UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED
SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21507
Allspring Utilities and High Income Fund
(Exact name of registrant as specified in charter)
1415 Vantage
Park Drive, 3rd Floor,
Charlotte, NC 28203
(Address of principal executive offices) (Zip code)
Matthew
Prasse
Allspring Funds Management, LLC
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Name and address of agent for service)
Registrants telephone number, including area
code: 800-222-8222
Date of fiscal year
end: August 31
Date of reporting period: August 31, 2023
ITEM 1. REPORT TO STOCKHOLDERS
Allspring Utilities and High Income Fund (ERH)
Annual Report
August 31, 2023
Managed Distribution Plan |
Pursuant to an exemptive order issued by the Securities and
Exchange Commission (“Order”), the Fund is authorized to
distribute long-term capital gains to shareholders more frequently than once per year.
Pursuant to the Order, the Fund’s Board of Trustees approved a
Managed Distribution Plan (“MDP”) for the Fund pursuant to which the Fund makes monthly cash distributions to common shareholders, stated in terms of a fixed amount per common share. |
The Fund’s Board has adopted a managed distribution plan for
the Fund at an annual minimum fixed rate of 7% based on the Fund’s
average monthly NAV per share over the prior 12 months. The Fund makes distributions monthly. You should not draw any conclusions about the Fund’s investment performance from the amount of these distributions or from the terms
of the MDP. The MDP will be subject to regular periodic review by the Board and the
Board may amend or terminate the MDP at any time without prior notice to
Fund shareholders. However, at this time there are no reasonably foreseeable circumstances that might cause the termination of the MDP. |
The Fund may distribute more than its income and net realized
capital gains and, therefore, a portion of your distribution may be a
return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance
and should not be confused with ‘yield’ or
‘income’. |
With each distribution, the Fund will issue a notice to
shareholders and a press release containing information about the amount
and sources of the distribution and other related information. The amounts and sources of distributions reported in the notice and press release are only estimates and are not provided for tax reporting purposes. The actual amounts and
sources of the amounts for tax reporting purposes will depend upon the Fund’s
investment experience during its fiscal year and may be subject to
changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. |
The views expressed and any forward-looking statements are as of August 31, 2023, unless otherwise noted, and are those of the Fund’s portfolio
managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations.
Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time
in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed
or forward-looking statements.
Allspring Utilities and High Income Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring
Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Utilities and High Income Fund for the
12-month period that ended August 31, 2023. Globally, stocks and bonds experienced high levels of volatility through the period. The market was focused on persistently high inflation and the impact of ongoing aggressive central bank rate hikes. Compounding these concerns were the
global reverberations of the Russia-Ukraine war. Riskier assets rallied in 2023, with anticipation of an end to the tight monetary policy despite concerns of a possible impending recession. After suffering deep and broad losses through 2022, bonds now benefit from a base
of higher yields that can help generate higher income. However, ongoing rate hikes continued to be a headwind during recent months.
For the 12-month period, stocks generally outperformed bonds—both domestic
U.S. and global. For the period, U.S. stocks, based on the S&P 500
Index,1 gained 15.94%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 11.89%, while the MSCI EM Index (Net) (USD)3 had more modest performance, with a gain of 1.25%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -1.19%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 gained 0.65%, the Bloomberg
Municipal Bond Index6 gained 1.70%, and the ICE BofA U.S. High Yield Index7 returned 7.09%.
Despite
high inflation and central bank rate hikes, markets rallied.
The
12-month period began with all asset classes suffering major losses in September 2022. Central banks kept up their battle against rapidly rising prices with more rate hikes. The
strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates
jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was
seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Globally, developed markets outpaced emerging
market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high
inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased, thanks to unseasonably warm weather and plentiful gas on
hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
1
The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and
industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.
2
The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA
Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets,
excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index.
3
The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of emerging markets. You cannot invest directly in an index
4
The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the
investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities
(agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an
index.
5
The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index.
6
The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term
tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.
7
The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of
domestic and Yankee high yield bonds. The index tracks the performance of high yield securities traded in the U.S. bond market. You cannot invest directly in an index.
Copyright 2023. ICE Data Indices, LLC. All rights reserved.
2 | Allspring Utilities and High Income Fund
Letter to shareholders (unaudited)
Stocks and bonds rallied in
November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept increasing rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained
at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its
zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities declining
overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with
generally flat monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the
reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but
declining inflation rates as the year wound down.
The year 2023 began with a rally across
global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported strong job gains and unemployment
fell to 3.4%—the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25%
federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would
likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was taken as a negative, with inflation not falling quickly enough for the
Fed, which raised interest rates by 0.25% in February. Meanwhile, the BoE and the European Central Bank (ECB) both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS.
The banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. And China’s economy continued to
rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes2 in the U.S., U.K., and eurozone beat expectations and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor
market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in
manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and the ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of
further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt
default.
“ The collapse of Silicon Valley Bank in March, the
second-largest banking failure in U.S. history, led to a bank run that spread to Europe, where
Switzerland’s Credit Suisse was taken over by its rival, UBS. ”
1
The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index.
2
The Purchasing Managers Index (PMI) is an index of the prevailing direction of
economic trends in the manufacturing and service sectors. You cannot invest directly in an index.
Allspring Utilities and High Income Fund | 3
Letter to shareholders (unaudited)
June
featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, Core CPI1, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still
at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
July was a strong month for stocks. However, bonds had more muted but positive monthly returns overall.
Riskier sectors and regions tended to do well, as investors grew more optimistic regarding economic prospects. With strong second-quarter gross domestic product growth—initially estimated at 2.4%—and U.S. annual inflation easing steadily to 3.2% in July, hopes for a
soft economic landing grew. The Fed, the ECB, and the BoE all raised their respective key interest rates by 0.25% in July. In the Fed’s case, speculation grew that it could
be very close to the end of its tightening cycle. Meanwhile, China’s economy showed numerous signs of
stagnation, bringing fresh concerns regarding global fallout.
Stocks
retreated in August while monthly bond returns were flat overall. Increased global market volatility reflected unease over the Chinese property market being stressed along with weak Chinese economic data. On a more positive note, speculation grew over a possible end to the Fed’s campaign of
interest rate increases or at least a pause in September. U.S. economic data generally remained solid, with resilient job market data and inflation ticking up slightly in August, as the annual CPI was up 3.7%. However, the three-month trend for Core CPI stood at a
more encouraging annualized 2.4%.
Don’t let short-term uncertainty
derail long-term investment goals.
Periods of investment uncertainty
can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to
manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain
committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
“ With strong
second-quarter gross
domestic product
growth—initially
estimated at 2.4%—and
U.S. annual inflation easing steadily to 3.2%
in July, hopes for a soft
economic landing grew. ”
For further
information about your fund, contact your investment professional, visit
our website at allspringglobal.com, or call us directly at 1-800-222-8222.
1
The Core CPI is a measure of the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services excluding energy and food prices. You cannot invest directly in an index.
4 | Allspring Utilities and High Income Fund
Letter to shareholders (unaudited)
|
On November 16, 2022, the Fund announced a renewal of its
open-market share repurchase program (the “Buyback Program”).
Under the renewed Buyback Program, the Fund may repurchase up to 5% of its outstanding shares in open market transactions during the period beginning on January 1, 2023 and ending on December 31, 2023. The Fund’s Board
of Trustees has delegated to Allspring Funds Management, LLC, the Fund’s adviser,
discretion to administer the Buyback Program, including the determination
of the amount and timing of repurchases in accordance with the best interests of the Fund and subject to applicable legal limitations.
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Allspring Utilities and High Income Fund | 5
Performance highlights (unaudited)
Performance highlights
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The Fund seeks a high level of current income and moderate capital growth, with an emphasis on providing
tax-advantaged dividend income. |
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The Fund allocates its assets between two separate investment strategies, or sleeves. Under normal market
conditions, the Fund will allocate approximately 70% of its total assets to a sleeve that places a
focus on common, preferred and convertible preferred stocks of utility companies and
approximately 30% of its total assets to a sleeve of U.S. dollar denominated below
investment grade (high yield) debt. |
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Allspring Funds Management, LLC |
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Allspring Global Investments, LLC |
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Chris Lee, CFA, Kent Newcomb, CFA, Michael J. Schueller, CFA, Jack Spudich,
CFA |
Average annual total returns (%) as of August 31, 20231
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Based on net asset value (NAV) |
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ICE BofA U.S. High Yield Constrained Index3
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Figures quoted represent past performance, which is no
guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance
may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Performance figures of the Fund do
not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. If taxes and such brokerage commissions had been
reflected, performance would have been lower. To obtain performance information current to the most recent month-end, please call
1-800-222-8222.
The Fund’s expense ratio for the year ended August 31, 2023, was 2.45% which
includes 1.44% of interest expense.
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Total returns based on market value are calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Total returns
based on NAV are calculated based on the NAV at the beginning of the
period and at the end of the period. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. |
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Source: Allspring Funds Management, LLC. The ERH Blended Index is weighted 70% in S&P 500 Utilities Index and 30% in the ICE BofA U.S. High Yield Constrained Index.
Effective October 15, 2019, the ERH Blended Index changed the high yield
component of the index from the ICE BofA U.S. High Yield Index to the ICE BofA U.S. High Yield Constrained Index in order to better match the Fund’s investment strategy. You cannot invest directly in an index. |
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The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and
payment-in-kind securities. Issues included in the index have maturities
of one year or more and have a credit rating lower than BBB-/Baa3 but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE
Data Indices, LLC. All rights reserved. |
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The S&P 500 Utilities Index is a market-value-weighted index that measures the performance of all stocks within the utilities sector of the S&P 500
Index. You cannot invest directly in an index. |
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CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring Utilities and High Income Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of August 31, 20231 |
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The chart compares the performance of the Fund for the most recent ten years with the ERH Blended Index, ICE BofA U.S. High Yield Constrained Index and S&P 500
Utilities Index. The chart assumes a hypothetical investment of $10,000 investment
and reflects all operating expenses of the Fund. |
Comparison of NAV vs. market value1 |
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This chart does not reflect any brokerage commissions charged on the purchase and sale of the Fund’s common stock. Dividends and distributions paid by the Fund are
included in the Fund’s average annual total returns but have the effect of
reducing the Fund’s NAV. |
Allspring Utilities and High Income Fund | 7
Performance highlights (unaudited)
Risk summary
This closed-end fund is no longer available as an initial public offering and is only offered
through broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the Fund may trade at either a
premium or discount relative to the Fund’s net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated
by, securities held by the Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Equity
securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield
securities and unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The Fund is also subject to risks associated with any concentration of its investments in the utility sector. The Fund is leveraged through a revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
More detailed information about the Fund’s investment objective, principal investment
strategies and the principal risks associated with investing in the Fund can be found on
page11.
8 | Allspring Utilities and High Income Fund
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Overview
The
Fund’s return based on market value was -14.96% for the 12-month period that ended August 31, 2023. During the same period, the Fund’s return based on net asset
value (NAV) was -10.79%. Based on its market value and NAV return, the Fund underperformed the ERH Blended Index, which returned -6.91%.
The equity sleeve slightly trailed the utilities
benchmark in a challenging year.
The Fund’s equity sleeve benchmark, the S&P 500 Utilities Index, underperformed the
S&P 500 Index* by more than 28% for the period. The equity sleeve trailed the benchmark by just over 1%. Utilities modestly underperformed the market from September
through December 2022. Through the first eight months of 2023, however, utilities broadly
underperformed, as a narrow group of large growth stocks, most of which do not pay a dividend,
dominated market performance. This underperformance does not, in our opinion, reflect a deterioration in either utility earnings or dividend growth expectations, which remain on track for healthy mid-single-digit percentage
growth again in 2023. On a price/earnings basis, the S&P 500 Utilities Index is currently trading at about a 15% discount to the S&P 500 Index versus a 10-year average premium of about 2%.
The equity sleeve managers sold a natural gas utility that lowered its projected growth rate in the face of higher inflation. They also added to positions on weakness in utilities in
states with attractive regulatory environments. The Fund did not own several index stocks that performed well, which was the largest detractor from relative performance. The managers view those stocks as embedding
either undue risk, subpar dividend growth, or a difficult regulatory environment. The Fund benefited
from an overweight position in gas utilities that had strong performance. Lower natural gas costs
were a likely catalyst. The Fund also benefited by not owning an index component that principally owns unregulated power generation assets.
Ten largest holdings (%) as of August 31,
20231 |
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American Electric Power Co., Inc. |
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Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The equity sleeve
outlook: There is a path for moderate growth in equity earnings and dividends.
Fundamentally, the equity sleeve managers continue to see a clear path for moderate yet consistent growth in utility earnings and dividends. This, combined with estimated dividend yields
for the sector that exceed yields for the broader market, could provide investors with solid total return potential and below-average volatility.
Sector allocation as of August 31, 20231 |
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Figures represent the percentage of the Fund’s long-term investments. Allocations are subject to change and may have changed since the date specified. |
The high income sleeve is focused on quality improvement.
Quality improvement was the central theme of the high income sleeve strategy over the past 12 months. The high income sleeve managers focused on companies and sectors that they
believe can keep pace with inflation to generate consistent earnings growth and that are prudently
financed to weather the pressures of tighter monetary policy and higher costs of borrowing. A broad
macro backdrop of tight monetary policy and tighter financial conditions suggests slower economic growth ahead.
The managers increased the Fund’s allocation to BBB-rated and above credits while decreasing CCC-rated holdings and maintaining a core allocation to BB/B rated issues throughout
the year to improve the quality of the portfolio. In addition, they continued to rotate into shorter-duration
*
The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.
Allspring Utilities and High Income Fund | 9
Performance highlights (unaudited)
bonds to take
advantage of the shape of the yield curve and maximize the portfolio’s yield.
At the sector level, a consistent overweight to energy was a positive for the portfolio as strong
earnings and balance sheet discipline supported the sector. An overweight to leisure and an underweight to wireline services companies helped boost performance. In addition, the managers increased the Fund’s allocation to real
estate investment trusts and decreased its allocation to airlines to take advantage of attractive
valuations and reduce cyclicality. The managers also reduced the Fund’s allocation to deep
cyclicals such as chemicals and metals/mining to further reduce economic cyclicality.
The main detractors were the brokerage/asset managers, retailers, and electric sectors.
The main detractors from performance within the high income sleeve came from brokerage/asset manager American Beacon*, retailer QVC*, and electric generator Enviva.
Credit quality as of August 31, 20231 |
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The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service,
and/or Fitch Ratings Ltd. Credit quality ratings apply to the underlying
holdings of the Fund and not to the Fund itself. The percentages of the
portfolio with the ratings depicted in the chart are calculated based on the
market value of fixed income securities held by the Fund. If a security
was rated by all three rating agencies, the middle rating was utilized. If
rated by two of the three rating agencies, the lower rating was utilized,
and if rated by one of the rating agencies, that rating was utilized.
Standard & Poor’s rates the creditworthiness of bonds, ranging
from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by
the addition of a plus (+) or minus (-) sign to show relative standing within the rating
categories. Standard & Poor’s rates the creditworthiness of
short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates
the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest).
Ratings Aa to B may be modified by the addition of a number 1 (highest) to
3 (lowest) to show relative standing within the ratings categories.
Moody’s rates the creditworthiness of short-term U.S. tax-exempt
municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch
rates the creditworthiness of bonds, ranging from AAA (highest) to D
(lowest). Credit quality distribution is subject to change and may have changed
since the date specified. |
The top contributors were the transportation services, leisure, and property and casualty insurance sectors.
Top-performing contributors within the high income sleeve included debt investments in transportation services company FLY Leasing, leisure company Royal Caribbean, and property and
casualty insurer BroadStreet Partners.
Geographic allocation as of August 31, 20231 |
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Figures represent the percentage of the Fund’s long-term investments. Allocations are subject to change and may have changed since the date specified. |
Leverage had a negative impact.
The Fund’s use
of leverage through bank borrowings had a negative impact on total return performance during this reporting period. As of August 31, 2023, the Fund had approximately 23% of total assets in leverage.
Fund distributions
Pursuant to an exemptive order issued by the Securities and Exchange Commission (the
“Order”), the Fund is authorized to distribute long-term capital gains to shareholders more frequently than once per year. Pursuant to the Order, the Fund’s Board of Trustees approved a managed distribution plan pursuant to which the Fund
makes monthly cash distributions to common shareholders. The Fund’s managed distribution plan
had no effect on the Fund’s investment strategy during the year ended August 31, 2023 and is not expected to have such an effect in future periods. If distributions exceed Fund returns, they will cause its NAV per share to erode. Shareholders should
not draw any conclusions about the Fund’s investment performance from the amount of its distribution or from the terms of its managed distribution plan. For the year ended August 31, 2023, the Fund’s total
distributions were $0.88 per share. The Fund’s distributions may be comprised of amounts characterized for federal income tax purposes as qualified and non-qualified ordinary dividends, capital gains and nondividend
distributions, also known as return of capital distributions. The federal income tax character of distributions is determined after the end of the calendar year and reported to shareholders on Form 1099-DIV.
*
This security was no longer held at the end of the reporting period.
10 | Allspring Utilities and High Income Fund
Objective, strategies and risks (unaudited)
Objective, strategies and
risks
Investment objective
The Fund seeks a high level of current income and moderate capital growth, with an emphasis on providing tax-advantaged dividend income. The Fund’s investment objective is a fundamental policy and may not be changed without the approval of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund.
Principal investment strategies
The Fund allocates its assets between two separate investment strategies, or sleeves.
Equity Sleeve. Under normal market conditions, the Fund allocates approximately
70% of its total assets to an investment strategy that focuses on common, preferred and convertible preferred stocks of utility companies (“equity sleeve”).
Utility companies may include, for example, companies that provide basic services such as water, sewage, and the transmission, generation and distribution of electricity and
transmission and distribution of natural gas. The Fund may invest this portion of assets in companies across all market capitalizations.
We focus on dividend-paying companies that we expect to pay and increase dividends consistently.
Our process applies a rigorous analytical methodology to all of our investment decisions, which might include the following analyses of a company and its stock: cash flow analysis, debt levels, discipline of company management, relative and absolute valuation levels and dividend yield. In selecting companies, we begin with a screen of a broad universe of equity securities that looks first, but not exclusively, at dividend yield, dividend growth potential, and market capitalization. In addition, a review of company fundamentals, such as valuation, earnings growth, and financial condition, helps the portfolio managers focus on companies with dividends that appear reasonably sustainable with potential for moderate dividend growth. We seek to provide tax-advantaged income by investing in securities that offer qualified dividends and attempt to maintain a low portfolio turnover in order to moderate realized capital gains.
We regularly review the investments of the equity sleeve and may sell a holding when there is
deterioration in the underlying fundamentals of the business, dividend growth is no longer expected or there is the possibility of a dividend cut, the stock price reflects
full or overvaluation, it has achieved its valuation target or we have identified a more attractive investment opportunity.
Material Changes During the Fiscal Year ended August 31, 2023: There were
no material changes to the equity sleeve during the fiscal year ended August 31, 2023.
High Yield Bond Sleeve. Under normal market conditions, the Fund allocates
approximately 30% of its total assets to an investment strategy that focuses on U.S. dollar-denominated below investment-grade bonds, debentures, and other income obligations
(often called “high yield” securities or “junk bonds”). We may invest in below investment-grade debt securities of any credit quality. This portion of
the Fund invests in high yield securities rated between and including B3 and Ba1 by Moody’s or B- and BB+ by S&P or, if unrated, that are deemed by us to be of comparable quality at the time of purchase. This portion of the Fund’s portfolio targets securities with a minimum rating of B to BB at the time of purchase and attempts to maintain a weighted average credit quality with respect to the high yield securities of B to BB. This portion of the Fund will not purchase high yield securities with a rating of CCC or below, although the Fund may hold such securities as a result of a downgrade in ratings subsequent to their purchase. No more than 10% of this portion of the Fund’s assets may be invested in securities that are rated CCC or below or are unrated.
Securities in the Fund’s high yield bond sleeve may be issued by domestic or foreign
issuers (including foreign governments), may include securities of emerging market issuers and may be non-U.S. dollar-denominated. The Fund may invest in non-investment-grade
securities of any credit quality at the time of purchase.
For purposes of the Fund’s credit quality policies, if a security receives different ratings from nationally recognized securities rating organizations, the Fund will use the rating chosen by the portfolio managers as most representative of the security’s credit quality. The Fund’s high yield securities may have fixed or variable principal payments and all types of interest rate and dividend payment and reset terms, including fixed rate, adjustable rate, contingent, deferred, payment in kind and auction rate features. The Fund’s weighted average duration range for high yield U.S. debt securities is six years or less.
The Fund’s high yield sleeve is managed following a rigorous investment process that
emphasizes both quality and value. The research driven approach includes both a top-down review of macroeconomic factors and intensive, bottom-up scrutiny of individual
securities. We consider both broad economic and issuer specific factors in selecting the high yield portfolio. In assessing the appropriate maturity and duration for the
Fund’s high yield sleeve and the credit quality parameters and weighting objectives for each sector and industry in this portion of the Fund’s portfolio, we
consider a variety of factors that are expected to influence the economic environment and the dynamics of the high yield market. These factors include fundamental economic
indicators, such as interest rate trends, the rates of economic growth and inflation, the performance of equity markets, commodities prices, Federal Reserve monetary policy and the relative value of the U.S. dollar compared to other currencies. Once we determine the preferable portfolio characteristics, we conduct further evaluation to determine capacity and inventory levels in each targeted industry. We also identify any circumstances that may lead to improved business conditions, thus increasing the attractiveness of a particular industry. We select individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity, rating, sector and issuer diversification. We also employ due
Allspring Utilities and High Income Fund | 11
Objective, strategies and risks (unaudited)
diligence and
fundamental research to assess an issuer’s credit quality, taking into account financial condition and profitability, future capital needs, potential for change in
rating, industry outlook, the competitive environment and management ability.
The
analysis of issuers may include, among other things, historic and current financial conditions, current and anticipated cash flow and borrowing requirements, value of assets
in relation to historical costs, strength of management, responsiveness to business conditions, credit standing, the company’s leverage versus industry norms and
current and anticipated results of operations. While we consider as one factor in our credit analysis the ratings assigned by the rating services, we perform our own
independent credit analysis of issuers.
In making decisions for the high yield
sleeve, we rely on the knowledge, experience and judgment of our team who have access to a wide variety of research. We apply a strict sell discipline, which is as important
as purchase criteria in determining the performance of this portion of this portfolio. We routinely meet to review profitability outlooks and discuss any deteriorating
business fundamentals, as well as consider changes in equity valuations and market perceptions before selling securities.
In other than normal market conditions, when changing economic conditions and other factors cause
the yield difference between lower rated and higher rated securities to narrow, the high yield bond sleeve may purchase higher rated U.S. debt instruments if we believe that
the risk of loss of income and principal may be reduced substantially with only a relatively small reduction in yield.
We regularly review the investments of the portfolio and may sell a portfolio holding when it has
achieved its valuation target, there is deterioration in the underlying fundamentals of the business, or we have identified a more attractive investment
opportunity.
Material Changes During the Fiscal Year Ended August
31, 2023: There were no material changes to the high yield sleeve during the fiscal year ended August 31,
2023.
The Fund’s Overall Portfolio. We monitor the weighting of each investment strategy within the Fund’s portfolio on an ongoing basis and rebalance the Fund’s assets when we determine that such a rebalancing is necessary to align the portfolio in accordance with the investment strategies described above. From time to time, we may make adjustments to the weighting of each investment strategy. Such adjustments would be based on our review and consideration of the expected returns for each investment strategy and would factor in the stock, bond and money markets, interest rate and corporate earnings growth trends, and economic conditions which support changing investment opportunities.
The Fund may invest up to 25% of its total assets in foreign securities.
The investment policies of the Fund described above are non-fundamental and may be changed by the Board of Trustees of the Fund so long as shareholders are provided with at least 60 days prior written notice of any change to the extent required by the rules under the 1940 Act.
Other investment techniques and strategies
Foreign Currency Transactions. The Fund may engage in foreign currency
transactions for the purpose of hedging against foreign exchange risk arising from the Fund’s investment or anticipated investment in securities denominated in foreign
currencies. The Fund also may enter into these contracts for purposes of increasing exposure to a foreign currency or to shift exposure to foreign currency fluctuations from
one country to another.
Preferred Shares. The Fund may invest in preferred shares. Preferred shares are equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer’s common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the Fund’s fixed income securities.
Loans.
The Fund may invest in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The Fund may invest up to 10% of its total
assets in corporate loans. The loans in which the Fund invests primarily consist of direct obligations of a borrower. The Fund may invest in a loan at origination as a
co-lender or by acquiring in the secondary market participations in, assignments of or novations of a corporate loan. By purchasing a participation, the Fund acquires some or
all of the interest of a bank or other lending institution in a loan to a borrower. The participations typically will result in the Fund having a contractual relationship
only with the lender, not the borrower. The Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender
selling the participation and only upon receipt by the lender of the payments from the borrower. Many such loans are secured, although some may be unsecured. Loans that are
fully secured offer the Fund more protection than an unsecured loan in the event of non-payment of scheduled interest or principal. However, there is no assurance that the
liquidation of collateral from a secured loan would satisfy the corporate borrower’s obligation, or that the collateral can be liquidated. Direct debt instruments may
involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the Fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The markets in loans are not regulated by federal securities laws or the U.S. Securities and Exchange Commission.
Structured Securities. The Fund may invest in structured securities. The value
of the principal and/or interest on such securities is determined by reference to changes in the value of specific currencies, interest rates, commodities, indices or other
financial indicators (“Reference”) or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption
may be increased or decreased depending upon changes in the Reference. The terms of the structured securities may provide in certain circumstances that no principal is due at
12 | Allspring Utilities and High Income Fund
Objective, strategies and risks (unaudited)
maturity and,
therefore, may result in a loss of the Fund’s investment. Changes in the interest rate or principal payable at maturity may be a multiple of the changes in the value of
the Reference. Consequently, structured securities may entail a greater degree of market risk than other types of fixed income securities.
U.S. Government Securities. The Fund may invest in U.S. government securities, including debt securities issued or guaranteed by the U.S. Treasury, U.S. Government agencies or government-sponsored entities. These securities may have fixed, floating or variable rate and also include mortgage-backed securities.
Other Investment Companies. The Fund may invest in other investment companies
to the extent permitted under the Investment Company Act of 1940, as amended, and the rules, regulations, and exemptive orders thereunder. The Fund, as a holder of the
securities of other investment companies, will bear its pro rata portion of the other investment companies’ expenses, including advisory fees. These expenses are in
addition to the direct expenses of the Fund’s own operations.
Defensive and Temporary Investments. Under unusual market or economic
conditions or for temporary defensive purposes, the Fund may invest up to 100% of its total assets in securities issued or guaranteed by the U.S. government or its
instrumentalities or agencies, certificates of deposit, bankers’ acceptances and other bank obligations, commercial paper rated in the highest category by a nationally
recognized statistical rating organization or other fixed income securities deemed by us to be consistent with a defensive posture, or may hold cash. To the extent the Fund
implements defensive strategies, it may be unable to achieve its investment objective.
Derivatives. The Fund may purchase and sell derivative instruments such as
exchange-listed and over-the-counter put and call options on securities, financial futures, equity, fixed-income and interest rate indices, and other financial instruments,
purchase and sell financial futures contracts and options thereon, and enter into various interest rate transactions such as swaps, caps, floors or collars. The Fund also may
purchase derivative instruments that combine features of these instruments. Collectively, all of the above are referred to as “derivatives.” The Fund generally
seeks to use derivatives as a portfolio management or hedging technique to seek to protect against possible adverse changes in the market value of securities held in or to be
purchased for the Fund’s portfolio, protect the value of the Fund’s portfolio, facilitate the sale of certain securities for investment purposes, manage the
effective interest rate exposure of the Fund, manage the effective maturity or duration of the Fund’s portfolio, or establish positions in the derivatives markets as a temporary substitute for purchasing or selling particular securities. The Fund may invest up to 10% of its total assets in futures and options on securities and indices and in other derivatives. In addition, the Fund may enter into interest rate swap transactions with respect to the total amount the Fund is leveraged in order to hedge against adverse changes in interest rates affecting dividends payable on any preferred shares or interest payable on borrowings constituting leverage. In connection with any such swap transaction, the Fund will segregate liquid securities in the amount of its obligations under the transaction. The Fund generally does not anticipate using derivatives for non-hedging purposes, but in the event we use derivatives for non-hedging purposes, no more than 10% of the Fund’s total assets will be committed to initial margin for derivatives for such purposes.
Repurchase Agreements. The Fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the Fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. We review and monitor the creditworthiness of any institution which enters into a repurchase agreement with the Fund. The counterparty’s obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is held by the Fund’s custodian in a segregated, safekeeping account for the benefit of the Fund. Repurchase agreements afford the Fund an opportunity to earn income on temporarily available cash at low risk. In the event that the counterparty to a repurchase agreement is unwilling or unable to fulfill its contractual obligations to repurchase the underlying security, the Fund may lose money, suffer delays, or incur costs arising from holding or selling the underlying security.
Portfolio Turnover. It is the policy of the Fund not to engage in trading for short-term profits although portfolio turnover is not considered a limiting factor in the execution of investment decisions for the Fund.
Leverage. The Fund may borrow money from banks or financial institutions.
Although it has no current intention to do so, the Fund also reserves the flexibility to issue preferred shares and debt securities for leveraging purposes. The Fund also may
borrow money as a temporary measure for extraordinary or emergency purposes, including the payment of dividends and the settlement of securities transactions which otherwise
might require untimely dispositions of the Fund’s holdings. The Fund will not borrow or issue preferred shares if, immediately after such borrowing or issuance, total
leverage for the Fund exceeds 38% of the Fund’s total assets. The Fund may also borrow through reverse repurchase agreements (up to 20% of its total assets). Reverse repurchase agreements involve the sale of a security by the Fund to another party (generally a bank or dealer) in return for cash and an agreement by the Fund to buy the security back at a specified price and time. When the Fund leverages its assets, the fees paid to us for investment advisory and management services will be higher than if the Fund did not leverage because our fees are calculated based on the Fund’s total assets including the proceeds of the issuance of preferred shares or any other amounts representing leverage. Consequently, the Fund’s investment adviser may have differing interests than the Fund in determining whether to leverage the Fund’s assets. The Board of Trustees monitors this potential conflict.
Principal risks
An investment in the Fund may lose money, is not a deposit of a bank, is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, and is primarily subject to the risks briefly summarized below.
Allspring Utilities and High Income Fund | 13
Objective, strategies and risks (unaudited)
Market Risk. The values of, and/or the income generated by, securities held by
a Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Securities markets are volatile and
may decline significantly in response to adverse issuer, regulatory, political, or economic developments. Different sectors of the market and different security types may
react differently to such developments. Political, geopolitical, natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures,
inflation, natural and environmental disasters, epidemics, pandemics and other public health crises and related events have led, and in the future may lead, to economic uncertainty, decreased economic activity, increased market volatility and other disruptive effects on U.S. and global economies and markets. Such events may have significant adverse direct or indirect effects on a Fund and its investments. In addition, economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers in other countries or regions.
Equity Securities Risk. The values of equity securities may experience periods
of substantial price volatility and may decline significantly over short time periods. In general, the values of equity securities are more volatile than those of debt
securities. Equity securities fluctuate in value and price in response to factors specific to the issuer of the security, such as management performance, financial condition,
and market demand for the issuer’s products or services, as well as factors unrelated to the fundamental condition of the issuer, including general market, economic and
political conditions. Investing in equity securities poses risks specific to an issuer, as well as to the particular type of company issuing the equity securities. For
example, investing in the equity securities of small- or mid-capitalization companies can involve greater risk than is customarily associated with investing in stocks of
larger, more-established companies. Different parts of a market, industry and sector may react differently to adverse issuer, market, regulatory, political, and economic developments. Negative news or a poor outlook for a particular industry or sector can cause the share prices of securities of companies in that industry or sector to decline. This risk may be heightened for a Fund that invests a substantial portion of its assets in a particular industry or sector.
Utility Securities Risk. Investments in utility sectors include the unique risks associated with decreases in the demand for utility company products and services, increased competition resulting from deregulation, and rising energy costs, among others. Such developments also could cause utility companies such as water, gas and electric companies, to reduce the dividends they pay on their stock, potentially decreasing the dividends you receive from the Fund. Water, gas and electric companies typically borrow heavily to support continuing operations. Increases in interest rates could increase these utility companies’ borrowing costs, which could adversely impact their financial results and stock price, and ultimately the value of and total return on your Fund shares.
Industry Concentration Risk. A Fund that concentrates its investments in an
industry or group of industries is more vulnerable to adverse market, economic, regulatory, political or other developments affecting such industry or group of industries
than a fund that invests its assets more broadly.
Debt Securities
Risk. Debt securities are subject to credit risk and interest rate risk. Credit risk is the possibility that the issuer or guarantor of a debt security may be unable, or perceived to be unable or unwilling, to pay interest or repay principal when they become due. In these instances, the value of an investment could decline and the Fund could lose money. Credit risk increases as an issuer’s credit quality or financial strength declines. The credit quality of a debt security may deteriorate rapidly and cause significant deterioration in the Fund’s net asset value. Interest rate risk is the possibility that interest rates will change over time. When interest rates rise, the value of debt securities tends to fall. The longer the terms of the debt securities held by a Fund, the more the Fund is subject to this risk. If interest rates decline, interest that the Fund is able to earn on its investments in debt securities may also decline, which could cause the Fund to reduce the dividends it pays to shareholders, but the value of those securities may increase. Some debt securities give the issuers the option to call, redeem or prepay the securities before their maturity dates. If an issuer calls, redeems or prepays a debt security during a time of declining interest rates, the Fund might have to reinvest the proceeds in a security offering a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Very low or negative interest rates may magnify interest rate risk. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. Changes in market conditions and government policies may lead to periods of heightened volatility in the debt securities market, reduced liquidity Fund investments and an increase in Fund redemptions.
High Yield Securities Risk. High yield securities and unrated securities of
similar credit quality (commonly known as “junk bonds”) are considered speculative and have a much greater risk of default (or in the case of bonds currently in
default, of not returning principal) and their values tend to be more volatile than higher-rated securities with similar maturities. Additionally, these securities tend to be
less liquid and more difficult to value than higher-rated securities.
Leverage Risk. The use of leverage through the issuance of preferred shares
and/or debt securities, or from borrowing money, may result in certain risks to the Fund. Leveraging is a speculative technique, and there are special risks involved,
including the risk that downside outcomes for common shareholders are magnified as a result of losses and declines in value of portfolio securities purchased with borrowed
money. In addition, the costs of the financial leverage may exceed the income from investments made with such leverage, interest rates or dividends payable on the financial
leverage may affect the yield and distributions to the common shareholders, and the net asset value and market value of common shares may be more volatile than if the Fund had not been leveraged. The use of leverage may cause the Fund to have to liquidate portfolio positions when it may not be advantageous to do so. There can be no assurance that any leveraging strategies will be successful.
Certain transactions, such as derivatives, also may give rise to a form of economic leverage. Because many derivatives have a leverage component (i.e.,
14 | Allspring Utilities and High Income Fund
Objective, strategies and risks (unaudited)
a notional
value in excess of the assets needed to establish and/or maintain the derivative position), adverse changes in the value or level of the underlying asset, rate or index may
result in a loss substantially greater than the amount invested in the derivative itself.
Anti-takeover Provisions Risk. The Fund’s Agreement and Declaration of
Trust and By-laws include provisions that could limit the ability of other entities or persons to acquire control of the Fund or to change the composition of its Board of
Trustees. Such provisions could limit the ability of shareholders to sell their shares at a premium over prevailing market prices by discouraging a third party from seeking
to obtain control of the Fund. These provisions include staggered terms of office for the Trustees, advance notice requirements for shareholder proposals, and supermajority
voting requirements for open-ending the Fund or a merger, liquidation, asset sale or similar transactions.
Closed-end Fund Risk. Closed-end funds involve investment risks different from those associated with other investment companies. Shares of closed-end funds frequently trade at either a premium or discount relative to their net asset value (“NAV”). There can be no assurance that the discount will decrease. It is possible that a market discount may increase and the Fund may suffer realized or unrealized capital losses due to further decline in the market price of the securities held by the Fund, thereby adversely affecting the NAV of the Fund’s shares. Similarly, there can be no assurance that the Fund’s shares will trade at a premium, will continue to trade at a premium or that the premium will not decrease over time. The Fund’s shares are designed primarily for long-term investors, and the Fund should not be viewed as a vehicle for short-term trading purposes.
Convertible Securities Risk. A convertible security has characteristics of both equity and debt securities and, as a result, is exposed to risks that are typically associated with both types of securities. The market value of a convertible security tends to decline as interest rates increase but also tends to reflect changes in the market price of the common stock of the issuing company. A convertible security is also exposed to the risk that an issuer is unable to meet its obligation to make dividend or interest and principal payments when due as a result of changing financial or market conditions. In the event of a liquidation of the issuer, holders of a convertible security would generally be paid only after holders of any senior debt obligations. A Fund may be forced to convert a convertible security before it would otherwise choose to do so, which may decrease the Fund’s return.
Derivatives Risk. The use of derivatives, such as futures, options and swap agreements, presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the derivatives’ underlying assets, indexes or rates and the derivatives themselves, which may be magnified by certain features of the derivatives. These risks are heightened when derivatives are used to enhance a Fund’s return or as a substitute for a position or security, rather than solely to hedge (or mitigate) the risk of a position or security held by the Fund. The success of a derivative strategy will be affected by the portfolio manager’s ability to assess and predict market or economic developments and their impact on the derivatives’ underlying assets, indexes or reference rates, as well as the derivatives themselves. Certain derivative instruments may become illiquid and, as a result, may be difficult to sell when the portfolio manager believes it would be appropriate to do so. Certain derivatives create leverage, which can magnify the impact of a decline in the value of their underlying assets, indexes or reference rates, and increase the volatility of the Fund’s net asset value. Certain derivatives (e.g., over-the-counter swaps) are also subject to the risk that the counterparty to the derivative contract will be unwilling or unable to fulfill its contractual obligations, which may cause a Fund to lose money, suffer delays or incur costs arising from holding or selling an underlying asset. Changes in laws or regulations may make the use of derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the use, value or performance of derivatives.
Foreign Currency Risk. The Fund may invest in non-dollar-denominated investments. The Fund may be limited in its ability to hedge the value of its non-dollar denominated investments against currency fluctuations. As a result, a decline in the value of currencies in which the Fund’s investments are denominated against the dollar will result in a corresponding decline in the dollar value of the Fund’s assets. These declines will in turn affect the Fund’s income and net asset value.
Foreign Investment Risk. Foreign investments may be subject to lower liquidity,
greater price volatility and risks related to adverse political, regulatory, market or economic developments. Foreign companies may be subject to significantly higher levels
of taxation than U.S. companies, including potentially confiscatory levels of taxation, thereby reducing the earnings potential of such foreign companies. Foreign investments
may involve exposure to changes in foreign currency exchange rates. Such changes may reduce the U.S. dollar value of the investments. Foreign investments may be subject
to additional risks, such as potentially higher withholding and other taxes, and may also be subject to greater trade settlement, custodial, and other operational risks than domestic investments. Certain foreign markets may also be characterized by less stringent investor protection and disclosure standards.
Growth/Value Investing Risk. Securities that exhibit certain characteristics,
such as growth characteristics or value characteristics, tend to perform differently and shift into and out of favor with investors depending on changes in market and
economic sentiment and conditions. As a result, a Fund’s performance may at times be worse than the performance of other mutual funds that invest more broadly or in
securities that exhibit different characteristics.
Investment Risk. An investment in the Fund is subject to investment risk,
including the possible loss of the entire principal amount that you invest. Your investment in the Fund represents an indirect investment in the securities owned by the Fund.
The value of these securities may increase or decrease, at times rapidly and unexpectedly. Your investment in the Fund may at any point in the future be worth less than your
original investment even after taking into account the reinvestment of dividends and distributions.
Allspring Utilities and High Income Fund | 15
Objective, strategies and risks (unaudited)
Issuer Risk. The value of corporate income-producing securities may decline for
a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods and
services.
Loan Risk. Loans may be unrated, less liquid and more difficult to value than traditional debt securities. Loans may be made to finance highly leveraged corporate operations or acquisitions. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in financial, economic or market conditions. Loans generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such loans in secondary markets. As a result, a Fund may be unable to sell loans at a desired time or price. If the Fund acquires only an assignment or a participation in a loan made by a third party, the Fund may not be able to control amendments, waivers or the exercise of any remedies that a lender would have under a direct loan and may assume liability as a lender.
Market Capitalization Risk. The Fund may invest the portion of its assets
invested in utility securities in securities of companies of all market capitalizations. Stocks fall into three broad market capitalization categories—large, medium and
small. Investing primarily in one category carries the risk that due to current market conditions that category may be out of favor with investors. If valuations of large
capitalization companies appear to be greatly out of proportion to the valuations of small or medium capitalization companies, investors may migrate to the stocks of small-
and mid-sized companies causing a fund that invests in these companies to increase in value more rapidly than a fund that invests in larger, fully-valued companies. Investing
in medium and small capitalization companies may be subject to special risks associated with narrower product lines, more limited financial resources, smaller management groups or greater dependence on a few key employees, and a more limited trading market for their stocks as compared to larger capitalization companies. As a result, stocks of small and medium capitalization companies may decline significantly in market downturns or their value may fluctuate more sharply than other securities.
Market Price of Shares Risk. Whether investors will realize a gain or loss upon
the sale of the Fund’s common shares will depend upon whether the market value of the shares at the time of sale is above or below the price the investor paid, taking
into account transaction costs, for the shares and is not directly dependent upon the Fund’s net asset value. Because the market value of the Fund’s shares will
be determined by factors such as the relative demand for and supply of the shares in the market, general market conditions and other factors beyond the control of the Fund,
the Fund cannot predict whether its common shares will trade at, below or above net asset value, or below or above the initial offering price for the shares.
Preferred Stock Risk. The Fund may purchase preferred stock. Preferred stock, unlike common stock, has a stated dividend rate payable from the corporation’s earnings. Preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. “Cumulative” dividend provisions require all or a portion of prior unpaid dividends to be paid. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, which can be a negative feature when interest rates decline. The rights of preferred stock on distribution of a corporation’s assets in the event of a liquidation are generally subordinate to the rights associated with a corporation’s debt securities.
16 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
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Consumer discretionary: 0.00% |
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Energy equipment & services: 0.10% |
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Oil, gas & consumable fuels: 0.07% |
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Electric utilities: 48.09% |
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American Electric Power Co., Inc. |
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Constellation Energy Corp. |
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Public Service Enterprise Group, Inc. |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Water Works Co., Inc. |
|
|
|
|
|
|
Total common stocks (Cost $75,872,027) |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 17
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
Corporate bonds and notes: 37.65% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clear Channel Outdoor Holdings, Inc.144A |
|
|
|
|
|
|
Clear Channel Outdoor Holdings, Inc.144A |
|
|
|
|
|
|
Outfront Media Capital LLC/Outfront Media Capital Corp.144A
|
|
|
|
|
|
|
Outfront Media Capital LLC/Outfront Media Capital Corp.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cablevision Lightpath LLC144A |
|
|
|
|
|
|
Cablevision Lightpath LLC144A |
|
|
|
|
|
|
Match Group Holdings II LLC144A |
|
|
|
|
|
|
Uber Technologies, Inc.144A |
|
|
|
|
|
|
Uber Technologies, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.144A |
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.144A |
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp. |
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.144A |
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.144A |
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directv Financing LLC/Directv Financing Co.-Obligor, Inc.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gray Television, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Scripps Escrow II, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sirius XM Radio, Inc.144A |
|
|
|
|
|
|
Townsquare Media, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications: 0.34% |
|
|
|
|
|
|
CommScope Technologies LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
18 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
Consumer, cyclical: 7.49% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Airlines Pass-Through Certificates Series 2013-1 Class A |
|
|
|
|
|
|
Hawaiian Brand Intellectual Property Ltd./HawaiianMiles Loyalty Ltd.144A |
|
|
|
|
|
|
Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto manufacturers: 1.15% |
|
|
|
|
|
|
Allison Transmission, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto parts & equipment: 0.19% |
|
|
|
|
|
|
Adient Global Holdings Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution/wholesale: 0.35% |
|
|
|
|
|
|
G-III Apparel Group Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Churchill Downs, Inc.144A |
|
|
|
|
|
|
Churchill Downs, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live Nation Entertainment, Inc.144A |
|
|
|
|
|
|
Live Nation Entertainment, Inc.144A |
|
|
|
|
|
|
Live Nation Entertainment, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toll Brothers Finance Corp. |
|
|
|
|
|
|
Tri Pointe Group, Inc./Tri Pointe Homes, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 19
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carnival Holdings Bermuda Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bath & Body Works, Inc.144A |
|
|
|
|
|
|
Dave & Buster’s, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LSF9 Atlantis Holdings LLC/Victra Finance Corp.144A |
|
|
|
|
|
|
Macy’s Retail Holdings LLC144A |
|
|
|
|
|
|
Macy’s Retail Holdings LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
NMG Holding Co., Inc./Neiman Marcus Group LLC144A |
|
|
|
|
|
|
PetSmart, Inc./PetSmart Finance Corp.144A |
|
|
|
|
|
|
PetSmart, Inc./PetSmart Finance Corp.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer, non-cyclical: 3.88% |
|
|
|
|
|
|
Commercial services: 2.62% |
|
|
|
|
|
|
Allied Universal Holdco LLC/Allied Universal Finance Corp.144A
|
|
|
|
|
|
|
Allied Universal Holdco LLC/Allied Universal Finance Corp.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPH Acquisition Holdings LLC144A |
|
|
|
|
|
|
MPH Acquisition Holdings LLC144A |
|
|
|
|
|
|
PECF USS Intermediate Holding III Corp.144A |
|
|
|
|
|
|
Prime Security Services Borrower LLC/Prime Finance, Inc.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Corp. International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare-services: 1.26% |
|
|
|
|
|
|
Catalent Pharma Solutions, Inc.144A |
|
|
|
|
|
|
CHS/Community Health Systems, Inc.144A |
|
|
|
|
|
|
CHS/Community Health Systems, Inc.144A |
|
|
|
|
|
|
CHS/Community Health Systems, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pediatrix Medical Group, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
20 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
Healthcare-services (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tenet Healthcare Corp.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy-alternate sources: 1.37% |
|
|
|
|
|
|
Enviva Partners LP/Enviva Partners Finance Corp.144A |
|
|
|
|
|
|
TerraForm Power Operating LLC144A |
|
|
|
|
|
|
TerraForm Power Operating LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aethon United BR LP/Aethon United Finance Corp.144A |
|
|
|
|
|
|
Encino Acquisition Partners Holdings LLC144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.144A |
|
|
|
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.144A |
|
|
|
|
|
|
Nabors Industries Ltd.144A |
|
|
|
|
|
|
Nabors Industries, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & gas services: 0.63% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oceaneering International, Inc. |
|
|
|
|
|
|
Oceaneering International, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CQP Holdco LP/BIP-V Chinook Holdco LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnLink Midstream Partners LP |
|
|
|
|
|
|
EnLink Midstream Partners LP |
|
|
|
|
|
|
Harvest Midstream I LP144A |
|
|
|
|
|
|
Hess Midstream Operations LP144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rockies Express Pipeline LLC144A |
|
|
|
|
|
|
Rockies Express Pipeline LLC144A |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 21
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.144A
|
|
|
|
|
|
|
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.144A
|
|
|
|
|
|
|
Venture Global Calcasieu Pass LLC144A |
|
|
|
|
|
|
Venture Global Calcasieu Pass LLC144A |
|
|
|
|
|
|
Venture Global LNG, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified financial services: 2.71% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Point Capital, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nationstar Mortgage Holdings, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oppenheimer Holdings, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rocket Mortgage LLC/Rocket Mortgage Co-Issuer, Inc.144A
|
|
|
|
|
|
|
Rocket Mortgage LLC/Rocket Mortgage Co-Issuer, Inc.144A
|
|
|
|
|
|
|
United Wholesale Mortgage LLC144A |
|
|
|
|
|
|
United Wholesale Mortgage LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AssuredPartners, Inc.144A |
|
|
|
|
|
|
BroadStreet Partners, Inc.144A |
|
|
|
|
|
|
HUB International Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLP Capital LP/GLP Financing II, Inc. |
|
|
|
|
|
|
HAT Holdings I LLC/HAT Holdings II LLC144A |
|
|
|
|
|
|
HAT Holdings I LLC/HAT Holdings II LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp.144A |
|
|
|
|
|
|
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp.144A |
|
|
|
|
|
|
MPT Operating Partnership LP/MPT Finance Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
22 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starwood Property Trust, Inc.144A |
|
|
|
|
|
|
Starwood Property Trust, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spirit AeroSystems, Inc.144A |
|
|
|
|
|
|
Spirit AeroSystems, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building materials: 0.64% |
|
|
|
|
|
|
Camelot Return Merger Sub, Inc.144A |
|
|
|
|
|
|
Emerald Debt Merger Sub LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hand/machine tools: 0.66% |
|
|
|
|
|
|
Werner FinCo LP/Werner FinCo, Inc.144A |
|
|
|
|
|
|
Werner FinCo LP/Werner FinCo, Inc. (PIK at 14.50%)144A¥
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery-diversified: 0.45% |
|
|
|
|
|
|
Chart Industries, Inc.144A |
|
|
|
|
|
|
Chart Industries, Inc.144A |
|
|
|
|
|
|
TK Elevator U.S. Newco, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Packaging & containers: 1.01% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corp.144A |
|
|
|
|
|
|
Clydesdale Acquisition Holdings, Inc.144A |
|
|
|
|
|
|
Owens-Brockway Glass Container, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trucking & leasing: 0.41% |
|
|
|
|
|
|
Fortress Transportation & Infrastructure Investors LLC144A
|
|
|
|
|
|
|
Fortress Transportation & Infrastructure Investors LLC144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 23
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud Software Group, Inc.144A |
|
|
|
|
|
|
SS&C Technologies, Inc.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NextEra Energy Operating Partners LP144A |
|
|
|
|
|
|
NSG Holdings LLC/NSG Holdings, Inc.144A |
|
|
|
|
|
|
Pattern Energy Operations LP/Pattern Energy Operations, Inc.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vistra Corp. (5 Year Treasury Constant Maturity+5.74%)144Aʊ± |
|
|
|
|
|
|
Vistra Operations Co. LLC144A |
|
|
|
|
|
|
Vistra Operations Co. LLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total corporate bonds and notes (Cost $39,353,150) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clear Channel Outdoor Holdings, Inc. (U.S. SOFR 3 Month+3.50%)± |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hubbard Radio LLC (1 Month LIBOR+4.25%)± |
|
|
|
|
|
|
Telecommunications: 0.15% |
|
|
|
|
|
|
Intelsat Jackson Holdings SA (U.S. SOFR 3 Month+4.25%)± |
|
|
|
|
|
|
Consumer, cyclical: 0.36% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mileage Plus Holdings LLC (3 Month LIBOR+5.25%)± |
|
|
|
|
|
|
SkyMiles IP Ltd. (U.S. SOFR 3 Month+3.75%)± |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer, non-cyclical: 0.76% |
|
|
|
|
|
|
Commercial services: 0.70% |
|
|
|
|
|
|
Geo Group, Inc. (U.S. SOFR 1 Month+7.13%)± |
|
|
|
|
|
|
Healthcare-services: 0.06% |
|
|
|
|
|
|
Surgery Center Holdings, Inc. (U.S. SOFR 1 Month+3.75%)± |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
24 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GIP II Blue Holding LP (U.S. SOFR 1 Month+4.50%)± |
|
|
|
|
|
|
M6 ETX Holdings II Midco LLC (U.S. SOFR 1 Month+4.50%)± |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified financial services: 0.14% |
|
|
|
|
|
|
Resolute Investment Managers, Inc. (3 Month LIBOR+4.25%)± |
|
|
|
|
|
|
Resolute Investment Managers, Inc. (U.S. SOFR 3 Month+8.00%)‡± |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asurion LLC (3 Month LIBOR+3.25%)± |
|
|
|
|
|
|
Asurion LLC (U.S. SOFR 1 Month+5.25%)± |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery-diversified: 0.04% |
|
|
|
|
|
|
Vertical U.S. Newco, Inc. (U.S. SOFR 6 Month+3.50%)± |
|
|
|
|
|
|
Total loans (Cost $2,447,475) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communication services: 0.00% |
|
|
|
|
|
|
Diversified telecommunication services: 0.00% |
|
|
|
|
|
|
Intelsat Jackson Holdings SA♦† |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yankee corporate bonds and notes: 5.57% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications: 0.16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Intelsat Jackson Holdings SA♦ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer, cyclical: 2.42% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Canada Pass-Through Trust Series 2020-1 Class C144A
|
|
|
|
|
|
|
American Airlines, Inc./AAdvantage Loyalty IP Ltd.144A
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 25
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
American Airlines, Inc./AAdvantage Loyalty IP Ltd.144A
|
|
|
|
|
|
|
VistaJet Malta Finance PLC/Vista Management Holding, Inc.144A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royal Caribbean Cruises Ltd.144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd.144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd.144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd.144A |
|
|
|
|
|
|
Royal Caribbean Cruises Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1011778 BC ULC/New Red Finance, Inc.144A |
|
|
|
|
|
|
Consumer, non-cyclical: 0.59% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Teva Pharmaceutical Finance Netherlands III BV |
|
|
|
|
|
|
Teva Pharmaceutical Finance Netherlands III BV |
|
|
|
|
|
|
Teva Pharmaceutical Finance Netherlands III BV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Griffin Coal Mining Co. Pty. Ltd.144A♦† |
|
|
|
|
|
|
|
|
|
|
|
|
|
Northriver Midstream Finance LP144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified financial services: 0.58% |
|
|
|
|
|
|
Castlelake Aviation Finance DAC144A |
|
|
|
|
|
|
Macquarie Airfinance Holdings Ltd.144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sensata Technologies BV144A |
|
|
|
|
|
|
Sensata Technologies BV144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
26 | Allspring Utilities and High Income Fund
Portfolio of investments—August 31, 2023
|
|
|
|
|
|
Packaging & containers: 0.27% |
|
|
|
|
|
|
Ardagh Metal Packaging Finance USA LLC/Ardagh Metal Packaging Finance PLC144A |
|
|
|
|
|
|
Ardagh Metal Packaging Finance USA LLC/Ardagh Metal Packaging Finance PLC144A |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trucking & leasing: 0.28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total yankee corporate bonds and notes (Cost $5,676,606) |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments: 1.19% |
|
|
|
|
|
|
Investment companies: 1.19% |
|
|
|
|
|
|
Allspring Government Money Market Fund Select
Class♠∞ |
|
|
|
|
|
|
Total short-term investments (Cost $1,178,650) |
|
|
|
|
|
|
Total investments in securities (Cost $124,527,908) |
|
|
|
|
|
|
Other assets and liabilities, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The security is fair valued in accordance with procedures approved by the Board of Trustees. |
|
Non-income-earning security |
|
The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of
1933. |
|
A payment-in-kind (PIK) security is a security in which the issuer may make interest or dividend payments in cash or additional securities or a combination of both.
The rate shown is the rate in effect at period end. |
|
Security is perpetual in nature and has no stated maturity date. The date shown reflects the next call date. |
|
Variable rate investment. The rate shown is the rate in effect at period end. |
|
Security is valued using significant unobservable inputs. |
|
The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
|
The rate represents the 7-day annualized yield at period end. |
|
|
London Interbank Offered Rate |
|
Real estate investment trust |
|
Secured Overnight Financing Rate |
The
accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 27
Portfolio of investments—August 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
|
Value,
beginning of
period |
|
|
Net
realized
gains
(losses) |
Net
change in
unrealized
gains
(losses) |
|
|
Income
from
affiliated
securities |
|
|
|
|
|
|
|
|
|
Allspring Government Money Market Fund Select Class |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial statements.
28 | Allspring Utilities and High Income Fund
Statement of assets and liabilities—August 31, 2023
Financial statements
Statement of assets and liabilities
|
|
Investments in unaffiliated securities, at value (cost $123,349,258) |
|
Investments in affiliated securities, at value (cost $1,178,650) |
|
|
|
Receivable for dividends and interest |
|
Receivable for investments sold |
|
Prepaid expenses and other assets |
|
|
|
|
|
Secured borrowing payable |
|
|
|
Payable for investments purchased |
|
|
|
Administration fee payable |
|
Trustees’ fees and expenses payable |
|
Accrued expenses and other liabilities |
|
|
|
|
|
|
|
|
|
Total distributable earnings |
|
|
|
Net asset value per share |
|
Based on $98,783,521 divided by 9,292,262 shares issued and outstanding (unlimited number of shares
authorized) |
|
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 29
Statement of operations—year ended August 31, 2023
Statement of operations
|
|
|
|
|
|
Income from affiliated securities |
|
|
|
|
|
|
|
|
|
Custody and accounting fees |
|
|
|
Shareholder report expenses |
|
Trustees’ fees and expenses |
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gains (losses) on investments |
|
|
|
|
|
Foreign currency and foreign currency translations |
|
Net realized losses on investments |
|
Net change in unrealized gains (losses) on |
|
|
|
Foreign currency and foreign currency translations |
|
Net change in unrealized gains (losses) on investments |
|
Net realized and unrealized gains (losses) on investments |
|
Net decrease in net assets resulting from operations |
|
The accompanying notes are an integral part of these financial statements.
30 | Allspring Utilities and High Income Fund
Statement of changes in net assets
Statement of
changes in net assets
|
Year ended August 31, 2023 |
Year ended August 31, 2022 |
|
|
|
|
|
|
|
|
|
|
Net realized losses on investments |
|
|
|
|
Net change in unrealized gains (losses) on investments |
|
|
|
|
Net increase (decrease) in net assets resulting from operations |
|
|
|
|
Distributions to shareholders from |
|
|
|
|
Net investment income and net realized gains |
|
|
|
|
Tax basis return of capital |
|
|
|
|
Total distributions to shareholders |
|
|
|
|
Capital share transactions |
|
|
|
|
Net asset value of common shares issued under the Automatic Dividend Reinvestment Plan |
|
|
|
|
Total decrease in net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 31
Statement of cash flows—year ended August 31, 2023
Statement of cash flows
Cash flows from operating activities |
|
Net decrease in net assets resulting from operations |
|
Adjustments to reconcile net decrease in net assets from operations to net cash provided in operating activities |
|
Purchases of long-term securities |
|
Proceeds from the sales of long-term securities |
|
|
|
Purchases and sales of short-term securities, net |
|
Increase in receivable for investments sold |
|
Increase in receivable for dividends and interest |
|
Increase in prepaid expenses and other assets |
|
Decrease in payable for investments purchased |
|
Increase in trustees’ fees and expenses payable |
|
Decrease in advisory fee payable |
|
Increase in administration fee payable |
|
Increase in accrued expenses and other liabilities |
|
Proceeds from foreign currency transactions |
|
Net realized losses on unaffiliated securities |
|
Net realized losses on foreign currency and foreign currency translations |
|
Net change in unrealized gains (losses) on unaffiliated securities |
|
Net change in unrealized gain (losses) on foreign currency and foreign currency translations |
|
Net cash provided by operating activities |
|
Cash flows from financing activities |
|
|
|
Net cash used in financing activities |
|
|
|
|
|
|
|
|
|
Supplemental cash disclosure |
|
|
|
The accompanying notes are an integral part of these financial statements.
32 | Allspring Utilities and High Income Fund
Financial
highlights
(For a share
outstanding throughout each period)
|
|
|
|
|
|
|
|
Net asset value, beginning of period |
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses) on investments |
|
|
|
|
|
Total from investment operations |
|
|
|
|
|
Distributions to shareholders from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax basis return of capital |
|
|
|
|
|
Total distributions to shareholders |
|
|
|
|
|
Net asset value, end of period |
|
|
|
|
|
Market value, end of period |
|
|
|
|
|
Total return based on net asset value1 |
|
|
|
|
|
Total return based on market value1 |
|
|
|
|
|
Ratios to average net assets (annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s omitted) |
|
|
|
|
|
Borrowings outstanding, end of period (000s omitted) |
|
|
|
|
|
Asset coverage per $1,000 of borrowing, end of period |
|
|
|
|
|
|
Ratios include interest expense relating to interest associated with borrowings and/or leverage transactions as follows: |
Year ended August 31, 2023 |
|
Year ended August 31, 2022 |
|
Year ended August 31, 2021 |
|
Year ended August 31, 2020 |
|
Year ended August 31, 2019 |
|
|
Total returns based on net asset value are calculated based on the net asset value at the beginning of the period and at the end of the period. Total returns based on
market value are calculated assuming a purchase of common stock on the
first day and a sale on the last day of the period reported. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. Total returns do not
reflect brokerage commissions that a shareholder would pay on the purchase and
sale of shares. |
The accompanying notes are an integral part of these financial statements.
Allspring Utilities and High Income Fund | 33
Notes to financial statements
Notes to financial
statements
Allspring Utilities and High Income Fund (the “Fund”) was organized as a
statutory trust under the laws of the state of Delaware on February 4, 2004. Originally classified as non-diversified, the Fund was reclassified as a diversified closed-end
management investment company in September 2014. As an investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), the
Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting
policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles
which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Debt securities are valued at the evaluated bid price provided by an independent pricing service
(e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent
broker-dealer.
Investments in registered open-end investment companies (other than
those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of
investments.
Foreign currency translation
The
accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S.
dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of
securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise
from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts
of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains
and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net
assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented.
Such changes are included in net realized and unrealized gains or losses from investments.
When-issued transactions
The Fund
may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at
least equal in value to the Fund’s commitment to purchase when-issued securities. Securities
purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.
Loans
The Fund may invest in direct
debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans pay interest at rates which are periodically reset by reference to
a base lending rate plus a spread. Investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When the
Fund purchases participations, it generally has no rights to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund assumes the
credit risk of both the borrower and the lender that is selling the
34 | Allspring Utilities and High Income Fund
Notes to financial statements
participation. When
the Fund purchases assignments from lenders, it acquires direct rights against the borrower on the loan and may enforce compliance by the borrower with the terms of the loan
agreement. Loans may include fully funded term loans or unfunded loan commitments, which are contractual obligations for future funding.
Unfunded loan commitments represent the remaining obligation of the Fund to the borrower. At any
point in time, up to the maturity date of the issue, the borrower may demand the unfunded portion. Unfunded amounts, if any, are marked to market and any unrealized gains or
losses are recorded in the Statement of Assets and Liabilities.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified
cost.
Interest income is accrued daily and bond discounts are accreted and premiums
are amortized daily. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the
collection of all or a portion of interest has been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer
subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual
status.
Dividend income is recognized on the ex-dividend date.
Distributions to shareholders
Under a managed distribution plan, the Fund pays monthly distributions to shareholders at an annual minimum fixed rate of 7% based on the Fund’s average monthly net asset value per share over the prior 12 months. The monthly distributions may be sourced from income, paid-in capital, and/or capital gains, if any. To the extent that sufficient investment income is not available on a monthly basis, the Fund may distribute paid-in capital and/or capital gains, if any, in order to maintain its managed distribution level.
Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years
and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of August 31, 2023, the aggregate cost of all investments for federal income tax purposes was
$124,803,869 and the unrealized gains (losses) consisted of:
As of August 31, 2023, the Fund had capital loss carryforwards which consist of $581,818 in short-term capital losses and $2,015,846 in long-term capital losses.
Allspring Utilities and High Income Fund | 35
Notes to financial statements
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments
are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s
investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest
priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is
significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level
1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level
3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of August 31, 2023:
|
|
Other significant
observable inputs
(Level 2) |
Significant
unobservable inputs
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds and notes |
|
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Yankee corporate bonds and notes |
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Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended August 31, 2023, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding
company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the adviser to the Fund and is entitled to receive a fee at an annual
rate of 0.50% of the Fund’s average daily total assets. Total assets consist of the net assets of the Fund plus borrowings or other leverage for investment purposes to
the extent excluded in calculating net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate of 0.40% of the Fund’s average daily total assets.
Administration fee
Allspring Funds
Management also serves as the administrator to the Fund, providing the Fund with a wide range of administrative services necessary to the operation of the Fund. Allspring
Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Fund’s average daily total assets.
36 | Allspring Utilities and High Income Fund
Notes to financial statements
Interfund
transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates
pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund
transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund
transactions during the year ended August 31, 2023.
5.
CAPITAL SHARE TRANSACTIONS
The Fund has authorized an unlimited
number of shares with no par value. For the years ended August 31, 2023 and August 31, 2022, the Fund issued 0 and 8,014 shares, respectively.
Under an open-market share repurchase program (the “Buyback Program”), the Fund is
authorized to repurchase up to 5% of its outstanding shares in open market transactions. The Fund’s Board of Trustees has delegated to Allspring Funds Management full
discretion to administer the Buyback Program including the determination of the amount and timing of repurchases in accordance with the best interests of the Fund and subject
to applicable legal limitations. During the year ended August 31, 2023, the Fund did not repurchase any of its shares under the open-market share repurchase
program.
The Fund has borrowed $30,000,000 through a revolving credit facility administered by a
major financial institution (the “Facility”). The Facility has a commitment amount of up to $30,000,000. The Fund is charged interest at the 1 Month Secured
Overnight Financing Rate (SOFR) plus a spread and a commitment fee based on the unutilized amount of the commitment amount. The financial institution holds a security
interest in all the assets of the Fund as collateral for the borrowing. Based on the nature of the terms of the Facility and comparative market rates, the carrying amount of
the borrowings at August 31, 2023 approximates its fair value. If measured at fair value, the borrowings would be categorized as a Level 2 under the fair value
hierarchy.
During the year ended August 31, 2023, the Fund had average borrowings
outstanding of $30,000,000 at an average interest rate of 5.17% and recorded interest in the amount of $1,550,378, which represents 1.44% of its average daily net
assets.
7.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments,
excluding U.S. government obligations (if any) and short-term securities, for the year ended August 31, 2023 were $23,768,345 and $25,245,123, respectively.
8.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years
ended August 31, 2023 and August 31, 2022 were as follows:
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Tax basis return of capital |
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As of August 31, 2023, the components of distributable earnings on a tax
basis consisted of $2,597,664 in capital loss carrryforwards and $3,489,811 in unrealized gains.
As of the end of the period, the Fund
invested a concentration of its portfolio in the utilities sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in
that sector than would be a fund whose investments are not heavily weighted in any sector.
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights
against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts
indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
Allspring Utilities and High Income Fund | 37
Notes to financial statements
11.
SUBSEQUENT DISTRIBUTIONS
Under the managed distribution plan, the Fund declared the
following distributions to common shareholders:
These distributions are not reflected in the accompanying financial statements.
38 | Allspring Utilities and High Income Fund
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Utilities and High Income Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Utilities and High Income Fund (the Fund), including the portfolio of investments, as of August 31, 2023, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the
Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2023, by correspondence with the custodian, transfer agent, agent banks and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one
or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies
since at least 1955.
Boston, Massachusetts
October 26, 2023
Allspring Utilities and High Income Fund | 39
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 74% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended August 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $2,692,682 of income dividends paid during the fiscal year ended August 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended August 31, 2023, $1,695,754 has been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
Proxy voting information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities
were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Delaware statutory trust act – control share acquisitions
Because the Fund is organized as a Delaware statutory trust, it is subject to the control share acquisition statute (the “Control Share Statute”) contained
in Subchapter III of the Delaware Statutory Trust Act (the “DSTA”), which became automatically applicable to listed closed-end funds, such as the Fund, upon its effective date of August 1, 2022 (the “Effective Date”).
The Control Share Statute provides for a series of voting power thresholds above which shares are considered control shares. The first such threshold is 10% or more, but less than 15%, of all voting power. Voting power is defined by the Control Share Statute as the power to directly or indirectly exercise or direct the exercise of the voting power of Fund shares in the election of trustees. Whether a voting power threshold is met is determined by aggregating the holdings of the acquirer as well as those of its “associates,” as defined by the Control Share Statute.
Once a threshold is reached, an acquirer has no voting rights under the DSTA or the governing
documents of the Fund with respect to shares acquired in excess of that threshold (i.e., the “control shares”) unless approved by shareholders or exempted by the
Fund’s Board of Trustees. Approval by shareholders requires the affirmative vote of two-thirds of all votes entitled to be cast on the matter, excluding shares held by
the acquirer and its associates as well as shares held by certain insiders of the Fund. The Control Share Statute provides procedures for an acquirer to request a shareholder
meeting for the purpose of considering whether voting rights shall be accorded to control shares. Further approval by the Fund’s shareholders would be required with respect to additional acquisitions of control shares above the next applicable threshold level. In addition, the Fund’s Board of Trustees is permitted, but not obligated to, exempt specific acquisitions or classes of acquisitions of control shares, either in advance or retroactively.
The Control Share Statute does not retroactively apply to acquisitions of shares that occurred
prior to the Effective Date. However, such shares will be aggregated with any shares acquired after the Effective Date for purposes of determining whether a voting power
threshold is exceeded, resulting in the newly acquired shares constituting control shares.
The Control Share Statute requires shareholders to disclose to the Fund any control share acquisition within 10 days of such acquisition and, upon request, to provide any information that the Fund’s Board of Trustees reasonably believes is necessary or desirable to determine whether a control share acquisition has occurred.
The foregoing is only a summary of certain aspects of the Control Share Statute. Shareholders should consult their own legal counsel to determine the application of the Control Share Statute with respect to their shares of the Fund and any subsequent acquisitions of shares.
40 | Allspring Utilities and High Income Fund
Other information (unaudited)
Board of trustees and
officers
The following table provides basic information about the Board of Trustees
(the “Trustees”) and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for each fund in the Allspring family of
funds, which consists of 126 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust, and four closed-end funds, including the
Fund (collectively the “Fund Complex”). The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. The Board of
Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected.
Each Officer serves an indefinite term.
Independent Trustees
|
|
Principal occupations during past five years or
longer |
Current other
public company
or
investment
company
directorships |
Class I - Non-Interested Trustees to serve until 2023 Annual Meeting of
Shareholders |
Isaiah
Harris, Jr.
(Born 1952) |
Trustee,
since 2009;
Audit Committee
Chair,
since 2019 |
Retired. Member of the Advisory Board of CEF of East Central Florida.
Chairman of the Board of CIGNA Corporation from 2009 to
2021, and Director from 2005 to 2008. From 2003 to 2011,
Director of Deluxe Corporation. Prior thereto, President and CEO of
BellSouth Advertising and Publishing Corp. from 2005 to
2007, President and CEO of BellSouth Enterprises from 2004 to
2005 and President of BellSouth Consumer Services from 2000 to 2003.
Emeritus member of the Iowa State University Foundation
Board of Governors. Emeritus Member of the Advisory board of
Iowa State University School of Business. Advisory Board Member, Palm
Harbor Academy (private school). Advisory Board Member,
Fellowship of Christian Athletes. Mr. Harris is a certified public
accountant (inactive status). |
|
David F.
Larcker
(Born 1950) |
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Distinguished Visiting Fellow at the Hoover Institution since 2022. James
Irvin Miller Professor of Accounting at the Graduate School
of Business (Emeritus), Stanford University, Director of the
Corporate Governance Research Initiative and Senior Faculty of The Rock
Center for Corporate Governance since 2006. From 2005 to
2008, Professor of Accounting at the Graduate School of
Business, Stanford University. Prior thereto, Ernst & Young Professor
of Accounting at The Wharton School, University of Pennsylvania
from 1985 to 2005. |
|
Olivia S.
Mitchell
(Born 1953) |
Trustee,
since 2006;
Nominating and
Governance
Committee Chair,
since 2018 |
International Foundation of Employee Benefit Plans Professor since 1993,
Wharton School of the University of Pennsylvania. Director
of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic
Research. Previously taught at Cornell University from 1978 to 1993.
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|
Class II - Non-Interested Trustees to serve until 2024 Annual Meeting
of Shareholders |
William R.
Ebsworth
(Born 1957) |
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Retired. From 1984 to 2013, equities analyst, portfolio manager, research
director and chief investment officer at Fidelity
Management and Research Company in Boston, Tokyo, and Hong
Kong, and retired in 2013 as Chief Investment Officer of Fidelity
Strategic Advisers, Inc. where he led a team of investment
professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International
Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire
Fidelity Investments Life Insurance Company. Audit
Committee Chair and Investment Committee Chair of the Vincent
Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA
charterholder. |
|
Jane A.
Freeman
(Born 1953) |
Trustee,
since 2015;
Chair Liaison,
since 2018 |
Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of
Scientific Learning Corporation. From 2008 to 2012, Ms.
Freeman provided consulting services related to strategic
business projects. Prior to 1999, Portfolio Manager at Rockefeller &
Co. and Scudder, Stevens & Clark. Board member of the
Harding Loevner Funds from 1996 to 2014, serving as both Lead
Independent Director and chair of the Audit Committee. Board member of
the Russell Exchange Traded Funds Trust from 2011 to 2012
and the chair of the Audit Committee. Ms. Freeman is also an
inactive Chartered Financial Analyst. |
|
Allspring Utilities and High Income Fund | 41
Other information (unaudited)
|
Position held and
length of service* |
Principal occupations during past five years or
longer |
Current other
public company
or
investment
company
directorships |
Class III - Non-Interested Trustees to serve until 2025 Annual Meeting
of Shareholders |
Timothy J.
Penny
(Born 1951) |
Trustee,
since 1996;
Chair,
since 2018 |
President and Chief Executive Officer of Southern Minnesota Initiative
Foundation, a non-profit organization, since 2007. Vice
Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of
NorthStar Education Finance, Inc., a non-profit organization, from
2007-2022. Senior Fellow of the University of Minnesota Humphrey
Institute from 1995 to 2017. |
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James G.
Polisson
(Born 1959) |
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Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from
2015 to 2017. From 2012 to 2015, Principal of The Polisson
Group, LLC, a management consulting, corporate advisory and
principal investing company. Chief Executive Officer and Managing
Director at Russell Investments, Global Exchange Traded
Funds from 2010 to 2012. Managing Director of Barclays
Global Investors from 1998 to 2010 and Global Chief Marketing Officer for
iShares and Barclays Global Investors from 2000 to 2010.
Trustee of the San Francisco Mechanics’ Institute, a non- profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust
from 2011 to 2012. Director of Barclays Global Investors Holdings
Deutschland GmbH from 2006 to 2009. Mr. Polisson is an
attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. |
|
Pamela Wheelock
(Born 1959) |
Trustee,
since January 2020;
previously Trustee from
January 2018 to
July 2019 |
Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit
sectors. Interim President and CEO, McKnight Foundation, 2020. Interim
Commissioner, Minnesota Department of Human Services, 2019.
Chief Operating Officer, Twin Cities Habitat for Humanity,
2017-2019. Vice President for University Services, University of Minnesota, 2012- 2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive
Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008.
Commissioner, Minnesota Department of Finance, 1999-2002.
Chair of the Board of Directors of Destination Medical Center
Corporation. Board member of the Minnesota Wild Foundation. |
|
|
Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable. |
42 | Allspring Utilities and High Income Fund
Other information (unaudited)
Officers1
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Position held and
length of
service |
Principal occupations during past five years or
longer |
|
|
President and Chief Executive Officer of Allspring Funds Management, LLC
since 2017 and Head of Global Fund Governance of Allspring
Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated
Managers, Allspring Global Investments, from 2014 to 2019 and Executive
Vice President responsible for marketing, investments and product
development for Allspring Funds Management, LLC, from 2009 to 2014. |
Jeremy DePalma
(Born 1974) |
Treasurer,
since 2012
(for certain funds in
the Fund Complex);
since 2021 (for
the remaining funds
in the Complex) |
Senior Vice President of Allspring Funds Management, LLC since 2009.
Senior Vice President of Evergreen Investment Management
Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
|
Christopher Baker
(Born 1976) |
Chief Compliance
Officer,
since 2022 |
Global Chief Compliance Officer for Allspring Global Investments since
2022. Prior thereto, Chief Compliance Officer for State
Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015
Vice President, Global Head of Investment and Marketing Compliance for State
Street Global Advisors. |
Matthew Prasse
(Born 1983) |
Chief Legal Officer,
since 2022;
Secretary,
since 2021 |
Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department
from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018.
Prior to joining Barings, Associate at Morgan, Lewis & Bockius
LLP from 2008 to 2015. |
1 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
Allspring Utilities and High Income Fund | 43
Other information (unaudited)
Board consideration of investment
advisory and sub-advisory
agreements:
Under the
Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of the Allspring Utilities and High Income Fund (the
“Fund”) must determine annually whether to approve the continuation of the Fund’s investment advisory and sub-advisory agreements. In this regard, at
a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are not “interested persons” of the Fund, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved: (i) an investment advisory agreement with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The investment advisory agreement with Allspring Funds Management and the investment sub-advisory agreement with the Sub-Adviser are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May
2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent,
and quality of services
The Board received and considered various information
regarding the nature, extent and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information
included, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the
Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements
with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the additional services provided to the Fund due to the fact that the Fund is a closed-end fund, including, but not limited to, leverage management and monitoring, evaluating, and, where appropriate, making recommendations with respect to the Fund’s trading discount, share repurchase program, managed distribution program, and distribution rates, as well as shareholder relations activities.
1
The trade name for the asset management firm that includes Allspring Funds Management
and the Sub-Adviser is “Allspring Global Investments.”
44 | Allspring Utilities and High Income Fund
Other information (unaudited)
The Board considered
the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The
Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory and
supervisory personnel.
The Board further considered the compliance programs and
compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management
functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans and their approaches to data privacy and
cybersecurity. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods
ended December 31, 2020. The Board considered these results in comparison to the investment performance of funds in a custom peer group that included funds selected by
Broadridge Inc. (“Broadridge”) and additional funds that were determined by Allspring Funds Management to be similar to the Fund (the “Custom Peer
Group”), and in comparison to the Fund’s benchmark index and to other comparative data. The Board received a description of the methodology used by Broadridge and
Allspring Funds Management to select the funds in the Custom Peer Group and discussed the limitations inherent in the use of other peer groups. The Board noted that the investment performance of the Fund was higher than the average investment performance of the Custom Peer Group for all periods under review except for the ten-year period. The Board also noted that the investment performance of the Fund was lower than its benchmark, the Utilities and High Income Blended Index, which is a custom index used by the Board to help it assess the Fund’s relative performance, for all periods under review except for the three-year period.
The Board noted that it had approved a change in the sub-advisory arrangements and principal investment strategy for the Fund, which was implemented on or about October 15, 2019, and that the investment performance of the Fund for most of the periods covered did not reflect the investment performance of the Fund’s revised sub-advisory arrangement or principal investment strategy. The Board noted that it would continue to review the Fund’s investment performance going forward to monitor implementation of the Fund’s revised sub-advisory arrangement and principal investment strategy.
The Board also received and considered information regarding the Fund’s net operating
expense ratio and its various components, including actual management fees, and custodian and other non-management fees. The Board considered this ratio in comparison to the
median ratio of funds in the Custom Peer Group and in comparison to the median ratio of funds in an expense group that was determined by Broadridge to be similar to the Fund
(the “Broadridge Group”, and together with the Custom Peer Group, the “Expense Groups”). Broadridge is an independent provider of investment company
data. The Board received a description of the methodology used by Broadridge and Allspring Funds Management to select the funds in the Expense Groups, and an explanation from Broadridge of how funds comprising Broadridge expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratio of the Fund was lower than the median net operating expense ratios of the Expense Groups.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment advisory and sub-advisory fee rates
The Board reviewed and considered the contractual investment advisory fee rate that is payable by the Fund to Allspring Funds Management for investment advisory services (the “Advisory Agreement Rate”), both on a stand-alone basis and on a combined basis with the Fund’s contractual administration fee rate (the “Management Rate”). The Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Board was a comparison of the Management Rate of the Fund
with those of other funds in the Expense Groups at a common asset level. The Board noted that the Management Rate of the Fund was lower than the average rates for its Expense
Groups.
The Board also received and considered information about the portion of the
total advisory fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of
this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not
delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management
and the Sub-Adviser, the Board ascribed limited relevance to the allocation of the advisory fee between them.
Based on its consideration of the factors and information it deemed relevant, including those
described here, the Board determined that the Advisory Agreement Rate and the Sub-Advisory Agreement Rate were reasonable.
Allspring Utilities and High Income Fund | 45
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds
Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s
profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability
analysis.
Allspring Funds Management reported on the methodologies and estimates
used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates
its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor
impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on
factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services, the difficulties of calculating economies of scale on an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted that the Fund is not engaged in a continuous offering that could help its assets grow, and that, as is typical of closed-end funds, there are no breakpoints in the Management Rate, which was reduced in 2019. Although the Fund would not share in any potential economies of scale through contractual breakpoints, the Board noted that Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund
constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders. The Board also noted that it would have opportunities to revisit
the Management Rate as part of future contract reviews.
Other benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on
its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring
Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
46 | Allspring Utilities and High Income Fund
Automatic dividend reinvestment plan
Automatic dividend reinvestment
plan
All common shareholders are eligible to participate in the Automatic Dividend
Reinvestment Plan (“the Plan”). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains
distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (“Plan Agent”), in additional
common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as “dividends”) payable
either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The shares are acquired
by the Plan Agent for the participant’s account, 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 Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (“market premium”), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participant’s account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value (“market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 505000, Louisville, Kentucky 40233 or by calling 1-800-730-6001.
Allspring Utilities and High Income Fund | 47
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Transfer Agent, Registrar, Shareholder
Servicing
Agent & Dividend Disbursing Agent
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, Kentucky 40233
1-800-730-6001
Website: allspringglobal.com
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not
limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds
Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for
general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any
specific investment, strategy, or plan.
© 2023 Allspring Global Investments
Holdings, LLC. All rights reserved.
ALL-09122023-gvxxd8dk 10-23
AUHIF 08-23
ITEM 2. CODE OF ETHICS
(a) As of the end of the period covered by the report, Allspring Utilities and High Income Fund has adopted a code of ethics that applies to its President and
Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
(c) During the period covered
by this report, there were no amendments to the provisions of the code of ethics adopted in Item 2(a) above.
(d) During the period covered by this
report, there were no implicit or explicit waivers to the provisions of the code of ethics adopted in Item 2(a) above.
ITEM 3. AUDIT COMMITTEE
FINANCIAL EXPERT
The Board of Trustees of Allspring Income Opportunities Fund has determined that Isaiah Harris is an audit committee financial
expert, as defined in Item 3 of Form N-CSR. Mr. Harris is independent for purposes of Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a), (b), (c), (d) The following table presents aggregate fees billed in each of the last two fiscal years for services rendered to the Registrant by the
Registrants principal accountant. These fees were billed to the registrant and were approved by the Registrants audit committee.
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Fiscal year ended August 31, 2023 |
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Fiscal year ended August 31, 2022 |
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Audit fees |
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$ |
62,725 |
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$ |
59,320 |
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Audit-related fees |
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|
|
|
|
|
|
|
Tax fees (1) |
|
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4,690 |
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|
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4,565 |
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All other fees |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
67,415 |
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|
$ |
63,885 |
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(1) |
Tax fees consist of fees for tax compliance, tax advice, tax planning and excise tax. |
(e)(1) The Chair of the Audit Committees is authorized to pre-approve: (1) audit services for the Allspring
Utilities and High Income Fund; (2) non-audit tax or compliance consulting or training services provided to the Allspring Utilities and High Income Fund by the independent auditors (Auditors)
if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to the Allspring Utilities and
High Income Funds investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Allspring
Utilities and High Income Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chair, Management shall prepare a brief
description of the proposed services. If the Chair approves of such service, he or she shall sign the statement prepared by Management. Such written statement shall be presented to the full Committees at their next regularly scheduled meetings.
(e)(2) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED
REGISTRANTS
The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The Audit Committee is comprised of:
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William R. Ebsworth Jane A. Freeman
Isaiah Harris, Jr. David F. Larcker
Olivia S. Mitchell Timothy J. Penny
James G. Polisson Pamela Wheelock |
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|
ITEM 6. INVESTMENTS
A Portfolio of Investments for Allspring Utilities and High Income Fund is included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT
COMPANIES
PROXY VOTING POLICIES AND PROCEDURES
EFFECTIVE March 2023
The Allspring Utilities and High
Income Fund has adopted policies and procedures (Fund Proxy Voting Procedures) that are used to determine how to vote proxies relating to portfolio securities held by the Fund. The Fund Proxy Voting Procedures are designed to ensure that
proxies are voted in the best interests of Fund shareholders, without regard to any relationship that any affiliated person of a Fund (or an affiliated person of such affiliated person) may have with the issuer of the security and with the goal of
maximizing value to shareholders consistent with governing laws and the investment policies of the Fund. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, the Fund supports
sound corporate governance practices within companies in which it invests. The Board of the Fund has delegated the responsibility for voting proxies relating to the Funds portfolio securities to Allspring Funds Management. Allspring Funds
Management utilizes the Allspring Global Investments Proxy Voting Policies and Procedures, included below, to ensure that proxies relating to the Funds portfolio securities are voted in shareholders best interests.
Allspring Global Investments (Allspring) Stewardship
As fiduciaries, we are committed to effective stewardship of the assets we manage on behalf of our clients. To us, good stewardship reflects responsible,
active ownership and includes both engaging with investee companies and voting proxies in a manner that we believe will maximize the long-term value of our investments.
Scope of Policies and Procedures
In conjunction with the
Allspring Engagement Policy, these Proxy Voting Policies and Procedures (Policies and Procedures) set out how Allspring complies with applicable regulatory requirements in respect of how we exercise voting rights when we invest in shares
traded on a regulated market on behalf of a client.
With respect to client accounts of Allspring Funds Management, LLC (Allspring Funds
Management) this includes, among others, Allspring Funds Trust, Allspring Master Trust, Allspring Variable Trust, Allspring Global Dividend Opportunity Fund, Allspring Income Opportunities Fund, Allspring Multi-Sector Income Fund, Allspring
Utilities and High Income Fund (the Trusts). It also includes Allspring (Lux) Worldwide Fund and Allspring Worldwide Alternative Fund SICAV-SIF, both domiciled in Luxembourg (the Luxembourg
Funds). Aside from the investment funds managed by Funds Management, Allspring also offers medium term note programs, managed for issuers of such notes domiciled in Luxembourg. Hereafter, all series of the Trusts, and all such Trusts not
having separate series, and all sub-funds of the Luxembourg Funds, as well as the MTN issuers, are referred to as the Investment Products. In addition, these Policies and Procedures are used to
determine how to vote proxies for the assets managed on behalf of Allsprings other clients. Not all clients delegate proxy voting authority to Allspring. Allspring will not vote proxies, or provide advice to clients on how to vote proxies in
the absence of specific delegation of authority, a pre-existing contractual agreement, or an obligation under applicable law (e.g., securities that are held in an investment advisory account for which
Allspring exercises no investment discretion are not voted by Allspring).
Luxembourg Products
Allspring Global Investments Luxembourg S.A. (Allspring Luxembourg) has delegated the portfolio management of the Luxembourg Funds it manages to
Allspring and the responsibility for exercising voting rights in conjunction with such delegation; as such, these Policies and Procedures shall apply to the portfolio management of the Allspring (Lux) Worldwide Fund. The respective portfolio
management may also delegate the responsibility for exercising voting rights to the Proxy Voting Vendor, with the prior consent of Allspring Luxembourg. Responsibility for exercising voting rights has also been delegated to Allspring with respect to
the Allspring Worldwide Alternative Fund SICAV-SIF and to the MTN issuers.
Voting Philosophy
Allspring has adopted these Policies and Procedures to ensure that proxies are voted in the best interests of clients and Investment Product investors, without
regard to any relationship that any affiliated person of Allspring or the Investment Product (or an affiliated person of such affiliated person) may have with the issuer. Allspring exercises its voting responsibility as a fiduciary with the goal of
maximizing value to clients consistent with governing laws and the investment policies of each client. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, Allspring supports
sound corporate governance practices at companies in which client assets are invested. Allspring has established an appropriate strategy determining when and how the voting rights related to the instruments held in portfolios managed are exercised,
so that these rights are exclusively reserved to the relevant Investment Product and its investors.
Proxy Administration
Allsprings Stewardship Team (Stewardship) administers the proxy voting process. The Stewardship Team is part of the Allspring Sustainability
Team. Stewardship is responsible for administering and overseeing the proxy voting process to ensure the implementation of the Policies and Procedures, including regular operational reviews, typically conducted on a weekly basis. Stewardship
monitors third party voting of proxies to ensure it is being done in a timely and responsible manner, including review of scheduled vendor reports. Stewardship, in conjunction with the Allspring Proxy Governance Committee, reviews the continuing
appropriateness of the Policies and Procedures set forth herein, and recommends revisions as necessary.
Third Party Proxy Voting Vendor
Allspring has retained a third-party proxy voting service, Institutional Shareholder Services Inc. (ISS), to assist in the implementation of
certain proxy voting-related functions including: 1.) Providing research on proxy matters 2.) Providing technology to facilitate the sharing of research and discussions related to proxy votes 3.) Vote proxies in accordance with Allsprings
guidelines 4.) Handle administrative and reporting items 5.) Maintain records of proxy statements received in connection with proxy votes and provide copies/analyses upon request. Except in instances where clients have retained voting authority,
Allspring retains the responsibility for proxy voting decisions.
Proxy Committee
Allspring Proxy Governance Committee
The Allspring Proxy
Governance Committee shall be responsible for overseeing the proxy voting process to ensure its implementation in conformance with these Policies and Procedures. The Allspring Proxy Governance Committee shall coordinate with Allspring Compliance to
monitor ISS, the proxy voting agent currently retained by Allspring, to determine that ISS is accurately applying the Policies and Procedures as set forth herein and operates as an independent proxy voting agent. Allsprings ISS Vendor
Oversight process includes an assessment of ISS Policy and Procedures (P&P), including conflict controls and monitoring, receipt and review of routine performance-related reporting by ISS to Allspring and periodic onsite due
diligence meetings. Due diligence meetings typically include: meetings with key staff, P&P related presentations and discussions, technology-related demonstrations and assessments, and some sample testing, if appropriate. The Allspring Proxy
Governance Committee shall review the continuing appropriateness of the Policies and Procedures set forth herein. The Allspring Proxy Governance Committee may delegate certain powers and responsibilities to proxy voting working groups. The
Allspring Proxy Governance Committee reviews and, in accordance with these Policies and Procedures, votes on issues that have been escalated from proxy voting working groups. Members of the Allspring Proxy Governance Committee also oversee the
implementation of Allspring Proxy Governance Committee recommendations for the respective functional areas in Allspring that they represent.
Proxy
Voting Due Diligence Working Group
Among other delegated matters, the proxy voting Due Diligence Working Group (DDWG) in accordance with
these Policies and Procedures, reviews and votes on routine proxy proposals that it considers under these Policies and Procedures in a timely manner. If necessary, the DDWG escalates issues to the Allspring Proxy Governance
Committee that are determined to be material by the DDWG or otherwise in accordance with these Policies and Procedures. The DDWG coordinates with Allsprings Compliance teams to review the performance and independence of ISS in
exercising its proxy voting responsibilities.
Meetings; Committee Actions
The Allspring Proxy Governance Committee shall convene or act through written consent, including through the use of electronic systems of record, of a majority
of Allspring Proxy Governance Committee
members as needed and when discretionary voting determinations need to be considered. Any working group of the Allspring Proxy Governance Committee shall have the authority on matters delegated
to it to act by vote or written consent, including through the use of electronic systems of record, of a majority of the working group members available at that time. The Allspring Proxy Governance Committee shall also meet quarterly to review the
Policies and Procedures.
Membership
Members are
selected based on subject matter expertise for the specific deliverables the committee is required to complete. The voting members of the Allspring Proxy Governance Committee are identified in the Allspring Proxy Charter. Changes to the membership
of the Allspring Proxy Governance Committee will be made only with approval of the Allspring Proxy Governance Committee. Upon departure from Allspring Global Investments, a members position on the Allspring Proxy Governance Committee will
automatically terminate.
Voting Procedures
Unless
otherwise required by applicable law,1 proxies will be voted in accordance with the following steps and in the following order of consideration:
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1. |
First, any voting items related to Allspring
Top-of-House voting principles (as described below under the heading Allspring Proxy Voting Principles/Guidelines) will generally be voted in
accordance with a custom voting policy with ISS (Custom Policy) designed to implement the Allsprings Top-of-House voting principles.2 |
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2. |
Second, any voting items for meetings deemed of high importance3 (e.g., proxy contests, mergers and acquisitions,) where ISS opposes management recommendations will be referred to the Portfolio Management teams for recommendation or the DDWG (or escalated to the
Allspring Proxy Governance -Committee) for case-by-case review and vote determination. |
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3. |
Third, with respect to any voting items where ISS Sustainability Voting Guidelines4 provide a different recommendation than ISS Standard Voting Guidelines, the following steps are taken: |
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a. |
Stewardship5 evaluates the matter for materiality and any
other relevant considerations. |
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b. |
If Stewardship recommends further review, the voting item is then referred to the Portfolio Management teams
for recommendation or the DDWG (or escalated to the Allspring Proxy Governance Committee) for case-by-case review and vote determination. |
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c. |
If Stewardship does not recommend further review, the matter is voted in accordance with ISS Standard Voting
Guidelines. |
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4. |
Fourth, any remaining proposals are voted in accordance with ISS Standard Voting Guidelines.6 |
1 |
Where provisions of the Investment Company Act of 1940 (the 1940 Act) specify the manner in which
items for any third party registered investment companies (e.g., mutual funds, exchange-traded funds and closed-end funds) and business development companies (as defined in Section 2(a)(48) of the 1940
Act) (Third Party Fund Holding Voting Matters) held by the Trusts or series thereof, Allspring shall vote the Third Party Fund Holding Voting Matter on behalf of the Trusts or series thereof accordingly. |
2 |
The Allspring Proxy Governance Committee may determine that additional review of a Top-of-House voting matter is warranted. For example, voting matters for declassified boards or annual election of directors of public operating and holding companies that
have certain long-term business commitments (e.g., developing proprietary technology; or having an important strategic alliance in place) may warrant referral to the DDWG (or escalation to the Proxy Governance Committee) for case-by-case review and vote determination. |
3 |
The term high importance is defined as those items designated Proxy Level 6 or 5 by ISS, which
include proxy contests, mergers, and other reorganizations. . |
4 |
ISSs Sustainability Voting Guidelines seeks to promote support for recognized global governing bodies
encouraging sustainable business practices advocating for stewardship of environment, fair labor practices, non-discrimination, and the protection of human rights. |
5 |
The Allspring Stewardship Team is part of the Sustainability Team, led by Henrietta Pacquement who reports into
the Allspring Chief Investment Officer(s). |
6 |
The voting of proxies for Taft Hartley clients may incorporate the use of ISSs Taft Hartley voting
guidelines. |
Commitment to the Principles of Responsible Investment
As a signatory to the Principles for Responsible Investment, Allspring has integrated certain environmental, social, and governance factors into its investment
processes, which includes the proxy process. As described under Voting Procedures above, Allspring considers ISSs Sustainability Voting Guidelines as a point of reference in certain cases deemed to be material to a companys long-term
shareholder value.
Voting Discretion
In all cases,
the Allspring Proxy Governance Committee (and any working group thereof) will exercise its voting discretion in accordance with the voting philosophy of these Policies and Procedures. In cases where a proxy item is forwarded by ISS to the Allspring
Proxy Governance Committee or a working group thereof, the Allspring Proxy Governance Committee or its working group may be assisted in its voting decision through receipt of: (i) independent research and voting recommendations provided by ISS
or other independent sources; (ii) input from the investment sub-adviser responsible for purchasing the security; and (iii) information provided by company management and shareholder groups.
Portfolio Manager and Sub-Adviser Input
The Allspring Proxy Governance Committee (and any working group thereof) may consult with portfolio management teams and Fund
sub-advisers on specific proxy voting issues as it deems appropriate. In addition, portfolio management teams or Fund sub-advisers may proactively make recommendations
to the Allspring Proxy Governance Committee regarding any proxy voting issue. In this regard, the process takes into consideration expressed views of portfolio management teams and Fund sub-advisers given
their deep knowledge of investee companies. For any proxy vote, portfolio management teams and Investment Product advisers and sub-advisers may make a case to vote against the ISS or Allspring Proxy Governance
Committees recommendation (which is described under Voting Procedures above). Any portfolio management teams or Investment Product advisers or sub-advisers opinion should be documented
in a brief write-up for consideration by the DDWG who will determine, or escalate to the Allspring Proxy Governance Committee, the final voting decision.
Consistent Voting
The Allspring Proxy Policy and
Procedures is consistently applied on the same matter when securities of an issuer are held by multiple client accounts unless there are 1) special circumstances such as, for example, proposals concerning corporate actions such as mergers, tender
offers, and acquisitions or as reasonably necessary to implement specified proxy voting guidelines as established by a client (e.g. Taft Hartley ISS Guidelines or custom proxy guidelines) or 2) the expressed views of different portfolio management
teams and Fund sub-advisers is different on particular proposals. In the latter case, the Proxy Governance Committee will work with the investment teams to gauge whether alignment can be achieved.
Governance and Oversight
Allspring Top-of-House Proxy Voting Principles/Guidelines.
The following reflects
Allsprings Top-of-House Voting Principles in effect as of the date of these Policies and Procedures. Allspring has put in place a custom voting policy with ISS to
implement these voting principles.
We believe that Boards of Directors of investee companies should have strong, independent leadership and should
adopt structures and practices that enhance their effectiveness. We recognize that the optimal board size and governance structure can vary by company size, industry, region of operations, and circumstances specific to the company.
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We generally vote for the election of Directors in uncontested elections. We reserve the right to vote on a case-by-case basis when directors fail to meet their duties as a board member, such as failing to act in the best economic interest of shareholders; failing to maintain
independent audit, compensation, nominating committees; and failing to attend at least 75% of meetings, etc. |
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We generally vote for an independent board that has a majority of outside directors who are not affiliated with
the top executives and have minimal or no business dealings with the company to avoid potential conflicts of interests. |
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Generally speaking, we believe Directors serving on an excessive number of boards could result in time
constraints and an inability to fulfill their duties. |
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We generally support adopting a declassified board structure for public operating and holding companies. We
reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. |
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We generally support annual election of directors of public operating and holding companies. We reserve the right
to vote on a case-by-case basis when companies have certain long-term business commitments. |
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We believe a well-composed board should embody multiple dimensions of diversity in order to bring personal and
professional experiences to bear and create a constructive debate of competing perspectives and opinions in the boardroom. Diversity should consider factors such as gender, ethnicity, and age as well as professional factors such as area of
expertise, industry experience and geographic location. |
We believe it is the responsibility of the Board of Directors to create,
enhance, and protect shareholder value and that companies should strive to maximize shareholder rights and representation.
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We believe that companies should adopt a one-share, one-vote standard and avoid adopting share structures that create unequal voting rights among their shareholders. We will normally support proposals seeking to establish that shareholders are entitled to voting
rights in proportion to their economic interests |
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We believe that directors of public operating and holding companies be elected by a majority of the shares voted.
We reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. This ensures that directors of public operating and
holding companies who are not broadly supported by shareholders are not elected to serve as their representatives. We will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections.
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We believe a simple majority voting standard should be required to pass proposals. We will normally support
proposals seeking to introduce bylaws requiring a simple majority vote. |
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We believe that shareholders who own a meaningful stake in the company and have owned such stake for a sufficient
period of time should have, in the form of proxy access, the ability to nominate directors to appear on the management ballot at shareholder meetings. In general we support market-standardized proxy access proposals and we will analyze them based on
various criteria such as threshold ownership levels, a minimum holding period, and the % and/or number of directors that are subject to nomination. |
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We believe that shareholders should have the right to call a special meeting and not wait for company management
to schedule a meeting if there is sufficiently high shareholder support for doing so on issues of substantial importance. In general we support the right to call a special meeting if there is balance between a reasonable threshold of shareholders
and a hurdle high enough to also avoid the waste of corporate resources for narrowly supported interests. We will evaluate the issues of importance on the basis of serving all shareholders well and not structured for the benefit of a dominant
shareholder over others. |
Practical Limitations to Proxy Voting
While Allspring uses its reasonable best efforts to vote proxies, in certain circumstances, it may be impractical or impossible for Allspring to vote proxies
(e.g., limited value or unjustifiable costs).
Securities on Loan
As a general matter, securities on loan will not be recalled to facilitate proxy voting (in which case the borrower of the security shall be entitled to vote
the proxy). However, as it relates to portfolio holdings of the Investment Products, if the Allspring Proxy Governance Committee is aware of an item in time to recall the security and has determined in good faith that the importance of the matter to
be voted upon outweighs the loss in lending revenue that would result from recalling the security (e.g., if there is a controversial upcoming merger or acquisition, or some other significant matter), the security will be recalled for voting.
Share Blocking
Proxy voting in certain countries
requires share blocking. Shareholders wishing to vote their proxies must deposit their shares with a designated depository before the date of the meeting. Consequently, the shares may not be sold in the period preceding the proxy vote.
Absent compelling reasons, Allspring believes that the benefit derived from voting these shares is outweighed by the burden of limited trading. Therefore, if share blocking is required in certain markets, Allspring will not participate and will
refrain from voting proxies for those clients impacted by share blocking.
Conflicts of Interest
We always seek to place the interests of our clients first and to identify and manage any conflicts of interest, including those that arise from proxy voting
or engagement. Allspring acts as a fiduciary with respect to its asset management activities and therefore we must act in the best interest of our clients and address conflicts that arise.
Conflicts of interest are identified and managed through a strict and objective application of our voting policy and procedures. Allspring may have a conflict
of interest regarding a proxy to be voted upon if, for example, Allspring may have other relationships with the issuer of the proxy (e.g. the issuer may be a corporate pension fund client of Allspring). This type of conflict is generally mitigated
by the information barriers between Allspring and its affiliates and our commitment as a fiduciary to independent judgement. However, when the Allspring Proxy Governance Committee becomes aware of a conflict of interest (that gets uncovered through
the Allspring Proxy Voting Policy and Procedures), it takes additional steps to mitigate the conflict, by using any of the following methods:
1.
Instructing ISS to vote in accordance with its recommendation;
2. Disclosing the conflict to the relevant Board and obtaining its consent before voting;
3. Submitting the matter to the relevant Board to exercise its authority to vote on such matter;
4. Engaging an independent fiduciary who will direct the vote on such matter,
5. Consulting with Legal and Compliance and, if necessary, outside legal counsel for guidance on resolving the conflict of interest,
6. Voting in proportion to other shareholders (mirror voting) following consultation with the Board of the Funds if the conflict pertains to a
matter involving a portfolio holding of the Funds; or
7. Voting in other ways that are consistent with Allsprings obligation to vote in the best
interests of its clients.
Finally, Allspring is a privately-owned company and one of our owners is GTCR which owns other companies as well
known as Affiliates. The Allspring Regulatory Compliance team maintains the GTCR Affiliates list and publishes an updated list quarterly. Since the Affiliates may issue publicly traded stock and hold regular proxy meetings, Allspring manages
this potential conflict of interest by defaulting all proxy voting in the affiliates to the ISS recommendations. Allspring has no influence attributed to the decisions or the voting elections.
Vendor Oversight
The Stewardship Team monitors the ISS
proxy process against specific criteria in order to identify potential issues relating to account reconciliation, unknown and rejected ballot reviews, upcoming proxy reviews, share reconciliation oversight, etc. With respect to ISSs management
of its potential conflicts of interest with corporate issuers, ISS provides institutional clients such as Allspring with its Policy and disclosure of Significant ISS Relationships and tools to provide transparency of those relationships.
Other Provisions
Policy Review and Ad Hoc
Meetings
The Allspring Proxy Governance Committee meets at least annually to review this Policy and consider any appropriate changes. Meetings may be
convened more frequently (for example, to discuss a specific proxy agenda or proposal) as requested by the Head of Stewardship, any member of the Allspring Proxy Governance Committee, or Chief Compliance Officer. The Allspring Proxy Governance
Committee includes representation from Portfolio Management, Stewardship, Investment Analytics, Legal and Compliance.
Records Retention
The Stewardship Team will maintain the following records relating to the implementation of the Policies and Procedures:
|
|
|
A copy of these proxy voting policies and procedures; |
|
|
|
Proxy statements received for client securities (which will be satisfied by relying on ISS);
|
|
|
|
Records of votes cast on behalf of Investment Products and separate account clients (which ISS maintains on
behalf of Allspring); |
|
|
|
Records of each written client request for proxy voting records and Allsprings written response to any
client request (written or oral) for such records; and |
|
|
|
Any documents prepared by Allspring or ISS that were material to making a proxy voting decision.
|
Such proxy voting books and records shall be maintained at an office of Allspring in an easily accessible place for a period of six
years.
Compliance with Regional Regulations and Client Delegation Arrangements
U.S. Regulation
These Policies and Procedures have been
written in compliance with Rule 206(4)-6 of the Investment Advisers Act of 1940. Proxy voting records for Allsprings mutual funds are disclosed on Form N-PX
annually, as required by Section 30 and Rule 30b1-4 of the Investment Company Act of 1940, to the Securities and Exchange Commission (SEC).
E.U. Regulation
These Policies and Procedures have been
established, implemented and maintained, as they apply to Allspring Luxembourg and Allspring Global Investments (UK) Limited, in accordance the EU Shareholder Rights Directive II (EU 2017/828) (SEF II). Specific to Allspring Luxembourg, the Policies
and Procedures also comply with Article 23 of CSSF Regulation No. 10-4, and the CSSF Circular 18/698.
Disclosure of policies and procedures
A summary of the proxy voting policy and procedures are disclosed on Allsprings website.
In addition, Allspring will disclose to its separate clients (i.e. proxy votes for assets managed on behalf of Allsprings other clients as per a
delegation arrangement) a summary description of its proxy voting policy and procedures via mail.
Disclosure of proxy voting results
Allspring will provide to clients proxy statements and any records as to how Allspring voted proxies on behalf of clients, quarterly or upon request. For
assistance, clients may contact their relationship manager, call Allspring at 1-866-259-3305 or
e-mail: allspring.clientadministration@allspring-global.com to request a record of proxies voted on their behalf.
Allspring will publish high-level proxy voting statistics in periodic reports. However, except as otherwise required by law, Allspring has a general policy of
not disclosing to any issuer specific or third party how its separate account client proxies are voted.
Approved by the Allspring Proxy Governance
Committee: March 2023
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
PORTFOLIO MANAGERS (as of August 31, 2023)
Chris Lee,
CFA
Senior Portfolio Manager, Plus Fixed Income - Chris Lee is a senior portfolio manager for the Plus Fixed Income team at Allspring
Global Investments. He joined Allspring from its predecessor firm, Wells Fargo Asset Management (WFAM). He also served as head of high-yield trading for the WFAM U.S. High Yield Fixed Income team. Prior to this, he served as a managing director, co-portfolio manager, and head of trading for Silver Lake Credit. Preceding this, he was a senior analyst and portfolio manager for the U.S. High Yield team at WFAM. Earlier in his career, Chris
served as a senior research analyst with Wells Fargos Proprietary Investment Group. He began his investment industry career in 2001. Chris earned a bachelors degree in political science from University of California, Irvine, where he
graduated magna cum laude. He also earned a masters degree in business administration from the Graduate School of Management at the University of California, Davis. Chris is a graduate of Wells Fargos Credit Management Training Program.
He has earned the right to use the Chartered Financial Analyst® (CFA®) designation.
Kent Newcomb
Mr. Newcomb is a portfolio manager for
the Allspring Global Investments Compass Equity team. In this capacity, he manages the managed diversified stock income plan portfolio. Kent began his investment industry career as an equity analyst for A. G. Edwards. Prior to assuming his current
duties, he had research responsibility for the firms DSIP list and the industrials and utilities sectors. He earned a bachelors degree in economics from Northwestern University and a masters degree in business administration with
an emphasis in finance from Washington University. Kent has earned the right to use the Chartered Financial Analyst® (CFA®)
designation and is a member of CFA Institute and CFA Society St. Louis.
Michael Schueller, CFA
Senior Portfolio Manager, Plus Fixed Income - Michael (Mike) Schueller is a senior portfolio manager for the Plus Fixed Income team at Allspring
Global Investments. He joined Allspring from its predecessor firm, Wells Fargo Asset Management (WFAM). He joined WFAM as a senior investment research analyst from Strong Capital Management, where he held a similar position. Mike rejoined Strong in
2000, having left the firm to start a trust department for Community Bank & Trust in Sheboygan, Wisconsin. Before that, he served as associate counsel for Strongs legal department. Prior to this, Mike practiced law with Reinhart,
Boerner, Van Deuren, Norris & Rieselbach, S.C., in Milwaukee, specializing in corporate reorganizations, mergers, and acquisitions. He began his investment industry career in 1998. Mike earned a bachelors degree in economics from the
University of Minnesota and a law degree from the University of Wisconsin, Madison. He has earned the right to use the Chartered Financial Analyst® (CFA®) designation.
Jack Spudich, CFA
Mr. Spudich is a senior portfolio manager and team leader of the ALLSPRING GLOBAL INVESTMENTS Compass Equity team. Before joining predecessor firm A. G.
Edwards, where he began his investment industry career, Jack was a certified public accountant and audit manager for an international accounting firm. He earned a bachelors degree in accountancy from the University of Illinois and has earned
the right to use the Chartered Financial Analyst® (CFA®) designation. Jack is also a member of CFA Institute and CFA Society St.
Louis.
OTHER FUNDS AND ACCOUNTS MANAGED
The following
table provides information about the registered investment companies (including the Fund) and other pooled investment vehicles and accounts managed by the portfolio manager of the Fund as of the Funds most recent fiscal year ended August
31, 2023.
Chris Lee
|
|
|
|
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
7 |
|
|
|
5 |
|
|
|
24 |
|
Total assets of above accounts (millions) |
|
$ |
3,184.69 |
|
|
$ |
227.58 |
|
|
$ |
293.44 |
|
|
|
|
performance based fee accounts: |
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Kent Newcomb
|
|
|
|
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
2 |
|
|
|
0 |
|
|
|
1 |
|
Total assets of above accounts (millions) |
|
$ |
425.46 |
|
|
$ |
0 |
|
|
$ |
0.11 |
|
|
|
|
performance based fee accounts: |
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Michael Schueller
|
|
|
|
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
14 |
|
|
|
6 |
|
|
|
25 |
|
Total assets of above accounts (millions) |
|
$ |
9,952.29 |
|
|
$ |
336.11 |
|
|
$ |
294.38 |
|
|
|
|
performance based fee accounts: |
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Jack Spudich
|
|
|
|
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
2 |
|
|
|
0 |
|
|
|
1 |
|
Total assets of above accounts (millions) |
|
$ |
425.46 |
|
|
$ |
0 |
|
|
$ |
0.11 |
|
|
|
|
performance based fee accounts: |
|
|
|
|
|
|
|
|
|
I manage the following types of accounts: |
|
Other Registered Investment Companies |
|
|
Other Pooled Investment Vehicles |
|
|
Other Accounts |
|
Number of above accounts |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total assets of above accounts (millions) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
MATERIAL CONFLICTS OF INTEREST
The Portfolio Managers face inherent conflicts of interest in
their day-to-day management of the Funds and other accounts because the Funds may have different investment objectives, strategies and risk profiles than the
other accounts managed by the Portfolio Managers. For instance, to the extent that the Portfolio Managers manage accounts with different investment strategies than the Funds, they may from time to time be inclined to purchase securities, including
initial public offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the Portfolio Managers may have different fee structures, including performance fees, which are or have the potential to be higher or lower,
in some cases significantly higher or lower, than the fees paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio Managers to allocate more favorable trades to the higher-paying accounts.
To minimize the effects of these inherent conflicts of interest, the Sub-Adviser has adopted and implemented
policies and procedures, including brokerage and trade allocation policies and procedures, that it believes address the potential conflicts associated with managing portfolios for multiple clients and are designed to ensure that all clients are
treated fairly and equitably. Accordingly, security block purchases are allocated to all accounts with similar objectives in a fair and equitable manner. Furthermore, the Sub-Adviser has adopted a
Code of Ethics under Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of1940 (the Advisers Act) to address
potential conflicts associated with managing the Funds and any personal accounts the Portfolio Managers may maintain.
Allspring Investments.
Allspring Global Investments, LLC (Allspring Investments) Portfolio Managers often provide investment management for separate accounts advised in
the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest over various issues such as trade allocation, fee disparities and research acquisition,
Allspring Investments has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of interest are minimized.
The Portfolio Managers face inherent conflicts of interest in
their day-to-day management of the Funds and other accounts because the Funds may have different investment objectives, strategies and risk profiles than the
other accounts managed by the Portfolio Managers. For instance, to the extent that the Portfolio Managers manage accounts with different investment strategies than the Funds, they may from time to time be inclined to purchase securities, including
initial public offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the Portfolio Managers may have different fee structures, including performance fees, which are or have the potential to be higher or lower,
in some cases significantly higher or lower, than the fees paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio Managers to allocate more favorable trades to the higher-paying accounts.
To minimize the effects of these inherent conflicts of interest, Allspring Investments has adopted and implemented policies and procedures, including
brokerage and trade allocation policies and procedures, that they believe address the potential conflicts associated with managing portfolios for multiple clients and are designed to ensure that all clients are treated fairly and equitably.
Accordingly, security block purchases are allocated to all accounts with similar objectives in a fair and equitable manner. Furthermore, Allspring Investments has adopted a Code of Ethics under
Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940 (the Advisers Act) to address potential conflicts
associated with managing the Funds and any personal accounts the Portfolio Managers may maintain.
COMPENSATION
The
Portfolio Managers were compensated by their employing sub-adviser from the fees the Adviser paid the Sub-Adviser using the following compensation
structure:
Allspring Investments.
The compensation
structure for Allspring Investments Portfolio Managers includes a competitive fixed base salary plus variable incentives, payable annually and over a deferred period. Allspring Investments participates in third party investment management
compensation surveys for market-based compensation information to help support individual pay decisions and to ensure our compensation is aligned with the marketplace. In addition to surveys, Allspring Investments also considers prior professional
experience, tenure, seniority, and a Portfolio Managers team size, scope, and assets under management when determining his/her total compensation. In addition, Portfolio Managers who meet the eligibility requirements may participate in our
401(k) plan that features a limited matching contribution. Eligibility for and participation in this plan is on the same basis for all employees.
Allspring Investments investment incentive program plays an important role in aligning the interests of its Portfolio Managers, investment team members,
clients, and shareholders. Incentive awards for Portfolio Managers are determined based on a review of relative investment and business/team performance. Investment performance is generally evaluated for 1, 3, and 5 year performance results, with a
predominant weighting on the 3 and 5 year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment style.
Once
determined, incentives are awarded to Portfolio Managers annually, with a portion awarded as annual cash and a portion awarded as a deferred incentive. The long-term portion of incentives generally carry
a pro-rated vesting schedule over a 3 year period. For many of its Portfolio Managers, Allspring Investments further requires a portion of their annual long-term award be allocated directly into each
strategy they manage through a deferred compensation vehicle. In addition, investment team members who are eligible for long term awards also have the opportunity to invest up to 100% of their awards into investment strategies they support (through
a deferred compensation vehicle).
As an independent firm, approximately 20% of Allspring Group Holdings, LLC (of which Allspring Investments is a
subsidiary) is owned by employees, including Portfolio Managers.
BENEFICIAL OWNERSHIP OF THE FUND
The following table shows for each Portfolio Manager the dollar value of the Fund beneficially owned by the Portfolio Manager as of August 31, 2023:
|
|
|
|
|
Chris Lee |
|
$ |
10,001-50,000 |
|
Kent Newcomb |
|
|
None |
|
Michael Schueller |
|
|
None |
|
Jack Spudich |
|
|
None |
|
ITEM 9. PURCHASES OF EQUITY SECURITIES
BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
|
|
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|
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|
|
|
|
|
|
|
|
Period |
|
(a) Total Number of Shares Purchased |
|
|
(b) Average Price Paid per Share |
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
|
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
|
9/1/2022 to 9/30/2022 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
928,809 |
|
10/1/2022 to 10/31/22 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
928,809 |
|
11/1/2022 to 11/30/2022 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
928,809 |
|
12/1/2022 to 12/31/2022 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
928,809 |
|
1/1/2023 to 1/31/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
2/1/2023 to 2/28/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
3/1/2023 to 3/31/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
4/1/2023 to 4/30/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
5/1/2023 to 5/31/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
6/1/2023 to 6/30/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
7/1/2023 to 7/31/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
8/1/2023 to 8/31/2023 |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
0 |
|
|
|
0.00 |
|
|
|
0 |
|
|
|
929,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On November 16, 2022, the Fund announced a renewal of its open-market share repurchase program (the Buyback
Program). Under the renewed Buyback Program, the Fund may repurchase up to 5% of its outstanding shares in open market transactions during the period beginning on January 1, 2023 and ending on December 31, 2023. The Funds Board
of Trustees has delegated to Allspring Funds Management, LLC, the Funds adviser, discretion to administer the Buyback Program, including the determination of the amount and timing of repurchases in accordance with the best interests of the
Fund and subject to applicable legal limitations.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board of Trustees that have been
implemented since the registrants last provided disclosure in response to the requirements of this Item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that the Allspring Utilities and High Income Fund disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the registrant is made known to them by the appropriate persons, based on their
evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the
registrants internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year of the period
covered by this report that materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
ITEM 12. DISCLOSURES OF SECURITIES LENDING ACTIVITIES
FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. EXHIBITS
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.
|
|
|
Allspring Utilities and High Income Fund |
|
|
By: |
|
/s/ Andrew Owen |
|
|
Andrew Owen |
|
|
President |
|
|
Date: |
|
October 26, 2023 |
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 date indicated.
|
|
|
Allspring Utilities and High Income Fund |
|
|
By: |
|
/s/ Andrew Owen |
|
|
Andrew Owen |
|
|
President |
|
|
Date: |
|
October 26, 2023 |
|
|
|
By: |
|
/s/ Jeremy DePalma |
|
|
Jeremy DePalma |
|
|
Treasurer |
|
|
Date: |
|
October 26, 2023 |
Exhibit 13(a)(1)
Allspring Funds Trust
Allspring Master Trust
Allspring Variable Trust
Allspring Global Dividend Opportunity Fund
Allspring Income Opportunities Fund
Allspring Multi-Sector Income Fund
Allspring Utilities and High-Income Fund
Joint Code of Ethics for Principal Executive Officer and Senior Financial Officers
I. |
Covered Officers / Purpose of the Code |
This Code of Ethics (Code) of Allspring Funds Trust, Allspring Master Trust and Allspring Variable Trust, Allspring Global Dividend
Opportunity Fund, Allspring Income Opportunities Fund, Allspring Multi-Sector Income Fund and Allspring Utilities and High Income Fund (collectively, the Trusts and each, a Trust) applies to each Trusts Principal
Executive Officer, Principal Financial Officer and any other Trust officers listed on Exhibit A (the Covered Officers) for the purpose of promoting:
|
|
|
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships; |
|
|
|
full, fair, accurate, timely and understandable financial disclosure in reports and documents that a Trust files
with, or submits to, the Securities and Exchange Commission (SEC) and in other public communications made by the Trust; |
|
|
|
compliance with applicable laws and governmental rules and regulations; |
|
|
|
the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the
Code; and |
|
|
|
accountability for adherence to the Code. |
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest.
II. |
Covered Officers Should Handle Ethically Both Actual and Apparent Conflicts of Interest
|
Overview. A conflict of interest occurs when a Covered Officers private
interest interferes with the interests of, or his or her service to, a Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her
position with the Trust. Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (Investment Company
Act) and the Investment Advisers Act of 1940 (Investment Advisers Act). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Trust
because of their status as affiliated persons of the Trust. The compliance programs and procedures of the Trust and Allspring Funds Management, LLC (the Adviser) are designed to prevent, or identify and correct, violations of
these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise
from, or as a result of, the contractual relationship between the Trust and the Adviser, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their
duties (whether formally for the Trust or for the Adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Adviser and the Trust. The participation of the Covered Officers in such
activities is inherent in the contractual relationship between the Trust and the Adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Trust. Each Covered Officer recognizes that, as an officer of
a Trust, he or she has a duty to act in the best interests of the Trust and its shareholders. If a Covered Officer believes that his or her responsibilities as an officer or employee of the Adviser are likely to materially compromise his or her
objectivity or his or her ability to perform the duties of his or her role as an officer of the Trust, he or she should consult with the Chief Legal Officer. Under appropriate circumstances, a Covered Officer should also consider whether to present
the matter to the Board. In addition, it is recognized by the Trusts Board of Trustees (Board) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment
Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Officer should not be placed improperly before the interest of the Trust.
* * * *
Each Covered Officer must:
|
|
|
not use his or her personal influence or personal relationships improperly to influence investment decisions or
financial reporting by a Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; |
|
|
|
not cause the Trust to take action, or fail to take action, for the individual personal benefit of the Covered
Officer rather than the benefit of a Trust; |
|
|
|
not use material non-public knowledge of portfolio transactions made or
contemplated for the Trust to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; |
|
|
|
not retaliate against any other Covered Officer or any employee of a Trust or its affiliated persons for reports
of potential violations that are made in good faith; and |
|
|
|
not engage in personal, business or professional relationships or dealings that would impair his or her
independence of judgment or adversely affect the performance of his or her duties in the best interests of the Trust and their shareholders. |
There are some conflict of interest situations that should always be approved in advance by the Chief Legal Officer of the Trust (the
Chief Legal Officer) if material. Examples of these include:
|
|
|
service as a director on the board of any public or private for-profit
company (provided, however, that a Covered Officer who is employed by another company (e.g., Allspring) may serve as a director of such company or any entity, controlling, controlled by, or under common control with, such company);
|
|
|
|
acquiring a financial interest in any company that provides services to the Trust (provided, however, that a
Covered Officer who is employed by another company (e.g., Allspring) may have an ownership interest in his or her employer or the employers parent company); |
|
|
|
the receipt of any entertainment or gifts from any person or company with which the Trust has current or
prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; |
|
|
|
any consulting or employment relationship with any of the Trusts service providers, other than with the
primary employer of the Covered Officer; and |
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|
|
a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trust for
effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officers primary employment, such as compensation or equity ownership. |
III. |
Disclosure and Compliance |
Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Trust.
Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Trust to others, whether within or
outside the Trust, including to the Board and the Trusts auditors, and to governmental regulators and self-regulatory organizations.
Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of
the Trust and the Adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Trust files with, or submits to, the SEC and in other public communications made by the Trust.
It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules
and regulations.
Each Covered Officer should, consistent with his or her responsibilities, exercise appropriate supervision over and
assist relevant Trust service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner.
Each Covered Officer is responsible for the accuracy of the records and reports that he or she is responsible for maintaining. The books and
records of the Trust shall meet the highest standards and accurately reflect the true nature of the transactions they record. The Covered Officers must not create false or misleading documents or accounting, financial or electronic records for any
purpose, and must not direct any other person to do so. If a Covered Officer becomes aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information,
he shall promptly report it to Chief Legal Officer for a determination as to what, if any, corrective action is necessary or appropriate.
No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in a
Trusts books or records for any reason. No disbursement of a Trusts assets shall be made without adequate supporting documentation or for any purpose other than as described in the Trusts documents or contracts.
A Trust will maintain and preserve for a period of not less than six (6) years from the date
such action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Board: (i) that provided the basis for any amendment or waiver to this Code, and (ii) relating to any
violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the Board.
IV. |
Reporting and Accountability |
Each Covered Officer must:
|
|
|
upon adoption of the Code (or thereafter upon becoming a Covered Officer), affirm in writing (in the form
attached to this Code) to the Board that he or she has received, read, and understands the Code; |
|
|
|
annually thereafter affirm in writing (in the form attached to this Code) to the Board that he or she has
complied with the requirements of the Code; and |
|
|
|
notify the Chief Legal Officer of the Trust promptly if he or she knows of any violation of this Code. Failure to
do so is itself a violation of this Code. |
The Chief Legal Officer is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. While the Chief Legal Officer in authorized to interpret this Code, an approval of a situation that is expressly
prohibited by this Code is deemed to be a waiver and can be approved only by the Board.
The Trust will follow these
procedures in investigating and enforcing this Code:
|
|
|
the Chief Legal Officer will take all appropriate action to investigate any potential violations reported to him
or her; |
|
|
|
if, after such investigation, the Chief Legal Officer believes that no violation has occurred, the Chief Legal
Officer is not required to take any further action; |
|
|
|
any matter that the Chief Legal Officer believes is a violation will be reported to the Board;
|
|
|
|
if the Board concurs that a violation has occurred, it will consider appropriate action, which may include review
of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Adviser; or a recommendation to dismiss the Covered Officer; |
|
|
|
the Board will be responsible for granting waivers, as appropriate (a waiver is the approval of a
situation that is expressly prohibited by this Code); and |
|
|
|
any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.
|
V. |
Other Policies and Procedures |
This Code shall be the sole code of ethics adopted by the Trusts for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and
forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Trusts or the Adviser govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they
are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The codes of ethics adopted by the Trusts and the Adviser under Rule 17j-1 under the Investment Company
Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a
majority of independent Trustees.
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected
accordingly. Except upon request of the SEC or another regulatory agency, or as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than Board and its counsel.
The Code is intended solely for the internal use by each Trust and does not constitute an admission, by or on behalf of any Trust, as to any
fact, circumstance, or legal conclusion.
IX. |
Disclosure of Code of Ethics to the Public |
Pursuant to Item 2(f) of Form N-CSR the registrant is required to disclose the Code of Ethics per one
of the methods listed below:
|
(1) |
File with the Commission, pursuant to Item 13(a)(1), a copy of its code of ethics that applies to the
registrants principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as an exhibit to its annual report on this Form
N-CSR; |
|
(2) |
Post the text of such code of ethics on its Internet website and disclose, in its most recent report on this
Form N- CSR, its Internet address and the fact that it has posted such code of ethics on its Internet website; or |
|
(3) |
Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made. |
X. |
Interpretation of Code |
This Code will not be interpreted or applied in any manner that would violate the legal rights of any Covered Officer as an employee under
applicable law. For example, nothing in this Code or the Exhibits attached hereto prohibits or in any way restricts any Covered Officer from reporting possible violations of law or regulation to, otherwise communicating directly with, cooperating
with or providing information to
any governmental or regulatory body or any self-regulatory organization or making other disclosures that are protected under applicable law or regulations of the SEC or any other governmental or
regulatory body or self-regulatory organization. A Covered Officer does not need prior authorization of the Trust or Adviser before taking any such action and is not required to inform the Trust or Adviser if he or she chooses to take such action.
Amended: January 31, 2022
Exhibit A
Persons Covered by the Code
Andrew Owen,
President of each Trust
Jeremy DePalma, Treasurer of each Trust
Exhibit A amended: January 31, 2022
Exhibit 13(a)(2)
CERTIFICATION
I, Andrew Owen, certify that:
1. I have reviewed this report
on Form N-CSR of Allspring Utilities and High Income Fund;
2. Based on my knowledge, this report does
not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) for the registrant and have:
|
a) |
designed such disclosure controls and procedures or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared; |
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles; |
|
c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and |
|
d) |
disclosed in this report any change in the registrants internal controls over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. The registrants other certifying officers and I have disclosed to the registrants auditors and the audit committee of the registrants
Board of Trustees (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls over financial reporting.
Date: October 26, 2023
|
/s/ Andrew Owen |
Andrew Owen |
President |
Allspring Utilities and High Income Fund |
CERTIFICATION
I, Jeremy DePalma, certify that:
1. I have reviewed this
report on Form N-CSR of Allspring Utilities and High Income Fund;
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) for the registrant and have:
|
a) |
designed such disclosure controls and procedures or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared; |
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles; |
|
c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and |
|
d) |
disclosed in this report any change in the registrants internal controls over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. The registrants other certifying officers and I have disclosed to the registrants auditors and the audit committee of the registrants
Board of Trustees (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants
internal controls over financial reporting.
Date: October 26, 2023
|
/s/ Jeremy DePalma |
Jeremy DePalma |
Treasurer |
Allspring Utilities and High Income Fund |
Exhibit 13(b)
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Allspring Utilities and High Income Fund, hereby certifies, to the best of
his knowledge, that the registrants report on Form N-CSR for the year ended August 31, 2023 (the Report) fully complies with the requirements of Section 13(a) or
Section 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: October 26, 2023
|
|
|
By: |
|
/s/ Andrew Owen |
|
|
Andrew Owen |
|
|
President |
|
|
Allspring Utilities and High Income Fund |
This certification is being furnished to the Securities and Exchange Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with
the Securities and Exchange Commission.
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Allspring Utilities and High Income Fund, hereby certifies, to the best of
his knowledge, that the registrants report on Form N-CSR for the year ended August 31, 2023 (the Report) fully complies with the requirements of Section 13(a) or
Section 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: October 26, 2023
|
|
|
By: |
|
/s/ Jeremy DePalma |
|
|
Jeremy DePalma |
|
|
Treasurer |
|
|
Allspring Utilities and High Income Fund |
This certification is being furnished to the Securities and Exchange Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with
the Securities and Exchange Commission.
Exhibit 13(c)
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
March 1, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 2/28/2023 |
|
|
|
ESTIMATED SOURCES OF DISTRIBUTION |
|
|
|
|
|
PER SHARE DISTRIBUTION |
|
|
NII |
|
|
LT GAINS |
|
|
ST GAINS |
|
|
PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
|
|
0.07394 |
|
|
|
0.04481 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.02913 |
|
|
|
Current Month (%) |
|
|
100.00 |
% |
|
|
60.60 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
39.40 |
% |
|
|
Fiscal Year to Date ($) |
|
|
0.45069 |
|
|
|
0.17659 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.27410 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
DATA AS OF 1/31/2023 |
|
|
|
|
|
|
|
ANNUALIZED |
|
|
CUMULATIVE |
|
|
|
FISCAL YTD DIST |
|
|
NAV |
|
|
5-YEAR RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
|
FISCAL YTD RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
|
|
0.37675 |
|
|
|
11.93 |
|
|
|
5.77 |
% |
|
|
7.53 |
% |
|
|
-4.66 |
% |
|
|
3.16 |
% |
1 |
As a percentage of 1/31 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the
funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
April 3, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 3/31/2023 |
|
|
|
ESTIMATED SOURCES OF DISTRIBUTION |
|
|
|
|
|
PER SHARE DISTRIBUTION |
|
|
NII |
|
|
LT GAINS |
|
|
ST GAINS |
|
|
PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
|
|
0.07342 |
|
|
|
0.04998 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.02344 |
|
|
|
Current Month (%) |
|
|
100.00 |
% |
|
|
68.10 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
31.90 |
% |
|
|
Fiscal Year to Date ($) |
|
|
0.52411 |
|
|
|
0.22657 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.29754 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 2/28/2023 |
|
|
|
|
|
|
|
ANNUALIZED |
|
|
CUMULATIVE |
|
|
|
FISCAL YTD DIST |
|
|
NAV |
|
|
5-YEAR RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
|
FISCAL YTD RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
|
|
0.45069 |
|
|
|
11.17 |
|
|
|
5.17 |
% |
|
|
8.14 |
% |
|
|
-10.10 |
% |
|
|
4.03 |
% |
1 |
As a percentage of 2/28 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to
the funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
May 1, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 4/30/2023 |
|
|
|
ESTIMATED SOURCES OF DISTRIBUTION |
|
|
|
|
|
PER SHARE DISTRIBUTION |
|
|
NII |
|
|
LT GAINS |
|
|
ST GAINS |
|
|
PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
|
|
0.07291 |
|
|
|
0.00127 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.07164 |
|
|
|
Current Month (%) |
|
|
100.00 |
% |
|
|
1.70 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
98.30 |
% |
|
|
Fiscal Year to Date ($) |
|
|
0.59702 |
|
|
|
0.22784 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.36918 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 3/31/2023 |
|
|
|
|
|
|
|
ANNUALIZED |
|
|
CUMULATIVE |
|
|
|
FISCAL YTD DIST |
|
|
NAV |
|
|
5-YEAR RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
|
FISCAL YTD RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
|
|
0.52411 |
|
|
|
11.55 |
|
|
|
5.41 |
% |
|
|
7.81 |
% |
|
|
-6.40 |
% |
|
|
4.54 |
% |
1 |
As a percentage of 3/31 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the
funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
June 1, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 5/31/2023 |
|
|
|
ESTIMATED SOURCES OF DISTRIBUTION |
|
|
|
|
|
PER SHARE DISTRIBUTION |
|
|
NII |
|
|
LT GAINS |
|
|
ST GAINS |
|
|
PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
|
|
0.07194 |
|
|
|
0.07194 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
Current Month (%) |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
Fiscal Year to Date ($) |
|
|
0.66896 |
|
|
|
0.29978 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.36918 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 4/30/2023 |
|
|
|
|
|
|
|
ANNUALIZED |
|
|
CUMULATIVE |
|
|
|
FISCAL YTD DIST |
|
|
NAV |
|
|
5-YEAR RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
|
FISCAL YTD RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
|
|
0.59702 |
|
|
|
11.65 |
|
|
|
5.65 |
% |
|
|
7.73 |
% |
|
|
-4.94 |
% |
|
|
5.12 |
% |
1 |
As a percentage of 3/31 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the
funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
July 3, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 6/30/2023 |
|
|
|
ESTIMATED SOURCES OF DISTRIBUTION |
|
|
|
|
|
PER SHARE DISTRIBUTION |
|
|
NII |
|
|
LT GAINS |
|
|
ST GAINS |
|
|
PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
|
|
0.07097 |
|
|
|
0.01895 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.05202 |
|
|
|
Current Month (%) |
|
|
100.00 |
% |
|
|
26.70 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
73.30 |
% |
|
|
Fiscal Year to Date ($) |
|
|
0.73993 |
|
|
|
0.31873 |
|
|
|
0.00000 |
|
|
|
0.00000 |
|
|
|
0.42120 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATA AS OF 5/31/2023 |
|
|
|
|
|
|
|
ANNUALIZED |
|
|
CUMULATIVE |
|
|
|
FISCAL YTD DIST |
|
|
NAV |
|
|
5-YEAR RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
|
FISCAL YTD RETURN ON NAV |
|
|
FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
|
|
0.66896 |
|
|
|
9.97 |
|
|
|
4.84 |
% |
|
|
8.97 |
% |
|
|
-9.93 |
% |
|
|
6.71 |
% |
1 |
As a percentage of 5/31 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the
funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
Allspring Utilities and High Income Fund
(ERH) CUSIP 94987E109
IMPORTANT
NOTICE TO SHAREHOLDERS
August 1, 2023 This Notice provides information about the sources of the Funds monthly distributions. You should
not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of
capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not
be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not
being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid in capital. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year
that will tell you how to report these distributions for federal income tax purposes.
The following table provides an estimate of the Funds
distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution
throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
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DATA AS OF 7/31/2023 |
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ESTIMATED SOURCES OF DISTRIBUTION |
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PER SHARE DISTRIBUTION |
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NII |
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LT GAINS |
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ST GAINS |
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PAID IN CAPITAL |
|
ERH (FYE 8/31) |
|
Current Month ($) |
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|
0.07014 |
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0.00970 |
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0.00000 |
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0.00000 |
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0.06044 |
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Current Month (%) |
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100.00 |
% |
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13.80 |
% |
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|
0.00 |
% |
|
|
0.00 |
% |
|
|
86.20 |
% |
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|
Fiscal Year to Date ($) |
|
|
0.81007 |
|
|
|
0.32843 |
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|
0.00000 |
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0.00000 |
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0.48164 |
|
The following table provides information regarding distributions and total return performance over various time periods. This
information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
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DATA AS OF 6/30/2023 |
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ANNUALIZED |
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CUMULATIVE |
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FISCAL YTD DIST |
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NAV |
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5-YEAR RETURN ON NAV |
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FISCAL YTD DIST RATE ON NAV1 |
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FISCAL YTD RETURN ON NAV |
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FISCAL YTD DIST RATE ON NAV1 |
|
ERH (FYE 8/31) |
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0.73993 |
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11.09 |
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4.98 |
% |
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|
8.04 |
% |
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|
-8.23 |
% |
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|
6.67 |
% |
1 |
As a percentage of 6/30 NAV |
Additional Disclosures about the Allspring Closed-End Funds
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders
of the fund at an annual minimum fixed rate of 7.0%, based on the funds average monthly net asset value (NAV) per share over the prior 12 months. Under the managed distribution plan, distributions are sourced from income and also may be
sourced from paid-in capital and/or capital gains. The funds distributions in any period may be more or less than the net return earned by the fund on its investments and therefore should not be used as
a measure of performance or confused with yield or income. Distributions in excess of fund returns will cause the funds NAV to decline. Investors should not draw any conclusions about the funds investment performance from the amount of
its distribution or from the terms of its managed distribution plan.
The quoted distribution rate is a figure that uses the funds previous
distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Allspring Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The funds investment objective is to seek a high level of current income and moderate capital growth with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend distributions in the current year will be made after year-end.
The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a funds investment experience during the remainder of the fiscal year and may be subject to change based on tax
regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Allsprings closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through
broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the
funds net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those
directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and
unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of
its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a
revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of
common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest
rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
Allspring Global Investments is the trade name for the asset management firms of Allspring Global
Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management,
LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This
material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kindincluding a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements
provide no assurance as to the funds actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual
circumstances.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
2
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Media Inquiries:
Bradley Steiner
bradley.steiner@allspring-global.com
332-910-7873
3
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