NOTES TO FINANCIAL STATEMENTS AS OF AUGUST 31, 2013
(UNAUDITED) (CONTINUED)
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
(continued)
be estimated; however, based on experience, management
considers the risk of loss from such claims remote.
NOTE 3 — INVESTMENT MANAGEMENT AND ADMINISTRATIVE
FEES
ING Investments, LLC (“ING Investments” or the
“Investment Adviser”), an Arizona limited liability company, is the Investment Adviser of the Fund. The Fund pays the Investment Adviser for
its services under the investment management agreement (“Management Agreement”), a fee, payable monthly, based on an annual rate of 1.15% of
the Fund’s average daily managed assets. For purposes of the Management Agreement, managed assets are defined as the Fund’s average daily
gross asset value, minus the sum of the Fund’s accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other
than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of
any outstanding preferred shares). As of August 31, 2013, there were no preferred shares outstanding.
The Investment Adviser entered into a sub-advisory
agreement (“Sub-Advisory Agreement”) with ING Investment Management Advisors B.V. (“IIMA”) a subsidiary of ING Groep N.V.,
domiciled in The Hague, The Netherlands. Subject to policies as the Board or the Investment Adviser might determine, IIMA manages the Fund’s
assets in accordance with the Fund’s investment objectives, policies and limitations.
Effective May 6, 2013, the Investment Adviser entered into
a sub-advisory agreement (“Sub-Advisory Agreement”) with ING Investment Management Co. LLC (“ING IM”), a Delaware limited liability
company. Subject to policies as the Board or the Investment Adviser might determine, ING IM will manage the Fund’s assets in accordance with the
Fund’s investment objectives, policies and limitations.
ING Funds Services, LLC (the “Administrator”), a
Delaware limited liability company, serves as Administrator to the Fund. The Fund pays the Administrator for its services a fee based on an annual rate
of 0.10% of the Fund’s average daily managed assets.
The Investment Adviser has also retained ING Investment
Management Co. LLC (“ING IM” or “Consultant”), a Delaware limited liability company, to provide certain consulting services for the
Investment Adviser. These services include, among other things, furnishing statistical and other factual information; providing advice with respect to
potential investment strategies that may be employed for the Fund, including, but not limited to, potential options strategies; developing economic
models of the anticipated investment performance and yield for the Fund; and providing advice to the Investment Adviser and/or sub-adviser with respect
to the Fund’s level and/or managed distribution policy. For its services, the Consultant will receive a consultancy fee from the Investment
Adviser. No fee will be paid by the Fund directly to the Consultant.
NOTE 4 — EXPENSE LIMITATION
AGREEMENT
The Investment Adviser has entered into a written expense
limitation agreement (“Expense Limitation Agreement”) with the Fund under which it will limit the expenses of the Fund, excluding interest,
taxes, leverage expenses, and extraordinary expenses (and acquired fund fees and expenses) to 1.50% of average daily managed assets. The Investment
Adviser may at a later date recoup from the Fund fees waived and other expenses assumed by the Investment Adviser during the previous 36 months, but
only if, after such recoupment, the Fund’s expense ratio does not exceed the percentage described above. The Expense Limitation Agreement is
contractual through March 1, 2014 and shall renew automatically for one-year terms unless; (i) ING Investments provides 90 days written notice of its
termination; and (ii) such termination is approved by the Board; or (iii) the Investment Management Agreement has been terminated.
Waived and reimbursed fees and any recoupment by the
Investment Adviser of such waived and reimbursed fees are reflected on the accompanying Statement of Operations for the Fund.
As of August 31, 2013, there are no amounts of waived or
reimbursed fees that are subject to possible recoupment by the Investment Adviser.
NOTE 5 — OTHER TRANSACTIONS WITH AFFILIATES AND RELATED
PARTIES
The Fund has adopted a Deferred Compensation Plan (the
“Plan”), which allows eligible non-affiliated trustees as described in the Plan to defer the receipt of all or a portion of the trustees fees
payable. Amounts deferred are treated as though invested in various “notional” funds advised by ING Investments until distribution in
accordance with the Plan.
15
NOTES TO FINANCIAL STATEMENTS AS OF AUGUST 31, 2013
(UNAUDITED) (CONTINUED)
NOTE 6 — PURCHASES AND SALES OF INVESTMENT
SECURITIES
The cost of purchases and proceeds from sales of
investments for the period ended August 31, 2013, excluding short-term securities, were $81,419,298 and $87,527,903 respectively.
NOTE 7 — TRANSACTIONS IN WRITTEN
OPTIONS
Transactions in written OTC call options on indices were as
follows:
|
|
|
|
Number of
Contracts
|
|
Premiums
Received
|
|
|
|
|
|
45,439,800 |
|
|
$ |
578,096 |
|
|
|
|
|
|
259,433,000 |
|
|
|
4,365,820 |
|
|
|
|
|
|
(131,415,300 |
) |
|
|
(1,950,711 |
) |
|
|
|
|
|
— |
|
|
|
— |
|
Options Terminated in Closing Purchase Transactions |
|
|
|
|
(131,020,400 |
) |
|
|
(2,354,687 |
) |
|
|
|
|
|
42,437,100 |
|
|
$ |
638,518 |
|
NOTE 8 — CONCENTRATION OF RISKS
All mutual funds involve risk — some more than others
— and there is always the chance that you could lose money or not earn as much as you hope. The Fund’s risk profile is largely a factor of
the principal securities in which it invests and investment techniques that it uses. For more information regarding the types of securities and
investment techniques that may be used by the Fund and its corresponding risks, see the Fund’s most recent Prospectus and/or the Statement of
Additional Information.
Foreign Securities and Emerging Markets. The
Fund makes significant investments in foreign securities and securities issued by companies located in countries with emerging markets. Investments in
foreign securities may entail risks not present in domestic investments. Since investments in securities are denominated in foreign currencies, changes
in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund.
Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or
economic developments, as well as from movements in currency, security value and interest rate, all of which could affect the market and/or credit risk
of the investments. The risks of investing in foreign securities can be intensified in the case of investments in issuers located in countries with
emerging markets.
Leverage. Although the Fund has no current
intention to do so, the Fund is authorized to utilize leverage through the issuance of preferred shares and/or borrowings, including the issuance of
debt securities. In the event that the Fund determines in the future to utilize investment leverage, there can be no assurance that such a leveraging
strategy will be successful during any period in which it is employed.
Asia Pacific Regional and Country Risks.
Investments in the Asia Pacific region are subject to special risks. The Asia Pacific region includes countries in all stages of economic development.
Some Asia Pacific economies may be characterized by over-extension of credit, currency devaluations and restrictions, underdeveloped financial services
sectors, heavy reliance on international trade, and economic recessions. In addition, the economies of many Asia Pacific countries are dependent on the
economies of the United States, Europe and other Asian countries, and a deceleration in any of these economies could negatively impact the economies of
Asia Pacific countries. Currency fluctuations, devaluations and trading restrictions in any one country can have a significant effect on the entire
Asia Pacific region. Increased political and social instability in any Asia Pacific country could cause further economic and market uncertainty in the
region, or result in significant downturns and volatility in the economies of Asia Pacific countries. The development of Asia Pacific economies, and
particularly those of China, Japan and South Korea, may also be affected by political, military, economic and other factors related to North
Korea.
NOTE 9 — CAPITAL SHARES
Transactions in capital shares and dollars were as
follows:
|
|
|
|
Reinvestment
of
distributions
|
|
Net increase
in shares
outstanding
|
|
Reinvestment
of
distributions
|
|
Net
increase
|
Year or period ended
|
|
|
|
#
|
|
#
|
|
($)
|
|
($)
|
|
|
|
|
|
1,800 |
|
|
|
1,800 |
|
|
|
28,198 |
|
|
|
28,198 |
|
|
|
|
|
|
82,817 |
|
|
|
82,817 |
|
|
|
1,249,909 |
|
|
|
1,249,909 |
|
NOTE 10 — FEDERAL INCOME TAXES
The amount of distributions from net investment income and
net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting
principles for investment companies. These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary differences are not reclassified. Key differences include the treatment of
short-term capital gains, foreign currency transactions, income from passive foreign investment companies (PFICs) and wash sale deferrals.
Distributions in excess
16
NOTES TO FINANCIAL STATEMENTS AS OF AUGUST 31, 2013
(UNAUDITED) (CONTINUED)
NOTE 10 — FEDERAL INCOME TAXES
(continued)
of net investment income and/or net realized capital
gains for tax purposes are reported as return of capital.
Dividends paid by the Fund from net investment income and
distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to
shareholders.
The tax composition of dividends and distributions in the
current period will not be determined until after the Fund’s tax year-end of December 31, 2013. The tax composition of dividends and distributions
as of the Fund’s most recent tax year-end was as follows:
Tax Year Ended
December 31, 2012
|
Ordinary
Income
|
|
|
Return
of Capital
|
|
|
|
|
The tax-basis components of distributable earnings and the
capital loss carryforwards which may be used to offset future realized capital gains for federal income tax purposes as of December 31, 2012 are
detailed below. The Regulated Investment Company Modernization Act of 2010 (the “Act”) provides an unlimited carryforward period for newly
generated capital losses. Under the Act, there may be a greater likelihood that all or a portion of the Fund’s pre-enactment capital loss
carryforwards may expire without being utilized due to the fact that post-enactment capital losses are required to be utilized before pre-enactment
capital loss carryforwards.
Unrealized
Appreciation/
(Depreciation)
|
|
Short-term
Capital Loss
Carryforwards
|
|
Expiration
|
$15,226,507 |
|
$ |
(31,359,178 |
) |
|
|
2017 |
|
The Fund’s major tax jurisdictions are U.S. federal
and Arizona. The earliest tax year that remains subject to examination by these jurisdictions is 2008.
As of August 31, 2013, no provision for income tax is
required in the Fund’s financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The
Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are
subject to examination by the Internal Revenue Service and state department of revenue.
NOTE 11 — RESTRUCTURING PLAN
The Investment Adviser, ING IM, and the Administrator, are
indirect, wholly-owned subsidiaries of ING U.S., Inc. (“ING U.S.”). ING U.S. is a U.S.-based financial institution whose subsidiaries operate
in the retirement, investment, and insurance industries. ING U.S. is a majority-owned subsidiary of ING Groep N.V. (“ING Groep”), which is a
global financial institution of Dutch origin, with operations in more than 40 countries.
In October 2009, ING Groep submitted a restructuring plan
(the “Restructuring Plan”) to the European Commission in order to receive approval for state aid granted to ING Groep by the Kingdom of the
Netherlands in November 2008 and March 2009. To receive approval for this state aid, ING Groep was required to divest its insurance and investment
management businesses, including ING U.S., before the end of 2013. In November 2012, the Restructuring Plan was amended to permit ING Groep additional
time to complete the divestment. Pursuant to the amended Restructuring Plan, ING Groep must divest at least 25% of ING U.S. by the end of 2013, more
than 50% by the end of 2014, and the remaining interest by the end of 2016 (such divestment, the “Separation Plan”).
In May 2013, ING U.S. conducted an initial public offering
of ING U.S. common stock (the “IPO”).
On September 13, 2013, ING U.S. filed a new Registration
Statement on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”) in connection with another potential public offering of
ING U.S. common stock held by ING Groep. ING U.S. will not issue or sell common stock in the offering. On October 23, 2013, ING U.S. announced the
pricing of 33 million shares of its common stock being offered by ING Groep in this offering. Closing of the offering is expected to occur on October
29, 2013. ING Groep also granted the underwriters in the offering an option exercisable within 30 days, to acquire up to approximately an additional 5
million shares from ING Groep. This option was exercised in full. ING U.S. will not receive any proceeds from the offering.
ING Groep continues to own a majority of the common stock
of ING U.S. ING Groep has stated that it intends to sell its remaining controlling ownership interest in ING U.S. over time. While the base case for
the remainder of the Separation Plan is the divestment of ING Groep’s remaining interest in one or more broadly distributed offerings, all options
remain open and it is possible that ING Groep’s divestment of its remaining interest in ING U.S. may take place by means of a sale to a single
buyer or group of buyers.
It is anticipated that one or more of the transactions
contemplated by the Separation Plan would result in the automatic termination of the existing advisory and
17
NOTES TO FINANCIAL STATEMENTS AS OF AUGUST 31, 2013
(UNAUDITED) (CONTINUED)
NOTE 11 — RESTRUCTURING PLAN
(continued)
sub-advisory agreements under which the Adviser and
sub-adviser provide services to the Fund. In order to ensure that the existing investment advisory and sub-advisory services can continue
uninterrupted, the Board approved new advisory and sub-advisory agreements for the Fund in connection with the IPO. In addition, shareholders of the
Fund were asked to approve new investment advisory and sub-advisory agreements prompted by the IPO, as well as any future advisory and sub-advisory
agreements prompted by the Separation Plan that are approved by the Board and whose terms are not be materially different from the current agreements.
Shareholders of the Fund approved new advisory and sub-advisory agreements on May 6, 2013. This means that shareholders may not have another
opportunity to vote on a new agreement with the Adviser or an affiliated sub-adviser even if they undergo a change of control, as long as no single
person or group of persons acting together gains “control” (as defined in the 1940 Act) of ING U.S.
The Separation Plan, whether implemented through public
offerings or other means, may be disruptive to the businesses of ING U.S. and its subsidiaries, including the Adviser and affiliated entities that
provide services to the Fund, and may cause, among other things, interruption of business operations or services, diversion of management’s
attention from day-to-day operations, reduced access to capital, and loss of key employees or customers. The completion of the Separation Plan is
expected to result in the Adviser’s and affiliated entities’ loss of access to the resources of ING Groep, which could adversely affect its
business. It is anticipated that ING U.S., as a stand-alone entity, may be a publicly held U.S. company subject to the reporting requirements of the
Securities Exchange Act of 1934 as well as other U.S. government and state regulations, and subject to the risk of changing
regulation.
The Separation Plan may be implemented in phases. During
the time that ING Groep retains a majority interest in ING U.S., circumstances affecting ING Groep, including restrictions or requirements imposed on
ING Groep by European and other authorities, may also affect ING U.S. A failure to complete the Separation Plan could create uncertainty about the
nature of the relationship between ING U.S. and ING Groep, and could adversely affect ING U.S. and the Adviser and its affiliates. Currently, the
Adviser and its affiliates do not anticipate that the Separation Plan will have a material adverse impact on their operations or the Fund and its
operation.
Shareholder Proxy Proposals
At a meeting of the Board on January 10, 2013, the Board
nominated to Class III of the Board five individuals (collectively, the “Nominees”) for election as Trustees of the Trust. The Nominees
include John V. Boyer, Patricia W. Chadwick, and Sheryl K. Pressler, each of whom was a current member of the Board. In addition, the Board nominated
to Class III of the Board Albert E. DePrince Jr. and Martin J. Gavin and appointed to Class II of the Board Joseph E. Obermeyer and Russell H. Jones,
each of whom was not a member of the Board at the time, but who served as a director or trustee to other investment companies in the ING Funds complex.
The Nominees were approved by shareholders on May 6, 2013. The election of the Nominees was effective on May 21, 2013. The appointment of Messrs.
Obermeyer and Jones was effective May 21, 2013. These nominations and appointments were, in part, the result of an effort on the part of the Board,
another board in the ING Funds complex, and the Investment Adviser to the Fund to consolidate the membership of the boards so that the same members
serve on each board in the ING Funds complex. The result is that all ING Funds are now governed by Boards that are compromised of the same
individuals.
NOTE 12 — SUBSEQUENT EVENTS
Dividends: Subsequent to August 31, 2013, the Fund
made a distribution of:
Per Share
Amount
|
|
|
|
Declaration
Date
|
|
Payable
Date
|
|
Record
Date
|
|
|
|
|
|
|
|
|
|
Each quarter, the Fund will provide disclosures with
distribution payments made that estimate the percentages of that distribution that represent net investment income, capital gains, and return of
capital, if any. A significant portion of the quarterly distribution payments made by the Fund may constitute a return of capital.
The Fund was granted exemptive relief by the SEC (the
“Order”), which under the 1940 Act, would permit the Fund, subject to Board approval, to include realized long-term capital gains as a part
of its regular distributions to Common Shareholders more frequently than would otherwise be permitted by the 1940 Act (generally once per taxable year)
(“Managed Distribution Policy”). The Fund may in the future adopt a Managed Distribution Policy.
Effective close of business September 12, 2013, Mr. Gavin
resigned as Trustee.
18
NOTES TO FINANCIAL STATEMENTS AS OF AUGUST 31, 2013
(UNAUDITED) (CONTINUED)
NOTE 12 — SUBSEQUENT EVENTS
(continued)
The Fund has evaluated events occurring after the Statement
of Assets and Liabilities date (subsequent events) to determine whether any subsequent events necessitated adjustment to or disclosure in the financial
statements. Other than the above, no such subsequent events were identified.
19
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED)
Shares
|
|
|
|
|
|
|
|
Value
|
|
Percentage
of Net
Assets
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,005,836 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Australia & New Zealand Banking Group Ltd. |
|
|
2,222,171 |
|
|
|
1.3 |
|
|
|
|
|
|
|
CFS Retail Property Trust |
|
|
2,078,442 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
1,681,765 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Insurance Australia Group |
|
|
2,176,011 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,003,310 |
|
|
|
1.2 |
|
|
|
|
|
|
|
National Australia Bank Ltd. |
|
|
2,238,855 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Pan Australian Resources Ltd. |
|
|
1,823,832 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,054,854 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Sigma Pharmaceuticals Ltd. |
|
|
1,782,402 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Spark Infrastructure Group |
|
|
1,825,049 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,057,892 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,232,338 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,186,679 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
1,984,318 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,077,680 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
3,522,344 |
|
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
35,953,778 |
|
|
|
20.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOC Hong Kong Holdings Ltd. |
|
|
2,303,454 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Communications Services Corp., Ltd. |
|
|
2,460,373 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,283,834 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,230,986 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Petroleum & Chemical Corp. |
|
|
2,210,502 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Resources Power Holdings Co. |
|
|
2,097,616 |
|
|
|
1.2 |
|
|
|
|
|
|
|
China Shanshui Cement Group Ltd. |
|
|
1,833,119 |
|
|
|
1.0 |
|
|
|
|
|
|
|
China Shineway Pharmaceutical Group Ltd. |
|
|
2,054,191 |
|
|
|
1.2 |
|
|
|
|
|
|
|
China Telecom Corp., Ltd. |
|
|
2,317,523 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Digital China Holdings Ltd. |
|
|
1,839,580 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
1,698,282 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Industrial and Commercial Bank of China Ltd. |
|
|
2,381,525 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Jiangsu Expressway Co. Ltd. |
|
|
2,387,241 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,207,303 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Shanghai Industrial Holdings Ltd. |
|
|
2,385,955 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Zhejiang Expressway Co., Ltd. |
|
|
2,370,053 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
1,545,541 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
36,607,078 |
|
|
|
21.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,165,394 |
|
|
|
1.2 |
|
COMMON STOCK: (continued) |
|
|
|
|
|
|
|
|
Cheung Kong Infrastructure Holdings Ltd. |
|
$ |
2,179,052 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,077,108 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Emperor Watch & Jewellery Ltd. |
|
|
1,683,772 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Hang Lung Properties Ltd. |
|
|
2,080,522 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
10,185,848 |
|
|
|
5.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,679,685 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,143,015 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
1,814,635 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
5,833,543 |
|
|
|
3.4 |
|
|
|
|
|
|
|
|
|
|
11,470,878 |
|
|
|
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Negara Indonesia Persero Tbk PT |
|
|
1,794,534 |
|
|
|
1.1 |
|
|
|
|
|
|
|
Indo Tambangraya Megah PT |
|
|
2,310,324 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Indofood Sukses Makmur Tbk PT |
|
|
1,753,676 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
1,896,138 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
7,754,672 |
|
|
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,379,799 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,687,715 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,010,996 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,114,750 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,130,470 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
7,943,931 |
|
|
|
4.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sky Network Television Ltd. |
|
|
2,186,831 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,138,228 |
|
|
|
1.2 |
|
|
|
|
|
|
|
United Overseas Bank Ltd. |
|
|
2,223,490 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
4,361,718 |
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,917,656 |
|
|
|
1.1 |
|
|
|
|
|
|
|
Hyundai Marine & Fire Insurance Co., Ltd. |
|
|
2,059,076 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
1,910,639 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,324,340 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,132,782 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,031,481 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,433,637 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Samsung Electronics Co., Ltd. PRF Shares |
|
|
2,414,165 |
|
|
|
1.4 |
|
See Accompanying Notes to Financial
Statements
20
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED) (CONTINUED)
Shares
|
|
|
|
|
|
|
|
Value
|
|
Percentage
of Net
Assets
|
COMMON STOCK: (continued) |
|
|
|
|
|
|
|
|
Samsung Engineering Co. Ltd. |
|
$ |
2,322,676 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Shinhan Financial Group Co., Ltd. |
|
|
2,175,501 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,296,214 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
24,018,167 |
|
|
|
14.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cheng Uei Precision Industry Co., Ltd. |
|
|
2,182,591 |
|
|
|
1.3 |
|
|
|
|
|
|
|
CTBC Financial Holding Co. Ltd |
|
|
2,373,319 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,367,895 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Mega Financial Holdings Co., Ltd. |
|
|
2,228,862 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Powertech Technology, Inc. |
|
|
1,914,440 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,114,732 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Taiwan Semiconductor Manufacturing Co., Ltd. |
|
|
2,165,495 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,167,517 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
17,514,851 |
|
|
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,188,810 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,249,267 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,119,019 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
4,368,286 |
|
|
|
2.6 |
|
| |
|
|
|
|
|
|
Total Common Stock
(Cost $184,044,368) |
|
|
166,934,647 |
|
|
|
97.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
810,078 |
|
|
|
0.5 |
|
PREFERRED STOCK: (continued) |
|
|
|
|
|
|
|
|
Hyundai Motor Co. — Series 2 |
|
$ |
1,713,635 |
|
|
|
1.0 |
|
| |
|
|
|
|
|
|
Total Preferred Stock
(Cost $1,723,028) |
|
|
2,523,713 |
|
|
|
1.5 |
|
| |
|
|
|
|
|
|
Total Investments in Securities
(Cost $185,767,396) |
|
$ |
169,458,360 |
|
|
|
98.7 |
|
|
|
|
|
|
|
Assets in Excess of Other Liabilities |
|
|
2,284,847 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
$ |
171,743,207 |
|
|
|
100.0 |
|
“Other Securities” represents issues not
identified as the top 50 holdings in terms of market value and issues or issuers not exceeding 1% of net assets individually or in aggregate
respectively as of August 31, 2013.
The following footnotes apply to either the individual
securities noted or one or more of the securities aggregated and listed as a single line item.
|
|
Cost for federal income tax purposes is
$186,006,461. |
Net unrealized depreciation consists of: |
|
|
|
|
|
|
Gross Unrealized Appreciation |
|
|
|
$ |
9,136,883 |
|
Gross Unrealized Depreciation |
|
|
|
|
(25,684,984 |
) |
Net Unrealized Depreciation |
|
|
|
$ |
(16,548,101 |
) |
Sector Diversification
|
|
|
|
Percentage
of Net Assets
|
|
|
|
|
|
31.0 |
% |
|
|
|
|
|
12.1 |
|
|
|
|
|
|
11.3 |
|
|
|
|
|
|
9.5 |
|
|
|
|
|
|
7.0 |
|
|
|
|
|
|
6.8 |
|
|
|
|
|
|
6.7 |
|
Telecommunication Services |
|
|
|
|
6.4 |
|
|
|
|
|
|
5.7 |
|
|
|
|
|
|
2.2 |
|
Assets in Excess of Other Liabilities |
|
|
|
|
1.3 |
|
|
|
|
|
|
100.0 |
% |
Fair Value Measurementsˆ
The following is a summary of the fair valuations according
to the inputs used as of August 31, 2013 in valuing the assets and liabilities:(1)
|
|
|
|
Quoted Prices
in Active Markets
for
Identical
Investments
(Level 1)
|
|
Significant
Other
Observable
Inputs #
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value
at
August 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
35,953,778 |
|
|
$ |
— |
|
|
$ |
35,953,778 |
|
|
|
|
|
|
2,387,241 |
|
|
|
34,219,837 |
|
|
|
— |
|
|
|
36,607,078 |
|
|
|
|
|
|
— |
|
|
|
10,185,848 |
|
|
|
— |
|
|
|
10,185,848 |
|
|
|
|
|
|
1,583,082 |
|
|
|
9,887,796 |
|
|
|
— |
|
|
|
11,470,878 |
|
|
|
|
|
|
1,896,138 |
|
|
|
5,858,534 |
|
|
|
— |
|
|
|
7,754,672 |
|
|
|
|
|
|
— |
|
|
|
2,379,799 |
|
|
|
— |
|
|
|
2,379,799 |
|
|
|
|
|
|
1,687,715 |
|
|
|
6,256,216 |
|
|
|
— |
|
|
|
7,943,931 |
|
See Accompanying Notes to Financial
Statements
21
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED) (CONTINUED)
|
|
|
|
Quoted Prices
in Active Markets
for
Identical
Investments
(Level 1)
|
|
Significant
Other
Observable
Inputs #
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value
at
August 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
2,186,831 |
|
|
$ |
— |
|
|
$ |
2,186,831 |
|
|
|
|
|
|
— |
|
|
|
4,361,718 |
|
|
|
— |
|
|
|
4,361,718 |
|
|
|
|
|
|
— |
|
|
|
24,018,167 |
|
|
|
— |
|
|
|
24,018,167 |
|
|
|
|
|
|
— |
|
|
|
17,514,851 |
|
|
|
— |
|
|
|
17,514,851 |
|
|
|
|
|
|
— |
|
|
|
2,188,810 |
|
|
|
— |
|
|
|
2,188,810 |
|
|
|
|
|
|
— |
|
|
|
4,368,286 |
|
|
|
— |
|
|
|
4,368,286 |
|
|
|
|
|
|
7,554,176 |
|
|
|
159,380,471 |
|
|
|
— |
|
|
|
166,934,647 |
|
|
|
|
|
|
— |
|
|
|
2,523,713 |
|
|
|
— |
|
|
|
2,523,713 |
|
Total Investments, at fair value |
|
|
|
$ |
7,554,176 |
|
|
$ |
161,904,184 |
|
|
$ |
— |
|
|
$ |
169,458,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Instruments+ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
(1,030,670 |
) |
|
$ |
— |
|
|
$ |
(1,030,670 |
) |
|
|
|
|
$ |
— |
|
|
$ |
(1,030,670 |
) |
|
$ |
— |
|
|
$ |
(1,030,670 |
) |
(1) |
|
For the period ended August 31, 2013, as a result of the fair
value pricing procedures for international equities utilized by the Fund, certain securities have transferred in and out of Level 1 and Level 2
measurements during the period. The Fund’s policy is to recognize transfers between levels at the end of the reporting period. At August 31, 2013,
securities valued at $9,990,019 and $4,108,642 were transferred from Level 1 to Level 2 and Level 2 to Level 1, respectively, within the fair value
hierarchy. |
ˆ |
|
See Note 2, “Significant Accounting Policies” in the
Notes to Financial Statements for additional information. |
+ |
|
Other Financial Instruments are derivatives not reflected in the
Portfolio of Investments and may include open forward foreign currency contracts, equity forwards, futures, swaps, and written options. Forward foreign
currency contracts, equity forwards and futures are valued at the unrealized gain (loss) on the instrument. Swaps and written options are valued at the
fair value of the instrument. |
# |
|
The earlier close of the foreign markets gives rise to the
possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those
securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party
vendor modeling tools to the extent available. Accordingly, a portion of the Fund’s investments are categorized as Level 2
investments. |
ING Asia Pacific High Dividend Equity Income Fund
Written OTC Options on August 31, 2013:
Number of
Contracts
|
|
|
|
Counterparty
|
|
Description
|
|
Exercise
Price
|
|
Expiration
Date
|
|
Premiums
Received
|
|
Fair Value
|
| Options on Indices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call on S&P/ASX 200 Index |
|
|
|
|
09/05/13 |
|
|
$ |
238,075 |
|
|
$ |
(435,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
09/05/13 |
|
|
|
165,973 |
|
|
|
(111,278 |
) |
|
|
|
|
|
|
Call on Korea Stock Exchange KOSPI 200 Index |
|
|
|
|
09/05/13 |
|
|
|
128,216 |
|
|
|
(316,568 |
) |
|
|
|
|
|
|
Call on Taiwan Stock Exchange Weighted Index |
|
|
|
|
09/05/13 |
|
|
|
106,254 |
|
|
|
(167,627 |
) |
|
|
|
|
Total Written OTC Options |
|
|
$ |
638,518 |
|
|
$ |
(1,030,670 |
) |
A summary of derivative instruments by primary risk
exposure is outlined in the following tables.
The fair value of derivative instruments as of August 31,
2013 was as follows:
Derivatives not accounted for as
hedging
instruments
|
|
|
Location on Statement
of Assets and Liabilities
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Written options, at fair value |
|
|
$ |
1,030,670 |
|
Total Liability Derivatives |
|
|
|
|
|
$ |
1,030,670 |
|
The effect of derivative instruments on the Fund’s
Statement of Operations for the period ended August 31, 2013 was as follows:
|
|
|
|
Amount of Realized Gain or (Loss)
on Derivatives
Recognized in Income |
Derivatives not accounted for as hedging
instruments
|
|
|
|
Written options
|
|
|
|
|
$ |
(69,440 |
) |
|
|
|
|
$ |
(69,440 |
) |
See Accompanying Notes to Financial
Statements
22
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND
SUMMARY PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED) (CONTINUED)
|
|
|
Change in Unrealized Appreciation or Depreciation
on
Derivatives Recognized in Income |
Derivatives not accounted for as hedging
instruments
|
|
|
Written options
|
|
|
|
$ |
524,917 |
|
|
|
|
$ |
524,917 |
|
The following is a summary by counterparty of the fair
value of OTC derivative instruments subject to Master Netting Agreements and collateral pledged (received), if any, at August 31,
2013:
|
|
|
|
Morgan Stanley
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,030,670 |
|
|
|
|
|
$ |
1,030,670 |
|
Net OTC derivative instruments by counterparty, at fair value |
|
|
|
$ |
(1,030,670 |
) |
Total collateral pledged by Fund/(Received from counterparty) |
|
|
|
$ |
— |
|
|
|
|
|
$ |
(1,030,670 |
) |
(1) |
|
Positive net exposure represents amounts due from each
respective counterparty. Negative exposure represents amounts due from the Fund. Please refer to Note 2 for additional details regarding counterparty
credit risk and credit related contingent features. |
Supplemental Option Information
(Unaudited)
Supplemental Call Options Statistics as of August 31,
2013:
% Of Total Net Assets against which calls written |
|
|
|
|
25.28 |
% |
Average Days to Expiration at time written |
|
|
|
|
27 days |
|
Average Call Moneyness* at time written |
|
|
|
|
ATM |
|
Premiums received for calls |
|
|
|
$ |
638,518 |
|
|
|
|
|
$ |
(1,030,670 |
) |
* |
|
“Moneyness” is the term used to describe the
relationship between the price of the underlying asset and the option’s exercise or strike price. For example, a call (buy) option is considered
“in-the-money” when the value of the underlying asset exceeds the strike price. Conversely, a put (sell) option is considered
“in-the-money” when its strike price exceeds the value of the underlying asset. Options are characterized for the purpose of Moneyness as,
“in-the-money” (“ITM”), “out-of-the-money” (“OTM”) or “at-the-money” (“ATM”), where the
underlying asset value equals the strike price. |
See Accompanying Notes to Financial
Statements
23
SHAREHOLDER MEETING INFORMATION (UNAUDITED)
An annual shareholder meeting of the ING Asia Pacific
High Dividend Equity Income Fund Registrant was held May 6, 2013, at the offices of ING Funds, 7337 East Doubletree Ranch Road, Suite 100, Scottsdale,
AZ 85258.
Proposals:
1 |
|
To approve a new investment advisory agreement for the Funds
with ING Investments prompted by the IPO, and to approve, under certain circumstances, any future advisory agreements prompted by Change of Control
Events that occur as part of the Separation Plan. |
3 |
|
To approve a new investment sub-advisory agreement between ING
Investments and ING Investment Management Advisors, V.B. (“IIMA”) with respect to certain Funds prompted by the IPO, and to approve, under
certain circumstances, any future sub-advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan. |
5 |
|
To elect five nominees to the Boards of Trustees of certain
Funds. |
7 |
|
To approve a new investment sub-advisory agreement between ING
Investments and ING IM with respect to certain Funds. |
|
|
|
|
Proposal
|
|
Shares
voted for
|
|
Total Shares
Voted
|
|
Shares
abstained
|
|
Broker
non-vote
|
|
Total Shares
Voted
|
ING Asia Pacific High Dividend Equity Income Fund |
|
|
|
|
|
|
5,929,203.171 |
|
|
|
362,959.034 |
|
|
|
186,143.834 |
|
|
|
1,472,189.938 |
|
|
|
7,950,495.977 |
|
|
|
|
|
|
|
|
5,907,334.338 |
|
|
|
377,058.940 |
|
|
|
193,912.761 |
|
|
|
1,472,189.938 |
|
|
|
7,950,495.977 |
|
| |
|
|
|
|
|
|
Proposal
|
|
For All
|
|
Withhold All
|
|
For all
Except
|
|
Broker
non-vote
|
|
Total Shares
Voted
|
|
|
|
|
|
|
|
7,639,870.863 |
|
|
|
310,625.114 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
7,950,495.977 |
|
|
|
|
|
|
|
|
7,660,740.778 |
|
|
|
289,755.199 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
7,950,495.977 |
|
|
|
|
|
|
|
|
7,640,852.206 |
|
|
|
309,643.771 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
7,950,495.977 |
|
|
|
|
|
|
|
|
7,637,593.017 |
|
|
|
312,902.960 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
7,950,495.977 |
|
|
|
|
|
|
|
|
7,643,619.438 |
|
|
|
306,876.539 |
|
|
|
0.000 |
|
|
|
0.000 |
|
|
|
7,950,495.977 |
|
| |
|
|
|
|
|
|
Proposal
|
|
Shares
voted for
|
|
Total Shares
Voted
|
|
Shares
abstained
|
|
Broker
non-vote
|
|
Total Shares
Voted
|
|
|
|
|
|
|
|
5,928,454.482 |
|
|
|
358,181.356 |
|
|
|
191,670.201 |
|
|
|
1,472,189.938 |
|
|
|
7,950,495.977 |
|
24
ADDITIONAL INFORMATION (UNAUDITED)
During the period, there were no material changes in the
Fund’s investment objective or policies that were not approved by the shareholders or the Fund’s charter or by-laws or in the principal risk
factors associated with investment in the Fund.
Dividend Reinvestment Plan
Unless the registered owner of Common Shares elects to
receive cash by contacting Computershare Shareowner Services LLC (the “Plan Agent”), all dividends declared on Common Shares of the Fund will
be automatically reinvested by the Plan Agent for shareholders in additional Common Shares of the Fund through the Fund’s Dividend Reinvestment
Plan (the “Plan”). Shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash paid by
check mailed directly to the shareholder of record (or, if the Common Shares are held in street or other nominee name, then to such nominee) by the
Plan Agent. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and
processed by the Plan Agent prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re-invest that cash
in additional Common Shares of the Fund for you. If you wish for all dividends declared on your Common Shares of the Fund to be automatically
reinvested pursuant to the Plan, please contact your broker.
The Plan Agent will open an account for each Common
Shareholder under the Plan in the same name in which such Common Shareholder’s Common Shares are registered. Whenever the Fund declares a dividend
or other distribution (together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan
will receive the equivalent in Common Shares. The Common Shares will be acquired by the Plan Agent for the participants’ accounts, depending upon
the circumstances described below, either (i) through receipt of additional unissued but authorized Common Shares from the Fund (“Newly Issued
Common Shares”) or (ii) by purchase of outstanding Common Shares on the open market (“Open-Market Purchases”) on the NYSE or elsewhere.
Open-market purchases and sales are usually made through a broker affiliated with the Plan Agent.
If, on the payment date for any Dividend, the closing
market price plus estimated brokerage commissions per Common Share is equal to or greater than the net asset value per Common Share, the Plan Agent
will invest the Dividend amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to
each participant’s account will be determined by dividing the dollar amount of the Dividend by the net asset value per Common Share on the payment
date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the
Dividend will be divided by 95% of the closing market price per Common Share on the payment date. If, on the payment date for any Dividend, the net
asset value per Common Share is greater than the closing market value plus estimated brokerage commissions, the Plan Agent will invest the Dividend
amount in Common Shares acquired on behalf of the participants in Open-Market Purchases. In the event of a market discount on the payment date for any
Dividend, the Plan Agent will have until the last business day before the next date on which the Common Shares trade on an “ex-dividend”
basis or 30 days after the payment date for such Dividend, whichever is sooner (the “Last Purchase Date”), to invest the Dividend amount in
Common Shares acquired in Open-Market Purchases.
The Fund pays quarterly Dividends. Therefore, the period
during which Open-Market Purchases can be made will exist only from the payment date of each Dividend through the date before the next
“ex-dividend” date, which typically will be approximately ten days.
If, before the Plan Agent has completed its Open-Market
Purchases, the market price per common share exceeds the net asset value per Common Share, the average per Common Share purchase price paid by the Plan
Administrator may exceed the net asset value of the Common Shares, resulting in the acquisition of fewer Common Shares than if the Dividend had been
paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan
provides that if the Plan Agent is unable to invest the full Dividend amount in Open-Market Purchases during the purchase period or if the market
discount shifts to a market premium during the purchase period, the Plan Agent will cease making Open-Market Purchases and will invest the un-invested
portion of the Dividend amount in Newly Issued Common Shares at the net asset value per common share at the close of business on the Last Purchase Date
provided that, if the net asset value is less than or equal to 95% of the then current market price per Common Share, the dollar amount of the Dividend
will be divided by 95% of the market price on the payment date.
25
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
The Plan Agent maintains all shareholders’ accounts in
the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common
Shares in the account of each Plan participant will be held by the Plan Agent on behalf of the Plan participant, and each shareholder proxy will
include those shares purchased or received pursuant to the Plan. The Plan Agent will forward all proxy solicitation materials to participants and vote
proxies for shares held under the Plan in accordance with the instructions of the participants.
In the case of shareholders such as banks, brokers or
nominees which hold shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common
Shares certified from time to time by the record shareholder’s name and held for the account of beneficial owners who participate in the
Plan.
There will be no brokerage charges with respect to Common
Shares issued directly by the Fund. However, each participant will pay a pro rata share of brokerage commissions incurred in connection with
Open-Market Purchases. The automatic reinvestment of Dividends will not relieve participants of any federal, state or local income tax that may be
payable (or required to be withheld) on such Dividends. Participants that request a partial or full sale of shares through the Plan Agent are subject
to a $15.00 sales fee and a $0.10 per share brokerage commission on purchases or sales, and may be subject to certain other service
charges.
The Fund reserves the right to amend or terminate the Plan.
There is no direct service charge to participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to
include a service charge payable by the participants.
All questions concerning the Plan should be directed to the
Fund’s Shareholder Service Department at (800) 992-0180.
Key Financial Dates — Calendar 2013
Distributions:
Declaration Date
|
|
|
|
Ex Date
|
|
Payable Date
|
March 15, 2013 |
|
|
|
|
April 1, 2013 |
|
|
|
April 15, 2013 |
|
June 17, 2013 |
|
|
|
|
July 1, 2013 |
|
|
|
July 15, 2013 |
|
September 16, 2013 |
|
|
|
|
October 1, 2013 |
|
|
|
October 15, 2013 |
|
December 16, 2013 |
|
|
|
|
December 27, 2013 |
|
|
|
January 15, 2014 |
|
Record date will be two business days after each
Ex-Dividend Date. These dates are subject to change.
Stock Data
The Fund’s common shares are traded on the NYSE
(Symbol: IAE).
Repurchase of Securities by Closed-End
Companies
In accordance with Section 23(c) of the 1940 Act, and Rule
23c-1 under the 1940 Act the Fund may from time to time purchase shares of beneficial interest of the Fund in the open market, in privately negotiated
transactions and/or purchase shares to correct erroneous transactions.
Number of Shareholders
The approximate number of record holders of Common Stock as
of August 31, 2013 was 9, which does not include approximately 5,199 beneficial owners of shares held in the name of brokers of other
nominees.
Certifications
In accordance with Section 303A.12 (a) of the New York
Stock Exchange Listed Company Manual, the Fund’s CEO submitted the Annual CEO Certification on June 27, 2013 certifying that he was not aware, as
of that date, of any violation by the Fund of the NYSE’s Corporate governance listing standards. In addition, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and related SEC rules, the Fund’s principal executive and financial officers have made quarterly certifications,
included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Fund’s disclosure controls and procedures and
internal controls over financial reporting.
26
(THIS PAGE INTENTIONALLY LEFT BLANK)
Investment Adviser
ING Investments, LLC
7337 East
Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258
Administrator
ING Funds Services, LLC
7337 East
Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258
Transfer Agent
Computershare Shareowner Services
LLC
480 Washington Boulevard
Jersey City, New Jersey 07310-1900
Custodian
The Bank of New York Mellon
One Wall
Street
New York, New York 10286
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, D.C. 20006
Toll-Free Shareholder Information
Call us from 9:00
a.m. to 7:00 p.m. Eastern time on any business day for account or other information, at (800) 992-0180
SAR-UIAE (0813-102513)
Item 2. Code of Ethics.
Not required for semi-annual filing.
Item 3. Audit Committee Financial Expert.
Not required for semi-annual filing.
Item 4. Principal Accountant Fees and Services.
Not required for semi-annual filing.
Item 5. Audit Committee Of Listed Registrants.
Not required for semi-annual filing.
Item 6. Schedule of Investments.
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND |
PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED) |
Shares
|
|
|
|
|
|
|
|
Value
|
|
Percentage
of Net
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
2,005,836 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Australia & New Zealand Banking Group Ltd. |
|
|
2,222,171 |
|
|
|
1.3 |
|
|
|
|
|
|
|
CFS Retail Property Trust |
|
|
2,078,442 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
1,681,765 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Insurance Australia Group |
|
|
2,176,011 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,003,310 |
|
|
|
1.2 |
|
|
|
|
|
|
|
National Australia Bank Ltd. |
|
|
2,238,855 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Pan Australian Resources Ltd. |
|
|
1,823,832 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,054,854 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Sigma Pharmaceuticals Ltd. |
|
|
1,782,402 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Spark Infrastructure Group |
|
|
1,825,049 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,057,892 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,232,338 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,186,679 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
1,984,318 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,077,680 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
3,522,344 |
|
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
35,953,778 |
|
|
|
20.9 |
|
|
|
|
|
|
|
|
|
|
BOC Hong Kong Holdings Ltd. |
|
|
2,303,454 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Communications Services Corp., Ltd. |
|
|
2,460,373 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,283,834 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,230,986 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Petroleum & Chemical Corp. |
|
|
2,210,502 |
|
|
|
1.3 |
|
|
|
|
|
|
|
China Resources Power Holdings Co. |
|
|
2,097,616 |
|
|
|
1.2 |
|
|
|
|
|
|
|
China Shanshui Cement Group Ltd. |
|
|
1,833,119 |
|
|
|
1.1 |
|
|
|
|
|
|
|
China Shineway Pharmaceutical Group Ltd. |
|
|
2,054,191 |
|
|
|
1.2 |
|
|
|
|
|
|
|
China Telecom Corp., Ltd. |
|
|
2,317,523 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Digital China Holdings Ltd. |
|
|
1,839,580 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
1,698,282 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Industrial and Commercial Bank of China Ltd. |
|
|
2,381,525 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Jiangsu Expressway Co. Ltd. |
|
|
2,387,241 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Parkson Retail Group Ltd. |
|
|
1,545,541 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
2,207,303 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Shanghai Industrial Holdings Ltd. |
|
|
2,385,955 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Zhejiang Expressway Co., Ltd. |
|
|
2,370,053 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
36,607,078 |
|
|
|
21.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,165,394 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Cheung Kong Infrastructure Holdings Ltd. |
|
|
2,179,052 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,077,108 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Emperor Watch & Jewellery Ltd. |
|
|
1,683,772 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Hang Lung Properties Ltd. |
|
|
2,080,522 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
10,185,848 |
|
|
|
5.9 |
|
|
|
|
|
|
|
|
|
|
Bharat Heavy Electricals Ltd. |
|
|
1,264,191 |
|
|
|
0.7 |
|
|
|
|
|
|
|
|
|
|
1,679,685 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,143,015 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
1,583,082 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
1,814,635 |
|
|
|
1.1 |
|
|
|
|
|
|
|
Oil & Natural Gas Corp., Ltd. |
|
|
1,403,741 |
|
|
|
0.8 |
|
|
|
|
|
|
|
Oriental Bank Of Commerce |
|
|
959,554 |
|
|
|
0.6 |
|
|
|
|
|
|
|
|
|
|
622,975 |
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
11,470,878 |
|
|
|
6.7 |
|
|
|
|
|
|
|
|
|
|
Bank Negara Indonesia Persero Tbk PT |
|
|
1,794,534 |
|
|
|
1.0 |
|
|
|
|
|
|
|
Indo Tambangraya Megah PT |
|
|
2,310,324 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Indofood Sukses Makmur Tbk PT |
|
|
1,753,676 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
1,896,138 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
7,754,672 |
|
|
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,379,799 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,687,715 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
2,010,996 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,114,750 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,130,470 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
7,943,931 |
|
|
|
4.6 |
|
|
|
|
|
|
|
|
|
|
Sky Network Television Ltd. |
|
|
2,186,831 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,138,228 |
|
|
|
1.2 |
|
|
|
|
|
|
|
United Overseas Bank Ltd. |
|
|
2,223,490 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
4,361,718 |
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,917,656 |
|
|
|
1.1 |
|
|
|
|
|
|
|
Hyundai Marine & Fire Insurance Co., Ltd. |
|
|
2,059,076 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
1,910,639 |
|
|
|
1.1 |
|
See Accompanying Notes to Financial
Statements
ING ASIA PACIFIC HIGH DIVIDEND
EQUITY INCOME FUND |
PORTFOLIO OF INVESTMENTS
AS OF AUGUST 31, 2013 (UNAUDITED) |
Shares
|
|
|
|
|
|
|
|
Value
|
|
Percentage
of Net
Assets
|
|
|
|
|
|
|
|
|
|
2,324,340 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,132,782 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,031,481 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,433,637 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Samsung Electronics Co., Ltd. PRF Shares |
|
|
2,414,165 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Samsung Engineering Co. Ltd. |
|
|
2,322,676 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Shinhan Financial Group Co., Ltd. |
|
|
2,175,501 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,296,214 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
24,018,167 |
|
|
|
14.0 |
|
|
|
|
|
|
|
|
|
|
Cheng Uei Precision Industry Co., Ltd. |
|
|
2,182,591 |
|
|
|
1.3 |
|
|
|
|
|
|
|
CTBC Financial Holding Co. Ltd |
|
|
2,373,319 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
2,367,895 |
|
|
|
1.4 |
|
|
|
|
|
|
|
Mega Financial Holdings Co., Ltd. |
|
|
2,228,862 |
|
|
|
1.3 |
|
|
|
|
|
|
|
Powertech Technology, Inc. |
|
|
1,914,440 |
|
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
2,114,732 |
|
|
|
1.2 |
|
|
|
|
|
|
|
Taiwan Semiconductor Manufacturing Co., Ltd. |
|
|
2,165,495 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
2,167,517 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
17,514,851 |
|
|
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,188,810 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,249,267 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
2,119,019 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
4,368,286 |
|
|
|
2.6 |
|
| |
|
|
|
|
|
|
Total Common Stock
(Cost $184,044,368) |
|
|
166,934,647 |
|
|
|
97.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
810,078 |
|
|
|
0.5 |
|
|
|
|
|
|
|
Hyundai Motor Co. — Series 2 |
|
|
1,713,635 |
|
|
|
1.0 |
|
| |
|
|
|
|
|
|
Total Preferred Stock
(Cost $1,723,028) |
|
|
2,523,713 |
|
|
|
1.5 |
|
| |
|
|
|
|
|
|
Total Investments in Securities
(Cost $185,767,396) |
|
$ |
169,458,360 |
|
|
|
98.7 |
|
|
|
|
|
|
|
Assets in Excess of Other Liabilities |
|
|
2,284,847 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
$ |
171,743,207 |
|
|
|
100.0 |
|
|
|
Cost for federal income tax purposes is
$186,006,461. |
Net unrealized depreciation consists of: |
|
|
|
|
|
|
Gross Unrealized Appreciation |
|
|
|
$ |
9,136,883 |
|
Gross Unrealized Depreciation |
|
|
|
|
(25,684,984 |
) |
Net Unrealized Depreciation |
|
|
|
$ |
(16,548,101 |
) |
Sector Diversification
|
|
|
|
Percentage
of Net Assets
|
|
|
|
|
|
30.9 |
% |
|
|
|
|
|
12.1 |
|
|
|
|
|
|
11.2 |
|
|
|
|
|
|
9.5 |
|
|
|
|
|
|
7.1 |
|
|
|
|
|
|
6.9 |
|
|
|
|
|
|
6.8 |
|
Telecommunication Services |
|
|
|
|
6.3 |
|
|
|
|
|
|
5.7 |
|
|
|
|
|
|
2.2 |
|
Assets in Excess of Other Liabilities |
|
|
|
|
1.3 |
|
|
|
|
|
|
100.0 |
% |
See Accompanying Notes to Financial
Statements
2
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-end Management Investment
Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-end Management Investment Companies.
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.
The Board has a
Nominating Committee for the purpose of considering and presenting to the Board candidates it proposes for nomination to fill Independent Trustee vacancies on the Board. The Committee currently consists of all Independent Trustees of the Board. (6
individuals). The Nominating Committee operates pursuant to a Charter approved by the Board. The primary purpose of the Nominating Committee is to consider and present to the Board the candidates it proposes for nomination to fill vacancies on the
Board. In evaluating candidates, the Nominating Committee may consider a variety of factors, but it has not at this time set any specific minimum qualifications that must be met. Specific qualifications of candidates for Board membership will be
based on the needs of the Board at the time of nomination.
The Nominating Committee is willing to consider nominations received from
shareholders and shall assess shareholder nominees in the same manner as it reviews its own nominees. A shareholder nominee for director should be submitted in writing to the Fund’s Secretary. Any such shareholder nomination should include at a
minimum the following information as to each individual proposed for nomination as trustee: such individual’s written consent to be named in the proxy statement as a nominee (if nominated) and to serve as a trustee (if elected), and all
information relating to such individual that is required to be disclosed in the solicitation of proxies for election of trustees, or is otherwise required, in each case under applicable federal securities laws, rules and regulations.
The secretary shall submit all nominations received in a timely manner to the Nominating Committee. To be
timely, any such submission must be delivered to the Fund’s Secretary not earlier than the 90th day prior to such meeting and not later than the close of business on the later of the 60th day prior to such meeting or the 10th day following the
day on which public announcement of the date of the meeting is first made, by either disclosure in a press release or in a document publicly filed by the Fund with the Securities and Exchange Commission.
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): ING Asia Pacific High Dividend Equity Income Fund
|
|
|
| By |
|
/s/ Shaun P. Mathews |
|
|
Shaun P. Mathews President
and Chief Executive Officer |
Date: November 5, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
|
|
|
| By |
|
/s/ Shaun P. Mathews |
|
|
Shaun P. Mathews President
and Chief Executive Officer |
Date: November 5, 2013
|
|
|
| By |
|
/s/ Todd Modic |
|
|
Todd Modic Senior Vice
President and Chief Financial Officer |
Date: November 5, 2013
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