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 811-21765
Macquarie Global Infrastructure Total Return Fund Inc.
(Exact name of registrant as specified in charter)
125 West 55th Street, New York, NY 10019
(Address of principal executive offices) (Zip code)
Macquarie Global Infrastructure Total Return Fund Inc.
125 West 55th Street, New York, NY 10019
(Name and address of agent for service)
Registrants telephone number, including area code: 1 (866) 567-4771
Date of fiscal year end: November 30
Date of reporting period: December 1, 2015 November 30, 2016
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
Section 19(b) disclosure | ||
Macquarie Global Infrastructure Total Return Fund Inc. | November 30, 2016 (Unaudited) |
Caution regarding forward-looking statements and past performance
1
Stockholder letter | ||||
Macquarie Global Infrastructure Total Return Fund Inc. | November 30, 2016 | (Unaudited) |
2
3
Stockholder letter
Macquarie Global Infrastructure Total Return Fund Inc.
4
underperformed the MSCI World Index (Net Total Return).
Fund Diversification by Country & Sector
As of November 30, 2016, the Fund was well diversified across 52 positions in global infrastructure stocks, representing 16 countries and 11 sectors. (During the Period, the main increases in the Funds weightings were Airports and Electric Utilities while the largest declines in sector weightings were with the Toll Roads and Electricity & Gas Distribution sectors. Sector changes were driven principally by bottom-up stock selection.)
The table below shows the top ten holdings in the Fund as of November 30, 2016.
Rank | Stock | Country | Infrastructure Sector6 | %7 | ||||
1 |
Transurban Group | Australia | Toll roads | 5.7 | ||||
2 |
Sempra Energy | United States | Electricity and gas distribution | 5.2 | ||||
3 |
Enbridge Inc | Canada | Pipelines | 5.0 | ||||
4 |
Abertis Infraestructuras SA | Spain | Toll roads Rail / other | 4.0 | ||||
5 |
Groupe Eurotunnel SE | France | transportation | 3.9 | ||||
6 |
Cheniere Energy Inc | United States | Pipelines | 3.8 | ||||
7 |
Duke Energy Corp | United States | Electric utility | 3.4 | ||||
8 |
Kinder Morgan Inc/DE | United States | Pipelines | 3.1 | ||||
9 |
NextEra Energy Inc | United States | Electric utility | 3.1 | ||||
10 |
TransCanada Corp | Canada | Pipelines | 3.0 |
6 | Industry segments are based on the Managers own evaluation of issuers and industries, and do not necessarily track any standard industry or segment classification. Classifications are made by the Investment team and based on the primary business segment of the issuer. |
7 | Based on Total Assets as defined in the Prospectus. |
Subject | to change in the future. |
5
Stockholder letter
Macquarie Global Infrastructure Total Return Fund Inc.
The tables below show the structure of the portfolio by country and sector.
Country | % of Fund on November 30, 20167 |
% Point Change over Period |
% of Fund on November 30, 20157 | ||||||||||||
United States |
37.1 | (5.0 | ) | 42.1 | |||||||||||
Canada |
9.3 | 0.6 | 8.7 | ||||||||||||
Australia |
8.7 | 0.3 | 8.4 | ||||||||||||
Spain |
8.6 | 3.3 | 5.3 | ||||||||||||
China |
6.8 | (0.8 | ) | 7.6 | |||||||||||
Italy |
6.7 | 2.9 | 3.8 | ||||||||||||
United Kingdom |
4.9 | (0.9 | ) | 5.8 | |||||||||||
France |
4.4 | (3.4 | ) | 7.8 | |||||||||||
Mexico |
2.4 | 1.6 | 0.8 | ||||||||||||
Germany |
2.2 | 0.2 | 2.0 | ||||||||||||
Brazil |
1.8 | 1.3 | 0.5 | ||||||||||||
Switzerland |
1.7 | | 1.7 | ||||||||||||
Singapore |
1.2 | (1.0 | ) | 2.2 | |||||||||||
Japan |
1.0 | 1.0 | | ||||||||||||
Netherlands |
0.5 | 0.5 | | ||||||||||||
Luxembourg |
0.5 | 0.3 | 0.2 | ||||||||||||
Poland |
| (0.3 | ) | 0.3 | |||||||||||
Other Assets in Excess of Other Liabilities |
2.2 | (0.6 | ) | 2.8 | |||||||||||
Infrastructure Sector | % of Fund on November 30, 20167 |
% Point Change over Period |
% of Fund on November 30, 20157 | ||||||||||||
Pipelines |
26.7 | (0.2 | ) | 26.9 | |||||||||||
Electric Utility |
17.4 | 1.0 | 16.4 | ||||||||||||
Toll Roads |
12.7 | (3.1 | ) | 15.8 | |||||||||||
Electricity and Gas Distribution |
8.4 | (0.1 | ) | 8.5 | |||||||||||
Seaports |
6.9 | (1.3 | ) | 8.2 | |||||||||||
Airports |
6.4 | 2.6 | 3.8 | ||||||||||||
Rail / Other Transportation |
5.0 | 0.9 | 4.1 | ||||||||||||
Communications Infrastructure |
4.5 | (0.2 | ) | 4.7 | |||||||||||
Electricity Transmission |
4.7 | 0.3 | 4.4 | ||||||||||||
Water |
1.9 | (0.7 | ) | 2.6 | |||||||||||
Electricity Generation |
3.2 | 1.4 | 1.8 | ||||||||||||
Other Assets in Excess of Other Liabilities |
2.2 | (0.6 | ) | 2.8 |
7 | Based on Total Assets as defined in the Prospectus. |
Subject to change in the future.
6
7
Schedule of investments | ||
Macquarie Global Infrastructure Total Return Fund Inc. | November 30, 2016 |
Number of shares | Value (U.S. $) | |||||||
Common Stock 133.60%D |
||||||||
Australia 12.35% |
||||||||
APA Group ¥ |
1,111,284 | $ | 6,540,392 | |||||
Sydney Airport ¥ |
1,147,918 | 5,323,422 | ||||||
Transurban Group ¥ |
3,041,157 | 23,670,087 | ||||||
|
|
|||||||
35,533,901 | ||||||||
|
|
|||||||
Brazil 2.58% |
||||||||
Prumo Logistica |
1,646,571 | 3,734,185 | ||||||
Transmissora Alianca de Energia Eletrica |
672,200 | 3,686,909 | ||||||
|
|
|||||||
7,421,094 | ||||||||
|
|
|||||||
Canada 13.17% |
||||||||
Enbridge ¥ |
494,139 | 20,783,781 | ||||||
TransCanada ¥ |
273,432 | 12,280,319 | ||||||
Veresen ¥ |
524,700 | 4,820,068 | ||||||
|
|
|||||||
37,884,168 | ||||||||
|
|
|||||||
China/Hong Kong 9.66% |
||||||||
China Longyuan Power Group |
4,264,000 | 3,336,876 | ||||||
China Merchants Port Holdings |
3,165,886 | 7,950,939 | ||||||
CLP Holdings |
445,500 | 4,356,498 | ||||||
COSCO SHIPPING Ports |
6,714,820 | 7,029,503 | ||||||
ENN Energy Holdings |
424,000 | 1,951,499 | ||||||
Huadian Fuxin Energy |
14,092,000 | 3,179,398 | ||||||
|
|
|||||||
27,804,713 | ||||||||
|
|
|||||||
France 6.32% |
||||||||
Groupe Eurotunnel ¥ |
1,842,994 | 16,212,362 | ||||||
Vinci |
30,337 | 1,968,707 | ||||||
|
|
|||||||
18,181,069 | ||||||||
|
|
|||||||
Germany 3.20% |
||||||||
Hamburger Hafen und Logistik ¥ |
159,297 | 2,785,710 | ||||||
Innogy 144A # |
181,980 | 6,425,512 | ||||||
|
|
|||||||
9,211,222 | ||||||||
|
|
|||||||
Italy 9.47% |
||||||||
Atlantia ¥ |
312,224 | 6,935,884 | ||||||
Enav 144A # |
2,658,895 | 8,989,513 | ||||||
Enel |
1,865,101 | 7,539,236 | ||||||
Italgas ¥ |
78,676 | 281,507 | ||||||
Terna Rete Elettrica Nazionale |
806,554 | 3,497,948 | ||||||
|
|
|||||||
27,244,088 | ||||||||
|
|
|||||||
Japan 1.45% |
||||||||
East Japan Railway |
48,800 | 4,165,734 | ||||||
|
|
|||||||
4,165,734 | ||||||||
|
|
8
Number of shares | Value (U.S. $) | |||||||
Common StockD (continued) |
||||||||
Luxembourg 0.66% |
||||||||
Intelsat |
460,614 | $ | 1,897,730 | |||||
|
|
|||||||
1,897,730 | ||||||||
|
|
|||||||
Mexico 3.41% |
||||||||
Infraestructura Energetica Nova |
1,590,500 | 6,924,426 | ||||||
OHL Mexico ¥ |
3,403,000 | 2,899,232 | ||||||
|
|
|||||||
9,823,658 | ||||||||
|
|
|||||||
Netherlands 0.69% |
||||||||
Koninklijke Vopak |
42,696 | 1,995,584 | ||||||
|
|
|||||||
1,995,584 | ||||||||
|
|
|||||||
Singapore 1.70% |
||||||||
Hutchison Port Holdings Trust ¥ |
11,612,400 | 4,877,208 | ||||||
|
|
|||||||
4,877,208 | ||||||||
|
|
|||||||
Spain 12.28% |
||||||||
Abertis Infraestructuras |
1,237,262 | 16,529,088 | ||||||
Aena ³ |
37,634 | 4,989,787 | ||||||
Enagas |
77,419 | 1,907,721 | ||||||
Iberdrola |
1,977,208 | 11,900,591 | ||||||
|
|
|||||||
35,327,187 | ||||||||
|
|
|||||||
Switzerland 2.44% |
||||||||
Flughafen Zuerich ¥ |
40,837 | 7,029,089 | ||||||
|
|
|||||||
7,029,089 | ||||||||
|
|
|||||||
United Kingdom 6.98% |
||||||||
National Grid ¥ |
1,069,763 | 12,223,109 | ||||||
Pennon Group ¥ |
767,346 | 7,853,672 | ||||||
|
|
|||||||
20,076,781 | ||||||||
|
|
|||||||
United States 47.24% |
||||||||
American Electric Power ¥ |
66,600 | 3,932,730 | ||||||
American Tower ¥ |
55,800 | 5,706,666 | ||||||
Cheniere Energy ¥ |
379,600 | 15,510,456 | ||||||
Crown Castle International ¥ |
126,890 | 10,590,239 | ||||||
Dominion Resources ¥ |
86,800 | 6,361,572 | ||||||
Duke Energy ¥ |
189,396 | 13,971,743 | ||||||
Edison International ¥ |
70,300 | 4,834,531 | ||||||
Kinder Morgan ¥ |
585,500 | 12,998,100 | ||||||
NextEra Energy |
112,900 | 12,896,567 | ||||||
PG&E ¥ |
198,300 | 11,660,040 | ||||||
Sempra Energy ¥ |
216,900 | 21,646,620 | ||||||
Southwest Gas |
54,600 | 4,047,498 | ||||||
Spectra Energy ¥ |
127,700 | 5,229,315 |
9
Schedule of investments
Macquarie Global Infrastructure Total Return Fund Inc.
Number of shares | Value (U.S. $) | |||||||
Common StockD (continued) |
||||||||
United States (continued) |
||||||||
Williams ¥ |
212,300 | $ | 6,517,610 | |||||
|
|
|||||||
135,903,687 | ||||||||
|
|
|||||||
Total Common Stock (cost $426,790,726) |
384,376,913 | |||||||
|
|
|||||||
Master Limited Partnership 5.52% |
||||||||
Enterprise Products Partners ¥ |
331,756 | 8,602,433 | ||||||
Magellan Midstream Partners ¥ |
105,134 | 7,280,530 | ||||||
|
|
|||||||
Total Master Limited Partnership (cost $14,428,861) |
15,882,963 | |||||||
|
|
|||||||
Total Value of Securities 139.12% |
$ | 400,259,876 | ||||||
|
|
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2016, the aggregate value of Rule 144A securities was $15,415,025, which represents 5.36% of the Funds net assets. |
³ | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such securities cannot be sold by the issuer in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Funds Board of Directors. At November 30, 2016, the aggregate value of Regulation S securities was $4,989,787, which represents 1.73% of the Funds net assets. |
D | Securities have been classified by country of origin. Aggregate classification by business sectors has been presented on page 6 in Stockholder letter. |
| Non-income-producing security. |
¥ | Fully or partially pledged as collateral for borrowing transactions. |
See accompanying notes, which are an integral part of the financial statements.
10
Statement of assets and liabilities | ||
Macquarie Global Infrastructure Total Return Fund Inc. | ||
(Expressed in U.S. Dollars) | November 30, 2016 |
Assets: |
||||
Investments, at value1 |
$ | 400,259,876 | ||
Cash |
8,948,187 | |||
Dividends receivable |
1,756,708 | |||
Tax reclaim receivable |
436,775 | |||
Prepaid arrangement fees on loan outstanding |
79,152 | |||
Other assets |
62,296 | |||
|
|
|||
Total assets |
411,542,994 | |||
|
|
|||
Liabilities: |
||||
Loan payable, at value2 |
121,735,642 | |||
Foreign currencies due to custodian |
43,297 | |||
Payable for securities purchased |
687,660 | |||
Accrued interest on loans payable |
6,085 | |||
Accrued investment advisory expense to affiliates |
1,062,651 | |||
Other payables and accrued expenses |
173,607 | |||
Accrued administration expense |
58,786 | |||
Accrued directors expense |
51,031 | |||
Accrued legal expense |
14,727 | |||
|
|
|||
Total liabilities |
123,833,486 | |||
|
|
|||
Total Net Assets |
$ | 287,709,508 | ||
|
|
|||
Net Assets Consist of: |
||||
Paid-in capital |
$ | 317,827,483 | ||
Accumulated net investment income |
1,139,015 | |||
Accumulated net realized gain on investments and foreign currency |
5,159,116 | |||
Net unrealized depreciation of investments |
(40,959,711 | ) | ||
Net unrealized appreciation of foreign currencies |
4,543,605 | |||
|
|
|||
Total Net Assets |
$ | 287,709,508 | ||
|
|
|||
Net Asset Value |
||||
Common Shares |
||||
Net assets |
$ | 287,709,508 | ||
Shares of common stock outstanding at $0.001 par value, 100,000,000 shares authorized |
12,468,293 | |||
Net asset value per share |
$ | 23.08 |
1 Investments, at cost |
$ | 441,219,587 | ||
2 Loans payable, at cost |
126,373,698 |
See accompanying notes, which are an integral part of the financial statements.
11
Statement of operations | ||
Macquarie Global Infrastructure Total Return Fund Inc. | ||
(Expressed in U.S. Dollars) | Year ended November 30, 2016 |
Investment Income: |
||||
Dividends (net of foreign withholding tax $1,363,520) |
$ | 18,871,367 | ||
Securities lending income |
42,802 | |||
Other Income |
5,293 | |||
|
|
|||
18,919,462 | ||||
|
|
|||
Expenses: |
||||
Investment advisory |
4,126,735 | |||
Interest on loan |
2,214,575 | |||
Administration |
385,562 | |||
Legal |
244,299 | |||
Directors |
205,176 | |||
Audit & tax services |
140,941 | |||
Insurance |
93,522 | |||
Custody |
89,042 | |||
Printing |
54,370 | |||
Transfer agent |
28,777 | |||
Other expenses |
125,384 | |||
|
|
|||
Total operating expenses |
7,708,383 | |||
|
|
|||
Net Investment Income |
11,211,079 | |||
|
|
|||
Net Realized and Unrealized Gain (Loss): |
||||
Net realized gain on: |
||||
Investments |
1,138,219 | |||
Foreign currencies |
5,465,704 | |||
|
|
|||
Net realized gain |
6,603,923 | |||
|
|
|||
Net change in unrealized appreciation (depreciation) of: |
||||
Investments |
(7,227,612 | ) | ||
Foreign currencies |
(5,134,177 | ) | ||
|
|
|||
Net change in unrealized appreciation (depreciation) |
(12,361,789 | ) | ||
|
|
|||
Net Realized and Unrealized Loss |
(5,757,866 | ) | ||
|
|
|||
Net Increase in Net Assets Resulting from Operations |
$ | 5,453,213 | ||
|
|
See accompanying notes, which are an integral part of the financial statements.
12
Statements of changes in net assets
Macquarie Global Infrastructure Total Return Fund Inc.
(Expressed in U.S. Dollars)
Year ended | ||||||||
11/30/16 | 11/30/15 | |||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||
Net investment income |
$ | 11,211,079 | $ | 8,399,461 | ||||
Net realized gain |
6,603,923 | 10,501,114 | ||||||
Net change in unrealized depreciation |
(12,361,789 | ) | (56,597,343 | ) | ||||
|
|
|
|
|||||
Net increase (decrease) in net assets resulting from operations |
5,453,213 | (37,696,768 | ) | |||||
|
|
|
|
|||||
Distributions to Shareholders from: |
||||||||
Net investment income |
(14,948,379 | ) | (9,072,830 | ) | ||||
Net realized gain |
(3,504,695 | ) | (8,881,512 | ) | ||||
|
|
|
|
|||||
(18,453,074 | ) | (17,954,342 | ) | |||||
|
|
|
|
|||||
Net Decrease in Net Assets |
(12,999,861 | ) | (55,651,110 | ) | ||||
Net Assets: |
||||||||
Beginning of year |
$ | 300,709,369 | $ | 356,360,479 | ||||
|
|
|
|
|||||
End of year |
$ | 287,709,508 | $ | 300,709,369 | ||||
|
|
|
|
|||||
Accumulated net investment gain (loss) |
$ | 1,139,015 | $ | (660,645 | ) | |||
|
|
|
|
See accompanying notes, which are an integral part of the financial statements.
13
Statement of cash flows | ||
Macquarie Global Infrastructure Total Return Fund, Inc. | ||
(Expressed in U.S. Dollars) | Year ended November 30, 2016 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
Net increase in net assets resulting from operations |
$ | 5,453,213 | ||
|
|
|||
Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities: |
||||
Purchase of investment securities |
(273,056,723 | ) | ||
Proceeds from disposition of investment securities |
282,143,320 | |||
Net realized gain on investment securities |
(1,138,219 | ) | ||
Net realized gain on foreign currency transactions |
(5,465,704 | ) | ||
Net change in unrealized depreciation on investments |
7,227,612 | |||
Net change in unrealized appreciation on translation of liabilities denominated in foreign currencies |
5,134,177 | |||
Decrease in receivable for collateral for securities loaned |
11,766,772 | |||
Decrease in payable upon return of securities loaned |
(11,766,772 | ) | ||
Increase in dividends receivable |
(253,698 | ) | ||
Decrease in tax reclaim receivable |
2,847 | |||
Decrease in securities lending interest receivable |
10,814 | |||
Decrease in prepaid arrangement fees on loan outstanding |
30,082 | |||
Increase in other assets |
(6 | ) | ||
Decrease in accrued interest on loan payable |
(16,658 | ) | ||
Decrease in accrued investment advisory expense |
(2,984 | ) | ||
Decrease in accrued legal expense |
(15,049 | ) | ||
Increase in accrued administration expense |
25,909 | |||
Increase in accrued directors expense |
2,726 | |||
Decrease in other payables and accrued expenses |
(23,887 | ) | ||
|
|
|||
Net cash provided by operating activities |
20,057,772 | |||
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
Cash received from borrowings |
33,080,800 | |||
Cash payments to reduce borrowings |
(38,593,940 | ) | ||
Cash distributions paid |
(18,453,074 | ) | ||
|
|
|||
Net cash used in financing activities |
(23,966,214 | ) | ||
|
|
|||
Effect of exchange rates on cash |
318,320 | |||
|
|
|||
Net decrease in cash |
(3,590,122 | ) | ||
Cash and foreign currency, beginning balance |
12,495,012 | |||
|
|
|||
Cash ending balance* |
$ | 8,904,890 | ||
|
|
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||
Cash paid during the period for interest from bank borrowings |
$ | 2,231,233 | ||
|
|
* | Includes foreign currencies due to custodian as shown on the Statement of assets and liabilities. |
See accompanying notes, which are an integral part of the financial statements.
14
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Financial highlights
Macquarie Global Infrastructure Total Return Fund Inc.
(Expressed in U.S. Dollars)
Selected data for each share of the Fund outstanding throughout each period were as follows:
|
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Accretive effect of tender offers |
Net asset value, end of period |
Market value, end of period |
Total return based on5: |
Net asset value |
Market value |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets6 |
Ratio of expenses to average net assets excluding interest expenses |
Ratio of net investment income to average net assets |
Portfolio turnover |
Leverage analysis: |
Debt outstanding at end of period (000 omitted) |
Asset coverage ratio to total assets10
|
1 | Certain line items from 2012 have been reclassified to conform to the 2013 presentation. |
2 | Per share amounts have been calculated using average shares method. |
3 | Includes accretive effect of tender offer of $0.21. As shares of common stock were tendered at a price less than NAV (92%), there is an accretive impact to shares remaining in the Fund. |
4 | Includes accretive effect of tender offer of $0.26. As shares of common stock were tendered at a price less than NAV (95%), there is an accretive impact to shares remaining in the Fund. |
5 | Total investment return is calculated assuming a purchase of a common share at the opening on the first day and a sale at closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Funds dividend reinvestment plan. Total investment returns exclude brokerage commissions on buying and selling of MGU shares, but do include commissions on buying and selling the underlying portfolio securities. Past performance is not a guarantee of future results. |
6 | For the years ended November 30, 2016, 2015, 2014, 2013 and 2012, the annualized ratios to Total Assets were 1.88%, 1.89%, 1.53%, 1.56%, and 2.08%, respectively. The prospectus for the Fund defines Total Assets as Total Net Assets plus leverage. |
7 | Excludes reimbursement from MCIM for certain expenses related to the 2012 proxy. The expense ratio, had the reimbursement been included, would have been 2.11%. |
8 | Excludes reimbursement from MCIM for certain expenses related to the 2012 proxy. The expense ratio, had the reimbursement been included, would have been 1.73%. |
9 | Excludes reimbursement from MCIM for certain expenses related to the 2012 proxy. The net investment income ratio, had the reimbursement been included, would have been 4.44%. |
10 | Asset coverage ratios are calculated based on Total Assets as defined in the Funds Prospectus. (See Note 6) |
See accompanying notes, which are an integral part of the financial statements.
16
Year ended | |||||||||||||||||||||||||
11/30/16 | 11/30/15 | 11/30/14 | 11/30/13 | 11/31/121 | |||||||||||||||||||||
$ | 24.120 | $ | 28.580 | $ | 24.980 | $ | 21.380 | $ | 18.940 | ||||||||||||||||
0.899 | 2 | 0.670 | 2 | 0.900 | 2 | 1.590 | 0.970 | ||||||||||||||||||
(0.459 | ) | (3.690 | ) | 4.100 | 3.080 | 2.170 | |||||||||||||||||||
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|
||||||||||||||||
0.440 | (3.020 | ) | 5.000 | 4.670 | 3.140 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(1.199 | ) | (0.730 | ) | (1.300 | ) | (1.280 | ) | (0.960 | ) | ||||||||||||||||
(0.281 | ) | (0.710 | ) | (0.100 | ) | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(1.480 | ) | (1.440 | ) | (1.400 | ) | (1.280 | ) | (0.960 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
| | | 0.210 | 3 | 0.260 | 4 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$ | 23.080 | $ | 24.120 | $ | 28.580 | $ | 24.980 | $ | 21.380 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$ | 19.420 | $ | 19.760 | $ | 26.600 | $ | 21.950 | $ | 18.850 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2.82% | (10.16% | ) | 21.24% | 24.25% | 18.89% | ||||||||||||||||||||
5.60% | (20.92% | ) | 28.42% | 23.84% | 22.85% | ||||||||||||||||||||
$ | 287,710 | $ | 300,709 | $ | 356,360 | $ | 311,413 | $ | 296,189 | ||||||||||||||||
2.56% | 2.37% | 2.20% | 2.22% | 7 | 2.40% | ||||||||||||||||||||
1.83% | 1.73% | 1.73% | 1.85% | 8 | 1.98% | ||||||||||||||||||||
3.73% | 2.47% | 3.32% | 4.33% | 9 | 4.19% | ||||||||||||||||||||
65% | 53% | 61% | 70% | 71% | |||||||||||||||||||||
$ | 121,736 | $ | 127,262 | $ | 133,521 | $ | 122,176 | $ | 108,811 | ||||||||||||||||
336% | 336% | 367% | 355% | 372% |
17
Macquarie Global Infrastructure Total Return Fund Inc. | November 30, 2016 |
1. Organization and Significant Accounting Policies
The Fund is a diversified, closed-end investment management company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and organized under the laws of the State of Maryland. The Fund was previously registered as a non-diversified investment company. The Funds investment objective is to provide to its common stockholders a high level of total return consisting of dividends and other income and capital appreciation.
The Funds shares of common stock are listed on the New York Stock Exchange (NYSE) under the ticker MGU.
The Funds financial statements are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). This 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 these estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946.
The following summarizes the significant accounting policies of the Fund.
Cash and Cash Equivalents Cash equivalents are funds (proceeds) temporarily invested in original maturities of 90 days or less.
Restricted Cash As of November 30, 2016, the Fund did not classify any funds (proceeds) as restricted.
Portfolio Valuation The net asset value (NAV) of the Funds shares of common stock will be computed based upon the value of the securities and other assets and liabilities held by the Fund. The NAV is determined as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern Time) on each day the NYSE is open for trading. U.S. debt securities and non-U.S. securities will normally be priced using data reflecting the earlier closing of the principal markets for those securities (subject to the fair value policies described below).
Readily marketable portfolio securities listed on any U.S. exchange other than the NASDAQ National Market are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined, or if no sale price, at the mean of the most recent bid and asked prices on such day. Securities admitted to trade on the NASDAQ National Market are valued at the NASDAQ official closing price as determined by NASDAQ. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. U.S. equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ National Market, are valued at the closing bid prices.
Non-U.S. exchange-listed securities will generally be valued using information provided by an independent third-party pricing service. The official non-U.S. security price is determined using the last sale price at the official close of the securitys respective non-U.S. market, which is usually different from
18
the close of the NYSE. Occasionally, events affecting the value of such securities may occur between such times and the close of the NYSE that will not always be reflected in the computation of the value of such securities. If events materially affecting the value of such securities occur during such period, these securities will be valued at their fair value according to the procedures adopted by the Funds Board of Directors. Although there are observable inputs assigned on a security level, prices are derived from factors using Interactive Data Corporations (IDC) Fair Value Information Service (FVIS) model. For this reason, significant events will cause movements between Level 1 and Level 2 (see the description of inputs and levels below). Non-U.S. securities, currencies and other assets denominated in non-U.S. currencies are translated into U.S. Dollars at the exchange rate of such currencies against the U.S. Dollar as provided by a pricing service. When price quotes are not available, fair market value may be based on prices of comparable securities in accordance with the Funds valuation policy.
In the event that the pricing service cannot or does not provide a valuation for a particular security, or such valuation is deemed unreliable, especially with unlisted securities or instruments, fair value is determined by the Valuation Committee. Except as otherwise designated by the Board of Directors, the Valuation Committee shall be comprised of at least five members designated by the Fund or MCIM, each of whom are officers of the Fund, representatives of MCIM and/or representatives of ALPS Fund Services, Inc. A quorum of the Valuation Committee will consist of a minimum of three voting members, provided that the members present include at least one of the following: the Portfolio Manager, the Chief Financial Officer (or appropriate designee) or the Trader. The Chief Compliance Officer (or appropriate designee) must be in attendance, but shall be non-voting. In fair valuing the Funds investments, the Valuation Committee will consider the Securities and Exchange Commission (the SEC) pronouncements on valuations, including Accounting Series Release No. 118, to the extent relevant.
A variety of factors may be considered when determining the fair value of such securities, including, but not limited to the following:
| the type of security |
| the size of the holding |
| the cost of the holding |
| the financial statements of the issuer |
| the fundamental business data relating to the issuer |
| an evaluation of the forces that influence the market in which these securities are purchased or sold |
| transactions in comparable securities |
| price quotes from dealers and/or pricing services |
| information obtained from contacting the issuer, analysts or appropriate stock exchange |
| the existence of merger proposals or tender offers that might affect the value of the security |
Fair Value Measurements The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entitys own
19
Notes to financial statements
Macquarie Global Infrastructure Total Return Fund Inc.
1. Organization and Significant Accounting Policies (continued)
assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of the Funds investments as of the reporting period end. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 | | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. | ||
Level 2 | | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, credit risk, yield curves, default rates and similar data. | ||
Level 3 | | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing Managements own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The Fund evaluates transfers into or out of Level 1, Level 2 and Level 3 as of the end of the reporting period. During the year ended November 30, 2016, there were no transfers between Level 1 investments or Level 2 investments.
Changes in valuation techniques may result in transfers between the levels during the reporting period. The Fund recognizes transfers between the levels as of the end of each reporting period. In accordance with procedures established by, and under the general supervision of the Funds Board of Directors, certain equity securities listed or traded on foreign security exchanges in the Funds portfolio may include a fair valuation adjustment factor applied to their equity prices as of the end of the period and may be categorized as Level 2. Application of fair valuation adjustment factors was not deemed necessary at the end of the period and as such, equity securities listed or traded on foreign security exchanges were categorized as Level 1.
20
The following is a summary of the inputs used as of November 30, 2016 in valuing the Funds investments carried at value:
Securities* |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stock |
$384,376,913 | $ | $ | $384,376,913 | ||||||||||||
Master Limited Partnership |
15,882,963 | | | 15,882,963 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Value of Securities |
$400,259,876 | $ | $ | $400,259,876 | ||||||||||||
|
|
|
|
|
|
|
|
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Common Stock | ||||
Balance as of 11/30/15 |
$ 3,863,869 | |||
Net realized gain (loss) |
7,962 | |||
Net change in unrealized appreciation (depreciation) |
(625,145) | |||
Purchases |
4,376,598 | |||
Sales |
(593,781) | |||
|
|
|||
Transfers out of Level 31 |
(7,029,503) | |||
|
|
|||
Balance as of 11/30/16 |
$ | |||
|
|
|||
Net change in unrealized appreciation (depreciation) |
$ | |||
|
|
* | For detailed country descriptions, see accompanying Schedule of Investments. |
(1) | Trading of this security was halted for part of the Period. The Valuation Committee estimated fair value by applying an indexing methodology which adjusted the security according to the beta-adjusted movement in the Hang Seng Index. The security resumed trading on December 14, 2015. |
Foreign Currency Translation The accounting records of the Fund are maintained in U.S. Dollars. Prices of securities and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. Dollars using the exchange rate at 4:00 p.m., Eastern Time. Amounts related to the purchases and sales of securities, investment income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions.
Net realized gain or loss on foreign currency transactions represents net foreign exchange gains or losses from the closure of forward currency contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the Funds books and the U.S. Dollar equivalent amount actually received or paid. Net unrealized currency gains and losses arising from valuing foreign currency denominated assets and liabilities, other than security investments, at the current exchange rate are reflected as part of unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies.
The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at period end. The Fund does not isolate the effect of changes in foreign exchange rates from changes in market prices of securities sold during the year. The Fund may invest in foreign securities and foreign currency
21
Notes to financial statements
Macquarie Global Infrastructure Total Return Fund Inc.
1. Organization and Significant Accounting Policies (continued)
transactions that may involve risks not associated with domestic investments as a result of the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability, among others.
The Fund has elements of risk, including the risk of loss of principal. There is no assurance that the investment process will consistently lead to successful results. An investment concentrated in sectors and industries may involve greater risk and volatility than a more diversified investment.
Distributions to Shareholders The Fund intends to distribute to holders of its common shares quarterly distributions of all or a portion of its net income and/or realized gains after payment of interest in connection with any leverage used by the Fund. Distributions to shareholders are recorded by the Fund on the ex-dividend date.
The Fund has received approval from the SEC for exemption from Section 19(b) of the 1940 Act, and Rule 19b-1 thereunder permitting the Fund to make periodic distributions of long-term capital gains more frequently than otherwise permitted by the 1940 Act, provided that the Fund adheres to the distribution policy that requires the Fund to make level distributions each quarter to shareholders of common stock after payment of interest on any outstanding borrowings.
Securities Transactions and Investment Income Investment security transactions are accounted for as of the trade date. Dividend income is recorded on the ex-dividend date. Distributions received from Master Limited Partnerships are recorded as return on capital on the ex-dividend date. Realized gains and losses from securities transactions are determined on the basis of identified cost for both financial reporting and income tax purposes.
2. Income Taxes and Tax Basis Information
The Fund complies with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies (RICs) and intends to distribute substantially all of its net taxable income and net capital gains, if any, each year. The Fund is not subject to income taxes to the extent such distributions are made.
As of and during the fiscal year ended November 30, 2016, the Fund did not have a liability for any unrecognized tax benefits in the accompanying financial statements. The Income Tax Statement requires management of the Fund to analyze all open tax years, fiscal years 2010-2016 for all open federal income tax years (November 30, 2013November 30, 2016), and all open state income tax years (November 30, 2010November 30, 2016), as defined by IRS statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. In regard to foreign taxes only, the Fund has open tax years in certain foreign countries in which it invests that may date back to the inception of the Fund.
Classification of Distributions Net investment income/loss and net realized gain/loss may differ for financial statements and tax purposes. The tax character of the distributions made during the year from
22
net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes.
The tax character of the distributions paid by the Fund during the years ended November 30, 2016 and 2015, respectively were as follows:
Distributions paid from:
Year ended | ||||||||
11/30/16 | 11/30/15 | |||||||
Ordinary income |
$ | 14,948,379 | $ | 14,207,394 | ||||
Long-term capital gain |
3,504,695 | 3,746,948 | ||||||
|
|
|
|
|||||
Total |
$ | 18,453,074 | $ | 17,954,342 | ||||
|
|
|
|
Tax components of distributable earnings are determined in accordance with income tax regulations which may differ from composition of net assets reported under GAAP. Accordingly, for the year ended November 30, 2016, the effects of certain differences were reclassified. The Fund increased its accumulated net investment income by $5,536,960, decreased paid-in capital by $565,384, and decreased accumulated net realized gain by $4,971,576. These differences were primarily due to the differing tax treatment of foreign currency and investments in passive foreign investment companies and partnerships. Net assets of the portfolio were unaffected by the reclassifications and the calculation of net investment income per share in the Financial Highlights excludes these adjustments.
As of November 30, 2016, the components of distributable earnings on a tax basis were as follows:
Common Stock |
$ | 317,827,483 | ||
Undistributed ordinary income |
2,257,496 | |||
Undistributed long-term capital gain |
1,586,735 | |||
Net unrealized depreciation of investments and foreign currency |
(33,962,206 | ) | ||
|
|
|||
Net assets |
$ | 287,709,508 | ||
|
|
|||
As of November 30, 2016, net unrealized appreciation/depreciation of investments based on federal tax costs was as follows:
|
| |||
Cost of investments |
$ | 438,765,687 | ||
Aggregate unrealized appreciation of investments |
$ | 24,055,929 | ||
Aggregate unrealized depreciation of investments |
(62,561,740 | ) | ||
|
|
|||
Net unrealized depreciation of investments |
$ | (38,505,811 | ) | |
|
|
The differences between book and tax net unrealized depreciation and cost were primarily due to the differing tax treatment of investments in passive foreign investment companies and partnerships and wash sale deferrals.
23
Notes to financial statements
Macquarie Global Infrastructure Total Return Fund Inc.
3. Capital Transactions
Year ended | ||||||||
11/30/16 | 11/30/15 | |||||||
Shares: |
||||||||
Common Shares Outstanding - beginning of period |
12,468,293 | 12,468,293 | ||||||
Common Shares Outstanding - end of period |
12,468,293 | 12,468,293 |
4. Portfolio Securities
For the year ended November 30, 2016, the Fund made purchases and sales of investment securities other than U.S. government securities and short-term investments as follows:
Purchases |
$ | 270,301,466 | ||
Sales |
281,210,224 |
5. Investment Advisory and Management Agreement, Affiliated Transactions and Administration Agreements
On July 12, 2016, the Board of Directors approved the renewal of the Investment Advisory and Management Agreement with MCIM (the Advisory Agreement), pursuant to which MCIM serves as the Funds investment manager and is responsible for determining the Funds overall investment strategy and implementation through day-to-day portfolio management, subject to the general supervision of the Funds Board of Directors. MCIM is also responsible for managing the Funds business affairs, overseeing other service providers and providing management services. As compensation for its services to the Fund, MCIM receives an annual management fee, payable on a quarterly basis, equal to the annual rate of 1.00% of the Funds Total Assets (as defined below) up to and including $300 million, 0.90% of the Funds Total Assets over $300 million up to and including $500 million, and 0.65% of the Funds Total Assets over $500 million. Total Assets of the Fund, for the purpose of this calculation, include the aggregate of the Funds average daily net assets plus proceeds from any outstanding borrowings used for leverage.
The Fund may place a portion of its portfolio transactions with a brokerage firm which is an affiliate of MCIM. The commissions paid to the affiliated firm totaled $11,664 for the year ended November 30, 2016.
Effective September 26, 2016, The Bank of New York Mellon (BNYMellon) is the Funds Administrator and Fund Accountant in accordance with certain fee arrangements. Prior to September 26, 2016, ALPS Fund Services, Inc. was the Funds Administrator and Fund Accountant.
Computershare Trust Company, N.A. (Computershare) serves as the Funds Transfer Agent, dividend-paying agent, and registrar. As compensation for Computershares services, the Fund pays Computershare a monthly fee plus certain out-of-pocket expenses.
24
6. Leverage
The Fund has entered into a Committed Facility Agreement with BNP Paribas Prime Brokerage International Ltd. (the BNP Paribas Facility or the Agreement), which provides for a committed credit facility to be used as leverage for the Fund. The BNP Paribas Facility provides for secured, committed lines of credit for the Fund, where selected Fund assets are pledged against advances made to the Fund. Under the 1940 Act, the Fund, after any such borrowings, must have asset coverage of at least 300% (33 1/3% of the Funds Total Assets after borrowings). Under the current terms, the total amount of loans that may be outstanding at any one time, or the Maximum Commitment Financing (MCF), under the BNP Paribas Facility is $120,000,000 and Euro 40,000,000. The Fund may reduce the MCF by a total aggregate amount of up to $20,000,000 upon one business days prior notice (no more than one time per calendar month). The Fund pays 0.70% per annum above 3-month LIBOR for the U.S. Dollar line and 0.70% above the 3-month EURIBOR for the Euro line. The Fund pays a commitment fee of 0.50% on the undrawn MCF.
On July 23, 2014, $60,000,000 of the U.S. Dollar line was fixed at a rate of 2.453% for a five year period. The Fund paid an arrangement fee of 0.25% on the fixed rate borrowing.
As of November 30, 2016, the Fund had $31,000,000 and Euro 29,000,000 in leverage outstanding on the variable lines and $60,000,000 outstanding on the fixed line. The daily average amounts outstanding over the period on the variable line was $30,792,350, with an average rate on the borrowing of 1.41%, and Euro 30,598,361, with the average rate on borrowing of 0.70%.
The unused amount under the BNP Paribas Facility was $29,000,000 and Euro 11,000,000 at November 30, 2016. The loan payable is carried at value, and the Euro line is adjusted daily for foreign currency translation. At November 30, 2016, the Fund maintained an asset coverage of 336%, and the market value of the securities pledged as collateral for the BNP Paribas Facility totaled $268,684,465.
7. Lending of Portfolio Securities
During the Period, the Fund loaned portfolio securities to broker-dealers and banks. The loans were secured by collateral in the form of cash equal to at least 102% of the fair value of the U.S. securities and at least 105% of the fair value of the non-U.S. securities loaned plus accrued interest, if any. The collateral had a market value at least equal to 100% of the market value of the loaned securities at all times during the duration of the loan. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be for the account of the Fund. Under the lending agreement, the Fund had the right to recover the securities from the borrower on demand, and loans were subject to termination by the lending Fund or the borrower at any time. While the lending Fund did not have the right to vote securities on loan, it intended, to the extent practicable, to terminate the loan and regain the right to vote if the matter to be voted upon was considered significant with respect to the investment. The risks of securities lending are that the borrower may not provide additional collateral when required or return the securities when due, which could result in losses to the Fund. The Fund received cash collateral that was invested in the Invesco Short-Term Investments Trust Treasury Portfolio. This collateral was valued daily; should the market value of the loaned securities increase, the borrower must
25
Notes to financial statements
Macquarie Global Infrastructure Total Return Fund Inc.
7. Lending of Portfolio Securities (continued)
furnish additional collateral to the lending Fund. The Fund bears the risk of any income or gains and losses from investing and reinvesting cash pledged as collateral. During the time portfolio securities were on loan, the borrower paid the lending Fund the economic equivalent of any dividends or interest paid on such securities. In the event the borrower defaulted on its obligation to the lending Fund, the lending Fund could experience delays in recovering its securities and possible capital losses. As of August 2, 2016, the Fund terminated its securities lending arrangement.
8. Soft Dollar Arrangement
MCIM maintains commission sharing arrangements with various executing brokers in which a portion of total commissions paid by the Fund is allocated to a pool of credits maintained by a broker. These credits may be used to pay for a portion of MCIMs permitted investment research services.
9. Compensation of Directors
The non-interested Directors of the Fund receive a quarterly retainer of $10,000 and the Chairman of the Board of Directors receives a quarterly retainer of $12,188. Non-interested Directors and the Chairman also receive an additional $2,500 for each meeting attended, and $1,500 for each telephonic meeting. Additional out-of-pocket expenses are paid as incurred.
10. Indemnifications
In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnifications. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
11. Recent Accounting Pronouncements
On October 13, 2016, the Securities and Exchange Commission amended existing rules intended to modernize reporting and disclosure of information. These amendments relate to Regulation S-X which sets forth the form and content of financial statements. At this time, management is evaluating the implications of adopting these amendments and their impact on the financial statements and accompanying notes.
12. Subsequent Events
Distributions On December 5, 2016, the Fund announced a Board-approved regular quarterly distribution of $0.37 per common share. The distribution was paid on December 30, 2016 to shareholders of record on December 16, 2016.
Management has determined that no other material events or transactions occurred subsequent to November 30, 2016 that would require recognition or disclosure in the Funds financial statements.
26
registered public accounting firm
To the Board of Directors and Shareholders of
Macquarie Global Infrastructure Total Return Fund Inc.:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations, of changes in net assets, and of cash flows and the financial highlights present fairly, in all material respects, the financial position of Macquarie Global Infrastructure Total Return Fund Inc. (the Fund) as of November 30, 2016, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as financial statements) are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of November 30, 2016 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
January 24, 2017
27
Additional information (Unaudited)
Macquarie Global Infrastructure Total Return Fund Inc.
Dividend Reinvestment Plan
Unless a stockholder of the Fund (Stockholder) elects to receive cash distributions, all dividends, including any capital gain dividends, on the Stockholders Common Shares will be automatically reinvested by the Plan Agent, Computershare, in additional Common Shares under the Dividend Reinvestment Plan. If a Stockholder elects to receive cash distributions, the Stockholder will receive all distributions in cash paid by check mailed directly to the Stockholder by Computershare, as dividend paying agent.
If a Stockholder decides to participate in the Plan, the number of Common Shares the Stockholder will receive will be determined as follows:
● | If Common Shares are trading at or above NAV at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date. |
● | If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments. |
A Stockholder may withdraw from the Plan at any time by giving written notice to the Plan Agent, or by telephone in accordance with such reasonable requirements as the Plan Agent and Fund may agree upon. If a Stockholder withdraws or the Plan is terminated, the Stockholder will receive a certificate for each whole share in its account under the Plan and the Stockholder will receive a cash payment for any fraction of a share in its account. If the Stockholder wishes, the Plan Agent will sell the Stockholders shares and send the proceeds, minus brokerage commissions, if any, to the Stockholder.
The Plan Agent maintains all Stockholders accounts in the Plan and gives written confirmation of all transactions in the accounts, including information a Stockholder may need for tax records. Common Shares in an account will be held by the Plan Agent in non-certificated form. The Plan Agent will forward to each participant any proxy solicitation material and will vote any shares so held only in accordance with proxies returned to the Fund. Any proxy a Stockholder receives will include all Common Shares received under the Plan.
There is no brokerage charge for reinvestment of a Stockholders dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvesting dividends and distributions does not mean that a Stockholder does not have to pay income taxes due upon receiving dividends and distributions.
28
If a Stockholder holds Common Shares with a brokerage firm that does not participate in the Plan, the Stockholder will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Stockholders should consult their financial adviser for more information.
The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board of Directors the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants.
All correspondence or questions concerning the Plan should be directed to the Plan Administrator, Computershare, PO Box 30170, College Station, TX 77842-3170, 1-866-587-4518.
Board Approval of Investment Advisory and Management Agreement
The Directors, including all of the non-interested Directors, met on July 12, 2016 and considered the continuation of the Investment Advisory and Management Agreement with MCIM (the Advisory Agreement) for a one-year term. In their consideration, the Directors took into account a memorandum from MCIM titled Information in support of renewal of Investment Advisory Agreement dated June 28, 2016, regarding the services rendered to the Fund by MCIM (the Memorandum), relevant information provided and discussed during the meeting, the experience of the principal portfolio managers, as well as the broader portfolio management team, the organizational structure and key personnel of MCIMs securities business and MCIMs financial statements and information relating to its profitability. The Directors noted that they found the materials and presentations provided by MCIM and its affiliated entities to be responsive to the Boards request for information. The Directors also considered a memorandum titled Directors Duties and Responsibilities in Connection with the Renewal of the Investment Advisory and Management Agreement dated June 24, 2016 describing the legal duties of the Directors under the 1940 Act, which was reviewed with their independent counsel. The Directors also considered information prepared by Broadridge Financial Solutions, Inc. (Broadridge) comparing the Funds fee rate for management services and expenses and performance characteristics to those of other funds. In particular, the Directors considered the following:
(a) | The nature, extent and quality of services provided by the Adviser. The Directors considered the services that MCIM provides to the Fund, MCIMs reputation as a manager of infrastructure assets and the information in the Memorandum, specifically related to Macquaries position as a global market leading infrastructure manager, Macquaries global infrastructure network, the extent of MCIMs team and its ability to leverage Macquaries global infrastructure capabilities, its strong portfolio construction and risk management process and the Funds performance in light of current economic conditions. Based on this presentation, the Directors concluded that the nature, extent and quality of services provided to the Fund by MCIM under the Advisory Agreement supported the Boards re-approval of the Advisory Agreement. |
(b) | Management fee, expense ratio and investment performance of the Fund, including a comparison of fees paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients. Consistent with the process followed in previous years, the Directors were provided with two sets of comparisons prepared by Broadridge that compared the Funds performance, management fees and expenses to other closed-end sector equity funds, |
29
Additional information (Unaudited)
Macquarie Global Infrastructure Total Return Fund Inc.
including the other closed-end infrastructure fund sub-advised by MCIM. One set of funds was selected by Broadridge and the other set selected by MCIM based on disclosed criteria. The Memorandum provided further detail on the comparison groups, limitations of the Broadridge data and analysis of the comparisons.
The Directors considered information prepared by Broadridge comparing the Funds management fee rate and expenses to those of other funds and noted that the Funds management fee rate was within range of the median of the MCIM-selected comparison group (although somewhat higher compared to the Broadridge-selected comparison group median) for actual management fees common and leveraged assets, and the Funds expense ratio was higher than the medians of the MCIM-selected and Broadridge-selected comparison groups for actual total expenses common and leveraged assets. The Directors noted MCIMs assertion that certain of the expenses that contribute to the Fund having higher expenses than the median of the comparison group include investment-related expenses, which are attributed to the Funds leverage, and certain non-management expenses.
The Directors considered the information prepared by Broadridge comparing the Funds performance to that of other funds and noted that in comparison to the Funds MCIM-selected comparison group, the Funds performance ranked 4th of 8 for the 1 year period, 4th of 8 for the 3 year period, 2nd of 6 for the 5 year period, and 1st of 6 since inception.
Based on these considerations and the other factors considered at the meeting, the Directors concluded that the Funds management fee rate, expense level and performance supported the re-approval of the Advisory Agreement.
(c) | Cost of the services to be provided and profits realized by MCIM from the relationship with the Fund. The Directors considered the pro forma income statement relating to the cost of the services provided by MCIM and the profits realized by MCIM from its relationship with the Fund. It was noted that affiliates of MCIM did not derive any material direct or indirect economic benefits from MCIMs relationship with the Fund, other than through commissions received by an affiliated broker/dealer. On a quarterly basis, the Board is provided with Rule 17e-1 transaction reports (regarding transactions executed with an affiliated broker-dealer), including commissions paid with respect to those transactions. After reviewing the pro forma financial information, the Directors concluded that the profitability of MCIM attributable to the Fund did not suggest that the investment advisory fee was so disproportionately large that it could not have been the product of arms length bargaining. |
(d) | The extent to which economies of scale are realized as the Fund grows and whether fee levels reflect such economies of scale. The Directors considered that economies of scale should be predicated on increasing assets and that, because the Fund is a closed-end fund without daily inflows and outflows of capital, there were not at this time significant economies of scale to be realized by MCIM in managing the Funds assets. |
Conclusion. No single factor was determinative to the decision of the Directors. In addition, the Directors consideration of the advisory fee arrangements had the benefit of, and was performed in part by reference to, a number of years of reviews during which lengthy discussions took place between the Directors and MCIM representatives. Certain aspects of the arrangements may have received greater
30
scrutiny in some years than in others, and the Directors conclusions may be based, in part, on information considered in prior years or learned throughout the period of their service. Based on the foregoing and such other matters as were deemed relevant, all of the Directors, including the Independent Directors, approved the continuation of Advisory Agreement. It was noted that the Independent Directors were represented by independent legal counsel who assisted them in their deliberations.
Certain discussions and conclusions occurred during executive session but are included here, in one place, for ease of presentation.
Fund Proxy Voting Policies & Procedures
Policies and procedures used in determining how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, are available without a charge, upon request, by contacting the Fund at 1-866-567-4771 or on the Funds website at http://www.macquarie.com/mgu and on the Commissions web site at http:// www.sec.gov.
Portfolio Holdings
The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q within 60 days after the end of the period. Copies of the Funds Forms N-Q are available without a charge, upon request, by contacting the Fund at 1-866-567-4771 or on the Funds website at http://www.macquarie.com/mgu and on the Commissions web site at http:// www.sec.gov. You may also review and copy Form N-Q at the Commissions Public Reference Room in Washington, D.C. For more information about the operation of the Public Reference Room, please call the Commission at 1-800-SEC-0330.
Designation Requirements
The Fund designates the following for federal income tax purposes for the year ended November 30, 2016.
Foreign Taxes Paid |
$ | 905,828 | ||
Foreign Source Income |
$ | 14,910,286 |
Of the distributions paid by the Fund from ordinary income for the calendar year ended December 31, 2015, the following percentages met the requirements to be treated as qualifying for the corporate dividends received deduction and qualified dividend income, respectively.
Dividends Received Deduction |
32.83% | |||
Qualified Dividend Income |
75.71% |
In early 2016, if applicable, shareholders of record received this information for the distributions paid to them by the Fund during the calendar year 2015 via Form 1099. The Fund will notify shareholders in early 2017 of amounts paid to them by the Fund, if any, during the calendar year 2016.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Fund designated $3,504,695 as a long-term capital gain distribution.
31
Additional information (Unaudited)
Macquarie Global Infrastructure Total Return Fund Inc.
Notice
Notice is hereby given in accordance with Section 23(c) of the 1940 Act that the Fund may purchase at market prices from time to time shares of its common stock in the open market.
Section 19(a) Notices
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the 1940 Act, as amended, and the related rules adopted there under. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain, and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the fiscal year-to-date cumulative distribution amount per share for the Fund.
The amounts and sources of distributions reported in these 19(a) notices are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the year ended November 30, 2016 | ||||||
Net Investment Income |
Net Realized Capital Gains |
Return of Capital |
Total Per Common Share | |||
$0.8010 |
$0.3090 | $0.3700 | $1.4800 | |||
% Breakdown of the Total Cumulative Distributions for the year ended November 30, 2016 | ||||||
Net Investment Income |
Net Realized Capital Gains |
Return of Capital |
Total Per Common Share | |||
54.12% |
20.88% | 25.00% | 100.00% |
The Funds distribution policy is to distribute all or a portion of its net investment income to its shareholders on a quarterly basis. In order to provide shareholders with a more stable level of dividend distributions, the Fund may at times pay out less than the entire amount of net investment income earned in any particular quarter and may at times in any particular quarter pay out such accumulated but undistributed income in addition to net investment income earned in that quarter. As a result, the distributions paid by the Fund for any particular quarter may be more or less than the amount of net investment income earned by the Fund during such quarter. The Funds current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Assets and Liabilities, which comprises part of the financial information included in this report.
32
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November 30, 2016 (Unaudited)
Certain biographical and other information relating to the Directors and Executive Officers of the Fund are set out below, including their year of birth, their principal occupations for at least the last five years,
Name, Birth Year and Address1 of Director |
Position(s) Held with the Fund |
Term of Office and Length of Time Served2 |
||||||
Biographical Information of the Non-Interested Directors of the Fund |
| |||||||
Gordon A. Baird* |
Class I Director | Since July 2005 | ||||||
Birth Year: 1968
|
||||||||
Thomas W. Hunersen* |
Class II Director | Since July 2005 | ||||||
Birth Year: 1958
|
||||||||
Chris LaVictorie Mahai* |
Class III Director | Since July 2005 | ||||||
Birth Year: 1955 |
||||||||
Biographical Information of the Interested Directors of the Fund |
| |||||||
Brad Frishberg |
Class III Director | Since January 2011 | ||||||
Birth Year: 1967 |
1 | Each Director may be contacted by writing to the Director c/o Macquarie Global Infrastructure Total Return Fund Inc., 125 West 55th Street Level 9, New York, NY 10019. |
2 | Each Directors term of office extends until the next stockholder meeting for the purpose of electing Directors in the relevant class and until the election and qualification of a successor, or until such Director dies, resigns or is removed as provided in the governing documents of the Fund. |
* | Member of the Audit Committee. |
34
the length of time served, the total number of portfolios overseen in the complex of funds advised by the Manager (MCIM-Affiliate Advised Funds) and other public company directorships.
Principal Occupation(s) During Past Five Years |
Number of Advised Funds Overseen |
Other Public Company Directorships | ||||
Mr. Baird is the President and Chief Executive Officer of MPIB Holdings, LLC. Mr. Baird was the Chief Executive Officer of Independence Bancshares, Inc. from 2013 to 2015. Mr. Baird was an Operating Advisor to Thomas H. Lee Partners L.P in 2011 and 2012. From 2003 to 2011 Mr. Baird was Chief Executive Officer of Paramax Capital Partners LLC. Prior to 2003 Mr. Baird was a Director at Citigroup Global Markets, Inc, an investment analyst at State Street Bank and Trust Company and real estate analyst at John Hancock Real Estate Finance Inc. Mr. Baird is a Chartered Financial Analyst.
|
1 | None | ||||
Mr. Hunersen served as Group Executive Corporate & Institutional Recovery at Irish Bank Resolution Corporation, Dublin, Republic of Ireland until 2013; Head of Strategy Projects - North America Bank of Ireland, Greenwich, Connecticut, 2004; Chief Executive Officer, Slingshot Game Technology Inc., Natick, Massachusetts, 2001 2003; and EVP and Global Head of Energy & Utilities, National Australia Bank Limited, Melbourne, London and New York, 1987 2001.
|
1 | None | ||||
Ms. Mahai has been Owner/Managing Member/Partner of Aveus, LLC (general management consulting) since 1999. |
1 | None | ||||
Mr. Frishberg has been Managing Director and Chief Investment Officer of Infrastructure Securities of Macquarie Asset Management since December 2009. Previously, he was Managing Director and U.S. Equity Portfolio Manager of J.P. Morgan Asset Management from 2000 2008.
|
1 | None |
35
Directors & Officers
November 30, 2016 (Unaudited)
Name, Birth Year and Address of Officer |
Position(s) Held with Fund(s) |
Term of Office and Length of Time Served3 | ||
Biographical Information of the Executive Officers of the Fund
| ||||
Brad Frishberg Birth Year: 1967 125 West 55th Street New York, NY 10019 |
Chief Executive Officer and President |
Since May 2010 | ||
William Fink Birth Year: 1968 125 West 55th Street New York, NY 10019
|
Chief Compliance Officer
|
Since September 2014
| ||
John H. Kim Birth Year: 1971 125 West 55th Street New York, NY 10019
|
Chief Legal Officer and Secretary
|
Since February 2011
| ||
Meredith Meyer Birth Year: 1973 125 West 55th Street New York, NY 10019
|
Chief Financial Officer and Treasurer
|
Since February 2011
|
3 | Each officer serves an indefinite term. |
36
Principal Occupation(s) During the Past Five Years | ||
Mr. Frishberg has been Managing Director and Chief Investment Officer of Infrastructure Securities of Macquarie Asset Management since December 2009. Previously, he was Managing Director and U.S. Equity Portfolio Manager of JP Morgan Asset Management from 2000 2008. | ||
Mr. Fink is a Senior Manager for Macquarie Bank Limited (September 2014 present); previously,
he was the Chief | ||
Mr. Kim is Managing Director and U.S. General Counsel of Macquarie Asset Management (June 2009
present);
| ||
Ms. Meyer is an Associate Director and Chief Operating Officer of MCIM (2009 present). She has
been with
|
37
Item 2. Code of Ethics.
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrants principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrants principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
(d) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrants principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this items instructions. |
Item 3. Audit Committee Financial Expert.
The Board of Directors of the Registrant has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. The Board of Directors has determined that each of the independent directors is an audit committee financial expert. Each of Gordon A. Baird, Chris LaVictoire Mahai and Thomas W. Hunersen is independent as defined in paragraph (a)(2) of Item 3 to Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Audit Fees
(a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrants annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $99,664 for 2016 and $92,664 for 2015. |
Audit-Related Fees
(b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the |
registrants financial statements and are not reported under paragraph (a) of this Item are $2,200 for 2016 and $2,700 for 2015. |
Tax Fees
(c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $52,642 for 2016 and $54,840 for 2015. |
All Other Fees
(d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2016 and $0 for 2015. |
(e)(1) | Disclose the audit committees pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
All services to be performed by the Registrants principal auditors must be pre-approved by the Registrants audit committee, which may include the approval of certain services up to an amount determined by the audit committee. Any services that would exceed that amount would require additional approval of the audit committee.
(e)(2) | The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
(b) N/A
(c) N/A
(d) N/A
(f) | Not applicable |
(g) | The aggregate non-audit fees billed by the registrants accountant for services rendered to the registrant, and rendered to the registrants investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2016 and $0 for 2015. |
(h) | The registrants audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrants investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another 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 paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountants independence. |
Item 5. Audit Committee of Listed registrants.
(a) | The Registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 and is comprised of the following members: Gordon A. Baird, Chris LaVictoire Mahai and Thomas W. Hunersen. |
(b) | Not applicable |
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Registrants (MGU) Proxy Voting Procedures
Macquarie Capital Investment Manager LLC (MCIM) is the adviser of MGU and is responsible for voting proxies on its behalf. MCIM has adopted the following policies and procedures designed to ensure that all such votes are in the best interest of MGU.
a) MCIMs policy is to vote on all proxies for securities held by MGU consistently and in the best interest of MGU and its shareholders, considered as a group rather than individually, unless it determines that abstaining from the vote would be in the best interest of MGU. For this purpose, best interest means in the best economic interest of MGU and its shareholders, as investors (hereafter, collectively, MGU), without regard to any self-interest which MCIM, its management or affiliates might have in a particular voting matter or any interest which MGU shareholders may have other than their economic interest, in common, as MGU investors.
b) MCIM has engaged the services of Institutional Shareholder Services to make recommendations to MCIM with respect to voting proxies related to securities held by MGU. Institutional Shareholder Services recommendations will be based on Institutional Shareholder Services pre-established voting guidelines.
c) MCIM will review each Institutional Shareholder Services recommendation and will generally vote in accordance with such recommendation unless it determines that the recommendation is not in the best interest of MGU.
d) In the event that MCIM determines that it is not in the best interest of MGU to vote, or to vote in accordance with an Institutional Shareholder Services recommendation, regarding a particular voting matter, MCIM will document its reasons for such determinations.
e) In the event that MCIM manages the assets of a company or its pension plan and the Fund holds securities issued by that company, MCIM will vote proxies relating to that companys securities in accordance with
Institutional Shareholder Services recommendations to avoid any actual or apparent conflict of interest in the matter.
f) In the event, apart from the situation described in e) immediately above, that MCIM determines it has an actual, potential or apparent conflict of interest regarding a particular voting matter, it will generally follow the Institutional Shareholder Services recommendation to ensure that such conflict is avoided. Should MCIM determine that a vote according to Institutional Shareholder Services recommendation regarding such a matter would not be in the best interest of MGU, MCIM will promptly escalate the matter so that voting instructions may be obtained from the MGU Board of Directors upon the advice, if sought, of legal counsel or other advisers to the Fund and/or its independent directors.
g) MCIM will follow any specific voting procedures adopted by MGU, unless it determines that it is unable to do so. In the event that MCIM is unable, for any reason, to follow specific procedures adopted by MGU, it will document the reasons for its determination and promptly so notify the Board of Directors of MGU or their appointed delegate.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) Portfolio Managers as of November 30, 2016:
Name |
Title | Length of Service | Business Experience During the Past 5 Years | |||
Jonathon Ong, CFA | Co-Portfolio Manager |
Since November 2012 | Mr. Ong joined the Macquaries Investment Management Infrastructure Securities team in Sydney as a Portfolio Manager in January 2008. He has been a member of the teams Investment Committee since then. He has over 20 years of investment experience. Prior to joining Macquarie, Mr. Ong held Analyst and Portfolio Manager roles at Credit Suisse Asset Management (CSAM), where he worked for 8 years in Sydney and Tokyo. His portfolio management and analytical responsibilities were primarily focused on infrastructure and related stocks. Prior to CSAM, he spent 3 years as an Asia-Pacific telecom analyst for Bankers Trust, having started his career as a sell-side analyst in Hong Kong for Kim Eng Securities. Mr. Ong earned a Bachelor of Science degree from the University of Melbourne and a Bachelor of Business (Banking and Finance) from Monash University.
| |||
Brad Frishberg, CFA | Co-Portfolio Manager |
Since November 2012 | Mr. Frishberg is the head of Macquarie Investment Management Infrastructure Securities business and serves as its Chief Investment Officer. He is also a Co-Portfolio Manager for a number of portfolios. He has more than 20 years of asset management experience. Prior to joining Macquarie in 2009, Mr. Frishberg was managing director and US equity portfolio manager at J.P. Morgan Asset Management, where over a period of 13 years he
|
was responsible for managing portfolios and businesses in London, Tokyo, and New York. He started his career at Aetna Asset Management as an international analyst and then as a portfolio manager for Japanese equity and fixed income. Mr. Frishberg earned his Bachelors degree in business economics from Brown University and his Masters degree in economics from Trinity College. |
(a)(2) Other Accounts Managed as of November 30, 2016:
Portfolio Managers
Name
|
Number of Registered
|
Number of
Other
|
Number of Other Accounts,
|
Advisory Fee
Number of
| ||||
Jonathon Ong
|
0
|
3, $360M
|
0
|
0
| ||||
Brad Frishberg
|
2, $269M | 6, $310M | 5, $779M | 0 |
Material Conflicts of Interest. Macquarie Capital Investment Management LLC (the Adviser) believes that Mr. Ongs and Mr. Frishbergs simultaneous management of the Registrant and other accounts may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and other accounts. To address these conflicts, the Adviser has adopted a Trade Allocation/Aggregation Policy that is designed to ensure fair and equitable allocation of investment opportunities among accounts over time and to ensure compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager.
(a)(3) | Portfolio Manager Compensation as of November 30, 2016: |
Compensation | consists of three components: |
1. | Fixed remuneration in the form of a base salary; |
2. | Variable (at risk) pay in the form of an annual profit share allocation; and |
3. | A long term incentive in the form of stock (applies to Director level employees only). |
Fixed remuneration takes into consideration the role of each individual and market conditions. Remuneration is reviewed on a yearly basis in March/April and takes effect from 1 July of that year.
Aggregate staff profit share is linked to Macquarie Groups profitability and return on ordinary equity, with the allocation of individual profit share being based on factors including contribution to profit, use of capital, funding and risk. Macquarie Group operates profit share retention arrangements for employees
meeting certain pay thresholds, to ensure an appropriate balance between short and longer-term incentives. Retained profit share is invested in the Macquarie Employee Retained Equity Plan (MEREP) to further align employee and shareholder interests as well as enhance Macquarie Groups ability to attract and retain high caliber talent.
(a)(4) Dollar Range of Securities Owned by Portfolio Managers as of November 30, 2016:
Portfolio Manager | Dollar Range of Equity Securities in Registrant1 | |
Jonathon Ong | $0 | |
Brad Frishberg | $100,001-$500,000 |
1 | Beneficial Ownership is determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended. |
(b) | Not applicable |
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrants board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the 1940 Act) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrants second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(c) | Pursuant to the Securities and Exchange Commissions Order granting relief from Section 19(b) of the Investment Company Act of 1940 dated January 6, 2009, the 19(a) Notices to Beneficial Owners are attached hereto as Exhibit 12(c). |
(12.other) Not applicable.
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) | Macquarie Global Infrastructure Total Return Fund Inc. |
By (Signature and Title)* | /s/ Brad Frishberg | |
Brad Frishberg | ||
Chief Executive Officer/Principal Executive Officer |
Date | 02/02/2017 | |
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 (Signature and Title)* | /s/ Brad Frishberg | |
Brad Frishberg | ||
Chief Executive Officer/Principal Executive Officer |
Date | 02/02/2017 | |
By (Signature and Title)* | /s/ Meredith Meyer | |
Meredith Meyer | ||
Treasurer, Chief Financial Officer/Principal Financial Officer |
Date | 02/02/2017 | |
* | Print the name and title of each signing officer under his or her signature. |
EX-99.CODE ETH
MACQUARIE GLOBAL INFRASTRUCTURE TOTAL RETURN FUND INC.
SENIOR OFFICER CODE OF CONDUCT
Macquarie Global Infrastructure Total Return Fund Inc. (the Fund) is committed to conducting its business activities in accordance with applicable laws, rules and regulations, reporting of unethical or illegal conduct, and the highest standards of ethics, and to provide full, fair, accurate and timely disclosure to its shareholders and regulators.
The Fund has adopted this Code of Conduct, applicable to the Principal Executive Officer and Principal Financial Officer (or persons performing similar functions) (each a Senior Officer and together the Senior Officers), to inform them of the standards of conduct that the Fund requires of them and the policies and procedures designed by the Fund to guide them in the performance of their duties.
As a Senior Officer, you must inform yourself of and comply with all applicable laws and regulations, and you must act in an honest, ethical manner. You have a duty to create an environment and culture for the Fund that encourages high ethical standards and a commitment to compliance.
This Code of Conduct is in addition to, and intended to supplement, the obligations to which you are subject under the applicable securities laws and regulations, including, but not limited to the Securities Act of 1933, as amended, the Securities Exchange Act of 1934 as amended, the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and the rules, policies, procedures and codes of ethics adopted by the Fund pursuant to those laws (collectively Regulations).
As a Senior Officer, you may be subject to certain conflicts of interest inherent in the operation of the Fund due to your role as an officer of the Funds adviser or an affiliate of the Funds adviser or because you may currently or in the future serve as senior officer of other funds. Conflicts of interest may also arise when your personal business activities conflict with or appear to conflict with the Fund. You have a duty to avoid, or resolve in a manner consistent with obligations to the Fund, conflicts of interest between your personal activities and the Funds activities. You must conduct yourself in an honest and ethical manner, and as a Senior Officer, you must maintain a work environment that encourages the internal reporting and prompt addressing of compliance concerns.
STANDARD OF CONDUCT
As a Senior Officer, you have a duty to the Fund to act with integrity and in accordance with the highest standards of ethics. Integrity requires, among other things, being
honest and candid at all times and avoiding deceit. As a Senior Officer, you must act with integrity at all times but still maintain the confidentiality of information as required by applicable Regulations.
CONFLICTS OF INTEREST
A conflict of interest would include any situation in which your private interests constitute an actual or apparent conflict with the interests of the Fund or otherwise creates the appearance of impropriety.
As a Senior Officer, you are expected to be objective and unbiased when making decisions that affect the Fund, avoiding actual or perceived conflicts of interest whenever possible. In light of the inherent conflicts of interest that may arise because of your role with Macquarie Capital Investment Management LLC (the Adviser) or one of its affiliates, you must be careful to identify situations that may create actual or apparent conflicts of interest and handle them in an ethical manner an in accordance with all applicable Regulations.
You are also required to identify any actual or apparent conflicts of interest between your personal and business relationships to MCIMs CCO and the Funds CCO and to handle them in an ethical manner.
If you are in doubt as to the application or interpretation of this Code of Conduct to you as a Senior Officer, or the possibility about a situation that may pose a conflict of interest, you should fully disclose all relevant facts and circumstances to and obtain the approval of the Chief Compliance Officer of the Fund prior to taking any action.
Potential conflict of interest situations that must be approved by the Chief Compliance Officer include but are not limited to, the following:
| The receipt of any entertainment or non-nominal gift by the Senior Officer, or a member of his or her family, from any company with which the Fund has current or prospective business dealings, unless such entertainment or gift is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; |
| Any ownership interest in, or any consulting or employment relationship with, any of the Funds service providers, other than the Adviser and its affiliates; or |
| A direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund to effect portfolio transactions or for selling or redeeming shares. |
FUND DISCLOSURES
It is the policy of the Fund to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable Regulations in all reports and documents that it files with, or submits to, the Securities and Exchange Commission, the New York Stock Exchange, Inc., any other regulatory agency, and in all other public communications made by the Fund. As a Senior Officer, you are required to adhere to this policy and to enforce the procedures adopted by the Fund to achieve compliance with this policy. In particular, you must:
| Familiarize yourself with the financial and business operations of the Fund; |
| Inform yourself of the disclosure requirements applicable to the Fund; and |
| Not knowingly misrepresent, or cause others to misrepresent, information about the Fund to others, including to the Directors, auditors, counsel, counsel to the independent directors, governmental regulators or self-regulatory organizations. |
COMPLIANCE WITH CODE OF CONDUCT
If you know of or suspect a violation of this Code of Conduct or the other Regulations, you must promptly report that information to the Chief Compliance Officer or in accordance with the whistle blower procedures adopted by the Fund.
YOU WILL NOT BE SUBJECT TO RETALIATION DUE TO A GOOD FAITH REPORT OF A SUSPECTED VIOLATION.
The Chief Compliance Officer of the Fund is responsible for investigating and enforcing this Code of Conduct and reporting any violations or suspected violations to the Board of Directors. The Board of Directors will make the final determination about whether a violation has occurred and will take appropriate disciplinary measures.
RECORDKEEPING
The Fund will maintain all records pursuant to this Code of Conduct in accordance with the record-keeping procedures in Appendix 3 of its Compliance Manual, including any
information or materials supplied to the Boards of Directors pursuant to this Code of Conduct that provided the basis for any amendments or relating to any violation of, or waiver from, this Code of Conduct, sanctions imposed for such violation, and a record of the approval or action taken by the Board of Directors.
AMENDMENTS
This Code of Conduct may not be amended except in writing and approved by a majority vote of the Board of Directors, including a majority of its Independent Directors.
CONFIDENTIALITY
All reports and records prepared and/or maintained pursuant to this Code of Conduct are confidential and shall be maintained and protected accordingly. Except as otherwise required by the Regulations, matters regarding this Code of Conduct shall not be disclosed, in whole or in part, to anyone other than officers, directors, and employees of the Fund, its Adviser, counsel to the independent or controlling entities of the Adviser (who have a need to know such matters in connection with the services they provide to the Fund).
ACKNOWLEDGMENT FORM
I have received and read the Macquarie Global Infrastructure Total Return Fund Inc. Senior Officer Code of Conduct, and I understand its contents and its application Regulations as defined in the code.
I understand that I have an obligation to report any suspected violations of the Code of Conduct on a timely basis to the Chief Compliance Officer or in accordance with the whistle blower policies adopted by the Fund.
Signature | ||
Print Name | ||
Date |
Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the
Sarbanes-Oxley Act
I, Brad Frishberg, certify that:
1. | I have reviewed this report on Form N-CSR of Macquarie Global Infrastructure Total Return Fund Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure |
controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: 02/02/2017 |
/s/ Brad Frishberg | |||
Brad Frishberg | ||||
Chief Executive Officer/Principal Executive Officer |
Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the
Sarbanes-Oxley Act
I, Meredith Meyer, certify that:
1. | I have reviewed this report on Form N-CSR of Macquarie Global Infrastructure Total Return Fund Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3 (d) under the Investment Company Act of 1940) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: 02/02/2017 |
/s/ Meredith Meyer | |||
Meredith Meyer | ||||
Treasurer, Chief Financial Officer/Principal Financial Officer |
Certification Pursuant to Rule 30a - 2(b) under the 1940 Act and Section 906 of the
Sarbanes-Oxley Act
I, Brad Frishberg, Chief Executive Officer/Principal Executive Officer of Macquarie Global Infrastructure Total Return Fund Inc. (the Registrant), certify that:
1. | The Form N-CSR of the Registrant (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: 02/02/2017 |
/s/ Brad Frishberg | |||
Brad Frishberg | ||||
(principal executive officer) |
I, Meredith Meyer, Treasurer, Chief Financial Officer/Principal Financial Officer of Macquarie Global Infrastructure Total Return Fund Inc. (the Registrant), certify that:
1. | The Form N-CSR of the Registrant (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: 02/02/2017 |
/s/ Meredith Meyer | |||
Meredith Meyer | ||||
Treasurer, Chief Financial Officer/Principal Financial Officer |
MACQUARIE GLOBAL INFRASTRUCTURE TOTAL RETURN FUND
Statement Pursuant to Section 19(a) of the Investment Company Act of 1940
On September 30, 2016, the Macquarie Global Infrastructure Total Return Fund (NYSE: MGU) (the Fund), a closed-end fund, paid a quarterly distribution on its common stock of $0.3700 per share to shareholders of record at the close of business on September 21, 2016.
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
Current Distribution from: |
||||||||||||
Per Share($) | % | |||||||||||
Net Investment Income |
0.2722 | 73.57% | ||||||||||
Net Realized Short-Term Capital Gain |
0.0978 | 26.43% | ||||||||||
Net Realized Long-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Return of Capital or other Capital Source |
0.0000 | 0.00% | ||||||||||
Total (per common share) |
0.3700 | 100.00% | ||||||||||
Fiscal Year-to-Date Cumulative |
||||||||||||
Distributions from: |
||||||||||||
Per Share($) | % | |||||||||||
Net Investment Income |
0.8010 | 54.12% | ||||||||||
Net Realized Short-Term Capital Gain |
0.3090 | 20.88% | ||||||||||
Net Realized Long-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Return of Capital or other Capital Source |
0.3700 | 25.00% | ||||||||||
Total (per common share) |
1.4800 | 100.00% |
The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. Subject to the foregoing, the Fund estimates (as of the date
hereof) that it has distributed more than its income and net realized capital gains for the fiscal year ending November 30, 2016; therefore, a portion of your distribution may be a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
Presented below are return figures, based on the change in the Funds Net Asset Value per share (NAV), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last business day of the month prior to distribution record date.
Fund Performance & Distribution Information
Fiscal Year to Date (12/01/2015 through 8/31/2016) |
|
|||||||
Annualized Distribution Rate as a Percentage of NAV^ |
5.77% | |||||||
Cumulative Distribution Rate on NAV^ |
5.77% | |||||||
Cumulative Total Return on NAV* |
12.40% | |||||||
Average Annual Total Return on NAV for the 5 Year Period |
||||||||
Ending 8/31/2016** |
12.16% | |||||||
^ Based on the Funds NAV as of August 31, 2016.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions for the period December 1, 2015 through August 31, 2016.
**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and is through the last business day of the month prior to the month of the current distribution record date.
The payment of dividend distributions in accordance with the distribution policy may result in a decrease in the Funds net assets. A decrease in the Funds net assets may cause an increase in the Funds annual operating expenses and a decrease in the Funds market price per share to the extent the market price correlates closely to the Funds net asset value per share. The distribution policy may also negatively affect the Funds investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold, for the purpose of paying the dividend distribution. The distribution policy may, under certain circumstances, cause the amounts of taxable distributions to exceed the amount minimally required to be distributed under the tax rules, such excess will be taxable as ordinary income to the extent loss carry forwards reduce the required amount of capital gains distributions in that year. The Board of Directors has the right to amend, suspend or terminate the distribution policy at any time. The amendment, suspension or termination of the distribution policy may affect the Funds market price per share. Investors should consult their tax advisor regarding federal, state, and local tax considerations that may be applicable in their particular circumstances.
While the NAV performance may be indicative of the Funds investment performance, it does not measure the value of a shareholders investment in the Fund. The value of a shareholders
- 2 -
investment in the Fund is determined by the Funds market price, which is based on the supply and demand for the Funds shares in the open market. Shareholders should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
Furthermore, the Board of Directors reviews the amount of any potential distribution and the income, capital gain or capital available. The Board of Directors will continue to monitor the Funds distribution level, taking into consideration the Funds net asset value and the financial market environment. The Funds distribution policy is subject to modification by the Board of Directors at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.
The Fund is not intended to be a complete investment program. An investment in the Fund involves risks, and the Fund may or may not be able to achieve its investment objective for a variety of reasons. The following summarizes some of the Funds risks but does not purport to be a complete listing of all of the risks. Investors should carefully review the Funds Prospectus and consult their own advisers.
Adviser Risk. MCIML, the Funds adviser, is an investment adviser with limited investment history or track record. The Fund is further dependent on Co-Portfolio Managers Jonathon Ong and Brad Frishberg. There is no guarantee an adequate replacement could be found for MCIML should Co-Portfolio Managers Jonathon Ongs and/or Brad Frishbergs services no longer be available. The Fund is also subject to risk because it is an actively managed portfolio. Industry Concentration and Infrastructure Industry Risk. The Fund will be concentrated in the infrastructure industry, and will be more susceptible to adverse economic or regulatory occurrences affecting that industry than a fund that is not concentrated in a specific industry. Non-U.S. Investment Risk. A majority of the Funds investments will be in non-U.S. issuers and a substantial portion of the trades executed for the Fund will take place on foreign exchanges. Investments in securities and instruments of non-U.S. issuers involve certain considerations and risks not ordinarily associated with investments in those of U.S. issuers. Emerging Markets Risk. In addition to non-US investment risk, investments in emerging markets may expose the Fund to heightened risks that may be more volatile than investments in developed markets. Use of Derivatives and Hedging. The Fund may use derivatives and employ a variety of hedging techniques. Derivatives can be illiquid, may disproportionately increase losses and may have a potentially large impact on the Funds performance. Certain of the investment techniques that the Fund may employ for hedging or to increase income or total return will expose the Fund to additional risks. Leverage Risk. The Fund expects to employ leverage as part of its investing strategy. The use of leverage will increase the volatility of the Fund and increase risk to investors. Any difficulty in maintaining the Funds leverage could cause a diversion of cash flow and/or require liquidation of some portion of the Funds portfolio. Restrictions imposed as a result of any leverage may directly or indirectly inhibit the Funds ability to take actions that otherwise may be taken in an unleveraged portfolio of similar assets.
MAC000156 9/29/2017.
- 3 -
MACQUARIE GLOBAL INFRASTRUCTURE TOTAL RETURN FUND
Statement Pursuant to Section 19(a) of the Investment Company Act of 1940
On December 30, 2016, the Macquarie Global Infrastructure Total Return Fund (NYSE: MGU) (the Fund), a closed-end fund, paid a quarterly distribution on its common stock of $0.3700 per share to shareholders of record at the close of business on December 16, 2016.
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
Current Distribution from: |
||||||||||||
Per Share ($) | % | |||||||||||
Net Investment Income |
0.0000 | 0.00% | ||||||||||
Net Realized Short-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Net Realized Long-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Return of Capital or other Capital Source |
0.3700 | 100.00% | ||||||||||
Total (per common share) |
0.3700 | 100.00% | ||||||||||
Fiscal Year-to-Date Cumulative |
||||||||||||
Distributions from: |
||||||||||||
Per Share ($) | % | |||||||||||
Net Investment Income |
0.0000 | 0.00% | ||||||||||
Net Realized Short-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Net Realized Long-Term Capital Gain |
0.0000 | 0.00% | ||||||||||
Return of Capital or other Capital Source |
0.3700 | 100.00% | ||||||||||
Total (per common share) |
0.3700 | 100.00% |
The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. Subject to the foregoing, the Fund estimates (as of the date
hereof) that it has distributed more than its income and net realized capital gains for the fiscal year ending November 30, 2017; therefore, a portion of your distribution may be a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
Presented below are return figures, based on the change in the Funds Net Asset Value per share (NAV),
compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last business day of the month prior to distribution record date.
Fund Performance & Distribution Information
Fiscal Year to Date (12/01/2015 through 11/30/2016) |
|
|||||||
Annualized Distribution Rate as a Percentage of NAV^ |
6.42% | |||||||
Cumulative Distribution Rate on NAV^ |
1.60% | |||||||
Cumulative Total Return on NAV* |
6.71% | |||||||
Average Annual Total Return on NAV for the 5 Year Period |
||||||||
Ending 11/30/2016** |
10.58% | |||||||
^ Based on the Funds NAV as of November 30, 2016.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions for the period December 1, 2015 through November 30, 2016.
**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and is through the last business day of the month prior to the month of the current distribution record date.
The payment of dividend distributions in accordance with the distribution policy may result in a decrease in the Funds net assets. A decrease in the Funds net assets may cause an increase in the Funds annual operating expenses and a decrease in the Funds market price per share to the extent the market price correlates closely to the Funds net asset value per share. The distribution policy may also negatively affect the Funds investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold, for the purpose of paying the dividend distribution. The distribution policy may, under certain circumstances, cause the amounts of taxable distributions to exceed the amount minimally required to be distributed under the tax rules, such excess will be taxable as ordinary income to the extent loss carry forwards reduce the required amount of capital gains distributions in that year. The Board of Directors has the right to amend, suspend or terminate the distribution policy at any time. The amendment, suspension or termination of the distribution policy may affect the Funds market price per share. Investors should consult their tax advisor regarding federal, state, and local tax considerations that may be applicable in their particular circumstances.
While the NAV performance may be indicative of the Funds investment performance, it does not measure the value of a shareholders investment in the Fund. The value of a shareholders
- 2 -
investment in the Fund is determined by the Funds market price, which is based on the supply and demand for the Funds shares in the open market. Shareholders should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
Furthermore, the Board of Directors reviews the amount of any potential distribution and the income, capital gain or capital available. The Board of Directors will continue to monitor the Funds distribution level, taking into consideration the Funds net asset value and the financial market environment. The Funds distribution policy is subject to modification by the Board of Directors at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.
The Fund is not intended to be a complete investment program. An investment in the Fund involves risks, and the Fund may or may not be able to achieve its investment objective for a variety of reasons. The following summarizes some of the Funds risks but does not purport to be a complete listing of all of the risks. Investors should carefully review the Funds Prospectus and consult their own advisers.
Adviser Risk. MCIML, the Funds adviser, is an investment adviser with limited investment history or track record. The Fund is further dependent on Co-Portfolio Managers Jonathon Ong and Brad Frishberg. There is no guarantee an adequate replacement could be found for MCIML should Co-Portfolio Managers Jonathon Ongs and/or Brad Frishbergs services no longer be available. The Fund is also subject to risk because it is an actively managed portfolio. Industry Concentration and Infrastructure Industry Risk. The Fund will be concentrated in the infrastructure industry, and will be more susceptible to adverse economic or regulatory occurrences affecting that industry than a fund that is not concentrated in a specific industry. Non-U.S. Investment Risk. A majority of the Funds investments will be in non-U.S. issuers and a substantial portion of the trades executed for the Fund will take place on foreign exchanges. Investments in securities and instruments of non-U.S. issuers involve certain considerations and risks not ordinarily associated with investments in those of U.S. issuers. Emerging Markets Risk. In addition to non-US investment risk, investments in emerging markets may expose the Fund to heightened risks that may be more volatile than investments in developed markets. Use of Derivatives and Hedging. The Fund may use derivatives and employ a variety of hedging techniques. Derivatives can be illiquid, may disproportionately increase losses and may have a potentially large impact on the Funds performance. Certain of the investment techniques that the Fund may employ for hedging or to increase income or total return will expose the Fund to additional risks. Leverage Risk. The Fund expects to employ leverage as part of its investing strategy. The use of leverage will increase the volatility of the Fund and increase risk to investors. Any difficulty in maintaining the Funds leverage could cause a diversion of cash flow and/or require liquidation of some portion of the Funds portfolio. Restrictions imposed as a result of any leverage may directly or indirectly inhibit the Funds ability to take actions that otherwise may be taken in an unleveraged portfolio of similar assets.
- 3 -
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