Reaves Utility Income Fund Section 19(a) Notice
Reaves Utility Income Fund (UTG) paid a monthly distribution of $0.19 per share to shareholders of record on December 15, 2023. The estimated sources of distribution for the current fiscal year and fiscal year-to-date cumulative distribution amount are disclosed, with percentages for net investment income, net realized short-term capital gain, net realized long-term capital gain, and return of capital or other capital source. The fund's performance and distribution information for the fiscal year to date and the 5-year period ended November 30, 2023, are also provided.
The Reaves Utility Income Fund's distribution announcement, particularly the breakdown of the sources of distribution, is a critical piece of information for current and prospective investors. The allocation of the distribution between net investment income and net realized long-term capital gains sheds light on the Fund's earning strategy and tax implications for shareholders. A higher proportion of distributions from net investment income could indicate a stable earning from interest or dividends, whereas a larger portion from capital gains might suggest a more aggressive strategy with potential for higher yields but also increased risk and variable tax consequences.
From a financial analysis perspective, the Fund's performance metrics, including the annualized distribution rate and the cumulative total return on NAV , are essential for evaluating the Fund's effectiveness in generating income and capital appreciation relative to its net asset value. These figures can be compared with industry benchmarks to determine the Fund's competitive standing. Additionally, the average annual total return over a five-year period provides insight into the Fund's long-term performance consistency and risk profile.
For investors in the Reaves Utility Income Fund, understanding the tax implications of distributions is paramount. The notice clarifies that distributions may be a mix of investment income and capital gains, which are taxed differently. The timing and character of distributions for income tax purposes are governed by tax regulations, not GAAP and this can lead to variances in taxable income reporting. Investors should be aware that the estimated sources of distribution provided in the notice are not final for tax reporting purposes and that the final tax character will be determined later, impacting their tax planning and potential liability for the year.
When examining the Reaves Utility Income Fund's distribution information, it is important to contextualize the data with market trends and investor expectations. The Fund's NAV performance and distribution rates offer a snapshot of its current health and appeal to income-focused investors. However, the market price of the Fund's shares, influenced by supply and demand dynamics, may diverge from the NAV. This discrepancy can affect investor sentiment and the perceived value of the Fund. Monitoring these aspects in conjunction with broader market conditions helps in understanding the Fund's position within the closed-end sector fund category and its potential attractiveness to investors seeking utility sector exposure.
12/29/2023 - 05:59 AM
Statement Pursuant to Section 19(a) of the Investment Company Act of 1940
DENVER, CO / ACCESSWIRE / December 29, 2023 / On December 29, 2023, the Reaves Utility Income Fund (AMEX:UTG) (the "Fund"), a closed-end sector fund, paid a monthly distribution on its common stock of $0.19 per share to shareholders of record at the close of business on December 15, 2023.
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. In accordance with generally accepted accounting principles ("GAAP"), the Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
Current Distribution from:
Per Share ($)
%
Net Investment Income
0.07324
38.55%
Net Realized Short-Term Capital Gain
0.00000
0.00%
Net Realized Long-Term Capital Gain
0.11676
61.45%
Return of Capital or other Capital Source
0.00000
0.00%
Total (per common share)
0.19000
100.00%
Fiscal Year-to-Date Cumulative
Distributions from:
Per Share ($)
%
Net Investment Income
0.10195
26.83%
Net Realized Short-Term Capital Gain
0.00000
0.00%
Net Realized Long-Term Capital Gain
0.27805
73.17%
Return of Capital or other Capital Source
0.00000
0.00%
Total (per common share)
0.38000
100.00%
The timing and character of distributions for federal income tax purposes are determined in accordance with income tax regulations which may differ from GAAP. As such, all or a portion of this distribution may be reportable as taxable income on your 2023 federal income tax return. The final tax character of any distribution declared in 2023 will be determined in January 2024 and reported to you on IRS Form 1099-DIV.
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.
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 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^
8.66%
Cumulative Distribution Rate on NAV^
1.44%
Cumulative Total Return on NAV*
8.15%
Average Annual Total Return on NAV for the 5 Year Period Ended 11/30/2023**
2.73%
^ Based on the Fund's NAV as of November 30, 2023.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions 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 is through 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. Past performance does not guarantee future results. 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.
Paralel Distributors LLC, FINRA Member Firm.
Contact info:
Website: https://www.utilityincomefund.com info@utilityincomefund.com
SOURCE: Reaves Utility Income Fund
press release on accesswire.com
What was the monthly distribution paid by Reaves Utility Income Fund (UTG)?
The monthly distribution paid was $0.19 per share to shareholders of record on December 15, 2023.
What are the estimated sources of distribution for the current fiscal year?
The estimated sources of distribution for the current fiscal year include net investment income, net realized short-term capital gain, net realized long-term capital gain, and return of capital or other capital source.
What is the fund's performance and distribution information for the fiscal year to date?
The fund's fiscal year-to-date cumulative distribution amount and the annualized distribution rate as a percentage of NAV are 0.38% and 8.66% respectively. The cumulative total return on NAV is 8.15%.
What is the 5-year average annual total return on NAV for the Reaves Utility Income Fund?
The 5-year average annual total return on NAV for the fund is 2.73%.
How is the value of a shareholder's investment in the Reaves Utility Income Fund determined?
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.
