Bancroft Fund Ltd. Declares Distribution of $0.32 per Share

Rhea-AI Summary

Bancroft Fund Ltd. (NYSE American: BCV) has declared a quarterly cash distribution of $0.32 per share, payable on September 23, 2025, to shareholders of record as of September 16, 2025.

The Fund maintains a policy of distributing the greater of either 5% of the trailing 12-month average month-end market price or the minimum required distribution under IRS regulations. The 2025 distributions comprise approximately 39% from net investment income, 25% from net capital gains, and 36% return of capital on a book basis.

The Board of Trustees regularly reviews distribution levels, considering net asset value and market conditions, with the policy subject to modification or termination at any time.

Positive

• Regular quarterly distribution maintained at $0.32 per share
• 39% of distributions come from net investment income
• 25% of distributions derive from net capital gains

Negative

• 36% of distributions classified as return of capital, which reduces shareholder cost basis
• Distribution policy subject to modification or termination by Board
• 3.8% Medicare surcharge applies to certain shareholders on net investment income

Insights

Financial Analyst

Bancroft Fund declared a $0.32 per share distribution with a 5% annual target rate, comprising 39% income, 25% capital gains, and 36% return of capital.

Bancroft Fund Ltd. (BCV) has declared a $0.32 per share cash distribution payable on September 23, 2025, to shareholders recorded by September 16, 2025. This follows the fund's stated distribution policy of paying the greater of 5% of its trailing 12-month average market price or the minimum required by IRS regulations for investment companies.

The distribution composition is particularly noteworthy, with approximately 39% coming from net investment income, 25% from net capital gains, and 36% classified as return of capital. This composition reveals that over a third of the distribution isn't being generated from the fund's earnings but rather returning shareholders' original investment capital.

The substantial return of capital component suggests the fund may be struggling to generate sufficient earnings to fully cover its targeted distribution level. When closed-end funds return capital, it effectively reduces shareholders' cost basis rather than generating new wealth. While this maintains the appearance of a consistent yield, it potentially erodes the fund's asset base over time if not offset by portfolio appreciation.

The quarterly review process by the Board of Trustees indicates they're actively managing the distribution level against market conditions and the fund's NAV, providing some governance oversight. However, investors should note the explicit warning that the distribution policy could be modified or terminated, underscoring that the current 5% target isn't guaranteed indefinitely.

RYE, N.Y., Aug. 27, 2025 (GLOBE NEWSWIRE) -- The Board of Trustees of Bancroft Fund Ltd. (NYSE American: BCV) (the “Fund”) declared a $0.32 per share cash distribution payable on September 23, 2025 to common shareholders of record on September 16, 2025.

The Fund intends to pay the greater of either an annual distribution of 5% of the Fund’s trailing 12-month average month-end market price or an amount that meets the minimum distribution requirement of the Internal Revenue Code for regulated investment companies.

Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Trustees will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the current financial market environment. If necessary, the Fund pays an adjusting distribution in December, which includes any additional income and net realized capital gains in excess of the quarterly distributions. The Fund’s distribution policy is subject to modification or termination by the Board of Trustees at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and with income that exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis.

Long-term capital gains, qualified dividend income, investment company taxable income and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund currently available, each of the distributions paid in 2025 to common shareholders with respect to the Fund’s fiscal year ending September 30, 2025 would include approximately 39% from net investment income, 25% from net capital gains and 36% would be deemed a return of capital on a book basis. This information does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2025 will be made after year end and can vary from the quarterly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2025 distributions in early 2026 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

Laurissa Martire
(914) 921-5399

About Bancroft Fund Ltd.
Bancroft Fund Ltd. is a diversified, closed-end management investment company with $164 million in total net assets. BCV invests primarily in convertible securities with the objectives of providing income and the potential for capital appreciation, objectives the Fund considers to be relatively equal over the long term due to the nature of the securities in which it invests. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE American – BCV
CUSIP – 059695106

Investor Relations Contact:
Laurissa Martire
(914) 921-5399
lmartire@gabelli.com

FAQ

When is Bancroft Fund's (BCV) next dividend payment date?

Bancroft Fund's next dividend of $0.32 per share will be paid on September 23, 2025 to shareholders of record as of September 16, 2025.

What is Bancroft Fund's (BCV) dividend distribution policy?

The Fund distributes the greater of 5% of trailing 12-month average month-end market price or the minimum required distribution under IRS regulations.

How are Bancroft Fund's (BCV) 2025 distributions categorized?

The 2025 distributions comprise approximately 39% from net investment income, 25% from net capital gains, and 36% return of capital.

What are the tax implications of BCV's 2025 distributions?

Distributions may be treated as long-term capital gains or qualified dividend income, taxed at maximum 20% for individuals. Some shareholders face an additional 3.8% Medicare surcharge.

When will BCV shareholders receive tax information for 2025 distributions?

Shareholders will receive Form 1099-DIV in early 2026 detailing the tax treatment of all 2025 distributions.