GLQ Clough Global Equity Fund

Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website at www.cloughglobal.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

Beginning on January 1, 2019, you may, notwithstanding the availability of shareholder reports online, elect to receive all future shareholder reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with a Fund, you can call 1-866-226-8017, from 8am to 5pm CT, to let the Fund know you wish to continue receiving paper copies of your shareholder reports.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-866-226-8017.

To Our Investors,

First, we at Clough Capital Partners L.P. extend our best wishes to all our relationships in this extraordinary time, and hope this update finds you safe and healthy. Our investment team, along with our in-house trading, legal, finance, IT, distribution, and compliance colleagues are up and running seamlessly thanks to the important investments we have made in our infrastructure during our 20-year history.

The Clough Global Dividend and Income Fund (“GLV” or the “Fund”) was down -15.39% on net asset value (“NAV”) and -17.57% on market price for the first six months of the Fund’s fiscal year. The Fund’s benchmark, the 50% Bloomberg Barclays US Aggregate Bond Index/50% MSCI World Index, was down -0.78% for the same period.

The fiscal first half performance (November 1, 2019 – April 30, 2020) for the Fund bore the brunt of a full-blown panic over the coronavirus (COVID-19) attack and subsequent economic shutdown. The stock market decline in March reflected the most intensive scramble for cash ever. Forced deleveraging occurred in hedge funds, mortgage real estate investment trusts (“REITs”) and other traditional users of leverage. The speed and extent of the decline was exceeded only twice in the last 100 years, during the Great Depression and the Global Financial Crisis in 2007-2008. By the end of April, the Federal Reserve (the “Fed”) and U.S. Department of Treasury were responding with the strongest reflationary effort since WWII.

These new programs are likely, in our view, to put enough cash in the economy to turn or at least stem the tide for both the economy and financial markets. The blizzard of announcements from the Treasury and the Fed include cash payments to individuals, small business loans, and various related grants. This infusion of liquidity potentially amounts to 35 to 40% of gross domestic product (“GDP”), an impressive sum. Now authorized to buy paper in unlimited amounts, from banks and non-banks alike, the central bank is trying to make sure there are no cash shortages anywhere in the economy. We think this is likely to support the financial markets while the COVID-19 infection rate levels off. Liquidity being injected into capital markets will go somewhere, and it will still be there when the COVID-19 crisis passes. In the meantime, many stocks are down significantly and valuations for equities are currently much more attractive.

The Fund is using the current market dislocations to make significant investments in technology, healthcare, the emerging mortgage cycle, and attractive income from COVID-19-free sectors in the corporate bond market. We still believe more than ever in a lower for longer interest rate environment. In addition to long duration U.S. Treasuries, the Fund also expressed a low rate view by holding Eurodollar futures (Eurodollars are U.S. bank deposits held abroad and their values rise as the rates on bank deposit decline, which of course is happening). This type of approach is likely to be an effective tool, in our view, if deposit rates go negative.

Technology still has strong tailwinds. For one, we think cloud spending won’t slow. The months of being trapped and tethered to our homes will show us that telecommuting works. Broadband use for work, entertainment, and shopping is surging during the pandemic lockdown and we think that will speed up the 6 GHz mid-band spectrum that is so useful for the rollout of 5G. In any event, demand for 5G services will likely explode. The growth in the uses of artificial intelligence and machine learning will also likely spur a far more rapid buildout of 5G capability.

In March, the focus on healthcare quickly switched from the presidential race to COVID-19 with its unprecedented demand shock. The pandemic has delayed non-essential medical procedures, slowed clinical trials, and interrupted new drug and medical device launches. But it has also created opportunities by accelerating the shift toward virtual care and telemedicine, innovative pharmaceutical and biotech development, and new vaccines and treatments for this treacherous disease. The solution to the economic shutdown will be found in science and biology. While the government stimulus is important to reviving the economy, isolating and launching a treatment that slows replication of COVID-19 in the human body so that our immune system can catch up and fight the virus is the real solution to getting back to normal.

We believe the pending mortgage cycle could be very significant as interest rates have collapsed from the economic slowdown. With the 10-year Treasury well below 1%, the management of First American Financial Corp, one of the largest title insurers, recently estimated that there is $8 trillion dollars of mortgages in the U.S. that are eligible for refinancing and only $1 to $2 trillion in capacity to originate and process these potential transactions. Our investments in this area will focus on pure plays that we believe are likely to directly benefit from the mortgage cycle in origination, title insurance, as well as best in class homebuilders.

We have been of the view for some time now that sustainable yield will be in short supply. The pandemic and the economic fallout will only exacerbate this shortage. With the recent sell-off in corporate debt, we believe investment grade corporate bonds in non COVID-19 sectors, like software and pharmaceuticals, can offer equity-like returns with much lower volatility. Some high-quality REITs in the medical office building sector as well as higher quality agency mortgage REITs and business development companies (“BDCs”) with the liquidity and balance sheet to ride out the economic downturn can offer 5% to 10% dividend yields at significant discounts to book value.

Top 5 Contributors for the Fund’s first fiscal half of the year:

Microsoft Corp (MSFT): the pandemic is accelerating the transition to cloud-hosted software. Microsoft Azure and Office 365 both continue to grow rapidly through this period despite the economic weakness. The advantage of cloud-based software is that the software can be hosted, launched, and used remotely at home, away from the office.

Apple Inc (AAPL): we are looking forward to Apple’s 5G offering next year. Longer term, its strong balance sheet and share buyback program coupled with rapid growth in services make it, in our view, an attractive risk reward opportunity for the Fund.

Ford Motor (F): the Fund was short Ford Motor Co during the period. A heavy debt load and margin pressure from new model launches were weighing on performance prior to the onset of the pandemic. COVID-19 quickly priced a recession level valuation into the stock. The Fund has since covered the position.

Booking Holdings Inc (BKNG) and Sabre Corp (SABR): the Fund established short positions in both BKNG and SABR during the onset of the virus in January. Both companies help facilitate online travel reservations. The mounting travel restrictions from COVID-19 quickly reduced their sales and their stocks fell in value. The Fund has since covered both positions.

Top 5 Detractors for the Fund’s first fiscal half of the year:

Citigroup Inc (C): the U.S. money center banks were sold off by investors over 50% in a matter of weeks. We believe the move lower to this degree was overdone. While there will certainly be losses on the balance sheet, Citigroup does not have significant exposure to the hardest hit areas of the economy like energy, restaurants, and travel and leisure. Unlike 2008, Citigroup, as well as JPMorgan Chase & Co and Bank of America Corp, are operating with much lower leverage and greater liquidity and will be much better situated to recover from the collapse in economic activity. The Fund continues to hold the position.

PennyMac Mortgage Investment Trust (PMT) is an agency mortgage REIT that suffered a significant hit to book value during the first half of the year and was forced to reduce its dividend. Funding costs increased while the pricing of the mortgages it holds fell violently. We believe that the management team at PMT is a good operator of the REIT, but we believe there are other sectors that can recover quicker from the March lows and have exited the position.

Golub Capital BDC Inc (GBDC) is a BDC with a long and successful track record in managing credit to middle market companies. Given the rapid decline in the economy and the stress it put on many of its portfolio companies, Golub reduced its dividend and launched a rights offering to shore up its balance sheet and have dry powder to take advantage of distressed valuations in the market. The rights offering was a short term hit to pricing. However, we believe GBDC offers significant potential going forward in a recovery. The Fund participated in the rights offering and currently maintains its position in GBDC.

Ladder Capital Corp (LADR) is a commercial mortgage REIT. Ladder’s portfolio came under tremendous pressure during March. Investors, worried over questions of rent forbearance and future demand for apartments, hotels, and office space, quickly sold vehicles with commercial exposure like LADR. Similar to PMT, we believe LADR’s management is very sound. However, we believe the recovery could take some time for LADR and have exited the position.

Community Healthcare Trust Inc (CHCT) is a best-in-class medical office building REIT. It leases office space to outpatient facilities that perform essential services like chemotherapy and dialysis. Approximately 97% of their occupants paid rent in March and April. Management continues to make accretive acquisitions and made a modest increase to the dividend. The stock has rallied from its lows in March and we currently maintain the position.

The hedge book served the Fund well during the first half of the year. With valuations over-sold across many sectors, the Fund has covered many of its short positions while maintaining long term positions in sectors like European banks. We believe long duration U.S. Treasuries and the previously mentioned Eurodollar futures are, for the time being, more likely sources of potential protection for the Fund’s long equity book.

As always, please don’t hesitate to reach out to us with any questions. Be safe and we hope to see many of you in person as soon as possible.

Charles I Clough, Jr.

Robert M. Zdunczyk

This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Global Dividend and Income Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not continuously issue shares for sale as open-end mutual funds do. The market price of a closed-end Fund is based on the market’s value.

The information in this letter represents the opinions of the individual portfolio managers and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. Past performance is no guarantee of future results.

MSCI World Index: a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 23 developed markets countries. Both indices referenced herein reflect the reinvestment of dividends. Effective July 31, 2010, the MSCI World Index returns prior to January 1, 2002 were revised to reflect the total returns, with dividends reinvested, reported by MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).

Bloomberg Barclays US Aggregate Bond Index: an index that measures the performance of the U.S. investment grade bond market. The Barclays Aggregate Bond index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States, including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year.

The net asset value (NAV) of a closed-end fund is the market price of the underlying investments (i.e., stocks and bonds) in the fund’s portfolio, minus liabilities, divided by the total number of fund shares outstanding. However, the fund also has a market price; the value of which it trades on an exchange. This market price can be more or less than its NAV.

It is not possible to invest directly in an Index.

RISKS

An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain an annual report or semiannual report which contains this and other information visit www.cloughglobal.com or call 1-877-256-8445. Read them carefully before investing.

A Fund’s distribution policy will, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio.

Distributions may be paid from sources of income other than ordinary income, such as net realized short-term capital gains, net realized long-term capital gains and return of capital. Based on current estimates, we anticipate the most recent distribution has been paid from short-term and long-term capital gains. The actual amounts and sources of the amounts for tax reporting purposes will depend upon a Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.

A Fund’s investments in securities of foreign issuers are subject to risks not usually associated with owning securities of U.S. issuers. These risks can include fluctuations in foreign currencies, foreign currency exchange controls, social, political and economic instability, differences in securities regulation and trading, expropriation or nationalization of assets, and foreign taxation issues.

A Fund’s investments in preferred stocks and bonds of below investment grade quality (commonly referred to as “high yield” or “junk bonds”), if any, are predominately speculative because of the credit risk of their issuers.

An investment by a Fund in REITs will subject it to various risks. The first, real estate industry risk, is the risk that the REIT share prices will decline because of adverse developments affecting the real estate industry and real property values. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country or of different regions, and the strength of specific industries that rent properties. The second, investment style risk, is the risk that returns from REITs—which typically are small or medium capitalization stocks—will trail returns from the overall stock market. The third, interest rate risk, is the risk that changes in interest rates may hurt real estate values or make REIT shares less attractive than other income-producing investments. Credit risk is the risk that an issuer of a preferred or debt security will become unable to meet its obligation to make dividend, interest and principal payments.

Interest rate risk is the risk that preferred stocks paying fixed dividend rates and fixed-rate debt securities will decline in value because of changes in market interest rates. When interest rates rise the value of such securities generally will fall. Derivative transactions (such as futures contracts and options thereon, options, swaps, and short sales) subject a Fund to increased risk of principal loss due to imperfect correlation or unexpected price or interest rate movements. Compared to investment companies that focus only on large companies, the Fund’s share price may be more volatile because it also invests in small and medium capitalization companies.

Past performance is no guarantee of future results.