power to directly or indirectly exercise or direct the exercise of the voting power of Fund shares in the election of trustees. Whether a voting power threshold is met is determined by aggregating the holdings of the acquirer as well as those of its “associates,” as defined by the Control Share Statute.
Once a threshold is reached, an acquirer has no voting rights under the DSTA or the governing
documents of the Fund with respect to shares acquired in excess of that threshold (i.e., the “control shares”) unless approved by shareholders or exempted by the
Fund’s Board of Trustees. Approval by shareholders requires the affirmative vote of two-thirds of all votes entitled to be cast on the matter, excluding shares held by
the acquirer and its associates as well as shares held by certain insiders of the Fund. The Control Share Statute provides procedures for an acquirer to request a shareholder
meeting for the purpose of considering whether voting rights shall be accorded to control shares. Further approval by the Fund’s shareholders would be required with respect to additional acquisitions of control shares above the next applicable threshold level. In addition, the Fund’s Board of Trustees is permitted, but not obligated to, exempt specific acquisitions or classes of acquisitions of control shares, either in advance or retroactively.
The Control Share Statute does not retroactively apply to acquisitions of shares that occurred
prior to the Effective Date. However, such shares will be aggregated with any shares acquired after the Effective Date for purposes of determining whether a voting power
threshold is exceeded, resulting in the newly acquired shares constituting control shares.
The Control Share Statute requires shareholders to disclose to the Fund any control share acquisition within 10 days of such acquisition and, upon request, to provide any information that the Fund’s Board of Trustees reasonably believes is necessary or desirable to determine whether a control share acquisition has occurred.
The foregoing is only a summary of certain aspects of the Control Share Statute. Shareholders should consult their own legal counsel to determine the application of the Control Share Statute with respect to their shares of the Fund and any subsequent acquisitions of shares.
Allspring Income Opportunities Fund | 37
Other information (unaudited)
BOARD OF TRUSTEES AND
OFFICERS
The following table provides basic information about the Board of Trustees
(the “Trustees”) and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for each fund in the Allspring family of
funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust, and four closed-end funds, including
the Fund (collectively the “Fund Complex”). The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. The
Board of Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is
elected. Each Officer serves an indefinite term.
Independent Trustees
| |
|
Principal occupations during past five years or
longer |
Current other
public company
or
investment
company
directorships |
Class I - Non-Interested Trustees to serve until 2023 Annual Meeting of
Shareholders |
Isaiah
Harris, Jr.
(Born 1952) |
Trustee,
since 2010;
Audit Committee
Chair,
since 2019 |
Retired. Member of the Advisory Board of CEF of East Central Florida.
Chairman of the Board of CIGNA Corporation from 2009 to
2021, and Director from 2005 to 2008. From 2003 to 2011,
Director of Deluxe Corporation. Prior thereto, President and CEO of
BellSouth Advertising and Publishing Corp. from 2005 to
2007, President and CEO of BellSouth Enterprises from 2004 to
2005 and President of BellSouth Consumer Services from 2000 to 2003.
Emeritus member of the Iowa State University Foundation
Board of Governors. Emeritus Member of the Advisory Board of
Iowa State University School of Business. Advisory Board Member, Palm
Harbor Academy (private school). Advisory Board Member,
Fellowship of Christian Athletes. Mr. Harris is a certified public
accountant (inactive status). |
|
David F.
Larcker
(Born 1950) |
|
Distinguished Visiting Fellow at the Hoover Institution since 2022. James
Irvin Miller Professor of Accounting at the Graduate School
of Business (Emeritus), Stanford University, Director of the
Corporate Governance Research Initiative and Senior Faculty of The Rock
Center for Corporate Governance since 2006. From 2005 to
2008, Professor of Accounting at the Graduate School of
Business, Stanford University. Prior thereto, Ernst & Young Professor
of Accounting at The Wharton School, University of Pennsylvania
from 1985 to 2005. |
|
Olivia S.
Mitchell
(Born 1953) |
Trustee,
since 2010;
Nominating and
Governance
Committee Chair,
since 2018 |
International Foundation of Employee Benefit Plans Professor since 1993,
Wharton School of the University of Pennsylvania. Director
of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic
Research. Previously taught at Cornell University from 1978 to 1993.
|
|
Class II - Non-Interested Trustees to serve until 2024 Annual Meeting
of Shareholders |
William R.
Ebsworth
(Born 1957) |
|
Retired. From 1984 to 2013, equities analyst, portfolio manager, research
director and chief investment officer at Fidelity
Management and Research Company in Boston, Tokyo, and Hong
Kong, and retired in 2013 as Chief Investment Officer of Fidelity
Strategic Advisers, Inc. where he led a team of investment
professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International
Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire
Fidelity Investments Life Insurance Company. Audit
Committee Chair and Investment Committee Chair of the Vincent
Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA
charterholder. |
|
Jane A.
Freeman
(Born 1953) |
Trustee,
since 2015;
Chair Liaison,
since 2018 |
Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of
Scientific Learning Corporation. From 2008 to 2012, Ms.
Freeman provided consulting services related to strategic
business projects. Prior to 1999, Portfolio Manager at Rockefeller &
Co. and Scudder, Stevens & Clark. Board member of the
Harding Loevner Funds from 1996 to 2014, serving as both Lead
Independent Director and chair of the Audit Committee. Board member of
the Russell Exchange Traded Funds Trust from 2011 to 2012
and the chair of the Audit Committee. Ms. Freeman is also an
inactive Chartered Financial Analyst. |
|
38 | Allspring Income Opportunities Fund
Other information (unaudited)
| |
Position held and
length of service* |
Principal occupations during past five years or
longer |
Current other
public company
or
investment
company
directorships |
Class III - Non-Interested Trustees to serve until 2025 Annual Meeting
of Shareholders |
Timothy J.
Penny
(Born 1951) |
Trustee,
since 2010;
Chair,
since 2018 |
President and Chief Executive Officer of Southern Minnesota Initiative
Foundation, a non-profit organization, since 2007. Vice
Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of
NorthStar Education Finance, Inc., a non-profit organization, from
2007-2022. Senior Fellow of the University of Minnesota Humphrey
Institute from 1995 to 2017. |
|
James G.
Polisson
(Born 1959) |
|
Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from
2015 to 2017. From 2012 to 2015, Principal of The Polisson
Group, LLC, a management consulting, corporate advisory and
principal investing company. Chief Executive Officer and Managing
Director at Russell Investments, Global Exchange Traded
Funds from 2010 to 2012. Managing Director of Barclays
Global Investors from 1998 to 2010 and Global Chief Marketing Officer for
iShares and Barclays Global Investors from 2000 to 2010.
Trustee of the San Francisco Mechanics’ Institute, a non- profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust
from 2011 to 2012. Director of Barclays Global Investors Holdings
Deutschland GmbH from 2006 to 2009. Mr. Polisson is an
attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. |
|
Pamela Wheelock
(Born 1959) |
Trustee,
since January 2020;
previously Trustee from
January 2018 to
July 2019 |
Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit
sectors. Interim President and CEO, McKnight Foundation, 2020. Interim
Commissioner, Minnesota Department of Human Services, 2019.
Chief Operating Officer, Twin Cities Habitat for Humanity,
2017-2019. Vice President for University Services, University of Minnesota, 2012- 2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive
Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008.
Commissioner, Minnesota Department of Finance, 1999-2002.
Chair of the Board of Directors of Destination Medical Center
Corporation. Board member of the Minnesota Wild Foundation. |
|
| |
Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable. |
Allspring Income Opportunities Fund | 39
Other information (unaudited)
Officers1
| |
Position held and
length of
service |
Principal occupations during past five years or
longer |
| |
|
President and Chief Executive Officer of Allspring Funds Management, LLC
since 2017 and Head of Global Fund Governance of Allspring
Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated
Managers, Allspring Global Investments, from 2014 to 2019 and Executive
Vice President responsible for marketing, investments and product
development for Allspring Funds Management, LLC, from 2009 to 2014. |
Jeremy DePalma
(Born 1974) |
Treasurer,
since 2012
(for certain funds in
the Fund Complex);
since 2021 (for
the remaining funds
in the Fund
Complex) |
Senior Vice President of Allspring Funds Management, LLC since 2009.
Senior Vice President of Evergreen Investment Management
Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
|
Christopher Baker
(Born 1976) |
Chief Compliance
Officer,
since 2022 |
Global Chief Compliance Officer for Allspring Global Investments since
2022. Prior thereto, Chief Compliance Officer for State
Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015
Vice President, Global Head of Investment and Marketing Compliance for State
Street Global Advisors. |
Matthew Prasse
(Born 1983) |
Chief Legal Officer,
since 2022;
Secretary,
since 2021 |
Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department
from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018.
Prior to joining Barings, Associate at Morgan, Lewis & Bockius
LLP from 2008 to 2015. |
1 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
40 | Allspring Income Opportunities Fund
Automatic dividend reinvestment plan
AUTOMATIC DIVIDEND REINVESTMENT
PLAN
All common shareholders are eligible to participate in the Automatic Dividend
Reinvestment Plan (“the Plan”). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains
distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (“Plan Agent”), in additional
common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as “dividends”) payable
either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The shares are acquired
by the Plan Agent for the participant’s account, 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 NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (“market premium”), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participant’s account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value (“market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 505000, Louisville, Kentucky 40233 or by calling 1-800-730-6001.
Allspring Income Opportunities Fund | 41
Transfer Agent, Registrar, Shareholder
Servicing
Agent & Dividend Disbursing Agent
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, Kentucky 40233
1-800-730-6001
Website: allspringglobal.com
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not
limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds
Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for
general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any
specific investment, strategy, or plan.
© 2023 Allspring Global Investments
Holdings, LLC. All rights reserved.
ALL-05052023-skihavn1 06-23
AR156 04-23
ITEM 2. CODE OF ETHICS
(a) As of the end of the period covered by the report, Allspring Income Opportunities Fund has adopted a code of ethics that applies to its President and
Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
(c) During the period covered by this report, there were no
amendments to the provisions of the code of ethics adopted in Item 2(a) above.
(d) During the period covered by this report, there were no implicit
or explicit waivers to the provisions of the code of ethics adopted in Item 2(a) above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of Allspring Income Opportunities Fund has determined that Isaiah Harris is an audit committee financial expert, as defined in
Item 3 of Form N-CSR. Mr. Harris is independent for purposes of Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT
FEES AND SERVICES
(a), (b), (c), (d) The following table presents aggregate fees billed in each of the last two fiscal years for services
rendered to the Registrant by the Registrant’s principal accountant. These fees were billed to the registrant and were approved by the Registrant’s audit committee.
|
|
|
|
|
|
|
|
|
| |
|
Fiscal
year ended
April 30, 2023 |
|
|
Fiscal
year ended
April 30, 2022 |
|
| Audit fees |
|
$ |
63,400 |
|
|
$ |
61,850 |
|
| Audit-related fees |
|
|
— |
|
|
|
— |
|
| Tax fees (1) |
|
|
4,690 |
|
|
|
4,565 |
|
| All other fees |
|
|
— |
|
|
|
— |
|
|
|
$ |
68,090 |
|
|
$ |
66,415 |
|
| (1) |
Tax fees consist of fees for tax compliance, tax advice, tax planning and excise tax. |
(e) The Chair of the Audit Committees is authorized to pre-approve: (1) audit services for the Allspring Income Opportunities
Fund; (2) non-audit tax or compliance consulting or training services provided to the Allspring Income Opportunities Fund by the independent auditors (“Auditors”) if the fees for any particular engagement are not anticipated
to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Allspring Income Opportunities Fund’s investment adviser and its controlling entities
(where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Allspring Income Opportunities Fund) if the fee to the Auditors for any particular engagement is not anticipated to
exceed $50,000. For any such pre-approval sought from the Chair, Management shall prepare a brief description of the proposed services. If the Chair approves of such service, he or she shall sign the statement prepared by Management. Such
written statement shall be presented to the full Committees at their next regularly scheduled meetings.
(f) Not applicable.
(g) Not applicable.
3
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
The
registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee is comprised of:
William R. Ebsworth
Jane A.
Freeman
Isaiah Harris, Jr.
David F. Larcker
Olivia S.
Mitchell
Timothy J. Penny
James G. Polisson
Pamela
Wheelock
ITEM 6. INVESTMENTS
A Portfolio of
Investments for Allspring Income Opportunities Fund is included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
PROXY VOTING POLICIES AND PROCEDURES
EFFECTIVE March
2023
The Allspring Income Opportunities Fund has adopted policies and procedures (“Fund Proxy Voting Procedures”) that are used to determine
how to vote proxies relating to portfolio securities held by the Fund. The Fund Proxy Voting Procedures are designed to ensure that proxies are voted in the best interests of Fund shareholders, without regard to any relationship that any affiliated
person of a Fund (or an affiliated person of such affiliated person) may have with the issuer of the security and with the goal of maximizing value to shareholders consistent with governing laws and the investment policies of the Fund. While
securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, the Fund supports sound corporate governance practices within companies in which it invests. The Board of the Fund has delegated
the responsibility for voting proxies relating to the Fund’s portfolio securities to Allspring Funds Management. Allspring Funds Management utilizes the Allspring Global Investments Proxy Voting Policies and Procedures, included below, to
ensure that proxies relating to the Fund’s portfolio securities are voted in shareholders’ best interests.
Allspring Global Investments
(Allspring) Stewardship
As fiduciaries, we are committed to effective stewardship of the assets we manage on behalf of our clients. To us, good
stewardship reflects responsible, active ownership and includes both engaging with investee companies and voting proxies in a manner that we believe will maximize the long-term value of our investments.
4
Scope of Policies and Procedures
In conjunction with the Allspring Engagement Policy, these Proxy Voting Policies and Procedures (“Policies and Procedures”) set out how Allspring
complies with applicable regulatory requirements in respect of how we exercise voting rights when we invest in shares traded on a regulated market on behalf of a client.
With respect to client accounts of Allspring Funds Management, LLC (“Allspring Funds Management”) this includes, among others, Allspring Funds
Trust, Allspring Master Trust, Allspring Variable Trust, Allspring Global Dividend Opportunity Fund, Allspring Income Opportunities Fund, Allspring Multi-Sector Income Fund, Allspring Utilities and High Income Fund (the “Trusts”). It also
includes Allspring (Lux) Worldwide Fund and Allspring Worldwide Alternative Fund SICAV-SIF, both domiciled in Luxembourg (the “Luxembourg Funds”). Aside from the investment funds managed by Funds Management, Allspring also offers medium
term note programs, managed for issuers of such notes domiciled in Luxembourg. Hereafter, all series of the Trusts, and all such Trusts not having separate series, and all sub-funds of the Luxembourg Funds, as well as the MTN issuers, are referred
to as the “Investment Products”. In addition, these Policies and Procedures are used to determine how to vote proxies for the assets managed on behalf of Allspring’s other clients. Not all clients delegate proxy voting authority to
Allspring. Allspring will not vote proxies, or provide advice to clients on how to vote proxies in the absence of specific delegation of authority, a pre-existing contractual agreement, or an obligation under applicable law (e.g., securities that
are held in an investment advisory account for which Allspring exercises no investment discretion are not voted by Allspring).
Luxembourg Products
Allspring Global Investments Luxembourg S.A. (“Allspring Luxembourg”) has delegated the portfolio management of the Luxembourg Funds it
manages to Allspring and the responsibility for exercising voting rights in conjunction with such delegation; as such, these Policies and Procedures shall apply to the portfolio management of the Allspring (Lux) Worldwide Fund. The respective
portfolio management may also delegate the responsibility for exercising voting rights to the Proxy Voting Vendor, with the prior consent of Allspring Luxembourg. Responsibility for exercising voting rights has also been delegated to Allspring with
respect to the Allspring Worldwide Alternative Fund SICAV-SIF and to the MTN issuers.
Voting Philosophy
Allspring has adopted these Policies and Procedures to ensure that proxies are voted in the best interests of clients and Investment Product investors, without
regard to any relationship that any affiliated person of Allspring or the Investment Product (or an affiliated person of such affiliated person) may have with the issuer. Allspring exercises its voting responsibility as a fiduciary with the goal of
maximizing value to clients consistent with governing laws and the investment policies of each client. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, Allspring supports
sound corporate governance practices at companies in which client assets are invested. Allspring has established an appropriate strategy determining when and how the voting rights related to the instruments held in portfolios managed are exercised,
so that these rights are exclusively reserved to the relevant Investment Product and its investors.
Proxy Administration
Allspring’s Stewardship Team (“Stewardship”) administers the proxy voting process. The Stewardship Team is part of the Allspring Sustainability
Team. Stewardship is responsible for administering and overseeing the proxy voting process to ensure the implementation of the Policies and Procedures,
5
including regular operational reviews, typically conducted on a weekly basis. Stewardship monitors third party voting of proxies to ensure it is being done in a timely and responsible manner,
including review of scheduled vendor reports. Stewardship, in conjunction with the Allspring Proxy Governance Committee, reviews the continuing appropriateness of the Policies and Procedures set forth herein, and recommends revisions as necessary.
Third Party Proxy Voting Vendor
Allspring has
retained a third-party proxy voting service, Institutional Shareholder Services Inc. (“ISS”), to assist in the implementation of certain proxy voting-related functions including: 1.) Providing research on proxy matters 2.) Providing
technology to facilitate the sharing of research and discussions related to proxy votes 3.) Vote proxies in accordance with Allspring’s guidelines 4.) Handle administrative and reporting items 5.) Maintain records of proxy statements received
in connection with proxy votes and provide copies/analyses upon request. Except in instances where clients have retained voting authority, Allspring retains the responsibility for proxy voting decisions.
Proxy Committee
Allspring Proxy Governance Committee
The Allspring Proxy Governance Committee shall be responsible for overseeing the proxy voting process to ensure its implementation in conformance with
these Policies and Procedures. The Allspring Proxy Governance Committee shall coordinate with Allspring Compliance to monitor ISS, the proxy voting agent currently retained by Allspring, to determine that ISS is accurately applying the Policies and
Procedures as set forth herein and operates as an independent proxy voting agent. Allspring’s ISS Vendor Oversight process includes an assessment of ISS’ Policy and Procedures (“P&P”), including conflict controls and
monitoring, receipt and review of routine performance-related reporting by ISS to Allspring and periodic onsite due diligence meetings. Due diligence meetings typically include: meetings with key staff, P&P related presentations and discussions,
technology-related demonstrations and assessments, and some sample testing, if appropriate. The Allspring Proxy Governance Committee shall review the continuing appropriateness of the Policies and Procedures set forth herein. The Allspring Proxy
Governance Committee may delegate certain powers and responsibilities to proxy voting working groups. The Allspring Proxy Governance Committee reviews and, in accordance with these Policies and Procedures, votes on issues that have been escalated
from proxy voting working groups. Members of the Allspring Proxy Governance Committee also oversee the implementation of Allspring Proxy Governance Committee recommendations for the respective functional areas in Allspring that they represent.
Proxy Voting Due Diligence Working Group
Among other
delegated matters, the proxy voting Due Diligence Working Group (‘DDWG’) in accordance with these Policies and Procedures, reviews and votes on routine proxy proposals that it considers under these Policies and Procedures in a timely
manner. If necessary, the DDWG escalates issues to the Allspring Proxy Governance Committee that are determined to be material by the DDWG or otherwise in accordance with these Policies and Procedures. The DDWG coordinates with Allspring’s
Compliance teams to review the performance and independence of ISS in exercising its proxy voting responsibilities.
Meetings; Committee Actions
The Allspring Proxy Governance Committee shall convene or act through written consent, including through the use of electronic systems of record, of a
majority of Allspring Proxy Governance Committee members as needed and when discretionary voting determinations need to be considered. Any working group of the Allspring Proxy Governance Committee shall have the authority on matters delegated to it
to act by vote or written consent, including through the use of electronic systems of record, of a majority of
the working group members available at that
time. The Allspring Proxy Governance Committee shall also meet quarterly to review the Policies and Procedures.
6
Membership
Members are selected based on subject matter expertise for the specific deliverables the committee is required to complete. The voting members of the Allspring
Proxy Governance Committee are identified in the Allspring Proxy Charter. Changes to the membership of the Allspring Proxy Governance Committee will be made only with approval of the Allspring Proxy Governance Committee. Upon departure from
Allspring Global Investments, a member’s position on the Allspring Proxy Governance Committee will automatically terminate.
Voting Procedures
Unless otherwise required by applicable law,1 proxies will be voted in accordance with the
following steps and in the following order of consideration:
| |
1. |
First, any voting items related to Allspring “Top-of-House” voting principles (as described below
under the heading “Allspring Proxy Voting Principles/Guidelines”) will generally be voted in accordance with a custom voting policy with ISS (“Custom Policy”) designed to implement the Allspring’s Top-of-House voting
principles.2 |
| |
2. |
Second, any voting items for meetings deemed of “high importance”3 (e.g., proxy contests, mergers and acquisitions,) where ISS opposes management recommendations will be referred to the Portfolio Management teams for recommendation or the DDWG (or escalated to the
Allspring Proxy Governance -Committee) for case-by-case review and vote determination. |
| |
3. |
Third, with respect to any voting items where ISS Sustainability Voting Guidelines4 provide a different recommendation than ISS Standard Voting Guidelines, the following steps are taken: |
| |
a. |
Stewardship5 evaluates the matter for materiality and any
other relevant considerations. |
| |
b. |
If Stewardship recommends further review, the voting item is then referred to the Portfolio Management teams
for recommendation or the DDWG (or escalated to the Allspring Proxy Governance Committee) for case-by-case review and vote determination. |
| |
c. |
If Stewardship does not recommend further review, the matter is voted in accordance with ISS Standard Voting
Guidelines. |
| |
4. |
Fourth, any remaining proposals are voted in accordance with ISS Standard Voting Guidelines.6 |
| 1 |
Where provisions of the Investment Company Act of 1940 (the “1940 Act”) specify the manner in which
items for any third party registered investment companies (e.g., mutual funds, exchange-traded funds and closed-end funds) and business development companies (as defined in Section 2(a)(48) of the 1940 Act) (“Third Party Fund Holding
Voting Matters”) held by the Trusts or series thereof, Allspring shall vote the Third Party Fund Holding Voting Matter on behalf of the Trusts or series thereof accordingly. |
| 2 |
The Allspring Proxy Governance Committee may determine that additional review of a Top-of-House voting matter
is warranted. For example, voting matters for declassified boards or annual election of directors of public operating and holding companies that have certain long-term business commitments (e.g., developing proprietary technology; or having an
important strategic alliance in place) may warrant referral to the DDWG (or escalation to the Proxy Governance Committee) for case-by-case review and vote determination. |
| 3 |
The term “high importance” is defined as those items designated Proxy Level 6 or 5 by ISS, which
include proxy contests, mergers,and other reorganizations. . |
| 4 |
ISS’s Sustainability Voting Guidelines seeks to promote support for recognized global governing bodies
encouraging sustainable business practices advocating for stewardship of environment, fair labor practices, non-discrimination, and the protection of human rights. |
| 5 |
The Allspring Stewardship Team is part of the Sustainability Team, led by Henrietta Pacquement who reports into
the Allspring Chief Investment Officer(s). |
| 6 |
The voting of proxies for Taft Hartley clients may incorporate the use of ISS’s Taft Hartley voting
guidelines. |
7
Commitment to the Principles of Responsible Investment
As a signatory to the Principles for Responsible Investment, Allspring has integrated certain environmental, social, and governance factors into its investment
processes, which includes the proxy process. As described under Voting Procedures above, Allspring considers ISS’s Sustainability Voting Guidelines as a point of reference in certain cases deemed to be material to a company’s long-term
shareholder value.
Voting Discretion
In all cases,
the Allspring Proxy Governance Committee (and any working group thereof) will exercise its voting discretion in accordance with the voting philosophy of these Policies and Procedures. In cases where a proxy item is forwarded by ISS to the Allspring
Proxy Governance Committee or a working group thereof, the Allspring Proxy Governance Committee or its working group may be assisted in its voting decision through receipt of: (i) independent research and voting recommendations provided by ISS
or other independent sources; (ii) input from the investment sub-adviser responsible for purchasing the security; and (iii) information provided by company management and shareholder groups.
Portfolio Manager and Sub-Adviser Input
The Allspring
Proxy Governance Committee (and any working group thereof) may consult with portfolio management teams and Fund sub-advisers on specific proxy voting issues as it deems appropriate. In addition, portfolio management teams or Fund sub-advisers may
proactively make recommendations to the Allspring Proxy Governance Committee regarding any proxy voting issue. In this regard, the process takes into consideration expressed views of portfolio management teams and Fund sub-advisers given their deep
knowledge of investee companies. For any proxy vote, portfolio management teams and Investment Product advisers and sub-advisers may make a case to vote against the ISS or Allspring Proxy Governance Committee’s recommendation (which is
described under Voting Procedures above). Any portfolio management team’s or Investment Product adviser’s or sub-adviser’s opinion should be documented in a brief write-up for consideration by the DDWG who will determine, or escalate
to the Allspring Proxy Governance Committee, the final voting decision.
Consistent Voting
The Allspring Proxy Policy and Procedures is consistently applied on the same matter when securities of an issuer are held by multiple client accounts unless
there are 1) special circumstances such as, for example, proposals concerning corporate actions such as mergers, tender offers, and acquisitions or as reasonably necessary to implement specified proxy voting guidelines as established by a client
(e.g. Taft Hartley ISS Guidelines or custom proxy guidelines) or 2) the expressed views of different portfolio management teams and Fund sub-advisers is different on particular proposals. In the latter case, the Proxy Governance Committee will work
with the investment teams to gauge whether alignment can be achieved.
Governance and Oversight
Allspring Top-of-House Proxy Voting Principles/Guidelines.
The following reflects Allspring’s Top-of-House Voting Principles in effect as of the date of these Policies and Procedures. Allspring has put in place a
custom voting policy with ISS to implement these voting principles.
We believe that Boards of Directors of investee companies should have strong,
independent leadership and should adopt structures and practices that enhance their effectiveness. We recognize that the optimal board size and governance structure can vary by company size, industry, region of operations, and circumstances specific
to the company.
8
| |
• |
|
We generally vote for the election of Directors in uncontested elections. We reserve the right to vote on a
case-by-case basis when directors fail to meet their duties as a board member, such as failing to act in the best economic interest of shareholders; failing to maintain independent audit, compensation, nominating committees; and failing to attend at
least 75% of meetings, etc. |
| |
• |
|
We generally vote for an independent board that has a majority of outside directors who are not affiliated with
the top executives and have minimal or no business dealings with the company to avoid potential conflicts of interests. |
| |
• |
|
Generally speaking, we believe Directors serving on an excessive number of boards could result in time
constraints and an inability to fulfill their duties. |
| |
• |
|
We generally support adopting a declassified board structure for public operating and holding companies. We
reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. |
| |
• |
|
We generally support annual election of directors of public operating and holding companies. We reserve the right
to vote on a case-by-case basis when companies have certain long-term business commitments. |
| |
• |
|
We believe a well-composed board should embody multiple dimensions of diversity in order to bring personal and
professional experiences to bear and create a constructive debate of competing perspectives and opinions in the boardroom. Diversity should consider factors such as gender, ethnicity, and age as well as professional factors such as area of
expertise, industry experience and geographic location. |
We believe it is the responsibility of the Board of Directors to create,
enhance, and protect shareholder value and that companies should strive to maximize shareholder rights and representation.
| |
• |
|
We believe that companies should adopt a one-share, one-vote standard and avoid adopting share structures that
create unequal voting rights among their shareholders. We will normally support proposals seeking to establish that shareholders are entitled to voting rights in proportion to their economic interests |
| |
• |
|
We believe that directors of public operating and holding companies be elected by a majority of the shares voted.
We reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. This ensures that directors of public operating and holding companies who are not broadly supported by shareholders are not elected to
serve as their representatives. We will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections. |
| |
• |
|
We believe a simple majority voting standard should be required to pass proposals. We will normally support
proposals seeking to introduce bylaws requiring a simple majority vote. |
| |
• |
|
We believe that shareholders who own a meaningful stake in the company and have owned such stake for a sufficient
period of time should have, in the form of proxy access, the ability to nominate directors to appear on the management ballot at shareholder meetings. In general we support market-standardized proxy access proposals and we will analyze them based on
various criteria such as threshold ownership levels, a minimum holding period, and the % and/or number of directors that are subject to nomination. |
| |
• |
|
We believe that shareholders should have the right to call a special meeting and not wait for company management
to schedule a meeting if there is sufficiently high shareholder support for doing so on issues of substantial importance. In general we support the right to call a special meeting if there is balance between a reasonable threshold of shareholders
and a hurdle high enough to also avoid the waste of corporate resources for narrowly supported interests. We will evaluate the issues of importance on the basis of serving all shareholders well and not structured for the benefit of a dominant
shareholder over others. |
9
Practical Limitations to Proxy Voting
While Allspring uses its reasonable best efforts to vote proxies, in certain circumstances, it may be impractical or impossible for Allspring to vote proxies
(e.g., limited value or unjustifiable costs).
Securities on Loan
As a general matter, securities on loan will not be recalled to facilitate proxy voting (in which case the borrower of the security shall be entitled to vote
the proxy). However, as it relates to portfolio holdings of the Investment Products, if the Allspring Proxy Governance Committee is aware of an item in time to recall the security and has determined in good faith that the importance of the matter to
be voted upon outweighs the loss in lending revenue that would result from recalling the security (e.g., if there is a controversial upcoming merger or acquisition, or some other significant matter), the security will be recalled for voting.
Share Blocking
Proxy voting in certain countries
requires ‘share blocking’. Shareholders wishing to vote their proxies must deposit their shares with a designated depository before the date of the meeting. Consequently, the shares may not be sold in the period preceding the proxy vote.
Absent compelling reasons, Allspring believes that the benefit derived from voting these shares is outweighed by the burden of limited trading. Therefore, if share blocking is required in certain markets, Allspring will not participate and will
refrain from voting proxies for those clients impacted by share blocking.
Conflicts of Interest
We always seek to place the interests of our clients first and to identify and manage any conflicts of interest, including those that arise from proxy voting
or engagement. Allspring acts as a fiduciary with respect to its asset management activities and therefore we must act in the best interest of our clients and address conflicts that arise.
Conflicts of interest are identified and managed through a strict and objective application of our voting policy and procedures. Allspring may have a conflict
of interest regarding a proxy to be voted upon if, for example, Allspring may have other relationships with the issuer of the proxy (e.g. the issuer may be a corporate pension fund client of Allspring). This type of conflict is generally mitigated
by the information barriers between Allspring and its affiliates and our commitment as a fiduciary to independent judgement. However, when the Allspring Proxy Governance Committee becomes aware of a conflict of interest (that gets uncovered through
the Allspring Proxy Voting Policy and Procedures), it takes additional steps to mitigate the conflict, by using any of the following methods:
1.
Instructing ISS to vote in accordance with its recommendation;
2. Disclosing the conflict to the relevant Board and obtaining its consent before voting;
3. Submitting the matter to the relevant Board to exercise its authority to vote on such matter;
4. Engaging an independent fiduciary who will direct the vote on such matter,
5. Consulting with Legal and Compliance and, if necessary, outside legal counsel for guidance on resolving the conflict of interest,
6. Voting in proportion to other shareholders (“mirror voting”) following consultation with the Board of the Funds if the conflict pertains to a
matter involving a portfolio holding of the Funds; or
7. Voting in other ways that are consistent with Allspring’s obligation to vote in the best
interests of its clients.
10
Finally, Allspring is a privately-owned company and one of our owners is GTCR which owns other companies as well
known as Affiliates. The Allspring Regulatory Compliance team maintains the GTCR Affiliates list and publishes an updated list quarterly. Since the Affiliates may issue publicly traded stock and hold regular proxy meetings, Allspring manages
this potential conflict of interest by defaulting all proxy voting in the affiliates to the ISS recommendations. Allspring has no influence attributed to the decisions or the voting elections.
Vendor Oversight
The Stewardship Team monitors the ISS
proxy process against specific criteria in order to identify potential issues relating to account reconciliation, unknown and rejected ballot reviews, upcoming proxy reviews, share reconciliation oversight, etc. With respect to ISS’s management
of its potential conflicts of interest with corporate issuers, ISS provides institutional clients such as Allspring with its “Policy and disclosure of Significant ISS Relationships” and tools to provide transparency of those relationships.
Other Provisions
Policy Review and Ad Hoc
Meetings
The Allspring Proxy Governance Committee meets at least annually to review this Policy and consider any appropriate changes. Meetings may be
convened more frequently (for example, to discuss a specific proxy agenda or proposal) as requested by the Head of Stewardship, any member of the Allspring Proxy Governance Committee, or Chief Compliance Officer. The Allspring Proxy Governance
Committee includes representation from Portfolio Management, Stewardship, Investment Analytics, Legal and Compliance.
Records Retention
The Stewardship Team will maintain the following records relating to the implementation of the Policies and Procedures:
| |
• |
|
A copy of these proxy voting policies and procedures; |
| |
• |
|
Proxy statements received for client securities (which will be satisfied by relying on ISS);
|
| |
• |
|
Records of votes cast on behalf of Investment Products and separate account clients (which ISS maintains on
behalf of Allspring); |
| |
• |
|
Records of each written client request for proxy voting records and Allspring’s written response to any
client request (written or oral) for such records; and |
| |
• |
|
Any documents prepared by Allspring or ISS that were material to making a proxy voting decision.
|
Such proxy voting books and records shall be maintained at an office of Allspring in an easily accessible place for a period of six
years.
Compliance with Regional Regulations and Client Delegation Arrangements
U.S. Regulation
These Policies and Procedures have been
written in compliance with Rule 206(4)-6 of the Investment Advisers Act of 1940. Proxy voting records for Allspring’s mutual funds are disclosed on Form N-PX annually, as required by Section 30 and Rule 30b1-4 of the Investment Company Act
of 1940, to the Securities and Exchange Commission (“SEC”).
E.U. Regulation
These Policies and Procedures have been established, implemented and maintained, as they apply to Allspring Luxembourg and Allspring Global Investments (UK)
Limited, in accordance the EU Shareholder Rights Directive II (EU 2017/828) (SEF II). Specific to Allspring Luxembourg, the Policies and Procedures also comply with Article 23 of CSSF Regulation No. 10-4, and the CSSF Circular 18/698.
11
Disclosure of policies and procedures
A summary of the proxy voting policy and procedures are disclosed on Allspring’s website. In addition, Allspring will disclose to its separate clients
(i.e. proxy votes for assets managed on behalf of Allspring’s other clients as per a delegation arrangement) a summary description of its proxy voting policy and procedures via mail.
Disclosure of proxy voting results
Allspring will
provide to clients proxy statements and any records as to how Allspring voted proxies on behalf of clients, quarterly or upon request. For assistance, clients may contact their relationship manager, call Allspring at 1-866-259-3305 or e-mail:
allspring.clientadministration@allspring-global.com to request a record of proxies voted on their behalf.
Allspring will publish high-level proxy voting
statistics in periodic reports. However, except as otherwise required by law, Allspring has a general policy of not disclosing to any issuer specific or third party how its separate account client proxies are voted.
Approved by the Allspring Proxy Governance Committee: March 2023
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
PORTFOLIO MANAGERS
Chris Lee, CFA
Senior Portfolio Manager, Plus Fixed Income—Chris Lee is a senior portfolio manager for the Plus Fixed Income team at Allspring Global Investments.
He joined Allspring from its predecessor firm, Wells Fargo Asset Management (WFAM). He also served as head of high-yield trading for the WFAM U.S. High Yield Fixed Income team. Prior to this, he served as a managing
director, co-portfolio manager, and head of trading for Silver Lake Credit. Preceding this, he was a senior analyst and portfolio manager for the U.S. High Yield team at WFAM. Earlier in his career, Chris served as a senior research
analyst with Wells Fargo’s Proprietary Investment Group. He began his investment industry career in 2001. Chris earned a bachelor’s degree in political science from University of California, Irvine, where he graduated magna cum laude. He
also earned a master’s degree in business administration from the Graduate School of Management at the University of California, Davis. Chris is a graduate of Wells Fargo’s Credit Management Training Program. He has earned the right to use
the Chartered Financial Analyst® (CFA®) designation.
Michael Schueller, CFA
Senior Portfolio Manager, Plus
Fixed Income—Michael (Mike) Schueller is a senior portfolio manager for the Plus Fixed Income team at Allspring Global Investments. He joined Allspring from its predecessor firm, Wells Fargo Asset Management (WFAM). He joined WFAM as a
senior investment research analyst from Strong Capital Management, where he held a similar position. Mike rejoined Strong in 2000, having left the firm to start a trust department for Community Bank & Trust in Sheboygan, Wisconsin. Before
that, he served as associate counsel for Strong’s legal department. Prior to this, Mike practiced law with Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C., in Milwaukee, specializing in corporate reorganizations, mergers, and
acquisitions. He began his investment industry career in 1998. Mike earned a bachelor’s degree in economics from the University of Minnesota and a law degree from the University of Wisconsin, Madison. He has earned the right to use the
Chartered Financial Analyst® (CFA®) designation.
12
OTHER FUNDS AND ACCOUNTS MANAGED
The following table provides information about the registered investment companies (including the Fund) and other pooled investment vehicles and accounts
managed by the portfolio manager of the Fund as of the Fund’s most recent year ended April 30, 2023.
Chris Lee
|
|
|
|
|
|
|
|
|
|
|
|
|
| I manage the following types of accounts: |
|
Other
Registered
Investment
Companies |
|
|
Other
Pooled
Investment
Vehicles |
|
|
Other
Accounts |
|
| Number of above accounts |
|
|
7 |
|
|
|
4 |
|
|
|
24 |
|
| Total assets of above accounts (millions) |
|
$ |
3,128.33 |
|
|
$ |
197.28 |
|
|
$ |
251.39 |
|
performance based fee accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
| I manage the following types of accounts: |
|
Other
Registered
Investment
Companies |
|
|
Other
Pooled
Investment
Vehicles |
|
|
Other
Accounts |
|
| Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Michael Schueller
|
|
|
|
|
|
|
|
|
|
|
|
|
| I manage the following types of accounts: |
|
Other Registered
Investment
Companies |
|
|
Other
Pooled
Investment
Vehicles |
|
|
Other
Accounts |
|
| Number of above accounts |
|
|
14 |
|
|
|
5 |
|
|
|
25 |
|
| Total assets of above accounts (millions) |
|
$ |
9,528.71 |
|
|
$ |
206.33 |
|
|
$ |
252.35 |
|
performance based fee accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
| I manage the following types of accounts: |
|
Other Registered
Investment
Companies |
|
|
Other
Pooled
Investment
Vehicles |
|
|
Other
Accounts |
|
| Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
MATERIAL CONFLICTS OF INTEREST
The Portfolio Managers face inherent conflicts of interest in their day-to-day management of the Funds and other accounts because the Funds may have
different investment objectives, strategies and risk profiles than the other accounts managed by the Portfolio Managers. For instance, to the extent that the Portfolio Managers manage accounts with different investment strategies than the Funds,
they may from time to time be inclined to purchase securities, including initial public offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the Portfolio Managers may have different fee structures, including
performance fees, which are or have the potential to be higher or lower, in some cases significantly higher or lower, than the fees paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio Managers to allocate
more favorable trades to the higher-paying accounts.
13
To minimize the effects of these inherent conflicts of interest, the Sub-Adviser has adopted and
implemented policies and procedures, including brokerage and trade allocation policies and procedures, that it believes address the potential conflicts associated with managing portfolios for multiple clients and are designed to ensure that all
clients are treated fairly and equitably. Accordingly, security block purchases are allocated to all accounts with similar objectives in a fair and equitable manner. Furthermore, the Sub-Adviser has adopted a Code of Ethics under
Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of1940 (the “Advisers Act”) to address potential conflicts associated with managing the Funds and any personal accounts the Portfolio
Managers may maintain.
Allspring Investments.
Allspring Global Investments, LLC (“Allspring Investments”) Portfolio Managers often provide investment management for separate accounts advised in
the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest over various issues such as trade allocation, fee disparities and research acquisition,
Allspring Investments has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of interest are minimized.
The Portfolio Managers face inherent conflicts of interest in their day-to-day management of the Funds and other accounts because the Funds may have
different investment objectives, strategies and risk profiles than the other accounts managed by the Portfolio Managers. For instance, to the extent that the Portfolio Managers manage accounts with different investment strategies than the Funds,
they may from time to time be inclined to purchase securities, including initial public offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the Portfolio Managers may have different fee structures, including
performance fees, which are or have the potential to be higher or lower, in some cases significantly higher or lower, than the fees paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio Managers to allocate
more favorable trades to the higher-paying accounts.
To minimize the effects of these inherent conflicts of interest, Allspring Investments has adopted
and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that they believe address the potential conflicts associated with managing portfolios for multiple clients and are designed to ensure that all
clients are treated fairly and equitably. Accordingly, security block purchases are allocated to all accounts with similar objectives in a fair and equitable manner. Furthermore, Allspring Investments has adopted a Code of Ethics under
Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940 (the “Advisers Act”) to address potential conflicts associated with managing the Funds and any personal accounts the Portfolio
Managers may maintain.
COMPENSATION
The Portfolio Managers
were compensated by their employing sub-adviser from the fees the Adviser paid the Sub-Adviser using the following compensation structure:
14
Allspring Investments.
The compensation structure for Allspring Investments’ Portfolio Managers includes a competitive fixed base salary plus variable incentives, payable
annually and over a deferred period. Allspring Investments participates in third party investment management compensation surveys for market-based compensation information to help support individual pay decisions and to ensure our compensation is
aligned with the marketplace. In addition to surveys, Allspring Investments also considers prior professional experience, tenure, seniority, and a Portfolio Manager’s team size, scope, and assets under management when determining his/her total
compensation. In addition, Portfolio Managers who meet the eligibility requirements may participate in our 401(k) plan that features a limited matching contribution. Eligibility for and participation in this plan is on the same basis for all
employees.
Allspring Investments’ investment incentive program plays an important role in aligning the interests of its Portfolio Managers,
investment team members, clients, and shareholders. Incentive awards for Portfolio Managers are determined based on a review of relative investment and business/team performance. Investment performance is generally evaluated for 1, 3, and 5 year
performance results, with a predominant weighting on the 3 and 5 year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment style.
Once determined, incentives are awarded to Portfolio Managers annually, with a portion awarded as annual cash and a portion awarded as a deferred incentive.
The long-term portion of incentives generally carry a pro-rated vesting schedule over a 3 year period. For many of its Portfolio Managers, Allspring Investments further requires a portion of their annual long-term award be allocated
directly into each strategy they manage through a deferred compensation vehicle. In addition, investment team members who are eligible for long term awards also have the opportunity to invest up to 100% of their awards into investment strategies
they support (through a deferred compensation vehicle).
As an independent firm, approximately 20% of Allspring Group Holdings, LLC (of which Allspring
Investments is a subsidiary) is owned by employees, including Portfolio Managers.
BENEFICIAL OWNERSHIP OF THE FUND
The following table shows for each Portfolio Manager the dollar value of the Fund beneficially owned by the Portfolio Manager as of April 30, 2023:
|
|
|
|
|
| Chris Lee |
|
$ |
100,001-$500,000 |
|
| Michael Schueller |
|
$ |
50,001-$100,000 |
|
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
(d) |
|
| Period |
|
Total Number
of Shares
Purchased |
|
|
Average
Price Paid
per Share |
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs |
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs |
|
| 5/1/2022 to 5/31/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,718,531.00 |
|
| 6/1/2022 to 6/30/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,718,531.00 |
|
| 7/1/2022 to 7/31/2022 |
|
|
482,930.00 |
|
|
|
6.56 |
|
|
|
482,930.00 |
|
|
|
5,235,601.00 |
|
| 8/1/2022 to 8/31/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,235,601.00 |
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/1/2022 to 9/30/2022 |
|
|
37,418.00 |
|
|
|
6.53 |
|
|
|
37,418.00 |
|
|
|
5,198,183.00 |
|
| 10/1/2022 to 10/31/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,198,183.00 |
|
| 11/1/2022 - 11/30/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,198,183.00 |
|
| 12/1/2022 - 12/31/2022 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,198,183.00 |
|
| 1/1/2023 - 1/31/2023 |
|
|
53,433.00 |
|
|
|
6.76 |
|
|
|
53,433.00 |
|
|
|
2,932,856.00 |
|
| 2/1/2023 - 2/28/2023 |
|
|
7,986.00 |
|
|
|
6.57 |
|
|
|
7,986.00 |
|
|
|
2,924,870.00 |
|
| 3/1/2023 - 3/31/2023 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,924,870.00 |
|
| 4/1/2023 - 4/30/2023 |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,924,870.00 |
|
| Total |
|
|
581,767.00 |
|
|
|
6.59 |
|
|
|
581,767.00 |
|
|
|
2,924,870.00 |
|
On November 12, 2022, the Fund announced a renewal of its open-market share repurchase program (the “Buyback
Program”). Under the renewed Buyback Program, the Fund may repurchase up to 5% of its outstanding shares in open market transactions during the period beginning on January 1, 2023 and ending on December 31, 2023. The Fund’s Board
of Trustees has delegated to Allspring Funds Management, LLC, the Fund’s adviser, discretion to administer the Buyback Program, including the determination of the amount and timing of repurchases in accordance with the best interests of the
Fund and subject to applicable legal limitations.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees that have been
implemented since the registrant’s last provided disclosure in response to the requirements of this Item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that the Allspring Income Opportunities Fund (the “Fund”) disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Fund is made known to them by the appropriate persons based on their evaluation of these
controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the Fund’s internal
controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year of the period covered by this report that materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURES OF SECURITIES LENDING
ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM
13. EXHIBITS
(a)(1) Code of Ethics.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2022.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2022.
16
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.
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| Allspring Income Opportunities Fund |
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| By: |
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/s/ Andrew Owen |
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Andrew Owen |
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President |
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| Date: June 26, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report
has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
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| Allspring Income Opportunities Fund |
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| By: |
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/s/ Andrew Owen |
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Andrew Owen |
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President |
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| Date: June 26, 2023 |
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| By: |
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/s/ Jeremy DePalma |
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Jeremy DePalma |
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Treasurer |
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| Date: June 26, 2023 |
Allspring Funds
Allspring Funds Trust
Allspring Master Trust
Allspring Variable Trust
Allspring Global Dividend Opportunity Fund
Allspring Income Opportunities Fund
Allspring Multi-Sector Income Fund
Allspring Utilities and High-Income Fund
Joint Code of Ethics for Principal Executive Officer and Senior Financial Officers
| I. |
Covered Officers / Purpose of the Code |
This Code of Ethics (“Code”) of Allspring Funds Trust, Allspring Master Trust and Allspring Variable Trust, Allspring Global Dividend
Opportunity Fund, Allspring Income Opportunities Fund, Allspring Multi-Sector Income Fund and Allspring Utilities and High Income Fund (collectively, the “Trusts” and each, “a Trust”) applies to each Trust’s Principal
Executive Officer, Principal Financial Officer and any other Trust officer’s listed on Exhibit A (the “Covered Officers”) for the purpose of promoting:
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• |
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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships; |
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full, fair, accurate, timely and understandable financial disclosure in reports and documents that a Trust files
with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Trust; |
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• |
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compliance with applicable laws and governmental rules and regulations; |
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• |
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the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the
Code; and |
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• |
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accountability for adherence to the Code. |
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest.
| II. |
Covered Officers Should Handle Ethically Both Actual and Apparent Conflicts of Interest
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Overview. A “conflict of interest” occurs when a Covered Officer’s private interest interferes
with the interests of, or his or her service to, a Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Trust.
Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the
Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Trust because of their
status as “affiliated persons” of the Trust. The compliance programs and procedures of the Trust and Allspring Funds Management, LLC (the “Adviser”) are designed to prevent, or identify and correct, violations of these
provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual
relationship between the Trust and the Adviser, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Trust or
for the Adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Adviser and the Trust. The participation of the Covered Officers in such activities is inherent in the contractual
relationship between the Trust and the Adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Trust. Each Covered Officer recognizes that, as an officer of a Trust, he or she has a duty to act in
the best interests of the Trust and its shareholders. If a Covered Officer believes that his or her responsibilities as an officer or employee of the Adviser are likely to materially compromise his or her objectivity or his or her ability to perform
the duties of his or her role as an officer of the Trust, he or she should consult with the Chief Legal Officer. Under appropriate circumstances, a Covered Officer should also consider whether to present the matter to the Board. In addition, it is
recognized by the Trust’s Board of Trustees (“Board”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment
Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Officer should not be placed improperly before the interest of the Trust.
* * * *
Each Covered Officer must:
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• |
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not use his or her personal influence or personal relationships improperly to influence investment decisions or
financial reporting by a Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; |
2
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not cause the Trust to take action, or fail to take action, for the individual personal benefit of the Covered
Officer rather than the benefit of a Trust; |
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• |
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not use material non-public knowledge of portfolio transactions made or
contemplated for the Trust to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; |
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• |
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not retaliate against any other Covered Officer or any employee of a Trust or its affiliated persons for reports
of potential violations that are made in good faith; and |
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• |
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not engage in personal, business or professional relationships or dealings that would impair his or her
independence of judgment or adversely affect the performance of his or her duties in the best interests of the Trust and their shareholders. |
There are some conflict of interest situations that should always be approved in advance by the Chief Legal Officer of the Trust (the
“Chief Legal Officer”) if material. Examples of these include:
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• |
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service as a director on the board of any public or private for-profit
company (provided, however, that a Covered Officer who is employed by another company (e.g., Allspring) may serve as a director of such company or any entity, controlling, controlled by, or under common control with, such company);
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• |
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acquiring a financial interest in any company that provides services to the Trust (provided, however, that a
Covered Officer who is employed by another company (e.g., Allspring) may have an ownership interest in his or her employer or the employer’s parent company); |
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• |
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the receipt of any entertainment or gifts from any person or company with which the Trust has current or
prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; |
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• |
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any consulting or employment relationship with any of the Trust’s service providers, other than with the
primary employer of the Covered Officer; and |
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• |
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a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trust for
effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officer’s primary employment, such as compensation or equity ownership. |
| III. |
Disclosure and Compliance |
Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Trust.
3
Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts
about the Trust to others, whether within or outside the Trust, including to the Board and the Trust’s auditors, and to governmental regulators and self-regulatory organizations.
Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of
the Trust and the Adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Trust files with, or submits to, the SEC and in other public communications made by the Trust.
It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules
and regulations.
Each Covered Officer should, consistent with his or her responsibilities, exercise appropriate supervision over and
assist relevant Trust service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner.
Each Covered Officer is responsible for the accuracy of the records and reports that he or she is responsible for maintaining. The books and
records of the Trust shall meet the highest standards and accurately reflect the true nature of the transactions they record. The Covered Officers must not create false or misleading documents or accounting, financial or electronic records for any
purpose, and must not direct any other person to do so. If a Covered Officer becomes aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information,
he shall promptly report it to Chief Legal Officer for a determination as to what, if any, corrective action is necessary or appropriate.
No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in a
Trust’s books or records for any reason. No disbursement of a Trust’s assets shall be made without adequate supporting documentation or for any purpose other than as described in the Trust’s documents or contracts.
A Trust will maintain and preserve for a period of not less than six (6) years from the date such action is taken, the first two
(2) years in an easily accessible place, a copy of the information or materials supplied to the Board: (i) that provided the basis for any amendment or waiver to this Code, and (ii) relating to any violation of the Code and sanctions
imposed for such violation, together with a written record of the approval or action taken by the Board.
4
| IV. |
Reporting and Accountability |
Each Covered Officer must:
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• |
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upon adoption of the Code (or thereafter upon becoming a Covered Officer), affirm in writing (in the form
attached to this Code) to the Board that he or she has received, read, and understands the Code; |
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• |
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annually thereafter affirm in writing (in the form attached to this Code) to the Board that he or she has
complied with the requirements of the Code; and |
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• |
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notify the Chief Legal Officer of the Trust promptly if he or she knows of any violation of this Code. Failure to
do so is itself a violation of this Code. |
The Chief Legal Officer is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. While the Chief Legal Officer in authorized to interpret this Code, an approval of a situation that is expressly
prohibited by this Code is deemed to be a “waiver” and can be approved only by the Board.
The Trust will follow these
procedures in investigating and enforcing this Code:
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• |
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the Chief Legal Officer will take all appropriate action to investigate any potential violations reported to him
or her; |
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• |
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if, after such investigation, the Chief Legal Officer believes that no violation has occurred, the Chief Legal
Officer is not required to take any further action; |
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• |
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any matter that the Chief Legal Officer believes is a violation will be reported to the Board;
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if the Board concurs that a violation has occurred, it will consider appropriate action, which may include review
of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Adviser; or a recommendation to dismiss the Covered Officer; |
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• |
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the Board will be responsible for granting waivers, as appropriate (a “waiver” is the approval of a
situation that is expressly prohibited by this Code); and |
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• |
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any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.
|
5
| V. |
Other Policies and Procedures |
This Code shall be the sole code of ethics adopted by the Trusts for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and
forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Trusts or the Adviser govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they
are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The codes of ethics adopted by the Trusts and the Adviser under Rule 17j-1 under the Investment Company
Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a
majority of independent Trustees.
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected
accordingly. Except upon request of the SEC or another regulatory agency, or as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than Board and its counsel.
The Code is intended solely for the internal use by each Trust and does not constitute an admission, by or on behalf of any Trust, as to any
fact, circumstance, or legal conclusion.
| IX. |
Disclosure of Code of Ethics to the Public |
Pursuant to Item 2(f) of Form N-CSR the registrant is required to disclose the Code of Ethics per one
of the methods listed below:
| (1) |
File with the Commission, pursuant to Item 13(a)(1), a copy of its code of ethics that applies to the
registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as an exhibit to its annual report on this Form
N-CSR; |
| (2) |
Post the text of such code of ethics on its Internet website and disclose, in its most recent report on this
Form N- CSR, its Internet address and the fact that it has posted such code of ethics on its Internet website; or |
| (3) |
Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made. |
6
| X. |
Interpretation of Code |
This Code will not be interpreted or applied in any manner that would violate the legal rights of any Covered Officer as an employee under applicable law. For
example, nothing in this Code or the Exhibits attached hereto prohibits or in any way restricts any Covered Officer from reporting possible violations of law or regulation to, otherwise communicating directly with, cooperating with or providing
information to any governmental or regulatory body or any self-regulatory organization or making other disclosures that are protected under applicable law or regulations of the SEC or any other governmental or regulatory body or self-regulatory
organization. A Covered Officer does not need prior authorization of the Trust or Adviser before taking any such action and is not required to inform the Trust or Adviser if he or she chooses to take such action.
Amended: January 31, 2022
7
Exhibit A
Persons Covered by the Code
Andrew Owen,
President of each Trust
Jeremy DePalma, Treasurer of each Trust
Exhibit A amended: January 31, 2022
8
Exhibit 13(a)(2)
CERTIFICATION
I, Andrew Owen, certify that:
1. I have reviewed this report on
Form N-CSR of Allspring Income Opportunities Fund.
2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and
procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial
reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the most recent
fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit
committee of the registrant’s Board of Trustees (or persons performing the equivalent functions):
a) all significant deficiencies in
the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal controls over financial reporting.
|
| Date: June 26, 2023 |
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| /s/ Andrew Owen |
| Andrew Owen |
| President |
| Allspring Income Opportunities Fund |
CERTIFICATION
I, Jeremy DePalma, certify that:
1. I have reviewed this report
on Form N-CSR of Allspring Income Opportunities Fund.
2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and
procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial
reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the most recent
fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit
committee of the registrant’s Board of Trustees (or persons performing the equivalent functions):
a) all significant deficiencies in
the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal controls over financial reporting.
|
| Date: June 26, 2023 |
|
| /s/ Jeremy DePalma |
| Jeremy DePalma |
| Treasurer |
| Allspring Income Opportunities Fund |
Exhibit 13(b)
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Allspring Income Opportunities Fund, hereby certifies, to the best of his
knowledge, that the registrant’s report on Form N-CSR for the year ended April 30, 2023 (the “Report”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date:
June 26, 2023
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| By: |
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/s/ Andrew Owen |
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Andrew Owen |
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President |
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Allspring Income Opportunities Fund |
This certification is being furnished to the Securities and Exchange Commission pursuant to
Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Allspring Income Opportunities Fund, hereby certifies, to the best of his
knowledge, that the registrant’s report on Form N-CSR for the year ended April 30, 2023 (the “Report”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date:
June 26, 2023
|
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| By: |
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/s/ Jeremy DePalma |
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Jeremy DePalma |
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Treasurer |
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Allspring Income Opportunities Fund |
This certification is being furnished to the Securities and Exchange Commission pursuant to
Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.
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