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: May 31, 2018

 

 

 

 

 

 

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 May 31, 2018 (Unaudited)

 

Shares        Value   Percentage
of Net
Assets		 
COMMON STOCK: 99.9%         
       Canada: 14.7%          
33,050      Barrick Gold Corp.  $435,930    0.3 
112,989      Canadian Natural Resources Ltd.   3,904,900    2.7 
97,364      Enbridge, Inc.   3,025,099    2.1 
211,102   (1)  Iamgold Corp.   1,317,276    0.9 
261,541   (1)  Kinross Gold Corp.   941,548    0.6 
9,434      Norbord, Inc.   394,530    0.3 
71,490      PAN American Silver Corp.   1,264,658    0.9 
25,138      Pembina Pipeline Corp.   874,048    0.6 
109,230      Suncor Energy, Inc.   4,345,169    3.0 
75,954      Teck Cominco Ltd. - Class B   2,063,670    1.4 
44,026      TransCanada Corp.   1,841,608    1.2 
380,066      Yamana Gold, Inc.   1,105,992    0.7 
           21,514,428    14.7 
                  
       United Kingdom: 1.5%          
68,689      TechnipFMC PLC   2,139,662    1.5 
                  
       United States: 83.7%          
54,495      Anadarko Petroleum Corp.   3,803,751    2.6 
18,137      Andeavor   2,619,527    1.8 
10,095      Apache Corp.   403,800    0.3 
16,407      Avery Dennison Corp.   1,723,227    1.2 
10,948      Baker Hughes a GE Co.   378,691    0.2 
31,222   (1)  Berry Plastics Group, Inc.   1,507,710    1.0 
38,766   (1)  Carrizo Oil & Gas, Inc.   979,229    0.7 
94,777      Chevron Corp.   11,780,781    8.0 
8,205      Cimarex Energy Co.   762,409    0.5 
6,042      Compass Minerals International, Inc.   395,147    0.3 
18,304   (1)  Concho Resources, Inc./Midland TX   2,513,322    1.7 
95,324      ConocoPhillips   6,423,884    4.4 
5,570   (1)  Continental Resources, Inc.   375,084    0.2 
27,629   (1)  Crown Holdings, Inc.   1,197,441    0.8 
25,840      Delek US Holdings, Inc.   1,441,355    1.0 
16,290      Devon Energy Corp.   677,175    0.5 
24,559   (1)  Dril-Quip, Inc.   1,180,060    0.8 
13,360      Eagle Materials, Inc.   1,447,957    1.0 
52,792      EOG Resources, Inc.   6,219,426    4.2 
38,811      EQT Corp.   2,000,319    1.4 
75,093   (1)  Extraction Oil & Gas, Inc.   1,273,577    0.9 
119,633      Exxon Mobil Corp.   9,718,985    6.6 
40,922      Freeport-McMoRan, Inc.   691,582    0.5 
19,515      Greif, Inc. - Class A   1,137,920    0.8 
95,484   (1)  Gulfport Energy Corp.   1,060,827    0.7 
85,916      Halliburton Co.   4,273,462    2.9 
5,818      Hess Corp.   351,524    0.2 
28,062      HollyFrontier Corp.   2,165,825    1.5 
12,534      International Paper Co.   670,569    0.4 
160,501      Kinder Morgan, Inc.   2,677,157    1.8 
115,856   (1)  Laredo Petroleum, Inc.   1,075,144    0.7 
48,157      Louisiana-Pacific Corp.   1,405,221    1.0 
100,661      Marathon Oil Corp.   2,157,165    1.5 
Shares        Value   Percentage
of Net
Assets		 
COMMON STOCK: (continued)          
       United States: (continued)          
49,665      Marathon Petroleum Corp.  $3,925,025    2.7 
1,801      Martin Marietta Materials, Inc.   401,389    0.3 
40,980   (1)  McDermott International, Inc.   890,495    0.6 
8,907      National Oilwell Varco, Inc.   368,928    0.2 
18,538   (1)  Newfield Exploration Co.   542,051    0.4 
67,860      Newmont Mining Corp.   2,641,790    1.8 
10,824      Noble Energy, Inc.   386,417    0.3 
71,068      Occidental Petroleum Corp.   5,983,926    4.1 
15,623      Oneok, Inc.   1,064,864    0.7 
15,901      Packaging Corp. of America   1,868,367    1.3 
31,911      PBF Energy, Inc.   1,505,561    1.0 
23,390   (1)  PDC Energy, Inc.   1,414,861    1.0 
33,369      Peabody Energy Corp.   1,443,877    1.0 
24,367      Phillips 66   2,838,512    1.9 
7,682      Pioneer Natural Resources Co.   1,483,394    1.0 
98,553   (1)  QEP Resources, Inc.   1,191,506    0.8 
61,089      RPC, Inc.   1,003,081    0.7 
92,057      Schlumberger Ltd.   6,321,554    4.3 
237,395   (1)  Southwestern Energy Co.   1,122,878    0.8 
31,275   (1)  Summit Materials, Inc.   888,836    0.6 
34,619      US Silica Holdings, Inc.   1,070,766    0.7 
43,066      Valero Energy Corp.   5,219,599    3.6 
3,208      Vulcan Materials Co.   409,790    0.3 
6,980      WestRock Co.   410,982    0.3 
25,614      Williams Cos., Inc.   687,992    0.5 
52,958      World Fuel Services Corp.   1,105,763    0.7 
           122,681,457    83.7 
                  
    Total Common Stock          
    (Cost $147,005,939)   146,335,547    99.9 
                  
SHORT-TERM INVESTMENTS: 0.6%         
       Mutual Funds: 0.6%          
939,931   (2)  BlackRock Liquidity Funds, FedFund, Institutional Class, 1.640%          
       (Cost $939,931)   939,931    0.6 
                  
    Total Short-Term Investments          
    (Cost $939,931)  939,931    0.6 
                  
    Total Investments in Securities
(Cost $147,945,870)		  $147,275,478    100.5 
    Liabilities in Excess of Other Assets   (659,969)   (0.5) 
    Net Assets  $146,615,509    100.0 

 

(1) Non-income producing security.
(2) Rate shown is the 7-day yield as of May 31, 2018.

 

 

 

 

Voya Natural Resources Equity Income Fund PORTFOLIO OF INVESTMENTS
as of May 31, 2018 (Unaudited)(Continued)

 

Industry Diversification   Percentage
of Net Assets		 
Oil & Gas Exploration & Production   25.6%
Integrated Oil & Gas   21.7 
Oil & Gas Refining & Marketing   10.7 
Oil & Gas Equipment & Services   9.7 
Oil & Gas Storage & Transportation   5.6 
Oil&Gas   3.7 
Paper Packaging   3.2 
Mining   3.1 
Gold   2.8 
Metal & Glass Containers   2.6 
Diversified Metals & Mining   2.2 
Oil&Gas Services   1.5 
Construction Materials   1.6 
Coal   1.0 
Oil & Gas   1.0 
Materials   1.0 
Building Materials   0.9 
Energy   0.7 
Utilities   0.7 
Pipelines   0.6 
Short-Term Investments   0.6 
Liabilities in Excess of Other Assets   (0.5)
Net Assets   100.0%

Fair Value Measurements

The following is a summary of the fair valuations according to the inputs used as of May 31, 2018 in valuing the assets and liabilities:

 

   Quoted Prices
in Active Markets
for Identical
Investments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Fair Value
at
May 31, 2018		 
Asset Table                    
Investments, at fair value                       
Common Stock*  $146,335,547   $–   $–   $146,335,547 
Short-Term Investments   939,931    –    –    939,931 
Total Investments, at fair value  $147,275,478   $–   $–   $147,275,478 
Liabilities Table                    
Other Financial Instruments+                    
Written Options  $–   $(511,582)  $–   $(511,582)
Total Liabilities  $–   $(511,582)  $–   $(511,582)

  

+ Other Financial Instruments 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.

 

 

 

 

Voya Natural Resources Equity Income Fund PORTFOLIO OF INVESTMENTS
as of May 31, 2018 (Unaudited)(Continued)

 

 At May 31, 2018, the following OTC written equity options were outstanding for Voya Natural Resources Equity Income Fund:

 

Description  Counterparty  Put/Call  Expiration
Date		  Exercise
Price		  Number of
Contracts		   Notional
Amount		   Premiums
Received		   Fair Value 
                              
Energy Select Sector SPDR® Fund  UBS AG  Call  06/29/18   78.130   USD   541,775    41,185,736   $483,480   $(369,065)
Materials Select Sector SPDR® Fund  Citibank N.A.  Call  06/15/18   61.060   USD   162,045    9,427,778    53,345    (1,036)
SPDR® S&P Oil & Gas Exploration & Production ETF  JPMorgan Chase Bank N.A.  Call  06/15/18   45.320   USD   373,031    15,760,560    159,396    (71,148)
VanEck Vectors Gold Miners ETF  HSBC Bank USA N.A.  Call  06/15/18   22.630   USD   270,392    6,040,557    84,606    (70,333)
                              $780,827   $(511,582)

  

Currency Abbreviations
USD - United States Dollar

 

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

 

The fair value of derivative instruments as of May 31, 2018 was as follows:

 

      Fair Value 
Derivatives not accounted for as hedging instruments        
         
Liability Derivatives  Instrument Type     
         
Equity contracts  Written options  $511,582 
Total Liability Derivatives     $511,582 

 

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 May 31, 2018:

 

   Citibank N.A.   HSBC Bank USA N.A.   JPMorgan Chase Bank N.A.   UBS AG   Totals 
Liabilities:                    
Written options  $1,036   $70,333   $71,148   $369,065   $511,582 
Total Liabilities  $1,036   $70,333   $71,148   $369,065   $511,582 
                          
Net OTC derivative instruments by counterparty, at fair value  $(1,036)  $(70,333)  $(71,148)  $(369,065)   (511,582)
                          
Total collateral pledged by the Fund/(Received from counterparty)  $-   $-   $-   $-   $- 
                          
Net Exposure(1)  $(1,036)  $(70,333)  $(71,148)  $(369,065)  $(511,582)

 

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

 

At May 31, 2018, the aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments at period end were:

 

Cost for federal income tax purposes was $147,292,919.

 

Net unrealized depreciation consisted of:

 

Gross Unrealized Appreciation  $16,132,283 
Gross Unrealized Depreciation   (16,639,085)
Net Unrealized Depreciation  $(506,802)

 

 

 

 

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/ Michael Bell  
  Michael Bell  
  Chief Executive Officer  
     
Date: July 26, 2018  

 

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/ Michael Bell  
  Michael Bell  
  Chief Executive Officer  
     
Date: July 26, 2018  
     
By /s/ Todd Modic  
  Todd Modic  
  Senior Vice President and Chief Financial Officer  
     
Date: July 26, 2018