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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
ING Global Advantage and Premium Opportunity Fund
(Exact name of registrant as specified in charter)
     
7337 E. Doubletree Ranch Rd., 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 28, 2010
 
 


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(ARCH PHOTO)

Annual Report
 
February 28, 2010
 
ING Global Advantage and
Premium Opportunity Fund
 
 
     (E-DELIVERY LOGO)  E-Delivery Sign-up — details inside
 
This report is submitted for general information to shareholders of the ING Funds. It is not authorized for distribution to prospective shareholders unless accompanied or preceded by a prospectus which includes details regarding the fund’s investment objectives, risks, charges, expenses and other information. This information should be read carefully.
   FUNDS
(ING FUNDS LOGO)
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(E-DELIVERY LOGO)          Go Paperless with E-Delivery!          (E-DELIVERY LOGO)
 
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.ingfunds.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 ING Funds’ website at www.ingfunds.com; and (3) on the SEC’s 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 ING Funds’ website at www.ingfunds.com and on the SEC’s 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. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330; and is available upon request from the Fund by calling Shareholder Services toll-free at (800) 992-0180.


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PRESIDENT’S LETTER
 

(PHOTO OF SHAUN P. MATHEWS)

 
Dear Shareholder,
 
ING 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 equivalent to a significant portion of its equity portfolio. The Fund also hedges most of its foreign currency exposure to reduce volatility of total returns.
 
For the fiscal year ended February 28, 2010, the Fund made quarterly total distributions of $1.77 per share, all consisting of return of capital. During the fiscal year, the Fund reduced its quarterly distribution from $0.465 to $0.372 per quarter, commencing with the distribution paid on January 15, 2010.
 
Based on net asset value (“NAV”), the Fund provided a total return of 35.81% for the fiscal year ended February 28, 2010.(1) This NAV return reflects an increase in its NAV from $11.29 on February 28, 2009 to $13.37 on February 28, 2010. Based on its share price, the Fund provided a total return of 57.38% for the fiscal year ended February 28, 2010.(2) This share price return reflects an increase in its share price from $10.42 on February 28, 2009 to $14.30 on February 28, 2010.
 
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 Fund’s performance.
 
At ING Funds our mission is to set the standard in helping our clients manage their financial future. We seek to assist you and your financial advisor by offering a range of global investment solutions. We invite you to visit our website at www.ingfunds.com. Here you will find information on our products and services, including current market data and fund statistics on our open- and closed-end funds. You will see that we offer a broad variety of equity, fixed income and multi-asset funds that aim to fulfill a variety of investor needs.
 
We thank you for trusting ING Funds with your investment assets, and we look forward to serving you in the months and years ahead.
 
Sincerely,
 
(-s- Shaun P. Mathews)
Shaun P. Mathews
President & Chief Executive Officer
ING Funds
April 9, 2010
 
The views expressed in the President’s 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 ING Funds disclaim any responsibility to update such views. These views may not be relied on as investment advice and because investment decisions for an ING Fund are based on numerous factors, may not be relied on as an indication of investment intent on behalf of any ING 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.
 
For more complete information, or to obtain a prospectus for any ING Fund, please call your Investment Professional or the Fund’s Shareholder Service Department at (800) 992-0180 or log on to www.ingfunds.com. The prospectus should be read carefully before investing. Consider the fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this information and other information about the fund. Check with your Investment Professional to determine which funds are available for sale within their firm. Not all funds are available for sale at all firms.
 
(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 Fund’s dividend reinvestment plan.
 
(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 Fund’s dividend reinvestment plan.


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Market Perspective:  Year Ended February 28, 2010
 
 
In our semi-annual report, we described how global equities in the form of the MSCI World IndexSM(1) measured in local currencies, including net reinvested dividends (“MSCI” for regions discussed below), staged a dramatic recovery beginning on March 9, from a 22% deficit for the calendar year to date. Smaller gains were made in the second half of the fiscal year, and for the whole fiscal year the index rose 46.06%. (The MSCI World IndexSM(1) returned 54.30% for the entire fiscal year, measured in U.S. dollars.) In currencies, the U.S. dollar, on a trade weighted basis, touched a 15-month low in late November but rebounded somewhat against European currencies. For the fiscal year, the U.S. dollar lost 6.9% to the euro, 9.0% against the yen, and 6.4% against the pound.
 
Gradually, the seeds of recovery from global recession started to bear fruit as opposed to just the “green shoots” on which the prices of risky assets had improbably surged since March. The financial crisis that caused the recession led governments to intervene massively to recapitalize companies considered systemically important, or at least make practically unlimited amounts of liquidity available to them at low cost. These were mainly banks and other financial institutions, but in the U.S. also included major auto makers. Some financial giants once thought impregnable now sit meekly under government control. Interest rates have been reduced to record low levels to encourage these institutions to lend and generally to support demand. Bank lending has continued to stagnate however (except in China, where banks tend to follow government directions).
 
“Cash-for-Clunkers” programs were successfully introduced in a number of countries, under which governments subsidized the trade-in of old vehicles for newer models. In the U.S. the government offered an $8,000 tax credit to first-time home buyers and extended jobless benefits. In Europe, to reduce the number of workers being laid off, corporations were subsidized to keep them on part time. The U.K. reduced value added tax (“VAT”).
 
Government budget deficits have soared to modern-day records: in the U.S. alone $1.42 trillion for the fiscal year ending September 2009. To keep interest rates down the Federal Reserve Board and the Bank of England have been buying U.S. Treasury bonds in a strategy known as quantitative easing.
 
What will happen when large-scale government intervention ends, is probably the greatest concern for investors. But China’s rate of gross domestic product (“GDP”) growth is now back above 10% and some key areas of the economy are clearly looking better.
 
House prices have started to rise again. The Standard & Poor’s (“S&P”)/Case-Shiller National U.S. Home Price Index(2) of house prices in 20 cities was reported in February to have risen for seven consecutive months and was only down 3.1% from a year earlier. Sales of existing homes reached the highest levels since February 2007 but then fell in December and January, perhaps distorted by tax credit effects.
 
On the employment front, improvement has so far been too slow to sustain a vigorous recovery. Jobs were still being lost as our fiscal year ended, although the trend is falling. The unemployment rate was reported at 9.7% in February, having peaked at 10.2%. Wage growth remains weak and the participation rate (percentage of the population in the labor force) fell to 64.6%, the lowest level since August 1985, before edging up in January.
 
At least the economy has started to expand again after four quarterly declines. In the third quarter of 2009, GDP in the U.S. rose by 2.2% at an annual rate and in the fourth quarter 5.90%, largely due to inventory rebuilding. U.S. equities, represented by the S&P 500® Composite Stock Price (“S&P 500®”) Index(3) including dividends returned 53.62% in the fiscal year, five sixths of it in the first half. The rally was led by the financials sector which almost doubled in value. The index suffered its first monthly fall since February 2009 in October, when a rather flat personal incomes report issued on the last day of the month drove the market down by over 2%. A more serious setback took place in January, when, after a bright start, concerns over the employment situation, enforced credit tightening in China and the possibility of sovereign debt default in Greece depressed risk appetites and sent markets tumbling. Profits for S&P 500® companies suffered their ninth straight quarter of annual decline in the third quarter before showing strong improvement in the fourth.
 
In international markets, the MSCI Japan® Index(4) rose 21.76% over the fiscal year, but actually fell nearly 6.00% in the second half. GDP resumed growth in the fourth quarter, bolstered by government


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Market Perspective:  Six Months Ended August 31, 2009
 
stimulus and because imports are falling faster than exports. But domestic demand is generally weak, with wages down for 18 consecutive months and deflation again the norm. The MSCI Europe ex UK® Index(5) surged 44.27% for the entire fiscal year. As in the U.S. the region’s economy returned to growth in the third quarter of 2009, by 0.4% over the previous quarter, but only rose by 0.1% in the fourth quarter. Adding to the sense of a stalled recovery, composite sentiment and purchasing managers’ indices slipped after months of increase. Unemployment rose to a decade-high 9.9% and stayed there. Greece’s credit rating was downgraded on concerns about its burgeoning budget deficit. The MSCI UK® Index(6) gained 46.17% for the entire fiscal year. The U.K. had to wait until the fourth quarter for a rise in GDP, of 0.3%. Consumers continued to pay down debt at record rates and the household savings rate rose to 8.6%, the highest since 1998. Yet unemployment stabilized at 7.8% and purchasing managers’ indices held firmly in expansion mode. House prices resumed rising on an annual basis but ominously fell in February for the first month in ten.
(1) The MSCI World IndexSM is 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.
 
(2) The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly.
 
(3) The S&P 500® Index is 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.
 
(4) The MSCI Japan® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Japan.
 
(5) The MSCI Europe ex UK® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe, excluding the UK.
 
(6) The MSCI UK® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in the UK.
 
All indices are unmanaged and investors cannot invest directly in an index.
 
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 Fund’s performance is subject to change since the period’s end and may be lower or higher than the performance data shown. Please call (800) 992-0180 or log on to www.ingfunds.com to obtain performance data current to the most recent month end.
 
Market Perspective reflects the views of ING’s Chief Investment Risk Officer only through the end of the period, and is subject to change based on market and other conditions.


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ING Global Advantage and Premium Opportunity Fund
Portfolio Managers’ Report
 

 
Country Allocation
as of February 28, 2010
(as a percent of net assets)
 
Portfolio holdings are subject to change daily.
 

 
ING Global Advantage and Premium Opportunity Fund’s (the “Fund”) primary investment objective is to provide 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 diversified global equity portfolio; and
 
•  utilizing an integrated option writing strategy.
 
The Fund is managed by Paul Zemsky, Vincent Costa, Jody I. Hrazanek, Carl Ghielen, Martin Jansen, Bas Peeters and Frank van Etten, Portfolio Managers, ING Investment Management Co. — the Sub-Adviser.
 
Equity Portfolio Construction: Under normal market conditions, the Fund invests in a diversified portfolio of common stocks of companies located in a number of different countries throughout the world, normally in approximately 450-500 common stocks, seeking to reduce the Fund’s exposure to individual stock risk. The Fund normally invests across a broad range of countries (usually 25-30 countries), industries and market sectors, including investments in issuers located in countries with emerging markets.
 
The Fund’s weighting between U.S. and international equities depends on the Sub-Adviser’s ongoing assessment of market opportunities for the Fund. Under normal market conditions, the Fund seeks to maintain a target weighting of 60% in U.S. domestic common stocks and not less than 40% in international (ex-U.S.) common stocks.
 
The Fund’s 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 writing (selling) index call options on selected indices in an amount equal to approximately 60% to 100% of the value of the Fund’s holdings in common stocks.
 
Writing index call options involves granting the buyer the right to appreciation of the value of an index above at a particular price (the “strike price”) at a particular time. If the purchaser exercises an index call option sold by the Fund, the Fund will pay the purchaser the difference between the cash value of the index and the strike price of the option.
 
The Fund seeks to generate gains from its portfolio index call option strategy and, to a lesser extent, income from dividends on the common stocks held in the Fund’s portfolio. The extent of index call option writing activity depends upon market conditions and the Sub-Adviser’s ongoing assessment of the attractiveness of writing index call options on selected indices. Index call options are primarily written in over-the-counter markets with major international banks, broker-dealers and financial institutions. The Fund may also write call options in exchange-listed option markets.
 
The Fund writes call options that are generally short-term (between 10 days and three months until expiration) and at- or near-the-money. The Fund typically maintains its covered call positions until expiration, but it retains the option to buy back the covered call options and sell new covered call options. Lastly, in order to reduce volatility of NAV returns, the Fund employs a policy to hedge major foreign currencies.
 
Performance: Based on net asset value (“NAV”) as of February 28, 2010, the Fund provided a total return of 35.81% for the year. This NAV return reflects an increase in its NAV from $11.29 on February 28, 2009 to $13.37 on February 28, 2010. Based on its share price as of February 28, 2010, the Fund provided a total return of 57.38% for the year. This share price return reflects an increase in its share price from $10.42 on February 28, 2009 to $14.30 on February 28, 2010. The Standard & Poor’s 500® Composite Stock Price Index(1) (“S&P 500® Index”), the Morgan Stanley Capital International — Europe, Australasia and Far East® Index(2) (“MSCI EAFE® Index”) and the Chicago Board Options Exchange (“CBOE”) BuyWrite Monthly Index(3) returned 53.62%, 54.58% and 39.32%, respectively, for the reporting period. During the period, the Fund made quarterly total distributions of $1.77 per share, all consisting of return of capital. During the fiscal year, the Fund

 
Top Ten Holdings*
as of February 28, 2010
(as a percent of net assets)
 
           
iShares MSCI EAFE Index Fund 
    2.0   %
Microsoft Corp. 
    1.8   %
International Business Machines Corp. 
    1.5   %
AT&T, Inc. 
    1.4   %
General Electric Co. 
    1.4   %
Pfizer, Inc. 
    1.4   %
ExxonMobil Corp. 
    1.2   %
Chevron Corp. 
    1.2   %
Wells Fargo & Co. 
    1.1   %
Hewlett-Packard Co. 
    1.1   %
 
  Excludes short-term investments related to ING Institutional  
Prime Money Market Fund – Class I.
 
Portfolio holdings are subject to change daily.
 


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ING Global Advantage and Premium Opportunity Fund
Portfolio Managers’ Report
 
reduced its quarterly distribution from $0.465 to $0.372 per quarter, commencing with the distribution paid on January 15, 2010. As of February 28, 2010, the Fund had 18,129,510 shares outstanding.
 
Market Review: The equity portfolio of the Fund uses a customized reference index (which is a blend of 60% S&P 500® Index and 40% MSCI EAFE® Index) to reflect the strategic emphasis of the Fund. As the intensity of the global crisis started to abate in early March 2009, global markets recovered strongly as investors gained confidence that the unprecedented levels of monetary and fiscal support would arrest the global economic contraction. Subsequently, both the S&P 500® Index and the MSCI EAFE® Index saw very high returns during the period, returning 53.62% and 54.58% respectively. The blended reference index returned 54.15% for the one year period.
 
Equity Portfolio: ING’s International Index Plus strategy is utilized for the international equity portion of the Fund. For the review period, the strategy outperformed its benchmark, the MSCI EAFE® Index. The predictive power of the models employed was strong, and the Fund was consequently broadly appropriately positioned. By design the strategy approximates the regional and sector weights of the index. Materially positive security selection results from the materials, financials and consumer discretionary sectors accounted for the bulk of the excess performance. This was partly negated by negative selection arising in the healthcare and information technology sectors.
 
The Fund’s U.S. domestic equity component underperformed the S&P 500® Index due mainly to negative selection effect in certain sectors. In particular, financials, consumer discretionary and industrials acted as a drag on performance. Positive value was added by selection in consumer staples and materials. As markets surged in April and May, valuation factors were effective, but the market’s change in focus to lower-quality stocks was problematic for our quality factors in those months. As markets stabilized in June, the efficacy of valuation factors ebbed but rebounded in the latter part of the period. Market recognition factors were problematic for a protracted period, with only some months working well. Quality factors had mixed performance during the period, with factors like accruals working well, while those such as return on equity detracted from performance.
 
Option Portfolio: The Fund generates premiums and seeks gains by writing (selling) call options on a basket of market indexes on a portion of the value of the equity portfolio. During the period, the Fund sold short-maturity options on the S&P 500® Index, the Dow Jones Euro STOXX 50® Index, the Nikkei 225 Index and the FTSE 100 Index®. The strike prices of the traded options were typically at or near the money, and the average expiration dates were between three and six weeks. The coverage ratio was maintained at approximately 65-70% throughout the period. Option positions resulted in an overall drag on performance for the period, as global equity markets experienced significant rallies, particularly in the middle part of the year. As a result, many of the options expired in the money. Volatility, as measured by the VIX Index, decreased during the period as uncertainty in the global markets faded and equities rallied. The market experienced spikes in implied volatility around specific economic concerns but the general trend was lower.
 
The Fund continued its policy of hedging major currencies to reduce volatility of NAV returns. Its hedges detracted from performance for the period amid the global turmoil. We saw the beginning of a reversal of this theme at the end of the period.
 
Current Strategy & Outlook: The underlying U.S. and international strategies seek to reward investors with sector- and country- diversification close to the S&P 500® Index and the MSCI EAFE® Index, while seeking outperformance through portfolio construction techniques. If the market falls or moves sideways, the premiums generated from our call-writing, dividends and our disciplined equity strategies may make up an important part of the Fund’s total return. If the market rallies, the strategy may generate an absolute positive return, but the upside may be limited as call options will likely be exercised.
 
We believe the global economic and financial outlooks continue to improve. Considerable headwinds for consumption in the developed markets do, however, suggest that economic growth in 2010 will be below average for the first year of a recovery. Interest rates are likely to remain low for a protracted period, but probably need to rise by late 2010. We believe market volatility will remain higher than the level preceding the financial crisis, which should support the generation of relatively attractive levels of premiums received through the call writing activities of the Fund, albeit lower than the average levels seen in the 2009 fiscal year.
(1)  The S&P 500® Index is 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.
 
(2)  The MSCI EAFE® Index is an unmanaged index that measures the performance of securities listed on exchanges in Europe, Australasia and the Far East. It includes the reinvestment of dividends net of withholding taxes, but does not reflect fees, brokerage commissions or other expenses of investing.
 
(3)  The CBOE BuyWrite Monthly IndexSM is a passive total return index based on selling the near-term, at-the-money S&P 500® Index call option against the S&P 500® stock index portfolio each month, on the day the current contract expires.
 
Portfolio holdings and characteristics are subject to change and may not be representative of current holdings and characteristics.
 
Performance data represents past performance and is no guarantee of future results.
 
Past performance is not indicative of future results. The indices do not reflect fees, brokerage commissions, taxes or other expenses of investing. Investors cannot invest directly in an index.


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Shareholders and Board of Trustees
ING Global Advantage and Premium Opportunity Fund
 
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of ING Global Advantage and Premium Opportunity Fund as of February 28, 2010, 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 four-year period then ended, and the period from October 31, 2005 (commencement of operations) to February 28, 2006. 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 audits 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. Our procedures included confirmation of securities owned as of February 28, 2010, by correspondence with the custodian, transfer agent, and brokers or by other appropriate auditing procedures where 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 ING Global Advantage and Premium Opportunity Fund as of February 28, 2010, and the results of its operations, the changes in its net assets, and the financial highlights for the periods specified in the first paragraph above, in conformity with U.S. generally accepted accounting principles.
 
(KPMG LLP)
 
Boston, Massachusetts
April 26, 2010


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STATEMENT OF ASSETS AND LIABILITIES as of February 28, 2010
 
         
ASSETS:
       
Investments in securities at value*
  $ 236,271,538  
Short-term investments in affiliates**
    4,381,000  
Cash
    2,702,869  
Cash collateral for futures
    409,950  
Foreign currencies at value***
    54,365  
Receivables:
       
Investment securities sold
    344,960  
Dividends and interest
    525,421  
Unrealized appreciation on forward foreign currency contracts
    756,201  
Prepaid expenses
    2,158  
         
Total assets
    245,448,462  
         
         
LIABILITIES:        
Payable for investment securities purchased
    10,023  
Unrealized depreciation on forward foreign currency contracts
    425,451  
Payable to affiliates
    37,062  
Payable for trustee fees
    4,780  
Other accrued expenses and liabilities
    187,114  
Written optionsˆ
    2,357,763  
         
Total liabilities
    3,022,193  
         
NET ASSETS (equivalent to $13.37 per share on 18,129,510 shares outstanding)
  $ 242,426,269  
         
         
NET ASSETS WERE COMPRISED OF:
       
Paid-in capital — shares of beneficial interest at $0.01 par value (unlimited shares authorized)
  $ 275,034,853  
Distributions in excess of net investment income
    (2,896,957 )
Accumulated net realized loss on investments, foreign currency related transactions, futures, and written options
    (53,606,782 )
Net unrealized appreciation on investments, foreign currency related transactions, futures, and written options
    23,895,155  
         
NET ASSETS
  $ 242,426,269  
         
         
       
* Cost of investments in securities
  $ 213,707,254  
** Cost of short-term investments in affiliates
  $ 4,381,000  
*** Cost of foreign currencies
  $ 51,543  
ˆ Premiums received on written options
  $ 3,337,062  
 
 
See Accompanying Notes to Financial Statements


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STATEMENT OF OPERATIONS for the year ended February 28, 2010
 
         
 
INVESTMENT INCOME:
       
Dividends, net of foreign taxes withheld*(1)
  $ 5,978,009  
Interest
    62,610  
         
Total investment income
    6,040,619  
         
         
EXPENSES:
       
Investment management fees
    1,732,704  
Transfer agent fees
    28,371  
Administrative service fees
    231,026  
Shareholder reporting expense
    119,402  
Professional fees
    45,907  
Custody and accounting expense
    125,913  
Trustee fees
    7,220  
Miscellaneous expense
    52,879  
         
Total expenses
    2,343,422  
Net waived and reimbursed fees
    (31,632 )
         
Net expenses
    2,311,790  
         
Net investment income
    3,728,829  
         
         
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY RELATED TRANSACTIONS, FUTURES AND WRITTEN OPTIONS:
       
Net realized gain (loss) on:
       
Investments
    (1,602,209 )
Foreign currency related transactions
    (8,954,144 )
Futures
    2,071,755  
Written options
    (15,830,737 )
         
Net realized loss on investments, foreign currency related transactions, futures and written options
    (24,315,335 )
         
Net change in unrealized appreciation or depreciation on:
       
Investments
    93,809,985  
Foreign currency related transactions
    (276,171 )
Futures
    130,714  
Written options
    (4,011,099 )
         
Net change in unrealized appreciation or depreciation on investments, foreign currency related transactions, futures and written options
    89,653,429  
         
Net realized and unrealized gain on investments, foreign currency related transactions, futures and written options
    65,338,094  
         
Increase in net assets resulting from operations
  $ 69,066,923  
         
         
       
* Foreign taxes withheld
  $ 287,766  
(1) Dividends from affiliates
  $ 92,284  
 
 
See Accompanying Notes to Financial Statements


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STATEMENTS OF CHANGES IN NET ASSETS
 
                 
    Year Ended
  Year Ended
    February 28,
  February 28,
   
2010
 
2009
 
FROM OPERATIONS:
               
Net investment income
  $ 3,728,829     $ 5,565,187  
Net realized loss on investments, foreign currency related transactions, futures, and written options
    (24,315,335 )     (34,335,088 )
Net change in unrealized appreciation or depreciation on investments, foreign currency related transactions, futures, and written options
    89,653,429       (55,949,113 )
                 
Increase (decrease) in net assets resulting from operations
    69,066,923       (84,719,014 )
                 
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS:
               
Net investment income
          (13,517,200 )
Return of capital
    (31,827,194 )     (20,392,899 )
                 
Total distributions
    (31,827,194 )     (33,910,099 )
                 
                 
FROM CAPITAL SHARE TRANSACTIONS:
               
Reinvestment of distributions
    2,069,138        
Cost of shares repurchased, net of commissions
    (1,428,482 )     (1,100,260 )
                 
Net increase (decrease) in net assets resulting from capital share transactions
    640,656       (1,100,260 )
                 
Net increase (decrease) in net assets
    37,880,385       (119,729,373 )
                 
                 
NET ASSETS:
               
Beginning of year
    204,545,884       324,275,257  
                 
End of year
  $ 242,426,269     $ 204,545,884  
                 
Undistributed net investment income (distributions in excess of net investment income)
at end of year
  $ (2,896,957 )   $ 2,461,040  
                 
 
 
See Accompanying Notes to Financial Statements


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ING Global Advantage and Premium Opportunity Fund
Financial Highlights
 
Selected data for a share of beneficial interest outstanding throughout each year or period.
 
                                                 
        Year
  Year
  Year
  Year
  October 31,
        Ended
  Ended
  Ended
  Ended
  2005(1) to
        February 28,
  February 28,
  February 29,
  February 28,
  February 28,
        2010   2009   2008   2007   2006
 
Per Share Operating Performance:
                                               
Net asset value, beginning of period
    $       11.29       17.79       21.19       20.24       19.06 (2)
Income (loss) from investment operations:
                                               
Net investment income
    $       0.21 *     0.31 *     0.30 *     0.26       0.06 *
Net realized and unrealized gain (loss) on investments
    $       3.64       (4.95 )     (0.73 )     2.55       1.28  
Total from investment operations
    $       3.85       (4.64 )     (0.43 )     2.81       1.34  
Less distributions from:
                                               
Net investment income
    $             0.74             0.04       0.16  
Net realized gains on investments
    $                   2.40       1.54        
Return of capital
    $       1.77       1.12       0.57       0.28        
Total distributions
    $       1.77       1.86       2.97       1.86       0.16  
Net asset value, end of period
    $       13.37       11.29       17.79       21.19       20.24  
Market value, end of period
    $       14.30       10.42       16.73       21.11       18.61  
Total investment return at net asset value(3)
    %       35.81       (26.96 )     (2.40 )     14.81       7.08  
Total investment return at market value(4)
    %       57.38       (28.32 )     (7.87 )     24.40       (6.17 )
                                                 
Ratios and Supplemental Data:
                                               
Net assets, end of period (000’s)
    $       242,426       204,546       324,275       385,433       365,374  
Ratios to average net assets:
                                               
Gross expenses prior to expense waiver(5)
    %       1.01       0.99       0.97       0.95       1.06  
Net expenses after expense waiver(5)(6)
    %       1.00 **     0.99 **     0.97 **     0.95       1.00  
Net investment income after expense waiver(5)(6)
    %       1.61 **     2.01 **     1.45 **     1.29       0.86  
Portfolio turnover rate
    %       141       178       194       132       41  
 
 
(1) Commencement of operations.
 
(2) Net asset value at beginning of period reflects the deduction of the sales load of $0.90 per share and offering costs of $0.04 per share paid by the shareholder from the $20.00 offering price.
 
(3) 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.
 
(4) 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 Fund’s dividend reinvestment plan. Total investment return at market value is not annualized for periods less than one year.
 
(5) Annualized for periods less than one year.
 
(6) The Investment Adviser has agreed to limit expenses, (excluding interest, taxes, brokerage, extraordinary expenses and acquired fund fees and expenses) subject to possible recoupment by ING Investments, LLC within three years of being incurred.
 
* Calculated using average number of shares outstanding throughout the period.
 
** 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 ratio.
 
 
See Accompanying Notes to Financial Statements


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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010
 
NOTE 1 — ORGANIZATION
 
ING 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.
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
 
The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements, and such policies are in conformity with U.S. generally accepted accounting principles for investment companies.
 
A.  Security Valuation. Investments in equity securities traded on a national securities exchange are valued at the last reported sale price. Securities reported by NASDAQ are valued at the NASDAQ official closing prices. Securities traded on an exchange or NASDAQ for which there has been no sale and equity securities traded in the over-the-counter-market are valued at the mean between the last reported bid and ask prices. All investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at that time. Debt securities acquired with more than 60 days to maturity are fair valued using matrix pricing methods determined by an independent pricing service which takes into consideration such factors as yields, maturities, liquidity, ratings and traded prices in similar or identical securities. Investments in open-end mutual funds are valued at the net asset value. Investments in securities maturing in 60 days or less from date of acquisition are valued at amortized cost which approximates market value.
 
Securities for which valuations are not readily available from an independent pricing service may be valued by brokers which use prices provided by market makers or estimates of fair market value obtained from yield data relating to investments or securities with similar characteristics.
 
Securities and assets for which market quotations are not readily available (which may include certain restricted securities that are subject to limitations as to their sale) are valued at their fair values as defined by the 1940 Act, and as determined in good faith by or under the supervision of the Fund’s Board of Trustees (“Board”), in accordance with methods that are specifically authorized by the Board. Securities traded on exchanges, including foreign exchanges, which close earlier than the time that the Fund calculates its net asset value (“NAV”) may also be valued at their fair values, as defined by the 1940 Act, and as determined in good faith by or under the supervision of the Board, in accordance with methods that are specifically authorized by the Board. The value of a foreign security traded on an exchange outside the United States is generally based on its price on the principal foreign exchange where it trades as of the time the Fund determines its NAV or if the foreign exchange closes prior to the time the Fund determines its NAV, the most recent closing price of the foreign security on its principal exchange. Trading in certain non-U.S. securities may not take place on all days on which the NYSE Euronext (“NYSE”) is open. Further, trading takes place in various foreign markets on days on which the NYSE is not open. Consequently, the calculation of the Fund’s NAV may not take place contemporaneously with the determination of the prices of securities held by the Fund in foreign securities markets. Further, the value of the Fund’s assets may be significantly affected by foreign trading on days when a shareholder cannot purchase or redeem shares of the Fund. In calculating the Fund’s NAV, foreign securities denominated in foreign currency are converted to U.S. dollar equivalents. If an event occurs after the time at which the market for foreign securities held by the Fund closes but before the time that the Fund’s NAV is calculated, such event may cause the closing price on the foreign exchange to not represent a readily available reliable market value quotation for such securities at the time the Fund determines its NAV. In such a case, the Fund will use the fair value of such securities as determined under the Fund’s valuation procedures. Events after the close of trading on a foreign market that could require the Fund to fair value some or all of its foreign securities include, among others, securities trading in the U.S. and other markets, corporate announcements, natural and other disasters, and political and other events. Among other elements of analysis in the determination of a security’s fair value, the Board has authorized the use of one or more independent research services to assist with such


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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)
 
determinations. An independent research service may use statistical analyses and quantitative models to help determine fair value as of the time the Fund calculates its NAV. There can be no assurance that such models accurately reflect the behavior of the applicable markets or the effect of the behavior of such markets on the fair value of securities, or that such markets will continue to behave in a fashion that is consistent with such models. Unlike the closing price of a security on an exchange, fair value determinations employ elements of judgment. Consequently, the fair value assigned to a security may not represent the actual value that the Fund could obtain if it were to sell the security at the time of the close of the NYSE. Pursuant to procedures adopted by the Board, the Fund is not obligated to use the fair valuations suggested by any research service, and valuation recommendations provided by such research services may be overridden if other events have occurred or if other fair valuations are determined in good faith to be more accurate. Unless an event is such that it causes the Fund to determine that the closing prices for one or more securities do not represent readily available reliable and market value quotations at the time the Fund determines its NAV, events that occur between the time of the close of the foreign market on which they are traded and the close of regular trading on the NYSE will not be reflected in the Fund’s NAV.
 
Options that are traded over-the-counter will be valued using one of three methods: (1) dealer quotes; (2) industry models with objective inputs; or (3) by using a benchmark arrived at by comparing prior-day dealer quotes with the corresponding change in the underlying security. Exchange traded options will be valued using the last reported sale. If no last sale is reported, exchange traded options will be valued using an industry accepted model such as “Black Scholes.” Options on currencies purchased by the Fund are valued using industry models with objective inputs.
 
Fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. 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 the sub-adviser’s 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 which are valued at amortized cost, which approximates fair value, are generally considered to be Level 2 securities under applicable accounting rules. A table summarizing the Fund’s investments under these levels of classification is included following the Portfolio of Investments.
 
For the year ended February 28, 2010, 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 the end of the day.
 
  (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 the end of the day, the Fund does not isolate the portion of

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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)
 
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 Fund’s 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 at period end, 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.
 
D.  Distributions to Shareholders. The Fund intends to make quarterly distributions from its cash available for distribution, which consists of the Fund’s dividends and interest income after payment of Fund expenses, net option premiums and net realized and unrealized gains on investments. 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. generally accepted accounting principles for investment companies.
 
The tax treatment and characterization of the Fund’s 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 Fund’s tax year, and will be reported to shareholders at that time. A significant portion of the Fund’s 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 Fund’s tax positions taken on federal income tax returns for all open tax years in making this determination. No capital gain distributions shall be made until the capital loss carryforwards have been fully utilized or expire.
 
F.  Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 Fund’s 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


13


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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)
 
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 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. Credit risk relates to the ability of the issuer to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield bonds are subject to credit risk to a greater extent than lower-yield, higher-quality bonds.
 
   Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.
 
   Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.
 
   Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.
 
   Risks of Investing in Derivatives. The Fund’s 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.
 
   The use of these strategies involves certain special risks, including a possible imperfect correlation, or even no correlation, between price movements of derivative instruments and price movements of related investments. While some strategies involving derivative instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in related investments or otherwise, due to the possible inability of the Fund to purchase or sell a portfolio security at a time that otherwise would be favorable or the possible need to sell a portfolio security at a disadvantageous time because the Fund is required to maintain asset coverage or offsetting positions in connection with transactions in derivative instruments. Additional associated risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Fund. Associated risks are not the risks that the Fund is attempting to increase or decrease exposure to, per its investment objectives, but are the additional risks from investing in derivatives. Examples of these associated risks are liquidity risk, which is the risk that the Fund will not be able to sell the derivative in the open market in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. Associated risks can be different for each type of derivative and are discussed by each derivative type in the following notes.
 
   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 Fund’s 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 Fund’s International Swap and Derivatives Association, Inc. (“ISDA”) Master Agreements (“Master Agreements”). These agreements are with select counterparties and they govern transactions, including certain over-


14


Table of Contents

NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)
 
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 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.
 
   The Fund’s maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain in excess of any collateral pledged by the counterparty to the Fund. For purchased OTC options, the Fund bears the risk of loss in the amount of the premiums paid and the change in market value of the options should the counterparty not perform under the contracts. The Fund did not enter into any purchased OTC options during the year ended February 28, 2010.
 
   The Fund has 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 Fund’s net assets and or a percentage decrease in the Fund’s NAV, which could cause the Fund to accelerate payment of any net liability owed to the counterparty. The contingent features are established within the Fund’s Master Agreements.
 
   Written options by the Fund do not give rise to counterparty credit risk, as written options obligate the Fund to perform and not the counterparty. As of February 28, 2010, the total value of written OTC call options subject to Master Agreements in a net liability position was $2,357,763. If a contingent feature had been triggered, the Fund could have been required to pay this amount in cash to its counterparties. The Fund did not hold or post collateral for its open written OTC call options at year end.
 
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 Fund’s 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.
 
   For the year ended February 28, 2010, the Fund has entered into forward foreign currency contracts with the obligation to buy and sell specified foreign currencies in the future at a currently negotiated forward rate in order to increase or decrease exposure to foreign exchange rate risk. The Fund uses forward foreign currency contracts to enhance potential gain, hedge against anticipated currency exchange rates, and to maintain diversity and liquidity of the portfolio.
 
   During the year ended February 28, 2010, the Fund had average contract amounts on forward foreign currency contracts to buy and sell of $89,367 and $73,852,024, respectively.


15


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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   The Fund may enter into futures contracts involving foreign currency, interest rates, securities and securities indices. The Fund intends to limit its use of futures contracts and futures options to “bona fide hedging” transactions, as such term is defined in applicable regulations, interpretations and practice. 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 28, 2010, the Fund has purchased futures contracts on various equity indexes to increase exposure to equity risk. 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 Fund’s securities.
 
   During the year ended February 28, 2010, the Fund had an average market value of $7,349,440 on purchased futures contracts.
 
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 is subject to equity price risk in the normal course of pursuing its investment objectives. During the year ended February 28, 2010, the Fund has written call options on equity indexes in an attempt to manage this risk. Please refer to Note 6 for the volume of written option activity during the period ended February 28, 2010.
 
J.  Indemnifications. In the normal course of business, the Fund may enter into contracts that provide certain indemnifications. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, management believes, based on experience, the risk of loss from such claims is considered remote.
 
NOTE 3 — INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
 
ING Investments, LLC (“ING Investments” or the “Investment Adviser”), an Arizona limited liability company, is the Investment Adviser of the Fund. The Fund pays the Investment Adviser for its services under the investment management agreement (“Management Agreement”), a fee, payable monthly, based on an annual rate of 0.75% of the Fund’s average daily managed assets. For purposes of the Management Agreement, managed assets are defined as the Fund’s average daily gross asset value, minus the sum of the Fund’s 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 28, 2010, there were no preferred shares outstanding.


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NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 3 — INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES (continued)
 
The Investment Adviser entered into a sub-advisory agreement (“Sub-Advisory Agreement”) with ING IM. Subject to policies as the Board or the Investment Adviser might determine, ING IM manages the Fund’s assets in accordance with the Fund’s investment objectives, policies and limitations.
 
ING Funds are permitted to invest end-of-day cash balances into ING Institutional Prime Money Market Fund. Investment management fees paid by the Fund will be reduced by an amount equal to the management fees paid indirectly to the ING Institutional Prime Money Market Fund with respect to assets invested by the Fund. For the year ended February 28, 2010, the Fund waived $6,445 of such management fees. These fees are not subject to recoupment.
 
ING Funds Services, LLC, a Delaware limited liability company, (the “Administrator”) serves as Administrator to the Fund. The Fund pays the Administrator for its services a fee based on an annual rate of 0.10% of the Fund’s average daily managed assets. The Investment Adviser, ING IM, and the Administrator are indirect, wholly-owned subsidiaries of ING Groep N.V. (“ING Groep”). ING Groep is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services.
 
On October 19, 2008, ING Groep announced that it reached an agreement with the Dutch government to strengthen its capital position. ING Groep issued non-voting core Tier-1 securities for a total consideration of EUR 10 billion to the Dutch State. The transaction boosted ING Bank’s core Tier-1 ratio, strengthened the insurance balance sheet and reduced ING Groep’s Debt/Equity ratio.
 
On October 26, 2009, ING Groep announced that it will move towards a complete separation of its banking and insurance operations. A formal restructuring plan (“Restructuring Plan”) was submitted to the European Commission (“EC”), which approved it on November 18, 2009. It is expected that the Restructuring Plan will be achieved over the next four years by a divestment of all insurance operations (including ING Investment Management) as well as a divestment of ING Direct US by the end of 2013. ING Groep will explore all options, including initial public offerings, sales or combinations thereof.
 
On December 21, 2009, ING Groep announced that it has completed its planned repurchase of EUR 5 billion of Core Tier 1 securities issued in November 2008 to the Dutch State and its EUR 7.5 billion rights issue.
 
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, leverage expenses, and 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 fees waived and other expenses assumed by the Investment Adviser during the previous 36 months, but only if, after such recoupment, the Fund’s expense ratio does not exceed the percentage described above. The Expense Limitation Agreement is contractual and shall renew automatically for one-year terms unless ING Investments or the Fund provides written notice of the termination within 90 days of the end of the then current term or upon written termination of the Management Agreement.
 
Waived and reimbursed fees and any recoupment by the Investment Adviser of such waived and reimbursed fees are reflected on the accompanying Statement of Operations for the Fund.
 
As of February 28, 2010, the amounts of waived and reimbursed fees that are subject to possible recoupment by the Investment Adviser, and the related expiration dates are as follows:
 
             
February 28,    
2010   2011   2012   Total
 
$—
  $—   $25,187   $25,187
 
NOTE 4 — OTHER TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES
 
As of February 28, 2010, the Fund had the following amounts recorded in payable to affiliates on the accompanying Statement of Assets and Liabilities:
 
         
Accrued
       
Investment
  Accrued
   
Management
  Administrative
   
Fees   Fees   Total
 
$18,793   $18,269   $37,062
 
The Fund has adopted a Retirement Policy (“Policy”) covering independent trustees of the Trust who were trustees on or before May 9, 2007, and who will have served as an independent trustee for at least five years as of the date of their retirement (as that term is defined in the Policy). Benefits under the Policy are based on an annual rate as defined in the Policy.


17


Table of Contents

NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 4 — OTHER TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES (continued)
 
The Fund has adopted a Deferred Compensation Plan (the “Plan”), which allows eligible non-affiliated trustees as described in the Plan to defer the receipt of all or a portion of the trustees fees payable. Amounts deferred are treated as though invested in various “notional” funds advised by ING Investments until distribution in accordance with the Plan.
 
NOTE 5 — PURCHASES AND SALES OF INVESTMENT SECURITIES
 
The cost of purchases and proceeds from sales of investments for the year ended February 28, 2010, excluding short-term securities, were $317,999,386 and $374,885,860, respectively.
 
NOTE 6 — TRANSACTIONS IN WRITTEN OPTIONS
 
Written option activity for the year ended February 28, 2010 was as follows:
 
                 
    Number of
   
    Contracts   Premium
 
Balance at 02/28/09
    332,312     $ 6,359,147  
Options Written
    3,835,350       52,568,749  
Options Expired
    (1,233,666 )     (13,227,898 )
Options Terminated in Closing Purchase Transactions
    (2,630,829 )     (42,362,936 )
                 
Balance at 02/28/10
    303,167     $ 3,337,062  
                 
 
NOTE 7 — CONCENTRATION OF INVESTMENT RISKS
 
All mutual funds involve risk — some more than others — and there is always the chance that you could lose money or not earn as much as you hope. The Fund’s risk profile is largely a factor of the principal securities in which it invests and investment techniques that it uses. For more information regarding the types of securities and investment techniques that may be used by the Fund and its corresponding risks, see the Fund’s most recent Prospectus and/or the Statement of Additional Information.
 
Foreign Securities and Emerging Markets. The Fund makes significant investments in foreign securities and may invest up to 20% of its managed assets in securities issued by companies located in countries with emerging markets. Investments in foreign securities may entail risks not present in domestic investments. Since investments in securities are denominated in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, as well as from movements in currency, security value and interest rate, all of which could affect the market and/or credit risk of the investments. The risks of investing in foreign securities can be intensified in the case of investments in issuers located in countries with emerging markets.
 
Leverage. Although the Fund has no current intention to do so, the Fund is authorized to utilize leverage through the issuance of preferred shares and/or borrowings, including the issuance of debt securities. In the event that the Fund determines in the future to utilize investment leverage, there can be no assurance that such a leveraging strategy will be successful during any period in which it is employed.
 
NOTE 8 — CAPITAL SHARES
 
Transactions in capital shares and dollars were as follows:
 
                 
    Year
  Year
    Ended
  Ended
    February 28,
  February 28,
   
2010
 
2009
 
Number of Shares
               
Reinvestment of distributions
    158,337        
Shares repurchased
    (153,044 )     (107,019 )
                 
Net increase (decrease) in shares outstanding
    5,293       (107,019 )
                 
$
               
Reinvestment of distributions
  $ 2,069,138        
Shares repurchased
    (1,428,482 )     (1,100,260 )
                 
Net increase (decrease)
  $ 640,656     $ (1,100,260 )
                 
 
Share Repurchase Program
 
Effective December 2008, the Board authorized an open-market share repurchase program pursuant to which the Fund may purchase, over the period ending December 31, 2009, up to 10% of its stock, in open-market transactions. There is no assurance that the Fund will purchase shares at any particular discount level or in any particular amounts. The share repurchase program seeks to enhance shareholder value by purchasing shares trading at a discount from their NAV per share, in an attempt to reduce or eliminate the discount or to increase the NAV per share of the applicable remaining shares of the Fund.
 
For the year ended February 28, 2010, the Fund repurchased 153,044 shares, representing approximately 0.8% of the Fund’s outstanding shares for a net purchase price of $1,428,482 (including commissions


18


Table of Contents

NOTES TO FINANCIAL STATEMENTS as of February 28, 2010 (continued)
 
NOTE 8 — CAPITAL SHARES (continued)
 
of $4,591). Shares were repurchased at a weighted-average discount from NAV per share of 14.25% and a weighted-average price per share of $9.30.
 
For the year ended February 28, 2009, the Fund repurchased 107,019 shares, representing approximately 0.6% of the Fund’s outstanding shares for a net purchase price of $1,100,260 (including commissions of $3,211). Shares were repurchased at a weighted-average discount from NAV per share of 11.95% and a weighted-average price per share of $10.25.
 
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. generally accepted accounting principles 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 corporations 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 Fund’s tax year ended December 31, 2009:
 
         
    Undistributed
  Accumulated
Paid-in
  Net Investment
  Net Realized
Capital
  Income   Gains/(Losses)
 
$(4,697,934)
  $(9,086,826)   $13,784,760
 
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 Fund’s tax year-end of December 31, 2010. The tax composition of dividends and distributions as of the Fund’s most recent tax year-ends were as follows:
 
         
Tax Year Ended
  Tax Year Ended
December 31, 2009   December 31, 2008
Return
  Ordinary
  Return
of Capital
  Income   of Capital
 
$31,827,194
  $13,517,200   $20,392,899
 
The tax-basis components of distributable earnings and the expiration dates of the capital loss carryforwards which may be used to offset future realized capital gains for federal income tax purposes as of the tax year ended December 31, 2009 were:
 
                 
Unrealized
  Capital Loss
  Expiration
Appreciation
  Carryforwards   Date
 
$22,207,261
  $ (6,687,204 )     2016  
      (47,317,406 )     2017  
                 
    $ (54,004,610 )        
                 
 
The Fund’s major tax jurisdictions are federal and Arizona. The earliest tax year that remains subject to examination by these jurisdictions is 2005.
 
As of February 28, 2010, no provision for income tax is required in the Fund’s financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The Fund’s 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.
 
NOTE 10 — SUBSEQUENT EVENTS
 
Distributions:  Subsequent to February 28, 2010, the Fund made a distribution of:
 
             
Per Share
           
Amount
  Declaration Date   Payable Date   Record Date
 
$0.372
  3/19/2010   4/15/2010   4/6/2010
 
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. At the Fund’s tax year end, the Fund may re-characterize payments over the course of the year across ordinary 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.
 
The Fund has evaluated events occurring after the balance sheet 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.


19


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010
 
                             
Shares               Value
 
 
 
COMMON STOCK: 94.6%
             
           
Australia: 3.2%
  150,750        
Alumina Ltd.
  $ 203,467  
  5,170        
AMP Ltd.
    27,462  
  153,121     @  
Asciano Group
    246,556  
  657        
ASX Ltd.
    21,447  
  26,199        
Australia & New Zealand Banking Group Ltd.
    542,204  
  31,275        
BHP Billiton Ltd.
    1,146,926  
  51,103        
Brambles Ltd.
    317,701  
  16,378        
Commonwealth Bank of Australia
    789,391  
  8,328        
Computershare Ltd.
    86,801  
  59,306        
Crown Ltd.
    423,953  
  8,764        
CSL Ltd.
    269,523  
  1,115        
Macquarie Group Ltd.
    45,122  
  18,947        
National Australia Bank Ltd.
    431,716  
  11,325        
Newcrest Mining Ltd.
    319,596  
  12,436        
Orica Ltd.
    277,951  
  5,237        
QBE Insurance Group Ltd.
    100,273  
  2,848        
Rio Tinto Ltd.
    179,871  
  5,212        
Suncorp-Metway Ltd.
    39,849  
  18,615        
Tattersall’s Ltd.
    39,980  
  20,616        
Wesfarmers Ltd.
    574,150  
  33,362        
Westpac Banking Corp.
    779,898  
  9,226        
Woodside Petroleum Ltd.
    358,853  
  14,532        
Woolworths Ltd.
    349,200  
  8,616        
WorleyParsons Ltd.
    189,706  
                     
                          7,761,596  
                             
             
           
Austria: 0.3%
  2,654        
Erste Bank der Oesterreichischen Sparkassen AG
    99,900  
  20,323     @  
Immoeast Immobilien Anlagen AG
    96,416  
  10,325        
OMV AG
    382,301  
  2,420        
Raiffeisen International Bank Holding AG
    108,504  
  1,979        
Wiener Staedtische Allgemeine Versicherung AG
    95,343  
                     
                          782,464  
                             
             
           
Barbados: 0.4%
  45,200     @  
Nabors Industries Ltd.
    996,208  
                     
                          996,208  
                             
             
           
Belgium: 0.4%
  14,622        
Anheuser-Busch InBev NV
    730,185  
  24,304     @  
Anheuser-Busch InBev NV — STRIP VVPR
    165  
  18,284     @  
Fortis
    62,461  
  7,900     @,X  
Fortis — STRIP VVPR
    22  
  1,571        
Groupe Bruxelles Lambert S.A.
    137,523  
                     
                          930,356  
                             
             
           
Denmark: 0.2%
  3,313     @  
Danske Bank A/S
    75,320  
  10,106        
H Lundbeck A/S
    177,575  
  4,992        
Novo-Nordisk A/S
    354,299  
                     
                          607,194  
                             
             
           
Finland: 0.1%
  23,384        
Nokia OYJ
    315,783  
  858        
Sampo OYJ
    20,792  
                     
                          336,575  
                             
             
           
France: 3.2%
  42,084     @  
Alcatel S.A.
    127,925  
  20,915        
AXA S.A.
    420,201  
  9,013        
BNP Paribas
    651,161  
  862        
Casino Guichard Perrachon S.A.
    69,257  
  559        
Christian Dior S.A.
    54,706  
  1,016        
Cie Generale D’Optique Essilor International S.A.
    61,184  
  1,441        
CNP Assurances
    129,094  
  6,285        
Compagnie Generale des Etablissements Michelin
    438,256  
  14,929        
Credit Agricole S.A.
    221,656  
  22,716        
France Telecom S.A.
    531,412  
  3,885        
Gaz de France
    142,387  
  333        
Groupe Danone
    19,452  
  3,989        
Lafarge S.A.
    258,592  
  674        
L’Oreal S.A.
    69,719  
  1,716        
LVMH Moet Hennessy Louis Vuitton S.A.
    185,865  
  2,395        
PPR
    274,471  
  9,865     @  
Renault S.A.
    405,210  
  12,647        
Sanofi-Aventis
    923,011  
  5,886        
Schneider Electric S.A.
    628,841  
  5,179        
Scor S.A.
    126,593  
  5,927        
Societe Generale
    325,751  
  3,541        
Technip S.A.
    251,911  
  14,498        
Total S.A.
    807,869  
  26,451        
Vivendi
    665,542  
                     
                          7,790,066  
                             
             
           
Germany: 2.9%
  4,232        
Allianz AG
    488,265  
  14,736        
BASF AG
    827,530  
  5,326        
Bayer AG
    352,958  
  793        
DaimlerChrysler AG
    33,081  
  7,301        
Deutsche Bank AG
    463,646  
  3,190        
Deutsche Boerse AG
    221,718  
  30,112        
Deutsche Post AG
    489,715  
  42,529        
Deutsche Telekom AG
    547,552  
  23,681        
E.ON AG
    842,709  
  2,308     @  
Hannover Rueckversicheru — Reg
    103,332  
  7,679        
HeidelbergCement AG
    391,066  
  484        
Hochtief AG
    34,067  
  800        
Metro AG
    41,022  
  2,389        
Muenchener Rueckversicherungs AG
    369,488  
  7,300        
RWE AG
    618,226  
  12,236        
SAP AG
    545,883  
  5,048        
Siemens AG
    432,838  
  14,173     @  
United Internet AG
    219,088  
                     
                          7,022,184  
                             
             
           
Greece: 0.1%
  8,008     @  
EFG Eurobank Ergasias S.A.
    63,893  
  5,042     @  
National Bank of Greece S.A.
    95,043  
  9,342     @  
Public Power Corp.
    140,587  
  1,287        
Titan Cement Co. S.A.
    31,563  
                     
                          331,086  
                             
             
           
Hong Kong: 1.1%
  79,500        
BOC Hong Kong Holdings Ltd.
    179,163  
  6,000        
Cheung Kong Holdings Ltd.
    73,185  
  36,000        
Chinese Estates Holdings Ltd.
    57,705  
  27,500        
CLP Holdings Ltd.
    190,073  
  23,626        
Hang Lung Group Ltd.
    118,770  
  34,000        
Hang Lung Properties Ltd.
    129,753  
  3,800        
Hang Seng Bank Ltd.
    55,549  
  97,000        
Hong Kong & China Gas
    218,384  
  13,300        
Hong Kong Exchanges and Clearing Ltd.
    222,458  
  36,244        
Hopewell Holdings
    106,181  
  59,000        
Hutchison Whampoa Ltd.
    423,177  
  39,000        
Hysan Development Co. Ltd.
    103,755  
  83,000        
New World Development Ltd.
    152,234  
  24,000        
Shangri-La Asia Ltd.
    39,883  
  56,000        
Sino Land Co.
    106,141  
  7,000        
Sun Hung Kai Properties Ltd.
    97,219  
  15,500        
Swire Pacific Ltd.
    173,070  
  24,000        
Wharf Holdings Ltd.
    123,585  
  28,000        
Wheelock & Co. Ltd.
    78,383  
                     
                          2,648,668  
                             
                             
 
See Accompanying Notes to Financial Statements


20


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
                             
Shares               Value
 
 
             
           
Italy: 1.6%
  7,675        
Assicurazioni Generali S.p.A.
  $ 174,152  
  11,756        
Banca Monte dei Paschi di Siena S.p.A.
    17,408  
  10,317        
Banca Popolare di Milano Scrl
    60,727  
  9,078        
Banche Popolari Unite Scpa
    113,077  
  21,182     @  
Banco Popolare Scarl
    134,794  
  131,625        
Enel S.p.A.
    714,155  
  9,630        
ENI S.p.A.
    217,341  
  94,416     @  
Intesa Sanpaolo S.p.A.
    332,035  
  21,958        
Intesa Sanpaolo S.p.A. — RNC
    59,152  
  31,355        
Italcementi S.p.A.
    341,868  
  55,356        
Mediaset S.p.A.
    419,319  
  1,736     @  
Mediobanca S.p.A.
    18,343  
  168,808        
Parmalat S.p.A
    426,230  
  13,824        
Saipem S.p.A.
    457,723  
  126,443     @  
UniCredito Italiano S.p.A.
    319,561  
                     
                          3,805,885  
                             
             
           
Japan: 8.9%
  5,970        
Acom Co. Ltd.
    85,991  
                             
  8,700        
Aeon Credit Service Co. Ltd.
            88,926  
  3,500        
Aeon Mall Co. Ltd.
    63,718  
  8,700        
Aisin Seiki Co. Ltd.
    227,822  
  4,000        
Asahi Breweries Ltd.
    76,667  
  14,000        
Bank of Kyoto Ltd.
    121,221  
  500        
Benesse Corp.
    22,439  
  2,742        
Bridgestone Corp.
    47,983  
  14,000        
Canon, Inc.
    580,915  
  65        
Central Japan Railway Co.
    492,023  
  23,000        
Chiba Bank Ltd.
    139,775  
  8,500        
Credit Saison Co. Ltd.
    107,803  
  1,875        
Daito Trust Construction Co. Ltd.
    91,656  
  1,260        
Diamond Lease Co. Ltd.
    43,404  
  8,781        
East Japan Railway Co.
    604,673  
  4,800        
Eisai Co. Ltd.
    187,072  
  3,600        
Electric Power Development Co.
    120,639  
  500        
Fast Retailing Co. Ltd.
    84,071  
  44,000     @  
Fuji Heavy Industries Ltd.
    199,659  
  13,600        
Fuji Photo Film Co. Ltd.
    430,928  
  22,000        
Gunma Bank Ltd.
    122,512  
  11,300        
Honda Motor Co. Ltd.
    390,853  
  700        
Idemitsu Kosan Co. Ltd.
    51,251  
  2,800        
Ito En Ltd.
    42,955  
  63,000        
Itochu Corp.
    506,875  
  15,400        
JFE Holdings, Inc.
    571,556  
  164        
Jupiter Telecommunications Co.
    191,770  
  81,000        
Kajima Corp.
    189,213  
  800        
Kansai Electric Power Co., Inc.
    18,963  
  9,700        
Kao Corp.
    247,488  
  61        
KDDI Corp.
    325,089  
  19,000        
Keisei Electric Railway Co. Ltd.
    113,247  
  800        
Kyocera Corp.
    71,120  
  16,135        
Kyushu Electric Power Co., Inc.
    362,830  
  5,500        
Mabuchi Motor Co. Ltd.
    299,911  
  82,000        
Marubeni Corp.
    489,269  
  13,000        
Maruichi Steel Tube Ltd.
    257,499  
  7,400        
Mediceo Paltac Holdings Co. Ltd.
    87,615  
  7,800        
Mitsubishi Corp.
    194,563  
  14,000        
Mitsubishi Estate Co. Ltd.
    219,508  
  108,100        
Mitsubishi UFJ Financial Group, Inc.
    550,608  
  33,100        
Mitsui & Co. Ltd.
    513,006  
  9,497        
Mitsui Fudosan Co. Ltd.
    160,469  
  3,300        
Mitsui Sumitomo Insurance Group Holdings, Inc.
    84,545  
  14,700        
Mitsumi Electric Co. Ltd.
    279,493  
  90,603        
Mizuho Financial Group, Inc.
    175,796  
  5,900        
Murata Manufacturing Co. Ltd.
    312,853  
  600        
Nintendo Co. Ltd.
    163,419  
  21,000        
Nippon Electric Glass Co. Ltd.
    272,001  
  44,000        
Nippon Mining Holdings, Inc.
    219,057  
  155,000        
Nippon Steel Corp.
    577,844  
  700        
Nippon Telegraph & Telephone Corp.
    30,526  
  41,163        
Nishi-Nippon City Bank Ltd.
    111,271  
  48,000     @  
Nissan Motor Co. Ltd.
    379,586  
  30,500        
Nisshin Seifun Group, Inc.
    402,376  
  12,300        
Nissin Food Products Co. Ltd.
    426,430  
  22,300        
Nomura Holdings, Inc.
    164,189  
  30        
NTT DoCoMo, Inc.
    46,330  
  66,000        
Obayashi Corp.
    254,995  
  180        
Obic Co. Ltd.
    31,524  
  43,000        
Osaka Gas Co. Ltd.
    155,921  
  5,200        
Rohm Co. Ltd.
    354,426  
  4,908        
Sankyo Co. Ltd.
    236,743  
  36,100        
Sega Sammy Holdings, Inc.
    444,810  
  13,300        
Shinko Electric Industries
    192,255  
  14,800        
Softbank Corp.
    386,826  
  21,000        
Sompo Japan Insurance, Inc.
    145,276  
  14,100        
Sony Corp.
    480,130  
  45,100        
Sumitomo Corp.
    490,283  
  18,312        
Sumitomo Electric Industries Ltd.
    219,898  
  15,600        
Sumitomo Mitsui Financial Group, Inc.
    501,099  
  8,009        
Sumitomo Realty & Development Co. Ltd.
    141,989  
  26,200        
Sumitomo Rubber Industries, Inc.
    212,986  
  28,142        
Sumitomo Trust & Banking Co. Ltd.
    158,740  
  9,000        
Suruga Bank Ltd.
    82,523  
  13,632        
Takeda Pharmaceutical Co. Ltd.
    617,543  
  6,800        
Terumo Corp.
    368,063  
  7,800        
Tohoku Electric Power Co., Inc.
    169,889  
  9,989        
Tokio Marine Holdings, Inc.
    281,527  
  1,600        
Tokyo Electric Power Co., Inc.
    43,935  
  94,000        
Tokyo Gas Co. Ltd.
    409,639  
  10,000        
Tosoh Corp.
    23,876  
  28,900        
Toyota Motor Corp.
    1,081,767  
  4,800        
USS Co. Ltd.
    311,114  
  6,000        
Yamaguchi Financial Group, Inc.
    65,689  
  10,171        
Yamato Kogyo Co. Ltd.
    321,142  
                     
                          21,625,879  
                             
             
           
Kazakhstan: 0.2%
  23,379        
Eurasian Natural Resources Corp.
    366,589  
                     
                          366,589  
                             
             
           
Netherlands: 2.2%
  8,939     @  
Aegon NV
    56,285  
  11,455        
Boskalis Westminster
    368,010  
  41,986        
Koninklijke Ahold NV
    513,486  
  9,478        
Koninklijke DSM NV
    395,848  
  22,129        
Koninklijke Philips Electronics NV
    647,063  
  1,440     @  
Koninklijke Vopak NV
    105,847  
  8,164     @  
Randstad Holdings NV
    341,388  
  35,298        
Royal Dutch Shell PLC — Class A
    963,892  
  39,480        
Royal Dutch Shell PLC — Class B
    1,034,191  
  27,074        
Royal KPN NV
    431,054  
  15,437        
Unilever NV
    464,070  
                     
                          5,321,134  
                             
             
           
New Zealand: 0.1%
  125,080        
Telecom Corp. of New Zealand Ltd.
    203,496  
                     
                          203,496  
                             
             
           
Norway: 0.3%
  2,610     @  
DnB NOR ASA
    28,372  
  27,400        
Statoil ASA
    615,306  
                     
                          643,678  
                             
             
           
Portugal: 0.5%
  21,498        
Banco Espirito Santo S.A.
    107,201  
  8,149        
Brisa-Auto Estradas de Portugal S.A.
    65,344  
  113,205        
Energias de Portugal S.A.
    415,442  
 
See Accompanying Notes to Financial Statements


21


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
                             
Shares               Value
 
 
           
Portugal (continued)
  38,255        
Jeronimo Martins
  $ 367,154  
  23,754        
Portugal Telecom SGPS S.A.
    250,675  
                     
                          1,205,816  
                             
             
           
Singapore: 0.3%
  9,000        
DBS Group Holdings Ltd.
    89,516  
  4,000        
Jardine Cycle & Carriage Ltd.
    69,018  
  41,000        
Oversea-Chinese Banking Corp.
    247,317  
  11,000        
Singapore Exchange Ltd.
    60,293  
  86,000        
StarHub Ltd.
    130,948  
  8,000        
United Overseas Bank Ltd.
    105,937  
  35,000        
United Overseas Land Ltd.
    98,959  
                     
                          801,988  
                             
             
           
Spain: 1.3%
  38,694        
Banco Bilbao Vizcaya Argentaria S.A.
    501,798  
  3,748        
Banco Popular Espanol S.A.
    24,789  
  86,469        
Banco Santander Central Hispano S.A.
    1,124,206  
  4,617        
Bankinter S.A.
    37,641  
  18,661        
Corp. Mapfre S.A.
    67,150  
  25,025        
Criteria Caixacorp S.A.
    114,336  
  327        
Inditex S.A.
    19,269  
  1,265        
Indra Sistemas S.A.
    25,877  
  49,327        
Telefonica S.A.
    1,156,745  
                     
                          3,071,811  
                             
             
           
Sweden: 1.3%
  3,871        
Assa Abloy AB
    72,655  
  14,548        
Atlas Copco AB — Class A
    205,891  
  24,750        
Atlas Copco AB — Class B
    319,496  
  9,538        
Investor AB
    169,263  
  27,807        
Nordea Bank AB
    271,302  
  4,475     @  
Skandinaviska Enskilda Banken AB
    27,026  
  28,356        
Skanska AB
    468,695  
  6,676        
SKF AB — B Shares
    105,453  
  32,591        
Svenska Cellulosa AB — B Shares
    481,680  
  1,359        
Svenska Handelsbanken AB
    37,089  
  19,730        
Swedish Match AB
    449,250  
  47,011        
Telefonaktiebolaget LM Ericsson
    470,044  
                     
                          3,077,844  
                             
             
           
Switzerland: 3.6%
  41,828     @  
ABB Ltd.
    847,457  
  10,079        
Compagnie Financiere Richemont S.A.
    340,136  
  13,112        
Credit Suisse Group
    583,757  
  5,140        
Holcim Ltd.
    340,035  
  8        
Lindt & Spruengli AG — REG
    186,204  
  26,314        
Nestle S.A.
    1,309,914  
  24,254        
Novartis AG
    1,343,895  
  8,024        
Roche Holding AG — Genusschein
    1,340,565  
  1,478        
Swatch Group AG — BR
    411,112  
  1,031     @  
Swiss Life Holding
    129,813  
  5,270        
Swiss Reinsurance
    236,744  
  2,071        
Synthes, Inc.
    247,129  
  28,637     @  
UBS AG — Reg
    396,370  
  40,379     @  
Xstrata PLC
    634,693  
  1,834        
Zurich Financial Services AG
    442,388  
                     
                          8,790,212  
                             
             
           
United Kingdom: 7.2%
  12,056     @  
Anglo American PLC
    439,448  
  18,073        
AstraZeneca PLC
    798,287  
  3,885     @  
Autonomy Corp. PLC
    90,720  
  39,832        
Aviva PLC
    237,273  
  47,994        
BAE Systems PLC
    274,128  
  133,881        
Barclays PLC
    639,804  
  40,490        
BG Group PLC
    707,704  
  10,765        
BHP Billiton PLC
    330,468  
  148,386        
BP PLC
    1,307,413  
  30,702        
British American Tobacco PLC
    1,043,896  
  43,125        
Compass Group PLC
    320,693  
  47,090        
Diageo PLC
    767,365  
  10,701        
Experian Group Ltd.
    99,070  
  9,873        
Firstgroup PLC
    53,578  
  41,670        
GlaxoSmithKline PLC
    770,398  
  5,656        
Group 4 Securicor PLC
    23,365  
  53,174        
Home Retail Group
    206,923  
  177,313        
HSBC Holdings PLC
    1,945,182  
  17,590        
ICAP PLC
    87,472  
  8,905        
Imperial Tobacco Group PLC
    277,913  
  18,917        
Inmarsat PLC
    211,604  
  56,847        
International Power PLC
    281,310  
  9,346        
Investec PLC
    63,454  
  52,983        
J Sainsbury PLC
    267,097  
  9,947        
Kazakhmys PLC
    203,472  
  121,816        
Kingfisher PLC
    399,601  
  268,890     @  
Lloyds TSB Group PLC
    215,262  
  10,049        
London Stock Exchange Group PLC
    101,967  
  41,992        
Man Group PLC
    143,995  
  52,724        
National Grid PLC
    523,176  
  106,881     @  
Old Mutual PLC
    184,912  
  6,066        
Pearson PLC
    84,558  
  7,977        
Petrofac Ltd.
    124,974  
  15,404        
Prudential PLC
    141,950  
  13,253        
Reckitt Benckiser PLC
    697,716  
  10,709        
Rio Tinto PLC
    553,022  
  54,707        
Rolls-Royce Group PLC
    465,729  
  18,604        
Smith & Nephew PLC
    191,187  
  22,555        
Standard Chartered PLC
    537,581  
  33,370        
Standard Life PLC
    99,428  
  23,971        
Tesco PLC
    153,494  
  18,404        
Tomkins PLC
    54,107  
  626        
Unilever PLC
    18,408  
  548,547        
Vodafone Group PLC
    1,185,334  
  3,399        
WPP PLC
    31,202  
                     
                          17,355,640  
                             
             
           
United States: 55.2%
  9,700        
3M Co.
    777,455  
  46,601     S  
Abbott Laboratories
    2,529,502  
  13,678        
Aflac, Inc.
    676,377  
  53,300        
Altria Group, Inc.
    1,072,396  
  500     @  
Amazon.com, Inc.
    59,200  
  27,900        
American Express Co.
    1,065,501  
  17,952        
AmerisourceBergen Corp.
    503,374  
  30,369     @,S  
Amgen, Inc.
    1,719,189  
  2,600        
Amphenol Corp.
    108,290  
  13,003     @,S  
Apple, Inc.
    2,660,674  
  5,066        
Archer-Daniels-Midland Co.
    148,738  
  133,800        
AT&T, Inc.
    3,319,583  
  103,640     S  
Bank of America Corp.
    1,726,642  
  1,900        
Becton Dickinson & Co.
    147,953  
  28,652     S  
Bemis Co.
    838,644  
  13,000     @  
Berkshire Hathaway, Inc.
    1,041,690  
  23,300        
Best Buy Co., Inc.
    850,450  
  100     @  
Big Lots, Inc.
    3,350  
  10,900        
Broadcom Corp.
    341,388  
  3,469        
Brown-Forman Corp.
    181,637  
  42,792        
CA, Inc.
    962,820  
  13,400        
Capital One Financial Corp.
    505,850  
  46,300        
Cardinal Health, Inc.
    1,572,811  
  9,300     @  
CareFusion Corp.
    234,732  
  10,600     @  
CB Richard Ellis Group, Inc.
    139,920  
  100     @  
Cephalon, Inc.
    6,867  
  6,400        
Chesapeake Energy Corp.
    170,048  
  39,242     S  
Chevron Corp.
    2,837,197  
  82,392     @  
Cisco Systems, Inc.
    2,004,597  
  72,300     @,S  
Citigroup, Inc.
    245,820  
  3,293        
CME Group, Inc.
    993,465  
  4,700        
Coach, Inc.
    171,268  
  6,272        
Coca-Cola Co.
    330,660  
  126,455        
Comcast Corp. — Class A
    2,078,920  
  25,000     @,S  
Compuware Corp.
    187,250  
 
See Accompanying Notes to Financial Statements


22


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
                             
Shares               Value
 
 
           
United States (continued)
  49,400        
ConAgra Foods, Inc.
  $ 1,208,324  
  2,600        
ConocoPhillips
    124,800  
  31,400        
Constellation Energy Group, Inc.
    1,101,198  
  55,600     @  
Dell, Inc.
    735,588  
  37,200     @  
DIRECTV
    1,259,220  
  100     @  
Discovery Communications, Inc. — Class A
    3,115  
  5,550        
Dover Corp.
    251,193  
  35,217        
DTE Energy Co.
    1,529,122  
  1,100        
Eastman Chemical Co.
    65,505  
  17,300        
Eaton Corp.
    1,178,476  
  10,116     @,S  
eBay, Inc.
    232,870  
  17,900        
EI Du Pont de Nemours & Co.
    603,588  
  65,950     @  
EMC Corp.
    1,153,466  
  40,248        
Emerson Electric Co.
    1,905,340  
  45,662     S  
ExxonMobil Corp.
    2,968,030  
  12,226        
Fifth Third Bancorp.
    149,279  
  6,600        
FirstEnergy Corp.
    255,090  
  53,400     @,S  
Ford Motor Co.
    626,916  
  10,400     @  
Forest Laboratories, Inc.
    310,752  
  7,700     @  
GameStop Corp.
    132,440  
  43,170        
Gap, Inc.
    928,155  
  204,256        
General Electric Co.
    3,280,351  
  11,805     S  
Goldman Sachs Group, Inc.
    1,845,712  
  3,169     @  
Google, Inc. — Class A
    1,669,429  
  28,200        
H&R Block, Inc.
    487,296  
  6,543        
Harris Corp.
    295,874  
  52,509        
Hewlett-Packard Co.
    2,666,932  
  13,700        
Honeywell International, Inc.
    550,192  
  24,881        
Hudson City Bancorp., Inc.
    336,391  
  4,886     @,S  
Humana, Inc.
    231,254  
  11,302        
Intel Corp.
    232,030  
  1,200     @  
IntercontinentalExchange, Inc.
    128,748  
  29,089        
International Business Machines Corp.
    3,698,957  
  46,868        
International Paper Co.
    1,085,932  
  26,900     @  
Intuit, Inc.
    870,484  
  25,386        
ITT Corp.
    1,300,525  
  8,300        
Jabil Circuit, Inc.
    125,911  
  26,500     @  
Jacobs Engineering Group, Inc.
    1,028,200  
  16,975        
Johnson & Johnson
    1,069,425  
  63,457        
JPMorgan Chase & Co.
    2,663,290  
  17,545        
Kimberly-Clark Corp.
    1,065,683  
  5,900     @  
Kohl’s Corp.
    317,538  
  4,600        
L-3 Communications Holdings, Inc.
    420,532  
  31,300        
Limited Brands, Inc.
    692,043  
  22,140        
Lockheed Martin Corp.
    1,721,606  
  17,789        
McKesson Corp.
    1,052,219  
  44,900        
MeadWestvaco Corp.
    1,030,006  
  7,800     @  
Medco Health Solutions, Inc.
    493,272  
  26,927        
Merck & Co., Inc.
    993,068  
  149,962     S  
Microsoft Corp.
    4,297,911  
  32,800        
Molson Coors Brewing Co.
    1,324,464  
  10,800        
Moody’s Corp.
    287,496  
  18,600     @  
Nasdaq Stock Market, Inc.
    346,518  
  36,140        
National Oilwell Varco, Inc.
    1,571,006  
  74,700        
News Corp. — Class A
    998,739  
  100        
Northern Trust Corp.
    5,329  
  3,100        
Northrop Grumman Corp.
    189,906  
  2,900        
Nucor Corp.
    120,060  
  14,100        
NYSE Euronext
    371,958  
  3,800        
Occidental Petroleum Corp.
    303,430  
  104,175        
Oracle Corp.
    2,567,914  
  32,700        
Peabody Energy Corp.
    1,503,219  
  186,732        
Pfizer, Inc.
    3,277,147  
  23,604        
Philip Morris International, Inc.
    1,156,124  
  21,750        
Pitney Bowes, Inc.
    498,075  
  8,900        
PNC Financial Services Group, Inc.
    478,464  
  300     @  
Priceline.com, Inc.
    68,028  
  36,650        
Procter & Gamble Co.
    2,319,212  
  38,000        
Progressive Corp.
    651,700  
  7,200        
Prudential Financial, Inc.
    377,352  
  4,600        
Public Service Enterprise Group, Inc.
    136,712  
  3,907     @  
Pulte Homes, Inc.
    42,313  
  11,405        
Qualcomm, Inc.
    418,449  
  38,700     S  
Qwest Communications International, Inc.
    176,472  
  30,100        
Raytheon Co.
    1,692,824  
  20,000     S  
Reynolds American, Inc.
    1,056,000  
  15,600        
Ross Stores, Inc.
    762,996  
  39,700     @  
Rowan Cos., Inc.
    1,032,994  
  1,600        
Ryder System, Inc.
    56,464  
  108,900        
Sara Lee Corp.
    1,476,684  
  26,600        
Sempra Energy
    1,307,922  
  3,100        
Smith International, Inc.
    127,069  
  9,300     @  
Starbucks Corp.
    213,063  
  11,223        
State Street Corp.
    504,025  
  37,308        
Target Corp.
    1,922,108  
  3,500     @,S  
Teradata Corp.
    106,715  
  71,700     S  
Texas Instruments, Inc.
    1,748,046  
  17,686     @  
Thermo Fisher Scientific, Inc.
    862,546  
  21,300        
TJX Cos., Inc.
    886,719  
  33,271        
Travelers Cos., Inc.
    1,749,722  
  32,633        
United Technologies Corp.
    2,240,255  
  30,995        
UnitedHealth Group, Inc.
    1,049,491  
  5,598        
UnumProvident Corp.
    116,494  
  17,020        
US Bancorp.
    418,862  
  14,655        
Verizon Communications, Inc.
    423,969  
  35,100     @  
Viacom — Class B
    1,040,715  
  20,900        
Walgreen Co.
    736,516  
  8,567        
Wal-Mart Stores, Inc.
    463,218  
  11,000     @  
WellPoint, Inc.
    680,570  
  100,571        
Wells Fargo & Co.
    2,749,611  
  8,600     @  
Western Digital Corp.
    332,218  
  29,900        
Western Union Co.
    471,822  
  52,700        
Williams Cos., Inc.
    1,135,158  
  104,400        
Xerox Corp.
    978,228  
  51,400        
Xilinx, Inc.
    1,327,662  
  7,300        
XTO Energy, Inc.
    333,610  
                     
                          133,781,919  
                             
           
Total Common Stock
(Cost $207,302,948)
    229,258,288  
                     
 
REAL ESTATE INVESTMENT TRUSTS: 0.8%
             
           
Australia: 0.2%
  64,346        
CFS Retail Property Trust
    109,425  
  86,493        
Mirvac Group
    118,051  
  11,842        
Westfield Group
    127,316  
                     
                          354,792  
                             
             
           
France: 0.0%
  432        
Unibail
    85,237  
                     
                          85,237  
                             
             
           
Hong Kong: 0.0%
  30,500        
Link Real Estate Investment Trust
    76,697  
                     
                          76,697  
                             
             
           
Singapore: 0.1%
  73,550        
Ascendas Real Estate Investment Trust
    101,048  
  64,000        
CapitaMall Trust
    80,463  
                     
                          181,511  
                             
             
           
United Kingdom: 0.0%
  6,099        
Segro PLC
    29,673  
                     
                          29,673  
                             
             
           
United States: 0.5%
  5,300        
HCP, Inc.
    152,534  
  3,400        
Plum Creek Timber Co., Inc.
    121,482  
 
See Accompanying Notes to Financial Statements


23


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
                             
Shares               Value
 
 
           
United States (continued)
  1,000        
Public Storage, Inc.
  $ 82,190  
  12,169        
Simon Property Group, Inc.
    952,711  
                     
                          1,308,917  
                             
           
Total Real Estate Investment Trusts
(Cost $1,545,868)
    2,036,827  
                     
 
EXCHANGE-TRADED FUNDS: 2.0%
             
           
Developed Markets: 2.0%
  90,000        
iShares MSCI EAFE Index Fund
    4,735,800  
                     
           
Total Exchange-Traded Funds
(Cost $4,585,572)
    4,735,800  
                     
 
PREFERRED STOCK: 0.1%
             
           
Germany: 0.1%
  1,371        
RWE AG
    108,019  
  1,627        
Volkswagen AG
    132,604  
                     
           
Total Preferred Stock
(Cost $272,866)
    240,623  
                     
           
Total Long-Term Investments
(Cost $213,707,254)
    236,271,538  
                     
 
SHORT-TERM INVESTMENTS: 1.8%
             
           
Affiliated Mutual Fund: 1.8%
  4,381,000     S  
ING Institutional Prime Money Market Fund — Class I
    4,381,000  
                     
           
Total Short-Term Investments
(Cost $4,381,000)
    4,381,000  
                     
       
Total Investments in Securities
          (Cost $218,088,254)*     99.3 %   $ 240,652,538  
       
Other Assets and
Liabilities - Net
    0.7       1,773,731  
                         
        Net Assets     100.0 %   $ 242,426,269  
                         
 
     
@
  Non-income producing security
S
  All or a portion of this security has been identified by the Fund to cover future collateral requirements for applicable futures, options, swaps, foreign currency contracts and/or when-issued or delayed-delivery securities.
     
*
  Cost for federal income tax purposes is $226,716,807.
     
    Net unrealized appreciation consists of:
 
                 
Gross Unrealized Appreciation
          $ 18,710,993  
Gross Unrealized Depreciation
            (4,775,262 )
                 
Net Unrealized Appreciation
          $ 13,935,731  
                 
 
         
    Percentage of
Industry   Net Assets
 
Aerospace/Defense
    2.9 %
Agriculture
    2.2  
Apparel
    0.1  
Auto Manufacturers
    1.4  
Auto Parts & Equipment
    0.5  
Banks
    10.8  
Beverages
    1.4  
Biotechnology
    0.8  
Building Materials
    0.6  
Chemicals
    0.9  
Coal
    0.6  
Commercial Services
    0.9  
Computers
    4.7  
Cosmetics/Personal Care
    1.1  
Distribution/Wholesale
    0.9  
Diversified
    0.1  
Diversified Financial Services
    1.8  
Electric
    3.1  
Electrical Components & Equipment
    1.0  
Electronics
    1.2  
Engineering & Construction
    1.4  
Entertainment
    0.1  
Food
    3.2  
Food Service
    0.1  
Forest Products & Paper
    1.1  
Gas
    0.9  
Health Care
    0.1  
Healthcare — Products
    1.0  
Healthcare — Services
    0.8  
Holding Companies — Diversified
    0.4  
Home Builders
    0.0  
Home Furnishings
    0.2  
Household Products/Wares
    0.7  
Insurance
    3.7  
Internet
    0.9  
Investment Companies
    0.1  
Iron/Steel
    0.7  
Leisure Time
    0.2  
Lodging
    0.2  
Machinery — Construction & Mining
    0.2  
Media
    2.8  
Metal Fabricate/Hardware
    0.2  
Mining
    1.9  
Miscellaneous Manufacturing
    3.4  
Office/Business Equipment
    0.9  
Oil & Gas
    6.4  
Oil & Gas Services
    1.0  
Packaging & Containers
    0.4  
Pharmaceuticals
    7.2  
Pipelines
    0.5  
Real Estate
    0.8  
Regional Malls
    0.4  
Retail
    4.3  
Savings & Loans
    0.1  
Semiconductors
    1.7  
Shopping Centers
    0.2  
Software
    3.9  
Storage
    0.0  
Telecommunications
    5.4  
Toys/Games/Hobbies
    0.1  
Transportation
    0.9  
Other Long-Term Investments
    2.0  
Short-Term Investments
    1.8  
Other Assets and Liabilities — Net
    0.7  
         
Net Assets
    100.0 %
         
 
See Accompanying Notes to Financial Statements


24


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
Fair Value Measurementsˆ
 
The following is a summary of the fair valuations according to the inputs used as of February 28, 2010 in valuing the Fund’s assets and liabilities:
 
                                 
    Quoted Prices
  Significant
       
    in Active Markets
  Other
  Significant
   
    for Identical
  Observable
  Unobservable
  Fair Value
    Investments
  Inputs#
  Inputs
  at
    (Level 1)   (Level 2)   (Level 3)   2/28/2010
 
 
Asset Table
                               
Investments, at value
                               
Common Stock
                               
Australia
  $     $ 7,761,596     $     $ 7,761,596  
Austria
          782,464             782,464  
Barbados
    996,208                   996,208  
Belgium
    165       930,191             930,356  
Denmark
          607,194             607,194  
Finland
          336,575             336,575  
France
          7,790,066             7,790,066  
Germany
          7,022,184             7,022,184  
Greece
          331,086             331,086  
Hong Kong
    190,073       2,458,595             2,648,668  
Italy
          3,805,885             3,805,885  
Japan
          21,625,879             21,625,879  
Kazakhstan
          366,589             366,589  
Netherlands
          5,321,134             5,321,134  
New Zealand
    203,496                   203,496  
Norway
          643,678             643,678  
Portugal
          1,205,816             1,205,816  
Singapore
          801,988             801,988  
Spain
          3,071,811             3,071,811  
Sweden
          3,077,844             3,077,844  
Switzerland
          8,790,212             8,790,212  
United Kingdom
          17,355,640             17,355,640  
United States
    133,781,919                   133,781,919  
                                 
Total Common Stock
    135,171,861       94,086,427             229,258,288  
                                 
Real Estate Investment Trusts
    1,308,917       727,910             2,036,827  
Exchange-Traded Funds
    4,735,800                   4,735,800  
Preferred Stock
          240,623             240,623  
Short-Term Investments
    4,381,000                   4,381,000  
                                 
Total Investments, at value
  $ 145,597,578     $ 95,054,960     $     $ 240,652,538  
                                 
Other Financial Instruments+:
                               
Forward foreign currency contracts
          756,201             756,201  
Futures
    31,115                   31,115  
                                 
Total Assets
  $ 145,628,693     $ 95,811,161     $     $ 241,439,854  
                                 
Liabilities Table
                               
Other Financial Instruments+:
                               
Forward foreign currency contracts
          (425,451 )           (425,451 )
Futures
    (11,932 )                 (11,932 )
Written options
          (2,357,763 )           (2,357,763 )
                                 
Total Liabilities
  $ (11,932 )   $ (2,783,214 )   $     $ (2,795,146 )
                                 
 
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, swaps, and written options. Forward foreign currency contracts and futures are reported at their unrealized gain/loss at measurement date which represents the amount due to/from the Fund. Swaps and written options are reported at their market value at measurement date.
 
Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any security or derivative instrument where a change in the pricing level occurred from the beginning to the end of the period.
 
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 Portfolio 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 significant portion of the Portfolio’s investments are categorized as Level 2 investments.
 
At February 28, 2010 the following forward foreign currency contracts were outstanding for the ING Global Advantage and Premium Opportunity Fund:
 
                                                 
                In
      Unrealized
            Settlement
  Exchange
      Appreciation
Currency
      Buy/Sell   Date   For   Value   (Depreciation)
                USD   USD    
 
Australian Dollar
AUD
    9,062,000       SELL       4/13/10       7,811,988       8,081,222     $ (269,234 )
Swiss Franc
CHF
    8,757,000       SELL       4/13/10       8,164,122       8,154,188       9,934  
EU Euro
EUR
    25,533,000       SELL       4/13/10       34,966,575       34,764,822       201,753  
British Pound
GBP
    13,490,000       SELL       4/13/10       21,107,264       20,562,750       544,514  
Japanese Yen
JPY
    1,989,543,000       SELL       4/13/10       22,242,255       22,398,472       (156,217 )
                                                 
                                            $ 330, 750  
                                                 
 
ING Global Advantage and Premium Opportunity Fund Open Futures Contracts on February 28, 2010:
 
                             
                Unrealized
Contract
  Number of
  Expiration
  Market
  Appreciation
Description   Contracts   Date   Value   (Depreciation)
 
Long Contracts
                           
S&P 500®
    5     03/18/10   $ 1,379,250     $ (11,932 )
S&P 500®
    13     06/17/10     3,570,450       31,115  
                             
                $ 4,949,700     $ 19,183  
                             
 
See Accompanying Notes to Financial Statements


25


Table of Contents

PORTFOLIO OF INVESTMENTS
ING Global Advantage and Premium Opportunity Fund
as of February 28, 2010 (continued)
 
Written OTC Call Options
 
                                         
# of
          Expiration
  Strike
  Premiums
   
Contracts
 
Counterparty
 
Description
 
Date
 
Price/Rate
 
Received
 
Value
 
  2,650     Goldman
Sachs & Co. 
  Dow Jones
Euro Stoxx 50
  03/04/10     2,718.43 EUR     $ 275,613     $ (135,550 )
  2,610     Goldman
Sachs & Co. 
  Dow Jones
Euro Stoxx 50
  03/18/10     2,783.56 EUR       236,860       (116,259 )
  1,350     ABN AMRO
Bank, N.V. 
  FTSE 100 Index   03/04/10     5,121.40 GBP       241,922       (478,695 )
  1,410     ABN AMRO
Bank, N.V. 
  FTSE 100 Index   03/18/10     5,308.80 GBP       220,872       (227,680 )
  102,000     ABN AMRO
Bank, N.V. 
  Nikkei 225 Index   03/04/10     10,287.53 JPY       280,278       (53,814 )
  105,250     UBS   Nikkei 225 Index   03/18/10     10,320.60 JPY       261,309       (133,028 )
  41,685     Citigroup   S&P 500® Index   03/03/10     1,097.28 USD       910,400       (537,682 )
  46,212     Morgan Stanley   S&P 500® Index   03/18/10     1,109.17 USD       909,808       (675,055 )
                                         
                            $ 3,337,062     $ (2,357,763 )
                                         
 
A summary of derivative instruments by primary risk exposure is outlined in the following tables.
 
The fair value of derivative instruments as of February 28, 2010 was as follows:
 
             
Derivatives not accounted for
       
as hedging instruments
  Location on Statement
   
under FASB ASC 815   of Assets and Liabilities   Fair Value
 
Asset Derivatives
           
             
Equity contracts
  Net Assets — Unrealized appreciation*   $ 31,115  
Foreign exchange contracts
  Unrealized appreciation on forward foreign currency contracts     756,201  
             
Total Asset Derivatives
      $ 787,316  
             
Liability Derivatives
           
             
Equity contracts
  Net Assets — Unrealized depreciation*   $ 11,932  
Foreign exchange contracts
  Unrealized depreciation on forward foreign currency contracts     425,451  
Equity contracts
  Written options     2,357,763  
             
Total Liability Derivatives
      $ 2,795,146  
             
 
*     Includes cumulative appreciation/depreciation of futures contracts as reported in the table following the Portfolio of Investments.
 
The effect of derivative instruments on the Fund’s Statement of Operations for the year ended February 28, 2010 was as follows:
 
                                 
    Amount of Realized Gain or (Loss)
    on Derivatives Recognized in Income
    Forward
           
Derivatives not accounted
  Foreign
           
for as hedging instruments
  Currency
      Written
   
under FASB ASC 815
 
Contracts
 
Futures
 
options
 
Total
 
Equity contracts
  $     $ 2,071,755     $ (15,830,737 )   $ (13,758,982 )
Foreign exchange contracts
    (11,652,745 )                 (11,652,745 )
                                 
Total
  $ (11,652,745 )   $ 2,071,755     $ (15,830,737 )   $ (25,411,727 )
                                 
 
                                 
    Change in Unrealized Appreciation or
    (Depreciation) on Derivatives Recognized in Income
    Forward
           
Derivatives not accounted
  Foreign
           
for as hedging instruments
  Currency
      Written
   
under FASB ASC 815
 
Contracts
 
Futures
 
options
 
Total
 
Equity contracts
  $     $ 130,714     $ (4,011,099 )   $ (3,880,385 )
Foreign exchange contracts
    (302,367 )                 (302,367 )
                                 
Total
  $ (302,367 )   $ 130,714     $ (4,011,099 )   $ (4,182,752 )
                                 
 
Supplemental Option Information (Unaudited)
 
     
Supplemental Call Option Statistics as of February 28, 2010
   
% of Total Net Assets against which calls written
  68%
Average Days to Expiration at time written
  28 days
Average Call Moneyness* at time written
  ATM
Premium received for calls
  $3,337,062
Value of calls
  $(2,357,763)
 
*     “Moneyness” is the term used to describe the relationship between the price of the underlying asset and the option’s 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


26


Table of Contents

TAX INFORMATION (Unaudited)
 
Distributions paid during the year ended February 28, 2010 were as follows:
 
                 
Fund Name
 
Type
 
Per Share Amount
 
ING Global Advantage and Premium Opportunity Fund
    ROC     $ 1.7670  
 
ROC — Return of capital
 
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.


27


Table of Contents

TRUSTEE AND OFFICER INFORMATION (Unaudited)
 
The business and affairs of the Trust are managed under the direction of the Trust’s 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. The Statement of Additional Information includes additional information about trustees of the Trust and is available, without charge, upon request at (800) 992-0180.
 
                     
                Number of
   
                Portfolios in
   
                Fund
  Other Directorships/
    Position(s)
  Term of Office
      Complex
  Trusteeships
    held with
  and Length of
  Principal Occupation(s)
  Overseen
  held by
Name, Address, and Age
 
Trust
 
Time Served(1)
 
during the Past Five Years
 
by Trustee(2)
 
Trustee
 
Independent Trustees:
                   
                     
Colleen D. Baldwin
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 49
  Trustee   August 2007 — Present   Consultant, Glantuam Partners, LLC (January 2009 — Present); President, National Charity League/Canaan Parish Board (April 2005 — March 2009) and Consultant (January 2005 — Present).   136   None.
                     
John V. Boyer(4)
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 56
  Trustee   July 2005 — Present   President and Chief Executive Officer, Bechtler Arts Foundation (January 2008 — Present). Formerly, Consultant (July 2007 — February 2008); President and Chief Executive Officer, Franklin and Eleanor Roosevelt Institute (March 2006 — July 2007); and Executive Director, The Mark Twain House & Museum (September 1989 — March 2006).   136   None.
                     
Patricia W. Chadwick
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 61
  Trustee   January 2006 — Present   Consultant and President, Ravengate Partners LLC (January 2000 — Present).   136   Wisconsin Energy Corporation (June 2006 — Present) and The Royce Fund (2009 — Present).
                     
Peter S. Drotch
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 68
  Trustee   October 2007 — Present   Retired partner, PricewaterhouseCoopers, LLP.   136   First Marblehead Corporation (September 2003 — Present).
                     
J. Michael Earley
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 64
  Trustee   July 2005 — Present   Retired. Formerly, President and Chief Executive Officer, Bankers Trust Company, N.A., Des Moines (June 1992 — December 2008).   136   None.
                     
Patrick W. Kenny
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 67
  Trustee   July 2005 — Present   Retired. Formerly, President and Chief Executive Officer, International Insurance Society (June 2001 — June 2009).   136   Assured Guaranty Ltd. (April 2004 — Present).
                     
Sheryl K. Pressler
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 59
  Trustee   January 2006 — Present   Consultant (May 2001 — Present).   136   Centerra Gold (May 2008 — Present) and Stillwater Mining Company (May 2002 — Present).
                     
Roger B. Vincent
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 64
  Chairman/Trustee   July 2005 — Present   President, Springwell Corporation (March 1989 — Present).   136   UGI Corporation (February 2006 — Present) and UGI Utilities, Inc. (February 2006 — Present).


28


Table of Contents

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)
 
                     
                Number of
   
                Portfolios in
   
                Fund
  Other Directorships/
    Position(s)
  Term of Office
      Complex
  Trusteeships
    held with
  and Length of
  Principal Occupation(s)
  Overseen
  held by
Name, Address, and Age
 
Trust
 
Time Served(1)
 
during the Past Five Years
 
by Trustee(2)
 
Trustee
 
                     
Trustees who are
“Interested Persons:”
                   
                     
Robert W. Crispin(5)
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 63
  Trustee   October 2007 — Present   Retired. Chairman and Chief Executive Officer, ING Investment Management Co. (July 2001 — December 2007).   136   Intact Financial Corporation (December 2004 — Present).
                     
Shaun P. Mathews(3)(5)
7337 E. Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 54
  Trustee   June 2006 — Present   President and Chief Executive Officer, ING Investments, LLC(6) (November 2006 — Present). Formerly, Head of ING Mutual Funds and Investment Products (November 2004 — November 2006).   178   ING Retirement Holdings, Inc. (September 1998 — Present); ING Services Holding Company, Inc. (May 2000 — Present); ING Financial Advisers, LLC(8) (April 2002 — Present); Southland Life Insurance Company (June 2002 — Present); and ING Capital Corporation, LLC and ING Funds Distributor, LLC(7) (December 2005 — Present); ING Funds Services, LLC, ING Investments, LLC and ING Pilgrim Funding, Inc. (March 2006 — Present); and Directed Services, LLC (December 2006 — Present).
(1) The Board is divided into three classes, with the term of one class expiring at each annual meeting of the Fund. At each annual meeting, one class of Trustees is elected to a three-year term and serves until their successors are duly elected and qualified. The tenure of each Trustee is subject to the Board’s retirement policy, which states that each duly elected or appointed Trustee who is not an “interested person” of the Fund, as defined in the Investment Company Act of 1940, as amended (“1940 Act”) (“Independent Trustees”), shall retire from service as a Trustee at the conclusion of the first regularly scheduled meeting of the Board that is held after the Trustee reaches the age of 72. A unanimous vote of the Board may extend the retirement date of a Trustee for up to one year. An extension may be permitted if the retirement would trigger a requirement to hold a meeting of shareholders of the Fund under applicable law, whether for purposes of appointing a successor to the Trustee or if otherwise necessary under applicable law, in which case the extension would apply until such time as the shareholder meeting can be held or is no longer needed.
 
(2) For the purposes of this table (except for Mr. Mathews),“Fund Complex” means the following investment companies: ING Asia Pacific High Dividend Equity Income Fund, ING Equity Trust; ING Funds Trust; ING Global Equity Dividend and Premium Opportunity Fund; ING Global Advantage and Premium Opportunity Fund; ING Infrastructure, Industrials, and Materials Fund; ING International High Dividend Equity Income Fund; ING Investors Trust; ING Mayflower Trust; ING Mutual Funds; ING Partners, Inc.; ING Prime Rate Trust; ING Risk Managed Natural Resources Fund; ING Senior Income Fund; ING Separate Portfolios Trust; ING Variable Insurance Trust; and ING Variable Products Trust.
 
(3) For Mr. Mathews, the Fund Complex also includes the following investment companies: ING Series Fund, Inc.; ING Strategic Allocation Portfolios, Inc.; ING Variable Funds; ING Variable Portfolios, Inc.; ING Balanced Portfolio, Inc.; ING Intermediate Bond Portfolio; and ING Money Market Portfolio.
 
(4) Mr. Boyer held a seat on the Board of Directors of The Mark Twain House & Museum from September 1989 to November 2005. ING Groep N.V. makes non-material, charitable contributions to The Mark Twain House & Museum.
 
(5) Messrs. Mathews and Crispin are deemed to be “interested persons” of the Fund as defined in the 1940 Act because of their relationship with ING Groep, N.V., the parent corporation of the Manager, ING Investment Manager.
 
(6) ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING Pilgrim Investments, LLC is the successor in interest to ING Pilgrim Investments, Inc., which was previously known as Pilgrim Investments, Inc. and before that was known as Pilgrim America Investments, Inc.
 
(7) ING Funds Distributor, LLC is the successor in interest to ING Funds Distributor, Inc., which was previously known as ING Pilgrim Securities, Inc., and before that was known as Pilgrim Securities, Inc., and before that was known as Pilgrim America Securities, Inc.
 
(8) ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc., which was previously known as Pilgrim Group, Inc. and before that was known as Pilgrim America Group, Inc.

29


Table of Contents

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)
 
             
        Term of Office
   
        and Length of
  Principal Occupation(s)
Name, Address and Age
 
Position(s) Held with the Trust
 
Time Served(1)
 
during the Past Five Years
 
Officers:
           
             
Shaun P. Mathews(5)
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 54
  President and Chief Executive Officer   November 2006 — Present   President and Chief Executive Officer, ING Investments, LLC (November 2006 — Present). Formerly, President, ING Mutual Funds and Investment Products (November 2004 — November 2006).
             
Michael J. Roland
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 51
  Executive Vice President   July 2005 — Present   Executive Vice President and Chief Operating Officer, ING Investments, LLC(2) and ING Funds Services, LLC(3) (January 2007 — Present). Formerly, Executive Vice President, Head of Product Management (January 2005 — January 2007); Chief Compliance Officer, ING Investments, LLC(2) and Directed Services LLC(6) (October 2004 — December 2005).
             
Stanley D. Vyner
230 Park Avenue
New York, New York 10169
Age: 59
  Executive Vice President and Chief Investment Risk Officer   July 2005 — Present September 2009 — Present   Executive Vice President, ING Investments, LLC(2) (July 2000 — Present) and Chief Investment Risk Officer, ING Investments, LLC(2) (January 2003 — Present).
             
Joseph M. O’Donnell
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 55
  Executive Vice President and Chief Compliance Officer   March 2006 — Present July 2005 — Present   Chief Compliance Officer of the ING Funds (November 2004 — Present); Executive Vice President of the ING Funds (March 2006 — Present); Chief Compliance Officer of ING Investments, LLC(2) (March 2006 — July 2008 and October 2009 — Present); and Investment Advisor Chief Compliance Officer, Directed Services LLC(6) (March 2006 — July 2008 and October 2009 — Present). Formerly, Investment Advisor Chief Compliance Officer, ING Life Insurance and Annuity Company (March 2006 — December 2006).
             
Todd Modic
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 42
  Senior Vice President, Chief/Principal Financial Officer and Assistant Secretary   July 2005 — Present   Senior Vice President, ING Funds Services, LLC(3) (March 2005 — Present).
             
Kimberly A. Anderson
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 45
  Senior Vice President   July 2005 — Present   Senior Vice President, ING Investments, LLC(2) (June 1995 — Present).
             
Robert Terris
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 39
  Senior Vice President   May 2006 — Present   Senior Vice President, Head of Division Operations, ING Funds Services, LLC(3) (May 2006 — Present). Formerly, Vice President of Administration, ING Funds Services, LLC(3) (October 2001 — May 2006).
             
Robyn L. Ichilov
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 42
  Vice President and Treasurer   July 2005 — Present   Vice President and Treasurer, ING Funds Services, LLC(3) (November 1995 — Present) and ING Investments, LLC(2) (August 1997 — Present).


30


Table of Contents

TRUSTEE AND OFFICER INFORMATION (Unaudited) (continued)
 
             
        Term of Office
   
        and Length of
  Principal Occupation(s)
Name, Address and Age
 
Position(s) Held with the Trust
 
Time Served(1)
 
during the Past Five Years
 
             
Lauren D. Bensinger
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 56
  Vice President   July 2005 — Present   Vice President and Chief Compliance Officer, ING Funds Distributor, LLC(4) (August 1995 — Present); Vice President, ING Investments, LLC(2) and ING Funds Services, LLC (3) (February 1996 — Present); and Director of Compliance, ING Investments, LLC(2) (October 2004 — Present).
             
William Evans
10 State House Square
Hartford, Connecticut 06103
Age: 37
  Vice President   September 2007 — Present   Vice President, Head of Mutual Fund Advisory Group (April 2007 — Present). Formerly, Vice President, U.S. Mutual Funds and Investment Products (May 2005 — April 2007) and Senior Fund Analyst, U.S. Mutual Funds and Investment Products (May 2002 — May 2005).
             
Maria M. Anderson
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 51
  Vice President   July 2005 — Present   Vice President, ING Funds Services, LLC(3) (September 2004 — Present).
             
Denise Lewis
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 46
  Vice President   January 2007 — Present   Vice President, ING Funds Services, LLC (December 2006 — Present). Formerly, Senior Vice President, UMB Investment Services Group, LLC (November 2003 — December 2006).
             
Kimberly K. Springer
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 52
  Vice President   March 2006 — Present   Vice President, ING Funds Services, LLC(3) (March 2006 — Present) and Managing Paralegal Registration Statements (June 2003 — Present). Formerly, Assistant Vice President, ING Funds Services, LLC(3) (August 2004 — March 2006).
             
Craig Wheeler
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 40
  Assistant Vice President   May 2008 — Present   Assistant Vice President — Director of Tax, ING Funds Services (March 2008 — Present). Formerly, Tax Manager, ING Funds Services (March 2005 — March 2008).
             
Huey P. Falgout, Jr.
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 46
  Secretary   July 2005 — Present   Chief Counsel, ING Americas, U.S. Legal Services (September 2003 — Present).
             
Theresa K. Kelety
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 47
  Assistant Secretary   July 2005 — Present   Senior Counsel, ING Americas, U.S. Legal Services (April 2008 — Present). Formerly, Counsel, ING Americas, U.S. Legal Services (April 2003 — April 2008).
             
Kathleen Nichols
7337 East Doubletree Ranch Rd.
Scottsdale, Arizona 85258
Age: 34
  Assistant Secretary   May 2008 — Present   Counsel, ING Americas, U.S. Legal Services (February 2008 — Present). Formerly, Associate, Ropes & Gray LLP (September 2005 — February 2008)
(1) The officers hold office until the next annual meeting of the Trustees and until their successors shall have been elected and qualified.
 
(2) ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING Pilgrim Investments, LLC is the successor in interest to ING Pilgrim Investments, Inc., which was previously known as Pilgrim Investments, Inc. and before that was known as Pilgrim America Investments, Inc.
 
(3) ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc., which was previously known as Pilgrim Group, Inc. and before that was known as Pilgrim America Group, Inc.
 
(4) ING Funds Distributor, LLC is the successor in interest to ING Funds Distributor, Inc., which was previously known as ING Pilgrim Securities, Inc., and before that was known as Pilgrim Securities, Inc., and before that was known as Pilgrim America Securities, Inc.
 
(5) Mr. Mathews commenced services as CEO and President of the ING Funds on November 11, 2006.
 
(6) Directed Services LLC is the successor in interest to Directed Services, Inc.


31


Table of Contents

ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited)
 
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY CONTRACTS
 
Section 15(c) of the Investment Company Act of 1940, as amended (the “1940 Act”) provides that, after an initial period, ING Global Advantage and Premium Opportunity Fund’s (the “Fund”) existing investment advisory and sub-advisory contracts will remain in effect only if the Board of Trustees (the “Board”) of the Fund, including a majority of 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 term is defined under the 1940 Act (the “Independent Trustees”), annually review and approve them. Thus, at a meeting held on November 12, 2009, the Board, including a majority of the Independent Trustees, considered whether to renew the investment advisory contract (the “Advisory Contract”) between ING Investments, LLC (the “Adviser”) and the sub-advisory contract (“Sub-Advisory Contract”) with ING Investment Management Co. (the “Sub-Adviser”).
 
The Independent Trustees also held separate meetings on October 13 and November 10, 2009 to consider the renewal of the Advisory Contract and Sub-Advisory Contract. As a result, subsequent references herein to factors considered and determinations made by the Independent Trustees include, as applicable, factors considered and determinations made on those earlier dates by the Independent Trustees.
 
At its November 12, 2009 meeting, the Board voted to renew the Advisory and Sub-Advisory Contracts for the Fund. In reaching these decisions, the Board took into account information furnished to it throughout the year at regular meetings of the Board and the Board’s committees, as well as information prepared specifically in connection with the annual renewal 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 Advisory Contract and Sub-Advisory Contract were considered at the same Board meeting, the Trustees considered the Fund’s advisory and sub-advisory relationships separately.
 
Provided below is an overview of the Board’s contract approval process in general, as well as a discussion of certain specific factors that the Board considered at its renewal meeting. While the Board gave its attention to the information furnished, at its request, that was most relevant to its considerations, discussed below are a number of the primary factors relevant to the Board’s consideration as to whether to renew the Advisory and Sub-Advisory Contracts for the one-year period ending November 30, 2010. Each Board member may have accorded different weight to the various factors in reaching his or her conclusions with respect to the Fund’s advisory and sub-advisory arrangements.
 
Overview of the Contract Renewal and Approval Process
 
Several years ago, the Independent Trustees instituted a revised process by which they seek and consider relevant information when they decide whether to approve new or existing advisory and sub-advisory arrangements for the investment companies in the ING Funds complex under their jurisdiction, including the Fund’s existing Advisory and Sub-Advisory Contracts. Among other actions, the Independent Trustees: retained the services of independent consultants with experience in the mutual fund industry to assist the Independent Trustees in working with the 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 advisory and sub-advisory relationships and to help evaluate that information; established a specific format in which certain requested information is provided to the Board; and determined the process for reviewing such information in connection with advisory and sub-advisory contract renewals and approvals. The end result was an enhanced process which is currently employed by the Independent Trustees to review and analyze information in connection with their annual renewal of the ING Funds’ advisory and sub-advisory contracts, as well as their review and approval of new advisory relationships.
 
Since the current renewal and approval process was first implemented, the Board’s membership has changed substantially through periodic retirements of some Trustees and the appointment and election of new Trustees. In addition, throughout this period the Independent Trustees have reviewed and refined the renewal and approval process at least annually. The Board also established a Contracts Committee and two Investment Review Committees (“IRCs”), including the International/Balanced/Fixed Income Funds Investment


32


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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)
 
Review Committee (the “I/B/F IRC”). Among other matters, the Contracts Committee provides oversight with respect to the contracts renewal process, and the Fund is assigned to the I/B/F IRC, which provides oversight regarding, among other matters, investment performance.
 
The type and format of the information provided to the Board or to legal counsel for the Independent Trustees in connection with the contract approval and renewal process has been codified in the ING Funds 15(c) Methodology Guide. This Guide was developed under the direction of the Independent Trustees and sets out a blueprint pursuant to which the Independent Trustees request certain information that they deem important to facilitate an informed review in connection with initial and annual approvals of advisory and sub-advisory contracts.
 
Management provides certain of the information requested by the 15(c) Methodology Guide in Fund Analysis and Comparison Tables (“FACT sheets”) prior to the Independent Trustees’ review of advisory and sub-advisory arrangements (including the Fund’s Advisory and Sub-Advisory Contracts). The Independent Trustees previously retained an independent firm to verify and test the accuracy of certain FACT sheet data for a representative sample of funds in the ING Funds complex. In addition, in 2007, 2008 and 2009, the Contracts Committee employed the services of 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 sheets, and proposed Selected Peer Group of investment companies (“SPG”) to be used by the Fund for certain comparison purposes during the renewal process.
 
As part of an ongoing process, the Contracts Committee recommends or considers recommendations from Management for refinements to the 15(c) Methodology Guide and other aspects of the review process, and the Board’s IRCs, including the I/B/F IRC, review benchmarks used to assess the performance of the funds in the ING Funds complex. The IRCs may apply a heightened level of scrutiny in cases where performance has lagged an ING Fund’s relevant benchmark and/or SPG.
 
The Board employed its process for reviewing contracts when considering the renewals of the Fund’s Advisory and Sub-Advisory Contracts that would be effective through November 30, 2010. Set forth below is a discussion of many of the Board’s primary considerations and conclusions resulting from this process.
 
Nature, Extent and Quality of Service
 
In determining whether to approve the Advisory and Sub-Advisory Contracts for the Fund for the year ending November 30, 2010, 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 Adviser and Sub-Adviser. This included information regarding the Adviser and 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 renewal meetings.
 
The materials requested by and provided to the Board and/or to K&L Gates prior to the November 12, 2009 Board meeting included, among other information, the following items for the Fund: (1) FACT sheets that provided information regarding the performance and expenses of the Fund and other similarly managed funds in its SPG, as well as information regarding the Fund’s 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 sheets were prepared, including the manner in which the Fund’s benchmark and SPG were selected and how profitability was determined; (4) responses from the Adviser and Sub-Adviser to a series of questions posed by K&L Gates on behalf of the Trustees; (5) copies of the forms of Advisory Contract and Sub-Advisory Contract; (6) copies of the Forms ADV for the Adviser and Sub-Adviser; (7) financial statements for the Adviser and Sub-Adviser; (8) a draft of a narrative summary addressing key factors the Board customarily considers in evaluating the renewals of the ING Funds’ (including the Fund’s) advisory contracts and sub-advisory contract, including a written analysis for the Fund of how performance, fees and expenses compare to its SPG and designated benchmark; (9) independent analyses of Fund performance by the Fund’s Chief Investment Risk Officer; (10) information regarding net asset flows into and out of the Fund; and (11) other information relevant to the Board’s evaluations.
 
The Fund’s common shares were used for purposes of certain comparisons to the funds in its SPG. Common shares were selected because they are the only Fund


33


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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)
 
class issued and outstanding. The common shares were compared to the analogous class of shares for each fund in the SPG. The mutual funds included in the Fund’s SPG were selected based upon criteria designed to mirror the Fund share class being compared to the SPG.
 
In arriving at its conclusions with respect to the Advisory Contract, the Board was mindful of the “manager-of-managers” platform of the ING Funds that has been developed by Management. The Board also considered the techniques that the Adviser has developed, at the Board’s direction, to screen and perform due diligence on the sub-advisers that are recommended to the Board to manage the investment portfolios of the funds in the ING Funds complex. The Board noted the resources that the Adviser has committed to the Board and the I/B/F IRC to assist the Board and the I/B/F IRC with their assessment of the investment performance of the funds in the ING Funds complex (including the Fund) on an ongoing basis throughout the year. This includes the appointment of a Chief Investment Risk Officer and his staff, who report directly to the Board and who have developed attribution analyses and other metrics used by the Board’s IRCs to analyze the key factors underlying investment performance for the funds in the ING Funds complex. The Board also noted the techniques used by the Adviser to monitor the performance of the Sub-Adviser.
 
In considering the Fund’s Advisory Contract, the Board also considered the extent of benefits provided to the Fund’s shareholders, beyond advisory services, from being part of the ING family of funds. The Board also took into account the Adviser’s efforts in recent years to reduce the expenses of the ING Funds through renegotiated arrangements with the ING Funds’ service providers. In addition, the Board considered the efforts of the Adviser and the expenses that it incurred in recent years to help make the ING Funds complex more efficient by combinations of similar funds.
 
Further, the Board 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 by Adviser and Sub-Adviser personnel with codes of ethics. The Board considered reports from the Fund’s Chief Compliance Officer (“CCO”) evaluating whether the regulatory compliance systems and procedures of the Adviser and 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 CCO’s 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 Board’s Compliance Committee that guide the CCO’s compliance oversight function.
 
The Board reviewed the level of staffing, quality and experience of the Fund’s portfolio management team. The Board took into account the respective resources and reputations of the Adviser and Sub-Adviser, and evaluated the ability of the Adviser and Sub-Adviser to attract and retain qualified investment advisory personnel. The Board also considered the adequacy of the resources committed to the Fund (and other relevant funds in the ING Funds complex) by the Adviser and Sub-Adviser, and whether those resources are commensurate with the needs of the Fund and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of the Adviser and Sub-Adviser.
 
Based on their deliberations and the materials presented to them, the Board concluded that the advisory and related services provided by the Adviser and Sub-Adviser are appropriate in light of the Fund’s operations, the competitive landscape of the investment company business, and investor needs, and that the nature and quality of the overall services provided by the Adviser and Sub-Adviser were appropriate.
 
Fund Performance
 
In assessing the advisory and sub-advisory relationships, the Board placed emphasis on the net investment returns of the Fund. While the Board considered the performance reports and discussions with portfolio managers at Board and committee meetings during the year, particular attention in assessing performance was given to the FACT sheets furnished in connection with the renewal process. The FACT sheet prepared for the Fund included its investment performance compared to the Fund’s Morningstar category median, Lipper category median, SPG and primary benchmark. The FACT sheet performance data was as of June 30, 2009. In addition,


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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)
 
the Board also considered at its November 12, 2009 meeting certain additional data regarding performance and the Fund’s asset level as of September 30, 2009.
 
The Fund’s performance was compared to its Morningstar category median and its primary benchmark, a broad-based securities market index that appears in the Fund’s prospectus. With respect to Morningstar quintile rankings, the first quintile represents the highest (best) performance and the fifth quintile represents the lowest performance.
 
In considering whether to approve the renewal of the Advisory and Sub-Advisory Contracts for the Fund, the Board considered that, based on performance data for the periods ended June 30, 2009: (1) the Fund outperformed its Morningstar category median for all periods presented, with the exception of the most recent calendar quarter and year-to-date periods, during which it underperformed; (2) the Fund outperformed its primary benchmark for all periods presented, with the exception of the most recent calendar quarter, during which it underperformed; and (3) the Fund is ranked in the first (highest) quintile of its Morningstar category for the one-year period, the second quintile for the three-year period, the fourth quintile for the year-to-date period, and the fifth (lowest) quintile for the most recent calendar quarter.
 
Economies of Scale
 
When evaluating the reasonableness of advisory fee rates, the Board also considered whether economies of scale will be realized by the Adviser as the Fund grows larger and the extent to which any such economies are reflected in contractual fee rates. In this regard, the Board considered the compensation under an Advisory Contract with level fees that does not include breakpoints, taking into account that the Fund is a closed-end fund. The Board also considered the extent to which economies of scale could be realized through waivers, reimbursements or expense reductions.
 
In evaluating economies of scale, the Independent Trustees also considered prior periodic management reports and industry information on this topic, and the Independent Trustees who were Board members at that time also considered a November 2006 evaluation and analysis presented to them by an independent consultant regarding fee breakpoint arrangements and economies of scale.
 
The Board also considered that the Fund had experienced material declines in assets, especially during October 2008, due to general market declines precipitated by the credit crises and other generally adverse market developments. As a result of this asset decline, the Board considered that there were fewer opportunities to realize economies of scale.
 
Information Regarding Services to Other Clients
 
The Board requested and considered information regarding the nature of services and fee rates offered by the Adviser and Sub-Adviser to other clients, including other registered investment companies and institutional accounts. The Board also noted that the fee rates charged to the Fund and other institutional clients of the Adviser or the Sub-Adviser (including other investment companies) may differ materially due to, among other reasons: differences in services; different regulatory requirements associated with registered investment companies, such as the Fund, as compared to non-registered investment company clients; market differences in fee rates that existed when the Fund first was organized; differences in the original sponsors of the Fund that now are managed by the Adviser; investment capacity constraints that existed when certain contracts were first agreed upon or that might exist at present; and different pricing structures that are necessary to be competitive in different marketing channels.
 
Fee Rates and Profitability
 
The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser. The Board also considered the contractual sub-advisory fee rates payable by the Adviser to the Sub-Adviser for sub-advisory services for the Fund. In addition, the Board considered fee waivers and expense limitations applicable to the fees payable by the Fund.
 
The Board considered: (1) the fee structure of the Fund as it relates to the services provided under the contracts; and (2) the potential fall-out benefits to the Adviser and Sub-Adviser and their respective affiliates from their association with the Fund. For the Fund, the Board determined that the fees payable to the Adviser and Sub-Adviser are reasonable for the services that each performs, which were considered in light of the nature and quality of the services that each has performed and is expected to perform.


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ADVISORY CONTRACT APPROVAL DISCUSSION (Unaudited) (continued)
 
The Board considered information on revenues, costs and profits realized by the Adviser, which was prepared by Management in accordance with the allocation methodology (including related assumptions) specified in the 15(c) Methodology Guide. In analyzing the profitability of the Adviser in connection with its services to the Fund, the Board took into account the sub-advisory fee rate payable by the Adviser to the Sub-Adviser. The Board also considered information that it requested and was provided by Management with respect to the profitability of service providers affiliated with the Adviser, as well as information provided by the Sub-Adviser with respect to its profitability. Further, the Board considered that the decline in the Fund’s asset levels caused by recent adverse economic conditions was likely to cause a similar decline in any profits realized by the Adviser and Sub-Adviser.
 
In considering the fees payable under the Advisory and Sub-Advisory Contracts for the Fund, the Board took into account the factors described above and also considered: (1) the fairness of the compensation under an Advisory Contract with level fees that does not include breakpoints; and (2) the pricing structure (including the expense ratio to be borne by shareholders) of the Fund, as compared to its SPG, including that: (a) the management fee (inclusive of a 0.10% administration fee) for the Fund is below the median and the average management fees of the funds in its SPG; and (b) the expense ratio for the Fund is below the median and the average expense ratios of the funds in its SPG.
 
In analyzing this fee data, the Board took into account Management’s representations that closed-end funds have unique distribution characteristics and their pricing structures are highly driven by the market and competitive environment at the time of their initial offering when their fee structures were established.
 
The Board recognized that analysis of the Adviser’s profitability is not an exact science and there is no uniform methodology for determining profitability for this purpose. In this context, the Board realized that Management’s calculations regarding its costs incurred in establishing the infrastructure necessary for the Fund’s operations may not be fully reflected in the expenses allocated to the Fund in determining profitability, and that the information presented may not portray all of the costs borne by Management or capture Management’s entrepreneurial risk associated with offering and managing a mutual fund complex in the current regulatory and market environment. In addition, the Board recognized that the use of different methodologies for purposes of calculating profit data can give rise to dramatically different profit and loss results.
 
Conclusion
 
After its deliberation, the Board reached the following conclusions: (1) the Fund’s management fee rate is reasonable in the context of all factors considered by the Board; (2) the Fund’s expense ratio is reasonable in the context of all factors considered by the Board; (3) the Fund’s performance is reasonable in the context of all factors considered by the Board; and (4) the sub-advisory fee rate payable by the Adviser to the Sub-Adviser is reasonable in the context of all factors considered by the Board. Based on these conclusions and other factors, the Board voted to renew the Advisory and Sub-Advisory Contracts for the Fund for the year ending November 30, 2010. During this renewal process, different Board members may have given different weight to different individual factors and related conclusions.


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SHAREHOLDER MEETING INFORMATION (Unaudited)
 
A special meeting of shareholders of ING Global Advantage and Premium Opportunity Fund was held June 25, 2009, at the offices of ING Funds, 7337 East Doubletree Ranch Road, Scottsdale, AZ 85258.
 
A brief description of each matter voted upon as well as the results are outlined below:
 
Matters:
 
To elect three members of the Board of Trustees to represent the interests of the holders of Common Shares of the Fund, with all three individuals to serve as Class I Trustees, for a term of three-years, and until the election and qualification of their successors.
 
Results:
 
                                     
            Shares
       
            Voted
       
        Shares
  Against
      Total
        Voted
  or
  Shares
  Shares
    Proposal   For   Withheld   Abstained   Voted
 
Class I Trustees
  Colleen D. Baldwin     13,964,001.051       403,716.667               14,367,717.718  
    Robert W. Crispin     13,947,888.835       419,828.883               14,367,717.718  
    Peter S. Drotch     13,951,115.804       416,601.914               14,367,717.718  
Proposal Passed


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ADDITIONAL INFORMATION (Unaudited)
 
During the period, there were no material changes in the Fund’s investment objective or policies that were not approved by the shareholders or the Fund’s charter or by-laws or in the principal risk factors associated with investment in the Fund. During the reporting period, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Fund’s portfolio.
 
During the fiscal year, the Fund reduced its quarterly distribution from $0.465 to $0.372 per quarter, commencing with the distribution paid on January 15, 2010.
 
Dividend Reinvestment Plan
 
Unless the registered owner of Common Shares elects to receive cash by contacting BNY (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 Fund’s 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 Shareholder’s Common Shares are registered. Whenever the Fund declares a dividend or other distribution (together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in Common Shares. The Common Shares will be acquired by the Plan 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 net asset value 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 participant’s account will be determined by dividing the dollar amount of the Dividend by the net asset value per Common Share on the payment date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95% of the closing market price per Common Share on the payment date. If, on the payment date for any Dividend, the net asset value per Common Share is greater than the closing market value plus estimated brokerage 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 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.
 
It is contemplated that the Fund will pay 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 net asset value per Common Share, the average per Common Share purchase price paid by the Plan Administrator may exceed the net asset value of the Common Shares, resulting in the acquisition of fewer Common Shares than if the Dividend had been paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan Agent is unable to invest the full Dividend amount in Open-Market Purchases during


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ADDITIONAL INFORMATION (Unaudited) (continued)
 
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 net asset value per common share at the close of business on the Last Purchase Date provided that, if the net asset value is less than or equal to 95% of the then current market price per Common Share, the dollar amount of the Dividend will be divided by 95% of the market price on the payment date.
 
The Plan 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 shareholder’s 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 should be directed to the Fund’s Shareholder Service Department at (800) 992-0180.
 
KEY FINANCIAL DATES — CALENDAR 2010 DISTRIBUTIONS:
 
         
DECLARATION
  EX-DIVIDEND
  PAYABLE
DATE
 
DATE
 
DATE
 
March 19, 2010
  April 1, 2010   April 15, 2010
June 21, 2010
  July 1, 2010   July 15, 2010
September 20, 2010
  October 1, 2010   October 15, 2010
December 20, 2010
  December 29, 2010   January 17, 2011
 
Record date will be two business days after each Ex-Dividend Date. These dates are subject to change.
 
Stock Data
 
The Fund’s 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 approximate number of record holders of Common Stock as of February 28, 2010 was 14,470, which does not include 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 Fund’s CEO submitted the Annual CEO Certification on May 26, 2009 certifying that he was not aware, as of that date, of any violation by the Fund of the NYSE’s Corporate governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Fund’s principal executive and financial officers have made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Fund’s disclosure controls and procedures and internal controls over financial reporting.


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Investment Adviser
ING Investments, LLC
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
 
Administrator
ING Funds Services, LLC
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
 
Transfer Agent
BNY Mellon Shareowner Services
480 Washington Boulevard
Jersey City, NJ 07310-1900
Independent Registered Public
Accounting Firm
KPMG LLP
99 High Street
Boston, Massachusetts 02110
 
Custodian
The Bank of New York Mellon
One Wall Street
New York, New York 10286
 
Legal Counsel
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
 
 
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
 
PRAR-UIGA                  (0210-042310)
 
(ING FUNDS LOGO)


Item 2. Code of Ethics.
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 J. Michael Earley and Peter S. Drotch are audit committee financial experts, as defined in Item 3 of Form N-CSR. Mr. Earley and Mr. Drotch 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 $22,000 for the year ended February 28, 2010 and $22,000 for year ended February 28, 2009.
 
(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 $2,150 for the year ended February 28, 2010 and $4,225 for the year ended February 28, 2009.
 
(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 $6,550 in the year ended February 28, 2010 and $7,486 in the year ended February 28, 2009. 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 $5,000 for the year ended February 28, 2010 and $5,000 for the year ended February 28, 2009.
 
(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 ING 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.

 


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II. Audit Services
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.
IV. Tax Services
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

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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.
V. Other Services
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).
VII. Procedures
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.

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VIII. Delegation
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.
Effective April 23, 2008, the KPMG LLP (“KPMG”) audit team for the ING Funds accepted the global responsibility for monitoring the auditor independence for KPMG relative to the ING 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 ING entities that would impair KPMG independence with the respect to the ING Funds. In addition to receiving pre-approval from the ING Funds Audit Committee for services provided to the ING Funds and for services for ING entities in the Investment Company Complex, the audit team has developed a process for periodic notification via email to the ING Funds’ Audit Committee Chairpersons regarding requests to provide services to ING Groep NV and its affiliates from KPMG offices worldwide. Additionally, KPMG provides a quarterly summary of the fees for services that have commenced for ING Groep NV and Affiliates at each Audit Committee Meeting.

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Last Approved: November 13, 2008

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Appendix A
Pre-Approved Audit Services for the Pre-Approval Period January 1, 2009 through December 31, 2009
Service
         
    The Fund(s)   Fee Range
Statutory audits or financial audits (including tax services associated with audit services)
  Ö   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.
  Ö   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.
  Ö   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
  Ö   Not to exceed $12,600 per audit
 
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.

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Appendix B
Pre-Approved Audit-Related Services for the Pre-Approval Period January 1, 2009 through December 31, 2009
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)
  Ö   Ö   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.]
  Ö       Not to exceed $5,000 per occurrence during the Pre-Approval Period
 
           
Review of the Funds’ semi-annual financial statements
  Ö       Not to exceed $2,200 per set of financial statements per fund
 
           
Reports to regulatory or government agencies related to the annual engagement
  Ö       Up to $5,000 per occurrence during the Pre-Approval Period
 
           
Regulatory compliance assistance
  Ö   Ö   Not to exceed $5,000 per quarter
 
           
Training courses
      Ö   Not to exceed $2,000 per course
 
           
For Prime Rate Trust, agreed upon procedures for quarterly reports to rating agencies
  Ö       Not to exceed $9,450 per quarter
 
           
For Prime Rate Trust and Senior Income Fund, agreed upon procedures for the Revolving Credit and Security Agreement with Citigroup
  Ö       Not to exceed $21,000 per fund per year

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Appendix C
Pre-Approved Tax Services for the Pre-Approval Period January 1, 2009 through December 31, 2009
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
  Ö       As presented to Audit Committee2
 
           
Review of IRC Sections 851(b) and 817(h) diversification testing on a real-time basis
  Ö       As presented to Audit Committee2
 
           
Assistance and advice regarding year-end reporting for 1099’s
  Ö       As presented to Audit Committee2
 
           
Tax assistance and advice regarding statutory, regulatory or administrative developments
  Ö   Ö   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.

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Appendix C, continued
Service
             
    The Fund(s)   Fund Affiliates   Fee Range
Tax training courses
      Ö   Not to exceed $2,000 per course during the Pre-Approval Period
 
           
Tax services associated with Fund mergers
  Ö   Ö   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.
  Ö       Not to exceed $120,000 during the Pre-Approval Period

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Appendix D
Pre-Approved Other Services for the Pre-Approval Period January 1, 2009 through December 31, 2009
Service
             
    The Fund(s)   Fund Affiliates   Fee Range
Agreed-upon procedures for Class B share 12b-1 programs
      Ö   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 ING Investments, LLC.
  Ö   Ö   Not to exceed $5,000 per Fund during the
Pre-Approval Period
 
           
Agreed upon procedures for 15 (c) FACT Books
  Ö       Not to exceed $35,000 during the Pre-Approval Period

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Appendix E
Prohibited Non-Audit Services
Dated: January 1, 2009
    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
 
    Actuarial services
 
    Internal audit outsourcing services
 
    Management functions
 
    Human resources
 
    Broker-dealer, investment adviser, or investment banking services
 
    Legal services
 
    Expert services unrelated to the audit
 
    Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible

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EXHIBIT A
ING EQUITY TRUST
ING FUNDS TRUST
ING ASIA PACIFIC HIGH DIVIDEND EQUITY INCOME FUND
ING GLOBAL ADVANTAGE AND PREMIUM OPPORTUNITY FUND
ING GLOBAL EQUITY DIVIDEND AND PREMIUM OPPORTUNITY FUND
ING INTERNATIONAL HIGH DIVIDEND EQUITY INCOME FUND
ING RISK MANAGED NATURAL RESOURCES FUND
ING INVESTORS TRUST
ING MAYFLOWER TRUST
ING MUTUAL FUNDS
ING PARTNERS, INC.
ING PRIME RATE TRUST
ING SENIOR INCOME FUND
ING SEPARATE PORTFOLIOS TRUST
ING VARIABLE INSURANCE TRUST
ING VARIABLE PRODUCTS TRUST
ING INFRASTRUCTURE, INDUSTRIALS AND MATERIALS


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(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 non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant were $2,011,031 for the year ended February 28, 2010 and $1,637,485 for year ended February 28, 2009.
 
(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.

 


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Item 5. Audit Committee of Listed Registrants.
a.   The registrant has a separately-designated standing audit committee. The members are J. Michael Earley, Patricia W. Chadwick and Peter S. Drotch.
 
b.   Not applicable.
Item 6. Schedule of Investments.
Schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed End Management Investment companies.
ING FUNDS
 
PROXY VOTING PROCEDURES AND GUIDELINES
Effective Date: July 10, 2003
Revision Date: March 25, 2010
 
I. INTRODUCTION
The following are the Proxy Voting Procedures and Guidelines (the “Procedures and Guidelines”) of the ING Funds set forth on Exhibit 1 attached hereto and each portfolio or series thereof, except for any “Sub-Adviser-Voted Series” identified on Exhibit 1 and further described in Section III below (each non-Sub-Adviser-Voted Series hereinafter referred to as a “Fund” and collectively, the “Funds”). The purpose of these Procedures and Guidelines is to set forth the process by which each Fund subject to these Procedures and Guidelines will vote proxies related to the equity assets in its investment portfolio (the “portfolio securities”). The term “proxies” as used herein shall include votes in connection with annual and special meetings of equity stockholders but not those regarding bankruptcy matters and/or plans of reorganization. The Procedures and Guidelines have been approved by the Funds’ Boards of Trustees/Directors1 (each a “Board” and collectively, the “Boards”), including a majority of the independent Trustees/Directors2 of the Board. These Procedures and Guidelines may be amended only by the Board. The Board shall review these Procedures and Guidelines at its discretion, and make any revisions thereto as deemed appropriate by the Board.
II. COMPLIANCE COMMITTEE
The Boards hereby delegate to the Compliance Committee of each Board (each a “Committee” and collectively, the “Committees”) the authority and responsibility to oversee the implementation of these Procedures and Guidelines, and where applicable, to make determinations on behalf of the Board with respect to the voting of proxies on behalf of each Fund. Furthermore, the Boards hereby delegate to each Committee the authority to review and approve material changes to proxy voting procedures of any Fund’s investment adviser (the “Adviser”). The Proxy Voting Procedures of the Adviser (the “Adviser Procedures”) are attached hereto as Exhibit 2. Any determination regarding the voting of proxies of each Fund
 
1   Reference in these Procedures to one or more Funds shall, as applicable, mean those Funds that are under the jurisdiction of the particular Board or Compliance Committee at issue. No provision in these Procedures is intended to impose any duty upon the particular Board or Compliance Committee with respect to any other Fund.
 
2   The independent Trustees/Directors are those Board members who are not “interested persons” of the Funds within the meaning of Section 2(a)(19) of the Investment Company Act of 1940.
Effective Date: 07/10/03
Revision Date: 03/25/10

 


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that is made by a Committee, or any member thereof, as permitted herein, shall be deemed to be a good faith determination regarding the voting of proxies by the full Board. Each Committee may rely on the Adviser through the Agent, Proxy Coordinator and/or Proxy Group (as such terms are defined for purposes of the Adviser Procedures) to deal in the first instance with the application of these Procedures and Guidelines. Each Committee shall conduct itself in accordance with its charter.
III. DELEGATION OF VOTING AUTHORITY
Except as otherwise provided for herein, the Board hereby delegates to the Adviser to each Fund the authority and responsibility to vote all proxies with respect to all portfolio securities of the Fund in accordance with then current proxy voting procedures and guidelines that have been approved by the Board. The Board may revoke such delegation with respect to any proxy or proposal, and assume the responsibility of voting any Fund proxy or proxies as it deems appropriate. Non-material amendments to the Procedures and Guidelines may be approved for immediate implementation by the President or Chief Financial Officer of a Fund, subject to ratification at the next regularly scheduled meeting of the Compliance Committee.
A Board may elect to delegate the voting of proxies to the Sub-Adviser of a portfolio or series of the ING Funds. In so doing, the Board shall also approve the Sub-Adviser’s proxy policies for implementation on behalf of such portfolio or series (a “Sub-Adviser-Voted Series”). Sub-Adviser-Voted Series shall not be covered under these Procedures and Guidelines but rather shall be covered by such Sub-Adviser’s proxy policies, provided that the Board, including a majority of the independent Trustees/Directors1, has approved them on behalf of such Sub-Adviser-Voted Series, and ratifies any subsequent changes at the next regularly scheduled meeting of the Compliance Committee and the Board.
When a Fund participates in the lending of its securities and the securities are on loan at record date, proxies related to such securities will not be forwarded to the Adviser by the Fund’s custodian and therefore will not be voted. However, the Adviser shall use best efforts to recall or restrict specific securities from loan for the purpose of facilitating a “material” vote as described in the Adviser Procedures.
Funds that are “funds-of-funds” will “echo” vote their interests in underlying mutual funds, which may include ING Funds (or portfolios or series thereof) other than those set forth on Exhibit 1 attached hereto. This means that, if the fund-of-funds must vote on a proposal with respect to an underlying investment company, the fund-of-funds will vote its interest in that underlying fund in the same proportion all other shareholders in the investment company voted their interests.
A fund that is a “feeder” fund in a master-feeder structure does not echo vote. Rather, it passes votes requested by the underlying master fund to its shareholders. This means that, if the feeder
 
1   The independent Trustees/Directors are those Board members who are not “interested persons” of the Funds within the meaning of Section 2(a)(19) of the Investment Company Act of 1940.

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fund is solicited by the master fund, it will request instructions from its own shareholders, either directly or, in the case of an insurance-dedicated Fund, through an insurance product or retirement plan, as to the manner in which to vote its interest in an underlying master fund.
When a Fund is a feeder in a master-feeder structure, proxies for the portfolio securities owned by the master fund will be voted pursuant to the master fund’s proxy voting policies and procedures. As such, and except as otherwise noted herein with respect to vote reporting requirements, feeder Funds shall not be subject to these Procedures and Guidelines.
IV. APPROVAL AND REVIEW OF PROCEDURES
Each Fund’s Adviser has adopted proxy voting procedures in connection with the voting of portfolio securities for the Funds as attached hereto in Exhibit 2. The Board hereby approves such procedures. All material changes to the Adviser Procedures must be approved by the Board or the Compliance Committee prior to implementation; however, the President or Chief Financial Officer of a Fund may make such non-material changes as they deem appropriate, subject to ratification by the Board or the Compliance Committee at its next regularly scheduled meeting.
V. VOTING PROCEDURES AND GUIDELINES
The Guidelines that are set forth in Exhibit 3 hereto specify the manner in which the Funds generally will vote with respect to the proposals discussed therein.
Unless otherwise noted, the defined terms used hereafter shall have the same meaning as defined in the Adviser Procedures
     A. Routine Matters
The Agent shall be instructed to submit a vote in accordance with the Guidelines where such Guidelines provide a clear “For,” “Against,” “Withhold” or “Abstain” on a proposal. However, the Agent shall be directed to refer any proxy proposal to the Proxy Coordinator for instructions as if it were a matter requiring case-by-case consideration under circumstances where the application of the Guidelines is unclear, it appears to involve unusual or controversial issues, or an Investment Professional (as such term is defined for purposes of the Adviser Procedures) recommends a vote contrary to the Guidelines.
     B. Matters Requiring Case-by-Case Consideration
The Agent shall be directed to refer proxy proposals accompanied by its written analysis and voting recommendation to the Proxy Coordinator where the Guidelines have noted “case-by-case” consideration.
Upon receipt of a referral from the Agent, the Proxy Coordinator may solicit additional research from the Agent, Investment Professional(s), as well as from any other source or service.

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Except in cases in which the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation, the Proxy Coordinator will forward the Agent’s analysis and recommendation and/or any research obtained from the Investment Professional(s), the Agent or any other source to the Proxy Group. The Proxy Group may consult with the Agent and/or Investment Professional(s), as it deems necessary.
The Proxy Coordinator shall use best efforts to convene the Proxy Group with respect to all matters requiring its consideration. In the event quorum requirements cannot be timely met in connection with a voting deadline, it shall be the policy of the Funds to vote in accordance with the Agent’s recommendation, unless the Agent’s recommendation is deemed to be conflicted as provided for under the Adviser Procedures, in which case no action shall be taken on such matter (i.e., a “Non-Vote”).
  1.   Within-Guidelines Votes: Votes in Accordance with a Fund’s Guidelines and/or, where applicable, Agent Recommendation
In the event the Proxy Group, and where applicable, any Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group will instruct the Agent, through the Proxy Coordinator, to vote in this manner. Except as provided for herein, no Conflicts Report (as such term is defined for purposes of the Adviser Procedures) is required in connection with Within-Guidelines Votes.
  2.   Non-Votes: Votes in Which No Action is Taken
The Proxy Group may recommend that a Fund refrain from voting under circumstances including, but not limited to, the following: (1) if the economic effect on shareholders’ interests or the value of the portfolio holding is indeterminable or insignificant, e.g., proxies in connection with fractional shares, securities no longer held in the portfolio of an ING Fund or proxies being considered on behalf of a Fund that is no longer in existence; or (2) if the cost of voting a proxy outweighs the benefits, e.g., certain international proxies, particularly in cases in which share blocking practices may impose trading restrictions on the relevant portfolio security. In such instances, the Proxy Group may instruct the Agent, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator with standing instructions on parameters that would dictate a Non-Vote without the Proxy Group’s review of a specific proxy. It is noted a Non-Vote determination would generally not be made in connection with voting rights received pursuant to class action participation; while a Fund may no longer hold the security, a continuing economic effect on shareholders’ interests is likely.

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Reasonable efforts shall be made to secure and vote all other proxies for the Funds, but, particularly in markets in which shareholders’ rights are limited, Non-Votes may also occur in connection with a Fund’s related inability to timely access ballots or other proxy information in connection with its portfolio securities.
Non-Votes may also result in certain cases in which the Agent’s recommendation has been deemed to be conflicted, as described in V.B. above and V.B.4. below.
  3.   Out-of-Guidelines Votes: Votes Contrary to Procedures and Guidelines, or Agent Recommendation, where applicable, Where No Recommendation is Provided by Agent, or Where Agent’s Recommendation is Conflicted
If the Proxy Group recommends that a Fund vote contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, if the Agent has made no recommendation on a matter and the Procedures and Guidelines are silent, or the Agent’s recommendation on a matter is deemed to be conflicted as provided for under the Adviser Procedures, the Proxy Coordinator will then request that all members of the Proxy Group, including any members who abstained from voting on the matter or were not in attendance at the meeting at which the relevant proxy is being considered, and each Investment Professional participating in the voting process complete a Conflicts Report (as such term is defined for purposes of the Adviser Procedures). As provided for in the Adviser Procedures, the Proxy Coordinator shall be responsible for identifying to Counsel potential conflicts of interest with respect to the Agent.
If Counsel determines that a conflict of interest appears to exist with respect to the Agent, any member of the Proxy Group or the participating Investment Professional(s), the Proxy Coordinator will then contact the Compliance Committee(s) and forward to such Committee(s) all information relevant to their review, including the following materials or a summary thereof: the applicable Procedures and Guidelines, the recommendation of the Agent, where applicable, the recommendation of the Investment Professional(s), where applicable, any resources used by the Proxy Group in arriving at its recommendation, the Conflicts Report and any other written materials establishing whether a conflict of interest exists, and findings of Counsel (as such term is defined for purposes of the Adviser Procedures). Upon Counsel’s finding that a conflict of interest exists with respect to one or more members of the Proxy Group or the Advisers generally, the remaining members of the Proxy Group shall not be required to complete a Conflicts Report in connection with the proxy.
If Counsel determines that there does not appear to be a conflict of interest with respect to the Agent, any member of the Proxy Group or the participating Investment Professional(s), the Proxy Coordinator will instruct the Agent to vote the proxy as recommended by the Proxy Group.

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  4.   Referrals to a Fund’s Compliance Committee
A Fund’s Compliance Committee may consider all recommendations, analysis, research and Conflicts Reports provided to it by the Agent, Proxy Group and/or Investment Professional(s), and any other written materials used to establish whether a conflict of interest exists, in determining how to vote the proxies referred to the Committee. The Committee will instruct the Agent through the Proxy Coordinator how to vote such referred proposals.
The Proxy Coordinator shall use best efforts to timely refer matters to a Fund’s Committee for its consideration. In the event any such matter cannot be timely referred to or considered by the Committee, it shall be the policy of the Funds to vote in accordance with the Agent’s recommendation, unless the Agent’s recommendation is conflicted on a matter, in which case no action shall be taken on such matter (i.e., a “Non-Vote”).
The Proxy Coordinator will maintain a record of all proxy questions that have been referred to a Fund’s Committee, all applicable recommendations, analysis, research and Conflicts Reports.
VI. CONFLICTS OF INTEREST
In all cases in which a vote has not been clearly determined in advance by the Procedures and Guidelines or for which the Proxy Group recommends an Out-of-Guidelines Vote, and Counsel has determined that a conflict of interest appears to exist with respect to the Agent, any member of the Proxy Group, or any Investment Professional participating in the voting process, the proposal shall be referred to the Fund’s Committee for determination so that the Adviser shall have no opportunity to vote a Fund’s proxy in a situation in which it or the Agent may be deemed to have a conflict of interest. In the event a member of a Fund’s Committee believes he/she has a conflict of interest that would preclude him/her from making a voting determination in the best interests of the beneficial owners of the applicable Fund, such Committee member shall so advise the Proxy Coordinator and recuse himself/herself with respect to determinations regarding the relevant proxy.
VII. REPORTING AND RECORD RETENTION
Annually in August, each Fund will post its proxy voting record, or a link thereto, for the prior one-year period ending on June 30th on the ING Funds’ website. The proxy voting record for each Fund will also be available on Form N-PX in the EDGAR database on the SEC’s website. For any Fund that is a feeder in a master/feeder structure, no proxy voting record related to the portfolio securities owned by the master fund will be posted on the ING Funds’ website or included in the Fund’s Form N-PX; however, a cross-reference to the master fund’s proxy voting record as filed in the SEC’s EDGAR database will be included in the Fund’s Form N-PX and posted on the ING Funds’ website. If any feeder fund was solicited for vote by its underlying

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master fund during the reporting period, a record of the votes cast by means of the pass-through process described in Section III above will be included on the ING Funds’ website and in the Fund’s Form N-PX.

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EXHIBIT 1
to the
ING Funds
Proxy Voting Procedures
ING ASIA PACIFIC HIGH DIVIDEND EQUITY INCOME FUND
ING EQUITY TRUST
ING FUNDS TRUST
ING GLOBAL ADVANTAGE AND PREMIUM OPPORTUNITY FUND
ING GLOBAL EQUITY DIVIDEND AND PREMIUM OPPORTUNITY FUND
ING INFRASTRUCTURE, INDUSTRIALS AND MATERIALS FUND
ING INTERNATIONAL HIGH DIVIDEND EQUITY INCOME FUND
ING INVESTORS TRUST1
ING MAYFLOWER TRUST
ING MUTUAL FUNDS
ING PARTNERS, INC.
ING PRIME RATE TRUST
ING RISK MANAGED NATURAL RESOURCES FUND
ING SENIOR INCOME FUND
ING SEPARATE PORTFOLIOS TRUST
ING VARIABLE INSURANCE TRUST
ING VARIABLE PRODUCTS TRUST
 
1   Sub-Adviser-Voted Series: ING Franklin Mutual Shares Portfolio


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EXHIBIT 2
to the
ING Funds
Proxy Voting Procedures
ING INVESTMENTS, LLC,
ING INVESTMENT MANAGEMENT CO.
AND
DIRECTED SERVICES LLC
 
PROXY VOTING PROCEDURES
 
I. INTRODUCTION
ING Investments, LLC, ING Investment Management Co. and Directed Services LLC (each an “Adviser” and collectively, the “Advisers”) are the investment advisers for the registered investment companies and each series or portfolio thereof (each a “Fund” and collectively, the “Funds”) comprising the ING family of funds. As such, the Advisers have been delegated the authority to vote proxies with respect to securities for certain Funds over which they have day-to-day portfolio management responsibility.
The Advisers will abide by the proxy voting guidelines adopted by a Fund’s respective Board of Directors or Trustees (each a “Board” and collectively, the “Boards”) with regard to the voting of proxies unless otherwise provided in the proxy voting procedures adopted by a Fund’s Board.
In voting proxies, the Advisers are guided by general fiduciary principles. Each must act prudently, solely in the interest of the beneficial owners of the Funds it manages. The Advisers will not subordinate the interest of beneficial owners to unrelated objectives. Each Adviser will vote proxies in the manner that it believes will do the most to maximize shareholder value.
The following are the Proxy Voting Procedures of ING Investments, LLC, ING Investment Management Co. and Directed Services LLC (the “Adviser Procedures”) with respect to the voting of proxies on behalf of their client Funds as approved by the respective Board of each Fund.
Unless otherwise noted, best efforts shall be used to vote proxies in all instances.

 


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II. ROLES AND RESPONSIBILITIES
A. Proxy Coordinator
The Proxy Coordinator identified in Appendix 1 will assist in the coordination of the voting of each Fund’s proxies in accordance with the ING Funds Proxy Voting Procedures and Guidelines (the “Procedures” or “Guidelines” and collectively the “Procedures and Guidelines”). The Proxy Coordinator is authorized to direct the Agent to vote a Fund’s proxy in accordance with the Procedures and Guidelines unless the Proxy Coordinator receives a recommendation from an Investment Professional (as described below) to vote contrary to the Procedures and Guidelines. In such event, and in connection with proxy proposals requiring case-by-case consideration (except in cases in which the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation), the Proxy Coordinator will call a meeting of the Proxy Group (as described below).
Responsibilities assigned herein to the Proxy Coordinator, or activities in support thereof, may be performed by such members of the Proxy Group or employees of the Advisers’ affiliates as are deemed appropriate by the Proxy Group.
Unless specified otherwise, information provided to the Proxy Coordinator in connection with duties of the parties described herein shall be deemed delivered to the Advisers.
B. Agent
An independent proxy voting service (the “Agent”), as approved by the Board of each Fund, shall be engaged to assist in the voting of Fund proxies for publicly traded securities through the provision of vote analysis, implementation, recordkeeping and disclosure services. The Agent is ISS Governance Services, a unit of RiskMetrics Group, Inc. The Agent is responsible for coordinating with the Funds’ custodians to ensure that all proxy materials received by the custodians relating to the portfolio securities are processed in a timely fashion. To the extent applicable, the Agent is required to vote and/or refer all proxies in accordance with these Adviser Procedures. The Agent will retain a record of all proxy votes handled by the Agent. Such record must reflect all the information required to be disclosed in a Fund’s Form N-PX pursuant to Rule 30b1-4 under the Investment Company Act. In addition, the Agent is responsible for maintaining copies of all proxy statements received by issuers and to promptly provide such materials to the Adviser upon request.
The Agent shall be instructed to vote all proxies in accordance with a Fund’s Guidelines, except as otherwise instructed through the Proxy Coordinator by the Adviser’s Proxy Group or a Fund’s Compliance Committee (“Committee”).

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The Agent shall be instructed to obtain all proxies from the Funds’ custodians and to review each proxy proposal against the Guidelines. The Agent also shall be requested to call the Proxy Coordinator’s attention to specific proxy proposals that although governed by the Guidelines appear to involve unusual or controversial issues.
Subject to the oversight of the Advisers, the Agent shall establish and maintain adequate internal controls and policies in connection with the provision of proxy voting services voting to the Advisers, including methods to reasonably ensure that its analysis and recommendations are not influenced by conflict of interest, and shall disclose such controls and policies to the Advisers when and as provided for herein. Unless otherwise specified, references herein to recommendations of the Agent shall refer to those in which no conflict of interest has been identified.
C. Proxy Group
The Adviser shall establish a Proxy Group (the “Group” or “Proxy Group”) which shall assist in the review of the Agent’s recommendations when a proxy voting issue is referred to the Group through the Proxy Coordinator. The members of the Proxy Group, which may include employees of the Advisers’ affiliates, are identified in Appendix 1, as may be amended from time at the Advisers’ discretion.
A minimum of four (4) members of the Proxy Group (or three (3) if one member of the quorum is either the Fund’s Chief Investment Risk Officer or Chief Financial Officer) shall constitute a quorum for purposes of taking action at any meeting of the Group. The vote of a simple majority of the members present and voting shall determine any matter submitted to a vote. Tie votes shall be broken by securing the vote of members not present at the meeting; provided, however, that the Proxy Coordinator shall ensure compliance with all applicable voting and conflict of interest procedures and shall use best efforts to secure votes from all or as many absent members as may reasonably be accomplished. A member of the Proxy Group may abstain from voting on any given matter, provided that quorum is not lost for purposes of taking action and that the abstaining member still participates in any conflict of interest processes required in connection with the matter. The Proxy Group may meet in person or by telephone. The Proxy Group also may take action via electronic mail in lieu of a meeting, provided that each Group member has received a copy of any relevant electronic mail transmissions circulated by each other participating Group member prior to voting and provided that the Proxy Coordinator follows the directions of a majority of a quorum (as defined above) responding via electronic mail. For all votes taken in person or by telephone or teleconference, the vote shall be taken outside the presence of any person other than the members of the Proxy Group and such other persons whose attendance may be deemed appropriate by the Proxy Group from time to time in furtherance of its duties or the day-to-day administration of the Funds. In its discretion, the Proxy Group may provide the Proxy Coordinator with standing instructions to perform responsibilities assigned herein to the Proxy Group, or activities in support thereof, on its behalf, provided that such

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instructions do not contravene any requirements of these Adviser Procedures or a Fund’s Procedures and Guidelines.
A meeting of the Proxy Group will be held whenever (1) the Proxy Coordinator receives a recommendation from an Investment Professional to vote a Fund’s proxy contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, (2) the Agent has made no recommendation with respect to a vote on a proposal, or (3) a matter requires case-by-case consideration, including those in which the Agent’s recommendation is deemed to be conflicted as provided for under these Adviser Procedures, provided that, if the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation and no issue of conflict must be considered, the Proxy Coordinator may implement the instructions without calling a meeting of the Proxy Group.
For each proposal referred to the Proxy Group, it will review (1) the relevant Procedures and Guidelines, (2) the recommendation of the Agent, if any, (3) the recommendation of the Investment Professional(s), if any, and (4) any other resources that any member of the Proxy Group deems appropriate to aid in a determination of a recommendation.
If the Proxy Group recommends that a Fund vote in accordance with the Procedures and Guidelines, or the recommendation of the Agent, where applicable, it shall instruct the Proxy Coordinator to so advise the Agent.
If the Proxy Group recommends that a Fund vote contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, or if the Agent’s recommendation on a matter is deemed to be conflicted, it shall follow the procedures for such voting as established by a Fund’s Board.
The Proxy Coordinator shall use best efforts to convene the Proxy Group with respect to all matters requiring its consideration. In the event quorum requirements cannot be timely met in connection with to a voting deadline, the Proxy Coordinator shall follow the procedures for such voting as established by a Fund’s Board.
D. Investment Professionals
The Funds’ Advisers, sub-advisers and/or portfolio managers (each referred to herein as an “Investment Professional” and collectively, “Investment Professionals”) may submit, or be asked to submit, a recommendation to the Proxy Group regarding the voting of proxies related to the portfolio securities over which they have day-to-day portfolio management responsibility. The Investment Professionals may accompany their recommendation with any other research materials that they deem appropriate or with a request that the vote be deemed “material” in the context of the portfolio(s) they manage, such that lending activity on behalf of such portfolio(s) with respect to the relevant security should be reviewed by the Proxy Group and considered for recall and/or

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restriction. Input from the relevant sub-advisers and/or portfolio managers shall be given primary consideration in the Proxy Group’s determination of whether a given proxy vote is to be deemed material and the associated security accordingly restricted from lending. The determination that a vote is material in the context of a Fund’s portfolio shall not mean that such vote is considered material across all Funds voting that meeting. In order to recall or restrict shares timely for material voting purposes, the Proxy Group shall use best efforts to consider, and when deemed appropriate, to act upon, such requests timely, and requests to review lending activity in connection with a potentially material vote may be initiated by any relevant Investment Professional and submitted for the Proxy Group’s consideration at any time.
III. VOTING PROCEDURES
  A.   In all cases, the Adviser shall follow the voting procedures as set forth in the Procedures and Guidelines of the Fund on whose behalf the Adviser is exercising delegated authority to vote.
 
  B.   Routine Matters
The Agent shall be instructed to submit a vote in accordance with the Guidelines where such Guidelines provide a clear “For,” “Against,” “Withhold” or “Abstain” on a proposal. However, the Agent shall be directed to refer any proxy proposal to the Proxy Coordinator for instructions as if it were a matter requiring case-by-case consideration under circumstances where the application of the Guidelines is unclear, it appears to involve unusual or controversial issues, or an Investment Professional recommends a vote contrary to the Guidelines.
  C.   Matters Requiring Case-by-Case Consideration
The Agent shall be directed to refer proxy proposals accompanied by its written analysis and voting recommendation to the Proxy Coordinator where the Guidelines have noted “case-by-case” consideration.
Upon receipt of a referral from the Agent, the Proxy Coordinator may solicit additional research from the Agent, Investment Professional(s), as well as from any other source or service.
Except in cases in which the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation, the Proxy Coordinator will forward the Agent’s analysis and recommendation and/or any research obtained from the Investment Professional(s), the Agent or any other source to the Proxy Group. The Proxy Group may consult with the Agent and/or Investment Professional(s), as it deems necessary.

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  1.   Within-Guidelines Votes: Votes in Accordance with a Fund’s Guidelines and/or, where applicable, Agent Recommendation
In the event the Proxy Group, and where applicable, any Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group will instruct the Agent, through the Proxy Coordinator, to vote in this manner. Except as provided for herein, no Conflicts Report (as such term is defined herein) is required in connection with Within-Guidelines Votes.
  2.   Non-Votes: Votes in Which No Action is Taken
The Proxy Group may recommend that a Fund refrain from voting under circumstances including, but not limited to, the following: (1) if the economic effect on shareholders’ interests or the value of the portfolio holding is indeterminable or insignificant, e.g., proxies in connection with fractional shares, securities no longer held in the portfolio of an ING Fund or proxies being considered on behalf of a Fund that is no longer in existence; or (2) if the cost of voting a proxy outweighs the benefits, e.g., certain international proxies, particularly in cases in which share blocking practices may impose trading restrictions on the relevant portfolio security. In such instances, the Proxy Group may instruct the Agent, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator with standing instructions on parameters that would dictate a Non-Vote without the Proxy Group’s review of a specific proxy. It is noted a Non-Vote determination would generally not be made in connection with voting rights received pursuant to class action participation; while a Fund may no longer hold the security, a continuing economic effect on shareholders’ interests is likely.
Reasonable efforts shall be made to secure and vote all other proxies for the Funds, but, particularly in markets in which shareholders’ rights are limited, Non-Votes may also occur in connection with a Fund’s rela