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: |
811-21786 |
Voya
Global Advantage and
Premium Opportunity Fund |
(Exact
name of
registrant as
specified in
charter) |
7337
E. Doubletree
Ranch Rd.
Suite 100,
Scottsdale, AZ |
85258 |
(Address
of
principal executive
offices) |
(Zip
code) |
The
Corporation Trust
Company, 1209
Orange |
Street,
Wilmington, DE
19801 |
(Name
and address
of agent
for service) |
Registrant’s
telephone number,
including area
code: 1-800-992-0180
Date
of fiscal
year end:
|
February
28 |
|
|
Date
of reporting
period: |
February
29, 2016 |
| Item 1. | Reports
to Stockholders. |
The
following is
a copy
of the
report transmitted
to stockholders
pursuant to
Rule 30e-1
under the
Act (17
CFR 270.30e-1):
Annual Report
February 29, 2016
Voya Global Advantage and Premium Opportunity
Fund
E-Delivery Sign-up details
inside
This report is intended for existing current holders. It is
not a prospectus. This information should be read carefully. |
INVESTMENT MANAGEMENT |
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voyainvestments.com |
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TABLE OF CONTENTS
Presidents
Letter |
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1 |
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Market
Perspective |
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2 |
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Portfolio
Managers Report |
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4 |
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Report of
Independent Registered Public Accounting Firm |
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6 |
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Statement of
Assets and Liabilities |
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7 |
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Statement of
Operations |
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8 |
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Statements of
Changes in Net Assets |
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9 |
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Financial
Highlights |
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10 |
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Notes to
Financial Statements |
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11 |
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Summary Portfolio
of Investments |
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21 |
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Tax
Information |
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26 |
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Shareholder
Meeting Information |
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27 |
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Trustee and
Officer Information |
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28 |
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Advisory Contract
Approval Discussion |
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32 |
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Additional
Information |
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36 |
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Go Paperless with E-Delivery!
|
|
Sign up
now for on-line prospectuses, fund reports, and proxy statements. In less than five minutes, you can help reduce paper mail and lower fund
costs. |
|
Just go
to www.voyainvestments.com, click on the E-Delivery icon from the home page, follow the directions and complete the quick 5 Steps to
Enroll. |
|
You will
be notified by e-mail when these communications become available on the internet. Documents that are not available on the internet will continue to be
sent by mail. |
PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio securities is available:
(1) without charge, upon request, by calling Shareholder Services toll-free at (800) 992-0180; (2) on the Funds website at
www.voyainvestments.com; and (3) on the U.S. Securities and Exchange Commissions (SECs) website at www.sec.gov. Information
regarding how the Fund voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge
on the Funds website at www.voyainvestments.com and on the SECs website at www.sec.gov.
QUARTERLY PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This
report contains a summary portfolio of investments for the Fund. The Funds Forms N-Q are available on the SECs website at www.sec.gov. The
Funds Forms N-Q may be reviewed and copied at the SECs Public Reference Room in Washington, DC, and information on the operation of the
Public Reference Room may be obtained by calling (800) SEC-0330. The Funds Forms N-Q, as well as a complete portfolio of investments, are
available without charge upon request from the Fund by calling Shareholder Services toll-free at (800) 992-0180.
(THIS PAGE INTENTIONALLY LEFT BLANK)
PRESIDENTS LETTER
Dear Shareholder,
Voya Global Advantage and Premium Opportunity Fund (the Fund) is a diversified, closed-end management investment company whose
shares are traded on the New York Stock Exchange under the symbol IGA. The primary objective of the Fund is to provide a high level of
income, with a secondary objective of capital appreciation.
The Fund seeks to achieve its investment objectives by
investing at least 80% of its managed assets in a diversified global equity portfolio and employing an option strategy of writing index call options on
a portion of its equity portfolio. The Fund also seeks to hedge most of its foreign currency exposure to seek to reduce volatility of total
returns.
For the year ended February 29, 2016, the Fund made
quarterly distributions totaling $1.12 per share, characterized as $0.73 per share net realized gain and $0.39 per share net investment
income.*
Based on net asset value (NAV), the Fund
provided a total return of 8.48% for the year ended February 29, 2016.(1)(2) This NAV return reflects a decrease in the Funds
NAV from $12.93 on February 28, 2015 to $10.71 on February 29, 2016, after taking into account the quarterly distributions noted above. Based on its
share price, the Fund provided a total return of 10.96% for the year ended February 29, 2016.(2)(3) This share price return reflects a
decrease in the Funds share price from $11.85 on February 28, 2015 to $9.55 on February 29, 2016, after taking into account the quarterly
distributions noted above.
The global equity markets have witnessed a challenging and
turbulent period. Please read the Market Perspective and Portfolio Managers Report for more information on the market and the Funds
performance.
At Voya our mission is to help you grow and protect your
wealth, by offering you and your financial advisor a range of global investment solutions. We invite you to visit our website at
www.voyainvestments.com. Here you will find current information on our investment products and services, including our open- and closed-end funds and
our retirement portfolios. You will see that Voya offers a broad range of equity, fixed income and multi-asset strategies that aim to fulfill a variety
of investor needs.
Thank you for trusting Voya with your investment assets. We
look forward to serving you in the months and years ahead.
Shaun P. Mathews
President and Chief Executive
Officer
Voya Family of Funds
April 1, 2016
The views expressed in the Presidents Letter reflect those of the President
as of the date of the letter. Any such views are subject to change at any time based upon market or other conditions and the Voya mutual funds disclaim
any responsibility to update such views. These views may not be relied on as investment advice and because investment decisions for a Voya mutual fund
are based on numerous factors, may not be relied on as an indication of investment intent on behalf of any Voya mutual fund. Reference to specific
company securities should not be construed as recommendations or investment advice. International investing does pose special risks including currency
fluctuation, economic and political risks not found in investments that are solely domestic.
More complete information about the Fund, including the
Funds daily New York Stock Exchange closing prices and net asset values per share, is available at www.voyainvestments.com or by calling the
Funds Shareholder Service Department at (800) 992-0180. To obtain a prospectus for any Voya mutual fund, please call your financial advisor or a
funds Shareholder Service Department at (800) 992-0180 or log on to www.voyainvestments.com. A prospectus should be read carefully before
investing. Consider a funds investment objectives, risks, charges and expenses carefully before investing. A prospectus contains this information
and other information about a fund. Check with your financial advisor to determine which Voya mutual funds are available for sale within their firm.
Not all funds are available for sale at all firms.
* |
|
The final tax composition of dividends and distributions will not
be determined until after the Funds tax year-end. |
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|
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(1) |
|
Total investment return at net asset value has been calculated
assuming a purchase at net asset value at the beginning of each period and a sale at net asset value at the end of each period and assumes reinvestment
of dividends, capital gain distributions, and return of capital distributions/allocations, if any, in accordance with the provisions of the Funds
dividend reinvestment plan. |
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|
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(2) |
|
Total returns shown include, if applicable, the effect of fee
waivers and/or expense reimbursements by the investment adviser. Had all fees and expenses been considered, the total returns would have been
lower. |
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|
|
(3) |
|
Total investment return at market value measures the change in
the market value of your investment assuming reinvestment of dividends, capital gain distributions, and return of capital distributions/allocations, if
any, in accordance with the provisions of the Funds dividend reinvestment plan. |
1
MARKET
PERSPECTIVE: YEAR ENDED FEBRUARY 29, 2016
In our semi-annual report, we described how global equities,
in the form of the MSCI World IndexSM (the Index) measured in local currencies, including net reinvested dividends, had been
shaken when China announced a 2% devaluation of the yuan. The Index staged a strong recovery in October, which stalled in November and unraveled in
December. Concerns intensified in 2016 and by the end of February, the Index was down 9.73% for the fiscal year. (The Index returned 11.00% for
the one year ended February 29, 2016, measured in U.S. dollars.)
U.S. economic data blew hot and cold. Employment showed the
most consistent strength. By the end of February, 231,000 new jobs were being created monthly, on average. The unemployment rate fell to 4.9%, the
lowest since February 2008. Sluggish annual wage growth improved to 2.5%, which doesnt sound like much, but it was the best since 2009. Gross
domestic product (GDP) was 3.9% annualized in the second quarter of 2015, after another harsh winter, before an inventory downturn and
waning demand pegged it back to 2.0% in the third quarter and 1.0% in the fourth quarter. Industrial production was uneven, while purchasing
managers indices in manufacturing indicated contraction in the last five months of the period. Retail sales were still showing no real
acceleration despite lower gasoline prices.
Superimposed on this was the prospect of rising U.S.
interest rates. On December 16, the Federal Open Market Committee of the U.S. Federal Reserve Board finally announced a 0.25% increase in the federal
funds interest rate as a first step in normalizing policy. Further increases would be data driven. There was a substantial body of opinion that felt
the increase was unwarranted, not least because all other major central banks were far from considering rate increases.
Chinas unexpected 2% devaluation of the yuan in August
caused such market turmoil because it was handled so poorly and because it suggested that the Chinese economy, the largest single contributor to global
growth in recent years, was weaker than had previously been admitted. Chinas own market, represented by the Shanghai Stock Exchange Composite
Index (Shanghai Composite), was already in retreat. By August 26 the Shanghai Composite was down 43% from its June 12 peak. Global equities
fell sharply and had fallen 5.39% by the end of our fiscal half year.
Yet in the fourth quarter the feeling grew that concerns had
been overdone. The Bank of China lowered interest rates, eased bank reserve requirements and by early November, the Shanghai Composite had recouped
over a quarter of its losses. The price of oil had fallen to a new multi-year low near the end of August, but rebounded sharply and edged further ahead
in October. Global equities responded with an 11% bounce between late September and early November.
But it was not to last. Chinese authorities had clearly been
rattled by the violent reaction to the devaluation and as they tried to keep the yuan steady, Chinas foreign exchange reserves were falling by
about $100bn per month as the period ended. In early January a new bout of panic sent the Shanghai Composite down nearly 7% triggering a recently
introduced circuit-breaker, which having seemed to make things worse, was soon abandoned. Again the authorities had created a perception of
incompetence. Fourth quarter growth in China was reported at 6.8%, the weakest since 2009. The yuan and the Shanghai Composite were falling
again.
The oil price and global equities soon followed. Concerns
re-emerged about the various areas of instability in global economies and markets, including the already hard-hit energy sector, the vast investment it
creates and was postponing because of falling energy prices amid faltering demand and uncontrollable supply. Inflation was nowhere to be seen and to
create it, increasingly commonplace negative bond yields were being encouraged by central banks, which, to many commentators, had lost their power to
improve economic conditions.
In U.S. fixed income markets, the Barclays U.S. Aggregate
Bond Index (Barclays Aggregate) gained 1.50% in the fiscal year, while the Barclays U.S. Treasury Bond sub-index added 2.88%. Indices of
riskier classes fared worse. The Barclays U.S. Corporate Investment Grade Bond sub-index fell 1.49%; the Barclays High Yield Bond 2% Issuer
Constrained Composite Index (not a part of the Barclays Aggregate) fell 8.26%. According to Bloomberg in February, some 29% by value of world
government bonds outstanding had negative yields.
U.S. equities, represented by the S&P 500® Index
including dividends, dropped 6.19% in the year through February. The defensive telecommunications sector did best, returning 7.56%. The worst
performing sector was understandably energy, slumping 24.21%. S&P 500® earnings per share fell year-over-year in each of the last three
quarters of 2015 and were set to fall again in the first quarter of 2016.
In currencies, the dollar added 2.94% against the euro after
that currency dipped in February in anticipation of further monetary easing in March. The dollar gained 9.05% on the pound, accelerating late in the
period as concerns grew over Britains possible exit from the European Union. The dollar lost 5.22% to the yen, again after a late move in
response to market instability.
In international markets, the MSCI Japan® Index dropped
14.93%, all in 2016, on renewed concern over Chinas slowdown and a rising yen. The MSCI Europe ex UK® Index sagged 12.03%, all in the last
three months. The financial sector was particularly hard hit by low (and in some cases negative) interest rates and deteriorating loan losses. The MSCI
UK® Index fell 9.22%, a decline that was much more evenly spread throughout the year and mostly concentrated in a dozen or so multinationals in
the financials, materials and energy sectors such as HSBC (financials), Glencore (materials) and Royal Dutch Shell (energy).
Past performance does not guarantee future results. The
performance quoted represents past performance. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may
be worth more or less than their original cost. The Funds performance is subject to change since the periods end and may be lower or higher
than the performance data shown. Please call (800) 992-0180 or log on to www.voyainvestments.com to obtain performance data current to the most recent
month end.
Market Perspective reflects the views of Voya Investment
Managements Chief Investment Risk Officer only through the end of the period, and is subject to change based on market and other
conditions.
2
BENCHMARK
DESCRIPTIONS
Index |
|
|
|
Description |
Barclays High
Yield Bond 2% Issuer Constrained Composite Index |
|
|
|
An
unmanaged index that includes all fixed-income securities having a maximum quality rating of Ba1, a minimum amount outstanding of $150 million, and at
least one year to maturity. |
Barclays U.S.
Aggregate Bond Index |
|
|
|
An
unmanaged index of publicly issued investment grade U.S. Government, mortgage-backed, asset-backed and corporate debt securities. |
Barclays U.S.
Corporate Investment Grade Bond Index |
|
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|
An
unmanaged index consisting of publicly issued, fixed rate, nonconvertible, investment grade debt securities. |
Barclays U.S.
Treasury Bond Index |
|
|
|
A
market capitalization-weighted index that measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of one
year or more. |
MSCI Europe ex
UK® Index |
|
|
|
A free
float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe, excluding the
UK. |
MSCI Japan®
Index |
|
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|
A free
float-adjusted market capitalization index that is designed to measure developed market equity performance in Japan. |
MSCI UK®
Index |
|
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|
A free
float-adjusted market capitalization index that is designed to measure developed market equity performance in the UK. |
MSCI World
IndexSM |
|
|
|
An
unmanaged index that measures the performance of over 1,400 securities listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand and the
Far East. |
S&P 500®
Index |
|
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|
An
unmanaged index that measures the performance of securities of approximately 500 large-capitalization companies whose securities are traded on major
U.S. stock markets. |
Shanghai Stock
Exchange Composite Index |
|
|
|
A
capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The
index was developed on December 19, 1990 with a base value of 100. |
3
VOYA GLOBAL
ADVANTAGE
AND PREMIUM OPPORTUNITY FUND |
PORTFOLIO MANAGERS REPORT |
Geographic Diversification as of February 29, 2016 (as a percentage of net assets) |
|
United
States |
|
|
|
|
55.6 |
% |
Japan |
|
|
|
|
9.4 |
% |
United
Kingdom |
|
|
|
|
9.3 |
% |
Germany |
|
|
|
|
5.4 |
% |
Switzerland |
|
|
|
|
5.1 |
% |
Hong
Kong |
|
|
|
|
3.0 |
% |
France |
|
|
|
|
2.8 |
% |
Canada |
|
|
|
|
2.2 |
% |
Austria |
|
|
|
|
1.2 |
% |
Australia |
|
|
|
|
0.7 |
% |
Countries
between 0.3%0.6%ˆ |
|
|
|
|
1.9 |
% |
Assets in
Excess of Other Liabilities |
|
|
|
|
3.4 |
% |
Net
Assets |
|
|
|
|
100.0 |
% |
|
ˆ Includes 4 countries, which each represents 0.3%0.6% of net assets.
|
|
Portfolio holdings are subject to change daily. |
Voya Global Advantage and Premium Opportunity Fund (the
Fund) is a diversified closed-end fund with the primary investment objective of providing a high level of income. Capital appreciation is a
secondary investment objective. The Fund seeks to achieve its investment objectives by:
investing at least 80% of its managed assets in a portfolio of common stocks of companies located in a number of different countries throughout the world, including the United States; and
utilizing an integrated derivatives strategy.
Portfolio Management: The Fund is managed by
Pieter Schop, Jeff Meys and Willem van Dommelen, Portfolio Managers, NNIP Advisors B.V. the Sub-Adviser.*
Equity Portfolio Construction: Under normal
market conditions, the Fund will invest at least 80% of its managed assets in a diversified portfolio of equity securities across a broad range of
countries, industries and market sectors. Equity securities held by the Fund may be denominated in both U.S. dollars and non-U.S. currencies. The Fund
may invest up to 20% of its managed assets in securities issued by companies located in emerging markets when the Sub-Adviser believes they present
attractive investment opportunities.
The Fund seeks to invest in a portfolio of approximately 100
to 150 equity securities and will select securities through an analysis of a companys fundamentals in terms of sales, margins and capital use and
other fundamental factors by the Sub-Advisers equity analysts, as well as quantitative factors. The Sub-Adviser seeks to identify opportunities
in mispricing between its bottom-up fundamental analysis of a securitys value and the market price of individual stocks using a proprietary
discounted cash flow valuation model and quantitative techniques. Investment opportunities with the highest conviction are selected from the resulting
focus list to construct a diversified portfolio.
The Funds weighting between U.S. and international
equities depends on the Sub-Advisers ongoing assessment of market opportunities for the Fund. Under normal market conditions, the Fund seeks to
target at least a 40% weighting in international (ex-U.S.) equity securities.
The Fund seeks to target a relatively high active share in
combination with a moderate tracking error as measured against the MSCI World IndexSM.
The Funds Integrated Option Strategy:
The option strategy of the Fund is designed to seek gains and lower volatility of total returns over a market cycle by generally writing (selling)
index call options on selected indices and/or exchange-traded funds (ETFs) in an amount equal to approximately 35% to 100% of the value of
the Funds holdings in common stocks.
Top Ten Holdings as of February 29, 2016 (as a percentage of net assets) |
Alphabet,
Inc. Class A |
|
|
|
|
2.7 |
% |
Pfizer,
Inc. |
|
|
|
|
2.5 |
% |
Merck
& Co., Inc. |
|
|
|
|
2.4 |
% |
Apple,
Inc. |
|
|
|
|
2.3 |
% |
Gilead
Sciences, Inc. |
|
|
|
|
2.3 |
% |
Imperial
Brands PLC |
|
|
|
|
2.3 |
% |
British
American Tobacco PLC |
|
|
|
|
2.2 |
% |
Actelion
Ltd. Reg |
|
|
|
|
2.2 |
% |
Muenchener Rueckversicherungs-Gesellschaft AG |
|
|
|
|
2.2 |
% |
Delta Air
Lines, Inc. |
|
|
|
|
2.2 |
% |
|
|
|
|
|
|
|
Portfolio holdings are subject to change daily. |
The extent of call option writing activity depends upon
market conditions and the Sub-Advisers ongoing assessment of the attractiveness of writing call options on selected indices and/or ETFs. Call
options will be written (sold) usually at-the money, out-of-the-money or near-the-money and can be written both in exchange-listed option markets and
over-the-counter markets with major international banks, broker-dealers and financial institutions.
The Fund writes call options that are generally short-term
(between 10 days and three months until expiration). The Fund typically maintains its call positions until expiration, but it retains the option to buy
back the call options and sell new call options.
Additionally, in order to reduce volatility of NAV returns,
the Fund generally employs a policy to hedge major foreign currencies using foreign currency forwards or zero-cost collars.
In addition to the intended strategy of selling index call
options, the Fund may invest in other derivative instruments such as futures for investment, hedging and risk-management purposes to gain or reduce
exposure to securities, security markets and market indices consistent with its investment objectives and strategies. Such derivative instruments are
acquired to enable the Fund to make market directional tactical decisions to enhance returns, to protect against a decline in its assets or as a
substitute for the purchase or sale of equity securities.
Performance: Based on net asset value
(NAV), the Fund provided a total return 8.48% for the year ended February 29, 2016.(1) This NAV return reflects a decrease
in the Funds NAV from $12.93 on February 28, 2015 to $10.71 on February 29, 2016, after taking into
4
PORTFOLIO MANAGERS REPORT |
VOYA GLOBAL ADVANTAGE
AND PREMIUM OPPORTUNITY FUND |
account
quarterly distributions. Based on its share price as of February 29, 2016, the Fund provided
a total return of 10.96% for the year.(1) This share price return reflects
a decrease in the Funds share price from $11.85 on February 28, 2015 to $9.55 on
February 29, 2016, after taking into account quarterly distributions. The Funds
reference index, the MSCI World IndexSM returned 11.00%. During the
year, the Fund made quarterly distributions totaling $1.12 per share, characterized as
$0.73 per share net realized gain and $0.39 per share net investment income.(2)
As of February 29, 2016, the Fund had 18,353,572 shares outstanding.
Portfolio
Specifics: The equity portfolio underperformed the MSCI World Index for the reporting
period. The underperformance of the portfolio was mainly due to stock selection in the
U.S., in particular in the information technology sector. Against the MSCI World Index
as a whole, stock selection in the materials and consumer discretionary sectors also
detracted from results. This was partially offset by positive results in financials and
utilities.
Stock
returns in the U.S. in 2105 were driven to a large extent by strongly positive performances
of the so-called FANG stocks (Facebook Inc., Amazon.com Inc., Netflix Inc.
and Alphabet Inc. (Google)). Our underweight positions in most of those stocks had a
negative effect on performance. Against the MSCI World Index as a whole, the Funds
materials sector positions in commodities producers and miners disappointed. In the consumer
discretionary sector our holdings in videogame and footwear retailers underperformed
on market concerns that the speed in the shift to digital downloads would hurt the business
models of brick and mortar retailers. Stock selection results in the utilities and financials
sectors were positive. The Fund remains diversified over sectors and regions. The financials
and industrials sectors were the largest overweight positions as of period-end, while
the consumer, energy and health care sectors were the largest underweights.
Option
Portfolio: The Fund generates premiums and seeks gains by writing (selling) call
options on a variety of market indices on a portion of the value of the equity portfolio,
and by implementing an equity market directional strategy on the same market indices
via equity index futures.
During
the reporting period, the Fund sold short-maturity options on the S&P 500®
Index, the DJ Eurostoxx 50 Index, the Nikkei 225 Index and the FTSE 100 Index.
The strike prices of the traded options were typically slightly out-of-the the money,
and the expiration dates ranged between six and seven weeks. We maintained the coverage
ratio at approximately 50% of portfolio assets during the reporting period.
During
the reporting period all relevant markets were down in local currency terms. As could
be expected, in this declining market, the option portfolio had a positive impact on
overall return, as did our futures strategy. The Fund continued its policy of hedging
currencies back to the U.S. dollar to seek to reduce the volatility of NAV returns. The
currency hedge benefited performance for the reporting period.
Outlook
and Current Strategy: There are many uncertainties facing the markets. Markets
remain volatile due to the ongoing weakening of the Chinese economy and low commodity
prices. In our view, developed market economies are generally more resilient, though
economic growth continues to be sub-par and the expectations for the U.S. economy are
deteriorating. We believe growth in developed markets is aided by a pick-up in global
consumption thanks to the sharp decline in global oil prices and an improved labor market.
At the same time, low inflation is allowing central banks to maintain loose policies,
though there are increasing doubts about the effectiveness of central bank actions. Emerging
market economies face many headwinds such as weak commodity prices, the Chinese growth
slowdown, U.S. tightening and capital outflows.
Strong
corporate balance sheets and low interest rates have been a big driver of share buyback
programs and mergers and acquisitions in 2015. However, we believe the pace of share
buybacks might slow this year if corporate bond yields move up. Many companies are cautious
on their outlook for 2016 and earnings expectations for developed markets have come down
significantly in recent weeks. We therefore expect relatively modest, single-digit earnings
growth.
Adding
it all up, our base case is for a hectic and volatile year with equity returns at best
in line with earnings growth. Risks to this outlook include rising geopolitical tensions
or a deterioration in global growth that would impact earnings expectations. Alternatively,
a stabilization in commodity prices and better Chinese growth numbers could result in
further upside potential.
* |
|
Effective May 31, 2015, Jeff Meys replaced Bert Veldman as a
Portfolio Manager to the Fund. Prior to April 7, 2015, NNIP Advisors B.V. was known as ING Investment Management Advisors B.V. |
(1) |
|
Total returns shown include, if applicable, the effect of fee
waivers and/or expense reimbursements by the investment adviser. Had all fees and expenses been considered, the total returns would have been
lower. |
(2) |
|
The final tax composition of dividends and distributions will not
be determined until after the Funds tax year-end. |
Portfolio holdings and characteristics are subject to change and may not be representative of current holdings and characteristics. Fund
holdings are subject to change daily. The outlook for this Fund may differ from that presented for other Voya mutual funds. The Funds performance
returns shown reflect applicable fee waivers and/or expense limits in effect during this period. Absent such fee waivers/expense limitations, if any,
performance would have been lower. Performance for the different classes of shares will vary based on differences in fees associated with each
class.
5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Shareholders and Board of Trustees
Voya Global
Advantage and Premium Opportunity Fund
We have audited the accompanying statement of assets and
liabilities, including the summary portfolio of investments, of Voya Global Advantage and Premium Opportunity Fund, as of February 29, 2016, and the
related statement of operations 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 financial highlights for each of the years in the ten-year period then ended. These financial statements and financial highlights are
the responsibility of management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). 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. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements and portfolio of investments. Our procedures included confirmation
of securities owned as of February 29, 2016, by correspondence with the custodian, transfer agent, and brokers, or by other appropriate auditing
procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material respects, the financial position of the Voya Global Advantage and Premium Opportunity Fund
as of February 29, 2016, the results of its operations 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 ten-year period then ended, in conformity with U.S. generally accepted
accounting principles.
Boston, Massachusetts
April 25, 2016
6
STATEMENT OF ASSETS AND LIABILITIES as of February 29,
2016
ASSETS: |
|
|
|
|
|
|
Investments in
securities at fair value* |
|
|
|
$ |
189,975,023 |
|
Cash |
|
|
|
|
2,909,401 |
|
Cash collateral
for futures |
|
|
|
|
52,050 |
|
Cash pledged as
collateral for OTC derivatives (Note 2) |
|
|
|
|
3,260,000 |
|
Foreign
currencies at value** |
|
|
|
|
31,699 |
|
Foreign cash
collateral for futures*** |
|
|
|
|
731,316 |
|
Receivables: |
|
|
|
|
|
|
Investment
securities sold |
|
|
|
|
207,698 |
|
Dividends |
|
|
|
|
487,638 |
|
Foreign
currency settlement (Note 11) |
|
|
|
|
365,088 |
|
Foreign tax
reclaims |
|
|
|
|
300,103 |
|
Unrealized
appreciation on forward foreign currency contracts |
|
|
|
|
732,534 |
|
Prepaid
expenses |
|
|
|
|
732 |
|
Other
assets |
|
|
|
|
6,276 |
|
Total
assets |
|
|
|
|
199,059,558 |
|
|
LIABILITIES: |
|
|
|
|
|
|
Payable for
investment securities purchased |
|
|
|
|
207,542 |
|
Unrealized
depreciation on forward foreign currency contracts |
|
|
|
|
85,980 |
|
Payable for
investment management fees |
|
|
|
|
130,276 |
|
Payable to
trustees under the deferred compensation plan (Note 6) |
|
|
|
|
6,276 |
|
Payable for
trustee fees |
|
|
|
|
1,116 |
|
Other accrued
expenses and liabilities |
|
|
|
|
100,879 |
|
Written options,
at fair valueˆ |
|
|
|
|
1,951,773 |
|
Total
liabilities |
|
|
|
|
2,483,842 |
|
NET
ASSETS |
|
|
|
$ |
196,575,716 |
|
|
NET ASSETS
WERE COMPRISED OF: |
|
|
|
|
|
|
Paid-in
capital |
|
|
|
$ |
200,690,511 |
|
Distributions in
excess of net investment income |
|
|
|
|
(298,320 |
) |
Accumulated net
realized gain |
|
|
|
|
1,155,525 |
|
Net unrealized
depreciation |
|
|
|
|
(4,972,000 |
) |
NET
ASSETS |
|
|
|
$ |
196,575,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Cost of
investments in securities |
|
|
|
$ |
195,540,579 |
|
** |
|
Cost of
foreign currencies |
|
|
|
$ |
31,962 |
|
*** |
|
Cost of
foreign cash collateral for futures |
|
|
|
$ |
731,316 |
|
ˆ |
|
Premiums
received on written options |
|
|
|
$ |
1,970,094 |
|
|
|
|
|
|
|
|
|
|
Net
assets |
|
|
|
$ |
196,575,716 |
|
Shares
authorized |
|
|
|
|
unlimited |
|
Par
value |
|
|
|
$ |
0.010 |
|
Shares
outstanding |
|
|
|
|
18,353,572 |
|
Net asset
value |
|
|
|
$ |
10.71 |
|
See Accompanying Notes to Financial
Statements
7
STATEMENT OF OPERATIONS FOR THE YEAR ENDED FEBRUARY 29,
2016
INVESTMENT
INCOME: |
|
|
|
|
|
|
Dividends, net
of foreign taxes withheld* |
|
|
|
$ |
5,257,291 |
|
Total
investment income |
|
|
|
|
5,257,291 |
|
|
EXPENSES: |
|
|
|
|
|
|
Investment
management fees(1) |
|
|
|
|
1,857,043 |
|
Transfer agent
fees |
|
|
|
|
18,109 |
|
Administrative
service fees(1) |
|
|
|
|
39,644 |
|
Shareholder
reporting expense |
|
|
|
|
67,500 |
|
Professional
fees |
|
|
|
|
63,530 |
|
Custody and
accounting expense |
|
|
|
|
135,842 |
|
Trustee
fees |
|
|
|
|
6,694 |
|
Miscellaneous
expense |
|
|
|
|
34,711 |
|
Total
expenses |
|
|
|
|
2,223,073 |
|
Net investment
income |
|
|
|
|
3,034,218 |
|
|
REALIZED AND
UNREALIZED GAIN (LOSS): |
|
|
|
|
|
|
Net realized
gain (loss) on: |
|
|
|
|
|
|
Investments |
|
|
|
|
21,923,828 |
|
Foreign
currency related transactions |
|
|
|
|
2,522,610 |
|
Futures |
|
|
|
|
1,596,835 |
|
Written
options |
|
|
|
|
3,185,233 |
|
Net realized
gain |
|
|
|
|
29,228,506 |
|
Net change in
unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
Investments |
|
|
|
|
(54,253,220 |
) |
Foreign
currency related transactions |
|
|
|
|
(101,279 |
) |
Futures |
|
|
|
|
(226,945 |
) |
Written
options |
|
|
|
|
2,056,032 |
|
Net change in
unrealized appreciation (depreciation) |
|
|
|
|
(52,525,412 |
) |
Net realized and
unrealized loss |
|
|
|
|
(23,296,906 |
) |
Decrease in
net assets resulting from operations |
|
|
|
$ |
(20,262,688 |
) |
|
|
|
|
|
|
|
|
* Foreign taxes
withheld |
|
|
|
$ |
241,466 |
|
(1) |
|
Effective May 1, 2015, the investment management fee and
administration fee were combined under a single amended and restated investment management agreement. Please see Note 4 for further
information. |
See Accompanying Notes to Financial
Statements
8
STATEMENTS OF CHANGES IN NET ASSETS
|
|
|
|
Year Ended February 29, 2016
|
|
Year Ended February 28, 2015
|
FROM
OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
Net investment
income |
|
|
|
$ |
3,034,218 |
|
|
$ |
3,126,859 |
|
Net realized
gain |
|
|
|
|
29,228,506 |
|
|
|
7,339,328 |
|
Net change in
unrealized appreciation (depreciation) |
|
|
|
|
(52,525,412 |
) |
|
|
7,182,943 |
|
Increase
(decrease) in net assets resulting from operations |
|
|
|
|
(20,262,688 |
) |
|
|
17,649,130 |
|
|
FROM
DISTRIBUTIONS TO SHAREHOLDERS: |
|
|
|
|
|
|
|
|
|
|
Net investment
income |
|
|
|
|
(7,087,905 |
) |
|
|
(10,868,115 |
) |
Net realized
gains |
|
|
|
|
(13,468,096 |
) |
|
|
|
|
Return of
capital |
|
|
|
|
|
|
|
|
(9,687,885 |
) |
Total
distributions |
|
|
|
|
(20,556,001 |
) |
|
|
(20,556,000 |
) |
|
FROM CAPITAL
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
|
Net increase in
net assets resulting from capital share transactions |
|
|
|
|
|
|
|
|
|
|
Net decrease in
net assets |
|
|
|
|
(40,818,689 |
) |
|
|
(2,906,870 |
) |
|
NET
ASSETS: |
|
|
|
|
|
|
|
|
|
|
Beginning of
year or period |
|
|
|
|
237,394,405 |
|
|
|
240,301,275 |
|
End of year or
period |
|
|
|
$ |
196,575,716 |
|
|
$ |
237,394,405 |
|
Distributions in
excess of net investment income at end of year or period |
|
|
|
$ |
(298,320 |
) |
|
$ |
(1,260,771 |
) |
See Accompanying Notes to Financial
Statements
9
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding
throughout each year or period.
|
|
|
|
Per Share Operating Performance
|
|
Ratios and Supplemental Data
|
|
|
|
|
|
|
|
Income (loss) from investment operations
|
|
|
|
Less distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of
year or period
|
|
Net investment income gain
(loss)
|
|
Net realized and unrealized gain
(loss)
|
|
Total from investment operations
|
|
From net investment income
|
|
From net realized gains
|
|
From return of capital
|
|
Total distributions
|
|
Net asset value, end of
year or period
|
|
Market value, end of year
or period
|
|
Total investment return
at net asset value(1)
|
|
Total investment return
at market value(2)
|
|
Net assets, end of year or
period (000s)
|
|
Gross expenses prior to
expense waiver/ recoupment(3)
|
|
Net expenses after expense
waiver/ recoupment(3)(4)
|
|
Net investment income
after
expense waiver/ recoupment(3)(4)
|
|
Portfolio turnover rate
|
|
Year or period
ended
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
(%)
|
|
(%)
|
|
($000s)
|
|
(%)
|
|
(%)
|
|
(%)
|
|
(%)
|
|
02-29-16 |
|
|
|
|
12.93 |
|
|
|
0.17 |
|
|
|
(1.27 |
) |
|
|
(1.10 |
) |
|
|
0.39 |
|
|
|
0.73 |
|
|
|
|
|
|
|
1.12 |
|
|
|
10.71 |
|
|
|
9.55 |
|
|
|
(8.48 |
))(5) |
|
|
(10.96 |
) |
|
|
196,576 |
|
|
|
1.00 |
|
|
|
1.00 |
|
|
|
1.36 |
|
|
|
117 |
|
|
02-28-15 |
|
|
|
|
13.09 |
|
|
|
0.17 |
|
|
|
0.79 |
|
|
|
0.96 |
|
|
|
0.59 |
|
|
|
|
|
|
|
0.53 |
|
|
|
1.12 |
|
|
|
12.93 |
|
|
|
11.85 |
|
|
|
8.72 |
|
|
|
9.52 |
|
|
|
237,394 |
|
|
|
0.95 |
|
|
|
0.97 |
|
|
|
1.32 |
|
|
|
17 |
|
|
02-28-14 |
|
|
|
|
12.92 |
|
|
|
0.19 |
|
|
|
1.10 |
|
|
|
1.29 |
|
|
|
0.27 |
|
|
|
|
|
|
|
0.85 |
|
|
|
1.12 |
|
|
|
13.09 |
|
|
|
11.91 |
|
|
|
10.94 |
|
|
|
3.14 |
|
|
|
240,301 |
|
|
|
0.99 |
|
|
|
1.00 |
|
|
|
1.43 |
|
|
|
11 |
|
|
02-28-13 |
|
|
|
|
12.66 |
|
|
|
0.21 |
|
|
|
1.23 |
|
|
|
1.44 |
|
|
|
0.44 |
|
|
|
0.54 |
|
|
|
0.20 |
|
|
|
1.18 |
|
|
|
12.92 |
|
|
|
12.64 |
|
|
|
12.85 |
|
|
|
17.49 |
|
|
|
237,034 |
|
|
|
1.07 |
|
|
|
1.00 |
|
|
|
1.68 |
|
|
|
234 |
|
|
02-29-12 |
|
|
|
|
13.76 |
|
|
|
0.22 |
|
|
|
0.00 |
* |
|
|
0.22 |
|
|
|
1.32 |
|
|
|
|
|
|
|
|
|
|
|
1.32 |
|
|
|
12.66 |
|
|
|
11.90 |
|
|
|
2.43 |
|
|
|
(3.44 |
) |
|
|
232,156 |
|
|
|
1.00 |
|
|
|
1.00 |
|
|
|
1.76 |
|
|
|
135 |
|
|
02-28-11 |
|
|
|
|
13.37 |
|
|
|
0.20 |
|
|
|
1.57 |
|
|
|
1.77 |
|
|
|
1.38 |
|
|
|
|
|
|
|
|
|
|
|
1.38 |
|
|
|
13.76 |
|
|
|
13.72 |
|
|
|
14.05 |
|
|
|
6.32 |
|
|
|
251,545 |
|
|
|
0.98 |
|
|
|
0.99 |
|
|
|
1.48 |
|
|
|
164 |
|
|
02-28-10 |
|
|
|
|
11.29 |
|
|
|
0.21 |
|
|
|
3.64 |
|
|
|
3.85 |
|
|
|
|
|
|
|
|
|
|
|
1.77 |
|
|
|
1.77 |
|
|
|
13.37 |
|
|
|
14.30 |
|
|
|
35.81 |
|
|
|
57.38 |
|
|
|
242,426 |
|
|
|
1.01 |
|
|
|
1.00 |
|
|
|
1.61 |
|
|
|
141 |
|
|
02-28-09 |
|
|
|
|
17.79 |
|
|
|
0.31 |
|
|
|
(4.95 |
) |
|
|
(4.64 |
) |
|
|
0.74 |
|
|
|
|
|
|
|
1.12 |
|
|
|
1.86 |
|
|
|
11.29 |
|
|
|
10.42 |
|
|
|
(26.96 |
) |
|
|
(28.32 |
) |
|
|
204,546 |
|
|
|
0.99 |
|
|
|
0.99 |
|
|
|
2.01 |
|
|
|
178 |
|
|
02-29-08 |
|
|
|
|
21.19 |
|
|
|
0.30 |
|
|
|
(0.73 |
) |
|
|
(0.43 |
) |
|
|
|
|
|
|
2.40 |
|
|
|
0.57 |
|
|
|
2.97 |
|
|
|
17.79 |
|
|
|
16.73 |
|
|
|
(2.40 |
) |
|
|
(7.87 |
) |
|
|
324,275 |
|
|
|
0.97 |
|
|
|
0.97 |
|
|
|
1.45 |
|
|
|
194 |
|
|
02-28-07 |
|
|
|
|
20.24 |
|
|
|
0.26 |
|
|
|
2.55 |
|
|
|
2.81 |
|
|
|
0.04 |
|
|
|
1.54 |
|
|
|
0.28 |
|
|
|
1.86 |
|
|
|
21.19 |
|
|
|
21.11 |
|
|
|
14.81 |
|
|
|
24.40 |
|
|
|
385,433 |
|
|
|
0.95 |
|
|
|
0.95 |
|
|
|
1.29 |
|
|
|
132 |
|
|
(1) |
|
Total investment return at net asset value has been calculated
assuming a purchase at net asset value at the beginning of each period and a sale at net asset value at the end of each period and assumes reinvestment
of dividends, capital gain distributions and return of capital distributions/allocations, if any, in accordance with the provisions of the dividend
reinvestment plan. Total investment return at net asset value is not annualized for periods less than one year. |
(2) |
|
Total investment return at market value measures the change in
the market value of your investment assuming reinvestment of dividends, capital gain distributions and return of capital distributions/allocations, if
any, in accordance with the provisions of the Funds dividend reinvestment plan. Total investment return at market value is not annualized for
periods less than one year. |
(3) |
|
Annualized for periods less than one year. |
(4) |
|
The Investment Adviser has entered into a written expense
limitation agreement with the Fund under which it will limit the expenses of the Fund (excluding interest, taxes, investment-related costs, leverage
expenses, extraordinary expenses and acquired fund fees and expenses) subject to possible recoupment by the Investment Adviser within three years of
being incurred. |
(5) |
|
Excluding amounts related to a foreign currency settlement
recorded in the fiscal year ended February 29, 2016, the Funds total return would have been (8.65)%. |
|
|
Calculated using average number of shares outstanding throughout
the period. |
* |
|
Amount is less than $0.005 or 0.005% or more than $(0.005) or
(0.005)%. |
|
|
Impact of waiving the advisory fee for the ING Institutional
Prime Money Market Fund holding has less than 0.005% impact on the expense ratio and net investment income or loss ratio. |
See Accompanying Notes to Financial
Statements
10
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016
NOTE 1 ORGANIZATION
Voya Global Advantage and Premium Opportunity Fund (the
Fund) is a diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended (the
1940 Act). The Fund is organized as a Delaware statutory trust.
Voya Investments, LLC (Voya Investments or the
Investment Adviser), an Arizona limited liability company, serves as the Investment Adviser to the Fund. Voya Investments oversees all
investment advisory and portfolio management services for the Fund and assists in managing and supervising all aspects of the general day-to-day
business activities and operations of the Fund, including custodial, transfer agency, dividend disbursing, accounting, auditing, compliance and related
services. The Investment Adviser has retained Voya Investment Management Co. LLC (Voya IM), a Delaware limited liability company, to
provide certain consulting services to the Investment Adviser. The Investment Adviser has engaged NNIP Advisors B.V. (NNIP Advisors), a
subsidiary of NN Group N.V. (NN Group), domiciled in The Hague, The Netherlands and Voya IM to serve as sub-advisers to the Fund. Prior to
April 7, 2015, NNIP Advisors was known as ING Investment Management Advisors B.V.
NOTE 2 SIGNIFICANT ACCOUNTING
POLICIES
The following significant accounting policies are
consistently followed by the Fund in the preparation of its financial statements. The Fund is considered an investment company under U.S. generally
accepted accounting principles (GAAP) and follows the accounting and reporting guidance applicable to investment
companies.
A. Security Valuation. The Fund is
open for business every day the New York Stock Exchange (NYSE) opens for regular trading (each such day, a Business Day). The
net asset value (NAV) per share of the Fund is determined each Business Day as of the close of the regular trading session (Market
Close), as determined by the Consolidated Tape Association (CTA), the central distributor of transaction prices for exchange-traded
securities (normally 4:00 p.m. Eastern time unless otherwise designated by the CTA). The NAV per share of the Fund is calculated by taking the value of
the Funds assets, subtracting the Funds liabilities, and dividing by the number of shares that are outstanding. On days when the Fund is
closed for business, Fund shares will not be priced and the Fund does not transact purchase and redemption orders. To the extent the Funds assets
are traded in other markets on days when the Fund does not price its shares, the value of the Funds assets will likely change and you will not be
able to purchase or redeem shares of the Fund.
Assets for which market quotations are readily available are
valued at market value. A security listed or traded on an exchange is valued at its last sales price or official closing price as of the close of the
regular trading session on the exchange where the security is principally traded or, if such price is not available, at the last sale price as of the
Market Close for such security provided by the CTA. Bank loans are valued at the average of the averages of the bid and ask prices provided to an
independent loan pricing service by brokers. Futures contracts are valued at the final settlement price set by an exchange on which they are
principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded.
Investments in open-end registered investment companies that do not trade on an exchange are valued at the end of day NAV per share. Investments in
registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the regular
trading session on the exchange where the security is principally traded.
When a market quotation is not readily available or is
deemed unreliable, the Fund will determine a fair value for the relevant asset in accordance with procedures adopted by the Board of Trustees
(Board). Such procedures provide, for example, that: (a) Exchange-traded securities are valued at the mean of the closing bid and ask; (b)
Debt obligations are valued using an evaluated price provided by an independent pricing service. Evaluated prices provided by the pricing service may
be determined without exclusive reliance on quoted prices, and may reflect factors such as institution-size trading in similar groups of securities,
developments related to specific securities, benchmark yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and
other market data; (c) Securities traded in the over-the-counter market are valued based on prices provided by independent pricing services or market
makers; (d) Options not listed on an exchange are valued by an independent source using an industry accepted model, such as Black-Scholes; (e)
Centrally cleared swap agreements are valued using a price provided by the central counterparty clearinghouse; (f) Over-the-counter swap agreements are
valued using a price provided by an independent pricing service; (g) Forward foreign currency contracts are valued utilizing current and forward rates
obtained from an independent pricing service. Such prices from the third party pricing service are for specific settlement periods and the Funds
forward foreign currency contracts are valued at an interpolated rate between the closest preceding and subsequent period reported by the independent
pricing service and (h) Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by
brokers.
11
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
The prospectuses of the open-end registered investment
companies in which the Fund may invest explain the circumstances under which they will use fair value pricing and the effects of using fair value
pricing.
Foreign securities (including foreign exchange
contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of Market Close. If market quotations are available and
believed to be reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours
for certain foreign securities end before Market Close, closing market quotations may become unreliable. An independent pricing service determines the
degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value
as of Market Close. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be
valued by the independent pricing service using pricing models designed to estimate likely changes in the values of those securities between the times
in which the trading in those securities is substantially completed and Market Close. Multiple factors may be considered by the independent pricing
service in determining the value of such securities and may include information relating to sector indices, American Depositary Receipts and domestic
and foreign index futures.
All other assets for which market quotations are not readily
available or became unreliable (or if the above fair valuation methods are unavailable or determined to be unreliable) are valued at fair value as
determined in good faith by or under the supervision of the Board following procedures approved by the Board. The Board has delegated to the Investment
Adviser responsibility for overseeing the implementation of the Funds valuation procedures; a Pricing Committee comprised of
employees of the Investment Adviser or its affiliates has responsibility for applying the fair valuation methods set forth in the procedures and, if a
fair valuation cannot be determined pursuant to the fair valuation methods, determining the fair value of assets held by the Fund. Issuer specific
events, transaction price, position size, nature and duration of restrictions on disposition of the security, market trends, bid/ask quotes of brokers
and other market data may be reviewed in the course of making a good faith determination of a securitys fair value. Valuations change in response
to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions,
interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of fair valuation, the values used to determine the
Funds NAV may materially differ from the value received upon actual sale of those investments. Thus, fair valuation may have an unintended
dilutive or accretive effect on the value of shareholders investments in the Fund.
Each investment asset or liability of the Fund is assigned a
level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical securities
are classified as Level 1, inputs other than quoted prices for an asset or liability that are observable are classified as Level
2 and unobservable inputs, including each sub-advisers or Pricing Committees judgment about the assumptions that a market participant
would use in pricing an asset or liability are classified as Level 3. The inputs used for valuing securities are not necessarily an
indication of the risks associated with investing in those securities. Short-term securities of sufficient credit quality are generally considered to
be Level 2 securities under applicable accounting rules. A table summarizing the Funds investments under these levels of classification is
included following the Summary Portfolio of Investments.
U.S. GAAP requires a reconciliation of the beginning to
ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and
transfers in or out of the Level 3 category during the period. The beginning of period timing recognition is used for the transfers between Levels of
the Funds assets and liabilities. A reconciliation of Level 3 investments is presented only when the Fund has a significant amount of Level 3
investments.
For the year ended February 29, 2016, there have been no
significant changes to the fair valuation methodologies.
B. Security Transactions and Revenue
Recognition. Security transactions are recorded on the trade date. Realized gains or losses on sales of investments are calculated on the
identified cost basis. Interest income is recorded on the accrual basis. Premium amortization and discount accretion are determined using the effective
yield method. Dividend income is recorded on the ex-dividend date, or in the case of some foreign dividends, when the information becomes available to
the Fund.
C. Foreign Currency Translation.
The books and records of the Fund are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following
basis:
(1) |
|
Market value of investment securities, other assets and
liabilities at the exchange rates prevailing at Market Close. |
12
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
(2) |
|
Purchases and sales of investment securities, income and expenses
at the rates of exchange prevailing on the respective dates of such transactions |
Although the net assets and the market values are presented
at the foreign exchange rates at Market Close, the Fund does not isolate the portion of the results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the
net realized and unrealized gains or losses from investments. For securities, which are subject to foreign withholding tax upon disposition,
liabilities are recorded on the Statement of Assets and Liabilities for the estimated tax withholding based on the securities current market
value. Upon disposition, realized gains or losses on such securities are recorded net of foreign withholding tax.
Reported net realized foreign exchange gains or losses arise
from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference
between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other
than investments in securities, resulting from changes in the exchange rate. Foreign security and currency transactions may involve certain
considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not
limited to, revaluation of currencies and future adverse political and economic developments which could cause securities and their markets to be less
liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities. The foregoing risks are even greater with
respect to securities of issuers in emerging markets.
D. Distributions to Shareholders.
The Fund intends to make quarterly distributions from its cash available for distribution, which consists of the Funds dividends and interest
income after payment of Fund expenses, net option premiums and net realized and unrealized gains on investments. Such quarterly distributions may also
consist of a return of capital. At least annually, the Fund intends to distribute all or substantially all of its net realized capital gains.
Distributions are recorded on the ex-dividend date. Distributions are determined annually in accordance with federal tax principles, which may differ
from U.S. GAAP for investment companies.
The tax treatment and characterization of the Funds
distributions may vary significantly from time to time depending on whether the Fund has gains or losses on the call options written on its portfolio
versus gains or losses on the equity securities in the portfolio. Each quarter, the Fund will provide disclosures with distribution payments made that
estimate the percentages of that distribution that represent net investment income, other income or capital gains, and return of capital, if any. The
final composition of the tax characteristics of the distributions cannot be determined with certainty until after the end of the Funds tax year,
and will be reported to shareholders at that time. A significant portion of the Funds distributions may constitute a return of capital. The
amount of quarterly distributions will vary, depending on a number of factors. As portfolio and market conditions change, the rate of dividends on the
common shares will change. There can be no assurance that the Fund will be able to declare a dividend in each period.
E. Federal Income Taxes. It is the
policy of the Fund to comply with the requirements of subchapter M of the Internal Revenue Code that are applicable to regulated investment companies
and to distribute substantially all of its net investment income and any net realized capital gains to its shareholders. Therefore, a federal income
tax or excise tax provision is not required. Management has considered the sustainability of the Funds tax positions taken on federal income tax
returns for all open tax years in making this determination. The Fund may utilize equalization accounting for tax purposes, whereby a portion of
redemption payments are treated as distributions of income or gain.
F. Use of Estimates. The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
G. Risk Exposures and the Use of Derivative
Instruments. The Funds investment objectives permit the Fund to enter into various types of derivatives contracts, including, but not
limited to, forward foreign currency exchange contracts, futures and purchased and written options. In doing so, the Fund will employ strategies in
differing combinations to permit it to increase or decrease the level of risk, or change the level or types of exposure to market risk factors. This
may allow the Fund to pursue its objectives more quickly and efficiently, than if it were to
13
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
make direct purchases or sales of securities capable of
affecting a similar response to market factors.
Market Risk Factors. In pursuit of its investment
objectives, the Fund may seek to use derivatives to increase or decrease its exposure to the following market risk factors:
Credit Risk. The price of a bond or other debt
instrument is likely to fall if the issuers actual or perceived financial health deteriorates, whether because of broad economic or
issuer-specific reasons. In certain cases, the issuer could be late in paying interest or principal, or could fail to pay its financial obligations
altogether.
Equity Risk. Stock prices may be volatile or
have reduced liquidity in response to real or perceived impacts of factors including, but not limited to, economic conditions, changes in market
interest rates, and political events. Stock markets tend to be cyclical, with periods when stock prices generally rise and periods when stock prices
generally decline. Any given stock market segment may remain out of favor with investors for a short or long period of time, and stocks as an asset
class may underperform bonds or other asset classes during some periods. Additionally, legislative, regulatory or tax policies or developments in these
areas may adversely impact the investment techniques available to a manager, add to costs and impair the ability of the Fund to achieve its investment
objectives.
Foreign Exchange Rate Risk. To the extent that
the Fund invests directly in foreign (non-U.S.) currencies or in securities denominated in, or that trade in, foreign (non-U.S.) currencies, it is
subject to the risk that those foreign (non-U.S.) currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions,
that the U.S. dollar will decline in value relative to the currency being hedged by the Fund through foreign currency exchange
transactions.
Currency rates may fluctuate significantly over short
periods of time. Currency rates may be affected by changes in market interest rates, intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the International Monetary Fund, by the imposition of currency controls, or other
political or economic developments in the United States or abroad.
Interest Rate Risk. Changes in short-term
market interest rates will directly affect the yield on Common Shares. If short-term market interest rates fall, the yield on Common Shares will also
fall. To the extent that the interest rate spreads on loans in the Funds portfolio experience a general decline, the yield on the Common Shares
will fall and the value of the Funds assets may decrease, which will cause the Funds net asset value to decrease. Conversely, when
short-term market interest rates rise, because of the lag between changes in such short-term rates and the resetting of the floating rates on assets in
the Funds portfolio, the impact of rising rates will be delayed to the extent of such lag. In the case of inverse securities, the interest rate
paid by such securities generally will decrease when the market rate of interest to which the inverse security is indexed increases. With respect to
investments in fixed rate instruments, a rise in market interest rates generally causes values of such instruments to fall. The values of fixed rate
instruments with longer maturities or duration are more sensitive to changes in market interest rates.
As of the date of this report, market interest rates in the
United States are at or near historic lows, which may increase the Funds exposure to risks associated with rising market interest rates. Rising
market interest rates could have unpredictable effects on the markets and may expose fixed-income and related markets to heightened volatility which
could reduce liquidity for certain investments, adversely affect values, and increase costs. If dealer capacity in fixed-income and related markets is
insufficient for market conditions, it may further inhibit liquidity and increase volatility in the fixed-income and related markets.
Risks of Investing in Derivatives. The
Funds use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where
the Fund is using derivatives to decrease, or hedge, exposures to market risk factors for securities held by the Fund, there are also risks that those
derivatives may not perform as expected resulting in losses for the combined or hedged positions.
Derivative instruments are subject to a number of risks,
including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to
changes in market interest rates and liquidity and volatility risk. The amounts required to purchase certain derivatives may be small relative to the
magnitude of exposure assumed by the Fund. Therefore, the purchase of certain derivatives may have an economic leveraging effect on the Fund and
exaggerate any increase or decrease in the net asset value. Derivatives may not perform as expected, so the Fund may not realize the intended benefits.
When used for hedging purposes, the change in value of a derivative may not correlate as expected with the currency, security or other risk being
hedged. When used as an alternative or substitute for direct cash investments, the return provided by the derivative may not provide the same return as
direct cash investment.
14
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
In addition, given their complexity, derivatives expose
the Fund to the risk of improper valuation.
Generally, derivatives are sophisticated financial
instruments whose performance is derived, at least in part, from the performance of an underlying asset or assets. Derivatives include, among other
things, swap agreements, options, forwards and futures. Investments in derivatives are generally negotiated over-the-counter with a single counterparty
and as a result are subject to credit risks related to the counterpartys ability or willingness to perform its obligations; any deterioration in
the counterpartys creditworthiness could adversely affect the value of the derivative. In addition, derivatives and their underlying securities
may experience periods of illiquidity which could cause the Fund to hold a security it might otherwise sell, or to sell a security it otherwise might
hold at inopportune times or at an unanticipated price. A manager might imperfectly judge the direction of the market. For instance, if a derivative is
used as a hedge to offset investment risk in another security, the hedge might not correlate to the markets movements and may have unexpected or
undesired results such as a loss or a reduction in gains.
The U.S. government has enacted legislation that provides
for new regulation of the derivatives market, including clearing, margin, reporting, and registration requirements. The European Union (and other
countries outside of the European Union) is implementing similar requirements, which will affect the Fund when it enters into a derivatives transaction
with a counterparty organized in that country or otherwise subject to that countrys derivatives regulations. Because these requirements are new
and evolving (and some of the rules are not yet final), their ultimate impact remains unclear. Central clearing is expected to reduce counterparty risk
and increase liquidity, however, there is no assurance that it will achieve that result, and in the meantime, central clearing and related requirements
expose the Fund to new kinds of costs and risks.
Counterparty Credit Risk and Credit Related Contingent
Features. Certain derivative positions are subject to counterparty credit risk, which is the risk that the counterparty will not fulfill its
obligation to the Fund. The Funds derivative counterparties are financial institutions who are subject to market conditions that may weaken their
financial position. The Fund intends to enter into financial transactions with counterparties that it believes to be creditworthy at the time of the
transaction. To reduce this risk, the Fund generally enters into master netting arrangements, established within the Funds International Swap and
Derivatives Association, Inc. (ISDA) Master Agreements (Master Agreements). These agreements are with select counterparties and
they govern transactions, including certain over-the-counter (OTC) derivative and forward foreign currency contracts, entered into by the
Fund and the counterparty. The Master Agreements maintain provisions for general obligations, representations, agreements, collateral, and events of
default or termination. The occurrence of a specified event of termination may give a counterparty the right to terminate all of its contracts and
affect settlement of all outstanding transactions under the applicable Master Agreement.
The Fund may also enter into collateral agreements with
certain counterparties to further mitigate counterparty credit risk associated with OTC derivative and forward foreign currency contracts. Subject to
established minimum levels, collateral is generally determined based on the net aggregate unrealized gain or loss on contracts with a certain
counterparty. Collateral pledged to the Fund is held in a segregated account by a third-party agent and can be in the form of cash or debt securities
issued by the U.S. government or related agencies.
As of February 29, 2016, the maximum amount of loss the Fund
would incur if the counterparties to its derivative transactions failed to perform would be $732,534 which represents the gross payments to be received
by the Fund on open forward foreign currency contracts were they to be unwound as of February 29, 2016. As of February 29, 2016, there was no
collateral posted to the Fund by any counterparty.
The Funds master agreements with derivative
counterparties have credit related contingent features that if triggered would allow its derivatives counterparties to close out and demand payment or
additional collateral to cover their exposure from the Fund. Credit related contingent features are established between the Fund and its derivatives
counterparties to reduce the risk that the Fund will not fulfill its payment obligations to its counterparties. These triggering features include, but
are not limited to, a percentage decrease in the Funds net assets and or a percentage decrease in the Funds NAV, which could cause the Fund
to accelerate payment of any net liability owed to the counterparty. The contingent features are established within the Funds Master
Agreements.
As of February 29, 2016, the Fund had a liability position
of $2,037,753 on open forward foreign currency contracts and written options with credit related contingent features. If a contingent feature would
have been triggered as of February 29, 2016, the Fund could have been required to pay this amount in cash to its counterparties. As of February 29,
2016, the Fund had posted $3,260,000 in cash collateral for its open OTC derivatives transactions. There were no credit events during the year
ended
15
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
February 29, 2016 that triggered any credit related
contingent features.
H. Forward Foreign Currency Contracts and Futures
Contracts. The Fund may enter into forward foreign currency contracts primarily to hedge against foreign currency exchange rate risks on its
non-U.S. dollar denominated investment securities. When entering into a forward foreign currency contract, the Fund agrees to receive or deliver a
fixed quantity of foreign currency for an agreed-upon price on an agreed future date. These contracts are valued daily and the Funds net equity
therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of
entry into the contracts and the forward rates at the reporting date, is included in the statement of assets and liabilities. Realized and unrealized
gains and losses on forward foreign currency contracts are included on the Statement of Operations. These instruments involve market and/or credit risk
in excess of the amount recognized in the statement of assets and liabilities. Risks arise from the possible inability of counterparties to meet the
terms of their contracts and from movement in currency and securities values and interest rates.
During the year ended February 29, 2016, the Fund used
forward foreign currency contracts to hedge its investments in non-U.S. dollar denominated equity securities in an attempt to decrease the volatility
of the Funds NAV. Please refer to the table following the Summary Portfolio of Investments for open forward foreign currency contracts at
February 29, 2016.
During the year ended February 29, 2016, the Fund had
average contract amounts on forward foreign currency contracts to buy and sell of $217,949 and $79,701,693, respectively.
The Fund may enter into futures contracts involving foreign
currency, interest rates, securities and securities indices. A futures contract obligates the seller of the contract to deliver and the purchaser of
the contract to take delivery of the type of foreign currency, financial instrument or security called for in the contract at a specified future time
for a specified price. Upon entering into such a contract, the Fund is required to deposit and maintain as collateral such initial margin as required
by the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount equal to the
daily fluctuations in the value of the contract. Such receipts or payments are known as variation margin and are recorded as unrealized gains or losses
by the Fund. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Futures contracts are exposed to the market risk factor of
the underlying financial instrument. During the year ended February 29, 2016, the Fund had purchased and sold futures contracts on various equity
indices to enable the Fund to make market directional tactical decisions to enhance returns, to protect against a decline in its assets or as a
substitute for the purchase or sale of equity securities. Additional associated risks of entering into futures contracts include the possibility that
there may be an illiquid market where the Fund is unable to liquidate the contract or enter into an offsetting position and, if used for hedging
purposes, the risk that the price of the contract will correlate imperfectly with the prices of the Funds securities. With futures, there is
minimal counterparty credit risk to the Fund since futures are exchange traded and the exchanges clearinghouse, as counterparty to all exchange
traded futures, guarantees the futures against default. Please refer to the table following the Summary Portfolio of Investments for open futures
contracts at February 29, 2016.
During the year ended February 29, 2016, the Fund had
average notional values on futures contracts purchased and sold of $5,024,121 and $6,375,770, respectively.
I. Options Contracts. The Fund may
purchase put and call options and may write (sell) put options and covered call options. The premium received by the Fund upon the writing of a put or
call option is included in the Statement of Assets and Liabilities as a liability which is subsequently marked-to-market until it is exercised or
closed, or it expires. The Fund will realize a gain or loss upon the expiration or closing of the option contract. When an option is exercised, the
proceeds on sales of the underlying security for a written call option or purchased put option or the purchase cost of the security for a written put
option or a purchased call option is adjusted by the amount of premium received or paid. The risk in writing a call option is that the Fund gives up
the opportunity for profit if the market price of the security increases and the option is exercised. The risk in buying an option is that the Fund
pays a premium whether or not the option is exercised. Risks may also arise from an illiquid secondary market or from the inability of counterparties
to meet the terms of the contract.
The Fund generates premiums and seeks gains by writing call
options on indices on a portion of the value of the equity portfolio. Please refer to Note 7 for the volume of written option activity during the year
ended February 29, 2016.
J. Indemnifications. In the normal course of
business, the Fund may enter into contracts that provide certain
16
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
indemnifications. The Funds maximum exposure under
these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, based on experience,
management considers the risk of loss from such claims remote.
NOTE 3 INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of
investments for the year ended February 29, 2016, excluding short-term securities, were $255,096,787 and $268,482,089, respectively.
NOTE 4 INVESTMENT MANAGEMENT FEES
Prior to May 1, 2015, the Fund had entered into an
investment management agreement (Management Agreement) with the Investment Adviser. The Management Agreement compensated the Investment
Adviser with a management fee, payable monthly, based on an annual rate of 0.75% of the Funds average daily managed assets. For purposes of the
Management Agreement, managed assets are defined as the Funds average daily gross asset value, minus the sum of the Funds accrued and
unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings
incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares). As of February 29, 2016,
there were no preferred shares outstanding. Amounts paid to the Investment Adviser through April 30, 2015 are reflected as investment management fees
on the accompanying Statement of Operations.
Also, prior to May 1, 2015, the Fund had entered into an
administrative agreement (Administrative Agreement) with Voya Funds Services, LLC (the Administrator), a Delaware limited
liability company. The Administrator provided certain administrative and shareholder services necessary for Fund operations and was responsible for the
supervision of other service providers. For its services, the Administrator was entitled to receive from the Fund a fee at an annual rate of 0.10% of
the Funds average daily managed assets. Amounts paid to the Administrator through April 30, 2015 are reflected as administrative service fees on
the accompanying Statement of Operations.
Effective May 1, 2015, the terms of the Funds
Management Agreement and Administrative Agreement were combined under a single Amended and Restated Investment Management Agreement with a single
management fee. The single management fee rate under the Funds Amended and Restated Investment Management Agreement does not exceed the former
combined investment management and administrative services fee rates for the Fund and there is no change to the investment management or administrative
services provided.
The Amended and Restated Investment Management Agreement
compensates the Investment Adviser with a management fee, payable monthly, based on an annual rate of 0.85% of the Funds average daily managed
assets. Single management fee amounts paid to the Investment Adviser from May 1, 2015 through February 29, 2016 are reflected as investment management
fees on the accompanying Statement of Operations.
The Investment Adviser has entered into a consulting
agreement with Voya IM (the Consultant). For its services, the Consultant will receive a consultancy fee from the Investment Adviser. No
fee will be paid by the Fund directly to the Consultant. These services include, among other things, furnishing statistical and other factual
information; providing advice with respect to potential investment strategies that may be employed for the Fund, including, but not limited to,
potential options strategies; developing economic models of the anticipated investment performance and yield for the Fund; and providing advice to the
Investment Adviser and/or sub-advisers with respect to the Funds level and/or managed distribution policy.
The Investment Adviser has entered into sub-advisory
agreements with NNIP Advisors and Voya IM. Subject to policies as the Board or the Investment Adviser may determine, NNIP Advisors currently manages
the Funds assets in accordance with the Funds investment objectives, policies and limitations. However, in the future, the Investment
Adviser may allocate the Funds assets to Voya IM for management, and may change the allocation of the Funds assets among the two
sub-advisers in its discretion, to pursue the Funds investment objective. Each sub-adviser would make investment decisions for the assets it is
allocated to manage.
NOTE 5 EXPENSE LIMITATION AGREEMENT
The Investment Adviser has entered into a written expense
limitation agreement (Expense Limitation Agreement) with the Fund under which it will limit the expenses of the Fund, excluding interest,
taxes, investment-related costs, leverage expenses, extraordinary expenses, and acquired fund fees and expenses to 1.00% of average daily managed
assets.
The Investment Adviser may at a later date recoup from the
Fund for fees waived and other expenses assumed by the Investment Adviser during the previous 36 months, but only
17
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 5 EXPENSE LIMITATION AGREEMENT
(continued)
if, after such recoupment, the Funds expense ratio
does not exceed the percentage described above. Waived and reimbursed fees net of any recoupment by the Investment Adviser of such waived and
reimbursed fees are reflected on the accompanying Statement of Operations. Amounts payable by the Investment Adviser are reflected on the accompanying
Statement of Assets and Liabilities.
As of February 29, 2016, there are no amounts of waived
and/or reimbursed fees that are subject to possible recoupment by the Investment Adviser.
The Expense Limitation Agreement is contractual through
March 1, 2017 and shall renew automatically for one-year terms. Termination or modification of this obligation requires approval by the
Board.
NOTE 6 OTHER TRANSACTIONS WITH AFFILIATES AND RELATED
PARTIES
The Fund has adopted a deferred compensation plan (the
Plan), which allows eligible independent trustees, as described in the Plan, to defer the receipt of all or a portion of the trustees
fees that they are entitled to receive from the Fund. For purposes of determining the amount owed to the trustee under the Plan, the amounts deferred
are invested in shares of the notional funds selected by the trustee (the Notional Funds). The Fund purchases shares of the
Notional Funds, which are all advised by Voya Investments, in amounts equal to the trustees deferred fees, resulting in a Fund asset equal to the
deferred compensation liability. Such assets are included as a component of Other assets on the accompanying Statement of Assets and
Liabilities. Deferral of trustees fees under the Plan will not affect net assets of the Fund, and will not materially affect the Funds
assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the Plan.
NOTE 7 TRANSACTIONS IN WRITTEN
OPTIONS
Transactions in written OTC call options on equity indices
were as follows:
|
|
|
|
Number of Contracts
|
|
Premiums Received
|
Balance at
02/28/2015 |
|
|
|
|
105,300 |
|
|
$ |
1,698,591 |
|
Options
Written |
|
|
|
|
868,800 |
|
|
|
13,531,454 |
|
Options
Expired |
|
|
|
|
(466,900 |
) |
|
|
(7,713,390 |
) |
Options
Terminated in Closing Purchase Transactions |
|
|
|
|
(401,000 |
) |
|
|
(5,546,561 |
) |
Balance at
02/29/2016 |
|
|
|
|
106,200 |
|
|
$ |
1,970,094 |
|
NOTE 8 CAPITAL SHARES
There was no capital shares activity during the years ended
February 29, 2016 and February 28, 2015.
NOTE 9 FEDERAL INCOME TAXES
The amount of distributions from net investment income and
net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP for investment companies.
These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the capital accounts based on their
federal tax-basis treatment; temporary differences are not reclassified. Key differences include the treatment of short-term capital gains, foreign
currency transactions, income from passive foreign investment companies (PFICs), and wash sale deferrals. Distributions in excess of net investment
income and/or net realized capital gains for tax purposes are reported as return of capital.
The following permanent tax differences have been
reclassified as of the Funds tax year ended December 31, 2015:
Undistributed Net Investment Income
|
|
|
|
Accumulated Net Realized
Gains/(Losses)
|
$5,016,138 |
|
|
|
$(5,016,138) |
Dividends paid by the Fund from net investment income and
distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to
shareholders.
The tax composition of dividends and distributions in the
current period will not be determined until after the Funds tax year-end of December 31, 2016. The tax composition of dividends and distributions
as of the Funds most recent tax year-ends was as follows:
Tax Year Ended December 31, 2015
|
|
Tax Year Ended December 31, 2014
|
Ordinary Income
|
|
|
|
Long-term Capital Gain
|
|
Ordinary Income
|
|
|
|
Return of Capital
|
$7,087,905 |
|
|
|
$13,468,096 |
|
$10,868,115 |
|
|
|
$9,687,885 |
The tax-basis components of distributable earnings as of
December 31, 2015 were:
Undistributed Long-term Capital Gain
|
|
|
|
Unrealized Appreciation/ (Depreciation)
|
$2,815,858 |
|
|
|
$6,083,356 |
At December 31, 2015, the Fund did not have any capital loss
carryforwards for U.S. federal income tax purposes.
The Funds major tax jurisdictions are U.S. federal and
Arizona state.
18
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 9 FEDERAL INCOME TAXES
(continued)
As of February 29, 2016, no provision for income tax is
required in the Funds financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The
Funds federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are
subject to examination by the Internal Revenue Service and state department of revenue. The earliest tax year that remains subject to examination by
these jurisdictions is 2011.
NOTE 10 RESTRUCTURING PLAN
NNIP Advisors is an indirect, wholly-owned subsidiary of NN
Group.
Prior to July 2014, NN Group
was a wholly-owned subsidiary of ING Groep N.V. (ING Groep). In October 2009, ING Groep submitted
a restructuring plan (the Restructuring Plan) to the European Commission in order to receive approval
for state aid granted to ING Groep by the Kingdom of the Netherlands in November 2008 and March 2009. To receive
approval for this state aid, ING Groep was required to divest its insurance and investment management businesses
before the end of 2013. In November 2012, the Restructuring Plan was amended to permit ING Groep additional
time to complete the divestment. In connection with the amended Restructuring Plan, ING Groep was required
to divest more than 50% of its shares in NN Group before December 31, 2015 and is required to divest the remaining
interest before December 31, 2016. In July 2014, ING Groep settled the initial public offering of NN Group.
ING Groep has stated its intention to divest its remaining stake in NN Group in an orderly manner and ultimately
by the end of 2016. On the 14th of April 2016, ING Groep announced that it will sell its remaining stake in NN Group.
In 2014 in order to ensure that the existing sub-advisory
services could continue uninterrupted in case a change of control situation under the 1940 Act would occur related to the divestment of NN Group by ING
Groep, the Board approved new sub-advisory agreements for the Funds. Shareholders of the Funds for which NNIP Advisors serves as a sub-adviser approved
these new investment sub-advisory agreements. This approval also included approval of any future sub-advisory agreements prompted by the divestment of
NN Group that are approved by the Board and whose terms are not materially different from the current agreements. This means that shareholders of the
Fund would not have another opportunity to vote on a new agreement with NNIP Advisors even if NNIP Advisors undergoes a change of control pursuant to
ING Groeps divestment of NN Group, as long as no single person or group of persons acting together gains control (as defined in the
1940 Act) of NN Group.
On November 19, 2015, in anticipation of a change of control
that would occur when the ownership interest of ING Groep in NN Group would drop below 25%, the Board, at an in-person meeting, approved new
sub-advisory agreements. In January 2016, ING Group further reduced its interest in NN Group below 25% to approximately 16.2% (the November
Offering). The November Offering was deemed by the Adviser and NNIP Advisors to be a change of control (the Change of Control). The
new sub-advisory agreements, based on the Board approval of November 2015 and in connection with the Change of Control, became effective on January 8,
2016. At that time, NNIP Advisors represented that no single person or group of persons acting together was expected to gain control (as
defined in the 1940 Act) of NN Group. The terms of the new sub-advisory agreements are not materially different from the prior agreements. As a result,
shareholders of the Fund have not been asked to vote again on the new agreements with NNIP Advisors.
NOTE 11 FOREIGN CURRENCY SETTLEMENT
In March 2015, The Bank of New York Mellon
(BNY), the Funds custodian, announced it had agreed to settle various lawsuits (the Settlement) involving its standing
instruction foreign exchange services. The Fund was named a member of the Settlement class. On September 24, 2015, the United States District Court,
Southern District of New York approved (the Approval) the plan of allocation related to the Settlement. After the announcement of the
Approval, the Fund recorded a receivable in the amount of $365,088, representing the Funds estimated share of the net recovery associated with
the Settlement. The Settlement amount for the Fund is included in Net Realized Gain/(Loss) on Foreign Currency Related Transactions in the accompanying
Statements of Operations.
NOTE 12 SUBSEQUENT EVENTS
Dividends: Subsequent to February 29, 2016, the Fund
made a distribution of:
Per Share Amount
|
|
Declaration Date
|
|
Payable Date
|
|
Record Date
|
$0.280 |
|
3/15/2016 |
|
4/15/2016 |
|
4/5/2016 |
Each quarter, the Fund will provide disclosures with
distribution payments made that estimate the percentages of that distribution that represent net investment income, capital gains, and return of
capital, if any. A significant portion of the quarterly distribution payments made by the Fund may constitute a return of capital.
19
NOTES TO FINANCIAL STATEMENTS AS OF FEBRUARY 29,
2016 (CONTINUED)
NOTE 12 SUBSEQUENT EVENTS
(continued)
Share Repurchase Program: Effective March 18, 2016,
the Board authorized an open-market share repurchase program pursuant to which the Fund may purchase, over the period ending March 18, 2017, up to 10% of its stock
in open market transactions. The amount and timing of the repurchases will be at the discretion of the Funds management, subject to market
conditions and investment considerations. There is no assurance that the Fund will purchase shares at any particular discount level or in any
particular amounts. Any repurchases made under this program would be made on a national securities exchange at the prevailing market price, subject to
exchange requirements and volume, timing and other limitations under federal securities laws. The share repurchase program seeks to enhance shareholder
value by purchasing shares trading at a discount from its NAV per share.
The Fund has evaluated events occurring after the Statement
of Assets and Liabilities date (subsequent events) to determine whether any subsequent events necessitated adjustment to or disclosure in
the financial statements. Other than the above, no such subsequent events were identified.
20
VOYA Global Advantage AND
PREMIUM OPPORTUNITY FUND
|
SUMMARY
PORTFOLIO OF INVESTMENTS
AS OF FEBRUARY 29, 2016 |
Shares
|
|
|
|
|
|
|
|
Value
|
|
Percentage of Net Assets
|
|
COMMON STOCK: 96.6% |
|
|
381,830 |
|
|
|
|
|
Harvey Norman Holdings Ltd. |
|
$ |
1,298,845 |
|
|
|
0.7 |
|
|
|
|
37,931 |
|
|
|
|
|
Lenzing AG |
|
|
2,451,048 |
|
|
|
1.2 |
|
|
|
|
30,154 |
|
|
|
|
|
Other Securities |
|
|
948,871 |
|
|
|
0.5 |
|
|
|
|
110,323 |
|
|
|
|
|
Toronto-Dominion Bank |
|
|
4,275,118 |
|
|
|
2.2 |
|
|
|
|
21,809 |
|
|
|
|
|
Other Securities |
|
|
981,042 |
|
|
|
0.5 |
|
|
|
|
59,885 |
|
|
|
|
|
Vinci S.A. |
|
|
4,136,353 |
|
|
|
2.1 |
|
99,863 |
|
|
|
|
|
Other Securities |
|
|
1,359,302 |
|
|
|
0.7 |
|
|
|
|
|
|
|
|
|
|
5,495,655 |
|
|
|
2.8 |
|
|
|
|
34,347 |
|
|
|
|
|
Bayerische Motoren Werke AG |
|
|
2,790,297 |
|
|
|
1.4 |
|
22,031 |
|
|
|
|
|
Muenchener Rueckversicherungs-Gesellschaft AG |
|
|
4,324,617 |
|
|
|
2.2 |
|
49,528 |
|
|
|
|
|
ProSiebenSat.1 Media SE |
|
|
2,531,535 |
|
|
|
1.3 |
|
12,359 |
|
|
|
|
|
Other Securities |
|
|
1,033,118 |
|
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
10,679,567 |
|
|
|
5.4 |
|
|
|
|
2,391,337 |
|
|
|
|
|
SmarTone Telecommunications Holding Ltd. |
|
|
3,935,727 |
|
|
|
2.0 |
|
649,500 |
|
|
|
|
|
Other Securities |
|
|
1,972,287 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
5,908,014 |
|
|
|
3.0 |
|
|
|
|
106,800 |
|
|
|
|
|
Japan Airlines Co. Ltd. |
|
|
3,821,467 |
|
|
|
1.9 |
|
874,400 |
|
|
|
|
|
Resona Holdings, Inc. |
|
|
3,066,612 |
|
|
|
1.6 |
|
94,300 |
|
|
|
|
|
Sumitomo Mitsui Financial Group, Inc. |
|
|
2,646,076 |
|
|
|
1.3 |
|
291,000 |
|
|
|
|
|
Tadano Ltd. |
|
|
2,491,299 |
|
|
|
1.3 |
|
2,177,000 |
|
|
|
|
|
Ube Industries Ltd. |
|
|
3,683,378 |
|
|
|
1.9 |
|
117,000 |
|
|
|
|
|
Other Securities |
|
|
2,809,115 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
18,517,947 |
|
|
|
9.4 |
|
|
|
|
174,477 |
|
|
|
|
|
BinckBank NV |
|
|
1,189,084 |
|
|
|
0.6 |
|
|
|
|
381,500 |
|
|
|
|
|
Other Securities |
|
|
593,712 |
|
|
|
0.3 |
|
|
|
|
31,880 |
|
|
|
@ |
|
Actelion Ltd. Reg |
|
|
4,415,992 |
|
|
|
2.2 |
|
10,776 |
|
|
|
|
|
Partners Group |
|
|
3,900,493 |
|
|
|
2.0 |
|
62,294 |
|
|
|
|
|
Other Securities |
|
|
1,778,647 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
10,095,132 |
|
|
|
5.1 |
|
|
COMMON STOCK: (continued) |
|
|
|
144,830 |
|
|
|
|
|
Barratt Developments PLC |
|
$ |
1,183,185 |
|
|
|
0.6 |
|
81,241 |
|
|
|
|
|
British American Tobacco PLC |
|
|
4,419,844 |
|
|
|
2.2 |
|
86,374 |
|
|
|
|
|
Imperial Brands PLC |
|
|
4,458,254 |
|
|
|
2.3 |
|
263,618 |
|
|
|
|
|
John Wood Group PLC |
|
|
2,279,142 |
|
|
|
1.2 |
|
44,000 |
|
|
|
@ |
|
Persimmon PLC |
|
|
1,329,738 |
|
|
|
0.7 |
|
54,776 |
|
|
|
|
|
Shire PLC |
|
|
2,857,634 |
|
|
|
1.5 |
|
464,562 |
|
|
|
|
|
Taylor Wimpey PLC |
|
|
1,196,897 |
|
|
|
0.6 |
|
18,463 |
|
|
|
|
|
Other Securities |
|
|
474,505 |
|
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
18,199,199 |
|
|
|
9.3 |
|
|
|
|
7,347 |
|
|
|
@ |
|
Alphabet, Inc. Class A |
|
|
5,269,415 |
|
|
|
2.7 |
|
2,013 |
|
|
|
@ |
|
Alphabet, Inc. Class C |
|
|
1,404,611 |
|
|
|
0.7 |
|
20,607 |
|
|
|
|
|
Altria Group, Inc. |
|
|
1,268,773 |
|
|
|
0.6 |
|
24,054 |
|
|
|
|
|
American Electric Power Co., Inc. |
|
|
1,485,334 |
|
|
|
0.8 |
|
47,737 |
|
|
|
|
|
Apple, Inc. |
|
|
4,615,691 |
|
|
|
2.3 |
|
18,425 |
|
|
|
@ |
|
Berkshire Hathaway, Inc. Class B |
|
|
2,472,082 |
|
|
|
1.3 |
|
39,890 |
|
|
|
|
|
CA, Inc. |
|
|
1,168,378 |
|
|
|
0.6 |
|
22,426 |
|
|
|
|
|
Campbell Soup Co. |
|
|
1,384,805 |
|
|
|
0.7 |
|
91,842 |
|
|
|
|
|
Citigroup, Inc. |
|
|
3,568,062 |
|
|
|
1.8 |
|
89,307 |
|
|
|
|
|
Delta Air Lines, Inc. |
|
|
4,308,170 |
|
|
|
2.2 |
|
14,154 |
|
|
|
|
|
Dr Pepper Snapple Group, Inc. |
|
|
1,295,516 |
|
|
|
0.7 |
|
61,395 |
|
|
|
|
|
Foot Locker, Inc. |
|
|
3,837,187 |
|
|
|
2.0 |
|
174,587 |
|
|
|
|
|
Ford Motor Co. |
|
|
2,184,083 |
|
|
|
1.1 |
|
44,504 |
|
|
|
|
|
General Electric Co. |
|
|
1,296,847 |
|
|
|
0.7 |
|
51,432 |
|
|
|
|
|
Gilead Sciences, Inc. |
|
|
4,487,442 |
|
|
|
2.3 |
|
100,014 |
|
|
|
|
|
Intel Corp. |
|
|
2,959,414 |
|
|
|
1.5 |
|
95,287 |
|
|
|
|
|
Merck & Co., Inc. |
|
|
4,784,360 |
|
|
|
2.4 |
|
94,348 |
|
|
|
|
|
Metlife, Inc. |
|
|
3,732,407 |
|
|
|
1.9 |
|
90,139 |
|
|
|
|
|
Mosaic Co. |
|
|
2,402,204 |
|
|
|
1.2 |
|
16,292 |
|
|
|
|
|
Omnicom Group, Inc. |
|
|
1,267,681 |
|
|
|
0.6 |
|
168,003 |
|
|
|
|
|
Pfizer, Inc. |
|
|
4,984,649 |
|
|
|
2.5 |
|
33,897 |
|
|
|
|
|
Philip Morris International, Inc. |
|
|
3,085,644 |
|
|
|
1.6 |
|
110,647 |
|
|
|
|
|
PPL Corp. |
|
|
3,871,539 |
|
|
|
2.0 |
|
48,031 |
|
|
|
|
|
Rockwell Collins, Inc. |
|
|
4,206,075 |
|
|
|
2.1 |
|
20,388 |
|
|
|
|
|
Scripps Networks Interactive Class A |
|
|
1,207,785 |
|
|
|
0.6 |
|
20,394 |
|
|
|
|
|
Tesoro Corp. |
|
|
1,645,388 |
|
|
|
0.8 |
|
64,656 |
|
|
|
|
|
Valero Energy Corp. |
|
|
3,884,532 |
|
|
|
2.0 |
|
55,300 |
|
|
|
|
|
Welltower, Inc. |
|
|
3,527,034 |
|
|
|
1.8 |
|
800,245 |
|
|
|
|
|
Other Securities |
|
|
27,736,681 |
|
|
|
14.1 |
|
|
|
|
|
|
|
|
|
|
109,341,789 |
|
|
|
55.6 |
|
|
|
|
|
|
|
|
Total Common Stock (Cost $195,540,579) |
|
|
189,975,023 |
|
|
|
96.6 |
|
|
|
|
|
|
|
Assets in Excess of Other Liabilities |
|
|
6,600,693 |
|
|
|
3.4 |
|
|
|
|
|
|
|
Net Assets |
|
$ |
196,575,716 |
|
|
|
100.0 |
|
See Accompanying Notes to Financial
Statements
21
VOYA Global Advantage AND
PREMIUM OPPORTUNITY FUND
|
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF FEBRUARY 29, 2016 (continued) |
Other Securities represents issues not
identified as the top 50 holdings in terms of market value and issues or issuers not exceeding 1% of net assets individually or in aggregate
respectively as of February 29, 2016.
The following footnotes apply to either the individual
securities noted or one or more of the securities aggregated and listed as a single line item.
@ |
Non-income producing security. |
|
|
Cost for federal income tax purposes is the same as for financial
statement purposes. |
Net unrealized
depreciation consists of: |
|
|
|
|
|
|
Gross
Unrealized Appreciation |
|
|
|
$ |
8,965,950 |
|
Gross
Unrealized Depreciation |
|
|
|
|
(14,531,506 |
) |
Net Unrealized
Depreciation |
|
|
|
$ |
(5,565,556 |
) |
Sector Diversification
|
|
|
|
Percentage of Net Assets
|
Financials |
|
|
|
|
21.4 |
% |
Information
Technology |
|
|
|
|
13.6 |
|
Industrials |
|
|
|
|
13.0 |
|
Consumer
Discretionary |
|
|
|
|
12.2 |
|
Health
Care |
|
|
|
|
11.6 |
|
Consumer
Staples |
|
|
|
|
9.3 |
|
Materials |
|
|
|
|
4.8 |
|
Energy |
|
|
|
|
4.8 |
|
Utilities |
|
|
|
|
3.4 |
|
Telecommunication Services |
|
|
|
|
2.5 |
|
Assets in Excess
of Other Liabilities |
|
|
|
|
3.4 |
|
Net
Assets |
|
|
|
|
100.0 |
% |
Fair Value Measurementsˆ
The following is a summary of the fair valuations according
to the inputs used as of February 29, 2016 in valuing the assets and liabilities:
|
|
|
|
Quoted Prices in Active Markets for Identical
Investments (Level 1)
|
|
Significant Other Observable Inputs#
(Level 2)
|
|
Significant Unobservable Inputs (Level
3)
|
|
Fair Value at February 29, 2016
|
Asset
Table |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments,
at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Australia |
|
|
|
$ |
|
|
|
$ |
1,298,845 |
|
|
$ |
|
|
|
$ |
1,298,845 |
|
Austria |
|
|
|
|
2,451,048 |
|
|
|
|
|
|
|
|
|
|
|
2,451,048 |
|
Belgium |
|
|
|
|
|
|
|
|
948,871 |
|
|
|
|
|
|
|
948,871 |
|
Canada |
|
|
|
|
4,275,118 |
|
|
|
|
|
|
|
|
|
|
|
4,275,118 |
|
Finland |
|
|
|
|
|
|
|
|
981,042 |
|
|
|
|
|
|
|
981,042 |
|
France |
|
|
|
|
|
|
|
|
5,495,655 |
|
|
|
|
|
|
|
5,495,655 |
|
Germany |
|
|
|
|
|
|
|
|
10,679,567 |
|
|
|
|
|
|
|
10,679,567 |
|
Hong
Kong |
|
|
|
|
|
|
|
|
5,908,014 |
|
|
|
|
|
|
|
5,908,014 |
|
Japan |
|
|
|
|
|
|
|
|
18,517,947 |
|
|
|
|
|
|
|
18,517,947 |
|
Netherlands |
|
|
|
|
|
|
|
|
1,189,084 |
|
|
|
|
|
|
|
1,189,084 |
|
Singapore |
|
|
|
|
|
|
|
|
593,712 |
|
|
|
|
|
|
|
593,712 |
|
Switzerland |
|
|
|
|
494,468 |
|
|
|
9,600,664 |
|
|
|
|
|
|
|
10,095,132 |
|
United
Kingdom |
|
|
|
|
|
|
|
|
18,199,199 |
|
|
|
|
|
|
|
18,199,199 |
|
United
States |
|
|
|
|
109,341,789 |
|
|
|
|
|
|
|
|
|
|
|
109,341,789 |
|
Total Common
Stock |
|
|
|
|
116,562,423 |
|
|
|
73,412,600 |
|
|
|
|
|
|
|
189,975,023 |
|
Total
Investments, at fair value |
|
|
|
$ |
116,562,423 |
|
|
$ |
73,412,600 |
|
|
$ |
|
|
|
$ |
189,975,023 |
|
Other
Financial Instruments+ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign
Currency Contracts |
|
|
|
|
|
|
|
|
732,534 |
|
|
|
|
|
|
|
732,534 |
|
Futures |
|
|
|
|
7,179 |
|
|
|
|
|
|
|
|
|
|
|
7,179 |
|
Total
Assets |
|
|
|
$ |
116,569,602 |
|
|
$ |
74,145,134 |
|
|
$ |
|
|
|
$ |
190,714,736 |
|
Liabilities
Table |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Financial Instruments+ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign
Currency Contracts |
|
|
|
$ |
|
|
|
$ |
(85,980 |
) |
|
$ |
|
|
|
$ |
(85,980 |
) |
Futures |
|
|
|
|
(49,281 |
) |
|
|
|
|
|
|
|
|
|
|
(49,281 |
) |
Written
Options |
|
|
|
|
|
|
|
|
(1,951,773 |
) |
|
|
|
|
|
|
(1,951,773 |
) |
Total
Liabilities |
|
|
|
$ |
(49,281 |
) |
|
$ |
(2,037,753 |
) |
|
$ |
|
|
|
$ |
(2,087,034 |
) |
ˆ |
|
See Note 2, Significant Accounting Policies in the
Notes to Financial Statements for additional information. |
+ |
|
Other Financial Instruments are derivatives not reflected in the
portfolio of investments and may include open forward foreign currency contracts, futures, centrally cleared swaps, OTC swaps and written options.
Forward foreign currency contracts, futures and centrally cleared swaps are valued at the unrealized gain (loss) on the instrument. OTC swaps and
written options are valued at the fair value of the instrument. |
# |
|
The earlier close of the foreign markets gives rise to the
possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those
securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party
vendor modeling tools to the extent available. Accordingly, a portion of the Funds investments are categorized as Level 2
investments. |
See Accompanying Notes to Financial
Statements
22
VOYA Global Advantage AND
PREMIUM OPPORTUNITY FUND
|
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF FEBRUARY 29, 2016 (continued) |
At February 29, 2016, the following forward foreign currency
contracts were outstanding for Voya Global Advantage and Premium Opportunity Fund:
Counterparty
|
|
|
|
Currency
|
|
Contract Amount
|
|
Buy/Sell
|
|
Settlement Date
|
|
In Exchange For
|
|
Fair Value
|
|
Unrealized Appreciation (Depreciation)
|
The Royal
Bank of Scotland PLC |
|
|
|
EU Euro |
|
|
190,781 |
|
|
Buy |
|
03/31/16 |
|
$ |
207,867 |
|
|
$ |
207,736 |
|
|
$ |
(131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(131 |
) |
|
Barclays
Bank PLC |
|
|
|
Japanese Yen |
|
|
2,106,562,861 |
|
|
Sell |
|
03/31/16 |
|
$ |
18,970,373 |
|
|
$ |
18,703,044 |
|
|
$ |
267,329 |
|
Barclays
Bank PLC |
|
|
|
Swiss Franc |
|
|
9,549,852 |
|
|
Sell |
|
03/31/16 |
|
|
9,694,617 |
|
|
|
9,579,594 |
|
|
|
115,023 |
|
The Royal
Bank of Scotland PLC |
|
|
|
Hong Kong Sar Dollar |
|
|
46,115,572 |
|
|
Sell |
|
03/31/16 |
|
|
5,934,812 |
|
|
|
5,930,191 |
|
|
|
4,621 |
|
The Royal
Bank of Scotland PLC |
|
|
|
British Pound |
|
|
12,885,151 |
|
|
Sell |
|
03/31/16 |
|
|
17,967,583 |
|
|
|
17,936,325 |
|
|
|
31,258 |
|
The Royal
Bank of Scotland PLC |
|
|
|
Canadian Dollar |
|
|
5,756,654 |
|
|
Sell |
|
03/31/16 |
|
|
4,168,945 |
|
|
|
4,254,794 |
|
|
|
(85,849 |
) |
The Royal
Bank of Scotland PLC |
|
|
|
EU Euro |
|
|
19,937,422 |
|
|
Sell |
|
03/31/16 |
|
|
22,023,594 |
|
|
|
21,709,347 |
|
|
|
314,247 |
|
The Royal
Bank of Scotland PLC |
|
|
|
Japanese Yen |
|
|
6,643,013 |
|
|
Sell |
|
03/31/16 |
|
|
59,036 |
|
|
|
58,980 |
|
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
646,685 |
|
At February 29, 2016, the following futures contracts were
outstanding for Voya Global Advantage and Premium Opportunity Fund:
Contract Description
|
|
|
|
Number of Contracts
|
|
Expiration Date
|
|
Notional Value
|
|
Unrealized Appreciation/ (Depreciation)
|
Long
Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nikkei 225
Index |
|
|
|
|
21 |
|
|
|
03/10/16 |
|
|
$ |
1,486,697 |
|
|
$ |
(43,424 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,486,697 |
|
|
$ |
(43,424 |
) |
Short
Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EURO STOXX
50® Index |
|
|
|
|
(11 |
) |
|
|
03/18/16 |
|
|
|
(351,094 |
) |
|
|
(1,931 |
) |
FTSE 100
Index |
|
|
|
|
(20 |
) |
|
|
03/18/16 |
|
|
|
(1,686,500 |
) |
|
|
(3,926 |
) |
S&P 500
E-Mini |
|
|
|
|
(5 |
) |
|
|
03/18/16 |
|
|
|
(482,375 |
) |
|
|
7,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(2,519,969 |
) |
|
$ |
1,322 |
|
At February 29, 2016, the following over-the-counter written
options were outstanding for Voya Global Advantage and Premium Opportunity Fund:
Number of Contracts
|
|
|
|
Counterparty
|
|
Description
|
|
Exercise Price
|
|
Expiration Date
|
|
Premiums Received
|
|
Fair Value
|
Options on Indices |
|
|
|
1,200 |
|
|
|
Barclays Bank PLC |
|
Call on EURO STOXX 50® Index |
|
2,949.340 EUR |
|
|
04/01/16 |
|
|
$ |
90,647 |
|
|
$ |
(121,240 |
) |
1,200 |
|
|
|
Barclays Bank PLC |
|
Call on EURO STOXX 50® Index |
|
3,059.431 EUR |
|
|
03/04/16 |
|
|
|
104,485 |
|
|
|
(9,776 |
) |
1,200 |
|
|
|
Morgan Stanley |
|
Call on EURO STOXX 50® Index |
|
2,960.020 EUR |
|
|
03/18/16 |
|
|
|
88,978 |
|
|
|
(90,921 |
) |
700 |
|
|
|
Barclays Bank PLC |
|
Call on FTSE 100 Index |
|
5,910.380 GBP |
|
|
03/18/16 |
|
|
|
116,394 |
|
|
|
(219,134 |
) |
700 |
|
|
|
Citigroup, Inc. |
|
Call on FTSE 100 Index |
|
6,074.950 GBP |
|
|
04/01/16 |
|
|
|
104,137 |
|
|
|
(137,451 |
) |
800 |
|
|
|
Morgan Stanley |
|
Call on FTSE 100 Index |
|
5,929.520 GBP |
|
|
03/04/16 |
|
|
|
147,245 |
|
|
|
(193,070 |
) |
23,800 |
|
|
|
BNP Paribas Bank |
|
Call on Nikkei 225 Index |
|
16,380.090 JPY |
|
|
04/01/16 |
|
|
|
92,416 |
|
|
|
(80,390 |
) |
23,200 |
|
|
|
Morgan Stanley |
|
Call on Nikkei 225 Index |
|
17,264.715 JPY |
|
|
03/18/16 |
|
|
|
84,821 |
|
|
|
(10,441 |
) |
23,500 |
|
|
|
Morgan Stanley |
|
Call on Nikkei 225 Index |
|
17,521.850 JPY |
|
|
03/04/16 |
|
|
|
91,506 |
|
|
|
(97 |
) |
9,900 |
|
|
|
Morgan Stanley |
|
Call on S&P 500 Index |
|
1,906.860 USD |
|
|
03/18/16 |
|
|
|
328,185 |
|
|
|
(465,895 |
) |
10,100 |
|
|
|
Morgan Stanley |
|
Call on S&P 500 Index |
|
1,917.440 USD |
|
|
03/04/16 |
|
|
|
388,244 |
|
|
|
(242,172 |
) |
9,900 |
|
|
|
Morgan Stanley |
|
Call on S&P 500 Index |
|
1,933.060 USD |
|
|
04/01/16 |
|
|
|
333,036 |
|
|
|
(381,186 |
) |
|
|
|
|
|
|
|
|
Total Written OTC
Options | |
|
$ |
1,970,094 |
|
|
$ |
(1,951,773 |
) |
See Accompanying Notes to Financial
Statements
23
VOYA Global Advantage AND
PREMIUM OPPORTUNITY FUND
|
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF FEBRUARY 29, 2016 (continued) |
A summary of derivative instruments by primary risk
exposure is outlined in the following tables.
The fair value of derivative instruments as of February 29,
2016 was as follows:
Derivatives not accounted for as hedging
instruments
|
|
|
|
Location on Statement of Assets and
Liabilities
|
|
Fair Value
|
Asset
Derivatives |
|
|
|
|
|
|
|
|
Foreign exchange
contracts |
|
|
|
Unrealized appreciation on forward foreign currency contracts |
|
$ |
732,534 |
|
Equity
contracts |
|
|
|
Net Assets Unrealized appreciation* |
|
|
7,179 |
|
Total Asset
Derivatives |
|
|
|
|
|
$ |
739,713 |
|
Liability
Derivatives |
|
|
|
|
|
|
|
|
Foreign exchange
contracts |
|
|
|
Unrealized depreciation on forward foreign currency contracts |
|
$ |
85,980 |
|
Equity
contracts |
|
|
|
Net Assets Unrealized depreciation* |
|
|
49,281 |
|
Equity
contracts |
|
|
|
Written options, at fair value |
|
|
1,951,773 |
|
Total Liability
Derivatives |
|
|
|
|
|
$ |
2,087,034 |
|
* |
|
Includes cumulative appreciation/depreciation of futures
contracts as reported in the table following the Summary Portfolio of Investments. |
The effect of derivative instruments on the Funds
Statement of Operations for the year ended February 29, 2016 was as follows:
|
|
|
|
Amount of Realized Gain or (Loss) on Derivatives
Recognized in Income
|
|
Derivatives not accounted for as hedging
instruments
|
|
|
|
Foreign currency related transactions*
|
|
Futures
|
|
Written options
|
|
Total
|
Equity
contracts |
|
|
|
$ |
|
|
|
$ |
1,596,835 |
|
|
$ |
3,185,233 |
|
|
$ |
4,782,068 |
|
Foreign exchange
contracts |
|
|
|
|
4,416,656 |
|
|
|
|
|
|
|
|
|
|
|
4,416,656 |
|
Total |
|
|
|
$ |
4,416,656 |
|
|
$ |
1,596,835 |
|
|
$ |
3,185,233 |
|
|
$ |
9,198,724 |
|
|
|
|
|
Change in Unrealized Appreciation or (Depreciation)
on Derivatives Recognized in Income
|
|
Derivatives not accounted for as hedging
instruments
|
|
|
|
Foreign currency related transactions*
|
|
Futures
|
|
Written options
|
|
Total
|
Equity
contracts |
|
|
|
$ |
|
|
|
$ |
(226,945 |
) |
|
$ |
2,056,032 |
|
|
$ |
1,829,087 |
|
Foreign exchange
contracts |
|
|
|
|
(99,171 |
) |
|
|
|
|
|
|
|
|
|
|
(99,171 |
) |
Total |
|
|
|
$ |
(99,171 |
) |
|
$ |
(226,945 |
) |
|
$ |
2,056,032 |
|
|
$ |
1,729,916 |
|
* |
|
Amounts recognized for forward foreign currency contracts are
included in net realized gain (loss) on foreign currency related transactions and net change in unrealized appreciation or depreciation on foreign
currency related transactions. |
The following is a summary by counterparty of the fair value
of OTC derivative instruments subject to Master Netting Agreements and collateral pledged (received), if any, at February 29, 2016:
|
|
|
|
Barclays Bank PLC
|
|
BNP Paribas Bank
|
|
Citigroup, Inc.
|
|
Morgan Stanley
|
|
The Royal Bank of Scotland Group PLC
|
Totals
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign
currency contracts |
|
|
|
$ |
382,352 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
350,182 |
|
$ 732,534 |
|
Total
Assets |
|
|
|
$ |
382,352 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
350,182 |
|
$ 732,534 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign
currency contracts |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
85,980 |
|
$ 85,980 |
|
Written
options |
|
|
|
|
350,150 |
|
|
|
80,390 |
|
|
|
137,451 |
|
|
|
1,383,782 |
|
|
|
|
|
1,951,773 |
|
Total
Liabilities |
|
|
|
$ |
350,150 |
|
|
$ |
80,390 |
|
|
$ |
137,451 |
|
|
$ |
1,383,782 |
|
|
$ |
85,980 |
|
$ 2,037,753 |
|
|
Net OTC
derivative instruments by counterparty, at fair value |
|
|
|
$ |
32,202 |
|
|
$ |
(80,390 |
) |
|
$ |
(137,451 |
) |
|
$ |
(1,383,782 |
) |
|
$ |
264,202 |
|
$(1,305,219) |
|
|
Total
collateral pledged by the Fund/(Received from counterparty) |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
1,780,000 |
|
|
$ |
1,480,000 |
|
$ 3,260,000 |
|
|
Net
Exposure(1) |
|
|
|
$ |
32,202 |
|
|
$ |
(80,390 |
) |
|
$ |
(137,451 |
) |
|
$ |
396,218 |
|
|
$ |
1,744,202 |
|
$ 1,954,781 |
|
(1) |
|
Positive net exposure represents amounts due from each respective
counterparty. Negative exposure represents amounts due from the Fund. Please refer to Note 2 for additional details regarding counterparty credit risk
and credit related contingent features. |
See Accompanying Notes to Financial
Statements
24
VOYA Global Advantage AND
PREMIUM OPPORTUNITY FUND
|
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF FEBRUARY 29, 2016 (continued) |
Supplemental Option Information (Unaudited)
Supplemental Call Option Statistics as of February 29,
2016:
% of Total Net
Assets against which calls written |
|
|
|
|
49.92 |
% |
Average Days to
Expiration at time written |
|
|
|
|
44 days |
|
Average Call
Moneyness* at time written |
|
|
|
|
ATM |
|
Premium received
for calls |
|
|
|
$ |
1,970,094 |
|
Value of
calls |
|
|
|
$ |
(1,951,773 |
) |
* |
|
Moneyness is the term used to describe the
relationship between the price of the underlying asset and the options exercise or strike price. For example, a call (buy) option is considered
in-the-money when the value of the underlying asset exceeds the strike price. Conversely, a put (sell) option is considered
in-the-money when its strike price exceeds the value of the underlying asset. Options are characterized for the purpose of Moneyness as,
in-the-money (ITM), out-of-the-money (OTM) or at-the-money (ATM), where the
underlying asset value equals the strike price. |
See Accompanying Notes to Financial
Statements
25
TAX INFORMATION
(UNAUDITED)
Dividends and distributions paid during the tax year ended December 31, 2015 were as follows:
Fund Name
|
|
|
|
Type
|
|
Per Share Amount
|
Voya Global
Advantage and Premium Opportunity Fund |
|
|
|
|
NII |
|
|
|
$0.3862 |
|
|
|
|
|
|
LTCG |
|
|
|
$0.7338 |
|
NII Net investment income
LTCG Long-term capital gain
Of the ordinary distributions made during the tax year ended December 31, 2015, 35.12% qualifies for the dividends received deduction (DRD)
available to corporate shareholders.
For the tax year ended December 31, 2015, 71.55% of ordinary income dividends paid by the Fund are designated as qualifying dividend income (QDI)
subject to reduced income tax rates for individuals.
For the tax year ended December 31, 2015, the Fund designates $13,468,096 of long-term capital gain distributions as 20% rate long-term capital gain
dividends under Internal Revenue Code Section 852(b)(3)(C).
Above figures may differ from those cited elsewhere in this report due to differences in the calculation of income and gains under U.S. generally
accepted accounting principles (book) purposes and Internal Revenue Service (tax) purposes.
Shareholders are strongly advised to consult their own tax advisers with respect to the tax consequences of their investments in the Fund. In January,
shareholders, excluding corporate shareholders, receive an IRS 1099-DIV regarding the federal tax status of the dividends and distributions they
received in the calendar year.
26
SHAREHOLDER MEETING
INFORMATION (UNAUDITED)
Proposal:
1 |
|
To elect four nominees to the Board of Trustees of Voya Global
Advantage and Premium Opportunity Fund. |
An annual shareholder meeting of Voya Global Advantage
and Premium Opportunity Fund was held July 1, 2015, at the offices of Voya Investment Management, 7337 East Doubletree Ranch Road, Suite 100,
Scottsdale, AZ 85258.
|
|
|
|
Proposal
|
|
Shares voted for
|
|
Shares voted
against or
withheld
|
|
Shares
abstained
|
|
Broker non-vote
|
|
Total Shares
Voted
|
Voya Global
Advantage and Premium Opportunity Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colleen D.
Baldwin |
|
|
|
1* |
|
|
16,201,057.700 |
|
|
|
454,449.000 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
16,655,506.700 |
|
Peter S.
Drotch |
|
|
|
1* |
|
|
16,160,851.700 |
|
|
|
494,655.000 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
16,655,506.700 |
|
Russell H.
Jones |
|
|
|
1* |
|
|
16,174,829.700 |
|
|
|
480,677.000 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
16,655,506.700 |
|
Joseph E.
Obermeyer |
|
|
|
1* |
|
|
16,202,868.700 |
|
|
|
452,638.000 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
16,655,506.700 |
|
27
TRUSTEE AND
OFFICER INFORMATION (UNAUDITED)
The business and affairs of the Trust are managed under the
direction of the Board. A Trustee, who is not an interested person of the Trust, as defined in the 1940 Act, is an independent trustee
(Independent Trustee). The Trustees and Officers of the Trust are listed below.
Name, Address and Age
|
|
Position(s) Held with the Trust
|
|
Term of Office and Length of Time
Served(1)
|
|
Principal Occupation(s) During
the Past 5 Years
|
|
Number of Funds in Fund Complex Overseen
by Trustee(2)
|
|
Other Board Positions Held by
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
Independent Trustees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colleen D.
Baldwin 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 55 |
|
Trustee |
|
October
2007Present |
|
President, Glantuam Partners, LLC, a business consulting firm (January 2009Present). |
|
151 |
|
DSM/Dentaquest, Boston, MA (February 2014Present). |
|
|
|
|
|
|
|
|
|
|
|
John V.
Boyer 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 62 |
|
Chairperson Trustee |
|
January
2014Present July 2005Present |
|
President and Chief Executive Officer, Bechtler Arts Foundation, an arts and education foundation (January
2008Present). |
|
151 |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
Patricia W.
Chadwick 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 67 |
|
Trustee |
|
January
2006Present |
|
Consultant and President, Ravengate Partners LLC, a consulting firm that provides advice regarding financial markets and the global economy
(January 2000Present). |
|
151 |
|
Wisconsin Energy Corporation (June 2006Present); The Royce Funds (35 funds) (December 2009Present); and AMICA Mutual Insurance
Company (1992Present). |
|
|
|
|
|
|
|
|
|
|
|
Peter S.
Drotch 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 74 |
|
Trustee |
|
October
2007Present |
|
Retired. |
|
151 |
|
First
Marblehead Corporation (September 2003Present). |
|
|
|
|
|
|
|
|
|
|
|
Martin J.
Gavin 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258-2034 Age: 66 |
|
Trustee |
|
August
2015Present |
|
Retired. Formerly, President and Chief Executive Officer, Connecticut Childrens Medical Center (May 2006November
2015). |
|
151 |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
Russell H.
Jones 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 71 |
|
Trustee |
|
May
2013Present |
|
Retired. |
|
151 |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
Patrick W.
Kenny 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 73 |
|
Trustee |
|
July
2005Present |
|
Retired. |
|
151 |
|
Assured Guaranty Ltd. (April 2004Present). |
|
|
|
|
|
|
|
|
|
|
|
Joseph E.
Obermeyer 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 58 |
|
Trustee |
|
May
2013Present |
|
President, Obermeyer & Associates, Inc., a provider of financial and economic consulting services (November
1999Present). |
|
151 |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
Sheryl K.
Pressler 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 65 |
|
Trustee |
|
January
2006Present |
|
Consultant (May 2001Present). |
|
151 |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
Christopher P.
Sullivan 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 62 |
|
Trustee |
|
October 2015
Present |
|
Retired. Formerly, President, Bond Division, Fidelity Management and Research (June 2009 September 2012). |
|
151 |
|
None. |
28
TRUSTEE AND
OFFICER INFORMATION (UNAUDITED) (CONTINUED)
Name, Address and Age
|
|
Position(s) Held with the Trust
|
|
Term of Office and Length of Time
Served(1)
|
|
Principal Occupation(s) During
the Past 5 Years
|
|
Number of Funds in Fund Complex Overseen
by Trustee(2)
|
|
Other Board Positions Held by
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
Roger B. Vincent 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age:
70 |
|
Trustee |
|
July
2005Present |
|
Retired. Formerly, President, Springwell Corporation, a corporate finance firm (March 1989August 2011). |
|
151 |
|
UGI
Corporation (February 2006Present) and UGI Utilities, Inc. (February 2006Present). |
|
|
|
|
|
|
|
|
|
|
|
Trustee who is an interested person: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shaun P.
Mathews(3) 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age:60 |
|
Trustee |
|
June
2006Present |
|
President and Chief Executive Officer, Voya Investments, LLC (December 2006 Present). |
|
151 |
|
Voya
Capital Corporation, LLC and Voya Investments Distributor, LLC (December 2005Present); Voya Funds Services, LLC, Voya Investments, LLC and Voya
Investment Management (March 2006Present); and Voya Investment Trust Co. (April 2009Present). |
(1) |
|
Trustees serve until their successors are duly elected and
qualified. The tenure of each Trustee who is not an interested person as defined in the 1940 Act, of each Fund (Independent
Trustee) is subject to the Boards retirement policy which states that each duly elected or appointed Independent Trustee shall retire from
and cease to be a member of the Board of Trustees at the close of business on December 31 of the calendar year in which the Independent Trustee attains
the age of 75. A majority vote of the Boards other Independent Trustees may extend the retirement date of an Independent Trustee if the
retirement would trigger a requirement to hold a meeting of shareholders of the Trust under applicable law, whether for the purposes of appointing a
successor to the Independent Trustee or otherwise comply under applicable law, in which case the extension would apply until such time as the
shareholder meeting can be held or is no longer required (as determined by a vote of a majority of the other Independent Trustees). |
(2) |
|
For the purposes of this table, Fund Complex means
the Voya family of funds including the following investment companies: Voya Asia Pacific High Dividend Equity Income Fund; Voya Balanced Portfolio,
Inc.; Voya Emerging Markets High Dividend Equity Fund; Voya Equity Trust; Voya Funds Trust; Voya Global Advantage and Premium Opportunity Fund; Voya
Global Equity Dividend and Premium Opportunity Fund; Voya Infrastructure, Industrials and Materials Fund; Voya Intermediate Bond Portfolio; Voya
International High Dividend Equity Income Fund; Voya Investors Trust; Voya Money Market Portfolio; Voya Mutual Funds; Voya Natural Resources Equity
Income Fund; Voya Partners, Inc.; Voya Prime Rate Trust; Voya Senior Income Fund; Voya Separate Portfolios Trust; Voya Series Fund, Inc.; Voya
Strategic Allocation Portfolios, Inc.; Voya Variable Funds; Voya Variable Insurance Trust; Voya Variable Portfolios, Inc.; and Voya Variable Products
Trust. The number of funds in the Fund Complex is as of March 31, 2016. |
(3) |
|
Mr. Mathews is deemed to be an interested person of
the Trust as defined in the 1940 Act, because of his current affiliation with the Voya funds, Voya Financial, Inc. or Voya Financial, Inc.s
affiliates. |
29
TRUSTEE AND
OFFICER INFORMATION (UNAUDITED) (CONTINUED)
Name, Address and Age
|
|
Position(s) Held With the Trust
|
|
Term of Office and Length of Time
Served(1)
|
|
Principal Occupation(s) During the
Past 5 Years
|
|
|
|
|
|
|
|
Shaun P.
Mathews 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 60 |
|
President and
Chief Executive Officer |
|
November
2006Present |
|
President and Chief Executive Officer, Voya Investments, LLC (December 2006Present). |
|
|
|
|
|
|
|
Michael J.
Roland 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 57 |
|
Executive Vice
President |
|
July
2005Present |
|
Managing Director and Chief Operating Officer, Voya Investments, LLC and Voya Funds Services, LLC (March 2012Present). Formerly, Chief
Compliance Officer, Directed Services LLC and Voya Investments, LLC (March 2011December 2013); Executive Vice President and Chief Operating
Officer, Voya Investments, LLC and Voya Funds Services, LLC (January 2007April 2012) and Chief Compliance Officer, Voya Family of Funds (March
2011February 2012). |
|
|
|
|
|
|
|
Stanley D.
Vyner 230 Park Avenue New York, New York 10169 Age: 65 |
|
Executive Vice
President Chief Investment Risk Officer |
|
July
2005Present September 2009Present |
|
Executive Vice President, Voya Investments, LLC (July 2000Present) and Chief Investment Risk Officer, Voya Investments, LLC (January
2003Present). |
|
|
|
|
|
|
|
Kevin M.
Gleason 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 49 |
|
Chief Compliance
Officer |
|
February
2012Present |
|
Senior
Vice President, Voya Investment Management and Chief Compliance Officer, Voya Family of Funds (February 2012Present). Formerly, Assistant General
Counsel and Assistant Secretary, The Northwestern Mutual Life Insurance Company (June 2004January 2012). |
|
|
|
|
|
|
|
Todd Modic 7337
East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 48 |
|
Senior Vice
President, Chief/Principal Financial Officer and Assistant Secretary |
|
July
2005Present |
|
Senior
Vice President, Voya Investments, LLC and Voya Funds Services, LLC (April 2005 Present). |
|
|
|
|
|
|
|
Kimberly A.
Anderson 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 51 |
|
Senior Vice
President |
|
July
2005Present |
|
Senior
Vice President, Voya Investments, LLC (September 2003Present). |
|
|
|
|
|
|
|
Julius A. Drelick,
III 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 49 |
|
Senior Vice
President |
|
July
2012Present |
|
Senior
Vice President Fund Compliance, Voya Investments, LLC (June 2012Present); and Chief Compliance Officer of Directed Services LLC and Voya
Investments, LLC (January 2014Present). Formerly, Vice President Platform Product Management & Project Management, Voya Investments,
LLC (April 2007June 2012). |
|
|
|
|
|
|
|
Robert
Terris 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 45 |
|
Senior Vice
President |
|
May
2006Present |
|
Senior
Vice President, Head of Division Operations, Voya Investments, LLC (October 2015Present) and Voya Funds Services, LLC (March
2006Present). |
|
|
|
|
|
|
|
Fred
Bedoya 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 43 |
|
Vice President and
Treasurer |
|
September
2012Present |
|
Vice
President, Voya Investments, LLC (October 2015Present) and Voya Funds Services, LLC (July 2012Present). Formerly, Assistant Vice President
Director, Voya Funds Services, LLC (March 2003March 2012). |
|
|
|
|
|
|
|
Maria M.
Anderson 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 57 |
|
Vice
President |
|
July
2005Present |
|
Vice
President, Voya Investments, LLC (October 2015Present) and Voya Funds Services, LLC (September 2004Present). |
30
TRUSTEE AND
OFFICER INFORMATION (UNAUDITED) (CONTINUED)
Name, Address and Age
|
|
Position(s) Held With the Trust
|
|
Term of Office and Length of Time
Served(1)
|
|
Principal Occupation(s) During the
Past 5 Years
|
|
|
|
|
|
|
|
Lauren D. Bensinger 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age:
62 |
|
Vice
President |
|
July
2005Present |
|
Vice
President, Voya Funds Services, LLC (February 1996Present) and Voya Investments, LLC (October 2004Present); Vice President and Money
Laundering Reporting Officer, Voya Investments Distributor, LLC (April 2010Present); Anti-Money Laundering Compliance Officer, Voya Financial,
Inc. (January 2013Present); and Money Laundering Reporting Officer, Voya Investment Management Trust Co. (October
2012Present). |
|
|
|
|
|
|
|
Sara M.
Donaldson 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 56 |
|
Vice
President |
|
September
2014Present |
|
Vice
President, Voya Investments, LLC (October 2015Present). Formerly Vice President, Voya Funds Services, LLC (April 2014October 2015).
Formerly, Director, Compliance, AXA Rosenberg Global Services, LLC (September 1997March 2014). |
|
|
|
|
|
|
|
Robyn L.
Ichilov 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 48 |
|
Vice
President |
|
July
2005Present |
|
Vice
President, Voya Funds Services, LLC (November 1995Present) and Voya Investments, LLC (August 1997Present). Formerly, Treasurer, Voya Family
of Funds (November 1999February 2012). |
|
|
|
|
|
|
|
Jason
Kadavy 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 40 |
|
Vice
President |
|
September
2012Present |
|
Vice
President, Voya Investments, LLC (October 2015Present) and Voya Funds Services, LLC (July 2007Present). |
|
|
|
|
|
|
|
Kimberly K.
Springer 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 58 |
|
Vice
President |
|
March
2006Present |
|
Vice
President Mutual Fund Product Development, Voya Investments, LLC (July 2012Present); Vice President, Voya Family of Funds (March
2010Present) and Vice President, Voya Funds Services, LLC (March 2006Present). Formerly Managing Paralegal, Registration Statements (June
2003July 2012). |
|
|
|
|
|
|
|
Craig
Wheeler 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 47 |
|
Vice
President |
|
May
2013Present |
|
Vice
President Director of Tax, Voya Investments, LLC (October 2015Present). Formerly, Vice PresidentDirector of Tax, Voya Funds
Services, LLC (March 2013October 2015). Formerly, Assistant Vice President Director of Tax, Voya Funds Services, LLC (March
2008February 2013). |
|
|
|
|
|
|
|
Huey P. Falgout,
Jr. 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 52 |
|
Secretary |
|
July
2005Present |
|
Senior
Vice President and Chief Counsel, Voya Investment Management Mutual Fund Legal Department (March 2010Present). |
|
|
|
|
|
|
|
Paul A.
Caldarelli 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 64 |
|
Assistant
Secretary |
|
June
2010Present |
|
Vice
President and Senior Counsel, Voya Investment Management Mutual Fund Legal Department (March 2010Present). |
|
|
|
|
|
|
|
Theresa K.
Kelety 7337 East Doubletree Ranch Rd. Suite 100 Scottsdale, Arizona 85258 Age: 53 |
|
Assistant
Secretary |
|
July
2005Present |
|
Vice
President and Senior Counsel, Voya Investment Management Mutual Fund Legal Department (March 2010Present). |
(1) |
|
The Officers hold office until the next annual meeting of the
Board of Trustees and until their successors shall have been elected and qualified. |
31
ADVISORY CONTRACT
APPROVAL DISCUSSION (UNAUDITED)
BOARD CONSIDERATION AND APPROVAL OF SUB-ADVISORY CONTRACT FOR
VOYA GLOBAL ADVANTAGE AND PREMIUM OPPORTUNITY FUND
Section 15(c) of the Investment Company Act of 1940, as
amended (the 1940 Act), to which Voya Global Advantage and Premium Opportunity Fund (the Fund) is subject, makes it unlawful
for any registered fund having a board of trustees to enter into any new advisory agreement, including any sub-advisory agreement, unless the agreement
has been approved by a vote of a majority of the trustees who have no direct or indirect interest in the agreement and who are not interested
persons of the fund. At its November 19, 2015 meeting, the Board of Trustees of the Fund (the Board), including a majority of the
Board members who have no direct or indirect interest in the advisory and sub-advisory contracts, and who are not interested persons of the
Fund, as such persons are defined under the 1940 Act (the Independent Trustees), considered a proposal by Voya Investments, LLC
(Adviser), the adviser to the Fund, to enter into a new sub-advisory contract with NNIP Advisors B.V. (the Sub-Adviser or
NNIP) for the Fund (the Sub-Advisory Contract). The Board was asked to approve the Sub-Advisory Contract because it was advised
by the Adviser that the existing sub-advisory contract (the Prior Contract) between the Adviser and the Sub-Adviser was expected to
terminate in the near future due to a change of control of the Sub-Adviser.
In addition to the Board meeting on November 19, 2015, the
Independent Trustees held separate meetings on October 1, 2015 and November 17, 2015, to review and evaluate the Sub-Advisers services to the
Fund. As a result, subsequent references herein to factors considered and determinations made by the Board include, as applicable, factors considered
and determinations made on those earlier dates by the Independent Trustees.
At its November 19, 2015 meeting, the Board, including a
majority of the Independent Trustees, voted to approve the Sub-Advisory Contract for the Fund. In reaching its decision, the Board took into account
information furnished to it throughout the year at meetings of the Board and the Boards committees, as well as information prepared specifically
in connection with the annual review process. Determinations by the Independent Trustees also took into account various factors that they believed, in
light of the legal advice furnished to them by K&L Gates LLP (K&L Gates), their independent legal counsel, and their own business
judgment, to be relevant. Further, while the Board reviewed at the same meeting the sub-advisory contracts for other Voya funds, the Board considered
each Voya funds sub-advisory relationship separately.
Provided below is a general overview of the Boards
review and evaluation process with respect to the Sub-Adviser, as well as a discussion of certain specific factors that the Board considered at its
review and approval meetings. While the Board considered all of the information it deemed relevant, discussed below are some of the primary factors
relevant to the Boards consideration as to whether to approve the Sub-Advisory Contract. Each Board member may have accorded different weight to
the various factors in reaching his or her conclusion with respect to the Sub-Advisory Contract.
Overview of the Contract Review and Approval
Process
The Board followed a structured process (the Contract
Review Process) pursuant to which it requested and considered relevant information when it decided whether to approve the Sub-Advisory Contract.
Among other actions, the Independent Trustees previously retained an independent consultant with experience in the registered fund industry to assist
them in working with personnel employed by the Adviser or its affiliates who administer the Fund (Management) to: identify the types of
information presented to the Board to inform its deliberations with respect to sub-advisory relationships and to help evaluate that information;
evaluate industry best practices in regard to the consideration of sub-advisory contracts; establish a specific format in which certain requested
information was provided to the Board; and determine the process for the Boards review of such information.
The Board has established (among other committees) three
Investment Review Committees (each, an IRC) and a Contracts Committee. Among other matters, the Contracts Committee provides oversight with
respect to the Contract Review Process, and the Fund is assigned to an IRC, which provides oversight regarding, among other matters, the investment
performance of the Sub-Adviser, as well as oversight by the Adviser of the performance of the Sub-Adviser. The IRCs may apply a heightened level of
scrutiny in cases where performance was below the Funds relevant benchmark, and/or a selected peer group of investment companies (Selected
Peer Group), and/or Lipper Inc. (Lipper) category median, and/or Morningstar, Inc. (Morningstar) category median, as
applicable.
The type and format of the information provided to the Board
or to legal counsel for the Independent Trustees in connection with the Contract Review Process has been codified in a 15(c) methodology guide for the
Voya funds (15(c) Methodology Guide). This 15(c) Methodology Guide was developed under the direction of the Independent Trustees and sets
out a blueprint pursuant to which they request certain information in connection with their review of advisory and sub-advisory
contracts.
Management provided certain of the information requested by
the 15(c) Methodology Guide in Fund Analysis and Comparison Tables (FACT sheet). The Independent Trustees periodically have retained,
including most
32
ADVISORY CONTRACT
APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
recently in 2015, an independent firm to test and verify
the accuracy of certain FACT sheet data for a representative sample of the Voya funds. In addition, the Contracts Committee has routinely employed an
independent consultant to assist in its review and analysis of, among other matters, the 15(c) Methodology Guide, the content and format of the FACT
sheet, and the Selected Peer Group to be used by the Fund for certain comparison purposes during the review process.
Set forth below is a discussion of many of the Boards
primary considerations and conclusions in connection with its decision to approve the Funds Sub-Advisory Contract.
Nature, Extent and Quality of
Service
The Independent Trustees received and evaluated such
information as they deemed necessary regarding the nature, extent and quality of services provided to the Fund by the Sub-Adviser. This included
information regarding the Sub-Adviser provided throughout the year at regular meetings of the Board and its committees, as well as information
furnished in connection with the contract review meetings.
The materials requested by the Independent Trustees and
provided to the Board, K&L Gates and/or independent consultants that assisted the Independent Trustees prior to the November 19, 2015 Board meeting
included, among other information, the following items: (1) the FACT sheet that provided information regarding the performance and expenses of the Fund
and other similarly managed funds in its Selected Peer Group, as well as information regarding the Funds investment portfolio, objective and
strategies; (2) reports providing risk and attribution analyses of the Fund; (3) the 15(c) Methodology Guide, which describes how the FACT sheet was
prepared, including the manner in which the Funds benchmark and Selected Peer Group were selected and how profitability was determined; (4)
responses from the Sub-Adviser to the Fund to a series of questions posed by K&L Gates dated June 12, 2015, and November 7, 2015, on behalf of the
Independent Trustees; (5) a copy of the form of Sub-Advisory Contract; (6) a copy of the Form ADV for the Sub-Adviser; (7) financial statements for the
Sub-Adviser; (8) independent analyses of Fund performance by the Funds Chief Investment Risk Officer; (9) a report by the Funds Chief
Compliance Officer (CCO); and (10) other information relevant to the Boards evaluations.
The Board was advised by the Adviser that pursuant to an
agreement with the European Commission, ING Groep, N.V. (ING Groep) is required to divest its entire interest in NN Group N.V. (NN
Group) into an independent, standalone company by the end of 2016 (the Separation Plan). NN Group previously was a wholly-owned,
indirect subsidiary of ING Groep and is a parent company of the Sub-Adviser. The Board was advised that the Separation Plan contemplates one or more
public offerings and each may be deemed to be a change of control.
The Board considered the potential effects of the Separation
Plan on the Fund and the Sub-Adviser, including the Sub-Advisers ability during and after the separation to perform the same level of service to
the Fund as the Sub-Adviser currently provides. The Board was advised that the Sub-Adviser anticipated that the Separation Plan would have no material
adverse impact on the Fund or its operations and administration.
The Fund is subject to the 1940 Act, which provides that any
investment advisory agreement, including any sub-advisory agreement, must terminate automatically upon its assignment. As used in the 1940
Act, the term assignment includes any transfer of a controlling block of outstanding voting securities of an adviser or the parent company of an
adviser. Such a transfer is referred to herein as a Change of Control Event. ING Groeps base case to achieve the Separation Plan was
through an initial public offering of NN Group (the IPO) followed by the divestment of ING Groeps remaining ownership interest over
time through one or more additional public offerings of NN Group stock. The Board recognized that the Separation Plan contemplates several public
offerings and each may be deemed to be a Change of Control Event, triggering the necessity for a new agreement, which would require the approval of the
Board. The Board concluded that the shareholders approval of a new agreement that would become effective upon one or more Change of Control
Events would permit the Fund to benefit from the continuation of services by the Sub-Adviser throughout the Separation Plan without the need for
multiple shareholder meetings. The Board was informed by the Adviser that the Sub-Adviser was relying on regulatory assurances from the staff of the
U.S. Securities and Exchange Commission in March 2013 that they would not object to approval of future agreements by shareholders at a single
shareholder meeting. Fund shareholders approved the future agreements in February 2015.
The Board noted that the IPO was completed in July 2014, and
ING Groep has divested additional shares of NN Group through four subsequent public offerings since July 2014, including a secondary common stock
offering that settled on October 5, 2015, which further reduced ING Groeps stake in NN Group to 25.8% of outstanding shares. NN Group did not
receive any proceeds from these offerings. Upon the completion of the next transaction, ING Groeps ownership in NN Group is expected to be
reduced to less than 25%, which the Board was advised by the Adviser will be deemed to be a Change of Control Event that would result in the
termination of the Prior Contract.
33
ADVISORY CONTRACT
APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
In arriving at its conclusions with respect to the
Sub-Advisory Contract, the Board recognized that the Adviser is responsible for monitoring the investment program, performance, and developments and
ongoing operations of the Sub-Adviser under its manager-of-managers arrangement.
The Board also received periodic reports showing that the
investment policies and restrictions for the Fund were consistently complied with and other periodic reports covering matters such as compliance with
codes of ethics by personnel of the Sub-Adviser. The Board considered reports from the Funds CCO evaluating whether the regulatory compliance
systems and procedures of the Sub-Adviser are reasonably designed to assure compliance with the federal securities laws, including those related to,
among others, late trading and market timing, best execution, fair value pricing, proxy voting and trade allocation practices. The Board also took into
account the CCOs annual and periodic reports and recommendations with respect to service provider compliance programs. In this regard, the Board
also considered the policies and procedures developed by the CCO in consultation with the Boards Compliance Committee that guide the CCOs
compliance oversight function.
The Board requested and, as applicable, considered
information regarding the level of staffing, quality and experience of the Funds portfolio management team, the resources and reputation of the
Sub-Adviser, and the ability of the Sub-Adviser to attract and retain qualified investment advisory personnel, as well as the adequacy of the resources
committed to the Fund by the Sub-Adviser, whether those resources are commensurate with the needs of the Fund and are sufficient to sustain appropriate
levels of performance and compliance needs. Additionally, the Board considered the financial stability of the Sub-Adviser.
Based on their deliberations and the materials presented to
them, the Board concluded that the sub-advisory and related services provided by the Sub-Adviser are appropriate in light of the Funds
operations, the competitive landscape of the investment company business, and investor needs, and that the nature, extent and quality of the overall
services provided by the Sub-Adviser are appropriate.
Fund Performance
In assessing the sub-advisory relationship, the Board placed
emphasis on the investment returns of the Fund. The Board considered the performance reports and analyses from MR&S and IRMD and discussions with
portfolio managers at Board and committee meetings during the year. The Board also paid particular attention in assessing performance information
provided on the FACT sheet furnished in connection with the review and approval process. The FACT sheet prepared for the Fund included its investment
performance compared to the Funds Morningstar category median and/or Lipper category median, Selected Peer Group and primary benchmark. The FACT
sheet performance data was as of March 31, 2015. In addition, the Board also received and considered updated performance information for the Fund
against its Morningstar category median and/or Lipper category median and primary benchmark as of October 31, 2015.
Economies of Scale
When evaluating the reasonableness of advisory fee rates,
the Board also considered whether economies of scale likely will be realized by the Sub-Adviser as the Fund grows larger and the extent to which any
such economies are reflected in contractual fee rates. The Board noted that the Fund, as a closed-end fund, generally does not issue new shares and is
less likely to realize economies of scale from additional share purchases. The Board also noted that any breakpoints in the Sub-Advisers fee
schedule for the Fund would inure to the benefit of the Adviser, except to the extent that there are corresponding advisory fee rate breakpoints or
waivers. The Independent Trustees also considered prior periodic management reports, industry information on this topic, fee rates at projected levels
of growth versus peers and the Funds investment performance.
Information Regarding Services to Other
Clients
The Board requested and, as applicable, considered
information regarding the nature of services and fee rates offered by the Sub-Adviser to other clients, including other registered investment companies
and relevant institutional accounts.
Fee Rates and Profitability
The Board reviewed and considered the contractual
sub-advisory fee rate payable by the Adviser to the Sub-Adviser for sub-advisory services for the Fund, including the portion of the contractual
advisory fees that are paid to the Sub-Adviser, as compared to the portion retained by the Adviser.
The Board requested information regarding and, as
applicable, considered: (1) the fee rate structure of the Fund as it relates to the services provided under the Sub-Advisory Contract; and (2) the
potential fall-out benefits to the Sub-Adviser from its association with the Fund. For the Fund, the Board determined that the fee rate payable to the
Sub-Adviser is reasonable for the services that it performs, which were considered in light of the nature, extent and quality of the services that it
has performed and is expected to perform.
34
ADVISORY CONTRACT
APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
The Board did not request profitability data from the
Sub-Adviser because the Board did not view this data as relevant to its deliberations, given the arms-length nature of the relationship between
the Adviser and the Sub-Adviser with respect to the negotiation of sub-advisory fee rates. In this regard, the Board also considered that the Adviser
(and not the Fund) pays the sub-advisory fees earned by the Sub-Adviser.
Conclusions
In light of the foregoing, on November 19, 2015 the Board,
at an in-person meeting, approved the Sub-Advisory Contract for the Fund to replace the Prior Contract upon such Change of Control Event as described
above. The Sub-Adviser represented that the agreements approved by the Board were not materially different from the agreements approved by shareholders
of the Fund in February 2015 and no single person or group of persons acting together is expected to gain control (as defined in the 1940
Act) of NN Group. As a result, shareholders of the Fund will not be asked to vote again on this new agreement with the Sub-Adviser.
The decision by the Board, including a majority of the
Independent Trustees, to approve the Sub-Advisory Contract was based on a determination by the Board that it would be in the best interests of the
shareholders of the Fund for the Sub-Adviser to continue providing sub-advisory and related services for the Fund, without interruption, after the
Change of Control Event.
In light of all factors it considered in its review of the
Sub-Advisory Contract, the Board concluded that the fee rates set forth in the Sub-Advisory Contract were fair and reasonable. Among other factors, the
Board considered: (1) the nature, extent and quality of services provided and to be provided under the Sub-Advisory Contract; (2) the extent to which
economies of scale are reflected in fee rate schedules under the Sub-Advisory Contract; (3) the existence of any fall-out benefits to the
Sub-Adviser; and (4) a comparison of fee rates, expense ratios, and investment performance to those of similar funds.
In connection with its approval of the Sub-Advisory
Contract, on November 19, 2015, the Board considered a representation from the Sub-Adviser that there were no additional developments not already
disclosed to the Board in the prior response provided to the Board in connection with their annual review of the Prior Contract, that would be a
material consideration to the Board in connection with its consideration of the Sub-Advisory Contract. Additionally, the Board took into account, among
other factors, the considerations set out below.
1) |
|
The Independent Trustees solicited and received ongoing advice
regarding the Boards legal duties when approving the Sub-Advisory Contract from K&L Gates, their independent legal counsel, which law firm
has extensive experience regarding such matters. |
2) |
|
The Board considered the Sub-Advisers representations
regarding its commitment to maintain appropriate levels of overall staffing, ongoing resources and service quality through the transactions under the
Separation Plan and after the Change of Control Event. The Board noted that such services include, but are not limited to, investment management and
research services. In this regard, the Board considered representations by the Sub-Adviser that its separation from ING Groep, as contemplated by the
Separation Plan, will not lead to a reduction in the quality or scope of these and other services provided by those firms to the funds in the Voya
funds complex, including the Fund. |
3) |
|
The Board considered representations by the Sub-Adviser that
approval of the Sub-Advisory Contract would be necessary for the Fund to continue receiving sub-advisory services from the Sub-Adviser following the
Change of Control Event. In addition, the Board considered representations by the Sub-Adviser, as well as related supporting documentation, indicating
that the Sub-Advisory Contract, including the fees payable thereunder, are substantially similar to and, in any event, are no less favorable to the
Fund than, the terms of the Prior Contract. |
4) |
|
The Board considered representations by the Sub-Adviser indicating
that: (a) the Sub-Adviser can be expected to provide services of the same nature, extent and quality under the Sub-Advisory Contract as were provided
thereby under the Prior Contract; and (b) the Change of Control Event is not expected to result in any changes to: (i) the management of the Fund,
including the continuity of the Funds portfolio managers and other personnel responsible for the management operations of the Fund; or (ii) the
investment objective of or the principal investment strategies used to manage the Fund. |
Based on the foregoing and other relevant considerations, at
a meeting of the Board held on November 19, 2015, the Board, including a majority of the Independent Trustees, voted to approve the Sub-Advisory
Contract. In this connection, the Board concluded that, in light of all factors considered, the terms of the Sub-Advisory Contract, including fee
rates, were fair and reasonable, and the Sub-Advisory Contract should be approved so as to enable a continuation without interruption of the services
being provided by the Sub-Adviser pursuant to the Prior Contract. The Board noted that no one factor was determinative of its decisions which, instead,
were premised upon the totality of factors considered. The Board also noted that different Board members likely placed emphasis on different factors in
reaching their individual conclusions to vote in favor of the Sub-Advisory Contract.
35
ADDITIONAL INFORMATION
(UNAUDITED)
During the period, there were no material changes in the
Funds investment objective or policies that were not approved by the shareholders or the Funds charter or by-laws or in the principal risk
factors associated with investment in the Fund. Effective May 31, 2015, Jeff Meys replaced Bert Veldman as a Portfolio Manager to the
Fund.
The Fund may lend portfolio securities in an amount equal to
up to 33 1/3% of its managed assets to broker dealers or other institutional borrowers, in exchange for cash collateral and fees. The fund may use the
cash collateral in connection with the Funds investment program as approved by the Investment Adviser, including generating cash to cover
collateral posting requirements. Although the Fund has no current intention to do so, it may use the cash collateral to generate additional income. The
use of cash collateral in connection with the Funds investment program may have a leveraging effect on the Fund, which would increase the
volatility of the Fund and could reduce its returns and/or cause a loss.
The Fund intends to engage in lending portfolio securities
only when such lending is secured by cash or other permissible collateral in an amount at least equal to the market value of the securities loaned. The
Fund will maintain cash, cash equivalents or liquid securities holdings in an amount sufficient to cover its repayment obligation with respect to the
collateral, marked to market on a daily basis.
Securities lending involves the risks of delay in recovery
or even loss of rights in the securities loaned if the borrower of the securities fails financially. Loans will be made only to organizations whose
credit quality or claims paying ability is considered by the sub-advisers to be at least investment grade. The financial condition of the borrower will
be monitored by the Investment Adviser on an ongoing basis. The Fund will not lend portfolio securities subject to a written American style covered
call option contract. The Fund may lend portfolio securities subject to a written European style covered call option contract as long as the lending
period is less than or equal to the term of the covered call option contract.
The Fund was granted exemptive relief by the SEC (the
Order), which under the 1940 Act, would permit the Fund, subject to Board approval, to include realized long-term capital gains as a part
of its regular distributions to Common Shareholders more frequently than would otherwise be permitted by the 1940 Act (generally once per taxable year)
(Managed Distribution Policy). The Fund may in the future adopt a Managed Distribution Policy.
Dividend Reinvestment Plan
Unless the registered owner of Common Shares elects to
receive cash by contacting Computershare Shareowner Services LLC (the Plan Agent), all dividends declared on Common Shares of the Fund will
be automatically reinvested by the Plan Agent for shareholders in additional Common Shares of the Fund through the Funds Dividend Reinvestment
Plan (the Plan). Shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash paid by
check mailed directly to the shareholder of record (or, if the Common Shares are held in street or other nominee name, then to such nominee) by the
Plan Agent. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and
processed by the Plan Agent prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re-invest that cash
in additional Common Shares of the Fund for you. If you wish for all dividends declared on your Common Shares of the Fund to be automatically
reinvested pursuant to the Plan, please contact your broker.
The Plan Agent will open an account for each Common
Shareholder under the Plan in the same name in which such Common Shareholders Common Shares are registered. Whenever the Fund declares a dividend
or other distribution (together, a Dividend) payable in cash, non-participants in the Plan will receive cash and participants in the Plan
will receive the equivalent in Common Shares. The Common Shares will be acquired by the Plan Agent for the participants accounts, depending upon
the circumstances described below, either (i) through receipt of additional unissued but authorized Common Shares from the Fund (Newly Issued
Common Shares) or (ii) by purchase of outstanding Common Shares on the open market (Open-Market Purchases) on the NYSE or elsewhere.
Open-market purchases and sales are usually made through a broker affiliated with the Plan Agent.
If, on the payment date for any Dividend, the closing market
price plus estimated brokerage commissions per Common Share is equal to or greater than the NAV per Common Share, the Plan Agent will invest the
Dividend amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each
participants account will be determined by dividing the dollar amount of the Dividend by the NAV per Common Share on the payment date; provided
that, if the NAV is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95%
of the closing market price per Common Share on the payment date. If, on the payment date for any Dividend, the NAV per Common Share is greater than
the closing market value plus estimated brokerage commissions, the Plan Agent will invest the Dividend amount in Common Shares acquired on behalf of
the participants in Open-Market Purchases. In the event of a market discount on the payment date for any Dividend, the Plan Agent will have until the
last business
36
ADDITIONAL INFORMATION
(UNAUDITED) (CONTINUED)
day before the next date on which the Common Shares
trade on an ex-dividend basis or 30 days after the payment date for such Dividend, whichever is sooner (the Last Purchase
Date), to invest the Dividend amount in Common Shares acquired in Open-Market Purchases.
The Fund pays quarterly Dividends. Therefore, the period
during which Open-Market Purchases can be made will exist only from the payment date of each Dividend through the date before the next
ex-dividend date, which typically will be approximately ten days.
If, before the Plan Agent has completed its Open-Market
Purchases, the market price per common share exceeds the NAV per Common Share, the average per Common Share purchase price paid by the Plan
Administrator may exceed the NAV of the Common Shares, resulting in the acquisition of fewer Common Shares than if the Dividend had been paid in Newly
Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if
the Plan Agent is unable to invest the full Dividend amount in Open-Market Purchases during the purchase period or if the market discount shifts to a
market premium during the purchase period, the Plan Agent will cease making Open-Market Purchases and will invest the un-invested portion of the
Dividend amount in Newly Issued Common Shares at the NAV per common share at the close of business on the Last Purchase Date provided that, if the NAV
is less than or equal to 95% of the then current market price per Common Share, the dollar amount of the Dividend will be divided by 95% of the market
price on the payment date.
The Plan Agent maintains all shareholders accounts in
the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common
Shares in the account of each Plan participant will be held by the Plan Agent on behalf of the Plan participant, and each shareholder proxy will
include those shares purchased or received pursuant to the Plan. The Plan Agent will forward all proxy solicitation materials to participants and vote
proxies for shares held under the Plan in accordance with the instructions of the participants.
In the case of shareholders such as banks, brokers or
nominees which hold shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common
Shares certified from time to time by the record shareholders name and held for the account of beneficial owners who participate in the
Plan.
There will be no brokerage charges with respect to Common
Shares issued directly by the Fund. However, each participant will pay a pro rata share of brokerage commissions incurred in connection with
Open-Market Purchases. The automatic reinvestment of Dividends will not relieve participants of any federal, state or local income tax that may be
payable (or required to be withheld) on such Dividends. Participants that request a partial or full sale of shares through the Plan Agent are subject
to a $15.00 sales fee and a $0.10 per share brokerage commission on purchases or sales, and may be subject to certain other service
charges.
The Fund reserves the right to amend or terminate the Plan.
There is no direct service charge to participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to
include a service charge payable by the participants.
All questions concerning the Plan or a request to terminate
participation should be directed to the Funds Shareholder Service Department at (800) 992-0180.
Key Financial Dates Calendar 2016
Distributions:
Declaration Date
|
|
|
|
Ex Date
|
|
Record Date
|
|
Payable Date
|
15-Mar-16 |
|
|
|
|
1-Apr-16 |
|
|
|
5-Apr-16 |
|
|
|
15-Apr-16 |
|
15-Jun-16 |
|
|
|
|
1-Jul-16 |
|
|
|
6-Jul-16 |
|
|
|
15-Jul-16 |
|
15-Sep-16 |
|
|
|
|
3-Oct-16 |
|
|
|
5-Oct-16 |
|
|
|
17-Oct-16 |
|
15-Dec-16 |
|
|
|
|
28-Dec-16 |
|
|
|
30-Dec-16 |
|
|
|
17-Jan-17 |
|
Record date will be two business days after each
Ex-Dividend Date. These dates are subject to change.
Stock Data
The Funds common shares are traded on the NYSE
(Symbol: IGA).
Repurchase of Securities by Closed-End
Companies
In accordance with Section 23(c) of the 1940 Act, and Rule
23c-1 under the 1940 Act the Fund may from time to time purchase shares of beneficial interest of the Fund in the open market, in privately negotiated
transactions and/or purchase shares to correct erroneous transactions.
Number of Shareholders
The number of record holders of Common Stock as of February
29, 2016 was 12, which does not include approximately 7,895 beneficial owners of shares held in the name of brokers of other nominees.
Certifications
In accordance with Section 303A.12 (a) of the New York Stock
Exchange Listed Company Manual, the Funds CEO submitted the Annual CEO Certification on July 31, 2015 certifying that he was not aware, as of
that date, of any violation by the Fund of the NYSEs Corporate governance listing standards. In addition, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and related SEC rules, the Funds principal executive and financial officers have made quarterly certifications,
included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Funds disclosure controls and procedures and
internal controls over financial reporting.
37
(THIS PAGE INTENTIONALLY LEFT BLANK)
(THIS PAGE INTENTIONALLY LEFT BLANK)
Investment Adviser
Voya Investments, LLC
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258
Transfer Agent
Computershare Shareowner Services LLC
480 Washington Boulevard
Jersey City, New Jersey 07310-1900
Independent Registered Public Accounting Firm KPMG
LLP
Two Financial Center
60 South Street
Boston, Massachusetts 02111
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, New York 10286
Legal Counsel
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, Massachusetts 02199
Toll-Free Shareholder Information
Call us from 9:00 a.m. to 7:00 p.m. Eastern time on any business
day for account or other information, at (800) 992-0180
RETIREMENT | INVESTMENTS | INSURANCE
voyainvestments.com
|

AR-IGA (0216-042216) |
As
of the
end of
the period
covered by
this report,
Registrant had
adopted a
code of
ethics, as
defined in
Item 2
of Form
N-CSR, that
applies to
the Registrant’s
principal executive
officer and
principal financial
officer. There
were no
amendments to
the Code
during the period
covered by
the report.
The Registrant
did not
grant any
waivers, including
implicit waivers,
from any
provisions of
the Code
during the
period covered
by this
report. The
code of
ethics is
filed herewith
pursuant to
Item 10(a)(l),
Exhibit 99,CODE
ETH.
| Item 3. | Audit
Committee Financial
Expert. |
The Board of Trustees has determined
that Colleen D. Baldwin, Peter S. Drotch, Patrick W. Kenny, Joseph E. Obermeyer, and Roger B. Vincent are audit committee financial
experts, as defined in Item 3 of Form N-CSR. Ms. Baldwin, Mr. Drotch, Mr. Kenny, Mr. Obermeyer and Mr. Vincent are “independent”
for purposes of Item 3 of Form N-CSR.
| Item 4. | Principal
Accountant Fees
and Services. |
| (a) | Audit
Fees:
The aggregate
fees billed
for each
of the
last two
fiscal years
for professional
services rendered
by KPMG
LLP (“KPMG”),
the principal
accountant for
the audit
of the
registrant’s annual
financial statements,
for services
that are
normally provided
by the
accountant in connection
with statutory
and regulatory
filings or
engagements for the
fiscal year
were $26,600
for the
year ended
February 29,
2016 and
$26,600 for
year ended
February 28,
2015. |
| (b) | Audit-Related
Fees: The aggregate
fees billed
in each
of the
last two
fiscal years
for assurance
and related
services by
KPMG that
are seasonably
related to the
performance of
the audit
of the
registrant’s financial
statements and
are not
reported under
paragraph (a)
of this Item
were $2,525
for the
year ended
February 29,
2016 and
$2,525 for
the year
ended February
28, 2015. |
| (c) | Tax
Fees:
The aggregate
fees billed
in each
of the
last two
fiscal years
for professional
services rendered
by KPMG
for tax
compliance, tax
advice, and
tax planning
were $13,095
in the
year ended
February 29,
2016 and
$10,210 in
the year
ended February
28, 2015.
Such services
included review
of excise
distribution calculations
(if applicable),
preparation of the
Funds’ federal
state and
excise tax
returns, tax
services related
to mergers
and routine
consulting. |
| (d) | All
Other Fees:
The aggregate
fees billed
in each
of the
last two
fiscal years
for all
other fees
were $2,650
for the
year ended
February 29,
2016 and
$3,038 for
the year
ended February
28, 2015. |
| (e)(1) | Audit
Committee Pre-Approval
Policies and
Procedures |
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY
| I. | Statement of Principles |
Under the Sarbanes-Oxley Act of 2002 (the “Act”),
the Audit Committee of the Board of Directors or Trustees (the “Committee”) of the Voya funds (each a “Fund,”
collectively, the “Funds”) set out on Exhibit A to this Audit and Non-Audit Services Pre-Approval Policy (“Policy”)
is responsible for the oversight of the work of the Funds’ independent auditors. As part of its responsibilities, the Committee
must pre-approve the audit and non-audit services performed by the auditors in order to assure that the provision of these services
does not impair the auditors’ independence from the Funds. The Committee has adopted, and the Board has ratified, this Policy,
which sets out the procedures and conditions under which the services of the independent auditors may be pre-approved.
Under Securities and Exchange Commission (“SEC”)
rules promulgated in accordance with the Act, the Funds may establish two different approaches to pre-approving audit and non-audit
services. The Committee may approve services without consideration of specific case-by-case services (“general pre-approval”)
or it may pre-approve specific services (“specific pre-approval”). The Committee believes that the combination of these
approaches contemplated in this Policy results in an effective and efficient method for pre-approving audit and non-audit services
to be performed by the Funds’ independent auditors. Under this Policy, services that are not of a type that may receive general
pre-approval require specific pre-approval by the Committee. Any proposed services that exceed pre-approved cost levels or budgeted
amounts will also require the Committee’s specific pre-approval.
For both types of approval, the Committee considers
whether the subject services are consistent with the SEC’s rules on auditor independence and that such services are compatible
with maintaining the auditors independence. The Committee also considers whether a particular audit firm is in the best position
to provide effective and efficient services to the Funds. Reasons that the auditors are in the best position include the auditors’
familiarity with the Funds’ business, personnel, culture, accounting systems, risk profile, and other factors, and whether
the services will enhance the Funds’ ability to manage and control risk or improve audit quality. Such factors will be considered
as a whole, with no one factor being determinative.
The appendices attached to this Policy describe
the audit, audit-related, tax-related, and other services that have the Committee’s general pre-approval. For any service
that has been approved through general pre-approval, the general pre-approval will remain in place for a period 12 months from
the date of pre-approval, unless the Committee determines that a different period is appropriate. The Committee will annually review
and pre-approve the services that may be provided by the independent auditors without specific pre-approval. The Committee will
revise the list of services subject to general pre-approval as appropriate. This Policy does not serve as a delegation to Fund
management of the Committee’s duty to pre-approve services performed by the Funds’ independent auditors.
The annual audit services engagement terms
and fees are subject to the Committee’s specific pre-approval. Audit services are those services that are normally provided
by auditors in connection with statutory and regulatory filings or engagements or those that generally only independent auditors
can reasonably provide. They include the Funds’ annual financial statement audit and procedures that the independent auditors
must perform in order to form an opinion on the Funds’ financial statements (e.g., information systems and procedural
reviews and testing). The Committee will monitor the audit services engagement and approve any changes in terms, conditions or
fees deemed by the Committee to be necessary or appropriate.
The Committee may grant general pre-approval
to other audit services, such as statutory audits and services associated with SEC registration statements, periodic reports and
other documents filed with the SEC or issued in connection with securities offerings.
The Committee has pre-approved the audit services
listed on Appendix A. The Committee must specifically approve all audit services not listed on Appendix A.
| III. | Audit-related Services |
Audit-related services are assurance and related
services that are reasonably related to the performance of the audit or the review of the Funds’ financial statements or
are traditionally performed by the independent auditors. The Committee believes that the provision of audit-related services will
not impair the independent auditors’ independence, and therefore may grant pre-approval to audit-related services. Audit-related
services include accounting consultations related to accounting, financial reporting or disclosure matters not classified as “audit
services;” assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking
authorities; agreed-upon or expanded audit procedures relating to accounting and/or billing records required to respond to or comply
with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Form
N-SAR or Form N-CSR.
The Committee has pre-approved the audit-related
services listed on Appendix B. The Committee must specifically approve all audit-related services not listed on Appendix B.
The Committee believes the independent auditors
can provide tax services to the Funds, including tax compliance, tax planning, and tax advice, without compromising the auditors’
independence. Therefore, the Committee may grant general pre-approval with respect to tax services historically provided by the
Funds’ independent auditors that do not, in the Committee’s view, impair auditor independence and that are consistent
with the SEC’s rules on auditor independence.
The Committee will not grant pre-approval if
the independent auditors initially recommends a transaction the sole business purpose of which is tax avoidance and the tax treatment
of which may not be supported in the Internal Revenue Code and related regulations. The Committee may consult outside counsel to determine that tax planning
and reporting positions are consistent with this Policy.
The Committee has pre-approved the tax-related
services listed on Appendix C. The Committee must specifically approve all tax-related services not listed on Appendix C.
The Committee believes it may grant approval
of non-audit services that are permissible services for independent auditors to a Fund. The Committee has determined to grant general
pre-approval to other services that it believes are routine and recurring, do not impair auditor independence, and are consistent
with SEC rules on auditor independence.
The Committee has pre-approved the non-audit
services listed on Appendix D. The Committee must specifically approve all non-audit services not listed on Appendix D.
A list of the SEC’s prohibited non-audit
services is attached to this Policy as Appendix E. The SEC’s rules and relevant guidance should be consulted to determine
the precise definitions of these impermissible services and the applicability of exceptions to certain of the SEC’s prohibitions.
| VI. | Pre-approval of Fee levels and Budgeted Amounts |
The Committee will annually establish pre-approval
fee levels or budgeted amounts for audit, audit-related, tax and non-audit services to be provided to the Funds by the independent
auditors. Any proposed services exceeding these levels or amounts require the Committee’s specific pre-approval. The Committee
considers fees for audit and non-audit services when deciding whether to pre-approve services. The Committee may determine, for
a pre-approval period of 12 months, the appropriate ratio between the total amount of fees for the Fund’s audit, audit-related,
and tax services (including fees for services provided to Fund affiliates that are subject to pre-approval), and the total amount
of fees for certain permissible non-audit services for the Fund classified as other services (including any such services provided
to Fund affiliates that are subject to pre-approval).
Requests or applications for services to be
provided by the independent auditors will be submitted to management. If management determines that the services do not fall within
those services generally pre-approved by the Committee and set out in the appendices to these procedures, management will submit
the services to the Committee or its delagee. Any such submission will include a detailed description of the services to be rendered.
Notwithstanding this paragraph, the Committee will, on a quarterly basis, receive from the independent auditors a list of services
provided for the previous calendar quarter on a cumulative basis by the auditors during the Pre-Approval Period.
The Committee may delegate pre-approval authority
to one or more of the Committee’s members. Any member or members to whom such pre-approval authority is delegated must report
any pre-approval decisions, including any pre-approved services, to the Committee at its next scheduled meeting. The Committee
will identify any member to whom pre-approval authority is delegated in writing. The member will retain such authority for a period
of 12 months from the date of pre-approval unless the Committee determines that a different period is appropriate. The period of
delegated authority may be terminated by the Committee or at the option of the member.
| IX. | Additional Requirements |
The Committee will take any measures the Committee
deems necessary or appropriate to oversee the work of the independent auditors and to assure the auditors’ independence from
the Funds. This may include reviewing a formal written statement from the independent auditors delineating all relationships between
the auditors and the Funds, consistent with Independence Standards Board No. 1, and discussing with the auditors their methods
and procedures for ensuring independence.
Part of KPMG’s performance of an audit
in accordance with standards of the Public Company Accounting Oversight Board (US) includes their responsibility to maintain and
monitor auditor independence with respect to the Voya funds. Using a proprietary system called Sentinel, the audit team is able
to identify and manage potential conflicts of interest across the member firms of the KPMG International Network and prevent the
provision of prohibited services to the Voya entities that would impair KPMG independence with the respect to the Voya funds. KPMG
requests pre-approval from the Voya funds Audit Committee for services provided to the Voya funds and for services to affiliated
entities that relate to the financial reporting or nature of operations of the Voya Funds. Additionally, KPMG provides an annual
summary of the fees for services that have commenced for Voya funds and Affiliates.
Last Approved: November 19, 2015
Appendix A
Pre-Approved Audit Services for the Pre-Approval Period January 1, 2016 through December 31, 2016
Service |
|
The Fund(s) |
Fee Range |
Statutory audits or financial audits (including tax services associated with audit services) |
√ |
As presented to Audit Committee1 |
Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., consents), and assistance in responding to SEC comment letters. |
√ |
Not to exceed $9,750 per filing |
Consultations by Fund management with respect to accounting or disclosure treatment of transactions or events and/or the actual or potential effect of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board, or other regulatory or standard setting bodies. |
√ |
Not to exceed $8,000 during the Pre-Approval Period |
Seed capital audit and related review and issuance of consent on the N-2 registration statement |
√ |
Not to exceed $13,750 per audit |
Audit of summary portfolio of investments |
√ |
Not to exceed $525 per fund |
| 1 | For new Funds launched during the Pre-Approval Period, the fee ranges pre-approved will be the same as those for existing Funds,
pro-rated in accordance with inception dates as provided in the auditors’ Proposal or any Engagement Letter covering the
period at issue. Fees in the Engagement Letter will be controlling. |
Appendix B
Pre-Approved Audit-Related Services for the Pre-Approval Period January 1, 2016 through December 31, 2016
Service |
|
The Fund(s) |
Fund Affiliates |
Fee Range |
Services related to Fund mergers (Excludes tax services - See Appendix C for tax services associated with Fund mergers) |
√ |
√ |
Not to exceed $10,000 per merger |
Consultations by Fund management with respect to accounting or disclosure treatment of transactions or events and/or the actual or potential effect of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board, or other regulatory or standard setting bodies. [Note: Under SEC rules some consultations may be “audit” services and others may be “audit-related” services.] |
√ |
|
Not to exceed $5,000 per occurrence during the Pre-Approval Period |
Review of the Funds’ semi-annual and quarterly financial statements |
√ |
|
Not to exceed $2,525 per set of financial statements per fund |
Reports to regulatory or government agencies related to the annual engagement |
√ |
|
Up to $5,000 per occurrence during the Pre-Approval Period |
Regulatory compliance assistance |
√ |
√ |
Not to exceed $5,000 per quarter |
Training courses |
|
√ |
Not to exceed $5,000 per course |
For Prime Rate Trust, agreed upon procedures for quarterly reports to rating agencies |
√ |
|
Not to exceed $9,450 per quarter |
Appendix C
Pre-Approved Tax Services for the Pre-Approval Period January 1, 2016 through December 31, 2016
Service |
|
The Fund(s) |
Fund
Affiliates |
Fee Range |
Preparation of federal and state income tax returns and federal excise tax returns for the Funds including assistance and review with excise tax distributions |
√ |
|
As presented to Audit Committee2 |
Review of IRC Sections 851(b) and 817(h) diversification testing on a real-time basis |
√ |
|
As presented to Audit Committee2 |
Assistance and advice regarding year-end reporting for 1099’s, as requested |
√ |
|
As presented to Audit Committee2 |
Tax assistance and advice regarding statutory, regulatory or administrative developments |
√ |
√ |
Not to exceed $5,000 for the Funds or for the Funds’ investment adviser during the Pre-Approval Period |
| 2 | For new Funds launched during the Pre-Approval Period, the fee ranges pre-approved will be the same as those for existing Funds,
pro-rated in accordance with inception dates as provided in the auditors’ Proposal or any Engagement Letter covering the
period at issue. Fees in the Engagement Letter will be controlling. |
Appendix C, continued
Service |
|
The Fund(s) |
Fund
Affiliates |
Fee Range |
Tax training courses |
|
√ |
Not to exceed $5,000 per course during the Pre-Approval Period |
Tax services associated with Fund mergers |
√ |
√ |
Not to exceed $4,000 per fund per merger during the Pre-Approval Period |
Other tax-related assistance and consultation, including, without limitation, assistance in evaluating derivative financial instruments and international tax issues, qualification and distribution issues, and similar routine tax consultations. |
√ |
|
Not to exceed $120,000 during the Pre-Approval Period |
Appendix D
Pre-Approved Other Services for the Pre-Approval Period January 1, 2016 through December 31, 2016
Service |
|
The Fund(s) |
Fund Affiliates |
Fee Range |
Agreed-upon procedures for Class B share 12b-1 programs |
|
√ |
Not to exceed $60,000 during the Pre-Approval Period |
Security counts performed pursuant to Rule 17f-2 of the 1940 Act
(i.e., counts for Funds holding securities with affiliated sub-custodians)
Cost to be borne 50% by the Funds and 50% by Voya Investments, LLC. |
√
|
√
|
Not to exceed $5,300 per Fund during the Pre-Approval Period |
Agreed upon procedures for 15 (c) FACT Books |
√ |
|
Not to exceed $50,000 during the Pre-Approval Period |
Appendix E
Prohibited Non-Audit Services
Dated: January 1, 2016 to December 31, 2016
| · | Bookkeeping or other services related to the accounting records or financial statements of the Funds |
| · | Financial information systems design and implementation |
| · | Appraisal or valuation services, fairness opinions, or contribution-in-kind reports |
| · | Internal audit outsourcing services |
| · | Broker-dealer, investment adviser, or investment banking services |
| · | Expert services unrelated to the audit |
| · | Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible |
EXHIBIT A
VOYA ASIA PACIFIC HIGH DIVIDEND EQUITY INCOME
FUND
VOYA BALANCED PORTFOLIO, INC.
VOYA EMERGING MARKETS HIGH DIVIDEND EQUITY FUND
VOYA EQUITY TRUST
VOYA FUNDS TRUST
VOYA GLOBAL ADVANTAGE AND PREMIUM OPPORTUNITY
FUND
VOYA GLOBAL EQUITY DIVIDEND AND PREMIUM OPPORTUNITY
FUND
VOYA INFRASTRUCTURE, INDUSTRIALS, AND MATERIALS
FUND
VOYA INTERMEDIATE BOND PORTFOLIO
VOYA INTERNATIONAL HIGH DIVIDEND EQUITY INCOME
FUND
VOYA INVESTORS TRUST
VOYA MONEY MARKET PORTFOLIO
VOYA MUTUAL FUNDS
VOYA PARTNERS, INC.
VOYA PRIME RATE TRUST
VOYA NATURAL RESOURCES EQUITY INCOME FUND
VOYA SENIOR INCOME FUND
VOYA SEPARATE PORTFOLIOS TRUST
VOYA SERIES FUND, INC.
VOYA STRATEGIC ALLOCATIONS PORTFOLIOS, INC.
VOYA VARIABLE FUNDS
VOYA VARIABLE INSURANCE TRUST
VOYA VARIABLE PORTFOLIOS INC,
VOYA VARIABLE PRODUCTS TRUST
| (e)(2) | Percentage
of services
referred to
in 4(b)
— (4)(d)
that were
approved by the
audit committee
100% of
the services
were approved
by the
audit committee. |
| (f) | Percentage
of hours
expended attributable
to work
performed by
other than
full time
employees of
KPMG if
greater than 50%.
Not applicable. |
| (g) | Non-Audit
Fees: The
following table presents
(i) the
aggregate non-audit
fees (i.e.,
fees for
audit-related, tax,
and other
services) billed
to each
Registrant by
the independent
registered public
accounting firm
for each
Registrant's fiscal
years ended
February 29,
2016 and
February 28,
2015; and (ii)
the
aggregate
non-audit fees
billed
to the
investment adviser,
or any
of its
affiliates that
provide ongoing
services to
the registrant,
by the
independent registered
public accounting
firm for
the same
time periods. |
Registrant/Investment Adviser | |
2016 | | |
2015 | |
Voya Global Advantage and Premium Opportunity | |
$ | 18,270 | | |
$ | 15,773 | |
Voya Investments, LLC (1) | |
$ | 178,050 | | |
$ | 211,825 | |
| (1) | Each
Registrant's investment
adviser and
any of
its affiliates,
which are
subsidiaries of
Voya Financial,
Inc. |
| (h) | Principal
Accountants Independence: The
Registrant’s Audit
committee has
considered whether
the provision
of non-audit
services that
were rendered
to the
registrant’s investment
adviser and
any entity
controlling, controlled
by, or
under common
control with
the investment
adviser that
provides ongoing
services to
the registrant that
were not
pre-approved pursuant
to Rule
2-01(c)(7)(ii) of
Regulation S-X
is compatible
with maintaining
KPMG’s independence. |
| Item 5. | Audit
Committee of
Listed Registrants. |
| a. | The
registrant has
a separately-designated
standing audit
committee. The
members are
Colleen D.
Baldwin, Peter
S. Drotch,
Patrick W.
Kenny, Joseph
E. Obermeyer,
and Roger
B. Vincent. |
| Item 6. | Schedule
of Investments. |
Complete schedule of investments
filed herein.

|
KPMG
LLP |
|
Two
Financial Center |
|
60
South Street |
|
Boston,
MA 02111 |
Report of Independent
Registered Public Accounting Firm
The Shareholders
and Board of Trustees
Voya Global
Advantage and Premium Opportunity Fund
We have audited
the accompanying statement of assets and liabilities, including the summary portfolio of investments, of Voya Global Advantage
and Premium Opportunity Fund, as of February 29, 2016, and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then ended (collectively, the "financial statements"),
the financial highlights for each of the years in the ten-year period then ended (the financial statements and financial highlights
are included in Item 1 of this Form N-CSR), and the portfolio of investments as of February 29, 2016 (included in Item 6 of this
Form N-CSR). These financial statements, financial highlights, and portfolio of investments are the responsibility of management.
Our responsibility is to express an opinion on these financial statements, financial highlights, and portfolio of investments based
on our audits.
We conducted our
audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements, financial highlights,
and portfolio of investments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and portfolio of investments. Our procedures included confirmation of securities
owned as of February 29, 2016, by correspondence with the custodian, transfer agent, and brokers, or by other appropriate auditing
procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion,
the financial statements, financial highlights, and portfolio of investments referred to above present fairly, in all material
respects, the financial position of the Voya Global Advantage and Premium Opportunity Fund, as of February 29, 2016, and the results
of its operations 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 ten-year period then ended, in conformity with U.S. generally accepted
accounting principles.

Boston, Massachusetts
April 25, 2016
Voya Global Advantage and Premium Opportunity Fund |
PORTFOLIO OF INVESTMENTS
as of February
29, 2016 |
Shares | | |
| |
| |
Value | | |
Percentage of Net Assets | |
COMMON STOCK: 96.6% | | |
| | |
| | | |
| |
Australia: 0.7% | |
| | | |
| | |
| 381,830 | | |
| |
Harvey Norman Holdings Ltd. | |
| 1,298,845 | | |
| 0.7 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Austria: 1.2% | |
| | | |
| | |
| 37,931 | | |
| |
Lenzing AG | |
| 2,451,048 | | |
| 1.2 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Belgium: 0.5% | |
| | | |
| | |
| 30,154 | | |
| |
Proximus SADP | |
| 948,871 | | |
| 0.5 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Canada: 2.2% | |
| | | |
| | |
| 110,323 | | |
| |
Toronto-Dominion Bank | |
| 4,275,118 | | |
| 2.2 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Finland: 0.5% | |
| | | |
| | |
| 21,809 | | |
| |
Sampo OYJ | |
| 981,042 | | |
| 0.5 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
France: 2.8% | |
| | | |
| | |
| 42,919 | | |
| |
AXA S.A. | |
| 943,644 | | |
| 0.5 | |
| 56,944 | | |
| |
Havas SA | |
| 415,658 | | |
| 0.2 | |
| 59,885 | | |
| |
Vinci S.A. | |
| 4,136,353 | | |
| 2.1 | |
| | | |
| |
| |
| 5,495,655 | | |
| 2.8 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Germany: 5.4% | |
| | | |
| | |
| 34,347 | | |
| |
Bayerische Motoren Werke AG | |
| 2,790,297 | | |
| 1.4 | |
| 22,031 | | |
| |
Muenchener Rueckversicherungs-Gesellschaft AG | |
| 4,324,617 | | |
| 2.2 | |
| 49,528 | | |
| |
ProSiebenSat.1 Media SE | |
| 2,531,535 | | |
| 1.3 | |
| 12,359 | | |
| |
RTL Group SA | |
| 1,033,118 | | |
| 0.5 | |
| | | |
| |
| |
| 10,679,567 | | |
| 5.4 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Hong Kong: 3.0% | |
| | | |
| | |
| 61,500 | | |
| |
CLP Holdings Ltd. | |
| 536,125 | | |
| 0.3 | |
| 464,000 | | |
| |
Hang Lung Properties Ltd. | |
| 814,154 | | |
| 0.4 | |
| 2,391,337 | | |
| |
SmarTone Telecommunications Holding Ltd. | |
| 3,935,727 | | |
| 2.0 | |
| 124,000 | | |
| |
Wharf Holdings Ltd. | |
| 622,008 | | |
| 0.3 | |
| | | |
| |
| |
| 5,908,014 | | |
| 3.0 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Japan: 9.4% | |
| | | |
| | |
| 8,200 | | |
| |
East Japan Railway Co. | |
| 718,071 | | |
| 0.4 | |
| 90,500 | | |
| |
Itochu Corp. | |
| 1,066,923 | | |
| 0.5 | |
| 106,800 | | |
| |
Japan Airlines Co. Ltd. | |
| 3,821,467 | | |
| 1.9 | |
| 874,400 | | |
| |
Resona Holdings, Inc. | |
| 3,066,612 | | |
| 1.6 | |
| 94,300 | | |
| |
Sumitomo Mitsui Financial Group, Inc. | |
| 2,646,076 | | |
| 1.3 | |
| 291,000 | | |
| |
Tadano Ltd. | |
| 2,491,299 | | |
| 1.3 | |
| 8,600 | | |
| |
Tokyo Electron Ltd. | |
| 518,386 | | |
| 0.3 | |
| 9,700 | | |
| |
Toyota Motor Corp. | |
| 505,735 | | |
| 0.2 | |
| 2,177,000 | | |
| |
Ube Industries Ltd. | |
| 3,683,378 | | |
| 1.9 | |
| | | |
| |
| |
| 18,517,947 | | |
| 9.4 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Netherlands: 0.6% | |
| | | |
| | |
| 174,477 | | |
| |
BinckBank NV | |
| 1,189,084 | | |
| 0.6 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Singapore: 0.3% | |
| | | |
| | |
| 381,500 | | |
| |
CapitaMall Trust | |
| 593,712 | | |
| 0.3 | |
| | | |
| |
| |
| | | |
| | |
| | | |
| |
Switzerland: 5.1% | |
| | | |
| | |
| |