Royce Micro-Cap Trust, Inc. (NYSE-RMT) declares Third Quarter Common Stock Distribution of $0.18 Per Share

Rhea-AI Summary

Royce Micro-Cap Trust (NYSE: RMT) has declared a quarterly distribution of $0.18 per share on its Common Stock, payable on September 23, 2024. The distribution can be received in additional shares or cash. RMT's Distribution Policy aims to pay quarterly distributions at an annual rate of 7% of the rolling average of prior four quarter-end NAVs. The Fund estimates that part of the distribution may be a return of capital. For the current distribution, 22% comes from short-term gains, 68% from long-term gains, and 10% is return of capital. RMT's 5-year average annual total return is 13.90%, with a current annualized distribution rate of 6.47%.

Positive

• Declared quarterly distribution of $0.18 per share
• 5-year average annual total return of 13.90%
• Cumulative total return of 10.35% for the fiscal year through 8/31/2024
• 68% of distribution comes from realized long-term gains

Negative

• 10% of distribution is return of capital, potentially indicating insufficient earnings
• No distribution from net investment income, suggesting possible challenges in generating income

Insights

Financial Analyst

The $0.18 per share quarterly distribution by Royce Micro-Cap Trust (RMT) is a significant event for investors. This 7% annual distribution rate, based on rolling average NAV, demonstrates the fund's commitment to shareholder returns. However, it's important to note that 10% of this distribution is classified as a return of capital, which may impact the fund's long-term sustainability.

The fund's 13.90% average annual total return over the past 5 years is impressive, outperforming many peers in the micro-cap space. The 10.35% cumulative total return for the current fiscal year also indicates strong performance. However, investors should be cautious about the fund potentially distributing more than its income and realized gains, which could erode the NAV over time if not supported by underlying performance.

Tax Expert

The tax implications of RMT's distribution are complex and warrant careful consideration. The breakdown of the distribution sources is important for tax planning: 22% from short-term gains, 68% from long-term gains and 10% as return of capital. This mix affects how the distribution is taxed.

The return of capital portion is particularly noteworthy. While not immediately taxable, it reduces the cost basis of shares, potentially increasing capital gains tax liability upon sale. Investors should maintain accurate records of these distributions for future tax calculations. The fund's use of Form 1099-DIV for tax reporting will be essential for shareholders to correctly report their income and avoid potential issues with the IRS.

NEW YORK, Sept. 3, 2024 /PRNewswire/ -- Royce Micro-Cap Trust, Inc. (NYSE-RMT) has declared a quarterly distribution of $0.18 per share on its Common Stock.  The distribution, optionally payable in additional shares of Common Stock, or in cash by specific stockholder election, is to be paid on September 23, 2024 to stockholders of record at the close of business on September 13, 2024 (ex-dividend on September 13, 2024).  The price of shares issued for reinvestment will be determined on September 20, 2024.

The Fund has adopted a Distribution Policy of paying quarterly distributions on its Common Stock. Distributions are being made at the annual rate of 7% of the rolling average of the prior four calendar quarter-end net asset values (NAVs), with the fourth quarter distribution being the greater of 1.75% of the rolling average or the minimum distribution required by IRS regulations. The policy, including the annual rate, is subject to change at the discretion of the Fund's Board of Directors.

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'

The Fund's estimated sources of the distribution to be paid on September 23, 2024 and for 2024 year-to-date are as follows:

Estimated Allocations as of August 31, 2024
Fund	Distribution Per Share	Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
RMT	$0.18	$0.00 (0 %)	$0.0390 (22 %)	$0.1228 (68 %)	$0.0182 (10 %)

 

Estimated Allocations for 2024 through August 31, 2024
Fund	Distribution Per Share	Net Investment Income	Net Realized Short-Term Gains	Net Realized Long-Term Gains	Return of Capital
RMT	$0.53	$0.00 (0 %)	$0.1149 (22 %)	$0.3615 (68 %)	$0.0536 (10 %)

You should not draw any conclusions about the Fund's investment performance from the amount of the current distribution or from the terms of the Fund's Distribution Policy.  The amounts and sources of distributions reported herein are only estimates and are not being provided 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.

Fund Performance and Distribution Rate Information:
Fund	Average Annual Total Return (in relation to NAV for the 5-year period ending on 8/31/2024)1	Annualized Current Distribution Rate (expressed as a percentage of NAV as of 8/31/2024)2	Cumulative Total Return (in relation to NAV for the fiscal year through 8/31/2024)3	Cumulative Fiscal Year Distribution Rate (as a percentage of NAV as of 8/31/2024)4
RMT	13.90 %	6.47 %	10.35 %	4.77 %

¹    Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five-year period ended August 31, 2024.  Annual NAV Total Return is the percentage change in the Fund's NAV over a year, assuming reinvestment of distributions paid.

²  The Annualized Current Distribution Rate is the current fiscal period's distribution rate annualized as a percentage of the Fund's NAV as of August 31, 2024.

³   Cumulative Total Return is the percentage change in the Fund's NAV from December 31, 2023 to August 31, 2024, assuming reinvestment of distributions paid.

⁴   The Cumulative Fiscal Year Distribution Rate is the dollar value of distributions for the fiscal year period (January 1, 2024 to August 31, 2024), as a percentage of the Fund's NAV as of August 31, 2024.

About Royce Micro-Cap Trust, Inc.

Royce Micro-Cap Trust, Inc. (the "Fund") is a closed-end diversified management investment company whose shares of Common Stock are listed and traded on the New York Stock Exchange.  The Fund's investment goal is long-term capital growth, which it seeks by investing primarily in equity securities of companies that, at the time of investment, have market capitalizations of $750 million or less. 

View original content:https://www.prnewswire.com/news-releases/royce-micro-cap-trust-inc-nyse-rmt-declares-third-quarter-common-stock-distribution-of-0-18-per-share-302237076.html

SOURCE Royce Micro-Cap Trust, Inc.

FAQ

What is Royce Micro-Cap Trust's (RMT) quarterly distribution amount for Q3 2024?

Royce Micro-Cap Trust (RMT) has declared a quarterly distribution of $0.18 per share for the third quarter of 2024.

When is the ex-dividend date for RMT's Q3 2024 distribution?

The ex-dividend date for RMT's Q3 2024 distribution is September 13, 2024.

What is RMT's annualized current distribution rate as of August 31, 2024?

RMT's annualized current distribution rate is 6.47% of NAV as of August 31, 2024.

What percentage of RMT's Q3 2024 distribution is considered return of capital?

10% of RMT's Q3 2024 distribution is estimated to be return of capital.