Gabelli Global Small and Mid Cap Value Trust Declares Second Quarter Distribution of $0.16 Per Share

Rhea-AI Summary

The Gabelli Global Small and Mid Cap Value Trust (NYSE:GGZ) has announced a quarterly cash distribution of $0.16 per share, payable on June 23, 2025, to shareholders of record as of June 13, 2025. The distribution composition includes approximately 17% from net capital gains and 83% return of capital on a book basis. The Fund's Board of Trustees determines the distribution amount quarterly, considering factors such as net asset value and market conditions. The distribution may be subject to various tax treatments, including long-term capital gains and qualified dividend income, with a maximum federal tax rate of 20% for individuals. Additionally, certain shareholders may be subject to a 3.8% Medicare surcharge on their net investment income.

Positive

• Regular quarterly dividend distribution maintained at $0.16 per share
• 17% of distribution comes from net capital gains

Negative

• 83% of distribution classified as return of capital, indicating insufficient earnings to cover the distribution
• Fund's distribution policy subject to modification with no guarantee of continuation

Insights

Investment Trust Analyst

GGZ declared a $0.16 quarterly distribution with 83% classified as return of capital rather than from earnings, signaling potential sustainability concerns.

The Gabelli Global Small and Mid Cap Value Trust (GGZ) has declared its Q2 2025 distribution of $0.16 per share, payable on June 23 to shareholders of record as of June 13. While this maintains the fund's quarterly distribution pattern, the composition of this distribution reveals important nuances for investors.

The distribution breakdown is particularly noteworthy - only 17% comes from net capital gains while a substantial 83% is classified as return of capital. This means the vast majority of what shareholders receive isn't coming from the fund's investment performance but is effectively returning a portion of their original investment.

Return of capital distributions aren't necessarily negative, but they do reduce shareholders' cost basis and can indicate the fund isn't generating sufficient earnings to cover its distributions. In this case, the fund explicitly acknowledges that the distribution exceeds its earnings (dividends, interest income, and realized capital gains minus expenses).

The Fund's board reviews distribution levels quarterly, considering NAV and market conditions, but investors should understand this isn't a guaranteed yield or dividend in the traditional sense. For taxable accounts, this distribution structure creates a different tax profile than funds distributing primarily from earnings or capital gains - typically more tax-efficient in the short term but potentially creating larger capital gains exposure upon eventual sale of shares.

The high return of capital component suggests potential sustainability questions about the current distribution level without improvement in the fund's ability to generate earnings or capital appreciation in its underlying investments.

RYE, N.Y., May 14, 2025 (GLOBE NEWSWIRE) -- The Board of Trustees of The Gabelli Global Small and Mid Cap Value Trust (NYSE:GGZ) (the “Fund”) declared a $0.16 per share cash distribution payable on June 23, 2025 to common shareholders of record on June 13, 2025.

The Fund intends to pay a quarterly distribution of an amount determined each quarter by the Board of Trustees. In addition to the quarterly distributions, and in accordance with the minimum distribution requirements of the Internal Revenue Code for regulated investment companies, the Fund may pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the quarterly distributions for that year.

Each quarter, the Board of Directors reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Directors will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the current financial market environment. The Fund’s distribution policy is subject to modification by the Board of Directors 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 whose income 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 to common shareholders in 2025 would include approximately 17% from net capital gains and 83% would be deemed a return of capital on a book basis. This 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:

Bethany Uhlein
(914) 921-5546

About The Gabelli Global Small and Mid Cap Value Trust
The Gabelli Global Small and Mid Cap Value Trust is a diversified, closed-end management investment company with $136 million in total net assets whose primary investment objective is to achieve long-term capital growth of capital. Under normal market conditions, the Fund will invest at least 80% of its total assets in equity securities (such as common stock and preferred stock) of companies with small or medium sized market capitalizations. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE – GGZ
CUSIP – 36249W104

THE GABELLI GLOBAL SMALL AND MID CAP VALUE TRUST

Investor Relations Contact:
Bethany Uhlein
(914) 921-5546
buhlein@gabelli.com

FAQ

When is GGZ's Q2 2025 dividend payment date and record date?

The dividend payment date is June 23, 2025, and the record date is June 13, 2025.

What is the dividend amount for GGZ's Q2 2025 distribution?

GGZ declared a quarterly cash distribution of $0.16 per share.

What is the composition of GGZ's Q2 2025 distribution?

The distribution consists of approximately 17% from net capital gains and 83% would be deemed a return of capital on a book basis.

How are GGZ's distributions taxed for shareholders?

Distributions may be treated as long-term capital gains or qualified dividend income, subject to a maximum 20% federal tax rate for individuals, plus a potential 3.8% Medicare surcharge for certain shareholders.