ASA Gold and Precious Metals Limited Announces Increase To Semi-Annual Distribution and Additional Voluntary Fee Waiver by its Adviser
- The Company declared a distribution of $0.02 per common share payable on May 16, 2024, representing a $0.01 increase from the previous rate.
- Merk Investments voluntarily waived a portion of its advisory fee in recognition of the expenses incurred due to a proxy contest initiated by Saba Capital Management, L.P.
- The Company has paid uninterrupted distributions since 1959 and employs bottom-up fundamental analysis for investment decisions.
- None.
The increase in distribution from $0.01 to $0.02 per common share by ASA Gold and Precious Metals Limited is a notable change for shareholders, effectively doubling the previous rate. This adjustment suggests that the company is experiencing positive cash flow or a strategic shift to enhance shareholder value. It also signifies a consistent commitment to returning value to shareholders, as evidenced by the uninterrupted distribution since 1959. The implications for investors are twofold: there is the immediate benefit of increased income from the distribution and there is also the potential for this to be a positive signal about the company's financial health and future prospects.
Furthermore, the voluntary fee waiver by Merk Investments LLC points to a strategic partnership between the investment adviser and ASA, aimed at mitigating the financial impact of extraordinary expenses due to the ongoing proxy contest with Saba Capital. This move may be perceived favorably by investors, as it demonstrates Merk's alignment with shareholder interests and its commitment to the fund's performance despite external challenges.
ASA Gold and Precious Metals Limited's focus on precious metals and minerals is of particular interest given the current economic climate. Precious metals often serve as a hedge against inflation and currency devaluation, which could be driving increased investor interest in such funds. The company's bottom-up fundamental analysis and primary research approach indicate a thorough and potentially more reliable investment strategy, which could be attractive to investors seeking exposure to the commodities market.
The announcement of the distribution increase and fee waiver might also reflect broader industry trends where funds are seeking to differentiate themselves and attract investors through both performance and cost-efficiency. This could lead to competitive responses from other funds in the sector, potentially benefiting investors through improved terms and returns across the industry.
The classification of ASA Gold and Precious Metals Limited as a 'passive foreign investment company' (PFIC) has significant implications for U.S. shareholders. The PFIC status affects the taxation of distributions and gains from the sale of shares. Investors in PFICs may be subject to different tax rates or additional reporting requirements. The company's encouragement for shareholders to consult with tax advisors suggests that these tax consequences could be complex and materially impact the net benefit of the investment. Shareholders should consider the tax implications of the increased distribution in the context of the PFIC rules to understand the actual after-tax return on their investment.
In addition, the Company announced that Merk Investments LLC (“Merk”), the investment adviser for the Company, has voluntarily agreed to waive a portion of its advisory fee, equal to an annual rate of
This voluntary waiver is separate from, and in addition to, Merk’s ongoing waiver arrangement. Since December 1, 2020, Merk has continued to waive a portion of its advisory fee equal to an annual rate of
The Company is a non-diversified, closed-end fund that seeks long-term capital appreciation primarily through investing in companies engaged in the exploration for, development of projects in, or mining of precious metals and minerals.
It is a fundamental policy of the Company that at least
The Company employs bottom-up fundamental analysis and relies on detailed primary research including meetings with company executives, site visits to key operating assets, and proprietary financial analysis in making its investment decisions.
Investors are encouraged to visit the Company’s website for additional information, including historical and current share prices, news releases, financial statements, tax and supplemental information. The site may be found at www.asaltd.com, or you may contact the Company directly at (800) 432-3378.
Investment advisory services for the Company are provided by Merk Investments LLC (Merk), an SEC registered investment adviser. Merk provides investment advice on liquid global markets, including domestic and international equities, fixed income, commodities and currencies and their respective derivative markets.
Certain Tax Information
The Company is a “passive foreign investment company” for
View source version on businesswire.com: https://www.businesswire.com/news/home/20240403171738/en/
Axel Merk
Chief Operating Officer
(650) 376-3135 or (800) 432-3378
info@asaltd.com
Source: ASA Gold and Precious Metals Limited
FAQ
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