The India Fund, Inc. Announces Distribution Payment Details
The India Fund, IFN, announced a distribution of $0.45 per share, payable on July 5, 2024, to shareholders of record as of May 30, 2024. Shareholders will receive this distribution in newly issued shares unless they opt for cash. The valuation date for the stock distribution is June 21, 2024. Fractional shares will generally be settled in cash.
To receive cash instead of stock, shareholders must notify their bank, brokerage, or Computershare Investor Services by June 20, 2024. The fund's distribution policy aims to provide stable returns using current income and realized capital gains.
For fiscal year-to-date, the total distribution amounts to $0.88 per share, all of which is considered a return of capital. The Fund's 5-year average annual return on NAV is 9.08%. The actual tax treatment of these distributions will be clarified after year-end, with Form 1099-DIV sent to shareholders.
- Distribution of $0.45 per share on July 5, 2024.
- Shareholders can opt to receive distributions in cash or newly issued shares.
- 5-year average annual total return on NAV is 9.08%.
- 9.01% current fiscal period's annualized distribution rate on NAV.
- Stable distribution policy aimed at providing consistent returns.
- All distributions for the fiscal year-to-date are a return of capital.
- Potential decrease in fund's net assets due to distribution policy.
- Possible increase in annual operating expense ratio if net assets decrease.
- Distribution policy may require holding larger cash positions or liquidating securities.
The India Fund, Inc. (NYSE: IFN) has announced a distribution payment of
Short-term Implications: The payout in shares rather than cash could be both beneficial and disadvantageous. On the positive side, reinvested shares can compound over time, enhancing long-term gains. However, shareholders seeking immediate liquidity would need to arrange for a cash payout, which adds an administrative step.
Long-term Implications: The fund’s decision to issue shares at the lower of NAV or market price ensures shareholders do not suffer from share dilution below market value. Yet, the reliance on issuing new shares rather than paying cash might indicate a prioritization of maintaining cash reserves, potentially signaling liquidity concerns or a strategy to leverage growth opportunities. Additionally, the return of capital distribution, which constitutes 100% of the payout, may not be from actual earnings, potentially reducing the fund’s net asset value (NAV) over time.
Tax Considerations: The complexity in tax treatment is notable. Return of capital lowers the cost basis, impacting capital gains tax calculations when shares are sold. Investors must be aware of these tax consequences and consult with tax advisors to avoid potential surprises during tax season.
Comparative Performance: The fund’s annualized distribution rate of
In summary, for those prioritizing growth and willing to reinvest dividends, the announced distribution is positive. However, for income-focused investors needing cash flow, the extra steps to receive cash could be seen as a drawback.
PHILADELPHIA, PA / ACCESSWIRE / May 20, 2024 / The India Fund, Inc. (NYSE:IFN), announced today that it will pay
Ticker | Exchange | Fund | Amount |
| IFN | NYSE | The India Fund, Inc. |
At the end of each calendar year, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of the Fund's distributions and provide information with respect to their appropriate tax treatment for the prior calendar year. You should not draw any conclusions about the Fund's investment performance from the amount of the distributions.
For The India Fund, Inc. ("IFN"), this stock distribution will automatically be paid in newly issued shares of the Fund unless otherwise instructed by the shareholder. Shares of common stock will be issued at the lower of the net asset value ("NAV") per share or the market price per share with a floor for the NAV of not less than
Shareholders may request to be paid their quarterly distributions in cash instead of shares of common stock by providing advance notice to the bank, brokerage or nominee who holds their shares if the shares are in "street name," or by filling out in advance an election card received from Computershare Investor Services if the shares are in registered form. To receive the quarterly distribution payable in July 2024 in cash instead of shares of common stock, the bank, brokerage or nominee who holds the shares must advise the Depository Trust Company as to the full and fractional shares for which they want the distribution paid in cash by June 20, 2024, and written notification for the election of cash by registered shareholders must be received by Computershare Investor Services prior to June 20, 2024.
The Fund has adopted a distribution policy to provide investors with a stable distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital in reliance on an exemptive order granted by the Securities and Exchange Commission.
Under applicable U.S. tax rules, the amount and character of distributable income for the Fund's fiscal year can be finally determined only as of the end of the Fund's fiscal year. However, under Section 19 of the Investment Company Act of 1940, as amended (the "1940 Act") and related rules, the Fund may be required to indicate to shareholders the estimated source of certain distributions to shareholders.
The following tables set forth the estimated amounts of the sources of the distributions for purposes of Section 19 of the 1940 Act and the rules adopted thereunder. The tables have been computed based on generally accepted accounting principles. The tables include estimated amounts and percentages for the current distributions to be paid as well as for the cumulative distributions paid relating to fiscal year to date, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital. The estimated compositions of the distributions may vary because the estimated composition may be impacted by future income, expenses and realized gains and losses on securities and currencies.
The Fund's estimated sources of the current distributions to be paid and for its current fiscal year to date are as follows:
Estimated Amounts of Current Distribution per Share | |||||||||
Fund | Distribution | Net Investment | Net Realized | Net Realized Long- | Return of | ||||
IFN | - | - | - | - | - | - | |||
Estimated Amounts of Fiscal Year to Date Cumulative Distributions per Share | |||||||||
Fund | Fiscal Year** to Date | Net Investment | Net Realized | Net Realized Long- | Return of | ||||
IFN | - | - | - | - | - | - | |||
* includes currency gains
**IFN has a 12/31 fiscal year end.
The amounts and sources of distributions reported in this notice are only estimates and are not being provided for tax reporting purposes. The final determination of the source of all distributions for the current year will only be made after year-end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of the fiscal year and may be subject to change based on tax regulations. After the end of each calendar year, a Form 1099-DIV will be sent to shareholders for the prior calendar year that will tell you how to report these distributions for federal income tax purposes.
The following table provides the Fund's total return performance based on net asset value (NAV) over various time periods compared to the Fund's annualized and cumulative distribution rates.
Fund Performance and Distribution Rate Information | ||||
Fund | Average Annual Total Return | Current Fiscal Period's | Cumulative Total | Cumulative |
IFN | ||||
1 Return data is net of all fund expenses and fees and assumes the reinvestment of all distributions reinvested at prices obtained under the Fund's dividend reinvestment plan.
2 Based on the Fund's NAV as of April 30, 2024.
Shareholders should not draw any conclusions about a Fund's investment performance from the amount of the Fund's current distributions or from the terms of the distribution policy (the "Distribution Policy").
While 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.
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Funds may distribute any long-term capital gains more frequently than the limits provided in Section 19(b) under the 1940 Act and Rule 19b-1 thereunder. Therefore, distributions paid by the Funds during the year may include net income, short-term capital gains, long-term capital gains and/or a return of capital. Net income dividends and short-term capital gain dividends, while generally taxable at ordinary income rates, may be eligible, to the extent of qualified dividend income earned by the Funds, to be taxed at a lower rate not to exceed the maximum rate applicable to your long-term capital gains. Distributions made in any calendar year in excess of investment company taxable income and net capital gain are treated as taxable ordinary dividends to the extent of undistributed earnings and profits, and then as a return of capital that reduces the adjusted basis in the shares held. To the extent return of capital distributions exceed the adjusted basis in the shares held, capital gain is recognized with a holding period based on the period the shares have been held at the date such amount is received.
The payment of distributions in accordance with the Distribution Policy may result in a decrease in the Fund's net assets. A decrease in the Fund's net assets may cause an increase in the Fund's annual operating expense ratio and a decrease in the Fund's market price per share to the extent the market price correlates closely to the Fund's net asset value per share. The Distribution Policy may also negatively affect the Fund's investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold, for the purpose of paying the distribution. Each Fund's Board has the right to amend, suspend or terminate the Distribution Policy at any time. The amendment, suspension or termination of the Distribution Policy may affect the Fund's market price per share. Investors should consult their tax advisor regarding federal, state, and local tax considerations that may be applicable in their particular circumstances.
Circular 230 disclosure: To ensure compliance with requirements imposed by the U.S. Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, abrdn Asia Limited, abrdn Private Equity (Europe) Limited, and abrdn ETFs Advisors LLC.
Closed-end funds are traded on the secondary market through one of the stock exchanges. A Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund's portfolio. There is no assurance that a Fund will achieve its investment objective. Past performance does not guarantee future results.
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For More Information Contact:
abrdn U.S. Closed-End Funds
Investor Relations
1-800-522-5465
Investor.Relations@abrdn.com
SOURCE: The India Fund, Inc.
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FAQ
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