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 811-21687
Fiduciary/Claymore Dynamic Equity Fund
(Exact name of registrant as specified in charter)
2455 Corporate West Drive, Lisle, IL 60532
(Address of principal executive offices) (Zip code)
J. Thomas Futrell
2455 Corporate West Drive, Lisle, IL 60532
(Name and address of agent for service)
Registrant's telephone number, including area code: (630) 505-3700
Date of fiscal year end: November 30
Date of reporting period: November 30, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The registrant's annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940, as amended (the "Investment
Company Act") is as follows:
ANNUAL
REPORT
November 30, 2008
FIDUCIARY/CLAYMORE|
|HCE
DYNAMIC EQUITY FUND|
Picture: Park with arch
FAMCO Logo: CLAYMORE (SM)
FIDUCIARY ASSET MANAGEMENT
|
www.claymore.com/hce
... your path to the LATEST,
most up-to-date INFORMATION about the
Fiduciary/Claymore Dynamic Equity Fund
|
The shareholder report you are reading right now is just the beginning of the
story. Online at WWW.CLAYMORE.COM/HCE, you will find:
o Daily, weekly and monthly data on share prices, distributions, and more
o Portfolio overviews and performance analyses
o Announcements, press releases and special notices
o Fund and adviser contact information
Fiduciary Asset Management and Claymore are continually updating and expanding
shareholder information services on the Fund's website, in an ongoing effort to
provide you with the most current information about how your Fund's assets are
managed, and the results of our efforts. It is just one more small way we are
working to keep you better informed about your investment in the Fund.
2 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
DEAR SHAREHOLDER|
This report covers the performance of the Fiduciary/Claymore Dynamic Equity Fund
(the "Fund") for the fiscal year ended November 30, 2008. This has been an
extraordinarily difficult period for all investors and we are disappointed to
report that the Fund performed very poorly.
The Fund's investment objective is to provide a high level of current income and
current gains and, to a lesser extent, capital appreciation. Fiduciary Asset
Management, LLC ("FAMCO"), the Fund's sub-adviser, seeks to achieve that
objective by investing in a diversified portfolio of equity securities and
employing a strategy of writing (selling) covered call options on a substantial
portion of the securities in the Fund's portfolio.
FAMCO manages a wide range of institutional products and is one of the leading
managers of hedged equity investments. As of November 30, 2008, Fiduciary
managed or supervised approximately $12.9 billion in assets.
All Fund returns cited - whether based on net asset value ("NAV") or market
price - assume the reinvestment of all distributions. For the 12-month period
ending November 30, 2008, the Fund provided a total return based on market price
of -79.94% and a return of -75.49% based on NAV. As of November 30, 2008, the
Fund's market price of $3.03 represented a discount of 31.60% to the NAV of
$4.43.
The Fund paid quarterly dividends of $0.425 per share on February 29, 2008, and
May 31, 2008. A dividend of $0.390 per share was paid on August 29, 2008, and a
dividend of $0.150 per share was paid on November 28, 2008. The November
dividend represents an annualized distribution rate of 19.8%, based on the
Fund's last closing market price of $3.03 as of November 30, 2008. Past
performance is not a guarantee of future results. The Fund's dividend was
modified in an effort to provide a greater balance between the ability to
generate a high level of current income, including current gains, and capital
appreciation.
In December 2008, after the end of the Fund's fiscal year, the Fund's Board of
Trustees (the "Board") adopted a proposal to liquidate the Fund. Subject to
shareholder approval of the plan of liquidation and dissolution (the
"Liquidation Plan") adopted by the Board, the Fund plans to sell its assets,
discharge its liabilities and distribute the net proceeds to shareholders.
After considering the relatively small asset size of the Fund compared to
current expenses, the historic and current discounts to net asset value at which
the Fund's shares have traded and several alternatives to liquidation, the
Board, on the recommendation of Fund Management, concluded that it would be in
the best interests of the Fund and its shareholders to liquidate and dissolve
the Fund.
Annual Report | November 30, 2008 | 3
HCE | Fiduciary/Claymore Dynamic Equity Fund | Dear Shareholder continued
The Board plans to submit a proposal to shareholders to approve the Liquidation
Plan at a special meeting of shareholders (the "Special Meeting"). If the
proposal is approved by shareholders, the Fund will commence the orderly
liquidation of its assets in accordance with the Liquidation Plan. Following the
liquidation of the Fund's assets, the Fund will pay one or more liquidating
distributions to shareholders of record as of the effective date of the
Liquidation Plan. There can be no assurance that the necessary percentage of the
shareholders of the Fund will vote in favor of the proposal to approve the
Liquidation Plan.
Any solicitation of proxies by the Fund in connection with the Special Meeting
will be made only pursuant to separate proxy materials filed with the U.S.
Securities and Exchange Commission (the "SEC") under applicable federal
securities laws and mailed with a proxy card to each shareholder entitled to
vote at the Special Meeting. Because the proxy materials will contain important
information, including a more detailed description of the Liquidation Plan,
shareholders are urged to read them carefully when they become available.
Sincerely,
/s/J. Thomas Futrell
J. Thomas Futrell
Fiduciary/Claymore Dynamic Equity Fund
January 5, 2009
|
4 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
QUESTIONS & ANSWERS|
The Fiduciary/Claymore Dynamic Equity Fund (the "Fund") is managed by Fiduciary
Asset Management, LLC ("FAMCO"). In the following interview, Portfolio Manager
Charles D. Walbrandt, CFA, discusses the economic and market environment, the
structure of the portfolio and how the Fund performed during the fiscal year
ended November 30, 2008.
WILL YOU REMIND US OF THIS FUND'S OBJECTIVE AND
HOW YOU PURSUE IT?
The Fund's investment objective is to provide a high level of current income and
current gains and, to a lesser extent, capital appreciation. We seek to achieve
the Fund's investment objective by investing in a diversified portfolio of
equity securities and writing (selling) call options on a substantial portion of
the securities in the portfolio.
Under normal market conditions, we invest at least 80% of total assets in a
diversified portfolio of common stock of U.S. corporations and U.S.
dollar-denominated equity securities of foreign issuers, in each case that are
traded on U.S. securities exchanges, and write (sell) covered call options on a
substantial portion of the equity securities held in the Fund's portfolio. The
extent of option writing activity depends upon market conditions and our ongoing
assessment of the attractiveness of writing call options on the Fund's stock
holdings. We seek to produce a high level of current income and current gains
primarily from the option premiums received from writing call options and from
dividends received on the equity securities held in the Fund's portfolio and, to
a lesser extent, capital appreciation in the value of equity securities
underlying such covered call options. Writing covered call options involves a
tradeoff between the option premium received and reduced participation in
potential future stock price appreciation. Based on our dynamic option strategy
and our evaluation of market conditions, we may write covered call options on
varying percentages of the Fund's common stock holdings with varying option
strike prices in relation to the market value of the underlying common stock, as
long as the overall portfolio remains substantially covered per the Prospectus.
PLEASE TELL US ABOUT THE ECONOMIC AND MARKET ENVIRONMENT OVER THE LAST YEAR.
In the mid-year report for the Fund, we described the six-month period ended May
31, 2008, as a time of economic uncertainty and turmoil in capital markets.
Since that time, there has been pronounced deterioration in equity and debt
markets, not only in the U.S. but throughout the world. As the year progressed,
credit markets became so intolerant of risk that they were essentially frozen.
Conditions became even worse in September, when Lehman Brothers Holdings Inc.
filed for bankruptcy, after U.S. Treasury Secretary Henry Paulson and Federal
Reserve Chairman Ben Bernanke had been criticized by Congress for rescuing other
failing financial institutions rather than attempting to provide relief to
homeowners with unaffordable mortgages. After Lehman's failure, which appeared
to have a dramatically negative effect on capital markets, lending essentially
ceased, as financial institutions exhibited no confidence in one another.
During September and October, equity markets suffered a double shock. A dramatic
drop in equity prices in these months was accompanied by an unprecedented
increase in implied volatility(1). This spike in volatility adversely impacted
positions where the Fund was short (selling) volatility.
The Standard & Poor's 500 Index ("S&P 500"), which is generally regarded as a
good indicator of the broad stock market, had a return of -39.49% for the
12-month period ended November 30, 2008.(2) All ten industry sectors within the
S&P 500 had negative returns for this period; the weakest sector was financials,
down more than 50%, while the strongest sector, consumer staples, was down just
over 15%.
PLEASE TELL US ABOUT THE FUND'S PERFORMANCE AND DISTRIBUTIONS DURING THIS
PERIOD.
All Fund returns cited--whether based on net asset value ("NAV") or market
price-- assume the reinvestment of all distributions. For the 12-month period
ending November 30, 2008, the Fund returned -79.94% on a market price basis. On
an NAV basis, the return was -75.49%. By comparison, the S&P 500 returned
-39.49%, and the CBOE S&P 500 Buy-Write Index ("BXM") returned -30.12%.(3)
The closing market price of the Fund's shares as of November 30, 2008, was
$3.03, representing a discount of 31.60% to the Fund's NAV of $4.43. On November
30, 2007, the Fund's market price closed at $17.08, which represented a discount
of 14.47% to the NAV of $19.97.
The market value of the Fund's shares fluctuates from time to time, and it may
be higher or lower than the Fund's NAV.
The Fund paid quarterly dividends of $0.425 per share on February 29, 2008, and
May 31, 2008. The Fund also paid a quarterly dividend of $0.390 per share on
August 29, 2008, and $0.150 per share on November 28, 2008. The November
dividend represents an annualized distribution rate of 19.8%, based on the
Fund's last closing market price of $3.03 as of November 30, 2008. Past
performance is not a guarantee of future results.
Indices are unmanaged and it is not possible to invest directly in an index.
(1) Market volatility is generally measured by the Chicago Board Options
Exchange Volatility Index (the "VIX Index", which measures the implied
volatility of S&P 500 index options.
(2) The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted
index of 500 stocks. The index is designed to measure performance of the
broad domestic economy through changes in the aggregate market value of 500
stocks representing all major industries.
(3) The CBOE S&P 500 Buy-Write Index is a benchmark index designed to show the
hypothetical performance of a portfolio that purchases all the constituents
of the S&P 500 Index and then sells at-the-money (meaning same as purchase
price) calls of one-month duration against those positions.
Annual Report | November 30, 2008 | 5
HCE | Fiduciary/Claymore Dynamic Equity Fund | Questions & Answers continued
The Fund's dividend was modified in an effort to provide a greater balance
between the ability to generate a high level of current income, including
current gains, and capital appreciation.
WHICH INVESTMENT DECISIONS OR STRATEGIES HAD THE GREATEST EFFECT ON THE FUND'S
PERFORMANCE?
The Fund's investment objective is to provide a high level of current income and
current gains and, to a lesser extent, capital appreciation. The first objective
of the Fund's covered call program is to support the Fund's distributions
through premiums earned on call options sold. The option strategy also has the
potential to help the Fund capture as much upside potential as possible in a
market that is moving upward and help protect on the downside in a downward
trending market.
We also have the flexibility to vary our hedge ratio. Hedging techniques
generally have two purposes: to attempt to reduce volatility and to help or seek
to prevent dramatic declines in the portfolio. In sectors that we believe will
perform well, we want to have more of the portfolio unhedged. In more volatile
or downward trending markets, we want to be fully hedged.
During the fiscal year ended November 30, 2008, and most particularly in the
months of September and October, the Fund's option and hedge strategies had an
extremely negative effect on performance, overwhelming the performance of the
equity portfolio that was in line with the S&P 500.
At mid-year, we reminded shareholders that the Fund's offering documents
authorize the use of financial leverage, which we believe has the potential to
enhance the Fund's performance. The purpose of leverage (borrowing) is to fund
the purchase of additional securities that help provide increased income and/or
potentially greater appreciation to common shareholders than could be achieved
from an unleveraged portfolio.
In September 2008, the Fund secured a line of credit and invested the proceeds
in an index-based covered call option strategy. As the market weakened and
became more volatile, we reduced the exposure to the covered call-on-call option
strategy; however, the Fund experienced additional volatility from positions
that were still held. The line of credit was repaid in October 2008, and there
was no outstanding balance as of the end of the Fund's fiscal year.
The Fund's strategy of selling out-of-the-money index put options against cash
reserves resulted in losses on the Fund's positions due to the extreme drop in
the equity indices in September and October. Additionally, as part of the Fund's
macro strategies, the Fund has periodically sold variance swaps, which has the
effect of being short volatility. This strategy had a negative impact on the
portfolio as markets experienced extreme volatility.
The hedging strategy also detracted from performance. Near the end of the
summer, when we considered equity valuations to be low and anticipated a
recovery, we chose to reduce the hedge ratio in the option portfolio in an
effort to capture additional upside participation potential. While reduced
income from reducing the hedge ratio was partially offset by the relatively high
option premiums in the market, the result was less downside protection as
compared to the fully-covered BXM as the equity market continued to decline in
September, October and November.(4)
HOW DID THE EQUITY PORTFOLIO PERFORM?
The equity portfolio was down approximately 38%, in line with the S&P 500 Index.
The best decision in this very negative market proved to be a cash position we
raised, beginning in the summer, as a defensive measure. The Fund historically
has rarely had a cash position over 10% of assets, but cash represented
approximately 18% of total assets as of November 30, 2008.
Performance relative to the S&P 500 benefited from an underweight in the
financials sector, which performed poorly, and by stock selection in this
sector. We made the decision about a year ago to reduce positions in the large
brokerage/investment banking firms, and this proved to be highly beneficial. Our
positions in the financials sector are concentrated in high quality banks such
as U.S. Bancorp (not in portfolio at period end) and Wells Fargo & Company (not
in portfolio at period end), which actually had positive returns for the period.
Call out
WHAT IS A COVERED CALL?
A call is an option (or contract) that gives its holder the right, but not the
obligation, to buy shares of the underlying security at a specified price on or
before a pre-determined expiration date. After this pre-determined date, the
option and its corresponding rights expire. A call is "covered" when the seller
of the call option also owns the security on which the call is written. Covered
call strategies are generally used as a hedge - to limit losses by obtaining
premium income from the sale of calls, while still maintaining upside potential.
A covered call-on-call option strategy involves purchasing a call option on a
particular security while also writing (selling) a call option on the same
security.
WHAT IS A PUT OPTION?
A put option is an option (or contract) that gives its holder the right, but not
the obligation, to sell shares of the underlying security at a specified price
on or before a pre-determined expiration date.
WHAT IS A VARIANCE SWAP?
A variance swap is a financial derivative that allows investors to trade future
realized volatility against current implied volatility of an underlying product
such as a stock index.
(4) The BXM is a covered call index that theoretically purchases all the
constituents of the S&P 500 Index and sells at-the-money (meaning the
option's strike price is the same as the stock's purchase price) calls of
one-month duration against those positions.
6 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund | Questions & Answers continued
Another position that performed well is McDonald's Corporation (4.0% of
long-term investments), which is benefiting from consumers' tendency to trade
down in a weak economic environment.
Overweights and stock selection in the industrials and technology sectors
detracted from relative performance. These sectors had performed quite well in
prior periods, when global economies were growing and there was substantial
investment in infrastructure, especially in rapidly expanding economies such as
China. As marginal growth slowed dramatically in emerging markets, demand for
infrastructure products from industrials such as farm equipment manufacturer
Deere & Company (not in portfolio at period end) dropped sharply; Deere was one
of the weakest stocks in the portfolio. Other industrials holdings that
performed poorly were Honeywell International, Inc. (4.9% of long-term
investments) and Rockwell Collins, Inc. (not in portfolio at period end),
suppliers of aircraft components that were hurt by a strike at The Boeing
Company (not in portfolio at period end). In the technology sector, a position
that detracted from performance was MEMC Electronic Materials, Inc. (not in
portfolio at period end), which is really more like an industrial company, as it
produces silicon for solar panels and computer chips.
WHAT IS THE OUTLOOK FOR THE FUND IN THE FUTURE?
In December 2008, after the end of the Fund's fiscal year, the Fund's Board of
Trustees (the "Board") adopted a proposal to liquidate the Fund. Subject to
shareholder approval of the plan of liquidation and dissolution (the
"Liquidation Plan") adopted by the Board, the Fund plans to sell its assets,
discharge its liabilities and distribute the net proceeds to shareholders.
After considering the relatively small asset size of the Fund compared to
current expenses, the historic and current discounts to net asset value at which
the Fund's shares have traded and several alternatives to liquidation, the
Board, on the recommendation of Fund Management, concluded that it would be in
the best interest of the Fund and its shareholders to liquidate and dissolve the
Fund.
The Board plans to submit a proposal to shareholders to approve the Liquidation
Plan at a special meeting of shareholders (the "Special Meeting"). If the
proposal is approved by shareholders, the Fund will commence the orderly
liquidation of its assets in accordance with the Liquidation Plan. Following the
liquidation of the Fund's assets, the Fund will pay one or more liquidating
distributions to shareholders of record as of the effective date of the
Liquidation Plan. There can be no assurance that the necessary percentage of the
shareholders of the Fund will vote in favor of the proposal to approve the
Liquidation Plan.
Any solicitation of proxies by the Fund in connection with the Special Meeting
will be made only pursuant to separate proxy materials filed with the U.S.
Securities and Exchange Commission (the "SEC") under applicable federal
securities laws and mailed with a proxy card to each shareholder entitled to
vote at the Special Meeting. Because the proxy materials will contain important
information, including a more detailed description of the Liquidation Plan,
shareholders are urged to read them carefully when they become available.
Annual Report | November 30, 2008 | 7
HCE | Fiduciary/Claymore Dynamic Equity Fund | Questions & Answers continued
HCE RISKS AND OTHER CONSIDERATIONS
The views expressed in this report reflect those of the Portfolio Managers and
Claymore only through the report period as stated on the cover. These views are
subject to change at any time, based on market and other conditions and should
not be construed as a recommendation of any kind. The material may also contain
forward-looking statements that involve risk and uncertainty, and there is no
guarantee they will come to pass. There can be no assurance that the Fund will
achieve its investment objectives. The value of the Fund will fluctuate with the
value of the underlying securities. Historically, closed-end funds often trade
at a discount to their net asset value. The Fund is subject to investment risk,
including the possible loss of the entire amount that you invest. Past
performance does not guarantee future results.
INVESTMENT RISK. An investment in the Fund is subject to investment risk,
including the possible loss of the entire principal amount that you invest.
EQUITY RISK. A principal risk of investing in the Fund is equity risk, which is
the risk that the securities held by the Fund will fall due to general market
and economic conditions, perceptions regarding the industries in which the
issuers of securities held by the Fund participate or factors relating to
specific companies in which the Fund invests.
RISKS ASSOCIATED WITH OPTIONS ON SECURITIES. A strategy of writing (selling)
covered call options entails various risks. For example, the correlation between
the equity securities and options markets may, at times, be imperfect and can
furthermore be affected by market behavior and unforeseen events, thus causing a
given transaction to not achieve its objectives. There may be times when the
Fund will be required to purchase or sell equity securities to meet its
obligations under the options contracts on certain options at inopportune times
when it may not be beneficial to the Fund. The Fund will forego the opportunity
to profit from increases in the market value of equity securities that it has
written call options on, above the sum of the premium and the strike price of
the option. Furthermore, the Fund's downside protection on equity securities it
has written call options on would be limited to the amount of the premium
received for writing the call option and thus the Fund would be at risk for any
further price declines in the stock below that level. A decision as to whether,
when and how to use options involves the exercise of skill and judgment, and
even a well-conceived transaction may be unsuccessful to some degree because of
market behavior or unexpected events. There can be no assurance that a liquid
market will exist when the Fund seeks to close out an option position.
SMALL AND MID CAPITALIZATION COMPANIES RISK. The Fund may invest in securities
of small and mid capitalization companies. Such securities may be subject to
more abrupt or erratic market movements and may have lower trading volumes or
more erratic trading than securities of larger-sized companies or the market
averages in general. In addition, such companies typically are subject to a
greater degree of change in earnings and business prospectus than are
larger-sized, more established companies.
FOREIGN INVESTMENT RISK: The Fund's investments in non-U.S. issuers may involve
unique risks compared to investing in securities of U.S. issuers, including,
among others, less market liquidity, generally greater market volatility than
U.S. securities and less complete financial information than for U.S. issuers.
FUND DISTRIBUTION RISK. Pursuant to its distribution policy, the Fund intends to
make regular quarterly distributions on its Common Shares. In order to make such
distributions, the Fund may have to sell a portion of its investment portfolio
at a time when independent investment judgment may not dictate such action. In
addition, the Fund's ability to make distributions more frequently than annually
from any net realized capital gains by the Fund is subject to the Fund obtaining
exemptive relief from the Securities and Exchange Commission, which cannot be
assured. To the extent the total quarterly distributions for a year exceed the
Fund's net investment company income and net realized capital gain for that
year, the excess will generally constitute a return of capital. Such return of
capital distributions generally are tax-free up to the amount of a Common
Shareholder's tax basis in the Common Shares (generally, the amount paid for the
Common Shares). In addition, such excess distributions will decrease the Fund's
total assets and may increase the Fund's expense ratio.
In addition to the risks described above, the Fund is also subject to: Income
Risk, Industry Concentration Risk, Interest Rate Risk, Risks Related To
Preferred Securities, Inflation Risk, Derivatives Risk, Illiquid Securities
Risk, Market Discount Risk, Portfolio Turnover Risk, Tax Risk, Other Investment
Companies, Hedging and Leverage Risk, Management Risk, Current Developments
Risks, and Anti-Takeover Provisions. Please see www.claymore.com/hce for a more
detailed discussion about Fund risks and considerations.
8 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
Fund SUMMARY | AS OF NOVEMBER 30, 2008
FUND STATISTICS
Share Price $3.03
Common Share Net Asset Value $4.43
Premium/(Discount) to NAV -31.60%
Net Assets ($000) $25,265
--------------------------------------------------------------------------------
TOTAL RETURNS
--------------------------------------------------------------------------------
(INCEPTION 4/29/05) MARKET NAV
--------------------------------------------------------------------------------
One Year -79.94% -75.49%
Three Year (average annual) -38.55% -33.33%
Since Inception (average annual) -34.84% -27.31%
--------------------------------------------------------------------------------
% OF LONG-TERM
SECTOR BREAKDOWN INVESTMENTS
--------------------------------------------------------------------------------
Financials 19.7%
Information Technology 15.9%
Industrials 15.2%
Energy 13.5%
Health Care 10.1%
Consumer Staples 9.0%
Consumer Discretionary 8.9%
Telecommunication Services 4.2%
Materials 3.5%
--------------------------------------------------------------------------------
% OF LONG-TERM
TOP TEN ISSUERS INVESTMENTS
--------------------------------------------------------------------------------
Midcap SPDR Trust Series 1 5.3%
Aflac, Inc. 5.2%
Honeywell International, Inc. 4.9%
Gilead Sciences, Inc. 4.9%
Apple, Inc. 4.9%
Target Corp. 4.9%
Chevron Corp. 4.4%
AT&T, Inc. 4.2%
Coca-Cola Co. (The) 4.0%
McDonald's Corp. 4.0%
--------------------------------------------------------------------------------
|
Past performance is not a guarantee of future results. All portfolio data is
subject to change daily. For more current information, please visit
www.claymore.com/hce. The above summaries are provided for informational
purposes only and should not viewed as recommendations.
Line chart:
Share Price & NAV Performance
Share Price NAV
11/30/07 17.08 19.97
17.17 19.9
17.12 19.81
17.35 20.09
17.55 20.35
17.56 20.34
17.66 20.51
17.42 20.11
17.46 20.16
17.44 20.2
17.35 20.01
17.12 19.76
17.23 19.81
17.3 19.89
17.21 20.01
17.5 20.31
17.67 20.47
17.73 20.5
17.61 20.25
17.55 20.29
17.6 20.21
17.69 19.92
17.71 19.84
17.52 19.33
17.49 19.4
17.29 19.16
17.17 19.36
17.5 19.54
17.45 19.3
17.48 19.49
17.22 19.11
17.16 18.97
16.84 18.38
16.44 18.04
16 17.83
16.25 18.29
16.9 18.68
16.72 18.29
16.82 18.76
17.05 18.94
17.36 18.88
17.75 19.22
17.97 19.42
17.91 19.25
17.66 18.44
17.45 18.3
17.42 18.57
17.5 18.57
17.5 18.81
17.66 18.94
17.23 18.84
16.91 18.6
16.75 18.56
16.89 18.61
17 18.78
16.76 18.61
16.86 18.74
17.06 19.13
17.45 19.28
17.34 19.32
17.28 19.12
17.09 18.52
17.01 18.53
17 18.48
17.13 18.63
17 18.21
16.68 17.96
16.04 17.59
16.34 18.39
16.3 18.24
16.45 18.37
16.12 17.63
15.51 17.44
15.83 18.43
15.6 17.81
15.74 18.21
16.11 18.71
16.64 18.78
16.6 18.64
16.56 18.36
16.2 18.24
16.24 18.43
16.7 19.08
16.76 19.04
16.85 19.05
16.98 19.13
17.3 19.18
17.15 19.19
16.98 19.06
16.9 19.14
16.7 18.9
16.6 18.97
16.61 19.04
17.28 19.28
17.34 19.09
17.42 19.39
17.31 19.32
17.16 19.24
17.39 19.34
17.6 19.43
17.56 19.47
17.55 19.43
17.57 19.32
17.41 19.24
17.6 19.44
17.6 19.4
17.52 19.33
17.61 19.45
17.4 19.22
17.5 19.32
17.45 19.28
17.5 19.49
17.09 18.96
17.01 18.97
17.22 19.15
17.23 19.13
17.15 19.15
17 18.98
16.86 18.87
16.98 18.96
16.96 18.81
17.08 18.93
17.15 19.01
17.34 19.11
17.45 19.17
17.44 19.03
17.38 18.95
17.32 18.98
17.53 19.16
17.06 18.79
16.97 18.7
16.92 18.64
16.62 18.34
16.61 18.36
16.85 18.72
16.94 18.86
16.95 18.77
16.95 18.63
17.02 18.66
16.65 18.33
16.35 18.25
16.22 18.26
16.45 18.39
16.05 17.77
15.95 17.51
15.77 17.53
15.8 17.68
15.62 17.3
15.36 17.3
15.2 17.25
15.41 17.63
15.17 17.12
15.1 17.18
15 16.83
14.67 16.59
14.2 16.47
14.46 16.95
14.76 17.15
14.95 17.1
14.99 17.06
15.08 17.4
15.28 17.68
15 17.12
15.02 17.28
14.85 17.05
15.04 17.42
15.27 17.71
15.25 17.48
15.22 17.4
15.06 17.26
15.3 17.7
15.3 17.81
15.22 17.57
15.44 17.86
15.47 18.01
15.43 17.85
15 17.36
14.96 17.5
15 17.65
14.99 17.41
14.89 17.22
14.88 17.38
14.86 17.45
15.05 17.72
14.98 17.39
15 17.46
15.06 17.66
15.21 17.66
15.21 17.68
15.22 17.59
15.23 17.54
14.92 16.88
14.75 16.88
14.9 17.18
14.51 16.45
14.3 16.53
14.3 16.76
14.14 16.81
13.51 15.6
12.7 15.77
11.55 14.6
11.6 15.03
12.67 15.79
12.15 15.04
11.74 14.3
11.35 14.26
11.6 14.66
11.63 14.88
10.5 12.87
10.68 12.59
9.92 12.39
9.69 11.08
8.5 10.3
7.04 8.55
5.99 6.82
4.63 6.76
4.12 5.53
3.46 5.02
4.55 5.6
4.48 5.64
4.13 4.3
3.69 4.62
4.1 4.74
4.19 5.03
4.05 4.93
3.69 4.57
3.57 4.56
3.33 4.44
3.39 4.33
3.73 4.7
3.7 4.72
3.81 4.81
3.88 4.87
4.01 4.88
4.2 5.02
4 4.83
3.9 4.65
3.91 4.75
3.85 4.72
3.7 4.64
3.43 4.31
3.45 4.53
3.36 4.38
3.24 4.3
3.19 4.34
2.9 4.13
2.95 3.91
2.82 4.05
2.99 4.26
2.89 4.3
3 4.4
11/30/08 3.03 4.43
|
Bar Chart:
Distributions to Shareholders
Nov 07 0.425
Feb 08 0.425
May 08 0.425
Aug 08 0.39
Nov 08 0.15
Annual Report | November 30, 2008 | 9
|
HCE | Fiduciary/Claymore Dynamic Equity Fund
Portfolio of INVESTMENTS | NOVEMBER 30, 2008
Number
of Shares Value
================================================================================
LONG-TERM INVESTMENTS - 83.3% (a)
COMMON STOCKS - 78.9%
CONSUMER DISCRETIONARY - 7.4%
14,200 McDonald's Corp. $ 834,250
30,700 Target Corp. 1,036,432
--------------------------------------------------------------------------------
1,870,682
--------------------------------------------------------------------------------
CONSUMER STAPLES - 7.5%
18,000 Coca-Cola Co. (The) 843,660
15,400 CVS Caremark Corp. 445,522
9,500 Procter & Gamble Co. 611,325
--------------------------------------------------------------------------------
1,900,507
--------------------------------------------------------------------------------
ENERGY - 11.2%
9,600 Apache Corp. 742,080
11,800 Chevron Corp. 932,318
11,800 Schlumberger Ltd. (Netherlands) 598,732
30,900 Valero Energy Corp. 567,015
--------------------------------------------------------------------------------
2,840,145
--------------------------------------------------------------------------------
FINANCIALS - 12.0%
23,500 Aflac, Inc. 1,088,050
40,500 Bank of America Corp. 658,125
6,500 Goldman Sachs Group, Inc. 513,435
24,200 JPMorgan Chase & Co. 766,172
--------------------------------------------------------------------------------
3,025,782
--------------------------------------------------------------------------------
HEALTH CARE - 8.4%
23,200 Gilead Sciences, Inc. (a) 1,039,128
11,800 Johnson & Johnson 691,244
23,700 Pfizer, Inc. 389,391
--------------------------------------------------------------------------------
2,119,763
--------------------------------------------------------------------------------
INDUSTRIALS - 12.6%
13,000 Emerson Electric Co. 466,570
2,000 First Solar, Inc. (a) 249,680
37,300 Honeywell International, Inc. 1,039,178
13,700 Union Pacific Corp. 685,548
15,400 United Technologies Corp. 747,362
--------------------------------------------------------------------------------
3,188,338
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 13.4%
8,700 Adobe Systems, Inc. (a) 201,492
11,200 Apple, Inc. (a) 1,037,904
13,700 Cisco Systems, Inc. (a) 226,598
40,400 EMC Corp. (a) 427,028
1,400 Google, Inc. - Class A (a) 410,144
1,400 Hewlett-Packard Co. 49,392
12,600 Intel Corp. 173,880
5,400 International Business Machines Corp. 440,640
23,700 Oracle Corp. (a) 381,333
--------------------------------------------------------------------------------
3,348,411
--------------------------------------------------------------------------------
Number
of Shares Value
================================================================================
MATERIALS - 2.9%
9,200 Monsanto Co. $ 728,640
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 3.5%
30,900 AT&T, Inc. 882,504
--------------------------------------------------------------------------------
TOTAL COMMON STOCK - 78.9%
(Cost $26,926,715) 19,904,772
--------------------------------------------------------------------------------
EXCHANGE-TRADED FUNDS - 4.4%
FINANCIALS - 4.4%
12,000 Midcap SPDR Trust Series 1
(Cost $1,020,390) 1,123,080
--------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS - 83.3%
(Cost $27,947,105) 21,027,852
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 19.5%
MONEY MARKET FUND - 19.5%
4,936,929 Fidelity U.S. Treasury Money Market Fund
(Cost $4,936,929) 4,936,929
--------------------------------------------------------------------------------
|
CONTRACTS
(100 SHARES EXPIRATION EXERCISE
PER CONTRACT) CALL OPTIONS PURCHASED (a)(b) DATE PRICE VALUE
===================================================================================================
CALL OPTIONS PURCHASED - 2.8%
200 SPDR Trust Series 1 December 19, 2009 $ 80 $ 394,000
100 SPDR Trust Series 1 June 20, 2009 60 317,750
---------------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS PURCHASED
(Cost $1,754,600) 711,750
---------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 105.6%
(Cost $34,638,634) 26,676,531
Liabilities in excess of Other Assets - (0.7%) (174,169)
Total Options Written - (4.9%) (1,237,711)
---------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $25,264,651
===================================================================================================
(a) All or a portion of all long-term investments represents cover for written
options.
(b) Non-income producing security.
|
See notes to financial statements.
l0 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund | Portfolio of Investments
continued
CONTRACTS
(100 SHARES EXPIRATION EXERCISE
PER CONTRACT) CALL OPTIONS WRITTEN (a) DATE PRICE VALUE
---------------------------------------------------------------------------------------------------
87 Adobe Systems, Inc. January 17, 2009 $ 30.00 $ 3,915
235 Aflac, Inc. December 20, 2008 45.00 95,175
96 Apache Corp. December 20, 2008 75.00 67,200
112 Apple, Inc. December 20, 2008 105.00 21,224
309 AT&T, Inc. December 20, 2008 27.00 73,696
405 Bank of America Corp. December 20, 2008 22.50 5,062
118 Chevron Corp. January 17, 2009 75.00 107,380
137 Cisco Systems, Inc. January 17, 2009 17.50 14,933
120 Coca-Cola Co. (The) January 17, 2009 50.00 20,700
60 Coca-Cola Co. (The) December 20, 2008 47.50 10,050
154 CVS Caremark Corp. December 20, 2008 30.00 17,710
404 EMC Corp. January 17, 2009 14.00 7,474
130 Emerson Electric Co. January 17, 2009 40.00 20,150
20 First Solar, Inc. March 21, 2009 150.00 43,200
232 Gilead Sciences, Inc. December 20, 2008 45.00 46,400
65 Goldman Sachs Group, Inc. December 20, 2008 80.00 48,913
14 Google, Inc. Class A January 17, 2009 350.00 12,040
14 Hewlett-Packard Co. December 20, 2008 35.00 2,905
125 Honeywell International, Inc. January 17, 2009 30.00 20,938
248 Honeywell International, Inc. December 20, 2008 35.00 2,480
126 Intel Corp. January 17, 2009 17.50 2,709
54 International Business
Machines Corp. January 17, 2009 100.00 5,130
118 Johnson & Johnson January 17, 2009 70.00 3,540
242 JPMorgan Chase & Co. January 17, 2009 30.00 114,950
142 McDonald's Corp. January 17, 2009 67.50 8,875
120 Midcap SPDR Trust Series 1 December 20, 2008 90.00 84,000
92 Monsanto Co. December 20, 2008 75.00 63,940
237 Oracle Corp. January 17, 2009 20.00 5,925
237 Pfizer, Inc. December 20, 2008 20.00 830
95 Procter & Gamble Co. January 17, 2009 70.00 11,875
118 Schlumberger Ltd. January 17, 2009 50.00 71,390
300 SPDR Trust Series 1 December 20, 2008 90.00 132,000
86 Target Corp. January 17, 2009 40.00 16,942
221 Target Corp. December 20, 2008 40.00 16,575
137 Union Pacific Corp. January 17, 2009 55.00 31,510
154 United Technologies Corp. January 17, 2009 60.00 8,855
214 Valero Energy Corp. December 20, 2008 20.00 17,120
---------------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS WRITTEN
(Premiums received $926,650) $ 1,237,711
===================================================================================================
(a) Non-income producing security.
|
See notes to financial statements.
Annual Report | November 30, 2008 | 11
HCE | Fiduciary/Claymore Dynamic Equity Fund
Statement of ASSETS AND LIABILITIES | November 30, 2008
ASSETS
Investments, at value (cost $34,638,634) $ 26,676,531
Cash 99,892
Dividends receivable 81,973
Interest receivable 7,876
Other assets 3,927
--------------------------------------------------------------------------------------------------------------
Total assets 26,870,199
--------------------------------------------------------------------------------------------------------------
LIABILITIES
Options written, at value (premiums received of $926,650) 1,237,711
Payable for securities purchased 258,420
Advisory fee payable 10,364
Administration fee payable 572
Accrued expenses 98,481
--------------------------------------------------------------------------------------------------------------
Total liabilities 1,605,548
--------------------------------------------------------------------------------------------------------------
NET ASSETS $25,264,651
==============================================================================================================
COMPOSITION OF NET ASSETS
Common stock, $.01 par value per share; unlimited number of shares authorized,
5,705,240 shares issued and outstanding $ 57,052
Additional paid-in capital 104,335,944
Accumulated net realized loss on investments and options (70,855,181)
Accumulated net unrealized depreciation on investments, options and swaps (8,273,164)
--------------------------------------------------------------------------------------------------------------
NET ASSETS $ 25,264,651
==============================================================================================================
NET ASSET VALUE (based on 5,705,240 common shares outstanding) $ 4.43
==============================================================================================================
|
See notes to financial statements.
l2 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
Statement of OPERATIONS | FOR THE YEAR ENDED NOVEMBER 30, 2008
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $91) $ 1,566,198
Interest 286,616
--------------------------------------------------------------------------------------------------------------
Total Income $ 1,852,814
--------------------------------------------------------------------------------------------------------------
EXPENSES
Advisory fee 935,894
Professional fees 184,812
Trustees' fees and expenses 136,983
Custodian fee 61,666
Interest expense and fees 59,241
Printing expense 51,701
Fund accounting 36,444
Administration fee 25,737
NYSE listing fee 21,921
Transfer agent fee 18,639
Miscellaneous 13,417
Insurance 12,511
--------------------------------------------------------------------------------------------------------------
Total expenses 1,558,966
Advisory fees waived (14,448)
--------------------------------------------------------------------------------------------------------------
Net expenses 1,544,518
--------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 308,296
--------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS
Net realized gain (loss) on:
Investments (36,085,626)
Options (3,933,699)
Swaps (30,030,185)
Net change in unrealized appreciation/(depreciation) on:
Investments (9,738,610)
Options (1,964,569)
Swaps 723,327
--------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss (81,029,362)
--------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations $ (80,721,066)
==============================================================================================================
|
See notes to financial statements.
Annual Report | November 30, 2008 | 13
HCE | Fiduciary/Claymore Dynamic Equity Fund
Statement of CHANGES IN NET ASSETS|
FOR THE FOR THE
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2008 NOVEMBER 30, 2007
==============================================================================================================
Increase (Decrease) in Net Assets from Operations
Net investment income (loss) $ 308,296 $ 145,530
Net realized gain/(loss) on investments, options, and swap transactions (70,049,510) 11,316,673
Net change in unrealized appreciation (depreciation) on investments,
options and swap transactions. (10,979,852) 2,117,063
--------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (80,721,066) 13,579,266
--------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From and in excess of net investment income (3,581,196) (9,698,908)
Return of capital (4,349,088) --
--------------------------------------------------------------------------------------------------------------
Total Distributions (7,930,284) (9,698,908)
--------------------------------------------------------------------------------------------------------------
Total increase/(decrease) in net assets (88,651,350) 3,880,358
Net Assets
Beginning of period 113,916,001 110,035,643
--------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment income of $0
and $74,122, respectively) $ 25,264,651 $ 113,916,001
==============================================================================================================
|
See notes to financial statements.
14 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
Financial HIGHLIGHTS |
FOR THE PERIOD
FOR THE FOR THE FOR THE APRIL 29, 2005*
PER SHARE OPERATING PERFORMANCE YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
FOR A COMMON SHARE OUTSTANDING THROUGHOUT THE PERIOD NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
2008 2007 2006 2005
====================================================================================================================================
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.97 $ 19.29 $ 19.65 $ 19.10(b)
------------------------------------------------------------------------------------------------------------------------------------
Investment operations
Net investment income/(loss) (a) 0.05 0.03 (0.07) (0.02)
Net realized and unrealized gain/(loss) on investments and options (14.20) 2.35 1.41 1.46
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (14.15) 2.38 1.34 1.44
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
From and in excess of net investment income (0.63) (1.70) (1.70) (0.85)
Return of capital (0.76) - - -
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1.39) (1.70) (1.70) (0.85)
------------------------------------------------------------------------------------------------------------------------------------
OFFERING EXPENSES CHARGED TO PAID-IN CAPITAL - - - (0.04)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 4.43 $ 19.97 $ 19.29 $ 19.65
------------------------------------------------------------------------------------------------------------------------------------
MARKET VALUE, END OF PERIOD $ 3.03 $ 17.08 $ 18.83 $ 17.72
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN (c)
Net asset value (75.49)% 12.87% 7.14% 7.37%
Market value (79.94)% (0.55)% 16.31% (7.36)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 25,265 $ 113,916 $ 110,036 $112,098
Ratio of net expenses to average net assets 1.67%(e) 1.48% 1.49% 1.54%(d)
Ratio of net investment income (loss) to average net assets 0.33%(e) 0.13% (0.37)% (0.17)%(d)
Portfolio turnover rate 112% 151% 136% 232%
====================================================================================================================================
* Commencement of investment operations.
(a) Based on average shares outstanding during the period.
(b) Before deduction of offering expenses charged to capital.
(c) Total investment return is calculated assuming a purchase of a common share
at the beginning of the period and a sale on the last day of the period
reported either at net asset value ("NAV") or market price per share.
Dividends and distributions are assumed to be reinvested at NAV for NAV
returns or the prices obtained under the Fund's Dividend Reinvestment Plan
for market value returns. Total investment return does not reflect
brokerage commissions. A return calculated for a period of less than one
year is not annualized.
(d) Annualized for 2005.
(e) For the year ended November 30, 2008, the Adviser voluntarily waived fees
and expenses equal to approximately 0.01% of average net assets. Without
this fee waiver, the ratio of expense to average net assets and ratio of
net investment income would have been 1.68% and 0.32%, respectively.
|
See notes to financial statements.
Annual Report | November 30, 2008 | 15
HCE | Fiduciary/Claymore Dynamic Equity Fund
Notes to FINANCIAL STATEMENTS | NOVEMBER 30, 2008
Note 1 - ORGANIZATION:
Fiduciary/Claymore Dynamic Equity Fund (the "Fund") was organized as a Delaware
statutory trust on December 15, 2004. The Fund is registered as a diversified,
closed-end management investment company under the Investment Company Act of
1940, as amended. The Fund's investment objective is to provide a high level of
current income and current gains and, to a lesser extent, capital appreciation.
The Fund seeks to achieve its investment objective by investing in a diversified
portfolio of equity securities and writing (selling) call options on a
substantial portion of its portfolio securities. There can be no assurance that
the Fund's investment objective will be achieved.
Note 2 - ACCOUNTING POLICIES:
The preparation of the financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates. The following is a
summary of significant accounting policies followed by the Fund.
(a) VALUATION OF INVESTMENTS
The Fund values equity securities at the last reported sale price on the
principal exchange or in the principal OTC market in which such securities are
traded, as of the close of regular trading on the NYSE on the day the securities
are being valued or, if there are no sales, at the mean between the last
available bid and asked prices on that day. Securities traded on NASDAQ are
valued at the NASDAQ Official Closing Price. Debt securities are valued by
independent pricing services or dealers using the mean of the closing bid and
asked prices for such securities or, if such prices are not available, at prices
for securities of comparable maturity, quality and type. Short-term securities
having a remaining maturity of sixty days or less are valued at amortized cost,
which approximates market value.
For those securities whose quotations or prices are not available, the
valuations are determined in accordance with procedures established in good
faith by the Board of Trustees. Valuations in accordance with these procedures
are intended to reflect each security's (or asset's) "fair value". Such "fair
value" is the amount that the Fund might reasonably expect to receive for the
security (or asset) upon its current sale. Each such determination should be
based on a consideration of all relevant factors, which are likely to vary from
one pricing context to another. Examples of such factors may include, but are
not limited to: (i) the type of security, (ii) the initial cost of the security,
(iii) the existence of any contractual restrictions on the security's
disposition, (iv) the price and extent of public trading in similar securities
of the issuer or of comparable companies, (v) quotations or evaluated prices
from broker-dealers and/or pricing services, (vi) information obtained form the
issuer, analysts, and/or the appropriate stock exchange (for exchange traded
securities),(vii) an analysis of the company's financial statements, and (viii)
an evaluation of the forces that influence the issuer and the market(s) in which
the security is purchased and sold (e.g., the existence of pending merger
activity, public offerings or tender offers that might affect the value of the
security).
In September, 2006, the FASB issued Statement of Financial Accounting
Standards No. 157, "Fair Valuation Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value measurements. FAS 157 establishes three different categories
for valuations. Level 1 valuations are those based upon quoted prices in active
markets. Level 2 valuations are those based upon quoted prices in inactive
markets or based upon significant observable inputs (i.e. yield curves;
benchmark interest rates; indices). Level 3 valuations are those based upon
unobservable inputs (i.e. discounted cash flow analysis; non-market based
methods used to determine fair valuation). Details as of November 30, 2008 were
as follows:
DESCRIPTION OPTIONS AND
(VALUES IN $000S) SECURITIES OTHER DERIVATIVES TOTAL
--------------------------------------------------------------------------------
ASSETS:
Level 1 $25,965 $ - $25,965
Level 2 - 712 712
Level 3 - - -
--------------------------------------------------------------------------------
Total $25,965 $ 712 $26,677
--------------------------------------------------------------------------------
LIABILITIES:
Level 1 $ - $1,238 $ 1,238
Level 2 - - -
Level 3 - - -
--------------------------------------------------------------------------------
Total - $1,238 $ 1,238
--------------------------------------------------------------------------------
|
(b) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized gains and
losses on investments are determined on the identified cost basis. Dividend
income is recorded net of applicable withholding taxes on the ex-dividend date
and interest income is recorded on an accrual basis. Discounts or premiums on
debt securities are accreted or amortized to interest income over the lives of
the respective securities using the effective interest method.
(c) OPTIONS
The Fund will pursue its primary objective by employing an option strategy of
writing (selling) covered call options on common stocks. The Fund seeks to
produce a high level of current income and gains generated from option writing
premiums and, to a lesser extent, from dividends. An option on a security is a
contract that gives the holder of the option, in return for a premium, the right
to buy from (in the case of a call) or sell to (in the case of a put) the writer
of the option the security underlying the option at a specified exercise or
"strike" price. The writer of an option on a security has the obligation upon
exercise of the option to deliver the underlying security upon payment of the
exercise price (in the case of a call) or to pay the exercise price upon
delivery of the underlying security (in the case of a put).
The Fund may also pursue its option strategy (with respect to 25% of its total
assets) through writing covered call-on-call option positions. In a covered
call-on-call strategy, the Fund achieves its long exposure to the underlying
stock through the purchase of a call option, and simultaneously sells an option
on the same security at a higher exercise price.
There are several risks associated with transactions in options on securities.
As the writer of a covered call option, the Fund forgoes, during the option's
life, the opportunity to profit from increases in the market value of the
security covering the call option above the sum of the premium and the exercise
price of the call but has retained the risk of loss should the price of the
underlying security decline by more than the amount of the premium received for
the option. The writer of an option has no control over the time when it may be
required to fulfill its obligation as writer of the option. Once an option
writer has received an exercise notice, it cannot effect a closing purchase
transaction in order to terminate its obligation under the option and must
deliver the underlying security at the exercise price.
(d) VARIANCE SWAPS
A variance swap is an instrument which allows counterparties to trade future
realized volatility of an underlying asset against its current implied
volatility. The swaps are valued at current market value and any unrealized gain
or loss is included in the Statement of Operations. Once a variance swap
contract is closed, the net amount received or paid is recorded as realized
gain/loss on swaps. During the period the swap agreement is open, the
16 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund | Notes to Financial Statements
continued
Fund may be subject to risk from the potential inability of the counterparty to
meet the terms of the agreement. As of November 30, 2008 there were no swap
agreements outstanding.
(e) DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and pays quarterly dividends to common shareholders. These
dividends consist of investment company taxable income, which generally includes
qualified dividend income, ordinary income and short-term capital gains.
Realized short-term capital gains are considered ordinary income for tax
purposes and will be reclassified at the Fund's fiscal year end on the Fund's
Statement of Assets and Liabilities from accumulated net realized gain to
accumulated undistributed net investment income. Any net realized long-term
gains are distributed annually to common shareholders.
Distributions to shareholders are recorded on the ex-dividend date. The amount
and timing of distributions are determined in accordance with federal income tax
regulations, which may differ from U.S. generally accepted accounting
principles.
Note 3 - INVESTMENT ADVISORY AGREEMENT, SUB-ADVISORY AGREEMENT
AND OTHER AGREEMENTS:
Pursuant to an Investment Advisory Agreement (the "Agreement") between the Fund
and Claymore Advisors, LLC (the "Adviser"), the Adviser will furnish offices,
necessary facilities and equipment, provide administrative services, oversee the
activities of Fiduciary Asset Management, LLC (the Fund's "Sub-Adviser"),
provide personnel including certain officers required for its administrative
management and pay the compensation of all officers and trustees of the Fund who
are its affiliates. As compensation for these services, the Fund will pay the
Adviser an annual fee, payable monthly, in an amount equal to 1.00% of the
Fund's average daily Managed Assets (net assets plus any assets attributable to
financial leverage).
Pursuant to a Sub-Advisory Agreement (the "Sub-Advisory Agreement") between the
Fund, the Adviser and the Sub-Adviser, the Sub-Adviser under the supervision of
the Fund's Board of Trustees and the Adviser, provides a continuous investment
program for the Fund's portfolio; provides investment research; makes and
executes recommendations for the purchase and sale of securities; and provides
certain facilities and personnel, including certain officers required for its
administrative management and pays the compensation of all officers and trustees
of the Fund who are its affiliates. As compensation for its services, the
Adviser pays the Sub-Adviser a fee, payable monthly, in an annual amount equal
to 0.50% of the Fund's average daily Managed Assets.
Effective October 21, 2008, the Adviser implemented a fee waiver of 0.50%, all
of which was allocated to the Sub-Adviser.
Under a separate Fund Administration agreement the Adviser provides fund
administration services to the Fund. As compensation for services performed
under the Administration Agreement, the Adviser receives an administration fee
payable monthly at an annual rate set forth below as a percentage of the average
daily Managed Assets:
MANAGED ASSETS RATE
================================================================================
First $200,000,000 0.0275%
Next $300,000,000 0.0200%
Next $500,000,000 0.0150%
Over $1,000,000,000 0.0100%
|
The Bank of New York Mellon ("BNY") acts as the Fund's custodian, accounting
agent and transfer agent. As custodian, BNY is responsible for the custody of
the Fund's assets. As accounting agent, BNY is responsible for maintaining the
books and records of the Fund's securities and cash. As transfer agent, BNY is
responsible for performing transfer agency services for the Fund.
Certain officers and trustees of the Fund are also officers and directors of the
Adviser and Sub-Adviser. The Fund does not compensate its officers or trustees
who are officers of the two aforementioned firms.
Note 4 - FEDERAL INCOME TAXES:
The Fund intends to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended, applicable to regulated investment companies.
Accordingly, no provision for U.S. federal income taxes is required. In
addition, by distributing substantially all of its ordinary income and long-term
capital gains, if any, during each calendar year, the Fund intends not to be
subject to U.S. federal excise tax.
Due to inherent differences in the recognition of income, expenses, and realized
gains/losses under U.S. generally accepted accounting principles and federal
income tax purposes, permanent differences between book and tax basis reporting
have been identified and appropriately reclassified on the Statement of Assets
and Liabilities. A permanent book and tax difference primarily relating to a
distribution of capital gains for tax purposes in the amount of $3,198,778 was
reclassified from accumulated undistributed net investment income to accumulated
net realized gain.
Information on the tax components of investments, excluding written options as
of November 30, 2008 is as follows:
Cost of Net Tax
Investments Gross Tax Gross Tax Unrealized
for Tax Unrealized Unrealized Appreciation
Purposes Appreciation Depreciation on Investments
================================================================================
$36,967,677 $298,670 $(10,589,816) $(10,291,146)
--------------------------------------------------------------------------------
Undistributed Undistributed
Ordinary Long-Term
Income/ Gains/ Other
(Accumulated (Accumulated Temporary
Ordinary Loss) Capital Loss) Differences
================================================================================
$0 $(68,526,138) $(311,061)
--------------------------------------------------------------------------------
|
At November 30, 2008 for federal income tax purposes, the Fund had a capital
loss carryforward of $68,471,517 available to offset possible future capital
gains. The capital loss carryforward is set to expire November 30, 2016.
Capital losses Incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of each the Fund's
next taxable year. During the year ended November 30, 2008, the Fund incurred
and will elect to defer net capital losses of $54,621.
The differences between book basis and tax basis unrealized appreciation/
(depreciation) are attributable to the deferral of losses for tax purposes
on wash sales.
For the year ended November 30, 2008, the tax character of distributions paid,
as reflected in the Statement of Changes in Net Assets, was $3,581,196 of
ordinary income and return of capital of $4,349,088. For the year ended November
30, 2007, the tax character of distributions paid was $8,846,313 of ordinary
income and $852,595 of long-term gain.
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or
Annual Report | November 30, 2008 | l7
HCE | Fiduciary/Claymore Dynamic Equity Fund | Notes to Financial Statements
continued
expected to be taken in the course of preparing the Fund's tax returns to
determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold would be recorded as a tax expense in the current
year. Management has evaluated the implications of Fin 48 and has determined it
does not have any impact on the financial statements as of November 30, 2008.
Tax years for 2005, 2006 and 2007 are still subject to examination by major
jurisdictions.
Note 5 - INVESTMENTS AND OPTIONS WRITTEN:
For the year ended November 30, 2008, purchases and sales of investments,
excluding written options and short-term securities were $102,088,938 and
$147,151,913, respectively.
The Fund entered into written option contracts
during the period ended November 30, 2008. Details of the transactions were as
follows:
NUMBER OF CONTRACTS PREMIUMS RECEIVED
================================================================================
Options outstanding, beginning of period 20,823 $ 3,953,921
Options written during the period 220,201 43,851,633
Options expired during the period (28,266) (5,956,277)
Options closed during the period (206,189) (40,812,405)
Options assigned during the period (791) (110,222)
--------------------------------------------------------------------------------
Options outstanding, end of period 5,778 $ 926,650
--------------------------------------------------------------------------------
|
Note 6 - BORROWINGS:
On September 18, 2008, the Fund entered into a $25,000,000 credit facility
agreement. Interest on the amount borrowed is based on the 1-month LIBOR plus
1.10%. An unused fee of 0.20% is charged on the difference between the
$25,000,000 credit facility and the amount borrowed. At November 30, 2008 there
was $0 outstanding in connection with the Fund's credit facility. The average
daily amount of borrowings on the credit facility during the year ended November
30, 2008 was $920,765 with a related average interest rate of 4.28%. The maximum
amount outstanding during the year ended November 30, 2008, was $20,000,000. On
December 29, 2008, the Fund terminated this credit facility agreement.
Note 7 - CAPITAL:
COMMON SHARES
The Fund has an unlimited amount of common shares, $0.01 par value, authorized
and 5,705,240 issued and outstanding.
There were no transactions in common shares during the year ended November 30,
2008.
At November 30, 2008, Claymore Advisors, LLC the Fund's investment adviser and
administrator, owned 5,633 shares.
Note 8 - INDEMNIFICATIONS:
In the normal course of business, the Fund enters into contracts that contain a
variety of representations, which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown, as this would require
future claims that may be made against the Fund that have not yet occurred.
However, the Fund expects the risk of loss to be remote.
Note 9 - ACCOUNTING PRONOUNCEMENTS:
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivatives instruments and related hedge fund
items are accounted for, and c) how derivative instruments and related hedge
items affect a fund's financial position, results of operations and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. As of November 30, 2008,
management does not believe the adoption of SFAS No. 161 will impact the
financial statement amounts; however, additional footnote disclosures may be
required about the use of derivative instruments and hedging items.
Note 10 - SUBSEQUENT EVENT:
On December 23, 2008 the Fund announced that its Board of Trustees adopted a
proposal to liquidate the Fund. Subject to shareholder approval of the plan of
liquidation and dissolution adopted by the Board of Trustees, the Fund plans to
sell its assets, discharge its liabilities and distribute the net proceeds to
shareholders.
Effective December 1, 2008, the Adviser increased the voluntary waiver of its
advisory fee to 1.00% of the Fund's Managed Assets.
18 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
FIDUCIARY/CLAYMORE DYNAMIC EQUITY FUND
We have audited the accompanying statement of assets and liabilities of
Fiduciary/Claymore Dynamic Equity Fund, (the "Fund"), including the portfolio of
investments, as of November 30, 2008, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years then ended, and the financial highlights for each of the three years
then ended and for the period from April 29, 2005 (commencement of operations)
through November 30, 2005. 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 conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2008, by correspondence with the Fund's
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Fiduciary/Claymore Dynamic Equity Fund as of November 30, 2008, and the results
of its operations for the year then ended, the changes in its net assets for
each of the two years then ended, and financial highlights for each of the three
years then ended and for the period from April 29, 2005 (commencement of
operations) through November 30, 2005, in conformity with U.S. generally
accepted accounting principles.
/s/ ERNST & YOUNG LLP
Chicago, Illinois
January 23, 2009
|
Annual Report | November 30, 2008 | 19
HCE | Fiduciary/Claymore Dynamic Equity Fund
Supplemental INFORMATION | (unaudited)
FEDERAL INCOME TAX INFORMATION
Qualified dividend income of as much as $1,455,612 was received by the Fund
through November 30, 2008. The Fund intends to designate the maximum amount of
dividends that qualify for the reduced tax rate pursuant to the Jobs and Growth
Tax Relief Reconciliation Act of 2003.
For corporate shareholders, $1,437,632 of investment income qualifies for the
dividends-received deduction.
In January 2009, you will be advised on IRS Form 1099 DIV or substitute 1099 DIV
as to the federal tax status of the distributions received by you in the
calendar year 2008.
RESULTS OF SHAREHOLDER VOTE
The Annual Meeting of Shareholders of the Fund was held on July 22, 2008. Common
shareholders voted on the election of Trustees.
With regard to the election of the following Class III Trustees by common
shareholders of the Fund:
# OF SHARES # OF SHARES
IN FAVOR WITHHELD
================================================================================
Robert B. Karn III 4,929,749 116,147
John M. Roeder 4,932,699 113,197
Ronald E. Toupin, Jr. 4,929,369 116,527
|
The other Trustees of the Fund whose terms did not expire in 2008 are Randall C.
Barnes, Nicholas Dalmaso, Joseph E. Gallagher Jr., Howard H. Kaplan and Ronald
A. Nyberg.
TRUSTEES
The Trustees of the Fiduciary/Claymore Dynamic Equity Fund and their principal
occupations during the past five years:
NUMBER OF
NAME, ADDRESS*, YEAR OF TERM OF OFFICE** PRINCIPAL OCCUPATIONS DURING FUNDS IN
BIRTH AND POSITION(S) AND LENGTH OF THE PAST FIVE YEARS AND FUND COMPLEX*** OTHER DIRECTORSHIPS
HELD WITH REGISTRANT TIME SERVED OTHER AFFILIATIONS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
====================================================================================================================================
INDEPENDENT TRUSTEES:
====================================================================================================================================
Randall C. Barnes Since 2005 Investor (2001-present). Formerly, 43 None.
Year of birth: 1951 Senior Vice President & Treasurer
Trustee (1993-1997), President, Pizza Hut
International (1991-1993) and Senior
Vice President, Strategic Planning
and New Business Development (1987-1990)
of PepsiCo, Inc. (1987-1997).
------------------------------------------------------------------------------------------------------------------------------------
Howard H. Kaplan Since 2005 Partner of Stinson Morrison Hecker, LLP, 2 None.
Year of birth: 1969 a law firm providing legal advice in
Trustee business law and litigation matters
(2007-present). Formerly, principal
of Blumenfeld, Kaplan & Sandweiss a law
firm providing legal advice in business
law and litigation (1994-2007).
------------------------------------------------------------------------------------------------------------------------------------
Robert B. Karn III Since 2005 Consultant (1998-present). Previously, 2 Director of Peabody
Year of birth: 1942 Managing Partner, Financial and Economic Energy Company, GP,
Trustee Consulting St. Louis Office of Arthur Natural Resource
Andersen, LLP. Partners LLC and
Kennedy Capital
Management, Inc.
------------------------------------------------------------------------------------------------------------------------------------
Ronald A. Nyberg Since 2005 Partner of Nyberg & Cassioppi, LLC, a 46 None.
Year of birth: 1953 law firm specializing in corporate law,
Trustee estate planning and business transactions
(2000-present). Formerly, Executive Vice
President, General Counsel and Corporate
Secretary of Van Kampen Investments
(1982-1999).
------------------------------------------------------------------------------------------------------------------------------------
John M. Roeder Since 2005 Financial consultant (1999-present). 2 Director, LMI
Year of birth: 1943 Formerly, Director in Residence at The Aerospace.
Trustee Institute for Excellence in Corporate
Governance of the University of Texas at
Dallas School of Management. (2005-2007)
Office Managing Partner Arthur Andersen,
LLP. (1966-1999)
------------------------------------------------------------------------------------------------------------------------------------
Ronald E. Toupin, Jr. Since 2005 Retired. Formerly, Vice President, Manager 43 None.
Year of birth: 1958 and Portfolio Manager of Nuveen Asset
Trustee Management (1998-1999), Vice President of
Nuveen Investment Advisory Corp. (1992-1999),
Vice President and Manager of Nuveen Unit
Investment Trusts (1991-1999), and Assistant
Vice President and Portfolio Manager of Nuveen
Unit Investment Trusts (1988-1999), each of
John Nuveen & Co., Inc. (1982-1999).
------------------------------------------------------------------------------------------------------------------------------------
|
20 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund | Supplemental Information
(unaudited) continued
NUMBER OF
NAME, ADDRESS*, YEAR OF TERM OF OFFICE** PRINCIPAL OCCUPATIONS DURING FUNDS IN
BIRTH AND POSITION(S) AND LENGTH OF THE PAST FIVE YEARS AND FUND COMPLEX*** OTHER DIRECTORSHIPS
HELD WITH REGISTRANT TIME SERVED OTHER AFFILIATIONS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
====================================================================================================================================
INDEPENDENT TRUSTEES:
====================================================================================================================================
Nicholas Dalmaso+ Since 2005 Attorney. Formerly, Senior 45 None.
Year of birth: 1965 Managing Director and Chief
Trustee Administrative Officer (2007-2008)
and General Counsel (2001-2007)
of Claymore Advisors, LLC and
Claymore Securities, Inc. Formerly,
Assistant General Counsel, John
Nuveen and Company Inc. (1999-2000).
Former Vice President and Associate
General Counsel of Van Kampen
Investments, Inc. (1992-1999).
------------------------------------------------------------------------------------------------------------------------------------
Joseph E. Gallagher, Jr.++ Since 2005 Executive Managing Director and 2 Member of the
8235 Forsyth Blvd. Chief Operating Officer of Fiduciary Board of Directors
Suite 700 Asset Management, LLC (1994-present). for the Rossman
St. Louis, MO 63105 Member of the St. Louis Chapter of School.
Year of Birth: 1956 the National Association for Business
Trustee Economics.
------------------------------------------------------------------------------------------------------------------------------------
* Address for all Trustees unless otherwise noted: 2455 Corporate West Drive,
Lisle, IL 60532
** After a Trustee's initial term, each Trustee is expected to serve a
three-year term concurrent with the class of Trustees for which he serves:
- Messrs. Barnes and Dalmaso, as Class I trustees, are expected to stand
for re-election at the Fund's 2009 annual meeting of shareholders.
- Messrs. Gallagher, Kaplan and Nyberg, as Class II trustees, are expected
to stand for re-election at the Fund's 2010 annual meeting of
shareholders.
- Messrs. Roeder, Toupin and Karn, as Class III trustees, are expected to
stand for re-election at the Fund's 2011 annual meeting of shareholders.
*** The Claymore Fund Complex consists of U.S. registered investment companies
advised or serviced by Claymore Advisors, LLC or Claymore Securities, Inc.
+ Mr. Dalmaso is an "interested person" (as defined in section 2(a)(19) of
the 1940 Act) of the Fund as a result of his former position as an officer
of and his equity ownership in Claymore Advisors, LLC the Fund's Investment
Adviser and certain of its affiliates.
++ Mr. Gallagher is an "interested person" (as defined in section 2(a)(19) of
the 1940 Act) of the Fund because of his position as an officer of
Fiduciary Asset Management, LLC, the Fund's Sub-Adviser.
|
OFFICERS
The Officers of the Fiduciary/Claymore Dynamic Equity Fund and their principal
occupations during the past five years:
NAME, ADDRESS*, YEAR OF BIRTH AND TERM OF OFFICE** AND PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
POSITION(S) HELD WITH REGISTRANT LENGTH OF TIME SERVED AND OTHER AFFILIATIONS
====================================================================================================================================
OFFICERS:
====================================================================================================================================
J. Thomas Futrell Effective May 29, 2008 Senior Managing Director and Chief Investment
Year of birth: 1955 Officer of Claymore Advisors, LLC and Claymore
Chief Executive Officer Securities Inc.(2008-Present). Formerly,
Managing Director of Research, Nuveen Asset
Management (2000-2007).
------------------------------------------------------------------------------------------------------------------------------------
Kevin Robinson Effective May 29, 2008 Senior Managing Director and General Counsel of
Year of birth: 1959 Claymore Advisors, LLC and Claymore Group, Inc.
Chief Legal Officer (2007-present). Formerly, Associate General
Counsel and Assistant Corporate Secretary of
NYSE Euronext, Inc. (2000-2007).
------------------------------------------------------------------------------------------------------------------------------------
Steven M. Hill Since 2005 Senior Managing Director of Claymore Advisors,
Year of birth: 1964 LLC and Claymore Securities, Inc.
Chief Accounting Officer, (2005-present). Formerly, Chief Financial
Chief Financial Officer Officer of Claymore Group Inc. (2005-2006);
and Treasurer Managing Director of Claymore Advisors,
LLC and Claymore Securities, Inc. (2003-2005).
Treasurer of Henderson Global Funds and
Operations Manager for Henderson Global
Investors (NA) Inc., (2002-2003). Managing
Director, FrontPoint Partners LLC (2001-2002).
------------------------------------------------------------------------------------------------------------------------------------
Bruce Saxon Since 2006 Vice President-Fund Compliance Officer of
Year of birth: 1957 Claymore Group Inc. (2006 to present). Chief
Chief Compliance Officer Compliance Officer/Assistant Secretary of
Harris Investment Management, Inc. (2003-2006).
Director-Compliance of Harrisdirect LLC
(1999-2003).
------------------------------------------------------------------------------------------------------------------------------------
Mark Mathiasen Since 2007 Assistant Vice President, Assistant General
Year of birth: 1978 Counsel of Claymore Advisors, LLC
Secretary (2007-present). Secretary of certain funds
in the Funds Complex. Previously, Law Clerk
for the Idaho State Courts (2003-2007).
------------------------------------------------------------------------------------------------------------------------------------
Charles D. Walbrandt Since 2008 Founding Principal, Chief Executive Officer &
Year of birth: 1938 Chief Investment Officer of Ficuciary Asset
Vice President Management, LLC (1994-Present).
------------------------------------------------------------------------------------------------------------------------------------
James Cunnane, Jr Since 2007 Managing Director, Senior Portfolio Manager of
Year of birth: 1970 Fiduciary Asset Management, LLC (1996-Present)
Vice President
------------------------------------------------------------------------------------------------------------------------------------
* Address for all Officers: 2455 Corporate West Drive, Lisle, IL 60532
** Officers serve at the pleasure of the Board of Trustees and until his or
her successor is appointed and qualified or until his or her earlier
resignation or removal.
|
Annual Report | November 30, 2008 | 21
HCE | Fiduciary/Claymore Dynamic Equity Fund
Dividend Reinvestment PLAN | (unaudited)
Unless the registered owner of common shares elects to receive cash by
contacting the Plan Administrator, all dividends declared on common shares of
the Fund will be automatically reinvested by the Bank of New York Mellon (the
"Plan Administrator"), Administrator for shareholders in the Fund's Dividend
Reinvestment Plan (the "Plan"), in additional common shares of the Fund.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by notice if received and processed by the
Plan Administrator prior to the dividend record date; otherwise such termination
or resumption will be effective with respect to any subsequently declared
dividend or other distribution. Some brokers may automatically elect to receive
cash on your behalf and may re-invest that cash in additional common shares of
the Fund for you. If you wish for all dividends declared on your common shares
of the Fund to be automatically reinvested pursuant to the Plan, please contact
your broker.
The Plan Administrator will open an account for each common shareholder under
the Plan in the same name in which such common shareholder's common shares are
registered. Whenever the Fund declares a dividend or other distribution
(together, a "Dividend") payable in cash, non-participants in the Plan will
receive cash and participants in the Plan will receive the equivalent in common
shares. The common shares will be acquired by the Plan Administrator for the
participants' accounts, depending upon the circumstances described below, either
(i) through receipt of additional unissued but authorized common shares from the
Fund ("Newly Issued Common Shares") or (ii) by purchase of outstanding common
shares on the open market ("Open-Market Purchases") on the New York Stock
Exchange or elsewhere. If, on the payment date for any Dividend, the closing
market price plus estimated brokerage commission per common share is equal to or
greater than the net asset value per common share, the Plan Administrator will
invest the Dividend amount in Newly Issued Common Shares on behalf of the
participants. The number of Newly Issued Common Shares to be credited to each
participant's account will be determined by dividing the dollar amount of the
Dividend by the net asset value per common share on the payment date; provided
that, if the net asset value is less than or equal to 95% of the closing market
value on the payment date, the dollar amount of the Dividend will be divided by
95% of the closing market price per common share on the payment date. If, on the
payment date for any Dividend, the net asset value per common share is greater
than the closing market value plus estimated brokerage commission, the Plan
Administrator will invest the Dividend amount in common shares acquired on
behalf of the participants in Open-Market Purchases.
If, before the Plan Administrator has completed its Open-Market Purchases, the
market price per common share exceeds the net asset value per common share, the
average per common share purchase price paid by the Plan Administrator may
exceed the net asset value of the common shares, resulting in the acquisition of
fewer common shares than if the Dividend had been paid in Newly Issued Common
Shares on the Dividend payment date. Because of the foregoing difficulty with
respect to Open-Market Purchases, the Plan provides that if the Plan
Administrator is unable to invest the full Dividend amount in Open-Market
Purchases during the purchase period or if the market discount shifts to a
market premium during the purchase period, the Plan Administrator may cease
making Open-Market Purchases and may invest the uninvested portion of the
Dividend amount in Newly Issued Common Shares at net asset value per common
share at the close of business on the Last Purchase Date provided that, if the
net asset value is less than or equal to 95% of the then current market price
per common share; the dollar amount of the Dividend will be divided by 95% of
the market price on the payment date.
The Plan Administrator maintains all shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by shareholders for tax records. Common shares in the account
of each Plan participant will be held by the Plan Administrator on behalf of the
Plan participant, and each shareholder proxy will include those shares purchased
or received pursuant to the Plan. The Plan Administrator will forward all proxy
solicitation materials to participants and vote proxies for shares held under
the Plan in accordance with the instruction of the participants.
There will be no brokerage charges with respect to common shares issued directly
by the Fund. However, each participant will pay a pro rata share of brokerage
commission incurred in connection with Open-Market Purchases. The automatic
reinvestment of Dividends will not relieve participants of any Federal, state or
local income tax that may be payable (or required to be withheld) on such
Dividends.
The Fund reserves the right to amend or terminate the Plan. There is no direct
service charge to participants with regard to purchases in the Plan; however,
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants.
All correspondence or questions concerning the Plan should be directed to the
Plan Administrator, BNY Mellon Shareowner Services P.O. Box 358015 Pittsburgh PA
15252-8015, Phone Number: (866) 488-3559.
22 | Annual Report | November 30, 2008
HCE | Fiduciary/Claymore Dynamic Equity Fund
Report in Connection with the Annual Review of
the INVESTMENT ADVISORY AGREEMENT and
INVESTMENT SUB-ADVISORY AGREEMENT FOR FIDUCIARY/
CLAYMORE DYNAMIC EQUITY FUNDl (unaudited)
On October 6, 20 and 21, 2008, the Nominating and Governance Committee (referred
to as the "Committee" and consisting solely of all those trustees who are not
interested persons as defined by the Investment Company Act of 1940, the
"Independent Trustees") of the Board of Trustees of the Fiduciary/Claymore
Dynamic Equity Fund (the "Fund") met independently of Fund management and of the
interested trustees of the Board of Trustees to consider the renewal of: (1) the
investment advisory agreement ("Investment Advisory Agreement") between the Fund
and Claymore Advisors, LLC ("Adviser") and (2) the investment sub-advisory
agreement ("Investment Sub-Advisory Agreement") among the Adviser, the Fund and
Fiduciary Asset Management, LLC ("Sub-Adviser"). (The Investment Advisory
Agreement and the Investment Sub-Advisory Agreement are together referred to as
the "Advisory Agreements.") As part of its review process, the Committee was
represented by independent legal counsel. The Committee reviewed materials
received from the Adviser, the Sub-Adviser and independent legal counsel.
In preparation for their review, the Committee members communicated with
independent legal counsel regarding the nature of information to be requested
for evaluation, and independent legal counsel, on behalf of the Committee, sent
a formal request for information. Among other information, the Adviser and
Sub-Adviser provided general information to assist the Committee in assessing
the nature and quality of services provided by the Adviser and Sub-Adviser and
information comparing the investment performance, advisory fees and total
expenses of the Fund to other funds, information about the profitability from
the Advisory Agreements to each of the Adviser and the Sub-Adviser and the
compliance matters affecting each of the Adviser and the Sub-Adviser.
The Committee requested additional information from the Adviser and Sub-Adviser
including information regarding strategic alternatives for the Fund in light of
the Fund's performance in September and October, 2008. The Board of Trustees of
the Fund met on October 20 and 21 and November 11, 2008 to consider renewal of
the Advisory Agreements. As the Board of Trustees considered the options
available to the Fund, the Board concluded that it was in the best interest of
the Fund to renew each of the Advisory Agreements on an interim basis until the
later of January 21, 2009 or the next in-person meeting of the Board of
Trustees.
Annual Report | November 30, 2008 | 23
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HCE | Fiduciary/Claymore Dynamic Equity Fund
Fund INFORMATION |
BOARD OF TRUSTEES
Randall C. Barnes
Nicholas Dalmaso*
Joseph E. Gallagher, Jr.**
Howard H. Kaplan
Robert B. Karn III
Ronald A. Nyberg
John M. Roeder
Ronald E. Toupin, Jr.
* Trustee is an "interested person" of the Fund as defined in the Investment
Company Act of 1940, as amended, as a result of his former position as an
officer of, and his equity ownership in, the Fund's Investment Adviser and
certain of its affiliates.
** Trustee is an "interested person" of the Fund as defined in the Investment
Company Act of 1940, as amended.
OFFICERS
J.Thomas Futrell
Chief Executive Officer
Kevin Robinson
Chief Legal Officer
Steven M. Hill
Chief Accounting Officer, Chief
Financial Officer and Treasurer
Bruce Saxon
Chief Compliance Officer
Mark Mathiasen
Secretary
Charles D. Walbrandt
Vice President
James Cunnane, Jr
Vice President
INVESTMENT ADVISER
AND ADMINISTRATOR
Claymore Advisors, LLC
Lisle, Illinois
INVESTMENT SUB-ADVISER
Fiduciary Asset Management, LLC
St. Louis, Missouri
ACCOUNTING AGENT, CUSTODIAN
AND TRANSFER AGENT
The Bank of New York Mellon
New York, New York
LEGAL COUNSEL
Skadden, Arps, Slate,
Meagher & Flom LLP
Chicago, Illinois
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
Chicago, Illinois
PRIVACY PRINCIPLES OF FIDUCIARY/CLAYMORE DYNAMIC EQUITY FUND FOR SHAREHOLDERS
The Fund is committed to maintaining the privacy of its shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Fund collects, how
we protect that information and why, in certain cases, we may share information
with select other parties.
Generally, the Fund does not receive any non-public personal information
relating to its shareholders, although certain non-public personal information
of its shareholders may become available to the Fund. The Fund does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone except as permitted by law or as is necessary in order to
service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Fund restricts access to non-public personal information about the
shareholders to Claymore Advisors, LLC employees with a legitimate business need
for the information. The Fund maintains physical, electronic and procedural
safeguards designed to protect the non-public personal information of its
shareholders.
QUESTIONS CONCERNING YOUR SHARES OF FIDUCIARY/CLAYMORE DYNAMIC EQUITY FUND?
o If your shares are held in a Brokerage Account, contact your Broker.
o If you have physical possession of your shares in certificate form,
contact the Fund's Custodian and Transfer Agent: The Bank of New York
Mellon Mellon, 101 Barclay 11W New York, New York 10286; (866)
488-3559
|
This report is sent to shareholders of Fiduciary/Claymore Dynamic Equity Fund
for their information. It is not a Prospectus, circular or representation
intended for use in the purchase or sale of shares of the Fund or of any
securities mentioned in this report.
A description of the Fund's proxy voting policies and procedures related to
portfolio securities is available without charge, upon request, by calling the
Fund at (800) 345-7999 or on the U.S. Securities and Exchange Commission's
("SEC") website at http://www.sec.gov.
Information regarding how the Fund voted proxies for portfolio securities, if
applicable, during the most recent 12-month period ended June 30 is also
available, without charge and upon request by calling the Fund at (800) 345-7999
or by accessing the Fund's Form N-PX on the SEC's website at http://www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is
available on the SEC website at http://www.sec.gov. The Fund's Form N-Q may also
be viewed and copied at the SEC's Public Reference Room in Washington, DC;
information on the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330 or at www.claymore.com.
In August 2008, the Fund submitted a CEO annual certification to the New York
Stock Exchange ("NYSE") in which the Fund's principal executive officer
certified that he was not aware, as of the date of the certification, of any
violation by the Fund of the NYSE's Corporate Governance listing standards. In
addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and
related Securities and Exchange Commission ("SEC") rules, the Fund's principal
executive and principal financial officers have made quarterly certifications,
included in filings with the SEC on Forms N-CSR and N-Q, relating to, among
other things, the Fund's disclosure controls and procedures and internal control
over financial reporting.
Annual Report | November 30, 2008 | 27
HCE | Fiduciary/Claymore Dynamic Equity Fund
About the FUND MANAGER |
FIDUCIARY ASSET MANAGEMENT, LLC
Fiduciary is a registered investment adviser that manages a broad array of
equity and fixed-income portfolios primarily for institutional investors and is
based in St. Louis, Missouri. As of November 30, 2008 Fiduciary currently
supervises and manages approximately $12.9 billion in assets for endowments &
foundations, public pension plans, corporate trusts, union plans, Taft-Hartley
plans, three exchange-listed closed-end funds and five private investment funds.
FIDUCIARY ASSET MANAGEMENT, LLC
8235 Forsyth Boulevard,
Suite 700
St. Louis, MO 63105
CLAYMORE SECURITIES, INC.
2455 Corporate West Drive
Lisle, IL 60532
Member FINRA/SIPC 01/09
HCE
LISTED
NYSE(R)
HCE-AR-1108
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics (the "Code of Ethics") that
applies to its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.
(b) No information need be disclosed pursuant to this paragraph.
(c) The registrant has not amended its Code of Ethics during the period covered
by the shareholder report presented in Item1 hereto.
(d) The registrant has not granted a waiver or an implicit waiver to its
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions from a provision
of its Code of Ethics during the period covered by this report.
(e) Not applicable.
(f) (1) The registrant's Code of Ethics is attached hereto as an exhibit.
(2) Not applicable.
(3) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that it has at least one audit
committee financial expert serving on its audit committee, Robert B. Karn, III.
Mr. Karn is an "independent" Trustee. Mr. Karn qualifies as an audit committee
financial expert by virtue of his experience obtained as a managing partner in a
public accounting firm, which included an understanding of generally accepted
accounting principals ("GAAP") in connection with the accounting for estimates,
accruals and reserves and also the review, audit and evaluation of financial
statements using GAAP.
(Under applicable securities laws, a person who is determined to be an audit
committee financial expert will not be deemed an "expert" for any purpose,
including without limitation for the purposes of Section 11 of the Securities
Act of 1933, as amended, as a result of being designated or identified as an
audit committee financial expert. The designation or identification of a person
as an audit committee financial expert does not impose on such person any
duties, obligations, or liabilities that are greater than the duties,
obligations, and liabilities imposed on such person as a member of the audit
committee and Board of Trustees in the absence of such designation or
identification. The designation or identification of a person as an audit
committee financial expert does not affect the duties, obligations, or liability
of any other member of the audit committee or Board of Trustees.)
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a). Audit Fees: the aggregate fees billed for the year ended November 30, 2008,
for professional services rendered by the principal accountant for the audit of
the registrant's annual financial statements were approximately $36,000. The
aggregate fees billed for the year ended November 30, 2007 for professional
services rendered by the principal accountant for the audit of the registrant's
annual financial statements were approximately $35,000.
(b). Audit-Related Fees: the aggregate fees billed for the year ended November
30, 2008, for assurance and related services by the principal accountant that
are reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this Item were
$0. The Audit-Related fees for the year ended November 30, 2007 were $0.
(c). Tax Fees: the aggregate fees billed for the the year ended November 30,
2008, for professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning were approximately $6,000. The Tax fees
for the year ended November 30, 2007 were approximately $6,000.
(d). All Other Fees: the aggregate fees billed for the the year ended November
30, 2008, for products and services provided by the principal accountant, other
than the services reported in paragraphs (a) and (c) of this Item were $0. The
Other fees for the year ended November 30, 2007 was $0.
The registrant's principal accountant did not bill fees for non-audit services
that required approval by the Audit Committee pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X during the Registrant's last two fiscal years.
(e) Audit Committee Pre-Approval Policies and Procedures.
(1) The Registrant's audit committee reviews, and in its sole
discretion, pre-approves, pursuant to written pre-approval procedures (A) all
engagements for audit and non-audit services to be provided by the principal
accountant to the registrant and (B) all engagements for non-audit services to
be provided by the principal accountant (1) to the registrant's investment
adviser (not including a sub-adviser whose role is primarily portfolio
management and is sub-contracted or overseen by another investment adviser) and
(2) to any entity controlling, controlled by or under common control with the
registrant's investment adviser that provides ongoing services to the
registrant; but in the case of the services described in subsection (B)(1) or
(2), only if the engagement relates directly to the operations and financial
reporting of the registrant; provided that such pre-approval need not be
obtained in circumstances in which the pre-approval requirement is waived under
rules promulgated by the Securities and Exchange Commission or New York Stock
Exchange listing standards. Sections IV.C.2 and IV.C.3 of the Audit Committee's
revised Audit Committee Charter contain the Audit Committee's Pre-Approval
Policies and Procedures and such sections are included below.
IV.C.2 Pre-approve any engagement of the independent auditors to
provide any non-prohibited services to the Trust, including
the fees and other compensation to be paid to the independent
auditors (unless an exception is available under Rule 2-01 of
Regulation S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval of services to the Trust for
non-prohibited services up to $10,000. All such delegated
pre-approvals shall be presented to the Audit Committee no
later than the next Audit Committee meeting.
|
IV.C.3 Pre-approve any engagement of the independent auditors,
including the fees and other compensation to be paid to the
independent auditors, to provide any non-audit services to the
Adviser (or any "control affiliate" of the Adviser providing
ongoing services to the Trust), if the engagement relates
directly to the operations and financial reporting of the
Trust (unless an exception is available under Rule 2-01 of
Regulation S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval for non-audit services to the Adviser
up to $10,000. All such delegated pre-approvals shall be
presented to the Audit Committee no later than the next Audit
Committee meeting.
|
(2) None of the services described in each of Items 4(b) through (d)
were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, the registrant's investment adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted with or overseen by another investment adviser) and/or any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant that directly related to the
operations and financial reporting of the registrant for the year ended November
30, 2008 were approximately $6,000. The Aggregate Non-Audit Fees for year ended
November 30, 2007 were approximately $6,000.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) 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 of the registrant is comprised of:
Randall C. Barnes, Howard H. Kaplan, Robert B. Karn, III, Ronald A. Nyberg, John
M. Roeder, and Ronald E. Toupin, Jr.
(b) Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments is included as part of Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant has delegated the voting of proxies relating to its voting
securities to its investment sub-adviser, Fiduciary Asset Management, LLC (the
"Sub-Adviser" or "Fiduciary"). The Sub-Adviser's Proxy Voting Policies and
Procedures are included as an exhibit hereto.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a)(1) Charles D. Walbrandt is primarily responsible for the day-to-day
management of the registrant's portfolio. The following provides information
regarding the portfolio manager as of November 30, 2008:
------------------------------ --------------- ---------------------------------------------------------
NAME SINCE PROFESSIONAL EXPERIENCE
------------------------------ --------------- ---------------------------------------------------------
CHARLES D. WALBRANDT Since 2008 Founding Principal, Chief Executive Officer & Chief
Investment Officer of Fiduciary Asset Management, LLC
(1994-Present).
------------------------------ --------------- --------------------------------------------------------
(a)(2)(i-iii) Other accounts managed. The following summarizes information
regarding each of the other accounts managed by the Portfolio Manager as of
November 30, 2008:
|
Total
# of Accounts Assets for
Managed for which
Total which Advisory
Name of Portfolio # of Advisory Fee Fee is
Manager or Accounts is Based on Based on
Team Member Type of Accounts Managed Total Assets Performance Performance
-----------------------------------------------------------------------------------------------------------------------------------
Charles D. Walbrandt Registered Investment Companies: 0 $ 0 0 $0
Other Pooled Investment Vehicles: 1 $ 98 mil 0 $0
Other Accounts: 0 $ 0 0 $0
|
(a)(2)(iv) Conflicts of Interest.
Actual or apparent conflicts of interest may arise when a portfolio manager has
day-to-day management responsibilities with respect to more than one fund or
other account. More specifically, portfolio managers who manage multiple funds
and/or other accounts may be presented with one or more of the following
potential conflicts:
The management of multiple funds and/or other accounts may result in a portfolio
manager devoting unequal time and attention to the management of each fund
and/or other account. Fiduciary seeks to manage such competing interests for the
time and attention of a portfolio manager by having the portfolio manager's
focus on a particular investment discipline. Most other accounts managed by a
portfolio manager are managed using the same investment models that are used in
connection with the management of the registrant.
If a portfolio manager identifies a limited investment opportunity which may be
suitable for more than one fund or other account, a fund may not be able to take
full advantage of that opportunity due to an allocation of filled purchase or
sale orders across all eligible funds and other accounts. To deal with these
situations, Fiduciary and the registrant have adopted procedures for allocating
portfolio transactions across multiple accounts. With respect to securities
transactions for the funds, Fiduciary determines which broker to use to execute
each order, consistent with its duty to seek best execution of the transaction.
However, with respect to certain other accounts (such as other funds for which
Fiduciary acts as sub-advisor, other pooled investment vehicles that are not
registered mutual funds, and other accounts managed for organizations and
individuals), Fiduciary may be limited by the client with respect to the
selection of brokers or may be instructed to direct trades through a particular
broker. In these cases, trades for a fund in a particular security may be placed
separately from, rather than aggregated with, such other accounts. Having
separate transactions with respect to a security may temporarily affect the
market price of the security or the execution of the transaction, or both, to
the possible detriment of the registrant or other account(s) involved.
Fiduciary and the registrant have adopted certain compliance procedures which
are designed to address these types of conflicts. However, there is no guarantee
that such procedures will detect each and every situation in which a conflict
arises.
(a)(3) Compensation Structure. The primary portfolio manager's compensation
consists of the following elements:
o Base Salary. The primary portfolio manager is paid a base salary which
is set at a level determined to be appropriate based upon his
experience and responsibilities through the use of independent
compensation surveys of the investment management industry.
o Annual Bonus. Mr. Walbrandt does not receive an annual bonus.
o The Primary portfolio manager also participates in benefit plans and
programs generally available to all employees.
(a)(4) Securities ownership. The following table discloses the dollar range of
equity securities of the Fund beneficially owned by the Fiduciary Portfolio
Manager as of November 30, 2008:
Dollar Range of Equity
NAME OF PORTFOLIO MANAGER Securities in Registrant
------------------------------------------------------------------------------
Charles D. Walbrandt $0
------------------------------------------------------------------------------
|
(b) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On October 21, 2008, the registrant's Board of Trustees (the "Board") approved a
revised written charter (the "Nominating and Governance Committee Charter") for
its nominating and governance committee (the "Nominating and Governance
Committee") that contains changes to the procedures by which shareholders may
recommend nominees to the Board.
Under the Nominating and Governance Charter, the previously existing procedures
by which shareholders may recommend nominees to the Board, as described in the
registrant's proxy statement filed with the Securities and Exchange Commission
on June 1, 2007, remain in effect. In addition to these previously existing
procedures, the Nominating and Governance Charter includes a new requirement
that following the submission by a shareholder of a Trustee candidate
recommendation, a Trustee candidate must (i) be prepared to submit written
answers to a questionnaire seeking professional and personal information that
will assist the Nominating and Governance Committee to evaluate the candidate
and to determine, among other matters, whether the candidate would qualify as a
Trustee who is not an "interested person" of the registrant as such term is
defined under the Investment Company Act of 1940; (ii) be prepared to submit
character references and agree to appropriate background checks; and (iii) be
prepared to meet with one or more members of the Nominating and Governance
Committee at a time and location convenient to those Nominating and Governance
Committee members in order to discuss the nominee's qualifications.
A copy of the Nominating and Governance Committee Charter will be filed with the
Securities and Exchange Commission as an appendix to the registrant's 2009
annual shareholder meeting proxy statement.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have evaluated the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act) as of a date within 90 days
of this filing and have concluded based on such evaluation, as required by Rule
30a-3(b) under the Investment Company Act of 1940, that the registrant's
disclosure controls and procedures were effective, as of that date, in ensuring
that information required to be disclosed by the registrant in this Form N-CSR
was recorded, processed, summarized, and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that
occurred during the registrant's second fiscal quarter of the period covered by
this report that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics for Chief Executive and Senior Officers.
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Rule30a-2 of the Investment Company Act.
(a)(3) Not applicable.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Rule 30a-2(b) of the Investment Company Act and Section 906
of the Sarbanes-Oxley Act of 2002.
(c) Proxy Voting Policies and Procedures.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Fiduciary/Claymore Dynamic Equity Fund
By: /s/ J. Thomas Futrell
--------------------------------------------------------------------
Name: J. Thomas Futrell
Title: Chief Executive Officer
Date: February 6, 2009
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ J. Thomas Futrell
--------------------------------------------------------------------
Name: J. Thomas Futrell
Title: Chief Executive Officer
Date: February 6, 2009
By: /s/ Steven M. Hill
--------------------------------------------------------------------
Name: Steven M. Hill
Title: Treasurer and Chief Financial Officer
Date: February 6, 2009
|
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