Clough Global Equity Fund (GLQ) N-CSRCertified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21712

Clough Global Equity Fund

(exact name of registrant as specified in charter)

1290 Broadway, Suite 1000, Denver, Colorado 80203

(Address of principal executive offices) (Zip code)

Nicholas Adams, Secretary

Clough Global Equity Fund

1290 Broadway, Suite 1000

Denver, Colorado 80203

(Name and address of agent for service)

Registrant’s telephone number, including area code: 877-256-8445

Date of fiscal year end: October 31

Date of reporting period: November 1, 2021 – October 31, 2022

Item 1. Reports to Stockholders.

Section 19(b) DiscloSure

October 31, 2022 (Unaudited)

Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund (each a “Fund” and collectively, the “Funds”), acting pursuant to a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Fund’s Board of Trustees (the “Board”), have adopted a plan, consistent with each Fund’s investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the “Plan”). In accordance with the Plan, the Funds’ managed distribution policy sets the monthly distribution rate at an amount equal to one twelfth of 10% of each Fund’s adjusted year-ending NAV, which is the average of the NAVs as of the last five business days of the prior calendar year.

Under the Plan, each Fund will distribute all available investment income to its shareholders, consistent with each Fund’s primary investment objectives and as required by the Internal Revenue Code of 1986, as amended (the “Code”). If sufficient investment income is not available on a monthly basis, each Fund will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution.

Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases to enable each Fund to comply with the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about each Fund’s investment performance from the amount of these distributions or from the terms of the Plan. Each Fund’s total return performance on net asset value is presented in its financial highlights table.

Each Board may amend, suspend or terminate each Fund’s Plan without prior notice. The suspension or termination of the Plan could have the effect of creating a trading discount (if a Fund’s stock is trading at or above net asset value) or widening an existing trading discount. Each Fund is subject to risks that could have an adverse impact on its ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, increased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to the Notes to Financial Statements in the Annual Report to Shareholders for a more complete description of its risks.

Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for each Fund’s current fiscal period. Section 19(a) notices for each Fund, as applicable, are available on the Clough Global Closed-End Funds website www.cloughglobal.com.

To Our Investors:

For the fiscal year ending October 31, 2022, the Clough Dividend and Income Fund (“GLV” or the “Fund”) declined 24.49% on net asset value (“NAV”) and 32.14% on market price. The Fund’s benchmark, the Morningstar Global Allocation Total Return Index, declined 20.0% over the same period.

Healthcare and energy holdings performed the best over the period; technology and financials holdings lagged. With stocks so depressed, we see price opportunities building. But while evidence of a clear bottom must await signs that inflation is becoming less of a problem, we think evidence of that will soon begin to build (see below).

Among the Fund’s top five performers for the fiscal year, a short in Rivian Automotive Inc., a manufacturer of electric vehicles, was the largest contributor as the company burned cash and its high multiple compressed during the period. Northrop Grumman Corp., a defense company, contributed to performance. Eli Lilly & Co, a large pharmaceuticals company, gained in part due to optimism surrounding its diabetes drug, Mounjaro, to be used for obesity treatment. Finally, options on a technology focused exchange-traded fund (“ETF”) and a long position in an energy ETF rounded out the contributors.

Among the Fund’s bottom five performers for the quarter, our holdings of U.S. Treasury bonds lost value as interest rates increased. Among stocks, BYD Co Ltd., a China-based technology leader in the electric vehicle industry, Microsoft Corp., which faced a weak technology tape, and Apple Inc. all declined. A long position in Redwood Trust Inc., a leading mortgage provider to prime jumbo borrowers, rounded out the detractors.

MARKET COMMENTS

Fiscal year 2022 was a difficult year for us and for many other investors. Reports of high inflation have been persistent and the Federal Reserve (the “Fed”) is following a policy of aggressive monetary tightening. Since many indicators that signal a coming recession are flashing, the Fund is currently positioned defensively.

One of the primary reasons for the decline in the Fund’s performance this year is that bond and stock prices have declined simultaneously, and that has happened on only one previous occasion of any material significance over the past 50 years, in 2018. But even then, it happened only briefly, was quickly reversed, and the declines were modest. In calendar year 2022 through October 31, the S&P 500 Index has declined -17.72% and the return on long-dated U.S. Treasury bonds has been -35.95%. These are extraordinary numbers; in fact, they represent the worst returns for bonds going back to 1976 (source: Bloomberg).

We have used the so-called “parity trade”, which consists of a mix of stocks and long-term bonds, for much of the Fund’s existence. Should stocks decline for fears of a coming recession, bonds would be likely to rally because inflation pressures and interest rates would likely decline. So, bonds can act not only as a hedge for equities in time of market stress, but over time they can add to returns as well.

We eliminated the parity trade in 2020 in the midst of the pandemic collapse when interest rates declined to such low levels that the trade stopped working. However, with the Fed forcing interest rates to zero and buying bonds hand over fist, that year turned out to be a good year for stocks.

In the spring of this year, the Fed embarked upon one of the most rapid interest rate hikes in history and yields once again became attractive. Even though there were still short-term risks we began to add a portfolio of high grade corporate and Treasury securities as well as mortgage-backed securities, primarily with 1-3-year maturities. That move proved premature and over the summer our short-term bonds lost value.

The monetary authorities have announced they will continue to tighten monetary policy until price pressures reverse. We think we are likely coming close to that point. The best current indicator of what may lie ahead comes from the monetary statistics themselves. M2, which measures deposits, rose 24% in the year ending September 2020, so inflation soared. Over the past year it has grown a mere 3% and has been declining in absolute terms for the past six months. A decline in the money stock has rarely happened and reflects an actual decline in gross domestic product (“GDP”) and the nation’s wealth. Bank reserves have declined by more than $1 trillion in 2022, liquidity is rapidly deteriorating, commodity prices have collapsed, mortgage rates are above 7%, banks are refusing commercial mortgage applications and retail inventories are soaring. Housing will take a large hit as new mortgage originations have fallen more than 40% and total mortgage originations have fallen more than 40% as of the time of this writing. Many technology companies which benefited from COVID restrictions are now seeing falling demand. Amazon.com Inc. is burning cash as are other technology companies. Outside of energy, corporate profits are falling. Semiconductors are turning from shortage to glut. Even natural gas prices are declining. Once demand falls below supply, prices change rapidly, and prices can go down as fast as they went up. As these patterns translate into the traditional price indices, and the Fed ceases to tighten credit, we think equities could easily move higher.

Before COVID, inflation and interest rates had been declining for 40 years. So, the question is: have the economic trends that made that happen substantively changed or are we still experiencing the effects of pandemic-related fiscal and monetary policies? Our view is that we are still feeling the effects of those policies, which include excessive household spending as Treasury cash grants are spent, and supply bottlenecks and shortages, including labor. It is estimated that the cash balances that households built during the period of fiscal largess will be depleted in a few short months.

There are strong reasons why we think the economy and inflation are likely to slow to the 1-2% range that characterized the 2010-2019 period. They are population dynamics, the leveraged nature of private sector balance sheets and technology. Population dynamics are the most important input into secular economic and market behavior. The baby boomers were the strongest demographic engine of borrowing and spending ever. Once entering the labor force in the 1960s and 1970s, they embarked upon an enormous borrowing and spending spree. They built the nation’s housing stock and automobile manufacturing infrastructure. Their heavy spending created the inflation experienced in the 1970s, which is the only inflation experience most investors have. Now they are retiring. The largest borrowing and spending contingent in history will enter their low spending years, creating downward pressures on final demand over the coming decade.

Secondly, ever since the nation’s household balance sheet structure became heavily levered, interest rates have been forced down. The higher the leverage, the lower the natural rate of interest will be. Zero interest rates which emerged after COVID simply created another burst of borrowing by households and corporations. Evidence that government issued savings have run out comes from the surge in installment credit borrowings, which have risen 17% over the past year. Since installment credit interest rates from some lenders approach 22%, the household sector is building very expensive liabilities. Current spending is simply unsustainable, in our view.

In the short-term, it appears to be the worst of times in the securities markets, but in the long-term sense, the markets are offering opportunities that they most often do not. Some equities are back to where they were in 2018. Merrill Lynch pointed out that over 80% of a security’s return comes from the price at which it was purchased. And today high yield credits offer a yield above 9%, and many equities are priced at bargain levels.

If a recession occurs, we believe it will likely be shallow, because no sector of the economy is currently likely to collapse like technology did after 2000 and like housing and the financial system did in the wake of the global financial crisis of 2008. A long shallow recession would be a perfect backdrop for profitable financial markets looking ahead. Stocks usually bottom shortly after recessions start, and we think we are close.

AEROSPACE AND DEFENSE

We think a great deal of spending will accrue to U.S. defense equipment manufacturers. Thirty years of underspending on defense, beginning with the fall of the former Soviet Union, has left the U.S. armed forces seriously under equipped and in many instances technologically behind potential adversaries. Defense spending has been growing 3 to 4% annually, not enough to cover for inflation. But the Russian invasion of Ukraine has spurred an investment cycle in the defense and aerospace sector that could last a decade or more, and sales across the industry could reach double digit annual rates as new programs take hold. Defense companies usually sell at a market premium, since multiyear production runs allow for high efficiency and strong cash flows, but today the stocks are valued at market multiple. Raytheon Technologies Corp. is currently one of the Fund’s larger positions. The company serves both military and commercial markets, with 65% of sales going to the military. Its commercial operations, made-up of Pratt & Whitney Engines and Collins Aerospace, are growing at double digit rates and they generate high levels of free cash flow.

Airbus SE, the European aircraft manufacturer and an obvious beneficiary of the 737 MAX 10 issue is also a holding in the Fund. Its A321neo is a direct competitor of the 737 MAX 10 and while the 737 was grounded, orders materially exceeded those for the Boeing aircraft. However, from Boeing’s viewpoint, these aircraft have delivery times that go out beyond the end of the decade and that allows plenty of time for Boeing to recover to the industry dominance it once enjoyed.

Finally, the industry is truly a duopoly. China is developing a commercial airliner to compete with the 737 and A320 series, but that aircraft is years away from flying commercially and will largely be purchased by Chinese airlines. Buoyed by the need to replace the 15 to 20-year-old aircraft in the current fleet, commercial aircraft production rates are likely to grow 15% per year between 2021 and 2026.

OIL AND ENERGY

This cycle seems different from past ones because of a lack of investment by the industry in fossil fuels, caused largely by systemic political attacks on the industry. American production has peaked, and Saudi production capability is in decline as its fields age. Oil company executives are focused on running their companies for cash flow and dividends. Exxon Mobil Corp. with activist investors on the board, offers a 3.5% yield with growth.

GLOBAL INVESTMENTS

Some Indian banks currently offer 15-20% earnings per share growth, returns on equity in the high teens and are massively over capitalized. We have long holdings in ICICI Bank Ltd. and HDFC Bank Ltd. They heavily reserved for loan losses when COVID struck but the pandemic did little damage. Credit costs are low given a strong economy and unlevered households. The major private banks have made large investments in technology. Even the State Bank of India is growing and is very profitable despite state ownership. While many inefficient state banks claim half of banking assets, the few quality private institutions are valuable assets.

Given China’s ambiguous political support of the private economy, we think global capital will migrate toward India. We think India is emerging as the fastest growing economy in the world. It boasts a young population, a desperate need for capital since that population demands jobs, and a tradition of rule of law. A few years back, Prime Minister Modi cancelled a large portion of the currency stock to force the Indian population out of the cash economy into the banking system. The percentage of the population with bank accounts surged from 30% to close to 80%.

SELECT SHORT POSITIONS

Excessive inventory positions and declining sales owing to discounting threaten retailing profit margins in the years ahead. In 2023, interest costs will rise just as same store sales peter out. As consumers face higher energy costs and slower income growth, same store sales will falter for many retailers.

We have long held a negative view of banking in Europe. What makes banking so structurally difficult in Europe is the fact that its financial sector is balkanized. Three or four major banks exist in France for example, and they must compete for limited credit opportunities in an economy of 72 million people. They lack scale, which is a critical disadvantage as banking becomes more technologically driven, so margins are low, and they will face increasing difficulties as higher energy will cost consumers and businesses far more to heat their homes and workplaces. Several banks in Italy and Germany have had to be bailed out in recent years, and that policy only sustains weak banks in the market. Valuations deserve to be at steep discounts to book values.

Finally, the Fund currently has short holdings in the semiconductor-foundry industry. Both managements have executed well and have talked about long-term agreements with their customers that should insulate them from a semiconductor foundry down cycle. They do offer a U.S.-Europe manufacturing footprint in a world moving away from China and Taiwan. However, these companies face limited barriers to entry. The foundry business is a fixed cost business where depreciation is the largest part of the cost base, and we suspect they will face strong profit headwinds in a semi down cycle.

As always, please don’t hesitate to reach out to us with any questions or comments.

Sincerely,

Charles I Clough, Jr.

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.

Although not generally stated throughout, the information in this letter reflects the opinions of the individual portfolio managers, which opinion is subject to change, and is not intended to be a forecast of future events, a guarantee of future results or investment advice.

The Morningstar Global Allocation Index represents a multi-asset class portfolio of 60% global equities and 40% global bonds. The asset allocation within each class is driven by Morningstar asset allocation methodology. To maintain broad global exposure and diversification, the index consists of equities & fixed income and utilizes global, float-weighted index methodology to determine allocation to U.S. and non-U.S.

The MSCI World Index is 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).

The Bloomberg U.S. Aggregate Bond Index measures the performance of the U.S. investment grade bond market. The Bloomberg U.S. 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 blended indices, 50% MSCI World/50% Bloomberg U.S. Aggregate Bond Index and 75% MSCI World/25% Bloomberg U.S. Aggregate Bond Index, have been calculated by Clough Capital Partners L.P. based on the sources listed above.

The performance of the indices referenced herein is used for informational purposes only. One cannot invest directly in an index. Indices are not subject to any of the fees or expenses to which the Fund is subject, and there are significant differences between the Fund’s investments and the components of the indices referenced.

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.

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 1-855-425-6844. Read them carefully before investing.

The 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 the 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. For the fiscal year 2021, the Fund’s distribution policy resulted in distributions of capital in the amount of $3,855,628.

The 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.

The 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 the Fund in real estate investment trusts (“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 the 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 neither a guarantee, nor necessarily indicative, of future results, which may be significantly affected by changes in economic and other conditions.

Distribution to Common Stockholders

The Fund intends to make monthly distributions to common shareholders according to its managed distribution policy. The Fund’s managed distribution policy is to set the monthly distribution rate at an amount equal to one twelfth of 10% of the Fund’s adjusted year-ending net asset value per share (“NAV”), which will be the average of the NAVs as of the last five business days of the prior calendar year. The Board of Directors approve the distribution and may adjust it from time to time. The monthly distribution amount paid from October 1, 2021 to December 31, 2021 was $0.0967 per share and the Fund paid $0.0906 per share monthly between January 1, 2022 and October 31, 2022. At times, to maintain a stable level of distributions, the Fund may pay out less than all of its net investment income or pay out accumulated undistributed income, or return of capital, in addition to current net investment income.

Performance of $10,000 Initial Investment (as of October 31, 2022)

The graph shown above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

To Our Investors:

For the fiscal year ending October 31, 2022, the Clough Global Equity Fund (“GLQ” or the “Fund”) declined 40.97% on net asset value (“NAV”) and 46.43% on market price. The Fund’s benchmark, the MSCI World Index, declined 18.06% over the same period.

Energy holdings performed the best over the period; technology and consumer discretionary holdings lagged. With stocks so depressed, we see price opportunities building. But while evidence of a clear bottom must await signs that inflation is becoming less of a problem, we think evidence of that will soon begin to build (see below).

Among the Fund’s top five performers for the fiscal year, four names came in the healthcare sector. Medical technology company iRhythm Technologies Inc. gained after positive reimbursement developments and earnings results. Checkmate Pharmaceuticals Inc., a small biotechnology company, was acquired by Regeneron Pharmaceuticals Inc. in an all cash deal. Arcellx, Inc. a biotechnology company and previously a private investment in the Fund, completed a successful IPO during the period. Vertex Pharmaceuticals Inc., a large biotechnology company, generated strong results. On the short side, Rivian Automotive Inc., a manufacturer of electric vehicles, contributed as the company burned cash and its high multiple compressed during the period.

Among the Fund’s bottom five performers for the fiscal year, our holdings of U.S. Treasury bonds lost value as interest rates increased. Among stocks, Amazon.com Inc, BYD Co Ltd., a China-based technology leader in the electric vehicle industry, and Microsoft Corp., which faced a weak technology tape, all declined. Finally, a long position in Carnival Corp, a cruise line operator, fell as COVID variants weighed on its near-term outlook.

MARKET COMMENTS

Fiscal year 2022 was a difficult year for us and for many other investors. Reports of high inflation have been persistent and the Federal Reserve (the “Fed”) is following a policy of aggressive monetary tightening. Since many indicators that signal a coming recession are flashing, the Fund is currently positioned defensively.

One of the primary reasons for the decline in the Fund’s performance this year is that bond and stock prices have declined simultaneously, and that has happened on only one previous occasion of any material significance over the past 50 years, in 2018. But even then, it happened only briefly, was quickly reversed, and the declines were modest. In calendar year 2022 through October 31, the S&P 500 Index has declined -17.72% and the return on long-dated U.S. Treasury bonds has been -35.95%. These are extraordinary numbers; in fact, they represent the worst returns for bonds going back to 1976 (source: Bloomberg).

We have used the so-called “parity trade”, which consists of a mix of stocks and long-term bonds, for much of the Fund’s existence. Should stocks decline for fears of a coming recession, bonds would be likely to rally because inflation pressures and interest rates would likely decline. So, bonds can act not only as a hedge for equities in time of market stress, but over time they can add to returns as well.

We eliminated the parity trade in 2020 in the midst of the pandemic collapse when interest rates declined to such low levels that the trade stopped working. However, with the Fed forcing interest rates to zero and buying bonds hand over fist, that year turned out to be a good year for stocks.

In the spring of this year, the Fed embarked upon one of the most rapid interest rate hikes in history and yields once again became attractive. Even though there were still short-term risks we began to add a portfolio of Treasury securities. That move proved premature and over the summer our short-term bonds lost value.

The monetary authorities have announced they will continue to tighten monetary policy until price pressures reverse. We think we are likely coming close to that point. The best current indicator of what may lie ahead comes from the monetary statistics themselves. M2, which measures deposits, rose 24% in the year ending September 2020, so inflation soared. Over the past year it has grown a mere 3% and has been declining in absolute terms for the past six months. A decline in the money stock has rarely happened and reflects an actual decline in gross domestic product (“GDP”) and the nation’s wealth. Bank reserves have declined by more than $1 trillion in 2022, liquidity is rapidly deteriorating, commodity prices have collapsed, mortgage rates are above 7%, banks are refusing commercial mortgage applications and retail inventories are soaring. Housing will take a large hit as new mortgage originations have fallen more than 40% and total mortgage originations have fallen more than 40% as of the time of this writing. Many technology companies which benefited from COVID restrictions are now seeing falling demand. Amazon.com Inc. is burning cash as are other technology companies. Outside of energy, corporate profits are falling. Semiconductors are turning from shortage to glut. Even natural gas prices are declining. Once demand falls below supply, prices change rapidly, and prices can go down as fast as they went up. As these patterns translate into the traditional price indices, and the Fed ceases to tighten credit, we think equities could easily move higher.

Before COVID, inflation and interest rates had been declining for 40 years. So, the question is: have the economic trends that made that happen substantively changed or are we still experiencing the effects of pandemic-related fiscal and monetary policies? Our view is that we are still feeling the effects of those policies, which include excessive household spending as Treasury cash grants are spent, and supply bottlenecks and shortages, including labor. It is estimated that the cash balances that households built during the period of fiscal largess will be depleted in a few short months.

There are strong reasons why we think the economy and inflation are likely to slow to the 1-2% range that characterized the 2010-2019 period. They are population dynamics, the leveraged nature of private sector balance sheets and technology. Population dynamics are the most important input into secular economic and market behavior. The baby boomers were the strongest demographic engine of borrowing and spending ever. Once entering the labor force in the 1960s and 1970s, they embarked upon an enormous borrowing and spending spree. They built the nation’s housing stock and automobile manufacturing infrastructure. Their heavy spending created the inflation experienced in the 1970s, which is the only inflation experience most investors have. Now they are retiring. The largest borrowing and spending contingent in history will enter their low spending years, creating downward pressures on final demand over the coming decade.

Secondly, ever since the nation’s household balance sheet structure became heavily levered, interest rates have been forced down. The higher the leverage, the lower the natural rate of interest will be. Zero interest rates which emerged after COVID simply created another burst of borrowing by households and corporations. Evidence that government issued savings have run out comes from the surge in installment credit borrowings, which have risen 17% over the past year. Since installment credit interest rates from some lenders approach 22%, the household sector is building very expensive liabilities. Current spending is simply unsustainable, in our view.

In the short-term, it appears to be the worst of times in the securities markets, but in the long-term sense, the markets are offering opportunities that they most often do not. Some equities are back to where they were in 2018. Merrill Lynch pointed out that over 80% of a security’s return comes from the price at which it was purchased. And today high yield credits offer a yield above 9%, and many equities are priced at bargain levels.

If a recession occurs, we believe it will likely be shallow, because no sector of the economy is currently likely to collapse like technology did after 2000 and like housing and the financial system did in the wake of the global financial crisis of 2008. A long shallow recession would be a perfect backdrop for profitable financial markets looking ahead. Stocks usually bottom shortly after recessions start, and we think we are close.

HEALTHCARE

We are particularly positive on the high growth biotechnology industry whose stocks have been halved since the February 2021 peak. While we are hesitant to call the bottom and biotechnology is a risk-on subsector in a fragile market, we have seen some positive trends, including stabilizing valuation, further mergers and acquisitions activity and a growing number of potential blockbuster bio-therapies entering U.S. Food and Drug Administration (“FDA”) trials. The biotechnology company stocks have been range trading for many years now, but over that time tens of billions of dollars have been spent on new therapies and a growing number promise to enter commercial status over the next few years. One way to think about biotech is to see it as among the cheapest ways to buy new technology in the marketplace today. Healthcare, and specifically the pharmaceutical and health insurance segments, have traditionally been viewed as defensive due to strong cash flows, large balance sheets and diversified revenue streams. These areas have benefitted from rotation out of more volatile sectors as this year’s market correction intensified and investors sought to stabilize portfolio.

AEROSPACE AND DEFENSE

We think a great deal of spending will accrue to U.S. defense equipment manufacturers. Thirty years of underspending on defense, beginning with the fall of the former Soviet Union, has left the U.S. armed forces seriously under equipped and in many instances technologically behind potential adversaries. Defense spending has been growing 3 to 4% annually, not enough to cover for inflation. But the Russian invasion of Ukraine has spurred an investment cycle in the defense and aerospace sector that could last a decade or more, and sales across the industry could reach double digit annual rates as new programs take hold. Defense companies usually sell at a market premium, since multiyear production runs allow for high efficiency and strong cash flows, but today the stocks are valued at market multiple. Raytheon Technologies Corp. is currently one of the Fund’s largest positions. The company serves both military and commercial markets, with 60% of sales going to the military. Its commercial operations, made-up of Pratt & Whitney Engines and Collins Aerospace, are growing at double digit rates and they generate high levels of free cash flow.

A truly contrarian idea, Boeing Co. faces many issues, but we think they are being resolved. The stock is down more than 65% from its high as of October 31, 2022 and it is essentially selling for the value of its defense business alone. Orders and deliveries are rising for the 737 MAX, the 787 and the 777 long range aircraft. As the company delivers parked aircraft and aircraft whose shipments were delayed by parts shortages, much needed cash is coming into the company. Delivery of unfinished aircraft and those awaiting delivery would add $25 billion to the company’s cash, a meaningful amount given the company’s equity valuation as of the time of this writing. Meanwhile Delta Air Lines Inc. is planning a large order for the 737 MAX 10 and United Airlines Holdings Inc. is about to make a similarly large order of widebody aircraft at a time the 787 is the most popular aircraft for long distant flying for both passengers and airlines. The 737 MAX 10 is still awaiting Federal Aviation Administration (“FAA”) certification but a delay beyond yearend could force a redesign of the cockpit, a particularly costly event. But given the volumes of orders which have been received for the MAX 10, we suspect Congress will extend the time period to allow certification.

Airbus SE, the European aircraft manufacturer and an obvious beneficiary of the 737 MAX 10 issue is also a holding in the Fund. Its A321neo is a direct competitor of the 737 MAX 10 and while the 737 was grounded, orders materially exceeded those for the Boeing aircraft. However, from Boeing’s viewpoint, these aircraft have delivery times that go out beyond the end of the decade and that allows plenty of time for Boeing to recover to the industry dominance it once enjoyed.

Finally, the industry is truly a duopoly. China is developing a commercial airliner to compete with the 737 and A320 series, but that aircraft is years away from flying commercially and will largely be purchased by Chinese airlines. Buoyed by the need to replace the 15 to 20-year-old aircraft in the current fleet, commercial aircraft production rates are likely to grow 15% per year between 2021 and 2026.

OIL AND ENERGY

The Fund currently holds a position in Cheniere Energy Inc., the world’s largest distributor of liquefied natural gas, companies in the oil and gas services industry and in a high dividend yield multinational energy company. This cycle seems different from past ones because of a lack of investment by the industry in fossil fuels, caused largely by systemic political attacks on the industry. American production has peaked, and Saudi production capability is in decline as its fields age. Oil company executives are focused on running their companies for cash flow and dividends. Exxon Mobil Corp. with activist investors on the board, offers a 3.5% yield with growth. Cheniere Energy currently generates a 16% free cash flow yield.

GLOBAL INVESTMENTS

Some investments outside the United States currently include BYD Co Ltd., a Chinese based manufacturer in the electric vehicle (“EV”) space. China will likely ultimately be the largest producer of EVs globally, and BYD is the largest EV producer in China. The company also designs and produces at scale the world’s higher margin EV components and batteries, motors and semiconductor components. We believe estimates of the company share of new electric vehicles sold in China will increase from 21% today to 45% in 2025. BYD sells more electric vehicles than Tesla Inc. today and as its mix is moving toward higher priced vehicles, profit margins are rising, and free cash flow is building. We think the company can grow its revenue 50% per year into mid-decade.

Some Indian banks currently offer 15-20% earnings per share growth, returns on equity in the high teens and are massively over capitalized. We have long holdings in ICICI Bank Ltd. and HDFC Bank Ltd. They heavily reserved for loan losses when COVID struck but the pandemic did little damage. Credit costs are low given a strong economy and unlevered households. The major private banks have made large investments in technology. Even the State Bank of India is growing and is very profitable despite state ownership. While many inefficient state banks claim half of banking assets, the few quality private institutions are valuable assets.

Given China’s ambiguous political support of the private economy, we think global capital will migrate toward India. We think India is emerging as the fastest growing economy in the world. It boasts a young population, a desperate need for capital since that population demands jobs, and a tradition of rule of law. A few years back, Prime Minister Modi cancelled a large portion of the currency stock to force the Indian population out of the cash economy into the banking system. The percentage of the population with bank accounts surged from 30% to close to 80%.

SELECT SHORT POSITIONS

Excessive inventory positions and declining sales owing to discounting threaten retailing profit margins in the years ahead. In 2023, interest costs will rise just as same store sales peter out. As consumers face higher energy costs and slower income growth, same store sales will falter for many retailers.

We have long held a negative view of banking in Europe. What makes banking so structurally difficult in Europe is the fact that its financial sector is balkanized. Three or four major banks exist in France for example, and they must compete for limited credit opportunities in an economy of 72 million people. They lack scale, which is a critical disadvantage as banking becomes more technologically driven, so margins are low, and they will face increasing difficulties as higher energy will cost consumers and businesses far more to heat their homes and workplaces. Several banks in Italy and Germany have had to be bailed out in recent years, and that policy only sustains weak banks in the market. Valuations deserve to be at steep discounts to book values.

Finally, the Fund currently has short holdings in the semiconductor-foundry industry. Both managements have executed well and have talked about long-term agreements with their customers that should insulate them from a semiconductor foundry down cycle. They do offer a U.S.-Europe manufacturing footprint in a world moving away from China and Taiwan. However, these companies face limited barriers to entry. The foundry business is a fixed cost business where depreciation is the largest part of the cost base, and we suspect they will face strong profit headwinds in a semi down cycle.

As always, please don’t hesitate to reach out to us with any questions or comments.

Sincerely,

Charles I Clough, Jr.

This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Global Equity Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not Equity Fund 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.

Although not generally stated throughout, the information in this letter reflects the opinions of the individual portfolio managers, which opinion is subject to change, and is not intended to be a forecast of future events, a guarantee of future results or investment advice.

The Morningstar Global Allocation Index represents a multi-asset class portfolio of 60% global equities and 40% global bonds. The asset allocation within each class is driven by Morningstar asset allocation methodology. To maintain broad global exposure and diversification, the index consists of equities & fixed income and utilizes global, float-weighted index methodology to determine allocation to U.S. and non-U.S.

The MSCI World Index is 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).

The Bloomberg U.S. Aggregate Bond Index measures the performance of the U.S. investment grade bond market. The Bloomberg U.S. 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 blended indices, 50% MSCI World/50% Bloomberg U.S. Aggregate Bond Index and 75% MSCI World/25% Bloomberg U.S. Aggregate Bond Index, have been calculated by Clough Capital Partners L.P. based on the sources listed above.

The performance of the indices referenced herein is used for informational purposes only. One cannot invest directly in an index. Indices are not subject to any of the fees or expenses to which the Fund is subject, and there are significant differences between the Fund’s investments and the components of the indices referenced.

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.

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 1-855-425-6844. Read them carefully before investing.

The 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 the 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. For the fiscal year 2021, the Fund’s distribution policy resulted in distributions of capital in the amount of $23,035,803.

The 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.

The 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 the Fund in real estate investment trusts (“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 the 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 neither a guarantee, nor necessarily indicative, of future results, which may be significantly affected by changes in economic and other conditions.

Distribution to Common Stockholders

The Fund intends to make monthly distributions to common shareholders according to its managed distribution policy. The Fund’s managed distribution policy is to set the monthly distribution rate at an amount equal to one twelfth of 10% of the Fund’s adjusted year-ending net asset value per share (“NAV”), which will be the average of the NAVs as of the last five business days of the prior calendar year. The Board of Directors approve the distribution and may adjust it from time to time. The monthly distribution amount paid from October 1, 2021 to December 31, 2021 was $0.1341 per share and the Fund paid $0.1162 per share monthly between January 1, 2022 and October 31, 2022. At times, to maintain a stable level of distributions, the Fund may pay out less than all of its net investment income or pay out accumulated undistributed income, or return of capital, in addition to current net investment income.

Performance of $10,000 Initial Investment (as of October 31, 2022)

The graph shown above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

To Our Investors,

For the fiscal year ending October 31, 2022, the Clough Global Opportunities Fund (“GLO” or the “Fund”) declined 42.06% on net asset value (“NAV”) and 48.53% on market price. The Fund’s benchmark, the Morningstar Global Allocation Total Return Index, declined 20.0% over the same period.

Energy holdings performed the best over the period; technology and consumer discretionary holdings lagged. With stocks so depressed, we see price opportunities building. But while evidence of a clear bottom must await signs that inflation is becoming less of a problem, we think evidence of that will soon begin to build (see below).

Among the Fund’s top five performers for the fiscal year, a short in Rivian Automotive Inc., a manufacturer of electric vehicles, was the largest contributor as the company burned cash and its high multiple compressed during the period. Checkmate Pharmaceuticals Inc, a small biotechnology company, was acquired by Regeneron Pharmaceuticals Inc. in an all cash deal. Arcellx Inc., a biotechnology company and previously a private investment in the Fund, completed a successful IPO during the period. Vertex Pharmaceuticals Inc., a large biotechnology company, generated strong results. Northrop Grumman Corp., a defense company, rounded out the top contributors.

Among the Fund’s bottom five performers for the fiscal year, our holdings of U.S. Treasury bonds lost value as interest rates increased. Among stocks, Amazon.com Inc., BYD Co Ltd., a China-based technology leader in the electric vehicle industry, and Microsoft Corp., which faced a weak technology tape, all declined. Finally, a long position in Carnival Corp, a cruise line operator, fell as COVID variants weighed on its near-term outlook.

MARKET COMMENTS

Fiscal year 2022 was a difficult year for us and for many other investors. Reports of high inflation have been persistent and the Federal Reserve (the “Fed”) is following a policy of aggressive monetary tightening. Since many indicators that signal a coming recession are flashing, the Fund is currently positioned defensively.

One of the primary reasons for the decline in the Fund’s performance this year is that bond and stock prices have declined simultaneously, and that has happened on only one previous occasion of any material significance over the past 50 years, in 2018. But even then, it happened only briefly, was quickly reversed, and the declines were modest. In calendar year 2022 through October 31, the S&P 500 Index has declined -17.72% and the return on long-dated U.S. Treasury bonds has been -35.95%. These are extraordinary numbers; in fact, they represent the worst returns for bonds going back to 1976 (source: Bloomberg).

We have used the so-called “parity trade”, which consists of a mix of stocks and long-term bonds, for much of the Fund’s existence. Should stocks decline for fears of a coming recession, bonds would be likely to rally because inflation pressures and interest rates would likely decline. So, bonds can act not only as a hedge for equities in time of market stress, but over time they can add to returns as well.

We eliminated the parity trade in 2020 in the midst of the pandemic collapse when interest rates declined to such low levels that the trade stopped working. However, with the Fed forcing interest rates to zero and buying bonds hand over fist, that year turned out to be a good year for stocks.

In the spring of this year, the Fed embarked upon one of the most rapid interest rate hikes in history and yields once again became attractive. Even though there were still short-term risks we began to add a portfolio of high grade corporate and Treasury securities as well as mortgage-backed securities, primarily with 1-3-year maturities. That move proved premature and over the summer our short-term bonds lost value.

The monetary authorities have announced they will continue to tighten monetary policy until price pressures reverse. We think we are likely coming close to that point. The best current indicator of what may lie ahead comes from the monetary statistics themselves. M2, which measures deposits, rose 24% in the year ending September 2020, so inflation soared. Over the past year it has grown a mere 3% and has been declining in absolute terms for the past six months. A decline in the money stock has rarely happened and reflects an actual decline in gross domestic product (“GDP”) and the nation’s wealth. Bank reserves have declined by more than $1 trillion in 2022, liquidity is rapidly deteriorating, commodity prices have collapsed, mortgage rates are above 7%, banks are refusing commercial mortgage applications and retail inventories are soaring. Housing will take a large hit as new mortgage originations have fallen more than 40% and total mortgage originations have fallen more than 40% as of the time of this writing. Many technology companies which benefited from COVID restrictions are now seeing falling demand. Amazon.com Inc. is burning cash as are other technology companies. Outside of energy, corporate profits are falling. Semiconductors are turning from shortage to glut. Even natural gas prices are declining. Once demand falls below supply, prices change rapidly, and prices can go down as fast as they went up. As these patterns translate into the traditional price indices, and the Fed ceases to tighten credit, we think equities could easily move higher.

Before COVID, inflation and interest rates had been declining for 40 years. So, the question is: have the economic trends that made that happen substantively changed or are we still experiencing the effects of pandemic-related fiscal and monetary policies? Our view is that we are still feeling the effects of those policies, which include excessive household spending as Treasury cash grants are spent, and supply bottlenecks and shortages, including labor. It is estimated that the cash balances that households built during the period of fiscal largess will be depleted in a few short months.

There are strong reasons why we think the economy and inflation are likely to slow to the 1-2% range that characterized the 2010-2019 period. They are population dynamics, the leveraged nature of private sector balance sheets and technology. Population dynamics are the most important input into secular economic and market behavior. The baby boomers were the strongest demographic engine of borrowing and spending ever. Once entering the labor force in the 1960s and 1970s, they embarked upon an enormous borrowing and spending spree. They built the nation’s housing stock and automobile manufacturing infrastructure. Their heavy spending created the inflation experienced in the 1970s, which is the only inflation experience most investors have. Now they are retiring. The largest borrowing and spending contingent in history will enter their low spending years, creating downward pressures on final demand over the coming decade.

Secondly, ever since the nation’s household balance sheet structure became heavily levered, interest rates have been forced down. The higher the leverage, the lower the natural rate of interest will be. Zero interest rates which emerged after COVID simply created another burst of borrowing by households and corporations. Evidence that government issued savings have run out comes from the surge in installment credit borrowings, which have risen 17% over the past year. Since installment credit interest rates from some lenders approach 22%, the household sector is building very expensive liabilities. Current spending is simply unsustainable, in our view.

In the short-term, it appears to be the worst of times in the securities markets, but in the long-term sense, the markets are offering opportunities that they most often do not. Some equities are back to where they were in 2018. Merrill Lynch pointed out that over 80% of a security’s return comes from the price at which it was purchased. And today high yield credits offer a yield above 9%, and many equities are priced at bargain levels.

If a recession occurs, we believe it will likely be shallow, because no sector of the economy is currently likely to collapse like technology did after 2000 and like housing and the financial system did in the wake of the global financial crisis of 2008. A long shallow recession would be a perfect backdrop for profitable financial markets looking ahead. Stocks usually bottom shortly after recessions start, and we think we are close.

HEALTHCARE

We are particularly positive on the high growth biotechnology industry whose stocks have been halved since the February 2021 peak. While we are hesitant to call the bottom and biotechnology is a risk-on subsector in a fragile market, we have seen some positive trends, including stabilizing valuation, further mergers and acquisitions activity and a growing number of potential blockbuster bio-therapies entering U.S. Food and Drug Administration (“FDA”) trials. The biotechnology company stocks have been range trading for many years now, but over that time tens of billions of dollars have been spent on new therapies and a growing number promise to enter commercial status over the next few years. One way to think about biotech is to see it as among the cheapest ways to buy new technology in the marketplace today. Healthcare, and specifically the pharmaceutical and health insurance segments, have traditionally been viewed as defensive due to strong cash flows, large balance sheets and diversified revenue streams. These areas have benefitted from rotation out of more volatile sectors as this year’s market correction intensified and investors sought to stabilize portfolio.

AEROSPACE AND DEFENSE

We think a great deal of spending will accrue to U.S. defense equipment manufacturers. Thirty years of underspending on defense, beginning with the fall of the former Soviet Union, has left the U.S. armed forces seriously under equipped and in many instances technologically behind potential adversaries. Defense spending has been growing 3 to 4% annually, not enough to cover for inflation. But the Russian invasion of Ukraine has spurred an investment cycle in the defense and aerospace sector that could last a decade or more, and sales across the industry could reach double digit annual rates as new programs take hold. Defense companies usually sell at a market premium, since multiyear production runs allow for high efficiency and strong cash flows, but today the stocks are valued at market multiple. Raytheon Technologies Corp. is currently one of the Fund’s largest positions. The company serves both military and commercial markets, with 60% of sales going to the military. Its commercial operations, made-up of Pratt & Whitney Engines and Collins Aerospace, are growing at double digit rates and they generate high levels of free cash flow.

A truly contrarian idea, Boeing Co. faces many issues, but we think they are being resolved. The stock is down more than 65% from its high as of October 31, 2022 and it is essentially selling for the value of its defense business alone. Orders and deliveries are rising for the 737 MAX, the 787 and the 777 long range aircraft. As the company delivers parked aircraft and aircraft whose shipments were delayed by parts shortages, much needed cash is coming into the company. Delivery of unfinished aircraft and those awaiting delivery would add $25 billion to the company’s cash, a meaningful amount given the company’s equity valuation as of the time of this writing. Meanwhile Delta Air Lines Inc. is planning a large order for the 737 MAX 10 and United Airlines Holdings Inc. is about to make a similarly large order of widebody aircraft at a time the 787 is the most popular aircraft for long distant flying for both passengers and airlines. The 737 MAX 10 is still awaiting Federal Aviation Administration (“FAA”) certification but a delay beyond yearend could force a redesign of the cockpit, a particularly costly event. But given the volumes of orders which have been received for the MAX 10, we suspect Congress will extend the time period to allow certification.

Airbus SE, the European aircraft manufacturer and an obvious beneficiary of the 737 MAX 10 issue is also a holding in the Fund. Its A321neo is a direct competitor of the 737 MAX 10 and while the 737 was grounded, orders materially exceeded those for the Boeing aircraft. However, from Boeing’s viewpoint, these aircraft have delivery times that go out beyond the end of the decade and that allows plenty of time for Boeing to recover to the industry dominance it once enjoyed.

Finally, the industry is truly a duopoly. China is developing a commercial airliner to compete with the 737 and A320 series, but that aircraft is years away from flying commercially and will largely be purchased by Chinese airlines. Buoyed by the need to replace the 15 to 20-year-old aircraft in the current fleet, commercial aircraft production rates are likely to grow 15% per year between 2021 and 2026.

OIL AND ENERGY

The Fund currently holds a position in Cheniere Energy Inc., the world’s largest distributor of liquefied natural gas, companies in the oil and gas services industry and in a high dividend yield multinational energy company. This cycle seems different from past ones because of a lack of investment by the industry in fossil fuels, caused largely by systemic political attacks on the industry. American production has peaked, and Saudi production capability is in decline as its fields age. Oil company executives are focused on running their companies for cash flow and dividends. Exxon Mobil Corp. with activist investors on the board, offers a 3.5% yield with growth. Cheniere Energy currently generates a 16% free cash flow yield.

GLOBAL INVESTMENTS

Some investments outside the United States currently include BYD Co Ltd., a Chinese based manufacturer in the electric vehicle (“EV”) space. China will likely ultimately be the largest producer of EVs globally, and BYD is the largest EV producer in China. The company also designs and produces at scale the world’s higher margin EV components and batteries, motors and semiconductor components. We believe estimates of the company share of new electric vehicles sold in China will increase from 21% today to 45% in 2025. BYD sells more electric vehicles than Tesla Inc. today and as its mix is moving toward higher priced vehicles, profit margins are rising, and free cash flow is building. We think the company can grow its revenue 50% per year into mid-decade.

Some Indian banks currently offer 15-20% earnings per share growth, returns on equity in the high teens and are massively over capitalized. We have long holdings in ICICI Bank Ltd. and HDFC Bank Ltd. They heavily reserved for loan losses when COVID struck but the pandemic did little damage. Credit costs are low given a strong economy and unlevered households. The major private banks have made large investments in technology. Even the State Bank of India is growing and is very profitable despite state ownership. While many inefficient state banks claim half of banking assets, the few quality private institutions are valuable assets.

Given China’s ambiguous political support of the private economy, we think global capital will migrate toward India. We think India is emerging as the fastest growing economy in the world. It boasts a young population, a desperate need for capital since that population demands jobs, and a tradition of rule of law. A few years back, Prime Minister Modi cancelled a large portion of the currency stock to force the Indian population out of the cash economy into the banking system. The percentage of the population with bank accounts surged from 30% to close to 80%.

SELECT SHORT POSITIONS

Excessive inventory positions and declining sales owing to discounting threaten retailing profit margins in the years ahead. In 2023, interest costs will rise just as same store sales peter out. As consumers face higher energy costs and slower income growth, same store sales will falter for many retailers.

We have long held a negative view of banking in Europe. What makes banking so structurally difficult in Europe is the fact that its financial sector is balkanized. Three or four major banks exist in France for example, and they must compete for limited credit opportunities in an economy of 72 million people. They lack scale, which is a critical disadvantage as banking becomes more technologically driven, so margins are low, and they will face increasing difficulties as higher energy will cost consumers and businesses far more to heat their homes and workplaces. Several banks in Italy and Germany have had to be bailed out in recent years, and that policy only sustains weak banks in the market. Valuations deserve to be at steep discounts to book values.

Finally, the Fund currently has short holdings in the semiconductor-foundry industry. Both managements have executed well and have talked about long-term agreements with their customers that should insulate them from a semiconductor foundry down cycle. They do offer a U.S.-Europe manufacturing footprint in a world moving away from China and Taiwan. However, these companies face limited barriers to entry. The foundry business is a fixed cost business where depreciation is the largest part of the cost base, and we suspect they will face strong profit headwinds in a semi down cycle.

As always, please don’t hesitate to reach out to us with any questions or comments.

Sincerely,

Charles I Clough, Jr.

This letter is provided for informational purposes only and is not an offer to purchase or sell shares. Clough Global Opportunities Fund (the “Fund”) is a closed-end fund, which is traded on the NYSE American LLC, and does not Equity Fund 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.

Although not generally stated throughout, the information in this letter reflects the opinions of the individual portfolio managers, which opinion is subject to change, and is not intended to be a forecast of future events, a guarantee of future results or investment advice.

The Morningstar Global Allocation Index represents a multi-asset class portfolio of 60% global equities and 40% global bonds. The asset allocation within each class is driven by Morningstar asset allocation methodology. To maintain broad global exposure and diversification, the index consists of equities & fixed income and utilizes global, float-weighted index methodology to determine allocation to U.S. and non-U.S.

The MSCI World Index is 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).

The Bloomberg U.S. Aggregate Bond Index measures the performance of the U.S. investment grade bond market. The Bloomberg U.S. 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 blended indices, 50% MSCI World/50% Bloomberg U.S. Aggregate Bond Index and 75% MSCI World/25% Bloomberg U.S. Aggregate Bond Index, have been calculated by Clough Capital Partners L.P. based on the sources listed above.

The performance of the indices referenced herein is used for informational purposes only. One cannot invest directly in an index. Indices are not subject to any of the fees or expenses to which the Fund is subject, and there are significant differences between the Fund’s investments and the components of the indices referenced.

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.

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 1-855-425-6844. Read them carefully before investing.

The 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 the 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. For the fiscal year 2021, the Fund’s distribution policy resulted in distributions of capital in the amount of $44,110,259.

The 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.

The 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 the Fund in real estate investment trusts (“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 the 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 neither a guarantee, nor necessarily indicative, of future results, which may be significantly affected by changes in economic and other conditions.

Distribution to Common Stockholders

The Fund intends to make monthly distributions to common shareholders according to its managed distribution policy. The Fund’s managed distribution policy is to set the monthly distribution rate at an amount equal to one twelfth of 10% of the Fund’s adjusted year-ending net asset value per share (“NAV”), which will be the average of the NAVs as of the last five business days of the prior calendar year. The Board of Directors approve the distribution and may adjust it from time to time. The monthly distribution amount paid from October 1, 2021 to December 31, 2021 was $0.1087 per share and the Fund paid $0.0943 per share monthly between January 1, 2022 and October 31, 2022. At times, to maintain a stable level of distributions, the Fund may pay out less than all of its net investment income or pay out accumulated undistributed income, or return of capital, in addition to current net investment income.

Performance of $10,000 Initial Investment (as of October 2022)

The graph shown above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

FUTURES CONTRACTS

CALL OPTIONS WRITTEN

PUT OPTIONS WRITTEN