Annual Shareholder Meeting Result/
Proxy Voting Policies & Procedures (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Convertible & Income 2024 Target Term, Convertible & Income and Convertible & Income II held their meeting of shareholders on July 11, 2019. Shareholders voted as indicated below:
Convertible & Income 2024 Target Term:
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Affirmative
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Withheld Authority
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Election of F. Ford Drummond Class II to serve until the
annual meeting for the 2022-2023 fiscal year
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16,406,093
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332,912
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Election of James A. Jacobson Class II to serve until the
annual meeting for the 2022-2023 fiscal year
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16,169,017
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569,988
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Election of James S. MacLeod Class II to serve until the
annual meeting for the 2022-2023 fiscal year
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16,163,149
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575,856
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Election of Sarah E. Cogan Class III to serve until the
annual meeting for the 2020-2021 fiscal year
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16,682,969
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56,107
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Election of Thomas J. Fuccillo† Class II to serve until the
annual meeting for the 2022-2023 fiscal year
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16,628,517
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110,559
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The other members of the Board of Trustees at the time of the meeting, namely, Ms. Deborah A. DeCotis and Messrs. Bradford K. Gallagher, Erick R. Holt†, Alan Rappaport, Hans W. Kertess, James S. MacLeod, William B. Ogden, IV and Davey S. Scoon continued to serve as Trustees of the Fund.
† Interested Trustee
Convertible & Income:
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Affirmative
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Withheld Authority
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Re-election of Hans W. Kertess Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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80,405,336
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6,116,373
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Re-election of William B. Ogden, IV Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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80,285,804
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6,235,904
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Election of Sarah E. Cogan Class II to serve until the
annual meeting for the 2020-2021 fiscal year
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80,999,524
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5,522,185
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Election of Thomas J. Fuccillo† Class III to serve until the
annual meeting for the 2021-2022 fiscal year
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80,749,938
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5,771,769
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Re-election of Erick R. Holt† Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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80,921,961
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5,599,745
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Re-election of Alan Rappaport* Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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3,196,156
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8,422,501
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The other members of the Board of Trustees at the time of the meeting, namely, Ms. Deborah A. DeCotis and Messrs. F. Ford Drummond, Bradford K. Gallagher, James A. Jacobson, James S. MacLeod, IV and Davey S. Scoon continued to serve as Trustees of the Fund.
* Mr. Alan Rappaport was elected by preferred shareholders voting as a separate class. All other trustees of the Convertible & Income II were elected by common and preferred shareholders voting together as a single class.
† Interested Trustee
February 29, 2020 | Annual Report 91
Annual Shareholder Meeting Result/
Proxy Voting Policies & Procedures (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Convertible & Income II:
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Affirmative
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Withheld Authority
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Re-election of William B. Ogden, IV Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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70,909,449
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4,904,552
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Election of Sarah E. Cogan Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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70,974,134
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4,839,868
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Election of Thomas J. Fuccillo† Class III to serve until the
annual meeting for the 2021-2022 fiscal year
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71,062,653
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4,751,349
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Re-election of Erick R. Holt† Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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70,948,181
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4,865,818
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Re-election of Alan Rappaport* Class I to serve until the
annual meeting for the 2022-2023 fiscal year
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2,999,341
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6,079,102
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The other members of the Board of Trustees at the time of the meeting, namely, Ms. Deborah A. DeCotis and Messrs. Deborah A. DeCotis, F. Ford Drummond, Bradford K. Gallagher, James A. Jacobson, Hans W. Kertess, James S. MacLeod, and Davey S. Scoon continued to serve as Trustees of the Fund.
* Mr. Alan Rappaport was elected by preferred shareholders voting as a separate class. All other trustees of the Convertible & Income II were elected by common and preferred shareholders voting together as a single class.
† Interested Trustee
Proxy Voting Policies & Procedures:
A description of the policies and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the most recent twelve month period ended June 30 is available (i) without charge, upon request, by calling the Funds' shareholder servicing agent at (800) 254-5197; (ii) on the Funds' website at us.allianzgi.com/closedendfunds; and (iii) on the Securities and Exchange Commission website at www.sec.gov.
92 Annual Report | February 29, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
The Investment Company Act of 1940, as amended, (the "1940 Act"), requires that both the full Board of Trustees (the "Board" or the "Trustees") and a majority of the Trustees who are not interested persons of the Fund (the "Independent Trustees"), voting separately, initially approve any new investment management agreement for a new Fund (as defined below).
On October 2, 2019, the Independent Trustees met in executive session with counsel, and the Board, including the Independent Trustees, unanimously approved the Investment Management Agreement (the "Agreement") between AllianzGI Artificial Intelligence & Technology Opportunities Fund (the "Fund") and Allianz Global Investors U.S. LLC (the "Investment Manager"). The material factors and conclusions that formed the basis of this approval are discussed below. On September 4, 2019, prior to the formation of the Board, the Trustees also met with counsel and representatives of the Fund and the Investment Manager on a preliminary basis to review and discuss information relating to the Fund, including factors relevant to their subsequent consideration of the Agreement.
In connection with their deliberations regarding the approval of the Agreement, the Independent Trustees considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Independent Trustees considered the nature, quality and extent of the various investment management, administrative, and other services to be
performed by the Investment Manager under the Agreement.
In advance of the Fund's organizational Board meeting, the Independent Trustees received and relied upon materials provided by the Investment Manager in response to a request from counsel including, among other items: (i) descriptions of various functions proposed to be performed by the Investment Manager for the Fund, such as portfolio management, compliance monitoring and portfolio trading practices, pricing, and administrative services; (ii) information regarding the overall organization and business functions of the Investment Manager, including, but not limited to, information regarding senior management, portfolio managers and other personnel proposed to provide investment management, administrative and other services to the Fund; (iii) the estimated costs to the Investment Manager of providing these services; (iv) the estimated profitability of the advisory arrangement to the Investment Manager; (v) information regarding potential economies of scale; (vi) information on potential "fall-out" benefits to the Investment Manager; (vii) information from Morningstar, Inc. ("Morningstar"), as compiled by the Investment Manager, on the total return investment performance for various time periods of a group of funds with investment classifications/objectives comparable to those of the Fund (the Trustees noted that the Fund was, at the time, newly organized and had no performance history of its own); (viii) information from Morningstar, as compiled by the Investment Manager, on the management fees and other expenses of comparable funds in the Morningstar peer
February 29, 2020 | Annual Report 93
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
group (the "Morningstar Fee Information"); (ix) information regarding the fees of other funds and institutional accounts managed by the Investment Manager with strategies that are similar (but in no case identical) to those of the Fund; and (x) information regarding the anticipated distribution yield of the Fund (collectively, the "15(c) Materials").
The Independent Trustees' conclusions as to the approval of the Agreement were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees' deliberations are described below, although individual Independent Trustees may have evaluated the information presented differently from one another, attributing different weights to various factors.
Nature, Extent, and Quality of Services
As part of their review, the Independent Trustees received and considered descriptions of various functions to be performed by the Investment Manager for the Fund, such as portfolio management, compliance monitoring, portfolio trading practices and oversight of third party service providers. They also considered information regarding the overall organization and business functions of the Investment Manager, including, without limitation, information regarding senior management, portfolio managers and other personnel who would provide investment management, administrative and other services to the Fund. They also considered corporate ownership and business operations of the Investment Manager unrelated to the Fund. The
Independent Trustees examined the ability of the Investment Manager to provide high-quality investment management and other services to the Fund. Among other information, the Independent Trustees considered the investment philosophy and research and decision-making processes of the Investment Manager, as well as the Investment Manager's broker selection process and trading operations; the experience of key management personnel of the Investment Manager and its affiliates, as applicable, responsible for portfolio management of the Fund; the ability of the Investment Manager to attract and retain capable personnel; the process for determining investment professionals' compensation; and the operational infrastructure, including technology and systems, of the Investment Manager.
In addition, the Independent Trustees noted the extensive range of services that the Investment Manager would provide to the Fund beyond the investment management services. In this regard, the Trustees reviewed the extent and quality of the Investment Manager's services with respect to regulatory compliance and ability to comply with the investment policies of the Fund; the compliance programs and risk controls of the Investment Manager; the specific contractual obligations of the Investment Manager pursuant to the Agreement; the nature, extent and quality of certain administrative services the Investment Manager would be responsible for providing to the Fund; the Investment Manager's risk management function; and conditions that might affect the ability of the Investment Manager to provide
94 Annual Report | February 29, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
high quality services to the Fund in the future under the Agreement, including, but not limited to, the organization's financial condition and operational stability. The Independent Trustees also considered that the Investment Manager would assume significant ongoing risks with respect to the Fund, including entrepreneurial and business risks the Investment Manager will undertake in serving as Investment Manager of the Fund, for which it is entitled to reasonable compensation. They noted that the Investment Manager's responsibilities include continual management of investment, operational, enterprise, legal, regulatory, and compliance risks as they relate to the Fund. The Independent Trustees also noted the Investment Manager's activities to be undertaken under its contractual obligation to oversee the Fund's various outside service providers, including its negotiation of certain service providers' fees and its evaluation of service providers' infrastructure, cybersecurity programs, compliance programs, and business continuity programs, among other matters. The Independent Trustees also considered the Investment Manager's ongoing development of its own infrastructure and information technology to support the Fund through, among other things, cybersecurity, business continuity planning, and risk management.
The Independent Trustees considered that the Investment Manager would provide the Fund with office space, certain administrative services and personnel to serve as officers of the Fund, and that the Investment Manager and its affiliates would pay all of the compensation of the Fund's interested
Trustees and officers (in their capacities as employees of the Investment Manager or such affiliates). Based on the foregoing, the Trustees concluded that the Investment Manager's investment processes, research capabilities and philosophy were well-suited to the Fund given its investment objective and policies, and that the Investment Manager would be able to meet any reasonably foreseeable obligations under the Agreement.
Fee and Expense Information
In assessing the reasonableness of the Fund's proposed fees under the Agreement, the Independent Trustees considered, among other information, the Fund's proposed management fee and projected total expense ratio and the management fees and total net expense ratios of a peer group of funds based on the Morningstar Fee Information, including a peer group ("Peer Group A") consisting of closed-end funds with similar initial public offering terms launched in 2019, and a peer group ("Peer Group B") consisting of closed-end funds focused on technology investment or investments in asset classes similar to the Fund's. In this regard, the Independent Trustees noted that different from most prior closed-end fund offerings, the Investment Manager proposed entering into an Organizational and Offering Expenses Agreement with the Fund, pursuant to which the Investment Manager would pay the organizational expenses and offering costs of the Fund's initial public offering, including, without limitation, underwriting and structuring fees, financial advisor commissions, marketing costs and the costs of legal and audit services incurred by the
February 29, 2020 | Annual Report 95
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
Fund in connection with the initial public offering. They noted that the funds in Peer Group A had similar expense allocation arrangements in connection with their initial public offerings. The Independent Trustees noted the Investment Manager's representation that the amounts to be paid by the Investment Manager pursuant to the Organizational and Offering Expenses Agreement would have no impact on the amount of the management or other fees or the fee rates paid by the Fund pursuant to the Agreement and other Fund agreements. The Trustees noted, as described below, that the Board had received information relating to the management fees and total expense ratios of comparable funds against which they were able to review the Fund's proposed fees.
The Independent Trustees also considered that the proposed fees to the Investment Manager under the Agreement will increase in absolute dollar terms to the extent that the Fund utilizes leverage, if at all, and that therefore the Investment Manager has a financial incentive to have leverage outstanding, which may create a conflict of interest between the Investment Manager and the Fund's shareholders. The Independent Trustees noted, however, the Fund has no current intention to use leverage, although it retains the flexibility to do so. The Independent Trustees noted that the 15(c) Materials included fee data for peer funds based on total managed assets (for management fees), and on net assets (for total net expenses) both with and without interest expense. The Independent Trustees considered the Morningstar Fee Information
with all funds included (those with and without leverage), noting that the data provided without giving effect to leverage was most relevant for the Fund.
The Independent Trustees, at the recommendation of the Investment Manager, considered the estimated total expense ratio of the Fund compared to the total expenses of the peer funds, recognizing that fees for management and administrative services would be included within the total expense ratio. It was noted that the Fund's proposed management fee and estimated total expense ratio were below the Peer Group A average and median (prior to giving effect to interest expense, in the case of peer funds using leverage), and the Fund's proposed management fee and estimated total expense ratio were above the Peer Group B average and median (prior to giving effect to interest expense, in the case of peer funds using leverage). With respect to the comparison of the Fund to Peer Group B, the Independent Trustees considered the relative complexity of the Fund's investment strategy as broadly compared with the investment strategies of the funds in Peer Group B, including the Fund's anticipated investments in private companies, and the Fund's reliance on the Investment Manager's Income & Growth team and U.S. Technology / Artificial Intelligence team located in different cities and multiple investment professionals with diverse areas of expertise. Taking these factors into account, the Independent Trustees concluded that the Fund's estimated fees and expenses, although generally higher those of the funds in Peer Group B, appeared to be reasonable in relation to the fees and
96 Annual Report | February 29, 2020
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
expenses of these comparable funds. It was noted, further, that various information regarding the Fund's estimated fees and expenses would depend upon the actual amount of the assets raised by the Fund in its initial public offering, such as the level of "other expenses" to be borne by the Fund, which were based on estimates prior to the Fund's initial public offering.
The Independent Trustees also considered the management fees charged by the Investment Manager and/or its affiliates to other funds and institutional accounts managed by the Investment Manager with strategies that are similar (but in no case identical) to those of the Fund, including other AllianzGI open-end and closed-end funds managed in a manner that corresponds to one of the investment management strategies of the Fund. The Independent Trustees noted that the proposed management fee to be paid by the Fund was in some cases higher than the management fees paid by such other clients. The Independent Trustees noted that the proposed management fee to be paid by the Fund is higher than the management fees paid by other AllianzGI closed-end funds but considered the Investment Manager's representations regarding the complexity of the Fund's strategy versus the other funds. The Trustees also were advised by the Investment Manager that there are additional portfolio management challenges in managing a closed-end fund, that do not apply to open-end funds, such as issues relating to trading on a national exchange, attempting to meet a regular dividend, and the use of leverage (when applicable). In
addition, with respect to institutional accounts, the Independent Trustees were advised by the Investment Manager that it generally provides broader and more extensive services to closed-end funds in comparison to institutional accounts, and incurs additional expenses in connection with the more extensive regulatory regime to which the Fund will be subject in comparison to institutional accounts generally. The Independent Trustees also considered various risks the Investment Manager will bear as sponsoring adviser to the Fund, which exceed or are in addition to those associated with the management of institutional accounts, including entrepreneurial, reputational, legal and regulatory risks, including the up-front payments of organizational and offering expenses to be made by the Investment Manager in connection with the Fund's IPO. The Independent Trustees also took into account complexities associated with the Fund being an exchange-traded closed-end fund with a twelve-year term that could be extended by the Board under certain circumstances, after which the Fund would be liquidated and shareholders would receive the current net asset value of their shares, unless the Fund's term is extended indefinitely.
Economies of Scale and "Fall-Out" Benefits
The Independent Trustees considered the extent to which the Investment Manager may realize economies of scale or other efficiencies in managing and supporting the Fund. The Independent Trustees took into account that, as a closed-end fund, the Fund was not expected to raise additional assets
February 29, 2020 | Annual Report 97
Matters Relating to the Trustees' Consideration of the Investment Management Agreement (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
following its initial public offering, so the net assets of the Fund were expected to grow (if at all) principally through the investment performance of the Fund or through the use of leverage in the future. The Trustees considered the Investment Manager's view that the proposed management fees for the Fund represent appropriate sharing of economies of scale under anticipated asset levels, while recognizing that the size of the initial public offering could not be predicted with accuracy.
Additionally, the Independent Trustees considered so-called "fall-out benefits" to the Investment Manager and its affiliates, such as research, statistical and quotation services from broker-dealers executing the Fund's transactions on an agency basis, and reputational value derived from serving as Investment Manager to the Fund.
Profitability
The Independent Trustees also considered estimated profitability to the Investment Manager of its relationship with the Fund based on the estimated initial offering size of the Fund and determined that such profitability was not excessive. The Independent Trustees took into account that estimated profitability would increase or decrease, as applicable, if the Fund raised a higher or lower level of assets in its initial public offering. The Independent Trustees also took into account that the profitability estimates did not factor in the substantial organizational and offering costs and marketing expenses to be borne by the Investment Manager in connection with the Fund's initial public offering (i.e., under the Organizational and Offering Expenses
Agreement described above), and considered supplemental information estimating that the Investment Manager would experience substantially negative profitability from the Fund for its first year of operations if such expenses were factored in. The Independent Trustees considered the cost allocation methodology used by the Investment Manager in developing its estimated profitability.
Conclusions
After reviewing these and other factors described herein, the Independent Trustees concluded, in their business judgment, within the context of their overall considerations regarding the Agreement, that the proposed fees payable under the Agreement represent reasonable compensation in light of the nature, extent and quality of services to be provided by the Investment Manager and should be approved for an initial two-year period. Based on their evaluation of factors that they deemed to be material, including, but not limited to, those factors described above, the Independent Trustees unanimously determined to recommend that the full board approve the Agreement.
98 Annual Report | February 29, 2020
Privacy Policy (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Please read this Policy carefully. It gives you important information about how Allianz Global Investors U.S. and its U.S. affiliates ("AllianzGI US," "we" or "us") handle non-public personal information ("Personal Information") that we may receive about you. It applies to all of our past, present and future clients and shareholders of AllianzGI US and the funds and accounts it manages, advises, administers or distributes, and will continue to apply when you are no longer a client or shareholder. As used throughout this Policy, "AllianzGI US" means Allianz Global Investors U.S. LLC, Allianz Global Investors Distributors LLC, and the family of registered and unregistered funds managed by one or more of these firms. AllianzGI US is part of a global investment management group, and the privacy policies of other Allianz Global Investors entities outside of the United States may have provisions in their policies that differ from this Privacy Policy. Please refer to the website of the specific non-US Allianz Global Investors entity for its policy on privacy.
We Care about Your Privacy
We consider your privacy to be a fundamental aspect of our relationship with you, and we strive to maintain the confidentiality, integrity and security of your Personal Information. To ensure your privacy, we have developed policies that are designed to protect your Personal Information while allowing your needs to be served.
Information We May Collect
In the course of providing you with products and services, we may obtain Personal Information about you, which may come from sources such as account application and
other forms, from other written, electronic, or verbal communications, from account transactions, from a brokerage or financial advisory firm, financial advisor or consultant, and/or from information you provide on our website.
You are not required to supply any of the Personal Information that we may request. However, failure to do so may result in us being unable to open and maintain your account, or to provide services to you.
How Your Information Is Shared
We do not disclose your Personal Information to anyone for marketing purposes. We disclose your Personal Information only to those service providers, affiliated and non-affiliated, who need the information for everyday business purposes, such as to respond to your inquiries, to perform services, and/or to service and maintain your account. This applies to all of the categories of Personal Information we collect about you. The affiliated and non-affiliated service providers who receive your Personal Information also may use it to process your transactions, provide you with materials (including preparing and mailing prospectuses and shareholder reports and gathering shareholder proxies), and provide you with account statements and other materials relating to your account. These service providers provide services at our direction, and under their agreements with us, are required to keep your Personal Information confidential and to use it only for providing the contractually required services. Our service providers may not use your Personal Information to market products and services
February 29, 2020 | Annual Report 99
Privacy Policy (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
to you except in conformance with applicable laws and regulations. We also may provide your Personal Information to your respective brokerage or financial advisory firm, custodian, and/or to your financial advisor or consultant.
In addition, we reserve the right to disclose or report Personal Information to non-affiliated third parties, in limited circumstances, where we believe in good faith that disclosure is required under law, to cooperate with regulators or law enforcement authorities or pursuant to other legal process, or to protect our rights or property, including to enforce our Privacy Policy or other agreements with you. Personal Information collected by us may also be transferred as part of a corporate sale, restructuring, bankruptcy, or other transfer of assets.
Security of Your Information
We maintain your Personal Information for as long as necessary for legitimate business purposes or otherwise as required by law. In maintaining this information, we have implemented appropriate procedures that are designed to restrict access to your Personal Information only to those who need to know that information in order to provide products and/or services to you. In addition, we have implemented physical, electronic and procedural safeguards to help protect your Personal Information.
Privacy and the Internet
The Personal Information that you provide through our website, as applicable, is handled in the same way as the Personal Information that you provide by any other means, as described above. This section of the Policy
gives you additional information about the way in which Personal Information that is obtained online is handled.
• Online Enrollment, Account Access and Transactions: When you visit our website, you can visit pages that are open to the general public, or, where available, log into protected pages to enroll online, access information about your account, or conduct certain transactions. Access to the secure pages of our website is permitted only after you have created a User ID and Password. The User ID and Password must be supplied each time you want to access your account information online. This information serves to verify your identity. When you enter Personal Information into our website to enroll or access your account online, you will log into secure pages. By using our website, you consent to this Privacy Policy and to the use of your Personal Information in accordance with the practices described in this Policy. If you provide Personal Information to effect transactions, a record of the transactions you have performed while on the site is retained by us. For additional terms and conditions governing your use of our website, please refer to the Investor Mutual Fund Access Disclaimer which is incorporated herein by reference and is available on our website.
• Cookies and Similar Technologies: Cookies are small text files stored in your computer's hard drive when you visit certain web pages. Clear GIFs (also known as Web Beacons) are typically transparent very small graphic images (usually 1 pixel x 1 pixel) that are placed on a website that may be included on our services provided via our website and
100 Annual Report | February 29, 2020
Privacy Policy (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
typically work in conjunction with cookies to identify our users and user behavior. We may use cookies and automatically collected information to: (i) personalize our website and the services provided via our website, such as remembering your information so that you will not have to re-enter it during your use of, or the next time you use, our website and the services provided via our website; (ii) provide customized advertisements, content, and information; (iii) monitor and analyze the effectiveness of our website and the services provided via our website and third-party marketing activities; (iv) monitor aggregate site usage metrics such as total number of visitors and pages viewed; and (v) track your entries, submissions, and status in any promotions or other activities offered through our website and the services provided via our website. Tracking technology also helps us manage and improve the usability of our website, (i) detecting whether there has been any contact between your computer and us in the past and (ii) to identify the most popular sections of our website. Because an industry-standard Do-Not-Track protocol is not yet established, our website will continue to operate as described in this Privacy Policy and will not be affected by any Do-Not-Track signals from any browser.
• Use of Social Media Plugins Our website uses the following Social Media Plugins ("Plugins"):
• Facebook Share Button operated by Facebook Inc., 1601 S. California Ave, Palo Alto, CA 94304, USA
• Tweet Button operated by Twitter Inc., 795 Folsom St., Suite 600, San Francisco, CA 94107, USA
• LinkedIn Share Button operated by LinkedIn Corporation, 2029 Stierlin Court, Mountain View, CA 94043, USA
All Plugins are marked with the brand of the respective operators Facebook, Twitter and LinkedIn ("Operators"). When you visit our website that contains a social plugin, your browser establishes a direct connection to the servers of the Operator. The Operator directly transfers the plugin content to your browser which embeds the latter into our website, enabling the Operator to receive information about you having accessed the respective page of our website. Thus, AllianzGI US has no influence on the data gathered by the plugin and we inform you according to our state of knowledge: The embedded plugins provide the Operator with the information that you have accessed the corresponding page of our website. If you do not wish to have such data transferred to the Operators, you need to log out of your respective account before visiting our website. Please see the Operators' data privacy statements in order to get further information about purpose and scope of the data collection and the processing and use:
• Facebook: https://de-de.facebook.com/about/privacy
• Twitter: https://twitter.com/privacy
• Linked In: https://www.linkedin.com/legal/privacy-policy
Changes to Our Privacy Policy
We may modify this Privacy Policy from time-to-time to reflect changes in related practices
February 29, 2020 | Annual Report 101
Privacy Policy (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
and procedures, or applicable laws and regulations. If we make changes, we will notify you on our website and the revised Policy will become effective immediately upon posting to our website. We also will provide account owners with a copy of our Privacy Policy, annually if required. We encourage you to visit our website periodically to remain up to date on our Privacy Policy. You acknowledge that by using
our website after we have posted changes to this Privacy Policy, you are agreeing to the terms of the Privacy Policy as modified.
Obtaining Additional Information
If you have any questions about this Privacy Policy or our privacy related practices in the United States, you may contact us via our dedicated email at PrivacyUS@allianzgi.com
102 Annual Report | February 29, 2020
Dividend Reinvestment Plan (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Each Fund has adopted a Dividend Reinvestment Plan (the "Plan") which allows common shareholders to reinvest Fund distributions in additional common shares of the Fund. American Stock Transfer & Trust Company, LLC (the "Plan Agent") serves as agent for common shareholders in administering the Plan. It is important to note that participation in the Plan and automatic reinvestment of Fund distributions does not ensure a profit, nor does it protect against losses in a declining market.
Automatic enrollment/voluntary participation. Under the Plan, common shareholders whose shares are registered with the Plan Agent ("registered shareholders") are automatically enrolled as participants in the Plan and will have all Fund distributions of income, capital gains and returns of capital (together, "distributions") reinvested by the Plan Agent in additional common shares of the Funds, unless the shareholder elects to receive cash. Registered shareholders who elect not to participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholder of record (or if the shares are held in street or other nominee name, to the nominee) by the Plan Agent. Participation in the Plan is voluntary. Participants may terminate or resume their enrollment in the Plan at any time without penalty by notifying the Plan Agent online at www.amstock.com, by calling (800) 254-5197, by writing to the Plan Agent, American Stock Transfer & Trust Company, LLC, at P.O. Box 922, Wall Street Station, New York, NY 10269-0560, or, as applicable, by completing and returning the transaction form attached to the Plan statement. A
proper notification will be effective immediately and apply to the Funds' next distribution if received by the Plan Agent at least three (3) days prior to the record date for the distribution; otherwise, a notification will be effective shortly following the Funds' next succeeding distribution thereafter. If you withdraw from the Plan and so request, the Plan Agent will arrange for the sale of your shares and send you the proceeds, minus a transaction fee and brokerage commissions.
How shares are purchased under the Plan. For each Fund distribution, the Plan Agent will acquire common shares for participants either (i) through receipt of newly issued common shares from the Fund ("newly issued shares") or (ii) by purchasing common shares of the Fund on the open market ("open market purchases"). If, on a distribution payment date, the net asset value per common share of the Funds ("NAV") is equal to or less than the market price per common share plus estimated brokerage commissions (often referred to as a "market premium"), the Plan Agent will invest the distribution amount on behalf of participants in newly issued shares at a price equal to the greater of (i) NAV or (ii) 95% of the market price per common share on the payment date. If the NAV is greater than the market price per common share plus estimated brokerage commissions (often referred to as a "market discount") on a distribution payment date, the Plan Agent will instead attempt to invest the distribution amount through open market purchases. If the Plan Agent is unable to invest the full distribution amount in open market purchases, or if the market discount shifts to a market premium
February 29, 2020 | Annual Report 103
Dividend Reinvestment Plan (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
during the purchase period, the Plan Agent will invest any un-invested portion of the distribution in newly issued shares at a price equal to the greater of (i) NAV or (ii) 95% of the market price per share as of the last business day immediately prior to the purchase date (which, in either case, may be a price greater or lesser than the NAV per common shares on the distribution payment date). No interest will be paid on distributions awaiting reinvestment. Under the Plan, the market price of common shares on a particular date is the last sales price on the exchange where the shares are listed on that date or, if there is no sale on the exchange on that date, the mean between the closing bid and asked quotations for the shares on the exchange on that date. The NAV per common share on a particular date is the amount calculated on that date (normally at the close of regular trading on the New York Stock Exchange) in accordance with the Funds' then current policies.
Fees and expenses. No brokerage charges are imposed on reinvestments in newly issued shares under the Plan. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases. There are currently no direct service charges imposed on participants in the Plan, although the Funds reserve the right to amend the Plan to include such charges. The Plan Agent imposes a transaction fee (in addition to brokerage commissions that are incurred) if it arranges for the sale of your common shares held under the Plan.
Shares held through nominees. In the case of a registered shareholder such as a broker, bank or other nominee (together, a "nominee") that holds common 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 by the nominee/record stockholder as representing the total amount registered in such shareholder's name and held for the account of beneficial owners who are to participate in the Plan. If your common shares are held through a nominee and are not registered with the Plan Agent, neither you nor the nominee will be participants in or have distributions reinvested under the Plan. If you are a beneficial owner of common shares and wish to participate in the Plan, and your nominee is unable or unwilling to become a registered shareholder and a Plan participant on your behalf, you may request that your nominee arrange to have all or a portion of your shares re-registered with the Plan Agent in your name so that you may be enrolled as a participant in the Plan. Please contact your nominee for details or for other possible alternatives. Participants whose shares are registered with the Plan Agent in the name of one nominee firm may not be able to transfer the shares to another firm and continue to participate in the Plan.
Tax consequences. Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions i.e., automatic reinvestment in additional shares does not relieve stockholders of, or defer the need to pay, any income tax that may be payable (or that is required to be withheld) on Fund dividends
104 Annual Report | February 29, 2020
Dividend Reinvestment Plan (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
and distributions. The Fund and the Plan Agent reserve the right to amend or terminate the Plan. Additional information about the Plan, as well as a copy of the full Plan itself, may be obtained from the Plan
Agent, American Stock Transfer & Trust Company, LLC, at P.O. Box 922, Wall Street Station, New York, NY 10269-0560; telephone number: (800) 254-5197; website: www.amstock.com.
February 29, 2020 | Annual Report 105
Board of Trustees (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Name,
Year of Birth and
Position(s) Held
with Funds
|
|
Term of Office
and Length
of Time Served
|
|
Number of
Funds in
Principal Occupation(s) During Past 5 Years
|
|
Fund
Complex
Overseen
by Trustee
|
|
Other Directorships
Held by Trustee
During the
Past 5 Years
|
|
Independent Trustees (1)
Alan Rappaport
1953
Chairman of the Board of Trustees
|
|
NCV & NCZ
Since June 2010
CBH
Since May 2017
AIO
Since October
2019
|
|
Adjunct Professor, New York University Stern School of Business (since 2011); Lecturer, Stanford University Graduate School of Business (since 2013); and Director, Victory Capital Holdings, Inc., an asset management firm (since 2013). Formerly, Trustee, American Museum of Natural History (2005-2015); and Trustee and Member of Board of Overseers, NYU Langone Medical Center (2007-2015); and Advisory Director (formerly, Vice Chairman), Roundtable Investment Partners (2009-2018).
|
|
|
90
|
|
|
None.
|
|
Sarah E. Cogan
1956
|
|
CBH, NCV & NCZ
Since January 2019
AIO
Since October 2019
|
|
Retired partner of Simpson Thacher & Bartlett LLP (law firm) ("STB"); Formerly, Partner, STB (1989-2018); Director, Girl Scouts of Greater New York (since 2016); and Trustee, Natural Resources Defense Council, Inc. (since 2013).
|
|
|
90
|
|
|
None.
|
|
Deborah A. DeCotis
1952
|
|
NCV & NCZ
Since March 2011
CBH
Since May 2017
AIO
Since October
2019
|
|
Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Member, Circle Financial Group (since 2009); Member, Council on Foreign Relations (since 2013); Trustee, Smith College (since 2017); and Director, Watford Re (Since 2017). Formerly, Co-Chair Special Projects Committee, Memorial Sloan Kettering (2005-2015); Trustee, Stanford University (2010-2015); and Principal, LaLoop LLC, a retail accessories company (1999-2014).
|
|
|
90
|
|
|
None.
|
|
F. Ford Drummond
1962
|
|
NCV & NCZ
Since June 2015
CBH
Since May 2017
AIO
Since October 2019
|
|
Owner/Operator, Drummond Ranch; and Board Member, Oklahoma Water Resources Board. Formerly, Director, The Cleveland Bank; and General Counsel, BMI-Health Plans (benefits administration); and Chairman, Oklahoma Water Resources Board.
|
|
|
62
|
|
|
Director, BancFirst Corporation.
|
|
106 Annual Report | February 29, 2020
Board of Trustees (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Name,
Year of Birth and
Position(s) Held
with Funds
|
|
Term of Office
and Length
of Time Served
|
|
Number of
Funds in
Principal Occupation(s) During Past 5 Years
|
|
Fund
Complex
Overseen
by Trustee
|
|
Other Directorships
Held by Trustee
During the
Past 5 Years
|
|
James A. Jacobson
1945
|
|
NCV & NCZ
Since December 2009
CBH
Since May 2017
AIO
Since October 2019
|
|
Retired. Trustee (since 2002) and Chairman of Investment Committee (since 2007), Ronald McDonald House of New York; and Trustee, New Jersey City University (since 2014).
|
|
|
90
|
|
|
Formerly, Trustee, Alpine Mutual Funds Complex (consisting of 18 funds) (2009- 2016).
|
|
Hans W. Kertess
1939
Trustee,
Vice Chairman of the Boards
|
|
NCV & NCZ
Since February 2004
CBH
Since May 2017
AIO
Since October 2019
|
|
President, H. Kertess & Co., a financial advisory company; and Senior Adviser (formerly Managing Director), Royal Bank of Canada Capital Markets (since 2004).
|
|
|
90
|
|
|
None.
|
|
James S. MacLeod
1947
|
|
NCV & NCZ
Since June 2015
CBH
Since May 2017
AIO
Since October 2019
|
|
Non-Executive Chairman, CoastalSouth Bancshares, Inc. (since 2018); Director, Coastal States Bank; Director, Coastal States Mortgage, Inc.; Vice Chairman, MUSC Foundation; Chairman of the Board of Trustees, University of Tampa. Formerly, Chief Executive Officer of CoastalSouth Bancshares (2010-2018); President and Chief Operating Officer, Coastal States Bank (2007-2018); Managing Director and President, Homeowners Mortgage, a subsidiary of Coastal States Bank (2007-2018), Executive Vice President, Mortgage Guaranty Insurance Corporation (1984-2004).
|
|
|
62
|
|
|
Non-Executive Chairman and Director, Sykes Enterprises, Inc.
|
|
William B. Ogden, IV
1945
|
|
NCV & NCZ
Since September 2006
CBH
Since May 2017
AIO
Since October 2019
|
|
Retired. Formerly, Asset Management Industry Consultant; and Managing Director, Investment Banking Division of Citigroup Global Markets Inc.
|
|
|
90
|
|
|
None.
|
|
Davey S. Scoon
1946
Trustee,
Vice Chairman of the Board
|
|
NCV & NCZ
Since June 2015
CBH
Since May 2017
AIO
Since October 2019
|
|
Formerly Adjunct Professor, University of Wisconsin-Madison (since 2011-2019).
|
|
|
62
|
|
|
Director, Albireo Pharma, Inc. (since 2016); and Director, AMAG Pharmaceuticals, Inc. (since 2006). Formerly, Director, Biodel Inc. (2013-2016).
|
|
February 29, 2020 | Annual Report 107
Board of Trustees (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Name,
Year of Birth and
Position(s) Held
with Funds
|
|
Term of Office
and Length
of Time Served
|
|
Number of
Funds in
Principal Occupation(s) During Past 5 Years
|
|
Fund
Complex
Overseen
by Trustee
|
|
Other Directorships
Held by Trustee
During the
Past 5 Years
|
|
Interested Trustees (2)
Thomas J. Fuccillo
1968
|
|
CBH, NCV & NCZ
Since March 2019
AIO
Since October 2019
|
|
Managing Director and Head of US Funds of Allianz Global Investors U.S. Holdings LLC; Managing Director of Allianz Global Investors Distributors LLC; Trustee, President and Chief Executive Officer of 62 funds in the Fund Complex; and President and Chief Executive Officer of The Korea Fund, Inc. and The Taiwan Fund, Inc. Formerly, Associate General Counsel, Head of US Funds and Retail Legal (2004-2019); Chief Legal Officer and Secretary of Allianz Global Investors Distributors LLC (2013-2019); Vice President, Secretary and Chief Legal Officer of numerous funds in the Fund Complex; and Secretary and Chief Legal Officer of The Korea Fund, Inc.
|
|
|
62
|
|
|
None.
|
|
Erick R. Holt
1952
|
|
CBH, NCV & NCZ
Since December 2017
AIO
Since October 2019
|
|
Board Member, Global Chief Risk Officer, General Counsel and Chief Compliance Officer (since 2006-April 2018) of Allianz Asset Management GmbH.
|
|
|
62
|
|
|
None.
|
|
(1) "Independent Trustees" are those Trustees who are not "Interested Persons" (as defined in section 2(a)(19) of the 1940 Act), and "Interested Trustees" are those Trustees who are "Interested Persons" of the Funds.
(2) Messers. Fuccillo and Holt are "Interested Persons" of the Funds as defined in Section 2(a)(19) of the 1940 Act, due to their affiliation with the Investment Manager and its affiliates.
108 Annual Report | February 29, 2020
Fund Officers (unaudited)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Name, Address*, Year of
Birth, Position(s) Held with Funds
|
|
Term of Office and
Length of Time
Served
|
|
Principal Occupation(s) During Past 5 Years
|
|
Thomas J. Fuccillo
President and Chief Executive Officer
1968
|
|
NCV & NCZ
Since April 2016
CBH
Since May 2017
AIO
Since October 2019
|
|
Managing Director and Head of US Funds of Allianz Global Investors U.S. Holdings LLC; Managing Director of Allianz Global Investors Distributors LLC; Trustee, President and Chief Executive Officer of 62 funds in the Fund Complex; and President and Chief Executive Officer of The Korea Fund, Inc. and The Taiwan Fund, Inc. Formerly, Associate General Counsel, Head of US Funds and Retail Legal (2004-2019); Chief Legal Officer and Secretary of Allianz Global Investors Distributors LLC (2013-2019); Vice President, Secretary and Chief Legal Officer of numerous funds in the Fund Complex; and Secretary and Chief Legal Officer of The Korea Fund, Inc.
|
|
Scott Whisten
Treasurer, Principal Financial and Accounting Officer
1971
|
|
CBH, NCV & NCZ
Since April 2018
AIO
Since October 2019
|
|
Director of Allianz Global Investors U.S. LLC; and Treasurer, Principal Financial and Accounting Officer of 62 funds in the Fund Complex. Formerly, Assistant Treasurer of numerous funds in the Fund Complex (2007-2018).
|
|
Angela Borreggine
Chief Legal Officer and Secretary
1964
|
|
NCV & NCZ
Since April 2016
CBH
Since May 2017
AIO
Since October 2019
|
|
Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; and Chief Legal Officer and Secretary of 62 funds in the Fund Complex. Formerly, Assistant Secretary of numerous funds in the Fund Complex (2015-2016).
|
|
Thomas L. Harter, CFA**
Chief Compliance Officer
1975
|
|
NCV & NCZ
Since June 2013
CBH
Since May 201
AIO
Since October 2019
|
|
Director, Senior Compliance Manager of Allianz Global Investors U.S. Holdings LLC; Director, Deputy Chief Compliance Officer of Allianz Global Investors U.S. LLC; and Chief Compliance Officer of 62 funds in the Fund Complex and of The Korea Fund, Inc.
|
|
Richard J. Cochran
Assistant Treasurer
1961
|
|
NCV & NCZ
Since May 2008
CBH
Since May 2017
AIO
Since October 2019
|
|
Vice President of Allianz Global Investors U.S. LLC; and Assistant Treasurer of 62 funds in the Fund Complex and of The Korea Fund, Inc.
|
|
Orhan Dzemaili
Assistant Treasurer
1974
|
|
NCV & NCZ
Since June 2012
CBH
Since May 2017
AIO
Since October 2019
|
|
Director of Allianz Global Investors U.S. LLC; Treasurer, Principal Financial and Accounting Officer of The Korea Fund, Inc.; and Assistant Treasurer of 62 funds in the Fund Complex. Formerly, Assistant Treasurer of The Korea Fund, Inc. (2016-2018).
|
|
February 29, 2020 | Annual Report 109
Fund Officers (unaudited) (continued)
AllianzGI Artificial Intelligence & Technology Opportunities Fund/AllianzGI Convertible & Income 2024 Target Term Fund/AllianzGI Convertible & Income Fund/AllianzGI Convertible & Income Fund II
Name, Address*, Year of
Birth, Position(s) Held with Funds
|
|
Term of Office and
Length of Time
Served
|
|
Principal Occupation(s) During Past 5 Years
|
|
Debra Rubano
Assistant Secretary
1975
|
|
NCV & NCZ
Since December 2015
CBH
Since May 2017
AIO
Since October 2019
|
|
Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; and Assistant Secretary of 62 funds in the Fund Complex.
|
|
Craig A. Ruckman
Assistant Secretary
1977
|
|
CBH, NCV & NCZ
Since December 2017
AIO
Since October 2019
|
|
Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; Chief Legal Officer of Allianz Global Investors Distributors LLC; and Assistant Secretary of 62 funds in the Fund Complex. Formerly, Associate of K&L Gates LLP (2012-2016).
|
|
Each of the Fund's executive officers is an "interested person" of the Funds (as defined in section 2(a)(19) of the 1940 Act) as a result of this or her position(s) set forth in the table above.
* Unless otherwise indicated, the business address of the persons listed above is c/o Allianz Global Investors U.S. LLC, 1633 Broadway, New York, New York 10019.
** The correspondence address for Thomas L. Harter is 600 West Broadway, San Diego, CA 92101.
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116 Annual Report | February 29, 2020
Trustees
Alan Rappaport
Chairman of the Board of Trustees
Sarah E. Cogan
Deborah A. DeCotis
F. Ford Drummond
Thomas J. Fuccillo
Erick R. Holt
James A. Jacobson
Hans W. Kertess
James S. MacLeod
William B. Ogden, IV
Davey S. Scoon
Fund Officers
Thomas J. Fuccillo
President and Chief Executive Officer
Scott Whisten
Treasurer, Principal Financial & Accounting Officer
Angela Borreggine
Chief Legal Officer & Secretary
Thomas L. Harter
Chief Compliance Officer
Richard J. Cochran
Assistant Treasurer
Orhan Dzemaili
Assistant Treasurer
Debra Rubano
Assistant Secretary
Craig A. Ruckman
Assistant Secretary
Investment Manager
Allianz Global Investors U.S. LLC
1633 Broadway
New York, NY 10019
Custodian & Accounting Agent
State Street Bank and Trust Co.
801 Pennsylvania Avenue
Kansas City, MO 64105
Transfer Agent, Dividend Paying Agent
and Registrar
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Legal Counsel
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
This report, including the financial information herein, is transmitted to the shareholders of AllianzGI Artificial Intelligence & Technology Opportunities, AllianzGI Convertible & Income 2024 Target Term, AllianzGI Convertible & Income and AllianzGI Convertible & Income II, for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Funds may purchase shares of their stock in the open market.
The Funds file their complete schedule of the portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-PORT. Each Fund's Form N-PORT is available on the SEC's website at www.sec.gov. The information on Form N-PORT is also available on the Funds' website at us.allianzgi.com/closedendfunds.
Information on the Funds is available at us.allianzgi.com/closedendfunds or by calling the Funds' shareholder servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper mailings.
To enroll, go to us.allianzgi.com/edelivery.
Allianz Global Investors Distributors AZ603AR_022920