UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22491
BrandywineGLOBAL -
Global Income Opportunities Fund Inc.
(Exact name of registrant as specified in charter)
620 Eighth Avenue, 47th Floor, New York, NY 10018
(Address of principal executive offices) (Zip code)
Marc A. De Oliveira
Franklin Templeton
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant’s telephone number, including area
code: 1-888-777-0102
Date of fiscal year end: October 31
Date of reporting period: October 31, 2024
| ITEM
1. | REPORT
TO STOCKHOLDERS. |
The Annual Report to Stockholders is filed herewith.
Annual Report
October 31, 2024
BrandywineGLOBAL —
GLOBAL INCOME
OPPORTUNITIES FUND INC. (BWG)
Managed Distribution Policy: The Fund’s Board of Directors (the “Board”) has authorized a managed distribution plan pursuant to which the Fund makes monthly distributions
to shareholders at a fixed rate of $0.0800 per common share, which rate may be adjusted
from time to time by the Fund’s Board (the “Plan”). The Plan is intended to provide shareholders with a constant, but not guaranteed, fixed minimum rate of distribution each month.
The Fund is managed with a goal of generating as much of the distribution as possible
from net ordinary income and short-term capital gains that is consistent with the Fund’s investment strategy and risk profile. To the extent that sufficient distributable income is not
available on a monthly basis, the Fund will distribute long-term capital gains and/or return
of capital in order to maintain its managed distribution rate. A return of capital may occur,
for example, when some or all of the money that was invested in the Fund is paid back
to shareholders. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. Even though the Fund may realize current year capital gains, such gains may be offset, in whole
or in part, by the Fund’s capital loss carryovers from prior years.
The Board may amend the terms of the Plan or terminate the Plan at any time without
prior notice to the Fund’s shareholders, however, at this time there are no reasonably foreseeable circumstances that might cause the termination of the Plan. The amendment or termination
of the Plan could have an adverse effect on the market price of the Fund’s common shares. The Plan is subject to the periodic review by the Board to determine if an adjustment
should be made.
Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Fund’s Plan. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will describe
how to
report the Fund’s distributions for federal income tax purposes.
Fund objectives
The Fund’s primary investment objective is to provide current income. As a secondary investment objective, the Fund will seek capital appreciation.
The Fund seeks to achieve its investment objectives by investing, under normal market
conditions, at least 80% of its assets in global fixed income securities.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Letter from the president
Dear Shareholder,
We are pleased to provide the annual report of BrandywineGLOBAL — Global Income Opportunities Fund Inc. for the twelve-month reporting period ended October 31, 2024.
Please read on for a detailed look at prevailing economic and market conditions during
the Fund’s reporting period and to learn how those conditions have affected Fund performance.
As always, we remain committed to providing you with excellent service and a full
spectrum of investment choices. We also remain committed to supplementing the support
you receive from your financial advisor. One way we accomplish this is through our
website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:
•
Fund prices and performance,
•
Market insights and commentaries from our portfolio managers, and
•
A host of educational resources.
We look forward to helping you meet your financial goals.
Jane Trust, CFA
President and Chief Executive Officer
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Q. What is the Fund’s investment strategy?
A. The Fund seeks to provide current income as a primary objective. Capital appreciation
is a secondary objective. The Fund seeks to achieve its investment objectives by investing,
under normal market conditions, at least 80% of its assets in global fixed income
securities. These may include, but are not limited to, sovereign debt of developed and emerging
market countries, U.S. and non-U.S. corporate debt, mortgage-backed securities (MBS)
and currency exposure. The Fund may manage its currency exposure through the use of futures,
forwards and other derivative instruments, for hedging and investment purposes. The Fund’s specific investments will shift as the Fund rotates among countries, credits and currencies
to find the most attractive values over time. Under normal market conditions, no more
than 55% of the Fund’s managed assets may be rated below investment grade (commonly known as “high yield” or “junk” bonds) by a nationally recognized statistical rating organization or, if unrated, that we determined to be of comparable quality; provided however, that
the quality of a security will be based on the highest rating it receives. In addition,
under normal market conditions, at least 40% of the Fund’s managed assets will be invested in non-U.S. countries or currencies. The Fund may use leverage to enhance current income.
In making investment decisions on behalf of the Fund, we apply a top-down, macro-driven
investment process and invest where we believe opportunities exist with respect to
interest rate levels and currency valuations. We consider secular trends, political and monetary
conditions and business cycle risks when making investment decisions. We also take
into account the relative risk and return characteristics of prospective investments when
determining how to achieve desired exposures.
Brandywine Global Investment Management, LLC (Brandywine Global), the Fund’s subadviser, is responsible for the day-to-day portfolio management of the Fund. Brandywine
Global uses an active, team-based approach to manage its fixed income portfolios.
The investment professionals at Brandywine Global who are primarily responsible for development of investment strategy, day-to-day portfolio management and oversight
and coordination of the Fund are David F. Hoffman, CFA, Jack P. McIntyre, CFA, Anujeet
Sareen, CFA, Brian Kloss, JD, CPA and Tracy Chen, CFA, CAIA.
Q. What were the overall market conditions for the Fund’s reporting period?
A. The overall global fixed income markets generated strong results over the twelve-month
reporting period ended October 31, 2024. The market experienced periods of volatility
due to a number of factors, including largely resilient economic data, moderating inflation,
central bank monetary “pivots,” and numerous geopolitical issues. After aggressively raising interest rates to combat inflation, in September 2024, the U.S. Federal Reserve
(Fed) reversed course and lowered rates for the first time since March 2020. The central
bank opted for a more substantial 50 basis point (bp) cut given progress on inflation and
the balance of risks. Meanwhile, the European Central Bank and the Bank of England also
lowered rates during the second half of the reporting period. One outlier was the
Bank of Japan, as it started raising rates in March 2024—the first rate hike since 2007.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
In its October 2024 World Economic Outlook Update, the International Monetary Fund
(IMF) said “Global growth is expected to remain stable yet underwhelming. Moreover, despite a sharp and synchronized tightening of monetary policy around the world, the global
economy has remained unusually resilient throughout the disinflationary process, avoiding
a global recession. Growth is projected to hold steady at 3.2% in 2024 and 2025, even though
a few countries, especially low-income developing countries, have seen sizable downside
growth revisions, often as a result of increased conflicts.” From a regional perspective, the IMF projects U.S. GDP will be 2.8% in 2024, versus 2.9% in 2023. Elsewhere, the IMF expects 2024 GDP of 0.8% in the eurozone (from 0.4% in 2023), 1.1% in the U.K. (from
0.3% in 2023) and 0.3% in Japan (versus 1.7% in 2023).
During the reporting period, government sovereign yields generally declined, and prices
rose (bond prices and yields generally move in the opposite direction). All told,
the Bloomberg Global Aggregate Indexi and U.S. Aggregate Indexii, returned 9.54% and 10.55%, respectively, for the twelve months ended October 31, 2024. Riskier fixed-income securities,
including high-yield bonds and emerging market debt, produced better results. Over
the fiscal year, the Bloomberg U.S. Corporate High Yield — 2% Issuer Cap Indexiii and the JPMorgan Emerging Markets Bond Index Globaliv returned 16.47% and 17.62%, respectively.
Q. How did we respond to these changing market conditions?
A. The twelve months have seen significant shifts in global market conditions with many
developed and emerging markets beginning their rate-cutting cycles. Global inflation
has been steadily decreasing but geopolitical risks persist, making the landscape still
challenging. The Fund has remained largely overweight duration versus the benchmark,
spread out between sovereigns, mortgages, and corporate exposures.
Over the reporting period, the Fund shifted its overweight duration position in government
sovereigns to a more significant overweight in U.S. mortgage-backed securities (MBS).
Mortgages offered a higher yield and became more compelling as global growth uncertainties spurred interest rate volatility, pushing MBS spreads wider. Additionally,
the U.S. housing market showed steady demand for limited housing inventory over the period,
with minimal prepayment risk as interest rates remained elevated. This provided a
strong foundation for MBS, and investor confidence remained high over the period as institutional
demand for the asset class increased.
The Fund shifted from a barbelled positioning between investment-grade and high-yield
corporates to being overweight high yield and underweight investment-grade corporates
as high yield offered superior yield with less interest rate risk. Anticipated lower
interest rates and stronger-than-expected economic data supported riskier assets and narrower credit
spreads over the period. The outlook for high yield remains resilient with growth
and consumer spending strong going into the fourth quarter of 2024. We believe that a
second Trump presidency would further benefit U.S. corporate credit. Credit exposures may
be boosted by an expected business-friendly and growth-oriented environment, including
lower
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
corporate tax rates, greater government deficit spending, more mergers and acquisitions,
and reduced regulations. We are particularly constructive on shorter-term corporate
credit (predominately five years and in) offering attractive yields, as investors shift away
from sovereign markets constrained by supply/demand imbalances and surging fiscal deficits.
From a currency perspective, the Fund increased its exposure to the U.S. dollar as
the currency proved resilient over the reporting period. The U.S. economy has remained
strong, driven by increased consumer spending and a robust labor market. Sentiment surrounding
the U.S. economy improved over the period as an economic soft landing became more
likely. We also increased the Fund’s exposures to the Canadian dollar, Mexican peso, and Egyptian pound. We reduced exposures to the Australian dollar, Brazilian real, Colombian peso,
and Norwegian krone.
Foreign exchange (FX) forwards used for hedging and alpha purposes added to performance.
Interest rate futures, equity futures, and swaps that were used for duration management,
hedging, and alpha source in aggregate minimally contributed to performance.
For the twelve months ended October 31, 2024, BrandywineGLOBAL — Global Income Opportunities Fund Inc. returned 21.50% based on its net asset value (NAV)v and 34.18% based on its New York Stock Exchange (NYSE) market price per share. The Fund’s unmanaged benchmark, the Bloomberg Global Aggregate Index, returned 9.54% for the
same period.
The Fund has adopted a managed distribution policy (the “Managed Distribution Policy”). Pursuant to this policy, the Fund intends to make regular monthly distributions to
common shareholders at a fixed rate per common share, which rate may be adjusted from time
to time by the Fund’s Board of Directors. This policy has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. The Fund’s manager believes the policy helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV.
During the twelve-month period, the Fund made distributions to shareholders totaling
$0.96 per share of which $0.39 will be treated as a return of capital for tax purposes.* The performance table shows the Fund’s twelve-month total return based on its NAV and market price as of October 31, 2024. Past performance is no guarantee of future results.
Performance Snapshot as of October 31, 2024
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All figures represent past performance and are not a guarantee of future results.
*
For the tax character of distributions paid during the fiscal year ended October 31,
2024, please refer to page 46 of this report.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
** Total returns are based on changes in NAV or market price, respectively. Returns
reflect the deduction of all Fund expenses, including management fees, operating expenses, and
other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that
investors may pay on distributions or the sale of shares.
† Total return assumes the reinvestment of all distributions, including returns of capital, at NAV.
‡ Total return assumes the reinvestment of all distributions, including returns of capital, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.
Q. What were the leading contributors to performance?
A. The Fund significantly outperformed its benchmark over the reporting period, with
U.S. high-yield corporate credit emerging as the largest contributor to returns. The strength
in U.S. high-yield credit was underpinned by the resilience of the U.S. economy, marked
by steady gross domestic product (GDP) growth and robust consumer spending, which collectively bolstered corporate earnings and reduced default risk across the high-yield
market. This economic stability helped reinforce investor confidence in lower-rated
corporate issuers, leading to narrowing credit spreads and strong price appreciation
in high-yield bonds. Corporate fundamentals were notably strong during this period, with many high-yield issuers benefiting from improved earnings and enhanced cash flow, enabling
them to manage debt obligations more effectively. The result was a decline in default
rates, which reached multi-year lows, and an increase in investor willingness to assume higher
credit risks in exchange for compelling returns. The Fund’s strategic overweight to high-yield credit allowed it to capitalize on these favorable conditions, driving its outperformance
relative to the benchmark. U.S. investment-grade corporates also contributed over
the period as a result of strong economic data. Anticipated rate cuts led to a decline
in treasury yields, enhancing the relative attractiveness of investment-grade corporates.
An allocation to U.S. MBS contributed over the period, supported by strong housing
demand and favorable economic conditions. The U.S. housing market remained resilient, with
low inventory and stable demand helping to sustain property values and reduce default
risks. As home prices appreciated, homeowners saw increased equity, further lowering default
probabilities and enhancing MBS performance.
Q. What were the leading detractors from performance?
A. The Fund’s largest detractor was its allocation to local currency emerging market (EM) bonds. Global uncertainties impacted the Fund’s EM positioning, as capital outflows increased over the period with investors favoring safe-haven assets. Brazilian duration
and currency positioning underperformed given various political and economic concerns.
The country saw inflation pick up, causing its central bank to pause rate cuts and ultimately
shift to interest rate hikes. Investor concerns increased over the period as the fiscal
deficit exceeded 10% of GDP. Colombian positioning was hurt from oil price fluctuations over
the period, as weaker oil prices put pressure on the peso, leading to outflows. Budget
concerns were also a headwind for the country as it led to slower growth and a higher risk
premium. Mexico was negatively impacted later in the reporting period as a second Trump presidency
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
was priced into the market. The potential for tariffs and shifts in trade policy weighed
on the currency and bond positions.
Looking for additional information?
The Fund is traded under the symbol “BWG” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the
symbol “XBWGX” on most financial websites. Barron’s and The Wall Street Journal’s Monday edition both carry closed-end fund tables that provide additional information.
In addition, the Fund issues a quarterly press release that can be found on most major
financial websites as well as www.franklintempleton.com.
In a continuing effort to provide information concerning the Fund, shareholders may
call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern
Time, for the Fund’s current NAV, market price and other information.
Thank you for your investment in the BrandywineGLOBAL — Global Income Opportunities Fund Inc. As always, we appreciate that you have chosen us to manage your assets and
we remain focused on achieving the Fund’s investment goals.
Sincerely,
David F. Hoffman, CFA
Portfolio Manager
Brandywine Global Investment
Management, LLC
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
John (“Jack”) P. McIntyre, CFA
Portfolio Manager
Brandywine Global Investment
Management, LLC
Anujeet Sareen, CFA
Portfolio Manager
Brandywine Global Investment
Management, LLC
Brian Kloss, JD, CPA
Portfolio Manager
Brandywine Global Investment
Management, LLC
Tracy Chen, CFA, CAIA
Portfolio Manager
Brandywine Global Investment
Management, LLC
RISKS: The Fund is a non-diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not
intended to be a complete investment program and, due to the uncertainty inherent in all investments,
there can be no assurance that the Fund will achieve its investment objective. The Fund’s common stock is traded on the New York Stock Exchange. Similar to stocks, the Fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the
original investment. Shares of closed-end funds often trade at a discount to their net asset
value. Because the Fund is non-diversified, it may be more susceptible to economic, political
or regulatory events than a diversified fund.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
The Fund’s investments are subject to various risks, including but not limited to, credit, inflation, income, prepayment and interest rate risks. As interest rates increase,
the value of fixed income securities decreases. Fixed income securities rated below investment
grade are commonly referred to as “high yield” securities or “junk” bonds and are subject to greater liquidity and credit risks (risk of default) than higher-rated securities.
Fixed income securities rated C or lower by Moody’s Investor Service, Inc., CCC or lower by Standard & Poor’s Corporation Ratings Group or CC or lower by Fitch Ratings, Inc. or comparably rated by another NRSRO or, if unrated, determined by Brandywine Global to be of comparable
quality are considered to have extremely poor prospects of ever attaining any real
investment standing, to have a current identifiable vulnerability to default, to be
unlikely to have the capacity to pay interest and repay principal when due in the event of adverse
business, financial or economic conditions and/or to be in default or not current
in the payment of interest or principal. Ratings may not accurately reflect the actual credit
risk associated with a corporate security. International investments involve certain risks
not associated with domestic investing, such as currency fluctuations, and changes in
political, social and economic conditions which could increase volatility. These risks are magnified
in emerging or developing markets. Emerging market countries tend to have economic, political, and legal systems that are less developed and are less stable than those
of more developed countries. Mortgage-backed securities are subject to additional risks, including
prepayment risk, which can limit the potential gains in a declining interest rate
environment. The Fund may invest in foreign currencies or currency derivatives which
may increase the risk and volatility of the Fund.
The Fund may invest in illiquid securities and securities/investments that have a
leveraging effect on the portfolio which will increase the risks of the Fund. The Fund’s use of leverage may result in greater volatility of NAV and the market price of common shares and
increases a shareholder’s risk of loss. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately
increase losses and have a potentially large impact on Fund performance. The use by
the Fund of derivatives such as options, forwards or futures contracts for investment
and/or risk management purposes may subject the Fund to risks associated with short economic exposure through such derivatives. Taking a short economic position through derivatives
exposes the Fund to the risk that it will be obligated to make payments to its counterparty
if the underlying asset appreciates in value, thus resulting in a loss to the Fund. The Fund’s loss on a short position, whether caused by the use of derivatives or otherwise, theoretically could be unlimited.
The Fund may invest in contingent convertible securities (“CoCos”). CoCos are a form of hybrid debt security that are intended to either convert into equity or have their
principal written down upon the occurrence of certain “triggers.” The triggers are generally linked to regulatory capital thresholds or regulatory actions calling into question the issuing
banking institution’s continued viability as a going-concern. CoCos are subject to risks, such as loss absorption risk (the risk that CoCos’ fully discretionary coupons can potentially be cancelled
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
at the banking institution’s discretion or at the request of the relevant regulatory authority in order to help the bank absorb losses) and subordination risk (the risk that (i) in
the event of liquidation, dissolution or winding-up of an issuer prior to a conversion having occurred,
the rights and claims of the holders of the CoCos will generally rank junior to the claims
of all holders of unsubordinated obligations of the issuer; and (ii) if the CoCos are converted
into the issuer’s underlying equity securities following a conversion event (i.e., a “trigger”), each holder will be subordinated due to their conversion from being the holder of a debt
instrument to being the holder of an equity instrument). The market values of securities
or other assets will fluctuate, sometimes sharply and unpredictably, due to changes in
general market conditions, overall economic trends or events, governmental actions or intervention,
actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions
caused by trade disputes or other factors, political developments, armed conflicts,
economic sanctions and countermeasures in response to sanctions, major cybersecurity events,
investor sentiment, the global and domestic effects of a pandemic, and other factors
that may or may not be related to the issuer of the security or other asset. The Fund may
also invest in money market funds, including funds affiliated with the Fund’s manager and subadviser. For more information on Fund risks, see Summary of information regarding
the Fund - Principal Risk Factors in this report.
Portfolio holdings and breakdowns are as of October 31, 2024, and are subject to change
and may not be representative of the portfolio managers’ current or future investments. Please refer to pages 13 through 23 for a list and percentage breakdown of the Fund’s holdings.
The mention of sector breakdowns is for informational purposes only and should not
be construed as a recommendation to purchase or sell any securities. The information provided regarding
such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking
financial advice regarding the appropriateness of investing in any securities or investment strategies
discussed should consult their financial professional. The Fund’s top five sector holdings (as a percentage of net assets) as of October 31, 2024, were: financials (33.3%), energy (23.7%), sovereign bonds
(23.2%), collateralized mortgage obligations (19.7%) and communication services (17.2%). The Fund’s portfolio composition is subject to change at any time.
All investments are subject to risk including the possible loss of principal. Past
performance is no guarantee of future results. All index performance reflects no deduction for fees,
expenses or taxes. Please note that an investor cannot invest directly in an index.
The information provided is not intended to be a forecast of future events, a guarantee
of future results or investment advice. Views expressed may differ from those of the firm as
a whole.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
i
The Bloomberg Global Aggregate Index is a market-weighted index of global government,
government-related agencies, corporate and securitized fixed-income investments
ii
The Bloomberg U.S. Aggregate Index is a broad-based bond index comprised of government,
corporate, mortgage- and asset-backed issues, rated investment grade or higher, and having at least one
year to maturity.
iii
The Bloomberg U.S. Corporate High Yield—2% Issuer Cap Index is an index of the 2% Issuer Cap component of the Bloomberg U.S. Corporate High Yield Index, which covers the U.S. dollar-denominated,
non-investment grade, fixed-rate, taxable corporate bond market.
iv
The JPMorgan Emerging Markets Bond Index Global tracks total returns for U.S. dollar-denominated
debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady
bonds, loans, Eurobonds and local market instruments.
v
Net asset value (NAV) is calculated by subtracting total liabilities, including liabilities
associated with financial leverage (if any), from the closing value of all securities held by the Fund (plus
all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The
NAV fluctuates with changes in the market prices of securities in which the Fund has invested. However, the price
at which an investor may buy or sell shares of the Fund is the Fund’s market price as determined by supply of and demand for the Fund’s shares.
Important data provider notices and terms available at www.franklintempletondatasources.com.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Fund at a glance† (unaudited)
Investment breakdown (%) as a percent of total investments
†
The bar graph above represents the composition of the Fund’s investments as of October 31, 2024, and October 31, 2023, and does not include derivatives, such as futures contracts, forward
foreign currency contracts and swap contracts. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Fund performance (unaudited)
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Average annual total returns1
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Twelve Months Ended 10/31/24
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Five Years Ended 10/31/24
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Cumulative total returns1
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10/31/14 through 10/31/24
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Average annual total returns2
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Twelve Months Ended 10/31/24
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Five Years Ended 10/31/24
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Cumulative total returns2
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10/31/14 through 10/31/24
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All figures represent past performance and are not a guarantee of future results.
Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage
commissions or taxes that investors may pay on distributions or the sale of shares.
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Assumes the reinvestment of all distributions, including returns of capital, if any,
at net asset value.
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Assumes the reinvestment of all distributions, including returns of capital, if any,
in additional shares in
accordance with the Fund’s Dividend Reinvestment Plan.
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Fund performance (unaudited) (cont’d)
Value of $10,000 invested in
BrandywineGLOBAL — Global Income Opportunities Fund Inc. vs. Bloomberg Global Aggregate Index† — October 2014 - October 2024
All figures represent past performance and are not a guarantee of future results.
Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage
commissions or taxes that investors may pay on distributions or the sale of shares.
†
Hypothetical illustration of $10,000 invested in BrandywineGLOBAL — Global Income Opportunities Fund Inc. on October 31, 2014, assuming the reinvestment of all distributions, including returns
of capital, if any, at net asset value and also assuming the reinvestment of all distributions, including returns of
capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan through October 31, 2024. The hypothetical illustration also assumes a $10,000 investment in the Bloomberg Global Aggregate Index.
The Bloomberg Global Aggregate Index (the “Index”) is an index comprised of several other Bloomberg indices that measure fixed income performance of regions around the world. The Index is unmanaged. Please note
that an investor cannot invest directly in an index.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
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Corporate Bonds & Notes — 100.1%
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Communication Services — 10.1%
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Diversified Telecommunication Services — 1.4%
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Consolidated Communications Inc., Senior
Secured Notes
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Level 3 Financing Inc., Senior Secured Notes
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Total Diversified Telecommunication Services
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Interactive Media & Services — 3.7%
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ANGI Group LLC, Senior Notes
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GrubHub Holdings Inc., Senior Notes
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Total Interactive Media & Services
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CCO Holdings LLC/CCO Holdings Capital
Corp., Senior Notes
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Colombia Telecomunicaciones SA ESP,
Senior Notes
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DISH Network Corp., Senior Secured Notes
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Liberty Interactive LLC, Senior Notes
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Univision Communications Inc., Senior
Secured Notes
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Total Communication Services
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Consumer Discretionary — 13.9%
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Hotels, Restaurants & Leisure — 13.3%
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Affinity Interactive, Senior Secured Notes
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GPS Hospitality Holding Co. LLC/GPS
Finco Inc., Senior Secured Notes
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Grupo Posadas SAB de CV, Senior Secured
Notes, Step bond (7.000% PIK to 12/30/25
then 8.000% Cash)
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Lindblad Expeditions LLC, Senior Secured
Notes
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Marriott Ownership Resorts Inc., Senior
Notes
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Melco Resorts Finance Ltd., Senior Notes
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Mohegan Tribal Gaming Authority, Secured
Notes
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Studio City Co. Ltd., Senior Secured Notes
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Viking Cruises Ltd., Senior Notes
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Viking Cruises Ltd., Senior Notes
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Total Hotels, Restaurants & Leisure
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See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments (cont’d)
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
|
|
Michaels Cos. Inc., Senior Secured Notes
|
|
|
|
|
|
|
Total Consumer Discretionary
|
|
|
|
Consumer Staples Distribution & Retail — 1.7%
|
Walgreens Boots Alliance Inc., Senior Notes
|
|
|
|
|
|
|
Minerva Luxembourg SA, Senior Notes
|
|
|
|
|
Simmons Foods Inc./Simmons Prepared
Foods Inc./Simmons Pet Food Inc./Simmons
Feed Ingredients Inc., Secured Notes
|
|
|
|
|
|
|
|
|
|
Turning Point Brands Inc., Senior Secured
Notes
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels — 23.7%
|
CITGO Petroleum Corp., Senior Secured
Notes
|
|
|
|
|
CNX Resources Corp., Senior Notes
|
|
|
|
|
Diamondback Energy Inc., Senior Notes
|
|
|
|
|
Energean Israel Finance Ltd., Senior Secured
Notes
|
|
|
|
|
Geopark Ltd., Senior Notes
|
|
|
|
|
Greenfire Resources Ltd., Senior Secured
Notes
|
|
|
|
|
Leviathan Bond Ltd., Senior Secured Notes
|
|
|
|
|
Leviathan Bond Ltd., Senior Secured Notes
|
|
|
|
|
Magnolia Oil & Gas Operating LLC/Magnolia
Oil & Gas Finance Corp., Senior Notes
|
|
|
|
|
New Fortress Energy Inc., Senior Secured
Notes
|
|
|
|
|
New Fortress Energy Inc., Senior Secured
Notes
|
|
|
|
|
Petroleos Mexicanos, Senior Notes
|
|
|
|
|
SierraCol Energy Andina LLC, Senior Notes
|
|
|
|
|
SM Energy Co., Senior Notes
|
|
|
|
|
Teine Energy Ltd., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels — continued
|
YPF SA, Senior Secured Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of America Corp., Subordinated Notes
|
|
|
|
|
Societe Generale SA, Subordinated Notes
|
|
|
|
|
Societe Generale SA, Subordinated Notes
(7.132% to 1/19/54 then 1 year Treasury
Constant Maturity Rate + 2.950%)
|
|
|
|
|
Texas Capital Bancshares Inc., Subordinated
Notes (4.000% to 5/6/26 then 5 year
Treasury Constant Maturity Rate + 3.150%)
|
|
|
|
|
|
|
|
|
|
Blue Owl Technology Finance Corp., Senior
Notes
|
|
|
|
|
Goldman Sachs Group Inc., Subordinated
Notes
|
|
|
|
|
Golub Capital BDC Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
Ally Financial Inc., Junior Subordinated
Notes (4.700% to 5/15/26 then 5 year
Treasury Constant Maturity Rate + 3.868%)
|
|
|
|
|
Credit Acceptance Corp., Senior Notes
|
|
|
|
|
goeasy Ltd., Senior Notes
|
|
|
|
|
PRA Group Inc., Senior Notes
|
|
|
|
|
World Acceptance Corp., Senior Notes
|
|
|
|
|
|
|
|
Financial Services — 3.2%
|
Freedom Mortgage Corp., Senior Notes
|
|
|
|
|
Freedom Mortgage Corp., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense — 1.2%
|
|
|
|
|
|
|
Commercial Services & Supplies — 0.3%
|
Deluxe Corp., Senior Notes
|
|
|
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments (cont’d)
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
Construction & Engineering — 0.2%
|
ATP Tower Holdings LLC/Andean Tower
Partners Colombia SAS/Andean Telecom
Partners Peru S.R.L., Senior Secured Notes
|
|
|
|
|
Passenger Airlines — 1.2%
|
US Airways Pass-Through Trust
|
|
|
|
|
Professional Services — 1.8%
|
Concentrix Corp., Senior Notes
|
|
|
|
|
|
|
|
|
|
Information Technology — 3.3%
|
Communications Equipment — 1.6%
|
CommScope LLC, Senior Secured Notes
|
|
|
|
|
Viasat Inc., Senior Secured Notes
|
|
|
|
|
Total Communications Equipment
|
|
|
|
Sabre GLBL Inc., Senior Secured Notes
|
|
|
|
|
Sabre GLBL Inc., Senior Secured Notes
|
|
|
|
|
|
|
|
|
|
Total Information Technology
|
|
|
|
|
|
Braskem Idesa SAPI, Senior Secured Notes
|
|
|
|
|
Braskem Netherlands Finance BV, Senior
Notes
|
|
|
|
|
|
|
|
|
|
First Quantum Minerals Ltd., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
|
Hotel & Resort REITs — 0.5%
|
XHR LP, Senior Secured Notes
|
|
|
|
|
|
|
|
|
|
|
Solaris Midstream Holdings LLC, Senior
Notes
|
|
|
|
|
|
|
Total Corporate Bonds & Notes (Cost — $151,506,798)
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentine Republic Government International
Bond, Senior Notes, Step bond (0.750% to
7/9/27 then 1.750%)
|
|
|
|
|
|
|
Brazil Notas do Tesouro Nacional Serie F,
Notes
|
|
|
|
|
|
|
El Salvador Government International Bond,
Senior Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexican Bonos, Senior Notes
|
|
|
|
|
|
|
|
|
|
Panama Government International Bond,
Senior Notes
|
|
|
|
|
Panama Government International Bond,
Senior Notes
|
|
|
|
|
|
|
|
|
|
Total Sovereign Bonds (Cost — $42,455,227)
|
|
Collateralized Mortgage Obligations(g) — 19.7%
|
1211 Avenue of the Americas Trust, 2015-
1211 A1A2
|
|
|
|
|
Banc of America Merrill Lynch Commercial
Mortgage Trust, 2017-BNK3 XA, IO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CFCRE Commercial Mortgage Trust, 2016-C3
A3
|
|
|
|
|
Citigroup Commercial Mortgage Trust, 2014-
GC25 AS
|
|
|
|
|
Eagle RE Ltd., 2021-2 M1B (30 Day Average
SOFR + 2.050%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, 5326 SA, IO (-1.000 x 30 Day
Average SOFR + 5.900%)
|
|
|
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments (cont’d)
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
Collateralized Mortgage Obligations(g) — continued
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, 5411 SC, IO (-1.000 x 30 Day
Average SOFR + 7.092%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Trust,
2022-DNA1 M1A (30 Day Average SOFR +
1.000%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Trust,
2022-DNA2 M1B (30 Day Average SOFR +
2.400%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Trust,
2022-HQA1 M1B (30 Day Average SOFR +
3.500%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Trust,
2023-HQA1 M1A (30 Day Average SOFR +
2.000%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
Structured Agency Credit Risk Trust, 2019-
DNA2 M2 (30 Day Average SOFR + 2.564%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2018-C06 2B1 (30 Day
Average SOFR + 4.214%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2024-R02 1M1 (30 Day
Average SOFR + 1.100%)
|
|
|
|
|
Morgan Stanley Bank of America Merrill
Lynch Trust, 2015-C23 B
|
|
|
|
|
Oaktown RE Ltd., 2021-1A M1B (30 Day
Average SOFR + 2.050%)
|
|
|
|
|
Wells Fargo Commercial Mortgage Trust,
2015-C31 B
|
|
|
|
|
Western Alliance Bank, 2022-CL4 M1 (30
Day Average SOFR + 2.250%)
|
|
|
|
|
WFRBS Commercial Mortgage Trust, 2013-
C15 XA, IO
|
|
|
|
|
|
|
Total Collateralized Mortgage Obligations (Cost — $31,013,819)
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
Mortgage-Backed Securities — 15.7%
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
|
|
|
|
|
|
|
Federal National Mortgage Association
(FNMA)
|
|
|
|
|
|
|
Government National Mortgage Association
(GNMA) II
|
|
|
|
|
|
|
Total Mortgage-Backed Securities (Cost — $24,135,840)
|
|
|
|
Communication Services — 3.9%
|
Diversified Telecommunication Services — 2.1%
|
Numericable U.S. LLC, USD Term Loan B14 (3
mo. Term SOFR + 5.500%)
|
|
|
|
|
Wireless Telecommunication Services — 1.8%
|
Gogo Intermediate Holdings LLC, Initial Term
Loan (1 mo. Term SOFR + 3.864%)
|
|
|
|
|
|
|
Total Senior Loans (Cost — $5,869,572)
|
|
Convertible Bonds & Notes — 3.2%
|
Communication Services — 3.2%
|
|
|
Cable One Inc., Senior Notes
|
|
|
|
|
DISH Network Corp., Senior Notes
|
|
|
|
|
|
|
Total Convertible Bonds & Notes (Cost — $5,345,659)
|
|
Total Investments before Short-Term Investments (Cost — $260,326,915)
|
|
|
|
Short-Term Investments — 1.8%
|
Egypt Treasury Bills (Cost — $2,827,985)
|
|
|
|
|
Total Investments — 167.6% (Cost — $263,154,900)
|
|
Mandatory Redeemable Preferred Stock, at Liquidation Value — (32.4)%
|
|
Other Liabilities in Excess of Other Assets — (35.2)%
|
|
Total Net Assets Applicable to Common Shareholders — 100.0%
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments (cont’d)
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
|
|
Face amount denominated in U.S. dollars, unless otherwise noted.
|
|
|
Security is exempt from registration under Rule 144A of the Securities Act of 1933.
This security may be resold in
transactions that are exempt from registration, normally to qualified institutional
buyers. This security has been
deemed liquid pursuant to guidelines approved by the Board of Directors.
|
|
|
All or a portion of this security is pledged as collateral pursuant to the loan agreement (Note 5).
|
|
|
Payment-in-kind security for which the issuer has the option at each interest payment
date of making interest
payments in cash or additional securities.
|
|
|
Security is exempt from registration under Regulation S of the Securities Act of 1933.
Regulation S applies to
securities offerings that are made outside of the United States and do not involve
direct selling efforts in the
United States. This security has been deemed liquid pursuant to guidelines approved
by the Board of Directors.
|
|
|
Variable rate security. Interest rate disclosed is as of the most recent information
available. Certain variable rate
securities are not based on a published reference rate and spread but are determined
by the issuer or agent and
are based on current market conditions. These securities do not indicate a reference
rate and spread in their
description above.
|
|
|
Security has no maturity date. The date shown represents the next call date.
|
|
|
Collateralized mortgage obligations are secured by an underlying pool of mortgages
or mortgage pass-through
certificates that are structured to direct payments on underlying collateral to different
series or classes of the
obligations. The interest rate may change positively or inversely in relation to one
or more interest rates, financial
indices or other financial indicators and may be subject to an upper and/or lower
limit.
|
|
|
Interest rates disclosed represent the effective rates on senior loans. Ranges in
interest rates are attributable to
multiple contracts under the same loan.
|
|
|
Senior loans may be considered restricted in that the Fund ordinarily is contractually
obligated to receive approval
from the agent bank and/or borrower prior to the disposition of a senior loan.
|
|
|
Rate shown represents yield-to-maturity.
|
Abbreviation(s) used in this schedule:
|
|
|
|
|
|
|
|
Connecticut Avenue Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate Mortgage Investment Conduit
|
|
|
|
Secured Overnight Financing Rate
|
|
|
|
|
At October 31, 2024, the Fund had the following open futures contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury 5-Year Notes
|
|
|
|
|
|
U.S. Treasury 10-Year Notes
|
|
|
|
|
|
Net unrealized depreciation on open futures contracts
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
At October 31, 2024, the Fund had the following open forward foreign currency contracts:
|
|
|
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized appreciation on open forward foreign currency contracts
|
|
Abbreviation(s) used in this table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Schedule of investments (cont’d)
October 31, 2024
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
At October 31, 2024, the Fund had the following open swap contracts:
OTC CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION1
|
Swap
Counterparty
(Reference Entity)
|
|
|
Implied
Credit
Spread at
October 31,
|
Periodic
Payments
Received by
|
|
Upfront
Premiums
Paid
(Received)
|
|
Morgan Stanley &
Co. Inc. (Lumen
Technologies Inc.,
5.625%, due
4/1/25)
|
|
|
|
|
|
|
|
|
|
If the Fund is a seller of protection and a credit event occurs, as defined under
the terms of that particular swap
agreement, the Fund will either (i) pay to the buyer of protection an amount equal
to the notional amount of the
swap and take delivery of the referenced obligation or underlying securities comprising
the referenced index or (ii)
pay a net settlement amount in the form of cash or securities equal to the notional
amount of the swap less the
recovery value of the referenced obligation or underlying securities comprising the
referenced index.
|
|
|
The maximum potential amount the Fund could be required to pay as a seller of credit
protection or receive as a
buyer of credit protection if a credit event occurs as defined under the terms of
that particular swap agreement.
|
|
|
Implied credit spreads, utilized in determining the market value of credit default
swap agreements on corporate or
sovereign issues as of period end, serve as an indicator of the current status of
the payment/performance risk and
represent the likelihood or risk of default for the credit derivative. The implied
credit spread of a particular
referenced entity reflects the cost of buying/selling protection and may include upfront
payments required to be
made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit
soundness and a greater likelihood or risk of default or other credit event occurring
as defined under the terms of
the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced
entity or obligation.
|
|
|
Percentage shown is an annual percentage rate.
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of Investments by Country# (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percentage of total investments. Please note that the Fund holdings are as of
October 31, 2024, and are
subject to change.
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Statement of assets and liabilities
October 31, 2024
|
|
|
Investments, at value (Cost — $263,154,900)
|
|
Foreign currency, at value (Cost — $477)
|
|
|
|
|
|
|
|
Deposits with brokers for open futures contracts
|
|
Unrealized appreciation on forward foreign currency contracts
|
|
Deposits with brokers for OTC derivatives
|
|
Dividends receivable from affiliated investments
|
|
Receivable for open OTC swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory Redeemable Preferred Stock ($10 liquidation value per share; 5,000,000 shares
issued and outstanding) (net of deferred offering costs of $133,135) (Note 6)
|
|
Payable for securities purchased
|
|
Distributions payable to Common Shareholders
|
|
Unrealized depreciation on forward foreign currency contracts
|
|
Distributions payable to Mandatory Redeemable Preferred Stockholders
|
|
Interest and commitment fees payable
|
|
Investment management fee payable
|
|
Payable to brokers — net variation margin on open futures contracts
|
|
OTC swaps, at value (premiums received — $21,577)
|
|
|
|
|
|
|
|
|
|
|
Total Net Assets Applicable to Common Shareholders
|
|
Net Assets Applicable to Common Shareholders:
|
|
Common stock par value ($0.001 par value; 16,791,836 shares issued and outstanding;
95,000,000 common shares authorized)
|
|
Paid-in capital in excess of par value
|
|
Total distributable earnings (loss)
|
|
Total Net Assets Applicable to Common Shareholders
|
|
Common Shares Outstanding
|
|
Net Asset Value Per Common Share
|
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Statement of operations
For the Year Ended October 31, 2024
|
|
|
|
|
|
Dividends from affiliated investments
|
|
Less: Foreign taxes withheld
|
|
|
|
|
|
|
|
Interest expense (Note 5)
|
|
Investment management fee (Note 2)
|
|
Distributions to Mandatory Redeemable Preferred Stockholders (Notes 1 and 6)
|
|
Amortization of preferred stock offering costs (Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock exchange listing fees
|
|
|
|
|
|
|
|
|
|
|
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Swap Contracts,
Forward
Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
|
Net Realized Gain (Loss) From:
|
|
Investment transactions in unaffiliated securities
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
Foreign currency transactions
|
|
|
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
Investments in unaffiliated securities
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
Net Gain on Investments, Futures Contracts, Swap Contracts, Forward Foreign
Currency Contracts and Foreign Currency Transactions
|
|
Increase in Net Assets Applicable to Common Shareholders From Operations
|
|
|
|
Net of foreign capital gains tax of $26,839.
|
|
|
Net of change in accrued foreign capital gains tax of $(33,831).
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Statements of changes in net assets
For the Years Ended October 31,
|
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Change in net unrealized appreciation (depreciation)
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Increase in Net Assets Applicable to Common Shareholders
From Operations
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Distributions to Common Shareholders From (Note 1):
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Total distributable earnings
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Decrease in Net Assets From Distributions to Common
Shareholders
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Increase (Decrease) in Net Assets Applicable to Common
Shareholders
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Net Assets Applicable to Common Shareholders:
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|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Statement of cash flows
For the Year Ended October 31, 2024
Increase (Decrease) in Cash:
|
|
Cash Flows from Operating Activities:
|
|
Net increase in net assets applicable to common shareholders resulting from operations
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net
cash
provided (used) by operating activities:
|
|
Purchases of portfolio securities
|
|
Sales of portfolio securities
|
|
Net purchases, sales and maturities of short-term investments
|
|
Net amortization of premium (accretion of discount)
|
|
Decrease in receivable for securities sold
|
|
Decrease in interest receivable
|
|
Decrease in prepaid expenses
|
|
Decrease in dividends receivable from affiliated investments
|
|
Decrease in net premiums received for OTC swap contracts
|
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Increase in payable for securities purchased
|
|
Amortization of preferred stock offering costs
|
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Increase in investment management fee payable
|
|
Decrease in Directors’ fees payable
|
|
Decrease in interest and commitment fees payable
|
|
Increase in accrued expenses
|
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Increase in distributions payable to Mandatory Redeemable Preferred Stockholders
|
|
Increase in payable to brokers — net variation margin on futures contracts
|
|
Net realized loss on investments
|
|
Change in net unrealized appreciation (depreciation) of investments, OTC swap contracts
and forward foreign currency contracts
|
|
Net Cash Provided in Operating Activities*
|
|
Cash Flows from Financing Activities:
|
|
Distributions paid on common stock (net of distributions payable)
|
|
Net Cash Used by Financing Activities
|
|
Net Increase in Cash and Restricted Cash
|
|
Cash and restricted cash at beginning of year
|
|
Cash and restricted cash at end of year
|
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|
Included in operating expenses is $3,823,276 paid for interest and commitment fees
on borrowings and $1,815,000
paid for distributions to Mandatory Redeemable Preferred Stockholders.
|
The following table provides a reconciliation of cash (including foreign currency)
and restricted cash reported within the Statement of Assets and Liabilities that sums to the total of such amounts
shown on the Statement of
Cash Flows.
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Total cash and restricted cash shown in the Statement of Cash Flows
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Restricted cash consists of cash that has been segregated to cover the Fund’s collateral or margin obligations under derivative contracts. It is separately reported on the Statement of Assets and
Liabilities as Deposits with brokers.
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
For a common share of capital stock outstanding throughout each year ended October
31:
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Net asset value, beginning of year
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Income (loss) from operations:
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Net realized and unrealized gain (loss)
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Total income (loss) from operations
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Less distributions to common shareholders
from:
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|
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|
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|
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Total distributions to common
shareholders
|
|
|
|
|
|
Anti-dilutive impact of tender offer
|
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|
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Net asset value, end of year
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|
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|
Market price, end of year
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|
Total return, based on NAV4,5
|
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|
|
|
|
Total return, based on Market Price6
|
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|
|
|
|
Net assets applicable to common
shareholders, end of year (millions)
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|
|
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|
Ratios to average net assets:
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Loan Outstanding, End of Year (000s)
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|
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Asset Coverage Ratio for Loan Outstanding10
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|
Asset Coverage, per $1,000 Principal Amount of
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Weighted Average Loan (000s)
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Weighted Average Interest Rate on Loan
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Mandatory Redeemable Preferred Stock at
Liquidation Value, End of Year (000s)
|
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|
|
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Asset Coverage Ratio for Mandatory
Redeemable Preferred Stock11
|
|
|
|
|
|
Asset Coverage, per $10 and/or $100,000
Liquidation Value per Share of Mandatory
Redeemable Preferred Stock11
|
|
|
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|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
|
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Per share amounts have been calculated using the average shares method.
|
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Amount represents less than $0.005 or greater than $(0.005) per share.
|
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|
The tender offer was completed at a price of $13.53 for 4,197,959 shares and $56,798,385
for the year ended
October 31, 2020.
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|
The total return calculation assumes that distributions are reinvested at NAV. Past
performance is no guarantee of
future results.
|
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|
Performance figures may reflect compensating balance arrangements, fee waivers and/or
expense
reimbursements. In the absence of compensating balance arrangements, fee waivers and/or
expense
reimbursements, the total return would have been lower. Past performance is no guarantee
of future results.
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The total return calculation assumes that distributions are reinvested in accordance with the Fund’s dividend
reinvestment plan. Past performance is no guarantee of future results.
|
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Included in the expense ratios are certain non-recurring legal and transfer agent
fees that were incurred by the
Fund during the period. Without these fees, the gross and net expense ratios would
have been 2.85% and 2.69%,
respectively.
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Reflects fee waivers and/or expense reimbursements.
|
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The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management
fee payable in connection with any investment in an affiliated money market fund.
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Represents value of net assets plus the loan outstanding and mandatory redeemable
preferred stock at the end of
the period divided by the loan outstanding at the end of the period.
|
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Represents value of net assets plus the loan outstanding and mandatory redeemable
preferred stock at the end of
the period divided by the loan and mandatory redeemable preferred stock outstanding
at the end of the period.
|
See Notes to Financial Statements.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements
1. Organization and significant accounting policies
BrandywineGLOBAL — Global Income Opportunities Fund Inc. (the “Fund”) was incorporated in Maryland on October 27, 2010, and is registered as a non-diversified,
closed-end management investment company under the Investment Company Act of 1940,
as amended (the “1940 Act”). The Fund’s primary investment objective is to provide current income. As a secondary investment objective, the Fund will seek capital appreciation.
There can be no assurance the Fund will achieve its investment objectives. The Fund seeks
to achieve its investment objectives by investing, under normal market conditions, at
least 80% of its assets in global fixed income securities.
The Fund follows the accounting and reporting guidance in Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (“ASC 946”). The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted
accounting principles (“GAAP”), including, but not limited to, ASC 946. Estimates and assumptions are required to be made regarding assets, liabilities and changes in net
assets resulting from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining these
estimates could cause actual results to differ. Subsequent events have been evaluated
through the date the financial statements were issued.
(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized
mortgage obligations and asset-backed securities) and certain derivative instruments
are typically the prices supplied by independent third party pricing services, which may
use market prices or broker/dealer quotations or a variety of valuation techniques and
methodologies. The independent third party pricing services typically use inputs that
are observable such as issuer details, interest rates, yield curves, prepayment speeds,
credit risks/spreads, default rates and quoted prices for similar securities. Investments
in open-end funds are valued at the closing net asset value per share of each fund on the day
of valuation. Futures contracts are valued daily at the settlement price established
by the board of trade or exchange on which they are traded. Equity securities for which market
quotations are available are valued at the last reported sales price or official closing
price on the primary market or exchange on which they trade. When the Fund holds securities
or other assets that are denominated in a foreign currency, the Fund will normally use
the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party
pricing services are unable to supply prices for a portfolio investment, or if the prices
supplied are deemed by the manager to be unreliable, the market price may be determined by the
manager using quotations from one or more broker/dealers or at the transaction price
if the security has recently been purchased and no value has yet been obtained from a pricing
service or pricing broker. When reliable prices are not readily available, such as
when the value of a security has been significantly affected by events after the close of the
exchange or market on which the security is principally traded, but before the Fund calculates
its net asset value, the Fund values these securities as determined in accordance with procedures
approved by the Fund’s Board of Directors.
Pursuant to policies adopted by the Board of Directors, the Fund’s manager has been designated as the valuation designee and is responsible for the oversight of the daily
valuation process. The Fund’s manager is assisted by the Global Fund Valuation Committee
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
(the “Valuation Committee”). The Valuation Committee is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Fund’s manager and the Board of Directors. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee,
among other things, conducts due diligence reviews of pricing vendors, monitors the
daily change in prices and reviews transactions among market participants.
The Valuation Committee will consider pricing methodologies it deems relevant and
appropriate when making fair value determinations. Examples of possible methodologies
include, but are not limited to, multiple of earnings; discount from market of a similar
freely traded security; discounted cash-flow analysis; book value or a multiple thereof;
risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis.
The Valuation Committee will also consider factors it deems relevant and appropriate in
light of the facts and circumstances. Examples of possible factors include, but are not limited
to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time
of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of
merger proposals or tender offers affecting the security; the price and extent of public
trading in similar securities of the issuer or comparable companies; and the existence of a shelf
registration for restricted securities.
For each portfolio security that has been fair valued pursuant to the policies adopted
by the Board of Directors, the fair value price is compared against the last available and
next available market quotations. The Valuation Committee reviews the results of such back
testing monthly and fair valuation occurrences are reported to the Board of Directors
quarterly.
The Fund uses valuation techniques to measure fair value that are consistent with
the market approach and/or income approach, depending on the type of security and the
particular circumstance. The market approach uses prices and other relevant information
generated by market transactions involving identical or comparable securities. The
income approach uses valuation techniques to discount estimated future cash flows to present
value.
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques
used to value assets and liabilities at measurement date. These inputs are summarized
in the three broad levels listed below:
•
Level 1 — unadjusted quoted prices in active markets for identical investments
•
Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
•
Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used to value securities are not necessarily an indication
of the risk associated with investing in those securities.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:
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Other Significant
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
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Collateralized Mortgage
Obligations
|
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|
Mortgage-Backed Securities
|
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Convertible Bonds & Notes
|
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Total Long-Term Investments
|
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Other Financial Instruments:
|
|
|
|
|
Forward Foreign Currency
Contracts††
|
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|
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|
|
|
|
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|
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|
|
Other Significant
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Other Financial Instruments:
|
|
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|
|
|
|
|
|
|
|
Forward Foreign Currency
Contracts††
|
|
|
|
|
OTC Credit Default Swaps on
Corporate Issues — Sell
Protection‡
|
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|
|
|
|
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|
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|
See Schedule of Investments for additional detailed categorizations.
|
|
|
Reflects the unrealized appreciation (depreciation) of the instruments.
|
|
|
Value includes any premium paid or received with respect to swap contracts.
|
(b) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes
in certain asset classes. A futures contract represents a commitment for the future purchase
or sale of an asset at a specified price on a specified date.
Upon entering into a futures contract, the Fund is required to deposit cash or securities
with a broker in an amount equal to a certain percentage of the contract amount. This is
known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
by the Fund each day, depending on the daily fluctuation in the value of the contract.
For certain futures, including foreign denominated futures, variation margin is not settled
daily, but is recorded as a net variation margin payable or receivable. The daily changes
in contract value are recorded as unrealized appreciation or depreciation in the Statement
of Operations and the Fund recognizes a realized gain or loss when the contract is closed.
Futures contracts involve, to varying degrees, risk of loss in excess of the amounts
reflected in the financial statements. In addition, there is the risk that the Fund may not
be able to enter into a closing transaction because of an illiquid secondary market.
(c) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar
denominated securities or to facilitate settlement of a foreign currency denominated
portfolio transaction. A forward foreign currency contract is an agreement between
two parties to buy and sell a currency at a set price with delivery and settlement at
a future date. The contract is marked-to-market daily and the change in value is recorded by
the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed,
through either delivery or offset by entering into another forward foreign currency
contract, the Fund recognizes a realized gain or loss equal to the difference between the value
of the contract at the time it was opened and the value of the contract at the time it is
closed.
Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency.
Forward foreign currency contracts involve elements of market risk in excess of the
amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward foreign currency
contract. Risks may also arise upon entering into these contracts from the potential
inability of the counterparties to meet the terms of their contracts.
(d) Swap agreements. The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes. The use of
swaps involves risks that are different from those associated with other portfolio transactions.
Swap agreements are privately negotiated in the over-the-counter market and may be
entered into as a bilateral contract (“OTC Swaps”) or centrally cleared (“Centrally Cleared Swaps”). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.
In a Centrally Cleared Swap, immediately following execution of the swap, the swap
agreement is submitted to a clearinghouse or central counterparty (the “CCP”) and the CCP becomes the ultimate counterparty of the swap agreement. The Fund is required to interface with the CCP through a broker, acting in an agency capacity. All payments
are settled with the CCP through the broker. Upon entering into a Centrally Cleared Swap,
the Fund is required to deposit initial margin with the broker in the form of cash or
securities.
Swap contracts are marked-to-market daily and changes in value are recorded as unrealized
appreciation (depreciation). The daily change in valuation of Centrally Cleared Swaps,
if any, is recorded as a net receivable or payable for variation margin on the Statement
of Assets and Liabilities. Gains or losses are realized upon termination of the swap
agreement. Collateral, in the form of restricted cash or securities, may be required
to be held in segregated accounts with the Fund’s custodian in compliance with the terms of the
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
swap contracts. Securities posted as collateral for swap contracts are identified
in the Schedule of Investments and restricted cash, if any, is identified on the Statement
of Assets and Liabilities. Risks may exceed amounts recorded in the Statement of Assets and
Liabilities. These risks include changes in the returns of the underlying instruments,
failure of the counterparties to perform under the contracts’ terms, and the possible lack of liquidity with respect to the swap agreements.
OTC Swap payments received or made at the beginning of the measurement period are
reflected as a premium or deposit, respectively, on the Statement of Assets and Liabilities.
These upfront payments are amortized over the life of the swap and are recognized
as realized gain or loss in the Statement of Operations. Net periodic payments received
or paid by the Fund are recognized as a realized gain or loss in the Statement of Operations.
The Fund’s maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of October 31, 2024, the total
notional value of all credit default swaps to sell protection was $1,625,000. This amount would
be offset by the value of the swap’s reference entity, upfront premiums received on the swap and any amounts received from the settlement of a credit default swap where the Fund
bought protection for the same referenced security/entity.
For average notional amounts of swaps held during the year ended October 31, 2024,
see Note 4.
The Fund enters into credit default swap (“CDS”) contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making
a stream of payments to another party in exchange for the right to receive a specified
return in the event of a default by a third party, typically corporate or sovereign issuers,
on a specified obligation, or in the event of a write-down, principal shortfall, interest
shortfall or default of all or part of the referenced entities comprising a credit index. The Fund
may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk
where the Fund has exposure to an issuer) or to take an active long or short position with respect
to the likelihood of a particular issuer’s default. As a seller of protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap
provided that there is no credit event. If the Fund is a seller of protection and
a credit event occurs, as defined under the terms of that particular swap agreement, the maximum
potential amount of future payments (undiscounted) that the Fund could be required
to make under a CDS agreement would be an amount equal to the notional amount of the
agreement. These amounts of potential payments will be partially offset by any recovery
of values from the respective referenced obligations. As a seller of protection, the
Fund effectively adds leverage to its portfolio because, in addition to its total net assets,
the Fund is subject to investment exposure on the notional amount of the swap. As a buyer
of protection, the Fund generally receives an amount up to the notional value of the
swap if a credit event occurs.
Implied spreads are the theoretical prices a lender receives for credit default protection.
When spreads rise, market perceived credit risk rises and when spreads fall, market
perceived credit risk falls. The implied credit spread of a particular referenced
entity reflects the cost of buying/selling protection and may include upfront payments required to
enter into the agreement. Wider credit spreads and decreasing market values, when compared
to
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring
as defined under the terms of the agreement. Credit spreads utilized in determining the
period end market value of CDS agreements on corporate or sovereign issues are disclosed
in the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For
CDS agreements on asset-backed securities and credit indices, the quoted market prices
and resulting values, particularly in relation to the notional amount of the contract
as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.
The Fund’s maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the
counterparty to the Fund to cover the Fund’s exposure to the counterparty). As the protection seller, the Fund’s maximum risk is the notional amount of the contract. CDS are considered to have credit risk-related contingent features since they require payment by the protection
seller to the protection buyer upon the occurrence of a defined credit event.
Entering into a CDS agreement involves, to varying degrees, elements of credit, market
and documentation risk in excess of the related amounts recognized on the Statement of
Assets and Liabilities. Such risks involve the possibility that there will be no liquid market
for these agreements, that the counterparty to the agreement may default on its obligation to
perform or disagree as to the meaning of the contractual terms in the agreement, and
that there will be unfavorable changes in net interest rates.
(e) Loan participations. The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Fund’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection
with purchasing participations, the Fund generally will have no right to enforce compliance
by the borrower with the terms of the loan agreement related to the loan, or any rights
of offset against the borrower and the Fund may not benefit directly from any collateral
supporting the loan in which it has purchased the participation.
The Fund assumes the credit risk of the borrower, the lender that is selling the participation
and any other persons interpositioned between the Fund and the borrower. In the event
of the insolvency of the lender selling the participation, the Fund may be treated as
a general creditor of the lender and may not benefit from any offset between the lender and
the borrower.
(f) Stripped securities. The Fund may invest in ‘‘Stripped Securities,’’ a term used collectively for components, or strips, of fixed income securities. Stripped Securities
can be principal only securities (“PO”), which are debt obligations that have been stripped of unmatured interest coupons, or interest only securities (“IO”), which are unmatured interest coupons that have been stripped from debt obligations. The market value of Stripped
Securities will fluctuate in response to changes in economic conditions, rates of
pre-payment, interest rates and the market’s perception of the securities. However, fluctuations in response to interest rates may be greater in Stripped Securities than for debt
obligations of comparable maturities that pay interest currently. The amount of fluctuation may
increase with a longer period of maturity.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
The yield to maturity on IO’s is sensitive to the rate of principal repayments (including prepayments) on the related underlying debt obligation and principal payments may
have a material effect on yield to maturity. If the underlying debt obligation experiences
greater than anticipated prepayments of principal, the Fund may not fully recoup its initial
investment in IO’s.
(g) Cash flow information. The Fund invests in securities and distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are reported in the
Statements of Changes in Net Assets and additional information on cash receipts and cash payments
is presented in the Statement of Cash Flows.
(h) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon
prevailing exchange rates on the date of valuation. Purchases and sales of investment
securities and income and expense items denominated in foreign currencies are translated
into U.S. dollar amounts based upon prevailing exchange rates on the respective dates
of such transactions.
The Fund does not isolate that portion of the results of operations resulting from
fluctuations in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies,
including gains and losses on forward foreign currency contracts, currency gains or
losses realized between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes
in the values of assets and liabilities, other than investments in securities, on the
date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and
risks not typically associated with those of U.S. dollar denominated transactions as a result
of, among other factors, the possibility of lower levels of governmental supervision and
regulation of foreign securities markets and the possibility of political or economic
instability.
(i) Credit and market risk. The Fund invests in high-yield and emerging market instruments that are subject to certain credit and market risks. The yields of high-yield
and emerging market debt obligations reflect, among other things, perceived credit and
market risks. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater
risk related to timely and ultimate payment of interest and principal, greater market price
volatility and less liquid secondary market trading. The consequences of political,
social, economic or diplomatic changes may have disruptive effects on the market prices of
investments held by the Fund. The Fund’s investments in non-U.S. dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange
rate fluctuations.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Investments in securities that are collateralized by real estate mortgages are subject
to certain credit and liquidity risks. When market conditions result in an increase in
default rates of the underlying mortgages and the foreclosure values of underlying real estate
properties are materially below the outstanding amount of these underlying mortgages,
collection of the full amount of accrued interest and principal on these investments
may be doubtful. Such market conditions may significantly impair the value and liquidity
of these investments and may result in a lack of correlation between their credit ratings and
values.
(j) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in
foreign currencies, may require settlement in foreign currencies or may pay interest or dividends
in foreign currencies, changes in the relationship of these foreign currencies to the
U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign
investments may also subject the Fund to foreign government exchange restrictions,
expropriation, taxation or other political, social or economic developments, all of
which affect the market and/or credit risk of the investments.
(k) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions where the Fund is exposed to counterparty credit risk in addition to broader market
risks. The Fund may invest in securities of issuers, which may also be considered counterparties
as trading partners in other transactions. This may increase the risk of loss in the
event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to
meet its contractual obligations. The Fund’s subadviser attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring
and/or limiting the amount of its net exposure to each individual counterparty based on its
assessment and (iii) requiring collateral from the counterparty for certain transactions.
Market events and changes in overall economic conditions may impact the assessment
of such counterparty risk by the subadviser. In addition, declines in the values of underlying
collateral received may expose the Fund to increased risk of loss.
With exchange traded and centrally cleared derivatives, there is less counterparty
risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments,
guarantees against a possible default. The clearinghouse stands between the buyer
and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse.
While offset rights may exist under applicable law, the Fund does not have a contractual
right of offset against a clearing broker or clearinghouse in the event of a default
of the clearing broker or clearinghouse.
The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement, with certain of its derivative counterparties that govern over-the-counter
(“OTC”) derivatives and provide for general obligations, representations, agreements, collateral posting terms, netting provisions in the event of default or termination
and credit related contingent features. The credit related contingent features include, but are
not limited to, a percentage decrease in the Fund net assets or net asset value per share
over a specified period of time. If these credit related contingent features were triggered,
the derivatives counterparty could terminate the positions and demand payment or require
additional collateral.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset
with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. However, absent an
event of default by the counterparty or a termination of the agreement, the terms of the
ISDA Master Agreements do not result in an offset of reported amounts of financial assets
and financial liabilities in the Statement of Assets and Liabilities across transactions
between the Fund and the applicable counterparty. The enforceability of the right to offset
may vary by jurisdiction.
Collateral requirements differ by type of derivative. Collateral or margin requirements
are set by the broker or exchange clearinghouse for exchange traded derivatives while
collateral terms are contract specific for OTC traded derivatives. Cash collateral
that has been pledged to cover obligations of the Fund under derivative contracts, if any,
will be reported separately in the Statement of Assets and Liabilities. Securities pledged
as collateral, if any, for the same purpose are noted in the Schedule of Investments.
As of October 31, 2024, the Fund held forward foreign currency contracts and OTC credit
default swaps with credit related contingent features which had a liability position
of $771,668. If a contingent feature in the master agreements would have been triggered,
the Fund would have been required to pay this amount to its derivatives counterparties.
As of October 31, 2024, the Fund had posted with its counterparties cash and/or securities
as collateral to cover the net liability of these derivatives amounting to $20,000, which
could be used to reduce the required payment.
(l) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind
securities) is recorded on the accrual basis. Amortization of premiums and accretion
of discounts on debt securities are recorded to interest income over the lives of the
respective securities, except for premiums on certain callable debt securities, which are amortized
to the earliest call date. Paydown gains and losses on mortgage- and asset-backed securities
are recorded as adjustments to interest income. Dividend income is recorded on the
ex-dividend date for dividends received in cash and/or securities. Foreign dividend
income is recorded on the ex-dividend date or as soon as practicable after the Fund determines
the existence of a dividend declaration after exercising reasonable due diligence. The
cost of investments sold is determined by use of the specific identification method. To the
extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may
halt any additional interest income accruals and consider the realizability of interest accrued
up to the date of default or credit event.
(m) Distributions to shareholders. Distributions to common shareholders from net investment income of the Fund, if any, are declared quarterly and paid on a monthly
basis. The actual source of the Fund’s monthly distributions may be from net investment income, return of capital or a combination of both. Common shareholders will be informed of
the tax characteristics of the distributions after the close of the fiscal year. Distributions
to common shareholders of net realized gains, if any, are declared at least annually. Pursuant
to its Managed Distribution Policy, adopted by the Fund in August 2012, the Fund intends
to make regular monthly distributions to common shareholders at a fixed rate per common share,
which rate may be adjusted from time to time by the Fund’s Board of Directors. Under the Fund’s Managed Distribution Policy, if, for any monthly distribution, the value of the Fund’s net investment income and net realized capital gain is less than the amount of the
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
distribution, the difference will be distributed from the Fund’s net assets (and may constitute a “return of capital”). The Board of Directors may modify, terminate or suspend the Managed Distribution Policy at any time, including when certain events would make
part of the return of capital taxable to common shareholders. Any such modification,
termination or suspension could have an adverse effect on the market price of the Fund’s shares. Distributions to common shareholders of the Fund are recorded on the ex-dividend
date and are determined in accordance with income tax regulations, which may differ
from GAAP.
Distributions to holders of Mandatory Redeemable Preferred Stock (“MRPS”) are accrued on a daily basis as described in Note 6 and are treated as an operating expense as required
by GAAP. For tax purposes, the payments made to the holders of the Fund’s MRPS are treated as dividends or distributions. The character of distributions to MRPS holders made
during the year may differ from their ultimate characterization for federal income tax purposes.
(n) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.
(o) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute
its taxable income and net realized gains, if any, to shareholders in accordance with
timing requirements imposed by the Code. Therefore, no federal or state income tax provision
is required in the Fund’s financial statements.
Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of October 31, 2024, no provision for income tax
is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations
have not expired are subject to examination by the Internal Revenue Service and state departments
of revenue.
Under the applicable foreign tax laws, a withholding tax may be imposed on interest,
dividends and capital gains at various rates. Realized gains upon disposition of securities
issued in or by certain foreign countries are subject to capital gains tax imposed
by those countries. As of October 31, 2024, there were no capital gains tax liabilities accrued
on unrealized gains.
(p) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During
the current year, the following reclassifications have been made:
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Total Distributable
Earnings (Loss)
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(a)
Reclassifications are due to non-deductible offering costs and differences between
actual and estimated information for the prior year related to the Fund’s return of capital distribution.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
2. Investment management agreement and other transactions with affiliates
Franklin Templeton Fund Adviser, LLC (“FTFA”) is the Fund’s investment manager and Brandywine Global Investment Management, LLC (“Brandywine Global”) is the Fund’s subadviser. FTFA and Brandywine Global are indirect, wholly-owned subsidiaries of
Franklin Resources, Inc. (“Franklin Resources”).
FTFA provides administrative and certain oversight services to the Fund. The Fund
pays an investment management fee, calculated daily and paid monthly, at an annual rate of
0.85% of the Fund’s average daily managed assets. “Managed assets” means net assets plus the amount of any borrowing and assets attributable to any preferred stock that
may be outstanding. FTFA delegates to Brandywine Global the day-to-day portfolio management
of the Fund. For its services, FTFA pays Brandywine Global a fee monthly, at an annual
rate equal to 70% of the net management fee it receives from the Fund.
During periods in which the Fund utilizes financial leverage, the fees paid to FTFA
will be higher than if the Fund did not utilize leverage because the fees are calculated as
a percentage of the Fund’s assets, including those investments purchased with leverage.
Effective June 1, 2022, FTFA implemented a voluntary investment management fee waiver
of 0.15% that continued until May 31, 2023. Effective June 1, 2023, FTFA implemented
a voluntary investment management fee waiver of 0.20% that will continue until May 31,
2025.
The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated
money market fund (the “affiliated money market fund waivers”).
During the year ended October 31, 2024, fees waived and/or expenses reimbursed amounted to $543,052, which included an affiliated money market fund waiver of $6,565.
All officers and one Director of the Fund are employees of Franklin Resources or its
affiliates and do not receive compensation from the Fund.
During the year ended October 31, 2024, the aggregate cost of purchases and proceeds
from sales of investments (excluding short-term investments) and U.S. Government &
Agency Obligations were as follows:
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U.S. Government &
Agency Obligations
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
At October 31, 2024, the aggregate cost of investments and the aggregate gross unrealized
appreciation and depreciation of investments for federal income tax purposes were
as follows:
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Cost/Premiums
Paid (Received)
|
Gross
Unrealized
Appreciation
|
Gross
Unrealized
Depreciation
|
Net
Unrealized
Appreciation
(Depreciation)
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Forward foreign currency contracts
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4. Derivative instruments and hedging activities
Below is a table, grouped by derivative type, that provides information about the
fair value and the location of derivatives within the Statement of Assets and Liabilities at
October 31, 2024.
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Forward foreign currency contracts
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Forward foreign currency contracts
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Generally, the balance sheet location for asset derivatives is receivables/net unrealized
appreciation and for
liability derivatives is payables/net unrealized depreciation.
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Includes cumulative unrealized appreciation (depreciation) of futures contracts as
reported in the Schedule of
Investments. Only net variation margin is reported within the receivables and/or payables
on the Statement of
Assets and Liabilities.
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Values include premiums paid (received) on swap contracts which are shown separately
in the Statement of
Assets and Liabilities.
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
The following tables provide information about the effect of derivatives and hedging
activities on the Fund’s Statement of Operations for the year ended October 31, 2024. The first table provides additional detail about the amounts and sources of gains (losses)
realized on derivatives during the period. The second table provides additional information
about the change in net unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.
AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
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Forward foreign currency contracts
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CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
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Forward foreign currency contracts
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During the year ended October 31, 2024, the volume of derivative activity for the
Fund was as follows:
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Futures contracts (to buy)
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Futures contracts (to sell)†
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Forward foreign currency contracts (to buy)
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Forward foreign currency contracts (to sell)
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Credit default swap contracts (sell protection)
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At October 31, 2024, there were no open positions held in this derivative.
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The following table presents the Fund’s OTC derivative assets and liabilities by counterparty net of amounts available for offset under an ISDA Master Agreement and net of the
related collateral pledged (received) by the Fund as of October 31, 2024.
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Gross Assets
Subject to
Master
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Gross
Liabilities
Subject to
Master
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Net Assets
(Liabilities)
Subject to
Master
Agreements
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
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Gross Assets
Subject to
Master
Agreements1
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Gross
Liabilities
Subject to
Master
Agreements1
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Net Assets
(Liabilities)
Subject to
Master
Agreements
|
Collateral
Pledged
(Received)2,3
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Morgan Stanley & Co. Inc.
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Absent an event of default or early termination, derivative assets and liabilities
are presented gross and not
offset in the Statement of Assets and Liabilities.
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Gross amounts are not offset in the Statement of Assets and Liabilities.
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In some instances, the actual collateral received and/or pledged may be more than
the amount shown here due
to overcollateralization.
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Net amount may also include forward foreign currency exchange contracts that are not
required to be
collateralized.
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Represents the net amount receivable (payable) from (to) the counterparty in the event
of default.
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The Fund has a Master Margin Loan Agreement (the “BNYM Credit Agreement”) with The Bank of New York Mellon (“BNYM”) as lender. The BNYM Credit Agreement provides for borrowings in an aggregate principal amount of up to $100,000,000, subject to the
terms and conditions therein. Each loan under the BNYM Credit Agreement constitutes an open
commitment by BNYM terminable upon 180 days’ notice by the Fund or BNYM. The Fund pays interest on borrowings calculated based on the Overnight Bank Funding Rate plus
applicable margin. The Overnight Bank Funding Rate is a volume weighted median measure
of U.S. dollar funding costs for U.S. based banks calculated using both federal funds
transactions and overnight eurodollar time deposits. The Fund pays a commitment fee
on the unutilized portion of the loan commitment amount at an annual rate of 0.25% except
that no commitment fee is accrued when the aggregate outstanding balance of the loan
is equal to or greater than 75% of the margin loan commitment amount. To the extent of
the borrowing outstanding, the Fund is required to maintain collateral in a special custody
account at the Fund’s custodian on behalf of BNYM. The BNYM Credit Agreement contains certain covenants that, among other things, may limit the Fund’s ability to pay distributions in certain circumstances, incur additional debt, change its fundamental investment
policies and engage in certain transactions, including mergers and consolidations, and require
asset coverage ratios in addition to those required by the 1940 Act. In addition, the BNYM
Credit Agreement may be subject to early termination under certain conditions and may contain
other provisions that could limit the Fund’s ability to utilize borrowing under the agreement. Interest expense related to the BNYM Credit Agreement for the year ended October 31,
2024 was $3,697,600. For the year ended October 31, 2024, the Fund incurred commitment
fees of $99,124. For the year ended October 31, 2024, the average daily loan balance
was $61,000,000 and the weighted average interest rate was 5.96%. At October 31, 2024,
the Fund had $61,000,000 of borrowings outstanding.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
6. Mandatory redeemable preferred stock
On December 30, 2019, the Fund completed a private placement of $50,000,000 fixed
rate Mandatory Redeemable Preferred Stock (”MRPS”). Net proceeds from the offering were used, in part, to refinance leverage provided by redeemed MRPS. Offering costs incurred
by the Fund in connection with the MRPS issuance are being amortized to expense over
the respective life of each series of MRPS. Series D MRPS were issued with a Term Redemption date of December 30, 2024 and Series E MRPS were issued with a Term Redemption date of December 30, 2026.
The table below summarizes the key terms of each series of the MRPS at October 31,
2024.
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Liquidation
Preference
Per Share
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Aggregate
Liquidation
Value
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The MRPS are not listed on any exchange or automated quotation system. The estimated
fair value of the MRPS was calculated, for disclosure purposes, based on estimated
market yields and credit spreads for comparable instruments with similar maturity, terms
and structure. The MRPS are categorized as Level 3 within the fair value hierarchy.
Holders of MRPS are entitled to receive quarterly cumulative cash dividends payable
on the first business day following each quarterly dividend date (February 15, May 15, August
15 and November 15). In the event of a rating downgrade of any series of the MRPS below “A” by Fitch Ratings Inc., the applicable dividend rate will increase, according to a
predetermined schedule, by 0.5% to 4.0%.
The MRPS rank senior to the Fund’s outstanding common stock and on parity with any other preferred stock. The Fund may, at its option, redeem the MRPS, in whole or in part,
at the liquidation preference amount plus all accumulated but unpaid dividends plus the make-
whole amount equal to the discounted value of the remaining scheduled payments. If
the Fund fails to maintain a total leverage (debt and preferred stock) asset coverage
ratio of at least 225% or is in default of specified rating agency requirements, the MRPS are
subject to mandatory redemption under certain provisions.
The Fund may not declare dividends or make other distributions on shares of its common
stock unless the Fund has declared and paid full cumulative dividends on the MRPS,
due on or prior to the date of the common stock dividend or distribution, and meets the MRPS
asset coverage and rating agency requirements.
The holders of the MRPS have one vote per share and vote together with the holders
of common stock of the Fund as a single class except on matters affecting only the holders
of MRPS or the holders of common stock. Pursuant to the 1940 Act, holders of the MRPS
have the right to elect two Directors of the Fund, voting separately as a class.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
7. Distributions to common shareholders subsequent to October 31, 2024
The following distributions to common shareholders have been declared by the Fund’s Board of Directors and are payable subsequent to the period end of this report:
8. Stock repurchase program
On November 16, 2015, the Fund announced that the Fund’s Board of Directors (the “Board”) had authorized the Fund to repurchase in the open market up to approximately 10% of
the Fund’s outstanding common stock when the Fund’s shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase shares of
common stock at such times and in such amounts as management reasonably believes may
enhance stockholder value. The Fund is under no obligation to purchase shares at any
specific discount levels or in any specific amounts. During the years ended October
31, 2024, and October 31, 2023, the Fund did not repurchase any shares.
Since the commencement of the stock repurchase program through October 31, 2024, the
Fund repurchased 86,958 shares or 0.41% of its common shares outstanding for a total
amount of $1,165,853.
9. Transactions with affiliated company
As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5%
or more of the outstanding voting securities, or a company which is under common ownership
or control with the Fund. The following company was considered an affiliated company
for all or some portion of the year ended October 31, 2024. The following transactions
were effected in such company for the year ended October 31, 2024.
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Affiliate
Value at
October 31,
2023
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Western Asset
Premier
Institutional U.S.
Treasury Reserves,
Premium Shares
|
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Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
|
Affiliate
Value at
October 31,
2024
|
Western Asset Premier
Institutional U.S.
Treasury Reserves,
Premium Shares
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Notes to financial statements (cont’d)
10. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended October 31,
was as follows:
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Mandatory redeemable preferred shares
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Total taxable distributions
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|
Total tax return of capital
|
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As of October 31, 2024, the components of distributable earnings (loss) on a tax basis
were as follows:
|
|
|
Other book/tax temporary differences(a)
|
|
Unrealized appreciation (depreciation)(b)
|
|
Total distributable earnings (loss) — net
|
|
|
|
These capital losses have been deferred in the current year as either short-term or
long-term losses. The losses
will be deemed to occur on the first day of the next taxable year in the same character
as they were originally
deferred and will be available to offset future taxable capital gains.
|
|
|
Other book/tax temporary differences are the book/tax differences in the timing of
the deductibility of various
expenses.
|
|
|
The difference between book-basis and tax-basis unrealized appreciation (depreciation)
is attributable to the tax
deferral of losses on wash sales and other book/tax basis adjustments.
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BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Report of independent registered public accounting firm
To the Board of Directors and Shareholders of BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the
schedule of investments, of BrandywineGLOBAL — Global Income Opportunities Fund Inc. (the “Fund”) as of October 31, 2024, the related statements of operations and cash flows for the year
ended October 31, 2024, the statement of changes in net assets for each of the two years in the period
ended October 31, 2024, including the related notes, and the financial highlights for each of the five
years in the period ended October 31, 2024 (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 October 31, 2024, 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 October 31, 2024 and
the financial highlights for each of the five years in the period ended October 31, 2024 in conformity with
accounting principles generally accepted in the United States of America.
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 October
31, 2024 by correspondence with the custodian 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
Baltimore, Maryland
December 20, 2024
We have served as the auditor of one or more investment companies in the Franklin
Templeton Group of Funds since 1948.
BrandywineGLOBAL — Global Income Opportunities Fund Inc. 2024 Annual Report
Board approval of management and
subadvisory agreements (unaudited)
Background
The Investment Company Act of 1940, as amended (the “1940 Act”), requires that the Board of Directors (the “Board”) of BrandywineGLOBAL Income Opportunities Fund Inc. (the “Fund”), including a majority of its members who are not considered to be “interested persons” under the 1940 Act (the “Independent Directors”) voting separately, approve on an annual basis the continuation of the investment management agreement (the “Management Agreement”) between the Fund and the Fund’s manager, Franklin Templeton Fund Adviser, LLC (formerly, Legg Mason Partners Fund Advisor, LLC) (“FTFA” or the “Manager”), and the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and Brandywine Global Investment Management, LLC (the “Sub-Adviser”), an affiliate of the Manager, with respect to the Fund.
At an in-person meeting (the “Contract Renewal Meeting”) held on May 20-21, 2024, the Board, including the Independent Directors, considered and approved the continuation
of each of the Management Agreement and the Sub-Advisory Agreement for an additional
one-year period. To assist in its consideration of the renewal of each of the Management
Agreement and the Sub-Advisory Agreement, the Board received and considered extensive
information (together with the information provided at the Contract Renewal Meeting,
the “Contract Renewal Information”) about the Manager and the Sub-Adviser, as well as the management and sub-advisory arrangements for the Fund and the other closed-end funds
in the same complex under the Board’s purview (the “Franklin Templeton Closed-end Funds”), certain portions of which are discussed below.
A presentation made by the Manager and the Sub-Adviser to the Board at the Contract
Renewal Meeting in connection with the Board’s evaluation of each of the Management Agreement and the Sub-Advisory Agreement encompassed the Fund and other Franklin Templeton Closed-end Funds. In addition to the Contract Renewal Information, the Board
received performance and other information throughout the year related to the respective
services rendered by the Manager and the Sub-Adviser to the Fund. The Board’s evaluation took into account the information received throughout the year and also reflected
the knowledge and experience gained as members of the Boards of the Fund and other Franklin
Templeton Closed-end Funds with respect to the services provided to the Fund by the
Manager and the Sub-Adviser. The information received and considered by the Board
(including its various committees) in conjunction with both the Contract Renewal Meeting
and throughout the year was both written and oral. The contractual arrangements discussed
below are the product of multiple years of review and negotiation and information
received and considered by the Board during each of those years.
At a meeting held on April 26, 2024, the Independent Directors, in preparation for
the Contract Renewal Meeting, met in a private session with their independent legal counsel
to review the Contract Renewal Information regarding the Franklin Templeton Closed-end
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Funds, including the Fund, received to date. No representatives of the Manager or
the Sub-Adviser participated in this meeting. Following the April 26, 2024 meeting, the Independent
Directors submitted certain questions and requests for additional information to Fund
management. The Independent Directors also met in private sessions with their independent legal counsel to consider the Contract Renewal Information and Fund management’s responses to the Independent Directors’ questions and requests for additional information in advance of and during the Contract Renewal Meeting. The
discussion below reflects all of these reviews.
The Manager provides the Fund with investment advisory and administrative services
pursuant to the Management Agreement and the Sub-Adviser provides the Fund with investment sub-advisory services pursuant to the Sub-Advisory Agreement. The discussion
below covers both the advisory and administrative functions being rendered by the
Manager, each such function being encompassed by the Management Agreement, and the
investment sub-advisory functions being rendered by the Sub-Adviser pursuant to the
Sub-Advisory Agreement.
Board Approval of Management Agreement and Sub-Advisory Agreement
The Independent Directors were advised by separate independent legal counsel throughout
the process. Prior to voting, the Independent Directors received a memorandum discussing
the legal standards for their consideration of the proposed continuation of the Management
Agreement and the Sub-Advisory Agreement. The Independent Directors considered the
Management Agreement and Sub-Advisory Agreement separately during the course of their
review. In doing so, they noted the respective roles of the Manager and the Sub-Adviser
in providing services to the Fund.
In approving the continuation of the Management Agreement and Sub-Advisory Agreement,
the Board, including the Independent Directors, considered a variety of factors, including
those factors discussed below. No single factor reviewed by the Board was identified
by the Board as the principal factor in determining whether to approve the continuation of
the Management Agreement and the Sub-Advisory Agreement. Each Director may have attributed different weight to the various factors in evaluating the Management Agreement
and the Sub-Advisory Agreement.
After considering all relevant factors and information, the Board, exercising its
reasonable business judgment, determined that the continuation of the Management Agreement and
Sub-Advisory Agreement were in the best interests of the Fund’s stockholders and approved the continuation of each such agreement for an additional one-year period.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
Nature, Extent and Quality of the Services under the Management Agreement and Sub-Advisory Agreement
The Board received and considered Contract Renewal Information regarding the nature,
extent, and quality of services provided to the Fund by the Manager and the Sub-Adviser
under the Management Agreement and the Sub-Advisory Agreement, respectively, during
the past year. The Board noted information received at regular meetings throughout
the year related to the services provided by the Manager in its management of the Fund’s affairs and the Manager’s role in coordinating the activities of the Sub-Adviser and the Fund’s other service providers. The Board observed that the scope of services provided by the Manager
and the Sub-Adviser, and of the undertakings required of the Manager and Sub-Adviser
in connection with those services, including maintaining and monitoring their respective
compliance programs as well as the Fund’s compliance programs, had expanded over time as a result of regulatory, market and other developments. The Board also noted that
on a regular basis it received and reviewed information from the Manager and the Sub-Adviser
regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the risks Fund borne by the Manager,
the Sub-Adviser and their respective affiliates on behalf of the Fund, including entrepreneurial,
operational, reputational, litigation and regulatory risks, as well as the Manager’s and the Sub-Adviser’s risk management processes.
The Board reviewed the qualifications, backgrounds, and responsibilities of the Manager’s senior personnel and the Sub-Adviser’s portfolio management team primarily responsible for the day-to-day portfolio management of the Fund. The Board also considered, based
on its knowledge of the Manager and its affiliates, the financial resources of Franklin
Resources, Inc., the parent organization of the Manager and the Sub-Adviser. The Board
recognized the importance of having a fund manager with significant resources.
The Board considered the division of responsibilities between the Manager and the
Sub-Adviser under the Management Agreement and the Sub-Advisory Agreement, respectively, including the Manager’s coordination and oversight of the services provided to the Fund by the Sub-Adviser and other fund service providers. The Management Agreement permits
the Manager to delegate certain of its responsibilities, including its investment advisory
duties thereunder, provided that the Manager, in each case, will supervise the activities
of the delegee.
In reaching its determinations regarding continuation of the Management Agreement
and the Sub-Advisory Agreement, the Board took into account that Fund stockholders, in
pursuing their investment goals and objectives, may have purchased their shares of
the Fund based upon the reputation and the investment style, philosophy and strategy of
the Manager and the Sub-Adviser, as well as the resources available to the Manager and
the Sub-Adviser.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
The Board concluded that, overall, the nature, extent, and quality of the management
and other services provided (and expected to be provided) to the Fund, under the Management
Agreement and the Sub-Advisory Agreement were satisfactory.
The Board received and considered information regarding Fund performance, including
information and analyses (the “Broadridge Performance Information”) for the Fund, as well as for a group of comparable funds (the “Performance Universe”) selected by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third-party provider of investment company data. The Board was provided with a description of the methodology Broadridge
used to determine the similarity of the Fund with the funds included in the Performance
Universe. It was noted that while the Board found the Broadridge Performance Information
generally useful, they recognized its limitations, including that the data may vary
depending on the end date selected, and that the results of the performance comparisons may
vary depending on the selection of the peer group and its composition over time. The Board
also noted that Board members had received and discussed with the Manager and the Sub-Adviser information throughout the year at periodic intervals comparing the Fund’s performance against its benchmark and against the Fund’s peers. In addition, the Board considered the Fund’s performance in view of overall financial market conditions.
The Broadridge Performance Information comparing the Fund’s performance to that of its Performance Universe, consisting of the Fund and all leveraged closed-end global income
funds classified by Broadridge, regardless of asset size, showed, among other data,
that based on net asset value per share, the Fund’s performance was above the median for the 1- and 5-year periods ended December 31, 2023, and was below the median for the 3-
and 10-year periods ended December 31, 2023. The Board noted the explanations from the
Manager and the Sub-Adviser regarding the Fund’s relative performance versus the Performance Universe for the various periods.
Based on the reviews and discussions of Fund performance and considering other relevant
factors, including an agreement at the Contract Renewal Meeting by the Manager to
continue the current voluntary fee waiver of 0.20% through May 31, 2025 (the “Fee Waiver”) and other factors noted above, the Board concluded, under the circumstances, that continuation of the Management Agreement and the Sub-Advisory Agreement for an additional one-year period would be consistent with the interests of the Fund and
its stockholders.
Management and Sub-Advisory Fees and Expense Ratios
The Board reviewed and considered the contractual management fee (the “Contractual Management Fee”) and the actual management fee (the “Actual Management Fee”) payable by the Fund to the Manager under the Management Agreement and the sub-advisory fee (the “Sub-Advisory Fee”) payable by the Manager to the Sub-Adviser under the
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
Sub-Advisory Agreement in view of the nature, extent and overall quality of the management, investment advisory and other services provided by the Manager and the
Sub-Adviser, respectively. The Board noted that the Sub-Advisory Fee is paid by the
Manager, not the Fund, and, accordingly, that the retention of the Sub-Adviser does
not increase the fees or expenses otherwise incurred by the Fund’s stockholders.
In addition, the Board received and considered information and analyses prepared by
Broadridge (the “Broadridge Expense Information”) comparing the Contractual Management Fee and the Actual Management Fee and the Fund’s total actual expenses with those of funds in an expense group (the “Expense Group”), as well as a broader group of funds, each selected and provided by Broadridge. The comparison was based upon the constituent
funds’ latest fiscal years. It was noted that while the Board found the Broadridge Expense Information generally useful, they recognized its limitations, including that the
data may vary depending on the selection of the peer group.
The Broadridge Expense Information showed that the Fund’s Contractual Management Fee was below the median. The Broadridge Expense Information also showed that the Fund’s Actual Management Fee was above the median based on common share assets and below
the median based on leveraged assets. The Broadridge Expense Information also showed
that the Fund’s actual total expenses were above the median based on both common share assets and leveraged assets. The Board took into account management’s discussion of the Fund’s expenses and noted the limited size of the Expense Group. The Board also considered the Manager’s agreement to continue the Fee Waiver for an additional year.
The Board also reviewed Contract Renewal Information regarding fees charged by the
Manager and/or the Sub-Adviser to other U.S. clients investing primarily in an asset
class similar to that of the Fund, including, where applicable, institutional and separate
accounts. The Manager reviewed with the Board the differences in services provided to these
different types of accounts, noting that the Fund is provided with certain administrative
services, office facilities, and Fund officers, and that the Fund is subject not only
to heightened regulatory requirements relative to institutional clients but also to requirements
for listing on the New York Stock Exchange, and that the Manager coordinates and oversees the provision of services to the Fund by other fund service providers. The
Board considered the fee comparisons in view of the different services provided in managing
these other types of clients and funds.
The Board considered the overall management fee, the fees of the Sub-Adviser and the
amount of the management fee retained by the Manager after payment of the subadvisory
fee in each case in view of the services rendered for those amounts. The Board also
received an analysis of complex-wide management fees provided by the Manager, which,
among other things, set out a framework of fees based on asset classes.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Taking all of the above into consideration, as well as the factors identified below,
the Board determined that the management fee and the Sub-Advisory Fee were reasonable in view
of the nature, extent and overall quality of the management, investment advisory and
other services provided by the Manager and the Sub-Adviser to the Fund under the Management
Agreement and the Sub-Advisory Agreement, respectively.
The Board, as part of the Contract Renewal Information, received an analysis of the
profitability to the Manager and its affiliates in providing services to the Fund
for the Manager’s fiscal years ended September 30, 2023 and September 30, 2022. The Board also received profitability information with respect to the Franklin Templeton fund complex
as a whole. In addition, the Board received Contract Renewal Information with respect to
the Manager’s revenue and cost allocation methodologies used in preparing such profitability data. It was noted that the allocation methodologies had been reviewed by an outside
consultant. The profitability to the Sub-Adviser was not considered to be a material
factor in the Board’s considerations since the Sub-Advisory Fee is paid by the Manager, not the Fund, although the Board noted the affiliation of the Manager with the Sub-Adviser.
The profitability of the Manager and its affiliates was considered by the Board to be
reasonable in view of the nature, extent and quality of services provided to the Fund.
The Board received and discussed Contract Renewal Information concerning whether the
Manager realizes economies of scale if the Fund’s assets grow. The Board noted that because the Fund is a closed-end fund it has limited ability to increase its assets.
The Board determined that the management fee structure was appropriate under the circumstances.
For similar reasons as stated above with respect to the Sub-Adviser’s profitability and the costs of the Sub-Adviser’s provision of services, the Board did not consider the potential for economies of scale in the Sub-Adviser’s management of the Fund to be a material factor in the Board’s consideration of the Sub-Advisory Agreement.
Other Benefits to the Manager and the Sub-Adviser
The Board considered other benefits received by the Manager, the Sub-Adviser and their
affiliates as a result of their relationship with the Fund, including the opportunity
to offer additional products and services to the Fund’s stockholders. In view of the costs of providing investment management and other services to the Fund and the ongoing commitment of
the Manager and the Sub-Adviser to the Fund, the Board considered that the ancillary benefits
that the Manager and its affiliates, including the Sub-Adviser, were reasonable.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Additional information (unaudited)
Information about Directors and Officers
The business and affairs of BrandywineGLOBAL — Global Income Opportunities Fund Inc. (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Directors. The business address of each Director is c/o
Jane Trust, Franklin Templeton, 280 Park Avenue, 8th Floor, New York, New York 10017.
Information pertaining to the Directors and officers of the Fund is set forth below.
The Fund’s annual proxy statement includes additional information about Directors and is
available, without charge, upon request by calling the Fund at 1-888-777-0102.
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Position(s) held with Fund1
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Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, and Compliance Liaison,
Class III
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Member of the Advisory Committee of the Dispute Resolution
Research Center at the Kellogg Graduate School of Business,
Northwestern University (2002 to 2016); formerly, Deputy
General Counsel responsible for western hemisphere matters
for BP PLC (1999 to 2001); Associate General Counsel at Amoco
Corporation responsible for corporate, chemical, and refining
and marketing matters and special assignments (1993 to 1998)
(Amoco merged with British Petroleum in 1998 forming BP PLC)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Position(s) held with Fund1
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Director and Member of Nominating, Audit and Compensation
Committees, and Chair of Pricing and Valuation Committee,
Class I
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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President, Colman Consulting Company (consulting)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Independent Directors† (cont’d)
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Position(s) held with Fund1
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Director and Member of Audit, Compensation and Pricing and
Valuation Committees, and Chair of Nominating Committee,
Class I
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Retired; formerly, Associate General Counsel, Pfizer Inc. (prior to
and including 2004)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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|
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Position(s) held with Fund1
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Director and Member of Nominating, Audit, and Pricing and
Valuation Committees, and Chair of Compensation Committee,
Class I
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Emeritus Professor of French and Italian (since 2014) and
formerly, Vice President and Dean of The College of Liberal Arts
(1984 to 2009) and Professor of French and Italian (2009 to 2014)
at Drew University
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Position(s) held with Fund1
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Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, Class I
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Retired; Founder, Managing Director and Partner of American
Securities Opportunity Funds (private equity and credit firm)
(2006 to 2018); formerly, Senior Managing Director of Evercore
Partners Inc. (investment banking) (2001 to 2004); Senior
Managing Director of Joseph Littlejohn & Levy, Inc. (private
equity firm) (1999 to 2001); Senior Managing Director of The
Blackstone Group L.P. (private equity and credit firm) (1991 to
1999)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Director of Littelfuse, Inc. (electronics manufacturing) (since
1991); formerly, Director of Oaktree Acquisition Corp. II (2020
to 2022); Director of Oaktree Acquisition Corp. (2019 to 2021)
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Additional information (unaudited) (cont’d)
Information about Directors and Officers
Independent Directors† (cont’d)
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Position(s) held with Fund1
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Chair and Member of Nominating, Compensation, Pricing and
Valuation and Audit Committees, Class III
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Chief Executive Officer, The Governance Partners, LLC
(consulting firm) (since 2015); National Association of Corporate
Directors Board Leadership Fellow (since 2016, with Directorship
Certification since 2019) and NACD 2022 Directorship 100
honoree; Adjunct Professor, Georgetown University Law Center
(since 2021); Adjunct Professor, The University of Chicago Law
School (since 2018); Adjunct Professor, University of Iowa
College of Law (since 2007); formerly, Chief Financial Officer,
Press Ganey Associates (health care informatics company) (2012
to 2014); Managing Director and Chief Financial Officer,
Houlihan Lokey (international investment bank) and President,
Houlihan Lokey Foundation (2010 to 2012)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Director, VALIC Company I (since October 2022); Director of ACV
Auctions Inc. (since 2021); Director of Associated Banc-Corp
(financial services company) (since 2007); formerly, Director of
Hochschild Mining plc (precious metals company) (2016
to 2023); formerly Trustee of AIG Funds and Anchor Series Trust
(2018 to 2021)
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Position(s) held with Fund1
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Director and Member of Nominating, Compensation and Pricing
and Valuation Committees, and Chair of the Audit Committee,
Class II
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Formerly, Managing Director and the Chief Financial Officer and
Chief Compliance Officer of Greenbriar Equity Group, LP (2011
to 2021); formerly, Chief Financial Officer and Chief
Administrative Officer of Rent the Runway, Inc. (2011); Executive
Vice President and Chief Financial Officer of AOL LLC, a
subsidiary of Time Warner Inc. (2007 to 2009); Member of the
Council of Foreign Relations
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Director of Birkenstock Holding plc (since 2023); Director of The
India Fund, Inc. (since 2016); formerly, Director of Aberdeen
Income Credit Strategies Fund (2017 to 2018); and Director of
The Asia Tigers Fund, Inc. (2016 to 2018)
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Independent Directors† (cont’d)
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Position(s) held with Fund1
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Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, Class III
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Arbitrator and Mediator (self-employed) (since 2021); formerly,
Global General Counsel of UNICEF (non-governmental
organization) (1998-2021)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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Chairman of University of Sydney USA Foundation (since 2020);
Director of the Radio Workshop US, Inc. (since 2023)
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Position(s) held with Fund1
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Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, Class II
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Agnes Williams Sesquicentennial Professor of Leadership and
Corporate Governance, Georgetown Law; and Professor of
Management, McDonough School of Business (since 2018);
formerly, Associate Dean for Strategy, Georgetown Law (2020-
2023); National Association of Corporate Directors Board Faculty
Member (since 2021); formerly, a Member of the Board of
Governors of FINRA (2016-2022)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Other board memberships held by Director during the past five
years
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CBOE U.S. Securities Exchanges, CBOE Futures Exchange, and
CBOE SEF, Director (since 2022); Advisory Board Member of
Foundation Press (academic book publisher) (since 2019); Chair
of DirectWomen Board Institute (since 2019); formerly, Member
of DirectWomen Board (nonprofit) (2007-2022)
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Additional information (unaudited) (cont’d)
Information about Directors and Officers
Interested Director and Officer
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Position(s) held with Fund1
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Director, President and Chief Executive Officer, Class II
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Senior Vice President, Fund Board Management, Franklin
Templeton (since 2020); Officer and/or Trustee/Director of 115
funds associated with FTFA or its affiliates (since 2015);
President and Chief Executive Officer of FTFA (since 2015);
formerly, Senior Managing Director (2018 to 2020) and
Managing Director (2016 to 2018) of Legg Mason & Co., LLC
(“Legg Mason & Co.”); and Senior Vice President of FTFA (2015)
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Number of portfolios in fund complex overseen by Director
(including the Fund)
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Trustee/Director of Franklin Templeton funds consisting of 115
portfolios; Trustee of Putnam Family of Funds consisting of 105
portfolios
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Other board memberships held by Director during the past five
years
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Franklin Templeton
280 Park Avenue, 8th Floor, New York, NY 10017
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Position(s) held with Fund1
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Director - Global Compliance of Franklin Templeton (since 2020);
Managing Director of Legg Mason & Co. (2006 to 2020); Director
of Compliance, Legg Mason Office of the Chief Compliance
Officer (2006 to 2020); formerly, Chief Compliance Officer of
Legg Mason Global Asset Allocation (prior to 2014); Chief
Compliance Officer of Legg Mason Private Portfolio Group (prior
to 2013); formerly, Chief Compliance Officer of The Reserve
Funds (investment adviser, funds and broker-dealer) (2004) and
Ambac Financial Group (investment adviser, funds and broker-
dealer) (2000 to 2003)
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Franklin Templeton
100 First Stamford Place, 6th Floor, Stamford, CT 06902
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Position(s) held with Fund1
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Secretary and Chief Legal Officer
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Associate General Counsel of Franklin Templeton (since 2020);
Secretary and Chief Legal Officer of certain funds associated
with Legg Mason & Co. or its affiliates since 2020); Assistant
Secretary of certain funds associated with Legg Mason & Co. or
its affiliates (since 2006); formerly, Managing Director (2016
to 2020) and Associate General Counsel of Legg Mason & Co.
(2005 to 2020)
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Additional Officers (cont’d)
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Franklin Templeton
100 First Stamford Place, 6th Floor, Stamford, CT 06902
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Position(s) held with Fund1
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Senior Associate General Counsel of Franklin Templeton
(since 2020); Secretary of FTFA (since 2006); Assistant Secretary
of certain funds associated with Legg Mason & Co. or its
affiliates (since 2006); Secretary of LM Asset Services, LLC
(“LMAS”) (since 2002) and Legg Mason Fund Asset
Management, Inc. (“LMFAM”) (since 2013) (formerly registered
investment advisers); formerly, Managing Director and Deputy
General Counsel of Legg Mason & Co. (2005 to 2020) and
Assistant Secretary of certain funds in the fund complex (2006
to 2022)
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Franklin Templeton
280 Park Avenue, 8th Floor, New York, NY 10017
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Position(s) held with Fund1
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Treasurer and Principal Financial Officer
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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Vice President, Fund Administration and Reporting, Franklin
Templeton (since 2020); Treasurer (since 2010) and Principal
Financial Officer (since 2019) of certain funds associated with
Legg Mason & Co. or its affiliates; formerly, Managing
Director (2020), Director (2015 to 2020), and Vice President (2011
to 2015) of Legg Mason & Co.
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Franklin Templeton
280 Park Avenue, 8th Floor, New York, NY 10017
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Position(s) held with Fund1
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Term of office1 and length of time served
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Principal occupation(s) during the past five years
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U.S. Fund Board Team Manager, Franklin Templeton (since 2020);
Senior Vice President of certain funds associated with Legg
Mason & Co. or its affiliates (since 2007); Senior Vice President
of FTFA (since 2006); President and Chief Executive Officer of
LMAS and LMFAM (since 2015); formerly, Managing Director of
Legg Mason & Co. (2005 to 2020); Senior Vice President of
LMFAM (2013 to 2015)
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†
Directors who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).
*
Effective November 15, 2024, Ms. Sale and Messrs. Grillo and Mason became Directors
of the Fund.
**
Effective November 15, 2024, Ms. Kamerick became Chair of the Board.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Additional information (unaudited) (cont’d)
Information about Directors and Officers
1
The Fund’s Board of Directors is divided into three classes: Class I, Class II and Class III. The terms of office of the Class I, II and III Directors expire at the Annual Meetings of Stockholders in
the year 2025, year 2026 and year 2027, respectively, or thereafter in each case when their respective successors
are duly elected and qualified. The Fund’s executive officers are chosen each year, to hold office until their successors are duly elected and qualified.
2
Ms. Trust is an “interested person” of the Fund as defined in the 1940 Act because Ms. Trust is an officer of FTFA and certain of its affiliates.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Annual chief executive officer and
principal financial officer certifications (unaudited)
The Fund’s Chief Executive Officer (“CEO”) has submitted to the NYSE the required annual certification and the Fund also has included the Certifications of the Fund’s CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC for the period of this report.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Other shareholder communications regarding accounting matters (unaudited)
The Fund’s Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting
controls or auditing matters (collectively, “Accounting Matters”). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Chief Compliance Officer (“CCO”). Persons who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Fund’s Audit Committee Chair. Complaints may be submitted on an anonymous basis.
The CCO may be contacted at:
Franklin Resources Inc.
Compliance Department
280 Park Ave, 8th Floor
New York, NY 10017
Complaints may also be submitted by telephone at 1-800-742-5274. Complaints submitted
through this number will be received by the CCO.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited)
Investment Objectives
The Fund’s primary investment objective is to provide current income. As a secondary investment objective, the Fund will seek capital appreciation.
Principal Investment Policies and Strategies
The Fund seeks to achieve its investment objectives by investing, under normal market
conditions, at least 80% of its Managed Assets (as defined herein) in global fixed-income
securities. These may include, but are not limited to, sovereign debt of developed
and emerging market countries, U.S. and non-U.S. corporate debt, mortgage-backed securities
and currency exposure. The Fund may manage its currency exposure through the use of
futures, forwards and other derivative instruments for hedging and investment purposes.
The Fund’s specific investments will shift as the Fund rotates among countries, credits and currencies to find the most attractive values over time. Under normal market conditions,
no more than 55% of the Fund’s Managed Assets may be rated below investment grade (commonly known as “high-yield” or “junk”) by a nationally recognized statistical rating organization or non-rated securities determined to be of comparable quality; provided
however, that the quality of a security will be based on the highest rating it receives.
Moreover, the Fund will not invest more than 10% of its Managed Assets in CCC or below
rated securities, including non-rated securities determined to be of comparable quality
by Brandywine.
In addition, under normal market conditions, at least 40% of the Fund’s Managed Assets will be invested in non-U.S. countries or currencies.
The Fund may also invest up to 20% of its Managed Assets in common or preferred stocks
of U.S. and non-U.S. issuers.
Furthermore, the Fund may invest up to 20% of its Managed Assets in non-agency residential and commercial mortgage backed securities. The Fund will not invest more
than 15% of its Managed Assets in non-agency residential and commercial mortgage backed
securities that are rated below investment grade. The Fund will not invest in collateralized
loan obligations or collateralized debt obligations.
The Fund may invest up to 20% of its Managed Assets in securities that, at the time
of investment, are considered illiquid securities.
With respect to corporate bonds in the Fund, no more than 5% of the Fund’s Managed Assets may be invested in any one issuer of such bonds.
The Fund may use currency derivative instruments to gain exposure to or hedge its
exposure to non-U.S. currency. The Fund may also use derivative instruments to gain exposure
to or hedge its exposure to fixed-income securities primarily through the use of credit
default swaps but may also use other derivative instruments. The Fund may invest without
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
limitation in derivative instruments related to currencies, including options contracts,
futures contracts, options on futures contracts, forward contracts and swap agreements
and combinations thereof. Under normal market conditions, the notional value of the Fund’s derivatives will not exceed 100% of the Fund’s Managed Assets when used to hedge the U.S. dollar, 65% of the Fund’s Managed Assets when resulting in non-U.S. dollar currency exposure and 25% of the Fund’s Managed Assets for non-currency derivatives.
The Fund may enter into various interest rate transactions, such as interest rate
swaps and the purchase or sale of interest rate caps and floors. The Fund may enter into, among
other things, fixed-for-floating rate swaps in the same currency, fixed-for-floating rate
swaps in different currencies, floating-for-floating rate swaps in the same currency, floating-for-floating rate swaps in different currencies, or fixed-for-fixed rate swaps in different currencies. The Fund may enter into total return swaps. The Fund may enter into these
transactions to hedge the value of the Fund’s portfolio to seek to increase its return, to preserve a return or spread on a particular investment or portion of its portfolio,
or for investment purposes.
The Fund may enter into repurchase agreements, in which the Fund purchases a security
from a bank or broker-dealer and the bank or broker-dealer agrees to repurchase the
security at the Fund’s cost plus interest within a specified time.
The Fund may lend its portfolio securities so long as the terms and the structure
of such loans are not inconsistent with the requirements of the 1940 Act.
The Fund is a non-diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not
intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. Your Common Stock at any point in time may be worth less than you invested,
even after taking into account the reinvestment of Fund dividends and distributions.
Investment and Market Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Your investment
in the Common Stock represents an indirect investment in the fixed income securities and
other investments owned by the Fund, most of which could be purchased directly. The value
of the Fund’s portfolio securities may move up or down, sometimes rapidly and unpredictably. At any point in time, your Common Stock may be worth less than your original investment,
even after taking into account the reinvestment of Fund dividends and distributions.
Below Investment Grade (High-Yield or Junk Bond) Securities Risk. Under normal market conditions, no more than 55% of the Fund’s Managed Assets may be rated below investment grade, which include securities that, at the time of investment, are rated
Ba1 or
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
lower by Moody’s, BB+ or lower by S&P, or BB+ or lower by Fitch (commonly known as “high-yield” or “junk”), by a nationally recognized NRSRO or determined to be of comparable quality; provided however, that the quality of a security will be based
on the highest rating it receives. High yield debt securities are generally subject to greater
credit risks than higher-grade debt securities, including the risk of default on the payment
of interest or principal. High yield debt securities are considered speculative, typically
have lower liquidity and are more difficult to value than higher grade bonds. High yield
debt securities tend to be volatile and more susceptible to adverse events, credit downgrades
and negative sentiments and may be difficult to sell at a desired price, or at all,
during periods of uncertainty or market turmoil.
Non-U.S. Government, or Sovereign, Debt Securities Risk. The Fund invests in non-U.S. government, or sovereign, debt securities. Non-U.S. government, or sovereign, debt
securities involve many of the risks of foreign and emerging markets investments as
well as the risk of debt moratorium, repudiation or renegotiation, and the Fund may be unable
to enforce its rights against the issuers. Sovereign debt risk is increased for emerging
market issuers.
Fixed Income Securities Risk. In addition to the risks described elsewhere in this section with respect to valuations and liquidity, fixed income securities, including high-yield
securities, are also subject to certain risks, including:
•
Issuer Risk. The value of fixed income securities may decline for a number of reasons
that directly relate to the issuer, such as management performance, financial leverage
and reduced demand for the issuer’s goods and services.
•
Interest Rate Risk. The market price of the Fund’s investments will change in response to
changes in interest rates and other factors. During periods of declining interest
rates, the
market price of fixed income securities generally rises. Conversely, during periods
of
rising interest rates, the market price of such securities generally declines. The
magnitude of these fluctuations in the market price of fixed income securities is
generally
greater for securities with longer maturities. Additionally, such risk may be greater
during
the current period of historically low interest rates. Fluctuations in the market
price of the
Fund’s securities will not affect interest income derived from securities already owned by
the Fund, but will be reflected in the Fund’s net asset value. The Fund may utilize certain
strategies, including investments in structured notes or interest rate swap or cap
transactions, for the purpose of reducing the interest rate sensitivity of the portfolio
and
decreasing the Fund’s exposure to interest rate risk, although there is no assurance that it
will do so or that such strategies will be successful.
•
Prepayment Risk. During periods of declining interest rates, the issuer of a security may
exercise its option to prepay principal earlier than scheduled, forcing the Fund to
reinvest
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
the proceeds from such prepayment in lower yielding securities, which may result in
a decline in the Fund’s income and distributions to stockholders. This is known as prepayment or “call” risk. Debt securities frequently have call features that allow the issuer to redeem the security at dates prior to its stated maturity at a specified
price (typically greater than par) only if certain prescribed conditions are met. An issuer
may choose to redeem a debt security if, for example, the issuer can refinance the debt
at a lower cost due to declining interest rates or an improvement in the credit standing
of the issuer.
•
Reinvestment Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will
decline if and when the Fund invests the proceeds from matured, traded or called fixed
income securities at market interest rates that are below the portfolio’s current earnings
rate. A decline in income could affect the Fund’s Common Stock price, its distributions or
Credit Risk. If an issuer or guarantor of a security held by the Fund or a counterparty to a
financial contract with the Fund defaults or its credit is downgraded, or is perceived
to be less creditworthy, or if the value of the assets underlying a security declines, the
value of your investment will typically decline. Changes in actual or perceived creditworthiness
may occur quickly. The Fund could be delayed or hindered in its enforcement of rights
against an issuer, guarantor or counterparty. Subordinated securities are more likely to suffer
a credit loss than non-subordinated securities of the same issuer and will be disproportionately
affected by a default, downgrade or perceived decline in creditworthiness.
Foreign Securities and Emerging Markets Risk. A fund that invests in foreign (non-U.S.) securities may experience more rapid and extreme changes in value than a fund that
invests exclusively in securities of U.S. companies. The securities markets of many foreign
countries are relatively small, with a limited number of companies representing a
small number of industries. Investments in foreign securities (including those denominated
in U.S. dollars) are subject to economic and political developments in the countries and regions
where the issuers operate or are domiciled, or where the securities are traded, such
as changes in economic or monetary policies. Values may also be affected by restrictions
on receiving the investment proceeds from a foreign country. Less information may be
publicly available about foreign companies than about U.S. companies. Foreign companies are
generally not subject to the same accounting, auditing and financial reporting standards
as are U.S. companies. In addition, the Fund’s investments in foreign securities may be subject to the risk of nationalization or expropriation of assets, imposition of currency
exchange controls or restrictions on the repatriation of foreign currency, confiscatory taxation,
political or financial instability and adverse diplomatic developments. In addition,
there may be difficulty in obtaining or enforcing a court judgment abroad. Dividends or interest
on, or
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
proceeds from the sale of, foreign securities may be subject to non-U.S. withholding
taxes, and special U.S. tax considerations may apply.
The risks of foreign investment are greater for investments in emerging markets. The
Fund considers an investment to be in an emerging market if the local currency long-term
debt rating assigned by all NRSROs to debt issued by that country is below A-. Emerging
market countries typically have economic and political systems that are less fully developed,
and that can be expected to be less stable, than those of more advanced countries. Low
trading volumes may result in a lack of liquidity and in price volatility. Emerging market
countries may have policies that restrict investment by foreigners, that require governmental
approval prior to investments by foreign persons, or that prevent foreign investors from withdrawing
their money at will. An investment in emerging market securities should be considered
speculative.
Currency Risk. The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could erase investment
gains or add to investment losses. Currency exchange rates can be volatile, and are
affected by factors such as general economic conditions, the actions of the U.S. and
foreign governments or central banks, the imposition of currency controls and speculation.
The Fund may be unable or may choose not to hedge its foreign currency exposure.
Derivatives Risk. The Fund may utilize a variety of derivative instruments for hedging and investment purposes. Derivative instruments include options contracts, derivative
instruments related to currencies, forward contracts, futures contracts, options on
futures contracts, indexed securities, credit default swaps and other swap agreements. Using
derivatives can increase Fund losses and reduce opportunities for gains when market
prices, interest rates, currencies, or the derivatives themselves behave in a way
not anticipated by the Fund. Using derivatives also can have a leveraging effect and increase
Fund volatility. Certain derivatives have the potential for unlimited loss, regardless
of the size of the initial investment. Derivatives may not be available at the time or price
desired, may be difficult to sell, unwind or value, and the counterparty may default on its
obligations to the Fund. Derivatives are generally subject to the risks applicable to the assets,
rates, indices or other indicators underlying the derivative. The value of a derivative may
fluctuate more than the underlying assets, rates, indices or other indicators to which it relates.
Use of derivatives may have different tax consequences for the Fund than an investment in
the underlying security, and those differences may affect the amount, timing and character
of income distributed to shareholders. The U.S. government and foreign governments are
in the process of adopting and implementing regulations governing derivatives markets,
including mandatory clearing of certain derivatives, margin and reporting requirements.
The ultimate impact of the regulations remains unclear. Additional regulation of derivatives
may
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
make derivatives more costly, limit their availability or utility, otherwise adversely
affect their performance or disrupt markets.
Effective August 19, 2022, the Fund began operating under Rule 18f-4 under the 1940
Act which, among other things, governs the use of derivative investments and certain financing
transactions (e.g. reverse repurchase agreements) by registered investment companies.
Among other things, Rule 18f-4 requires funds that invest in derivative instruments
beyond a specified limited amount to apply a value at risk (VaR) based limit to their use
of certain derivative instruments and financing transactions and to adopt and implement a derivatives
risk management program. A fund that uses derivative instruments in a limited amount
is not subject to the full requirements of Rule 18f-4. Compliance with Rule 18f-4 by
the Fund could, among other things, make derivatives more costly, limit their availability
or utility, or otherwise adversely affect their performance. Rule 18f-4 may limit the Fund’s ability to use derivatives as part of its investment strategy.
Credit default swap contracts involve heightened risks and may result in losses to
the Fund. Credit default swaps may be illiquid and difficult to value. When the Fund sells credit
protection via a credit default swap, credit risk increases since the Fund has exposure
to both the issuer whose credit is the subject of the swap and the counterparty to the
swap.
Repurchase Agreements Risk. Subject to its investment objectives and policies, the Fund may invest in repurchase agreements for leverage or investment purposes. Repurchase
agreements typically involve the acquisition by the Fund of debt securities from a
selling financial institution such as a bank, savings and loan association or broker-dealer.
The agreement provides that the Fund will sell the securities back to the institution
at a fixed time in the future. The Fund does not bear the risk of a decline in the value of the
underlying security unless the seller defaults under its repurchase obligation. In the event
of the bankruptcy or other default of a seller of a repurchase agreement, the Fund could
experience both delays in liquidating the underlying securities and losses, including
possible decline in the value of the underlying security during the period in which
the Fund seeks to enforce its rights thereto; possible lack of access to income on the underlying
security during this period; and expenses of enforcing its rights. While repurchase
agreements involve certain risks not associated with direct investments in debt securities,
the Fund follows procedures approved by the Fund’s Board of Directors that are designed to minimize such risks. These procedures include effecting repurchase transactions only
with large, well-capitalized and well-established financial institutions whose financial
condition will be continually monitored by Brandywine. In addition, the value of the collateral
underlying the repurchase agreement will be at least equal to the repurchase price,
including any accrued interest earned on the repurchase agreement. In the event of
a default or bankruptcy by a selling financial institution, the Fund generally will
seek to liquidate such collateral. However, the exercise of the Fund’s right to liquidate such
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
collateral could involve certain costs or delays and, to the extent that proceeds
from any sale upon a default of the obligation to repurchase were less than the repurchase
price, the Fund could suffer a loss.
Leverage Risk. The Fund may utilize leverage in an amount up to 33 1/3% of the Fund’s Managed Assets through Borrowings and 50% of the Fund’s Managed Assets through the issuance of Preferred Stock. The value of your investment may be more volatile if
the fund borrows or uses instruments, such as derivatives, that have a leveraging effect on the fund’s portfolio. Other risks described in the Prospectus also will be compounded because
leverage generally magnifies the effect of a change in the value of an asset and creates
a risk of loss of value on a larger pool of assets than the fund would otherwise have
had. The fund may also have to sell assets at inopportune times to satisfy its obligations
created by the use of leverage or derivatives. The use of leverage is considered to be a speculative
investment practice and may result in the loss of a substantial amount, and possibly
all, of the fund’s assets. In addition, the fund’s portfolio will be leveraged if it exercises its right to delay payment on a redemption, and losses will result if the value of the fund’s assets declines between the time a redemption request is deemed to be received by the fund
and the time the fund liquidates assets to meet redemption requests.
Reverse Repurchase Agreements Risk. The Fund’s use of reverse repurchase agreements is a form of leverage and therefore involves many of the same risks involved in the Fund’s use of leverage described above, as the proceeds from reverse repurchase agreements generally will be invested in additional securities. There is a risk that the market
value of the securities sold by the Fund in the reverse repurchase agreement may decline below
the price at which the Fund remains obligated to repurchase such securities. In addition,
there is a risk that the market value of the securities retained by the Fund may decline.
If the buyer of securities under a reverse repurchase agreement were to file for bankruptcy
or experiences insolvency, the Fund may be adversely affected. Also, in entering into
reverse repurchase agreements, the Fund would bear the risk of loss to the extent that the
proceeds of the reverse repurchase agreement are less than the value of the underlying securities.
In addition, due to the interest costs associated with reverse repurchase agreements
transactions, the Fund’s NAV will decline, and, in some cases, the Fund may be worse off than if it had not used such instruments.
Liquidity Risk. The Fund may invest up to 20% of its Managed Assets in Illiquid Securities. Liquidity risk exists when particular investments are difficult to sell. Securities
may become illiquid after purchase by the Fund, particularly during periods of market turmoil.
When the Fund holds illiquid investments, the portfolio may be harder to value, especially
in changing markets, and if the Fund is forced to sell these investments in order to segregate
assets or for other cash needs, the Fund may suffer a loss.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
Distressed Investment Risk. The Fund intends to invest in distressed investments including non-performing and sub-performing agency and non-agency residential MBS and commercial MBS, many of which are not publicly traded and which may involve a substantial degree of risk. In certain periods, there may be little or no liquidity
in the markets for these securities or instruments. In addition, the prices of such securities
or instruments may be subject to periods of abrupt and erratic market movements and above-average price volatility. It may be more difficult to value such securities and the spread
between the bid and asked prices of such securities may be greater than normally expected.
If Brandywine’s evaluation of the risks and anticipated outcome of an investment in a distressed security should prove incorrect, the Fund may lose a substantial portion
or all of its investment. Certain categories MBS have been referred to by the financial media
as “toxic assets.” If the market continues to view such assets as impaired over the life of the Fund, the Fund may not be able to dispose of such assets or dispose of them at a good
return.
Mortgage-Backed or Mortgage-Related Securities Risk. To the extent the Fund invests in mortgage-backed or mortgage-related securities, its exposure to prepayment and extension
risks may be greater than other investments in fixed income securities. Mortgage derivatives held by the Fund may have especially volatile prices and may have a disproportionate effect on the Fund’s share price. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in
interest rates. In addition, mortgage-related securities are subject to prepayment risk—the risk that borrowers may pay off their mortgages sooner than expected, particularly when interest
rates decline. This can reduce the Fund’s returns because the Fund may have to reinvest that money at lower prevailing interest rates.
Credit Risk Associated with Originators and Servicers of Residential and Commercial
Mortgage Loans. A number of originators and servicers of residential and commercial mortgage loans, including some of the largest originators and servicers in the residential
and commercial mortgage loan market, have experienced serious financial difficulties,
including some that are now subject to federal insolvency proceedings. These difficulties
have resulted from many factors, including increased competition among originators
for borrowers, decreased originations by such originators of mortgage loans and increased
delinquencies and defaults on such mortgage loans, as well as from increases in claims
for repurchases of mortgage loans previously sold by them under agreements that require
repurchase in the event of breaches of representations regarding loan quality and
characteristics. Furthermore, the inability of the originator to repurchase such mortgage
loans in the event of loan representation breaches or the servicer to repurchase such
mortgage loans upon a breach of its servicing obligations also may affect the performance
of related RMBS. Many of these originators and servicers are very highly leveraged.
These difficulties may also increase the chances that these entities may default on their
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
warehousing or other credit lines or become insolvent or bankrupt, thereby increasing
both the likelihood that repurchase obligations will not be fulfilled and the potential
for loss to holders of non-agency RMBS and subordinated security holders.
Subprime Mortgage Market Risk. The Fund may acquire non-agency RMBS backed by collateral pools of mortgage loans that have been originated using underwriting standards
that are less restrictive than those used in underwriting “prime mortgage loans” and “Alt-A mortgage loans.” These lower standards include mortgage loans made to borrowers having imperfect or impaired credit histories, mortgage loans where the amount of the loan
at origination is 80% or more of the value of the mortgage property, mortgage loans made
to borrowers with low credit scores, mortgage loans made to borrowers who have other
debt that represents a large portion of their income and mortgage loans made to borrowers
whose income is not required to be disclosed or verified. Due to economic conditions,
including increased interest rates and lower home prices, as well as aggressive lending
practices, subprime mortgage loans have in recent periods experienced increased rates
of delinquency, foreclosure, bankruptcy and loss, and they are likely to continue to
experience delinquency, foreclosure, bankruptcy and loss rates that are higher, and that may
be substantially higher, than those experienced by mortgage loans underwritten in a more
traditional manner. Thus, because of the higher delinquency rates and losses associated
with subprime mortgage loans, the performance of non-agency RMBS backed by subprime
mortgage loans that the Fund may acquire could be correspondingly adversely affected,
which could adversely impact the Fund’s results of operations, financial condition and business.
Management Risk. The Fund is subject to management risk because it is an actively managed investment portfolio. Brandywine and each individual portfolio manager may
not be successful in selecting the best performing securities or investment techniques,
and the Fund’s performance may lag behind that of similar funds.
Potential Conflicts of Interest Risk—Allocation of Investment Opportunities. FTFA, Brandywine and their affiliates are involved worldwide with a broad spectrum of financial
services and asset management activities and may engage in the ordinary course of
business in activities in which their interests or the interests of their clients
may conflict with those of the Fund. FTFA, Brandywine and their affiliates may provide investment
management services to other funds and discretionary managed accounts that follow
an investment program similar to that of the Fund. Subject to the requirements of the
1940 Act, FTFA, Brandywine and their affiliates intend to engage in such activities and may
receive compensation from third parties for their services. Neither FTFA, Brandywine nor their
affiliates are under any obligation to share any investment opportunity, idea or strategy
with the Fund. As a result, FTFA, Brandywine and their affiliates may compete with
the Fund for appropriate investment opportunities. The results of the Fund’s investment activities,
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
therefore, may differ from those of the Fund’s affiliates, or another account managed by the Fund’s affiliates, and it is possible that the Fund could sustain losses during periods in which one or more of the Fund’s affiliates or and other accounts achieve profits on their trading for proprietary or other accounts. FTFA, Brandywine have adopted policies
and procedures designed to address potential conflicts of interests.
Government Intervention in Financial Markets Risk. U.S. federal and state governments and foreign governments, their regulatory agencies or self regulatory organizations may
take additional actions that affect the regulation of the securities in which the Fund
invests, or the issuers of such securities, in ways that are unforeseeable. Legislation or regulation
may also change the way in which the Fund itself is regulated. Such legislation or regulation
could limit or preclude the Fund’s ability to achieve its investment objectives. Brandywine will monitor developments and seek to manage the Fund’s portfolio in a manner consistent with achieving the Fund’s investment objectives, but there can be no assurance that it will be successful in doing so.
Market Price Discount from Net Asset Value Risk. Shares of closed-end investment companies frequently trade at a discount from their net asset value. This risk is
separate and distinct from the risk that the Fund’s net asset value could decrease as a result of its investment activities and may be a greater risk to investors expecting to sell their
Common Stock in a relatively short period following completion of this offering. Whether
investors will realize gains or losses upon the sale of their Common Stock will depend not upon
the Fund’s net asset value but upon whether the market price of the Common Stock at the time of sale is above or below the investor’s purchase price for the Common Stock. Because the market price of the Common Stock will be determined by factors such as relative supply
of and demand for the Common Stock in the market, general market and economic conditions
and other factors beyond the control of the Fund, the Fund cannot predict whether
the Common Stock will trade at, above or below net asset value or at, above or below the
initial public offering price. The Fund’s Common Stock is designed primarily for long-term investors and you should not view the Fund as a vehicle for trading purposes.
Non-Diversification Risk. The Fund is classified as “non-diversified” under the 1940 Act. As a result, it can invest a greater portion of its assets in obligations of a single
issuer than a “diversified” fund. The Fund may therefore be more susceptible than a diversified fund to being adversely affected by any single corporate, economic, political or regulatory
occurrence. The Fund intends to qualify for the special tax treatment available to “regulated investment companies” under Subchapter M of the Code, and thus intends to satisfy the diversification requirements of Subchapter M, including the less stringent diversification
requirement that applies to the percent of its total assets that are represented by
cash and cash items (including receivables), U.S. government securities, the securities of
other regulated investment companies and certain other securities.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Anti-Takeover Provisions Risk. The Charter and Bylaws of the Fund include provisions that are designed to limit the ability of other entities or persons to acquire control
of the Fund for short-term objectives, including by converting the Fund to open-end status or
changing the composition of the Board, that may be detrimental to the Fund’s ability to achieve its primary investment objective of providing current income. The Bylaws also contain
a provision providing that the Board of Directors has adopted a resolution to opt in
the Fund to the provisions of the Maryland Control Share Acquisition Act (“MCSAA”). There can be no assurance, however, that such provisions will be sufficient to deter professional
arbitrageurs that seek to cause the Fund to take actions that may not be consistent
with its investment objective or aligned with the interests of long-term shareholders, such
as liquidating debt investments prior to maturity, triggering taxable events for shareholders
and decreasing the size of the Fund. Such provisions may limit the ability of shareholders
to sell their shares at a premium over prevailing market prices by discouraging an investor
from seeking to obtain control of the Fund.
Market Events Risk. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to factors such as economic events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or
foreign central banks, market disruptions caused by trade disputes, labor strikes or other
factors, political developments, armed conflicts, economic sanctions and countermeasures in
response to sanctions, major cybersecurity events, the global and domestic effects
of widespread or local health, weather or climate events, and other factors that may
or may not be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic, financial or political
events, trading and tariff arrangements, public health events, terrorism, wars, natural
disasters and other circumstances in one country or region could have profound impacts
on global economies or markets. As a result, whether or not the fund invests in securities
of issuers located in or with significant exposure to the countries or markets directly
affected, the value and liquidity of the fund’s investments may be negatively affected. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant
groups in the Middle East have caused and could continue to cause significant market
disruptions and volatility. The hostilities and sanctions resulting from those hostilities
have and could continue to have a significant impact on certain fund investments as well
as fund performance and liquidity. Following Russia’s invasion of Ukraine in 2022, Russian stocks lost all, or nearly all, of their market value. Other securities or markets could
be similarly affected by past or future geopolitical or other events or conditions. Furthermore,
events involving limited liquidity, defaults, non-performance or other adverse developments
that affect one industry, such as the financial services industry, or concerns or rumors
about any events of these kinds, have in the past and may in the future lead to market-wide
liquidity
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
problems, may spread to other industries, and could negatively affect the value and
liquidity of the fund’s investments.
The long-term impact of the COVID-19 pandemic and its subsequent variants on economies,
markets, industries and individual issuers is not known. The U.S. government and the
Federal Reserve, as well as certain foreign governments and central banks, took extraordinary actions to support local and global economies and the financial markets
in response to the COVID-19 pandemic. This and other government intervention into the
economy and financial markets have resulted in a large expansion of government deficits
and debt, the long term consequences of which are not known.
Raising the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to borrow could
lead to a default on U.S. government obligations, with unpredictable consequences for economies
and markets in the U.S. and elsewhere. Recently, inflation and interest rates have
been volatile and may increase in the future. These circumstances could adversely affect
the value and liquidity of the fund’s investments, impair the fund’s ability to satisfy redemption requests, and negatively impact the fund’s performance.
The United States and other countries are periodically involved in disputes over trade
and other matters, which may result in tariffs, investment restrictions and adverse impacts
on affected companies and securities. For example, the United States has imposed tariffs
and other trade barriers on Chinese exports, has restricted sales of certain categories
of goods to China, and has established barriers to investments in China. Trade disputes may
adversely affect the economies of the United States and its trading partners, as well
as companies directly or indirectly affected and financial markets generally. The United
States government has prohibited U.S. persons from investing in Chinese companies designated
as related to the Chinese military. These and possible future restrictions could limit the fund’s opportunities for investment and require the sale of securities at a loss or make
them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with
Taiwan that has included threats of invasion. If the political climate between the
United States and China does not improve or continues to deteriorate, if China were
to attempt unification of Taiwan by force, or if other geopolitical conflicts develop
or get worse, economies, markets and individual securities may be severely affected both
regionally and globally, and the value of the fund’s assets may go down.
Tax Risk. To qualify for the favorable U.S. federal income tax treatment generally accorded
to regulated investment companies (“RICs”), among other things, the Fund must derive in each taxable year at least 90% of its gross income from certain prescribed sources.
The U.S. Treasury Department has authority to issue regulations that would exclude non-U.S.
currency gains from qualifying income if such gains are not directly related to a fund’s business of investing in stock or securities. Accordingly, regulations may be issued
in the
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
future that could treat some or all of the Fund’s non-U.S. currency gains as non-qualifying income, thereby jeopardizing the Fund’s status as a RIC for all years to which the regulations are applicable. If for any taxable year the Fund does not qualify as a
RIC, all of its taxable income (including its net capital gain) would be subject to tax at regular
corporate rates without any deduction for distributions to stockholders, and such
distributions would be taxable as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits.
Credit Crisis Liquidity and Volatility Risk. The markets for credit instruments, including fixed income securities, have experienced periods of extreme illiquidity and volatility.
General market uncertainty and consequent repricing risk have led to market imbalances
of sellers and buyers, which in turn have also resulted in significant valuation uncertainties
in a variety of debt securities, including certain fixed income securities. These conditions
resulted, and in many cases continue to result in greater volatility, less liquidity,
widening credit spreads and a lack of price transparency, with many debt securities remaining
illiquid and of uncertain value. During times of reduced market liquidity, the Fund may not
be able to sell securities readily at prices reflecting the values at which the securities
are carried on the Fund’s books. Sales of large blocks of securities by market participants, such as the Fund, that are seeking liquidity can further reduce security prices in an illiquid
market. These market conditions may make valuation of some of the Fund’s securities uncertain and/or result in sudden and significant valuation increases or decreases in its holdings.
Illiquidity and volatility in the credit markets may directly and adversely affect
the setting of dividend rates on the Common Shares.
Common Stock Risk. The Fund may invest in common stocks and may hold common stocks which result from a corporate restructuring or stock conversion. An adverse event,
such as an unfavorable earnings report, may depress the value of a particular common stock
held by the Fund. In addition, the prices of common stocks are sensitive to general movements
in the stock market, and a drop in the stock market may depress the prices of common
stocks to which the Fund has exposure. Common stock prices fluctuate for several reasons
including changes in investors’ perceptions of the financial condition of an issuer or the general condition of the relevant stock market, or when political or economic events
affecting an issuer occur. In addition, common stock prices may be particularly sensitive
to rising interest rates, as the cost of capital rises and borrowing costs increase.
The value of the common stocks in which the Fund may invest will be affected by changes in the
stock markets generally, which may be the result of domestic or international political
or economic news, changes in interest rates or changing investor sentiment. At times,
stock markets can be volatile and stock prices can change substantially. The common stocks
of smaller companies are more sensitive to these changes than those of larger companies.
Common stock risk will affect the Fund’s net asset value per share, which will fluctuate as the value of the securities held by the Fund change.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
Preferred Stock Risk. The Fund may invest in preferred stock. Preferred stocks are unique securities that combine some of the characteristics of both common stocks and bonds.
Preferred stocks generally pay a fixed rate of return and are sold on the basis of
current yield, like bonds. However, because they are equity securities, preferred stock provides
equity ownership of a company, and the income is paid in the form of dividends. Preferred
stocks typically have a yield advantage over common stocks as well as comparably-rated
fixed income investments. Preferred stocks are typically subordinated to bonds and
other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.
Unlike interest payments on debt securities, preferred stock dividends are payable only if
declared by the issuer’s board of directors. Preferred stocks also may be subject to optional or mandatory redemption provisions. Certain of the preferred stocks in which the Fund
may invest may be convertible preferred stocks.
Short Sales Risk. To the extent the Fund makes use of short sales for investment and/or risk management purposes, the Fund may be subject to risks associated with selling short.
Short sales are transactions in which the Fund sells securities or other instruments that
the Fund does not own. Short sales expose the Fund to the risk that it will be required to
cover its short position at a time when the securities have appreciated in value, thus resulting
in a loss to the Fund. The Fund may engage in short sales where it does not own or have
the right to acquire the security sold short at no additional cost. The Fund’s loss on a short sale theoretically could be unlimited in a case where the Fund is unable, for whatever
reason, to close out its short position. In addition, the Fund’s short selling strategies may limit its ability to benefit from increases in the markets. If the Fund engages in short sales,
it will segregate liquid assets, enter into offsetting transactions, own positions covering
its obligations or otherwise cover such obligations; however, such segregation and cover
requirements will not limit or offset losses on related positions. Short selling also
involves a form of financial leverage that may exaggerate any losses realized by the Fund. Also,
there is the risk that the counterparty to a short sale may fail to honor its contractual
terms, causing a loss to the Fund.
Risk of Short Economic Exposure Through Derivatives. The use by the Fund of derivatives such as options, forwards or futures contracts for investment and/or risk management
purposes may subject the Fund to risks associated with short economic exposure through
such derivatives. Taking a short economic position through derivatives exposes the
Fund to the risk that it will be obligated to make payments to its counterparty if the underlying
asset appreciates in value, thus resulting in a loss to the Fund. The Fund’s loss on a short position using derivatives theoretically could be unlimited.
Counterparty Risk. Changes in the credit quality of the companies that serve as the Fund’s counterparties with respect to derivatives or other transactions supported by another party’s
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
credit will affect the value of those instruments. Certain entities that have served
as counterparties in the markets for these transactions have recently incurred significant
financial hardships including bankruptcy and losses as a result of exposure to sub-prime
mortgages and other lower quality credit investments that have experienced recent
defaults or otherwise suffered extreme credit deterioration. If a counterparty becomes bankrupt
or otherwise fails to perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any recovery
under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may
obtain only a limited recovery or may obtain no recovery in such circumstances.
Structured Notes and Related Instruments Risk. The Fund may invest in “structured” notes and other related instruments, which are privately negotiated debt obligations where
the principal and/or interest is determined by reference to the performance of a benchmark
asset, market or interest rate (an “embedded index”), such as selected securities, an index of securities or specified interest rates, or the differential performance of two
assets or markets, such as indexes reflecting bonds. Structured instruments may be issued by
corporations, including banks, as well as by governmental agencies. Structured instruments
frequently are assembled in the form of medium-term notes, but a variety of forms
are available and may be used in particular circumstances. The terms of such structured
instruments normally provide that their principal and/or interest payments are to
be adjusted upwards or downwards (but ordinarily not below zero) to reflect changes in
the embedded index while the structured instruments are outstanding. As a result, the
interest and/or principal payments that may be made on a structured product may vary widely,
depending on a variety of factors, including the volatility of the embedded index
and the effect of changes in the embedded index on principal and/or interest payments. The
rate of return on structured notes may be determined by applying a multiplier to the performance
or differential performance of the referenced index(es) or other asset(s). Application
of a multiplier involves leverage that will serve to magnify the potential for gain and
the risk of loss.
Inflation/Deflation 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.
The market prices of debt securities generally fall as inflation increases because the
purchasing power of the principal and income is expected to be worth less when repaid. Deflation
risk is the risk that prices throughout the economy decline over time—the opposite of inflation. Deflation may have an adverse affect on the creditworthiness of issuers and may make
issuer defaults more likely, which may result in a decline in the value of the Fund’s portfolio.
When-Issued and Delayed-Delivery Transactions Risk. The Fund may purchase fixed income securities on a when-issued basis, and may purchase or sell those securities
for delayed delivery. When-issued and delayed- delivery transactions occur when securities
are
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
purchased or sold by the Fund with payment and delivery taking place in the future
to secure an advantageous yield or price. Securities purchased on a when-issued or delayed-
delivery basis may expose the Fund to counterparty risk of default as well as the
risk that securities may experience fluctuations in value prior to their actual delivery. The
Fund will not accrue income with respect to a when-issued or delayed-delivery security prior
to its stated delivery date. Purchasing securities on a when-issued or delayed-delivery basis
can involve the additional risk that the price or yield available in the market when the
delivery takes place may not be as favorable as that obtained in the transaction itself.
Portfolio Turnover Risk. Changes to the investments of the Fund may be made regardless of the length of time particular investments have been held. A high portfolio turnover
rate may result in increased transaction costs for the Fund in the form of increased dealer
spreads and other transactional costs, which may have an adverse impact on the Fund’s performance. In addition, high portfolio turnover may result in the realization of
net short-term capital gains by the Fund which, when distributed to stockholders, will be taxable
as ordinary income. A high portfolio turnover may increase the Fund’s current and accumulated earnings and profits, resulting in a greater portion of the Fund’s distributions being treated as a dividend to the Fund’s stockholders. The portfolio turnover rate of the Fund will vary from year to year, as well as within a given year.
Temporary Defensive Strategies Risk. When Brandywine anticipates unusual market or other conditions, the Fund may temporarily depart from its principal investment strategies
as a defensive measure and invest all or a portion of its assets in obligations of
the U.S. government, its agencies or instrumentalities; other investment grade debt securities;
investment grade commercial paper; certificates of deposit and bankers’ acceptances; repurchase agreements with respect to any of the foregoing investments or any other
fixed income securities that Brandywine considers consistent with this strategy. To the
extent that the Fund invests defensively, it may not achieve its investment objectives.
Rating Agency Risk. Credit ratings are issued by rating agencies which are private services that provide ratings of the credit quality of debt obligations, including convertible
securities. Ratings assigned by a rating agency are not absolute standards of credit quality and
do not evaluate market risks or the liquidity of securities. Rating agencies may fail to
make timely changes in credit ratings and an issuer’s current financial condition may be better or worse than a rating indicates. In addition, in recent years there have been instances in
which the initial rating assigned by a rating agency to a security failed to take account of
adverse economic developments which subsequently occurred, leading to losses that were not
anticipated based on the initial rating. To the extent that the issuer of a security
pays a rating agency for the analysis of its security, an inherent conflict of interest may
exist that could affect the reliability of the rating. The ratings of a debt security may change
over time. As a result, debt instruments held by the Fund could receive a higher rating
or a lower
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
rating during the period in which they are held. The Fund will not necessarily sell
a security when its rating is reduced below its rating at the time of purchase.
Managed Distribution Risk. Under a managed distribution policy, the Fund would intend to make monthly distributions to stockholders at a fixed rate per share of Common Stock
or a fixed percentage of net asset value that may include periodic distributions of long-term
capital gains. Under a managed distribution policy, if, for any monthly distribution,
ordinary income (that is, net investment income and any net short-term capital gain) and net
realized capital gains were less than the amount of the distribution, the difference would
be distributed from the Fund’s previously accumulated earnings and profits or cash generated from the sale of Fund assets. If, for any fiscal year, the total distributions exceeded
ordinary income and net realized capital gains (the “Excess”), the Excess would represent a return of capital that decreases the Fund’s total assets and, as a result, would have the likely effect of increasing the Fund’s expense ratio. The Excess, if any, as a return of capital should not be considered income or a return on investment. There is a risk that the Fund would
not eventually realize capital gains in an amount corresponding to a distribution of the
Excess. In addition, in order to make such distributions, the Fund may have to sell a portion
of its investment portfolio at a time when independent investment judgment might not dictate
such action. Although the Fund does not intend to issue senior securities, if the
Fund were to issue senior securities and not be in compliance with the asset coverage requirements
of the 1940 Act, the Fund would be required to suspend the managed distribution policy.
Pursuant to the requirements of the 1940 Act and other applicable laws, a notice will
accompany each monthly distribution disclosing the sources of the distribution.
Operational risk. The valuation of the Fund’s investments may be negatively impacted because of the operational risks arising from factors such as processing errors and
human errors, inadequate or failed internal or external processes, failures in systems and
technology, changes in personnel, and errors caused by third party service providers
or trading counterparties. It is not possible to identify all of the operational risks
that may affect the Fund or to develop processes and controls that completely eliminate or
mitigate the occurrence of such failures. The Fund and its shareholders could be negatively
impacted as a result.
Cybersecurity risk. Like other funds and business enterprises, the fund, the manager, the subadvisers, Authorized Participants, the relevant listing exchange and their service
providers are subject to the risk of cyber incidents occurring from time to time.
Cybersecurity incidents, whether intentionally caused by third parties or otherwise,
may allow an unauthorized party to gain access to fund assets, fund or customer data (including
private shareholder information) or proprietary information, cause the fund, the manager,
the subadvisers, Authorized Participants, the relevant listing exchange and/or their
service providers (including, but not limited to, fund accountants, custodians, sub-custodians,
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Summary of information regarding the Fund (unaudited) (cont’d)
transfer agents and financial intermediaries) to suffer data breaches, data corruption
or loss of operational functionality, or prevent fund investors from purchasing, redeeming
or exchanging shares, receiving distributions or receiving timely information regarding
the fund or their investment in the fund. The fund, the manager, and the subadvisers have
limited ability to prevent or mitigate cybersecurity incidents affecting third party
service providers, and such third party service providers may have limited indemnification
obligations to the fund, the manager, and/or the subadvisers. Cybersecurity incidents
may result in financial losses to the fund and its shareholders, and substantial costs
may be incurred in order to prevent or mitigate any future cybersecurity incidents. Issuers
of securities in which the fund invests are also subject to cybersecurity risks, and
the value of these securities could decline if the issuers experience cybersecurity incidents.
New ways to carry out cyber attacks continue to develop. There is a chance that some
risks have not been identified or prepared for, or that an attack may not be detected, which
puts limitations on the fund’s ability to plan for or respond to a cyber attack.
For a complete list of the Fund’s fundamental investment restrictions and more detailed descriptions of the Fund’s investment policies, strategies and risks, see the Fund’s registration statement on Form N-2 that was declared effective by the SEC on March
27, 2012. The Fund’s fundamental investment restrictions may not be changed without the approval of the holders of a majority of the outstanding voting securities, as defined
in the 1940 Act.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Dividend reinvestment plan (unaudited)
Unless you elect to receive distributions in cash (i.e., opt-out), all dividends,
including any capital gain dividends and return of capital distributions, on your Common Stock will
be automatically reinvested by Computershare Trust Company, N.A., as agent for the stock-
holders (the “Plan Agent”), in additional shares of Common Stock under the Fund’s Dividend Reinvestment Plan (the “Plan”). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all cash distributions
paid by check mailed directly to you by Computershare Trust Company, N.A., as dividend paying
agent.
If you participate in the Plan, the number of shares of Common Stock you will receive
will be determined as follows:
(1) If the market price of the Common Stock (plus $0.03 per share commission) on the
payment date (or, if the payment date is not a NYSE trading day, the immediately preceding trading day) is equal to or exceeds the net asset value per share of the
Common Stock at the close of trading on the NYSE on the payment date, the Fund will
issue new Common Stock at a price equal to the greater of (a) the net asset value
per share at the close of trading on the NYSE on the payment date or (b) 95% of the market price per share of the Common Stock on the payment date.
(2) If the net asset value per share of the Common Stock exceeds the market price
of the Common Stock (plus $0.03 per share commission) at the close of trading on the
NYSE on the payment date, the Plan Agent will receive the dividend or distribution
in cash and will buy Common Stock in the open market, on the NYSE or elsewhere, for your account as soon as practicable commencing on the trading day following the payment date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the payment date for the next succeeding
dividend or distribution to be made to the stockholders; except when necessary to
comply with applicable provisions of the federal securities laws. If during this period:
(i) the market price (plus $0.03 per share commission) rises so that it equals or
exceeds the net asset value per share of the Common Stock at the close of trading
on the NYSE on the payment date before the Plan Agent has completed the open market purchases or (ii) if the Plan Agent is unable to invest the full amount eligible to
be reinvested in open market purchases, the Plan Agent will cease purchasing Common Stock in the open market and the Fund shall issue the remaining Common Stock at a
price per share equal to the greater of (a) the net asset value per share at the close
of trading on the NYSE on the day prior to the issuance of shares for reinvestment or
(b) 95% of the then current market price per share.
Common Stock in your account will be held by the Plan Agent in non-certificated form.
Any proxy you receive will include all shares of Common Stock you have received under
the Plan. You may withdraw from the Plan (i.e., opt-out) by notifying the Plan Agent in
writing at P.O. Box 43006, Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151.
Such withdrawal will be effective immediately if notice is received by the Plan Agent
not less than ten business days prior to any dividend or distribution record date; otherwise
such
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Dividend reinvestment plan (unaudited) (cont’d)
withdrawal will be effective as soon as practicable after the Plan Agent’s investment of the most recently declared dividend or distribution on the Common Stock.
Plan participants who sell their shares will be charged a service charge (currently
$5.00 per transaction) and the Plan Agent is authorized to deduct brokerage charges actually
incurred from the proceeds (currently $0.05 per share commission). There is no service charge
for reinvestment of your dividends or distributions in Common Stock. However, all participants
will pay a pro rata share of brokerage commissions incurred by the Plan Agent when
it makes open market purchases. Because all dividends and distributions will be automatically
reinvested in additional shares of Common Stock, this allows you to add to your investment
through dollar cost averaging, which may lower the average cost of your Common Stock
over time. Dollar cost averaging is a technique for lowering the average cost per
share over time if the Fund’s net asset value declines. While dollar cost averaging has definite advantages, it cannot assure profit or protect against loss in declining markets.
Automatically reinvesting dividends and distributions does not mean that you do not
have to pay income taxes due upon receiving dividends and distributions. Investors will be
subject to income tax on amounts reinvested under the Plan.
The Fund reserves the right to amend or terminate the Plan if, in the judgment of
the Board of Directors, the change is warranted. The Plan may be terminated, amended or supplemented by the Fund upon notice in writing mailed to stockholders at least 30
days prior to the record date for the payment of any dividend or distribution by the Fund
for which the termination or amendment is to be effective. Upon any termination, you will be
sent cash for any fractional share of Common Stock in your account. You may elect to notify
the Plan Agent in advance of such termination to have the Plan Agent sell part or all
of your Common Stock on your behalf. Additional information about the Plan and your account
may be obtained from the Plan Agent at P.O. Box 43006, Providence, RI 02940-3078 or by
calling the Plan Agent at 1-888-888-0151.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
Important tax information (unaudited)
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable.
Please also refer to www.franklintempleton.com for per share tax information related to any
distributions paid during the preceding calendar year. Shareholders are advised to
consult with their tax advisors for further information on the treatment of these amounts
on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders
with respect to income earned and distributions paid during its fiscal year.
The Fund hereby reports the following amounts, or if subsequently determined to be
different, the maximum allowable amounts, for the fiscal year ended October 31, 2024:
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Qualified Net Interest Income (QII)
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Section 163(j) Interest Earned
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Interest Earned from Federal Obligations
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BrandywineGLOBAL — Global Income Opportunities Fund Inc.
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BrandywineGLOBAL —
Global Income Opportunities Fund Inc.
Directors
Jane Trust
President and Chief Executive
Officer
Christopher Berarducci
Treasurer and Principal Financial
Officer
Fred Jensen
Chief Compliance Officer
Marc A. De Oliveira
Secretary and Chief Legal Officer
Thomas C. Mandia
Senior Vice President
Jeanne M. Kelly
Senior Vice President
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
620 Eighth Avenue
47th Floor
New York, NY 10018
Franklin Templeton Fund Adviser, LLC
Brandywine Global Investment
Management, LLC
The Bank of New York Mellon
Computershare Inc.
P.O. Box 43006
Providence, RI 02940-3078
Independent registered
public accounting firm
PricewaterhouseCoopers LLP
Baltimore, MD
Simpson Thacher & Bartlett LLP
900 G Street NW
Washington, DC 20001
New York Stock
Exchange Symbol
*
Effective November 15, 2024, Ms. Sale and Messrs. Grillo and Mason became Directors
of the Fund.
**
Effective November 15, 2024, Ms. Kamerick became Chair of the Board.
Franklin Templeton Funds Privacy and Security Notice
Your Privacy and the Security of Your Personal Information is Very Important to Us
This Privacy and Security Notice (the “Privacy Notice”) addresses the Funds’ privacy and data protection practices with respect to nonpublic personal information the Fund receives.
The Legg Mason Funds include the Western Asset Money Market Funds (Funds) sold by the Funds’ distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end
funds. The provisions of this Privacy Notice apply to your information both while you are a shareholder
and after you are no longer invested with the Funds.
The Type of Nonpublic Personal Information the Funds Collect About You
The Funds collect and maintain nonpublic personal information about you in connection
with your shareholder account. Such information may include, but is not limited to:
•
Personal information included on applications or other forms;
•
Account balances, transactions, and mutual fund holdings and positions;
•
Bank account information, legal documents, and identity verification documentation;
and
•
Online account access user IDs, passwords, security challenge question responses.
How the Funds Use Nonpublic Personal Information About You
The Funds do not sell or share your nonpublic personal information with third parties
or with affiliates for their marketing purposes, unless you have authorized the Funds to do
so. The Funds do not disclose any nonpublic personal information about you except as may be
required to perform transactions or services you have authorized or as permitted or required
by law. The Funds may disclose information about you to:
•
Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct
ordinary business or to comply with obligations to government regulators;
•
Service providers, including the Funds’ affiliates, who assist the Funds as part of the
ordinary course of business (such as printing, mailing services, or processing or
servicing
your account with us) or otherwise perform services on the Funds’ behalf, including
companies that may perform statistical analysis, market research and marketing services
•
Permit access to transfer, whether in the United States or countries outside of the
United States to such Funds’ employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations
to government regulators;
•
The Funds’ representatives such as legal counsel, accountants and auditors to enable the
Funds to conduct ordinary business, or to comply with obligations to government regulators;
•
Fiduciaries or representatives acting on your behalf, such as an IRA custodian or
trustee of a
NOT PART OF THE ANNUAL REPORT
Franklin Templeton Funds Privacy and Security Notice
(cont’d)
Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf, including those outside the United States, are contractually obligated to keep nonpublic
personal information the Funds provide to them confidential and to use the information
the Funds share only to provide the services the Funds ask them to perform.
The Funds may disclose nonpublic personal information about you when necessary to
enforce their rights or protect against fraud, or as permitted or required by applicable law,
such as in connection with a law enforcement or regulatory request, subpoena, or similar legal
process. In the event of a corporate action or in the event a Fund service provider changes,
the Funds may be required to disclose your nonpublic personal information to third parties.
While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.
Keeping You Informed of the Funds’ Privacy and Security Practices
The Funds will notify you annually of their privacy policy as required by federal
law. While the Funds reserve the right to modify this policy at any time, they will notify you promptly
if this privacy policy changes.
The Funds’ Security Practices
The Funds maintain appropriate physical, electronic and procedural safeguards designed
to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use
your nonpublic personal information for Fund business purposes only.
Although the Funds strive to protect your nonpublic personal information, they cannot
ensure or warrant the security of any information you provide or transmit to them, and you
do so at your own risk. In the event of a breach of the confidentiality or security of your
nonpublic personal information, the Funds will attempt to notify you as necessary so you can
take appropriate protective steps. If you have consented to the Funds using electronic
communications or electronic delivery of statements, they may notify you under such
circumstances using the most current email address you have on record with them.
In order for the Funds to provide effective service to you, keeping your account information
accurate is very important. If you believe that your account information is incomplete,
not accurate or not current, if you have questions about the Funds’ privacy practices, or our use of your nonpublic personal information, write the Funds using the contact information
on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.franklintempleton.com, or contact the Funds at 1-877-721-1926 for the
Western Asset Money Market Funds or 1-888-777-0102 for the Legg Mason-sponsored closed-end funds. For additional information related to certain state privacy rights, please
visit https://www.franklintempleton.com/help/privacy-policy.
NOT PART OF THE ANNUAL REPORT
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
BrandywineGLOBAL — Global Income Opportunities Fund Inc.
620 Eighth Avenue
47th Floor
New York, NY 10018
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase, at market prices, shares of its stock.
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-888-777-0102.
Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling 1-888-777-0102, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton’s website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton’s website in this report.
This report is transmitted to the shareholders of BrandywineGLOBAL — Global Income Opportunities Fund Inc. for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.
Computershare Inc.
P.O. Box 43006
Providence, RI 02940-3078
The registrant has adopted a code of ethics that applies to the
registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Board of Directors of the registrant has determined that Eileen
A. Kamerick and Nisha Kumar, are the members of the Board’s Audit Committee, possesses the technical attributes identified in Instruction
2(b) of Item 3 to Form N-CSR to qualify as an “audit committee financial experts”.
| Item
4. | Principal
Accountant Fees and Services. |
(a) Audit Fees. The aggregate fees billed in the previous
fiscal years ending October 31, 2023 and October 31, 2024 (the “Reporting Periods”) for professional services rendered by
the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements,
or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the
Reporting Periods, were $55,376 in October 31, 2023 and $58,699 in October 31, 2024.
(b) Audit-Related Fees. The aggregate fees billed in the
Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s
financial statements were $0 in October 31, 2023 and $0 in October 31, 2024.
(c) Tax Fees. The aggregate fees billed in the Reporting
Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”)
were $11,000 in October 31, 2023 and $11,000 in October 31, 2024. These services consisted of (i) review or preparation of U.S. federal,
state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory
or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments
held or proposed to be acquired or held.
There were no fees billed for tax services by the Auditors to
service affiliates during the Reporting Periods that required pre-approval by the Audit Committee.
(d) All Other Fees. The aggregate fees for other fees billed
in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through
(c) of this Item for the BrandywineGLOBAL - Global Income Opportunities Fund Inc. were $0 in October 31, 2023 and $0 in October 31, 2024.
All Other Fees. There were no other non-audit services rendered
by the Auditor to Legg Mason Partners Fund Advisors, LLC (“LMPFA”), and any entity controlling, controlled by or under common
control with LMPFA that provided ongoing services to BrandywineGLOBAL - Global Income Opportunities Fund Inc. requiring pre-approval
by the Audit Committee in the Reporting Period.
(e) Audit Committee’s pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
(1) The Charter for the Audit Committee (the “Committee”)
of the Board of each registered investment company (the “Fund”) advised by LMPFA or one of their affiliates (each, an “Adviser”)
requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible
non-audit services to be provided by the Fund’s independent auditors to the Adviser and any Covered Service Providers if the engagement
relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which
such services are approved other than by the full Committee.
The Committee shall not approve non-audit services that the Committee
believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit
services include any professional services (including tax services), that are not prohibited services as described below, provided to
the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial
statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records
or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services,
fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management
functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert
services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation,
is impermissible.
Pre-approval by the Committee of any permissible non-audit services
is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and
any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered
Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal
year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled
by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are
provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at
the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and
approved by the Committee (or its delegate(s)) prior to the completion of the audit.
(2) None of the services described in paragraphs (b) through (d)
of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Non-audit fees billed by the Auditor for services rendered
to BrandywineGLOBAL - Global Income Opportunities Fund Inc., LMPFA and any entity controlling, controlled by, or under common control
with LMPFA that provides ongoing services to BrandywineGLOBAL - Global Income Opportunities Fund Inc. during the reporting period were
$222,718 in October 31, 2023 and $229,399 in October 31, 2024.
(h) Yes. BrandywineGLOBAL - Global Income Opportunities Fund Inc.’s
Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved
(not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor
to the BrandywineGLOBAL - Global Income Opportunities Fund Inc. or to Service Affiliates, which were required to be pre-approved, were
pre-approved as required.
(i) Not applicable.
(j) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
a) Registrant has a separately-designated standing Audit Committee
established in accordance with Section 3(a)58(A) of the Exchange Act. The Audit Committee consists of the following Board members:
Robert D. Agdern
Carol L. Colman
Daniel P. Cronin
Paolo M. Cucchi
Eileen A. Kamerick
Nisha Kumar
b) Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
Included herein under Item 1.
| ITEM
7. | FINANCIAL
STATEMENTS AND FINANCIAL HIGLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM
8. | CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM
9. | PROXY
DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM
10. | REMUNERATION
PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM
11. | STATEMENT
REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
The information is disclosed as part of the Financial Statements
included in Item 1 of this Form N-CSR, as applicable.
| ITEM
12. | DISCLOSURE
OF PROXY VOTING POLOCIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
PROXY VOTING – Brandywine Global
Investment Management, LLC
Proxy Voting
Responsibility to Vote Proxies
As an investment adviser, Brandywine Global owes
its clients a duty of care and loyalty with respect to services undertaken on their behalf, including proxy voting. Rule 206(4)-6 under
the Investment Advisers Act of 1940 requires an investment adviser who exercises voting authority with respect to client securities to
adopt and implement written policies and procedures that are reasonably designed to ensure that the investment adviser votes proxies
in the best interest of its clients.
Client Accounts for which Brandywine Global Votes Proxies
Brandywine Global votes proxies for each client
account for which the client has specifically delegated to Brandywine Global the power to vote proxies in the applicable investment management
agreement or other written document, or in instances where the client has assigned Brandywine Global investment discretion over their
account. Brandywine Global also votes proxies for any employee benefit plan client subject to the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), unless the applicable investment management agreement specifically reserves the responsibility
for voting proxies to the plan trustees or other named fiduciary.
At or prior to the inception of each client account,
Brandywine Global will determine whether it has proxy voting authority over such account. In instances where the client has retained
proxy voting responsibility, Brandywine Global will have no involvement in the proxy voting process for that client.
General Principles
In exercising discretion to vote proxies for
securities held in client accounts, Brandywine Global is guided by general fiduciary principles. Brandywine Global’s goal in voting
proxies is to act prudently and solely in the best economic interest of its clients. In furtherance of such goal, Brandywine Global will
vote proxies in a manner that Brandywine Global believes will be consistent with efforts to maximize shareholder value and to protect
shareholder interests.
Brandywine Global does not exercise its proxy
voting discretion to further policy, political or other issues that have no connection to enhancing the economic value of a client’s
investment. As part of its fiduciary duty, Brandywine Global does consider environmental, social, and governance issues that may impact
the value of an investment, through introducing opportunity or by creating risk, or both.
How Brandywine Global Votes Proxies
Appendix A sets forth general guidelines considered
by Brandywine Global in voting common proxy items.
In the case of a proxy issue for which there
is a stated position set forth in Appendix A, Brandywine Global generally votes in accordance with the stated position. In the case of
a proxy issue for which there is no stated position set forth in Appendix A, Brandywine Global votes on a case-by-case basis in accordance
with the General Principles.
The general guidelines set forth in Appendix
A are not binding on Brandywine Global, but rather are intended to provide an analytical framework for the review and assessment of common
proxy issues. Such guidelines can always be superseded based on an assessment of the proxy issue and determination that a vote that is
contrary to such general guidelines is in the best economic interests of client accounts. Different portfolio management teams within
Brandywine Global may vote differently on the same issue based on their respective assessments of the proxy issue and determinations
as to what is in the best economic interests of client accounts for which they are responsible.
Use of an Independent Proxy Service Firm
Brandywine Global may contract with an independent
proxy service firm to provide Brandywine Global with certain services, including but not limited to, information or recommendations with
regard to proxy votes or other administrative support. Brandywine Global is not required to follow any recommendation furnished by such
service provider. The use of an independent proxy service firm to provide proxy voting information or recommendations does not relieve
Brandywine Global of its responsibility for any proxy votes.
With respect to any independent proxy service
firm engaged by Brandywine Global to provide Brandywine Global with information or recommendations with regard to proxy votes, Brandywine
Global will periodically review and assess such firm’s policies, procedures and practices including those with respect to the disclosure
and handling of conflicts of interest.
Conflict of Interest Procedures
In furtherance of Brandywine Global’s goal
to vote proxies in the best interests of clients, Brandywine Global follows procedures designed to identify and address material conflicts
that may arise between the interests of Brandywine Global and its employees and those of its clients before voting proxies on behalf
of such clients. Conflicts of interest may arise as a result of the firm’s business or as a result of an employee’s personal
relationships or circumstances.
| A. | Procedures
for Identifying Conflicts of Interest |
Brandywine Global relies on the procedures set
forth below to seek to identify conflicts of interest with respect to proxy voting.
| 1. | Brandywine
Global’s Compliance Department annually requires each Brandywine Global employee to
complete a questionnaire designed to elicit information that may reveal potential conflicts
between the employee’s interests and those of Brandywine Global clients. |
| 2. | Brandywine
Global treats client relationships as creating a material conflict of interest for Brandywine
Global in voting proxies with respect to securities issued by such client or its known affiliates. |
| 3. | As
a general matter, Brandywine Global takes the position that relationships between a non-Brandywine
Global Franklin Resources business unit and an issuer (e.g., investment management relationship
between an issuer and a non-Brandywine Global Franklin Resources-owned asset manager) do
not present a conflict of interest for Brandywine Global in voting proxies with respect to
such issuer because Brandywine Global operates as an independent business unit from other
Franklin Resources business units and because of the existence of informational barriers
between Brandywine Global and certain other Franklin Resources business units. |
| B. | Procedures
for Assessing Materiality of Conflicts of Interest |
| 1. | All
potential conflicts of interest identified must be brought to the attention of the Investment
Committee for resolution. |
| 2. | The
Investment Committee determines whether a conflict of interest is material. A conflict of
interest will be considered material to the extent that it is determined that such conflict
is likely to influence, or appear to influence, Brandywine Global’s decision-making
in voting the proxy. All materiality determinations will be based on an assessment of the
particular facts and circumstances. A written record of all materiality determinations made
by the Investment Committee will be maintained. |
| 3. | If
it is determined by the Investment Committee that a conflict of interest is not material,
Brandywine Global may vote proxies following normal processes notwithstanding the existence
of the conflict. |
| C. | Procedures
for Addressing Material Conflicts of Interest |
| 1. | With
the exception of those material conflicts identified in A.2. which will be voted in accordance
with paragraph C.1.b. below, if it is determined by the Investment Committee that a conflict
of interest is material, the Investment Committee will determine an appropriate method or
combination of methods to resolve such conflict of interest before the proxy affected by
the conflict of interest is voted by Brandywine Global. Such determination will be based
on the particular facts and circumstances, including the importance of the proxy issue, the
nature of the conflict of interest, etc. Such methods may include: |
| a. | confirming
that the proxy will be voted in accordance with the recommendations of an independent proxy
service firm retained by Brandywine Global; |
| b. | in
the case of a conflict of interest resulting from a particular employee’s personal
relationships or circumstances, removing such employee from the decision-making process with
respect to such proxy vote; or |
| c. | such
other method as is deemed appropriate given the particular facts and circumstances. |
| 2. | A
written record of the method used to resolve a material conflict of interest will be maintained. |
Other Considerations
In certain situations, Brandywine Global may
decide not to vote proxies on behalf of a client account for which it has discretionary voting authority because Brandywine Global believes
that the expected benefit to the client account of voting shares is outweighed by countervailing considerations (excluding the existence
of a potential conflict of interest). Examples of situations in which Brandywine Global may determine not to vote proxies are set forth
below.
Proxy voting in certain countries requires “share blocking.”
This means that shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting (e.g. one
week) with a designated depositary. During the blocking period, shares that will be voted at the meeting cannot be sold until the meeting
has taken place and the shares have been returned to client accounts by the designated depositary. In deciding whether to vote shares
subject to share blocking, Brandywine Global may consider and weigh, based on the particular facts and circumstances, the expected benefit
to client accounts of voting in relation to the potential detriment to clients of not being able to sell such shares during the applicable
period.
Certain clients of Brandywine Global, such as an institutional
client or a registered investment company for which Brandywine Global acts as a sub-adviser, may engage in securities lending with respect
to the securities in their accounts. Brandywine Global typically does not direct or oversee such securities lending activities. To the
extent feasible and practical under the circumstances, Brandywine Global may request that the client recall shares that are on loan so
that such shares can be voted if Brandywine Global believes that the expected benefit to the client of voting such shares outweighs the
detriment to the client of recalling such shares (e.g., foregone income). The ability to timely recall shares for proxy voting purposes
typically is not entirely within the control of Brandywine Global and requires the cooperation of the client and its other service providers.
Under certain circumstances, the recall of shares in time for such shares to be voted may not be possible due to applicable proxy voting
record dates and administrative considerations.
Proxy Voting-Related Disclosures
| A. | Proxy
Voting Independence and Intent |
Brandywine Global exercises its proxy voting authority independently
of other Franklin Resources-owned asset managers. Brandywine Global and its employees will not consult with or enter into any formal
or informal agreements with Brandywine Global’s ultimate parent, Franklin Resources, Inc., any other Franklin Resources business
unit, or any of their respective officers, directors or employees, regarding the voting of any securities by Brandywine Global on behalf
of its clients.
Brandywine Global and its employees may not disclose to any
person outside of Brandywine Global, including without limitation another investment management firm (affiliated or unaffiliated) how
Brandywine Global intends to vote a proxy without prior approval from Brandywine Global’s Chief Compliance Officer. Prior approval
is not required in instances where Brandywine Global discloses directly to representatives of an issuer how Brandywine Global intends
to vote a proxy so long as the disclosure is made solely to representatives of the issuer and Brandywine Global believes that the disclosure
is in the best interests of its clients.
If a Brandywine Global employee receives a request to disclose
Brandywine Global’s proxy voting intentions to another person outside of Brandywine Global (including an employee of another Franklin
Resources business unit) in connection with an upcoming proxy voting matter, the employee should immediately notify Brandywine Global’s
Chief Compliance Officer.
If a Brandywine Global portfolio manager wants to take a public
stance with regards to a proxy, the portfolio manager must consult with and obtain the approval of Brandywine Global’s Chief Compliance
Officer before making or issuing a public statement.
| B. | Disclosure
of Proxy Votes and Policy and Procedures |
Upon Brandywine Global’s receipt of any oral or written
client request for information on how Brandywine Global voted proxies for that client’s account, Brandywine Global will promptly
provide the client with such requested information in writing.
Brandywine Global will deliver to each client, for which it
has proxy voting authority, no later than the time it accepts such authority, a written summary of this Proxy Voting policy and procedures.
This summary must include information on how clients may obtain information about how Brandywine Global has voted proxies for their accounts
and must also state that a copy of Brandywine Global’s Proxy Voting policy and procedures is available upon request.
Brandywine Global must create and maintain a record of each
written client request for proxy voting information. Such record must be created promptly after receipt of the request and must include
the date the request was received, the content of the request, and the date of Brandywine Global’s response. Brandywine Global
must also maintain copies of written client requests and copies of all responses to such requests.
Brandywine Global may delegate to non-investment personnel
the responsibility to vote proxies in accordance with the guidelines set forth in Appendix A. Such delegation of duties will only be
made to employees deemed to be reasonably capable of performing this function in a satisfactory manner.
Proxy Engagement and Certain Non-Proxy Voting Matters
Brandywine Global may determine that it is appropriate
and beneficial to engage in a dialogue or written communication with a company or other shareholders regarding certain matters on a company’s
proxy statement from time to time, if and to the extent that Brandywine Global determines that doing so is consistent with law and applicable
general fiduciary principles. A company or shareholder may also seek to engage with Brandywine Global in advance of the company’s
formal proxy solicitation to review issues more generally or gauge support for certain proposals.
Absent a specific contrary written agreement
with a client or other legal obligation, Brandywine Global does not (1) render any advice to, or take any action on behalf of, clients
with respect to any legal proceedings, including bankruptcies and shareholder litigation, to which any securities or other investments
held in client accounts, or the issuers thereof, become subject, or (2) initiate or pursue legal proceedings, including without limitation
shareholder litigation, on behalf of clients with respect to transactions or securities or other investments held in client accounts,
or the issuers thereof. Except as otherwise agreed to in writing with a particular client, the right to take any action with respect
to any legal proceeding, including without limitation bankruptcies and shareholder litigation, and the right to initiate or pursue any
legal proceedings, including without limitation shareholder litigation, with respect to transactions or securities or other investments
held in a client account is expressly reserved to the client.
Recordkeeping
In addition to all other records required by
this Policy and Procedures, Brandywine Global will maintain the following records relating to proxy voting:
| A. | a
copy of this Policy and Procedures, including any and all amendments that may be adopted; |
| B. | a
copy of each proxy statement that Brandywine Global receives regarding client securities; |
| C. | a
record of each vote cast by Brandywine Global on behalf of a client; |
| D. | documentation
relating to the identification and resolution of conflicts of interest; |
| E. | any
documents created by Brandywine Global that were material to a proxy voting decision or that
memorialized the basis for that decision; |
| F. | a
copy of each written client request for information on how Brandywine Global voted proxies
on behalf of the client, and a copy of any written response by Brandywine Global to any (written
or oral) client request for information on how Brandywine Global voted proxies on behalf
of the requesting client; and |
| G. | records
showing whether or not Brandywine Global has proxy voting authority for each client account. |
All required records will be maintained and preserved
in an easily accessible place for a period of not less than six years from the end of the fiscal year during which the last entry was
made on such record, the first two years in an appropriate office of Brandywine Global. Brandywine Global also will maintain a copy of
any proxy voting policies and procedures that were in effect at any time within the last five years.
To the extent that Brandywine Global is authorized
to vote proxies for a United States registered investment company, Brandywine Global will maintain such records as are necessary to allow
such fund to comply with its recordkeeping, reporting and disclosure obligations under applicable laws, rules and regulations.
In lieu of keeping copies of proxy statements,
Brandywine Global may rely on proxy statements filed on the EDGAR system as well as on third party records of proxy statements if the
third party provides an undertaking to provide copies of such proxy statements promptly upon request.
Brandywine Global may rely on a third party to
make and retain, on Brandywine Global’s behalf, records of votes cast by Brandywine Global on behalf of clients if the third party
provides an undertaking to provide a copy of such records promptly upon request.
Appendix A
Proxy Voting Guidelines
Below are proxy voting guidelines that Brandywine
Global generally follows when voting proxies for securities held in client accounts. One or more portfolio management teams may decide
to deviate from these guidelines with respect to any one or more particular proxy votes, subject in all cases to the duty to act solely
in the best interest of client accounts holding the applicable security.
| A. | We
vote for non-employee director stock options, unless we consider the number of shares available
for issue excessive. |
| B. | We
vote for employee stock purchase programs. |
| C. | We
vote for compensation plans that are tied to the company achieving set profitability hurdles. |
| D. | We
vote against attempts to re-price options. Also, we vote against the re-election of incumbent
Directors in the event of such a re-pricing proposal. |
| E. | We
vote against attempts to increase incentive stock options available if they are excessive,
either in total or for one individual. |
| F. | We
vote against stock option plans allowing for stock options with exercise prices less than
100% of the stock’s price at the time of the option grant. |
| G. | We
vote for measures that give shareholders a vote on executive compensation. |
| A. | We
vote for proposals to separate the Chief Executive Officer and Chairman of the Board positions. |
| B. | We
vote against “catch-all” authorizations permitting proxy holders to conduct unspecified
business that arises during shareholder meetings. |
We vote against anti-takeover measures, including
without limitation:
| A. | Staggered
Boards of Directors (for example, where 1/3 of a company’s Board is elected each year
rather than the entire Board each year). |
| B. | Super-Majority
Voting Measures (for example, requiring a greater than 50% vote to approve takeovers or make
certain changes). |
| C. | Poison
Pills, which are special stock rights that go into effect upon a takeover offer or an outsider
acquiring more than a specified percentage of a company’s outstanding shares. |
We vote against attempts to increase authorized shares by more
than twice the number of outstanding shares unless there is a specific purpose for such increase given, such as a pending stock split
or a corporate purchase using shares, and we determine that increasing authorized shares for such purpose is appropriate.
| ITEM 13. | PORTFOLIO
MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| |
(a)(1): | As of the date of filing this report: |
NAME AND
ADDRESS* |
LENGTH OF
TIME SERVED |
PRINCIPAL OCCUPATION(S)
DURING
PAST 5 YEARS |
| David F. Hoffman |
2012 |
Co-lead portfolio manager
for Brandywine’s global fixed-income and related strategies. He joined Brandywine in 1995. Previously, Mr. Hoffman was president
of Hoffman Capital, a global financial futures investment firm (1991-1995); head of fixed income investments at Columbus Circle Investors
(1983-1990); senior vice president and portfolio manager at INA Capital Management (1979-1982), and fixed income portfolio manager
at Provident National Bank (1975-1979). Mr. Hoffman is a CFA charterholder and earned a B.A. in Art History from Williams College.
He is a member of the firm’s Executive Board, currently serving as the Board’s chair. |
| |
|
|
| Jack P. McIntyre |
2012 |
As portfolio manager
and senior research analyst for the Firm’s Global Fixed Income and related strategies, Jack provides valuable analytical and
strategic insight. He joined the Firm in 1998. Previously, he held positions as market strategist with McCarthy, Crisanti & Maffei,
Inc. (1995-1998); senior fixed income analyst with Technical Data, a division of Thomson Financial Services (1992-1995); quantitative
associate with Brown Brothers Harriman & Co. (1990), and investment analyst with the Public Employee Retirement Administration
of Massachusetts (1987-1989). Jack is a CFA charterholder and earned an M.B.A. in Finance from the Leonard N. Stern Graduate School
of Business at New York University and a B.B.A. in Finance from the University of Massachusetts, Amherst. |
| |
|
|
| Brian L. Kloss |
2012 |
Portfolio manager for Brandywine’s
fixed income group, with a concentration in high yield securities. He joined Brandywine in December 2009, bringing with him over
10 years of high yield and distressed debt experience. Previously, Mr. Kloss was co-portfolio manager at Dreman Value Management,
LLC (2007-2009); high yield analyst/trader at Gartmore Global Investments (2002-2007); high yield and equity portfolio manager and
general analyst at Penn Capital Management, Ltd. (2000-2002); an analyst with The Concord Advisory Group, Ltd. (1998-2000); and an
international tax consultant with Deloitte & Touche LLP (1995-1998). He earned his J.D. from Villanova School of Law and graduated
summa cum laude with B.S. in Accounting from University of Scranton. He is also a member of the New Jersey and Pennsylvania Bar and
is a Pennsylvania Certified Public Accountant. |
| Anujeet Sareen |
2017 |
Portfolio
manager for Brandywine’s Global Fixed Income and related strategies. He joined Brandywine Global Investment Management, LLC
in 2016. Prior to joining Brandywine Global, Mr. Sareen was a managing director of global fixed income and a global macro strategist,
as well as chair of the Currency Strategy Group at Wellington Management. Mr. Sareen has 22 years of investment industry experience.
Mr. Sareen is a CFA® charterholder and earned a B.A. in Computer Science from Brown University. |
| |
|
|
Tracy Chen
|
2016 |
As a portfolio manager and head of structured
credit, Tracy is responsible for conducting credit analysis on mortgage-backed and other structured securities, with special emphasis
on collateralized mortgage obligations (CMOs), collateralized loan obligations (CLOs), and other structured products. She also monitors
and analyzes the investment merits of global corporate debt issues. She joined Brandywine Global Investment Management, LLC in August
2008. Prior to joining Brandywine Global, she was with UBS Investment Bank as director of the fixed income valuation group (2006-2008),
GMAC Mortgage Group as a mortgage pricing analyst (2003-2006), Deloitte Consulting as a senior corporate strategy consultant (2001-2003),
and J&A Securities Ltd. in Shenzhen, China as an international corporate finance associate (1995-1999). Tracy earned an MBA with
a concentration in Finance from Kenan-Flagler Business School at the University of North Carolina, an M.A. in American Studies from
Sichuan University in Chengdu, China, and a B.A. in English for Scientific Purposes from University of Electronic Science & Technology
of China in Chengdu, China. Tracy is a CFA® charterholder and earned the Chartered Alternative Investment Analyst
(CAIA) charter in 2010. |
| * |
The address for each portfolio manager is Brandywine, 2929 Arch Street,
Philadelphia, Pennsylvania 19104, unless otherwise indicated.
|
(a)(2): DATA TO BE PROVIDED BY FINANCIAL CONTROL
The following tables set forth certain additional
information with respect to the fund’s investment professionals for the fund. Unless noted otherwise, all information is provided
as of October 31, 2024.
Other Accounts Managed by Portfolio Managers
The table below identifies the number of accounts
(other than the fund) for which the fund’s portfolio managers have day-to-day management responsibilities and the total assets
in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other
accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance is also indicated.
| Name of PM |
Other Accounts Managed |
# of Other Accounts |
Total Assets |
# with Performance Fee |
Total Assets with Performance Fee |
| David F. Hoffman |
Other Registered Investment Companies |
3 |
$1.96 billion |
None |
None |
| Other Pooled Vehicles |
24 |
$5.41 billion |
1 |
$0.16 billion |
| Other Accounts |
36 |
$17.86 billion |
7 |
$6.76 billion |
| John P. McIntyre |
Other Registered Investment Companies |
11 |
$ 4.38 billion |
None |
None |
| Other Pooled Vehicles |
47 |
$12.02 billion |
2 |
$0.29 billion |
| Other Accounts |
54 |
$22.55 billion |
8 |
$7.81 billion |
| Brian Kloss |
Other Registered Investment Companies |
12 |
$4.41 billion |
None |
None |
| Other Pooled Vehicles |
47 |
$12.06 billion |
2 |
$0.29 billion |
| Other Accounts |
55 |
$22.26 billion |
8 |
$7.81 billion |
| Anjujeet Sareen |
Other Registered Investment Companies |
11 |
$4.38 billion |
None |
None |
| Other Pooled Vehicles |
47 |
$12.02 billion |
2 |
$0.29 billion |
| Other Accounts |
54 |
$22.55 billion |
8 |
$7.81 billion |
| Tracy Chen |
Other Registered Investment Companies |
12 |
$4.41 billion |
None |
None |
| |
Other Pooled Vehicles |
47 |
$12.06 billion |
2 |
$0.29 billion |
| |
Other Accounts |
55 |
$22.26 billion |
8 |
$7.81 billion |
(a)(3): As of October 31, 2024:
Portfolio Manager Compensation
All portfolio managers receive a competitive
base salary. In addition, from the firm’s profits, a bonus is paid quarterly and based in part on the performance of the portfolio
managers’ investment strategies relative to a relevant peer-group universe over one-quarter, one-, three- and five-year time periods.
More subjective measurements of an individual’s contributions to the success of their product group and to the overall success
of the firm are also considered as part of the individual allocation decision. After this performance-based incentive compensation is
allocated, profits associated with individual product groups are allocated as follows: a majority is retained within the product group
and the remainder is allocated to a pool shared by all product groups. The Subadviser believes this system achieves the goal of retaining
top-quality investment professionals, as it provides extremely competitive compensation with entrepreneurial potential, and of fostering
excellent performance, growth, and teamwork.
Conflicts of Interest
The Subadviser maintains policies and procedures
reasonably designed to detect and minimize material conflicts of interest inherent in circumstances when a portfolio manager has day-to-day
portfolio management responsibilities for multiple portfolios. Nevertheless, no set of policies and procedures can possibly anticipate
or relieve all potential conflicts of interest. These conflicts may be real, potential, or perceived; certain of these conflicts are
described in detail below.
Allocation of Limited Investment Opportunities.
If a portfolio manager identifies a limited investment opportunity (including initial public offerings) that may be suitable for multiple
portfolios, the investment opportunity may be allocated among these several portfolios, which may limit a portfolio’s ability to
take full advantage of the investment opportunity, due to liquidity constraints or other factors.
The Subadviser has adopted trade allocation
procedures designed to ensure that allocations of limited investment opportunities are conducted in a fair and equitable manner between
portfolios. Nevertheless, investment opportunities may be allocated differently among portfolios due to the particular characteristics
of a portfolio, such as the size of the portfolio, cash position, investment guidelines and restrictions or its sector/ country/region
exposure or other risk controls, market restrictions or for other reasons.
Similar Investment Strategies. The Subadviser
and its portfolio management team may manage multiple portfolios with similar investment strategies. Investment decisions for each portfolio
are generally made based on each portfolio’s investment objectives and guidelines, cash availability, and current holdings. Purchases
or sales of securities for the portfolios may be appropriate for other portfolios with like objectives and may be bought or sold in different
amounts and at different times in multiple portfolios. Purchase and sale orders for a portfolio may be combined with those of other portfolios
in the interest of achieving the most favorable net results for all portfolios.
Differences in Financial Incentives.
A conflict of interest may arise where the financial or other benefits available to a portfolio manager or an investment adviser differ
among the portfolios under management. For example, when the structure of an investment adviser’s management fee differs among
the portfolios under its management (such as where certain portfolios pay higher management fees or performance-based management fees),
a portfolio manager might be motivated to favor certain portfolios over others. Performance-based fees could also create an incentive
for an investment adviser to make investments that are riskier or more speculative. In addition, a portfolio manager might be motivated
to favor portfolios in which he or she or the investment adviser and/or its affiliates have a financial interest. Similarly, the desire
to maintain or raise assets under management or to enhance the portfolio manager’s performance record in a particular investment
strategy or to derive other rewards, financial or otherwise, could influence a portfolio manager to lend preferential treatment to those
portfolios that could most significantly benefit the portfolio manager.
To manage conflicts that may arise from management
of portfolios with performance-based fees, the Subadviser has developed trade allocation procedures as described above and the Subadviser
periodically reviews the performance and trading in portfolios with like strategies to seek to ensure that no portfolio or group of portfolios
receives preference in the trading process.
Personal Account Trading. The Subadviser
may, from time to time, recommend to clients that they buy or sell securities in which employees have a financial interest. These types
of transactions may present a conflict of interest in that employees might benefit from market activity by a client in a security held
by an employee. In order to prevent conflicts of interest between the Subadviser and its client, employee trading is monitored under
the Code of Ethics (the “Code”). The Code includes policies and procedures (a) restricting personal trading, (b) requiring
the pre-clearance of most types of personal securities transactions, (c) requiring the reporting to the Subadviser of all required personal
securities holdings and transactions, and (d) mandating blackout periods during which employees are prohibited from making personal transactions
in certain securities.
The Subadviser and its employees may also invest
in mutual funds and other pooled investment vehicles, including private investment vehicles that are managed by the Subadviser. This
may result in a potential conflict of interest since the Subadviser employees have knowledge of such funds’ investment holdings,
which is non-public information.
Broker Selection and Soft Dollar Usage.
Investment professionals may be able to influence the selection of broker-dealers that are used to execute securities transactions for
the portfolios they manage. In addition to executing trades, some brokers and dealers provide brokerage and research services, which
may result in the payment of higher brokerage commissions than might otherwise be available and may provide an incentive to increase
trading with such brokers. All soft dollar arrangements in which the Subadviser is involved are subject to the Subadviser’s policy
of seeking best execution and are structured to comply with the safe harbor of Section 28(e) of the 1934 Act, and the rules and interpretations
thereof as issued by the SEC. Nonetheless, the research services obtained from brokers and dealers may be used to service portfolios
other than those paying commissions to the broker-dealers providing the research services, and also may benefit some portfolios more
than others.
Portfolio Manager Securities Ownership
The table below identifies the dollar range of securities
beneficially owned by each portfolio manager as of October 31, 2024.
Portfolio Manager(s)
|
|
Dollar Range of
Portfolio Securities
Beneficially Owned
|
| David
F. Hoffman |
|
A |
| Jack P. McIntyre |
|
A |
| Brian L. Kloss |
|
A |
| Anjujeet Sareen |
|
A |
| Tracy Chen |
|
A |
Dollar Range ownership is as follows:
A: none
B: $1 - $10,000
C: 10,001 - $50,000
D: $50,001 - $100,000
E: $100,001 - $500,000
F: $500,001 - $1 million
G: over $1 million
| ITEM
14. | PURCHASES
OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM
15. | SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
Not applicable.
| ITEM
16. | CONTROLS
AND PROCEDURES. |
| (a) | The
registrant’s principal executive officer and principal financial officer have concluded
that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c)
under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective
as of a date within 90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the disclosure controls and procedures
required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange
Act of 1934. |
| (b) | There
were no changes in the registrant’s internal control over financial reporting (as defined
in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report
that have materially affected, or are likely to materially affect the registrant’s
internal control over financial reporting |
| ITEM
17. | DISCLOSURE
OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM
18. | RECOVERY
OF ERRONEOUSLY AWARDED COMPENSATION. |
(a) (1) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley
Act of 2002 attached hereto.
Exhibit 99.CERT
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 attached hereto.
Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto
duly authorized.
BrandywineGLOBAL - Global Income Opportunities Fund Inc.
| By: |
/s/ Jane Trust |
|
| |
Jane Trust |
|
| |
Chief Executive Officer |
|
| |
|
|
| Date: |
December 23, 2024 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
| By: |
/s/ Jane Trust |
|
| |
Jane Trust |
|
| |
Chief Executive Officer |
|
| |
|
|
| Date: |
December 23, 2024 |
|
| By: |
/s/ Christopher Berarducci |
|
| |
Christopher Berarducci |
|
| |
Principal Financial Officer |
|
| |
|
|
| Date: |
December 23, 2024 |
|
Code of Conduct
for Principal Executive and Financial Officers (SOX)
Covered Officers and Purpose of the Code
The Funds’ code of ethics (the “Code”)
for investment companies within the Legg Mason family of mutual funds (each a “Fund,” and collectively, the “Funds”)
applies to each Fund’s Principal Executive Officer, Principal Financial Officer, and Controller (the “Covered Officers”)
for the purpose of promoting:
| • | honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between
personal and professional relationships; |
| • | full, fair, accurate, timely and understandable disclosure in reports and documents a registrant files
with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Funds; |
| • | compliance with applicable laws and governmental rules and regulations; |
| • | prompt internal reporting of Code violations to appropriate persons identified in the Code; and |
| • | accountability for adherence to the Code. |
Each Covered Officer should adhere to a high standard
of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
Covered Officers Should Ethically Handle Actual
and Apparent Conflicts of Interest
A “conflict of interest” occurs when a
Covered Officer’s private interest interferes with the interests of, or his or her service to, a Fund. For example, a conflict of
interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or
her position with a Fund.
Certain conflicts of interest arise out of the relationships
between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment
Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may
not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of
their status as “affiliated persons” of the Fund. The Funds’ and the investment advisers’ compliance programs
and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended
to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for
improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between a Fund and an investment adviser
of which Covered Officers are also officers or employees. As a result, this Code recognizes Covered Officers will, in the normal course
of their duties (whether formally for a Fund or for the adviser, or for both), be involved in establishing policies and
implementing decisions that will have different effects
on the adviser and the Funds. The participation of Covered Officers in such activities is inherent in the contractual relationship between
a Fund and an adviser and is consistent with the performance by Covered Officers of their duties as officers of the Funds. Thus, if performed
in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have
been handled ethically. In addition, it is recognized by the Funds’ Boards of Directors/Trustees (“Boards”) that Covered
Officers may also be officers or employees of one or more other investment companies covered by this or other codes and that such service,
by itself does not give rise to a conflict of interest.
Other conflicts of interest are covered by the Code,
even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following
list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind these examples are not exhaustive.
The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a
Fund.
Each Covered Officer must:
| • | not use his or her personal influence or personal relationships improperly to influence investment decisions
or financial reporting by a Fund; |
| • | not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered
Officer rather than the benefit the Fund; and, |
| • | not use material non-public knowledge of portfolio transactions made or contemplated for the Trust to
trade personally or cause others to trade personally in contemplation of the market effect of such transactions. |
There are some actual or potential conflict of interest
situations that, if material, should always be discussed with the Chief Compliance Officer (“CCO”) or designate that has been
appointed by the Board of the Funds. Examples of these include:
| • | service as a director on the board of any public company (other than the Funds or their investment advisers
or any affiliated person thereof); |
| • | the receipt of any non-nominal gifts (i.e., in excess of $100); |
| • | the receipt of any entertainment from any company with which a Fund has current or prospective business
dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to
raise any question of impropriety; |
| • | any ownership interest in, or any consulting or employment relationship with, any of the Funds’
service providers (other than their investment advisers, or principal underwriter, or any affiliated person thereof); |
| • | a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund
for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s
employment, such as compensation or equity ownership. |
Disclosure and Compliance
Each Covered Officer should:
| • | familiarize him or herself with the disclosure requirements generally applicable to the Funds; |
| • | not knowingly misrepresent, or cause others to misrepresent, facts about a Fund to others, whether within
or outside the Fund, including to the Fund’s Directors/Trustees and auditors, and to governmental regulators and self-regulatory
organizations; and |
| • | to the extent appropriate within his or her area of responsibility, consult with other officers and employees
of the Funds and the advisers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and
documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds. |
It is the responsibility of each Covered Officer to
promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.
Reporting and Accountability
Each Covered Officer must:
| • | upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing
to the Board that he or she has received, read, and understands the Code; |
| • | annually thereafter affirm to the Board that he or she has complied with the requirements of the Code; |
| • | not retaliate against any other Covered Officer or any employee of the Funds or their advisers or any
affiliated persons thereof or service providers of the Funds for reports of potential violations that are made in good faith; |
| • | notify the CCO promptly if he or she knows of any violation of this Code, of which failure to do so is
itself a violation; and |
| • | report at least annually, if necessary, any employment position, including officer or directorships, held
by the Covered Officer or any immediate family member of a Covered Officer with affiliated persons of or Service Providers to the Funds. |
The CCO is responsible for applying this Code to specific
situations in which questions are presented and has the authority to interpret this Code in any particular situation. However, approvals
or waivers sought by a Covered Officer will be considered by the Compliance Committee or Audit Committee, (the “Committee”)
responsible for oversight of the Fund’s code of ethics under Rule 17j-1 under the Investment Company Act. If a Covered Officer seeking
an approval or waiver sits on the Committee, the Covered Person shall recuse him or herself from any such deliberations. Any approval
or waiver granted by the Committee will be reported promptly to the Chair of the Audit Committees of the Funds.
The Funds will follow these procedures in investigating
and enforcing this Code:
| • | the CCO will take all appropriate action to investigate any potential violations reported to him, which
actions may include the use of internal or external counsel, accountants or other personnel; |
| • | if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required
to take any further action; |
| • | any matter that the CCO believes is a violation will be reported to the Committee; |
| • | if the Committee concurs that a violation has occurred, it will inform the Board, which will consider
appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to
appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; |
| • | the Committee will be responsible for granting waivers, as appropriate; and, |
| • | any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. |
Other Policies and Procedures
This Code shall be the sole code of ethics
adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered
investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds’ advisers, principal
underwriter, or other service providers govern or purport to govern the behavior or activities of Covered Officers subject to this
Code, they are superseded by this Code to the extent they overlap or conflict with the provisions of this Code. The Funds’ and
their investment advisers’ and principal underwriter’s codes of ethics under Rule 17j-1 under the Investment Company Act
are separate requirements applying to Covered Officers and others, and are not part of this Code.
Confidentiality
All reports and records prepared or maintained pursuant
to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or
this Code, such matters shall not be disclosed to anyone other than the appropriate Board and Fund counsel, and the board of Directors/Trustees
and fund counsel of any other investment company for whom a Covered Officer serves in a similar capacity.
Annual Report
No less than annually, the CCO shall provide the Board
with a written report describing any issues having arisen since the prior year’s report.
Internal Use
This Code is intended solely for the internal use by
the Funds and does not constitute an admission by or on behalf of any Fund, as to any fact, circumstance or legal consideration.
CERTIFICATIONS PURSUANT TO SECTION 302
EX-99.CERT
CERTIFICATIONS
I, Jane Trust, certify that:
| 1. | I
have reviewed this report on Form N-CSR of BrandywineGLOBAL - Global Income Opportunities
Fund Inc.; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations,
changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The
registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date of this report based on such evaluation;
and |
| d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officers and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
December 23, 2024 |
|
/s/ Jane Trust |
| |
|
|
Jane Trust |
| |
|
|
Chief Executive Officer |
CERTIFICATIONS
I, Christopher Berarducci, certify that:
| 1. | I
have reviewed this report on Form N-CSR of BrandywineGLOBAL - Global Income Opportunities
Fund Inc.; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial information included in this report, and the financial statements
on which the financial information is based, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant
as of, and for, the periods presented in this report; |
| 4. | The
registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report based on such evaluation; and |
| d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officers and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
December 23, 2024 |
|
/s/ Christopher
Berarducci |
| |
|
|
Christopher Berarducci |
| |
|
|
Principal Financial Officer |
CERTIFICATIONS PURSUANT TO SECTION 906
EX-99.906CERT
CERTIFICATION
Jane Trust, Chief Executive Officer, and Christopher Berarducci,
Principal Financial Officer of BrandywineGLOBAL - Global Income Opportunities Fund Inc. (the “Registrant”), each certify
to the best of their knowledge that:
1. The Registrant’s periodic report on Form
N-CSR for the period ended October 31, 2024 (the “Form N-CSR”) fully complies with the requirements of Section 13(a)
or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Form N-CSR fairly
presents, in all material respects, the financial condition and results of operations of the Registrant.
| Chief Executive Officer |
|
Principal Financial Officer |
| BrandywineGLOBAL - Global Income |
|
BrandywineGLOBAL - Global Income |
| Opportunities Fund Inc. |
|
Opportunities Fund Inc. |
| |
|
|
| /s/ Jane Trust |
|
/s/ Christopher Berarducci |
| Jane Trust |
|
Christopher Berarducci |
| Date: December 23, 2024 |
|
Date: December 23, 2024 |
This certification is being furnished to the Securities and Exchange Commission
solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.
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