Gabelli Convertible & Income Securities Fund 8% Distribution Policy Reaffirmed & Declared Third Quarter Distribution of $0.12...
20 August 2020 - 10:20PM
Business Wire
The Board of Directors of The Gabelli Convertible and Income
Securities Fund Inc. (NYSE:GCV) (the “Fund”) declared a $0.12 per
share cash distribution payable on September 23, 2020 to common
stock shareholders of record on September 16, 2020.
The Fund intends to pay a minimum annual distribution of 8% of
the average net asset value of the Fund within a calendar year or
an amount sufficient to satisfy the minimum distribution
requirements of the Internal Revenue Code for regulated investment
companies. Each quarter, the Board of Directors reviews the amount
of any potential distribution from the income, realized capital
gain, or capital available. The Fund’s distribution policy is
subject to modification by the Board of Directors at any time, and
there can be no guarantee that the policy will continue. The
distribution rate should not be considered the dividend yield or
total return on an investment in the Fund.
We note that the minimum annual distribution of 8% of the
average net asset value of the Fund is based on the ending net
asset values per share as of December 31, 2019, March 31, 2020,
June 30, 2020, and September 30, 2020. The current net asset value
is $5.94 per share. The net asset value per share fluctuates
daily.
The Board of Directors will continue to monitor the Fund’s
distribution level, taking into consideration the Fund’s net asset
value and the current financial market environment.
All or part of the distribution may be treated as long-term
capital gain or qualified dividend income (or a combination of
both) for individuals, each subject to the maximum federal income
tax rate, which is currently 20% in taxable accounts for
individuals (or less depending on an individual’s tax bracket). In
addition, certain U.S. shareholders who are individuals, estates or
trusts and whose income exceeds certain thresholds will be required
to pay a 3.8% Medicare surcharge on their "net investment income",
which includes dividends received from the Fund and capital gains
from the sale or other disposition of shares of the Fund.
If the Fund does not generate sufficient earnings (dividends and
interest income, less expenses, and realized net capital gain)
equal to or in excess of the aggregate distributions paid by the
Fund in a given year, then the amount distributed in excess of the
Fund’s earnings would be deemed a return of capital. Since this
would be considered a return of a portion of a shareholder’s
original investment, it is generally not taxable and would be
treated as a reduction in the shareholder’s cost basis.
Long-term capital gains, qualified dividend income, investment
company taxable income, and return of capital, if any, will be
allocated on a pro-rata basis to all distributions to common
shareholders for the year. Based on the accounting records of the
Fund currently available, each of the distributions paid to common
shareholders in 2020 would include approximately 10% from net
investment income, 77% from net capital gains and 13% would be
deemed a return of capital on a book basis. This information does
not represent information for tax reporting purposes. The estimated
components of each distribution are updated and provided to
shareholders of record in a notice accompanying the distribution
and are available on our website. The final determination of the
sources of all distributions in 2020 will be made after year end
and can vary from the quarterly estimates. Shareholders should not
draw any conclusions about the Fund’s investment performance from
the amount of the current distribution. All individual shareholders
with taxable accounts will receive written notification regarding
the components and tax treatment for all 2020 distributions in
early 2021 via Form 1099-DIV.
Investors should carefully consider the investment objectives,
risks, charges, and expenses of the Fund before investing. More
information regarding the Fund’s distribution policy and other
information about the Fund is available by calling 800-GABELLI
(800-422-3554) or visiting www.gabelli.com.
About Gabelli Convertible and Income Securities Fund
The Gabelli Convertible and Income Securities Fund Inc. is a
diversified, closed-end management investment company with $146
million in total net assets whose primary investment objective is
to seek a high level of total return on its assets through a
combination of current income and capital appreciation. The Fund is
managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors,
Inc. (NYSE:GBL).
NYSE: GCV CUSIP – 36240B109
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version on businesswire.com: https://www.businesswire.com/news/home/20200820005439/en/
Investor Relations: Laurissa Martire (914) 921-5399
lmartire@gabelli.com
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