Ellsworth Growth and Income Fund Announces Shareholder Distribution
The Board of Trustees of Ellsworth Growth and Income Fund Ltd. (NYSE American: ECF) has made an important announcement regarding its financial distributions to shareholders. The Fund has declared a cash distribution of $0.41 per share, set to be payable on December 30, providing a glimpse into the organization’s commitment to its investors.
Options for Shareholders Under the Dividend Plan
Flexible Distribution Choices
For those shareholders who do not participate in the Automatic Dividend Investment Plan, there is an option to receive this distribution either in cash or as beneficial shares of the Fund. This flexibility allows investors to choose the method that best suits their financial strategy. However, it’s essential to note that this distribution will be subjected to taxation for all shareholders, regardless of the chosen option.
Deadline for Distribution Election
Shareholders must be aware that the expiration date for opting into this distribution is December 15. For those who do not make an election, shares will automatically be received in beneficial shares instead of cash.
Determination of Share Allocations on Distribution Date
On December 16, the number of shares each holder will receive under this share option will be ascertained. This calculation will factor in either the closing market price of the Fund's beneficial shares or its net asset value, choosing the lower amount for the final determination. This careful consideration demonstrates the Fund’s commitment to safeguarding shareholder interests.
Annual Distribution Outlook and Financial Review
The Fund aims to provide an annual distribution which is at least 5% of its trailing 12-month average month-end market price or meets the minimum distribution requirements as outlined by the Internal Revenue Code for regulated investment entities. Each quarter, the Board of Trustees will evaluate potential distributions based on the Fund's income, realized capital gains, or available capital. This practice reinforces prudent fiscal management and active oversight over distribution levels.
Adjusting Distributions in December
The Board has the authority to implement an adjusting distribution in December, should there be any excess income or net realized capital gains beyond the standard quarterly distributions. It's important for potential investors to understand that the distribution policy may change or be terminated at any point, and there is no guarantee it will remain consistent in the long term.
Tax Considerations for Shareholders
The nature of the distribution may result in portions being recorded as long-term capital gains or qualified dividend income. This classification is significant, as it is subject to the maximum federal income tax rate for long-term capital gains, which currently stands at 20% for individuals. Furthermore, some U.S. shareholders, including individuals, estates, or trusts with income above set thresholds, may need to pay a 3.8% Medicare surcharge on their net investment income.
Acknowledging Potential Returns of Capital
If the Fund does not generate enough earnings—through dividends and interest income after accounting for expenses and realized net capital gains—the excess of distributions paid will be classified as a return of capital. This is a critical detail for shareholders, as returns of capital are generally not taxable and reduce the shareholder’s cost basis in the investment.
Transparency in Financial Notifications
Every year, long-term capital gains, qualified dividend income, investment company taxable income, and any potential returns of capital will be allocated pro-rata to all distributions for common shareholders. Shareholders can expect to receive notifications reflecting the estimated components of each distribution, alongside taxation treatments, ensuring transparency. These details are also routinely updated on the Fund’s website.
About Ellsworth Growth and Income Fund
Ellsworth Growth and Income Fund Ltd. stands as a diversified, closed-end management investment company, boasting $216 million in total net assets. The Fund primarily focuses on convertible securities and common stock with the dual goals of generating income while also pursuing capital appreciation. This balanced approach highlights the methodical consideration the Fund places in its investment strategy.
Managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI), the Fund actively evaluates market conditions to safeguard investors’ interests while fostering growth.
For further inquiries regarding the Fund’s distribution policy or to get additional information, shareholders can reach out to:
Bethany Uhlein
(914) 921-5546
Frequently Asked Questions
What is the announced distribution amount for 2025?
The announced distribution amount is $0.41 per share for 2025.
When will shareholders receive their distribution?
Distributions are set to be payable on December 30, 2025.
What options are available for receiving the distribution?
Shareholders can elect to receive their distribution in cash or shares of the Fund.
What is the deadline for choosing a distribution option?
The deadline to choose a distribution option is December 15, 2025.
How does the Fund determine the number of shares for the distribution?
The number of shares will be determined based on the lower of the closing market price or net asset value on December 16, 2025.
