OMB APPROVAL
 OMB Number: 3235-0578 
 Expires: April 30, 2010
 Estimated average burden
 hours per response: 10.5
  UNITED STATES    
  SECURITIES AND EXCHANGE COMMISSION    
  Washington, DC 20549    
       
 
FORM N-Q
    

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number  
811-21989
 
 
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, 2008

Date of reporting period: October 31, 2007        

Form N-Q is to be used by the registered management investment company, other than a small business investment company 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
October 31, 2007 (unaudited)
Shares
         
(000)
       
Value*
COMMON STOCK-59.3%      
    Aerospace/Defense-1.6%      
87   L-3 Communications Holdings, Inc. (a)  
$
9,571,572
 
    Automotive-1.7%      
226   Johnson Controls, Inc. (a)     9,876,348
 
    Beverages-3.4%      
162   Coca-Cola Co. (a)     10,023,648
177   Molson Coors Brewing Co. — Class B (a)     10,106,818
          20,130,466
    Chemicals-2.1%      
124   Monsanto Co. (a)     12,145,172
 
    Commercial Services-1.6%      
140   McKesson Corp. (a)     9,254,000
 
    Computers-3.6%      
474   EMC Corp. (a) (e)     12,034,860
77   International Business Machines Corp. (a)     8,906,404
          20,941,264
    Electric-1.7%      
103   Constellation Energy Group, Inc. (a)     9,716,220
 
    Healthcare Products-3.8%      
158   Baxter International, Inc. (a)     9,505,584
39   Intuitive Surgical, Inc. (a) (e)     12,845,991
          22,351,575
    Insurance-2.9%      
171   Cigna Corp. (a)     8,954,794
86   Prudential Financial, Inc. (a)     8,288,904
          17,243,698
    Machinery-5.1%      
195   AGCO Corp. (a) (e)     11,643,568
69   Deere & Co. (a)     10,734,570
105   Terex Corp. (a) (e)     7,763,412
          30,141,550
    Metals & Mining-1.9%      
93   Freeport-McMoRan Copper & Gold, Inc. (a)     10,944,240
 
    Miscellaneous Manufacturing-3.2%      
217   General Electric Co. (a)     8,927,604
142   Textron, Inc. (a)     9,855,504
          18,783,108
    Oil & Gas-6.6%      
87   Diamond Offshore Drilling, Inc. (a)     9,805,718
141   National Oilwell Varco, Inc. (a) (e)     10,356,136
99   Schlumberger Ltd.     9,589,401
127   Valero Energy Corp. (a)     8,958,696
          38,709,951
    Pharmaceuticals-6.8%      
311   Bristol-Myers Squibb Co. (a)     9,311,895
219   Gilead Sciences, Inc. (a) (e)     10,110,991
109   Medco Health Solutions, Inc. (a) (e)     10,315,734
175   Merck & Co., Inc. (a)     10,166,370
          39,904,990
 
    Retail-1.5%      
139   Target Corp. (a)     8,504,496
 
    Semi-conductors-1.6%      
355   Intel Corp. (a)     9,536,050
 
    Software-3.7%      
315   Microsoft Corp. (a)     11,584,107
443   Oracle Corp. (a) (e)     9,810,225
          21,394,332

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
October 31, 2007 (unaudited)
 
Shares
     
     
(000)
       
    
Value*
    Telecommunications-6.5%  
     
156   Harris Corp. (a)  
 
$
 9,417,080
293   Juniper Networks, Inc. (a) (e)  
    10,562,400
206   Qualcomm, Inc. (a)  
    8,815,199
202   Verizon Communications, Inc. (a)  
    9,306,140
       
    38,100,819
 
    Total Common Stock (cost-$305,928,026)  
    347,249,851
 
CONVERTIBLE PREFERRED STOCK-28.4%  
     
       
Credit Rating
     
       
(Moody's/S&P)
     
    Agriculture-0.9%  
     
39   Bunge Ltd., 4.875%, 12/31/49  
Ba1/BB
    5,553,250
 
    Automotive-0.9%  
     
214   General Motors Corp., 6.25%, 7/15/33, Ser. C  
Caa1/B-
    5,497,230
 
    Banking-1.0%  
     
43   Wells Fargo & Co., 8.00%, 6/1/08, Ser. AAPL (Apple, Inc.) (f)  
Aa1/AA+
    5,695,054
 
    Commercial Services-0.9%  
     
102   United Rentals, Inc., 6.50%, 8/1/28  
Caa1/B-
    5,096,888
 
    Diversified Financial Services-10.9%  
     
61   Citigroup Funding, Inc., 4.583%, 9/27/08, Ser. GNW (Genworth Financial, Inc.) (d) (f)  
Aa2/AA
    1,635,165
288   Eksportfinans AS, 13.00%, 11/1/08, Ser. TWX (Time Warner, Inc.) (f)  
Aaa/A+
    5,224,783
    Goldman Sachs Group, Inc.,  
     
240      12.00%, 12/12/07, Ser. CSCO (Cisco Systems, Inc.) (f)  
Aa3/NR
    6,890,870
119      20.00%, 3/6/08, Ser. DISH (EchoStar Communications Corp.) (f)  
Aa3/NR
    4,771,499
128   Lazard Ltd., 6.625%, 5/15/08  
Ba1/NR
    5,408,422
    Lehman Brothers Holdings, Inc.,  
     
209      6.00%, 10/12/10, Ser. GIS (General Mills, Inc.) (f)  
A1/A+
    5,239,620
68      8.50%, 8/25/08, Ser. UTX (United Technologies Corp.) (f)  
A1/A+
    4,932,900
145      20.00%, 2/24/08, Ser. HPQ (Hewlett-Packard Co.) (f)  
A1/A+
    6,177,978
    Morgan Stanley,  
     
59      20.00%, 12/15/07, Ser. XOM (Exxon Mobil Corp.) (f)  
Aa3/AA-
    4,322,966
134      20.00%, 1/31/08, Ser. T (AT&T, Inc.) (f)  
Aa3/AA-
    4,697,952
11      20.00%, 3/8/08, Ser. GOOG (Google, Inc.) (f)  
Aa3/NR
    5,227,841
130      20.00%, 3/24/08, Ser. DIS (Walt Disney Co.) (f)  
Aa3/NR
    3,983,015
120   Svensk Exportkredit AB, 10.00%, 10/20/08, Ser. TEVA (Teva Pharmaceutical Industries Ltd.) (f)  
Aa1/AA+
    5,280,975
       
    63,793,986
    Electric-2.9%  
     
102   AES Trust III, 6.75%, 10/15/29  
B3/B-
    5,087,667
82   Entergy Corp., 7.625%, 2/17/09  
NR/BBB
    5,935,338
15   NRG Energy, Inc., 5.75%, 3/16/09  
B2/CCC+
    5,953,447
       
    16,976,452
    Hand/Machine Tools-0.9%  
     
5   Stanley Works, 7.145%, 5/17/12 (d)  
A2/A
    5,512,650
 
    Insurance-3.7%  
     
4   Fortis Insurance NV, 7.75%, 1/26/08 (b) (c)  
Aa3/A+
    5,648,778
157   Metlife, Inc., 6.375%, 8/15/08  
NR/BBB+
    5,249,232
165   Platinum Underwriters Holdings Ltd., 6.00%, 2/15/09, Ser. A  
NR/BB+
    5,472,250
197   XL Capital Ltd., 7.00%, 2/15/09  
A3/A-
    5,023,830
       
    21,394,090
    Investment Companies-1.0%  
     
81   Vale Capital Ltd., 5.50%, 6/15/10, Ser. RIO (Companhia Vale do Rio Doce) (f)  
NR/NR
    5,894,210
 
    Oil & Gas-0.9%  
     
44   Chesapeake Energy Corp., 5.00%, 12/31/49  
NR/B
    5,274,375

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
October 31, 2007 (unaudited)
 
Shares
     
Credit Rating
     
(000)
     
(Moody's/S&P)
   
Value*
    Packaging & Containers-0.9%  
     
112   Owens-Illinois, Inc., 4.75%, 12/31/49  
Caa1/B-
  $ 5,273,100
 
    Pharmaceuticals-0.8%  
     
18   Schering-Plough Corp., 6.00%, 8/13/10  
Baa3/BBB
    4,899,450
 
    Real Estate-0.9%  
     
199   FelCor Lodging Trust, Inc., 1.95%, 12/31/49, Ser. A  
B2/B-
    4,972,500
 
    Telecommunications-1.0%  
     
98   Crown Castle International Corp., 6.25%, 8/15/12  
NR/NR
    5,913,294
 
    Waste Disposal-0.8%  
     
15   Allied Waste Industries, Inc., 6.25%, 3/1/08, Ser. D  
B3/B
    4,817,525
 
    Total Convertible Preferred Stock (cost-$159,836,170)  
    166,564,054
 
CONVERTIBLE BONDS & NOTES-5.6%  
     
Principal      
     
Amount      
     
(000)
     
     
    Automotive-0.8%  
     
$3,900   Ford Motor Co., 4.25%, 12/15/36  
Caa1/CCC+
    4,689,750
 
    Commercial Services-0.9%  
     
4,800   Bowne & Co., Inc., 5.00%, 10/1/33  
B2/B-
    5,160,000
 
    Computers-1.0%  
     
4,925   Maxtor Corp., 6.80%, 4/30/10  
Ba1/NR
    5,589,875
 
    Electric-0.9%  
     
1,540   PG&E Corp., 9.50%, 6/30/10  
NR/NR
    5,422,725
 
    Oil & Gas-1.1%  
     
3,775   Devon Energy Corp., 4.95%, 8/15/08  
Baa1/BBB
    6,450,531
 
    Telecommunications-0.9%  
     
5,910   Level 3 Communications, Inc., 6.00%, 3/15/10  
Caa3/CCC
    5,437,200
 
 
    Total Convertible Bonds & Notes (cost-$31,509,554)       32,750,081
 
CORPORATE BONDS & NOTES-3.4%  
     
    Electric-1.6%  
     
9,500   Energy Future Holdings Corp., 10.875%, 11/1/17 (b)(c)  
B3/CCC+
    9,654,375
 
    Paper Products-0.2%  
     
1,000   Neenah Paper, Inc., 7.375%, 11/15/14, GDR  
B2/B+
    970,000
 
    Pipelines-0.7%  
     
4,340   Dynergy Holdings, Inc., 7.75%, 6/1/19 (b)(c)  
B2/B-
    4,095,875
 
    Telecommunications-0.9%  
     
5,000   Millicom International Cellular S.A., 10.00%, 12/1/13, GDR  
B1/B+
    5,406,250
 
    Total Corporate Bonds & Notes (cost-$19,813,951)  
    20,126,500
 
U.S. GOVERNMENT SECURITIES-0.4%
 
     
 
2,000   U.S. Treasury Notes, 10.375%, 11/15/12 (cost-$2,075,312)  
    2,004,688
 
SHORT-TERM INVESTMENT-6.8%  
     
    Time Deposit-6.8%  
     
40,030   Bank of America—London, 4.10%, 11/1/07 (cost-$40,029,830)  
    40,029,830
         
     
 
    Total Investments, before call options written (cost-$559,192,843)- 103.9%  
    608,725,004

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
October 31, 2007 (unaudited)
 
Contracts      
Value*
 
CALL OPTIONS WRITTEN (e)-(1.4)%      
1,365   AGCO Corp., strike price $55, expires 11/17/07 $ (655,200 )
1,108   Baxter International, Inc., strike price $60, expires 11/17/07   (155,120 )
2,170   Bristol-Myers Squibb Co., strike price $32.50, expires 12/22/07   (60,760 )
1,195   CIGNA Corp., strike price $56.62, expires 1/19/08   (191,200 )
1,135   Coca-Cola Co., strike price $62.50, expires 12/22/07   (141,875 )
715   Constellation Energy Group, Inc., strike price $95, expires 1/19/08   (357,500 )
485   Deere & Co., strike price $155, expires 12/22/07   (426,800 )
600   Diamond Offshore Drilling, Inc., strike price $120, expires 11/17/07   (75,000 )
3,300   EMC Corp., strike price $25, expires12/22/07   (495,000 )
650   Freeport-McMoran Copper & Gold, Inc., strike price $120, expires 11/17/07   (221,000 )
1,520   General Electric Co., strike price $ 42.50, expires 12/22/07   (101,840 )
1,530   Gilead Sciences, Inc., strike price $47.50, expires 12/22/07   (214,200 )
1,090   Harris Corp., strike price $65, expires 11/17/07   (61,040 )
2,480   Intel Corp., strike price $27.50, expires 1/19/08   (292,640 )
535   International Business Machines Corp., strike price $120, expires 12/22/07   (117,700 )
275   Intuitive Surgical, Inc., strike price $340, expires 12/22/07   (500,500 )
1,580   Johnson Controls, Inc., strike price $45, expires 12/22/07   (221,200 )
2,050   Juniper Networks, Inc., strike price $40, expires 11/17/07   (20,500 )
610   L-3 Communications Holdings, Inc., strike price $110, expires 1/19/08   (292,800 )
980   McKesson Corp., strike price $62.50, expires 11/17/07   (362,600 )
760   Medco Health Solutions, Inc., strike price $95, expires 1/19/08   (364,800 )
1,220   Merck & Co., Inc., strike price $55, expires 11/17/07   (402,600 )
2,200   Microsoft Corp., strike price $37.50, expires 12/22/07   (236,500 )
1,230   Molson Coors Brewing Co., strike price $60, expires 11/17/07   (86,100 )
870   Monsanto Co., strike price $95, expires 11/17/07   (400,200 )
990   National Oilwell Varco, Inc., strike price $87.50, expires 11/17/07   (7,920 )
3,100   Oracle Corp., strike price $22.50, expires 11/17/07   (108,500 )
600   Prudential Financial, Inc., strike price $105, expires 12/22/07   (78,000 )
1,445   Qualcomm, Inc., strike price $45, expires 12/22/07   (153,170 )
695   Schlumberger Ltd., strike price $115, expires 11/17/07   (3,475 )
970   Target Corp., strike price $70, expires 1/19/08   (140,650 )
730   Terex Corp., strike price $90, expires 12/22/07   (56,210 )
995   Textron, Inc., strike price $65, expires 11/17/07   (477,600 )
890   Valero Energy Corp., strike price $75, expires 11/17/07   (57,850 )
1,415   Verizon Communications, Inc., strike price $45, expires 1/19/08   (382,050 )
 
    Total Call Options Written (premium received-$5,982,180)   (7,920,100 )
 
    Total Investments, net of call options written (cost-$553,210,663) -102.5%   600,804,904  
 
    Liabilities in excess of other assets-(2.5%)   (14,675,706 )
    Net Assets-100.0% $ 586,129,198  

 

Notes to Schedule of Investments:

*     

Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security, are fair-valued, in good faith, pursuant to guidelines established by the Board of Trustees. The Fund's investments, including over-the-counter options, are valued daily using prices supplied by an independent pricing service or dealer quotations, or the last sale price on the exchange that is the primary market for such securities, or the mean between the last quoted bid and ask price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange traded options are valued at the settlement price determined by the relevant exchange. Short-term investments maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. The prices used by the Fund to value securities may differ from the value that would be realized if the securities were sold. The Fund's net asset value is normally determined daily as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (“NYSE”) on each day the NYSE is open for business.
 

Nicholas-Applegate Equity & Convertible Income Fund Schedule of Investments
October 31, 2007 (unaudited)


 
(a)     

All or partial amount segregated as collateral for call options written.
(b)     

144A Security-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 $19,399,028, representing 3.31% of net assets are restricted.
(d)     

Variable rate security. Interest rate disclosed reflects the rate in effect on October 31, 2007.
(e)     

Non-income producing.
(f)     

Securities exchangeable or convertible into securities of an entity different than the issuer. Such entity is identified in the parenthetical.
 

Glossary:
GDR-Global Depositary Receipt
NR-Not Rated

Item 2. Controls and Procedures

a) The registrant's President and Chief Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17CFR270.30a-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 (17CFR 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

By /s/ Brian S. Shlissel
President & Chief Executive Officer

Date: December 21, 2007

By /s/ Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

Date: December 21, 2007

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 dated indicated.

By /s/ Brian S. Shlissel
President & Chief Executive Officer

Date: December 21, 2007

By /s/ Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

Date: December 21, 2007