Herzfeld Caribbean Basin Fund Announces Latest Distribution

Herzfeld Caribbean Basin Fund Distribution Announcement

MIAMI BEACH, Fla. — The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) recently made an important announcement regarding its latest distribution under its Managed Distribution Policy.

Details of the Distribution

The Fund has confirmed a distribution, which was paid entirely in cash, indicating its commitment to provide reliable returns to stockholders. The specific details of the distribution are summarized as follows:

Declaration Date: 12/20/2024
Ex-Date: 12/31/2024
Record Date: 12/31/2024
Payment Date: 01/13/2025
Per Share Distribution: $0.2325

Distribution Policy Overview

The primary goal of the Managed Distribution Policy is to offer stockholders a consistent rate of return, currently set at 15% of the Fund’s net asset value determined on a specific date. This distribution strategy underwent significant amendments recently, allowing quarterly, semi-annual, or annual periods of distribution. This change provides the flexibility needed to ensure consistent returns while accounting for necessary year-end regulatory distributions.

The Board of the Fund regularly reviews this policy, ensuring that it serves the best interests of the stockholders. The adjustments reflect the Fund's focus on maintaining the 15% annual distribution while taking into account market conditions and regulatory requirements.

Implications of the Policy

One of the key advantages of this policy is that it allows the Fund to allocate all available investment income to its stockholders, as mandated by relevant investment regulations. However, stockholders should note that the amount distributed per share is subject to modifications based on the Board’s discretion. In instances where investment income does not meet expectations, the Fund may resort to long-term capital gains or return capital to meet its managed distribution levels.

Understanding Returns of Capital

Investors might find that returns of capital can occur when a portion of their investment is reimbursed to them. It is essential for stockholders to recognize that a return of capital does not indicate the Fund's overall investment performance. Rather, it is a method through which the Fund maintains its distribution commitments.

Performance Over the Years

As part of its ongoing commitment to transparency, the Fund highlights its financial performance, including average annual returns. As of the latest reporting period, the average annual total return regarding net asset value was -4.50% for the past five years. However, the Fund maintains an annualized current distribution rate of 15.15% against its net asset value, providing assurance to investors about their returns.

Annual and Cumulative Distributions

Furthermore, the Fund reported a cumulative total return of 6.53% for the fiscal year. Cumulative fiscal year distributions as a percentage of net asset value stood at 7.57% as of the latest calculations, demonstrating the Fund's ability to navigate market challenges while still providing returns to its investors.

Forward Planning and Outlook

Looking ahead, the Fund acknowledges that its distribution strategy may need to adapt to the dynamic nature of financial markets. The Board holds the authority to amend or even suspend the policy if deemed beneficial to the Fund’s overall strategy. Each distribution that involves more than just net investment income prompts a comprehensive notice to stockholders, ensuring they are well-informed regarding their investments.

Additionally, Thomas J. Herzfeld Advisors, Inc., the investment advisor for the Fund, continues to provide exceptional management with a keen focus on the Caribbean Basin's investment landscape. Founded in 1984, the firm specializes in analyzing and managing investments in closed-end funds.

Frequently Asked Questions

1. What is the Herzfeld Caribbean Basin Fund?

The Fund is a publicly traded closed-end fund that focuses on investments in the Caribbean Basin.

2. What is the current distribution per share?

The current distribution per share is $0.2325.

3. How often does the Fund make distributions?

The Fund aims for a 15% annual distribution, with payments potentially made quarterly, semi-annually, or annually.

4. What does a return of capital mean for investors?

A return of capital can occur when part of a stockholder’s investment is returned, and it does not necessarily reflect the Fund’s investment performance.

5. How can stockholders stay informed about their investments?

The Fund regularly issues notices and detailed reports following distributions to keep stockholders informed regarding their investments and tax-related issues.

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