TEKLA HEALTHCARE OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2023 (Unaudited)
Convertible
Preferreds (Restricted) (a)(b) - 0.8% | |
Shares | | |
Value | |
Health Care Equipment & Supplies –
0.1% | |
| | | |
| | |
IO Light Holdings, Inc.
Series A2 | |
| 189,858 | | |
$ | 540,716 | |
| |
| | | |
| | |
Pharmaceuticals – 0.7% | |
| | | |
| | |
Aristea Therapeutics, Inc. Series B, 8.00% | |
| 616,645 | | |
| 3,399,995 | |
Endeavor Biomedicines, Inc. Series B,
8.00% | |
| 742,138 | | |
| 3,499,997 | |
| |
| | | |
| 6,899,992 | |
Total
Convertible Preferreds (Cost $7,532,724) | |
| | | |
| 7,440,708 | |
Non-Convertible Notes - 17.3% | |
Principal
Amount | | |
| |
Biotechnology – 2.8% | |
| | |
| |
AbbVie, Inc., 3.20% due 05/14/26 | |
$ | 3,245,000 | | |
| 3,074,228 | |
AbbVie, Inc., 4.25% due 11/14/28 | |
| 5,303,000 | | |
| 5,141,798 | |
AbbVie, Inc., 4.45% due 05/14/46 | |
| 3,080,000 | | |
| 2,707,306 | |
Amgen, Inc., 3.20% due 11/02/27 | |
| 2,200,000 | | |
| 2,053,760 | |
Amgen, Inc., 2.00% due 01/15/32 | |
| 2,795,000 | | |
| 2,206,006 | |
Gilead Sciences, Inc., 2.95% due
03/01/27 | |
| 10,000,000 | | |
| 9,388,689 | |
| |
| | | |
| 24,571,787 | |
Health Care Equipment & Supplies –
2.8% | |
| | | |
| | |
Abbott Laboratories, 3.40% due 11/30/23 | |
| 2,100,000 | | |
| 2,081,363 | |
Abbott Laboratories, 4.75% due 11/30/36 | |
| 10,498,000 | | |
| 10,516,007 | |
Becton, Dickinson and Co., 3.70% due 06/06/27 | |
| 2,413,000 | | |
| 2,293,682 | |
DH Europe Finance II Sarl, 3.25% due 11/15/39 | |
| 1,760,000 | | |
| 1,428,351 | |
Stryker Corp., 3.65% due 03/07/28 | |
| 3,500,000 | | |
| 3,325,414 | |
Zimmer Biomet Holdings, Inc., 4.25%
due 08/15/35 | |
| 6,000,000 | | |
| 5,180,168 | |
| |
| | | |
| 24,824,985 | |
Health Care Providers & Services –
7.1% | |
| | | |
| | |
CVS Health Corp., 4.30% due 03/25/28 | |
| 789,000 | | |
| 760,475 | |
CVS Health Corp., 1.88% due 02/28/31 | |
| 4,400,000 | | |
| 3,491,981 | |
CVS Health Corp., 4.78% due 03/25/38 | |
| 2,100,000 | | |
| 1,935,482 | |
CVS Health Corp., 5.05% due 03/25/48 | |
| 3,700,000 | | |
| 3,404,769 | |
Elevance Health, Inc., 3.50% due 08/15/24 | |
| 10,500,000 | | |
| 10,228,930 | |
Elevance Health, Inc., 4.10% due 03/01/28 | |
| 2,975,000 | | |
| 2,854,732 | |
Elevance Health, Inc., 2.55% due 03/15/31 | |
| 5,800,000 | | |
| 4,869,405 | |
Elevance Health, Inc., 4.65% due 08/15/44 | |
| 2,325,000 | | |
| 2,084,157 | |
The Cigna Group, 3.50% due 06/15/24 | |
| 2,100,000 | | |
| 2,057,114 | |
The Cigna Group, 4.38% due 10/15/28 | |
| 1,504,000 | | |
| 1,453,794 | |
The Cigna Group, 2.38% due 03/15/31 | |
| 5,800,000 | | |
| 4,867,409 | |
The Cigna Group, 6.13% due 11/15/41 | |
| 8,250,000 | | |
| 8,759,385 | |
UnitedHealth Group, Inc., 3.85% due 06/15/28 | |
| 1,460,000 | | |
| 1,399,206 | |
UnitedHealth Group, Inc., 3.88% due 12/15/28 | |
| 4,970,000 | | |
| 4,759,220 | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
Health Care Providers & Services – continued | |
Principal Amount | | |
Value | |
UnitedHealth Group, Inc.,
4.20% due 05/15/32 | |
$ | 10,940,000 | | |
$ | 10,439,616 | |
| |
| | | |
| 63,365,675 | |
Healthcare Services – 0.7% | |
| | | |
| | |
Laboratory Corporation of America Holdings, 3.60% due 02/01/25 | |
| 2,100,000 | | |
| 2,028,972 | |
Syneos
Health, Inc., 3.63% due 01/15/29(c) | |
| 4,100,000 | | |
| 4,008,078 | |
| |
| | | |
| 6,037,050 | |
Pharmaceuticals – 3.9% | |
| | | |
| | |
AstraZeneca
plc, 6.45% due 09/15/37 (d) | |
| 4,750,000 | | |
| 5,440,858 | |
Bristol-Myers Squibb Co., 3.20% due 06/15/26 | |
| 7,500,000 | | |
| 7,175,406 | |
Bristol-Myers Squibb Co., 3.40% due 07/26/29 | |
| 2,100,000 | | |
| 1,949,858 | |
IQVIA, Inc.,
5.00% due 05/15/27(c) | |
| 1,290,000 | | |
| 1,240,900 | |
Johnson & Johnson, 2.90% due 01/15/28 | |
| 2,200,000 | | |
| 2,069,170 | |
Merck & Co., Inc., 2.75% due 02/10/25 | |
| 2,100,000 | | |
| 2,020,631 | |
Merck & Co., Inc., 3.40% due 03/07/29 | |
| 4,000,000 | | |
| 3,741,929 | |
Pfizer, Inc., 3.45% due 03/15/29 | |
| 8,100,000 | | |
| 7,621,076 | |
Pfizer, Inc., 4.00% due 12/15/36 | |
| 3,200,000 | | |
| 2,979,917 | |
| |
| | | |
| 34,239,745 | |
Total
Non-Convertible Notes (Cost $162,354,284) | |
| | | |
| 153,039,242 | |
Common Stocks - 102.4% |
|
Shares |
|
Biotechnology – 16.1% | |
| | |
| |
AbbVie, Inc.
(e) | |
| 297,919 | | |
| 40,138,627 | |
Amgen, Inc.
(e) | |
| 166,595 | | |
| 36,987,422 | |
argenx
SE ADR (b) | |
| 7,604 | | |
| 2,963,507 | |
Biogen, Inc.
(b) | |
| 33,464 | | |
| 9,532,220 | |
Fusion
Pharmaceuticals, Inc. (b)(d) | |
| 14,319 | | |
| 67,013 | |
Fusion
Pharmaceuticals, Inc. (Restricted) (a)(b)(d) | |
| 7,160 | | |
| 30,158 | |
Galera
Therapeutics, Inc. (b) | |
| 314,430 | | |
| 981,022 | |
Gilead Sciences, Inc. | |
| 214,756 | | |
| 16,551,245 | |
I-Mab
ADR (b) | |
| 43,738 | | |
| 130,777 | |
Moderna, Inc.
(b) | |
| 38,588 | | |
| 4,688,442 | |
Rallybio
Corp. (b)(f) | |
| 594,616 | | |
| 3,365,526 | |
Regeneron
Pharmaceuticals, Inc. (b) | |
| 21,161 | | |
| 15,205,025 | |
Sarepta
Therapeutics, Inc. (b) | |
| 2,700 | | |
| 309,204 | |
Vertex
Pharmaceuticals, Inc. (b) | |
| 31,999 | | |
| 11,260,768 | |
| |
| | | |
| 142,210,956 | |
Equity Real Estate Investment Trusts – 3.4% | |
| | | |
| | |
Diversified Healthcare Trust REIT | |
| 293,879 | | |
| 661,228 | |
Global Medical REIT, Inc. | |
| 31,668 | | |
| 289,129 | |
Healthcare Realty Trust, Inc. | |
| 25,119 | | |
| 473,744 | |
Healthpeak Properties, Inc. | |
| 66,791 | | |
| 1,342,499 | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
Equity Real Estate Investment Trusts – continued | |
Shares |
|
|
|
Value | |
LTC Properties, Inc. | |
| 135,390 | | |
$ | 4,470,578 | |
Medical
Properties Trust, Inc. (f) | |
| 266,557 | | |
| 2,468,318 | |
National Health Investors, Inc. | |
| 5,596 | | |
| 293,342 | |
Omega Healthcare Investors, Inc. | |
| 235,358 | | |
| 7,223,137 | |
Physicians Realty Trust | |
| 582,346 | | |
| 8,147,021 | |
Sabra Health Care REIT, Inc. | |
| 419,879 | | |
| 4,941,976 | |
Universal Health Realty Income Trust | |
| 3,075 | | |
| 146,308 | |
| |
| | | |
| 30,457,280 | |
Health Care Equipment & Supplies –
16.5% | |
| | | |
| | |
Abbott
Laboratories (e) | |
| 307,502 | | |
| 33,523,868 | |
Baxter International, Inc. | |
| 198,244 | | |
| 9,031,997 | |
DexCom, Inc.
(b)(e) | |
| 107,929 | | |
| 13,869,956 | |
Edwards
Lifesciences Corp. (b) | |
| 115,471 | | |
| 10,892,379 | |
Guardant
Health, Inc. (b) | |
| 74,536 | | |
| 2,668,389 | |
IDEXX
Laboratories, Inc. (b) | |
| 24,307 | | |
| 12,207,705 | |
Inspire
Medical Systems, Inc. (b) | |
| 11,690 | | |
| 3,795,042 | |
Insulet
Corp. (b) | |
| 22,211 | | |
| 6,404,320 | |
LivaNova
plc (b) | |
| 108,480 | | |
| 5,579,126 | |
Medtronic
plc (e) | |
| 212,554 | | |
| 18,726,007 | |
STERIS plc | |
| 31,072 | | |
| 6,990,579 | |
Stryker
Corp. (e) | |
| 51,917 | | |
| 15,839,357 | |
Zimmer
Biomet Holdings, Inc. (e) | |
| 43,370 | | |
| 6,314,672 | |
| |
| | | |
| 145,843,397 | |
Health Care Providers & Services –
20.3% | |
| | | |
| | |
Acadia
Healthcare Co., Inc. (b) | |
| 74,939 | | |
| 5,968,142 | |
AmerisourceBergen Corp. | |
| 20,417 | | |
| 3,928,843 | |
Charles
River Laboratories International, Inc. (b)(e) | |
| 41,069 | | |
| 8,634,757 | |
Community
Health Systems, Inc. (b) | |
| 79,635 | | |
| 350,394 | |
CVS Health Corp. | |
| 93,621 | | |
| 6,472,020 | |
Elevance Health, Inc. | |
| 64,880 | | |
| 28,825,535 | |
HCA Healthcare, Inc. | |
| 41,863 | | |
| 12,704,583 | |
Humana, Inc.
(e) | |
| 22,522 | | |
| 10,070,262 | |
Molina
Healthcare, Inc. (b)(e) | |
| 29,112 | | |
| 8,769,699 | |
R1
RCM, Inc. (b) | |
| 232,554 | | |
| 4,290,621 | |
Tenet
Healthcare Corp. (b)(e) | |
| 105,224 | | |
| 8,563,129 | |
The
Cigna Group (e) | |
| 52,243 | | |
| 14,659,386 | |
UnitedHealth Group, Inc. | |
| 137,979 | | |
| 66,318,227 | |
| |
| | | |
| 179,555,598 | |
Health
Care Technology – 0.5%(b) | |
| | | |
| | |
Veradigm, Inc. | |
| 338,217 | | |
| 4,261,534 | |
| |
| | | |
| | |
Life Sciences Tools & Services –
6.4% | |
| | | |
| | |
Agilent Technologies, Inc. | |
| 43,191 | | |
| 5,193,718 | |
Avantor, Inc.
(b) | |
| 317,100 | | |
| 6,513,234 | |
ICON
plc (b) | |
| 2,800 | | |
| 700,560 | |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
Life Sciences Tools & Services – continued |
|
Shares |
|
|
Value |
|
Illumina, Inc. (b)(e) |
|
|
57,986 |
|
|
$ |
10,871,795 |
|
Thermo Fisher Scientific, Inc. (e) |
|
|
59,825 |
|
|
|
31,213,694 |
|
West Pharmaceutical Services, Inc. |
|
|
6,192 |
|
|
|
2,368,254 |
|
|
|
|
|
|
|
|
56,861,255 |
|
Medical Devices and Diagnostics – 6.6% |
|
|
|
|
|
|
|
|
Boston Scientific Corp. (b)(e) |
|
|
346,489 |
|
|
|
18,741,590 |
|
Danaher Corp. |
|
|
87,564 |
|
|
|
21,015,360 |
|
Intuitive Surgical, Inc. (b) |
|
|
39,948 |
|
|
|
13,659,819 |
|
ResMed, Inc. |
|
|
24,600 |
|
|
|
5,375,100 |
|
|
|
|
|
|
|
|
58,791,869 |
|
Pharmaceuticals – 32.6% |
|
|
|
|
|
|
|
|
Assertio Holdings, Inc. (b)(f) |
|
|
410,575 |
|
|
|
2,225,317 |
|
AstraZeneca plc ADR |
|
|
16,300 |
|
|
|
1,166,591 |
|
Bristol-Myers Squibb Co. |
|
|
276,824 |
|
|
|
17,702,895 |
|
Eli Lilly & Co. |
|
|
114,982 |
|
|
|
53,924,258 |
|
IQVIA
Holdings, Inc. (b)(e) | |
| 61,434 | | |
| 13,808,520 | |
Jazz
Pharmaceuticals plc (b) | |
| 31,345 | | |
| 3,885,840 | |
Johnson &
Johnson (e) | |
| 445,417 | | |
| 73,725,422 | |
McKesson
Corp. (e) | |
| 31,638 | | |
| 13,519,234 | |
Merck & Co., Inc. | |
| 423,628 | | |
| 48,882,435 | |
Oculis
Holding AG (Restricted) (a)(d) | |
| 591,759 | | |
| 6,588,053 | |
Perrigo
Co. plc (d) | |
| 28,292 | | |
| 960,513 | |
Pfizer, Inc.
(e) | |
| 971,961 | | |
| 35,651,529 | |
Teva
Pharmaceutical Industries Ltd. ADR (b) | |
| 77,704 | | |
| 585,111 | |
Zoetis, Inc.
(e) | |
| 89,682 | | |
| 15,444,137 | |
| |
| | | |
| 288,069,855 | |
Total
Common Stocks (Cost $770,791,266) | |
| | | |
| 906,051,744 | |
Short-Term Investments - 5.9% | |
Principal Amount | | |
| |
MUFG Bank Ltd. Commercial Paper, 5.00%, due 07/06/23 | |
$ | 20,000,000 | | |
| 19,986,111 | |
Repurchase Agreement,
Fixed Income Clearing Corp., repurchase value $27,436,475, 1.52%, dated 06/30/23, due 07/03/23 (collateralized by U.S. Treasury Note
1.500%, due 01/31/27, market value $27,981,726) | |
| 27,433,000 | | |
| 27,433,000 | |
|
|
SHARES |
|
|
|
|
State
Street Institutional U.S. Government Money Market Fund, Institutional Class, 5.03% (g) |
|
|
4,612,350 |
|
|
|
4,612,350 |
|
Total Short-Term
Investments (Cost $52,031,461) |
|
|
|
|
|
|
52,031,461 |
|
Total Investments
Before Milestone Interest 126.5% (Cost $992,709,735) |
|
|
|
|
|
|
1,118,563,155 |
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
Milestone
Interests (Restricted) (a)(b) – 0.0% | |
Interests | | |
Value | |
Biotechnology – 0.0% | |
| | | |
| | |
Rainier Therapeutics Milestone
Interest | |
| 1 | | |
$ | 0 | |
Total
Milestone Interests (Cost $277,782) | |
| | | |
| 0 | |
| |
| | | |
| | |
Option Contracts Written- (0.1)% | |
Number
Of Contracts (100 Shares Each)/ Notional Amount ($) |
|
|
|
| |
Call Option Contracts Written - (0.1)% | |
| | |
|
| | |
Abbott Laboratories Aug23 115 Call | |
| 451/(5,186,500) | |
|
| (35,178 | ) |
Abbott Laboratories Jul23 112 Call | |
| 460/(5,152,000) | |
|
| (37,720 | ) |
AbbVie, Inc. Aug23 140 Call | |
| 292/(4,088,000) | |
|
| (52,268 | ) |
AbbVie, Inc. Jul23 135 Call | |
| 297/(4,009,500) | |
|
| (50,787 | ) |
Amgen, Inc. Aug23 235 Call | |
| 246/(5,781,000) | |
|
| (46,986 | ) |
Amgen, Inc. Jul23 230 Call | |
| 246/(5,658,000) | |
|
| (23,124 | ) |
Boston Scientific Corp. Aug23 57.5 Call | |
| 337/(1,937,750) | |
|
| (13,143 | ) |
Charles River Laboratories International, Inc. Aug23
230 Call | |
| 39/(897,000) | |
|
| (15,210 | ) |
DexCom, Inc. Aug23 140 Call | |
| 106/(1,484,000) | |
|
| (28,620 | ) |
DexCom, Inc. Jul23 135 Call | |
| 106/(1,431,000) | |
|
| (13,250 | ) |
Humana, Inc. Aug23 470 Call | |
| 33/(1,551,000) | |
|
| (21,780 | ) |
Humana, Inc. Jul23 460 Call | |
| 33/(1,518,000) | |
|
| (12,870 | ) |
Illumina, Inc. Aug23 200 Call | |
| 57/(1,140,000) | |
|
| (37,620 | ) |
IQVIA Holdings, Inc. Aug23 230 Call | |
| 59/(1,357,000) | |
|
| (37,996 | ) |
Johnson & Johnson Aug23 170 Call | |
| 440/(7,480,000) | |
|
| (72,600 | ) |
Johnson & Johnson Jul23 165 Call | |
| 440/(7,260,000) | |
|
| (127,160 | ) |
McKesson Corp. Aug23 440 Call | |
| 31/(1,364,000) | |
|
| (27,900 | ) |
McKesson Corp. Jul23 430 Call | |
| 31/(1,333,000) | |
|
| (16,771 | ) |
Medtronic plc Aug23 90 Call | |
| 129/(1,161,000) | |
|
| (20,769 | ) |
Molina Healthcare, Inc. Aug23 310 Call | |
| 28/(868,000) | |
|
| (25,900 | ) |
Pfizer, Inc. Aug23 37.5 Call | |
| 1,413/(5,298,750) | |
|
| (100,323 | ) |
Pfizer, Inc. Jul23 37.5 Call | |
| 1,452/(5,445,000) | |
|
| (47,916 | ) |
Stryker Corp. Aug23 320 Call | |
| 37/(1,184,000) | |
|
| (11,840 | ) |
Tenet Healthcare Corp. Aug23 85 Call | |
| 104/(884,000) | |
|
| (31,200 | ) |
The Cigna Group Aug23 290 Call | |
| 77/(2,233,000) | |
|
| (52,360 | ) |
The Cigna Group Jul23 290 Call | |
| 77/(2,233,000) | |
|
| (15,015 | ) |
Thermo Fisher Scientific, Inc. Aug23 540 Call | |
| 80/(4,320,000) | |
|
| (85,440 | ) |
Thermo Fisher Scientific, Inc. Jul23 530 Call | |
| 80/(4,240,000) | |
|
| (53,920 | ) |
Zimmer Biomet Holdings, Inc. Aug23 155 Call | |
| 43/(666,500) | |
|
| (6,880 | ) |
Zoetis, Inc. Aug23 180 Call | |
| 87/(1,566,000) | |
|
| (24,360 | ) |
Total
Call Option Contracts Written (Premiums received $(784,445)) | |
|
| |
|
| (1,146,906 | ) |
Total
Investments - 126.4% (Cost $992,203,072) | |
|
| |
|
| 1,117,416,249 | |
Other Liabilities In Excess Of Assets
- (26.4)% | |
|
| |
|
| (233,148,884 | ) |
Net Assets - 100% | |
|
| |
|
$ | 884,267,365 | |
The
percentage shown for each investment category in the Schedule of Investments is based on net assets.
| (a) | Security
fair valued using significant unobservable inputs. See Investment Valuation and Fair Value
Measurements. |
| (b) | Non-income
producing security. |
| (c) | Security
exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These
securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers. |
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
| (e) | A
portion of security is pledged as collateral for call options written. |
| (f) | All
or a portion of this security is on loan as of June 30, 2023. |
| (g) | This
security represents the investment of cash collateral received for securities lending and
is a registered investment company advised by State Street Global Advisors. The rate shown
is the annualized seven-day yield as of June 30, 2023. |
ADR American
Depository Receipt
THE ACCOMPANYING NOTES ARE
AN INTEGRAL PART OF THIS SCHEDULE OF INVESTMENTS.
Investment
Valuation
Shares
of publicly traded companies listed on national securities exchanges or trading in the over-the-counter market are typically valued at
the last sale price, as of the close of trading, generally 4 p.m., Eastern Time. The Board of Trustees of the Fund (the Trustees) has
established and approved fair valuation policies and procedures with respect to securities for which quoted prices may not be available
or which do not reflect fair value. Convertible, corporate and government bonds are valued using a third-party pricing service. Convertible
bonds are valued using this pricing service only on days when there is no sale reported. Puts and calls generally are valued at the close
of regular trading on the securities or commodities exchange on which they are primarily traded. Options on securities generally are
valued at their last bid price in the case of exchange traded options or, in the case of OTC-traded options, the average of the last
bid price as obtained from two or more dealers unless there is only one dealer, in which case that dealer’s price is used. Forward
foreign currency contracts are valued on the basis of the value of the underlying currencies at the prevailing currency exchange rate.
Restricted securities of companies that are publicly traded are typically valued based on the closing market quote on the valuation date
adjusted for the impact of the restriction as determined in good faith by Tekla Capital Management LLC (the Adviser) also using fair
valuation policies and procedures approved by the Trustees described below. Non-exchange traded warrants of publicly traded companies
are generally valued using the Black-Scholes model, which incorporates both observable and unobservable inputs. Short-term investments
with a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.
Convertible
preferred shares, warrants or convertible note interests in private companies, milestone interests and other restricted securities, as
well as shares of publicly traded companies for which market quotations are not readily available, such as stocks for which trading has
been halted or for which there are no current day sales, or which do not reflect fair value, are typically valued in good faith, based
upon the recommendations made by the Adviser pursuant to fair valuation policies and procedures approved by the Trustees.
The Adviser
has a Valuation Sub-Committee comprised of senior management which reports to the Valuation Committee of the Board at least quarterly.
Each fair value determination is based on a consideration of relevant factors, including both observable and unobservable inputs. Observable
and unobservable inputs may include (i) the existence of any contractual restrictions on the disposition of securities; (ii) information
obtained from the company, which may include an analysis of the company’s financial statements, products, intended markets or technologies;
(iii) the price of the same or similar security negotiated at arm’s length in an issuer’s completed subsequent round
of financing; (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies; or (v) a
probability and time value adjusted analysis of contractual terms. Where available and appropriate, multiple valuation methodologies
are applied to confirm fair value. Significant unobservable inputs identified by the Adviser are often used in the fair value determination.
A significant change in any of these inputs may result in a significant change in the fair value measurement. Due to the uncertainty
inherent in the valuation process, such estimates of fair value may differ significantly from the values that would have been used had
a ready market for the investments existed, and differences could be material. Additionally, changes in the market environment and other
events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different
from the valuations used at the date of this schedule of investments.
Federal
Income Tax Cost
At June 30,
2023, the cost of securities for Federal income tax purposes was $993,834,181. The net unrealized gain on securities held by the Fund
was $123,582,068, including gross unrealized gain of $198,657,548 and gross unrealized loss of $75,075,480.
Securities
Lending
The Fund
may lend its securities to approved borrowers to earn additional income. The Fund receives cash collateral from the borrower and the
initial collateral received by the Fund is required to have a value of at least 102% of the current value of the loaned securities traded
on U.S. exchanges, and a value of at least 105% for all other securities. The Fund will invest its cash collateral in State Street Institutional
U.S. Government Money Market Fund (SAHXX), which is registered with the Securities and Exchange Commission (SEC) as an investment company.
SAHXX invests substantially all of its assets in the State Street U.S. Government Money
Market
Portfolio. The Fund will receive the benefit of any gains and bear any losses generated by SAHXX with respect to the cash collateral.
The Fund
has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent
is responsible and indemnifies the Fund for the lent securities. The lending agent uses the collateral received from the borrower to
purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is
less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the
extent that the shortfall is not due to any decrease in the value of SAHXX.
Although
the risk of loss on securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification,
the Fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to
return the securities on a timely basis. The Fund receives compensation for lending its securities by retaining a portion of the return
on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received
by the Fund is net of fees retained by the securities lending agent. Net income received from SAHXX is a component of securities lending
income as recorded by the Fund.
As of
June 30, 2023, the Fund loaned securities valued at $4,517,568 and received $4,612,350 of cash collateral.
Fair
Value Measurements
The Fund
uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value.
The three-tier hierarchy of inputs is summarized in the three broad levels. Level 1 includes quoted prices in active markets for identical
investments. Level 2 includes prices determined using other significant observable inputs (including quoted prices for similar investments,
interest rates, credit risk, etc.). The independent pricing vendor may value bank loans and debt securities at an evaluated bid
price by employing methodologies that utilize actual market transactions, broker-supplied valuations, and/or other methodologies designed
to identify the market value for such securities and such securities are considered Level 2 in the fair value hierarchy. Level 3 includes
prices determined using significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of
investments). These inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing
in those securities.
For the
period ended June 30, 2023, there were no transfers between levels.
The following
is a summary of the levels used as of June 30, 2023 to value the Fund’s investments.
Assets at Value | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Convertible Preferreds | |
| | | |
| | | |
| | | |
| | |
Health Care Equipment &
Supplies | |
$ | - | | |
$ | - | | |
$ | 540,716 | | |
$ | 540,716 | |
Pharmaceuticals | |
| - | | |
| - | | |
| 6,899,992 | | |
| 6,899,992 | |
Non-convertible Notes | |
| | | |
| | | |
| | | |
| | |
Biotechnology | |
| - | | |
| 24,571,787 | | |
| - | | |
| 24,571,787 | |
Health Care Equipment & Supplies | |
| - | | |
| 24,824,985 | | |
| - | | |
| 24,824,985 | |
Health Care Providers & Services | |
| - | | |
| 63,365,675 | | |
| - | | |
| 63,365,675 | |
Healthcare Services | |
| - | | |
| 6,037,050 | | |
| - | | |
| 6,037,050 | |
Pharmaceuticals | |
| - | | |
| 34,239,745 | | |
| - | | |
| 34,239,745 | |
Common Stocks | |
| | | |
| | | |
| | | |
| | |
Biotechnology | |
| 142,180,798 | | |
| 30,158 | | |
| - | | |
| 142,210,956 | |
Equity Real Estate Investment Trusts | |
| 30,457,280 | | |
| - | | |
| - | | |
| 30,457,280 | |
Health Care Equipment & Supplies | |
| 145,843,397 | | |
| - | | |
| - | | |
| 145,843,397 | |
Health Care Providers & Services | |
| 179,555,598 | | |
| - | | |
| - | | |
| 179,555,598 | |
Health Care Technology | |
| 4,261,534 | | |
| - | | |
| - | | |
| 4,261,534 | |
Life Sciences Tools & Services | |
| 56,861,255 | | |
| - | | |
| - | | |
| 56,861,255 | |
Medical Devices and Diagnostics | |
| 58,791,869 | | |
| - | | |
| - | | |
| 58,791,869 | |
Pharmaceuticals | |
| 281,481,802 | | |
| 6,588,053 | | |
| - | | |
| 288,069,855 | |
Short-term Investments | |
| 4,612,350 | | |
| 47,419,111 | | |
| | | |
| 52,031,461 | |
Milestone Interest | |
| | | |
| | | |
| | | |
| | |
Biotechnology | |
| - | | |
| - | | |
| 0 | * | |
| 0 | * |
Total | |
$ | 904,045,883 | | |
$ | 207,076,564 | | |
$ | 7,440,708 | | |
$ | 1,118,563,155 | |
Other Financial Instruments | |
| | | |
| | | |
| | | |
| | |
Options Contracts
Written | |
$ | (1,146,906 | ) | |
$ | - | | |
$ | - | | |
$ | (1,146,906 | ) |
Total | |
$ | (1,146,906 | ) | |
$ | - | | |
$ | - | | |
$ | (1,146,906 | ) |
*Represents security valued at zero.
The following
is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Investments in Securities | |
Balance as of
September 30,
2022 | | |
Net realized
gain (loss) and
change in
unrealized
appreciation
(depreciation) | | |
Cost of
purchases
and
conversions | | |
Proceeds
from
sales and
conversions | | |
Net
transfers
into
(out of)
Level 3 | | |
Balance as
of June 30,
2023 | |
Convertible Preferreds | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Biotechnology | |
$ | 3,981,414 | | |
$ | (653,670 | ) | |
$ | - | | |
$ | (3,327,744 | ) | |
$ | - | | |
$ | - | |
Health Care Equipment &
Supplies | |
| 640,771 | | |
| (100,394 | ) | |
| 339 | | |
| - | | |
| - | | |
| 540,716 | |
Pharmaceuticals | |
| 6,899,992 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 6,899,992 | |
Milestone Interest | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Biotechnology | |
| 268,893 | | |
| (268,893 | ) | |
| - | | |
| - | | |
| - | | |
| 0 | * |
Total | |
$ | 11,791,070 | | |
$ | (1,022,957 | ) | |
$ | 339 | | |
$ | (3,327,744 | ) | |
$ | - | | |
$ | 7,440,708 | |
Net change in unrealized appreciation (depreciation) from investments
still held as of June 30, 2023 | | | |
$ | 369,287 | |
*Represents
security valued at zero.
The following
is a quantitative disclosure about significant unobservable inputs used in the determination of the fair value of Level 3 assets.
|
|
Fair Value
at
June 30, 2023 |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range
(Weighted Average) |
Convertible Preferreds |
|
$ |
7,440,708 |
|
|
Transaction price |
|
(a) |
|
N/A |
Milestone Interest |
|
|
0 |
|
|
|
|
Probability of events
Timing of events |
|
90.00%-100.00% (N/A) 1.25-12.25 years (N/A) |
|
|
$ |
7,440,708 |
|
|
|
|
|
|
|
(a) The
valuation technique used as a basis to approximate fair value of these investments is based on a transaction price or subsequent financing
rounds.
Private
Companies and Other Restricted Securities
The Fund
may invest in private companies and other restricted securities if these securities would currently comprise 10% or less of Managed Assets.
The value of these securities represented 1% of the Fund’s Managed Assets at June 30, 2023.
The following
table details the acquisition date, cost, carrying value per unit, and value of the Fund’s private companies and other restricted
securities at June 30, 2023. The Fund on its own does not have the right to demand that such securities be registered.
Security (#) | |
Acquisition
Date | |
Cost | | |
Carrying
Value per Unit | | |
Value | |
Aristea Therapeutics, Inc. Series B,
Cvt. Pfd | |
07/27/21 | |
$ | 3,399,996 | | |
$ | 5.51 | | |
$ | 3,399,995 | |
Endeavor Biomedicines, Inc. Series B, Cvt. Pfd | |
01/21/22 | |
| 3,504,343 | | |
| 4.72 | | |
| 3,499,997 | |
Fusion Pharmaceuticals, Inc. Common | |
09/20/22 | |
| 0 | | |
| 4.21 | | |
| 30,158 | |
IO Light Holdings, Inc. Series A2 Cvt. Pfd | |
04/30/20,05/17/21,09/15/21 | † |
| 628,386 | | |
| 2.85 | | |
| 540,716 | |
Oculis Holding AG | |
03/06/23 | |
| 4,975,839 | | |
| 11.13 | | |
| 6,588,053 | |
Rainier Therapeutics Milestone Interest | |
09/28/21 | |
| 277,782 | | |
| 0.00 | | |
| 0 | |
| |
| |
$ | 12,786,345 | | |
| | | |
$ | 14,058,919 | |
| (#) | See
Schedule of Investments and corresponding footnotes for more information on each issuer. |
| † | Interest
received as part of a corporate action for a previously owned security. |
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