Gabelli Healthcare & WellnessRx Trust (NYSE: GRX) Increases Quarterly Distribution 13% to $0.17 From $0.15 Annual Distribution to $0.68 From $0.60 Per Share

Rhea-AI Summary

The Gabelli Healthcare & WellnessRx Trust (GRX) announced a 13% increase in its quarterly distribution from $0.15 to $0.17 per share, raising the annual distribution from $0.60 to $0.68 per share. The increased quarterly distribution will be paid on June 23, 2025, to shareholders of record as of June 13, 2025. Based on current accounting records, the 2025 distributions comprise approximately 4% from net investment income, 80% from net capital gains, and 16% return of capital. The Fund's 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

• 13% increase in quarterly distribution from $0.15 to $0.17 per share
• Annual distribution raised to $0.68 from $0.60 per share
• 80% of distributions come from net capital gains, indicating strong portfolio performance

Negative

• 16% of distributions classified as return of capital, which reduces shareholder cost basis
• Only 4% of distributions come from net investment income, suggesting low dividend yield from portfolio holdings

Insights

Income Investment Specialist

GRX's 13% distribution increase signals strong fund performance and enhances shareholder returns, though partially funded through capital gains and return of capital.

The 13% increase in GRX's quarterly distribution from $0.15 to $0.17 per share represents significant positive news for income-focused investors. This boost brings the annualized distribution to $0.68 from the previous $0.60 per share, enhancing the fund's income appeal.

Looking at the distribution composition is particularly revealing: only 4% comes from net investment income, while 80% derives from net capital gains and 16% constitutes return of capital. This structure indicates that GRX's distribution is primarily supported by realized gains rather than dividend and interest income from underlying holdings.

The substantial capital gains component suggests the fund's portfolio managers have successfully captured profits from healthcare and wellness investments. However, the 16% return of capital portion means a fraction of distributions represents shareholders receiving back part of their original investment rather than new earnings.

The distribution policy review by the Board each quarter creates a governance mechanism to adjust payouts based on fund performance, asset values, and market conditions. This flexible approach allows them to maintain competitive distributions while responding to changing investment environments.

For taxable investors, the composition provides favorable tax treatment since long-term capital gains and qualified dividends typically face lower tax rates than ordinary income, though some shareholders may face the additional 3.8% Medicare surcharge on investment income.

RYE, N.Y., May 14, 2025 (GLOBE NEWSWIRE) -- The Board of Trustees of The Gabelli Healthcare & Wellness^Rx Trust (the “Fund”) approved an increase in the annualized distribution to $0.68 per share, which will be paid $0.17 per share quarterly, commencing with the quarterly distribution payable on June 23, 2025 to common shareholders of record on June 13, 2025.

The Fund intends to pay a quarterly distribution determined 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 Trustees reviews the amount of any potential distribution and 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. 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 up 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 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 4% from net investment income, 80% from net capital gains and 16% 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 Healthcare & Wellness^Rx Trust
The Gabelli Healthcare & Wellness^Rx Trust is a diversified, closed-end management investment company with $218 million in total net assets whose primary investment objective is long-term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE: GRX
CUSIP – 36246K103

THE GABELLI HEALTHCARE & WELLNESSRx TRUST
    Investor Relations Contact:
    Bethany Uhlein
    914.921.5546
    buhlein@gabelli.com

FAQ

What is the new quarterly distribution amount for Gabelli Healthcare & WellnessRx Trust (GRX)?

The new quarterly distribution amount for GRX is $0.17 per share, increased from $0.15, representing a 13% increase.

When will GRX's increased quarterly distribution be paid?

The increased quarterly distribution will be paid on June 23, 2025, to shareholders of record as of June 13, 2025.

What is the composition of GRX's 2025 distributions?

Based on current accounting records, GRX's 2025 distributions comprise 4% from net investment income, 80% from net capital gains, and 16% return of capital.

What is the new annual distribution rate for GRX stock?

The new annual distribution rate for GRX stock is $0.68 per share, increased from $0.60 per share.

Are GRX's distributions guaranteed to continue at the new rate?

No, the Fund's distribution policy is subject to modification or termination by the Board of Trustees at any time, with no guarantee of continuation.