SAN FRANCISCO--(BUSINESS WIRE)--The Wells Fargo Global Dividend Opportunity Fund (NYSE: EOD), a closed-end fund, announced today that the fund’s Board of Trustees has approved the following changes to the fund:
- Changes to the fund’s principal investment strategy.
- Changes to subadvisory arrangement and portfolio management personnel.
- A reduction in investment advisory fees payable by the fund to Wells Fargo Funds Management, LLC (Funds Management), the fund’s investment advisor.
All of the changes discussed below are effective on or about October 15, 2019.
The fund’s primary investment objective will remain to seek a high level of current income. The fund’s secondary objective will remain long-term growth of capital. There will be no changes to these investment objectives.
Changes to the investment strategy
The equity portion of the fund’s investment strategy no longer expects to invest at least 65 percent of its total assets in securities of issuers in the utilities, energy and communication services sectors. Instead, the equity sleeve expects to invest normally in approximately 60 to 80 securities, broadly diversified among major economic sectors and regions. The targeted sector and region weighting goal will be +/- 5 percent of weights in the MSCI ACWI and according to Wells Capital Management’s proprietary region classification. Fundamental research will be carried out systematically using quantitative investment methodology that dynamically ranks stocks based on insider/management signaling, momentum/sentiment, relative value and short-term indicators. The model will combine both universe and sector factors that display positive predicted alpha. After more screening, further individual, qualitative analysis will evaluate aspects of the companies, such as management strength, industry positioning of products and services and risk profile.
The equity sleeve will no longer allow for a focus on convertible debt and will no longer allow for short sales on equity securities. The fund will no longer seek to emphasize equity securities that pay dividends qualifying for favorable tax treatment. Finally, the equity sleeve’s investment parameters that specified a specific percentage (or range) of assets to be invested in foreign securities (including emerging markets) and a minimum number of countries in which the sleeve intended to invest are being eliminated.
Changes to subadvisory arrangement and portfolio management personnel
Crow Point Partners, LLC, will no longer serve as a subadvisor to the fund, and as a result, Timothy O’Brien, CFA, of Crow Point Partners, will no longer be a portfolio manager for the fund. The assets of the fund previously managed by Crow Point Partners will be managed by Wells Capital Management Incorporated, the fund’s other subadvisor.
In light of the increased responsibility to be assigned to Wells Capital Management, Funds Management has agreed, and the Board has approved, to increase the subadvisory fee paid by Funds Management (not the fund) to Wells Capital Management from 0.20 percent of average daily total assets per year to 0.40 percent of average daily total assets per year. It is important to note that this subadvisory fee is paid from Funds Management’s own assets and is not paid by the fund, and the aggregate subadvisory fee paid by Funds Management will remain unchanged at 0.40 percent.
The portfolio managers that will be responsible for managing the assets of the equity sleeve will be Justin Carr, CFA, and Vince Fioramonti, CFA. Their biographies are listed below.
Justin Carr is a senior portfolio manager for the Golden Capital Equity team at Wells Fargo Asset Management. He is also a member of the research team with the responsibility of building and improving stock selection models, back-testing and refining existing factors and writing production code. Prior to joining Golden Capital, he was an analyst with the Global Strategic Products team at Wells Capital Management. Justin earned a bachelor’s degree in business administration from the University of Vermont and a master’s degree in mathematical finance from Worcester Polytechnic Institute. He has earned the right to use the Chartered Financial Analyst® (CFA®) designation.
Vince Fioramonti is a senior portfolio manager for the Golden Capital Equity team at Wells Fargo Asset Management. He helps manage the team’s international and yield-oriented strategies. Prior to joining Golden Capital, Vince served as a partner at Alpha Equity Management, LLC, where he managed the firm’s international equity strategies and was responsible for its technology infrastructure. Earlier, Vince worked with ING and its predecessor Aetna organizations as the lead portfolio manager for the Aetna International Fund. Vince began his career in investment management with Travelers Investment Management. He earned a bachelor’s degree in finance from the University of Dayton and a master’s degree in business administration from the University of Rochester. He has earned the right to use the Chartered Financial Analyst® (CFA®) designation and is a member of CFA Society North Carolina and CFA Institute.
In addition, Kandarp Acharya, CFA, FRM, and Christian Chan, CFA, will no longer be portfolio managers for the fund. They will be replaced by Greg McMurran and Megan Miller, CFA. Their biographies are listed below.
Greg McMurran is chief investment officer and portfolio manager for the Analytic Investors team at Wells Fargo Asset Management. In this role, Greg focuses on day-to-day portfolio management and research related to derivatives-based investment strategies. Greg has an extensive background in managing quantitative investment portfolios with his experience in quantitative research, portfolio management and trading. He earned a bachelor’s degree in economics from the University of California, Irvine, and a master’s degree in economics from California State University, Fullerton.
Megan Miller is a portfolio manager for the Analytic Investors team at Wells Fargo Asset Management. She is responsible for portfolio management and trading support for derivatives-based investment strategies. Specifically, she researches new models and ways to enhance existing models used in the investment process, develops and maintains optimization inputs and volatility forecasts and develops and maintains optimization frameworks used to create client portfolios. She earned a bachelor’s degree in applied mathematics from the University of California, Los Angeles, and a master’s degree in business administration, with an emphasis in finance from the University of California, Berkeley. Megan has earned the right to use the Chartered Financial Analyst® (CFA®) designation.
Niklas Nordenfelt, CFA, and Philip Susser will continue in their roles as portfolio managers for the other sleeve of the fund.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Reduction in investment advisory fees
Funds Management is entitled to receive a fee at an annual rate of 0.95 percent of the fund’s average daily total assets. This investment advisory fee paid by the fund to Funds Management will be reduced by 0.10 percent to 0.85 percent of the fund’s average daily total assets.
For more information on Wells Fargo’s closed-end funds, please visit our website at wfam.com.
The fund is a closed-end fund that is no longer engaged in initial public offerings, and shares are available only through broker-dealers on the secondary market. Unlike an open-end mutual fund, a closed-end fund offers a fixed number of shares for sale. After the initial public offering, shares are bought and sold through broker-dealers in the secondary marketplace, and the market price of the shares is determined by supply and demand, not by net asset value (NAV), and is often lower than the NAV. A closed-end fund is not required to buy its shares back from investors upon request.
The fund is leveraged through a revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market value of common shares. Derivatives involve risks, including interest rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track. There are numerous risks associated with transactions in options on securities and/or indices. As a writer of an index call option, the fund forgoes the opportunity to profit from increases in the values of securities held by the fund. However, the fund has retained the risk of loss (net of premiums received), should the price of the fund’s portfolio securities decline. Similar risks are involved with writing call options or secured put options on individual securities and/or indices held in the fund’s portfolio. This combination of potentially limited appreciation and potentially unlimited depreciation over time may lead to a decline in the net asset value of the fund. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Risks of foreign investing are magnified in emerging or developing markets. Small- and mid-cap securities may be subject to special risks associated with narrower product lines and limited financial resources compared with their large-cap counterparts, and, as a result, small- and mid-cap securities may decline significantly in market downturns and may be more volatile than those of larger companies due to their higher risk of failure. High-yield, lower-rated bonds may contain more risk due to the increased possibility of default. Illiquid securities may be subject to wide fluctuations in market value. The fund may be subject to significant delays in disposing of illiquid securities. Accordingly, the fund may be forced to sell these securities at less than fair market value or may not be able to sell them when the advisor or subadvisor believes that it is desirable to do so. This closed-end fund is no longer available as an initial public offering and is only offered through broker-dealers on the secondary market.
Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements provide no assurance as to the funds’ actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual circumstances. 405462 08-19
INVESTMENT PRODUCTS: NOT FDIC INSURED ● NO BANK GUARANTEE ● MAY LOSE VALUE