NUVEEN GLOBAL INVESTORS FUND PLC. (An umbrella fund with segregated liability between sub-funds)

Transcription

1 (An umbrella fund with segregated liability between sub-funds) Annual Report and Audited Financial Statements for the year ended 31 st May, 2015 Company Registration No

2 TABLE OF CONTENTS GENERAL INFORMATION 2 DIRECTORS REPORT 10 REPORT OF THE CUSTODIAN TO THE SHAREHOLDERS 15 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF NUVEEN GLOBAL INVESTORS FUND PLC 16 SUB-INVESTMENT MANAGERS REPORT 18 PORTFOLIO OF INVESTMENTS -NUVEEN TRADEWINDS GLOBAL ALL-CAP FUND 39 -NUVEEN NWQ LARGE-CAP VALUE FUND 43 -NUVEEN WINSLOW LARGE-CAP GROWTH FUND 46 -NUVEEN NWQ LARGE-CAP VALUE ESG FUND 50 -NUVEEN GLOBAL INFRASTRUCTURE FUND 53 -NUVEEN SANTA BARBARA GLOBAL DIVIDEND GROWTH FUND 58 -NUVEEN GRESHAM DIVERSIFIED COMMODITY STRATEGY FUND 61 -NUVEEN GRESHAM LONG/SHORT COMMODITY STRATEGY FUND 62 -NUVEEN GLOBAL HIGH INCOME FUND 63 -NUVEEN NWQ FLEXIBLE INCOME FUND 69 -NUVEEN NWQ SMALL-CAP VALUE FUND 76 -NUVEEN NWQ GLOBAL EQUITY FUND 79 -NUVEEN LARGE CAP CORE FUND 82 STATEMENT OF CHANGES IN THE PORTFOLIO (UNAUDITED) -NUVEEN TRADEWINDS GLOBAL ALL-CAP FUND 86 -NUVEEN NWQ LARGE-CAP VALUE FUND 90 -NUVEEN WINSLOW LARGE-CAP GROWTH FUND 93 -NUVEEN NWQ LARGE-CAP VALUE ESG FUND 97 -NUVEEN GLOBAL INFRASTRUCTURE FUND 100 -NUVEEN SANTA BARBARA GLOBAL DIVIDEND GROWTH FUND 102 -NUVEEN GRESHAM DIVERSIFIED COMMODITY STRATEGY FUND 104 -NUVEEN GRESHAM LONG/SHORT COMMODITY STRATEGY FUND 106 -NUVEEN GLOBAL HIGH INCOME FUND 108 -NUVEEN NWQ FLEXIBLE INCOME FUND 110 -NUVEEN NWQ SMALL-CAP VALUE FUND 112 -NUVEEN NWQ GLOBAL EQUITY FUND 115 -NUVEEN LARGE CAP CORE FUND 118 BALANCE SHEET 121 PROFIT AND LOSS ACCOUNT 126 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES 132 NOTES TO THE FINANCIAL STATEMENTS 138 MANAGEMENT AND ADMINISTRATION 220 APPENDIX 1 - PORTFOLIO TURNOVER RATES (UNAUDITED) 221 APPENDIX 2 - TOTAL EXPENSE RATIOS (UNAUDITED) Page

3 GENERAL INFORMATION Global Investors Fund plc (the Company ) is an umbrella fund with segregated liability between sub-funds, established as an open-ended investment company with variable capital organised under the laws of Ireland as a public limited company pursuant to the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as amended) (the UCITS Regulations ). The Company was incorporated in Ireland on 12 th February, 2007 and was initially authorised by the Central Bank of Ireland (the Central Bank ) as a non-ucits qualifying investor fund on 16 th April, The authorisation status of the Company was re-designated to a non-ucits retail fund on 22 nd May, On 27 th August, 2009 the authorisation of the Company as a non-ucits retail fund was revoked at the request of the Company and the Company was authorised by the Central Bank as a UCITS fund pursuant to the UCITS Regulations. As at 31 st May, 2015 the Company is comprised of thirteen sub-funds (each a Sub-Fund, collectively the Sub-Funds ), of which there are thirteen active portfolios of investments. These Sub-Funds are: the Tradewinds Global All-Cap Fund; the NWQ Large-Cap Value Fund; the Winslow Large-Cap Growth Fund; the NWQ Large-Cap Value ESG Fund; the Global Infrastructure Fund; the Santa Barbara Global Dividend Growth Fund; the Gresham Diversified Commodity Strategy Fund; the Gresham Long/Short Commodity Strategy Fund; the Global High Income Fund; the NWQ Flexible Income Fund; the NWQ Small-Cap Value Fund; the NWQ Global Equity Fund and the Large Cap Core Fund. The NWQ Small-Cap Value Fund and the NWQ Global Equity Fund were launched on 2 nd September, 2014 and the Large Cap Core Fund was launched on 18 th December, At the year end, the following redeemable participating shares were in issue in respect of each of the thirteen active Sub-Funds, and have been admitted to the official list and to trading on the main securities market of the Irish Stock Exchange. Sub-Fund Share Class Launch Date Initial Offer Price Listing Date Tradewinds Global All-Cap Fund Class A Euro 23 rd March, 2009 EUR rd April, 2007 Class I Euro 16 th September, 2009 EUR rd April, 2007 Class A 23 rd March, rd April, 2007 Class C 23 rd March, rd April, 2007 Class I 18 th April, rd April, 2007 NWQ Large-Cap Value Fund Class A Euro 23 rd March, 2009 EUR rd April, 2007 Class I Euro 16 th September, 2009 EUR rd April, 2007 Class A 23 rd March, rd April, 2007 Class C 23 rd March, rd April, 2007 Class I 18 th April, rd April, 2007 Winslow Large-Cap Growth Fund Class A Euro 8 th December, 2010 EUR th December, 2010 Class I Euro 8 th December, 2010 EUR th December, 2010 Class A 8 th December, th December, 2010 Class C 8 th December, th December, 2010 Class I 8 th December, th December, 2010 Class I GBP 8 th December, 2010 GBP th December, 2010 NWQ Large-Cap Value ESG Fund Class A Euro 15 th December, 2010 EUR rd December, 2010 Class I Euro 15 th December, 2010 EUR rd December, 2010 Class A 15 th December, rd December, 2010 Class C 15 th December, rd December, 2010 Class I 15 th December, rd December,

4 GENERAL INFORMATION (continued) Sub-Fund Share Class Launch Date Initial Offer Price Listing Date NWQ Large-Cap Value ESG Fund (continued) Class I GBP 15 th December, 2010 GBP rd December, 2010 Global Infrastructure Fund Class A Euro 10 th June, 2011 EUR th June, 2011 Class I Euro 10 th June, 2011 EUR th June, 2011 Class A 10 th June, th June, 2011 Class C 10 th June, th June, 2011 Class I 10 th June, th June, 2011 Class I GBP 10 th June, 2011 GBP th June, 2011 Santa Barbara Global Dividend Growth Fund Class A Euro Accumulating 1 st November, 2011 EUR th November, 2011 Class I Euro Accumulating 1 st November, 2011 EUR th November, 2011 Class A Accumulating 6th March, rd April, 2012 Class A Distributing 1 st November, th November, 2011 Class C Accumulating 24 th May, rd April, 2012 Class C Distributing 1 st November, th November, 2011 Class I Accumulating 12 th September th November, 2012 Class I Distributing 1 st November, th November, 2011 Class I GBP Accumulating 1 st November, 2011 GBP th November, 2011 Gresham Diversified Commodity Strategy Fund Class A Euro 9 th November, 2012 EUR th November, 2012 Class I Euro 9 th November, 2012 EUR th November, 2012 Class A 9 th November, th November, 2012 Class C 9 th November, th November, 2012 Class I 9 th November, th November, 2012 Class I GBP 9 th November, 2012 GBP th November, 2012 Gresham Long/Short Commodity Strategy Fund Class A Euro 9 th November, 2012 EUR th November, 2012 Class I Euro 9 th November, 2012 EUR th November, 2012 Class A 9 th November, th November, 2012 Class C 9 th November, th November, 2012 Class I 9 th November, th November, 2012 Class I GBP 9 th November, 2012 GBP th November, 2012 Global High Income Fund Class A Euro Accumulating 28 th June, 2013 EUR 20 8 th August, 2013 Class I Euro Accumulating 28 th June, 2013 EUR 20 8 th August, 2013 Class A Accumulating 28 th June, th August, 2013 Class A Distributing 28 th June, th August, 2013 Class C Accumulating 28 th June, th August, 2013 Class C Distributing 28 th June, th August, 2013 Class I Accumulating 28 th June, th August, 2013 Class I Distributing 28 th June, th August, 2013 Class I GBP Accumulating 28 th June, 2013 GBP 20 8 th August,

5 GENERAL INFORMATION (continued) Sub-Fund Share Class Launch Date Initial Offer Price Listing Date NWQ Flexible Income Fund Class A Euro Accumulating 20 th September, 2013 EUR th September, 2013 Class I Euro Accumulating 20 th September, 2013 EUR th September, 2013 Class A Accumulating 20 th September, th September, 2013 Class A Distributing 20 th September, th September, 2013 Class C Accumulating 20 th September, th September, 2013 Class C Distributing 20 th September, th September, 2013 Class I Accumulating 20 th September, th September, 2013 Class I Distributing 20 th September, th September, 2013 Class I GBP Accumulating 20 th September, 2013 GBP th September, 2013 NWQ Small-Cap Value Fund Class A Euro 2 nd September, 2014 EUR 20 2 nd September, 2014 Class I Euro 2 nd September, 2014 EUR 20 2 nd September, 2014 Class A 2 nd September, nd September, 2014 Class I 2 nd September, nd September, 2014 Class I GBP 2 nd September, 2014 GBP 20 2 nd September, 2014 NWQ Global Equity Class A Euro 2 nd September, 2014 EUR 20 2 nd September, 2014 Class I Euro 2 nd September, 2014 EUR 20 2 nd September, 2014 Class A 2 nd September, nd September, 2014 Class I 2 nd September, nd September, 2014 Class I GBP 2 nd September, 2014 GBP 20 2 nd September, 2014 Large Cap Core Fund Class A Euro 18 th December, 2014 EUR th December, 2014 Class I Euro 18 th December, 2014 EUR th December, 2014 Class A 18 th December, th December, 2014 Class C 18 th December, th December, 2014 Class I 18 th December, th December, 2014 Class I GBP 18 th December, 2014 GBP th December, 2014 The Sub-Funds, with the exception of certain share classes of the Santa Barbara Global Dividend Growth Fund; the Global High Income Fund and the NWQ Flexible Income Fund are accumulating Sub-Funds and, therefore, the Directors do not intend to declare any dividends in respect of these Sub-Funds. Details of dividends declared in respect of the Santa Barbara Global Dividend Growth Fund; the Global High Income Fund and the NWQ Flexible Income Fund are set out in note 14. The following is a summary of the investment objectives and policies of each of the active Sub-Funds. For full details of the investment objectives and policies for the Sub-Funds, please refer to the Company s prospectus (the Prospectus ). 4

6 GENERAL INFORMATION (continued) Tradewinds Global All-Cap Fund The objective of the Tradewinds Global All-Cap Fund is to provide long-term capital appreciation. The Sub- Fund seeks to adhere to disciplined value driven investment strategies whose aim is to achieve the objective of the Sub- Fund. Securities are carefully chosen through in-depth research. The Sub-Fund may invest up to 75% of its net asset value in equity securities of non-u.s. companies that are denominated in local currencies or the U.S. Dollar ( ) including American Depositary Receipts ( ADR ) of such companies. Up to 25% of the Sub-Fund s net asset value may be invested in equity securities of companies domiciled in emerging markets. However, no more than 35% of the Sub-Fund s net asset value may be invested in the securities of companies in a single non-u.s. country. The Sub-Fund may use financial derivative instruments ( FDI ) to seek to increase yield, hedge risk, or to enhance returns. NWQ Large-Cap Value Fund The objective of the NWQ Large-Cap Value Fund is to provide long-term capital appreciation. The Sub-Fund seeks to achieve this objective by adhering to a disciplined, value driven investment strategy. Quality securities are chosen following in-depth research and are followed closely over time to assess whether they continue to meet the purchase rationale. The equity securities in which the Sub-Fund invests shall primarily be listed, traded or dealt on regulated markets in the U.S. with market capitalisations at the time of investment comparable to companies in the Russell 1000 Index. The Sub- Fund may invest up to 35% of its net asset value in equity securities of non-u.s. companies, including up to 10% of the Sub-Fund s net asset value in equity securities of companies domiciled in emerging markets. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Winslow Large-Cap Growth Fund The objective of the Winslow Large-Cap Growth Fund is to provide long term capital appreciation. The Sub- Fund will seek to achieve its objective by adding value through bottom-up research focusing on identifying growth companies which exhibit some or all of the following characteristics: (i) participation in an industry with growth potential; (ii) leading or gaining market share; (iii) identifiable and sustainable competitive advantages; (iv) a management team that can perpetuate the issuer s competitive advantage; and (v) high and preferably rising, return on invested capital. It is not proposed to concentrate investment in any one industry group. The Sub-Fund will invest primarily in equity securities of companies listed or domiciled in the U.S. with market capitalisations in excess of U.S. $4 billion at the time of purchase. Up to 20% of the net asset value of the Sub-Fund may be invested in non-u.s. equity securities including equity securities of companies domiciled in emerging markets. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. NWQ Large-Cap Value ESG Fund The objective of the NWQ Large-Cap Value ESG Fund is to provide long-term capital appreciation while at the same time adhering to its environmental, social and governance ( ESG ) guidelines as described in the Prospectus. The Sub-Fund will seek to identify undervalued companies with a catalyst to unlock value or improve profitability, such as new management, industry consolidation, corporate restructuring or a turn in company fundamentals. The Sub-Fund will maintain a long-term investment view and a focus on securities it believes can appreciate over an extended time, regardless of interim fluctuations. 5

7 GENERAL INFORMATION (continued) NWQ Large-Cap Value ESG Fund (continued) The Sub-Fund will invest primarily in equity securities of companies listed, traded or dealt on regulated markets in the U.S. with market capitalisations at the time of investment comparable to companies in the Russell 1000 Index. The Sub- Fund may invest up to 35% of its net asset value in equity securities of non-u.s. companies, including up to 10% of the Sub-Fund s net asset value in equity securities of companies domiciled in emerging markets. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Global Infrastructure Fund The objective of the Global Infrastructure Fund is to provide long term capital appreciation. Under normal market conditions the Sub-Fund will invest at least 80% of its net asset value in equity securities of global infrastructure companies and companies in associated businesses. The Sub-Fund may invest in companies of any size. The equity securities in which the Sub-Fund will invest may include, without limitation, common stocks, preferred stocks, publicly-traded units of master limited partnerships ( MLPs ), real estate investment trusts ( REITs ) and securities convertible into or exchangeable for equity securities, such as convertible bonds, and warrants. The Sub-Fund will invest at least 30% of its net asset value in equity securities of infrastructure companies located in countries other than the U.S. The Sub-Fund may invest up to 25% of its net asset value in issuers of emerging markets (including Russia). The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Santa Barbara Global Dividend Growth Fund The objective of the Santa Barbara Global Dividend Growth Fund is to seek a total return comprised of income from dividends and long-term capital appreciation. The Sub-Fund focuses on equity securities of companies that have potential for dividend income and dividend growth. Under normal market conditions, the Sub-Fund expects to invest at least 80% of its net asset value in dividend-paying common and preferred stocks. The Sub-Fund expects to invest from 40 to 75% of the Sub-Fund s net asset value in equity securities of non-u.s. companies whose securities are denominated in the currency of the issuer or in. The Sub-Fund may also invest in the ADR s of such companies. It is not expected that the Sub-Fund will concentrate its investment in issuers in any particular country or geographic sector outside the U.S. No country, other than the U.S., may comprise more than 25% of the Sub-Fund s net asset value and no more than 10% of the Sub-Fund s net asset value may be invested in emerging markets. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Gresham Diversified Commodity Strategy Fund The objective of the Gresham Diversified Commodity Strategy Fund is to seek total return comprised of income and long-term capital appreciation. The Sub-Fund seeks to achieve its objectives: (i) primarily by using over-the-counter financial derivative instruments ( OTC FDI ) to gain exposure to a customized index (the Gresham TAP UCITS Index ); and (ii) by acquiring a collateral portfolio of cash equivalents and short-term, high grade debt securities that is actively managed by Asset Management, LLC. 6

8 GENERAL INFORMATION (continued) Gresham Diversified Commodity Strategy Fund (continued) The Gresham TAP UCITS Index is managed by Gresham Investment Management, LLC ( Gresham ) and is designed to replicate the economic return of a diversified portfolio (the Diversified Commodity Reference Portfolio ) of commodity futures and forward contracts with broad exposure to all principal groups in the global commodity markets. The Sub-Fund will seek exposure to the Gresham TAP UCITS Index through the use of OTC FDI. The Sub-Fund has entered into a total return swap agreement with Newedge UK Financial Limited in order to gain exposure to the Gresham TAP UCITS Index. Although there are no restrictions or limitations on the specific commodity investments in which the Diversified Commodity Reference Portfolio may invest except as otherwise described in the Prospectus, the portfolio s target concentration in any single commodity, commodity group or commodity complex will be limited in an attempt to moderate volatility. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Gresham Long/Short Commodity Strategy Fund The objective of the Gresham Long/Short Commodity Strategy Fund is to seek total return comprised of income and long-term capital appreciation. The Sub-Fund seeks to achieve its objectives: (i) primarily by using over-the-counter financial derivative instruments ( OTC FDI ) to gain exposure to a customized index (the Gresham L/S Commodity UCITS Index ); and (ii) by acquiring a collateral portfolio of cash equivalents and high-quality short-term debt securities that is actively managed by Asset Management, LLC. The Gresham L/S Commodity UCITS Index is managed by Gresham and is designed to replicate the economic return of a diversified portfolio (the Long/Short Commodity Reference Portfolio ) of commodity futures and forward contracts with broad exposure to all principal groups in the global commodity markets. The Sub-Fund will seek exposure to the Gresham L/S Commodity UCITS Index through the use of OTC FDI. The Sub- Fund has entered into a total return swap agreement with Newedge UK Financial Limited in order to gain exposure to the Gresham L/S Commodity UCITS Index. Although there are no restrictions or limitations on the specific commodity investments in which the Long/Short Commodity Reference Portfolio may invest except as otherwise described in the Prospectus, the portfolio s target concentration in any single commodity, commodity group or commodity complex will be limited in an attempt to moderate volatility. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. Global High Income Fund The objective of the Global High Income Fund is to seek total return comprised of income and capital appreciation. Under normal market conditions the Sub-Fund will invest at least 80% of its net asset value in fixed and floating rate bonds and debt securities that are commonly referred to as high-yield securities. These bonds and debt securities generally provide high income in an effort to compensate investors for their higher risk of default, which is the failure to make required interest or principal payments. There is no minimum rating requirement and no limitation on the average maturity or average effective duration of securities held by the Sub-Fund. 7

9 GENERAL INFORMATION (continued) Global High Income Fund (continued) The Sub-Fund may invest up to 25% of its net asset value in bonds and debt securities issued by governmental and corporate issuers that are located or listed in, or otherwise have substantial exposure to, emerging markets. At least 25% of the Sub-Fund s net asset value will be invested in bonds and debt securities issued by governmental and corporate issuers that are located outside of the U.S. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. NWQ Flexible Income Fund The objective of the NWQ Flexible Income Fund is to seek to provide current income and capital appreciation. The Sub-Fund will invest at least 80% of its net asset value in income-producing debt and equity securities. The Sub- Fund will invest at least 65% of its net asset value in preferred securities and debt securities. The debt securities in which the Sub-Fund will invest include fixed and floating rate corporate debt securities, bonds, mortgage-backed securities, municipal securities and U.S. government and agency debt securities. Preferred securities are securities issued by corporate issuers that generally pay fixed or adjustable rate distributions to investors and have preference over common stock in the payment of distributions and the liquidation of a company s assets, but are junior to most other forms of a company s debt, including both senior and subordinated debt. The Sub-Fund will typically invest at least 25% of its net asset value in debt and equity securities issued by companies principally engaged in financial services. The Sub-Fund may invest up to 35% of its net asset value in equity securities, including common stocks, publiclytraded business development corporations ( BDCs ), REITs, securities convertible into or exchangeable for equity securities such as convertible bonds and warrants, ADRs and other types of depositary receipts and other types of securities with the characteristics of equity securities. The Sub-Fund may use FDI to seek to increase yield, hedge risk, or to enhance returns. NWQ Small-Cap Value Fund The objective of the NWQ Small-Cap Value Fund is to provide long-term capital appreciation. The Sub-Fund focuses on under-valued companies where a catalyst event is expected to unlock value or improve profitability. Under normal market conditions, the Sub-Fund will invest at least 80% of its net asset value in equity securities, i.e. common stocks, preferred stocks, participatory notes, securities convertible into or exchangeable for equity securities, and warrants, of companies with market capitalisations at the time of investment comparable to companies in either the Russell 2000 Value Index or the Standard & Poor s Small Cap 600 Index. The Sub-Fund may also invest in ADRs and other types of depositary receipts. The Sub-Fund invests primarily in U.S. equity securities, but it may invest up to 35% of its net asset value in non-u.s. equity securities, including up to 10% of its net asset value in emerging markets. The Sub-Fund may use FDI for efficient portfolio management and/or investment purposes. NWQ Global Equity Fund The objective of the NWQ Global Equity Fund is to provide long-term capital appreciation. The Sub-Fund focuses on under-valued companies with positive risk-reward characteristics. Under normal market conditions, the Sub-Fund will invest at least 80% of its net asset value in equity securities, i.e. common stocks, preferred stocks, participatory notes, securities convertible into or exchangeable for equity securities, and warrants. The Sub-Fund may also invest in ADRs and other types of depositary receipts. Under normal market conditions, the Sub Fund will invest at least 40% of its net asset value in non-u.s. securities, including up to 20% of its net asset value in emerging markets. The Sub-Fund may invest in equity securities issued by companies of any market capitalisation, including small- and mid-capitalisation companies. 8

10 GENERAL INFORMATION (continued) NWQ Global Equity Fund (continued) The Sub-Fund may use FDI for efficient portfolio management and/or investment purposes. Large Cap Core Fund The objective of the Large Cap Core Fund is to provide long-term capital appreciation. Securities generally are added to the portfolio based both on the ranking given to a particular security by the multi-factor quantitative models used by the Sub-Investment Manager and on the fundamental analysis of the securities carried out by the Sub- Investment Manager. Under normal market conditions, the Sub-Fund will invest at least 80% of its net asset value in equity securities, i.e. common stocks, preferred stocks, participatory notes, securities convertible into or exchangeable for equity securities, warrants, ADRs and other types of depositary receipts, of large capitalisation companies. For the purposes of this Sub- Fund, large capitalisation companies are defined as companies that have market capitalisations at the time of purchase within the market capitalisation range of the companies in the Russell 1000 Index immediately after its most recent reconstitution prior to such purchase. The Sub-Fund may use FDI for efficient portfolio management and/or investment purposes. 9

11 DIRECTORS REPORT The Directors have the pleasure of submitting their annual report together with the audited financial statements for Global Investors Fund plc (the Company ) for the year ended 31 st May, 2015 and comparatives for the year ended 31 st May, The Company is organised in the form of an umbrella fund with segregated liability between sub-funds, and as at 31 st May, 2015 is comprised of thirteen active sub-funds: the Tradewinds Global All-Cap Fund; the NWQ Large-Cap Value Fund; the Winslow Large-Cap Growth Fund; the NWQ Large-Cap Value ESG Fund; the Global Infrastructure Fund; the Santa Barbara Global Dividend Growth Fund; the Gresham Diversified Commodity Strategy Fund; the Gresham Long/Short Commodity Strategy Fund; the Global High Income Fund; the NWQ Flexible Income Fund; the NWQ Small-Cap Value Fund; the NWQ Global Equity Fund and the Large Cap Core Fund (each a Sub-Fund, collectively the Sub- Funds ). Sub-Fund Launch Date Functional Currency Tradewinds Global All-Cap Fund 18 th April, 2007 US Dollar () NWQ Large-Cap Value Fund 18 th April, 2007 US Dollar () Winslow Large-Cap Growth Fund 8 th December, 2010 US Dollar () NWQ Large-Cap Value ESG Fund 15 th December, 2010 US Dollar () Global Infrastructure Fund 10 th June, 2011 US Dollar () Santa Barbara Global Dividend Growth Fund 1 st November, 2011 US Dollar () Gresham Diversified Commodity Strategy Fund 9 th November, 2012 US Dollar () Gresham Long/Short Commodity Strategy Fund 9 th November, 2012 US Dollar () Global High Income Fund 28 th June, 2013 US Dollar () NWQ Flexible Income Fund 20 th September, 2013 US Dollar () NWQ Small-Cap Value Fund 2 nd September, 2014 US Dollar () NWQ Global Equity Fund 2 nd September, 2014 US Dollar () Large Cap Core Fund 18 th December 2014 US Dollar () Directors Directors who held office at any time during the year ended 31 st May, 2015, and/or held office at 31 st May, 2015 were: Eimear Cowhey* John L. MacCarthy Denis Murphy* Adrian Waters* Margo L. Cook Thomas S. Schreier, Jr. * Independent Directors Principal Activities The Company was incorporated in Ireland on 12 th February, 2007 and was initially authorised by the Central Bank of Ireland (the Central Bank ) as a non-ucits qualifying investor fund on 16 th April, The authorisation status of the Company was re-designated to a non-ucits retail fund on 22 nd May, On 27 th August, 2009 the authorisation of the Company as a non-ucits retail fund was revoked at the request of the Company and the Company was authorised by the Central Bank as a UCITS fund pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, (as amended), (the UCITS Regulations ). A review of the principal activities of the Company is included in the Sub-Investment Managers Report. Results for the Year and Assets, Liabilities and Financial Position at 31 st May, 2015 Details of the state of assets, liabilities and financial position of the Company and results for the year ended 31 st May, 2015 are set out in the Balance Sheet and Profit and Loss Account. The Net Assets attributable to Holders of Redeemable Participating Shares of the Company as at 31 st May, 2015 were 402,178,544 (31 st May, 2014: 410,115,345). The increase in Net Assets attributable to Holders of Redeemable Participating Shares from operations was 22,075,415 (31 st May, 2014: 53,538,174). Risk Management Objectives & Policies The main risks arising from the Company s activities are market risk comprising: interest rate, foreign currency and other price risk, and credit and liquidity risk as set out in note

12 DIRECTORS REPORT (continued) Dividends and Retention The various share classes of the Company s Sub-Funds, with the exception of certain share classes of the Santa Barbara Global Dividend Growth Fund; the Global High Income Fund and the NWQ Flexible Income Fund are accumulating share classes and, therefore, it is not currently intended to declare dividends in respect of these Sub-Funds. It is intended that net income and net realised and unrealised capital gains from these Sub-Funds will be accumulated and reinvested on behalf of shareholders. For the Santa Barbara Global Dividend Growth Fund, the Directors intend to declare and pay quarterly dividends equal to all or substantially all of the Sub-Fund s net income for the Class A Distributing Shares, Class C Distributing Shares and Class I Distributing Shares; for the Global High Income Fund and the NWQ Flexible Income Fund, the Directors intend to declare and pay monthly dividends equal to all or substantially all of the Sub-Fund s net income for the Class A Distributing Shares, Class C Distributing Shares and Class I Distributing Shares. Details of the dividends declared for the Santa Barbara Global Dividend Growth Fund, the Global High Income Fund and the NWQ Flexible Income Fund are included in note 14. Directors' and Secretary's Interests None of the Directors, the Company Secretary, or their families hold or held any beneficial interests in the Company at 31 st May, 2015 or during the year ended 31 st May, 2015, other than those disclosed in note 13. Transactions Involving Directors There are no contracts or arrangements of any significance in relation to the business of the Company in which the Directors or the Company Secretary had any interest as defined in the Companies Act 2014 at any time during the year ended 31 st May, 2015, other than those disclosed in note 13. Statement of Directors' Responsibilities The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Financial Reporting Council and published by the Institute of Chartered Accountants in Ireland. Under Irish law, the Directors shall not approve the financial statements unless they are satisfied that they give a true and fair view of the company s assets, liabilities and financial position as at the end of the financial year and the profit or loss of the Company for the financial year. In preparing these financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with applicable accounting standards and identify the standards in question, subject to any material departures from those standards being disclosed and explained in the notes to the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to: correctly record and explain the transactions of the company; enable, at any time, the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy; and enable the Directors to ensure that the financial statements comply with the Companies Act 2014 and enable those financial statements to be audited. The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company s website. Legislation in Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 11

13 DIRECTORS REPORT (continued) Accounting Records To ensure that adequate accounting records are kept in accordance with Section 281 of the Companies Act 2014, the Company has employed a service organisation, Brown Brothers Harriman Fund Administration Services (Ireland) Limited (the Administrator ). The accounting records are located at the offices of the Administrator. Independent Auditors The Independent Auditors, PricewaterhouseCoopers, has indicated its willingness to continue in office in accordance with section 383(2) of the Companies Act Significant Events during the Year Other than those outlined in note 21, there were no significant events during the year. Events since the Year End Other than those outlined in note 22, there were no significant events since the year end. Connected Parties The Central Bank of Ireland UCITS Notice 14 Dealings by promoter, manager, trustee, investment adviser and group companies states in paragraph 1 that, inter alia, any transaction carried out with UCITS by a promoter, custodian, investment manager and/or associated or group companies of these ( connected parties ) must be carried out as if negotiated at arm s length. Transactions must be in best interests of the shareholders. The Board of Directors of the Company are satisfied that: (i) (ii) there are arrangements (evidenced by written procedures) in place to ensure that the obligations set out in paragraph 1 of the Central Bank of Ireland UCITS Notice 14 are applied to all transactions with connected parties; and transactions with connected parties entered into during the period complied with the obligations set out in paragraph 1 of the Central Bank s and UCITS Notice 14. Corporate Governance Statement General Principles The European Communities (Directive 2006/46/EC) Regulations (S.I. 450 of 2009 and S.I. 83 of 2010) require the inclusion of a corporate governance statement in the Directors Report. The Company is subject to corporate governance practices imposed by: (i) (ii) (iii) (iv) the Companies Act 2014 which is available for inspection at the registered office of the Company; and may also be obtained at the Articles of Association of the Company which are available for inspection at the registered office of the Company (Arthur Cox Building, Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland) and at the Companies Registration Office in Ireland; the Central Bank in their UCITS notices and guidance notes which can be obtained from the Central Bank s website at:- and are available for inspection at the registered office of the Company; and the ISE through the ISE Code of Listing Requirements and Procedures which can be obtained from the ISE s website at:- In addition, the Board has voluntarily adopted the Corporate Governance Code for Collective Investment Schemes and Management Companies as published by the Irish Funds Industry Association (the IFIA Code ) in full. The IFIA Code can be obtained from the Irish Funds Industry Association website at:- 12

14 DIRECTORS REPORT (continued) Corporate Governance Statement (continued) General Principles (continued) In accordance with the requirements of the Central Bank and the UCITS Regulations, the Company has adopted a business plan. This sets forth the corporate governance practices followed by the Directors in managing the Company. The business plan includes detailed procedures related to decision taking, monitoring of compliance, monitoring of investment performance, monitoring of capital, risk management practices, financial control practices, and internal audit. Although the Directors maintain ultimate governance responsibility for the Company, the Company may appoint various professional service providers to fulfil the Company s day-to-day operational requirements. Internal Control and Risk Management Systems in Relation to Financial Reporting Under the general oversight of the Directors, the Administrator is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of error or fraud in achieving the Company s financial reporting objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss. The Administrator has been appointed by the Directors to maintain the books and records of the Company in relation to financial reporting and is authorised and regulated by the Central Bank. The Administrator must comply with the rules imposed by the Central Bank. The Administrator has operating responsibility in respect of its internal controls in relation to the financial reporting process and the Administrator s report to the Directors. From time to time, the Directors review and evaluate the Administrator s financial accounting and reporting routines. The Administrator prepares the annual and half-yearly financial statements of the Company. The annual and half-yearly financial statements of the Company are required to be approved by the Directors and filed with the Central Bank and the ISE. The annual financial statements are audited by the independent auditors of the Company, PricewaterhouseCoopers, who report annually to the Directors on their findings. The Directors evaluate and discuss significant accounting and reporting issues as the need arises. The Directors monitor and evaluate the auditors performance, qualifications and independence. Dealings with Shareholders The convening and conduct of shareholders meetings are governed by the articles of association of the Company. Although the Directors may convene an extraordinary general meeting of the Company at any time, the Directors are required to convene an annual general meeting of the Company within fifteen months of the date of the previous annual general meeting. Not less than twenty one days notice of every annual general meeting must be given to shareholders unless the auditors of the Company and all the shareholders of the Company entitled to attend and vote at the general meeting agree to shorter notice. Two shareholders present either in person or by proxy constitutes a quorum at a general meeting provided that: (i) in the event that there is only one shareholder in a fund or class the quorum shall be one shareholder present in person or by proxy at the meeting; (ii) the quorum for a general meeting convened to consider any alteration to the class rights of shares shall be two or more shareholders present in person or by proxy whose holdings comprise at least one third of the issued shares of the relevant class; and (iii) the quorum at any adjourned meeting shall be any one shareholder present in person or by proxy and entitled to vote at the meeting. Every holder of shares present in person or by proxy who votes on a show of hands is entitled to one vote. On a poll, every holder of shares present in person or by proxy is entitled to one vote in respect of each share held. The chairman of a general meeting of the Company or at least five shareholders or any shareholder representing at least one tenth of the shares in issue having the right to vote at such meeting may demand a poll. Shareholders may resolve to adopt an ordinary resolution or special resolution at a shareholders meeting. An ordinary resolution of the Company or of the shareholders of a particular fund or class requires a simple majority of the votes cast by the shareholders voting in person or by proxy at the meeting at which the resolution is proposed. A special resolution of the Company or of the shareholders of a particular fund or class requires a majority of not less than 75% of the shareholders present in person or by proxy and voting at the general meeting in order to pass a special resolution to amend the Articles of Association. 13

15 DIRECTORS REPORT (continued) Corporate Governance Statement (continued) Board Composition and Activities Unless otherwise determined by an ordinary resolution of the Company in the general meeting, the number of Directors may not be less than two. Currently the Board of Directors of the Company is composed of the Directors listed on page 10 of these audited financial statements. The Directors oversee the business of the Company and exercise such powers that are not otherwise reserved under the Companies Act 2014 or the articles of association of the Company in the general meeting. A Director may, and the company secretary of the Company on the requisition of a Director shall, at any time summon a meeting of the Directors. Questions arising at any meeting of the Directors are determined by a majority of votes. In the case of an equality of votes, the chairman has a second or casting vote. The quorum necessary for the transaction of business at a meeting of the directors may be fixed by the Directors and, unless so fixed at any other number, shall be two. The principal responsibility of the Directors is oversight of the business affairs of the Company and, consistent with these oversight responsibilities, the Directors have delegated management functions and responsibilities to duly qualified service providers. Such service providers are subject to ongoing oversight by the Directors. On behalf of the Board of Directors Director: Adrian Waters Director: Denis Murphy 16 th September,

16 REPORT OF THE CUSTODIAN TO THE SHAREHOLDERS We have enquired into the conduct of Global Investors Fund plc (the Company ) for the year ended 31 st May, 2015, in our capacity as Custodian to the Company. This report including the opinion has been prepared for, and solely for, the shareholders in the Company in accordance with the Central Bank of Ireland s (the Central Bank ) UCITS Notice 4 (as amended), and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown. Responsibilities of the Custodian Our duties and responsibilities are outlined in the Central Bank s UCITS Notice 4 (as amended). One of those duties is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders. Our report shall state whether, in our opinion, the Company has been managed in that period in accordance with the provisions of the Company s Memorandum and Articles of Association and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as amended) (the UCITS Regulations ). It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as Custodian must state why this is the case and outline the steps which we have taken to rectify the situation. Basis of Custodian Opinion The Custodian conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in the Central Bank s UCITS Notice 4 (as amended) and to ensure that, in all material respects, the Company has been managed: (i) (ii) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations; and otherwise in accordance with the Company s constitutional documentation and the appropriate regulations. Opinion In our opinion, the Company has been managed during the year, in all material respects: (i) (ii) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Memorandum and Articles of Association and by the UCITS Regulations; and otherwise in accordance with the provisions of the Memorandum and Articles of Association and the UCITS Regulations. Brian Giblin Brown Brothers Harriman Trustee Services (Ireland) Limited 30 Herbert Street Dublin 2 Ireland 16 th September,

17 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF NUVEEN GLOBAL INVESTORS FUND PLC Report on the financial statements Our opinion In our opinion, Global Investors Fund plc s financial statements (the financial statements ): give a true and fair view of the company s and sub-funds assets, liabilities and financial position as at 31 st May 2015 and of their results for the year then ended; have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland; and have been properly prepared in accordance with the requirements of the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended). What we have audited The financial statements comprise: the balance sheet as at 31 st May 2015; the profit and loss account for the year then ended; the statement of changes in net assets attributable to holders of redeemable participating shares for the year then ended; the portfolio of investments for each of the sub-funds as at 31 st May 2015; and the notes to the financial statements for the company and for each of its sub-funds which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in the preparation of the financial statements is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland). In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. Matters on which we are required to report by the Companies Act 2014 We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited. The financial statements are in agreement with the accounting records. In our opinion the information given in the Directors' Report is consistent with the financial statements. Matter on which we are required to report by exception Directors remuneration and transactions Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising from this responsibility. Other matter SI83 of 2010 European Communities (Directive 2006/46/EC)(Amendment) Regulations 2010 has been revoked by the Companies Act 2014 without replacing regulation 5 of those regulations with an equivalent section in the Act. Consequently, we are unable to report under the requirements of Section 1373(7) of the Companies Act Had regulation 5 of SI83 of 2010 replaced section 1373(7) of the Companies Act 2014, there would be no additional matters to report. The information required to be included in the corporate governance statement by section 1373 of the Companies Act 2014 is referenced in the Directors Report and we have reported on the consistency of the information included in the Directors Report with the financial statements above. 16

18 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF NUVEEN GLOBAL INVESTORS FUND PLC (continued) Responsibilities for the financial statements and the audit Our responsibilities and those of the directors As explained more fully in the Statement of Directors Responsibilities set out on page 11, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the company s members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. We primarily focus our work in these areas by assessing the directors judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements. We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Damian Neylin For and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin 16th September

19 SUB-INVESTMENT MANAGERS REPORT The Tradewinds Global All-Cap Fund features portfolio management by Tradewinds Global Investors, LLC (Tradewinds), of which Investments, Inc. owns a controlling interest. The NWQ Large-Cap Value Fund, the NWQ Large-Cap Value ESG Fund, the NWQ Flexible Income Fund, the NWQ Small-Cap Value Fund and the NWQ Global Equity Fund feature portfolio management by NWQ Investment Management Company, LLC (NWQ), of which Investments, Inc. owns a controlling interest. The Winslow Large-Cap Growth Fund features portfolio management by Winslow Capital Management, LLC, of which Investments, Inc. owns a controlling interest. The Global Infrastructure Fund, the Global High Income Fund and the Large Cap Core Fund feature portfolio management by Asset Management, LLC, of which Investments, Inc. owns a controlling interest. The Santa Barbara Global Dividend Growth Fund features portfolio management by Santa Barbara Asset Management, LLC, of which Investments, Inc. owns a controlling interest. The Gresham Diversified Commodity Strategy Fund and the Gresham Long/Short Commodity Strategy Fund feature portfolio management by Gresham Investment Management LLC ( Gresham ), of which Investments, Inc. owns a controlling interest. Emily Alejos and Andrew Thelen co-manage the Tradewinds Global All-Cap Fund. Jon Bosse, CFA, is the Chief Investment Officer of NWQ and manages the NWQ Large-Cap Value Fund and the NWQ Large- Cap Value ESG Fund. Clark Winslow, Patrick Burton and Justin Kelly are co-portfolio managers of the Winslow Large-Cap Growth Fund. For the majority of the reporting period, Jay Rosenberg was lead manager and John Wenker and Tryg Sarsland were co-portfolio managers of the Global Infrastructure Fund. Effective 30 th April, 2015, John Wenker was removed as a co-manager, but continues to lead the Real Assets Team at Asset Management. James Boothe, CFA, is the portfolio manager of the Santa Barbara Global Dividend Growth Fund. Randy Migdal and Susan Wager co-manage both the Gresham Diversified Commodity Strategy Fund and the Gresham Long/Short Commodity Strategy Fund. John T. Fruit, CFA, and Jeff T. Schmitz, CFA, comanage the Global High Income Fund. Effective January 6, 2015, Michael Carne, CFA, is no longer a portfolio manager of the NWQ Flexible Income Fund. Thomas J. Ray, CFA, and Susi Budiman, CFA, now comanage the NWQ Flexible Income Fund. Phyllis Thomas, CFA, manages the NWQ Small-Cap Value Fund and James Stephenson, CFA, manages the NWQ Global Equity Income Fund. Robert C. Doll, CFA, a senior portfolio manager and chief equity strategist at Asset Management, is portfolio manager for the Large Cap Core Fund. Here they review the general market conditions and discuss key investment strategies and the performance of the Sub- Funds during the twelve-month or since inception periods ended 31 st May, What were the general market conditions during the reporting period ended 31 st May, 2015? During this reporting period, the U.S. economy continued to expand at a moderate pace. The U.S. Federal Reserve (Fed) maintained efforts to bolster growth and promote progress toward its mandates of maximum employment and price stability by holding the benchmark Fed funds rate at the record low level of zero to 0.25% that it established in December At its October 2014 meeting, the Fed announced that it would end its bond buying stimulus program in November after tapering its monthly asset purchases of mortgage-backed and longer-term Treasury securities from the original $85 billion per month to $15 billion per month over the course of seven consecutive meetings (December 2013 through September 2014). The Fed cited substantial improvement in the outlook for the labour market as well as sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Policymakers also reiterated that they would continue to look at a wide range of factors, including labour market conditions, indicators of inflationary pressures and readings on financial developments, in determining future actions. Additionally, the Fed stated that it would likely maintain the current target range for the Fed funds rate for a considerable time after the end of the asset purchase program, especially if projected inflation continues to run below its 2% longer run goal. However, if economic data shows faster progress, the Fed indicated that it could raise the Fed funds rate sooner than expected. The Fed changed its language slightly in December 2014, indicating it would be patient in normalizing monetary policy. This shift helped ease investors worries that rates might be raised too soon. However, as employment data released early in 2015 continued to look strong, anticipation began building that the Fed could raise its main policy rate as soon as June. As widely expected, after its March meeting, the Fed eliminated patient from its statement, but also highlighted the policymakers less optimistic view of the U.S. economy s overall health as well as downgraded their inflation projections. 18

20 SUB-INVESTMENT MANAGERS REPORT (continued) April 2015 s meeting seemed to further signal that a June rate hike was off the table. While the Fed attributed the first quarter s economic weakness to temporary factors, the meeting minutes from April revealed that many Federal Open Market Committee members believed the economic data available in June would be insufficient to meet the Fed s criteria for initiating a rate increase. According to the U.S. government s second estimate, the U.S. economy contracted at a 0.7% annualized rate in the first quarter of 2015, as measured by gross domestic product (GDP), compared with an increase of 2.2% in the fourth quarter of 2014 and 5.0% in the third quarter. The decline in the real GDP growth rate from the fourth quarter to the first quarter primarily reflected a downturn in both state and local government spending as well as declines in exports and consumer spending. These were partly offset by an upturn in federal government spending. The Consumer Price Index (CPI) was unchanged on a year-over-year basis as of May The core CPI figure (which excludes food and energy) increased 1.7% during the same period, which was below the Fed s unofficial longer term inflation objective of 2.0%. As of May 2015, the U.S. unemployment rate was 5.5%, a level not seen since mid-2008 and nearly 1% lower than one year ago. This figure is also considered full employment by some Fed officials. The housing market continued to post consistent gains, with 35 consecutive months of year-over-year increases as of its most recent reading in April The average home price in the S&P/Case-Shiller Index of 20 major metropolitan areas rose 4.9% for the twelve months ended April 2015 (most recent data available at the time this report was prepared). In the equity markets, the current U.S. bull market entered its seventh year during the reporting period. After dropping sharply in October 2014, equities surged upward again, although with heightened volatility, to reach multiple new highs throughout the remaining months of the reporting period. For example, the bellwether S&P 500 Index set a new alltime high in late December 2014, then dropped 3% in January 2015, before rebounding in the following months to hit several more new highs in February, April and again in late May, finishing the reporting period with an 11.81% return. Sector performance within the S&P 500 Index proved to be quite divergent with health care stocks leading the way, rising more than 27% on the back of increased merger and acquisition activity and investors quest for growth. Given the dramatic decline in oil and natural gas prices during the reporting period, the energy sector was hit hard with a decline of more than 15% within the index. Overall returns for the small-cap segment ended the reporting period in the same vicinity as large caps, after significantly underperforming earlier in In the final months of 2014 and early 2015, small-cap stocks, which are viewed as more exposed to the domestic economy, were propelled upward by improvements in jobs data, GDP, consumer spending and personal incomes. The small-cap focused Russell 2000 Index gained 11.32% during the reporting period. Across the market cap spectrum, growth oriented stocks outperformed value stocks by a fairly wide margin. As estimates for earnings growth declined throughout the reporting period, growth became harder to come by, prompting investors to pay more for that potential. For example, the return for the Russell 1000 Growth Index was 14.73%, while the Russell 1000 Value Index gained 9.03%. Overall, international markets ended the reporting period on a weak note with the MSCI EAFE Index down 0.06% and emerging markets only modestly better rising 0.33%, as measured by MSCI Emerging Markets Index. Dollar strength undermined U.S. dollar denominated equity returns as it hit multi-year highs. European markets finished the reporting period solidly in negative territory, whereas China s stock market surged to be a top performer despite headline weakness in many emerging markets. Japan s market also experienced a resurgence after underperforming earlier in the year. The global infrastructure asset class, as measured by the S&P Global Infrastructure Index, underperformed the broad U.S. equity market (S&P 500 Index) by more than 8% during the reporting period, but outpaced international markets with a 3.11% return. During the reporting period, the overall global high yield market experienced slightly negative returns as measured by the Barclays Global High Yield Index return of -1.69%. The U.S. portion of the high yield market performed best, emerging markets (EM) were modestly negative and the European section underperformed. Volatility was heightened across global markets during the first half of this reporting period, particularly in the energy, high yield and emerging market (EM) sectors, due to global growth concerns, ongoing geopolitical unrest and the sharp drop in commodity prices. The main driver was the collapse in the price of oil due to OPEC s decision to maintain its daily production quota in November This exacerbated falling oil prices, which were already slumping because of slowing worldwide demand and increased U.S. production. The precipitous drop in oil prices had the greatest effect on the high yield market because up to 14% of common high yield indexes consist of credits exposed to oil, more so than any other market. The uptick in volatility seen in the second half of 2014, coupled with reduced market liquidity, combined to raise risk premiums in the high yield space approximately 55 basis points during the fourth quarter. Adding to the selling pressure were the net outflows experienced by mutual funds during calendar 2014, which totaled a record $23.8 billion (source: JP Morgan). 19