Ellsworth Growth and Income Fund Limited Declares a New Distribution
The Board of Trustees of Ellsworth Growth and Income Fund Ltd. (NYSE American: ECF) has announced a cash distribution of $0.14 per share for its common shareholders. This significant announcement reflects the Fund's continued commitment to rewarding its investors.
Details of the Distribution
This cash distribution will be payable on December 30, 2024, to shareholders who are on record as of November 22, 2024. Shareholders who are not part of the Fund's Automatic Dividend Investment Plan are provided with the choice of receiving this distribution either in cash or as beneficial shares of the Fund.
Options Available for Shareholders
The deadline for shareholders to indicate their preference for cash or shares is December 13, 2024. For those who do not elect an option, shares will automatically be issued. The precise number of shares entitled to each holder will be determined based on the closing market price of the Fund’s beneficial shares or its net asset value on December 16, 2024, selecting the lower price.
Ongoing Distribution Strategy
Ellsworth Growth and Income Fund aims to maintain an annual distribution rate of at least 5% based on its trailing 12-month average market price. The valuation made by the Board of Trustees each quarter takes into account various factors such as income, realized capital gains, and the changing financial landscape.
Adjustment to Distributions
In instances where the Fund generates additional income or capital gains surpassing the regular distributions, an adjustment distribution may be disbursed in December. This move ensures that the Fund meets its distribution requirements effectively.
Understanding the Tax Implications
Investors should be aware that portions of the distribution may be characterized as long-term capital gain or qualified dividend income, both of which are subject to federal taxation. Current federal rates for long-term capital gains reach up to 20% for individuals. Furthermore, some shareholders may be subject to an additional Medicare surcharge based on their net investment income.
Capital Return Considerations
Should the Fund’s earnings fall short of covering all distributions for a year, the excess amount will be categorized as a return of capital, which usually isn’t taxable, as it reduces the shareholder's cost basis.
Distribution Components and Notifications
Ellsworth Growth and Income Fund ensures transparency by updating shareholders about the estimated components of distributions as they arise. Following each fiscal year, the final determination regarding the sources of all distributions is made, potentially differing from early estimates. Shareholders receive updates via Form 1099-DIV in early 2025, ensuring they are informed of the tax impacts associated with their investments.
Investor Considerations and Contact
Prospective investors are encouraged to evaluate the objectives, risks, charges, and expenses associated with the Fund before investing, to align their financial goals with suitable investments. For further queries regarding the Fund’s distribution policy, investors can reach out to:
Bethany Uhlein
(914) 921-5546
About Ellsworth Growth and Income Fund Ltd.
Ellsworth Growth and Income Fund Ltd. is a well-established, diversified closed-end management investment company managing approximately $184 million in total net assets. The Fund primarily invests in convertible securities and common stock to generate desirable income while pursuing capital appreciation. Structured under the management of Gabelli Funds, LLC, which is a part of GAMCO Investors, Inc. (OTCQX: GAMI), the Fund strategically balances income and growth potential in its investment approach.
Frequently Asked Questions
What is the distribution amount declared by the Fund?
The Fund has declared a cash distribution of $0.14 per share.
When will the distribution be payable?
The distribution will be payable on December 30, 2024.
How can shareholders choose between cash and shares?
Shareholders must indicate their preference for cash or shares by December 13, 2024. If no election is made, shares will be issued automatically.
What happens if the Fund's earnings are below distribution amounts?
If earnings do not cover the distributions, the excess will be considered a return of capital, which is generally not taxed.
Who manages the Ellsworth Growth and Income Fund?
The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc.
