Clough Global Dividend and Income Fund Section 19(a) Notice
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The Clough Global Dividend and Income Fund's recent distribution announcement highlights a significant portion of the payout as a return of capital, accounting for 78.12% of the current distribution. This is a critical indicator as it suggests that the fund is returning a portion of the investors' original investment rather than distributing profits from investments. This could imply that the fund's income and capital gains are not sufficient to cover the distributions, which may be a red flag for investors seeking sustainable income streams.
Moreover, the fund's performance metrics, such as the Cumulative Total Return on NAV of 5.97% for the fiscal year-to-date, contrast with the 5-year average annual total return of -1.28%. This discrepancy raises questions about the fund's long-term performance and consistency, which are vital considerations for investors looking for stable returns. The annualized distribution rate as a percentage of NAV at 11.61% could be attractive, but it is essential to assess whether such distributions are sustainable or if they might lead to erosion of capital over time.
From a tax perspective, the Fund's distribution composition is crucial information for shareholders. The differentiation between investment income, capital gains and return of capital influences the tax liability. Investment income and capital gains are typically subject to taxation, whereas a return of capital is not immediately taxable but adjusts the cost basis downward, potentially increasing capital gains tax upon the sale of the shares.
It is important for shareholders to understand that the provided estimates are not final figures for tax reporting purposes. The actual amounts and sources for tax purposes will only be confirmed after the Fund's fiscal year-end. Therefore, investors should be prepared for possible adjustments and ensure they use the correct figures provided on Form 1099-DIV for tax filings. The Fund's distribution strategy, particularly the high percentage of return of capital, may affect investors' after-tax return and requires careful tax planning.
The distribution dynamics of the Clough Global Dividend and Income Fund offer insights into the closed-end fund market segment. Closed-end funds often attract investors seeking regular income and the Fund's ability to maintain its distribution levels is a key factor in its market appeal. However, the reliance on return of capital to sustain distributions may concern investors who prioritize income derived from fund earnings and realized gains.
Investors often compare the market price of a closed-end fund to its NAV to gauge market sentiment. In this case, the Fund's NAV performance and distribution rates could impact investor perception and, subsequently, the market price. A sustained discrepancy between NAV performance and distribution rates may lead to adjustments in the market price as investors recalibrate their expectations based on distribution sustainability and long-term performance.
DENVER, CO / ACCESSWIRE / December 29, 2023 / On December 29, 2023, the Clough Global Dividend and Income Fund (NYSE American:GLV) (the "Fund"), a closed-end fund, paid a monthly distribution on its common stock of
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
| Current Distribution from: | ||
Per Share ($) | % | |
| Net Investment Income | 0.01306 | |
| Net Realized Short-Term Capital Gain | 0.00000 | |
| Net Realized Long-Term Capital Gain | 0.00000 | |
| Return of Capital or other Capital Source | 0.04664 | |
| Total (per common share) | 0.05970 | |
| Fiscal Year-to-Date Cumulative Distributions from: | ||
Per Share ($) | % | |
| Net Investment Income | 0.01948 | |
| Net Realized Short-Term Capital Gain | 0.00000 | |
| Net Realized Long-Term Capital Gain | 0.00000 | |
| Return of Capital or other Capital Source | 0.09992 | |
| Total (per common share) | 0.11940 |
The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with ‘yield' or ‘income.'
Presented below are return figures, based on the change in the Fund's Net Asset Value per share ("NAV"), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last business day of the month prior to distribution record date.
Fund Performance & Distribution Information
| Fiscal Year to Date (11/01/2023 through 11/30/2023) | ||||
| Annualized Distribution Rate as a Percentage of NAV^ | ||||
| Cumulative Distribution Rate on NAV^+ | ||||
| Cumulative Total Return on NAV* | ||||
| Average Annual Total Return on NAV for the 5 Year Period Ending 11/30/2023** | - | |||
Past performance is not indicative of future results.
^ Based on the Fund's NAV as of November 30, 2023.
+Cumulative distribution rate is based on distributions paid to date for the period November 1, 2023 through December 31, 2023.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions and that all rights in the Fund's rights offering were exercised, for the period November 1, 2023 through November 30, 2023.
**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and that all rights in the Fund's rights offering were exercised, as of the last business day of the month prior to the month of the current distribution record date.
While the NAV performance may be indicative of the Fund's investment performance, it does not measure the value of a shareholder's investment in the Fund. The value of a shareholder's investment in the Fund is determined by the Fund's market price, which is based on the supply and demand for the Fund's shares in the open market.
Shareholders should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's Managed Distribution Plan.
Furthermore, the Board of Trustees reviews the amount of any potential distribution and the income, 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 financial market environment. The Fund's distribution policy is subject to modification by the Board of Trustees at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.
Contact Info:
Website: https://www.cloughcefs.com/
Email: cloughclientinquiries@paralel.com
SOURCE: Clough Global Dividend and Income Fund | GLV
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FAQ
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