Washington, D.C. 20549
Macquarie Global Infrastructure Total Return Fund Inc.
Item 1. Reports to Stockholders.
| |
(a) |
The Report to Shareholders is attached herewith. |
Table of contents
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19
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20
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21
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22
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24
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26
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54
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Unless otherwise noted, views
expressed herein are current as of November 30, 2022, and subject to change for events occurring after such date.
Other than Macquarie Bank Limited ABN 46 008 583 542
("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do
not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an
investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return
on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
Section 19(b)
disclosure
| Macquarie
Global Infrastructure Total Return Fund Inc. |
November 30, 2022
(Unaudited) |
Macquarie Global Infrastructure Total Return Fund Inc. (Fund), acting
pursuant to a Securities and Exchange Commission (SEC) exemptive order and with the approval of the Fund’s Board of Directors (Board), has adopted a plan, consistent with its investment objectives and policies, to support a level distribution
of income, capital gains and/or return of capital (Plan). In accordance with the Plan, the Fund paid a monthly dividend of $0.10 per share from December 2021 through April 2022. Beginning May 2022, the Fund paid a monthly dividend of $0.13 per
share.
The fixed amount distributed per share is
subject to change at the discretion of the Fund’s Board. Under the Plan, the Fund will distribute all available investment income to its shareholders, consistent with its primary investment objectives and as required by the Internal Revenue
Code of 1986, as amended (Code). If sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly
distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable the Fund to comply with the distribution
requirements imposed by the Code.
Shareholders should not draw any conclusions about the Fund’s
investment performance from the amount of these distributions or from the terms of the Plan. The Fund’s total investment return on net asset value is presented in its financial highlights table.
The Board may amend, suspend or terminate the
Fund’s Plan without prior notice if it deems such action to be in the best interest of the Fund or its shareholders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Fund’s stock is
trading at or above net asset value) or widening an existing trading discount. The Fund is subject to risks that could have an adverse impact on its ability to maintain level distributions. Examples of potential risks include, but are not limited
to, economic downturns impacting the markets, increased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to the Fund’s prospectus for a more complete description of
its risks.
A cumulative summary of the Section
19(a) notices for the Fund’s current fiscal period, if applicable, is included in Additional Information. Section 19(a) notices for the Fund, as applicable, are available on the Fund’s website at macquarieim.com/mgu.
Caution regarding
forward-looking statements and past performance
This Annual Report contains certain
forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of Delaware Management Company (DMC), a series of Macquarie
Investment Management Business Trust and its respective representatives, taking into account the information available to them as of the financial reporting period. Forward-looking statements include all statements that do not relate solely to
current or historical facts. For example, forward-looking statements may include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,”
“may,” “should,” “would” or other words that convey uncertainty of future events or outcomes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the
Fund’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Past performance is not
a reliable indication of future performance. When evaluating the information included in this Annual Report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of DMC and its
respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.
Capitalized terms used but not defined herein have the meaning
assigned to them in the
Fund’s prospectus.
Annual commentary
| Macquarie
Global Infrastructure Total Return Fund Inc. |
November 30, 2022
(Unaudited) |
Introduction
We are pleased to present this annual report to the
shareholders of the Fund for the 12 months ended November 30, 2022 (“the period”). The Fund commenced operations and began trading on the New York Stock Exchange on August 26, 2005.
Performance and portfolio review
The fiscal year began with concerns around the COVID-19
Omicron variant, which proved to be more infectious than the Delta variant. Later in the period, however, investors took consolation that the Omicron variant also appeared to be far less virulent.
The first quarter of fiscal 2022 saw major changes in
the macroeconomic environment, driven by geopolitical factors. Equity markets reacted negatively as inflation increased, conflict broke out in Eastern Europe, and commodity prices spiked. Oil and natural gas prices rose significantly, fueling
expectations for higher inflation, a positive macroeconomic variable for infrastructure assets. Bond yields also rose significantly during this quarter, with 10-year US Treasury yields starting the period at 1.51% and finishing at 2.34%, driven by a
rapid escalation in expectations regarding the US Federal Reserve’s approach to increasing interest rates.
The infrastructure sector significantly outperformed
broader equity markets during the first quarter of fiscal 2022, as the S&P Global Infrastructure Index (net) rose 7.3%, as rising inflation, lower growth expectations, and a flight toward more stable and predictable investments combined. Broader
equity markets staged a recovery later in the quarter but ended the quarter down 5.2%, as measured by the MSCI World Index (net).
The second quarter of fiscal 2022 failed to provide the
catalyst that markets awaited.
Central banks continued to grapple with inflation, but they were now
even more conscious of rising growth risks, which remained higher in Europe than the US. Labor markets remained tight but with real wage growth in negative territory, the squeeze on consumers remained.
Central banks’ commitment to bring inflation
under control, despite the inherent risks to the growth outlook, shook both equity and bond markets in the third quarter of fiscal 2022. The focus was increasingly on growth risks and asset markets paid note to sentiment surveys where the
significant concerns consumers expressed were increasingly reflected by businesses. While the summer brought historical droughts and heatwaves to many parts of the world, the global economy nevertheless continued to cool down. Most of the economic
data published, such as the global composite Purchasing Managers’ Index (PMI), which dropped to a 22-month low of 50.8 in July 2022, continued to illustrate the slowing of the global economy. (The Purchasing Managers’ Index (PMI) is an
indicator of the economic health of the manufacturing sector.)
Toward the end of the reporting period, ongoing
concerns about inflation and further central bank tightening measures were at the forefront of investors’ minds. Central banks did deliver another round of steep policy interest rate hikes. The Fed and the Bank of England (BoE) raised policy
rates by 0.75% to 4.0% and 3.0%, respectively. However, despite headwinds from tighter monetary policy, investor sentiment improved significantly after the release of US inflation numbers for October 2022. The 7.7% year-on-year increase was below
consensus expectations, fueling the market’s hopes that US inflation had now peaked and could prove less sticky than initially feared. The idea that falling
Annual commentary
Macquarie Global Infrastructure Total Return Fund Inc.
inflation could mean that the end to the rate hiking cycle was not far
off, gave both stocks and bonds a boost.
Inflation has emerged as a threat to economies around
the world. The significant outperformance of the listed infrastructure sector relative to global equities can be attributed to the inflation-linked nature of infrastructure asset cash flows. Many infrastructure assets have direct revenue links to
inflation stated in their regulation, concessions, or contracts. The level and form of inflation protection in infrastructure varies by individual asset. Analysis of a range of factors is required to identify those listed infrastructure stocks with
superior inflation protection attributes over the long term. In general, sub-sectors that have explicit inflation linkage mechanisms in revenues and/or asset values, such as concession-based toll roads and regulated utilities in jurisdictions with
reliable and transparent regulation, can offer the strongest form of inflation protection, in our opinion. Identifying the listed infrastructure companies with the strongest inflation attributes requires detailed analysis of pricing power and direct
inflation linkages in regulation, concessions, and contracts, a task undertaken by our dedicated listed infrastructure investment team.
Source: Bloomberg.
For
the 12-month period ended
November 30, 20221 |
Total
Return
(%)2 |
| Macquarie
Global Infrastructure Total Return Fund Inc. - Net Asset Value |
17.50
|
| Macquarie
Global Infrastructure Total Return Fund Inc. - Market Price |
13.84
|
| S&P
Global Infrastructure Index (net)3 |
7.97
|
| MSCI
World Index (net)4 |
-10.86
|
Unless otherwise indicated, all references
to currency are to US dollars.
1 Calculated on a total return basis, adjusting for distributions and assuming dividend reinvestment.
2 Source: ALPS Fund Services Inc., Bloomberg L.P.
3 The S&P Global Infrastructure Index is composed
of 75 of the largest publicly listed companies in the global infrastructure industry. The index has balanced weights across three distinct infrastructure clusters: energy, transportation, and utilities. The “net total return” index
reinvests regular cash dividends after the deduction of applicable withholding taxes.
4 The MSCI World Index represents large- and mid-cap stocks across 23 developed market
countries worldwide. The index covers approximately 85% of the free float-adjusted market capitalization in each country. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at
the highest possible rate.
The Fund, which is not
managed against any benchmark, outperformed the reference benchmark, the S&P Global Infrastructure Index (net) and the MSCI World Index (net) during the 12-month period ended November 30, 2022.
Let’s look at these reasons in further
detail.
Rail
Stock selection in the rail sector, led by the
Fund’s exposure to Japanese rail companies, was the largest contributor to performance. East Japan Railway ADR and West Japan Railway ADR both outperformed
when the Japanese market was encouraged by loosening of restrictions around foreign visitors. Our patience was rewarded as we had continued to seek attractive relative value in these names earlier in the fiscal year and expected the market to
become more
favorable on the outlook for these companies when travel opened up in
Japan.
Energy infrastructure
The energy infrastructure sector was another
significant contributor. Relative to the benchmark, the Fund’s overweight position in Cheniere Energy Inc., a US energy infrastructure company, added to performance. Cheniere Energy is one of the largest
liquified natural gas (LNG) exporters in the world and has benefited tremendously from rising global LNG prices. Additionally, the stock has benefited more recently as a hedge against the current geopolitical tensions between Ukraine, Russia, and
NATO. We expect the LNG market to remain tight over the near term. We think there could be further upside potential to international LNG prices due to the increasing risk by Russia to use energy as a weapon against the EU. As such, we think
LNG is positioned to continue generating significant excess cash flow and returning it to shareholder via share repurchases and/or higher dividends while reducing their debt leverage to investment grade levels. We believe more attractive and
higher-quality opportunities lie within the more defensive constituents of the energy infrastructure universe.
Water
Stocks in the water sector detracted during the fiscal
period. Severn Trent ADR and American Water Works Company Inc. were the biggest detractors. Severn Trent fell amid concerns of higher UK interest rates and near-term cost
pressures. American Water Works, a longer duration asset, underperformed in a rising rate environment.
Electricity transmission
Positions within the electricity transmission sector
also detracted from performance led by
Terna SpA. While regulation adjusts
returns for cost of capital volatility, rising Italian sovereign yields acted as a near-term headwind, given Terna's relatively stable near-term cash flows.
Derivatives
We periodically examine the contribution of derivatives
to the Fund's performance. The Fund's use of foreign exchange (FX) currency positions had a limited material effect during the fiscal year. Overall, derivatives were immaterial to the Fund's performance during the fiscal year.
Leverage
As of November 30, 2022, the Fund had $134 million (US
dollar) in leverage outstanding. At period end, the Fund's leverage was 27.6% of its total assets, which is within the limit outlined in the Fund's prospectus. To avoid magnifying the US dollar exposure due to leverage, the Fund also borrows
in euro to help offset the currency exposure of the investments with the currency of the borrowings.
In determining the leverage level for the Fund, we
balance the cost of leverage against the longer-term potential for enhanced yield and capital returns.
Performance relative to reference benchmarks
The Fund, which is not managed against any benchmark,
outperformed the reference benchmark, the S&P Global Infrastructure Index (net) and underperformed the MSCI World Index (net) during the 12-month period ended November 30, 2022.
Fund diversification by country and sector
As of November 30, 2022, the Fund’s core
component was well diversified across 44 global infrastructure stocks, representing
Annual commentary
Macquarie Global Infrastructure Total Return Fund Inc.
13 countries and 10 sectors. During the 12-month period, the primary
increases in the Fund’s sector weightings were within the electricity and gas distribution and airports sectors. The largest declines in sector
weightings were within the energy infrastructure and water sectors.
Sector changes were driven principally by our bottom-up (stock-by-stock) investment process.
The table below shows the top 10 holdings in
the Fund as November 30, 2022.
| Rank
|
Stock
|
Country
|
Infrastructure
Sector5 |
%
6 |
| 1
|
Aena
SME |
Spain
|
Airports
|
5.3
|
| 2
|
NextEra
Energy |
United
States |
Electric
utility |
5.2
|
| 3
|
Transurban
Group |
Australia
|
Toll
roads |
5.1
|
| 4
|
Enbridge
|
United
Kingdom |
Energy
infrastructure |
4.8
|
| 5
|
American
Electric Power Company |
United
States |
Electric
utility |
4.0
|
| 6
|
Enav
|
Italy
|
Airports
|
3.8
|
| 7
|
ALEATICA
|
Mexico
|
Toll
roads |
3.4
|
| 8
|
National
Grid |
United
Kingdom |
Electricity
and gas distribution |
3.3
|
| 9
|
East
Japan Railway ADR |
Japan
|
Rail
/ other transportation |
3.2
|
| 10
|
Severn
Trent ADR |
United
Kingdom |
Water
|
3.1
|
5 Industry segments are based on the manager’s own evaluation of issuers and industries, and do not necessarily track any
standard industry or segment classification. Classifications are made by the investment team and based on the primary business segment of the issuer.
6 Based on Total Assets defined as follows: "Total Assets" of the Fund, for the purpose of this calculation, include the aggregate of
the Fund’s average daily net assets plus proceeds from any outstanding borrowings used for leverage.
The
tables below show the structure of the portfolio by country and sector.
| Country
|
% of Fund on
November 30, 20227 |
%
Point Change
over Period |
% of Fund on
November 30, 20217 |
| United
States |
39.2
|
8.3
|
30.9
|
| Canada
|
10.2
|
(4.0)
|
14.2
|
| United
Kingdom |
8.2
|
(1.3)
|
9.5
|
| Italy
|
7.4
|
(2.1)
|
9.5
|
| Australia
|
7.3
|
(3.8)
|
11.1
|
| Spain
|
6.3
|
(0.9)
|
7.2
|
| Mexico
|
4.3
|
(0.3)
|
4.6
|
| Japan
|
3.5
|
(0.4)
|
3.9
|
| France
|
2.6
|
0.2
|
2.4
|
| Brazil
|
2.1
|
2.1
|
0.0
|
| New
Zealand |
1.6
|
0.5
|
1.1
|
| China
|
1.0
|
(0.7)
|
1.7
|
| Germany
|
1.0
|
0.0
|
1.0
|
| Netherlands
|
0.5
|
(0.5)
|
1.0
|
| Switzerland
|
0.0
|
(0.6)
|
0.6
|
| Other
Assets in Excess of Other Liabilities |
4.7
|
3.4
|
1.3
|
| Infrastructure
Sector8 |
% of Fund on
November 30, 20227 |
%
Point Change
over Period |
% of Fund on
November 30, 20217 |
| Electric
Utility |
27.7
|
(2.3)
|
30.0
|
| Energy
Infrastructure |
23.3
|
2.1
|
21.2
|
| Toll
Roads |
14.9
|
0.7
|
14.2
|
| Airports
|
9.4
|
(4.1)
|
13.5
|
| Water
|
4.8
|
0.7
|
4.1
|
| Electricity
and Gas Distribution |
4.5
|
(2.6)
|
7.1
|
| Communications
Infrastructure |
4.0
|
3.0
|
1.0
|
| Rail
/ Other Transportation |
3.6
|
(0.3)
|
3.9
|
| Electricity
Transmission |
2.5
|
(0.1)
|
2.6
|
| Seaports
|
0.5
|
(0.5)
|
1.0
|
| Other
Assets in Excess of Other Liabilities |
4.8
|
3.4
|
1.4
|
7Based on Total Assets as defined in the prospectus.
8Industry sectors are based on the Manager’s own evaluation of issuers and industries, and do not necessarily track any standard
industry or sector classification. Classifications are made by the investment team and based on the primary business sector of the issuer.
Annual commentary
Macquarie Global Infrastructure Total Return Fund Inc.
The Fund paid a monthly dividend of $0.10 per share from December 2021
through April 2022. From May 2022 through November 2022, the Fund paid a monthly dividend of $0.13 per share. Altogether, the Fund paid $1.572 per share during this period.
A portion of the distributions may be treated as paid
from sources other than net income, including, but not limited to, short-term capital gain, long-term capital gain, and return of capital. The final determination of the source of all distributions in 2022, including the percentage of qualified
dividend income, will be made by the Fund after December 31, 2022.
Outlook
We ended fiscal 2022 in a very different place than
where we ended fiscal 2021. During the period, global vaccine rollouts and strong global fiscal and monetary stimulus led to substantial recoveries in economies and mobility. The challenge now facing global economies is the pervasive inflation
that has led to substantial central bank tightening in most economies. We expect meaningful impact from this tightening and recessions to occur throughout much of the world. This slowdown is further exacerbated by the ongoing conflict in the
Ukraine, which has led to an energy crisis in Europe. We look to 2023 with a cautious eye when considering multiple opportunities and risks within the Fund.
Transportation infrastructure – After a large
disruption throughout the COVID-19 pandemic, we have now seen a substantial recovery in mobility with toll road traffic broadly above 2019 levels. While air travel has shown more mixed results, it is still substantially ahead of 2020 and 2021
levels. We think the key question around future developments will
be to what extent Chinese travel fully recovers, assuming a relaxing
of COVID-era policies and how this will relate to the impacts of a slowing economy, particularly in Europe.
Utilities and renewables – We continue to see
further growth of wind and solar generation around the world as global utilities embrace these lower carbon-intensive options and the economics of such have become much more competitive. Investments in renewables and supporting network
infrastructure offer the potential for relatively low risk and growing regulated cash flows. Listed infrastructure companies are the largest investors globally in renewables and, due to their scale and experience, are best positioned to continue to
negotiate favorable contracts or regulation for ongoing and increased investment, in our view.
New clean technology – We continue to observe
considerable research efforts globally toward carbon elimination from our economies. Hydrogen has re-emerged as a leading contender to help in the reduction of carbon emissions, especially from energy intensive applications such as transport and
heavy industry. It is also a meaningful contender as an alternate form of energy storage, with sustainably produced energy used to produce hydrogen, which can subsequently be used to produce electricity, when needed. When burnt or passed through a
fuel cell, hydrogen generates water as a by-product. We think the infrastructure sector could be a key beneficiary of a transition toward hydrogen over the coming decades. Existing gas infrastructure can be, in some cases, repurposed or upgraded to
transport hydrogen.
Infrastructure spending as
stimulus – While the recession caused by COVID-19 required
extraordinary fiscal and monetary stimulus, we now face substantial
monetary tightening. Certain global governments, particularly in the US and Europe, have seen the opportunity of investing in economies through “green investment” to support jobs, reduce the carbon intensity of communities, and deliver
economic growth.
We continue to believe that a
thoughtful active management approach is required in the current environment. A vigilant and continuous assessment of the opportunity set across our global research platform offers opportunities to take advantage of market dislocations and achieve
what we view as attractive risk-adjusted returns for our clients.
Conclusion
The Fund’s investment strategy is to invest in
the listed securities of companies globally that
own or operate infrastructure assets that we believe provide essential services, have strong strategic positions, and are well positioned to potentially generate sustainable and growing cash flow
streams for shareholders from their infrastructure assets.
We believe the Fund provides investors with an
attractive vehicle to access the broad global universe of listed infrastructure securities and appreciate your investment in the Fund.
Performance summary
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
The performance quoted represents past performance and
does not guarantee future results. Investment return, principal value, and market value of an investment will fluctuate so that shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than
the performance quoted. Please obtain the most recent performance data by calling 866 587-4518.
| Fund
and benchmark performance |
|
|
|
| Average
annual total returns through November 30, 2022 |
1
year |
5
year |
10
year |
| At
market price (inception date August 26, 2005) |
+13.84%
|
+5.84%
|
+9.30%
|
| At
net asset value (inception date August 26, 2005) |
+17.50%
|
+6.63%
|
+9.67%
|
| S&P
Global Infrastructure Index (net) |
+7.97%
|
+3.27%
|
+6.08%
|
| S&P
Global Infrastructure Index (gross) |
+8.83%
|
+4.16%
|
+6.99%
|
| MSCI
World Index (net) |
-10.86%
|
+7.35%
|
+9.53%
|
| MSCI
World Index (gross) |
-10.42%
|
+7.90%
|
+10.12%
|
Diversification may not
protect against market risk.
International
investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to
increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are
generally more difficult to pursue.
The Fund may
invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives
transaction depends upon the counter parties’ ability to fulfill their contractual obligations. This is the risk associated with securities or practices (for example, borrowing and the use of certain derivatives) and investment in certain
types of derivatives that multiply small index or market movements into larger changes in value. Use of derivative instruments may involve leverage. Leverage magnifies the potential for gain and the risk of loss. As a result, a relatively small
decline in the value of the underlying investments could result in a relatively large loss.
Although the Fund will seek to manage the Fund’s
risk from the leverage associated with derivative investments by closely monitoring the volatility of such investments, the Fund may not be successful in this respect.
Narrowly focused investments may exhibit higher
volatility than investments in multiple industry sectors.
Investment strategies that hold securities issued by
companies principally engaged in the infrastructure industry have greater exposure to the potential adverse economic, regulatory, political, and other changes affecting such entities.
IBOR risk
is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition
to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics,
or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s
investments.
The Fund is not intended to be a
complete investment program. An investment in the Fund involves risks, and the Fund may or may not be able to achieve its investment objective for a variety of reasons. The following summarizes some of the Fund’s risks but does not purport to
be a complete listing of all of the risks. Investors should carefully review the Fund’s prospectus and consult their own advisers.
Closed-end fund shares do not represent a deposit or
obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation or any other government agency. Closed-end funds, unlike open-end
funds, are not continuously offered. After being issued during a onetime-only public offering, shares of closed-end funds are sold in the open market through a securities exchange. Net asset value (NAV) is calculated by subtracting total liabilities
from total assets, then dividing by the number of shares outstanding. At the time of sale, your shares may have a market price that is above or below NAV, and may be worth more or less than your original investment. NAV, market price, and premium or
discount will fluctuate with change in market conditions.
The Fund may be required to make higher distributions
of ordinary income and capital gains at calendar year end. Those distributions may temporarily cause extraordinarily high yields. There is no assurance that a Fund will repeat that yield in the future. Subsequent monthly distributions that do not
include ordinary income or capital gains in the form of dividends will likely be lower.
The “Fund performance” table and the
“Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Returns reflect the reinvestment of all distributions.
Dividends and distributions, if any, are assumed, for the purpose of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment policy. Shares of the Fund were initially offered with a sales charge of 6%.
Performance since inception does not include the sales charge or any other brokerage commission for purchases made since inception.
Past performance does not guarantee future results.
Performance summary
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
| Fund
basics |
|
| As
of November 30, 2022 |
|
| Fund
objectives |
Fund
start date |
The
primary investment objective of the Fund is to provide investors
with a high level of total return consisting of dividends and other income,
and capital appreciation. |
August
26, 2005 |
| |
| Total
net assets |
NYSE
symbol |
| $350.1
million |
XMGUX
|
| Number
of holdings |
|
| 43
|
|
Market
price versus net asset value (see notes on next page)
For the period November 30, 2021 through November 30,
2022
| |
Starting
value |
Ending
value |
 |
Macquarie
Global Infrastructure Total Return Fund Inc.
@ NAV |
$25.86
|
$28.45
|
 |
Macquarie
Global Infrastructure Total Return Fund Inc.
@ market price |
$22.76
|
$24.25
|
Past performance does not
guarantee future results.
Performance summary
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
Performance of a $10,000 investment
For the period November 30, 2012 through November 30,
2022
| |
Starting
value |
Ending
value |
 |
Macquarie
Global Infrastructure Total Return Fund Inc.
@ NAV |
$10,000
|
$25,177
|
|
|
MSCI
World Index (net) |
$10,000
|
$24,852
|
|
|
Macquarie
Global Infrastructure Total Return Fund Inc.
@ market price |
$10,000
|
$24,340
|
 |
S&P
Global Infrastructure Index (net) |
$10,000
|
$18,051
|
The “Performance of a
$10,000 investment” graph assumes $10,000 invested in the Fund on November 30, 2012, and includes the reinvestment of all distributions at market value. The graph also assumes $10,000 invested in the S&P Global Infrastructure Index and the
MSCI World Index on November 30, 2012.
Performance of the Fund at market value is based on
market performance during the period. Performance of the Fund at NAV is based on the fluctuations in NAV during the period. Macquarie Global Infrastructure Total Return Fund Inc. was initially offered with a sales charge of 6%. For market price,
performance shown in both graphs above does not include fees, the initial sales charge, or any brokerage commissions on purchases. For NAV, performance shown in both graphs above includes fees, but does not include the initial sales charge or any
brokerage commissions for purchases.
Investments
in the Fund are not available at NAV.
Market
price is the price an investor would pay for shares of the Fund on the secondary market.
NAV is the total value of one fund share, generally
equal to a fund’s net assets divided by the number of shares outstanding.
Past performance does not guarantee future results.
Security type / country
and sector allocations
| Macquarie
Global Infrastructure Total Return Fund Inc. |
As of November 30,
2022 (Unaudited) |
Sector designations may be different from the sector
designations presented in other Fund materials.
| Security
type / country |
Percentage
of net assets |
| Common
Stocks by Country |
130.84%
|
| Australia
|
10.11%
|
| Brazil
|
1.44%
|
| Canada
|
15.50%
|
| China/Hong
Kong |
1.43%
|
| France
|
3.66%
|
| Germany
|
1.37%
|
| Italy
|
10.22%
|
| Japan
|
4.89%
|
| Mexico
|
5.91%
|
| Netherlands
|
0.74%
|
| New
Zealand |
2.27%
|
| Spain
|
8.70%
|
| United
Kingdom |
11.37%
|
| United
States |
53.23%
|
| Master
Limited Partnerships |
0.93%
|
| Total
Value of Securities |
131.77%
|
| Leverage
|
(37.28%)
|
| Receivables
and Other Assets Net of Liabilities |
5.51%
|
| Total
Net Assets |
100.00%
|
| Common
stock and master limited partnerships by sector |
Percentage
of net assets |
| Airports
|
13.00%
|
| Communications
Infrastructure |
5.53%
|
| Electric
Utility |
39.82%
|
| Electricity
and Gas Distribution |
6.28%
|
| Electricity
Transmission |
3.42%
|
| Energy
Infrastructure |
32.33%
|
| Rail
& Other Transportation |
4.89%
|
| Seaports
|
0.74%
|
| Toll
Roads |
19.16%
|
| Water
|
6.60%
|
| Total
|
131.77%
|
Schedule of
investments
| Macquarie
Global Infrastructure Total Return Fund Inc. |
November 30, 2022
|
| |
|
Number
of
shares |
Value
(US $) |
| Common
Stocks – 130.84%Δ |
| Australia
− 10.11% |
| Atlas
Arteria << |
|
1,876,767
|
$ 9,034,431
|
| Transurban
Group << |
|
2,695,064
|
26,348,708
|
| |
35,383,139
|
| Brazil
− 1.44% |
| CCR
|
|
2,221,979
|
5,035,404
|
| |
5,035,404
|
| Canada
− 15.50% |
| Enbridge
<< |
|
608,134
|
25,113,812 |
| Gibson
Energy << |
|
499,039
|
9,055,899 |
| Hydro
One 144A #, << |
|
182,842
|
5,113,568 |
| TC
Energy << |
|
338,020
|
14,976,762
|
| |
54,260,041
|
| China/Hong
Kong − 1.43% |
| China
Tower Class H 144A #, << |
|
46,124,000
|
4,988,433
|
| |
4,988,433
|
| France
− 3.66% |
| Vinci
<< |
|
126,823
|
12,804,786
|
| |
12,804,786
|
| Germany
− 1.37% |
| Vantage
Towers << |
|
140,085
|
4,802,989
|
| |
4,802,989
|
| Italy
− 10.22% |
| Enav
144A #, << |
|
3,947,202
|
17,461,545 |
| Snam
<< |
|
1,243,660
|
6,348,525 |
| Terna
- Rete Elettrica Nazionale << |
|
1,564,371
|
11,982,996
|
| |
35,793,066
|
| Japan
− 4.89% |
| East
Japan Railway << |
|
169,600
|
9,615,635 |
| West
Japan Railway << |
|
176,200
|
7,506,063
|
| |
17,121,698
|
| Mexico
− 5.91% |
| ALEATICA
<<, † |
|
5,684,616
|
10,142,682 |
| Grupo
Aeroportuario del Centro Norte << |
|
1,215,279
|
10,549,760
|
| |
20,692,442
|
| Netherlands
− 0.74% |
| Koninklijke
Vopak << |
|
87,393
|
2,593,887
|
| |
2,593,887
|
| |
|
Number
of
shares |
Value
(US $) |
| Common
StocksΔ (continued) |
| New
Zealand − 2.27% |
| Auckland
International Airport <<, † |
|
1,559,539
|
$ 7,948,069
|
| |
7,948,069
|
| Spain
− 8.70% |
| Aena
144A #, <<, † |
|
74,007
|
9,549,383 |
| Cellnex
Telecom 144A #, << |
|
278,001
|
9,560,050 |
| Iberdrola
<< |
|
676,741
|
7,645,431 |
| Sacyr
<< |
|
1,330,211
|
3,697,910
|
| |
30,452,774
|
| United
Kingdom − 11.37% |
| National
Grid << |
|
707,762
|
8,706,236 |
| Severn
Trent << |
|
292,929
|
9,640,950 |
| SSE
<< |
|
684,302
|
14,192,804 |
| United
Utilities Group << |
|
585,857
|
7,266,924
|
| |
39,806,914
|
| United
States − 53.23% |
| Ameren
<< |
|
95,307
|
8,512,821 |
| American
Electric Power << |
|
227,464
|
22,018,515 |
| Archaea
Energy <<, † |
|
549,674
|
14,258,544 |
| Cheniere
Energy << |
|
91,362
|
16,021,240 |
| CMS
Energy << |
|
137,570
|
8,401,400 |
| Essential
Utilities << |
|
128,703
|
6,208,633 |
| Eversource
Energy << |
|
139,719
|
11,577,116 |
| Kinder
Morgan << |
|
821,675
|
15,710,426 |
| NextEra
Energy << |
|
308,437
|
26,124,614 |
| NiSource
<< |
|
191,511
|
5,350,817 |
| ONEOK
<< |
|
126,519
|
8,466,652 |
| PPL
<< |
|
545,717
|
16,109,566 |
| Sempra
Energy << |
|
100,017
|
16,621,825 |
| Xcel
Energy << |
|
156,378
|
10,980,863
|
| |
186,363,032
|
| Total
Common Stocks (cost $416,458,537) |
458,046,674
|
| |
| |
Schedule of
investments
Macquarie Global Infrastructure Total Return Fund
Inc.
| |
|
Number
of
shares |
Value
(US $) |
| |
| |
| Master
Limited Partnerships – 0.93% |
| Magellan
Midstream Partners << |
|
61,501
|
$ 3,241,103
|
Total
Master Limited Partnerships
(cost $3,010,837) |
3,241,103
|
Total
Value of Securities−131.77%
(cost $419,469,374) |
|
|
$461,287,777
|
| Δ
|
Securities
have been classified by country of risk. Aggregate classification by business sector has been presented on page 15 in “Security type / country and sector allocations.” |
| <<
|
Fully
or partially pledged as collateral for borrowing transactions. |
| #
|
Security
exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2022, the aggregate value of Rule 144A securities was $46,672,979, which represents 13.33% of the Fund's net assets. See Note 11 in “Notes to
financial statements." |
| †
|
Non-income
producing security. |
The following foreign currency exchange contracts
were outstanding at November 30, 2022:1
| Foreign
Currency Exchange Contracts |
|
|
|
|
| Counterparty
|
|
Currency
to
Receive (Deliver) |
|
In
Exchange For |
|
Settlement
Date |
|
Unrealized
Depreciation |
| BNYM
|
|
EUR
|
1,538,259
|
|
USD
|
(1,584,891)
|
|
12/2/22
|
|
$
(810) |
| BNYM
|
|
JPY
|
(10,471,500)
|
|
USD
|
74,947
|
|
12/1/22
|
|
(891)
|
| Total
Foreign Currency Exchange Contracts |
|
$
(1,701) |
The use of foreign currency exchange contracts
involves elements of market risk and risks in excess of the amounts disclosed in the financial statements. The foreign currency exchange contracts presented above represent the Fund's total exposure in such contracts, whereas only the net unrealized
appreciation (depreciation) is reflected in the Fund's net assets.
| 1 |
See Note 7 in
“Notes to financial statements.” |
| Summary
of abbreviations: |
| BNYM
– Bank of New York Mellon |
| Summary
of currencies: |
| EUR
– European Monetary Unit |
| JPY
– Japanese Yen |
| USD
– US Dollar |
See
accompanying notes, which are an integral part of the financial statements.
Statement of assets
and liabilities
| Macquarie
Global Infrastructure Total Return Fund Inc. |
November 30,
2022 |
| Assets:
|
|
| Investments,
at value* |
$
461,287,777 |
| Cash
|
18,914,460
|
| Foreign
currencies, at valueΔ |
184,541
|
| Receivable
for securities sold |
2,052,588
|
| Dividends
receivable |
956,092
|
| Foreign
tax reclaims receivable |
530,326
|
| Prepaid
expenses |
147,364
|
| Total
Assets |
484,073,148
|
| Liabilities:
|
|
| Loans
payable |
130,524,000
|
| Payable
for securities purchased |
1,600,713
|
| Investment
advisory expense payable to affiliates |
1,099,868
|
| Other
payables and accrued expenses |
543,271
|
| Interest
on loans payable |
226,951
|
| Unrealized
depreciation on foreign currency exchange contracts |
1,701
|
| Total
Liabilities |
133,996,504
|
| Total
Net Assets |
$
350,076,644 |
| |
| Net
Assets Consist of: |
|
| Paid-in
capital |
$
306,596,758 |
| Total
distributable earnings (loss) |
43,479,886
|
| Total
Net Assets |
$
350,076,644 |
| Common
Shares: |
|
| Net
assets |
$
350,076,644 |
| Shares
of common stock outstanding at $0.001 par value, 100,000,000 shares authorized |
12,303,293
|
| Net
asset value per share |
$
28.45 |
*Investments, at
cost |
$
419,469,374 |
|
ΔForeign currencies, at cost |
182,440
|
See accompanying notes,
which are an integral part of the financial statements.
Statement of
operations
Macquarie Global Infrastructure Total Return Fund
Inc. Year ended November 30, 2022
| Investment
Income: |
|
| Dividends
|
$
16,732,935 |
| Foreign
tax withheld |
(1,220,413)
|
| |
15,512,522
|
| |
| Expenses:
|
|
| Investment
advisory |
4,689,753
|
| Interest
expense |
2,078,946
|
| Administration
|
290,359
|
| Directors
|
284,050
|
| Custody
|
282,919
|
| Legal
fees |
206,556
|
| Printing
|
141,073
|
| Transfer
agent |
89,684
|
| Audit
and tax services |
78,043
|
| Registration
fees |
39,814
|
| Other
expenses |
417,983
|
| Total
operating expenses |
8,599,180
|
| Net
Investment Income (Loss) |
6,913,342
|
| |
| Net
Realized and Unrealized Gain (Loss): |
|
| Net
realized gain (loss) on: |
|
| Investments
|
7,519,332
|
| Foreign
currencies |
(574,503)
|
| Foreign
currency exchange contracts |
(87,616)
|
| Net
realized gain (loss) |
6,857,213
|
| |
| Net
change in unrealized appreciation (depreciation) on: |
|
| Investments
|
33,696,135
|
| Foreign
currencies |
3,721,003
|
| Foreign
currency exchange contracts |
(1,701)
|
| Net
change in unrealized appreciation (depreciation) |
37,415,437
|
| Net
Realized and Unrealized Gain (Loss) |
44,272,650
|
| Net
Increase (Decrease) in Net Assets Resulting from Operations |
$
51,185,992 |
See accompanying notes, which are an integral part of
the financial statements.
Statements of changes in
net assets
Macquarie Global Infrastructure Total Return Fund
Inc.
| |
Year
ended |
| |
11/30/22
|
|
11/30/21
|
| Increase
in Net Assets Resulting from Operations: |
|
|
|
| Net
investment income (loss) |
$
6,913,342 |
|
$
5,434,467 |
| Net
realized gain (loss) |
6,857,213
|
|
8,401,862
|
| Net
change in unrealized appreciation (depreciation) |
37,415,437
|
|
20,156,266
|
| Net
increase (decrease) in net assets resulting from operations |
51,185,992
|
|
33,992,595
|
| |
| Distributions
to Shareholders from: |
|
|
|
| Distributable
earnings |
(15,798,866)
|
|
(12,429,082)
|
| Return
of capital |
(3,588,238)
|
|
—
|
| Total
distributions to shareholders |
(19,387,104)
|
|
(12,429,082)
|
| |
| Capital
Share Transactions: |
|
|
|
| Cost
of shares redeemed |
(1,736,818)
|
|
(2,175,413)
|
| Decrease
in net assets derived from capital share transactions |
(1,736,818)
|
|
(2,175,413)
|
| Net
Increase in Net Assets |
30,062,070
|
|
19,388,100
|
| |
| Net
Assets: |
|
|
|
| Beginning
of year |
320,014,574
|
|
300,626,474
|
| End
of year |
$
350,076,644 |
|
$
320,014,574 |
See accompanying notes, which are an integral part of
the financial statements.
Statement of cash
flows
Macquarie Global Infrastructure Total Return Fund
Inc.
Year ended November 30, 2022
| CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
| Net
increase (decrease) in net assets resulting from operations |
$
51,185,992 |
| Adjustments
to reconcile net increase (decrease) in net assets from operations to net cash provided by (used for) operating activities: |
|
| Purchase
of investment securities |
(208,830,121)
|
| Proceeds
from disposition of investment securities |
246,902,087
|
| Net
realized (gain) loss on investments |
(7,519,332)
|
| Net
change in unrealized (appreciation) depreciation of investments |
(33,696,135)
|
| Net
change in unrealized (appreciation) depreciation of foreign currencies |
(3,721,003)
|
| Net
change in unrealized (appreciation) depreciation of foreign currency exchange contracts |
1,701
|
| Noncash
adjustments for dividend income return of capital |
290,311
|
| (Increase)
decrease in receivable for securities sold |
(2,052,588)
|
| (Increase)
decrease in dividends receivable |
(130,528)
|
| (Increase)
decrease in foreign tax reclaims receivable |
52,302
|
| (Increase)
decrease in prepaid expenses |
(147,364)
|
| (Increase)
decrease in prepaid arrangement fees on loan outstanding |
119,466
|
| (Increase)
decrease in other assets |
111,534
|
| Increase
(decrease) in payable for securities purchased |
(11,023,797)
|
| Increase
(decrease) in interest on loans payable |
103,271
|
| Increase
(decrease) in investment advisory expense payable to affiliates |
(63,813)
|
| Increase
(decrease) in administration expense payable |
(105,105)
|
| Increase
(decrease) in Directors’ expense payable |
(45,295)
|
| Increase
(decrease) in other payables and accrued expenses |
274,099
|
| Total
adjustments |
(19,480,310)
|
| Net
cash provided by (used for) operating activities |
31,705,682
|
| |
| CASH
FLOW FROM FINANCING ACTIVITIES: |
|
| Cash
received from borrowings |
15,000,000
|
| Cash
payments to reduce borrowings |
(26,000,000)
|
| Cost
of shares redeemed |
(1,736,818)
|
| Cash
distributions paid |
(19,387,104)
|
| Net
cash provided by financing activities |
(32,123,922)
|
| |
| Effect
of exchange rates on cash |
(18,996)
|
| Net
increase (decrease) in cash |
(437,236)
|
| Cash
and foreign currencies beginning balance |
19,536,237
|
| Cash
and foreign currencies ending balance |
$
19,099,001 |
| SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|
| Cash
paid during the period for interest expense from borrowings |
$
1,975,675 |
| The
following table provides a reconciliation of cash and foreign currencies reported within the statement of financial position that sum to the total of the same amounts shown above at November 30, 2022: |
|
| Cash
|
$
18,914,460 |
| Foreign
currencies, at value |
184,541
|
| Total
cash and foreign currencies at end of year |
$
19,099,001 |
See accompanying notes, which are an integral part of
the financial statements.
This page
intentionally left blank.
Financial
highlights
Macquarie Global Infrastructure Total Return Fund
Inc.
Selected data for each share of the Fund outstanding
throughout each period were as follows:
| |
| |
|
Net asset value, beginning of
period
|
| Income
(loss) from investment operations |
|
Net investment
income1
|
|
Net realized and unrealized gain
(loss)
|
|
Total from investment
operations
|
| Less
dividends and distributions from: |
|
Net investment
income
|
|
Return of
capital
|
|
Total dividends and
distributions
|
|
Net asset value, end of
period
|
|
Market value, end of
period
|
| Total
return based on:2 |
|
Net asset
value
|
|
Market
value
|
| Ratios
and supplemental data: |
|
Net assets, end of period (000 omitted)
|
|
Ratio of expenses to average net
assets3
|
|
Ratio of expenses to average net assets prior to interest expenses
reimbursed
|
|
Ratio of expenses to average net assets excluding interest
expenses
|
|
Ratio of net investment income to average net
assets
|
|
Ratio of net investment income to average net assets prior to interest expenses
reimbursed
|
|
Portfolio
turnover
|
| Leverage
analysis: |
|
Debt outstanding at end of period (000
omitted)
|
|
Asset coverage ratio to total
assets4
|
|
1 |
Calculated
using average shares outstanding. |
|
2 |
Total
return is calculated assuming a purchase of a common share at the opening on the first day and a sale at closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total returns exclude brokerage commissions on buying and selling of Fund shares, but do include commissions on buying and selling the underlying portfolio securities.
Past performance is not a guarantee of future results. |
|
3 |
For
the years ended November 2022, 2021, 2020, 2019 and 2018, the annualized ratios to Total Assets were 1.82%, 1.70%, 1.58%, 1.69%, and 1.92%, respectively. The prospectus for the Fund defines Total Assets as Total Net Assets plus leverage. |
|
4 |
Asset
coverage ratios are calculated based on Total Assets. "Total Assets" of the Fund, for the purpose of this calculation, include the aggregate of the Fund’s average daily net assets plus proceeds from any outstanding borrowings used for
leverage. (See Note 8) |
See
accompanying notes, which are an integral part of the financial statements.
| Year
ended |
| 11/30/22
|
|
11/30/21
|
|
11/30/20
|
|
11/30/19
|
|
11/30/18
|
| $
25.86 |
|
$
24.11 |
|
$
26.92 |
|
$
23.92 |
|
$
28.44 |
| |
|
|
|
|
|
|
|
|
| 0.56
|
|
0.44
|
|
0.39
|
|
1.29
|
|
1.21
|
| 3.60
|
|
2.31
|
|
(1.91)
|
|
3.39
|
|
(4.20)
|
| 4.16
|
|
2.75
|
|
(1.52)
|
|
4.68
|
|
(2.99)
|
| |
|
|
|
|
|
|
|
|
| (1.28)
|
|
(1.00)
|
|
(0.99)
|
|
(1.68)
|
|
(1.53)
|
| (0.29)
|
|
—
|
|
(0.30)
|
|
—
|
|
—
|
| (1.57)
|
|
(1.00)
|
|
(1.29)
|
|
(1.68)
|
|
(1.53)
|
| $
28.45 |
|
$
25.86 |
|
$
24.11 |
|
$
26.92 |
|
$
23.92 |
| $
24.25 |
|
$
22.76 |
|
$
20.63 |
|
$
24.35 |
|
$
20.67 |
| |
|
|
|
|
|
|
|
|
| 17.50%
|
|
12.07%
|
|
(4.14%)
|
|
21.40%
|
|
(10.10%)
|
| 13.84%
|
|
15.28%
|
|
(9.31%)
|
|
27.07%
|
|
(12.18%)
|
| |
|
|
|
|
|
|
|
|
| $350,077
|
|
$320,015
|
|
$300,626
|
|
$335,674
|
|
$
298,271 |
| 2.53%
|
|
2.25%
|
|
2.37%
|
|
2.50%
|
|
2.61%
|
| 2.53%
|
|
2.25%
|
|
2.37%
|
|
2.50%
|
|
2.61%
|
| 1.93%
|
|
1.81%
|
|
1.82%
|
|
1.75%
|
|
1.76%
|
| 2.02%
|
|
1.64%
|
|
1.71%
|
|
4.99%
|
|
4.67%
|
| 2.02%
|
|
1.64%
|
|
1.71%
|
|
4.99%
|
|
4.67%
|
| 46%
|
|
43%
|
|
62%
|
|
99%
|
|
99%
|
| |
|
|
|
|
|
|
|
|
| $130,524
|
|
$145,264
|
|
$132,614
|
|
$142,072
|
|
$
138,284 |
| 368%
|
|
320%
|
|
327%
|
|
336%
|
|
316%
|
Notes to financial
statements
| Macquarie
Global Infrastructure Total Return Fund Inc. |
November 30, 2022
|
Macquarie Global Infrastructure Total Return Fund Inc.
(Fund) is a diversified, closed-end investment management company registered under the Investment Company Act of 1940 (1940 Act), as amended, and organized under the laws of the State of Maryland. The Fund’s shares of common stock are listed
on the New York Stock Exchange (NYSE) under the ticker “MGU.”
1. Significant Accounting Policies
The Fund follows accounting and reporting guidance
under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following accounting policies are in accordance with US generally accepted accounting
principles (US GAAP) and are consistently followed by the Fund.
Security
Valuation — The net asset value (NAV) of the Fund’s shares of common stock will be computed based upon the value of the securities and other assets and liabilities held by the Fund. The NAV is
determined as of the close of regular trading on the NYSE (normally 4:00pm ET) on each day the NYSE is open for trading. US debt securities and non-US securities will normally be priced using data reflecting the earlier closing of the principal
markets for those securities. Equity securities, except those traded on the Nasdaq Stock Market LLC (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the NYSE on the valuation date. Equity securities traded
on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If, on a particular day, an equity security does not trade, the mean between the bid and ask prices will be used, which
approximates fair value. US equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the Nasdaq National Market, are valued at the closing bid prices. Equity securities listed on a foreign exchange are
normally valued at the last quoted sales price on the valuation date. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the
exchange representing the principal market for such securities. Foreign currency exchange contracts are valued at the mean between the bid and ask prices, which approximates fair value. Interpolated values are derived when the settlement date of the
contract is an interim date for which quotations are not available. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund's valuation designee,
Delaware Management Company (DMC). Subject to the oversight of the Fund's Board of Directors (Board), DMC, as valuation designee, has adopted policies and procedures to fair value securities that are not readily available consistent with the
requirements of Rule 2a-5 under the 1940 Act. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a
security. Restricted securities and private placements are valued at fair value.
Federal and Foreign Income Taxes — No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended,
and make the requisite
distributions to shareholders. The Fund evaluates tax positions taken or 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 are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken or expected to
be taken on the Fund’s federal/state income tax returns through the year ended November 30, 2022, and for all open federal income tax years (years ended
November 30, 2019–November 30, 2021) and all open state income tax years
(years ended
November 30, 2016–November 30, 2021), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. In regard to foreign taxes only, the Fund has open tax years in certain
foreign countries in which it invests that may date back to the inception of the Fund. If applicable, the Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in "Other expenses" on the “Statement of
operations.” During the year ended November 30, 2022, the Fund did not incur any interest or tax penalties.
Cash and Cash Equivalents — Cash equivalents are funds (proceeds) temporarily invested in original maturities of 90 days or less.
Restricted
Cash — As of November 30, 2022, the Fund did not classify any funds (proceeds) as restricted.
Foreign Currency Transactions — Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date in accordance with the Fund’s prospectus. The value of all assets and
liabilities denominated in foreign currencies is translated daily into US dollars at the exchange rate of such currencies against the US dollar. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon
settlement of the foreign currency transaction are reported in operations for the current period. The Fund generally does not bifurcate that portion of realized gains and losses on investments which is due to changes in foreign exchange rates from
that which is due to changes in market prices. These gains and losses are included on the “Statement of operations” under “Net realized gain (loss) on investments.” The Fund reports certain foreign currency related
transactions as components of realized gains (losses) for financial reporting purposes, whereas such components are treated as ordinary income (loss) for federal income tax purposes.
Derivative Financial Instruments — The Fund may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking
physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of
economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument.
Pursuant to Rule 18f-4 under the 1940 Act, among other things, the Fund must either use derivative financial instruments with embedded leverage in a limited manner or comply with an outer limit on fund leverage risk based
Notes to financial
statements
Macquarie Global Infrastructure Total Return Fund
Inc.
1. Significant Accounting
Policies (continued)
on value-at-risk. The Fund's successful use of a
derivative financial instrument depends on the investment adviser's ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may
limit the amount of appreciation the Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Fund's investments in these instruments, if any, are discussed in detail in the Notes to Financial
Statements.
Segregation and Collateralizations — In certain cases, based on requirements and agreements with certain exchanges and third-party broker-dealers, the Funds may deliver collateral in connection with certain investments (e.g., futures
contracts, foreign currency exchange contracts, options written, securities with extended settlement periods, and swaps). Certain countries require that cash reserves be held while investing in companies incorporated in that country. These cash
reserves and cash collateral that has been pledged/received to cover obligations of the Funds under derivative contracts, if any, will be reported separately on the "Statement of assets and liabilities" as cash collateral due to/from broker.
Securities collateral pledged for the same purpose, if any, is noted on the "Schedule of investments."
Use of
Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates
and the differences could be material.
Distributions to Shareholders — The Fund intends to distribute to holders of its common shares monthly distributions of all or a portion of its net income and/or realized gains after payment of interest in connection with any
leverage used by the Fund. Distributions to shareholders are recorded by the Fund on the ex-dividend date.
The Fund has received approval from the Securities
Exchange Commission (SEC) for exemption from Section 19(b) of the 1940 Act, and Rule 19b-1 thereunder permitting the Fund to make periodic distributions of long-term capital gains more frequently than otherwise permitted by the 1940 Act, provided
that the Fund adheres to the distribution policy that requires the Fund to make level distributions each month to shareholders of common stock after payment of interest on any outstanding borrowings.
Other
— Expenses directly attributable to the Fund are charged directly to the Fund. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date)
for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the
ex-dividend date and interest income is
recorded on the accrual basis. Taxable non-cash dividends are recorded as dividend income. Distributions received from investments in real estate investment trusts (REITs) are recorded as dividend income on the ex-dividend date,
subject to
reclassification upon notice of the character of such distributions by the issuer. Distributions received from Master Limited Partnerships are recorded as return on capital on the
ex-dividend date. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Fund is aware of such dividends, net of all tax withholdings, a portion of which may be reclaimable. Withholding taxes and reclaims on foreign dividends have been recorded in accordance
with the Fund’s understanding of the applicable country’s tax rules and rates.
2. Investment Advisory and Management Agreement,
Affiliated Transactions and Administration Agreements
DMC, a series of Macquarie Investment Management
Business Trust (MIMBT), is also responsible for managing the Fund’s business affairs, overseeing other service providers and providing management services. As compensation for its services to the Fund, and in accordance with the terms of its
investment management agreement with the Fund, DMC receives an annual management fee, payable on a quarterly basis, equal to the annual rate of 1.00% of the Fund’s Total Assets (as defined below) up to and including $300 million, 0.90% of the
Fund’s Total Assets over $300 million up to and including $500 million, and 0.65% of the Fund’s Total Assets over $500 million. Total Assets of the Fund, for the purpose of this calculation, include the aggregate of the Fund’s
average daily net assets plus proceeds from any outstanding borrowings used for leverage. On July 19, 2022, the Board approved the renewal of the Fund’s Advisory Agreement, pursuant to which MIMBT, through its DMC series, serves as the
Fund’s investment manager.
The Fund may
place a portion of its portfolio transactions with a brokerage firm which is an affiliate of MIMBT. There were no commissions paid to the affiliated firm for the year ended November 30, 2022.
Computershare Trust Company, N.A. (Computershare)
serves as the Fund’s Transfer Agent,
dividend-paying agent, and registrar. As compensation for Computershare’s services, the Fund pays Computershare a monthly fee plus certain out-of-pocket expenses.
3. Investments
For the year ended November 30, 2022, the Fund made
purchases and sales of investment securities other than US government securities and short-term investments as follows:
| Purchases
|
$208,830,121
|
| Sales
|
246,902,087
|
The tax cost of investments
and derivatives includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments but which approximate the tax basis unrealized gains and losses that may be realized and distributed
to
Notes to financial
statements
Macquarie Global Infrastructure Total Return Fund
Inc.
3. Investments (continued)
shareholders. At November 30, 2022, the cost and
unrealized appreciation (depreciation) of investments and derivatives for federal income tax purposes for the Fund were as follows:
| Cost
of investments and derivatives |
$421,239,987
|
| Aggregate
unrealized appreciation of investments and derivatives |
$
43,019,772 |
| Aggregate
unrealized depreciation of investments and derivatives |
(2,973,683)
|
| Net
unrealized appreciation of investments and derivatives |
$
40,046,089 |
US GAAP defines fair value as the price that the Fund
would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established
based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs
reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about
the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The Fund's investment in its entirety is assigned a level based upon the observability of the
inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:
Level 1
− Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts)
Level 2
− Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs.
(Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities)
Level 3
− Significant unobservable inputs, including the Fund's own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities)
Level 3 investments are valued using significant
unobservable inputs. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any
restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the
value which is
received upon
disposition and this could impact the results of operations.
The following table summarizes the valuation of the
Fund’s investments by fair value hierarchy levels as of November 30, 2022:
| |
|
Level
1 |
Level
2 |
|
Total
|
|
| Securities
|
|
|
|
|
|
|
| Assets:
|
|
|
|
|
|
|
| Common
Stocks |
|
|
|
|
|
|
| Australia
|
|
$
— |
$
35,383,139 |
|
$
35,383,139 |
|
| Brazil
|
|
5,035,404
|
—
|
|
5,035,404
|
|
| Canada
|
|
54,260,041
|
—
|
|
54,260,041
|
|
| China/Hong
Kong |
|
—
|
4,988,433
|
|
4,988,433
|
|
| France
|
|
—
|
12,804,786
|
|
12,804,786
|
|
| Germany
|
|
—
|
4,802,989
|
|
4,802,989
|
|
| Italy
|
|
—
|
35,793,066
|
|
35,793,066
|
|
| Japan
|
|
—
|
17,121,698
|
|
17,121,698
|
|
| Mexico
|
|
20,692,442
|
—
|
|
20,692,442
|
|
| Netherlands
|
|
—
|
2,593,887
|
|
2,593,887
|
|
| New
Zealand |
|
—
|
7,948,069
|
|
7,948,069
|
|
| Spain
|
|
—
|
30,452,774
|
|
30,452,774
|
|
| United
Kingdom |
|
—
|
39,806,914
|
|
39,806,914
|
|
| United
States |
|
186,363,032
|
—
|
|
186,363,032
|
|
| Master
Limited Partnerships |
|
3,241,103
|
—
|
|
3,241,103
|
|
| Total
Value of Securities |
|
$269,592,022
|
$191,695,755
|
|
$461,287,777
|
|
| |
|
| Derivatives
1 |
|
|
|
|
|
|
| Liabilities:
|
|
|
|
|
|
|
| Foreign
Currency Exchange Contracts |
|
$
— |
$
(1,701) |
|
$
(1,701) |
|
| 1Foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument at the year end. |
During the year ended November 30, 2022, there were no
transfers into or out of Level 3 investments. The Fund’s policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.
A reconciliation of Level 3 investments is presented
when the Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to the Fund's net assets. During the year ended November 30, 2022, there were no Level 3 investments.
Notes to financial
statements
Macquarie Global Infrastructure Total Return Fund
Inc.
4. Dividend and Distribution Information
Income and long-term capital gain distributions are
determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net gains on foreign currency transactions and net short-term gains on sales of investment securities are treated as
ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended November 30, 2022 and 2021 were as follows:
| |
Year
ended |
| |
11/30/22
|
|
11/30/21
|
| Ordinary
income |
$
8,443,677 |
|
$12,429,082
|
| Long-term
capital gains |
7,355,189
|
|
—
|
| Return
of capital |
3,588,238
|
|
—
|
| Total
|
$19,387,104
|
|
$12,429,082
|
5. Components of Net
Assets on a Tax Basis
As of November 30, 2022,
the components of net assets on a tax basis were as follows:
| Shares
of beneficial interest |
$306,596,758
|
| Unrealized
appreciation on investments and foreign currencies |
43,479,886
|
| Net
assets |
$350,076,644
|
The differences between book
basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and the tax treatment of partnerships.
For financial reporting purposes, capital accounts are
adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of partnerships. Results of operations and net assets were not affected by these reclassifications. For the year ended
November 30, 2022, the Fund recorded the following reclassifications:
| Paid-in
capital |
$(1,013)
|
| Total
distributable earnings (loss) |
1,013
|
6. Capital
Transactions
| |
Year
ended |
| |
11/30/22
|
|
11/30/21
|
| Shares:
|
| Common
Shares Outstanding - beginning of year |
12,373,293
|
|
12,468,293
|
| Common
Shares Redeemed |
(70,000)
|
|
(95,000)
|
| Common
Shares Outstanding - end of year |
12,303,293
|
|
12,373,293
|
7. Derivatives
US GAAP requires disclosures that enable investors to
understand: (1) how and why an entity uses derivatives; (2) how they are accounted for; and (3) how they affect an entity’s results of operations and financial position.
Foreign Currency Exchange Contracts — The Fund may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Fund may enter into these contracts to fix the US dollar value of a security that it has agreed to
buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Fund may also use these contracts to hedge the US dollar value of securities it already owns that are denominated in
foreign currencies. In addition, the Fund may enter into these contracts to facilitate or expedite the settlement of portfolio transactions. The change in value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain
or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of foreign currency exchange contracts does not
eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to an unfavorable change in the
value of the hedged currency, they also limit any potential gain that might result should the value of the currency change favorably. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms
of their contracts. The Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between the Fund and the
counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty.
During the year ended November 30, 2022, the Fund
entered into foreign currency exchange contracts to facilitate or expedite the settlement of portfolio transactions.
During the year ended November 30, 2022, the Fund
experienced net realized gains or losses attributable to foreign currency holdings, which is disclosed as on the "Statement of assets and liabilities" and “Statement of operations.”
The table below summarizes the average
daily balance of derivative holdings by the Fund during the year ended November 30, 2022:
| |
Long
Derivative
Volume |
|
Short
Derivative
Volume |
| Foreign
currency exchange contracts (average notional value) |
$
|
399,977
|
|
$
|
367,740
|
Notes to financial
statements
Macquarie Global Infrastructure Total Return Fund
Inc.
8. Leverage
The Fund has entered into a Committed Facility
Agreement with BNP Paribas Prime Brokerage International Ltd. (the BNP Paribas Facility or the Agreement), which provides for a committed credit facility to be used as leverage for the Fund. The BNP Paribas Facility provides for secured, committed
lines of credit for the Fund, where selected Fund assets are pledged against advances made to the Fund. Under the 1940 Act, the Fund, after any such borrowings, must have asset coverage of at least 300% (33 1/3% of the Fund’s Total Assets
after borrowings). Under the current terms, the total amount of loans that may be outstanding at any one time, or the Maximum Commitment Financing (MCF), under the BNP Paribas Facility is $120,000,000 and euro 40,000,000. The Fund may reduce the MCF
by a total aggregate amount of up to $20,000,000 upon one business day’s prior notice (no more than one time per calendar month). The Fund pays 0.55% per annum above 3-month LIBOR for the US dollar line and 0.55% above the 3-month EURIBOR for
the euro line.
Effective August 26, 2019,
$60,000,000 of the US dollar line was fixed and euro 25,000,000 for the euro line for a five-year period. At the end of the five-year period, following business day conventions, the fixed financing will be reduced to zero and the floating rate
financing will be increased by the same amount, unless the parties agree in writing to amend or extend the term of the relevant fixed rate periods. The Fund paid an arrangement fee of 0.25% on the fixed rate borrowing.
Effective November 8, 2021, the reference rate changed
to the Secured Overnight Financing Rate for the US dollar line and Euro Short Term Rate for the euro line. As of November 30, 2022, the Fund had $28,900,000 and euro 15,000,000 in leverage outstanding on the variable lines, and $60,000,000
outstanding and euro 25,000,000 on the fixed line. The carrying values of the loan approximate fair values. The daily average amounts outstanding over the period on the variable line was $45,310,959, with an average rate on the borrowing of 1.713%,
and euro 15,000,000 with the average rate on borrowing of 0.355%.
The unused amount under the BNP Paribas Facility was
$31,100,000 of the US dollar variable line. The loan payable is carried at value, and the euro line is adjusted daily for foreign currency translation. At November 30, 2022, the Fund maintained an asset coverage of 368%, and the market value of the
securities pledged as collateral for the BNP Paribas Facility totaled $456,252,373.
9. Soft Dollar Arrangement
DMC maintains commission sharing arrangements with
various executing brokers in which a portion of total commissions paid by the Fund is allocated to a pool of “credits” maintained by a broker. These credits may be used to pay for a portion of DMC’s permitted investment research
services.
10. Compensation of Directors
Effective January 1, 2020, the Chair of the Board
receives an annual retainer of $58,750, paid quarterly, for his services to the Fund, and each other non-interested Director of the Fund received an annual retainer of $50,000, paid quarterly, for his or her services to the Fund. Non-interested
Directors and the Chair also receive an additional $2,500 for each meeting attended, and $1,500 for each telephonic meeting. Additional out-of-pocket expenses are paid as incurred.
11. Credit and Market Risk
An outbreak of infectious respiratory illness caused by
a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has now been detected globally. This coronavirus has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry
and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The impact of COVID-19,
and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition,
the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and
economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.
Investments in equity securities in general are subject
to market risks that may cause their prices to fluctuate over time. Fluctuations in the value of equity securities in which the Fund invests will cause the NAV of the Fund to fluctuate.
Some countries in which the Fund may invest require
governmental approval for the repatriation of investment income, capital, or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country’s balance of payments or for other reasons, a country
may impose temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are
substantially smaller, less liquid, and more volatile than the major securities markets in the US. Consequently, acquisition and disposition of securities by the Fund may be inhibited. In addition, a significant portion of the aggregate market value
of equity securities listed on the major securities exchanges in emerging markets is held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Fund.
The Fund may invest up to 15% of its net assets in
illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily
marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Board has delegated to DMC the
day-to-day
Notes to financial
statements
Macquarie Global Infrastructure Total Return Fund
Inc.
11. Credit and Market Risk (continued)
functions of determining whether individual securities
are liquid for purposes of the Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in
illiquid securities. Rule 144A securities have been identified on the “Schedule of investments.”
12. Contractual Obligations
The Fund enters into contracts in the normal course of
business that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund's existing
contracts and expects the risk of loss to be remote.
13. Share Repurchase Program
The Board approved the share repurchase program on
January 20, 2021. On January 26, 2021, the Fund announced the adoption of an open-market share repurchase program pursuant to which the Fund may purchase, from time to time, up to 10% of its common shares in open-market transactions, at the
discretion of management in an effort to reduce the Fund’s market price discount to net asset value. Subject to the 10% limitation, the timing and amount of repurchases will be in the discretion of the Fund’s management. In exercising
their discretion, management will take into account various other factors, including, but not limited to, the level of the discount, the Fund’s performance, portfolio holdings, dividend history, market conditions, cash on hand, the
availability of other attractive investments, and whether the sale of certain portfolio securities would be undesirable because of liquidity concerns or because the sale might subject the Fund to adverse tax consequences. Any repurchases would be
made on a national securities exchange at the prevailing market price, subject to exchange requirements, federal securities laws and rules that restrict repurchases, and the terms of any outstanding leverage or borrowing of the Fund.
The Fund intends to repurchase its common shares, at
such times and in such amounts as is deemed advisable and in accordance with applicable law, subject to various factors, including the limitations imposed by the federal securities laws governing the repurchase of an issuer’s shares by the
issuer.
For the year ended November 30, 2022 the
Fund repurchased 70,000 common shares at an average price of $24.79 per share (including brokerage commissions) and at a weighted average discount of 16.78%. These repurchases had a total cost of $1,736,818 (including brokerage commissions).
14. Subsequent Events
On August 11, 2022, the Board of the Fund approved the
reorganization of the Fund into abrdn Global Infrastructure Income Fund (“Acquiring Fund”). On November 9, 2022, Fund shareholders voted to approve the reorganization of the Fund into the Acquiring Fund. It is currently expected
that the reorganization
will occur on or about March 10, 2023, subject to the satisfaction of customary closing conditions.
Management has determined that no other material events
or transactions occurred subsequent to November 30, 2022, that would require recognition or disclosure in the Fund's financial statements.
Report of independent
registered public accounting firm
To the Board of Directors and Shareholders of Macquarie
Global Infrastructure Total Return Fund Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets
and liabilities, including the schedule of investments, of Macquarie Global Infrastructure Total Return Fund Inc. (the “Fund”) as of November 30, 2022, the related statements of operations and cash flows for the year ended November 30,
2022, the statements of changes in net assets for each of the two years in the period ended November 30, 2022, including the related notes, and the financial highlights for each of the five years in the period ended November 30, 2022 (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of November 30, 2022, the results of its operations and its cash flows
for the year then ended, the changes in its net assets for each of the two years in the period ended November 30, 2022 and the financial highlights for each of the five years in the period ended November 30, 2022 in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of
the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the
risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included
confirmation of securities owned as of November 30, 2022 by correspondence with the custodian, transfer agents and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion..
/s/PricewaterhouseCoopers LLP
Philadelphia,
Pennsylvania
January 27, 2023
We have served
as the auditor of the Macquarie Global Infrastructure Total Return Fund Inc. since 2005.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
Dividend Reinvestment Plan
Unless a stockholder of the Fund (Stockholder) elects
to receive cash distributions, all dividends, including any capital gain dividends, on the Stockholder’s Common Shares will be automatically reinvested by the Plan Agent, Computershare, in additional Common Shares under the Dividend
Reinvestment Plan. If a Stockholder elects to receive cash distributions, the Stockholder will receive all distributions in cash paid by check mailed directly to the Stockholder by Computershare, as dividend paying agent.
If a Stockholder decides to participate in the Plan,
the number of Common Shares the Stockholder will receive will be determined as follows:
• If Common Shares are trading at or above
Net Asset Value (NAV) at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date.
• If Common Shares are trading below NAV at
the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the New York Stock Exchange or elsewhere, for the participants’ accounts. It is possible that the
market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase
of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the
valuation date except where temporary curtailment or suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments.
A Stockholder may withdraw from the Plan at any time by
giving written notice to the Plan Agent, or by telephone in accordance with such reasonable requirements as the Plan Agent and Fund may agree upon. If a Stockholder withdraws or the Plan is terminated, the Stockholder will receive a certificate for
each whole share in its account under the Plan and the Stockholder will receive a cash payment for any fraction of a share in its account. If the Stockholder wishes, the Plan Agent will sell the Stockholder’s shares and send the proceeds,
minus brokerage commissions, if any, to the Stockholder.
The Plan Agent maintains all Stockholders’
accounts in the Plan and gives written confirmation of all transactions in the accounts, including information a Stockholder may need for tax records. Common Shares in an account will be held by the Plan Agent in non-certificated form. The Plan
Agent will forward to each participant any proxy solicitation material and will vote any shares so held only in accordance with proxies returned to the Fund. Any proxy a Stockholder receives will include all Common Shares received under the
Plan.
There is no brokerage charge for
reinvestment of a Stockholder’s dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
Dividend Reinvestment
Plan (continued)
Automatically reinvesting dividends and distributions
does not mean that a Stockholder does not have to pay income taxes due upon receiving dividends and distributions.
If a Stockholder holds Common Shares with a brokerage
firm that does not participate in the Plan, the Stockholder will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Stockholders should consult their financial adviser
for more information.
The Fund reserves the right
to amend or terminate the Plan if in the judgment of the Board of Directors the change is warranted. There is no direct service charge to participants 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, Computershare, PO Box 43078, Providence, RI 02940-3078 or Computershare, 150 Royall St., Suite 101, Canton, MA 02021 (for overnight courier), 866 587-4518.
Fund Proxy Voting Policies and Procedures
Policies and procedures used in determining how to vote
proxies relating to portfolio securities and information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, are available without a charge, upon request, by contacting the Fund at 866 587-4518 or on the
Fund’s website at macquarieim.com/mgu and on the Securities Exchange Commission (SEC)’s website at sec.gov.
Portfolio Holdings
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-PORT. The Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating
to portfolio securities, are available without charge (i) upon request, by calling 866 587-4518; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Fund uses to determine how to vote
proxies (if any) relating to portfolio securities and the Schedule of Investments included in the Fund’s most recent Form N-PORT are available without charge on the Fund’s website at macquarieim.com/mgu.
Tax Information
The information set forth below is for the Fund’s
fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Fund. Accordingly, the
information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of the information.
All disclosures are
based on financial information available as of the date of this annual report and, accordingly, are subject to change. For any and all items requiring reporting, it is the intention of the Fund to report the maximum amount permitted under the
Internal Revenue Code and the regulations thereunder.
For the fiscal year ended November 30, 2022, the Fund
reported distributions paid during the year as follows:
| (A)
Long-Term Capital Gains Distributions (Tax Basis) |
37.94%
|
| (B)
Ordinary Income Distributions (Tax Basis)* |
43.55%
|
| (C)
Return of Capital (Tax Basis) |
18.51%
|
| Total
Distributions (Tax Basis) |
100.00%
|
| (D)
Qualifying Dividends1 |
48.90%
|
(A), (B), and (C) are based on a percentage of the
Fund’s total distributions.
(D) is based on
the Fund’s ordinary income distributions.
1Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.
*For the fiscal year ended November 30, 2022, certain
dividends paid by the Fund may be subject to a maximum tax rate of 20%. The percentages of dividends paid by the Fund from ordinary income reported as qualified income is 100%. Complete information will be computed and reported in conjunction with
your 2022 Form 1099-DIV.
The Fund intends to pass
through foreign tax credits in the maximum amount of $1,057,461. The gross foreign source income earned during fiscal year 2022 was $12,153,109. Complete information will be computed and reported in conjunction with your 2022 Form 1099-DIV.
Notice
Notice is hereby given in accordance with Section 23(c)
of the 1940 Act that the Fund may purchase at market prices from time to time shares of its common stock in the open market.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
Decision to opt into Maryland Control Share Acquisition
Act
On May 3, 2022, the Fund announced that the
Fund’s Board has unanimously approved the Fund’s election to be subject to the Maryland Control Share Acquisition Act (MCSAA), effective as of April 27, 2022. The objective of the MCSAA is to protect the interests of all shareholders of
a Maryland corporation. It achieves this by limiting the voting power of a large investor or group acting in concert on newly acquired shares above various threshold levels that start at 10%. Those shares can be voted only if two-thirds of the
shares held by the other shareholders agree to grant voting rights to these “control” shares.
Application of the MCSAA seeks to limit the ability of
an acquiring person to achieve a short-term gain at the expense of long-term value for the rest of the Fund’s shareholders. The MCSAA will only apply to “control shares” acquired after April 27, 2022, the date that the Fund elected
to be subject to the MCSAA. The above description of the MCSAA is only a high-level summary and investors should refer to the actual provisions of the MCSAA for more information.
Section 19(a) Notices
The following table sets forth the estimated amount of
the sources of distribution for purposes of Section 19 of the 1940 Act, as amended, and the related rules adopted there under. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and
prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain, and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are
disclosed for the fiscal
year-to-date cumulative distribution amount per share for the Fund.
The amounts and sources of distributions reported in
these 19(a) notices are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and
may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
| |
Total
Cumulative Distributions
for the year ended
November 30, 2022 |
| |
Net
Investment
Income |
Net
Realized
Short-
Term
Capital
Gains |
Net
Realized
Long-
Term
Capital
Gains |
Return
of
Capital |
Total
Per
Common
Share |
| |
$0.5998
|
$0.4024
|
$0.5698
|
$—
|
$1.5720
|
| |
Percentage
Breakdown of the
Total Cumulative Distributions
for the year ended
November 30, 2022 |
| |
Net
Investment
Income |
Net
Realized
Short-
Term
Capital
Gains |
Net
Realized
Long-
Term
Capital
Gains |
Return
of
Capital |
Total
Per
Common
Share |
| |
38.15%
|
25.60%
|
36.25%
|
0.00%
|
100.00%
|
The Fund’s
distribution policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Fund may at times pay out less than
the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the
distributions paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. The Fund’s current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of assets and liabilities, which comprises part of the financial information included in this report.
Proxy results
The Fund held its Annual Meeting of Stockholders (the
“Annual Meeting”) on August 10, 2022. The results of the voting at the meeting were as follows:
| Nominee
|
Shares
voted for |
Shares
against/withheld |
| Thomas
W. Hunersen |
5,033,258
|
5,323,470
|
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
Board Approval of Investment Advisory and Management
Agreement
The Directors, including all of the
non-interested Directors, met on July 19, 2022 and considered the continuation of the Investment Advisory and Management Agreement (the “Advisory Agreement”) with Delaware Management Company (“DMC”), a series of Macquarie
Investment Management Business Trust, for a one-year term. In their consideration, the Directors took into account a memorandum from DMC regarding the services rendered to the Fund by DMC, relevant information provided and discussed during the
meeting, the experience of the portfolio manager, as well as the broader portfolio management team, the organizational structure and key personnel of DMC’s securities business and DMC’s financial statements and information relating to
its profitability (collectively, the “Renewal Materials”). The Directors noted that they found the Renewal Materials provided by DMC and its affiliated entities to be responsive to the request for information from the Board of Directors
(“Board”). The Directors also considered information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”) comparing the Fund’s fee rate for management services, expenses and performance characteristics to
those of other similar funds.
The Directors
considered, among other factors, the following:
(a) The nature, extent and quality of services provided by the Adviser. The Directors considered the services that DMC provides to the Fund, DMC’s reputation as a manager of infrastructure assets, and the
information in the Renewal Materials, including information regarding (i) Macquarie’s position as a global market leading infrastructure manager, (ii) Macquarie’s global infrastructure network, (iii) the extent of DMC’s team and
its ability to leverage Macquarie’s global infrastructure capabilities, (iv) DMC’s strong portfolio construction and risk management process, and (v) the Fund’s performance in light of current economic conditions. Based on this
presentation, the Directors concluded that the nature, extent and quality of services provided to the Fund by DMC under the Advisory Agreement supported the Board’s re-approval of the Advisory Agreement.
(b) Management fee, expense ratio and investment performance of the Fund, including a comparison of fees paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or
other clients. Consistent with the process followed in previous years, the Directors were provided with two sets of comparisons prepared by Broadridge that compared the Fund’s performance, management fees and expenses to other
closed-end sector equity funds, including the other closed-end infrastructure fund sub-advised by DMC. One set of funds was selected by Broadridge and the other set selected by DMC based on disclosed criteria. The Renewal Materials provided further
detail on the comparison groups, limitations of the Broadridge data and analysis of the comparisons.
The Directors considered information prepared by
Broadridge comparing the Fund’s management fee rate and expenses to those of other funds and noted that the Fund’s management fee rate was close to the median for both the DMC-selected comparison group and the Broadridge-selected
comparison group for contractual management fees at a common asset level, defined as a fund’s most recent total net assets rounded up to the nearest $25 million, and the Fund’s expense ratio was higher than the median of the DMC-selected
and Broadridge-selected comparison groups for actual total expenses – common and leveraged assets, which
are computed from the
combined assets of common and leveraged shares for the subject fund and the Closed-End Expense Group using each fund’s most recent fiscal period. The Directors noted DMC’s explanation that certain of the expenses that contribute to the
Fund having higher expenses than the median of the comparison group include investment-related expenses, which are attributed to the Fund’s leverage, and certain non-management expenses.
The Directors considered the performance information
prepared by Broadridge comparing the Fund’s performance to the Fund’s Broadridge-selected comparison group.
Based on these considerations and the other factors
considered at the meeting, the Directors concluded that the Fund’s management fee rate, expense level and performance supported the re-approval of the Advisory Agreement.
(c) Cost of the services to be provided and profits realized by DMC from the relationship with the Fund. The Directors considered the pro forma income statement relating to the cost of the services provided by DMC and
the profits realized by DMC from its relationship with the Fund. It was noted that affiliates of DMC did not derive any additional material direct or indirect economic benefits from DMC’s relationship with the Fund, other than through
commissions received by an affiliated broker/dealer. On a quarterly basis, the Board is provided with Rule 17e-1 transaction reports showing that the transactions executed with the affiliated broker-dealer were reasonable and fair compared to the
commissions received by unaffiliated brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time. After reviewing this information, the Directors
concluded that the profitability of DMC attributable to the Fund did not suggest that the investment advisory fee was so disproportionately large that it could not have been the product of arms’ length bargaining.
(d) The extent to which economies of scale are realized as the Fund grows and whether fee levels reflect such economies of scale. The Directors considered that economies of scale should be predicated on increasing
assets and that, because the Fund is a closed-end fund without daily inflows and outflows of capital, there were not at this time significant economies of scale to be realized by DMC in managing the Fund’s assets.
Conclusion. No single factor was determinative to the decision of the Directors. In addition, the Directors’ consideration of the advisory fee arrangements had the benefit of, and was informed in part by
reference to, a number of years of reviews during which lengthy discussions took place between the Directors and DMC representatives. Certain aspects of the arrangements may have received greater scrutiny in some years than in others, and the
Directors’ conclusions may be based, in part, on information considered in prior years or learned throughout the period of their service. Based on the foregoing and such other matters as were deemed relevant, the Board of Directors, including
the Independent Directors, unanimously approved the continuation of Advisory Agreement. It was noted that the Independent Directors were represented by independent legal counsel who assisted them in their deliberations.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
The Fund's Investment Objective, Principal Investment
Strategies and Risks
What is the Fund's investment
objective?
The Fund's investment objective is to
provide to its common stockholders a high level of total return consisting of dividends and other income, and capital appreciation.
What are the Fund’s principal investment
strategies?
The Fund seeks to achieve its
investment objective by investing, under normal market conditions, at least 80% of its Total Assets (as defined below) in equity and equity-like securities and instruments, such as common stocks, preferred stocks, convertible securities and hybrid
securities issued by U.S. and non-U.S. issuers (Infrastructure Issuers) that primarily own or operate Infrastructure Assets (as defined below) (the 80% policy). “Total Assets” of the Fund, for the purpose of this calculation, include the
aggregate of the Fund’s average daily net assets plus proceeds from any outstanding borrowings used for leverage. The 80% policy is non-fundamental and may be changed without shareholder approval. Fund shareholders would be given at least 60
days' notice prior to any such change. “Infrastructure Assets” are an underlying foundation of basic services, facilities and institutions upon which the growth and development of a community depends. Infrastructure Assets may provide
the necessities of everyday life, such as fresh water, roads, airports, utilities, power, steam heating systems, hospitals, schools and other social services. Infrastructure Assets provide the transportation corridors and facilities, communications
networks, energy distribution systems and pipelines, and institutions that are fundamental to the health of an economy. Infrastructure Issuers include both publicly traded and privately held non-governmental entities. These entities may issue debt
or equity securities. Although the Infrastructure Issuers in which the Fund will invest will be non-governmental issuers, governmental units and government-related entities may hold securities issued by such non-governmental Infrastructure Issuers,
at times to a significant extent.
The Manager
seeks to identify and select investments in Infrastructure Issuers that, over the long term, are anticipated to produce attractive dividend yield, and capital appreciation commensurate with the underlying risk of the investment. The Manager analyzes
Infrastructure Issuers through detailed analysis of long-term fundamentals to determine the quality of their assets. The Manager believes that analysis of an Infrastructure Issuer’s underlying assets is key to determine the long-term quality
of the Infrastructure Issuer’s potential revenue and income streams. The Manager believes investments made on the basis of a systematic, fundamentals-based approach identifying long-term potential value in Infrastructure Issuers should
outperform investments made on the basis of short-term market factors. The Fund may invest in securities and instruments of Infrastructure Issuers that are forecast to decline in value due to the nature of the assets of the Infrastructure Issuer
under circumstances where such decline is anticipated to be offset by positive overall total return.
Certain members of the Macquarie Group (other than the
Manager), primarily those involved in the Macquarie Group’s infrastructure funds management and infrastructure advisory divisions, focus on identifying investment opportunities in securities of Infrastructure Issuers that are neither listed on
an exchange nor traded over-the-counter. Generally, these opportunities are not
appropriate for the Fund
due to the investment size and the significant level of control sought. Periodically, however, opportunities may be identified that meet the Fund’s investment objective, policies and guidelines and the Manager may be presented with the
opportunity to invest the assets of the Fund in such opportunities. The Manager may, if in accordance with the 1940 Act and the Fund’s investment objective, guidelines and policies, cause the Fund to make such investment. The Manager
anticipates that the majority, and possibly all, of the Fund’s opportunities to invest the assets of the Fund in such securities will be presented to the Manager through such other members of the Macquarie Group. No agreement exists between
any member of the Macquarie Group and the Fund with respect to presenting such opportunities and no assurances can be given that any such opportunities will be presented to the Manager or, if presented, will be deemed to be a suitable investment for
the Fund or will be permitted under the 1940 Act. No other member of the Macquarie Group will render investment advice to the Fund.
Up to 100% of the Fund’s Total Assets may be
composed of securities issued by Infrastructure Issuers primarily located outside the United States. Such Infrastructure Issuers are non-U.S. issuers and, although primarily located outside the United States, may own or operate Infrastructure Assets
located in the United States. Such securities generally will be denominated in currencies other than the U.S. dollar. The Fund may also purchase sponsored American Depository Receipts (ADRs) or U.S. dollar-denominated securities of non-U.S.
Infrastructure Issuers. ADRs are receipts issued by United States banks or trust companies in respect of securities of non-U.S. issuers held on deposit for use in the United States securities markets.
The Fund normally invests at least 85% of its Total
Assets in securities and instruments of issuers that are listed on national or regional exchanges, or traded over-the-counter, with most issuers expected to be listed on a national or regional exchange. Under normal market conditions, the Fund may
invest up to 15% of its Total Assets in unlisted securities or instruments of Infrastructure Issuers, although this is not a primary focus of the Fund. These unlisted securities or instruments may include equity, hybrid, convertible preferred
instruments and debt instruments.
The Fund also
applies the following guidelines to its investments at the time of investment: (i) no more than 5% of the Fund’s Total Assets may be invested in securities or instruments issued by any single Infrastructure Issuer; (ii) no more than 10% of the
Fund’s Total Assets may be invested in securities or instruments issued by Infrastructure Issuers primarily located in any one non-Organization for Economic Cooperation and Development (OECD) country; (iii) no more than 30% of the Fund’s
Total Assets may be invested in securities or instruments issued by Infrastructure Issuers primarily located in non-OECD countries; and (iv) no more than 30% of the Fund’s Total Assets may be invested in securities or instruments issued by
Infrastructure Issuers primarily located in any one country that is a part of the OECD, except that the Fund may invest up to 50% of the Fund’s Total Assets in Infrastructure Issuers primarily located in the United States.
The hybrid securities in which the Fund may invest
include stapled securities and various income trust units, including securities and instruments under which the issuers’ obligations to pay distributions on the securities and instruments may be linked to profits. Stapled securities typically
consist of two or more related securities that are “stapled” together to trade as one unit.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
What are the Fund’s principal investment strategies? (continued)
Income trusts are generally designed to distribute, in
a tax-efficient manner, cash flows from an operating company to the holders of the trust units. Income fund units, stapled securities and other “hybrid” securities will be treated as equity securities for the purposes of the Fund’s
investment strategies.
The Fund may invest, under
normal market conditions, up to 20% of its Total Assets in instruments that are not required to be issued by Infrastructure Issuers and debt securities, including bonds, notes (including structured notes), mortgage-backed securities, asset-backed
securities, Eurodollar and Yankee dollar instruments, and money market instruments. Debt securities may be issued by corporate and governmental issuers and may have all types of interest rate payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment-in-kind and auction rate. There is no minimum credit rating for the securities and instruments in which the Fund may invest. The Fund may invest up to 20% of its Total Assets in debt securities or
instruments rated non-investment grade by recognized statistical rating agencies or unrated securities of comparable quality.
The Fund may invest, to the extent permitted by law, in
securities and instruments of other open- or closed-end U.S. or non-U.S. investment companies that invest primarily in securities of the types in which the Fund may invest directly. In addition, the Fund may invest a portion of its Total Assets in
U.S. or non-U.S. pooled investment vehicles (other than investment companies) that invest primarily in securities, or the assets underlying those securities, of the types in which the Fund may invest directly. The Fund generally expects that it may
invest in other investment companies and/or pooled investment vehicles either during periods when it has large amount of uninvested cash, such as the period shortly after the Fund receives the proceeds of leverage instruments, or during periods when
there is a shortage of attractive securities of the types in which the Fund may invest directly available in the market.
The Fund may, but is not obligated to, use a variety of
financial instruments and investment techniques to attempt to hedge certain risks to which it will be subject. The instruments and techniques in which the Fund may invest include options, forward contracts, futures contracts, and swap agreements.
The Fund does not intend to enter into short sales other than short sales “against the box,” which are transactions in which the seller already owns the security being sold short. Examples of financial instruments in which the Fund may
invest include options on securities, currencies and indexes; interest rate futures contracts, index futures contracts and foreign currency futures contracts; the Fund may purchase and write call and put futures options; the Fund may enter into swap
agreements and related caps, floors and collars; and the Fund may invest in warrants.
The Fund may enter into forward contracts, including
forward currency contracts, in an effort to hedge the Fund’s exposure to investments in non-U.S. currencies. Similarly, the Fund may use interest rate futures contracts, index futures contracts and foreign currency futures contracts, and may
purchase and sell options on futures. A conventional futures contract is an agreement under which one party agrees to accept, and the other party agrees to make, delivery of the underlying asset to which the futures contract relates at a specified
future time and at a specified price.
The Fund may enter into
swap transactions with respect to income streams on an underlying investment, currency exchange rates, indices, and interest rates.
Though not a significant component of its investment
strategy, the Fund may use certain financial instruments and investment techniques, such as writing covered calls, to increase its income or total return.
The Fund does not normally use any derivative financial
instruments or investment techniques for purely speculative purposes. The Manager, on behalf of the Fund, has claimed an exclusion from the definition of the term “commodity pool operator” (CPO) under the Commodity Exchange Act (CEA)
and, as a result, is not subject to registration or regulation as a CPO under the CEA.
The Fund may buy and sell securities on a when-issued
or delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date.
As temporary investments, the Fund may invest in
repurchase agreements.
Although it is not the
Fund’s current intention, the Fund may lend its portfolio securities to broker-dealers and banks.
The Fund may not use leverage at all times and the
amount of leverage may vary depending upon a number of factors, including the Manager’s outlook for the market and the costs that the Fund would incur as a result of such leverage. The Fund will not issue leverage instruments with an aggregate
issue price exceeding 33 1/3% (in the case of debt) or 50% (in the case of preferred stock) of the Fund’s Total Assets (including the proceeds from the issuance of leverage instruments) in each case at the time such leverage instruments are
issued. Following the issuance of leverage instruments, however, the balance of outstanding leverage instruments may exceed 33 1/3% or 50% (as applicable) of the Fund’s Total Assets due to a reduction in the value of the Fund’s Total
Assets, subject to restrictions on leverage imposed by the 1940 Act.
The Fund may also borrow money as a temporary measure
for extraordinary or emergency purposes, including the payment of dividends and the settlement of securities transactions which otherwise might require untimely dispositions of Fund securities. This borrowing will be subject to the 33 1/3%
limitation described above.
During periods in
which the Manager determines that it is temporarily unable to follow the Fund’s investment strategy or that it is impractical to do so, the Fund may deviate from its principal investment strategies or any of the guidelines set out above and
invest all or any portion of its assets in securities with remaining maturities of less than one year, cash or cash equivalents. The Manager’s determination that it is temporarily unable to follow the Fund’s investment strategy or that
it is impractical to do so will generally occur only in situations in which a market disruption event has occurred and where trading in the securities selected through application of the Fund’s investment strategy is extremely limited or
absent. In such a case, the value of shares of the Fund may be adversely affected and the Fund may not pursue or achieve its investment objective.
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
What are the principal risks of investing in the
Fund?
Investing in any closed-end fund, such as
the Fund, involves the risk that you may lose part or all of the money you invest. Over time, the value of your investment in the Fund will increase and decrease according to changes in the value of the securities in the Fund’s portfolio. An
investment in the Fund may not be appropriate for all investors. The Fund’s principal risks include:
Active management and selection risk — The risk that the securities selected for the Fund by the Manager will underperform the markets, the relevant indices, or the securities selected for other funds with similar investment objectives and investment
strategies. The securities and sectors selected may vary from the securities and sectors included in the relevant index.
Industry and sector
risk — The risk that the value of securities in a particular industry or sector (such as infrastructure) will decline because of changing expectations for the performance of that industry or
sector.
Infrastructure risk — Infrastructure Issuers may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high
leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices,
the effects of energy conservation policies and other factors. Some of the specific risks that Infrastructure Issuers may be particularly affected by, or subject to, include the following: regulatory risk, technology risk, regional or geographic
risk, natural disasters risk, through-put risk, project risk, strategic asset risk, operation risk, customer risk, interest rate risk, inflation risk and financing risk. Other factors that may affect the operations of Infrastructure Issuers include
difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets, inexperience with and potential losses resulting from a developing deregulatory environment, increased susceptibility
to terrorist acts or political actions, and general changes in market sentiment towards infrastructure assets. In addition, the change in presidential administration could significantly impact the regulation of United States financial markets and
dramatically alter existing trade, tax, energy and infrastructure policies, among others. It is not possible to predict what, if any, changes will be made or their potential effect on the economy, securities markets, or financial stability of the
United States, or on the energy, natural resources, infrastructure and other markets.
Foreign risk and emerging markets risk — The risk that international investing (particularly in emerging markets) may be adversely affected by political instability; changes in currency exchange rates; inefficient markets and higher transaction costs;
foreign economic conditions; the imposition of economic or trade sanctions; or inadequate or different regulatory and accounting standards. The risk associated with international investing will be greater in emerging markets than in more developed
foreign markets because, among other things, emerging markets may have less stable political and economic environments. In addition, there often is substantially less publicly available information about issuers and such information tends to be of a
lesser quality. Economic markets and structures tend to be less mature and diverse and the securities markets may also be smaller, less liquid, and subject to greater price volatility.
Currency risk — The risk that fluctuations in exchange rates between the US dollar and foreign currencies and between various foreign currencies may cause the value of an investment to decline.
Market risk — The
risk that all or a majority of the securities in a certain market — such as the stock or bond market — will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence,
or heavy institutional selling.
Credit risk — The risk that an issuer of a debt security, including a governmental issuer or an entity that insures a bond, may be unable to make interest payments and/or repay principal in a timely manner. For a further
discussion of credit and market risks, see Note 11 in “Notes to financial statements.”
Equity risk — The
risk that stocks and other equity securities generally fluctuate in value more than bonds. Also the risk that an issuer does not realize sufficient income in a particular period both to service its liabilities and to pay dividends on its equity
securities and may forgo paying dividends on its equity securities.
Preferred securities risk — The risk that the value of preferred securities may be impacted by an issuer’s inability to make interest payments and/or repay principal in a timely manner, skipped or deferred dividend payments, early
redemption, limited voting rights, risks of subordination, or a lack of liquidity.
Interest rate risk
— The risk that the prices of bonds and other fixed income securities will increase as interest rates fall and decrease as interest rates rise. Interest rate changes are influenced by a number of factors, such as government policy, monetary
policy, inflation expectations, and the supply and demand of bonds. Bonds and other fixed income securities with longer maturities or duration generally are more sensitive to interest rate changes. The Fund may be subject to a greater risk of rising
interest rates due to the current period of historically low interest rates. Infrastructure Assets can be highly leveraged. As such, movements in the level of interest rates may affect the returns from these assets more significantly than other
assets in some instances.
Prepayment risk — The risk that the principal on a bond that is held by the Fund will be prepaid prior to maturity at a time when interest rates are lower than what that bond was paying. The Fund may then have to reinvest that
money at a lower interest rate.
Derivatives
risk — Derivatives contracts, such as futures, forward foreign currency contracts, options, and swaps, may involve additional expenses (such as the payment of premiums) and are subject to significant loss if a
security, index, reference rate, or other asset or market factor to which a derivatives contract is associated, moves in the opposite direction from what the portfolio manager anticipated. When used for hedging, the change in value of the
derivatives instrument may also not correlate specifically with the currency, rate, or other risk being hedged, in which case a fund may not realize the intended benefits. Derivatives contracts are also subject to the risk that the counterparty may
fail to perform its obligations under the contract due to, among other reasons, financial difficulties (such as a bankruptcy or reorganization).
Additional information
(Unaudited)
Macquarie Global Infrastructure Total Return Fund
Inc.
What are the principal risks of investing in the Fund? (continued)
Leveraging risk —
The risk that certain Fund transactions using leveraging techniques may give rise to leverage, causing the Fund to be more volatile than if it had not been leveraged, which may result in increased losses to the Fund. Leveraging techniques, such as
borrowing, will pose certain risks for the Fund's common shareholders, including the possibility of higher volatility of both the NAV and market value of the Fund's shares. There can be no assurance that the Fund would be able to realize a higher
net return on its investment portfolio than the then current interest rate payable under the BNP Paribas Agreement. In such event, the Fund's leveraged capital structure would result in a lower yield to the Fund's common shareholders than if the
Fund were not leveraged. Accordingly, the effect of leverage in a declining market is likely to be a greater decline in the Fund's NAV per share than if the Fund were not leveraged, which may be reflected in a greater decline in the market price of
its shares.
Liquidity risk — Liquidity risk is the possibility that securities cannot be readily sold within seven days at approximately the price at which the Fund has valued them.
Geographic focus risk
— The risk that local political and economic conditions could adversely affect the performance of the Fund to the extent it invests a substantial amount of assets in securities of issuers located in a single
country or a limited number of countries.
Investment companies risk — The risks of investing in other investment companies typically reflect the risks of the types of instruments in which the investment company invests. The Fund will bear its proportionate share of the fees and
expenses of an investment in an investment company. As a result, the Fund’s expenses may be higher and performance may be lower.
Inflation risk —
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Fund’s shares and distributions thereon
can decline. In addition, during any periods of rising inflation, interest and dividend rates of any leverage instruments a fund may have issued would likely increase, which would tend to further reduce returns to shareholders.
High yield (junk bond) risk — The risk that high yield securities, commonly known as “junk bonds,” are subject to reduced creditworthiness of issuers, increased risk of default, and a more limited and less liquid secondary
market. High yield securities may also be subject to greater price volatility and risk of loss of income and principal than are higher-rated securities. High yield bonds are sometimes issued by municipalities that have less financial strength and
therefore have less ability to make projected debt payments on the bonds.
Hybrid securities risk
— The Fund may invest in preferred stock and hybrid securities, which may have special risks. Preferred and hybrid securities may include provisions that permit the issuer, at its discretion, to defer distributions for a stated period without
any adverse consequences to the issuer. Some preferred and hybrid securities are noncumulative, meaning that the dividends do not accumulate and need not ever be paid. A portion of the Fund’s assets may include investments in noncumulative
preferred or hybrid securities, under which the issuer does not have an obligation to make up any arrears to its investors. Preferred and hybrid securities may be substantially less liquid than many other securities, such as common stocks
or
US government
securities. Generally, preferred and hybrid security holders (such as the Fund) have no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the security
holders generally may select a number of directors to the issuer’s board. Generally, once all the arrears have been paid, the security holders no longer have voting rights. In certain varying circumstances, an issuer of preferred or hybrid
securities may redeem the securities prior to a specified date. For instance, for certain types of preferred or hybrid securities, a redemption may be triggered by a change in federal income tax or securities laws. A redemption by the issuer may
negatively impact the return of the security held by the Fund.
Performance risk
— Performance risk broadly refers to the potential for changes in share prices to result in a loss in the value of your investment in the Fund. The Fund primarily invests in companies that are listed on a
share market and as a result is exposed to movements in their share prices.
Natural disaster and epidemic risk — Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been
and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the
Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other
countries. These disruptions could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective. Any such event(s) could have a
significant adverse impact on the value and risk profile of the Fund.
IBOR risk — The
risk that potential changes related to the use of the London Interbank Offered Rate (LIBOR) or similar interbank offered rates (“IBORs,” such as the Euro Overnight Index Average (EONIA)) could have adverse impacts on financial
instruments that reference LIBOR or a similar rate. While some instruments may contemplate a scenario where LIBOR or a similar rate is no longer available by providing for an alternative rate setting methodology, not all instruments have such
fallback provisions and the effectiveness of replacement rates is uncertain. The abandonment of LIBOR and similar rates could affect the value and liquidity of instruments that reference such rates, especially those that do not have fallback
provisions. The use of alternative reference rate products may impact investment strategy performance.
Directors and
officers
November 30, 2022 (Unaudited)
Certain biographical and other information relating to
the Directors and Executive Officers of the Fund is set out below, including their year of birth, their principal occupations for at least the last five years, the length of time served, the total number of portfolios overseen in the complex of
funds advised by the Manager (DMC-Affiliated Advised Funds) and other public company directorships.
Name,
Birth Year and Address1
of Director |
Position(s)
Held
with the Fund |
Term
of Office and Length of
Time Served2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
DMC-Affiliated
Advised Funds
Overseen |
Other
Public
Company
Directorships |
| |
|
Biographical Information of the Non-Interested Directors of the Fund |
Gordon
A. Baird*
Birth Year: 1968 |
Class
I Director |
Since
July 2005 |
Mr.
Baird is the President and Chief Executive Officer of Nexos Technologies Inc. from 2019 to present. Mr. Baird is also a Partner for Orbit Financial Holdings LP from July 2017 to present. Mr. Baird is also the founder and Managing Partner of G. A.
Baird Partners & Co from 2015 to present. Mr. Baird was the Chief Executive Officer of Independence Bancshares, Inc. from 2013 to 2015 and an Operating Advisor to Thomas H. Lee Partners L.P. in 2011 and 2012. From 2003 to 2011, Mr. Baird was
Chief Executive Officer of Paramax Capital Partners LLC. Prior to 2003, Mr. Baird was a Director at Citigroup Global Markets, Inc., an investment analyst at State Street Bank and Trust Company and real estate analyst at John Hancock Real Estate
Finance Inc. |
1
|
None
|
Name,
Birth Year and Address1
of Director |
Position(s)
Held
with the Fund |
Term
of Office and Length of
Time Served2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
DMC-Affiliated
Advised Funds
Overseen |
Other
Public
Company
Directorships |
Thomas
W. Hunersen*
Birth Year: 1958 |
Class
II Director |
Since
July 2005 |
Mr.
Hunersen is the Principal of CKW Ventures LLC (since 2013). Prior to 2013, Executive Vice President/Global Head of Energy & Utilities, National Australia Bank Limited, New York, NY; Group Executive, Corporate & Institutional Recovery, Irish
Bank Resolution Corporation, Dublin, Ireland; Group Executive, Bank of Ireland, Greenwich, CT; Chief Executive Officer, Slingshot GT Incorporated, Boston, MA; Assistant Vice President, Mellon Bank Corporation, Pittsburgh, PA. |
1
|
None
|
Chris
LaVictorie Mahai*
Birth Year: 1955 |
Class
III Director |
Since
July 2005 |
Ms.
Mahai is Managing Partner of clavm, LLC, a cross-industry strategic consultancy. She served as President of Aveus, a division of Medecision and Executive Vice President of Medecision, Inc. from May 2018 to December 2021. Prior to that she was
Founder, Owner and Managing Partner of Aveus LLC from 1999 to May 2018. |
1
|
None
|
Name,
Birth Year and Address1
of Director |
Position(s)
Held
with the Fund |
Term
of Office and Length of
Time Served2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
DMC-Affiliated
Advised Funds
Overseen |
Other
Public
Company
Directorships |
| |
|
Biographical Information of the Interested Directors of the Fund |
John
C. Leonard
Birth Year: 1960 |
Class
III Director |
Since
February 2020 |
Mr.
Leonard has been Executive Director and Global Head of Equities of Macquarie Asset Management since March 2017. Previously, he was Head of Equities and Group Managing Director of UBS Asset Management from 2008 to 2016. |
1
|
None
|
Name,
Birth Year and Address1
of Officer |
Position(s)
Held
with Fund(s) |
Term
of Office and Length
of Time Served3 |
Principal
Occupation(s) During the Past Five Years |
|
| |
|
Biographical Information of the Officers of the Fund |
John
C. Leonard
Birth Year: 1960 |
Chief
Executive Officer and
President |
Since
February 2020 |
Mr.
Leonard has been Executive Director and Global Head of Equities of Macquarie Asset Management since March 2017. Previously, he was Head of Equities and Group Managing Director of UBS Asset Management from 2008 to 2016. |
|
|
William
Speacht
Birth Year: 1970 |
Chief
Compliance Officer |
Since
April 2021 |
Mr.
Speacht is a Managing Director, US Compliance for Macquarie Asset Management. He has served in various capacities at different times at Macquarie Asset Management since rejoining in 2016. He rejoined Macquarie Asset Management in September 2016
from Aberdeen Asset Management. Previously, he served in various capacities at different times at Macquarie Asset Management from 1997 to 2006. |
|
|
Name,
Birth Year and Address1
of Officer |
Position(s)
Held
with Fund(s) |
Term
of Office and Length
of Time Served3 |
Principal
Occupation(s) During the Past Five Years |
|
Emilia
P. Wang, Esq.
Birth Year: 1974 |
Chief
Legal Officer and Secretary |
Since
April 2021 |
Ms.
Wang is a Managing Director, Legal for Macquarie Asset Management. She has served in various capacities at different times in the legal department at Macquarie Asset Management since 2007. |
|
|
Daniel
V. Geatens4
Birth Year: 1972 |
Chief
Financial Officer and
Treasurer |
Since
November 2017 |
Mr.
Geatens is Managing Director, Head of US Fund Administration for Macquarie Asset Management. Mr. Geatens has served in various capacities at different times at Macquarie Asset Management since 1997. |
|
|
1 Each Director may be contacted by writing to the Director c/o Macquarie Global Infrastructure Total Return Fund Inc., 125 West 55th
Street Level 9, New York, NY 10019.
2 Each Director’s term of office extends until the next stockholder meeting for the purpose of electing Directors in the relevant
class and until the election and qualification of a successor, or until such Director dies, resigns or is removed as provided in the governing documents of the Fund.
* Member of Audit Committee
3 Each officer serves an indefinite term.
4 Mr. Geatens also serves as the Chief Financial Officer for the Optimum Fund Trust and Treasurer for the Delaware Funds by Macquarie®, which share the same investment manager.
Delaware Funds by Macquarie® privacy practices notice
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Macquarie Asset Management (MAM) is the asset
management division of Macquarie Group. MAM, through its entities, operates as a full-service asset manager offering a diverse range of products including securities investment management, infrastructure and real asset management, and fund and
equity-based structured products.
Other than
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addition, if this document
relates to an investment, (a) the investor is subject to investment risk
including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they
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This privacy practices notice is being provided on behalf
of the following:
Central Park Advisers, LLC
Central Park Fund Administration, LLC
Central Park Group Activist Fund, LLC
Central Park Group
AlpInvest Co-Investment Fund VII, LLC
Central Park Group
Carlyle Equity Opportunity Fund II, LLC
Central Park Group
Carlyle Equity Opportunity Fund, LLC
Central Park Group Carlyle
Fund, LLC
Central
Park Group Global Private Equity Fund, LLC
Central Park Group KKR
Americas Fund XII, LLC
Central Park Group
Lighthouse Global
Long/Short Fund, LLC
Central Park Group
Manager Alliance Fund II, LLC
Central Park Group
Manager Alliance Fund, LLC
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Estate Opportunity Fund, LLC
Central Park Group WP Energy,
LLC
Central Park Group WP Global Growth, LLC
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Private Equity XII, LLC
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Opportunistic Real Estate, LLC
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LLC
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CPG Vintage Access Fund II, LLC
CPG Vintage Access Fund III, LLC
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Macquarie® privacy practices notice
CPG Vintage Access Fund IV, LLC
CPG Vintage Access Fund V, LLC
CPG Vintage Access Fund, LLC
Delaware Capital Management
Delaware Capital Management Advisers, Inc.
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Delaware Funds by Macquarie
Delaware Enhanced Global
Dividend
and Income Fund
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Group® Adviser Funds
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& International Funds
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Partners, Inc.
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Fund Inc.
Optimum Fund Trust
Revised June 2022
iii
This page is not part of the annual report.
Contact information
866 587-4518
Macquarie Global Infrastructure
Total
Return Fund Inc.
125 West 55th Street
New York, NY 10019
macquarieim.com/mgu
iv
This page is not part of the semiannual report.