Gabelli Fund Announces Significant Cash Distribution for Shareholders

Understanding Gabelli Convertible and Income Securities Fund

The Gabelli Convertible and Income Securities Fund Inc. (NYSE: GCV) has declared an impressive cash distribution of $0.12 per share. This distribution will be payable on December 20 to shareholders who are on record as of December 13. This marks the fourth quarter distribution, bringing the total for 2024 to $0.48 per share for investors. The timing and amount of distributions like this one demonstrate the Fund's ongoing commitment to its shareholders.

Investment Strategy and Distribution Goals

Investors should take note that the Gabelli Fund aims to deliver an annual distribution of at least 8% of its average net asset value. This figure reflects adherence to the requirements set out by the Internal Revenue Code applicable to regulated investment companies. The average net asset value is calculated based on the performance at the end of each of the last four quarters. Investors might be glad to know that the Fund has meticulously calculated that 8% of its average net asset value would equate to $0.30 per share.

Board of Directors' Distribution Review

The Board of Directors plays an essential role in determining the appropriate level for distributions each quarter. They assess potential distributions from various sources, including income and realized capital gains, while also considering the financial market environment. This careful review reflects a disciplined approach, ensuring that the Fund acts in the best interest of its shareholders.

Net Asset Value and Market Fluctuations

Moreover, it's reported that the net asset value per share of the Fund will fluctuate daily. For the declared distribution, the Board decided to distribute $0.12, which is $0.18 greater than what the distribution policy typically calls for. Such a move signals a beneficial adjustment in favor of the shareholders within the current market landscape.

Tax Implications for Shareholders

Investors should also consider the tax implications associated with their distributions. All or part of this distribution may be categorized as long-term capital gain or qualified dividend income, with a maximum federal income tax rate of 20%. Additional costs may apply if individual incomes exceed certain thresholds, including a 3.8% Medicare surcharge on net investment income for certain taxpayers.

Payouts and Returns on Investment

If the Fund does not generate sufficient earnings to match the aggregate distributions for the year, any excess over the earnings would generally be considered a return of capital. For investors, this return of capital would not typically be taxable. Instead, it might be treated as an adjustment to their overall investment cost basis, affecting future capital gains calculations.

Year-End Distributions and Notifications

As the year progresses, common shareholders will receive formal notifications about the estimated components of distributions through a notice associated with each distribution. Additionally, upon the conclusion of the year, shareholders can expect a formal statement detailing the sources of all distributions received throughout 2024. This is important information that should inform their individual tax responsibilities and investment evaluations.

Contact Information for Investors

For those seeking more information relating to the Gabelli Fund, they are encouraged to reach out:

Laurissa Martire
(914) 921-5399

About Gabelli Convertible and Income Securities Fund

This Fund, with total net assets amounting to approximately $84 million, aims to achieve a high total return through a combination of current income and capital appreciation. Managed by Gabelli Funds, LLC—a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI)—the Fund reflects a disciplined investment approach aimed at maximizing shareholder value.

Frequently Asked Questions

What is the recently declared distribution for the Gabelli Fund?

The Fund has declared a cash distribution of $0.12 per share.

When will the distribution be paid out?

The cash distribution will be paid on December 20 to shareholders on record as of December 13.

How is the annual distribution rate determined?

The Fund aims for a minimum annual distribution rate of 8% based on its average net asset value.

What happens if the Fund does not earn enough to cover distributions?

If earnings do not cover distributions, the excess may be treated as a return of capital, typically not taxable.

Who can I contact for more information about the Fund?

Investors can contact Laurissa Martire at (914) 921-5399 for any inquiries regarding the Fund's distribution policy.

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