|
|
|
|
|
|
Renewal of Current Investment Advisory and
Management Agreement
|
The Board of Directors of
each of S&P 500
®
GEARED
SM
Fund Inc. (“S&P
GEARED”), Defined Strategy Fund Inc. (“Defined Strategy”), S&P 500
®
Covered
Call Fund Inc. (“Covered Call”), Dow 30
SM
Premium & Dividend
Income Fund Inc. (“Dow 30”), Small Cap Premium & Dividend Income Fund Inc.
(“Small Cap”), Enhanced S&P 500
®
Covered Call Fund Inc.
(“Enhanced Covered Call”), Global Income & Currency Fund Inc. (“Global
Income”), NASDAQ Premium Income & Growth Fund Inc. (“NASDAQ Premium”) and
Dow 30
SM
Enhanced Premium & Income Fund Inc. (“Dow 30 Enhanced”)
(each, a “Fund” and collectively, the “Funds”), currently consisting solely of
Independent Directors, as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), has the responsibility
under the Investment Company Act to consider annually the Investment Advisory
and Management Agreement of each Fund (each, a “Management Agreement” and
together, the “Management Agreements”) with IQ Investment Advisors LLC (“IQ
Advisors”).
At a Board meeting held on
June 5, 2008, all of the Directors present at the meeting renewed the
Management Agreement for each Fund for an additional one-year term. Each
Management Agreement was considered separately by the relevant Fund’s
Directors. In considering whether to approve the continuance of the Management
Agreement, the Directors reviewed materials from counsel to the Funds and from
IQ Advisors including: (i) information concerning the services rendered to the
Funds by IQ Advisors and its affiliates; (ii) information concerning the
revenues and expenses incurred by IQ Advisors and its affiliates from the
operation of the Funds; (iii) a memorandum outlining the legal duties of the
Directors under the Investment Company Act; and (iv) information from Lipper,
Inc. (“Lipper”) comparing each Fund’s fee rate for advisory and administrative
services to those of other closed-end funds chosen by Lipper. Each Management
Agreement was considered separately by the relevant Fund’s Directors. The
Directors were represented by independent legal counsel who assisted them in
their deliberations. In voting to approve the continuation of each Fund’s
Management Agreement, the Directors considered in particular the following
factors:
(a) The nature, extent and quality of services provided by IQ
Advisors and its affiliates
— The Directors reviewed the services that IQ Advisors has provided to
the Funds. They considered the size and experience of IQ Advisors’ staff, its
use of technology, and the degree to which IQ Advisors exercises supervision
over the actions of the Fund’s subadviser. In connection with the investment
advisory services provided, the Directors took into account detailed
discussions they had with officers of IQ Advisors regarding the management of
each Fund’s investments in accordance with each Fund’s stated investment
objective and policies and the types of transactions entered into on behalf of
each Fund. During these discussions, the Directors asked detailed questions of,
and received answers from, the officers of IQ Advisors regarding the
implementation of each Fund’s investment strategy, its efficacy and risks.
In addition to the investment
advisory services provided to the Funds, the Directors considered that IQ
Advisors and its affiliates also provide administrative services, stockholder
services, oversight of Fund accounting, marketing services, assistance in
meeting legal and regulatory requirements and other services necessary for the
operation of the Funds. In particular, the Directors reviewed the compliance
and administrative services provided to the Funds by IQ Advisors, including its
oversight of each Fund’s day-to-day operations and its oversight of Fund
accounting. The Directors noted that IQ Advisors has access to administrative,
legal and compliance resources that help ensure a high level of quality in the
compliance and administrative services provided to the Funds. The Directors
also considered each Fund’s compliance history. Following their consideration
of this information, and based on the presentations at the Meeting and the
Directors’ experience as Directors of other investment companies advised by IQ
Advisors, the Directors concluded that the services provided to each Fund by IQ
Advisors under the respective Management Agreement were of a high quality and
benefited the Fund.
(b) Investment performance of each Fund and IQ Advisors
— The Directors considered the history,
experience, resources and strengths of IQ Advisors and its affiliates in
developing and implementing the investment strategies used by each Fund. The
Directors also considered the innovative nature of each Fund. The Directors
noted the specialized nature of each Fund’s investment strategy and the inherent
limitations in comparing a Fund’s investment performance to that of another
investment company. The Directors reviewed each Fund’s investment performance
and, where applicable, compared such performance to the performance of a
relevant reference index. The Directors discussed the degree to which each Fund
was achieving its investment objective. In particular, the Directors noted that
the Funds generally performed as expected and met their respective investment
objectives. As a result of their discussions and review, the Directors
concluded that each Fund’s performance was satisfactory. Based on
|
|
|
|
|
|
|
|
S&P 500
®
GEARED
SM
FUND INC.
|
JUNE 30, 2008
|
19
|
|
|
|
|
|
|
Renewal of Current Investment Advisory and
Management Agreement (continued)
|
these factors, the Directors
determined that IQ Advisors continued to be an appropriate investment adviser
for the Funds.
(c) Cost of services provided and profits realized by IQ
Advisors and its affiliates from the relationship with each of the Funds
— The Directors reviewed and considered a
memorandum from IQ Advisors regarding the methodology used by IQ Advisors in
allocating its costs regarding the operations of the Funds and calculating each
Fund’s profitability to IQ Advisors and its affiliates. The Directors also
reviewed a report detailing IQ Advisors’ profitability. After considering their
discussion with IQ Advisors and reviewing its memorandum and report, the
Directors concluded that there was a reasonable basis for the allocation of
costs and the determination of profitability. The Directors considered the cost
of the services provided by IQ Advisors to each Fund and the revenue derived by
IQ Advisors and its affiliates. The Directors took into account discussions
that they had with representatives of IQ Advisors regarding its general level
of profitability (if any), and the profits derived by its affiliate, BlackRock,
Inc. (“BlackRock”) from operating the Funds. The Directors also considered the
direct and indirect benefits derived by other IQ Advisors affiliates, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), from the
establishment of the Funds, including the underwriting arrangements relating to
the initial distribution of Fund shares. The Directors considered federal court
decisions discussing an investment adviser’s profitability and profitability
levels considered to be reasonable in those decisions. The Directors concluded
that any profits made by IQ Advisors and its affiliates (including BlackRock
and MLPF&S) are acceptable in relation to the nature, extent and quality of
services provided. The Directors also concluded that each Fund benefited from
such services provided by IQ Advisors’ affiliates.
(d) The extent to which economies of scale would be realized
as a Fund grows and whether fee levels would reflect such economies of scale
— The Directors considered the extent to
which economies of scale might be realized if the assets of a Fund were to
increase and whether there should be changes in the management fee rate or
structure in order to enable a Fund to participate in these economies of scale.
The Directors noted that, because each Fund is a closed-end fund, any increase
in asset levels generally would have to come from appreciation through
investment performance. The Directors also noted that each Fund, other than Dow
30, NASDAQ Premium, Dow 30 Enhanced and Covered Call, is an interval fund that
periodically allows stockholders to tender their shares to the Fund and that
such tender offers reduce the amount of Fund assets. In consideration of these
and other factors, the Directors determined that no changes were currently
necessary to each Fund’s fee structure. The Directors also discussed the
renewal requirements for investment advisory agreements, and determined that
they would revisit this issue no later than when they next review the
investment advisory fees.
(e) Comparison of services rendered and fees paid to those
under other investment advisory contracts, such as contracts of the same and
other investment advisers or other clients
— The Directors compared both the services
rendered and the fees paid under the Management Agreements to the contracts of
other investment advisers with respect to other closed-end registered
investment companies. In particular, the Directors evaluated each Fund’s
contractual fee rate for advisory and administrative services as compared to
the contractual fee rate of other closed-end funds chosen by Lipper. In
considering this information, the Directors took into account the nature of the
investment strategies of the Funds and the fact that the relevant peer group of
funds provided by Lipper for comparison have investment strategies and
restrictions different from those of the Funds. The Directors did not consider
compensation paid to IQ Advisors with respect to accounts other than registered
investment companies because IQ Advisors utilizes each Fund’s strategy in
connection with only registered funds. In particular, the Directors noted that
each Fund’s contractual advisory fee rate at a common asset level was equal to
or lower than the median fee rate of its Lipper comparison funds. The Directors
concluded that the advisory fee rates were reasonable in comparison to the data
reflected in the Lipper materials.
(f) Conclusion
— No single factor was determinative to the decision of the Directors.
Based on the foregoing and such other matters as were deemed relevant, all of
the Directors concluded that the advisory fee rate of each Fund was reasonable
in relation to the services provided by IQ Advisors to the Funds, as well as
the costs incurred and benefits gained by IQ Advisors and its affiliates in
providing such services, including the investment advisory and administrative
components. The Directors also found the investment advisory fees to be
reasonable in comparison to the fees charged by advisers to other funds in the
Lipper comparison. As a result, the Board of Directors of each Fund approved
the continuation of the Management Agreement for each Fund. The Directors were
represented by independent legal counsel who assisted them in their
deliberations.
|
|
|
|
|
|
20
|
S&P 500
®
GEARED
SM
FUND INC.
|
JUNE 30, 2008
|
|
|
|
|
|
|
Renewal of Current Investment Advisory and
Management Agreement (continued)
|
Continuation of Current Investment Subadvisory Agreements
In considering whether to
approve the continuance of the current Investment Subadvisory Agreement of each
Fund (each, a “Subadvisory Agreement” and, collectively, the “Subadvisory
Agreements”) for an additional annual period, the Directors received, reviewed
and evaluated information concerning the services and personnel of: BlackRock
Investment Management, LLC, as subadviser to each of S&P GEARED and Small
Cap; Oppenheimer Capital LLC, as subadviser to each of Covered Call and
Enhanced Covered Call; Nuveen HydePark Group, LLC (“Nuveen HydePark”), as
subadviser to Dow 30, Dow 30 Enhanced, NASDAQ Premium and Defined Strategy,
and Nuveen Asset Management (“NAM”), as subadviser to Global Income (each, a
“Subadviser” and, collectively, the “Subadvisers”). Each Subadvisory Agreement
was considered separately by the relevant Fund’s Directors. In voting to
approve the continuation of each Fund’s Subadvisory Agreement, the Directors
considered in particular the following factors:
(a) The nature, extent and quality of services provided by
each Subadviser
— The
Directors reviewed the services that each Subadviser provides to each of their
respective Funds. The Directors considered their detailed discussions with
officers of IQ Advisors and members of each Subadviser’s portfolio management
team, the management of each Fund’s investments in accordance with the Fund’s
stated investment objective and policies and the types of transactions that
have been entered into on behalf of the Funds. The Directors took into account
the annual due diligence investment review of each Subadviser and the report
that concluded that each such Subadviser has thus far executed its respective
Fund’s investment strategies in accordance with the Fund’s objectives and
general expectations. Drawing on their collective industry experience, the
Directors noted that they had discussed each Fund’s investment strategy with
representatives from the respective Subadviser, including discussions regarding
the premises underlying the Fund’s investment strategy, its efficacy and
potential risks. The Directors also considered the favorable history,
reputation and background of each Subadviser and its personnel, and the
substantial experience of such Subadviser’s portfolio management team. The
Directors discussed the compliance program of each Subadviser and the report of
the chief compliance officer of the Funds. Following consideration of this
information, and based on management presentations during the Board meeting and
their discussions in Executive Session, the Directors concluded that the
nature, extent and quality of services provided to each Fund by the applicable
Subadviser under its Subadvisory Agreement were of a high quality and would
continue to benefit the respective Fund.
(b) Investment performance of each Fund and each Subadviser
— The Directors received and considered
information about each Fund’s investment performance in light of its stated
investment objective and made the determinations discussed above under
“Continuation of Current Investment Advisory and Management Agreements.” Based
on these factors, the Directors determined that each Subadviser continued to be
appropriate for each of its respective Funds.
(c) Cost of services provided and profits realized by each
Subadviser from the relationship with each respective Fund
— The Directors considered the profitability
to BlackRock of serving as investment subadviser to two Funds and from its
relationship with IQ Advisors based on the information discussed above under
“Continuation of Current Investment Advisory and Management Agreements.” Based
on such information, the Directors concluded that BlackRock’s profits were
acceptable in relation to the nature, extent and quality of services provided.
The Directors noted that profitability data was not provided with respect to
the other Subadvisers of the Funds and concluded that such data was unnecessary
because such subadvisory arrangements were entered into at “arm’s length”
between IQ Advisors and each such Subadviser (including NAM and Nuveen
HydePark, with which subadvisory arrangements were originally negotiated prior
to the investment in their parent company by an affiliate of IQ Advisors). The
Directors then considered the potential direct and indirect benefits to each
Subadviser and its affiliates from their relationship with each of their
respective Funds, including the reputational benefits from managing the Funds.
The Directors of each Fund concluded that the potential benefits to each
Subadviser were consistent with those obtained by other subadvisers in similar
types of arrangements.
|
|
|
|
|
|
|
|
S&P 500
®
GEARED
SM
FUND INC.
|
JUNE 30, 2008
|
21
|
|
|
|
|
|
|
Renewal of Current Investment Advisory and
Management Agreement (concluded)
|
(d) The extent to which economies of scale would be realized
as a Fund grows and whether fee levels would reflect such economies of scale
— The Directors considered the extent to
which economies of scale might be realized if the assets of a Fund were to
increase and whether there should be changes in the subadvisory fee rate or
structure in order to enable a Fund to participate in these economies of scale.
The Directors noted that each Subadviser’s fees are paid by IQ Advisors out of
its fees and not directly by the Funds. The Directors noted that, because each
Fund is a closed-end fund, any increase in asset levels would have to come from
appreciation due to investment performance. The Directors also noted that each
Fund, other than Dow 30, NASDAQ Premium, Dow 30 Enhanced and Covered Call, is
an interval fund that periodically allows stockholders to tender their shares
to the Fund and that such tender offers reduce the amount of Fund assets. The
Directors also discussed the renewal requirements for subadvisory agreements,
and determined that they would revisit this issue no later than when they next review
the subadvisory fee.
(e) Comparison of services rendered and fees paid to those
under other subadvisory contracts, such as contracts of the same and other
investment advisers or other clients
— The Directors discussed the services rendered by each Subadviser and
determined that such services were consistent with those provided by
subadvisers generally and sufficient for the management of the Funds. Taking
into account the totality of the information and materials provided to the
Directors as noted above, including the fact that the subadvisory fee for each
Fund was negotiated with IQ Advisors and not payable directly by the Fund, the
Directors concluded that the subadvisory fee for each Fund was reasonable for
the services being rendered.
Conclusion
— No single factor was determinative to the decision of the Directors.
Based on the foregoing and such other matters as were deemed relevant, all of
the Directors concluded that the subadvisory fee rate of each Fund was
reasonable in relation to the services provided by the respective Subadviser.
As a result, all of the Directors approved the continuation of the Subadvisory
Agreement for each Fund. The Directors were represented by independent legal
counsel who assisted them in their deliberations.
|
|
|
|
|
|
22
|
S&P 500
®
GEARED
SM
FUND INC.
|
JUNE 30, 2008
|
|
|
|
|
|
|
Availability of Quarterly Schedule of Investments
|
The Fund files its complete
schedule of portfolio holdings with the Securities and Exchange Commission
(“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The
Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov. The
Fund’s Forms N-Q may also be reviewed and copied at the SEC’s Public Reference
Room in Washington, DC. Information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
The Fund offers electronic
delivery of communications to its shareholders. In order to receive this
service, you must register your account and provide us with e-mail information.
To sign up for this service, simply access this website at
http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you
will obtain a personal identification number (PIN). You will need this PIN
should you wish to update your e-mail address, choose to discontinue this
service and/or make any other changes to the service. This service is not
available for certain retirement accounts at this time.
For more information
regarding the Fund, please visit www.IQIAFunds.com or contact us at
1-877-449-4742.
|
|
|
|
|
|
|
|
S&P 500
®
GEARED
SM
FUND INC.
|
JUNE 30, 2008
|
23
|
|
|
|
|
|
|
|
|
www.IQIAFunds.com
|
|
|
|
|
|
|
S&P 500
®
GEARED
SM
Fund Inc. seeks to provide total returns, exclusive of fees and
expenses of the Fund, linked to the annual performance of the S&P 500
®
Composite Stock Price Index.
|
|
|
|
|
|
This report, including the
financial information herein, is transmitted to shareholders of S&P 500
®
GEARED
SM
Fund Inc. for their information. It is not a
prospectus. Past performance results shown in this report should not be
considered a representation of future performance. Statements and other
information herein are as dated and are subject to change.
|
|
|
|
|
|
A description of the
policies and procedures that the Fund uses to determine how to vote proxies
relating to portfolio securities is available without charge at
www.IQIAFunds.com/proxyvoting.asp or upon request by calling toll-free
1-877-449-4742 or through the Securities and Exchange Commission’s website at
http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund’s portfolio during the most recent 12-month
period ended June 30 is available (1) at www.IQIAFunds.com/proxyvoting.asp;
and (2) on the Securities and Exchange Commission’s website at
http://www.sec.gov.
|
|
|
|
|
|
S&P 500
®
GEARED
SM
Fund Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
|
|
|
|
|
|
|
|
|
|
|
|
|
#IQGRE
— 6/08
|
|
|
|
|
|
|
|
|
|
Item
2 –
|
Code
of Ethics – Not Applicable to this semi-annual report
|
|
|
|
|
Item
3 –
|
Audit
Committee
Financial Expert – Not Applicable to this semi-annual report
|
|
|
|
|
Item
4 –
|
Principal
Accountant Fees and Services – Not Applicable to this semi-annual report
|
|
|
|
|
Item
5 –
|
Audit
Committee of Listed Registrants – Not Applicable
to
this semi-annual report
|
|
|
|
|
Item
6 –
|
Investments
|
|
|
(a)
The registrant’s Schedule of Investments is included as part of
the Report to Stockholders filed under Item 1 of this form.
|
|
|
(b)
Not Applicable since no such divestments occurred during the semi-annual
period covered since the last report on Form N-CSR.
|
|
|
|
|
Item
7 –
|
Disclosure
of Proxy Voting Policies and Procedures for Closed-End Management Investment
Companies – Not
Applicable to this semi-annual report
|
|
|
|
|
Item
8 –
|
Portfolio
Managers
of Closed-End Management Investment Companies – Not Applicable to this semi-annual
report
|
|
|
|
|
Item
9 –
|
Purchases
of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers – Not
Applicable
|
|
|
|
|
Item
10 –
|
Submission
of Matters to a Vote of Security Holders – The registrant’s
Nominating Committee will consider nominees to the board of directors
recommended by shareholders when a vacancy becomes available. Shareholders
who wish to recommend a nominee should send nominations which include
biographical information and set forth the qualifications of the proposed
nominee to the registrant’s Secretary. There have been no material
changes to these procedures.
|
|
|
|
|
Item
11 –
|
Controls
and Procedures
|
|
|
|
|
11(a) –
|
The
registrant’s principal executive and principal financial officers
or persons performing similar
functions
have concluded that the registrant’s disclosure controls and procedures
(as defined in Rule
30a-3(c)
under the Investment Company Act of 1940, as amended (the “1940
Act”)) are effective as
of
a date within 90 days of the filing of this report based on the evaluation
of these controls and
procedures
required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under
the Securities
Exchange
Act of 1934, as amended.
|
|
|
|
|
11(b) –
|
There
were no changes in the registrant’s internal control over financial
reporting (as defined in
Rule
30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter
of the period
covered
by this report that have materially affected, or are reasonably likely
to materially affect, the
registrant’s
internal control over financial reporting.
|
|
|
|
|
Item
12 –
|
Exhibits
attached
hereto
|
|
|
|
|
12(a)(1) –
|
Code
of Ethics – Not Applicable to this semi-annual report
|
|
|
|
|
12(a)(2) –
|
Certifications – Attached
hereto
|
|
12(a)(3) –
|
Not
Applicable
|
|
|
|
|
12(b) –
|
Certifications – Attached
hereto
|
|
|
|
|
|
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.
|
|
|
|
|
|
S&P
500
®
GEARED
SM
Fund
Inc.
|
|
|
|
|
|
By:
|
/s/
Mitchell
M. Cox
|
|
|
|
|
Mitchell
M. Cox
|
|
|
|
Chief
Executive Officer of
|
|
|
|
S&P
500
®
GEARED
SM
Fund
Inc.
|
|
|
|
|
|
Date:
August 21, 2008
|
|
|
|
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
|
|
|
|
|
By:
|
/s/
Mitchell
M. Cox
|
|
|
|
|
Mitchell
M. Cox
|
|
|
|
Chief
Executive Officer (principal executive officer) of
|
|
|
|
S&P
500
®
GEARED
SM
Fund
Inc.
|
|
|
|
|
|
Date:
August 21, 2008
|
|
|
|
|
|
By:
|
/s/
James
E. Hillman
|
|
|
|
|
James
E. Hillman
|
|
|
|
Chief
Financial Officer (principal financial officer) of
|
|
|
|
S&P
500
®
GEARED
SM
Fund
Inc.
|
|
|
|
Date: August 21, 2008
S & P 500 Geared FD (NYSE:GRE)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
S & P 500 Geared FD (NYSE:GRE)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024
