Bancroft Fund Ltd. Declares Distribution of $0.32 Per Share

Rhea-AI Summary

The Board of Trustees of Bancroft Fund Ltd. (NYSE American: BCV) has declared a $0.32 cash distribution per share, payable on March 24, 2023, to shareholders of record on March 17, 2023. The Fund aims for an annual distribution of at least 5% of its trailing 12-month average market price or what meets the minimum distribution requirement for regulated investment companies. Currently, 19% of the distribution is sourced from net investment income, while 81% comes from net capital gains. All distributions may be partially taxable, and the final determination of the sources will be disclosed in 2024 via Form 1099-DIV.

Positive

• Declaring a distribution of $0.32 per share enhances shareholder value.
• Strategic distribution policy aims for at least 5% based on market performance.

Negative

• 81% of the distribution is derived from net capital gains, raising concerns about sustainability.
• There is a risk that if earnings do not meet distributions, excess amounts may be treated as a return of capital, impacting future growth.

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 March 24, 2023 to common shareholders of record on March 17, 2023.

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 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, the current distribution paid in 2023 to common shareholders with respect to the Fund’s fiscal year ending October 31, 2023 would include approximately 19% from net investment income and 81% 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 2023 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 2023 distributions in early 2024 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 $154 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. (OTCQX: GAMI).

NYSE American – BCV
CUSIP – 059695106

View source version on businesswire.com: https://www.businesswire.com/news/home/20230217005204/en/

Laurissa Martire

(914) 921-5399

Source: Bancroft Fund Ltd.

FAQ

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

Bancroft Fund Ltd. recently declared a cash distribution of $0.32 per share.

When is the payable date for the cash distribution of BCV?

The cash distribution for BCV is payable on March 24, 2023.

What percentage of the BCV distribution comes from net investment income?

Approximately 19% of the distribution comes from net investment income.

What happens if Bancroft Fund Ltd. does not generate sufficient earnings?

If the Fund does not generate enough earnings, excess distributions may be treated as a return of capital.

How is the distribution policy of Bancroft Fund Ltd. determined?

The distribution policy is reviewed quarterly by the Board of Trustees based on the Fund's net asset value and market conditions.