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Thornburg Income Builder Opportunities Trust Announces Distribution

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Thornburg Income Builder Opportunities Trust (TBLD) announced a monthly distribution of $0.10417 per share, payable on January 22, 2024, to common shareholders of record as of January 12, 2024. The distribution includes a return of capital of $0.04495. The Trust's investment objective is to provide current income and additional total return by investing at least 80% of its managed assets in income-producing securities, both in the US and globally.
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The announcement by Thornburg Income Builder Opportunities Trust of its monthly distribution of $0.10417 per share represents a routine cash flow event for shareholders. The distribution composition, which includes a return of capital, is a critical aspect for investors to consider. A return of capital, amounting to $0.04495 per share, suggests that part of the distribution is not sourced from net income or realized capital gains but from the paid-in capital of the investors. This can signal that the Trust's investments are not generating enough income or capital gains to cover the distribution or that the Trust is managing distributions to provide consistent cash flow to shareholders.

From a financial perspective, the sustainability of such distributions is essential. If the Trust continues to pay out a significant portion as a return of capital over the long term, it may erode the capital base, potentially impacting the Trust's ability to generate future income. Investors often look for distributions to be fully covered by net investment income and realized gains, as this can be an indicator of a healthy income-generating investment. The lack of short-term and long-term capital gains in the current distribution may raise questions about the Trust's recent investment performance and its ability to realize gains from its portfolio.

For shareholders of Thornburg Income Builder Opportunities Trust, understanding the tax implications of the distributions is paramount. The Trust's notice clarifies that the distribution does not include short-term or long-term capital gains, which have different tax treatments. The inclusion of a return of capital in the distribution impacts the shareholder's tax basis, reducing it by the amount of the return of capital received. This reduction in basis will potentially increase the shareholder's capital gain (or reduce any capital loss) upon the sale of the shares.

It is also noteworthy that the Trust is subject to a 4% excise tax if it fails to meet certain distribution thresholds by year-end. This tax regulation incentivizes investment trusts to distribute a significant portion of their income and realized gains to avoid the tax penalty. The Trust's distribution strategy may be influenced by these tax considerations, balancing the need to meet distribution requirements while managing the capital available for future investments.

The Trust's strategy of investing in a broad range of income-producing securities across both equity and debt markets, including emerging markets, is designed to achieve its objective of current income and additional total return. The diversification across geographies and asset classes can potentially reduce risk and stabilize returns. However, the lack of capital gains in the recent distribution may indicate market volatility or underperformance in certain sectors or regions the Trust is invested in.

Investors often compare the performance of such income-oriented investment trusts against benchmarks and peer funds. The Trust's distributions, especially the return of capital component, should be evaluated in the context of its peers and the broader market. If the Trust's strategy and portfolio allocations are aligned with industry norms yet result in a substantial return of capital, it could suggest that broader market conditions are challenging or that the Trust's strategy needs reassessment.

SANTA FE, N.M., Jan. 2, 2024 /PRNewswire/ -- Thornburg Income Builder Opportunities Trust (the "Trust") (NASDAQ: TBLD) today announced a monthly distribution of $0.10417 per share on the Trust's common shares, payable on January 22, 2024 to common shareholders of record as of January 12, 2024.

The Trust's monthly distribution is shown below:

Amount

Payable Date

Ex-Dividend Date

Record Date

Change from
Previous
Declaration

$0.10417

January 22, 2024

January 11, 2024

January 12, 2024

No Change

 

Distribution rates are not performance and are calculated by summing the Trust's monthly distribution per share over four quarters and dividing by the net asset value or market price per share, as applicable, as of the distribution announcement date. Distributions on common shares are generally paid from net investment income (regular interest and dividends) and may also include capital gains and/or a return of capital. The Trust's distribution payable on January 22, 2024, does not include a short-term capital gain or a long-term capital gain, but does include a return of capital of $0.04495. The specific tax characteristics of the distributions will be reported to the Trust's common shareholders on Form 1099 after the end of the 2024 calendar year. The final determination for all distributions paid in 2024 will be made in early 2025 and reported to you on Form 1099-DIV. You should not use this notice as a substitute for your 1099-DIV.

The Trust's fiscal year (10/01/2023 through 09/30/2024) cumulative distributions are shown below:


Current Distribution

Cumulative
Distributions FYTD

Net Investment
Income

$0.05922 (57 %)

$0.13112 (31 %)

Net Realized
Short-term
Capital Gain

$0.00000 (0 %)

$0.06678 (16 %)

Net Realized
Long-term
Capital Gain

$0.00000 (0 %)

$0.08712 (21 %)

Return of
Capital or Other
Capital Sources

$0.04495(43 %)

$0.13166 (32 %)

Total per share

$0.10417 (100 %)

$0.41668 (100 %)

 

Shareholders should not assume that the source of a distribution from the Trust is net income or profit. A distribution comprised in whole or in part by a return of capital does not necessarily reflect the Trust's investment performance and should not be confused with "yield" or "income." Future distributions may consist of a return of capital. For further information regarding the Trust's distributions, please visit www.thornburg.com/tbld-distributions.

The Trust's investment objective is to provide current income and additional total return. The Trust seeks to achieve its objective by investing, directly or indirectly, at least 80% of its managed assets in a broad range of income-producing securities. The Trust invests in both equity and debt securities of companies located in the United States and around the globe. The Trust may invest in non-U.S. domiciled companies, including up to 20% of its managed assets at the time of investment in equity and debt securities of emerging market companies.

As a registered investment company, the Trust is subject to a 4% excise tax that is imposed if the Trust does not distribute to common shareholders by the end of any calendar year at least the sum of (i) 98% of its ordinary income (not taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of its capital gain in excess of its capital loss (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year (unless an election is made to use the Trust's fiscal year). In certain circumstances, the Trust may elect to retain income or capital gain to the extent that the Board of Trustees, in consultation with Trust management, determines it to be in the interest of shareholders to do so.

The common share distributions paid by the Trust for any particular period may be more than the amount of net investment income from that period. As a result, all or a portion of a distribution may be a return of capital, which is in effect a partial return of the amount a common shareholder invested in the Trust, up to the amount of the common shareholder's tax basis in their common shares, which would reduce such tax basis. Although a return of capital may not be taxable, it will generally increase the common shareholder's potential gain, or reduce the common shareholder's potential loss, on any subsequent sale or other disposition of common shares.

About Thornburg

Thornburg Investment Management (Thornburg) is a global investment firm delivering on strategy for institutions, financial professionals and investors worldwide. The privately held firm, founded in 1982, is an active, high-conviction manager of equities, fixed income and multi-asset solutions. With $42 billion1 in client assets as of November 30, 2023, the firm offers mutual funds, closed-end funds, institutional accounts, separate accounts and UCITS funds for non-U.S. investors.

As an independent firm, Thornburg can take on a wide range of opportunities, explore ideas thoroughly and work across strategies to deliver consistent risk-adjusted outperformance over the long term. The firm attracts free-thinking professionals who are eager to pursue investment outcomes beyond the confines of popular wisdom. From nimble operational capabilities to principles and actions fitting of a global citizen, Thornburg's world-class investment platform and team are aligned on strategy to serve investors.

Thornburg's U.S. headquarters is in Santa Fe, New Mexico with offices in Hong Kong and Shanghai. For more information, visit www.thornburg.com or call 877 215 1330.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction. A registration statement relating to these securities has been filed with and declared effective by the U.S. Securities and Exchange Commission.

Certain statements in this press release constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Trust, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the Trust nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

Risk is inherent in all investing. There can be no assurance that the Trust will achieve its investment objective, and you could lose some or all of your investment.

Thornburg Securities Corporation, member FINRA, is an affiliate of Thornburg Investment Management, Inc.

NOT FDIC INSURED      NO BANK GUARANTEE      MAY LOSE VALUE

Media Inquiries 
Michael Corrao
Director of Global Communications
Thornburg Investment Management
Tel: +1 505 467 5345
Email: mcorrao@thornburg.com

1 Includes $41 billion in assets under management and $1 billion in assets under advisement as of November 30, 2023.

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SOURCE Thornburg Investment Management

FAQ

What is the monthly distribution announced by Thornburg Income Builder Opportunities Trust (TBLD)?

The monthly distribution announced by Thornburg Income Builder Opportunities Trust (TBLD) is $0.10417 per share, payable on January 22, 2024, to common shareholders of record as of January 12, 2024.

What is the Trust's investment objective?

The Trust's investment objective is to provide current income and additional total return by investing at least 80% of its managed assets in income-producing securities, both in the US and globally.

What is included in the distribution payable on January 22, 2024?

The distribution payable on January 22, 2024, includes a return of capital of $0.04495.

What are the tax characteristics of the distributions by Thornburg Income Builder Opportunities Trust (TBLD)?

The specific tax characteristics of the distributions will be reported to the Trust's common shareholders on Form 1099 after the end of the 2024 calendar year. The final determination for all distributions paid in 2024 will be made in early 2025 and reported to you on Form 1099-DIV.

What is the Trust's fiscal year cumulative distributions?

The Trust's fiscal year (10/01/2023 through 09/30/2024) cumulative distributions include net investment income of $0.05922 (57%), net realized short-term capital gain of $0.00000 (0%), net realized long-term capital gain of $0.00000 (0%), and return of capital or other capital sources of $0.04495 (43%).

Thornburg Income Builder Opportunities Trust

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About TBLD

head­quartered in santa fe, new mexico, thornburg investment management advises a range of active investment strategies, each offered through multiple vehicles to serve a broad spectrum of client needs worldwide. our goal is to add value for investors via active portfolio management, while offering employees a challenging and rewarding place to build a career. founded in 1982 by garrett thornburg, thornburg investment management now has more than 250 employees, many of whom have been with the company for five years or more. we are privately owned and independent, and our employees invest side-by-side with shareholders and clients. at thornburg investment management, we believe that competitive investment performance is key to providing excellent client service: we focus on the fundamentals, we invest for the long term, we stay flexible, and we go where we see value. both our equity and bond teams function as a single, interconnected unit and take a collaborative, collegial approach tha