LISLE, Ill., Nov. 15, 2013 (GLOBE NEWSWIRE) -- (NYSE: FMO ) Fiduciary/Claymore MLP Opportunity Fund (the "Fund") announced today that as a result of changes in the Fund's assumptions regarding state tax rates to which the Fund will be subject, the Fund has adjusted its accrued deferred income tax liability. Based upon current tax rates, these changes will have a positive impact on the Fund's net asset value.
Because of the Fund's concentration in master limited partnership ("MLP") investments, the Fund is not eligible to be treated as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). Instead, the Fund is treated as a regular corporation for U.S. federal income tax purposes and, as a result, unlike most investment companies, is subject to corporate income tax to the extent the Fund recognizes taxable income.
The Fund accrues a deferred income tax liability, at an assumed federal, state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital. The Fund's deferred tax liability is estimated using estimates of effective tax rates expected to apply to taxable income in the years such taxes are realized. As a result of changes in the Fund's assumptions regarding applicable state tax rates, the Fund has reduced its deferred tax liability by approximately $13 million, resulting in an increase in net asset value per common share of $0.40.
Upon the sale of an equity security in an MLP, the Fund generally will be liable for any previously deferred taxes. No assurance can be given that such taxes will not exceed the Fund's deferred tax assumptions for purposes of computing the Fund's net asset value per share, which would result in an immediate reduction of the Fund's net asset value per share. For purposes of estimating the Fund's deferred tax liability for financial statement reporting and determining its net asset value, the Fund will be required to rely, to some extent, on information provided by the MLPs in which it invests. Such information may not be received in a timely manner, with the result that the Fund's estimates regarding its deferred tax liability could vary dramatically from the Fund's actual tax liability and, as a result, the determination of the Fund's actual tax liability may have a material impact on the Fund's net asset value. From time to time, the Fund may modify its estimates or assumptions regarding its deferred tax liability as new information becomes available. Modifications of such estimates or assumptions or changes in applicable tax law could result in increases or decreases in the Fund's net asset value per share, which could be material.
The Fund is a non-diversified, closed-end management investment company. The Fund's investment objective is to provide a high level of after-tax total return with an emphasis on current distributions paid to shareholders. No assurance can be given that the Fund's investment objective will be achieved.
The Fund anticipates that a significant portion of the distributions received by the Fund from the MLPs in which it invests will consist of return of capital. If this expectation is not realized, the Fund will have a larger corporate income tax expense sooner than expected. Moreover, although MLP distributions that are treated as returns of capital are generally not taxable to the Fund to that extent, such returns of capital reduce the Fund's tax basis in its investments, resulting in potential increased gains (or decreased losses) upon dispositions of such investments. While the Fund will generally seek to maximize the portion of the Fund's distributions to common shareholders that will consist of return of capital, no assurance can be given in this regard.
About Guggenheim Investments
Guggenheim Investments represents the investment management division of Guggenheim Partners, LLC ("Guggenheim"), which consists of investment managers with approximately $164 billion in combined total assets*. Collectively, Guggenheim Investments has a long, distinguished history of serving institutional investors, ultra-high-net-worth individuals, family offices and financial intermediaries. Guggenheim Investments offers clients a wide range of differentiated capabilities built on a proven commitment to investment excellence. Guggenheim Investments has offices in Chicago, New York City and Santa Monica, along with a global network of offices throughout the United States, Europe, and Asia.
Guggenheim Investments is comprised of several investment management entities within Guggenheim, which includes Guggenheim Funds Investment Advisors, LLC. Guggenheim Funds Investment Advisors, LLC serves as Investment Adviser for FMO. For more information regarding the Fund, please visit www.guggenheiminvestments.com/fmo .
* Guggenheim Investments total asset figure is as of 9.30.2013 and includes $11.852B of leverage for assets under management and $0.331B of leverage for serviced assets. AUM includes assets from Security Investors, Guggenheim Partners Investment Management, LLC, Guggenheim Funds and its affiliated entities, and some business units including Guggenheim Real Estate, Guggenheim Aviation, GS GAMMA Advisors, Guggenheim Partners Europe, Transparent Value Advisors, and Guggenheim Partners India Management. Values from some funds are based upon prior periods.
About Advisory Research, Inc.
Advisory Research, Inc. serves as the Fund's investment sub-adviser. The FAMCO MLP team, a division of the Sub-Adviser, is responsible for the management of the Fund's portfolio of securities. The FAMCO MLP team is dedicated to managing MLPs and energy infrastructure strategies for open-end mutual funds and closed-end funds, public and corporate pension plans, endowments and foundations and private wealth individuals. In March 2012, the FAMCO MLP team and its business was transferred from Fiduciary Asset Management Inc. (the "Predecessor Sub-Adviser") to the Sub-Adviser. In March 2012, the FAMCO MLP team and its business was transferred from Fiduciary Asset Management Inc. (the "Predecessor Sub-Adviser") to the Sub-Adviser. The Sub-Adviser is and the Predecessor Sub-Adviser was, at the time of the transfer, a wholly-owned subsidiary of Piper Jaffray Companies.
This information does not represent an offer to sell securities of the Fund and it is not soliciting an offer to buy securities of the Fund. There can be no assurance that the Fund will achieve its investment objective. Investments in the Fund involve operating expenses and fees. The net asset value of the Fund will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value. Past performance is not indicative of future performance. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Some general risks and considerations associated with investing in the Fund include: Risks of Investing in MLP Units, Tax Risks of Investing in Equity Securities of MLPs, Affiliated Party Risk, Equity Securities Risk, Concentration Risk, Energy Sector Risks, Other Sector Risks, Small Capitalization Risk, Restricted Securities Risk, Cash Flow Risk, Risk Associated with Options on Securities, Liquidity Risk, Valuation Risk, Interest Rate Risk, Lower Grade Securities Risk, Portfolio Turnover Risk, Foreign Securities Risk, Derivatives Risk, Market Discount Risk, Other Investment Companies Risk, Royalty Trust Risk, Leverage Risk, Non-diversified Status Risk, Management Risk and Current Developments Risk.
Investors should consider the investment objective and policies, risk considerations, charges and expenses of any investment before they invest. For this and more information visit www.guggenheiminvestments.com or contact a securities representative or Guggenheim Funds Distributors, LLC 2455 Corporate West Drive, Lisle, IL 60532, 800-345-7999.
NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE
Member FINRA/SIPC (11/13)
Analyst Inquiries William T. Korver 630.505.3700 Media Inquiries Jeaneen Pisarra 212.518.5367
