UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number: 811-21938

 

Voya Natural Resources Equity Income Fund

(Exact name of registrant as specified in charter)

 

7337 East Doubletree Ranch Rd., Suite 100, Scottsdale, AZ 85258

(Address of principal executive offices) (Zip code)

 

Huey P. Falgout, Jr., 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258

(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: November 30, 2017

 

 

 

 

 

 

Item 1. Schedule of Investments

 

The schedules of investments as of the close of the reporting period are set forth below for:

 

Voya Natural Resources Equity Income Fund

 

The schedules are not audited.

 

 

 

 

  PORTFOLIO OF INVESTMENTS
Voya Natural Resources Equity Income Fund as of November 30, 2017 (Unaudited)

 

Shares         Value   Percentage
of Net
Assets		 
COMMON STOCK: 99.2% 
       Canada: 17.7%
34,029      Agnico-Eagle Mines Ltd.  $1,487,408    1.0 
137,763      Barrick Gold Corp.   1,898,374    1.3 
123,047      Canadian Natural Resources Ltd.   4,173,754    2.9 
35,495      Cenovus Energy, Inc.   337,558    0.2 
119,939      Crescent Point Energy Corp.   874,355    0.6 
110,214      Enbridge, Inc.   4,156,170    2.9 
5,308      Franco-Nevada Corp.   430,744    0.3 
28,606      GoldCorp, Inc.   361,580    0.3 
263,371   (1)  Kinross Gold Corp.   1,095,623    0.8 
30,711      Pembina Pipeline Corp.   1,070,586    0.7 
107,046      Suncor Energy, Inc.   3,720,919    2.6 
72,841      Teck Cominco Ltd. - Class B   1,673,886    1.2 
86,047      TransCanada Corp.   4,132,837    2.9 
           25,413,794    17.7 
                  
       Netherlands: 0.8%          
17,279      Royal Dutch Shell PLC - Class A ADR   1,107,929    0.8 
                  
       United Kingdom: 1.2%          
63,101      TechnipFMC PLC   1,807,213    1.2 
                  
       United States: 79.5%          
10,133   (1)  Alcoa Corp.   420,621    0.3 
36,095      Anadarko Petroleum Corp.   1,735,809    1.2 
19,218      Andeavor   2,026,922    1.4 
10,818      Apache Corp.   452,517    0.3 
15,202      Avery Dennison Corp.   1,734,852    1.2 
31,369      Baker Hughes a GE Co.   932,600    0.6 
10,063      Ball Corp.   401,614    0.3 
28,979   (1)  Berry Plastics Group, Inc.   1,732,075    1.2 
25,047      Boise Cascade Co.   964,309    0.7 
52,798   (1)  Carrizo Oil & Gas, Inc.   1,020,585    0.7 
92,476      Chevron Corp.   11,003,719    7.7 
15,478      Compass Minerals International, Inc.   1,079,591    0.8 
20,363   (1)  Concho Resources, Inc./Midland TX   2,847,969    2.0 
95,991      ConocoPhillips   4,884,022    3.4 
27,822   (1)  Crown Holdings, Inc.   1,661,808    1.2 
26,623      CVR Energy, Inc.   869,241    0.6 
16,403      Devon Energy Corp.   632,008    0.4 
14,623   (1)  Diamondback Energy, Inc.   1,598,440    1.1 
22,767   (1)  Dril-Quip, Inc.   1,091,678    0.8 
6,624      Eagle Materials, Inc.   741,424    0.5 
51,540      EOG Resources, Inc.   5,273,573    3.7 
35,957      EQT Corp.   2,143,037    1.5 
140,179      Exxon Mobil Corp.   11,675,509    8.1 
39,859   (1)  Freeport-McMoRan, Inc.   554,837    0.4 
18,330      Greif, Inc. - Class A   1,000,268    0.7 
63,167   (1)  Gulfport Energy Corp.   808,538    0.6 
71,586      Halliburton Co.   2,990,863    2.1 
12,141      HollyFrontier Corp.   540,032    0.4 
15,268              International Paper Co.   864,321    0.6 

 

Shares         Value   Percentage
of Net
Assets		 
COMMON STOCK: (continued) 
       United States: (continued)          
48,746      KapStone Paper and Packaging Corp.  $1,083,624    0.8 
161,625      Kinder Morgan, Inc.   2,784,799    1.9 
73,466   (1)  Laredo Petroleum, Inc.   785,352    0.5 
101,366      Marathon Oil Corp.   1,504,271    1.0 
54,426      Marathon Petroleum Corp.   3,408,700    2.4 
4,071      Martin Marietta Materials, Inc.   848,356    0.6 
11,732      National Oilwell Varco, Inc.   393,609    0.3 
18,667   (1)  Newfield Exploration Co.   577,370    0.4 
62,023      Newmont Mining Corp.   2,294,231    1.6 
58,938      Noble Energy, Inc.   1,550,069    1.1 
47,660      Occidental Petroleum Corp.   3,360,030    2.3 
13,133      Oneok, Inc.   681,603    0.5 
16,636      Packaging Corp. of America   1,973,030    1.4 
25,553      PBF Energy, Inc.   827,151    0.6 
19,938   (1)  PDC Energy, Inc.   916,151    0.6 
25,552      Phillips 66   2,492,853    1.7 
14,548      Pioneer Natural Resources Co.   2,270,070    1.6 
126,380   (1)  QEP Resources, Inc.   1,220,831    0.8 
32,686      Range Resources Corp.   589,002    0.4 
130,411      Schlumberger Ltd.   8,196,331    5.7 
31,685      SM Energy Co.   653,978    0.5 
86,138   (1)  Southwestern Energy Co.   547,838    0.4 
31,119   (1)  Summit Materials, Inc.   957,220    0.7 
127,400      Tahoe Resources, Inc.   561,834    0.4 
11,262      Targa Resources Corp.   488,771    0.3 
29,101   (1)  Unit Corp.   622,470    0.4 
29,934      US Silica Holdings, Inc.   992,911    0.7 
45,667      Valero Energy Corp.   3,910,009    2.7 
3,229      Vulcan Materials Co.   405,724    0.3 
7,267      WestRock Co.   453,533    0.3 
27,462   (1)  Whiting Petroleum Corp.   685,177    0.5 
61,414      Williams Cos., Inc.   1,784,077    1.2 
20,761              World Fuel Services Corp.   582,761    0.4 
           114,086,518    79.5 
                  
    Total Common Stock          
    (Cost $156,067,585)   142,415,454    99.2 
               
SHORT-TERM INVESTMENTS: 0.8% 
       Mutual Funds: 0.8%          
1,118,000   (2)  BlackRock Liquidity Funds, FedFund, Institutional Class, 0.960%          
       (Cost $1,118,000)   1,118,000    0.8 
                  
    Total Short-Term Investments           
    (Cost $1,118,000)   1,118,000    0.8 
                   
    Total Investments in Securities
(Cost $157,185,585)		  $143,533,454    100.0 
    Liabilities in Excess of Other Assets   (23,788)   – 
    Net Assets  $143,509,666    100.0 

 

 ADR American Depositary Receipt
(1) Non-income producing security.
(2) Rate shown is the 7-day yield as of November 30, 2017.

 

 

 

 

 

  PORTFOLIO OF INVESTMENTS
Voya Natural Resources Equity Income Fund as of November 30, 2017 (Unaudited)(Continued)

 

Industry Diversification  Percentage
of Net Assets		 
Oil & Gas Exploration & Production   24.0%
Integrated Oil & Gas   21.7 
Oil & Gas Equipment & Services   10.1 
Oil & Gas Storage & Transportation   9.2 
Oil & Gas Refining & Marketing   7.8 
Gold   4.6 
Paper Packaging   3.5 
Metal & Glass Containers   3.4 
Oil & Gas   2.3 
Diversified Metals & Mining   2.4 
Oil&Gas   1.9 
Mining   1.8 
Construction Materials   1.4 
Paper Products   0.8 
Pipelines   0.7 
Forest Products   0.7 
Building Materials   0.7 
Oil&Gas Services   0.6 
Utilities   0.5 
Oil & Gas Drilling   0.4 
Energy   0.4 
Aluminum   0.3 
Short-Term Investments   0.8 
Liabilities in Excess of Other Assets   – 
Net Assets   100.0%

 

Fair Value Measurements

 

The following is a summary of the fair valuations according to the inputs used as of November 30, 2017 in valuing the assets and liabilities:

 

   Quoted Prices
in Active Markets
for Identical
Investments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Fair Value
at
November 30,
2017		 
Asset Table                    
Investments, at fair value                    
Common Stock*  $142,415,454   $–   $–   $142,415,454 
Short-Term Investments   1,118,000    –    –    1,118,000 
Total Investments, at fair value  $143,533,454   $–   $–   $143,533,454 
Liabilities Table                    
Other Financial Instruments+                    
Written Options  $–   $(266,365)  $–   $(266,365)
Total Liabilities  $–   $(266,365)  $–   $(266,365)

 

+ Other Financial Instruments are derivatives not reflected in the Portfolio of Investments and may include open forward foreign currency contracts, futures, centrally cleared swaps, OTC swaps and written options. Forward foreign currency contracts, futures and centrally cleared swaps are valued at the unrealized gain (loss) on the instrument.  OTC swaps and written options are valued at the fair value of the instrument.
* For further breakdown of Common Stock by sector, please refer to the Portfolio of Investments.

 

 

 

 

  PORTFOLIO OF INVESTMENTS
Voya Natural Resources Equity Income Fund as of November 30, 2017 (Unaudited)(Continued)

 

At November 30, 2017, the following OTC written equity options were outstanding for Voya Natural Resources Equity Income Fund:

 

Description  Counterparty  Put/Call  Expiration
Date		  Exercise
Price		  Number of
Contracts		   Notional
Amount		   Premiums
Received		   Fair Value 
                                
Energy Select Sector SPDR® Fund  UBS AG  Call  12/01/17  70.050  USD   594,059    41,049,477   $287,643   $(4,037)
Materials Select Sector SPDR® Fund  HSBC Bank USA N.A.  Call  12/15/17  59.480  USD   156,063    9,295,112    30,947    (78,979)
SPDR S&P Oil & Gas Exploration & Production ETF  Goldman Sachs & Co.  Call  12/15/17  36.750  USD   428,571    15,308,556    222,728    (168,051)
VanEck Vectors Gold Miners ETF  Goldman Sachs & Co.  Call  12/15/17  23.250  USD   245,722    5,521,374    90,844    (15,298)
                            $632,162   $(266,365)

 

Currency Abbreviations
USD - United States Dollar

 

A summary of derivative instruments by primary risk exposure is outlined in the following tables.

 

The fair value of derivative instruments as of November 30, 2017 was as follows:

 

Derivatives not accounted for as hedging instruments  Instrument Type  Fair Value 
        
Liability Derivatives       
         
Equity contracts  Written options  $266,365 
Total Liability Derivatives     $266,365 

 

The following is a summary by counterparty of the fair value of OTC derivative instruments subject to Master Netting Agreements and collateral pledged (received), if any, at November 30, 2017:

 

   HSBC Bank USA Inc.   Goldman Sachs & Co.   UBS AG   Totals 
Liabilities:                
Written options  $78,979   $183,349   $4,037   $266,365 
Total Liabilities  $78,979   $183,349   $4,037   $266,365 
                     
Net OTC derivative instruments by counterparty, at fair value  $(78,979)  $(183,349)  $(4,037)   (266,365)
                     
Total collateral pledged by the Fund/(Received from counterparty)  $-   $-   $-   $- 
                     
Net Exposure(1)  $(78,979)  $(183,349)  $(4,037)  $(266,365)

 

(1) Positive net exposure represents amounts due from each respective counterparty. Negative exposure represents amounts due from the Fund.

 

At November 30, 2017, the aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments at period end were:

 

Cost for federal income tax purposes was $156,740,780.

 

Net unrealized depreciation consisted of:

 

Gross Unrealized Appreciation  $11,123,527 
Gross Unrealized Depreciation   (24,574,663)
      
Net Unrealized Depreciation  $(13,451,136)

 

 

 

 

Item 2. Controls and Procedures.

 

(a)Based on our evaluation conducted within 90 days of the filing date, hereof, the design and operation of the registrant’s disclosure controls and procedures are effective to ensure that material information relating to the registrant is made known to the certifying officers by others within the appropriate entities, particularly during the period in which Forms N-Q are being prepared, and the registrant’s disclosure controls and procedures allow timely preparation and review of the information for the registrant’s Form N-Q and the officer certifications of such Form N-Q.

 

(b)There were no significant changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as EX-99.CERT.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant): Voya Natural Resources Equity Income Fund

 

By /s/ Shaun P. Mathews  
  Shaun P. Mathews  
  President and Chief Executive Officer  
     
Date: January 26, 2018  

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By /s/ Shaun P. Mathews
  Shaun P. Mathews  
  President and Chief Executive Officer  
     
Date: January 26, 2018  
     
By /s/ Todd Modic  
  Todd Modic  
  Senior Vice President and Chief Financial Officer  
     
Date: January 26, 2018