SEC Form N-CSRS filed by Allspring Global Dividend Opportunity Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22005

Allspring Global Dividend Opportunity Fund

(Exact name of registrant as specified in charter)

1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203

(Address of principal executive offices) (Zip code)

Matthew Prasse

Allspring Funds Management, LLC

1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-222-8222

Date of fiscal year end: October 31

Date of reporting period: April 30, 2024

ITEM 1. REPORT TO STOCKHOLDERS

 

Allspring Global Dividend Opportunity Fund (EOD)

Semi-Annual Report

April 30, 2024

---

Letter to shareholders (unaudited)

 

Andrew Owen

President
Allspring Funds

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Allspring Global Dividend Opportunity Fund for the six-month period that ended April 30, 2024. Globally, stocks and bonds had positive returns for the period. However, markets were volatile as investors focused on persistently high inflation and the impact of aggressive central bank rate hikes. Riskier assets rallied as investors anticipated an end to the tight monetary policy.

For the period, U.S. stocks, based on the S&P 500 Index,1 returned 20.98%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 17.69% while the MSCI EM Index (Net) (USD),3 returned 15.40%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 advanced 4.97%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 gained 3.92%, the Bloomberg Municipal Bond Index6 returned 7.06%, and the ICE BofA U.S. High Yield Index7 gained 8.94%.

Investors remained focused on central bank monetary policies.

In November, the market mood brightened as cooling inflation inspired confidence that central banks could hold off on further rate hikes. Overall annual inflation in the U.S. fell to 3.1% in November while 12-month inflation in the U.K. and the eurozone eased to 4.6% and 2.4%, respectively—far below their peak levels of mid-2022. Third quarter annualized U.S. GDP growth was raised to an estimated 5.2% while U.S. job totals rose by close to 200,000 in November, indicating a slight cooling of the labor market. All of this fresh evidence added to confidence for a U.S. soft economic landing, leading to a more buoyant mood heading into winter.

The broad year-end rally among stocks and bonds continued in December as investors became more confident that monetary policy would ease in 2024. Supporting the bubbly market mood were reports confirming lower inflationary trends in the U.S. and Europe. During the period, it appeared more likely that the U.S. economy could achieve a soft landing, cooling enough to lower inflation without the pain of a recession. However, by year-end, an expectations gap developed. Capital markets priced in a total of 1.50 percentage points in federal funds rate cuts in 2024—twice as much as the three cuts of 0.25% hinted at by Fed officials.

1

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

2

The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source:  MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index.

3

The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of emerging markets. You cannot invest directly in an index.

4

The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

5

The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index.

6

The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high yield bonds. The index tracks the performance of high yield securities traded in the U.S. bond market. Returns shown are net of transaction costs beginning on July 1, 2022. You cannot invest directly in an index. Copyright 2024. ICE Data Indices, LLC. All rights reserved.

2 | Allspring Global Dividend Opportunity Fund

---

Letter to shareholders (unaudited)

Financial market performance was mixed in January 2024 as U.S. stocks had modest gains while non-U.S. equities, particularly those in emerging markets, and fixed income assets were held back by central bank pushback on market optimism over rate cuts. Overall, optimism was supported by hints of a soft landing for the U.S. economy. Key data included a surprisingly strong gain of 353,000 jobs in January, an unemployment rate of just 3.7%, and a rise of just 3.1% in the annual Consumer Price Index (CPI)1 in January. However, that resilience helped tone down expectations of a rate cut in March to a more likely second quarter initial move.

In February, stocks were supported by positive economic data and strong corporate earnings. However, fixed income investments were under pressure as resilient inflation curbed expectations on the timing of interest rate cuts. The S&P 500 Index had solid monthly gains along with emerging market equities, which benefited from a rebound in China.

The first quarter of 2024 closed with ongoing stock market momentum and a more muted sense of confidence in fixed income markets as investors adjusted to the prospect of greater-than-expected economic strength. On the flip side, expectations on the timing of an initial Fed rate cut were pushed back from March to June and then beyond. Additionally, the number of quarter-point rate cuts forecast by the market fell from six as projected in December 2023 to two to three cuts by fiscal period-end.

Markets retreated broadly in April as U.S. annual inflation continued to resist monetary policy efforts and expectations for its downward trajectory, with an April CPI reading of 3.4%. The timing of a Fed initial rate cut came into greater question in April. Not only was there less confidence regarding when a first cut would take place but also whether any rate reductions would occur at all in 2024. Market expectations continued to recede to a possible September Fed first cut. Meanwhile, eurozone annual inflation held steady in April at 2.4%. Developed market stocks and fixed income securities of all types were in the red for April.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

Andrew Owen
President
Allspring Funds

“ The first quarter of 2024 closed with ongoing stock market momentum and a more muted sense of confidence in fixed income markets as investors adjusted to the prospect of greater-than-expected economic strength. ”

For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.

1

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index.

Allspring Global Dividend Opportunity Fund | 3

---

Performance highlights (unaudited)

 

Growth of $10,000 investment as of April 30, 20241

  

1	The chart compares the performance of the Fund for the most recent ten years with the MSCI ACWI (Net) and Global Dividend Opportunity Blended Index. The chart assumes a hypothetical investment of $10,000 investment and reflects all operating expenses of the Fund.

 

Comparison of NAV vs. market value1

  

1	This chart does not reflect any brokerage commissions charged on the purchase and sale of the Fund’s common shares. Dividends and distributions paid by the Fund are included in the Fund’s average annual total returns but have the effect of reducing the Fund’s NAV.

 

Allspring Global Dividend Opportunity Fund | 7

---

Performance highlights (unaudited)

The option overlay* is a short-call strategy written on a portion of the Fund’s global equity allocation. The combined global equity and short option portfolio creates a global covered call portfolio. Over the long run, a covered call strategy aims to add yield and lower risk compared with a passive allocation to equity. The option overlay is expected to add value in flat-to-down global  equity markets and in above-average volatility environments.

 

Ten largest holdings (%) as of April 30, 20241
Microsoft Corp.	4.30
NVIDIA Corp.	3.07
Apple, Inc.	2.23
Alphabet, Inc. Class A	2.16
Amazon.com, Inc.	2.09
Taiwan Semiconductor Manufacturing Co. Ltd. ADR	1.97
Walmart, Inc.	1.96
Hitachi Ltd.	1.94
ConocoPhillips	1.92
Broadcom, Inc.	1.90

 

1	Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified.

The equity sleeve benefited from stock selection within IT, industrials, and financials.

Investor enthusiasm over AI benefited several IT holdings during the period. Dell Technologies, Inc., surged 87%, while Broadcom, Inc., and Taiwan Semiconductor returned 55% and 60%, respectively. Two industrial holdings, EMCOR Group, which was purchased during the period, and nVent Electric PLC, generated strong quarterly earnings and returned+68% and+50%, respectively. Within financials, Citigroup, Inc., and 3i Group PLC, a U.K. private equity firm, rallied 58% and 55%, respectively. The equity sleeve also benefited from an underweight to consumer staples, which returned 9%, and was the worst-performing sector of the index during the six-month period.

Stock selection within health care, communication services, and utilities detracted from relative performance.

China Medical Systems sold off 41% over disappointing sales and China’s ongoing anti-graft program targeting the medical industry. During April, we sold out of our position in the stock due to deteriorating model ranks and an elevated risk of future earnings disappointments. Two U.S. pharmaceutical companies, Gilead Sciences and Pfizer, Inc., declined 16% and 14%, respectively, over mixed quarterly results and underwhelming forward guidance. Copel, a Brazilian state-owned electric utility, fell 5% over the period and we sold out of our position due to deteriorating model ranks.

The high yield sleeve took a barbelled approach.

Since October 2022, as rates have risen and spreads have modestly widened, the Fund’s high yield sleeve reinvested some of its shorter-maturity, higher-quality holdings into a combination of higher-yielding shorter maturities and higher-quality longer maturities. Its ratings allocation has incrementally moved toward a more “barbelled” position. The high yield team reduced BB-rated and B-rated bonds while increasing BBB-rated and CCC-rated bonds.

By sector, leisure and transportation services were most additive within high yield, while media entertainment and health care holdings were most detrimental. Dish Network and Fly Leasing** were our best-performing individual credits. Underweight allocations to Lumen Technologies and iHeart Communications also contributed. Gray Television** and Enviva

were the two worst-performing individual holdings. 

Sector allocation as of April 30, 20241

  

1	Figures represent the percentage of the Fund’s long-term investments. Allocations are subject to change and may have changed since the date specified.

*

The option overlay is compared with the option-only returns of the U.S.-based covered call benchmarks, the Chicago Board Options Exchange (CBOE) S&P 500 Buy Write (BXM) Index and the CBOE S&P 500 2% OTM Buy Write (BXY) Index. The BXM is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The BXY Index is a new index that uses the same methodology as BXM, but is calculated using out-of-the-money S&P 500 Index (SPX) call options, rather than at-the-money SPX call options. We adjust the benchmarks to assume 50% written on equity and report only the option return. The unadjusted BXM Index and BXY Index returned 9.70% and 14.08%, respectively, from October 31, 2023 to April 30, 2024. You cannot invest directly in an index.

**

This security was no longer held at the end of the reporting period.

 

10 | Allspring Global Dividend Opportunity Fund

---

Performance highlights (unaudited)

Leverage impact was positive.

The Fund’s use of leverage through bank borrowings had a positive impact on the NAV total return performance during this reporting period. As of April 30, 2024, the Fund had approximately 17.1% leverage as a percent of total assets.

Option overlay detracted during a period of strong equity performance.

Global equity markets performed strongly during this six-month period, with the MSCI ACWI (Net) returning 19.77%. The overall increase in equity valuation caused option-implied volatilities to decrease over this time. The option-implied volatility, as measured by the VIX Index,* decreased from 18.14% to a post-COVID-19 low of 12.07% on December 12, 2023. The equity pull-back in April caused option-implied volatilities to increase again, peaking at 19.23% on April 15, 2024, before easing to finish the period at 15.65%. As expected, the option overlay detracted from the Fund’s performance during the period as equity markets sharply increased

and volatility declined. 

Credit quality as of April 30, 20241

  

1

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the portfolio with the ratings depicted in the chart are calculated based on the market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of the three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

The U.S. economy appears to be approaching a soft landing and will likely continue outperforming other developed markets.

As we enter May 2024, the lagged effects of tighter monetary policy and a withdrawal of COVID-19 fiscal stimulus are weighing on global growth. Gross domestic product growth is decelerating or stagnant across most developed and emerging markets, but most major economies are expected to avoid a hard landing in 2024. The labor market remains healthy, with strong employment gains and contained wage inflation. Higher short-term rates haven’t fully tamed inflation in the U.S., but core inflation remains on a downward trend. A resilient U.S. economy appears to be approaching a soft landing or no landing, and it is expected to continue outperforming other developed markets.

However, the recent hotter-than-expected inflation reports leave investors and central banks concerned about the stickiness of inflation and the need to keep rates higher for longer. The rebound in oil prices and elevated geopolitical concerns add further pressure to the inflation narrative. Without a significant deterioration in the labor market, the anticipated rate cut cycle by major central banks is likely to be further delayed or reduced.

After the concentrated mega-cap rally of 2023 and early 2024, equity markets are likely to be defined by slowing global economic growth, single-digit earnings growth, and a broadening of returns. Volatility is anticipated amid a highly contentious U.S. presidential election year and ongoing geopolitical tensions surrounding Ukraine, the Middle East, and Taiwan. Given this backdrop, we expect 2024 to provide opportunities for disciplined stock selection to add value.

The Fund’s equity team anticipates volatile and range-bound markets, but there are potential positive catalysts from decelerating inflation, a resilient jobs market, improving corporate earnings, and a broadening of market

returns. 

Geographic allocation as of April 30, 20241

  

1	Figures represent the percentage of the Fund’s long-term investments. Allocations are subject to change and may have changed since the date specified.

The high yield outlook is positive.

A “Goldilocks” economic environment—moderate growth and inflation that eventually recedes toward the Fed’s desired long-term target—creates a positive backdrop for high yield. Issuer balance sheets are generally healthy. Leverage and coverage ratios compare favorably to

*

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) is a popular measure of the implied volatility of S&P 500 Index options. It represents one measure of the market’s expectation of stock market volatility over the next 30-day period. You cannot invest directly in an index.

 

Allspring Global Dividend Opportunity Fund | 11

---