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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Nicholas-Applegate Equity & Convertible Income Fund

 

(Exact name of registrant as specified in charter)

1345 Avenue of the Americas New York, New York		10105
(Address of principal executive offices)		(Zip code)

Lawrence G. Altadonna — 1345 Avenue of the Americas New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-739-3371

Date of fiscal year end: January 31, 2010

Date of reporting period: April 30, 2009

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

Item 1. Schedule of Investments

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
April 30, 2009 (unaudited)

Shares
(000)						Value*
COMMON STOCK-69.0%
				Aerospace/Defense-1.8%
	74			L-3 Communications Holdings, Inc.		$	5,657,945
				Automotive-2.3%
	497			Ford Motor Co. (f)			2,973,746
	226			Johnson Controls, Inc.			4,294,359
							7,268,105
				Beverages-6.4%
	223			Coca-Cola Co.			9,608,416
	127			Molson Coors Brewing Co.—Cl. B			4,869,225
	114			PepsiCo, Inc.			5,672,640
							20,150,281
				Commercial Services-1.6%
	140			McKesson Corp.			5,180,000
				Communications Equipment-1.5%
	156			Harris Corp.			4,755,190
				Computers-5.0%
	379			EMC Corp. (f)			4,743,858
	67			International Business Machines Corp.			6,894,428
	61			Research In Motion Ltd. (f)			4,225,600
							15,863,886
				Cosmetics/Personal Care-1.9%
	121			Procter & Gamble Co.			6,002,016
				Diversified Financial Services-0.9%
	84			J.P. Morgan Chase & Co.			2,765,400
				Electric Utilities-2.7%
	92			Constellation Energy Group, Inc.			2,215,360
	54			Entergy Corp.			3,510,664
	154			NRG Energy, Inc. (f)			2,768,902
							8,494,926
				Electronics-1.6%
	149			Amphenol Corp. —Cl. A			5,042,160
				Energy Equipment & Services-1.6%
	69			Diamond Offshore Drilling, Inc.			4,989,049
				Healthcare Products-5.3%
	111			Baxter International, Inc.			5,388,350
	164			Gilead Sciences, Inc. (f)			7,511,200
	27			Intuitive Surgical, Inc. (f)			3,876,398
							16,775,948
				Insurance-2.6%
	53			Metlife, Inc.			1,582,224
	145			Platinum Underwriters Holdings Ltd.			4,177,404
	87			Prudential Financial, Inc.			2,512,560
							8,272,188
				Internet-1.8%
	14			Google, Inc. —Cl. A (f)			5,543,580
				Machinery-3.2%
	137			AGCO Corp. (f)			3,331,530
	101			Deere & Co.			4,163,134
	108			Joy Global, Inc.			2,748,900
							10,243,564
				Manufacturing-1.0%
	122			General Electric Co.			1,549,106
	142			Textron, Inc.			1,527,952
							3,077,058
				Metals & Mining-1.7%
	70			Freeport-McMoRan Copper & Gold, Inc.			2,985,500
	97			Peabody Energy Corp.			2,546,635
							5,532,135
				Oil & Gas-3.8%
	96			National Oilwell Varco, Inc. (f)			2,900,824
	90			Occidental Petroleum Corp.			5,054,842
	81			Schlumberger Ltd.			3,987,786
							11,943,452

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
April 30, 2009 (unaudited)

Shares
(000)						Value*
				Pharmaceuticals-4.2%
	137			Abbott Laboratories		$	5,733,450
	172			Medco Health Solutions, Inc. (f)			7,508,020
							13,241,470
				Retail-3.8%
	119			McDonald’s Corp.			6,325,523
	139			Target Corp.			5,718,636
							12,044,159
				Semi-conductors-3.4%
	355			Intel Corp.			5,594,010
	289			Texas Instruments, Inc.			5,215,728
							10,809,738
				Software-5.2%
	463			Microsoft Corp.			9,385,323
	367			Oracle Corp.			7,103,582
							16,488,905
				Telecommunications-5.7%
	314			Cisco Systems, Inc. (f)			6,060,684
	142			Qualcomm, Inc.			6,000,976
	202			Verizon Communications, Inc.			6,128,680
							18,190,340
				Total Common Stock (cost-$370,282,329)			218,331,495

CONVERTIBLE BONDS & NOTES-13.8%

Principal
Amount						Credit Rating
(000)						(Moody’s/S&P)
				Advertising-1.3%
$	4,415			Interpublic Group of Cos., Inc., 4.25%, 3/15/23		Ba3/B+					3,990,056
				Commercial Services-2.1%
	2,850			Alliance Data Systems Corp., 1.75%, 8/1/13 (b) (c)		NR/NR					2,212,312
	4,800			Bowne & Co., Inc., 6.00%, 10/1/33 (e)		B3/CCC+					4,590,000
											6,802,312
				Computers-1.5%
	4,925			Maxtor Corp., 6.80%, 4/30/10		Ba3/NR					4,875,750
				Electrical Components & Equipment-1.1%
	800			EnerSys, 3.375%, 6/1/38 (e)		B2/BB					593,000
	4,605			JA Solar Holdings Co., Ltd., 4.50%, 5/15/13		NR/NR					2,855,100
											3,448,100
				Entertainment-1.3%
	4,300			Regal Entertainment Group, 6.25%, 3/15/11 (b) (c)		NR/NR					4,015,125
				Oil & Gas-1.4%
	1,250			Nabors Industries, Inc., 0.94%, 5/15/11		NR/BBB+					1,142,188
	3,845			Transocean, Inc., 1.50%, 12/15/37, Ser. C		Baa2/BBB+					3,306,700
											4,448,888
				Pharmaceuticals-0.9%
	1,600			Mylan, Inc., 1.25%, 3/15/12		NR/B+					1,422,000
	1,850			Omnicare, Inc., 3.25%, 12/15/35			B3/B+				1,276,500
											2,698,500
				Real Estate (REIT)-2.5%
	5,950			Developers Diversified Realty Corp., 3.00%, 3/15/12		NR/BB+					3,242,750
	1,380			Health Care REIT, Inc., 4.75%, 12/1/26		Baa2/BBB-					1,321,350
	3,715			Vornado Realty Trust, 3.625%, 11/15/26		Baa2/BBB					3,334,213
											7,898,313
				Telecommunications-1.7%
	1,335			Anixter International, Inc., 1.00%, 2/15/13		NR/BB-					1,128,075
	4,700			NII Holdings, Inc., 3.125%, 6/15/12		NR/NR					3,454,500
	3,730			Nortel Networks Corp., 2.125%, 4/15/14 (i)		NR/NR					876,550
											5,459,125
				Total Convertible Bonds & Notes (cost-$49,807,083)							43,636,169

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
April 30, 2009 (unaudited)

Shares						Credit Rating
(000)						(Moody’s/S&P)				Value*
CONVERTIBLE PREFERRED STOCK-11.8%
				Agriculture-0.8%
	39			Bunge Ltd., 4.875%, 12/31/49		Ba1/BB				$	2,672,350
				Commercial Services-0.5%
	102			United Rentals, Inc., 6.50%, 8/1/28		Caa1/B-					1,408,688
				Diversified Financial Services-4.3%
				Bank of America Corp.,
	4			7.25%, 12/31/49, Ser. L		B3/BB-					2,437,825
	68			10.00%, 5/11/09, Ser. JNJ (Johnson & Johnson) (g)		A2/AA					3,349,084
	94			Citigroup, Inc., 6.50%, 12/31/49, Ser. T		Ca/C					2,976,720
	28			Eksportfinans AS, 10.00%, 6/13/09, Ser. AAPL (Apple, Inc.) (g)		Aa1/AA+					3,699,315
	209			Lehman Brothers Holdings, Inc., 6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) (g) (h) (i)		NR/NR					673,534
	33			Lehman Brothers Holdings, Inc., 28.00%, 3/6/09, Ser. RIG (Transocean, Inc.) (g) (h) (i)		NR/NR					455,285
	—	(a)		Preferred Blocker, Inc., 7.00%, 12/31/49 (b) (c)		NR/C					30,006
											13,621,769
				Electric Utilities -1.1%
	102			AES Trust III, 6.75%, 10/15/29			B3/B				3,584,726
				Hand/Machine Tools-1.1%
	5			Stanley Works, 5.125%, 5/17/12 (d)		A3/BBB+					3,478,800
				Investment Companies-0.7%
	62			Vale Capital Ltd., 5.50%, 6/15/10, Ser. RIO (Compania Vale do Rio Doce) (g)		NR/NR					2,161,868
				Oil & Gas-0.5%
	27			Chesapeake Energy Corp., 5.00%, 12/31/49		NR/B					1,723,050
				Pharmaceuticals-1.1%
	17			Schering-Plough Corp., 6.00%, 8/13/10		Baa3/BBB					3,502,359
				Real Estate (REIT)-0.3%
	207			FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A		Caa2/C					970,164
				Telecommunications-1.4%
	98			Crown Castle International Corp., 6.25%, 8/15/12		NR/NR					4,500,496
				Total Convertible Preferred Stock (cost-$72,321,499)							37,624,270

Principal
Amount
(000)
CORPORATE BONDS & NOTES-3.7%
				Apparel-0.2%
$	500			Levi Strauss & Co., 9.75%, 1/15/15			B2/B+				475,000
				Computers-0.4%
	2,300			Unisys Corp., 8.00%, 10/15/12		Caa1/B					1,322,500
				Diversified Financial Services-0.1%
	400			GMAC LLC, 6.75%, 12/1/14 (b) (c)		NR/CCC					316,000
				Healthcare-Services-0.1%
	400			HCA, Inc., 9.25%, 11/15/16		B2/BB-					397,000
				Miscellaneous Manufacturing-0.2%
	1,000			Polypore, Inc., 8.75%, 5/15/12			B3/B-				780,000
				Oil & Gas-1.0%
	4,340			Dynegy Holdings, Inc., 7.75%, 6/1/19			B3/B				3,211,600
				Paper Products-0.2%
	1,000			Neenah Paper, Inc., 7.375%, 11/15/14			B2/B+				490,000
				Telecommunications-1.5%
	4,600			Millicom International Cellular S.A., 10.00%, 12/1/13, GDR		B1/NR					4,623,000
				Total Corporate Bonds & Notes (cost-$14,349,440)							11,615,100

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
April 30, 2009 (unaudited)

Principal
Amount
(000)						Value*
U.S. GOVERNMENT SECURITIES-0.7%
	$2,000			United States Treasury Notes, 12.50%, 8/15/14 (cost-$2,197,500)		$	2,068,126
SHORT-TERM INVESTMENT 0.6%
				Time Deposit 0.6%
	1,966			Wells Fargo—Grand Cayman, 0.03%, 5/1/09 (cost-$1,966,114)			1,966,114
				Total Investments (cost-$510,923,965)-99.6%			315,241,274
				Other assets less liabilities -0.4%			1,320,324
				Net Assets-100.0%		$	316,561,598

Notes to Schedules of Investments:

(a)		Less than 500.
(b)		144A security—Exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.
(c)		Private Placement. Restricted as to resale and may not have a readily available market. Securities with an aggregate market value of $6,573,443, representing 2.08% of net assets.
(d)		Variable rate security. Interest rate disclosed reflects the rate in effect on April 30, 2009.
(e)		Step Bond: Coupon is a fixed rate for an initial period then resets at a specific date and rate.
(f)		Non-income producing.
(g)		Securities exchangeable or convertible into securities of an entity different than the issuer or structured by the issuer to provide exposure to securities of an entity different than the issuer. Such entity is identified in the parenthetical.
(h)		Fair-valued—Securities with an aggregate value of $1,128,819 representing 0.36% of net assets.
(i)		In default.

Glossary:
GDR-Global Depositary Receipt
NR-Not Rated
REIT-Real Estate Investment Trust

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
April 30, 2009 (unaudited)

Fair Value Measurements

The Fund has adopted Financial Accounting Standard Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosure about the use of the fair value measurements. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants. The three levels of the fair value hierarchy under SFAS 157 are described below:

	•		Level 1 — quoted prices in active markets for identical investments that the portfolio has the ability to access
	•		Level 2 — valuations based on other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) or quotes from inactive exchanges
	•		Level 3 — valuations based on significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

An investment asset or liability’s level within the fair value hierarchy is based on the lowest level input, individually or in the aggregate, that is significant to fair value measurement.

The valuation techniques used by the Fund to measure fair value during the three months ended April 30, 2009 maximized the use of observable inputs and minimized the use of unobservable inputs. The Fund utilized the following fair value technique on Level 3 investments: Multi-dimensional relational pricing model.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of April 30, 2009 in valuing the Fund’s investments carried at value:

		Investments in Securities
Valuation Inputs		Assets				Liabilities
Level 1 — Quoted Prices		$	249,744,660			$	—
Level 2 — Other Significant Observable Inputs			64,367,795				—
Level 3 — Significant Unobservable Inputs			1,128,819				—
Total		$	315,241,274			$	—

A roll forward of fair value measurement using significant unobservable inputs (Level 3) as of April 30, 2009, were as follows:

		Investments in
		Securities
Beginning balance, January 31, 2009		$	7,854,048
Net purchases (sales) and settlements			(9,225,492	)
Accrued discounts (premiums)			—
Total realized and unrealized gain (loss)			2,500,263
Transfers in and/or out of Level 3			—
Ending balance, April 30. 2009		$	1,128,819

Item 2. Controls and Procedures

a) The registrant’s President & Chief Executive Officer and Treasurer, Principal Financial & Accounting Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a -3(c))), as amended are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a -3(d))) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits

     (a) Exhibit 99.302 Cert. — Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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: Nicholas-Applegate Equity & Convertible Income Fund

Date: June 19, 2009

Date: June 19, 2009

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.

Date: June 19, 2009

Date: June 19, 2009