Bancroft Fund Ltd. Declares Distribution of $0.32 Per Share

Rhea-AI Summary

The Board of Trustees of Bancroft Fund Ltd. (BCV) announced a cash distribution of $0.32 per share, payable on September 23, 2022, to shareholders on record as of September 16, 2022. The Fund aims to meet an annual distribution of at least 5% of its average market price or fulfill IRS minimum requirements. The distribution policy is under regular review and may change. For 2022, approximately 3% of distributions are from net investment income while 97% is from net capital gains. Tax implications for shareholders are provided in upcoming notifications.

Positive

• Declared a cash distribution of $0.32 per share, indicating consistent income distribution to shareholders.
• The Fund's distribution policy aims for a minimum of 5% annual return on investment.
• Approximately 97% of 2022 distributions are derived from net capital gains, which may benefit investors tax-wise.

Negative

• Distribution policy is subject to modification or termination, introducing uncertainty for shareholders.
• If earnings are insufficient, excess distributions could be classified as a return of capital, affecting long-term investment value.

RYE, N.Y.--(BUSINESS WIRE)-- The Board of Trustees of Bancroft Fund Ltd. (NYSE American: BCV) (the “Fund”) declared a $0.32 per share cash distribution payable on September 23, 2022 to common shareholders of record on September 16, 2022.

The Fund intends to pay the greater of either an annual distribution of 5% of the Fund’s trailing 12-month average month-end market price or an amount that meets the minimum distribution requirement of the Internal Revenue Code for regulated investment companies.

Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized 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. If necessary, the Fund pays an adjusting distribution in December, which includes any additional income and net realized capital gains in excess of the quarterly distributions. The Fund’s distribution policy is subject to modification or termination by the Board of Trustees 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.

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 for long term capital gains, 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 with income that 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 share-holder’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 in 2022 to common shareholders with respect to the Fund’s fiscal year ending October 31, 2022 would include approximately 3% from net investment income and 97% from net capital gains 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 (www.gabelli.com). The final determination of the sources of all distributions in 2022 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 2022 distributions in early 2023 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

Laurissa Martire
(914) 921-5399

About Bancroft Fund Ltd.

Bancroft Fund Ltd. is a diversified, closed-end management investment company with $163 million in total net assets. BCV invests primarily in convertible securities with the objectives of providing income and the potential for capital appreciation, objectives the Fund considers to be relatively equal over the long term due to the nature of the securities in which it invests. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL).

NYSE American – BCV
CUSIP – 059695106

View source version on businesswire.com: https://www.businesswire.com/news/home/20220818005379/en/

Laurissa Martire

(914) 921-5399

Source: Bancroft Fund Ltd.

FAQ

What is the cash distribution amount for Bancroft Fund Ltd. (BCV) in 2022?

Bancroft Fund Ltd. (BCV) declared a cash distribution of $0.32 per share for 2022.

When will Bancroft Fund Ltd. (BCV) distribute cash to its shareholders?

The cash distribution will be payable on September 23, 2022, to shareholders of record as of September 16, 2022.

What percentage of the distribution comes from net capital gains for BCV in 2022?

Approximately 97% of the distributions paid in 2022 to shareholders are from net capital gains.

What is the minimum annual distribution requirement for Bancroft Fund Ltd. (BCV)?

The Fund intends to pay at least 5% of its trailing 12-month average market price or meet IRS minimum requirements.

What happens if Bancroft Fund Ltd. (BCV) does not generate enough earnings?

If the Fund does not generate sufficient earnings, the amount distributed in excess of earnings may be treated as a return of capital.