The Wells Fargo Advantage Income Opportunities Fund (NYSE MKT:
EAD), the Wells Fargo Advantage Multi-Sector Income Fund (NYSE MKT:
ERC), the Wells Fargo Advantage Utilities and High Income Fund
(NYSE MKT: ERH), and the Wells Fargo Advantage Global Dividend
Opportunity Fund (NYSE: EOD) each announced today its dividend
declaration. The Wells Fargo Advantage Global Dividend Opportunity
Fund also announced changes to its principal investment strategy,
as well as a reduction in its dividend distribution.
The Wells Fargo Advantage Income Opportunities Fund is a
closed-end high-yield bond fund. The fund’s investment objective is
to seek a high level of current income. The fund may, as a
secondary objective, seek capital appreciation to the extent it is
consistent with its investment objective.
The Wells Fargo Advantage Income Opportunities Fund declared the
following monthly dividend:
Declaration date Ex-dividend date
Record date Payable date
Dividend/share November 7, 2012 December 13,
2012 December 17, 2012 January 2, 2013 $0.077/share
The Wells Fargo Advantage Multi-Sector Income Fund is a
closed-end bond fund. The fund’s primary investment objective is to
seek a high level of current income consistent with limiting its
overall exposure to domestic interest-rate risk.
The Wells Fargo Advantage Multi-Sector Income Fund declared the
following monthly dividend:
Declaration date Ex-dividend date
Record date Payable date
Dividend/share November 7, 2012 December 13,
2012 December 17, 2012 January 2, 2013 $0.10/share
The Wells Fargo Advantage Utilities and High Income Fund is a
closed-end equity and high-yield bond fund. The fund’s primary
investment objective is to seek a high level of current income and
moderate capital growth, with an emphasis on providing
tax-advantaged dividend income.
The Wells Fargo Advantage Utilities and High Income Fund
declared the following monthly dividend:
Declaration date Ex-dividend date
Record date Payable date
Dividend/share November 7, 2012 December 13,
2012 December 17, 2012 January 2, 2013 $0.075/share
The Wells Fargo Advantage Global Dividend Opportunity Fund is a
closed-end fund with an investment objective to seek a high level
of current income. The fund’s secondary objective is long-term
growth of capital. In pursing these objectives, the fund primarily
invests in a diversified portfolio of common stocks of U.S. and
non-U.S. companies and other equity securities that offer
above-average potential for current and/or future dividends. The
fund typically focuses its equity investments in securities of
issuers in the utilities, energy, and telecommunications sectors
(or any one or more of these sectors). The fund typically employs
an option overlay strategy and uses a dividend capture strategy in
an attempt to optimize income. The fund has typically invested
between 40% and 70% of its total assets in foreign securities.
Effective immediately, the fund’s principal investment strategy
has been changed to expressly reflect that it will primarily invest
in common and/or preferred stocks of U.S. and non-U.S. companies
and other equity securities that offer an above-average potential
for current and/or future dividends. This change reflects an
increase in the portion of the fund’s portfolio that is normally
invested in preferred stocks, which typically provide greater
income potential than common stocks. In addition, because the
majority of preferred stock investments are expected to be in U.S.
companies, the normal allocation range for foreign investment has
been modified to be a typical range of 30% to 70% of the fund’s
total assets in foreign securities, rather than a typical range of
40% to 70% of the fund’s total assets in foreign securities.
In employing its dividend capture strategy, the fund purchases
stock before the ex-dividend date so it becomes entitled to the
dividend and then typically sells the stock on or after the
ex-dividend date. Over time, in a nonrising market, this strategy
may lead to a decline in the net asset value of the fund. Dividend
capture also increases the portfolio turnover rate and related
transaction costs of the fund. In light of this, the fund expects
to use dividend capture to a lesser extent and is reducing its
quarterly dividend declared today from $0.28 to $0.21 per share.
This reduction in dividend, coupled with increased investments in
preferred stocks, will lessen the fund’s need to rely on the
dividend capture strategy and is intended to enhance the fund’s
ability to pursue its objective of current income in a more
sustainable manner. The change may also reduce the volatility of
returns.
The Wells Fargo Advantage Global Dividend Opportunity Fund
declared the following quarterly dividend:
Declaration date Ex-dividend date
Record date Payable date
Dividend/share November 7, 2012 December 13,
2012 December 17, 2012 January 2, 2013 $0.210/share
More information on preferred stock investing by the Wells
Fargo Advantage Global Dividend Opportunity Fund
Preferred stock, unlike common stock, typically has a stated
dividend rate payable from the corporation’s earnings. If interest
rates rise, the fixed dividend on preferred stocks may be less
attractive, causing the price of preferred stocks to decline.
Preferred stock may have mandatory sinking fund provisions, as well
as call/redemption provisions prior to maturity, which can be a
negative feature when interest rates decline. The rights of
preferred stock on distribution of a corporation’s assets in the
event of liquidation are generally subordinate to rights associated
with a corporation’s debt securities.
About certain investment risks of the Wells Fargo Advantage
Global Dividend Opportunity Fund
Derivatives involve additional risks, including interest-rate
risk, credit risk, the risk of improper valuation, and the risk of
noncorrelation to the relevant instruments they are designed to
hedge or closely track. There are numerous risks associated with
transactions in options on securities. As a writer of an index call
option, the fund forgoes the opportunity to profit from increases
in the values of securities held by the fund. However, the fund has
retained the risk of loss (net premiums received) should the price
of the fund’s portfolio securities decline. Similar risks are
involved with writing call options on individual securities held in
the fund’s portfolio. This combination of potentially limited
appreciation and potentially unlimited depreciation over time may
lead to a decline in the net asset value of the fund. The fund’s
dividend capture strategy may lead to a similar result. Dividend
capture strategies involve a fund purchasing a stock before an
ex-dividend date so it becomes entitled to the dividend and then
typically selling the stock on or after the stock’s ex-dividend
date. Any decline in the value of the stock reflecting the dividend
payment may over time lead to a decline in the net asset value of
the fund. Dividend capture also increases the portfolio turnover
rate and related transaction costs of the fund. Foreign investments
may contain more risk due to the inherent risks associated with
changing political climates, foreign market instability, and
foreign currency fluctuations. Risks of foreign investing are
magnified in emerging or developing markets. Small- and mid-cap
securities may be subject to special risks associated with narrower
product lines and limited financial resources compared with their
large-cap counterparts, and, as a result, small- and mid-cap
securities may decline significantly in market downturns and may be
more volatile than those of larger companies due to their higher
risk of failure. High-yield, lower-rated bonds may contain more
risk due to the increased possibility of default. Illiquid
securities may be subject to wide fluctuations in market value. The
fund may be subject to significant delays in disposing of illiquid
securities. Accordingly, the fund may be forced to sell these
securities at less than fair market value or may not be able to
sell them when the adviser or subadviser believes that it is
desirable to do so.
Absent congressional action by the end of 2012, the current
maximum tax rates on long-term capital gains would increase to 20%
and income from dividends would be taxed at the rates applicable to
ordinary income and an additional 3.8% Medicare tax will be imposed
on certain net investment income.
The final determination of the source of all dividend
distributions in the current year will be made after year-end. The
actual amounts and sources of the amounts for tax reporting
purposes will depend upon a fund’s investment experience during the
remainder of the fiscal year and may be subject to change based on
tax regulations. Each fund will send shareholders a Form 1099-DIV
for the calendar year that will tell shareholders how to report
these distributions for federal income tax purposes.
These closed-end funds are no longer offered as an initial
public offering, and shares are only offered through broker/dealers
on the secondary market. Unlike an open-end mutual fund, a
closed-end fund offers a fixed number of shares for sale. After the
initial public offering, shares are bought and sold in the
secondary marketplace, and the market price of the shares is
determined by supply and demand, not by net asset value (NAV), and
is often lower than the NAV. A closed-end fund is not required to
buy its shares back from investors upon request.
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of
Wells Fargo & Company, provides investment advisory and
administrative services for Wells Fargo Advantage Funds®. Other
affiliates of Wells Fargo & Company provide subadvisory and
other services for the funds. The open-end funds are distributed by
Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an
affiliate of Wells Fargo & Company. For more information on
Wells Fargo Advantage Funds, please visit
wellsfargoadvantagefunds.com.
Some of the information contained herein may include
forward-looking statements about the expected investment activities
of the funds. These statements provide no assurance as to the
funds’ actual investment activities or results. The reader must
make his/her own assessment of the information contained herein and
consider such other factors as he/she may deem relevant to his/her
individual circumstances.
213217 11-12
NOT FDIC INSURED • NO BANK GUARANTEE • MAY
LOSE VALUE
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