Western Asset Inflation-Linked Opportunities & Income Fund (WIW or “the Fund”; CUSIP: 95766R104) Announces Notification of Sources of Distributions
- None.
- None.
Insights
The notification from Western Asset Inflation-Linked Opportunities & Income Fund regarding their distribution sources is a transparent communication to shareholders, indicating that the entirety of the distribution for March and the fiscal year-to-date is sourced from net investment income. This implies that the fund's investments are generating sufficient income to cover distributions, which can be seen as a positive indicator of the fund's performance.
From an investment income perspective, the lack of capital gains, both short-term and long-term, suggests that the fund is not realizing gains from the sale of assets at this point in the fiscal year. This could indicate a strategy focused on income generation rather than capital appreciation, or it could reflect market conditions that have not been conducive to realizing gains.
For investors, the absence of a return of capital is noteworthy, as it implies that distributions are not eroding the principal value of their investments. This is often a sign of a fund's financial health, as it indicates that the fund is able to meet its distribution obligations from its income, rather than by returning investors' own money back to them.
Investors looking at the Western Asset Inflation-Linked Opportunities & Income Fund's distribution composition should be aware of the tax implications. Distributions derived entirely from net investment income are typically taxed at the individual's ordinary income tax rate, whereas capital gains distributions would be subject to capital gains tax rates, which can be lower.
The current distribution structure being purely from investment income could influence an investor's tax planning. It’s beneficial for those in higher tax brackets to know that the distributions are not being classified as capital gains, which could potentially offer a more favorable tax treatment. Conversely, investors seeking to utilize capital losses to offset gains will not find opportunities within this distribution announcement.
The focus on net investment income as the sole source for distributions by the Western Asset Inflation-Linked Opportunities & Income Fund may reflect broader economic conditions. For instance, in an environment where interest rates are rising, funds that hold inflation-linked securities could be well-positioned to generate income, as the interest payments on such securities often increase with inflation.
This could also signal that the fund is managing its portfolio conservatively, possibly in anticipation of market volatility or as a strategic choice to prioritize stable income over riskier capital gains. This approach might appeal to risk-averse investors or those seeking steady income streams during uncertain economic times.
Notification of Sources of Distributions
Pursuant to Section 19(a) of the Investment Company Act of 1940
The Fund’s estimated sources of the distribution to be paid on March 28, 2024, and for the fiscal year 2024 year-to-date are as follows:
Estimated Allocations for the March Monthly Distribution as of February 29, 2024:
Distribution Per Share |
Net Investment Income |
Net Realized Short-Term Capital Gains |
Net Realized Long-Term Capital Gains |
Return of Capital |
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Cumulative Estimated Allocations fiscal year-to-date as of February 29, 2024, for the fiscal year ending November 30, 2024:
Distribution Per Share |
Net Investment Income |
Net Realized Short-Term Capital Gains |
Net Realized Long-Term Capital Gains |
Return of Capital |
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Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Plan. WIW estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of the WIW distribution to shareholders may be a return of capital. A return of capital may occur, for example, when some or all of the money that a shareholder invested in a Fund is paid back to them. A return of capital distribution does not necessarily reflect WIW’s investment performance and should not be confused with ‘yield’ or ‘income’. The amounts and sources of distributions reported herein are only estimates and are not being provided 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 a Form 1099-DIV to shareholders for the calendar year that will describe how to report the Fund’s distributions for federal income tax purposes.
Average Annual Total Return (in relation to the change in net asset value (NAV) for the 5-year period ended on 2/29/2024)1 |
Annualized Distribution Rate (as a percentage of NAV as of 2/29/2024)2 |
Cumulative Total Return (in relation to the change in NAV for the fiscal period through 2/29/2024)3 |
Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 2/29/2024)4 |
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Fund Performance and Distribution Rate Information:
- Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five-year period ended through February 29, 2024. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year, assuming reinvestment of distributions paid.
- The Annualized Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV as of February 29, 2024.
- Cumulative Total Return is the percentage change in the Fund’s NAV from November 30, 2023 through February 29, 2024, assuming reinvestment of distributions paid.
- The Cumulative Fiscal Year-To-Date Distribution Rate is the dollar value of distributions for the fiscal period November 30, 2023 through February 29, 2024, as a percentage of the Fund’s NAV as of February 29, 2024.
This Fund has a managed distribution policy that seeks to deliver the Fund’s long-term total return potential through regular monthly distributions declared at a fixed rate per common share. Distributions may be paid in part or in full from net investment income, realized capital gains and by returning capital, or a combination thereof. Shareholders should note, however, that if a Fund’s aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. A return of capital is not taxable; rather it reduces a shareholder’s tax basis in his or her shares of the Fund. The Board of Directors of the Fund may terminate or suspend the managed distribution policy at any time, which could have an adverse effect on the market price of the Fund’s shares.
For further information on Western Asset Inflation-Linked Opportunities & Income Fund, please visit our web site at: www.franklintempleton.com/investments/options/closed-end-funds
Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Funds.
Category: Distribution Related
Source: Franklin Resources, Inc.
Source: Legg Mason Closed End Funds
View source version on businesswire.com: https://www.businesswire.com/news/home/20240328726489/en/
Investors: Fund Investor Services 1-888-777-0102
Source: Franklin Resources, Inc. and Legg Mason Closed End Funds
FAQ
What is the distribution per share for Western Asset Inflation-Linked Opportunities & Income Fund (WIW) for March 28, 2024?
What are the estimated sources of distributions for WIW for the fiscal year 2024 year-to-date as of February 29, 2024?
What percentage of the distribution for WIW for March 28, 2024, is from net investment income?
Should shareholders draw any conclusions from the distribution announcement?
