Ellsworth Fund Declares Cash Distribution for Shareholders
RYE, N.Y. — The Board of Trustees of Ellsworth Growth and Income Fund Ltd. (NYSE American: ECF) has made an announcement regarding a cash distribution of $0.16 per share. This distribution is set to be payable on a specified date to those common shareholders who are on record. This declaration aims to provide clarity and consistency for shareholders regarding their returns.
Understanding the Fund’s Distribution Policy
The Fund is dedicated to maintaining a sound approach to its cash distributions. It intends to distribute at least 5% of its trailing 12-month average month-end market price or satisfy the Internal Revenue Code's minimum distribution requirements applicable to regulated investment companies.
Board Oversight on Distributions
Each quarter, the Board of Trustees diligently evaluates potential distributions based on income, realized capital gains, and available capital. The board is committed to monitoring distribution levels while considering the Fund's net asset value and overall market conditions. An adjusting distribution might be paid in the later months of the year should the Fund exceed its quarterly distributions.
Importance of Distribution Rate Transparency
It’s crucial for investors to understand that the distribution rate should not be equated with either the dividend yield or the total return of an investment in the Fund. Information about the distribution policy is subject to ongoing review and can be modified or even terminated by the Board at any time.
Tax Implications for Shareholders
Investors must also be aware of the potential tax implications related to distributions. Portions of the distribution may be classified as long-term capital gains or qualified dividend income. The current federal tax rate for long-term capital gains stands at 20% for taxable individual accounts, although this may vary depending on individual tax brackets.
Investor Surcharge Considerations
Moreover, individuals or entities exceeding certain income thresholds may need to pay a 3.8% Medicare surcharge on their net investment income, which encompasses dividends and capital gains derived from the Fund.
Return of Capital Explained
In instances where the Fund's earnings do not match or exceed the total distributions paid throughout the year, any excess distributed amounts might be categorized as a return of capital. This classification generally does not incur tax, but it does lower the shareholder's cost basis.
Distribution Insights for 2025
For the fiscal year ending September 30, 2025, distributions are projected to include approximately 20% from net investment income and 80% from net capital gains. This insight will be shared with shareholders in a notice accompanying the distribution, ensuring all investors are well-informed.
Tax Reporting Notifications
Shareholders will receive a written notification detailing the components and tax effects of all distributions for 2025 through Form 1099-DIV in early 2026, ensuring they have the necessary information for their tax reporting.
How to Contact for More Information
Potential investors are encouraged to review the Fund's objectives, risks, costs, and expenses before making any investment. For further details about the distribution policy or the fund's performance, interested parties can reach out to Bethany Uhlein at (914) 921-5546.
About Ellsworth Growth and Income Fund
Ellsworth Growth and Income Fund Ltd. operates as a diversified, closed-end management investment company, maintaining approximately $199 million in total net assets. The Fund primarily invests in convertible securities and common stocks with a dual objective: to provide a steady income while also pursuing potential capital appreciation over the long run.
Frequently Asked Questions
What is the recent distribution amount declared by the Fund?
The Fund has declared a cash distribution amount of $0.16 per share.
What factors does the Board of Trustees consider for distributions?
The Board reviews income, realized capital gains, capital availability, and market conditions each quarter.
How is the distribution policy subject to change?
The distribution policy may be modified or terminated by the Board at any time.
What are the tax implications for investors receiving the distribution?
Distributions could be categorized as long-term capital gains or qualified dividend income, affecting taxable income.
How can investors get more information regarding the Fund?
Investors can contact Bethany Uhlein at (914) 921-5546 for more details about the Fund and its distribution policy.
