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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number: 811-21938

 

Voya Natural Resources Equity Income Fund

(Exact name of registrant as specified in charter)

 

7337 East Doubletree Ranch Rd., Suite 100, Scottsdale, AZ 85258

(Address of principal executive offices) (Zip code)

 

Huey P. Falgout, Jr., 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 1-800-992-0180

 

Date of fiscal year end: February 28

 

Date of reporting period: November 30, 2014

 

 

 

Item 1. Schedule of Investments

 

The schedules of investments as of the close of the reporting period are set forth below for:

 

Voya Natural Resources Equity Income Fund

 

The schedules are not audited.

 

  

Voya Natural Resources Equity Income Fund

PORTFOLIO OF INVESTMENTS as of November 30, 2014 (Unaudited)

    

Shares								Value				Percentage of Net Assets
COMMON STOCK: 99.1%
						Energy: 83.5%
	93,198					Anadarko Petroleum Corp.		$	7,376,622				3.4
	23,704					Apache Corp.			1,519,189				0.7
	19,772					Baker Hughes, Inc.			1,127,004				0.5
	42,064			@		Cameron International Corp.			2,157,042				1.0
	128,264					Canadian Natural Resources Ltd.			4,268,626				2.0
	24,610					Carrizo Oil & Gas, Inc.			971,111				0.5
	110,262					Cenovus Energy, Inc.			2,436,790				1.1
	8,050			@		Cheniere Energy, Inc.			531,219				0.2
	145,118					Chevron Corp.			15,798,997				7.3
	34,917					Cimarex Energy Co.			3,664,539				1.7
	158,425					Cloud Peak Energy, Inc.			1,848,820				0.9
	134,479					ConocoPhillips			8,885,027				4.1
	55,653					Consol Energy, Inc.			2,177,702				1.0
	90,880					Devon Energy Corp.			5,359,194				2.5
	18,164					Diamond Offshore Drilling			533,477				0.2
	40,943					Enerplus Corp.			534,306				0.2
	95,575					EOG Resources, Inc.			8,288,264				3.8
	233,206					ExxonMobil Corp.			21,114,471				9.8
	43,436					Forum Energy Technologies, Inc.			1,042,898				0.5
	143,111					Halliburton Co.			6,039,284				2.8
	64,692					Hess Corp.			4,717,987				2.2
	245,285			@		Key Energy Services, Inc.			461,136				0.2
	60,477					Kinder Morgan, Inc.			2,500,724				1.2
	36,638					Marathon Oil Corp.			1,059,571				0.5
	20,374					Marathon Petroleum Corp.			1,835,494				0.9
	79,618			@		MEG Energy Corp.			1,292,966				0.6
	31,115					National Oilwell Varco, Inc.			2,085,950				1.0
	119,698					Noble Corp. PLC			2,153,367				1.0
	12,680					Noble Energy, Inc.			623,602				0.3
	349,672					Nordic American Tankers Ltd.			3,133,061				1.5
	126,921					Occidental Petroleum Corp.			10,124,488				4.7
	235,993					Paragon Offshore PLC			856,655				0.4
	113,126					Patterson-UTI Energy, Inc.			2,001,199				0.9
	79,529					Phillips 66			5,807,208				2.7
	7,192					Pioneer Natural Resources Co.			1,030,110				0.5
	49,098					Range Resources Corp.			3,223,284				1.5
	41,141					Royal Dutch Shell PLC - Class A ADR			2,732,174				1.3
	186,182					Schlumberger Ltd.			16,002,343				7.4
	7,391					SemGroup Corp.  - Class A			546,860				0.3
	47,857					Spectra Energy Corp.			1,812,823				0.8
	125,904					Suncor Energy, Inc.			3,977,307				1.8
	104,764					Superior Energy Services			2,022,993				0.9
	104,515					Talisman Energy’, Inc.			492,266				0.2
	1,828					Targa Resources Corp.			208,648				0.1
	68,031			@		Unit Corp.			2,600,145				1.2
	123,158					Valero Energy Corp.			5,986,710				2.8
	60,004			@		Whiting Petroleum Corp.			2,506,367				1.2
	48,870					Williams Cos., Inc.			2,529,022				1.2
									179,999,042				83.5
						Materials: 15.6%
	63,734					Alamos Gold, Inc.			431,396				0.2
	39,092					Alcoa, Inc.			675,901				0.3
	21,178					Ball Corp.			1,420,408				0.6
	112,490					Barrick Gold Corp.			1,337,506				0.6
	52,169			@		Crown Holdings, Inc.			2,582,366				1.2
	221,765					Freeport-McMoRan, Inc.			5,954,390				2.8
	28,624					GoldCorp, Inc.			562,175				0.2
	91,697					International Paper Co.			4,935,133				2.3
	213,645			@		Lundin Mining Corp.			1,018,247				0.5
	51,992					Packaging Corp. of America			3,861,966				1.8
	42,945					Randgold Resources Ltd. ADR			2,777,683				1.3
	59,407					Rio Tinto PLC ADR			2,768,366				1.3
	48,314					Rock-Tenn Co.			2,744,718				1.3
	41,136					Royal Gold, Inc.			2,619,540				1.2
									33,689,795				15.6
				Total Common Stock
				(Cost $223,529,021)					213,688,837				99.1
SHORT-TERM INVESTMENTS: 3.3%
						Mutual Funds: 3.3%
	7,004,000					BlackRock Liquidity Funds, TempFund, Institutional Class, 0.030%††
						(Cost $7,004,000)			7,004,000				3.3
				Total Short-Term Investments
				(Cost $7,004,000)					7,004,000				3.3
				Total Investments in Securities (Cost $230,533,021)				$	220,692,837				102.4
				Liabilities in Excess of Other Assets					(5,246,215	)			(2.4	)
				Net Assets				$	215,446,622				100.0

 

††	Rate shown is the 7-day yield as of November 30, 2014.
@	Non-income producing security
ADR	American Depositary Receipt

 

 

Voya Natural Resources Equity Income Fund

PORTFOLIO OF INVESTMENTS as of November 30, 2014 (Unaudited) (Continued)

 

Cost for federal income tax purposes is $230,601,897.

Net unrealized depreciation consists of:

 

Gross Unrealized Appreciation		$	14,769,001
Gross Unrealized Depreciation			(24,678,061	)
Net Unrealized Depreciation		$	(9,909,060	)

  

Industry Diversification as of November 30, 2014
(as a percentage of net assets)
Integrated Oil & Gas			28.2%
Oil & Gas Exploration & Production			23.7%
Oil & Gas Equipment & Services			14.3%
Oil & Gas Refining & Marketing			6.4%
Oil & Gas Storage & Transportation			5.3%
Diversified Metals & Mining			4.6%
Oil & Gas Drilling			3.7%
Gold			3.5%
Paper Packaging			3.1%
Paper Products			2.3%
Coal & Consumable Fuels			1.9%
Metal & Glass Containers			1.8%
Aluminum			0.3%
Assets in Excess of Other Liabilities*			0.9%
Net Assets			100.0%

 

* Includes short-term investments.

 

Fair Value Measurements

The following is a summary of the fair valuations according to the inputs used as of November 30, 2014 in valuing the assets and liabilities:(1)

 

		Quoted Prices in Active Markets for Identical Investments (Level 1)				Significant Other Observable Inputs  (Level 2)				Significant Unobservable Inputs (Level 3)				Fair Value at November 30, 2014
Asset Table
Investments, at fair value
Common Stock*		$	213,688,837			$	–			$	–			$	213,688,837
Short-Term Investments			7,004,000				–				–				7,004,000
Total Investments, at fair value		$	220,692,837			$	–			$	–			$	220,692,837
Liabilities Table
Other Financial Instruments+
Written Options		$	–			$	(134,248	)		$	–			$	(134,248	)
Total Liabilities		$	–			$	(134,248	)		$	–			$	(134,248	)

 

(1)	For the period ended November 30, 2014, as a result of the fair value pricing procedures for international equities utilized by the Fund, certain securities have transferred in and out of Level 1 and Level 2 measurements during the year. The Fund’s policy is to recognize transfers between levels at the end of the reporting period. At November 30, 2014, securities valued at $584,896 were transferred from Level 2 to Level 1 within the fair value hierarchy.
+	Other Financial Instruments are derivatives not reflected in the Portfolio of Investments and may include open forward foreign currency contracts, futures, centrally cleared swaps, OTC swaps and written options. Forward foreign currency contracts, futures and centrally cleared swaps are valued at the unrealized gain (loss) on the instrument.  OTC swaps and written options are valued at the fair value of the instrument.
*	For further breakdown of Common Stock by sector, please refer to the Portfolio of Investments.

 

At November 30, 2014, the following over-the-counter written options were outstanding for Voya Natural Resources Equity Income Fund:

   

Notional Amount				Counterparty		Description		Exercise Price		Expiration Date		Premiums Received				Fair Value
Options on Indices
	1,107,409			Goldman Sachs & Co.		Call on Energy Select Sector SPDR® Fund		90.310 USD		12/19/14		$	1,196,223			$	(42,205	)
	380,664			UBS AG		Call on Market Vectors Gold Miners ETF		20.260 USD		12/19/14			319,035				(86,541	)
	247,089			UBS AG		Call on Materials Select Sector SPDR® Fund		51.680 USD		12/19/14			44,451				(5,502	)
						Total Written OTC Options						$	1,559,709			$	(134,248	)

 

 

Voya Natural Resources Equity Income Fund

PORTFOLIO OF INVESTMENTS as of November 30, 2014 (Unaudited) (Continued)

 

A summary of derivative instruments by primary risk exposure is outlined in the following tables.

 

The fair value of derivative instruments as of November 30, 2014 was as follows:

 

Derivatives not accounted for as hedging instruments

 

				Fair Value
Liability Derivatives		Instrument Type
Equity contracts		Written options		$	134,248
Total Liability Derivatives				$	134,248

  

The following is a summary by counterparty of the fair value of OTC derivative instruments subject to Master Netting Agreements and collateral pledged (received), if any, at November 30, 2014:

 

		Goldman Sachs & Co.				UBS AG				Totals
Liabilities:
Written options		$	42,205			$	92,043			$	134,248
Total Liabilities		$	42,205			$	92,043			$	134,248
Net OTC derivative instruments by counterparty, at fair value		$	(42,205	)		$	(92,043	)			(134,248	)
Total collateral pledged by the Fund/(Received from counterparty)		$	–			$	–			$	–
Net Exposure(1)		$	(42,205	)		$	(92,043	)		$	(134,248	)

 

(1)

Positive net exposure represents amounts due from each respective counterparty. Negative exposure represents amounts due from the Fund.

 

Item 2. Controls and Procedures.

 

(a)

Based on our evaluation conducted within 90 days of the filing date, hereof, the design and operation of the registrant’s disclosure controls and procedures are effective to ensure that material information relating to the registrant is made known to the certifying officers by others within the appropriate entities, particularly during the period in which Forms N-Q are being prepared, and the registrant’s disclosure controls and procedures allow timely preparation and review of the information for the registrant’s Form N-Q and the officer certifications of such Form N-Q.

 

(b)

There were no significant changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s last fiscal quarter of 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.

 

Item 3. Exhibits.

 

A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as EX-99.CERT.

  

 

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, thereunto duly authorized.

 

(Registrant): Voya Natural Resources Equity Income Fund

 

By	/s/ Shaun P. Mathews
	Shaun P. Mathews
	President and Chief Executive Officer
Date:	January 23, 2015

 

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/ Shaun P. Mathews
	Shaun P. Mathews
	President and Chief Executive Officer
Date:	January 23, 2015
By	/s/ Todd Modic
	Todd Modic
	Senior Vice President and Chief Financial Officer Date:
	January 23, 2015